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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, December 20, 2023, Vol. 26, No. 254
Headlines
A U S T R A L I A
BIZPAY GROUP: Second Creditors' Meeting Set for Dec. 22
IE PROJECT: First Creditors' Meeting Set for Dec. 22
MORABUILT PTY: First Creditors' Meeting Set for Dec. 22
OKAMI DISTRIBUTION: Puts 16 Venues Into Voluntary Administration
SCOTGOLD RESOURCES: Second Creditors' Meeting Set for Dec. 22
TRITON BOND 2023-3P: S&P Assigns B(sf) Rating on Class E Notes
W.T.D. FENCING: First Creditors' Meeting Set for Dec. 27
B A N G L A D E S H
DUTCH-BANGLA BANK: S&P Assigns 'B/B' ICRs, Outlook Stable
C H I N A
CHINA EVERGRANDE: To Sell Downtown Shanghai JV Stake to Everbright
NIO INC: To Get US$2.2 Billion Investment From Abu Dhabi's CYVN
I N D I A
AJAY FOOD: Ind-Ra Corrects November 16, 2023 Rating Release
ALLIANCE DENIM: Ind-Ra Assigns B+ Bank Loan Rating, Outlook Stable
ARRAY LAND: CARE Keeps D Debt Rating in Not Cooperating Category
ASHASHREE FROZEN: CARE Keeps D Debt Rating in Not Cooperating
ASIAN FOOTWEARS: CRISIL Withdraws B Rating on INR10cr LT Loan
BHAGWATI RICE: CARE Keeps D Debt Rating in Not Cooperating
DHARTI DREDGING: CARE Keeps D Debt Ratings in Not Cooperating
DRN INFRASTRUCTURE: Ind-Ra Cuts Bank Loan Rating to C
GO FIRST: Spicejet Shows Interest in Buying Bankrupt Carrier
GURBAXANI ENGINEERING: Ind-Ra Affirms BB+ Term Loan Rating
JSW INFRASTRUCTURE: Fitch Alters Outlook on BB+ LongTerm IDR to Pos
KAMAL BUILDERS: CRISIL Reaffirms B+ Rating on INR5.4cr LT Loan
KHIMJI FINSERVE: Ind-Ra Assigns BB- Loan Rating, Outlook Stable
LAKSHMI GAYATRI: CARE Keeps D Debt Rating in Not Cooperating
LAXMI ENTERPRISES: CARE Keeps D Debt Ratings in Not Cooperating
MAHAVIR BRIGHT: CARE Keeps C Debt Rating in Not Cooperating
MANAPPURAM FINANCE: S&P Affirms 'BB-/B' ICRs, Outlook Stable
MUTHOOT FINANCE: S&P Affirms 'BB/B' ICRs on Strong Capitalization
NAIKNAVARE BUILDCON: CARE Reaffirms D Rating on INR75cr NCD
NAIKNAVARE DEVELOPERS: CARE Reaffirms D Rating on INR3.0cr NCD
OM CONSTRUCTION: CRISIL Keeps B+ Debt Rating in Not Cooperating
ONWARD PLASTIC: CRISIL Keeps B+ Debt Ratings in Not Cooperating
PARUL FOODS: CRISIL Keeps B+ Debt Ratings in Not Cooperating
PATWARI FORGINGS: CRISIL Keeps B+ Debt Rating in Not Cooperating
PATWARI STEELS: CRISIL Keeps D Debt Rating in Not Cooperating
PITAMBAR AGRO: Ind-Ra Assigns BB- Loan Rating, Outlook Stable
PRASANNA PURPLE: Ind-Ra Keeps BB Loan Rating in NonCooperating
PVS BUILDERS: CRISIL Keeps D Debt Rating in Not Cooperating
R. K. NATURAL: CRISIL Lowers Ratings on INR6.8cr Cash Loan to B
RADHA KRISHNA: CRISIL Keeps B+ Debt Ratings in Not Cooperating
RAJ KISHORE: CRISIL Keeps B+ Debt Rating in Not Cooperating
RANSAN PACKAGING: CRISIL Keeps D Debt Ratings in Not Cooperating
RELIANCE INFRASTRUCTURE: Ind-Ra Affirms D Loan Rating
RITZY CHEMICALS: CARE Keeps D Debt Rating in Not Cooperating
SIGMA CHEMTRADE: Ind-Ra Affirms BB+ Loan Rating, Outlook Stable
SINDHANUR GANGAVATHI: CARE Keeps D Debt Rating in Not Cooperating
STERLING AND WILSON: Ind-Ra Cuts Bank Loan Rating to BB
SUMRAN AGRO: Ind-Ra Assigns BB Loan Rating, Outlook Stable
TIRUMALA SEVEN: Ind-Ra Affirms BB- Loan Rating, Outlook Stable
VECTOR INFRAPROP: Ind-Ra Hikes Loan Rating to BB+, Outlook Stable
VINAY STEEL: CARE Keeps D Debt Rating in Not Cooperating
YOGENDRA JAISWAL: CARE Keeps C Debt Rating in Not Cooperating
ZEE ENTERTAINMENT: Sony Unit Says No Extn. Yet of Merger Deadline
M A L A Y S I A
SAPURA ENERGY: Gets Financiers' Nod for $2.2BB Debt Restructuring
SAPURA ENERGY: Gets Second Extension to Submit PN17 Revamp Plan
N E W Z E A L A N D
42GLASS LIMITED: Creditors' Proofs of Debt Due on Feb. 21
AGHA JOON: Creditors' Proofs of Debt Due on Feb. 9
AUJLA HOSPITALITY: Creditors' Proofs of Debt Due on Jan. 17
FIAFIA CONTRACTORS: Court to Hear Wind-Up Petition on Feb. 23
HAPPY VALLEY: Liquidators Call in Agents to Sell Land
NEST OR INVEST: Creditors' Proofs of Debt Due on Feb. 2
S I N G A P O R E
FEMALE DAILY: Creditors' Proofs of Debt Due on Jan. 15
FLEX GLOBAL: Court Enters Wind-Up Order
HPL OLYMPIA: Creditors' Proofs of Debt Due on Jan. 15
MCMING INVESTMENTS: Creditors' Proofs of Debt Due on Jan. 15
MCSHOPE INVESTMENTS: Creditors' Proofs of Debt Due on Jan. 15
MINWYN INVESTMENTS: Creditors' Proofs of Debt Due on Jan. 15
T H A I L A N D
[*] THAILAND: Cabinet OKs Debt Support for Smaller Firms, Debtors
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A U S T R A L I A
=================
BIZPAY GROUP: Second Creditors' Meeting Set for Dec. 22
-------------------------------------------------------
A second meeting of creditors in the proceedings of BizPay Group
Limited has been set for Dec. 22, 2023, at 11:00 a.m. at the
offices of BRI Ferrier, Level 26, 25 Bligh Street, in Sydney, NSW,
and via virtual meeting technology.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Dec. 21, 2023, at 4:00 p.m.
Jonathon Keenan and Peter Krejci of BRI Ferrier were appointed as
administrators of the company on Nov. 23, 2023.
IE PROJECT: First Creditors' Meeting Set for Dec. 22
----------------------------------------------------
A first meeting of the creditors in the proceedings of IE Project
Group Pty Ltd will be held on Dec. 22, 2023, at 9:30 a.m. at the
offices of B&T Advisory, Level 19, 144 Edward Street, in Brisbane,
Qld.
Travis Pullen of B&T Advisory was appointed as administrator of the
company on Dec. 15, 2023.
MORABUILT PTY: First Creditors' Meeting Set for Dec. 22
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Morabuilt
Pty Ltd, trading as Strategic Construction Advisory Services and
Strategic Construction Services & Advisory, will be held on Dec.
22, 2023, at 3:00 p.m. at the offices of BRI Ferrier, Level 26, 25
Bligh Street, in Sydney, NSW, and via virtual meeting technology.
