/raid1/www/Hosts/bankrupt/TCRAP_Public/231018.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
Wednesday, October 18, 2023, Vol. 26, No. 209
Headlines
A U S T R A L I A
3D PRINTERS: First Creditors' Meeting Set for Oct. 23
ALPINE PROJECTS: Liquidation Left Apartment Owners in Limbo
AUSTRALIAN ROCK: First Creditors' Meeting Set for Oct. 24
C & S PLUMBING: Sole Director Spotted Holidaying in US
COVENTRY BOND 2023-2: S&P Assigns B (sf) Rating to Class F Notes
EAST ENERGY: First Creditors' Meeting Set for Oct. 24
LA TROBE 2023-3: S&P Assigns B (sf) Rating to Class F Notes
METRO FINANCE 2022-1: Moody's Hikes Rating on Class F Notes to B1
RIDGWAY TRADING: First Creditors' Meeting Set for Oct. 20
ZADRO CONSTRUCTIONS: Second Creditors' Meeting Set for Oct. 20
C H I N A
CHINA: Local Governments Finding it No Longer Cheap to Borrow
CHINA: Ramps Up Liquidity Support to Banking System
GEMDALE CORP: Sees Stocks and Bonds Dive as Chairman Steps Down
I N D I A
AHITRI SPINNING: ICRA Keeps D Debt Ratings in Not Cooperating
ALLIED ENERGY: ICRA Keeps D Debt Ratings in Not Cooperating
ANISHA ENTERPRISES: ICRA Lowers Rating on INR15cr LT Loan to D
DINDAYAL JALAN: ICRA Keeps B+ Debt Ratings in Not Cooperating
FUTURE EDUCATION: ICRA Keeps D Debt Ratings in Not Cooperating
HARESH OVERSEAS: ICRA Reaffirms B+ Rating on INR5cr LT Loan
INKEL LTD: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable
JASSMINE ENTERPRISES: ICRA Keeps D Ratings in Not Cooperating
KHETAN CORRUCASE: Ind-Ra Affirms B+ Loan Rating, Outlook Stable
LINERS INDIA: ICRA Keeps D Debt Ratings in Not Cooperating
LIONS HOSPITAL: Ind-Ra Gives B- Loan Rating, Outlook Stable
MAHALASA EXPORTS: Ind-Ra Assigns BB+ Loan Rating, Outlook Stable
NARAYANI RESOURCES: Ind-Ra Affirms & Withdraws BB+ Loan Rating
PNB REALTY: ICRA Keeps D Debt Ratings in Not Cooperating Category
PRABHA ENGINEERS: ICRA Keeps B+ Debt Ratings in Not Cooperating
PRAVEEN ELECTRICAL: ICRA Keeps D Debt Ratings in Not Cooperating
PTG TECHNOPAK: ICRA Keeps B+ Debt Ratings in Not Cooperating
RADHAGOBINDA RICE: ICRA Keeps D Debt Ratings in Not Cooperating
RAJ MAHAL: ICRA Keeps D Debt Ratings in Not Cooperating Category
RAMALINGA MILLS: ICRA Reaffirms D Rating on INR85cr LT Loan
RANI MOTORS: Ind-Ra Affirms BB+ Bank Loan Rating, Outlook Stable
RATHNAVEL SUBRAMANIAM: ICRA Keeps D Rating in Not Cooperating
RKS STEEL: Ind-Ra Assigns B+ Bank Loan Rating, Outlook Stable
SAI GLOBAL: ICRA Keeps B Debt Ratings in Not Cooperating Category
SAI METAL: ICRA Keeps D Debt Ratings in Not Cooperating Category
SAR SENAPATI FOODS: ICRA Keeps D Debt Ratings in Not Cooperating
SAR SENAPATI: ICRA Keeps D Ratings in Not Cooperating Category
SHANTI EDUCATIONAL: ICRA Keeps D Debt Rating in Not Cooperating
SPICEJET LTD: Rakesh Gangwal Says No Plans to Invest in Carrier
SPICEJET LTD: Reaches Deal with Engine Lease Finance Outside Court
SUN SHINE: ICRA Lowers Rating on INR10cr Term Loan to C+
J A P A N
MITSUBISHI UFJ: Fitch Assigns BB+(EXP) Rating to AT1 Securities
RAKUTEN: Default Risk is Japan's Highest as Bond Deadlines Loom
M O N G O L I A
CAPITRON BANK: Moody's Affirms B3 Issuer Rating, Outlook Now Stable
N E W Z E A L A N D
ENVY ENTERPRISES: Creditors' Proofs of Debt Due on Nov. 24
FORM FOUNDATIONS: Court to Hear Wind-Up Petition on Oct. 26
GILLARD HONEY: Creditors' Proofs of Debt Due on Nov. 13
MARKETPLACE MEDIA: Court to Hear Wind-Up Petition on Oct. 26
SEKILIFE LIMITED: Creditors' Proofs of Debt Due on Nov. 24
S I N G A P O R E
AAMTF II: Creditors' Proofs of Debt Due on Nov. 18
ALPHA ASIA: Creditors' Proofs of Debt Due on Nov. 18
ALPHA OFFSHORE: Final General Meeting Set for Nov. 17
SCHMICK PTE: Court to Hear Wind-Up Petition on Oct. 27
SEGAMAT PTE: Creditors' Proofs of Debt Due on Nov. 17
S R I L A N K A
CO-OPERATIVE INSURANCE: Fitch Affirms BB(lka) IFS Rating
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A U S T R A L I A
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3D PRINTERS: First Creditors' Meeting Set for Oct. 23
-----------------------------------------------------
A first meeting of the creditors in the proceedings of 3D Printers
Online Pty Ltd will be held on Oct. 23, 2023, at 3:00 p.m. at Level
12, 20 Bridge Street, in NSW or via virtual meeting technology.
Domenic Calabretta and Mitchell Ball of Mackay Goodwin were
appointed as administrators of the company on Oct. 11, 2023.
ALPINE PROJECTS: Liquidation Left Apartment Owners in Limbo
-----------------------------------------------------------
News.com.au reports that owners of apartments in a defective Sydney
building have been left in limbo following the collapse of the
block's builder and developer, Alpine Projects Australia.
Rachel, in her early 30s, owns an apartment in a Campsie building
in the city's southwest, where she lives with her husband.
Alpine Projects Australia collapsed into liquidation on September
19 costing all 26 employees their jobs and with debts that "look to
be in the millions", news.com.au discloses citing liquidator
Mohammad Najjar of Vanguard Insolvency.
Rachel told news.com.au that after receiving a clean building and
strata bill of health when they bought their three bedroom
apartment for AUD685,000 in 2019, problems started to emerge in the
58 unit complex a year later which "the owners corporation has had
to fork out large amounts of money" to fix.
In 2020, the building failed its annual fire safety check but as it
was only completed in 2018 the building was still under warranty,
meaning the faults would need to be fixed - and paid for - by the
builder.
In NSW, a statutory warranty period of six years for major defects
and two years for other defects from the date of completion
applies.
News.com.au relates that Rachel, who is on the strata committee,
said that after approaches to Alpine were ignored, the committee
hired a surveyor to document the defects at its own cost.
According to news.com.au, the surveyor found that the building's
fire alarms were not loud enough, that fire tags had been painted
over and that exit signs and signs displaying emergency evacuation
routes had not been installed.
Additionally, waterproofing issues with some apartments in the
block also emerged at the same time.
Alpine was approached to rectify the defects but Rachel told
news.com.au: "It went on for two years and they didn't fix
anything."
She said the situation with the building's fire safety became so
bad that the local council, the City of Canterbury-Bankstown,
threatened to issue a fire order, which would have meant the
building was deemed unlivable and all residents would have been
forced to move out, news.com.au relays.
False fire alarms were also frequently triggered at a further cost
to the strata committee, as NSW fire services only allows one false
alarm in a 60 day period before charging AUD1,600 per call out for
subsequent false alarms.
With its requests to Alpine being ignored, earlier this year "we
started thinking about the lawyers," Rachel said.
However the situation then took another ugly turn with a standoff
between owner occupiers and investors in the building, the report
says.
Most owner occupiers – who make up 60 per cent of the owners -
were in favour of taking legal action while the majority of
investor owners were against it, she said.
After passing by a margin of one vote, lawyers were engaged by the
strata company and "the next week [Alpine] literally sent out these
contractors to fix the fire alarm stuff".
However, when Alpine collapsed into liquidation, they had failed to
pay at least one of the contractors, the report relays.
News.com.au relates that Rachel said this contractor is owed
AUD40,000 and has "threatened to come in and remove all the
fixtures he's put in".
Rachel said the owners are now waiting to see if the building will
pass its fire inspection.
She added that they have not heard anything from Mr. Najjar and it
is not clear whether fixing the remaining defects will be covered
by insurance.
In NSW, if a builder is unable to complete building work or fix
defects during the warranty period due to insolvency, the NSW State
Insurance Regulatory Authority will cover the cost of fixing
defects providing the builder had mandatory home building
compensation cover, news.com.au notes.
Mr. Najjar previously told news.com.au that contractors and trades
were among "a large amount of creditors" and that employees had
also been left out of pocket.
Alpine Projects Australia, which also trades as Alpine Designer
Projects, is a sister company to Lane Cove-based Allura Homes,
which news.com.au revealed had fallen into liquidation in July.
AUSTRALIAN ROCK: First Creditors' Meeting Set for Oct. 24
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Australian
Rock Walls Pty Ltd will be held on Oct. 24, 2023, at 10:00 a.m. at
Level 4, 240 Queen Street, in Brisbane, Qld, or via virtual meeting
technology.
Marcus Watters and Richard Albarran of Hall Chadwick were appointed
as administrators of the company on Oct. 12, 2023.
C & S PLUMBING: Sole Director Spotted Holidaying in US
------------------------------------------------------
News.com.au reports that the boss of a failed plumbing firm that
owes AUD12 million to creditors has copped criticism after
appearing to splash his cash on an overseas holiday.
In August, news.com.au revealed that Victorian-based C & S Plumbing
Pty Ltd had gone into liquidation with all 70 employees losing
their jobs on the spot. More than 100 creditors are owed AUD12.2
million.
Documents the liquidator submitted to ASIC showed that that in the
four months before C & S Plumbing's demise, the sole director,
Shane Arnold, paid himself AUD101,000, news.com.au relates.
He also sold the firm's assets to another company a family member
was involved with, while getting the existing plumbing business to
complete work for this other company.
Although Mr. Arnold has indicated to the liquidator that he is
considering filing for bankruptcy, creditors are furious to
discover that he has travelled to the other side of the world for a
family vacation, according to news.com.au.
A family member shared a happy snap of the plumbing boss grinning
with the iconic Hollywood sign, in Los Angeles over in the US, in
the background.
It is particularly galling for staff who have been left without
jobs and are owed AUD2 million while they watch their former boss
living large, news.com.au says.
According to news.com.au, the photo, uploaded to Instagram, was
posted to coincide with the Magpies AFL grand final.
The Arnold family can be seen sporting black and white colours to
support their team.
The account has since been turned onto private, the report notes.
One person told news.com.au that it was "absolutely outrageous" to
see the Instagram story in the wake of C & S Plumbing's messy
demise.
News.com.au relates that Ryan, who worked for C & S Plumbing for a
number of years, said he is owed about AUD10,000 in unpaid
superannuation by the firm, and also his final week of wages, money
he doesn't expect to get back.
"The frustrating part for me, and 99 per cent of the employees, is
that we lost our jobs on the spot, we had to search for new work,
and we're now seeing our old boss living his life, whether it's on
social media, off (holidaying)," Ryan told news.com.au. "Those are
things we can't do, we might have been unemployed for a month or
two months."
News.com.au contacted Mr Arnold for comment. He did not meet
multiple deadlines to provide a comment.
C & S Plumbing first went into administration in February before
going to liquidation in March, after creditors took the company to
court over unpaid debts. The plumber was unable to pay all of
them.
Simon Nelson of insolvency firm BPS Recovery and Reconstruction is
the appointed liquidator of the Victorian business.
COVENTRY BOND 2023-2: S&P Assigns B (sf) Rating to Class F Notes
----------------------------------------------------------------
S&P Global Ratings assigned its ratings to nine classes of
residential mortgage-backed securities (RMBS) issued by the
Perpetual Corporate Trust Ltd. as trustee of Coventry Bond Trust
2023-2. The Coventry Bond Trust 2023-2 is a securitization of prime
residential mortgage loans originated by BC Securities Pty Ltd.
(BCS).
The ratings assigned to the floating-rate RMBS reflect the
following factors.
The credit risk of the underlying collateral portfolio, which
comprises residential mortgage loans to residents of Australia and
to self-managed superannuation fund borrowers, and the credit
support provided to each class of rated notes are commensurate with
the ratings assigned. Credit support is provided by subordination,
excess spread, if any, and a loss reserve funded by the trapping of
excess spread, subject to conditions. S&P's assessment of credit
risk considers BCS's underwriting standards and approval process as
well as its servicing quality.
The rated classes of notes can meet timely payment of interest and
ultimate payment of principal under the rating stresses. Key rating
factors are the level of subordination provided, the loss reserve,
the principal draw function, the liquidity reserve, and the
provision of an extraordinary expense reserve. S&P's analysis is on
the basis that the notes are fully redeemed via the principal
waterfall mechanism under the transaction documents by their legal
final maturity date, and S&P assumes the notes are not called at or
beyond the call-option date.
S&P's ratings also take into account the counterparty exposure to
Australia and New Zealand Banking Group Ltd. as the bank account
provider.
S&P also has factored into its ratings the legal structure of the
trust, which is established as a special-purpose entity and meets
its criteria for insolvency remoteness.
