/raid1/www/Hosts/bankrupt/TCRAP_Public/231204.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
Monday, December 4, 2023, Vol. 26, No. 242
Headlines
A U S T R A L I A
CHANG JIANG: First Creditors' Meeting Set for Dec. 11
DAVID JONES: Could Falter as Stores Close, Retail Expert Warns
E K RECRUITMENT: First Creditors' Meeting Set for Dec. 7
FLEXICOMMERCIAL ABS 2: Moody's Assigns B2 Rating to Class D Notes
MYRIAD DEVELOPMENT: First Creditors' Meeting Set for Dec. 7
PSYCHOLOGICAL SOLUTIONS: First Creditors' Meeting Set for Dec. 5
SIMSAI CONSTRUCTION: Second Creditors' Meeting Set for Dec. 6
C H I N A
CHINA CITIC: Fined For Dozens of Banking Violations
CHINA EVERGRANDE: Creditors Seek Controlling Stakes in New Plan
GEMDALE CORP: Moody's Lowers CFR to 'Caa1', Outlook Negative
GEMDALE CORP: Steps up Asset Divestiture as Debt Woe Looms
ROAD KING: Moody's Cuts CFR to B3 & Senior Unsecured Notes to Caa1
YANLORD LAND: Moody's Lowers CFR to B1, Outlook Remains Negative
ZHONGZHI ENTERPRISE: Two Top Execs of Affiliated Cos. Go Missing
I N D I A
ABLE & WEAL: Ind-Ra Corrects September 16, 2022 Rating Release
AJAY FOOD: Ind-Ra Affirms BB+ Bank Loan Rating, Outlook Stable
APPROCOOL AIRCON: Ind-Ra Assigns BB+ Loan Rating, Outloook Stable
ARJUN TECHNOLOGIES: CRISIL Keeps D Ratings in Not Cooperating
CERAMIC FIBERS: CRISIL Keeps B+ Debt Ratings in Not Cooperating
CHINA EVERGRANDE: Creditor Group Supports Maintaining Operations
DUTTA AGRO: CRISIL Keeps B- Debt Ratings in Not Cooperating
EXCEL TECHNOVATION: Liquidation Resolution Process Case Summary
FAT SPARROW: Voluntary Liquidation Process Case Summary
GEETA COTTON: CRISIL Moves B Debt Rating to Not Cooperating
GO FIRST: Tells Delhi High Court It Has Exhausted CoC Funds
GULBERG COLD: CRISIL Lowers Rating on INR18.5cr Term Loan to D
INDICON CONSTRUCTION: CRISIL Withdraws D Rating on INR3.9cr Loan
IRODE MICROSYSTEMS: Voluntary Liquidation Process Case Summary
ITAAN PHARMA: Ind-Ra Affirms B Bank Loan Rating, Outlook Positive
JAYASHEEL N: Ind-Ra Downgrades Bank Loan Rating to BB
P.S. STEEL: Ind-Ra Affirms BB+ LongTerm Rating, Outlook Stable
PAYARE LAL: CRISIL Keeps D Debt Ratings in Not Cooperating
PRAKRUTI LIFE: CRISIL Keeps D Debt Ratings in Not Cooperating
PULIKKOTTIL LAZAR: CRISIL Keeps D Debt Ratings in Not Cooperating
RAJDHANI CRAFTS: Ind-Ra Assigns BB+ Loan Rating, Outlook Stable
RAM IMPEX: CRISIL Lowers Rating on INR5cr Cash Loan to C
RAM LAL KAMAL: Liquidation Resolution Process Case Summary
RAM MURTI: CRISIL Keeps B+ Debt Ratings in Not Cooperating
RAM SPINNING: CRISIL Reaffirms B+ Rating on INR15cr Cash Loan
RGS HEALTHCARE: Ind-Ra Cuts Loan Rating to BB, Outlook Negative
RS TRUST: Ind-Ra Hikes Loan Rating to BB+, Outlook Stable
RUDRA LAMKRAFT: Ind-Ra Assigns B+ Loan Rating, Outlook Stable
S. M. T. HI-TECK: CRISIL Keeps D Debt Rating in Not Cooperating
S. S. AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
S.S. OVERSEAS: CRISIL Keeps D Debt Rating in Not Cooperating
SACRED HEART: Ind-Ra Assigns BB+ Bank Loan Rating, Outlook Stable
SAFAL GLADONE: Ind-Ra Hikes Loan Rating to BB+, Outlook Stable
SANCHETI GEMS: CRISIL Keeps B+ Debt Rating in Not Cooperating
SATYANARAYANA RAW: CRISIL Keeps B Debt Rating in Not Cooperating
SCIENTIFICA TILES: CRISIL Keeps B Debt Rating in Not Cooperating
SCIKNOW TECHNO: CRISIL Keeps C Debt Rating in Not Cooperating
SHASHI CABLES: Ind-Ra Assigns BB+ Bank Loan Rating, Outlook Stable
SHEYN INTERNATIONAL: CRISIL Keeps D Rating in Not Cooperating
SINGHAL POWER: CRISIL Keeps B Debt Ratings in Not Cooperating
SOUNDHARYA SIZING: Ind-Ra Assigns BB Loan Rating, Outlook Stable
SOUTHERN PHARMA: CRISIL Keeps D Debt Ratings in Not Cooperating
SUSAAH LABORATORIES: CRISIL Keeps B+ Ratings in Not Cooperating
SWASTIK ENTERPRISE: CRISIL Keeps B Ratings in Not Cooperating
TIRUPATI AGENCIES: CRISIL Keeps D Debt Ratings in Not Cooperating
TRIBHUVAN ISPAT: CRISIL Keeps B+ Debt Ratings in Not Cooperating
TRUELIXIR LIFE: Ind-Ra Assigns B Bank Loan Rating, Outlook Stable
TULSI COTTON: CRISIL Keeps B+ Debt Rating in Not Cooperating
UMANG BOARDS: Ind-Ra Affirms & Withdraws BB+ Bank Loan Rating
UNITED COKE: Ind-Ra Affirms BB Bank Loan Rating, Outlook Stable
USHASRI COTTON: CRISIL Keeps B Debt Rating in Not Cooperating
VEL TRUST: Ind-Ra Hikes Loan Rating to BB+, Outlook Stable
VENKATA MANIKANTA: CRISIL Keeps D Debt Ratings in Not Cooperating
WAHID SANDHAR: CRISIL Keeps D Debt Ratings in Not Cooperating
YCD INDUSTRIES: Ind-Ra Moves BB+ Loan Rating in Non-Cooperating
I N D O N E S I A
VALE INDONESIA: S&P Affirms 'BB' ICR & Alters Outlook to Positive
J A P A N
ANA HOLDINGS: Egan-Jones Hikes Senior Unsecured Debt Ratings to B-
M O N G O L I A
MONGOLIAN NATIONAL: A.M. Best Assigns B(Fair) Fin. Strength Rating
N E W Z E A L A N D
3BROTHERS COFFEE: Creditors' Proofs of Debt Due on Jan. 19
AUCKLAND CITY TAXIS: Court to Hear Wind-Up Petition on Feb. 2
GREENWOOD TRADE: Court to Hear Wind-Up Petition on Dec. 7
GUMDROPS EARLY: Greg Sherriff Appointed as Receiver and Manager
MILESTONE TRUSTEE: Creditors' Proofs of Debt Due on Dec. 22
S I N G A P O R E
ECO CLOUD: Court to Hear Wind-Up Petition on Dec. 22
NEO TIEW: Commences Wind-Up Proceedings
PYFS MALL: Creditors' Meetings Set for Dec. 13
RAZE BUILDERS: Court to Hear Wind-Up Petition on Dec. 22
TAY PAPER: Court to Hear Judicial Management Order Bid on Dec. 27
WESTFORD SG: Commences Wind-Up Proceedings
S R I L A N K A
BANK OF CEYLON: Fitch Affirms 'CC' LongTerm Foreign Currency IDR
- - - - -
=================
A U S T R A L I A
=================
CHANG JIANG: First Creditors' Meeting Set for Dec. 11
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Chang Jiang
Financial Pty Ltd will be held on Dec. 11, 2023, at 11:00 a.m. via
teleconference only.
Stephen Dixon and Trent Hancock of Hamilton Murphy Advisory were
appointed as administrators of the company on Nov. 29, 2023.
DAVID JONES: Could Falter as Stores Close, Retail Expert Warns
--------------------------------------------------------------
News.com.au reports that a retail expert has warned that department
store giant David Jones could "finally falter" amid a perfect storm
of dire economic conditions and ongoing hardships being faced by
the iconic Aussie brand.
According to news.com.au, dozens of staff will be impacted after
the company announced one of its flagship stores at the Eastland
Shopping Centre in Ringwood, in Melbourne's east, would close from
January next year.
The move means only seven David Jones stores will be left standing
in the Victorian capital, the report says.
News.com.au says some have feared the latest move could sound the
death knell for large-scale Australian department stores across the
country amid a perfect storm of inflation, rising costs of living
and poor foot traffic putting pressure on sales.
But retail marketing expert Louise Grimmer said such conversations
were "cyclical" and department chains could "rise like a phoenix
from the ashes".
"This time around, though, the economic outlook is particularly
gloomy, with huge pressures on household budgets and discretionary
spend," news.com.au quotes Dr. Grimmer, a senior lecturer at the
University of Tasmania, as saying.
"In addition, wages have stagnated in this country for a number of
years . . . and at a really bad time with continuous rate rises in
the lead-up to Christmas.
"These factors are perhaps a perfect storm that could see David
Jones finally falter."
There are 42 David Jones stores located across Australia, employing
more than 7,500 people.
According to news.com.au, the announcement of Ringwood's closure is
the latest in a series of setbacks for the Australian-based chain.
In 2020, it closed its Fortitude Valley store in Brisbane after
just three years of trading.
The company's boutique Barangaroo store in Sydney was mothballed at
the height of the Covid-19 pandemic in 2020 after opening in 2016.
Last year, the only David Jones store in Wellington, New Zealand,
was closed.
News.com.au relates that Dr. Grimmer said a solution was for the
department chain to "get back to basics" – by improving service
and refocusing itself as a "luxury business" instead of being
"middle of the road".
She pointed to "woeful" service in the David Jones department
stores across the country and how it struggled to differentiate
from brands like Myer or even Kmart.
"Somewhere along the way, the brand has lost its meaning – it's
now trying to be all things to all people – offering top-end
products as well as those more affordable options," the report
quotes Dr. Grimmer as saying.
"(If) David Jones are going to continue to offer expensive,
high-end luxury products, they must have the store experience, the
online experience and the customer service to match.
"At present all these elements are out of kilter.
"Many of the competitors in the form of specialty stores are
winning the race – both in-store and online."
In a statement, a David Jones spokeswoman reiterated the company
"was focused on delivering world-class products and experiences …
both online and in-store as Australia's leading omnichannel
retailer".
"Key to delivering this experience is our ongoing program of retail
network optimisation, which includes refurbishing our stores,
right-sizing and, where necessary, consolidation of our footprint,"
the spokeswoman said.
The spokeswoman confirmed the Eastland store would be shut from
January, news.com.au relays.
"Our strategy was shared widely with our team members and customers
in January 2023, and we will continue to provide updates as we
evolve and grow our business," she said.
The spokeswoman did not answer questions regarding the number of
stores closed across Australia, the report notes.
She also did not state how many staff would be impacted by the
Eastland store closure but stated: "We are going through a
consultative process and 97 per cent of our team members have
redeployment opportunities.
"We look forward to welcoming our Eastland customers online and to
our other nearby store locations."
The 185-year-old Aussie department store brand was purchased for a
staggering $2.14 billion by South Africa's Woolworths Holding Ltd
(WHL) in 2014.
David Jones Pty Limited is an Australian upmarket department
store.
E K RECRUITMENT: First Creditors' Meeting Set for Dec. 7
--------------------------------------------------------
A first meeting of the creditors in the proceedings of E K
Recruitment Pty Ltd will be held on Dec. 7, 2023, at 11:00 a.m. via
Microsoft Teams platform.
Rajiv Ghedia of Westburn Advisory was appointed as administrator of
the company on Nov. 27, 2023.
FLEXICOMMERCIAL ABS 2: Moody's Assigns B2 Rating to Class D Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to notes
to be issued by Perpetual Corporate Trust Limited, as trustee of
flexicommercial ABS Inspire Trust No. 2.
Issuer: flexicommercial ABS Inspire Trust No. 2
AUD17.4 million Class B Notes Certificate, Assigned Baa2 (sf)
AUD17.4 million Class C Notes Certificate, Assigned Ba1 (sf)
AUD22.8 million Class D Notes Certificate, Assigned B2 (sf)
The AUD522 million Class A, AUD8.4 million Class E1 and AUD12
million Class E2 Notes are not rated by Moody's.
The transaction is a securitisation of a portfolio of commercial
auto and equipment loans and leases originated by Flexirent Capital
Pty Limited and flexicommercial Pty Ltd (together,
flexicommercial), each a wholly owned subsidiary of Humm Group
Limited. flexicommercial Pty Ltd will act as servicer of the
transaction. This is flexicommercial's third auto and equipment
asset backed securities transaction for 2023.
flexicommercial has been providing commercial asset finance to
Australian businesses for over 20 years. Historically,
flexicommercial primarily funded smaller ticket "tertiary assets"
such as scanners, copiers, printers and telephone systems under a
point-of-sale origination model. However, since early 2018,
flexicommercial has shifted its strategic focus towards commercial
lending via broker distribution predominantly via broker originated
transactions that fund larger ticket "primary" and "secondary"
assets such as trucks, trailers and construction equipment, which
form the majority of the portfolio with tertiary assets making up a
smaller portion of the portfolio.
RATINGS RATIONALE
The definitive ratings take into account, among other factors:
-- The historical loss data, there is a shorter performance
history for flexicommercial's broker originated "primary" asset
receivables that constitute most of this portfolio. Although
flexicommercial have been originating commercial equipment loans
and leases for over 20 years they shifted focus from point-of-sale
originated "tertiary" assets to broker originated larger ticket
"primary" assets in early 2018.
-- The evaluation of the underlying receivables and their expected
performance;
-- The evaluation of the capital structure;
-- The availability of excess spread over the life of the
transaction;
-- The liquidity facility provided by Bank of America N.A.,
Australian Branch (Aa1/P-1/Aa1(cr)/P-1(cr)) in the amount of 1.60%
of the rated note balance subject to a floor of AUD300,000;
-- The interest rate swap provided by Australia and New Zealand
Banking Group Limited (ANZ, Aa3/P-1/Aa2(cr)/P-1(cr)).
Initially, the Class A Notes will benefit from 13.0% subordination.
The Class B, Class C, Class D, and Class E1 Notes benefit from
10.1%, 7.2%,3.4%, and 2.0% of note subordination, respectively.
The notes will initially be repaid on a sequential basis until the
Class A Notes credit enhancement exceeds 20%. Once this threshold
is met, the Class A to Class D Notes will be paid pro-rata and then
sequentially to the Class E1 and Class E2 Notes until such point
that the Class D Notes subordination exceeds 8.0%. At that point
Class A to Class E2 Notes will be paid pro-rata. The notes will
however be paid on a sequential basis should there be any
unreimbursed charge-offs or the payment date is on or after the
call option date. The call option date is the earlier of the date
the aggregate invested amounts of the notes is equal to or less
than 10% of the initial invested amount of the notes, the payment
date in October 2027.
Key model and portfolio assumptions:
Moody's base case assumptions are a portfolio loss rate of 5.1%,
and a portfolio credit enhancement ("PCE") - representing the loss
that Moody's expects the portfolio to suffer in the event of a
severe recessionary scenario - of 29.00%.
To address the shorter historical loss data on flexicommercial's
broker originated portfolio, Moody's have benchmarked the
performance to data from comparable Australian commercial auto and
equipment ABS originators. Moody's have also overlaid additional
stresses into Moody's default and PCE assumptions.
Key portfolio features are as follows:
-- The portfolio is diversified both at an obligor level and a
geographical level. The largest obligor concentration is 0.3%.
-- The portfolio has a high yield of 10.69% which provides excess
spread to cure portfolio losses.
Methodology Underlying the Rating Action
The principal methodology used in these ratings was "Equipment
Lease and Loan Securitizations methodology" published in September
2023.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could lead to an upgrade of the notes include a rapid
build-up of credit enhancement, due to sequential amortization or
better-than-expected collateral performance. The Australian job
market is a primary driver of performance.
A factor that could lead to a downgrade of the notes is
worse-than-expected collateral performance. Other reasons that
could lead to a downgrade include poor servicing, error on the part
of transaction parties, a deterioration in the credit quality of
transaction counterparties, or lack of transactional governance and
fraud.
MYRIAD DEVELOPMENT: First Creditors' Meeting Set for Dec. 7
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Myriad
Development And Construction Group Pty Ltd will be held on Dec. 7,
2023, at 3:00 p.m. at Level 12, 20 Bridge Street, in Sydney, NSW.
Mitchell Warren Ball and Gavin David King of Mackay Goodwin were
appointed as administrators of the company on Nov. 27, 2023.
PSYCHOLOGICAL SOLUTIONS: First Creditors' Meeting Set for Dec. 5
----------------------------------------------------------------
A first meeting of the creditors in the proceedings of
Psychological Solutions (Qld) Pty Ltd, formerly trading as The
Health Hub Brisbane South, will be held on Dec. 5, 2023, at 10:30
a.m. at the offices of SV Partners, 22 Market Street, in Brisbane,
Queensland.
David Michael Stimpson and Anne Meagher of SV Partners were
appointed as administrators of the company on Nov. 23, 2023.
SIMSAI CONSTRUCTION: Second Creditors' Meeting Set for Dec. 6
-------------------------------------------------------------
A second meeting of creditors in the proceedings of Simsai
Construction Group Pty Ltd, trading as First Home Buyers Direct,
Express Homes WA and MD 360, has been set for Dec. 6, 2023, at
11:00 a.m. at Conference Room, Plaza Level, BGC Centre, 28 The
Esplanade, in Perth, WA.
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 Dec. 5, 2023, at 4:00 p.m.
Thomas Donald Birch and Jeremy Joseph Nipps of Cor Cordis were
appointed as administrators of the company on Nov. 1, 2023.
=========
C H I N A
=========
CHINA CITIC: Fined For Dozens of Banking Violations
---------------------------------------------------
China Daily reports that the National Financial Regulatory
Administration has fined China CITIC Bank, a joint-stock commercial
lender, more than CNY224.75 million (US$31.46 million), according
to the financial watchdog on Dec. 1.
According to the report, the bank was fined for violating 56 laws
and regulations, including inaccurate disclosure of asset
securitization information, undertaking defaulted assets by wealth
management products, and compliance failures regarding regulatory
requirements on risk isolation of wealth management business.
China Daily relates that the bank's headquarters was fined about
CNY152.43 million and CNY4.63 million confiscated, while its branch
institutions were fined CNY67.70 million, administrative punishment
information disclosed on the administration's website showed.
The bank said all the misdoings happened in or before 2019, and it
has fully addressed and rectified its mistakes in accordance with
regulatory requirements.
The bank also said it has been stepping up efforts to better serve
the real economy and strengthen compliance and internal risk
control, with remarkable progresses made since then.
Apart from China CITIC Bank, Agricultural Bank of China was fined
and around CNY27.11 million confiscated for 13 violations of laws
and regulations, while Bank of China was fined and CNY37.01 million
confiscated for 12 violations, the report says.
China CITIC Bank Corporation Limited provides banking services. The
Company offers deposits, loans, domestic settlement, currency
trading, bank guarantee, and other services. China CITIC Bank
provides its services to individuals, enterprises, and other
clients.
CHINA EVERGRANDE: Creditors Seek Controlling Stakes in New Plan
---------------------------------------------------------------
Reuters reports that a group of offshore creditors to China
Evergrande Group is asking for a controlling equity stake of the
developer and two of its Hong Kong subsidiaries as part of
company's revised debt restructuring proposal, a source familiar
with the matter said on Dec. 1.
Bloomberg News first reported the request on Dec. 1, citing people
familiar with the matter.
The group, which works as an ad hoc group of Evergrande's offshore
creditors, made the request after the developer earlier last week
made a new offer to repay their offshore debts, the source said,
Reuters relays.
Reuters reported on Nov. 30 that Evergrande had offered to swap
some offshore debt into equity in the company and two Hong
Kong-listed units, and repay the rest with non-tradeable
"certificates" backed by offshore assets.
According to Reuters, Evergrande has until a Hong Kong court
hearing on Dec. 4 to present a "concrete" revised debt
restructuring proposal for offshore creditors, a judge said last
month after its original plan had lapsed.
About China Evergrande
China Evergrande Group is an integrated residential property
developer. The Company, through its subsidiaries, operates in
property development, investment, management, finance, internet,
health, culture, and tourism markets.
As reported in the Troubled Company Reporter-Asia Pacific on Aug.
18, 2023, China Evergrande Group, the second largest real estate
developer in China, and certain of its affiliates sought creditor
protection in the United States under Chapter 15 of the Bankruptcy
Code (Bankr. S.D.N.Y. Lead Case No. 23-11332) on Aug. 17.