Jonathon Keenan and Peter Krejci of BRI Ferrier were appointed as
administrators of the company on Dec. 14, 2023.
OKAMI DISTRIBUTION: Puts 16 Venues Into Voluntary Administration
----------------------------------------------------------------
SmartCompany reports that 16 restaurants managed by the
all-you-can-eat Japanese restaurant business Okami have entered
voluntary administration, as its founder contends with delayed
COVID-era costs and rising inflation.
According to SmartCompany, documents listed by the Australian
Securities and Investments Commission (ASIC) show businesses
corresponding with Okami locations across Victoria, New South
Wales, South Australia, and the ACT are now under administration.
SmartCompany says the businesses include venues in:
* Braddon, ACT;
* Mawson, ACT;
* Cronulla, NSW;
* Hampton, VIC;
* Marrickville, NSW;
* Melton, VIC;
* Camden, NSW;
* Dubbo, NSW;
* Sutherland, NSW;
* Pennant Hills;
* Penrith, NSW;
* Glenunga, SA;
* Wagga Wagga, NSW;
* Camberwell, VIC;
* Sunbury, VIC; and
* Ballarat, VIC.
Three other businesses, not named in correspondence with Okami
restaurants, are wrapped up in the same administration process.
Philip Campbell-Wilson and John McInerney of Grant Thornton were
appointed joint administrators on Dec. 15, SmartCompany discloses.
In a statement provided to SmartCompany on Dec. 19, Mr.
Campbell-Wilson said the venues under voluntary administration fall
directly under the management of Okami Distribution and are not
part of the business' broad franchise network.
Preliminary investigations have unearthed some potential causes for
the business' recent difficulties.
"Based on our initial discussions with the founder of the Okami
business, they believe there has been a lag effect from the
COVID-19 pandemic combined with inflationary pressure on costs
which has led to a decline in sales and escalated operational
costs," Mr. Campbell-Wilson said.
According to SmartCompany, the Australian Taxation Office (ATO) and
related entities are likely to be major creditors to the venture.
However, the joint administrator stressed the investigation has
only just commenced, and the details are "subject to further
detailed investigation".
The first meeting of creditors was held virtually on December 19.
In good news for customers of the well-liked restaurant chain, the
administrators have confirmed they will continue trading the
business through the busy holiday period, SmartCompany relays.
"This approach is aimed at preserving business value and to provide
an opportunity to consider a formal restructuring plan," Mr.
Campbell-Wilson said.
It will also give breathing room to the 250 full-time, part-time,
and casual employees working at the affected restaurants.
"We have committed to funding the pre-appointment wages, ensuring
that all employee wages are up to date," the joint administrator
continued.
"This action is aimed to reduce the impact of the administration on
the employees leading into Christmas."
While the administration covers a significant portion of the Okami
network, which spans more than 50 restaurants nationwide, it does
not include the venues operating under its franchise model,
SmartCompany adds.
SCOTGOLD RESOURCES: Second Creditors' Meeting Set for Dec. 22
-------------------------------------------------------------
A second meeting of creditors in the proceedings of Scotgold
Resources Ltd has been set for Dec. 22, 2023, at 10:00 a.m. at the
offices of Pitcher Partners, Level 11, 12-14 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. 21, 2023, at 4:00 p.m.
Daniel Bredenkamp and Christopher Pattinson of Pitcher Partners
were appointed as administrators of the company on Nov. 24, 2023.
TRITON BOND 2023-3P: S&P Assigns B(sf) Rating on Class E Notes
--------------------------------------------------------------
S&P Global Ratings assigned its ratings to seven classes of prime
residential and small ticket commercial mortgage-backed securities
issued by Perpetual Corporate Trust Ltd. as trustee for Triton Bond
Trust 2023-3P Series 1.
The ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, which comprises prime residential (75%) and small-ticket
commercial (25%) loans. The portfolio comprises loans to investors,
of which 75% are to self-managed superannuation funds.
-- S&P's view that the credit support is sufficient to withstand
the stresses it applies. This credit support comprises mortgage
lenders insurance covering 5.47% of the loans in the portfolio as
well as note subordination for all rated notes.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including an amortizing liquidity
facility equal to 1.0% of the invested amount of all rated and
class G notes, subject to a floor of 0.10% of the initial invested
amount of all notes, principal draws, and a loss reserve that
builds from excess spread, are sufficient under S&P's stress
assumptions to ensure timely payment of interest.
-- The extraordinary expense reserve of A$150,000, funded from day
one by Columbus Capital Pty Ltd., available to meet extraordinary
expenses. The reserve will be topped up via excess spread if
drawn.
-- The benefit of a fixed- to floating-rate interest-rate swap
provided by National Australia Bank Ltd. to hedge the mismatch
between receipts from any fixed-rate mortgage loans and the
variable-rate RMBS, should any be entered into after transaction
close.
-- The legal structure of the trust, which has been established as
a special-purpose entity and meets our criteria for insolvency
remoteness.
Ratings Assigned
Triton Bond Trust 2023-3P Series 1
Class A1-A, A$330.40 million: AAA (sf)
Class A1-B, A$371.60 million: AAA (sf)
Class B, A$29.60 million: AA (sf)
Class C, A$26.80 million: A (sf)
Class D, A$18.32 million: BBB (sf)
Class E, A$10.24 million: BB (sf)
Class F, A$7.04 million: B (sf)
Class G, A$6.00 million: Not rated
W.T.D. FENCING: First Creditors' Meeting Set for Dec. 27
--------------------------------------------------------
A first meeting of the creditors in the proceedings of W.T.D.
Fencing Pty. Ltd. will be held on Dec. 27, 2023, at 3:00 p.m. via
Microsoft Teams meeting.
Gavin Moss and Henry Kwok of Chifley Advisory were appointed as
administrators of the company on Dec. 13, 2023.
===================
B A N G L A D E S H
===================
DUTCH-BANGLA BANK: S&P Assigns 'B/B' ICRs, Outlook Stable
---------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issuer credit rating
on Dutch-Bangla Bank PLC The outlook is stable. At the same time,
S&P assigned its 'B' short-term issuer credit rating on the bank.
Dutch-Bangla will continue to face tough operating conditions.
Economic growth in Bangladesh, where the bank is based, is likely
to remain high due to momentum in its labor markets and export
industries. However, commodity inflation and external sector
volatility present significant risks. Bangladesh is weathering a
period of elevated import bills and declining foreign exchange
reserves.
Dutch-Bangla is likely to maintain its satisfactory franchise. The
bank is among the top 15 in Bangladesh's fragmented banking
industry. The penetration of banks in the country is low.
Dutch-Bangla accounts for about 2.9% of the system's deposits. The
bank has been able to establish a good liability franchise through
judicious use of technology. It therefore has access to retail
remittances and export-oriented clients, thus helping it to face
the challenges arising from Bangladesh's weak external position.
However, the bank's loan portfolio has high concentration.
Meanwhile, the bank's capitalization is likely to benefit from an
improvement in profitability and high earnings retention.
S&P said, "Our anchor of 'b+' for Dutch-Bangla draws on our view of
the economic and industry risk in Bangladesh, where the bank
predominantly operates. In our opinion, Bangladesh's low-income
economy, heavy development needs, and fiscal constraints limit the
banking industry's economic resilience."
Although Bangladesh has healthy growth prospects (due to poverty
alleviation measures and the development of the manufacturing and
service sectors), credit risk in the country remains extremely
high. This is underscored by weak foreclosure laws and underwriting
standards, weak governance at some banks, and client concentration
that leads to sizable, stressed assets in the banking industry.
Bangladesh's regulatory supervision set-up also has gaps, which
results in limited market discipline. The weak asset quality and
capitalization of some banks reflect gaps in monitoring and in the
system's ability to address problems early.
In S&P's view, Bangladesh's banking system has overcapacity and
market distortions that lead to low profitability. A supportive
core customer deposit base and low reliance on external funding
temper these weaknesses.