Ratings Assigned
Coventry Bond Trust 2023-2
Class A1-MM, A$124.90 million: AAA (sf)
Class A1-AU, A$266.00 million: AAA (sf)
Class A1-4.5Y: A$40.00 million: AAA (sf)
Class A2, A$35.40 million: AAA (sf)
Class B, A$19.20 million: AA (sf)
Class C, A$8.20 million: A (sf)
Class D, A$5.70 million: BBB (sf)
Class E, A$3.50 million: BB (sf)
Class F, A$2.20 million: B (sf)
Class G, A$1.90 million: Not rated
EAST ENERGY: First Creditors' Meeting Set for Oct. 24
-----------------------------------------------------
A first meeting of the creditors in the proceedings of East Energy
Resources Limited will be held on Oct. 24, 2023, at 12:00 p.m. via
virtual technologies.
John Bumbak of KordaMentha was appointed as administrator of the
company on Oct. 12, 2023.
LA TROBE 2023-3: S&P Assigns B (sf) Rating to Class F Notes
-----------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to seven of the
nine classes of residential mortgage-backed securities (RMBS) to be
issued by Perpetual Corporate Trust Ltd. as trustee for La Trobe
Financial Capital Markets Trust 2023-3. La Trobe Financial Capital
Markets Trust 2023-3 is a securitization of nonconforming and prime
residential mortgages originated by La Trobe Financial Services Pty
Ltd. (La Trobe Financial).
The preliminary ratings reflect:
-- That the credit risk of the underlying collateral portfolio and
the credit support provided to each class of notes are commensurate
with the ratings assigned. Credit support is provided by
subordination and excess spread. The assessment of credit risk
takes into account La Trobe Financial's underwriting standards and
approval process, and La Trobe Financial's servicing quality.
-- That the transaction's cash flows can meet timely payment of
interest and ultimate payment of principal to the noteholders under
the rating stresses. Key factors are the level of subordination
provided, an amortizing liquidity facility sized at 1.5% of the
note balance, the principal draw function, the yield reserve, the
retention amount built from excess spread before the call date, the
amortization amount built from excess spread after the call date or
upon a servicer default, and the provision of an extraordinary
expense reserve. All rating stresses are made on the basis that the
trust does not call the notes at or beyond the call date, and that
all rated notes must be fully redeemed via the principal waterfall
mechanism under the transaction documents.
-- That S&P also has factored into its ratings the legal structure
of the trust, which has been established as a special-purpose
entity and meets our criteria for insolvency remoteness.
-- The counterparty support provided by National Australia Bank
Ltd. as liquidity facility provider and Commonwealth Bank of
Australia as bank account provider. The transaction documents for
the liquidity facility and bank accounts include downgrade language
consistent with S&P's "Counterparty Risk Framework: Methodology And
Assumptions" criteria, published on March 8, 2019, that requires
the replacement of the counterparty or other remedy, should its
rating fall below the applicable rating.
Preliminary Ratings Assigned
La Trobe Financial Capital Markets Trust 2023-3
Class A-S, A$180.00 million: AAA (sf)
Class A-L, A$720.00 million: AAA (sf)
Class B, A$39.40 million: AA (sf)
Class C, A$23.10 million: A (sf)
Class D, A$15.90 million: BBB (sf)
Class E, A$9.80 million: BB (sf)
Class F, A$6.50 million: B (sf)
Equity 1, A$2.80 million: Not rated
Equity 2, A$2.50 million: Not rated
METRO FINANCE 2022-1: Moody's Hikes Rating on Class F Notes to B1
-----------------------------------------------------------------
Moody's Investors Service has upgraded ratings on three classes of
notes issued by Metro Finance 2022-1 Trust.
The affected ratings are as follows:
Issuer: Metro Finance 2022-1 Trust
Class C Notes, Upgraded to Aa3 (sf); previously on Dec 16, 2022
Upgraded to A1 (sf)
Class D Notes, Upgraded to A2 (sf); previously on Dec 16, 2022
Upgraded to Baa1 (sf)
Class F Notes, Upgraded to B1 (sf); previously on Feb 17, 2022
Definitive Rating Assigned B2 (sf)
RATINGS RATIONALE
The upgrades were prompted by an increase in credit enhancement
available for the affected notes and the good collateral
performance to date.
Following the September 2023 payment date, the credit enhancement
available for the Class C and Class D Notes has increased to 9.5%
and 7.4% respectively, from 6.8% and 5.3% at the time of the last
rating action for these notes in December 2022. Credit enhancement
available for the Class F Notes has increased to 2.3% from 1.3% at
deal close.
As of end-August, 0.3% of the outstanding pool was 30-plus day
delinquent, and 0.1% was 90-plus day delinquent. The portfolio has
incurred gross and net losses of 0.16% and 0.06% (as a percentage
of the original pool balance) to date, all of which have been
covered by excess spread.
Based on the observed performance to date and loan attributes,
Moody's has maintained its expected default assumption at 2.25% as
a percentage of the current pool balance (equivalent to 1.4% as a
percentage of original pool balance, compared to 1.7% at the time
of the last rating action).
Moody's has maintained the Aaa portfolio credit enhancement at
15%.
Moody's analysis has also considered various scenarios involving
different mean default rates and default timings to evaluate the
resiliency of the note ratings.
The transaction is a cash securitisation of auto loans and leases
originated by Metro Finance Pty Limited and extended to prime
commercial obligors located in Australia.
The principal methodology used in these ratings was "Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS" published in
November 2022.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade of the ratings include (1)
performance of the underlying collateral that is better than
Moody's expectations, and (2) an increase in the notes' available
credit enhancement.
Factors that could lead to a downgrade of the ratings include (1)
performance of the underlying collateral that is worse than Moody's
expectations, (2) a decrease in the notes' available credit
enhancement, and (3) a deterioration in the credit quality of the
transaction counterparties.
RIDGWAY TRADING: First Creditors' Meeting Set for Oct. 20
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Ridgway
Trading Pty Ltd will be held on Oct. 20, 2023, at 11:00 a.m. via
via teleconference only.
Richard Albarran and John Vouris of Hall Chadwick were appointed as
administrators of the company on Oct. 10, 2023.
ZADRO CONSTRUCTIONS: Second Creditors' Meeting Set for Oct. 20
--------------------------------------------------------------
A second meeting of creditors in the proceedings of Zadro
Constructions Pty Ltd has been set for Oct. 20, 2023, at 11:30 a.m.
via virtual facilities, held notionally from Level 18, 145 Ann
Street, in Brisbane, Qld.
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 Oct. 19, 2023, at 12:00 p.m.
Cameron Crichton and John McInerney of Grant Thornton Australia
were appointed as administrators of the company on Sept. 15, 2023.
=========
C H I N A
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CHINA: Local Governments Finding it No Longer Cheap to Borrow
-------------------------------------------------------------
Bloomberg News reports that China's local authorities are finding
it more expensive to sell bonds, the latest sign of rising stress
as policymakers ramp up borrowings to stimulate growth and defuse
short-term payment risks.
Of the local government yuan bonds sold so far this year, 50 carry
coupons with a premium of more than 25 basis points with comparable
sovereign debt, according to Bloomberg-compiled data. That's the
most since 2020.
Bloomberg relates that the jump is a departure from the success
enjoyed by these borrowers in the past two years, when they had
priced almost every note with a yield spread of less than 25 basis
points, the lower end of an unofficial band set by regulators. The
higher coupons come as local authorities grapple with dwindling
land sales and taxation, as a housing-led economic slump persists.
If the demand indigestion worsens, it will heap pressure on the
People's Bank of China to step up liquidity support or ease
monetary policy further to fund Beijing's stimulus plans, Bloomberg
says. On Oct. 16, it add a net CNY289 billion ($39.6 billion) into
the financial system via a one-year policy loan, the most since
December 2020.
"Banks are already well fed after absorbing a large amount of local
government bonds," Bloomberg quotes Liu Lin, deputy general manager
of investment banking at Bank of China Ltd., as saying. "Pricing
may need to better reflect the market dynamics in the fourth
quarter."
Chinese banks owned 83% of the debt at the end of August, the
lowest proportion based on Bloomberg-compiled data going back to
2019.
A surge in the debt sales and signs of economic stabilization -
raising fears of less easing - have hurt the world's second-largest
bond market in recent months, pushing benchmark sovereign yields to
a fourth-month high at one point.
The splurge comes because local authorities had used up over 90% of
their special bond quotas for 2023 in the first three quarters,
Bloomberg-compiled data show, while sales by the central government
also picked up in September.
More supply is arriving, including a CNY1 trillion program to help
regional governments refinance hidden debts - a risk that Beijing
is keen to reduce. Policymakers are also weighing additional
sovereign bond sales of at least 1 trillion yuan for spending on
infrastructure, Bloomberg News reported last week.
The Standing Committee of the Communist Party-controlled parliament
will meet later this month to review a bill assigning additional
local government debt quotas "in advance," the state-run Xinhua
News Agency reported on Oct. 13, another move that will allow China
to increase the amount local governments can borrow, Bloomberg
relays.
Local authorities traditionally exert strong influence on guiding
banks to bid at lower yields, said Yang Hao, a fixed-income analyst
at Nanjing Securities Co. However, when sentiment weakens, "the low
yields become harder to sustain", he said, adding that demand looks
weaker for long-dated notes from fiscally vulnerable regions.
Provinces such as Hunan, Jilin, Jiangxi and Anhui are among those
paying higher coupons this year, Bloomberg-compiled data show.
To be sure, the chances of defaults by local governments remain
slim, even for those with strained finances, said Ding Shuang,
chief economist for Greater China and North Asia at Standard
Chartered Plc. "If local debt yields deviate too much from those on
sovereigns, we would expect some intervention or guidance from
government to correct it."
Bloomberg says the nation's central bank may also be called upon to
do more.
The prospect of increased government bond supply means "the PBOC
may need to step up its liquidity support and lower interest rates
to accommodate the issuance, which adds conviction to our call for
another cut to RRR and a policy rate cut in the fourth quarter,"
Goldman Sachs Group Inc. analysts including Maggie Wei and Hui Shan
wrote in a note, referring to banks' reserve requirement ratio,
adds Bloomberg.
CHINA: Ramps Up Liquidity Support to Banking System
---------------------------------------------------
Reuters reports that China's central bank ramped up liquidity
support to the banking system as it rolled over medium-term policy
loans on Oct. 16, but kept the interest rate unchanged amid
concerns about the risk of more sharp yuan declines.
According to Reuters, the People's Bank of China (PBOC) is walking
a tightrope between keeping liquidity ample to aid a struggling
economy and stabilising the yuan amid expectations of "higher for
longer" U.S. rates.
Reuters relates that the PBOC said in a statement it conducted
medium-term lending facility (MLF) operations worth CNY789 billion
($107.96 billion) to keep liquidity in the banking system
adequate.
With CNY500 billion worth of MLF loans maturing, the PBOC is
pumping CNY289 billion of fresh liquidity into the banking system,
the biggest such net injection in nearly three years.
Meanwhile, it held the rate on the one-year policy loans unchanged
at 2.50%, in line with a Reuters poll last week.
Oct. 16's operations shows "the PBOC hopes to provide liquidity to
ease stress in the market," said Stone Zhou, director of Global
Markets at UOB China.
This month, a slew of Chinese local governments, including Liaoning
and Chongqing, are rushing to issue special refinancing bonds to
repay outstanding liabilities, as Beijing steps up efforts to
reduce growing debt risks that remain a worry for investors,
Reuters notes.
Analysts expect issuance of such bonds to hit at least CNY1
trillion this year.
In addition, tax collections by the government in October will also
likely cause liquidity stress, analysts said.
Reuters says the PBOC has cut the MLF rate - a guide to China's
benchmark lending rates - twice this year to lower borrowing costs
in an economy hit by weak consumption and a deepening property
crisis.
But further monetary easing could widen China's yield gap with the
United States, putting fresh downward pressure on the yuan, which
has lost roughly 5.5% against the dollar this year, the report
notes.
According to Reuters, Xing Zhaopeng, senior China strategist at
ANZ, said the PBOC's decision on Oct. 16 not to cut rates does not
rule out a five basis point cut to 1-year lending benchmark rate on
Oct. 13.
"We believe the PBOC will maintain its easing pace at one measure
per month."
Louise Loo, lead economist at Oxford Economics, also expects
China's monetary policy to stay dovish in the near-term, Reuters
relays.
The economic advisory firm forecasts the PBOC will deliver a
further round of 10 bp rate cuts in the fourth quarter, as well as
another 25 bp cut to the reserve requirement ratio in December,
adds Reuters.
GEMDALE CORP: Sees Stocks and Bonds Dive as Chairman Steps Down
---------------------------------------------------------------
Reuters reports that China's Gemdale saw its stocks and bonds
plunge on Oct. 17 after the resignation of its chairman, becoming
the latest major property developer to be caught up in anxiety over
the crisis in the country's real estate sector.
Ling Ke, 64, had resigned due to health reasons, Shanghai-listed
Gemdale announced on Oct. 16, adding that he would be replaced by
company president Huang Juncan, Reuters relates.
It did not elaborate on the health reasons.
According to Reuters, Chinese media outlet Yicai on Oct. 17 quoted
a separate company statement as saying that Ling's resignation was
a normal transfer of management responsibilities and would not have
a big impact on the firm's operations.
Gemdale's onshore bonds maturing in 2024, 2025 and 2026 tumbled
25%, 21% and 20% respectively before they were suspended from
trade.
The company's shares slid 9% in the morning [Oct. 17]. Shares in
mainland-listed Chinese companies are not suspended from trade
until a move exceeds 10%, the report notes.
Investors were taking no chances given the broader debt problems in
the sector, said Ting Meng, a credit analyst at ANZ Bank China.