Evergrande, widely known as the most leveraged company in the
world, and its affiliates are asking the U.S. Bankruptcy Court for
the Southern District of New York for recognition of foreign
proceedings as "foreign main" proceeding under Chapter 15.
Evergrande is in the midst of a highly complex restructuring of
around $20 billion in offshore debt. In total, the Company has
more than $300 billion in liabilities.
Evergrande is incorporated in the Cayman Islands as an exempted
company with limited liability, with its principal place of
business located at 15th Floor, YF Life Centre, 38 Gloucester Road,
Wanchai, Hong Kong. It is subject to a restructuring proceeding
entitled In the Matter of China Evergrande Group, concerning a
scheme of arrangement between Evergrande and certain Scheme
Creditors pursuant to the relevant provisions of the Hong Kong
Companies Ordinance (Chapter 622 of the Laws of Hong Kong),
currently pending before the High Court of Hong Kong (Case Number
HCMP 1091/2023.
Affiliate Tianji Holding Limited is incorporated in Hong Kong as a
limited liability company, with its principal place of business
located at 17th Floor, One Island East, Taikoo Place, 18 Westlands
Road, Quarry Bay, Hong Kong. Tianji is subject to a restructuring
proceeding entitled In the Matter of Tianji Holding Limited,
concerning a scheme of arrangement between Tianji and certain
Scheme Creditors, pursuant to the relevant provisions of the Hong
Kong Companies Ordinance and currently pending before the Hong Kong
Court (Case Number HCMP 1090/2023).
Affiliate Scenery Journey Limited is incorporated in the British
Virgin Islands as a limited liability company, with its principal
place of business located at 2nd Floor Water's Edge Building,
Wickham's Cay II, Road Town, Tortola, BVI. Scenery Journey is
subject to a restructuring proceeding entitled In the Matter of
Scenery Journey Limited, concerning a scheme of arrangement between
Scenery Journey and certain Scheme Creditors, pursuant to section
179A of the BVI Business Companies Act, 2004, and currently pending
before the High Court of the Eastern Caribbean Supreme Court (Case
Number BVIHCOM 2023/0076).
U.S. Bankruptcy Judge Michael E Wiles presides over the Chapter 15
proceedings.
Sidley Austin is the Hong Kong Counsel to Evergrande and Tianji.
Maples BVI is the British Virgin Island Counsel to Scenery
Journey.
GEMDALE CORP: Moody's Lowers CFR to 'Caa1', Outlook Negative
------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of Gemdale Corporation to Caa1 from B3 and the CFR of Famous
Commercial Limited, Gemdale's wholly-owned subsidiary, to Caa2 from
Caa1.
Moody's has also downgraded the backed senior unsecured rating on
the bonds to Caa2 from Caa1 and the backed senior unsecured rating
to (P)Caa2 from (P)Caa1 on the medium-term note (MTN) program. The
bonds and the MTN program are issued by Gemdale Ever Prosperity
Investment Limited (Gemdale Ever Prosperity) and guaranteed by
Famous. Gemdale Ever Prosperity's offshore bonds and MTN programs
are supported by Gemdale through keepwell deeds and deeds of equity
interest purchase undertaking.
At the same time, Moody's has maintained the negative rating
outlooks for all the entities.
"The downgrades reflect Gemdale's heightened refinancing risks due
to its rapid deterioration of liquidity, constrained access to
funding, and sizable debt maturities over the next 6-12 months,"
says Kelly Chen, a Moody's Vice President and Senior Analyst.
The downgrades also consider Gemdale's weak liquidity management
that have led to the company's elevated refinancing risks.
"The negative outlook reflects uncertainties over the company's
ability to generate sufficient operating cash flow and raise new
funding to address its refinancing needs and replenish its
liquidity over the next six to 12 months," adds Chen.
RATINGS RATIONALE
Gemdale's liquidity continues to deteriorate, as reflected in a
material decline in its total cash balance to RMB33.8 billion as of
September 2023 from RMB46.1 billion as of the end of June 2023.
This is because the company repaid a large portion of maturing debt
using internal cash while contracted sales continued to drop.
Moody's estimates that the company's cash as of the end of
September 2023, together with the operating cash flow, will be
insufficient to cover all of its maturing debt obligations over the
next 12 to 18 months, including a USD480 million offshore bond and
RMB16.6 billion onshore bonds maturing or becoming puttable before
the end of 2024.
Moody's expects Gemdale's contracted sales to fall to RMB151
billion in 2023 and further to RMB112 billion in 2024, as its tight
liquidity conditions will further weigh on its operations in
addition to continued weakness in China's property market. During
the first 10 months of 2023, Gemdale's contracted sales dropped 28%
year on year to RMB132.9 billion, underperforming the broader
market. The weak contracted sales will pressure the company's
operating cash flow and liquidity.
Moody's also projects Gemdale's credit metrics will weaken over the
next 12-18 months given its revenue and profit margin will decline
along with its shrinking operations over the same period.
Specifically, Gemdale's debt/EBITDA will deteriorate to 7.5x over
the next 12-18 months, compared with 5.1x for the 12 months ended
June 2023, and its EBIT/interest coverage will stay weak at around
2.3x over the same period.
Gemdale is also exposed to joint venture (JV) partnerships, in
which the company may need to provide additional funding support to
the projects, particularly if the JV partner is in financial
distress, which could lead to fund leakage.
Meanwhile, Moody's has downgraded Famous' CFR to Caa2, which
incorporates a one-notch parental uplift, following the downgrade
of its parent Gemdale. The downgrade also reflects Famous' weak
standalone credit profile and Gemdale's weakened ability to support
Famous on a timely basis.
Famous' standalone credit profile is constrained by its weak
liquidity, small scale and high volatility of its operations, as
well as weak financial metrics.
Moody's support assumption considers (1) Gemdale's full ownership
of Famous; (2) Famous' status as Gemdale's primary platform to
raise funds from offshore debt capital markets; and (3) Gemdale's
track record of providing financial support to Famous.
The Caa2 backed senior unsecured ratings on the bonds and the
(P)Caa2 backed senior unsecured rating on the MTN program
guaranteed by Famous are not affected by subordination to claims at
the operating companies. This is because Moody's expects support
from Gemdale will flow through Famous rather than directly to its
main operating companies, thereby mitigating any differences in
expected loss that could result from structural subordination.
Moody's has changed Gemdale's governance issuer profile score to
G-5 from G-4 and its ESG Credit Impact Score to CIS-5 from CIS-4.
Gemdale's Credit Impact Score of CIS-5 is driven by governance
risks and indicates that the rating is lower than it would have
been if ESG risk exposures did not exist. In particular, the
assessment of the company's governance risk of G-5 reflects its
weak liquidity management that have led to the company's elevated
refinancing risks. The company's relatively complex organization
structure, including a large number of subsidiaries, joint ventures
and associates, is also a consideration. Furthermore, Moody's has
factored in Famous' status as a private company and its limited
corporate transparency.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely in the near term, given the negative
outlook.
However, positive rating momentum could emerge if Gemdale improves
its liquidity and access to funding, and strengthens its sales,
profitability and credit metrics over the next 12-18 months.
A significant reduction in contingent liabilities associated with
its JV projects or a reduced likelihood of providing funding
support to its JV projects could also be positive for the rating.
On the other hand, Moody's could downgrade Gemdale's ratings if its
liquidity or access to funding deteriorates further.
Meanwhile, Famous' rating is also unlikely to be upgraded given the
negative outlook.
However, Famous' outlook could return to stable if Gemdale's
outlook returns stable, and its standalone credit quality, as well
as support from Gemdale strengthens.
On the other hand, Famous' rating could come under pressure if (1)
Gemdale's rating is downgraded; or (2) Gemdale reduces its
ownership of, or lowers its support for, Famous.
Moody's could also downgrade Famous' rating if the company's credit
profile or liquidity deteriorates further than the agency's
expectation.
The principal methodology used in these ratings was Homebuilding
and Property Development published in October 2022.
Incorporated in China and listed on the Shanghai Stock Exchange,
Gemdale Corporation is a leading developer in China's residential
property sector. As of the end of 2022, the company's land bank
totaled around 52 million square meters (sqm) in saleable gross
floor area (GFA) across about 78 cities in China.
Incorporated in Hong Kong SAR, China in 1995, Famous Commercial
Limited is a wholly-owned subsidiary of Gemdale Corporation. The
company also serves as Gemdale's funding vehicle in overseas
markets.
GEMDALE CORP: Steps up Asset Divestiture as Debt Woe Looms
----------------------------------------------------------
Caixin Global reports that Gemdale Corp. is stepping up efforts to
divest assets in the face of more than CNY10 billion ($1.37
billion) of maturing debt amid deteriorating business and a
liquidity drain.
Gemdale, one of few developers in China that has so far avoided a
default, has since November listed several projects in major cities
for sale as fears over its financial sustainability grows, Caixin
learned from multiple sources.
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
October 2023, Moody's Investors Service has downgraded the
corporate family rating of Gemdale Corporation to B3 from Ba3 and
the CFR of Famous Commercial Limited, Gemdale's wholly-owned
subsidiary, to Caa1 from B1.
Moody's has also downgraded the backed senior unsecured rating on
the bonds to Caa1 from B1 and the backed senior unsecured rating to
(P)Caa1 from (P)B1 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 changed the rating outlook to
negative. Previously, the ratings were under review for downgrade.
This action concludes the review for downgrade initiated on Aug.
28, 2023.
ROAD KING: Moody's Cuts CFR to B3 & Senior Unsecured Notes to Caa1
------------------------------------------------------------------
Moody's Investors Service has downgraded Road King Infrastructure
Limited's corporate family rating to B3 from B2.
At the same time, Moody's has downgraded the backed senior
unsecured ratings to Caa1 from B2 of the notes issued by the
company's financing vehicles: RKI Overseas Finance 2017 (A)
Limited, RKP Overseas Finance 2016 (A) Limited, RKPF Overseas 2019
(A) Limited, RKPF Overseas 2019 (E) Limited, and RKPF Overseas 2020
(A) Limited.
Moody's has also maintained the negative rating outlooks for all
entities.
"The downgrades reflect Road King's declining liquidity buffer and
financial flexibility amid the company's weakening sales in a
challenging operating and funding environment over the next 12-18
months," says Cedric Lai, a Moody's Vice President and Senior
Analyst.
"The negative outlook reflects uncertainties over the company's
ability to recover its property sales and assess to debt capital
markets over the next 6-12 months," adds Lai.
RATINGS RATIONALE
While Road King's liquidity will be adequate, Moody's believes the
company's liquidity buffer will deplete over the next 12-18 months.
This is because it will use its internal resources to repay part of
its maturing debt during the period, including the currently
outstanding USD359 million offshore bonds due in September 2024,
while its access to offshore debt capital markets will remain
constrained. This is despite the company having raised funds
through the disposal of its toll road business to address part of
its maturing debt over the next 12-18 months.
Road King's weak contracted sales would also strain its operating
cash flow generation and balance-sheet liquidity. Moody's projects
that Road King's annual contracted sales will fall to around RMB28
billion - RMB30 billion in 2023 and 2024 from RMB40.6 billion in
2022 amid challenging market conditions. The company's reduced land
acquisitions to preserve liquidity over the past 12-18 months will
also hinder its sales over the next one to two years. The company's
contracted sales decreased 9% year-over-year to RMB19.0 billion in
the first nine months of 2023, compared with a 3.7% decline in
nation-wide property sales.
Moody's also projects Road King's credit metrics will weaken over
the next 12-18 months given its revenue and profit margin will fall
along with its declining sales. Specifically, Road King's
debt/EBITDA will deteriorate to 8.6x-9.1x over the next 12-18
months, compared with 7.8x for the 12 months ended June 2023, and
its EBIT/interest coverage will stay weak at around 1.8x over the
same period.
Road King's senior unsecured bond rating has been downgraded to
Caa1, which is one notch below the CFR, because of increased risk
of subordination, as the company's latest disposal of its four
expressways in China will reduce the benefit of credit
diversification that Moody's had considered as a mitigant to
structural subordination.
This subordination risk also reflects the fact that the majority of
claims are at the operating subsidiaries and have priority over
Road King's senior unsecured claims in a bankruptcy scenario. In
addition, the holding company lacks significant mitigating factors
for structural subordination. As a result, the likely recovery rate
for claims at the holding company will be lower.
Specifically, Road King's recurring income from the toll road
business will decrease to around 18% of its interest expense over
the next 12-18 months from around 35% for the 12 months ended June
2023, following the latest sale of its four expressways in China in
November 2023.
In terms of environmental, social and governance (ESG) factors,
Moody's has considered the concentration of Road King's ownership
in its controlling shareholder, Wai Kee Holdings Limited, which
held a 45% stake in the company as of 30 June 2023. Moody's has
also taken into account the presence of internal governance
structures and standards as required by the Hong Kong Stock
Exchange.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of the ratings is unlikely in the near term, given the
negative outlook.
However, Moody's could revise Road King's rating outlook to stable
if the company strengthens its sales, credit metrics and its access
to long-term funding, and maintains sufficient liquidity.
Road King's rating could be downgraded if its contracted sales
and/or operating cash flows weaken beyond Moody's expectations, or
if the company's access to funding deteriorates further.
The principal methodology used in these ratings was Homebuilding
and Property Development published in October 2022.
Listed in Hong Kong SAR, China, Road King Infrastructure Limited
invests in toll road projects on four expressways across Indonesia.
As of June 30, 2023, the company had a property development
portfolio with a land bank of 4.3 million square meters across the
Bohai Rim, Yangtze River Delta, Greater Bay Area (including Hong
Kong), Henan and Hubei Province.
Wai Kee Holdings Limited and Shenzhen Investment Limited are the
largest shareholders of the company, with 45% and 27% stakes,
respectively, as of June 30, 2023.
YANLORD LAND: Moody's Lowers CFR to B1, Outlook Remains Negative
----------------------------------------------------------------
Moody's Investors Service has downgraded Yanlord Land Group Limited
(Yanlord)'s corporate family rating to B1 from Ba3 and the backed
senior unsecured rating on the bonds issued by Yanlord Land (HK)
Co., Limited, a wholly-owned subsidiary of Yanlord, to B2 from B1.
The bonds are guaranteed by Yanlord.
At the same time, Moody's has maintained the negative rating
outlooks.
"The downgrades reflect Moody's expectation that Yanlord's credit
metrics and liquidity buffer will weaken further over the next
12-18 months due to its worse-than-expected decline in its property
sales and constrained access to debt capital markets," says Cedric
Lai, a Moody's Vice President and Senior Analyst.
"The negative outlook reflects uncertainties over Yanlord's ability
to recover its declining contracted sales and funding access over
the next 6-12 months, given the current volatile market and funding
conditions," adds Lai.
RATINGS RATIONALE
Moody's projects that Yanlord's contracted sales will fall to RMB30
billion - RMB35 billion annually in 2023 and 2024 because of its
moderate business scale and reduced land resources to preserve
liquidity over the past 12-18 months. The company's contracted
sales dropped 52% to RMB28.1 billion over the first ten months of
2023, which was significantly weaker than national average of a
3.7% decline in the same period. The company's contracted sales
amounted to RMB68.1 billion in 2022, an increase of 14% from that
in 2021.
The sales decline will weaken the company's operating cash flow and
credit metrics over the next 12-18 months. Moody's projects
Yanlord's debt leverage, as measured by debt/ EBITDA, will rise to
6.2x-6.5x over the next 12-18 months from 5.9x for the 12 months
ended June 2023, while its EBIT/interest coverage will drop to
2.0x-2.3x from 2.6x for the same period. These forecasts
incorporate Moody's expectation that the company will face a lower
profit margin of around 25% over the next 12-18 months compared
with 28% in the first half of 2023.
Yanlord's liquidity remains adequate. Its cash balance and
projected operating cash flow will likely be sufficient to cover
its committed land payments, dividend payments and maturing debts
over the next 12-18 months. However, its liquidity buffer will
decline because the company will have to use internal resources to
repay part of its maturing debt amid weak funding conditions.
Yanlord's B1 CFR reflects the company's established brand name and
high-quality products. The rating also considers Yanlord's adequate
liquidity and solid recurring rental income from its investment
properties (IP) in China and Singapore, which provide the company
with some stable cash flow. Moody's expects Yanlord's rental
income/interest coverage to improve to around 45% over the next
12-18 months from 40% over the 12 months ended June 2023, supported
by steady rental income growth.
On the other hand, the rating is constrained by Yanlord's volatile
operating performance, geographic concentration and weakening sales
and credit metrics. The company's significant exposure to joint
venture (JV) businesses also hinders the transparency of its credit
metrics, although the strength of its reputable JV partners tempers
this risk.
The company's B2 senior unsecured debt rating is one notch lower
than the CFR due to structural subordination risk. This risk
reflects the fact that the majority of claims are at the operating
subsidiaries and have priority over Yanlord's senior unsecured
claims in a bankruptcy scenario. In addition, the holding company
lacks significant mitigating factors for structural subordination.
As a result, the likely recovery rate for claims at the holding
company will be lower.
In terms of environmental, social and governance (ESG) factors,
Moody's has considered Yanlord's concentrated ownership, with its
largest shareholder and chairman, Mr. Zhong Sheng Jian, holding an
approximately 71.55% direct and indirect stake (excluding treasury
shares) in the company, based on the latest publicly available
information. Moody's has also taken into account the presence of
internal governance structures and standards as required by the
Singapore Exchange.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of the ratings is unlikely in the near term, given the
negative outlook.
However, Moody's could revise Yanlord's rating outlook to stable if
the company improves its sales and credit metrics, strengthens its
access to long-term funding, and maintains sufficient liquidity.
Credit metrics that could indicate a stable rating outlook include
EBIT/interest coverage above 2.8x and debt/EBITDA below 6.0x on a
sustained basis.
Moody's could downgrade Yanlord's ratings if the company's sales,
credit metrics or liquidity weaken, or if the company pursues
aggressive expansion or its access to funding deteriorates. Credit
metrics indicating a downgrade include EBIT/interest coverage
falling below 2.0x or debt/EBITDA above 7.0x, both on a sustained
basis.
The principal methodology used in these ratings was Homebuilding
and Property Development published in October 2022.
Yanlord Land Group Limited is a real estate developer in China and
Singapore, and is listed on the Singapore Stock Exchange. It had a
land bank with a gross floor area (GFA) of about 9.1 million square
meters as of June 2023, located mainly across six geographic
regions in China, including the Yangtze River Delta, the Greater
Bay Area, the Bohai Rim, Central China, Hainan and Western China.
The company also has residential development projects and
investment properties in Singapore.
ZHONGZHI ENTERPRISE: Two Top Execs of Affiliated Cos. Go Missing
----------------------------------------------------------------
Nikkei Asia reports that two companies linked to troubled Chinese
shadow bank Zhongzhi Enterprise Group said they have lost contact
with their chairpersons, raising speculation that they have been
detained by authorities.
Ma Changshui, chairman of Xinjiang Tianshan Animal Husbandry
Bio-Engineering, has been unreachable, the company said on Nov.
30.
This comes a day after Dalian My Gym Education Technology said it
was unable to contact its chairwoman, Ma Hongying, the Nikkei
relates.
Both companies said they tried to reach their chairpersons directly
through phone, WeChat and other means, as well as indirectly
through family members.
According to the Nikkei, the disappearances follow an announcement
on Dec. 2 by Beijing Public Security Bureau that "mandatory
measures" have been taken against people linked to Zhongzhi
Enterprise Group. Mandatory measures can mean placing people under
surveillance, detention or arrest.
Zhongzhi Enterprise Group is a major lender that operates outside
the banking regulator framework. The company told investors last
week that it was "severely insolvent," prompting an investigation
by Beijing authorities.
Ma Changshui also resigned from the board of Shenzhen Success
Electronics, a maker of liquid crystal displays and modules, the
company announced on Dec. 2, citing "personal reasons," the Nikkei
relays.
Xinjiang Tianshan, Dalian My Gym and Shenzhen Success Electronics
are all Shenzhen-listed companies once controlled through majority
stakes by Xie Zhikun, the late founder of Zhongzhi Enterprise
Group. Xie died in December 2021 from a heart attack.
Ma Changshui and Ma Hongying are major players within the Zhongzhi
group, according to annual reports. Ma Changshui is a former banker
at state-owned lender Industrial and Commercial Bank of China and
serves a double role as vice president of Zhongzhi Enterprise
Group, the report discloses.
Ma Hongying, previously an accountant at Deloitte, held the
position of chief financial officer at Zhongzhi Enterprise Group
until last year. She currently doubles as a board member of
multiple Zhongzhi affiliates, including Hengqin Life Insurance.
Zhongzhi Enterprise Group owns controlling interests in eight
listed companies, with the fallout likely spreading beyond the
three companies, the report states.
A major investment trust under Zhongzhi Enterprise Group's umbrella
missed payments on a series of investment products, triggering
protests from investors, according to the Nikkei. Large amounts of
its investments, mainly in real estate, appear to have become
unrecoverable. Zhongzhi Enterprise Group said in a letter that its
liabilities have exceeded its assets by CNY220 billion to as much
as CNY260 billion ($31 billion to $36.7 billion), the Nikkei
discloses.