Bangladesh's banking industry is fragmented. Dutch-Bangla competes
with more than 60 other banks in the country. It caters mainly to
corporates (about 70% of the loan book), followed by the retail
segment (about 19%) and small and midsize enterprises (SMEs, about
12%), as of June 30, 2023. This breakup is in line with the overall
industry, where S&P estimates loans to corporates account for
slightly over 80% of total loans.
Dutch-Bangla has a first-mover advantage in introducing innovative
technology-based solutions in Bangladesh. These include ATMs,
internet banking, mobile banking, point of sale (POS) terminals,
and card products. The bank has about half of the ATMs in the
country, around 20% market share of POS terminals, and sizable
market shares in e-commerce transactions, remittances, and debit
and credit card issuance.
S&P said, "We expect Dutch-Bangla's capitalization to benefit from
an improvement in profitability and high earnings retention. The
bank's capitalization as measured by S&P's pre-diversification
risk-adjusted capital (RAC) ratio should stay at 3.75%-4.25% over
the next 12-24 months, compared with about 4% at end-December 2022.
Our pre-diversification RAC ratio for emerging markets such as
Bangladesh typically tends to be lower than the regulatory tier-1
capital ratio, given that the exposures in these markets are
subjected to higher risk weights under our RAC methodology.
Nevertheless, the bank's capitalization, as measured by the RAC
ratio, remains a neutral factor for the credit ratings.
"In our view, Dutch-Bangla's loan growth will be at 12%-13% over
the next two years. This is broadly in line with the industry and
the nominal GDP growth in Bangladesh. We expect the bank's internal
capital generation to mainly support loan growth. Dividend payouts
are likely to remain low at 20%-25%.
"We expect Dutch-Bangla's profitability to remain significantly
better than the industry, driven mainly by its above-average net
interest margin (NIM), owing to the sizable amount of current and
savings account (CASA) deposits. The bank's return on assets (ROA,
defined as the ratio of core earnings to average adjusted assets)
is likely to be at 1.0%-1.2% over the next two years, compared with
about 1.0% at the end of September 2023.
"By our projection, Dutch-Bangla's NIM is likely to modestly
improve over the next two years. We expect some benefit for the
bank from the introduction of the new lending interest rate
benchmark for commercial banks (SMART--six-month moving average
treasury rates). Under this, a bank can price loans up to 375 basis
points above the benchmark rate. This compares with the earlier 9%
lending rate ceiling imposed by the Bangladesh central bank until
June 2023."
Dutch-Bangla, like its domestic peers, should also benefit from the
1% additional fee that commercial banks could levy on the cottage,
micro, and SME industries, and retail customers to cover
supervision costs. The increase in the cost of funds as the central
bank tries to tame high inflation would temper some of the
benefit.
Dutch-Bangla's credit costs are likely to remain at about 1% of
gross customer loans over the next 12-24 months. While the bank has
maintained higher provisions than required by regulations in
Bangladesh, its ratio of overall loan loss reserves to
nonperforming loans (NPLs) is low when compared with some global
peers. In S&P's view, reported NPL and credit losses mask the true
picture of asset quality in Bangladesh.
S&P's assessment of Dutch-Bangla's risk position reflects inherent
credit risk emanating from the bank's concentration in the
corporate sector. Corporate loans typically have the lowest yield
and have historically had a higher NPL ratio than the retail
portfolio.
In S&P's view, Dutch-Bangla's corporate book also has substantial
industry concentration. As of June 30, 2023, textile and readymade
garment industries accounted for about 43% of the bank's corporate
loans or about 30% of total book. While this industry is a large
exporter and contributes significantly to Bangladesh's economy and
employment, it is also exposed to global economic shocks.
The bank faces high single-name concentration. Its top 20 loan
exposures contribute about 19% to the total loan book and about
170% of the adjusted total capital. Furthermore, some corporate
clients are highly leveraged, increasing their susceptibility to
business volatility.
S&P said, "We expect Dutch-Bangla's NPL ratio to moderately improve
to 5.0%-6.0% in 2024 and 2025. The reported NPL ratio rose to about
6.5% at end-September 2023, compared with 4.3% at end 2022. We
expect the ratio to improve to 5.0%-5.5% by end-2023, based on the
bank's recovery efforts."
Historically, Dutch-Bangla's asset quality has been in line with
that of private commercial banks in Bangladesh. The average NPL
ratio for private commercial banks was at about 6.5% at end-June
2023.
In S&P's view, any significant slippages from Dutch-Bangla's COVID
restructured book into NPLs will be manageable. The bank has been
able to orderly downsize its significantly high COVID-related
restructured book to about 5.7% at end-September 2023, from a high
of 29% at end-December 2021. COVID-related moratorium facilities in
Bangladesh ended on Dec. 31, 2022.
At the sector level, the restructured loans for private commercial
banks in Bangladesh stood at about 14% of gross customer loans at
end-2022, and the ratio was about 19% for state-owned commercial
banks.
Dutch-Bangla's retail portfolio mainly comprises personal loans
(59% of retail loans in June 2023), home loans (33%), and credit
cards/overdrafts (6%). The customer base is a mix of salaried and
self-employed. The bank manages credit risk based on customer
profile, loan-to-value, and debt instalment to income limits. The
gross NPL ratio of the portfolio was about 1.7% on average between
2015-2022.
S&P expects Dutch-Bangla to maintain its diversified deposit
franchise over the next 12-18 months. The bank's deposits,
particularly its sizable low-cost CASA, support its funding
profile. Customer deposits have consistently contributed to about
90% of the Dutch-Bangla's funding base over the past five years.
The bank's CASA ratio of 76.5% as of Sept. 30, 2023, is better than
the industry average (46% at the end of December 2022).
Dutch-Bangla's ratio of loans to customer deposits averaged 80.5%
over the past five years, similar to the industry average. The
bank's regulatory liquidity coverage ratio of 168.3% (in December
2022) was in line with industry peers. Its deposit base is
granular, with the top 20 depositors contributing about 3.4% of
total deposits as of June 2023.
Dutch-Bangla's assets in the form of cash and short-term funds
underpin its liquidity. The ratio of broad liquid assets to
short-term wholesale funding was 5.0x as of Sept. 30, 2023, because
the bank has limited reliance on short-term wholesale funding.
Dutch-Bangla also maintains a matched asset-liability position in
its foreign exchange exposure. The bank has a positive net foreign
exchange open position. It has also been managing the issuance of
letters of credit at levels largely commensurate with its foreign
exchange inflows from export receipts and remittances.
S&P said, "Our stable outlook on Dutch-Bangla reflects our view
that the bank will maintain its satisfactory franchise and funding
over the next 12-18 months. We also expect the bank to be able to
manage its U.S. dollar liquidity despite the ongoing systemic
stress due to Bangladesh's fall in forex reserves."
S&P could lower the ratings, if:
-- Contrary to our expectation, Dutch-Bangla's funding and
liquidity metrics come under stress because of the ongoing shortage
of U.S.-dollar liquidity in Bangladesh.
-- S&P lowers its transfer and convertibility assessment on
Bangladesh by more than one notch.
-- The bank's asset quality declines substantially, which could be
due to strain in its corporate loan book.
-- The bank's pre-diversification RAC ratio declines and stays
sustainably below 3%. This could be due to more aggressive growth
or higher credit costs, leading to weaker profitability than S&P
anticipates.
-- S&P sees a weakening of the bank's franchise, possibly due to
any strategic misstep.
-- An upgrade of Dutch-Bangla is unlikely over the next 12-18
months.
Environmental, Social, And Governance
S&P said, "In our view, Bangladesh's regulatory standards are
typically in compliance with international standards, but gaps
could occur in supervision, resulting in limited market discipline.
The weak asset quality and capitalization of some banks in the
country reflect gaps in monitoring and in the system's inability to
address problems early."