"Investors are worried about Gemdale's financial condition as the
resignation of its chairman was a surprise," she said.
Gemdale did not immediately respond to a Reuters request for
comment. It ranked as China's 8th largest developer last year,
according to private research firm China Real Estate Information
Corp.
About Gemdale Corp
Gemdale Corp -- https://www.gemdale.com/ -- is a China-based
company principally engaged in the development and sales of real
estate. The Company's main businesses include residential real
estate development, commercial real estate and industrial real
estate development and operation, real estate finance, property
leasing and property management services. The Company mainly
conducts its businesses in the domestic market.
As reported in the Troubled Company Reporter-Asia Pacific in August
2023, Moody's Investors Service has downgraded the corporate family
rating of Gemdale Corporation to Ba3 from Ba2 and the CFR of Famous
Commercial Limited, Gemdale's wholly-owned subsidiary, to B1 from
Ba3.
Moody's has also downgraded the senior unsecured rating on the
bonds to B1 from Ba3 and the senior unsecured rating to (P)B1 from
(P)Ba3 on the medium-term note (MTN) program issued by Gemdale Ever
Prosperity Investment Limited (Gemdale Ever Prosperity) and
guaranteed by Famous. Gemdale Ever Prosperity's offshore bonds are
supported by Gemdale through keepwell deeds and deeds of equity
interest purchase undertaking.
At the same time, Moody's has put the ratings on review for further
downgrade. Previously, the outlook was negative.
=========
I N D I A
=========
AHITRI SPINNING: ICRA Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA has kept the Long-Term and Short- Term rating of Ahitri
Spinning Mills Pvt. Ltd. in the 'Issuer Not Cooperating' category.
The rating is denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short-term 1.35 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
Long-term– 1.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 18.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite multiple requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Incorporated in June 2014, Ahitri Spinning Mills Pvt. Ltd. (ASMPL)
is promoted by Mr. Haresh Trivedi, Mr. Hirabhai Ahir, Mrs. Jyotiben
Ahir and Mrs. Parul Trivedi and family members. ASMPL is engaged in
spinning of cotton to manufacture 100% carded cotton yarn, in the
range of 28s to 34s counts. The commercial operations commenced in
September 2017. The manufacturing facility is located in Dholi
village, Ahmedabad, with an installed capacity of 13056 spindles
per annum. The key promoters have experience in textile industry
through association with entities in cotton ginning.
ALLIED ENERGY: ICRA Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has kept the Long-Term and Short-Term ratings of Allied Energy
Systems Private Limited in the 'Issuer Not Cooperating' category.
The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 8.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long Term- 16.50 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
Short-term 9.50 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in 2005, Allied Energy Systems Private Limited is
primarily engaged in designing fabrication and erection of
Deaerators for boilers which are used in industries like Chemicals,
Power, Petrochem, Fertilizer, Sugar, Paper etc. The
company is also engaged in manufacturing of steel fabricated
products like Pressure Vessels, Heat Exchangers, and Evaporators
etc. The company has two manufacturing facilities in Bhiwadi,
Rajasthan.
ANISHA ENTERPRISES: ICRA Lowers Rating on INR15cr LT Loan to D
--------------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of
Anisha Enterprises (AE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 15.00 [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
Material event
The rating downgrade reflects Delay in Debt Repayment as mentioned
in the publicly available sources.
Impact of material event
The rating is based on limited information on the entity's
performance since the time it was last rated in July 2022. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the
rating may not adequately reflect the credit risk profile of the
entity, despite the downgrade.
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Founded in 2014, as a partnership firm, Anisha Enterprises (AE) is
engaged in the tobacco trading and processing business. The firm is
promoted by Mr. Damacharla Janardhana Rao and Mrs. Damacharla Naga
Satya Latha, who have more than five decades of experience in the
tobacco trading business.
DINDAYAL JALAN: ICRA Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
ICRA has kept the Long-Term rating of Dindayal Jalan Textiles Ltd
in the 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 14.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite multiple requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Dindayal Jalan Textiles Limited (DJTL), incorporated in 1993, is
wholesaler of textile products with its operations centered in
Varanasi, Uttar Pradesh. The company is a part of the Dindayal
Jalan group, which is involved in the textile trading business for
more than four decades. DJTL was a wholesaler and retailer till
FY2014, with trading of handloom, fabric, readymade garments,
hosiery etc. accounting for a major portion of its sales. The
retail operations of the company were discontinued from April 2014
onwards, and were shifted to the newly formed group company
Dindayal Jalan Retails Pvt Ltd. The company has 150,000 square feet
space on the outskirts of Varanasi, which serves as a warehouse and
a display center. This store is well connected to the National
Highway with Varanasi and other major cities of Uttar Pradesh and
Bihar.
FUTURE EDUCATION: ICRA Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
ICRA has kept the Long-Term and Short-Term ratings of Future
Education and Research Trust in the 'Issuer Not Cooperating'
category. The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 6.50 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 112.57 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long Term- 0.93 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
Long Term- (37.00) [ICRA]D; ISSUER NOT COOPERATING;
Interchangeable Rating Continues to remain under
'Issuer Not Cooperating'
Category
Short Term- (37.00) [ICRA]D; ISSUER NOT COOPERATING;
Interchangeable Rating Continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. 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 2001, Future Education And Research Trust (FERT)
had set up its first college in 2002 under the name, Future
Institute of Engineering and Management (FIEM), in Sonarpur, near
Kolkata, catering to undergraduate and postgraduate courses across
streams including engineering and management. In 2005, the trust
had set up a school under the name Future Campus School, affiliated
to the Central Board of Secondary Education (C.B.S.E.). In 2015,
the trust had set up another college in Garia, Kolkata named Future
Institute of Technology (FIT), which offers B. Tech courses across
various streams. Both FIEM and FIT are approved by the AICTE and
are affiliated to the Maulana Abul Kalam Azad University of
Technology, West Bengal, formerly West Bengal University of
Technology (WBUT). In 2019, the trust set up another school in
Garia, Kolkata named Future Think School (FTS). In addition, FERT
is in the process of setting up an oncology hospital in Sonarpur,
near Kolkata.
HARESH OVERSEAS: ICRA Reaffirms B+ Rating on INR5cr LT Loan
-----------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Haresh
Overseas Private Limited (HOPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term 5.00 [ICRA]B+ (Stable); reaffirmed
fund based-
Cash credit
Short term 34.37 [ICRA]A4; reaffirmed
non-fund based-
Letter of credit
Long term- 0.92 [ICRA]B+ (Stable); reaffirmed
Unallocated
Rationale
The reaffirmation of the ratings for HOPL factors in the extensive
experience of the promoters in the chemical trading business and
the company's reputed customer base. The ratings are, however,
constrained by the company's small scale and its adverse leverage
(TOL/TNW as on March 31, 2023) and debt coverage indicators. The
profits are also susceptible to the volatility in chemical prices
and foreign exchange fluctuations as the entire traded goods are
procured from overseas. ICRA also considers the intense competition
in the petrochemical trading industry owing to the presence of
several organised and unorganised players, which limits the pricing
flexibility.
The Stable outlook on the rating reflects ICRA's expectation that
HOPL will benefit from its long track record of operations and
maintain its credit profile, backed by recovery in margin and an
efficient working capital management.
Key rating drivers and their description
Credit strengths
* Extensive experience of promoters: HOPL's promoters have been
present in the petrochemical and speciality chemical industry for
more than three decades. The extensive experience and expertise of
the promoters helped HOPL in maintaining long relationships with
established overseas suppliers.
* Established relationships with reputed clientele translate into
repeat orders: The company has long-term relationships with reputed
customers like Berger Paints India Limited, Speciality Industrial
Polymers & Coatings Pvt. Ltd. and other large paint manufacturers
and have received consistent orders from them over the years. In
FY2023, it derived ~60% of its revenue from the top 10 customers,
indicating a moderately diversified customer base.
Credit challenges
* Small scale of operations; adverse capital structure and moderate
debt coverage indicators: The firm's scale of operations remains
small with an operating income of INR110.8 crore in FY2023, which
declined from INR134.1 crore in FY2022 owing to lower realisations
and sluggish volumes. The company's financial risk profile remains
average owing to a small net worth base (INR7.8 crore as on March
31, 2023) and adverse capital structure. The company has high
reliance on creditor funding which has resulted in high outside
liabilities, reflected in TOL/TNW of 4.5 times (though improved
from 5.3 times in FY2022). Going forward, the leverage and debt
protection metrics are expected to remain at average levels with an
estimated interest coverage of ~2.8 times and TOL/TNW of 3 times
for FY2024.
* Profitability exposed to volatility in raw material prices and
forex rates: The company's profit margins remain low due to the
trading nature of operations. The profit margins remain vulnerable
to the commodity price cycles, with HOPL trading in commodity
chemicals. Though a major part of the purchases are order-backed,
the company holds up to two months of inventory for some products.
The prices primarily move in line with the international demand and
supply scenario and are subject to considerable volatility,
depending on the crude oil price movements. Thus, its margins
remain susceptible to any
adverse price movements.
In FY2023, HOPL posted operating losses due to sharp volatility in
raw material prices and realisations. Further, the chemicals that
HOPL trades in are imported primarily from Saudi Arabia and
Thailand. However, exports form a minor portion of the total sales,
exposing the company to foreign currency fluctuation risk in the
absence of any natural hedge. With relative stability in prices and
no major volatility expected in the near future, the operating
margins are expected to recover to ~4-4.5% in FY2024, although they
will remain on the lower side.
* Intense competition in fragmented trading business: The chemical
trading business is characterised by stiff competition owing to the
presence of many companies in the organised and unorganised
sectors, limiting HOPL's pricing flexibility and bargaining power
with the customers.
Liquidity position: Stretched
The company's liquidity position continues to be stretched, given
the sizeable LC maturities in the near term. Further, the
company's debt servicing ability completely depends on the
timeliness of the receivable receipt, given the almost full
utilization of the working capital limits. Nonetheless, funding
support from the promoter and built-up of FDs (INR1 crore as on
September 2023) to meet the near-term LC maturities provides some
liquidity comfort.
Rating sensitivities
Positive factors – ICRA could upgrade HOPL's ratings if the
company demonstrates a sustained improvement in its scale and
profit margins, leading to an improvement in the key debt
protection metrics and liquidity position.
Negative factors – Pressure on HOPL's ratings could arise if
there is a deterioration in the company's scale and profitability,
or if any stretch in the working capital cycle adversely impacts
the key credit metrics and liquidity position on a sustained
basis.
HOPL, incorporated in 1983, has its headquarters in Mumbai
(Maharashtra) with branch offices in Cochin (Kerala), Gandhidham
(Gujarat) and Jodhpur (Rajasthan). The company is managed by Mr.
Kailash S. Kasat. HOPL is involved in the trading, marketing and
distribution of petrochemicals and solvents.
INKEL LTD: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Inkel Ltd (IL) a
Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable.
Key Rating Drivers
The rating reflects IL's modest credit metrics due to the modest
margins. The credit metrics improved in FY23 due to an increase in
the absolute EBITDA to INR54.25 million in FY23 (FY22: INR10.07
million). The interest coverage (operating EBITDA/gross interest
expenses) was 3.07x in FY23 (FY22: 0.66x) and the net leverage
(total adjusted net debt/operating EBITDAR) was 5.92x (17.79x). In
FY24, Ind-Ra expects the credit metrics to remain at similar levels
owing to the absence of any debt-funded capex plans.
The rating reflects IL's small scale of operations, as indicated by
revenue of INR673.26 million in FY23 (FY22: INR553.15 million). In
FY23, the revenue improved due to a shift in the company's focus
from project management consultancy to engineering procurement and
construction (EPC) projects. IL is a public-private-partnership
company set up by the government of Kerala (GoK) to stimulate
non-resident Indian investments in the state. The company executes
projects by entering into joint ventures with other companies.
During 4MFY24, IL booked revenue of INR145 million, and it had an
order book of INR2366.285 million as of August 2023, scheduled to
be executed by January 2025. Ind-Ra and the management expect the
revenue to improve in FY24, given the strong order book and
increased focus on EPC contracts.
The ratings also factor in IL's modest EBITDA margins due to the
nature of the business. The margin increased to 8.06% in FY23
(FY22: 1.82%) due to an increase in operating income generated from
guarantee fee, a decline in the cost of raw material, and a fall in
administration expenses. The ROCE was 1.7% in FY23 (FY22: negative
ROCE). Ind-Ra expects the EBITDA margin to be stable in FY24, given
the nature of the work being executed.
Liquidity Indicator - Stretched: The cash flow from operations
turned negative at INR134.59 million in FY23 (FY22: INR74.6
million) due to an increase in working capital requirements.
Consequently, The free cash flow also turned negative at INR139.34
million in FY23 (FY22: INR73.69 million). The net working capital
cycle remained elongated in FY23 and deteriorated to 251 days
(FY22: 131 days) because of an increase in debtor days to 456 days
(372 days). The cash and cash equivalents stood at INR129.15
million at FYE23 (FYE22: INR643.65 million). IL has capital market
exposure and it also relies on banks and financial institutions to
meet its funding requirements.
The ratings, however, are supported by the promoters' experience of
nearly two decades in the consultancy industry. Furthermore, the
GoK holds a 23% stake in the company, which has helped it establish
strong relationships with customers as well as suppliers.
Rating Sensitivities
Negative: Any decline in the scale of operations, leading to
deterioration in the credit metrics and/or deterioration in the
liquidity profile, all on a sustained basis, will be negative for
the rating.
Positive: A significant increase in the scale of operations while
maintaining the credit metrics, an improvement in the liquidity
position and shortening of the working capital cycle, on a
sustained basis, will be positive for the ratings.