About Zhongzhi Enterprise
Zhongzhi Enterprise Group Co. Ltd. operates as a diversified real
estate developer. The Company develops residential and commercial
areas. Zhongzhi Enterprise Group also provides trust investment,
highway operation, land reserve, and reservoirs treatment
services.
As reported in the Troubled Company Reporter-Asia Pacific on Nov.
24, 2023, Zhongzhi Enterprise Group Co. has revealed the depth of
its financial difficulties, telling investors it is "severely
insolvent" with a shortfall of $36.4 billion.
The privately owned wealth manager said liquidity has dried up and
the recoverable amount from asset disposals is expected to be low,
according to a letter sent to investors on Nov. 22 seen by
Bloomberg News.
=========
I N D I A
=========
ABLE & WEAL: Ind-Ra Corrects September 16, 2022 Rating Release
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) rectifies Able & Weal Private
Limited's (A&W) rating published on September 16, 2022 to state the
reason for the complexity indicator being high for the rated
instrument.
The amended version is as follows:
India Ratings and Research (Ind-Ra) has assigned Able & Weal
Private Limited's (A&W) proposed non-convertible debentures (NCDs)
a rating of 'IND B-' with a Negative Outlook as follows:
-- INR1.20 bil. Proposed NCDs* assigned with IND B-/Negative
rating.
*Yet to be placed
The proposed NCDs will be backed by a pledge over the shares held
by the promoter group in unlisted securities and a charge over the
identified immovable properties as agreed with the lenders.
Analytical Approach: To arrive at the ratings, Ind-Ra has taken a
consolidated view of group companies A&W, Siddharth Partners (SP),
and Akira Properties Private Limited on account of significant
operational and financial linkages between them, since all the
companies/firms operate in a similar line of business and have a
common management. All these entities together referred to as the
Family Office of Medlife Promoters (promoter group). The promoters
hold majority of the group's investments through a couple of trusts
namely Prasid Uno Family Trust and I M Investments Trust apart from
the above entities.
The Negative Outlook reflects the stretched liquidity of the
promoter group with a likely markdown in the value of investments
and high repayments scheduled in the near term.
Key Rating Drivers
Liquidity Indicator - Stretched: The promoter group together had
cash balances and fixed deposit investments of INR416.3 million at
FYE22 (FY21: INR15 million). A&W, SP and Akira are key investment
firms of the promoter group.
A&W does not have working capital facilities. It is raising NCDs
with a tenure of three years and a bullet repayment at the end of
tenure. These NCDs are likely to carry a redemption premium with
protentional internal rate of return of 21% p.a. while floor being
15% p.a. These NCDs are likely to support the promoter group in the
repayment of existing loans and investments in new assets. A&W does
not have operational revenues. With limited visibility on the
revenue income, these repayments rely on refinancing or
liquidation-based events such as sale of securities in secondary
market or through an offer for sale in initial public offering.
Interest servicing on these loans has been supported by regular
infusions by partners and sale of investments.
Akira does not have working capital facilities. It raised unlisted,
unrated zero-coupon debentures (ZCDs) worth INR1,020 million in
FY22 and ZCDs worth INR980 million in April 2022. These ZCDs were
loaned to SP to help with the repayment of existing loans and
investments in new assets. Akira's proposed NCDs of INR2,000
million will have a tenor of 12 months one week and the proceeds of
the same will be used for repayment of the former ZCDs. The ZCDs
and NCDs do not have any interim interest payments and have a
bullet maturity repayment along with coupon. At FYE22, Akira had
cash balances and fixed deposit investments of INR17.5 million
(FYE21: INR15.0 million).
SP does not have working capital facilities. It has raised term
loans from non-banking financial companies and inter-corporate
deposits from Akira. SP has repayments of INR1,322 million in FY23
and INR1,202 million in FY24. These loans were used for the
repayment of existing loans and investments in new assets. SP has
minimal rental office income. Amid limited visibility on the
revenue income, these repayments are highly reliant on refinancing
or liquidation-based events such as sale of securities in secondary
market or through an offer for sale in initial public offering.
Interest servicing on these loans have been supported by regular
infusions by partners and sale of investments.
High Refinancing Risk: The promoter group has raised term loans and
NCDs which have significant repayments in the near term (FY23:
INR1,322 million, FY24: INR3,467 million) as against limited
visibility on the sources of repayments. The promoter group thus is
exposed to a high refinancing risk. The ratings are constrained by
delays in the ability to raise funds during periods of financial
distress. Ind-Ra however takes comfort form regular funds infusions
from the promoters and sale of investments which have been able to
cover the obligations in the past.
No Operational Cashflows; Limited Income Sources: Akira, SP, and
A&W do not have any operational cashflows and are significantly
reliant on the sale of investments/regular infusions from the
promoters/partners.
Illiquid Nature of Investments: Majority of the portfolio of the
promoter group is unlisted entities such as API Holdings Limited,
Entero Healthcare Solutions Pvt. Ltd. (IND BBB/Stable), AMPA
Othodentics Pvt. Ltd., and ANI Technologies Limited which are in
growth phase and require regular funds. Also, promoter group has
only minority stakes in these entities, leaving low scope of
influencing dividend policy and limited headroom for dividend
upstreaming. Since these investments are unlisted in nature, Ind-Ra
expects promoter group to face delay and difficulty to monetize in
case of financial distress or market dislocations.
Successful Track Record of Promoters: A&W and Akira are promoted by
the family office of former Medlife promoters Tushar Kumar and
Prashant Singh. Both have more than a decade of experience in the
healthcare and pharma space and a successful track record of
creating and scaling up Medlife and monetizing their investments
through sales to API Holdings Limited. The promoters come from a
strong lineage from the founders of Alkem Laboratories Limited (IND
A1+).
Rating Sensitivities
Outlook Revision to Stable: Any improvement in the liquidity
position by way of timely tie-up of new debt or monetization of
investments and/or support from the promoters would result in an
Outlook revision to Stable.
Negative: Future developments that could lead to a negative rating
action:
- A substantial markdown in the value of investments while the
promoter group's indebtedness remaining the same, and/or
- any deterioration in liquidity by way of delays in the
monetization of investments, and/or
- any delay in support from the promoters.
Company Profile
Incorporated in FY22, A&W is a special purpose vehicle equally
owned by Prashant Singh and Tushar Kumar, former promoters of
Medlife International Private Limited. It is an investment holding
company of the promoter group.
AJAY FOOD: Ind-Ra Affirms BB+ Bank Loan Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Ajay food Products
(Katni) Private Limited's (AFPKPL) bank facilities as follows:
-- INR285 mil. (reduced from INR325 mil.) Fund-based working
capital limits affirmed with IND BB+/Stable/IND A4+ rating;
and
-- INR265 mil. (reduced from INR375 mil.) Term loans due on March
31, 2034 affirmed with IND BB+/Stable rating.
Key Rating Drivers
Liquidity Indicator - Stretched: The average maximum utilization of
fund-based working capital limits stood at 93.6% for the 12 months
ended September 2023. Furthermore, AFPKPL does not have any capital
market exposure and relies on banks and financial institutions to
meet its funding requirements. The cash flow from operations
declined to INR51.79 million in FY23 (FY22: INR76.19 million) due
to working capital changes. Furthermore, the free cash flow
declined to negative INR1.29 million (FY22: INR64.36 million) due
to capex of INR53.08 million. The net working capital cycle was
more or less stable at 28 days in FY23 (FY22: 29 days). The cash
and cash equivalents reduced to INR5.41 million at FYE23 (FYE22:
INR6.98 million). The company has a repayment obligation of INR76.4
million and INR89.9 million in FY24 and FY25, respectively.
The affirmation reflects AFPKPL's modest credit metrics, with an
interest coverage ratio (operating EBITDA/gross interest expenses)
of 2.65x in FY23 (FY22: 2.38x) and a net leverage ratio (adjusted
net debt/operating EBITDAR) of 4.12x (4.59x). The credit metrics
improved in FY23, due to an increase in the absolute EBITDA to
INR148.09 million (FY22: INR132.75 million). Ind-Ra expects the
credit metrics to improve in FY24 as well, due to scheduled debt
repayments and absence of any debt-led capex.
The affirmation also reflects AFPKPL's modest EBITDA margin of
2.94% in FY23 (FY22: 2.94%) with a return on capital employed of
8.4% (7.1%). Ind-Ra expects the EBITDA margin to improve slightly
in FY24, due to an improvement in the realization from AFPKPL's
hotel segment.
The ratings also factor in AFPKPL's medium scale of operations with
a revenue of INR5,044.88 million in FY23 (FY22: INR4,509.66
million). The revenue increased in FY23 on account of an increase
of demand for food products such as pulses, gram flour and flour.
During 5MFY23, AFPKPL booked a revenue of INR2,112.47 million, 91%
of which was contributed by the food processing division, 6% by the
woven sack division and around 3% by the hotel division. The
management is expecting to reach a top line of INR5,500 million by
end-FY24. Ind-Ra expects the revenue to improve in FY24 as well, on
account of a persist demand in the food segment and the likely
further improvement in the revenue of the hotel segment.
However, the ratings continue to be supported by the promoters'
nearly four decades of experience in the food industry. This has
facilitated the company to establish strong relationships with
customers as well as suppliers.
Rating Sensitivities
Negative: Substantial deterioration in the liquidity or scale of
operations, leading to deterioration in the overall credit metrics
and liquidity profile on a sustained basis could lead to a negative
rating action.
Positive: An improvement in the liquidity and the scale of
operations, leading to an improvement in the overall credit metrics
with net leverage reducing below 3.5x,all on a sustained basis,
could lead to a positive rating action.
Company Profile
AFPKPL was founded in 1990 as a sole proprietorship and was
converted into a private limited company in 2000. It has a pulses
mill, besan mill, flour mill with a capacity of 40,000MTPA,
25,500MTPA and 40,500MTPA, respectively. It is also the proprietor
of M/s TLC Incorporation which manufactures woven sack business
with a capacity of 1,680MTPA and has a hotel named The Arindum in
Katni having an occupancy of 115 rooms.
APPROCOOL AIRCON: Ind-Ra Assigns BB+ Loan Rating, Outloook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Approcool Aircon
Private Limited's bank loans 'IND BB+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR200 mil. Fund-based working capital limits assigned with
IND BB+/Stable/IND A4+ rating;
-- INR125 mil. Non-fund-based working capital limits assigned
with IND A4+ rating; and
-- INR301.5 mil. Term loan due on March 2027 assigned with
IND BB+/Stable rating.
Key Rating Drivers
The rating reflects AAPL's medium scale of operations, with its
revenue increasing to INR1,055 million in FY23 (FY22: INR735.22
million; FY21: INR409.76 million), led by a rise in the number of
the orders executed. AAPL receives monthly order schedule from its
customers. During 7MFY24, AAPL earned revenue of INR804 million.
AAPL had an outstanding order book of INR230 million in hand as of
October 31, 2023, which would be executed by December 2023. In
FY24, Ind-Ra expects the revenue to improve further as AAPL has
availed an in-house powder coating machine, which it was earlier
sourcing from a third party.
The rating also reflects AAPL's modest credit metrics with the
gross interest coverage (operating EBITDA/gross interest expenses)
marginally deteriorating to 2.11x in FY23 (FY22: 2.36x), and the
net leverage (adjusted net debt/operating EBITDAR) reducing to
4.75x (5.11x), due to an increase in the absolute EBITDA to
INR62.92 million (INR52.86 million). Ind-Ra expects the credit
metrics to improve in FY24 and in FY25, due to the absence of any
debt-funded capex plans.
AAPL's EBITDA margin remained modest and reduced to 5.96% in FY23
(FY22: 7.19%), due to a decrease in the other operating income. Its
return on capital employed stood at 8.4% in FY23 (FY22: 9.8%).
Ind-Ra expects the EBITDA margin to be range-bound in FY24 and the
trend to follow in FY25, due to the similar nature of orders in
hand.
Liquidity Indicator - Stretched: AAPL has debt obligations of
INR31.5 million and INR31.5 million in FY24 and FY25, respectively.
AAPL does not have any capital market exposure. In FY23, the cash
flow from operations turned negative INR8.85 million (FY22:
INR28.20 million), mainly on account of increased working capital
requirements. Moreover, the free cash flow remained negative
INR53.46 million in FY23 (FY22: negative INR93.47 million). The
average maximum utilization of the fund-based working capital
limits was around 75.34% over the 12 months ended October 2023. The
cash and cash equivalents were INR68.29 million at FYE23 (FYE22:
INR30.34 million). The networking cycle elongated to 63 in FY23
(FY22: 59), mainly on account of a decrease in the creditor days to
62 (79).
However, the rating is supported by the promoters' nearly 13 years
of experience in the manufacturing industry, leading to established
relationships with its customers as well as suppliers.
Rating Sensitivities
Positive: A significant increase in the scale of operations, along
with an improvement in the overall credit metrics with net leverage
reducing below 3.5x and an improvement in the 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 the liquidity
profile, all on a sustained basis, could lead to a negative rating
action.
Company Profile
AAPL was incorporated in 2019 and manufactures heat exchanger. Its
plant is in Jalna, Maharashtra. Jitendrea Rathi is the director of
the company.
ARJUN TECHNOLOGIES: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Arjun
Technologies India Limited (ATIL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 6 CRISIL D (Issuer Not
Cooperating)
Cash Credit 10 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 3 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 2.28 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 5.42 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Standby Line 2 CRISIL D (Issuer Not
of Credit Cooperating)
CRISIL Ratings has been consistently following up with ATIL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of ATIL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ATIL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ATIL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Incorporated in 1998, and promoted by Mr P Chandrasekhar, ATIL is
an engineering and equipment turnkey system supplier for the pulp
and paper industry.
CERAMIC FIBERS: CRISIL Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Shree Ceramic
Fibers Private Limited (SCFPL) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.5 CRISIL B+/Stable (Issuer Not
Cooperating)
Long Term Loan 3.41 CRISIL B+/Stable (Issuer Not
Cooperating)
Long Term Loan 0.09 CRISIL B+/Stable (Issuer Not
Cooperating)
Long Term Loan 4.41 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SCFPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SCFPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SCFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SCFPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in August 2011, SCFPL is promoted by Mr. Anad kumar
Tiwari and his two sons Mr. Amit Tiwari and Mr. Anupam Tiwari.
SCFPL engages in manufacturing of insulating materials such as
ceramic fibers.
CHINA EVERGRANDE: Creditor Group Supports Maintaining Operations
----------------------------------------------------------------
South China Morning Post reports that an ad hoc group of creditors
of China Evergrande's offshore unit has said it supports the
management's efforts to keep the embattled Chinese developer
operational, ahead of a key court decision on Dec. 4 when the
distressed developer faces the risk of a liquidation order.
The Post relates that the group of creditors, which owns about US$2
billion offshore notes of Scenery Journey and guaranteed by Tianji
Holding - offshore units of Evergrande - issued a statement late on
Dec. 1 urging that Hengda Real Estate, Evergrande's flagship
onshore unit, be allowed to maintain business operations to ensure
completion of homes and delivery of homes.
"No stakeholders of Hengda, be it customers, suppliers, creditors,
or the PRC government, would benefit from forcing Hengda into a
multi-year, value-destructive bankruptcy process," said the
statement issued by the group, the Post relays.
"Such a bankruptcy process would only detract from the common goals
of ensuring the prompt completion of projects and the timely
delivery of homes, as well as procuring the long-term
sustainability of Hengda as a going concern," it said.
There is also "no benefit or upside" in any bankruptcy of Hengda to
the noteholders of Scenery Journey, the statement said, adding that
the interests of Hengda's stakeholders are best served through the
company's continued operation.
According to the Post, the group also added that keeping Hengda
operational would also ensure completion of 35 onshore projects,
many of which are unleveraged and are close to completion requiring
little additional funds.
The group, which is advised by legal firms Kirkland & Ellis and
Moelis & Company, said it will "continue working together with
Hengda and its management to support their efforts," the Post
relays.
Evergrande, one of the most indebted developers globally, faces a
key court hearing on Dec. 4 where a winding-up order is "highly
likely" to be granted, if no restructuring plan is ready, as per
Justice Linda Chan at the last hearing on October 30, the Post
says.
Evergrande is trying to reorganise some US$20 billion of defaulted
debt and claims, in what is the largest workout by a Chinese
company with offshore creditors. A proposal presented to creditors
in late March offered some options, including instruments tied to
equity of the company and its two Hong Kong-listed units.
The restructuring process hit a snag in September when the company
failed to meet regulatory requirements for a bond issue – a key
plank of the initial restructuring proposal, the Post recalls.
These regulatory hurdles emerged as authorities investigated
chairman Hui Ka-yan and Hengda Real Estate.
Evergrande's shares fell 4.8 per cent to HK$0.24 on Dec. 1. It has
crashed 99 per cent from its peak in 2021, erasing HK$225 billion
in market value, the Post notes.
About China Evergrande
China Evergrande Group is an integrated residential property
developer. The Company, through its subsidiaries, operates in
property development, investment, management, finance, internet,
health, culture, and tourism markets.
As reported in the Troubled Company Reporter-Asia Pacific on Aug.
18, 2023, China Evergrande Group, the second largest real estate
developer in China, and certain of its affiliates sought creditor
protection in the United States under Chapter 15 of the Bankruptcy
Code (Bankr. S.D.N.Y. Lead Case No. 23-11332) on Aug. 17.
Evergrande, widely known as the most leveraged company in the
world, and its affiliates are asking the U.S. Bankruptcy Court for
the Southern District of New York for recognition of foreign
proceedings as "foreign main" proceeding under Chapter 15.
Evergrande is in the midst of a highly complex restructuring of
around $20 billion in offshore debt. In total, the Company has
more than $300 billion in liabilities.
Evergrande is incorporated in the Cayman Islands as an exempted
company with limited liability, with its principal place of
business located at 15th Floor, YF Life Centre, 38 Gloucester Road,
Wanchai, Hong Kong. It is subject to a restructuring proceeding
entitled In the Matter of China Evergrande Group, concerning a
scheme of arrangement between Evergrande and certain Scheme
Creditors pursuant to the relevant provisions of the Hong Kong
Companies Ordinance (Chapter 622 of the Laws of Hong Kong),
currently pending before the High Court of Hong Kong (Case Number
HCMP 1091/2023.
Affiliate Tianji Holding Limited is incorporated in Hong Kong as a
limited liability company, with its principal place of business
located at 17th Floor, One Island East, Taikoo Place, 18 Westlands
Road, Quarry Bay, Hong Kong. Tianji is subject to a restructuring
proceeding entitled In the Matter of Tianji Holding Limited,
concerning a scheme of arrangement between Tianji and certain
Scheme Creditors, pursuant to the relevant provisions of the Hong
Kong Companies Ordinance and currently pending before the Hong Kong
Court (Case Number HCMP 1090/2023).
Affiliate Scenery Journey Limited is incorporated in the British
Virgin Islands as a limited liability company, with its principal
place of business located at 2nd Floor Water's Edge Building,
Wickham's Cay II, Road Town, Tortola, BVI. Scenery Journey is
subject to a restructuring proceeding entitled In the Matter of
Scenery Journey Limited, concerning a scheme of arrangement between
Scenery Journey and certain Scheme Creditors, pursuant to section
179A of the BVI Business Companies Act, 2004, and currently pending
before the High Court of the Eastern Caribbean Supreme Court (Case
Number BVIHCOM 2023/0076).
U.S. Bankruptcy Judge Michael E Wiles presides over the Chapter 15
proceedings.
Sidley Austin is the Hong Kong Counsel to Evergrande and Tianji.
Maples BVI is the British Virgin Island Counsel to Scenery
Journey.
DUTTA AGRO: CRISIL Keeps B- Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Dutta Agro
Plantations Private Limited (DUAPPL) continue to be 'CRISIL
B-/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 5.25 CRISIL B-/Stable (Issuer Not
Cooperating)
Long Term Loan 3.55 CRISIL B-/Stable (Issuer Not
Cooperating)
Long Term Loan 2.50 CRISIL B-/Stable (Issuer Not
Cooperating)
Proposed Cash 3.0 CRISIL B-/Stable (Issuer Not
Credit Limit Cooperating)
Proposed Term Loan 0.7 CRISIL B-/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with DUAPPL for
obtaining information through letter and email dated October 4,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative and the ratings on bank
facilities of DUAPPL continues to be 'CRISIL B-/Stable Issuer Not
Cooperating'.
The entity did not provide the No Default Statements (NDS) for the
last three months. Therefore, the issuer is being classified as
'non cooperative' in line with Clause 11. 3 of SEBI Master circular
dated July 3, 2023.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of DUAPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
DUAPPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of DUAPPL continues to be 'CRISIL B-/Stable Issuer Not
Cooperating'.
DUAPPL, incorporated in October 1988, is engaged in tea
manufacturing business. The company was trading in tea leaves till
October 2016 through its three owned tea estates in Jalpaiguri
(West Bengal), having total tea area of 200 acres.