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C H I N A
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CHINA EVERGRANDE: To Sell Downtown Shanghai JV Stake to Everbright
------------------------------------------------------------------
Nikkei Asia reports that China Evergrande Group has agreed to sell
its stake in a development project in downtown Shanghai to the
country's midsize state-owned lender China Everbright Group.
This marks another asset disposal, this time in a prime location in
a top-tier city, by the country's leading cash-strapped developer,
which barely evaded another court decision in Hong Kong to be
liquidated early this month, according to the Nikkei.
In a late-night disclosure to the Hong Kong Exchange on Dec. 14,
Evergrande said its core domestic developer unit Hengda Real Estate
Group has agreed to sell its 30% stake in a joint venture to China
Everbright Xinglong Trust, controlled by Everbright Group.
Since the remaining 70% of the JV stake is held by Shanghai Genchen
Information Technology Partnership, which is 99.94% owned by
Everbright Group, the project will virtually be under the control
of the state financial group.
The Nikkei notes that the joint venture is part of the Shanghai
North Bund Project, which is a grand development scheme promoted by
the local authorities in central Shanghai. According to Hongkou
District of Shanghai City, the overall project covers a total land
area of 0.8 sq. kilometers and a development area of 8.4 sq.
kilometers, which lies on the northeast of the Bund, in a
waterfront region facing the Huangpu River.
The joint venture is responsible for a zone with a land area of
12,545 sq. meters, where a commercial and residential complex with
a total constructed area of 45,000 sq. meters is planned to be
built, the report says. The zone includes about 5,600 sq. meters of
historical buildings from the Qing Dynasty that require special
preservation, protection and renovation to be done in harmony with
the surrounding space.
Evergrande purchased the land rights in December 2020, through a
public auction, outbidding Poly Developments and Holdings Group, a
state-owned developer with a military background, after 38 rounds
of bidding, for a total price of CNY2.295 billion ($324 million in
present value), the Nikkei recalls.
However, according to the filing on Dec. 14, the development has
been suspended and no rental income has been generated from the
project so far.
The sale price to Everbright Group is CNY663.15 million (US$93.5
million). This is about a 4% discount from the 30% portion that
Evergrande owns at this point. The company will be recording a loss
of approximately CNY55 million through this transaction.
According to the Nikkei, Evergrande's president and executive
director Siu Shawn said in the filing that the company is facing a
"liquidity issue" which has "adversely affected the development and
progress" of its projects. The company admitted that the joint
venture project was no exception, and it has been "idle for a long
time." The local authorities have issued a notice to the company to
investigate idle land which could end up in administrative
penalties and a possible resumption.
The disposal of the project was meant to avoid any sort of punitive
actions and bring in much needed cash to the group in order to
"provide funds for use in the guaranteed delivery of properties,"
Siu said.
The consideration through this transaction is dwarfed by the size
of the overall liabilities the group owes, the Nikkei notes.
Hengda has unpaid debts of CNY301.36 billion and overdue commercial
bills of CNY205.93 billion, while it carries a total of 2,002
pending litigations with value of over CNY30 million each, which
adds up to CNY470.75 billion, all as of the end of October, the
Nikkei discloses.
While repayment of debts is obligatory, the Chinese government
places high emphasis on completing and delivering contracted but
unfinished housing projects due to social stability concerns, the
report states.
Satoru Shibata, a veteran Japanese financial bureaucrat and a China
economy expert, told reporters on Dec. 14 that "the top priority
for those distressed Chinese developers is to make sure they
complete the housing projects and deliver them." He believes any
company that is virtually insolvent like Evergrande is being kept
afloat to serve this socially important purpose, the report adds.
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.
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, 2023.
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.
NIO INC: To Get US$2.2 Billion Investment From Abu Dhabi's CYVN
---------------------------------------------------------------
Reuters reports that Chinese electric vehicle maker Nio Inc. said
it has signed a pact for an investment of $2.2 billion from CYVN
Holdings, an investment vehicle based in Abu Dhabi.
According to Reuters, the investment comes as Nio, with its EV
sales and profitability under pressure in a price war started by
Tesla, has sought to boost efficiency by cutting a tenth of the
workforce and deferring non-core projects.
Reuters relates that the deal, expected to close in the final week
of December, would take CYVN's shareholding to 20.1% of Nio's total
issued and outstanding shares, following an investment of $1
billion in July, Nio said in a statement on its website.
That would make CYVN the largest single shareholder of Nio,
although founder and chief executive William Li retains the most
voting power, with his ownership of Class 'C' ordinary shares CYVN,
which will subscribe to 294,000,000 newly issued Class A ordinary
shares priced at $7.50 each, will also be entitled to nominate two
directors to Nio's board, the company said.
The company, whose Nio-branded EVs compete with premium brands such
as Mercedes-Benz and BMW in China, has been developing two new
brands for mass markets that it aims to bring them to Europe from
2025, its executives have said.
In its drive to become more efficient, Nio is considering a
spin-off of its battery production unit while continuing to develop
technologies for key components on its own, Reuters has reported
previously.
About NIO Inc.
NIO Inc. designs, develops, manufactures, and sells smart electric
vehicles in China. It offers five and six-seater electric SUVs, as
well as smart electric sedans. The company also offers power
solutions, including Power Home, a home charging solution; Power
Swap, a battery swapping service; Power Charger and Destination
Charger; Power Mobile, a mobile charging service through charging
vans; Power Map, an application that provides access to a network
of public chargers and their real-time information; and One Click
for Power valet service. In addition, it provides repair,
maintenance, and bodywork services through its NIO service centers
and authorized third-party service centers; statutory and
third-party liability insurance, and vehicle damage insurance
through third-party insurers; repair and routine maintenance;
courtesy vehicle services; roadside assistance; data packages; and
auto financing and financial leasing services. Further, the company
involved in the provision of energy and service packages to its
users; design and technology development activities; manufacture of
e-powertrains, battery packs, and components; and sales and after
sales management activities. Additionally, it offers NIO Certified,
a used vehicle inspection, evaluation, acquisition, and sales
service.
Nio Inc. reported three consecutive annual net losses of CNY5.61
billion, CNY10.57 billion, and CNY14.56 billion for the years ended
Dec. 30, 2020, 2021 and 2022, respectively.
=========
I N D I A
=========
AJAY FOOD: Ind-Ra Corrects November 16, 2023 Rating Release
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) rectifies Ajay food Products
(Katni) Private Limited's (AFPKPL) rating published on November 16,
2023 to include the analytical approach while arriving at the
ratings.
The amended version is as follows:
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.
Analytical Approach: The agency continues to take a consolidated
view of AFPKPL with its proprietor firms M/s TLC Incorporation (a
woven sack project) and M/s TLC Inc The Arindum (Hotel) while
arriving at the ratings due to the moderate-to-strong legal,
operational and strategic linkages among them.
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.
ALLIANCE DENIM: Ind-Ra Assigns B+ Bank Loan Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Alliance Denim
Private Limited's (ADPL) bank facilities as follows:
-- INR225.00 mil. Term loan due on March 31, 2029 assigned with
IND B+/Stable rating; and
-- INR150.00 mil. Cash credit assigned with IND B+/Stable/IND A4
rating.
ANALYTICAL APPROACH: Ind-Ra has assessed the company on a
standalone basis.
Key Rating Drivers
The rating reflects ADPL's small-scale operations, with revenue of
INR187.95 million in FY23, and under-construction stage of ADPL's
denim fabric manufacturing facility in Ahmedabad, which would have
48 air jet looms. The management has informed the agency that the
commercial operations of the manufacturing unit will begin from
December 2023. However, ADPL has outsourced the production of denim
fabric to third parties on job work basis since May 2022. In
1HFY24, the company reported a revenue of INR180 million. Ind-Ra
expects the revenue to increase on a yoy basis in FY24, led by the
commencement of operations of the manufacturing facility.
The ratings reflect the modest EBITDA margins. The margin stood at
1.07% in FY23, and the ROCE was 4.71%. Ind-Ra expects the margins
to improve from FY24 owing to the commencement of manufacturing
operations.