Company Profile
Incorporated in 2007, IL is a public private partnership initiative
by the GoK. The company is engaged in project management
consultancy and it also undertakes EPC projects in the civil
construction and renewable energy sectors (solar and wind energy).
Their registered office is in Ernakulam, Kerala.
JASSMINE ENTERPRISES: ICRA Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
ICRA has kept the Long-Term and Short-Term rating of Jassmine
Enterprises in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short-term– 6.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 10.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite multiple requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Jassmine Enterprises ('JE') was established as a partnership
concern in August 2012. The firm was initially managed by the
partners, Mr. Shyam Sunder Motwani and Mr. Umesh Jani while Mr.
Mukesh Kumar Gadhiya joined the firm as partner in FY2016. However,
in FY2017, Mr. Umesh Jani retired from the business as partner. The
firm has its registered office in Mumbai and a warehouse facility
in Navi Mumbai (Maharashtra). It is involved in trading of various
types of fabrics, dress materials and readymade garments such as
salwar suits, shirts, kids' garments, tops and legins.
KHETAN CORRUCASE: Ind-Ra Affirms B+ Loan Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Khetan Corrucase Private Limited's (KCPL) bank
facilities:
-- INR67.5 mil. Fund-based working capital limit* affirmed and
withdrawn; and
-- INR118.2 mil. Term loan** due on December 31, 2029 affirmed
and withdrawn.
* Affirmed at 'IND B+'/Stable/'IND A4' before being withdrawn
** Affirmed at 'IND B+'/Stable before being withdrawn
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no objection certificate from the lender. This is
consistent with Ind-Ra's Policy on Withdrawal of Ratings. Ind-Ra
will no longer provide analytical and rating coverage for the
company.
Analytical Approach: Ind-Ra has changed KCPL's analytical approach
to standalone view from consolidated view.
Key Rating Drivers
Liquidity Indicator - Poor: KCPL's average maximum utilization of
the fund-based and non-fund-based working capital limits was 93.31%
and 83.68%, respectively, for the 12 months ended September 2023.
As per FY23 provisional financials, the cash and cash equivalents
stood low at INR1.0 million (FYE22: INR2.24 million). The net
working capital cycle was modest, although elongated to 87 days in
FY23 (FY22: 62 days) due to a reduction in the payable period to 37
days (116 days). KCPL does not have any capital market exposure and
relies on banks and financial institutions to meet its funding
requirements. The cash flow from operations turned positive to
INR12.92 million in FY23 (FY22: negative INR16.68 million), owing
to an increase in the absolute EBITDA to INR83.94 million (INR46.09
million). However, the free cash flow remained negative and
deteriorated further to INR83.12 million (FY22: negative INR26.73
million) because of capex of INR96.04 million. The company has
scheduled repayments of INR57.45 million and INR51.45 million in
FY24 and FY25, respectively.
The ratings continue to factor in KCPL's small scale of operations,
despite an increase in the revenue to INR660.51 million in FY23
(FY22: INR487.69 million). The growth in revenue was on account of
an increase in demand for corrugated packaging boxes and
containers. During 1QFY24, KCPL booked revenue of INR174.33
million. In FY24, Ind-Ra expects the revenue to grow further on
account of an increase in the company's production capacity.
However, the ratings are supported by KCPL's healthy EBITDA margin
of 12.71% in FY23 (FY22: 9.45%) with a return on capital employed
of 16.6% (9.6%). The increase in margins was due to a decline in
paper prices. In FY24, Ind-Ra expects the margins to remain at
similar levels owing to the similar nature of operations.
The ratings also benefit from the company's comfortable credit
metrics. The interest coverage (operating EBITDA/gross interest
expenses) improved to 2.77x in FY23 (FY22: 1.91x) and the net
leverage (total adjusted net debt/operating EBITDAR) to 4.99x
(5.08x) due to the improvement in EBITDA, partially offset by an
increase in the debt to INR355.4 million (INR236.21 million).
However, Ind-Ra expects the credit metrics to deteriorate in FY24
due to the capex undertaken for capacity enhancement.
The ratings also remain supported by KCPL's promoters' experience
of over three decades in the corrugated packaging industry.
Company Profile
KCPL was formed in 2016 by Ashok Khetan. The company manufactures
corrugated packaging boxes and containers. The company's head
office is in Mumbai and manufacturing facility in Mahbubnagar,
Telangana. The company supplies its product just in time to its
customer. KCPL is a subsidiary of Khetan Containers Private
Limited.
LINERS INDIA: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA has kept the long-term and short-term ratings for the bank
facilities of Liners India Limited in the 'Issuer Not Cooperating'
category. The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 27.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 7.20 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Fixed Deposit 5.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating Continues to remain under
issuer not cooperating category
Short Term- 15.75 [ICRA]D; ISSUER NOT COOPERATING;
Non Fund Rating Continues to remain under
Based-Others issuer not cooperating category
Long-term/ 0.05 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Unallocated remain under 'Issuer Not
Cooperating' Category
As part of its process and in accordance with its rating agreement
with Liners India Limited, 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 multiple requests by
ICRA, the entity's management has remained non-cooperative. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, the rating has been continued to the "Issuer Not
Cooperating" category. The rating is based on the best available
information.
Liners India Limited was originally established in 1974 as a
partnership firm by Mr. S Ganesh; the firm was reconstituted as a
private limited company in 1986 and to a public limited company in
1994. LIL has two divisions: cylinder liner manufacturing and
automobile components trading. LIL manufactures cylinder liners and
cast-iron products. The centrifugally cast cylinder liners are used
in diesel automotive engines. LIL supplies to original equipment
manufacturers of heavy, medium, and light commercial vehicles,
tractors, and diesel engines worldwide. The company has
manufacturing units in Vijayawada (Andhra Pradesh), and Rudrapur
(Uttarakhand) with an installed capacity of 24 crore liners per
annum. The company has set up the trading division after
acquisition of Jai Motors Ltd in January 2009. Under this division,
LIL is a distributor in South India for automotive component
manufacturing companies. It is an exclusive distributor of Shriram
Pistons & Rings Ltd and Allied Nippon Ltd for AP, Telangana,
Karnataka, Kerala, and Tamil Nadu. It is also a distributor of six
other automotive component manufacturing companies in South India.
LIONS HOSPITAL: Ind-Ra Gives B- Loan Rating, Outlook Stable
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Eight Lions
Hospital Private Limited's (EHLPL) bank facilities an 'IND B-'
rating. The Outlook is Stable.
The detailed rating actions are:
-- INR15 mil. Fund-based working capital limit assigned with
IND B-/Stable/IND A4 rating; and
-- INR350.78 mil. Term loan due on July 31, 2031 assigned with
IND B-/Stable rating.
Key Rating Drivers
The ratings reflect the operating losses of INR125.035 million
incurred by ELHPL in FY23, due to fixed overheads and the low
occupancy at its hospital. Ind-Ra expects the losses to continue
over FY24-FY25 and ELHPL to turn profitable only post FY26. The
company started operations in FY23 with a capacity of 100 beds.
FY23 financials are provisional in nature.
The ratings also factor in ELHPL's small scale of operations with a
revenue of INR73.38 million. The company saw 30% occupancy level
in 1QFY24 and the revenue booked till 4MFY24 was INR40 million.
Ind-Ra expects the scale of operations to remain small over the
medium term, as the company started operations only in April 2023
and the occupancy rate would be low in the initial years. The
projects entail a total investment of INR475.75 million. The total
cost to setup the hospital incurred till March 2023 was INR441.17
million, of which INR350.78 million was funded through bank debt
and the remaining through promoters' contribution in form of equity
infusion of INR23.65 million and unsecured loans of INR66.74
million.
The ratings further reflect ELHPL's modest the credit metrics as
the company incurred EBITDA losses in FY23. Ind-Ra expects the
credit metrics to remain modest in FY24 and FY25.
Liquidity Indicator - Poor: ELHPL does not have any capital market
exposure and relies on banks and financial institutions to meet its
funding requirements. ELHPL's average maximum utilization of its
fund-based working capital limits was 76.99% for the 12 months
ended August 2023. In FY23, the net working capital cycle stood at
negative 64 days. ELHPL's cash flow from operations stood at
negative INR86.05 million in FY23. ELHPL has debt repayment
obligations of INR27.5 million and INR32.36 million during FY24 and
FY25, respectively.
The ratings are, however, supported by ELHPL's various designated
doctors who have an overall experience of over a decade in the
healthcare industry.
Rating Sensitivities
Positive: A significant increase in the scale of operations, along
with an improvement in the overall credit metrics and liquidity
profile, all on a sustained basis, could lead to a positive rating
action.
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit metrics and further pressure on
the liquidity position, could lead to negative rating action.
Company Profile
ELHPL was incorporated in 2016 and is engaged in the business of
healthcare services in Varanasi, Uttar Pradesh. ELHPL operates a
100-bed multi-specialty hospital since April 2022. There are eight
directors who are the promoters of the company - Dr. S. P. Gupta,
Dr. Pramendra Singh, Dr. Amita Srivastava, Dr. S. Kumar, Dr. Sunil
Singh, Dr. Sunil Dubey, Dr. Vivek Vij and Dr. Seema Rai.
MAHALASA EXPORTS: Ind-Ra Assigns BB+ Loan Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Mahalasa Exports'
(ME) bank facilities as follows:
-- INR400 mil. Fund-based limits assigned with IND BB+/Stable/IND
A4+ rating; and
-- INR6 mil. Derivative limits assigned with IND A4+ rating.
Key Rating Drivers
The ratings reflect ME's small scale of operation as indicated by
revenue of INR3,599.85 million in FY23 (FY22: INR3,181.27 million).
The growth in revenue was led by an increase in price of cashew due
to the reopening of hotels and restaurants post the COVID-19
pandemic. This was despite a 7.4% yoy decline in sales volume to
4.276 million kilogram due to weaker export demand led by a global
slump, along with a reduction in the export incentive to 3% from
5%, resulting in a 21% yoy decline in overall cashew kernel exports
in FY23. Ind-Ra expects the revenue growth to remain muted in FY24
owing to the continued sluggishness in the exports market, intense
competition from Vietnam and Africa, and declining cashew prices
due to record imports of kernels in FY23 and 1HFY24.
Liquidity Indicator - Stretched: The cash flow from operations
turned negative to INR65.18 million in FY23 (FY22: INR43.28
million) due to unfavorable changes in working capital. The net
working capital cycle remained almost stable at 51 days in FY23
(FY22: 50 days). ME's average utilization of the fund-based limits
was 78.07% during the 12 months ended August 2023. The cash and
cash equivalents stood at INR195.88 million at FYE23 (FYE22:
INR181.45 million). ME does not have any capital market exposure
and relies on banks and financial institutions to meet its funding
requirements. It has scheduled repayments of INR33.7 million and
INR31 million in FY24 and FY25, respectively.
The ratings also factor in ME's modest credit metrics. The gross
interest coverage (operating EBITDA/gross interest expenses)
improved to 2.1x in FY23 (FY22: 1.79x) due to an increase in the
EBITDA to INR68.14 million (INR54.5 million). However, the net
leverage (total adjusted net debt/operating EBITDAR) deteriorated
to 5.2x in FY23 (FY22: 4.97x), due to an increase in debt raised at
the end of the year to INR550 million (INR452 million). Ind-Ra
expects the credit metrics to deteriorate marginally in FY24 due to
declining cashew prices, impacting profitability in FY24.
The ratings also reflect ME's modest EBITDA margins of 1.89% in
FY23 (FY22: 1.71%) with a return on capital employed of 6.9%
(5.7%). The increase in margins was due to an increase in the
proportion of raw kernel sales (FY23: 30% of revenue; FY22: 17%) as
opposed to processed kernels, leading to a reduction in processing
costs. The EBITDA margins remained at 1%-2% over FY21-FY23 due to
the low value add associated with the cashew processing business.
In FY24, Ind-Ra expects the EBITDA margins to remain under pressure
due to reduced export incentives and increasing competition from
Vietnam, which benefits from higher level of automation.
The ratings, however, are supported by the promoters' three decades
of experience in the cashew industry, leading to established
relationships with customers and suppliers.
Rating Sensitivities
Positive: An increase in the scale of operations, along with an
improvement in the liquidity and credit metrics with the interest
coverage increasing above 2.5x, on a sustained basis, will be
positive for the ratings.
Negative: A decline in the scale of operations, leading to
deterioration in credit metrics with the interest coverage reducing
below 2.0x and/or deterioration in the liquidity position, on a
sustained basis, will be negative for the ratings.
Company Profile
Established in 1993 as a partnership firm, Karnataka-based ME is
involved in the processing and packaging of cashew kernels for the
domestic and export markets. The company exports primarily to the
Middle East, the UK and the US.
NARAYANI RESOURCES: Ind-Ra Affirms & Withdraws BB+ Loan Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Narayani Resources Private Limited's (NRPL) debt
instruments:
-- INR250 mil. Fund-based working capital limit* affirmed and
withdrawn; and
-- INR470 mil. Non-fund-based working capital limit** affirmed
and withdrawn.
*Affirmed at 'IND BB+'/Stable/'IND A4+' before being withdrawn
**Affirmed at 'IND A4+' before being withdrawn
Ind-Ra is no longer required to maintain the rating, as the agency
has received withdrawal request from the issuer and the no
objection certificate from the lenders. This is consistent with
Ind-Ra's Policy on Withdrawal of Ratings. Ind-Ra will no longer
provide analytical and rating coverage for NRPL.
Key Rating Drivers
Declining Profitability Margin; likely to Improve: NRPL's operating
profitability margin declined and remained moderate at 1.93% in
FY23 (FY22: 4.26%; FY21: 3.53%) due to a significant increase in
its traded goods (coal) globally. Moreover, the company is unable
to pass on the incremental cost to its customer, due to intense
competition in the market, leading to lower profitability margin.