EXCEL TECHNOVATION: Liquidation Resolution Process Case Summary
---------------------------------------------------------------
Debtor: Excel Technovation Private Limited
101, F-174, Sumer Complex
Gautam Marg, B/h Bagadia Bhawan
C-Scheme, Jaipur
Rajasthan 302001
Liquidation Commencement Date: October 31, 2023
Court: National Company Law Tribunal, Jaipur Bench
Date of closure of
insolvency resolution process: November 26, 2022
Insolvency professional: Mr. Prashant Agrawal
Interim Resolution
Professional: Mr. Prashant Agrawal
Building No. F-174, Floor F-106
Sumer Complex, Gautam Marg
B/h Bagadia Bhawan, C-Scheme
Jaipur 302001, Rajasthan
E-mail: ippagrawal@gmail.com
cirp.excel@gmail.com
Last date for
submission of claims: November 30, 2023
FAT SPARROW: Voluntary Liquidation Process Case Summary
-------------------------------------------------------
Debtor: Fat Sparrow Technology Private Limited
A-302 Anisha Apartment CHS Ltd.
Yari Road, Opp. Gulmohar Garden
Andheri 400061
Liquidation Commencement Date: November 11, 2023
Court: National Company Law Tribunal, Mumbai Bench
Insolvency professional: Ms. Purnima Shetty
Interim Resolution
Professional: Ms. Purnima Shetty
DX-6, Om Woods, Plot No. 144
Nr. Dmart, Sector 21
Nerul East, Navi Mumbai 400706
E-mail: pcspurnima@gmail.com
Tel: +91-9920100695
Last date for
submission of claims: December 11, 2023
GEETA COTTON: CRISIL Moves B Debt Rating to Not Cooperating
-----------------------------------------------------------
CRISIL Ratings has migrated the rating on bank facilities of Geeta
Cotton Company Private Limited (GCCPL) to 'CRISIL B/Stable Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 35 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL Ratings has been consistently following up with GCCPL for
obtaining information through letter and email dated October 23,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of GCCPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GCCPL
is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the rating on
bank facilities of GCCPL to 'CRISIL B/Stable Issuer not
cooperating'.
For arriving at the rating, CRISIL Ratings has combined the
business and financial risk profiles of GCC and Krishna Cotton
Company (KCC). This is because both the entities, together referred
to as the Geeta group, have common promoters, are in the same line
of business, and have operational linkages.
About the Group
GCC was originally set up as a proprietorship firm in 1983 by Mr K
Nagnath Patel and reconstituted as a private limited company in
2013.
KCC was set up as a proprietorship concern by Mr Patel in 2006.
Both the entities primarily undertake ginning and pressing of raw
cotton.
The group also has crushing units to extract de-oiled cake and oil
from cotton seeds. The manufacturing facilities of both the
entities are in Bhainsa, Telangana.
GO FIRST: Tells Delhi High Court It Has Exhausted CoC Funds
-----------------------------------------------------------
Livemint.com reports that Go First on Nov. 30 informed the Delhi
High Court that it had exhausted the funds provided by the
Committee of Creditors and was dealing with a shortage of manpower
and financial constraints. The airline had received interim
financing of INR100 crore from the CoC for service maintenance
costs.
According to Livemint.com, the resolution professional (RP)
overseeing the bankrupt airline's insolvency also told the court
that Go First's lessors had been blocking it from reviving its
operations by filing petitions seeking the deregistration of its
aircraft.
The court has deferred the hearing to December 5-7. It had
concluded hearing the lessors' arguments and is currently
concluding the RP's arguments.
Go First is battling legal disputes with aircraft lessors as well
as challenges arising from government notifications impacting asset
reclamation during its moratorium period, the report states. The
government, through a notification, allowed a moratorium under the
insolvency process, but this will not apply to leased assets,
including aircraft and engines.
Go First plans to scout for litigation finance to bring home up to
INR12,000 crore tied up in various lawsuits, Mint reported earlier
on Nov. 30, as the bankrupt airline stares at likely liquidation.
The amount includes an arbitration award that it won against engine
maker Pratt and Whitney at the Singapore International Arbitration
Centre earlier this year.
Livemint.com notes that the airline received a temporary reprieve
on November 23 when the National Company Law Tribunal (NCLT)
granted it a 90-day extension for its Corporate Insolvency
Resolution Process, effective from November 6 to February 4, to
allow for revival of its operations.
The tribunal has warned that failure to conclude the process within
the new timeframe may trigger liquidation proceedings.
In the Delhi High Court, the lessors are pressing for immediate
release of their aircraft citing the government notification and
clarification from the Directorate General of Civil Aviation on the
moratorium.
Senior Lawyer Neeraj Kishan Kaul, representing the RP, emphasised
during Nov. 30's hearing that the government notification did not
explicitly state its retrospective nature. If it is not
retrospective, Kaul argued, the notification should be considered
proactive, Livemint.com relays.
He also contended that the Delhi High Court was not the appropriate
forum to decide on the applicability of the moratorium, and that
such decisions should be within the jurisdiction of the NCLT.
Livemint.com adds that Kaul said the Insolvency and Bankruptcy Code
(IBC) was designed to revive corporate debtors, with the correct
jurisdictional route being NCLT, followed by the National Company
Law Appellate Tribunal (NCLAT), and ultimately the Supreme Court.
About Go First
Go First, formerly known as GoAir, was an Indian ultra-low-cost
airline based in Mumbai, Maharashtra. Go First was incorporated in
April 2004 as GoAir and commenced flight operations in November the
following year. Its inaugural flight was from Mumbai to Ahmedabad.
The airline is owned by the Wadia Group.
Go First filed an application for voluntary insolvency resolution
proceedings before National Company Law Tribunal (NCLT) on May 2,
2023.
The company said the filing with the NCLT comes after Pratt &
Whitney, the exclusive engine supplier for the airline's Airbus
A320neo aircraft fleet, refused to comply with an order to release
engines to the airline that would have allowed it return to full
operations.
Go First owes INR6,521 crore to its financial creditors, Bank of
Baroda, IDBI Bank, and Deutsche Bank. The airline has a total
liability of about INR11,463 crore to banks, other creditors,
vendors, and others.
On May 10, 2023, the NCLT accepted Go First's voluntary insolvency
petition. The NCLT bench appointed Abhilash Lal as the interim
resolution professional to look after the affairs of Go First and
also suspended its board as part of the insolvency resolution
process.
GULBERG COLD: CRISIL Lowers Rating on INR18.5cr Term Loan to D
--------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long term bank
facilities of Gulberg Cold Chain (GCC) to 'CRISIL D' from 'CRISIL
BB/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.5 CRISIL D (Downgraded from
'CRISIL BB/Stable')
Term Loan 18.5 CRISIL D (Downgraded from
'CRISIL BB/Stable')
The downgrade reflects the delays in debt servicing for October
2023 on account of weak liquidity.
The rating also factors in modest scale of operations, average
financial risk profile and working capital intensive operations.
These weaknesses are partially offset by the extensive industry
experience of the promoters and favorable location of the cold
store facility.
Key Rating Drivers & Detailed Description
Weakness:
* Delays in debt servicing due to weak liquidity: GCC has delayed
servicing of its repayment obligation for October 2023 due to weak
liquidity. Bank limit utilisation is high on account of delays in
collections from growers and hence sufficient cushion to meet the
repayment obligations is not available in the account.
* Modest scale of operations: GCC's business profile is constrained
by its scale of operations in the intensely competitive cold
storage industry. GCC's scale of operations will continue limit its
operating flexibility.
* Average financial risk profile: Networth is small estimated at
INR8.2 crores for fiscal 2023. Total outside liabilities to total
tangible networth(TOL/TNW) is estimated at 3.01 times as on March
31, 2023. Debt protection metrics is however comfortable at 2.84
times as on March 31,2023.
* Working capital intensive operations: Gross current assets were
at over 300 days the three fiscals ended March 31, 2023. Its large
working capital requirements arise from its high debtors and
inventory levels. It is required to extend long credit period.
Furthermore, due to its business need, it holds large work in
process & inventory.
Strengths:
* Extensive industry experience of the promoters: The promoters
have an experience of over a decade in the cold storage industry.
This has given them an understanding of the market dynamics and
enabled them to establish relationships with suppliers and
customers.
* Favorable location of the cold store facility: Proximity of the
cold storage to the apple growing belt of Kashmir helps in timely
transportation and optimum capacity utilisation of the facility.
The location also offers opportunities for expansion in scale of
operations.
Liquidity: Poor
Liquidity is likely to remain constrained by leveraged capital
structure and large working capital requirement. Debt repayments
for October 2023 are yet to be made. Bank limit utilisation is
almost full.
Rating Sensitivity factors
Upward factors
* Track record of timely servicing of debt for at least three
months.
* Significant improvement in liquidity.
GCC was established as a proprietorship firm in 2021 by Mr Nazir
Ahmad Khan. GCC operates an integrated cold storage unit at IGC,
Lassipora, Pulwama, Kashmir for preservation and ripening of apples
and other horticulture produce with installed capacity of 5000 MT.
INDICON CONSTRUCTION: CRISIL Withdraws D Rating on INR3.9cr Loan
----------------------------------------------------------------
CRISIL Ratings has withdrawn its rating on the bank facilities of
Indicon Construction Private Limited (ICPL) on the request of the
company and after receiving no objection certificate from the bank.
The rating action is in-line with CRISIL Rating's policy on
withdrawal of its rating on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1.9 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Cash Credit 3.9 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Funded Interest 0.11 CRISIL D/Issuer Not
Term Loan Cooperating (Withdrawn)
Funded Interest 0.16 CRISIL D/Issuer Not
Term Loan Cooperating (Withdrawn)
Funded Interest 0.52 CRISIL D/Issuer Not
Term Loan Cooperating (Withdrawn)
Funded Interest 0.11 CRISIL D/Issuer Not
Term Loan Cooperating (Withdrawn)
Long Term Loan 0.8 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Long Term Loan 0.72 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Long Term Loan 0.08 CRISIL D/Issuer Not
Cooperating (Withdrawn)
Proposed Long Term 3.5 CRISIL D/Issuer Not
Bank Loan Facility Cooperating (Withdrawn)
Proposed Long Term 2 CRISIL D/Issuer Not
Bank Loan Facility Cooperating (Withdrawn)
Proposed Long Term 2 CRISIL D/Issuer Not
Bank Loan Facility Cooperating (Withdrawn)
Working Capital 1.7 CRISIL D/Issuer Not
Term Loan Cooperating (Withdrawn)
CRISIL Ratings has been consistently following up with ICPL for
obtaining information through letter and email dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of ICPL. This restricts CRISIL
Ratings' ability to take a forward looking view on the credit
quality of the entity. CRISIL Ratings believes that rating action
on ICPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, CRISIL Ratings has
continued the ratings on the bank facilities of ICPL to 'CRISIL
D/CRISIL D Issuer not cooperating'.
ICPL was established in 2003 by Mr Pradeep Kadam and Mr Ashok
Dhamdhere in Pune, Maharashtra. The company, which is registered as
a Class 1-A contractor with the Government of Maharashtra,
undertakes civil construction for the Public Works Department and
Pradhan Mantri Gram Gadak Yojana. Work comprises construction of
roads, mainly in western Maharashtra.
IRODE MICROSYSTEMS: Voluntary Liquidation Process Case Summary
--------------------------------------------------------------
Debtor: Irode Microsystems Private Limited
C-108, Purvasha
Anand Lok Apt. Mayur Vihar
Phase-I, New Delhi 110091
Liquidation Commencement Date: November 5, 2023
Court: National Company Law Tribunal, New Delhi Bench
Insolvency professional: Suman Pandey
Interim Resolution
Professional: Suman Pandey
2E/207, 2nd Floor, Caxton House
Jhandewalan Extension
New Delhi 110055
E-mail: ip.sumanpandey@gmail.com
Mobile: 9654772642
Last date for
submission of claims: December 4, 2023
ITAAN PHARMA: Ind-Ra Affirms B Bank Loan Rating, Outlook Positive
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Itaan Pharma
Private Limited's (IPPL) bank facilities as follows:
-- INR400 mil. Term loan due on August 2031 affirmed; Outlook
revised to Positive from Stable with IND B/Positive rating;
-- INR50 mil. Fund-based limits affirmed; Outlook revised to
Positive from Stable with IND B/Positive/IND A4 rating; and
-- INR15.4 mil. Term loan due on June 2031 assigned with IND B/
Positive rating.
The Positive Outlook reflects Ind-Ra's expectation of completion of
project and commencement of commercial operations in 4QFY24.
Key Rating Drivers
The affirmation reflects the under construction status of IPPL's
general injectables and pharmaceutical formulations manufacturing
plant at Karkapatla, Telangana with an annual installed capacity of
70 million vials per annum. As per management, 90% of the
construction work has been completed and installation of machinery
is in process. The plant is likely to commence commercial
operations in January 2024. The company plans to manufacture
generics as a contract manufacturer for regulated and
semi-regulated markets. Ind-Ra expects the scale of operations to
be small in FY24 as the commercial operations would begin in
4QFY24.
Liquidity Indicator - Stretched: IPPL does not have any capital
market exposure and relies on banks and financial institutions to
meet its funding requirements. The company has scheduled repayment
of INR1.1 million and INR8.3 million in FY24 and FY25 respectively.
The total estimated project cost is INR890.2 million, of which
INR415.3 million will be funded through term debt and the remaining
from promoters contribution. Of the total estimated amount,
INR860.89 million has been infused till October 2023 ( INR474.9
million in the form of promoters' contribution and INR381.4 million
of term debt).
However, the ratings are supported by the promoters' more than a
decade-long experience in the pharmaceutical industry.
Rating Sensitivities
Positive: Achieving of full completion of project and commencement
of operations, including key regulatory approvals and an
improvement in liquidity position will be positive for the
ratings.
Negative: Any delay in full completion of project and/or
commencement of operations, including key regulatory approvals and
or a stretch in the liquidity position could be negative for the
ratings.
Company Profile
IPPL was established on May 4, 2022 by Chirukuri Ramana Kumar. The
company is setting up a manufacturing unit of general injectables
and pharmaceutical formulations in Telangana.
JAYASHEEL N: Ind-Ra Downgrades Bank Loan Rating to BB
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded ratings of Shri
Jayasheel N Shetty's (SJNS) bank facilities to 'IND BB (ISSUER NOT
COOPERATING)' from 'IND BBB- (ISSUER NOT COOPERATING)'. The Outlook
is Stable.
The detailed rating actions are:
-- INR300 mil. Fund-based working capital limits downgraded with
IND BB (ISSUER NOT COOPERATING)/Stable/IND A4+ (ISSUER NOT
COOPERATING) rating; and
-- INR165 mil. Non-fund-based facilities downgraded with IND A4+
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best available information.
Key Rating Drivers
The downgrade is in accordance with Ind-Ra's Guidelines on What
Constitutes Non-Cooperation. As per the guidelines, if an issuer
has an investment grade rating outstanding while being
non-cooperative for more than six months with Ind-Ra, then Ind-Ra
will necessarily downgrade such rating to the non-investment grade,
while maintaining the Issuer Not Cooperating status.
The current outstanding rating of 'IND BB (ISSUER NOT COOPERATING)'
might not reflect SJNS's credit strength as the firm has been
non-cooperative with the agency since May 19, 2023. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings.
Company Profile
Established in 2006 as a proprietorship entity, SJNS is run by
Jayasheel Narayana Shetty. The firm is engaged in the civil
construction work of roads, bridges, canal works, barrage works and
lift irrigation works. The entity undertakes government projects on
tender basis. It also operates a bar and restaurant in Karnataka.
P.S. STEEL: Ind-Ra Affirms BB+ LongTerm Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed P.S. Steel Tubes
Limited's (PSSTL) Long-Term Rating at 'IND BB+'. The Outlook is
Stable.
The instrument-wise rating actions are:
-- INR860 mil. Fund-based working capital limit affirmed with IND
BB+/Stable/IND A4+ rating;
-- INR137 mil. Non-fund-based working capital limit affirmed with
IND A4+ rating; and
-- INR347.30 mil. Term loan due on March 31, 2027 affirmed with
IND BB+/Stable rating.
Key Rating Drivers
The affirmation reflects PSSTL's continued medium scale of
operations, despite an increase in the revenue to INR5,918.28
million in FY23 (FY22: INR5,018.70 million). The growth in revenue
was attributed to an increase in sales realizations to INR76,847
per metric ton (mt) in FY23 (FY22: INR69,397.79 per mt) and a
marginal increase in sales volume to 77,013mt (72,450mt). During
1HFY24, the company achieved revenue of INR2,500 million. However,
Ind-Ra expects the revenue to decline marginally in FY24 due to a
marginal decline in sales realization, resulting from a decline
price of raw materials which was passed on to the customer.
The ratings continue to factor in the company's modest EBITDA
margins of 3.58% in FY23 (FY22: 4.53%) with a return on capital
employed of 8.30% (9.30%). Despite the revenue growth, the margins
declined because of the intense price-based competition, resulting
from the fragmented nature of the industry. However, the agency
expects the margins to improve to 3.80%-4% in FY24 owing to a
likely increased sales of high-margin products such as gas
pipelines, metal crash barriers, among others.
Further, the ratings remain constrained by PSSTL's modest credit
metrics due to high bank borrowings (FY23: INR1,262.35 million,
FY22: INR1,292.01 million) and modest profitability. The gross
interest coverage (operating EBITDA/gross interest expenses)
deteriorated to 1.61x in FY23 (FY22: 1.69x) and the net leverage
(total adjusted net debt/operating EBITDAR) to 5.94x (5.59x) on the
back of a decline in the absolute EBITDA to INR212.01 million
(INR230.40 million) and a continued high bank borrowings. However,
Ind-Ra expects the credit metrics to improve marginally in FY24 on
account of the likely increase in profitability margins.
Liquidity Indicator - Stretched: The company's average maximum use
of the fund-based limits was 99% for the 12 months ended September
2023. The cash and cash equivalents stood at INR3.21 million at
FYE23 (FYE22: INR4.14 million). The cash flow from operations
declined to INR32.52million in FY23 (FY22: INR75.69 million) due to
unfavorable changes in working capital. Consequently, the free cash
flow declined to INR18.02 million in FY23 (FY22: INR67.21 million).
However, Ind-Ra expects the cash flow from operations and free cash
flow to improve in the near-to-medium term, due to a likely
improvement in the EBITDA with a stable working capital cycle and
the absence of any major debt-led capex plan. The company has an
elongated working capital cycle of 80-100 days as it manufactures
around 200 varieties of pipes. The working capital cycle improved
to 83 days in FY23 (FY22: 93 days) with a reduction in the
inventory holding period to 51 days (67 days). PSSTPL has long-term
debt repayment of INR91.4 million and INR100 million in FY24 and
FY25, respectively. The company does not have any capital market
exposure and relies on banks and financial institutions to meet its
funding requirements.
However, the ratings continue to be supported by the promoters'
nearly four decades of experience in the manufacturing of steel
pipes, leading to strong relationships with customers as well as
suppliers.
Rating Sensitivities
Negative: Deterioration in the liquidity and credit metrics with
the interest coverage reducing below 1.5x on a sustained basis will
be negative for the ratings.
Positive: An improvement in the liquidity position and credit
metrics with the interest coverage increasing above 2.25x on a
sustained basis, while maintaining the scale of operations will be
positive for the ratings.
Company Profile
Incorporated in 1989, PSSTL manufactures steel pipes and tubes. The
company has two plants located in Bhilai (Chhattisgarh) having
annual production capacity of 56,000mt and Khanav (Maharashtra) of
70,000mt. It specializes in production of oxygen lancing pipes,
mild steel electric resistance welded black and galvanized
pipes/tubes, square and rectangular hollow sections, scaffolding
pipes, and steel tubes for idlers and belt conveyors, boiler tubes
and air pre-heater tubes.
PAYARE LAL: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Payare Lal
Sharma (PLS) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 3.5 CRISIL D (Issuer Not
Cooperating)
Proposed Fund- 3.5 CRISIL D (Issuer Not
Based Bank Limits Cooperating)
CRISIL Ratings has been consistently following up with PLS for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative. 'The investors, lenders
and all other market participants should exercise due caution with
reference to the rating assigned/reviewed with the suffix 'ISSUER
NOT COOPERATING' as the rating is arrived at without any management
interaction and is based on best available or limited or dated
information on the company. Such non co-operation by a rated entity
may be a result of deterioration in its credit risk profile. These
ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking
component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of PLS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PLS
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PLS continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
PLS was formed in 2000 as a proprietor firm of Mr Payare Lal Sharma
in 2000. The firm constructs roads, bridges and buildings in Jammu
and Kashmir.
PRAKRUTI LIFE: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Prakruti Life
Science Private Limited (PLSPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 7 CRISIL D (Issuer Not
Cooperating)
Overdraft Facility 1.03 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PLSPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of PLSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PLSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PLSPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
PLSPL, set up in 2012 and based in Udupi, Karnataka, is part of the
Prakruti group. It undertakes contract manufacturing of
pharmaceutical drugs. Operations are managed by Mr M R Shetty.