Liquidity Indicator- Stretched: ADPL does not have any capital
market exposure and relies on banks and financial institutions to
meet its funding requirements. The cash equivalents stood at
INR0.26 million at FY23. In the event of a delay in capex
completion, the expenses will be funded by promoters. The current
ratio is likely to remain moderate in the medium term. The ongoing
capex plan and commencement of manufacturing operations could exert
stress on the liquidity level in the medium term. The total cost of
the project is about INR400 million, which will be funded by term
loan of INR225 million, which was sanctioned in FY24, and the rest
will be funded by the promoters through equity infusions and
unsecured loans. As of September 2023, ADPL had incurred
expenditure of around INR250 million (63% of the total cost) for
the project. The term loan of INR225 million has been sanctioned by
the bank in FY24, and of this, INR180 million had been disbursed as
of September 2023. ADPL has a debt repayment of around INR31.30
million in FY25.
At FYE23, the company had an unsecured loan of INR53.65 million
from the promoters, and it did not have any external debt. Despite
the availing of term loan of INR225 million in FY24, Ind-Ra
expects the credit metrics to remain at comfortable levels during
FY24 and FY25, backed by the likely improvement in the EBITDA.
The ratings are supported by the promoters' experience of more than
a decade in the textile industry, which would help ADPL to
establish strong relationships with customers as well as
suppliers.
Rating Sensitivities
Negative: Any delays in the commencement of manufacturing
operations and achievement of stability in the operating
performance after the start of commercial operations, affecting the
company's debt servicing ability, could lead to a negative rating
action.
Positive: The timely commencement of manufacturing operations and
the subsequent achievement of stable operating profitability could
lead to a positive rating action.
Company Profile
Established in May 2022, ADPL is setting up a denim fabric
manufacturing facility with 48 air jet looms in Ahmedabad, Gujarat.
Promoted by Mahesh Mittal and family, the company is also engaged
in the trading of denim fabric. ADPL expects to start its
manufacturing operations from December 2023. At present, the
fabric is manufactured through job work from third parties. Post
the commencement of operations at its unit in Ahmedabad, ADPL will
have the capacity to manufacture about 40 lakhs meters of denim
fabric per year.
ARRAY LAND: CARE Keeps D Debt Rating in Not Cooperating Category
----------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Array Land
Developers Private Limited (ALDPL) continue to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 33.61 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated October 11,
2022, placed the rating(s) of ALDPL under the 'issuer
non-cooperating' category as ALDPL had failed to provide
information for monitoring of the rating and had not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. ALDPL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated August 27, 2023, September 6,
2023, September 16, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Array Land Developers Private Limited (ALDPL) was incorporated in
the year 2008 and promoted by Mr. K Siva Kumar and Mrs. V. K.
Shashikala. The company is engaged in wind power generation.
ASHASHREE FROZEN: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Ashashree
Frozen foods Private Limited (AFFPL) continue to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.70 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated October 14,
2022, placed the rating(s) of AFFPL under the 'issuer
non-cooperating' category as AFFPL had failed to provide
information for monitoring of the rating and had not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. AFFPL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated August 30, 2023, September 9,
2023, September 19, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Incorporated in December 2014, Ashashree Frozen Foods Private
Limited (AFFPL) was promoted by Shri Srikanta Kumar Khuntia and
Smt. Anupama Khuntia for setting up a dairy processing plant in
Odisha. AFFPL has already set up the dairy processing unit at
Hatibari, Sambalpur with a processing capacity of 45,000 litre of
milk per day. The commercial operation of the unit has started from
January 14, 2018. AFFPL procures from locally and sells its milk
products through distributors. The company has not availed
moratorium from its lender that could be availed as per RBI
circular.
ASIAN FOOTWEARS: CRISIL Withdraws B Rating on INR10cr LT Loan
-------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Asian Footwears Private
Limited (AFPL) to 'CRISIL B/Stable Issuer Not Cooperating'. CRISIL
Ratings has withdrawn its rating on bank facility of AFPL following
a request from the company and on receipt of a 'no dues
certificate' from the banker. Consequently, CRISIL Ratings is
migrating the ratings on bank facilities of AFPL from 'CRISIL
B/Stable Issuer Not Cooperating' to 'CRISIL B/Stable'. The ratings
action is in line with CRISIL Ratings' policy on withdrawal of bank
loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Drop Line 5 CRISIL B/Stable (Migrated from
Overdraft 'CRISIL B/Stable ISSUER NOT
Facility COOPERATING'; Rating Withdrawn)
Long Term Loan 10 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING'; Rating Withdrawn)
Incorporated in 2009, AFPL manufactures footwear under the 'Asian'
brand. It has two plants in Delhi and Haryana for manufacturing
footwear at an installed capacity of 300,000 pieces per month. Mr
Rajinder Jindal and Ms Kiran Jindal are the promoters.
BHAGWATI RICE: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Bhagwati
Rice Mill Private Limited (BRM) continue to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 45.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
CARE Ratings Ltd. has been seeking information BRM to monitor the
rating(s) vide e-mail communications/letter dated November 3, 2023,
October 30, 2023, and October 3, 2023, etc and numerous phone
calls. However, despite repeated requests, the company has not
provided the requisite information for monitoring the ratings.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. The ratings of Bhagwati Rice Mill Private Limited bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating).
The rating has been revised on account of non-availability of
requisite information due to non-cooperation by Bhagwati Rice Mill
Private Limited with CARE Ratings Ltd.'s efforts to undertake a
review of the rating outstanding. CARE Ratings Ltd. views
information availability risk as a key factor in its assessment of
credit risk. Further, the rating assigned to the bank facilities of
Bhagwati Rice Mill Private Limited (BRM) takes into consideration
overutilization in the working capital limits of the company for
more than a month.
Analytical approach: Standalone
Outlook: Not applicable
At the time of last press release published on June 1, 2023, the
following were the rating strengths and weaknesses.
Detailed description of the key rating drivers:
Key weaknesses
* Overutilization in the working capital limits: As per the
feedback received from the banker, there has been overutilization
in its working capital limits for more than a month on account of
disruptions in the business operations of the company due to fire
incident leading to stretch in liquidity.
Key Strengths: Not applicable
Liquidity: Poor
The liquidity position of the company remained poor characterized
by overutilization in the working capital limits of the company for
more than a month due to disruptions in the business operations of
the company due to fire incident.
Uttar Pradesh-based Bhagwati Rice Mill Private Limited (BRM) was
incorporated in November 1995 as a private limited company. The
company is currently directed by Mr. Mohan Lal Goyal and Mrs. Kanta
Devi Goyal. The company is engaged in the milling and processing of
paddy with an installed capacity to process 12 tonnes per hour
(TPH) as on March 31, 2022, at its manufacturing facility located
in Mainpuri, Uttar Pradesh. The company is having two associate
concerns namely; "Rama Enterprises" (established in 1990) engaged
in the trading of food grains and "Goyal Brothers" (established in
1990) engaged in the trading of food grains.
DHARTI DREDGING: CARE Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Dharti
Dredging and Infrastructure Limited (DDIL) continue to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 79.96 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Long Term/ 208.00 CARE D/CARE D; ISSUER NOT
Short Term COOPERATING; Rating continues
Bank Facilities to remain under ISSUER NOT
COOPERATING category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 28,
2022, placed the rating(s) of DDIL under the 'issuer
non-cooperating' category as DDIL had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. DDIL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 14, 2023, August 24, 2023, September 3,
2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Incorporated in 1993, Dharti Dredging and Infrastructure Ltd (DDIL)
is a Hyderabad-based company engaged in the work of dredging,
mainly capital dredging. In addition to dredging activities, the
company also undertakes trenching and back filling works related to
offshore pipeline installation, road embankment projects,
de-weeding of lakes, land reclamation etc. DDIL has executed
dredging projects in India, the Middle East, Myanmar and Indonesia.