Furthermore, a substantial increase in freight and cargo handling
costs during FY23 affected the company's margins. However, its
return of capital employed (EBIT/capital employed (total debt plus
share capital plus reserves and surplus)) reduced to 23.0% in FY23
(FY22: 65.6%; FY21: 53.9%), which was still healthy due to the
asset light nature of the business. Ind-Ra expects NRPL's operating
profitability to improve in the next two-to-three years on account
of a price correction, increasing domestic coal demand mainly from
the power sector, and the sustenance of the coal trading volumes.
Liquidity Indicator - Stretched: NRPL's cash conversion cycle
reduced to four days in FY23 (FY22: 21) on account of an increase
in the payables to 70 days (42), due to a delay in payment to its
suppliers. Ind-Ra expects the cash conversion cycle to increase in
FY24-FY25, considering the nature of the business. The cash flow
from operations remained at negative INR99.32 million in FY23
(FY22: negative INR537.57 million) on account of a significant
increase in advances to suppliers and security deposits kept with
the suppliers to support the increase in inventory level, which in
turn stretched the fund-based utilization. The average maximum
monthly utilization of the fund-based limits was 92% during the 12
months ended July 2023. The company had net cash accruals of
INR130.8 million at FYE23 (FYE22: INR227.0 million), against the
scheduled debt repayment obligations of INR4.2 million in FY24 and
INR4.0 million in FY25. The unencumbered cash balance stood at
INR1.25 million at FYE23 (FYE23: INR2.26 million). It also had a
fixed deposit of INR292.91 million at FYE23 (FYE22: INR231.03
million), which was secured as collateral and the lien-marked
against the non-fund-based limits with its lenders. Ind-Ra expects
the net working capital cycle to remain in line with FY23 level in
FY24-FY25, due to the regularity in its payment collection, short
inventory holding period, and a comfortable credit payment period.
Improvement in Revenue and Sales Volume: NRPL's revenue improved
to INR10,486.4 million in FY23 (FY22: INR8,108.7 million; FY21:
2,639.8 million), driven by an improvement in sales volume and
increased demand from end-user industries such as steel, cement,
power among others. Moreover, coal prices significantly increased
in FY23, largely due to greater fuel and electricity demand amid
the Russia-Ukraine war as many European countries restricted gas
imports from Russia, leading to coal becoming the alternative
choice to fulfil the power supply gap. The company booked revenue
of INR3,289.1 million during 1QFY24. Although Ind-Ra expects some
moderation in coal prices over the near- to medium-term, increasing
demand for coal in the domestic market would help the company
sustain its performance.
Comfortable Credit Metrics: NRPL's gross interest coverage
(operating EBITDA/gross interest expense) declined but remained
comfortable at 3.37x in FY23 (FY22: 7.74x) on account of an
increase in its interest expense, resulting from an increase in
short-term debt and a decline in its EBIDTA to INR201.9 million in
FY23 (FY22: INR345.3 million). The net leverage (total adjusted net
debt/operating EBITDAR) increased to 2.75x in FY23 (FY22: 1.24x).
The total debt increased to INR554.35 million at FYE23 (FYE22:
INR429.94 million; FYE21: INR269.13 million), comprising a
short-term debt of INR220.37 million, a term loan of INR72.51
million and other debt of INR261.47 million. The company had
unsecured loans of INR259.0 million at FYE23, which was
subordinated to bank debt. The total outside liabilities/tangible
net worth increased to 7.24x at FYE23 (FYE22: 6.73x) due to an
increase in the trade payables. Ind-Ra expects the credit metrics
to remain stable in the near-to medium-term, subject to the
sustainability of revenue and EBITDA margins and the absence of any
debt-funded capex plan over the medium term.
Experienced Management in Coal Trading Business: NRPL is into
trading of coal and iron ore since 2011. Its promoter, Ankur
Agarwal, has more than a decade of experience in the coal trading
business, leading to the company having established relationship
with its customers across the country. Furthermore, it has helped
the company gain strength to expand its coal trading business.
Company Profile
Kolkata-based NRPL was incorporated in 2011. The company is engaged
in trading of coal and iron ore fines. NRPL serves to end users
mainly in power, steel and other sectors.
PNB REALTY: ICRA Keeps D Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
ICRA has kept the Long-term ratings of PnB Realty Ltd in the
'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 5.97 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term– 0.35 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long Term- 2.18 [ICRA]D; ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
PnB Realty Ltd. (PnB), a part of the PnB Group of Companies, was
incorporated in March 2008 as a public limited company. The group
is promoted by Mr. VGP Babudas, a second-generation entrepreneur,
with a track record of more than 20 years in real estate and
hospitality sectors. The company operates a hotel named Aurick
Hotel and is also involved in real-estate projects.
PRABHA ENGINEERS: ICRA Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has kept the Long-Term rating of Prabha Engineers in the
'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 2.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Long Term- 2.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite multiple requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite information
and in line with the aforesaid policy of ICRA, the rating has been
continued to the "Issuer Not Cooperating" category. The rating is
based on the best available information.
Prabha Engineers is a proprietorship concern established in 1992 as
a partnership firm by Mr. Prabhakar Janwadkar in Kolhapur with his
father. Firm was reconstructed as proprietorship in 1999 in the
name of his wife (Mrs. Beena Janwadkar). However, business is
maintained by himself and his son Mr. Yateen Janwadkar. The firm
basically provides machining services to Yash Metallics Private
Limited along with OEMs like TAFE motors and M&M.
PRAVEEN ELECTRICAL: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA has kept the Long-term and Short-term rating of Praveen
Electrical Works in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 5.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term 9.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
Long-term/ 6.00 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Unallocated remain under 'Issuer Not
Cooperating' Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Praveen Electrical Works (PEW) was established as a proprietorship
firm in the year 1994 by Mr.Prakash. C. Angadi. The firm is an
electrical contractor and is a registered Class I contractor with
Government of Karnataka. The firm undertakes internal and external
electrification works and caters to various Government departments
in Karnataka such as Hubli Electricity Supply Company Limited,
Karnataka Slum Development Board, Public Works Department and The
Karnataka Power Transmission Corporation Limited among others.
PTG TECHNOPAK: ICRA Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Ptg
Technopak Private Limited (PTG) in the issuer not-cooperating
category. The rating is denoted as [ICRA]B+(Stable)/[ICRA]A4 ISSUER
NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 7.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 1.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Short Term (6.00) [ICRA]A4; ISSUER NOT
Interchangeable COOPERATING; Rating Continues
to remain under issuer not
cooperating category
Unallocated 2.85 [ICRA]B+ (Stable) ISSUER NOT
Limits COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
The ratings are based on the limited cooperation from the entity
since the time it was rated in July 2022. ICRA has been
consistently following up with Ptg Technopack Private Limited for
obtaining the monthly no-default statement. However, the entity's
management has remained non-cooperative and ICRA has not received
the NDS for three consecutive months in July 2023, August 2023 and
September 2023.
ICRA is unable to validate whether Ptg Technopak Private Limited
has been able to meet its debt servicing obligations in a timely
manner. Accordingly, the lenders, investors and other market
participants are advised to exercise appropriate caution while
using the ratings.
Further, as part of its process and in accordance with its rating
agreement with Ptg Technopak Private Limited, ICRA has been sending
repeated reminders to the entity for the payment of surveillance
fee that has become due. Despite multiple requests by ICRA, the
entity's management has remained non-cooperative. The current
rating action has been taken by ICRA based on the best available
information on the issuer's performance. In the absence of
requisite cooperation and in line with SEBI's circular
No.SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the
company's ratings remain under the issuer notcooperating category.
The rating action has been taken in accordance with ICRA's policy
on non-cooperation by a rated entity available at www.icra.in.
PTG Technopak Private Limited (PTG), incorporated in 2016, is
wholly owned by the promoter group company of the Padia Group. The
company commenced commercial operations in February 2017 and
manufactures high-density polyethylene (HDPE) drums/barrels and
containers. PTG's manufacturing facility is in Ambala, Haryana. The
key managing promoter of PTPL, Mr. Amit Padia, has ~15 years of
experience in manufacturing plastic-moulded products and direct
marketing of products for industrial packaging.
RADHAGOBINDA RICE: ICRA Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has kept the Long-Term rating of Radhagobinda Rice Mills
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 2.20 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 5.40 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in 2009, RRMPL is currently engaged in the milling of
non-basmati rice. The manufacturing facility of the company is
located at Jaunlia, in the district of Murshidabad, West Bengal.
The company started its production in July 2012.
RAJ MAHAL: ICRA Keeps D Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
ICRA has kept the Long-Term and Short-Term ratings of Shree Raj
Mahal Diamonds Pvt. Ltd in the 'Issuer Not Cooperating' category.
The ratings are denoted as "[ICRA]D/[ICRA]D; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 30.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Short Term- (20.00) [ICRA]D; ISSUER NOT COOPERATING;
Interchangeable Rating Continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
SRMD was incorporated in 2010 and is a part of the Delhi based
Shree Raj Mahal Group, which is engaged in the manufacturing,
wholesale and retail sales of gold and diamond. SRMDPL is a closely
held company promoted by Mr. Pradeep Kumar Goel and Mr. Ashok Kumar
Goel. The group has presence largely in gold jewellery and its
customers are primarily wholesalers and retailers based in New
Delhi.
RAMALINGA MILLS: ICRA Reaffirms D Rating on INR85cr LT Loan
-----------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Shri
Ramalinga Mills Private Limited (SRML), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term 26.37 [ICRA]D; reaffirmed and removed
Fund-based- from 'Issuer Not Cooperating'
Term Loans Category
Long Term- 85.00 [ICRA]D; reaffirmed and removed
Fund-based- from 'Issuer Not Cooperating'
Working Capital Category
Facilities
Long Term- 66.67 [ICRA]D; reaffirmed and removed
Unallocated from 'Issuer Not Cooperating'
Limits Category
Short Term- 2.50 [ICRA]D; reaffirmed and removed
Non-fund Based from 'Issuer Not Cooperating'
Working Capital Category
Facilities
Rationale
The ratings reaffirmation of SRML factors in non-payment of dues
post invocation of corporate guarantee provided by SRML to its
subsidiary company 'Tamilnadu Jai Bharath Mills Limited'. The
ratings also consider disqualification of directors under the NCLT
order issued in June 2022 and concerns pertaining to succession
planning within the promoter's family. SRML's performance witnessed
moderations in FY2023 on the back of adverse demand conditions in
textile industry. Further, the operating margins witnessed sharp
moderations during FY2023 turning negative due to volatility in
cotton prices witnessed. The liquidity profile of the entity is
constrained due to unsecured loans being withdrawn by directors
over the last two fiscals which has adversely impacted its
financial flexibility. With revenues and operating profits
witnessing moderations in FY2023, SRML's coverage metrics and
liquidity position has also been deteriorated.
The ratings also consider the established presence of SRML in the
cotton spinning industry. However, it is constrained by its weak
financial profile, given the high working capital requirements and
losses incurred resulting in weak leverage indicators.
Also, intense competition limits pricing flexibility and exposes
its earnings to fluctuations in raw material prices.
Key rating drivers and their description
Credit strengths
* Established track record and diversified product mix: SRML has a
long operational track record of over three decades in the spinning
industry, resulting in established relationship with customers,
which lends stability to volumes as witnessed over the years. The
company enjoys a diversified revenue base across domestic and
export markets and across a wide range catering to both apparel and
home textile markets, lending some stability to performance.
Credit challenges
* Non-payment on invocation of Corporate Guarantee: SRML had
provided corporate guarantee to its subsidiary company 'Tamilnadu
Jai Bharath Mills Limited'. Subsequently in FY2023, the lender
declared the account of subsidiary company as NPA in December 2022
and invoked the corporate guarantee in March 2023. However, SRML
has been unable to service the dues of its subsidiary company. The
dues remain unpaid as on date.
* Weak financial profile: SRML's financial profile remains weak
constrained by weak earnings in FY2023, withdrawal of funds from
the company by its promoters through repayment of unsecured loans
and concerns on succession planning with NCLT order passed in June
2022 disqualifying directors of the company, which is likely to
adversely impact SRML's financial flexibility.
* Intense competition limits pricing power: SRML operates in an
intensely competitive and commoditised yarn industry, characterised
by low product differentiation and fragmented industry structure,
which restricts pricing flexibility. Thus, the earnings of market
players remain exposed to the volatility in prices, which has
constrained contribution levels witnessed during FY2023.
Liquidity position: Poor
SRML's liquidity position is poor due to non-payment of dues of its
subsidiary company, post invocation of the corporate guarantee by
the bank. Further, its liquidity is also expected to remain poor
due to losses incurred in FY2023. Further, the directors have
withdrawn unsecured loans to an extent of INR 50 crore and INR9
crore, respectively in FY2022 and 9MFY2023 which has constrained
its liquidity as well. Average working capital utilisation (as a
percentage of its limits) in the past 12 months ending in March
2023 remains fully utilised as against its drawing power. SRML has
no major capital expenditure plans, with annual repayment
obligation of INR4.5- 7.0 crore between FY2024-FY2026 against
estimated minimal cash accruals, its liquidity is expected to
remain strained.
Rating sensitivities
Positive factors – The ratings could be upgraded if the debt
servicing of the guaranteed company is regularised, for a sustained
period, as per ICRA's policy.
Shri Ramalinga Mills Private Limited (SRML) is a part of the Sri
Jayavilas Group (founded by Late Sathu T. Ramasamy Naicker), based
in Aruppukottai, Tamil Nadu. Incorporated in 1951, SRML is a
closely held and deemed public limited company. It has an installed
capacity of 1,45,968 spindles and 3,312 rotors. SRML also has 15
windmills with a total power generation capacity of 15 MW. Its
subsidiary, Tamil Nadu Jai Bharath Mills Limited, has no operations
under it and is in the process of liquidating its fixed assets.