PULIKKOTTIL LAZAR: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Pulikkottil
Lazar and Sons Jewellery Private Limited (PLSJPL) continue to be
'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 16.67 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Working Capital 1.33 CRISIL D (Issuer Not
Term Loan Cooperating)
CRISIL Ratings has been consistently following up with PLSJPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of PLSJPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
PLSJPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of PLSJPL continues to be 'CRISIL D Issuer Not
Cooperating'.
Set up in 2019 in Kerala by Mr Jomy Varghese and Mr Jimmy Varghese,
PLSJPL operates a gold jewellery showroom in Thrissur.
RAJDHANI CRAFTS: Ind-Ra Assigns BB+ Loan Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Rajdhani Crafts
Industries Private Limited's (RCIPL) bank facilities as follows:
-- INR440 mil. Fund-based working capital limit assigned with IND
BB+/Stable/ IND A4+ rating; and
-- INR110 mil. Term loan due on March 2028 assigned with IND BB+
/Stable rating.
Key Rating Drivers
The rating reflects RCIPL's medium scale of operations with its
revenue declining to INR1,118.05 million in FY23 (FY22: INR1,555.11
million), due to the overall slowdown in the international markets
including Europe and the US, owing to the ongoing Ukraine-Russia
war. In 6MFY23, RCIPL achieved revenue of around INR482 million and
had an order book of INR412 million as of September 2023, which
would be executed within three months. The company caters to the
domestic and export markets. In FY23, its export markets
contributed 94% to its net sales (around INR1,050.64 million) with
the remaining coming from the domestic market (6% and INR67.01
million). In FY24, the management expects the revenue to improve on
account of an increase it's the share of revenue from the domestic
market. However, Ind-Ra expects the revenue to remain at similar
range in FY24 amid the slowdown in overseas markets.
The rating also reflects RCIPL's modest EBITDA margin, which
decreased to 8.60% in FY23 (FY22: 11.48 %) due to the increase in
the administration costs and lower absorption of fixed costs. The
return on capital employed deteriorated to 4.4% in FY23 (FY22:
13.9%). In FY24, the management expects the EBITDA margins to
improve on account of increasing its domestic market share and
better absorption of fixed costs with the increase in sales.
However, the agency expects the EBITDA margins to be at the similar
level over the medium term due to the similar nature of
operations.
RCIPL has modest credit metrics with the gross interest coverage
(operating EBITDA/gross interest expense) deteriorating to 3.42x in
FY23 (FY22: 6.68x), due to a fall in the absolute EBITDA to
INR96.19 million (INR178.48 million), and the net financial
leverage (adjusted net debt/operating EBITDA) increasing to 5.80x
(2.97x). In FY23, Ind-Ra expects the credit metrics to improve
slightly due to no major debt-funded capex and its order book.
Liquidity Indicator –Stretched: The working capital cycle
remained elongated at 295 in FY23 (FY22: 176) due to the increase
in the inventory holding period to 295 days (176 days). The cash
and cash equivalents stood at INR0.23 million at FYE23 (FYE22:
INR97.42 million). RCIPL's average maximum utilization of the
fund-based limits was 79.55% and that of the non-fund-based limits
was 19.08% during the 12 months ended September 2023, with no
instance of overutilization. The company's fund-based limits
reduced to INR440 million (INR480 million), as the is focusing more
on the domestic market. The cash flow from operations deteriorated
to INR36.35 million in FY23 (FY22: INR90.10 million) on account of
the negative changes in the working capital. Furthermore, the free
cash flow remained at negative INR23.81 million (FY22: negative
INR38.70 million). The company has debt repayment obligations of
around INR61.6 million and INR59.7 million in FY24 and FY25,
respectively. RCIPL does not have any capital market exposure and
relies on banks and financial institutions to meet its funding
requirements.
The rating is constrained by RCIPL's customer concentration risk,
with Habufa Meubelen B.V. contributing 70% to its revenue in FY23
(FY22: 68.6%).
However, the rating is supported by the promoters' more than one
decade of experience in the manufacturing of furniture, leading to
established relationship with its customer.
Rating Sensitivities
Negative: A decrease in the scale of operations or operating
profitability, or a deterioration in the overall credit metrics or
the liquidity profile, and unable to reduce its customer
concentration risk, on a sustained basis, could lead to a negative
rating action.
Positive: An increase in the scale of operations and the operating
profitability, along with an improvement in the overall credit
metrics, financial risk profile and the liquidity profile, with the
net leverage falling below 3.5x, all on a sustained basis, could
lead to a positive rating action.
Company Profile
RCIPL was incorporated on December 23, 2009. The company
manufactures wooden furniture and handicraft items. Its plant is in
Jaipur, Rajasthan.
RAM IMPEX: CRISIL Lowers Rating on INR5cr Cash Loan to C
--------------------------------------------------------
CRISIL Ratings has downgraded the ratings on the bank facilities of
Ram Impex Corporation (RIC) to 'CRISIL C Issuer Not Cooperating'
from 'CRISIL B+/Stable Issuer Not Cooperating' while the rating on
the short term bank facilities continues to be 'CRISIL A4 Issuer
Not Cooperating' due to delay in debt service obligations to its
lenders as per publicly available information.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL C (ISSUER NOT
COOPERATING; Revised from
'CRISIL B+ ISSUER NOT
COOPERATING)
Letter of Credit 12 CRISIL A4 (ISSUER NOT
COOPERATING)
Letter of Credit 3 CRISIL A4 (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with RIC for
obtaining information through letters and email dated November 23,
2023 and September 11, 2023, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such
non-co-operation by a rated entity may be a result of deterioration
in its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward-looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of RIC, which restricts CRISIL
Ratings' ability to take a forward-looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RIC
is consistent with 'Assessing Information Adequacy Risk'.
RIC, set up in 2011, trades in steel, medium density fibre boards
and glass. Mr. Kakarlapudi Raju and Mr. Srinivas Reddy Marella are
the promoters. The firm is based in Hyderabad.
RAM LAL KAMAL: Liquidation Resolution Process Case Summary
----------------------------------------------------------
Debtor: Ram Lal Kamal Raj Jewellers Private Limited
Shop No. 109, First Floor
Ravi Market, 188-89
Katra Mashroo, Dariba Kalan
North Delhi, Delhi
India 110006
Liquidation Commencement Date: November 14, 2023
Court: National Company Law Tribunal, New Delhi Bench, Court VI
Date of closure of
insolvency resolution process: November 9, 2023
Insolvency professional: Mr. Debashis Nanda
Interim Resolution
Professional: Mr. Debashis Nanda
CS-14, Ansal Plaza
Vaishali, Ghaziabad
U.P.
E-mail: dnanda.cma@gmail.com
liquidationrkrjewellers@gmail.com
Last date for
submission of claims: December 14, 2023
RAM MURTI: CRISIL Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Shri Ram
Murti Smarak Trust (SRM) continue to be 'CRISIL B+/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.5 CRISIL B+/Stable (Issuer Not
Cooperating)
Term Loan 43.5 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SRM for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SRM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SRM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SRM continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
SRM was setup in 1994 by Mr. Dev Murti with an objective to provide
education services. SRMS provides education in the field of
Engineering, management, medical through five colleges on a campus
covering an area of nearly 137 acres at Bareilly, Uttar Pradesh
with around 1683 seats in all.
RAM SPINNING: CRISIL Reaffirms B+ Rating on INR15cr Cash Loan
-------------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long-term bank
facilities of Sri Ram Spinning Mills Ltd (SRSM) at 'CRISIL
B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL B+/Stable (Reaffirmed)
Drop Line
Overdraft Facility 2 CRISIL B+/Stable (Reaffirmed)
Proposed Fund-
Based Bank Limits 3.35 CRISIL B+/Stable (Reaffirmed)
Term Loan 3.37 CRISIL B+/Stable (Reaffirmed)
Term Loan 0.81 CRISIL B+/Stable (Reaffirmed)
Term Loan 0.47 CRISIL B+/Stable (Reaffirmed)
The rating reflects SRSM's modest scale of operations,
susceptibility of margins to volatility in raw material prices and
working capital intensive operations. These weaknesses are
partially offset by the extensive experience of the promoters in
the cotton yarn industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: With revenues of around INR67 crores
in fiscal 2023 and estimated at INR70-72 crores for upcoming
fiscal, the scale of operations remains modest. Further, intense
competition may continue to constrain scalability, pricing power,
and profitability in the upcoming fiscals.
* Susceptibility of margins to volatility in raw material prices
and large working capital requirement: Prices of the key raw
material that accounts for 50-60% of SRSM's turnover, are volatile
as the availability of cotton depends on the extent of rainfall.
SRSM's profitability will remain susceptible to volatility in raw
material prices because of its restrictions to completely pass on
any increase in prices to customers due to intense competition.
Further higher stocking requirement due to seasonality in the
availability of cotton results in higher working capital
requirements.
Strength
* Extensive experience of the promoters and their need-based
funding support: SRSM benefits from the promoters' experience of
over a decade, their strong understanding of market dynamics, and
healthy relationships with customers and suppliers ensuring
uninterrupted supply of raw material and flow of repeat orders'
should continue to support operations. Also, promoters will
continue to provide need based funding support.
Liquidity: Stretched
Cash accrual are expected to be over INR2-2.6 crore which are
tightly matched against term debt obligation of INR2 crore over the
medium term. Bank limit utilisation was high around 98 percent for
the twelve months ended Sept-2023.
Current ratio is also projected to remain low at 1.25 times as on
March 31, 2024.
Need based fund infusion from the promoters in the form of
unsecured loans also supports liquidity.
Outlook: Stable
CRISIL Ratings believes will continue to benefit from the extensive
experience of its promoters and established relationship with key
suppliers and customers.
Rating Sensitivity factors
Upward factors:
* Sustenance of cash accruals at higher levels of INR3-4 crore.
* Improvement in liquidity with average bank limit utilization
reducing to around 80-85%.
Downward factors:
* Steep decline in revenue and operating margin below 5% resulting
in significantly lower net cash accrual.
* Large debt-funded capital expenditure or significant stretch in
working capital cycle weakening the financial risk profile and
liquidity.
Incorporated in 1995, SRSM manufactures cotton yarn with counts of
30-40. The Hyderabad (Telangana)-based company has a capacity of
25000 spindles.
RGS HEALTHCARE: Ind-Ra Cuts Loan Rating to BB, Outlook Negative
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded RGS Healthcare
Limited's (RGS) term loan rating to 'IND BB (ISSUER NOT
COOPERATING)' from 'IND BBB- (ISSUER NOT COOPERATING)'. The Outlook
is Negative.
The detailed rating action is:
-- INR788.53 mil. Term loan due on March 2034 downgraded with
IND BB (ISSUER NOT COOPERATING)/Negative rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
best available information
Key Rating Drivers
The downgrade is in accordance with Ind-Ra's Guidelines on What
Constitutes Non-Cooperation. As per the guidelines, if an issuer
has an investment grade rating outstanding while being
noncooperative for more than six months with Ind-Ra, then the
agency will necessarily downgrade such rating to the non-investment
grade.
The rating of 'IND BB (ISSUER NOT COOPERATING)' might not reflect
RGS' credit strength as the company has been non-cooperative with
the agency since May 23, 2023. Therefore, investors and other users
are advised to take appropriate caution while using these ratings.
Company Profile
Formed in 2004, RGS operates a 325-bed super-speciality hospital in
Mohali.
RS TRUST: Ind-Ra Hikes Loan Rating to BB+, Outlook Stable
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded R.S. Trust's (RST)
bank facilities to 'IND BB+' from 'IND BB' with a Stable Outlook as
follows:
-- INR130 mil. Fund-based working capital limits upgraded with
IND BB+/Stable rating;
-- INR8.75 mil. (reduced from INR21.24 mil.) Bank loans upgraded
with IND BB+/Stable rating; and
-- INR18.76 mil. Proposed bank loans upgraded with IND BB+/Stable
rating.
The upgrade reflects an improvement in RST's scale of revenues and
credit metrics in FY23, and Ind-Ra expects the credit profile to
remain comfortable over the medium term.
Key Rating Drivers
RST's total revenue increased to INR308.83 million in FY23 (FY22:
INR256.17 million); however, the scale of operations remained
small. Despite the fall in student headcount, the trust's revenue
increased in FY23 due to an increase in the hostel & transportation
fee receipts post pandemic. Tuition fee receipts remain the key
source of revenue for the trust which accounted 99% for the total
income in FY23 (averagely accounted 98% during FY19-FY23). Ind-Ra
expects the revenue to grow gradually over the medium term owing to
gradual growth in the student headcount.
RST's student headcount bases declined 7.00% yoy to 3,479 in FY23,
due to a fall in the enrolments for engineering courses. However,
the student headcount increased to 3,645 for the academic year
2023-24 and it is likely to increase further as the admission
process is ongoing. Of the 3,479 students in FY23, 70% were in the
trust's college and the rest were in the school. The overall
capacity utilization remained at 79% in FY23. Ind-Ra expects the
student headcount to grow gradually in the medium term, due to the
availability of its infrastructure.
RST's net leverage (net debt/EBITDA) reduced to 0.67x in FY23
(FY22: 0.80x), interest service coverage ratio (ISCR) increased to
26.64x (18.92x), and debt service coverage ratio (DSCR) rose to
6.54x (6.05x). The increase in debt and coverage ratios was mainly
due to a fall in debt service obligations as the trust had closed
most of the term loan accounts during FY19-FY22 and had only one
long-term loans at FYE23. Ind-Ra expects RST's leverage and
coverage metrics to remain healthy in the near term on the back of
sustained growth in EBITDA.
The ratings factor in RST's moderate EBITDA margins. The trust's
EBITDA margin fell to 26.10% in FY23 (FY22: 39.87%). They were
above 36% during FY21-FY22 due to lower incurrence of operating
expenses on account of the pandemic-led lockdown. The absolute
EBITDA stood at INR80.61 million for FY23 (FY22: INR102.14
million). Ind-Ra expects VT's EBITDA margin remain moderate in near
term due to the sustained growth in revenue and expenditure.
Liquidity Indicator – Stretched: RST's liquidity profile remains
stretched due to its small scale of operations and elongated
receivables days. Furthermore, the trust relies on a single bank
for funding and does not have any access to the capital market.
Although its receivable days improved to 126 in FY23 (FY22: 148
days), they remained high. However, Ind-Ra believes RST's cash flow
from operations and unencumber cash and bank balances would be
adequate for its debt serving obligations (principal and associate
intertest cost) of around INR28 million for FY24 and INR34 million
for FY25. The unencumbered cash and bank balance to INR47.38
million in FY23 (FY22: INR16.52 million) due to favorable changes
in working capital. Moreover, the trust maintained credit balance
in its working capital limit during last 12 months ended September
2023.
The ratings are supported by the trust' long operating track record
of over 25 years and continuous financial support from the trustees
and the group entities in the form of interest-free unsecured
loans. The trust received unsecured loans worth INR86.71 million
from the trustees and the group entities as of FYE23.
Rating Sensitivities
Positive: Sizeable growth in the student base leading to higher
revenue and EBITDA exceeding INR250 million coupled with
comfortable liquidity on a sustained basis could lead to a positive
rating action.
Negative: Inability to maintain the EBITDA margin at current
levels, leading to deterioration in the debt and coverage metrics
and stress on the liquidity position on a sustained basis will be
negative for the ratings.
Company Profile
Established in 1998, RST is promoted by R Rangarajan (founder and
chairman) who is also the founder of the Vel Group. The trust runs
two colleges offering under-graduate and post-graduate courses in
engineering and paramedical. The trust also operates a
matriculation school, which offers KG to 12th standard education.
RST is a part of the Vel group, which also manages Vel Trust (1997)
and Vel Tech Rangarajan Dr. Sagunthala R&D Institute of Science and
Technology Trust.
RUDRA LAMKRAFT: Ind-Ra Assigns B+ Loan Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Shree Rudra Lamkraft
Private Limited's (SRLPL) bank facilities as follows:
-- INR109.5 mil. Fund-based working capital limits assigned with
IND B+/Stable/IND A4 rating; and
-- INR140 mil. Term loan due on December 2030 assigned with IND
B+/Stable rating.
Key Rating Drivers
The rating reflects SRLPL's small scale of operations and a limited
track record. Its revenue stood at INR394 million in FY23, mainly
supported by an increase in orders from its customers and sales
volume. SRLPL commenced its commercial operations of manufacturing
absorbent kraft paper only in July 2022, hence, its FY23 financials
included the operations for the remaining nine months of the
fiscal. During 1HFY24, SRLPL booked revenue of INR500 million.
Ind-Ra expects the revenue to increase in FY24, on the back of an
increase in capacity utilization coupled with an increase in demand
for its products.
Liquidity Indicator - Poor: The company incurred a total capex of
INR302 million in FY23 (term loan: INR178 million; promoter's
contribution: equity of INR69.40 million; and unsecured loans of
INR55 million). SRLPL's average maximum utilization of the
fund-based limit stood at 78.12% during the 12 months ended
September 2023. SRLPL does not have any capital market exposure and
relies on a single bank to meet its funding requirements. It has
repayment obligations of INR32.95 million in FY24 and INR32.95
million in FY25, which are likely to be met through its internal
accruals. The cash flow from operations remained negative at
INR107.83 million in FY23 (FY22: negative INR33.28 million), due
to an increase in the working capital requirements. The company's
net working capital cycle stood at 89 days in FY23, due to
elongated debtor days of 128 days. The cash and cash equivalents
stood at INR0.19 million at FYE23 (FYE22: INR3.19 million).
The company has modest credit metrics due to EBITDA losses in the
first year of operations. Its gross interest coverage (operating
EBITDA/gross interest expenses) stood at negative 0.81x in FY23 and
the net leverage (adjusted net debt/operating EBITDAR) was negative
21.69x. SRLPL's total debt stood at INR383 million in FY23,
including unsecured loans of INR140 million from related parties
and a term loan of INR164 million. However, Ind-Ra expects the
credit metrics to improve in FY24, aided by its scheduled repayment
of term loans and a likely increase in its operating profits.
The rating also reflects Ind-Ra's expectation of modest EBITDA
margins of 5%-6% in the near term. The company's return on capital
employed stood at 7.2% in FY23 (FY22: negative 8.4%). The company
booked an EBITDA of INR36.70 million (8.2%) till 1HFY24. Ind-Ra
expects its EBITDA margin to improve in FY24, on account of higher
absorption of fixed costs following an increase in its revenue.
However, its margins would remain modest because of competition in
the industry.
However, the rating is supported by the promoters' more than a
decade of experience in the kraft paper industry.
Rating Sensitivities
Positive: A significant increase in the scale of operations while
improving the overall credit metrics with the interest coverage
increasing above 1.3x and an improvement in the 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/or further
deterioration in the liquidity profile, on a sustained basis, could
lead to a negative rating action.
Company Profile
SRLPL was incorporated in 2021 and commenced its commercial
operations in July 2022. The company manufactures absorbent kraft
paper, used for laminating. Its factory is sin Kheda, Gujrat.
S. M. T. HI-TECK: CRISIL Keeps D Debt Rating in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of S. M. T.
Hi-Teck Polymer (SMT) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.75 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SMT for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SMT, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SMT
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SMT continues to be 'CRISIL D Issuer Not Cooperating'.
SMT was established as a proprietorship firm by Mrs.Tulasi Rani in
2012 in Muthukrishnaperi, Tamil Nadu. The firm is engaged in the
manufacturing of poly-phenylene oxide (PPO) bags for the sugar,
rice, cement and flour industries.
S. S. AGRO: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of S. S. Agro
(SSA; part of the SS group) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL D (Issuer Not
Cooperating)
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SSA for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SSA, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SSA
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SSA continues to be 'CRISIL D Issuer Not Cooperating'.
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of SSA and SS Overseas (SSO),
because the two firms, together referred to as the SS group, are in
the same line of business, with common promoters and management,
and strong financial linkages. CRISIL has also considered unsecured
loans extended by the group's promoters, as neither debt nor
equity, as they bear an interest rate that is lower than the market
rate, and have been in the business for over three years.
The SS group, based in Jalalabad, district Bhatinda (Punjab), is
managed by Mr Pravesh Kumar and his brothers. Both SSA and SSO
process and sell basmati rice.
S.S. OVERSEAS: CRISIL Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of S.S. Overseas
(SSO; part of the SS group) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 18 CRISIL D (Issuer Not
Cooperating)
Cash Credit 1.94 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 0.06 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SSO for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SSO, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SSO
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SSO continues to be 'CRISIL D Issuer Not Cooperating'.
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of SSO and S. S. Agro (SSA),
because the two firms, together referred to as the SS group, are in
the same line of business, with common promoters and management,
and strong financial linkages. CRISIL has also considered unsecured
loans extended by the group's promoters, as neither debt nor
equity, as they bear an interest rate that is lower than the market
rate, and have been in the business for over three years.
The SS group, based in Jalalabad, district Bhatinda (Punjab), is
managed by Mr Pravesh Kumar and his brothers. Both SSA and SSO
process and sell basmati rice.