DDIL commenced its operations with one dredging unit at Paradeep
Fishing Harbor in 1993. Over the years, it has executed various
dredging projects and post amalgamation with MDPL (Marine Dredging
Pvt. Ltd) DDIL owns a fleet of 16 dredgers (mostly cutter suction
dredgers).
DRN INFRASTRUCTURE: Ind-Ra Cuts Bank Loan Rating to C
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded DRN
Infrastructure Private Limited's (DRN Infra) bank loan ratings to
'IND C' from 'IND BB' while resolving the Rating Watch with
Negative Implications.
The detailed rating actions are:
-- INR0.75 mil. Proposed non-fund-based limits downgraded; off
Rating Watch with Negative Implications with IND C/IND A4
rating;
-- INR1.50 mil. Fund-based limits downgraded; off Rating Watch
with Negative Implications with IND C/IND A4 rating; and
-- INR4.75 mil. Non-fund-based limits downgraded; off Rating
Watch with Negative Implications with IND C/IND A4 rating.
Analytical Approach: To arrive at the ratings, Ind-Ra continues to
take a standalone view of DRN Infra's financials while factoring in
the cash outflow towards the equity/support required to be infused
by the company in its under-construction projects.
The downgrade and resolution of the Rating Watch with Negative
Implications reflect DRN Infra's ongoing delays in the servicing of
interest of an overdraft loan (not rated by Ind-Ra) as of September
2023, on account of its poor liquidity position. The agency has
been informed of the same via the independent auditor's report for
the annual report FY23. However, Ind-Ra has received confirmation
that there have not been any delays in the servicing of the bank
facilities rated by the agency.
Key Rating Drivers
Liquidity Indicator – Poor: DRN Infra delayed the payment of
interest on overdraft loan in FY23, and part interest servicing
remained due as of September 29, 2023. DRN Infra had free cash and
cash equivalents of around INR0.21 billion at FYE23 (FYE22: INR0.33
billion) against debt repayment obligations of INR0.34 billion for
FY24. The average monthly utilization of fund-based working capital
limits was 99.2% during the 12 months ended March 2023.
The ratings also reflect DRN Infra's modest credit metrics and
continued medium scale of operations in FY23 and 1HFY24. DRN
Infra's revenue declined to INR6.4 billion in FY23 (FY22: INR10.2
billion), owing to slower execution of its ongoing projects,
particularly its group hybrid annuity mode projects and Versova
sewage treatment plant project, which is in the preliminary stages.
The overall EBITDA declined to INR1.1 billion (INR 1.2 billion),
due to lower operating revenue. The profit after tax declined
sharply to INR0.13 billion in FY23(FY22: INR0.51 billion). In
1HFY24, the company generated revenues of INR2.30 billion, EBITDA
of INR0.48 billion and incurred PAT-level losses of INR0.03
billion. The net leverage (net debt/EBITDA) increased to 4.8x in
FY23 (FY22: 3.4x) and the net leverage (external debt) remained
high at 3.6x (FY22:3.2x).
Rating Sensitivities
Negative: Delays in servicing of debt facilities rated by Ind-Ra
will lead to a negative rating action.
Positive: An improvement in the liquidity position and scale of
operations of the company and/or regularization of debt servicing
for all facilities, will lead to a positive rating action.
Company Profile
DRN Infra (formerly R.N. Nayak & Sons), an engineering and
construction company was founded in 1983 as a partnership firm. It
was converted into a private limited company in April 2019. It has
a corporate office in Bangalore and branches in Mumbai, Nagpur and
Bengaluru. DRN undertakes civil engineering projects for state
governments and mainly operates in Karnataka and Telangana.
GO FIRST: Spicejet Shows Interest in Buying Bankrupt Carrier
------------------------------------------------------------
Reuters reports that SpiceJet Ltd has said on Dec. 19 it is
considering an offer for bankrupt carrier Go First, days after it
barely raised enough funds to get its grounded planes back in the
sky.
Reuters relates that SpiceJet said it would make the offer - the
details of which were not disclosed - after conducting due
diligence on Go First's resolution professional, the official
involved in conducting the airline's insolvency process.
Shares of the carrier rose about 7% to hit more than a year high.
According to Reuters, the news comes weeks after Go First's lenders
began contemplating the airline's liquidation as they failed to get
any bids before the deadline of Nov. 21.
"The bid that has come from SpiceJet is surprising," Reuters quotes
Prabhudas Lilladher analyst Jinesh Joshi as saying.
"(SpiceJet) is venturing to revive a grounded airline at a time
when it itself is battling a host of issues, including a funding
crunch," he said.
SpiceJet announced plans last week to raise INR22.50 billion
(nearly $271 million) - an amount that analysts believe just about
covers its total expense of INR21.8 billion for the July to
September quarter.
On Dec. 18, the Economic Times reported that Sharjah-based Sky One,
Africa-focused Safrik Investments and SpiceJet had all shown
interest in Go First and were in talks with the airline's creditors
for an extension of deadline.
Go First, which filed for bankruptcy in May, did not immediately
respond to a Reuters request for comment.
Go First has Central Bank of India, Bank of Baroda, IDBI Bank and
Deutsche Bank among its creditors, to whom it owes a total of
INR65.21 billion, Reuters notes.
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.
GURBAXANI ENGINEERING: Ind-Ra Affirms BB+ Term Loan Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Gurbaxani
Engineering & Constructions Private Limited's (GECPL) rupee term
loan rating as follows:
-- INR475.1 mil. Senior secured rupee term loan due on July 2031
affirmed with IND BB+/Stable rating.
*Bank guarantee worth INR102.6 million is a sub-limit of the rupee
term loan facility. The term loan outstanding was INR253.7 million
as of October 2023
Analytical Approach: Ind-Ra has analyzed the rating of the senior
secured rupee term loan of GECPL. Additionally, the promoter's
contribution in the form of an unsecured loan injected in GECPL, in
the form of quasi-equity, will be fully subordinated to the senior
ranking rupee term loan, and therefore, has not been considered as
additional debt in Ind-Ra's analysis. Any deviation from the above
arrangement could be negative for the ratings.
The project continues to be constrained by moderate counterparty
risk and moderate O&M risks. The rating continues to derive comfort
from the low revenue risk profile, the receipt of provisional COD
(PCOD) effective June 2023, and the likely receipt of the first
annuity in the month of January 2024. The rating also factors in
the strong characteristics of the hybrid annuity model (HAM)-based
road projects. Furthermore, D.C. Gurbaxani (DCG) has provided an
unconditional, absolute and irrevocable guarantee to provide funds
for debt servicing obligations in the event of a default by GECPL
at any time until the final settlement date of the term loan.
Key Rating Drivers
Moderate Counterparty Risk: The government of Maharashtra (GoM)
through its public works department (PWD) is engaged in the
development of its state highways under the Maharashtra Road
Improvement Programme. The timely receipt of annuity payments from
the PWD, as per the agreed terms in the concession agreement,
remains a key rating sensitivity.
Moderate O&M Risk: GECPL shall enter into a fixed-price operations
and maintenance (O&M) contract with DCG, which is the engineering,
procurement and construction-cum-O&M contractor, for taking up the
routine and major maintenance expenses. The duration of the O&M
contract with DCG is likely to be for the entire concession period.
The project's routine O&M costs and major maintenance costs are
broadly comparable with those of Ind-Ra-rated peers. Therefore,
Ind-Ra does not expect a major O&M risk.
Moderate Debt Structure: The repayment schedule of GECPL provides a
cushion of six months (the difference between the first repayment
date and the first annuity payment date from COD), which would
partially safeguard the project from any unanticipated delays in
the forthcoming annuity payments. Moreover, the availability of a
tail period of two years provides comfort to the rating.