Further, it has also been classified as NPA as of December 2022.
RANI MOTORS: Ind-Ra Affirms BB+ Bank Loan Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Rani Motors' (RM)
bank facility as follows:
-- INR345 mil. Fund-based limit affirmed with IND BB+/Stable/IND
A4+ rating.
Key Rating Drivers
The affirmation reflects RM's continued medium scale of operations
as indicated by revenue of INR1,899 million in FY23 (FY22: INR1,718
million). The revenue increased in FY23 because of a high demand of
passenger vehicles post the COVID-19 pandemic. Ind-Ra expects the
revenue to improve further in FY24 due to the launch of new car
models by Maruti Suzuki India Limited, for which RM is a dealer.
FY23 numbers are provisional.
The ratings also continue to factor in the firm's modest EBITDA
margin of 5.49% in FY23 (FY22: 5.73%, FY21: 5.47%) with a return on
capital employed of 11% (12.4%). In FY24, Ind-Ra expects the EBITDA
margin to remain at similar levels due to the dealership nature of
the business.
The ratings also reflect RM's continued modest credit metrics with
interest coverage (operating EBITDA/gross interest expenses) of
3.08x in FY23 (FY22: 2.98x) and net leverage (adjusted net
debt/operating EBITDAR) of 3.96x (3.31x). In FY23, the interest
coverage improved due to an increase in the operating EBITDA to
INR104.30 million (INR98.57 million); however, the net leverage
deteriorated due to an increase in the total debt to INR468.70
million (INR371.04 million). The agency expects the credit metrics
to remain at similar levels in FY24 in the absence of any
debt-funded capex plans.
Liquidity Indicator - Stretched: The firm's average maximum
utilization of the fund-based limits was 90.07% during the 12
months ended September 2023. RM does not have any capital market
exposure. The net working capital cycle elongated to 101 days in
FY23 (FY22: 64 days), due to an increase in the inventory holding
period 56 days (36 days). In FY23, the cash flow from operations
turned negative to INR86.57 million (FY22: INR52.85 million) on
the back of unfavorable changes in working capital. Consequently,
the free cash flow turned negative to INR92.87 million in FY23
(FY22: INR46.55 million). The cash and cash equivalents stood at
INR55.42 million at FYE23 (FYE22: INR44.49 million). The company
has scheduled debt repayment of INR50.4 million and INR94 million
in FY24 and FY25, respectively.
However, the ratings remain supported by RM's promoter's experience
of nearly 25 years in the automobile industry. This has facilitated
the company to establish strong relationships with customers as
well as suppliers.
Rating Sensitivities
Positive: A significant increase in the scale of operations, while
maintaining the overall credit metrics with the net leverage
reducing below 3.5x and an improvement in the liquidity position,
all on a sustained basis, could lead to a positive rating action.
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit metrics and the liquidity
profile, could lead to a negative rating action.
Company Profile
RM was established in 1995 and is located at Shillong, Meghalaya.
It is an authorized dealer of Maruti Suzuki India's passenger
vehicles.
RATHNAVEL SUBRAMANIAM: ICRA Keeps D Rating in Not Cooperating
-------------------------------------------------------------
ICRA has kept the Long-term ratings of Rathnavel Subramaniam
Educational Trust in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 84.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due 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.
RVS was established in 1983 as a non-profit, charitable trust under
the Indian Trusts Act 1882. Its educational institutes are centered
in Sulur & Kannamapalaym in Coimbatore and in Dindigul. With an
established track record of over 30 years in the education sector
and its experienced trustees, RVS Educational Trust operates a
range of educational institutions starting from schools to higher
educational institutions. The trust's diversified income streams
are agricultural, women hostel and interest. It currently has two
trustees, with Dr. Kuppusamy as its current chairman.
RKS STEEL: Ind-Ra Assigns B+ Bank Loan Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned RKS Steel
Industries Private Limited's bank loans 'IND B+'. The Outlook is
Stable.
The detailed rating actions are:
-- INR200 mil. Fund-based working capital limit assigned with IND
B+/Stable/IND A4 rating; and
-- INR180.2 mil. Term loan due on March 31, 2027 assigned with
IND B+/Stable rating.
Key Rating Drivers
Liquidity Poor - Poor: RKSSIPL's average maximum utilization of the
fund-based limits was around 96% during the 12 months ended August
2023. The net working capital cycle remained elongated despite
improving to 170 days in FY23 (FY22: 232 days), due to a long
inventory holding period of 115 days (162 days). The cash flow from
operations turned positive to INR59.38 million in FY23 (FY22:
negative INR123.27 million) due to favorable changes in the working
capital. Consequently, the free cash flow turned positive at
INR57.79 million (FY22: negative INR126.94 million). The cash and
cash equivalents stood at INR0.13 million at FYE23 (FYE22: INR0.10
million). The debt repayment obligations for FY24 and FY25 amount
to INR56.81 million and INR48.91 million, respectively. RKSSIPL
does not have any capital market exposure and relies on banks and
financial institutions to meet its funding requirements.
The ratings are constrained by RKSSIPL's weak credit metrics as
reflected in the net leverage (adjusted net debt/operating EBITDAR)
of 16.96x (10.78x) and interest coverage (operating EBITDA/gross
interest expenses) of 1.16x in FY23 (FY22: 2.19x). In FY23, the
credit metrics deteriorated due to a decline in the EBITDA to
INR40.79 million (FY22: INR73.08 million). In FY24, Ind-Ra expects
the credit metrics to remain stable, as company does not have any
plans to increase its overall debt.
The ratings also reflect RKSSIPL's modest EBITDA margin of 4.83% in
FY23 (FY22: 9.29%) with a return on capital employed of 3.1%
(8.4%). The EBITDA margins have been volatile since FY20, and
reduced yoy in FY23 on account of the fluctuations in the steel
prices, leading to higher costs. Ind-Ra expects the margins to
remain volatile over the near-to-medium term on account of the
continued volatile steel prices.
The ratings also factor in the RKSSIPL's small scale of operations
even as its revenue improved to INR844.96 million in FY23 (FY22:
INR787 million), supported by the increasing demand for steel
wires. During 1QFY24, the company earned a revenue of INR207
million. Furthermore, Ind-Ra expects the revenue to grow steadily
over the medium term on account of the increasing overall domestic
demand.
The ratings, however, are supported by the promoter's over three
decades of experience in the manufacturing business. This has
facilitated the company to establish strong relationships with
customers as well as suppliers.
Rating Sensitivities
Positive: An increase in the scale of operations, along with an
improvement in the overall credit metrics with the net leverage
improving below 6x, and an improvement in the liquidity profile,
all on a sustained basis, could lead to a positive rating action.
Negative: Any decline in the scale of operations leading to
deterioration in the credit metrics and/or pressure on the
liquidity profile, will be negative for the ratings.
Company Profile
Incorporated in 2017, RKSSIPL manufactures steel wires for
industrial use, at its facility in Bhiwadi, Rajasthan. The company
has an installed capacity of 24,000MT of wire per annum.
SAI GLOBAL: ICRA Keeps B Debt Ratings in Not Cooperating Category
-----------------------------------------------------------------
ICRA has retained the ratings for the bank facilities of Sai Global
Yarntex (India) Private Limited (SGYIPL) in the 'Issuer Not
Cooperating' category. The rating is denoted as
"[ICRA]B(Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 24.80 [ICRA]B (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 6.29 [ICRA]B (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Long Term/ 8.64 [ICRA]B (Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain
under issuer not cooperating
category
As part of its process and in accordance with its rating agreement
with SGYIPL, ICRA has been trying to seek information from the
entity so as to monitor its performance, but despite repeated
requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with the aforesaid policy of ICRA, a rating view has been
taken on the entity based on the best available information.
Incorporated in December 2005, SGYIPL is involved in cotton
spinning at its unit at Ongole, Prakasam district, Andhra Pradesh.
The installed capacity of the unit is 26,000 spindles. The company
is promoted by Mr. Koti Reddy, Mr. Veeraprakasa Rao, Mr. G. B.
Narayana, Mr. Srinivasa Rao, Mr. Gopala Reddy and Mr. Desu
Subrahmanyam. SGYIPL primarily produces cotton yarn of medium
counts, ranging from 26's to 40's of carded and combed variety.
SAI METAL: ICRA Keeps D Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
ICRA has kept the Long-Term rating of Shiv Sai Metal Products
Private Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 8.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term 4.00 [ICRA]D; ISSUER NOT COOPERATING;
Non-fund based Rating continues to remain under
Others 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Shiv Sai Metal Products Private Limited, incorporated in the year
2012, commenced its aluminium conductor manufacturing facility in
December, 2013 in Patna, Bihar. The product portfolio of the
company primarily includes Aluminium Conductor Steel Reinforced
(ACSR) and Double Paper Covering (DPC) aluminium wire and strip.
Apart from manufacturing conductors, the members of Agarwal family
are involved in the jewellery manufacture and retail business in
Patna and Kolkata.
SAR SENAPATI FOODS: ICRA Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA has kept the long-Term and short-term ratings of Sar Senapati
Foods Ltd. in the 'Issuer Not Cooperating' category. The rating is
denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 8.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 15.81 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
Long-term/ 3.19 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term COOPERATING; Rating Continues to
Unallocated remain under 'Issuer Not
Cooperating' Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Western Hill Foods Ltd. was established in 2008 by Mr. Bhagwan
Bende along with Mr. Girishkumar Samdadia and Mr. Vivek Walsepatil.
The company's facility is located at Pune, Maharashtra. The closely
held company is engaged in processing and exporting of Individual
Quick Freezer (IQF) Frozen Fruits, Vegetables.
SAR SENAPATI: ICRA Keeps D Ratings in Not Cooperating Category
--------------------------------------------------------------
ICRA has kept the Long-Term rating of Sar Senapati Santaji Ghorpade
Sugar Factory Limited in the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 97.00 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Cash Credit 'Issuer Not Cooperating'
Category
Long-term– 127.02 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due 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.
SSFL, incorporated in the year 2011, is involved in the sugar
manufacturing with an installed sugar mill capacity of 4,800 tonnes
crush per day (TCD). The company is promoted by Mr. Hasanso Mushrif
who is a Member of Legislative Assembly (MLA) from Kagal
constituency (Kolhapur, Maharashtra) and an Ex-Labour Minister,
Government of Maharashtra. The company's operations are forward
integrated in the form of 30 KLPD distillery unit and 23 MW
cogeneration unit. The sugar plant is located in village Belewadi
Kalamma, Kagal in Kolhapur district of Maharashtra. The company
commenced its commercial operations in December 2014.
SHANTI EDUCATIONAL: ICRA Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------------
ICRA has kept the Long-term ratings of Shanti Educational Trust in
the 'Issuer Not Cooperating' category. The rating is denoted as
"[ICRA]D; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 7.10 [ICRA]D; ISSUER NOT COOPERATING;
Fund based Rating Continues to remain under
Term Loan 'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due 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.
Shanti Educational Trust (SET) was established in 2010 as a trust
in Patna, Bihar. The trust has started a school as a franchisee of
G. D. Goenka Public School and AY2013-14 was the first year of
operation for the school. Currently, the school conducts classes
from Nursery to standard IX.
SPICEJET LTD: Rakesh Gangwal Says No Plans to Invest in Carrier
---------------------------------------------------------------
The Economic Times reports that IndiGo co-founder Rakesh Gangwal
has no intention of investing in SpiceJet, said a banker close to
him. Mr. Gangwal was responding to media reports that said he plans
to buy a stake in the low-fare carrier. "He still owns 25% in
IndiGo. It doesn't make the remotest sense for him to invest in
SpiceJet," said the banker.
Mr. Gangwal "is upset that retail investors are misguided thus, He
would like to appeal to the Sebi to investigate the root of such
baseless rumours," said the banker who didn't want to be named, ET
relays.
ET says Mr. Gangwal and his family owned close slightly over 37% of
IndiGo. He decided to part ways with the airline after a bitter
feud with co-founder Rahul Bhatia. Mr. Gangwal and his family have
been selling stake throughout the year and aims to exit the airline
in 3-4 years.
About Spicejet
SpiceJet Limited -- http://www.spicejet.com/-- is an India-based
low-budget air carrier. The Company operates daily flights between
major cities in India. The carrier is India's second-biggest budget
airline, after IndiGo.
As recently reported in the Troubled Company Reporter-Asia Pacific,
aircraft lessor Wilmington Trust SP Services (Dublin) Ltd has filed
a petition for initiating the corporate insolvency resolution
process against SpiceJet.
This is the third case filed against the airline, according to The
Economic Times. Two other cases under Section 9 of the Insolvency
and Bankruptcy Code, 2016, have been filed by aircraft lessor
Aircastle (Ireland) Ltd and engine lessor Willis Lease Finance
Corporation.
Aircastle (Ireland) filed a CIRP petition against Spicejet on April
28, 2023, while Willis Lease Finance Corporation filed its petition
on April 12, 2023.
In August 2023, aircraft lessor Celestial Aviation Services Ltd had
approached the tribunal to initiate insolvency proceedings against
the low-cost airline for a default of $29.9 million for nine
aircraft.
SPICEJET LTD: Reaches Deal with Engine Lease Finance Outside Court
------------------------------------------------------------------
BQ Prime reports that SpiceJet Ltd. and Engine Lease Finance
Corporation Aviation Services Ltd. have agreed to resolve their
disagreement without continuing proceedings before the Delhi High
Court. The lessor has said it would not continue its action to get
its one remaining aircraft engine back from the airline.