SACRED HEART: Ind-Ra Assigns BB+ Bank Loan Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Sacred Heart
Province's (SHP) bank loans 'IND BB+'. The Outlook is Stable.
The detailed rating action is:
-- INR450.0 mil. Bank loans assigned with IND BB+/Stable rating.
Key Rating Drivers
Small Scale of Operations: The rating reflects the trust's small
scale of operations due to its religious nature of establishment
and dependence on donations/contributions from its priest members.
SHP is a part of Kerala-based congregation, Carmelites of Mary
Immaculate (CMI), and is responsible for setting up and overseeing
various institutions established in the Sacred Hearts/Rajagiri
province (covering Archdiocese of Ernakulam and the Diocese of
Kothamangalam, parts of Kerala along with a few regions in other
states) in addition to religious services, as per the norms and
constitution laid down by the CMI and other charitable services in
the education and healthcare segments. SHP also owns significant
land holdings that have been leased out to various institutions set
up by the trust and also owns 27 flats constructed by a developer
to which SHP sold its land.
Weak Operational Performance: The trust depends on
donations/salaries earned by its priest members locally as well as
abroad. Being a religious trust, its EBITDA margin remains very low
and stood at 7.41% in FY23 (FY22: 13.84%). SHP reported a net loss
of INR31.96 million in FY23 (FY22: loss of INR30.73 million), on
account of higher interests. However, SHP can avail contributions
from the member institutions by virtue of its operational linkages
with them during financial stress. Ind-Ra expects SHP to report
strong income in FY24 and FY25, on account of the likely sale of
its flats in Kakkanad and a few other properties.
Liquidity Indicator-Stretched: The trust's liquidity profile is
supported by donations. It had available funds worth INR36.70
million at FYE23 (FYE22: INR31.50 million). Its liquidity has been
supported by it receiving advances for its flat sales since FY20
that is likely to continue till FY24. SHP is looking to retire its
debt in FY25 through selling a few land parcels owned by it. If the
sale plan does not go through as intended, its debt servicing may
fall back on its member institutions in case of liquidity issues.
SHP has debt repayment obligations of INR77.6 million each in FY24
and FY25.
High Debt Position and Moderate Coverage: SHP's debt is higher than
its income level as reflected in debt/income ratio of 569.24% in
FY23 (FY22: 616.88%). The debt was taken to set up/fund the member
institutions and the lenders have taken comfort from the patronage
SHP has from the CMI group as well as its huge land holdings. SHP
has been able to service the debt obligations from its internal
sources; however, it could fall back on its member institutions if
it required to meet the same.
The trust's interest coverage (EBITDA/interest cost) remained lower
than 1x during FY18-FY23 except for FY19, mainly on account of
limited scale of operations. However, after FY20, it received
advances against the sale of the flats in Kakkanad and the coverage
after considering this cash flow was above 1x for a major part of
FY18-FY23. Its interest coverage stood at 2.55x in FY23 (FY22:
2.19x). The net leverage (net debt/EBITDA) was high at 71.79x in
FY23 (FY22: 42.84x) corresponding to the scale of operations.
Strong Operational Linkages with Various Institutions: SHP has
taken debt to set up educational institutions from kindergarten to
medical colleges, along with a hospital. Many priest members of SHP
actively play a role in these institutions and the provincial, who
is the highest decision-making authority of SHP, is also the
president of the board of various institutions. SHP runs around 50
institutions such as educational, hospital, charitable
institutions, among others.
Rating Sensitivities
Positive: Timely sale of available properties and an improvement in
liquidity would result in a positive rating action.
Negative: Delays in the sale of properties and a lack of support
from the member institutions to meet debt service requirements and
stress in its liquidity profile would result in a negative rating
action.
Company Profile
SHP is registered as a trust under Income Tax Act, 1961. It is a
part of Kerala-based CMI congregation, which has a long history of
running a number of institutions in various fields that benefit the
society at large. In addition to religious activities, SHP has
contributed to setting up and running of the institutions promoted
by SHP/CMI.
SAFAL GLADONE: Ind-Ra Hikes Loan Rating to BB+, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Safal Gladeone
Estate's (SGE) term loan to 'IND BB+' from 'IND BB (ISSUER NOT
COOPERATING)'. The Outlook is Stable.
The detailed rating action is:
-- INR300mil. (reduced from INR730 mil.) Term loan due on March
31, 2026 upgraded with IND BB+/Stable rating.
The upgrade reflects the low execution risk at SGE's only ongoing
project and adequate sales visibility.
Key Rating Drivers
Low Execution Risk: SGE's only ongoing project Glade one had a
completion level of 72% at end-September 2023, wherein the entire
land cost was already incurred and remaining cost to be incurred
is just INR415 million. Considering the low remaining cost and the
short project execution timeline of March 2024, the execution risk
is low.
Adequate Sales Visibility: The company had sold out 60% of the
total 160 units and 115,320 square feet (sf) of the total combined
area of 198,302 sf of the ongoing project at end-September 2023.
SGE saw a sales velocity of INR248 million from the project over
the nine months ended September 2023 against which INR165 million
was collected. With the likely completion of the project in March
2024, Ind-Ra expects the sales velocity to improve in FY25 and
FY26.
Low Funding Risk backed by Resourceful Promoters: SGE's promoters
are working in the real estate segment from the last 25 years under
the name of BSafal group. Since the promoters have robust financial
resources, they have contributed over the years in SGE to prepay
its entire disbursed debt obligation before its actual timeline.
Liquidity Indicator - Stretched: At end-October 2023, the SGE's
ongoing project (sold) had receivables of INR753 million and the
company had an unsold inventory of INR824 million, against the
pending construction cost of just INR316 million. Since SGE does
not have any capital market exposure and relies on banks and
financial institutions to meet its funding requirements, its
liquidity likely to be stretched over the near-to-medium term for
making completion to the remaining portion of the ongoing project.
The company's available cash and cash equivalent was INR35 million,
according to the financials of FY23. SGE is likely to have debt
repayment obligation of INR300 million over FY24-FY25 in case it
avails the undisbursed portion of the term loan.
High Project and Geographical Concentration; Cyclicality and
Regulatory Risk: SGE faces single project risk as it is only
involved in only one project Glade one, with no supporting cash
inflows from any other ongoing project. SGE has developed its real
estate project near Ahmedabad so the firm is heavily dependent on
one micro market – Ahmedabad. Additionally, the Indian real
estate industry is highly cyclical with volatile cash flows. The
real estate sector is exposed to a number of regulatory
requirements that are subject to frequent and unpredictable
changes. This leads to confusion, non-compliance and delays in
project execution.
Rating Sensitivities
Positive: Successful project completion and sales or a significant
increase in sales realization, leading to strong cash flow
visibility would lead to a positive rating action.
Negative: Any delay in the project execution or cost overrun
resulting in a higher-than-Ind-Ra-expected debt requirement will be
negative for the rating.
Company Profile
SGE is a partnership firm established by promoters of
Ahmedabad-based BSafal group. The firm has purchased a land parcel
in Sanand, Gujarat. In the current phase, SGE is constructing 160
villas and resort with a golf course.
SANCHETI GEMS: CRISIL Keeps B+ Debt Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Sancheti Gems
and Jewellers India Private Limited (SGJIPL) continues to be
'CRISIL B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SGJIPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SGJIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
SGJIPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of SGJIPL continues to be 'CRISIL B+/Stable Issuer Not
Cooperating'.
SGJIPL was set up in fiscal 2011 by Mr Naman Sancheti. The company
retails gold jewellery and trades in gold coins, bullion, and
silver. It has one owned showroom, in Durg, Chhattisgarh, and
spread over an area of around 6000 square feet. It operates as a
franchise of Anopchand Tilokchand Jewellers Pvt Ltd markets its
products under the 'ATJA' brand.
SATYANARAYANA RAW: CRISIL Keeps B Debt Rating in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sri
Satyanarayana Raw and Boiled Rice Mill (SRBRM) continues to be
'CRISIL B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.85 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SRBRM for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SRBRM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SRBRM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SRBRM continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Set up in 1984, SRBRM mills and processes paddy into rice, rice
bran, broken rice, and husk in East Godavari (Andhra Pradesh). The
firm is promoted by Mr. R Krishna Murthy and Mr. V Srinivasa Rao.
SCIENTIFICA TILES: CRISIL Keeps B Debt Rating in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Scientifica
Tiles LLP (STL) continues to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 27.8 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with STL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of STL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on STL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
STL continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Set up in March 2017 as a partnership firm by Mr Mahendra Prabhu
Dalsaniya, Mr Hirenkumar Karshan Vadaviya, Mr Satishkumar Babulal
Bavarava, and seven other promoters, STL is establishing a
greenfield project in Morbi to manufacture glazed (digitally
printed) vitrified tiles. Commercial operations are likely to begin
from the first week of February 2018.
SCIKNOW TECHNO: CRISIL Keeps C Debt Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Sciknow Techno
Solutions Limited (STSL; part of the Karvy Data Management Services
Ltd (KDMSL) group) continues to be 'CRISIL C Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Drop Line 7.5 CRISIL C (Issuer Not
Overdraft Facility Cooperating)
CRISIL Ratings has been consistently following up with STSL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of STSL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on STSL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
STSL continues to be 'CRISIL C Issuer Not Cooperating'.
Hyderabad-based STSL is a manufacturer of electronic components.
Incorporated in 2008, the Hyderabad-based KDMSL is a step-down
subsidiary of Karvy Stock Broking Ltd (KSBL). It offers business
and knowledge processing services. The company started off as a
pure-play back office service provider and gradually, added other
verticals such as e-Governance, banking, telecom and E-commerce. It
is an established player in government mandates such as the Aadhar
and PAN cards, NPR Biometric and E-TDS. It has healthy relations
with several key government departments and enjoys strong support
from KSBL.
SHASHI CABLES: Ind-Ra Assigns BB+ Bank Loan Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Shashi Cables
Limited's (SCL) bank facilities as follows:
-- INR210 mil. Fund-based working capital limits assigned with
IND BB+/Stable/IND A4+ rating;
-- INR200 mil. Non-fund-based working capital limits assigned
with IND A4+ rating; and
-- INR47.11 mil. Term loans due on March 2027 assigned with IND
BB+/Stable rating.
Key Rating Drivers
The ratings reflect SCL's small scale of operations as indicated by
revenue of INR1,286.28 million in FY23 (FY22: INR843 million). The
growth in revenue was due to execution of a higher number of orders
as well as an increase in sales realization. In FY23, the capacity
utilization was around 22% for aluminum conductor (FY22: 18%) and
32% for copper conductors (14%). SCL booked revenue of INR444.29
million in 1HFY24. As on 12 September 2023, it had an unexecuted
order book of INR1,719 million, of which orders worth INR1,050
million are likely to be completed during FY24 and the balance in
FY25. Ind-Ra expects the revenue to grow further in FY25 on account
of the orders in hand.
The ratings also factor in SCL's modest EBITDA margins of 3.9% in
FY23 (FY22: 4.8%) with a return on capital employed of 9%(7%).
Despite the revenue growth, the EBITDA margins declined on account
of an increase in cost of key raw materials (copper, aluminum and
steel) coupled with a decline in other operating income. During
1HFY24, it achieved EBITDA of INR12.9 million with EBITDA margins
of 3%. Ind-Ra expects the margins to remain at similar levels in
FY24 owing to the similar nature of the business.
Further, the ratings reflect SCL's modest credit metrics with gross
interest coverage (operating EBITDA/gross interest expense) of
1.46x in FY23(FY22: 1.24x) and net leverage (adjusted net
debt/operating EBITDAR) of 5.77x (6.04x). The credit metrics
improved on account of an increase in the EBITDA to INR50.18
million (FY22: INR40.19 million). Ind-Ra expects the credit metrics
to remain at similar levels in the near term in the absence of any
major debt-led capex plan.
Liquidity Indicator - Stretched: The net working capital cycle
remained elongated despite reducing to 116 days in FY23 (FY22: 128
days) on account of a decrease in the debtor collection period to
111 days (144 days). SCL does not have any capital market exposure
and relies on banks and financial institutions to meet its funding
requirements. SCL's average maximum utilization of the fund-based
and non-fund-based limits was about 88.71% and 91.94%,
respectively, during the 12 months ended September 2023. The fund
flow from operations turned positive to INR10.03 million in FY23
(FY22: negative INR1.28 million) on account of the improvement in
EBITDA. However, the cash flow from operation turned negative to
INR65.94 million in FY23 (FY22: INR51.89 million), mainly on
account of unfavorable changes in working capital. Consequently,
the free cash flow turned negative to INR77.13 million in FY23(
FY22: INR32.46 million). The cash and cash equivalents stood at
INR0.55 million at FYE23 (FYE22: INR22.53 million). The company has
scheduled repayments of INR18.5 million and INR12.5 million in FY24
and FY25, respectively.
However, the ratings are supported by the promoters' more than two
decades of experience in the 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 overall credit metrics with the interest
coverage above 2.5x and an improvement in 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 liquidity profile,
could lead to a negative rating action.
Company Profile
Incorporated on June 25, 1981, SCL manufactures aluminum conductor
(up to 765kv lines) and grooved copper conductors (107 sq. milli
meters to 193 sq. milli meters). The company generally caters to
major electricity boards, private engineering, procurement and
construction players and turnkey contractors. Its registered office
is located in Lucknow, Uttar Pradesh.
SHEYN INTERNATIONAL: CRISIL Keeps D Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Sheyn
International School (SIS) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 7.25 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SIS for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SIS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SIS
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SIS continues to be 'CRISIL D Issuer Not Cooperating'.
SIS was set up in 2013 as a unit of Shaurya Jyoti Foundation (also
set up in 2013); it runs two schools, one each in Mango and Kandra,
both in Jamshedpur (Jharkhand). Mr Avinash Singh manages the
operations.
SINGHAL POWER: CRISIL Keeps B Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Singhal Power
Presses Private Limited (SPPPL) continue to be 'CRISIL B/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.94 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Long Term 9.73 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating)
Proposed Overdraft 8 CRISIL B/Stable (Issuer Not
Facility Cooperating)
CRISIL Ratings has been consistently following up with SPPPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SPPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SPPPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SPPPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Incorporated in 1989, SPPPL manufactures power presses used in the
automobile industry at its facility in Rajkot, Gujarat. Mr Gajinder
Singh Chawla, Mr Ranjit Singh Chawla, Mr Ravinder Singh Chawla, Mr
Ajit Singh Chawla and Mr Harmeet Singh Chawla are the promoters of
the company.
SOUNDHARYA SIZING: Ind-Ra Assigns BB Loan Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Soundharya Sizing
Mills' (SSM) bank facilities as follows:
-- INR220 mil. Fund-based working capital limits assigned with
IND BB/Stable/IND A4+ rating;
-- INR40 mil. Term loans due on January 31, 2028 assigned with
IND BB/Stable rating; and
-- INR40 mil. Non-Fund-based working capital limits assigned with
IND A4+ rating.
Key Rating Drivers
The ratings reflect SSM's medium scale of operations, as indicated
by revenue of INR1,359.50 million in FY23 (FY22: INR1,176.14
million). The revenue improved 15.6% yoy in FY23 due to the
increased number of orders executed by the company. In FY23,
exports constituted 21.59% (FY22: 19.85%) of the total revenue and
the rest was contributed by domestic sales. SSM has achieved
revenue of INR700 million in 1HFY24. Ind-Ra expects the revenue to
improve in FY24 as well, backed by demand and production focus.
FY23 financials is provisional in nature.
Liquidity Indicator - Stretched: SSM's fund-based limits were fully
utilized, with few instances of overutilization due to the interest
charged, during the 12 months ended September 2023; however, the
same was regularized within one to two days. The net working
capital cycle elongated to 91 days in FY23 (FY22: 60 days) on
account of an increase in inventory days to 71 (31). SSM does not
have any capital market exposure and relies on banks and financial
institutions to meet its funding requirements. Moreover, the cash
flow from operations remained low, despite improving to INR36.43
million in FY23 (FY22: Negative INR131.37 million), due to an
increase in EBITDA to INR46.97 million (INR28.88 million).
Similarly, the free cash flow remained low, despite improving to
INR0.36 million (negative INR131.36 million) due to lower capex of
INR36.07 million (INR 0.01 million). Also, the cash and cash
equivalents stood weak at INR5.88 million in FY23 (FY22: INR5.25
million). The company has scheduled repayments of INR17 million and
INR9.4 million in FY24 and FY25, respectively.
The ratings factor in SSM's average EBITDA margins of 3.45% in FY23
(FY22: 2.46%) with ROCE of 13% in FY23 (FY22: 12.2%). In FY23, the
EBITDA margins improved on account of a decline in other operating
expenses. Ind-Ra expects the margins to decline in FY24, based on
fluctuations in raw material prices.
The ratings also reflect SSM's modest credit metrics with gross
interest coverage (operating EBITDA/gross interest expense) of
2.53x in FY23 (FY22: 2.42x) and the net leverage (adjusted net
debt/operating EBITDAR) of 5.91x (6.03x). The credit metrics
improved in FY24 on account of the increase in EBITDA. Ind-Ra
expects the credit metrics to decline marginally in FY24, in spite
of the absence of any major debt-led capex plan and scheduled debt
repayments of debt, due to a likely increase in interest cost and
marginal decline in EBITDA led by raw material price fluctuations.
The ratings however are supported by the promoter's extensive
experience of around two decades in the fabric manufacturing
industry, leading to established relationships with customers and
suppliers.
Rating Sensitivities
Negative: A substantial decline in the scale of operations or
credit metrics and deterioration of the liquidity profile could
lead to a negative rating action.
Positive: An improvement in the scale of operations and credit
metrics with net leverage reducing below 4.5x, along with an
improvement in the overall liquidity profile, all on a sustained
basis, could lead to a positive rating action.
Company Profile
Incorporated in December 2009, SSM manufacturing of grey cloth
fabric. The company has its registered office in Tirupur, Tamil
Nadu.
SOUTHERN PHARMA: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Southern
Pharma India Private Limited (SPIPL) continue to be 'CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (Issuer Not
Cooperating)
Long Term Bank 15 CRISIL D (Issuer Not
Facility Cooperating)
CRISIL Ratings has been consistently following up with SPIPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SPIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SPIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SPIPL continues to be 'CRISIL D Issuer Not Cooperating'.
SPIPL was incorporated on April 22, 2015. The company manufactures
active pharmaceutical ingredients at its facility in Atchutapuram,
near Visakhapatnam, Andhra Pradesh.
SUSAAH LABORATORIES: CRISIL Keeps B+ Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Susaah
Laboratories Private Limited (SLPL) continue to be 'CRISIL
B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.25 CRISIL B+/Stable (Issuer Not
Cooperating)
Long Term Loan 3.75 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SLPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SLPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SLPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SLPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Established in 2007 as a private limited company, SLPL is a
manufacturer of active pharmaceutical ingredients (APIs) and bulk
drug intermediaries. Based in Hyderabad, Telangana, the company is
promoted and managed by Mr. K Srinivas.
SWASTIK ENTERPRISE: CRISIL Keeps B Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Swastik
Enterprise - Ahmedabad (SE) continue to be 'CRISIL B/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B/Stable (Issuer Not
Cooperating)
Proposed Long Term 5 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with SE for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SE, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SE is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of SE
continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
Incorporated in 1990, SE is engaged into trading cloth & chemicals.
The firm also have distributorship of HTC, App Daily, and Zopo. The
operations are managed by Mr Sandeep Jain.
TIRUPATI AGENCIES: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Tirupati
Agencies Private Limited (TAPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.6 CRISIL D (Issuer Not
Cooperating)
Cash Credit 7.0 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with TAPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of TAPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TAPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TAPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
TAPL, incorporated in 1981, trades in roller ball bearings of odd
sizes. The company has four warehouses, one in Kolkata and the
others in Mumbai. Operations are managed by the promoter-director
Mr Chandra Kant Khemka.
TRIBHUVAN ISPAT: CRISIL Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Shree
Tribhuvan Ispat Private Limited (STIPL) continue to be 'CRISIL
B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B+/Stable (Issuer Not
Cooperating)
Term Loan 1.55 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with STIPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of STIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on STIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
STIPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in 2002 STIPL manufactures mild steel (MS) ingots at
its manufacturing facility in Bazpur, Uttarakhand. It has installed
capacity of 25,000 metric tonne of MS ingots per annum. STIPL is
promoted by Mr Vibhor Mittal, Mr Anand Agarwal and their family
members.
TRUELIXIR LIFE: Ind-Ra Assigns B Bank Loan Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Truelixir Life
Science Private Limited's (TLSPL) bank facilities as follows:
-- INR25 mil. Fund-based working capital limits assigned with IND
B/Stable/IND A4 rating; and
-- INR175 mil. Term loan due on March 2031 assigned with IND B/
Stable rating.
Key Rating Drivers
The ratings reflect TLSPL's small scale of operations as indicated
by revenue of INR144.56 million in FY23 (FY22: INR96.79 million).
In FY23, the revenue grew due to an increase in customers after the
commencement of operations in FY21. Until 1HFY24, the company
booked revenue of INR90 million. As of September 2023, it had an
order book of INR70 million, to be executed by December 2023.