Also, the financing documents stipulate a minimum annual debt
service coverage ratio of 1.20x during the operations, a breach of
which shall lead to the discontinuation of restricted payments,
until restored to stipulated levels. Any default on the sponsor
debt shall accelerate debt repayments of GECPL under a cross
default linked mechanism. Interest servicing of the project for the
first six months until the first annuity as well as O&M expenses
during the same period shall be funded through inflation-indexed
construction grants, which are a part of the project cost.
Receipt of PCOD; Minimal Completion Risk: The project received PCOD
from 30 June 2023 for an effective length of 32.46km. The physical
progress of the project stood at 91.89% as on 21 June 2023 and the
project has received the fifth milestone payment for the same.
Ind-Ra has estimated the completion risk to be minimal since the
project has largely been completed and PCOD has also been achieved.
However, the completion of the balance work and funding for the
same would continue to be a key rating monitorable. The entire
contribution from the sponsor in the form of equity has been
infused already. The project has mainly been funded by equity of
INR170.9 million, debt of INR253.7 million and construction support
of INR1,231.5 million from the GoM, as per the chartered accountant
certificate for September 2023
Low Revenue Risk: GECPL shall receive semi-annual annuity payments
from the PWD, GoM, covering the remaining 40% of completion cost
after the COD. Furthermore, under HAM, the concession agreement
provides an adjustment of the bid project cost to the price index
multiple, and accordingly, 60% of the bid project cost shall be
payable during construction and the balance 40% during the
operations phase on the inflation-adjusted project cost.
The inflation-adjusted project cost would be calculated at various
milestones (as per the concession agreement), and finally, at the
completion of the project. These costs would be used for arriving
at the PWD, GoM's upfront participation of 60% and annuity payment
to the concessionaire covering balance 40% of the bid project
cost.
GECPL shall have three revenue streams adjusted for the price index
multiple post the COD: (i) 40% of the bid project cost split and
spread over 10 years commencing from the COD. The first annuity
instalment shall be due and payable within 15 days of the 180th day
from the COD and the remaining instalments shall be payable within
15 (fifteen) days of completion of each of the successive six
months; ii) interest on a reducing balance basis (after deducting
received annuities) at the Reserve Bank of India-quoted bank rate
(currently 5.65%) plus 3%. Such interest shall be paid biannually
along with each annuity instalment; and iii) O&M payments; GECPL
during the bidding had quoted (first year) O&M cost (O&M bid quote)
of INR25.0 million. As per the agreement, initially all the
expenses shall be borne by the concessionaire, and the PWD, GoM
shall reimburse to the concessionaire an amount equal to the
proportion of O&M bid quote adjusted to the price index multiple on
the reference date preceding the due date of payment (clause 23.7.2
of concession agreement). Any excess O&M costs shall be borne
solely by the concessionaire, and any shortfall shall be funded by
the promoter firm, DCG, under the sponsor support undertaking.
Adequate Sponsor Undertaking: The sponsor, DCG, has provided
reasonable undertakings to support the project by bringing in
equity contribution, enter into a fixed price O&M contract with the
company, bring in additional funds for any cost overruns, fund the
incremental O&M costs incurred in actuals over and above O&M
payments received from the PWD, and meeting any shortfall in debt
repayments due to delays in annuities.
DCG has infused committed equity in the project in a timely manner
along with giving an undertaking for meeting shortfalls for project
cost/ time overruns and shortfall in resources. Also, the sponsor
will bring in funds required for incurring O&M and major
maintenance expenses that are over and above the lender's base case
business plan. DCG shall also provide additional support for the
timely creation of the stipulated two quarters of debt service
reserve and meeting the first six months of interest obligations
and O&M expenses post the COD.
Liquidity Indicator – Adequate: Both the total interest
obligations on project debt availed and total O&M expenses for the
first six months from the PCOD until the receipt of the first
annuity are a part of the project cost, which indicates limited
dependence on the sponsor during that period. The sponsor shall
also fund any shortfalls in the creation of DSR or MMR obligations
as per the stipulations in the financing documents. The company has
to create a DSRA equivalent to two quarters' debt servicing, as per
the financing documents. GECPL had maintained a part DSRA of INR9.3
million as of October 2023.
Rating Sensitivities
Negative: Future developments that may, individually or
collectively, lead to a negative rating action are:
-- absence of timely sponsor support for project cost
escalations.
-- a decline in the average DSCR below 1.15x
-- significant delays or deductions in annuities, resulting in the
weakening of coverages from Ind-Ra's base case assumptions
-- non-creation of DSRA prior as per the financing documents;
-- deterioration in the credit profile of sponsor/O&M contractor
or concession authority
Positive: Future developments that may, individually or
collectively, lead to a positive rating action are:
-- timely receipt of the first annuity without any
performance-related deductions
-- creation of full DSRA in line with the financing document.
Company Profile
GECPL, a special purpose vehicle incorporated by DCG, has been
awarded a 12-year concession (including two-year construction
period) for the improvement and operation/maintenance of two-laning
of roads totalling 45.2km in the Chandrapur district in
Maharashtra.
The total bid-project cost of GECPL is INR1,709.5 million, which is
being financed by an equity contribution of INR208.7 million by
DCG, construction grants of INR1,025.7 million payable by
concession authority and project debt of INR475.1 million. The
appointed date of the project was received on 29 January 2019 and
the scheduled construction period is two years.
JSW INFRASTRUCTURE: Fitch Alters Outlook on BB+ LongTerm IDR to Pos
-------------------------------------------------------------------
Fitch Ratings has revised the Outlook on JSW Infrastructure
Limited's (JSWIL) to Positive from Stable, and affirmed India-based
port operator JSW Infrastructure Limited's (JSWIL) Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB+'.
Fitch has also affirmed JSWIL's USD400 million senior unsecured
notes due 2029 rating at 'BB+', and revised the Outlook to Positive
from Stable. The bondholders benefit from equity pledges and
guarantees from key operating subsidiaries.
RATING RATIONALE
The Positive Outlook reflects JSWIL's strong financial profile,
which is commensurate with a higher rating level and strengthened
further by the completion of its INR28 billion listing on the
Indian stock exchange in October 2023. Fitch expects JSWIL to
maintain its substantial rating headroom despite ambitious
debt-funded expansion plans in the medium term.
The Positive Outlook is also supported by steady increase in
third-party cargo contribution to 33% in the financial year
end-March 2023 (FY23) and 36% in 1H FY24, from 27% in FY22, and is
likely to increase further with volumes ramping up at two new
ports, Paradip East Quay Terminal (EQ) and New Mangalore Container
Terminal NMCT). Both port facilities handle only third-party cargo,
which will reduce JSWIL's revenue reliance on JSW group.
The rating reflects JSWIL's geographically diversified port
locations, reasonable tariffs, and long term take-or-pay contracts
that account for about 30% of total revenue. The rating is however
moderated by its cargo's high exposure to two commodities, coal and
iron ore, as well as customer concentration risk. JSW Steel Limited
(BB/Stable) contributes more than 50% of JSWIL's cargo volumes, but
JSWIL's credit assessment is not linked to that of JSW Steel.
Customer concentration risk is partially mitigated by limited
infrastructural constraints at the ports, which are linked to
national highways. Hence, the group can serve third-party customers
at existing ports, if required. Its analysis shows that JSWIL's
cash flow available from third parties and existing credit
facilities will be adequate to service and repay debt over the
weighted-average life of the concessions.
Throughput from JSW Group has demonstrated resilience to commodity
and steel price fluctuation historically. These cargoes are
unlikely to be diverted to other ports due to close proximity of
JSWIL's captive ports to the respective industries and the ports'
access to multimodal connectivity. In addition, healthy economic
growth and power demand in India coupled with the government's
infrastructure drive will continue to support ongoing local demand
for steel and coal.
KEY RATING DRIVERS
Portfolio of Geographically Diverse, Strategic Ports - Revenue Risk
(Volume): Midrange
JSWIL is a large commercial port operator and developer in India.
It owns the concession on nine ports and terminal facilities that
are well-diversified geographically along India's eastern and
western coasts. It also operates the Fujairah Terminal in the UAE.