In the hearing on Oct. 16, both sides' lawyers told the Delhi High
Court that they had agreed on the terms of the settlement, BQ Prime
relates. After they asked for more time, the court agreed, setting
the next meeting for Feb. 8, 2024.
In the previous hearing, the court granted the budget airline time
until Oct. 16 to engage in discussions for a resolution with the
engine lessor, Engine Lease Finance BV. The court cautioned that if
the negotiations fail, it would have to issue an order to prohibit
the use of the leased engines, BQ Prime says.
In the matter at hand, Engine Lease Finance BV went to the Delhi
High Court in late September to ask SpiceJet Ltd. to stop using one
of its leased engines and give it back. They had leased nine
engines to the airline and want the last one back. Justice Sachin
Dutta heard the case and seemed likely to agree with the lessor but
let SpiceJet present its side.
Previously, even the National Company Law Tribunal disclosed that
SpiceJet faced five insolvency petitions, all filed by lessors
instead of financial institutions, BQ Prime reports. Consequently,
the court recommended that the airline explore the option of
settling with the lessors, a move deemed beneficial for SpiceJet.
About Spicejet
SpiceJet Limited -- http://www.spicejet.com/-- is an India-based
low-budget air carrier. The Company operates daily flights between
major cities in India. The carrier is India's second-biggest budget
airline, after IndiGo.
As recently reported in the Troubled Company Reporter-Asia Pacific,
aircraft lessor Wilmington Trust SP Services (Dublin) Ltd has filed
a petition for initiating the corporate insolvency resolution
process against SpiceJet.
This is the third case filed against the airline, according to The
Economic Times. Two other cases under Section 9 of the Insolvency
and Bankruptcy Code, 2016, have been filed by aircraft lessor
Aircastle (Ireland) Ltd and engine lessor Willis Lease Finance
Corporation.
Aircastle (Ireland) filed a CIRP petition against Spicejet on April
28, 2023, while Willis Lease Finance Corporation filed its petition
on April 12, 2023.n August 2023, aircraft lessor Celestial Aviation
Services Ltd had approached the tribunal to initiate insolvency
proceedings against the low-cost airline for a default of $29.9
million for nine aircraft.
SUN SHINE: ICRA Lowers Rating on INR10cr Term Loan to C+
--------------------------------------------------------
ICRA has downgraded the ratings on certain bank facilities of Sun
Shine Builders, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 10.00 [ICRA]C+ ISSUER NOT COOPERATING;
Fund-based- downgraded from [ICRA]B+ (Stable)
Term loan continues to remain under 'Issuer
Not Cooperating'
Rationale
The rating downgrade is because of lack of adequate information
regarding Sun Shine Builders performance and hence the uncertainty
around its credit risk. ICRA assesses whether the information
available about the entity is commensurate with its rating and
reviews the same as per its "Policy in respect of non-cooperation
by a rated entity" available at www.icra.in. The lenders, investors
and other market participants are thus advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity, despite
the downgrade.
As part of its process and in accordance with its rating agreement
with Sun Shine Builders, ICRA has been trying to seek information
from the entity so as to monitor its performance and 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. In the
absence of requisite information and in line with the aforesaid
policy of ICRA, a rating view has been taken on the entity based on
the best available information.
Sun Shine Builders is a partnership firm formed in 2012 with Mr. T.
Janardhan Rao and Mr. M Ramesh as the partners and was
reconstituted in September 2013 with Mr. M Satish as the third
partner. The firm is involved in real-estate development and has
completed two residential projects in Bangalore since its
inception. It is developing a residential apartment project called
'Silicon Pride' at Whitefield, Bangalore.
=========
J A P A N
=========
MITSUBISHI UFJ: Fitch Assigns BB+(EXP) Rating to AT1 Securities
---------------------------------------------------------------
Fitch Ratings has assigned an expected rating of 'BB+(EXP)' to
Mitsubishi UFJ Financial Group, Inc.'s (MUFG, A-/Stable) upcoming
issue of US dollar-denominated perpetual subordinated debt
securities, which are classified as Additional Tier 1 (AT1)
securities.
The final rating on the notes is subject to the receipt of final
documentation conforming to information already received.
KEY RATING DRIVERS
The AT1 securities are rated four notches below the MUFG's
Viability Rating (VR), the baseline anchor rating for such
instruments, comprising two notches for loss severity and two
notches for non-performance risk.
Non-performance risk arises from the optional interest payments
that MUFG may cancel, at its discretion, in part or in full on an
interest payment date.
Expected recoveries upon non-performance is assessed as poor in
light of the securities' deep subordination - they only rank ahead
of ordinary equity. In addition, the securities are subject to full
and irrevocable principal write-down at a point of non-viability to
be applied when the Japanese Prime Minister confirms that the
Specified Item 2 Measures pursuant to Article 126-2, Paragraph 1,
Item 2 of the Deposit Insurance Act have to be taken or when the
common equity Tier 1 ratio falls below 5.125%.
The rating reflects that there are no relevant additional features
that reduce or increase non-performance risk, such as a profit test
on interest payments, or the presence of unusually thin capital
buffers or distributable reserves.
See Fitch Affirms Ratings on Mitsubishi UFJ Financial Group and
Affiliates at 'A-'; Outlook Stable for commentary on MUFG's key
rating drivers and sensitivities.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The rating on the securities will be downgraded if MUFG's VR is
downgraded.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
The rating on the securities will be upgraded if MUFG's VR is
upgraded.
SUMMARY OF FINANCIAL ADJUSTMENTS
Total assets and total liabilities exclude acceptances and
guarantees from Japan's generally accepted accounting principles
balance sheet to be globally comparable.
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
----------- ------
Mitsubishi UFJ
Financial Group,
Inc.
Subordinated LT BB+(EXP) Expected Rating
RAKUTEN: Default Risk is Japan's Highest as Bond Deadlines Loom
---------------------------------------------------------------
Takahiko Hyuga at Bloomberg News reports that e-commerce
conglomerate Rakuten Group is extending a three-month rally in
credit markets as it unveils fundraising plans including listing a
unit.
But lingering questions whether it will be able to service looming
debt maturities are crimping that rebound and leaving it stuck as
Japan's riskiest major borrower, the report says.
According to Bloomberg, Euro and dollar bonds from the company - a
household name in Japan - have jumped from record lows of about 40%
to 60% of face value in July to 61% to 71%, after announcing a
planned listing of unit Rakuten Securities Holdings. Some of those
prices are still in distressed territory though on concern that its
unprofitable mobile business will pressure finances. Its
credit-default swaps, which insure against debt nonpayment, remain
the highest in Japan at 553 basis points, CMA data show.
Bloomberg relates that the most pressing task now for Rakuten,
founded in 1997 as an internet shopping mall by Harvard Business
School graduate Hiroshi Mikitani, is to raise funds for a wall of
more than US$5 billion (JPY748 billion) of bonds due in the next
two years. Like technology firms worldwide Rakuten and fellow
Japanese conglomerate SoftBank Group have suffered as higher
interest rates raise the cost to fund investments in a fast-moving
industry, the report notes.
While Rakuten's earnings are "on a recovery track, it has yet to
raise enough capital to meet its large bond maturities," said
Makiko Yoshimura, Tokyo-based lead corporate ratings analyst at S&P
Global Ratings.
It's crunch time for Mr. Mikitani, who built up Rakuten over two
and a half decades into a competitor of Amazon.com in the local
market, making him a billionaire along the way. His company needs
to gather enough funds to repay JPY415 billion ($2.8 billion) of
its bonds maturing next year, and JPY430 billion more is due in
2025, according to Bloomberg-compiled data.
Rakuten has been "actively meeting with credit and equity investors
since our public offering in May, and we are aware that there is a
high level of interest and concern regarding the redemption of
bonds in 2024 and 2025," the company said in reply to questions
from Bloomberg.
Bloomberg says Mr. Mikitani's company rose above SoftBank Group in
terms of debt risk late last year, surpassing for the first time
the tech firm run by Masayoshi Son, Japan's third-richest person.
Bloomberg relates that SoftBank, started in 1981 by University of
California, Berkeley alumnus Son as a computer software retailer,
has made its way through more numerous spikes in debt-risk measures
after it borrowed heavily to expand its operations. But the
company, which now runs a tech investment fund, saw its bond risk
fall in the run-up to its chip designer unit Arm Holdings raising
$4.87 billion in the biggest initial public offering so far this
year in the U.S. last month.
The Arm listing and significant improvements in its investment
portfolio may result in S&P upgrading its ratings in the next six
months to a year, said Yoshimura, Bloomberg relays. While both
companies have a BB score from the rating firm, two levels below
investment grade, SoftBank has a positive outlook and Rakuten has a
negative outlook from S&P.
To bolster its balance sheet, Rakuten may sell more assets, and
that could raise as much as JPY300 billion, said Bloomberg
Intelligence credit analyst Sharon Chen. A possible stake sale in
Rakuten Card, its most profitable fintech business, could raise the
most funds, she said.
Free operating cash flow at Rakuten's nonfinancial operations will
likely recover but remain in deficit in fiscal 2024, S&P said in a
report last month, so it expects the company to continue relying
heavily on asset sales and refinancing to redeem the bonds, adds
Bloomberg.
About Rakuten Group
Japan-based Rakuten Group provides e-commerce, fintech, digital
content, and communications products and services.
As reported in the Troubled Company Reporter-Asia Pacific in
mid-September 2023, S&P Global Ratings has affirmed its 'BB'
long-term issuer credit and senior unsecured debt ratings on
Rakuten Group Inc. S&P has also affirmed its 'B' issue rating on
its subordinated bonds. The outlook on the long-term issuer credit
rating remains negative.
S&P said, "We affirmed the ratings on the Japan-based internet
services company because we expect negative FOCF in its
nonfinancial unit to narrow in the next 12-18 months. We base this
view on gradual improvement in the mobile business' operating
performance and a decrease in the business' capital expenditures.
The affirmation also reflects some progress in nondebt financing
since early 2023."
===============
M O N G O L I A
===============
CAPITRON BANK: Moody's Affirms B3 Issuer Rating, Outlook Now Stable
-------------------------------------------------------------------
Moody's Investors Service has affirmed Capitron Bank Closed JSC's
B3 foreign currency and local-currency long-term issuer ratings and
bank deposit ratings, Not Prime foreign currency and local-currency
short-term issuer ratings and bank deposit ratings, b3 Baseline
Credit Assessment (BCA) and Adjusted BCA, B3 foreign currency
long-term Counterparty Risk Ratings (CRR), B2 local-currency
long-term CRR, Not Prime foreign currency and local-currency
short-term CRRs, and B2(cr)/Not Prime(cr) long-term/ short-term
Counterparty Risk (CR) Assessments.
At the same time, Moody's has changed the outlook on the ratings to
stable from negative, where applicable.
RATINGS RATIONALE
The affirmation of Capitron Bank's ratings, and the change in
outlook to stable from negative reflect Moody's expectation that
the bank's credit profile will remain resilient at the current
rating level over the next 12-18 months. This expectation is
supported by the bank's stronger capitalization and improved
internal capital generation, which will provide a sufficient
capital buffer against its loan growth over the next 12-18 months.
Capitron Bank's B3 ratings reflect the bank's moderate
capitalization and liquid balance sheet, which are counterbalanced
by its weak funding profile because of a small deposit franchise;
and its weak asset quality stemming from credit concentration in
cyclical industries.
Moody's expects Capitron Bank's asset quality to remain stable over
the next 12-18 months, given that an ongoing improvement in
Mongolia's mining sector will likely support the country's overall
economy.
Capitron Bank's return on assets will likely increase to 1.5%-2% in
2023-24 from 1.2% in 2022. The improvement will be driven by the
bank's wider net interest margin, which will peak in 2023 following
the Bank of Mongolia's policy rate hikes to 13% from 6% during
2022, and its lower credit costs given the bank's increased
loan-loss coverage and the likely steady asset quality.
The agency expects Capitron Bank to maintain its tangible common
equity (TCE)/risk-weighted assets (RWA) above 12% because the
improved internal capital generation will comfortably support the
bank's solid loan growth of above 20% per annum.
Capitron Bank's funding profile will remain weak in 2023-24 given
its high reliance on the top 20 depositors and related parties that
leave the bank's funding vulnerable to any credit event of major
depositors. Moody's expects Capitron Bank to maintain good
liquidity with its liquid banking assets to tangible banking assets
ratio above 35% over the next 12-18 months, given the bank's plan
to largely maintain its asset mix.
Moody's has not incorporated affiliate support for Capitron Bank,
and therefore, the bank's Adjusted BCA is in line with its BCA of
b3.
Moody's has not reflected any government support uplift in Capitron
Bank's long-term ratings because the agency assumes a low level of
government support for the bank, given the government's limited
capacity and the bank's small business in the country. The bank's
market share by total assets was around 4.3% as of the end of 2022.
Furthermore, the bank's Adjusted BCA is already at the same level
as the Mongolian government's issuer rating of B3.
Mongolia does not have an operational bank resolution regime.
Moody's therefore applies a basic Loss Given Failure (LGF) approach
in rating Mongolian banks. Capitron Bank's long-term CRR of B2/B3
and long-term CR Assessment of B2(cr) incorporate the bank's b3
Adjusted BCA and Moody's basic LGF analysis, which positions the
preliminary CRRs and CR Assessment one notch above the bank's
Adjusted BCA. Moody's then adds the same uplift of government
support as applied to the bank's long-term issuer rating, subject
to country ceiling by currency.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
FACTORS THAT COULD LEAD TO AN UPGRADE
Moody's could upgrade Capitron Bank's ratings if the sovereign
rating is upgraded and the bank's credit profile improves such that
its BCA is upgraded.
Capitron Bank's BCA could be upgraded if the bank lowers the
concentration in its loans and deposits to a level comparable to
that of its domestic peers on a sustained basis, while maintaining
its TCE/RWA and liquidity at current levels.