Ind-Ra expects the revenue to increase further in FY24 due to
receipt of large orders for paracetamol intravenous (IV) fluids.
The ratings also factor in TLSPL's modest EBITDA margin of 14.51%
in FY23 (FY22: 4.78%) with a return on capital employed of negative
4.6% (negative 12.6%). In FY23, EBIT was negative due to
depreciation on property, plant and equipment. The improvement in
EBITDA margin in FY23 was on account of an improvement in capacity
utilization to 78% (FY22: 54%). It has a total manufacturing
capacity of 24.96 million bottles per annum. In FY24, Ind-Ra
expects the EBITDA margin to improve further on account of an
increase in sales of high-margin IV fluids.
The ratings also reflect TLSPL's modest credit metrics as reflected
by interest coverage (operating EBITDA/gross interest expenses) of
0.9x in FY23 (FY22: 0.2x) and net leverage (total adjusted net
debt/operating EBITDAR) of 16.54x (75.11x). The improvement in the
credit metrics was due to an increase in the absolute EBITDA to
INR20.98 million in FY23 (FY22: INR4.63 million) and a reduction in
bank debt to INR224.49 million (INR239.37 million). Ind-Ra expects
the credit metrics to improve further in FY24 on account of a
likely increase in the absolute EBITDA and scheduled repayment of
term loan.
Liquidity Indicator - Poor: TLSPL's average month-end utilization
of the fund-based limits was 98.2% during the 12 months ended
September 2023. It has repayment obligations of INR17.3 million in
FY24 and FY25, each. The cash flow from operations improved to
INR2.98 million in FY23 (FY22: INR0.83 million) due to the increase
in absolute EBITDA. Consequently, the free cash flow turned
positive to INR2.66 million (FY22: negative INR4.12 million). The
net working capital cycle was negative 59 days in FY23 (FY22:
negative 64 days) due to a decline in the inventory holding period
to 96 days (90 days). The cash and cash equivalents stood at
INR2.26 million at FYE23 (FYE22: INR0.13 million). Furthermore,
TLSPL does not have any capital market exposure and relies on banks
and financial institutions to meet its funding requirements.
Rating Sensitivities
Positive: An increase in the scale of operations, leading to the
interest coverage exceeding 1.1x, along with an improvement in the
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/or a further
pressure on the liquidity position, could lead to a negative rating
action.
Company Profile
Incorporated in 2018, TSLPL manufactures IV fluids of 100ml with a
total capacity of 24.96 million bottles per annum The company's
manufacturing plant is located in Aurangabad, Maharashtra.
TULSI COTTON: CRISIL Keeps B+ Debt Rating in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Tulsi Cotton
Mills Private Limited (TCMPL) continues to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with TCMPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of TCMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TCMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TCMPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
TCMPL was incorporated in 1992 by Pali, Rajasthan based Jain
family. The company is in to, processes, dyes, and prints cotton
sarees, dress materials and other fabric. The manufacturing
capacity of around 300 lakh meters per annum is utilized at
75-80%.
UMANG BOARDS: Ind-Ra Affirms & Withdraws BB+ Bank Loan Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed and withdrawn the
ratings on Umang Boards Limited's (UBL) bank facilities as
follows:
-- INR201.1 mil. Fund-based working capital limits* affirmed and
withdrawn;
-- INR203.4 mil. Non-fund-based working capital limits** affirmed
and withdrawn; and
-- INR315 mil. Term loans*** due on March 31, 2027 affirmed and
withdrawn.
*Affirmed at 'IND BB+'/Stable/'IND A4+' before being withdrawn
** Affirmed at 'IND A4+' before being withdrawn
***Affirmed at 'IND BB+'/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.
Key Rating Drivers
The affirmation reflects UBL's continued small scale of operations,
with a revenue of INR999.77 million in FY23 (FY22: INR763.94
million). The revenue grew in FY23 mainly due to an increase in the
demand for insulations and paper-coated winding wires. In 1HFY23,
UBL booked revenue of INR598.70 million. In FY24, Ind-Ra expects
UBL's revenue to increase on a yoy basis, backed by increased
demand.
The ratings continue to factor in UBL's modest EBITDA margins due
to the nature of the business. The margin fell to 12.50% in FY23
(FY22: 13.55%) owing to an increase in the revenue contribution of
lower-margin products. The ROCE was 10.1% in FY23 (FY22: 7.7%). In
FY24, Ind-Ra expects the EBITDA margin to remain at similar levels
due to similar nature of operations.
Liquidity Indicator - Stretched: UBL's net working capital cycle
remained elongated in FY23 but improved to 136 days (FY22: 145
days), mainly due to a reduction in the debtor days to 56 days (69
days). The company's average maximum utilization of the fund-based
limits was 35.48% and that of the non-fund-based limits was 96.06%
during the 12 months ended June 2023. The cash flow from operations
declined to INR36.57 million in FY23 (FY22: INR51.38 million)
because of higher working capital requirements. The free cash flow
declined to INR3.52 million (FY22: INR41.12 million) due to capex
of INR33.05 million undertaken by the company during the year
(INR10.26 million). The cash and cash equivalents stood at INR0.76
million at FYE23 (FYE22: INR0.84 million), against repayment
obligations of INR73.9 million and INR75 million for FY24 and FY25,
respectively. UBL does not have any capital market exposure and
relies on banks and financial institutions to meet its funding
requirements.
The ratings also reflect UBL's moderate credit metrics due to the
modest margins. The gross interest coverage (operating EBITDA/gross
interest expenses) declining marginally to 2.64x in FY23 (FY22:
3.16x) due to an increase in interest expenses. The net leverage
(total adjusted net debt/operating EBITDAR), however, improved to
4.10x in FY23 (FY22: 4.71x) due to a reduction in the long-term
debt to INR154.14 million (INR189.26 million). Ind-Ra expects the
credit metrics to improve in the near term due to the scheduled
term loan repayments.
The ratings, however, remain supported by the promoters' experience
of nearly two decades in the manufacturing of insulated paper,
which has led to established relationships with its customers and
suppliers.
Company Profile
Incorporated in 1999, UBL manufactures cellulose-based insulations,
super enameled and paper coated winding wires of copper and
aluminum and insulting chemicals. These products are used in the
transformers industry. The head office and manufacturing facility
are located in Jaipur, Rajasthan.
UNITED COKE: Ind-Ra Affirms BB Bank Loan Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed ratings of United
Coke Private Limited's (UCPL) bank loans as follows:
-- INR500 mil. Non-fund-based working capital limit affirmed with
IND A4+ rating; and
-- INR50 mil. Term loan due on March 2026 affirmed with IND BB/
Stable rating.
Key Rating Drivers
The affirmation reflects Ind-Ra's expectation of an improvement in
UCPL's EBITDA margins in FY24 to FY22 levels on account of a
reduction in price of its key raw material (coking coal) in 1HFY24.
As per management, the facility is operating at full capacity from
September 2023, providing higher absorption of expenses. During
FY23, the margins turned modest after declining to 1.7% in FY23
(FY22: 5.25 %) due to an increase in price of coking coal and lower
production on account of maintenance of ovens. The return on
capital employed was 4.4% in FY23 (FY22: 17.6%).
The ratings also reflect Ind-Ra's expectation of an improvement in
the company's credit metrics in FY24 due to a likely improvement in
EBITDA, despite the ongoing debt-led capex. The credit metrics
were modest in FY23. The gross interest coverage (operating
EBITDA/gross interest expense) deteriorated to 1.61x in FY23 (FY22:
7.13x) and the net financial leverage (adjusted net debt/operating
EBITDA) to 8.28x (5.52x) due to a decline in the EBITDA to INR17.86
million (INR43.43 million) and a rise in the interest expense to
INR11.12 million (INR6.10 million) because of an increase in
unsecured loans to INR52.7 million (INR30.5 million).
The agency expects UCPL's scale of operations to remain modest due
to a reduction in price of low ash metallurgical coke in 1HFY24,
but the EBITDA to improve in FY24. The company booked revenue of
INR362.5 million in 1HFY24. The company processes orders with
delivery within 7-10 days. The revenue grew to INR1,050 million in
FY23 (FY22: INR827.51 million) due to a rise in price realization
of low ash metallurgical coke to INR56,750 per metric ton
(INR30,000 per metric ton).
Liquidity Indicator - Stretched: UCPL 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
negative to INR41.37 million in FY23 (FY22: INR22.16 million) due
to unfavorable changes in working capital. Further, the free cash
flow turned negative to INR87.41 million in FY23 (FY22: INR20.79
million) due to capex of INR46.04 million (INR1.37 million) for
constructing an oven and purchasing bricks. UCPL is enhancing its
production capacity to 55,000 metric tons per annum (MTPA) from
36,000MTPA, for which it availed a term loan of INR50 million. The
management expects the capex to complete by October 2024 and the
production to commence in November 2024. The company has debt
repayments of INR12.5 million, each, in FY24 and FY25. UCPL's
average combined month-end utilization of the fund-based and
non-fund-based working capital limits was 40.08% during the 12
months ended September 2023. The net working capital cycle was
moderate and elongated to 45 days in FY23 (FY22: 0 days) due to an
increase in the inventory holding period to 39 days (15 days) and
receivable period to 61 days (26 days). The cash and cash
equivalents stood at INR10.41 million at FYE23 (FYE22: INR94.81
million).
However, the ratings continue to be supported by the promoter's
experience of more than 15 years in the manufacturing of low ash
metallurgical coke, leading to established relationships with its
customers and suppliers.
Rating Sensitivities
Negative: Any deterioration in the scale of operations or weakening
of the credit metrics or liquidity position, will be negative for
the ratings.
Positive: A significant improvement in the scale of operations,
leading to an improvement in the credit metrics with the net
leverage reducing below 4.0x and an improvement in the liquidity
position, will be positive for the ratings.
Company Profile
Incorporated in 2004, UCPL manufactures low ash metallurgical coke
and is also engaged in trading of coking coal. UCPL has an
installed capacity of 36,000MTPA in Kutch (Gujarat).
USHASRI COTTON: CRISIL Keeps B Debt Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Ushasri Cotton
And Ginning Mills Private Limited (UCGMPL) continues to be 'CRISIL
B/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with UCGMPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of UCGMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
UCGMPL is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of UCGMPL continues to be 'CRISIL B/Stable Issuer Not
Cooperating'.
Khammam-based UCGMPL, incorporated in August 2008, gins and presses
cotton. Mr Ch Sridhar and Mr Ch Satyam are the promoters.
VEL TRUST: Ind-Ra Hikes Loan Rating to BB+, Outlook Stable
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Vel Trust (1997)'s
(VT) bank facilities to 'IND BB+' from 'IND BB'. The Outlook is
Stable.
The detailed rating actions are:
-- INR120 mil. Fund-based working capital limits upgraded with
IND BB+/Stable rating;
-- INR11.28 mil. (reduced from INR40.35 mil.) Bank loans upgraded
with IND BB+/Stable rating; and
-- INR49.65 mil. Proposed bank loans upgraded with IND BB+/Stable
rating.
The upgrade reflects an improvement in VT's operational and
financial profile in FY23, which Ind-Ra expects to continue in the
medium term.
Key Rating Drivers
VT reported a continuous growth in the student headcount over
FY19-FY23. The student headcount increased 4.65% to 4,185 in FY23,
mainly on account of increased enrolment for engineering courses.
The student headcount increased further to 4,274 for the academic
year 2023-24 and is likely to increase further with the ongoing
admission process. The capacity utilization remained high at 91% in
FY23 (FY22: 90%, FY21: 85%). Ind-Ra expects VT's student headcount
to grow gradually in the near term due to availability of
infrastructure.
The revenue grew 11.4% yoy to INR345.15 million in FY23, driven by
tuition fee income. Tuition fee income remains the key source of
revenue, which accounted for 98% of the total income in FY23
(FY19-FY23: average 98%). Ind-Ra expects the revenue to grow
moderately in the near term owing to the likely moderate growth in
student headcount.
VT reported a high EBITDA margin of over 46% during FY21-FY22 due
to lower operating expenses on account of COVID-19 pandemic-led
lockdown. However, post the easing of lockdown restrictions, the
operating expenses increased and the EBITDA margin stabilized to
35.92% in FY23. Ind-Ra expects VT's EBITDA margin to remain healthy
above 30% in near term due to the sustained growth in revenue and
control over expenditure.
The trust had a low leverage and healthy coverage metrics during
FY22-FY23. The trust reported a net cash position in FY23 (FY22 net
leverage (net debt/EBITDA): 0.25x). The interest service coverage
ratio has been improving since FY19 (FY23: 30.60x, FY22: 17.40x,
FY21: 5.14x). Further, the debt service coverage ratio (DSCR)
remained healthy at 3.0x during FY21-FY23. In FY23, the DSCR
improved to 3.57x (FY22: 3.13x), mainly due to a decline in debt
servicing obligations as the trust repaid most of the term loan
during FY19-FY22 and has only one long-term loan outstanding at
FYE23. Ind-Ra expects VT's leverage and coverage metrics to remain
healthy in the near term on the back of a likely sustained growth
in EBITDA (FY23: INR123.97 million, FY22: INR144.81 million).
Liquidity Indicator - Stretched: VT's liquidity position improved
in FY23 as indicated by an increase in cash balance, a decline in
receivables and lower utilization of working capital limit. Its
unencumbered cash and bank balance increased to INR221.02 million
at FYE23 (FYE22: INR95.29 million) owing to favorable changes in
working capital. The receivable period reduced to 70 days in FY23
(FY22: 110 days) on account of an improvement in efficiency. The
trust maintained credit balance in the working capital limit during
the 12 months ended September 2023, except in March 2023
(utilization 81.58%) and September 2023 (10.06%). However, the
liquidity profile is stressed as the trust relies on a single bank
for funding diversification and does not have access to the capital
market. Ind-Ra believes VT's cash flow from operations, and
unencumber cash and bank balances would be adequate for its debt
serving obligations (principal and associate intertest cost) of
around INR28 million for FY24 and INR26 million for FY25.
However, the ratings further benefit from the trust's track record
of over 25 years and the continuous financial support it receives
from the trustee's and group entities in the form of interest-free
unsecured loans. The unsecured loans received from the trustees and
the group entities stood at INR51.47 million at FYE23.
Rating Sensitivities
Positive: A sizeable growth in student headcount, leading to a
higher revenue and the EBITDA exceeding INR250 million coupled with
a comfortable liquidity could lead to a positive rating action.
Negative: Inability to maintain the EBITDA margin at current
levels, leading to deterioration in debt and coverage metrics and
stress on the liquidity position will be negative for the ratings.
Company Profile
Established in 1997, VT is promoted by Founder and Chairman Dr. R
Rangarajan, who is also the founder of Vel Group, which also
manages R.S. Trust and Vel Tech Rangarajan Dr. Sagunthala R&D
Institute of Science and Technology Trust, along with VT. The trust
comprises two educational institutions: Vel Tech Multi Tech Dr.
Rangarajan Dr. Sagunthala Engineering College, and Vel Tech Ranga
Sanku Arts College, offering under-graduate and post-graduate
courses in engineering and arts and science, respectively, since
1998.
VENKATA MANIKANTA: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Sri Venkata
Manikanta Poultry Complex (SVMPL) continue to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.2 CRISIL D (Issuer Not
Cooperating)
Proposed Working 1.9 CRISIL D (Issuer Not
Capital Facility Cooperating)
Term Loan 1.9 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with SVMPL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of SVMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on SVMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
SVMPL continues to be 'CRISIL D Issuer Not Cooperating'.
SVMPL was set up in 2012 as a partnership firm in Tanuku, Andhra
Pradesh. The firm is engaged in poultry and hatchery business. It
is managed by Mr Satti Gopala Kumari and Mr Satti Srinivasa Reddy.
WAHID SANDHAR: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Wahid Sandhar
Sugars Limited (WSSL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL D (Issuer Not
Cooperating)
Cash Credit 40 CRISIL D (Issuer Not
Cooperating)
Proposed Fund- 1.74 CRISIL D (Issuer Not
Based Bank Limits Cooperating)
Term Loan 53.26 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with WSSL for
obtaining information through letters and emails dated October 10,
2023 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of WSSL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on WSSL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
WSSL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Established in 1933 by the Narang group in Phagwara, Punjab, WSSL
was taken over by the Oswal group in 1989. The current management
acquired controlling stake from the Oswal group in 2000. The
company manufactures sugar under the brand Phagwara.
YCD INDUSTRIES: Ind-Ra Moves BB+ Loan Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated YCD Industries
Limited's (YCDIL) bank facilities to the non-cooperating category
and has simultaneously withdrawn it.
The instrument-wise rating actions are:
-- INR150 mil. Fund-based facilities* migrated to non-cooperating
category and withdrawn;
-- INR160 mil. Proposed fund-based facilities* migrated to non-
cooperating category and withdrawn;
-- INR40 mil. Non-fund-based facilities** migrated to non-
cooperating category and withdrawn; and
-- INR80 mil. Term loan*** due on April 2025 migrated to non-
cooperating category and withdrawn.
Note: ISSUER NOT COOPERATING: The issuer did not cooperate, based
on the best available information.
*Migrated to 'IND BB+ (ISSUER NOT COOPERATING)/IND A4+ (ISSUER NOT
COOPERATING)' before being withdrawn
**Migrated to 'IND A4+ (ISSUER NOT COOPERATING)' before being
withdrawn
***Migrated to 'IND BB+ (ISSUER NOT COOPERATING)' before being
withdrawn
Key Rating Drivers
Ind-Ra has migrated the ratings to the non-cooperating category
because the issuer did not participate in the rating exercise,
despite repeated requests by the agency through phone calls and
emails, and has not provided information about the interim,
sanctioned bank facilities and utilization, business plan, and
projections for the next three years, information on corporate
governance, and the management certificate. This is in accordance
with Ind-Ra's policy of 'Guidelines on What Constitutes
Non-cooperation'.
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.
Company Profile
Incorporated in 1992, YCD Industries manufactures cotton and
polyester yarn. The company is located in Rupnagar, Punjab.
=================
I N D O N E S I A
=================
VALE INDONESIA: S&P Affirms 'BB' ICR & Alters Outlook to Positive
-----------------------------------------------------------------
S&P Global Ratings revised the outlook on its 'BB' long-term issuer
credit rating on Vale Indonesia Tbk. PT (PTVI) to positive from
stable, reflecting the prospects of rating uplift over the next 12
months if S&P expects PTVI to benefit from timely group and
government support under its new ownership structure. At the same
time, S&P affirmed its 'BB' issuer credit rating on the company.
PTVI could benefit from a higher likelihood of group and government
support amid increasing control and ownership by the Indonesian
government via MIND ID, in S&P's view. On Nov. 17, 2023, PTVI and
its three largest shareholders, MIND ID, Vale Canada Ltd. (VCL,
BBB-/Stable), and Sumitomo Metal Mining Co. Ltd. (SMM) signed a
heads of agreement for an ownership transfer, upon which MIND ID
will be the largest shareholder, with an approximately 34% equity
stake in PTVI.
Importantly, the transaction would also fulfill PTVI's divestment
obligation under Indonesia mining law and pave the path for an
extension of its mining license. S&P believes MIND ID acquiring an
additional 14% equity stake in PTVI, which is higher than the
statutory requirement of 11%, underscores the government's
intention to increase control and ownership of the Indonesian
nickel miner.
Despite the increasing ownership and control by the government via
MIND ID, the parent's ability to divert timely credit support to
PTVI would depend on MIND ID's ability to control or direct the
company's strategy and the disposition of its cash flow, in S&P's
assessment. It may deem that control exists even if MIND ID owns
less than 50% of PTVI's shareholder capital.
However, the extent of support would be subject to the final rights
and obligations that would be vested to MIND ID and other minority
shareholders like VCL and SMM post-transfer of the 14% equity stake
to MIND ID. PTVI expects the transaction to be completed in 2024.
Consequently, the company also expects more definitive
details--such as the transaction mechanism and size, and which
shareholder has ultimate control and may consolidate PTVI--to only
be finalized over the coming year.
S&P anticipates prospects of increasing government and group
influence and control via MIND ID in spite of the presence of
significant minority shareholders like VCL (approximately 33.9%),
SMM (approximately 11.5%) once the proposed transaction closes.
PTVI also has 20% of its shares broadly held as free float on the
Indonesia Stock Exchange. Conversely, the strong presence of
minorities in PTVI could inhibit MIND ID's ability to divert credit
support unilaterally.
Therefore, establishing the level of control that MIND ID will be
vested with post transaction will be crucial in determining whether
PTVI achieves any rating uplift from group support. It is also
possible that our review of the final transaction details and
ownership structure concludes that the increasing state ownership
in PTVI via MIND ID is not sufficient to warrant a rating uplift.
This would largely be based on S&P's view that MIND ID does not
have sufficient control over PTVI such that it could divert timely
credit support in times of need to the company.