FACTORS THAT COULD LEAD TO A DOWNGRADE
Moody's could downgrade Capitron Bank's ratings if the sovereign
rating is downgraded or the bank's BCA is downgraded.
The bank's BCA could be downgraded if the bank's solvency weakens
meaningfully with asset quality deterioration, such that its gross
new nonperforming loans formation ratio rises above 5%, and its
TCE/RWA falls below 10%; or if its deposit concentration worsens. A
significant deterioration in the bank's liquidity could also result
in a downgrade of the bank's BCA.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Banks
Methodology published in July 2021.
Capitron Bank Closed JSC is headquartered in Ulaanbaatar, Mongolia.
The bank reported total assets of MNT1,971.0 billion (USD572.3
million) as of the end of 2022.
=====================
N E W Z E A L A N D
=====================
ENVY ENTERPRISES: Creditors' Proofs of Debt Due on Nov. 24
----------------------------------------------------------
Creditors of Envy Enterprises Limited (trading as Kess Hair &
Beauty Botany) are required to file their proofs of debt by Nov.
24, 2023, to be included in the company's dividend distribution.
The company commenced wind-up proceedings on Oct. 10, 2023.
The company's liquidator is:
Paul Vlasic
Rodgers Reidy (NZ) Limited
PO Box 45220
Te Atatu Peninsula
Auckland 0651
FORM FOUNDATIONS: Court to Hear Wind-Up Petition on Oct. 26
-----------------------------------------------------------
A petition to wind up the operations of Form Foundations (S.I)
Limited will be heard before the High Court at Christchurch on Oct.
26, 2023, at 10:00 a.m.
McVicar Building Supplies Limited filed the petition against the
company on Aug. 31, 2023.
The Petitioner's solicitor is:
Holly Maree Cassin
Cavell Leitch Limited
BNZ Centre, Level 3
111 Cashel Mall
Christchurch 8011
GILLARD HONEY: Creditors' Proofs of Debt Due on Nov. 13
-------------------------------------------------------
Creditors of Gillard Honey & Hives Limited are required to file
their proofs of debt by Nov. 13, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Oct. 11, 2023.
The company's liquidator is:
Brent Thomas Dickins
CS Insolvency
C/- Coombe Smith (PN) Limited
168 Broadway Avenue
PO Box 788
Palmerston
Email: brentdickins@coombesmith.co.nz
MARKETPLACE MEDIA: Court to Hear Wind-Up Petition on Oct. 26
------------------------------------------------------------
A petition to wind up the operations of Marketplace Media Limited
will be heard before the High Court at Auckland on Oct. 26, 2023,
at 10:00 a.m.
Great Eagle Hotels (Auckland) Limited filed the petition against
the company on Sept. 8, 2023.
The Petitioner's solicitor is:
Benoit Jacques Upton
Simpson Grierson, Solicitors
Level 27, 88 Shortland Street
Auckland
SEKILIFE LIMITED: Creditors' Proofs of Debt Due on Nov. 24
----------------------------------------------------------
Creditors of Sekilife Limited are required to file their proofs of
debt by Nov. 24, 2023, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Oct. 6, 2023.
The company's liquidator is:
Thomas Lee Rodewald
Rodewald Consulting Limited
Level 1, The Hub, 525 Cameron Road
PO Box 15543
Tauranga 3144
=================
S I N G A P O R E
=================
AAMTF II: Creditors' Proofs of Debt Due on Nov. 18
--------------------------------------------------
Creditors of AAMTF II (Ex-Korea) Private Limited are required to
file their proofs of debt by Nov. 18, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Oct. 6, 2023.
The company's liquidator is:
Mr. Liew Khee Soon
60 Paya Lebar Road
#04-51, Paya Lebar Square
Singapore 409051
ALPHA ASIA: Creditors' Proofs of Debt Due on Nov. 18
----------------------------------------------------
Creditors of Alpha Asia Macro Trends Fund II Private Limited are
required to file their proofs of debt by Nov. 18, 2023, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on Oct. 6, 2023.
The company's liquidator is:
Mr. Liew Khee Soon
60 Paya Lebar Road
#04-51, Paya Lebar Square
Singapore 409051
ALPHA OFFSHORE: Final General Meeting Set for Nov. 17
-----------------------------------------------------
Alpha Offshore Drilling (S) Pte. Ltd. will hold a final meeting on
Nov. 17, 2023, at 11:00 a.m., at 180 Cecil Street #12-01, in
Singapore.
Agenda of the meeting includes:
a. to consider the Liquidator's Statement of Accounts showing
how the winding up has been conducted and the property of
the Company has been disposed of and to receive any
explanation thereon; and
b. to resolve that pursuant to Section 195(2) of the
Insolvency, Restructuring and Dissolution Act 2018, the
books and papers of the Company and of the Liquidator be
destroyed 5 years after the dissolution of the Company.
The company's liquidator is:
Yiong Kok Kong
c/o Avic Dkky Pte Ltd
180 Cecil Street, #12-04
Singapore 069546
SCHMICK PTE: Court to Hear Wind-Up Petition on Oct. 27
------------------------------------------------------
A petition to wind up the operations of Schmick Pte Ltd will be
heard before the High Court of Singapore on Oct. 27, 2023, at 10:00
a.m.
Attika Interior + MEP Pte. Ltd. filed the petition against the
company on Oct. 5, 2023.
The Petitioner's solicitors are:
Dentons Rodyk & Davidson LLP
80 Raffles Place
#33-00 UOB Plaza 1
Singapore 048624
SEGAMAT PTE: Creditors' Proofs of Debt Due on Nov. 17
-----------------------------------------------------
Creditors of Segamat Pte. Ltd. are required to file their proofs of
debt by Nov. 17, 2023, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Oct. 9, 2023.
The company's liquidators are:
Lo Wei Min @Mrs Pearlyn Chong
Chan Tuck Chee
c/o Lo Hock Ling & Co.
101A Upper Cross Street
#11-22 People’s Park Centre
Singapore 058358
=================
S R I L A N K A
=================
CO-OPERATIVE INSURANCE: Fitch Affirms BB(lka) IFS Rating
--------------------------------------------------------
Fitch Ratings has affirmed the National Insurer Financial Strength
(IFS) Ratings of the following insurers and removed them from
Rating Watch Negative (RWN). The Outlook is Stable.
- Sri Lanka Insurance Corporation Limited (SLIC) at 'A(lka)'
- Continental Insurance Lanka Limited at 'A-(lka)'
- HNB Assurance PLC at 'A-(lka)'
- HNB General Insurance Limited at 'A-(lka)'
- People's Insurance PLC at 'A-(lka)'
- Co-operative Insurance Company PLC at 'BB(lka)'
- Construction Guarantee Fund at 'BB(lka)'
Fitch has also downgraded National Insurance Trust Fund Board's
(NITF) National IFS Rating to 'BBB(lka)' from 'BBB+(lka)' and
removed it from RWN. The Outlook is Stable.
SLIC's IFS Rating of 'CC' on RWN was not considered in this
review.
KEY RATING DRIVERS
Stable Outlook: The removal of the RWN on the insurers' national
ratings reflects its view that near-term investment and liquidity
risks have been reduced substantially, evident from the upgrade of
Sri Lanka's Long-Term Local-Currency Issuer Default Rating (IDR) to
'CCC-' from 'RD' and the subsequent removal of the RWN on
Fitch-rated banks. Please see Fitch Upgrades Sri Lanka's Long-Term
Local-Currency IDR to 'CCC-', published 28 September 2023, and
Fitch Affirms Ratings on 15 Sri Lankan Banks; Removes Watch
Negative; CBL on Negative Outlook, published 5 October 2023.
NITF Downgraded: The one-notch downgrade of NITF's rating reflects
the insurer's inability to renew its external reinsurance
arrangements, resulting in weaker risk-management practices. NITF
is the sole domestic reinsurer and receives 30% of reinsurance
cessations from all domestic non-life operators. It has faced
continued delays in renewing its reinsurance contracts and
currently does not have any retrocession cover for its inwards
reinsurance business. This, alongside continued capital weakness in
certain business lines, exposes NITF's capital and earnings to
greater volatility.
Easing Investment and Liquidity Risks: The government has
successfully restructured its local-currency sovereign debt while
the holdings of treasury securities of banks and insurers have been
excluded from the domestic debt optimisation programme. The
investment and liquidity risk profiles of Sri Lankan insurers are
closely linked with that of the sovereign and banks as their
investment portfolios are dominated by local-currency fixed-income
securities issued by the government, corporate debt and deposits
with financial institutions.
The restructuring of Sri Lanka's foreign-currency debt, including
defaulted sovereign bonds, has not been completed, but Fitch
believes that incremental risks to Fitch-rated insurers' capital
from the restructuring are likely to be manageable, given their
limited exposure to these bonds (0.5% of invested assets at
end-March 2023). The domestic banking system's foreign-currency
liquidity has improved from the crisis period and should support
insurers' foreign-currency obligations such as premium payments to
foreign reinsurers and claim obligations arising from
foreign-currency policies.
Better Operating Conditions: Fitch expects the pressure on
insurers' regulatory capital profiles to ease alongside the
alleviated investment and liquidity risks. Fitch-rated insurers'
regulatory capital ratios have been well above the regulatory
minimum of 120%. Insurers' recent underwriting profitability has
deteriorated due to higher claim costs and expenses but Fitch does
not expect a material worsening over the next 12-18 months as
inflationary pressures have started to ease. Insurers have focused
on growing non-motor business lines amid continued restrictions on
the import of motor vehicles.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
NITF
- rising investment and asset risks, including a downgrade of the
ratings of financial institutions or the sovereign;
- deterioration in the RBC ratio to below 250%, or continued
weakness in the capital positions of non-strike, riot, civil
commotion and terrorism lines, for a sustained period;
- deterioration in the combined ratio to above 103% for a sustained
period;
- significant weakening in NITF's company profile, such as a large
reduction in government-related business.
SLIC
- rising investment and asset risks, including a downgrade of the
ratings of financial institutions or the sovereign;
- sharp deterioration in the risk-based capital (RBC) ratios for
both life and non-life insurance for a sustained period;
- deterioration in financial performance, including the non-life
combined ratio staying above 103%, for a sustained period.
People's Insurance
- rising investment and asset risks, including a downgrade of the
ratings of financial institutions or the sovereign;
- deterioration in the regulatory RBC ratio to below 220% for a
sustained period;
- sustained deterioration in financial performance, or weaker risk
management practices.
HNB Assurance/HNB General Insurance
- rising investment and asset risks, including a downgrade of the
ratings of financial institutions or the sovereign;
- deterioration in the RBC ratio below 260% for life insurance and
220% for non-life insurance for a sustained period;
- deterioration in financial performance, or weaker risk management
practices.
Continental Insurance Lanka
- rising investment and asset risks, including a downgrade of the
ratings of financial institutions or the sovereign;
- deterioration in the RBC ratio to below 230% for a sustained
period;
- sustained deterioration in financial performance, or weaker risk
management practices.
Co-operative Insurance Company
- deterioration in company profile, including a weaker franchise
and competitive positioning, or Fitch's perception that the
insurer's corporate governance practices have deteriorated;
- rising investment and asset risks, including a downgrade of the
ratings of financial institutions or the sovereign;
- sustained deterioration in financial performance, or weaker
risk-management practices.
Construction Guarantee Fund
- rising investment and asset risks, including a downgrade of the
ratings of financial institutions or the sovereign;
- sustained weakness in financial performance or weaker risk
management practices;
- a deterioration in the insurer's company profile - for instance,
due to significant weakening in its association with the government
- or a deterioration in its business risk profile due to a decline
in the country's economic conditions that affects the domestic
construction sector.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
NITF
- improved company profile in terms of better business risk profile
and improved risk-management practices or broader diversification
into stable sources of underwriting profitability.
SLIC
- significant reduction in SLIC's investment and asset risks on a
sustained basis while maintaining its 'Favourable' business profile
and capitalisation at current levels.
People's Insurance
- maintaining the RBC ratio consistently above 260% and the
combined ratio below 98% on a sustained basis;
- improving the business profile in terms of broader
diversification of business lines.
HNB Assurance/HNB General Insurance
- an improvement in the RBC ratio of HNB Assurance and HNB General
Insurance to well above 350% and 250%, respectively, while
maintaining the combined ratio below 98% on a sustained basis;
- further improvement in the company profile, for instance,
supported by a stronger business franchise and operating scale.
Continental Insurance Lanka
- maintaining its combined ratio below 98% for a sustained period,
while its assessment of the insurer's capitalisation remains
unchanged;
- sustained improvement in the company profile, including a further
expansion in its operating scale and business franchise.
Co-operative Insurance Company
- Fitch's perception that there is a sustained improvement in the
insurer's corporate governance practices.
Construction Guarantee Fund
- sustained improvement in the company profile in terms of a larger
operating scale as well as successful diversification into
profitable and stable business lines.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Sri Lanka Insurance
Corporation Limited Natl LT IFS A(lka) Affirmed A(lka)
HNB Assurance PLC Natl LT IFS A-(lka) Affirmed A-(lka)
People's Insurance
PLC Natl LT IFS A-(lka) Affirmed A-(lka)
Continental
Insurance
Lanka Limited Natl LT IFS A-(lka) Affirmed A-(lka)
HNB General
Insurance Limited Natl LT IFS A-(lka) Affirmed A-(lka)
Construction
Guarantee Fund Natl LT IFS BB(lka) Affirmed BB(lka)
Co-operative
Insurance
Company PLC Natl LT IFS BB(lka) Affirmed BB(lka)
National Insurance
Trust Fund Board Natl LT IFS BBB(lka) Downgrade BBB+(lka)
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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