S&P said, "We believe VCL would remain a supportive shareholder
despite the regulatory requirement to dilute its ownership in PTVI
under Indonesia's mining law. This is based on our expectation that
VCL is unlikely to negatively interfere in the company's operations
and financial decisions, or prevent MIND ID from directing support
to PTVI. Instead, VCL would likely continue to play an important
role in PTVI's operations and growth plans.
"We assess MIND ID's credit quality to be low investment-grade
(with a group credit profile of 'bbb-') and that the company could
have greater incentive to provide timely credit support to PTVI
after the transaction closes. Our view of MIND ID's
investment-grade credit quality is underpinned by its larger claims
of Freeport Indonesia PT (PTFI) cash flows starting from 2023,
which will support the group's free cash flow through 2024." MIND
ID's majority claim on dividends from PTFI (based on MIND ID's
51.2% effective stake in PTFI since January 2023) supports the
group's diversity and scale of cash flows and reduces the group's
reliance on dividends from its thermal coal mining subsidiary,
Bukit Asam Tbk. PT, for debt servicing.
With MIND ID's increasing ownership and influence in PTVI, the
company will likely become increasingly involved in and supportive
of PTVI's business strategy. MIND ID will have to ensure, in its
capacity, that PTVI's track record of mining operations, commitment
to environmental management, and its long nickel reserve life
persist. These are important considerations for foreign joint
venture (JV) partners in downstream projects, particularly because
the government aspires to entrench the country in the global
electric vehicle value chain.
MIND ID, the state-owned mining company, is charged to manage the
government's interests in the domestic mining industry, which
entails preserving the government's control over strategic mineral
reserves and driving domestic downstream development across the
group's minerals value chain. Beyond the policy imperative to
support its members, the presence of cross-default clauses may
provide strong incentive to encourage the parent group to divert
timely credit support to its subsidiaries in times of need, if
indeed PTVI were to ultimately fulfil the definitions of a material
subsidiary in MIND ID's U.S. denominated bond indentures.
S&P said, "Our base case projects MIND ID's annual adjusted EBITDA
(including PTFI's dividends) at Indonesian rupiah (IDR) 36
trillion-IDR40 trillion for 2023 and 2024. We forecast the group's
ratio of funds from operations (FFO) to debt at 40%-46% over the
period. This considers the company's sizable cash balance of about
IDR25 trillion and our projections of broadly stable reported debt
of IDR82 trillion-IDR86 trillion through 2024. The ratio was 31.8%
in 2022.
"PTVI's investment plans would improve its operating scale and
diversification, bringing it closer to 'BB+'-rated mining peers. We
estimate that, on an attributable basis, PTVI's mining and smelting
operations will at least double once these investments are
completed in 2027. Until then, we regard the company's single asset
concentration and smaller operating scale than the higher-rated
peers to be a relative weakness.
"Moreover, PTVI is likely to face execution risks, including the
risk of cost overruns and delays in project ramp-up, given the
magnitude of the planned expansion. These risks could result in a
temporarily weakened financial profile which may include higher
leverage (adjusted debt-to-EBITDA ratio) of above 2x, which we
would not regard as commensurate with a 'bb+' stand-alone credit
profile based on PTVI's current operating scale."
PTVI plans to add two new nickel mines to its portfolio by 2027, on
top of a planned brownfield expansion of the Sorowako mine for
limonite ore mining during the same period. The additional nickel
mining output will be sold to downstream nickel processing JVs in
which PTVI will have minority stakes. The company will own 100% of
the two nickel mines it plans to organically develop, namely in
Bahodopi and Pomalaa.
These JVs have a cumulative nickel metal production capacity of
about 250,000 ton per annum on a 100%-basis, which is about 5x the
size of PTVI's current production scale, with a product split of
73,000 ton nickel metal in ferronickel and about 180,000 tons of
nickel metal in mixed hydroxide precipitate. PTVI has a 49% equity
stake in Sambalagi JV, which will operate the ferronickel facility
alongside two Chinese partners. The company plans to acquire
minority stakes by exercising call options in the other JVs after
the assets are operational from 2027.
PTVI's adjusted leverage would likely peak at 1.8x-2.2x during 2025
as its investment cycle commences. S&P's base case forecasts
adjusted debt will increase to about US$1 billion in 2025, which
includes our estimate of a US$500 million-US$600 million debt
guarantee to the Sambalagi JV. This is largely driven by its
expectations for annual negative free operating cash flows (FOCF)
of US$500 million across 2024-2025 amid elevated capital outlay and
about US$400 million of equity injection into the Sambalagi JV.
PTVI's sizable cash balance of US$768 million as of Sept. 30, 2023
will largely mitigate the shortfall in FOCF. Earnings accretion
from the company's new projects would likely start from 2026, which
would support deleveraging following the construction phase.
S&P said, "We project PTVI's EBITDA will be stable at US$400
million-US$500 million through 2025, given our expectations for a
resilient cost structure. This is despite our projection for nickel
prices to average lower during 2024 (US$18,000/ton) and 2025
(US$19,000/ton), when compared with 2023 year-to-date average of
about US$22,000/ton. This is based on our latest metals price
assumptions. Energy costs, which make up 30%-40% of PTVI's cash
costs, will likely decline in tandem with lower thermal coal
prices. Indonesian thermal coal prices have at least halved since
peaking in 2022.
"In our assessment, PTVI's financial profile will become
increasingly sensitive to commodity price volatility as investment
picks up. Based on our sensitivity analysis, we estimate that a
US$1,000/ton drop in nickel prices could shave US$50 million-US$70
million off the company's EBITDA per annum, all else being equal.
This, in turn, would lead to an increase in leverage by 0.2x-0.4x,
under our base-case expectations."
The positive outlook reflects the prospects of increased group
support from PTVI's new ownership structure, which includes
increasing influence under ownership of MIND ID and increasing
certainty that PTVI would obtain a mining license extension.
S&P said, "The positive outlook also reflects our forecast for the
company's adjusted debt-to-EBITDA ratio (including corporate
guarantees for the Sambalagi JV) to remain well below 0.5x for
2023, and to reach 1.5x-2.0x for 2024.
"We could revise the outlook back to stable if we do not expect
PTVI to benefit from timely group support should there be any
unexpectedly onerous terms of the proposed deal that could alter
our view of the ownership transfer and new ownership structure.
"We could also revise the outlook to stable despite the prospects
of group support if we observe a deterioration in PTVI's
stand-alone credit profile. Weakening credit metrics such as an
adjusted debt-to-EBITDA ratio (including corporate guarantees for
the Sambalagi JV) remaining above 2.0x after expansionary capital
expenditure (capex) would indicate such a decline.
"We would likely raise the ratings if we expect PTVI to benefit
from timely group and government support under the proposed changes
to its ownership structure. This would likely be indicated by
increasing control by MIND ID, and could result in a one-notch
upgrade of PTVI to 'BB+'."
Any rating upside would require PTVI to maintain its 'bb'
stand-alone credit profile.
=========
J A P A N
=========
ANA HOLDINGS: Egan-Jones Hikes Senior Unsecured Debt Ratings to B-
------------------------------------------------------------------
Egan-Jones Ratings Company, on November 6, 2023, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Ana Holdings Inc. to B- from CCC+. EJR also
withdraws rating on commercial paper issued by the Company.
Headquartered in Tokyo, Japan, Ana Holdings Inc. provides a variety
of air transportation-related services.
===============
M O N G O L I A
===============
MONGOLIAN NATIONAL: A.M. Best Assigns B(Fair) Fin. Strength Rating
------------------------------------------------------------------
AM Best has assigned the Financial Strength Rating of B (Fair) and
the Long-Term Issuer Credit Rating of "bb+" (Fair) to Mongolian
National Reinsurance JSC (Mongolian Re) (Mongolia). The outlook
assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Mongolian Re's balance sheet strength, which AM
Best assesses as very strong, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management (ERM).
Incorporated in 2014, Mongolian Re was established under its
original name of Agriculture Reinsurance JSC as a wholly owned
company of the Ministry of Finance of Mongolia (MoF). Mongolia Re
is domiciled in Mongolia, where 13% of the country's gross domestic
product is generated from an agriculture sector that is dominated
by livestock, according to the World Bank. The company acts as the
sole operator of the index-based livestock insurance (IBLI) pool,
supporting social stability by providing nationwide insurance
coverage to livestock and safeguarding herder households' welfare.
Mongolian Re broadened its business scope in 2018 to include
additional reinsurance lines of business such as property, motor,
aviation, liability and personal accident. In 2022, Mongolian Re's
gross written premium (GWP) was MNT 4.0 billion (USD 1.5 million).
The company has maintained a leading market position in the
livestock and motor reinsurance segments.
Mongolian Re's very strong level of balance sheet strength is
underpinned by its risk-adjusted capitalization being assessed at
the strongest level, as measured by Best's Capital Adequacy Ratio
(BCAR). The company's adjusted capital and surplus has been on an
upward trend for the past five years, with a compound annual growth
rate of 4.3%.
The company has appropriate retrocession coverage for its
catastrophe-exposed lines, ceded to reinsurers with sound credit
quality. This protects the company's capital position from material
negative impacts from extreme weather events. Notwithstanding, a
partially offsetting factor to the company's balance sheet strength
assessment is its small capital size.
AM Best considers Mongolian Re's operating performance as adequate.
The company reported a robust compound annual growth rate increase
in gross written premium of 25.2% from 2017 to 2022 and delivered
an average return-on-equity (ROE) of 7% over the same five-year
period, mainly attributed to its robust and stable investment
income from time deposits. The five-year average net investment
yield was 11.2%. Conversely, Mongolian Re's underwriting
performance has been unfavorable, attributed to its volatile loss
ratio from catastrophe losses and high management expense ratio due
to its limited portfolio sizes. The company projects that they
would gradually manage down the expense ratio from expanding its
premium scale and improve its operating efficiency over the short
to intermediate term.
Given Mongolian Re's vital role in its domestic insurance market,
AM Best views the company's business profile as limited, compared
with international non-life reinsurance peers. Other offsetting
factors in the business profile assessment include Mongolian Re's
concentration in its domestic market, as well as in products with
high natural catastrophe risks.
The company's ERM is assessed as appropriate. Mongolian Re has a
defined risk appetite statement and periodically monitors key risk
indicators to govern its key risks. The company performs
catastrophe modelling on livestock mortality, and submits its risk
report and solvency report to the local insurance regulator, the
Financial Regulatory Commission, on a regular basis.
The stable outlooks reflect AM Best's expectation that Mongolian
Re's balance sheet strength will remain at a very strong level
through profit accumulation.
Positive rating actions could occur if the company demonstrates
consistent improvement in underwriting performance and sustains a
decrease in its expense ratio, while maintaining robustly high
investment returns.
Negative rating actions could occur if the company's risk-adjusted
capitalization significantly erodes by factors such as escalating
underwriting or investment risk, excessive dividends, or sustained
operating losses.
Negative rating actions could also occur if the company fails to
execute appropriate ERM control, for example, experiencing
unexpected changes in business and investment strategies subject to
undue influence from its shareholders that lead to a materially
negative impact to its credit fundamentals.
=====================
N E W Z E A L A N D
=====================
3BROTHERS COFFEE: Creditors' Proofs of Debt Due on Jan. 19
----------------------------------------------------------
Creditors of 3Brothers Coffee New Zealand Limited are required to
file their proofs of debt by Jan. 19, 2024, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Nov. 25, 2023.
The company's liquidator is:
Simon Dalton
Gerry Rea Partners
PO Box 3015
Auckland
AUCKLAND CITY TAXIS: Court to Hear Wind-Up Petition on Feb. 2
-------------------------------------------------------------
A petition to wind up the operations of Auckland City Taxis Limited
will be heard before the High Court at Auckland on Feb. 2, 2024, at
10:45 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Oct. 30, 2023.
The Petitioner's solicitor is:
Cloete Van Der Merwe
Inland Revenue, Legal Services
5 Osterley Way
Manukau City
Auckland 2104
GREENWOOD TRADE: Court to Hear Wind-Up Petition on Dec. 7
---------------------------------------------------------
A petition to wind up the operations of Greenwood Trade
Professionals Limited will be heard before the High Court at
Christchurch on Dec. 7, 2023, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Oct. 4, 2023.
The Petitioner's solicitor is:
Nanette Cunningham
Inland Revenue, Legal Services
PO Box 1782
Christchurch 8140
GUMDROPS EARLY: Greg Sherriff Appointed as Receiver and Manager
---------------------------------------------------------------
Greg Sherriff of Sherriff Consulting on Nov. 29, 2023, was
appointed as Receiver and Manager of Gumdrops Early Learning Centre
2004 Limited, The Early Learning Collective Limited and Katharine
Jane Larsen McKenzie.
The Receiver and Manager may be reached at:
Greg Sherriff
Sherriff Consulting Ltd
Building D, 42 Tawa Drive
Albany
Auckland
MILESTONE TRUSTEE: Creditors' Proofs of Debt Due on Dec. 22
-----------------------------------------------------------
Creditors of Milestone Trustee No. 2 Limited are required to file
their proofs of debt by Dec. 22, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on Nov. 22, 2023.
The company's liquidators are:
Rachel Mason-Thomas
Jeffrey Philip Meltzer
Meltzer Mason, Chartered Accountants
PO Box 6302
Victoria Street West
Auckland 1141
=================
S I N G A P O R E
=================
ECO CLOUD: Court to Hear Wind-Up Petition on Dec. 22
----------------------------------------------------
A petition to wind up the operations of Eco Cloud Solutions Pte Ltd
will be heard before the High Court of Singapore on Dec. 22, 2023,
at 10:00 a.m.
Maybank Singapore Limited filed the petition against the company on
Nov. 28, 2023.
The Petitioner's solicitors are:
Shook Lin & Bok LLP
1 Robinson Road
#18-00 AIA Tower
Singapore 048542
NEO TIEW: Commences Wind-Up Proceedings
---------------------------------------
Members of Neo Tiew Power Pte Ltd, on Nov. 24, 2023, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidator is:
Wong Joo Wan
Tina Phan Mei Ting
Alternative Advisors
1 Commonwealth Lane
#06-21 One Commonwealth
Singapore 149544
PYFS MALL: Creditors' Meetings Set for Dec. 13
----------------------------------------------
Pyfs Mall Pte Ltd will hold a meeting for its creditors on Dec. 13,
2023, at 10:00 a.m., via video conference.
Agenda of the meeting includes:
a. to receive a statement of the Company's affairs together
with a list of creditors and the estimated amounts of their
claims;
b. to confirmed the appointment of liquidators;
c. to appoint a Committee of Inspection if deemed necessary;
and
d. any other business.
RAZE BUILDERS: Court to Hear Wind-Up Petition on Dec. 22
--------------------------------------------------------
A petition to wind up the operations of Raze Builders Pte Ltd will
be heard before the High Court of Singapore on Dec. 22, 2023, at
10:00 a.m.
M5 Equipment Pte. Ltd. filed the petition against the company on
Nov. 27, 2023.
The Petitioner's solicitors are:
Withers Khattarwong LLP
80 Raffles Place
#25-01 UOB Plaza 1
Singapore 048624
TAY PAPER: Court to Hear Judicial Management Order Bid on Dec. 27
-----------------------------------------------------------------
A petition to place the operations of Tay Paper Recycling Pte Ltd
under the judicial management of judicial managers will be heard
before the High Court of Singapore on Dec. 27, 2023, at 10:00 a.m.
The application for placing the company under the judicial
management of a judicial manager was filed on Nov. 3, 2023.
The Petitioner's solicitors are:
Aquinas Law Alliance LLP
16 Raffles Quay
#17-03 Hong Leong Building
Singapore 048581
WESTFORD SG: Commences Wind-Up Proceedings
------------------------------------------
Members of Westford SG Pte Ltd on Nov. 24, 2023, passed a
resolution to voluntarily wind up the company's operations.
The company's liquidator is:
Ellyn Tan Huixian
Mazars Consulting
135 Cecil Street, #10-01
Singapore 069536
=================
S R I L A N K A
=================
BANK OF CEYLON: Fitch Affirms 'CC' LongTerm Foreign Currency IDR
----------------------------------------------------------------
Fitch Ratings has placed Bank of Ceylon's Viability Rating (VR) of
'cc' on Rating Watch Negative (RWN). At the same time, Fitch has
affirmed BOC's Long-Term Foreign-Currency Issuer Default Rating
(IDR) at 'CC'. The rating does not carry an Outlook because of the
potential for high volatility at this rating level, in line with
Fitch's rating definitions. Fitch has also affirmed BOC's Long-Term
Local-Currency IDR of 'CCC-' with a Stable Outlook, and the
Short-Term IDR at 'C'.
BOC's national ratings were not considered in this review.
KEY RATING DRIVERS
Downside Risks to VR: The RWN on the VR reflects risks to BOC's
standalone credit profile from potential capital stress stemming
from the restructuring of loans granted to state-owned entities.
The government budget unveiled on 13 November 2023 allocated LKR450
billion for the recapitalisation of two state banks, including BOC,
to ensure financial system stability.
This recapitalisation plan, should it materialise to address
potential capital erosion, may constitute extraordinary support. In
accordance with Fitch's Bank Rating Criteria, extraordinary capital
support to restore viability would be viewed by Fitch as "bank
failure" and would lead to the bank's VR being downgraded to 'f'
but subsequently, upon recapitalisation, be upgraded to a level
commensurate with its standalone credit profile.
IDRs Affirmed as Default Risk Unchanged: Fitch has affirmed BOC's
IDRs at current levels as the potential development has not changed
its view on the bank's ability service its foreign-currency and
local-currency obligations. BOC's Long-Term Foreign-Currency and
Short-Term IDRs continue to reflect a high risk of default from the
sovereign's restructuring of debt.
Risks to OE Subsiding: Fitch revised the outlook on Sri Lankan
banks' operating environment (OE) to stable from negative to
reflect its view that downside risks to the OE have largely abated
following the successful completion of the sovereign's
local-currency debt restructuring and the meaningful improvement in
economic variables relative to the significant deterioration last
year. Fitch expects the economic recovery to improve banks'
operational flexibility in the near to medium term.
Debt Restructuring Weighs on Capitalisation: Fitch thinks the
potential restructuring of debt of state-owned enterprises that has
been assumed by the government could have a significant impact on
the bank's capital position, as reflected in the allocation of
LKR450 billion by the government for the recapitalisation of the
state banks, including BOC.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Fitch expects to resolve the RWN on BOC's VR when the impact to its
capital becomes more apparent, which may take longer than six
months.
If the proposed restructuring of state debt leads to a material
capital shortfall that necessitates recapitalisation by the
authorities to restore viability or the granting of any regulatory
capital forbearance regarding such a shortfall, Fitch would
downgrade BOC's VR to 'f' and subsequently, upon any
recapitalisation, upgrade it to a level commensurate with its
standalone credit profile, likely driven by it risk profile and
capitalisation.
A downgrade of the VR may not necessarily lead to a downgrade of
the Long-Term Foreign- and Local-Currency IDRs.
Fitch would downgrade BOC's Long-Term Foreign- and/or
Local-Currency IDRs if Fitch perceives there is an increased
likelihood that the bank would default on or seek a restructuring
of its senior foreign- and/or local-currency obligations to
non-government creditors.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
There is limited scope for upward rating action on the VR given the
RWN. Fitch may resolve the Rating Watch with an affirmation if
Fitch views that large capital shortfalls that threaten the bank's
viability are not likely to arise.
An upgrade of BOC's Long-Term Foreign- and/or Local-Currency IDRs
would most likely result from an improvement in the sovereign's
credit profile, which could occur after the successful
restructuring of the sovereign's external debt.
State Support Unlikely: The Government Support Rating of 'ns'
reflects its assessment that there is no reasonable assumption of
government support being forthcoming.
The Government Support Rating is constrained by the sovereign
rating. An upward revision is possible, provided the sovereign's
ability to provide support significantly improves. However, this
appears unlikely in the near-to-medium term.
VR ADJUSTMENTS
The operating environment score of 'ccc-' is below the 'b' category
implied score due to the following adjustment reason: sovereign
rating (negative).
The business profile score of 'ccc-' is below the 'b' category
implied score due to the following adjustment reason: business
model (negative).
BOC has a 1.78% equity stake in Fitch Ratings Lanka Ltd. No
shareholder other than Fitch, Inc. is involved in the day-to-day
rating operations of, or credit reviews undertaken by, Fitch
Ratings Lanka Ltd.
ESG CONSIDERATIONS
BOC has an ESG Relevance Score of '4' for Governance Structure due
to ownership concentration, with a 100% state shareholding and
several related-party transactions with the state and state-owned
entities, which has a negative impact on the credit profile and is
relevant to the rating in conjunction with other factors.
BOC has an ESG Relevance Score of '4' for Financial Transparency.
It reflects its view that the recent regulatory forbearance
measures announced by the Central Bank of Sri Lanka could distort
the true solvency and liquidity position of the bank, thereby
limiting financial transparency. This has a negative impact on the
credit profile and is relevant to the rating in conjunction with
other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Bank of Ceylon LT IDR CC Affirmed CC
ST IDR C Affirmed C
LC LT IDR CCC- Affirmed CCC-
Viability cc Rating Watch On cc
Government Support ns Affirmed ns
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***