These ports are strategically located to meet the cargo-handling
requirements of JSW group companies, and support the group's entire
value chain, from sourcing to logistics to manufacturing and export
of finished steel. JSWIL provides operational efficiency and cost
savings to the JSW group.
Mix of Unregulated and Regulated Tariffs - Revenue Risk (Price):
Midrange
JSWIL's Jaigarh and Dharamtar ports account for over 50% of its
EBITDA. The tariffs for the two ports are unregulated and based on
market pricing. Cargo from the JSW group is the majority of volume
at these ports. The pricing for group companies is also kept at
arm's length, management said. The rest of the portfolio has
limited flexibility to fix tariffs, sharing about 21%-31% of
revenue with port authorities, except the newly acquired terminals
Ennore Coal (53%) and Ennore Bulk (36%). Still, tariffs remain
broadly competitive as regulations allow port operators a return on
capital employed of about 16%.
Discretionary Capex Plan - Infrastructure Development and Renewal:
Stronger
JSWIL has considerable experience and expertise in delivering on
its port portfolio investment. All of its ports and terminals are
operational, including EQ and NMCT, which started operation in
FY23. Even so, planned capex will increase in the medium term when
major construction works begin for Keni Port, a greenfield
development project.
Some of JSWIL's ports are close to the optimal operating level of
70% and may require some expansion to cater for additional demand.
JSWIL also plans to increase the contribution of third-party cargo
to diversify its cargo mix. Most of its development is
discretionary, and JSWIL has complete flexibility in roll-out plans
without a major impact on operations. Fitch expects additional
capex to be funded via operating cash flow and borrowings. The
group's weighted-average life of concession is about 24 years.
No Structural Subordination, Restrictive Covenants - Debt
Structure: Midrange
The US dollar bonds are close to 70% of its consolidated debt as of
30 September 2023, with the rest mainly held at JSW Jaigarh Port
Ltd, which accounts for over 40% of group EBITDA. The US dollar
bonds' structural subordination is mitigated by JSWIL's full
ownership of Jaigarh, EBITDA available outside of Jaigarh and
senior unsecured guarantees provided by the group's five key
subsidiaries, including the one housing Jaigarh. The five
subsidiaries hold the group's entire debt. The bondholders also
benefit from equity pledges by these five subsidiaries.
The US dollar bonds' indenture has some protective features on
additional debt and restricted payments, which are only allowed if
gross debt/tangible net worth is below 3.0x, besides certain
carve-outs. Restricted payments are only allowed if total
restricted payments are less than 50% of cumulative accrued net
income, with certain exceptions. The bonds do not benefit from
reserve accounts. JSWIL also relies on only natural hedging. Still,
a fifth of its revenue is in US dollars, likely sufficient to cover
US dollar debt-servicing. Ample liquidity and solid access to
capital markets mitigates refinancing risk.
Financial Profile
Fitch's base case assumes increased throughput in line with
management estimates. Management assumes low to mid-teens growth in
throughput in FY24, supported by utilisation ramp-up from newly
operating ports. Throughput growth slows from FY25 to about 5%,
which is still below Fitch's GDP forecast for India. The actual
realised cargo in 1HFY23 supports management's full-year projection
for FY23. Management expects overall tariff growth rate to be about
2% to 4% over FY24-FY28, which is also below Fitch's CPI growth
forecast for India.
The base case assumes the EBITDA margin at about 51%, 4pp lower
than management's assumption. JSWIL will incur higher capex in the
medium term as it takes on development projects, such as the LPG
terminal at Jaigarh, capacity expansion at the NMCT, Keni Port in
Karnataka and other potential capacity expansion plans in assets
operating above the optimal level of 70%. Growth capex is
nevertheless partially funded by proceeds from JSWIL's listing. The
base case also includes dividend distributions over FY24-FY28.
Its base case's projected debt/operating EBITDA remains low at
below 2.5x over FY24-FY28.
Fitch's rating case assumes a haircut of around 5% in the base
case's throughput in FY24, and 10% thereafter. Fitch also applies a
3% to 4% haircut on tariff assumptions. The rating case applies a
3pp-5pp stress on overall EBITDA margin, and 5% stress on capex in
the base case, and similar dividend distribution assumptions in the
base case. Its rating case projects the debt/operating EBITDA to
remain well below 3.2x throughout FY24-FY28.
PEER GROUP
JSWIL is most comparable to Adani Ports and Special Economic Zone
Limited (APSEZ, BBB-/Stable), in Fitch's view. Both JSWIL and APSEZ
have diverse portfolios and debt profiles with limited protective
features. However, APSEZ benefits from a more diverse cargo and
counterparty mix, larger scale of operations, and larger portion of
cargo throughput having long-term cargo contracts than JSWIL. Fitch
therefore assessed APSEZ at a higher rating level than JSWIL,
despite JSWIL's stronger financial profile.
JSWIL can also be compared with Port of Newcastle Investments
(Financing) Pty Ltd (BBB-/Stable), the financing entity of Port of
Newcastle (PON) in Australia. Both JSWIL and PON are significantly
dependent on specific cargo. JSWIL is dependent on coal and iron
ore, while PON is reliant on coal exports. However, PON's high coal
exposure is mitigated by increasing demand for high-quality coal
from Asia over the medium term and stable thermal and metallurgical
coal supply in Australia's Hunter Valley.
JSWIL's customer concentration risk in combination with its high
commodity exposure weighs on its volume risk assessment, resulting
in a 'Midrange' assessment compared with a 'High Midrange' for PON.
PON has a stronger price risk assessment, benefiting from its
landlord operation model, where 76% of contracted revenue is under
long-term, fixed price agreements, with the majority providing
inflation protection. These qualitative attributes justify rating
JSWIL a notch lower than PON despite JSWIL's lower leverage.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Fitch's rating case debt/EBITDA remaining sustainably above 3.5x,
in tandem with the third-party contribution falling sustainably
below 40% of JSWIL's total cargo and revenue in Fitch's forecast,
will result in the rating Outlook being revised to Stable.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Fitch's rating case debt/EBITDA remaining sustainably below 3.5x,
in tandem with the third-party contribution increasing sustainably
above 40% of JSWIL's total cargo and revenue in Fitch's forecast,
will result in a rating upgrade.
CREDIT UPDATE
Revenue increased by 41% in FY23 on account of throughput
contribution from two new terminals commencing operations during
the year. The EQ and NMCT started operations in the year.
Third-party cargo as a share of total cargo rose by another 6pp to
33% in FY23, and rose further to 36% in 1HFY24. The third-party
revenue contribution was about 48% in FY23, up from 45% in FY22.
The company raised about INR28 billion in its recent listing. The
company will use its listing proceeds for partial debt repayment,
expansion and facility upgrade capex and other general corporate
purposes.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
JSW Infrastructure
Limited LT IDR BB+ Affirmed BB+
JSW Infrastructure
Limited/Unsecured
Debt/1 LT LT BB+ Affirmed BB+
KAMAL BUILDERS: CRISIL Reaffirms B+ Rating on INR5.4cr LT Loan
--------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable/CRISIL A4'
ratings on the bank facilities of Kamal Builders (KB).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL B+/Stable (Reaffirmed)
Letter Of Guarantee 8 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5.4 CRISIL B+/Stable (Reaffirmed)
Working Capital
Term Loan 0.6 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect the small scale of operations,
large working capital requirement, and exposure to intense
competition and risks inherent in a tender-based business. Revenue
rose to around INR32.18 crore in fiscal 2023, from INR24.4 crore in
fiscal 2022. The company has booked a turnover of INR10 crore for
the first half of fiscal 2024 and is likely to book INR28-30 crore
for the full fiscal. Orders worth INR34 crore as of September 2023,
to be executed over the next 12-18 months, provide moderate revenue
visibility over the medium term. Consequently, networth was
moderate at INR12.35 crore as on March 31, 2023, and is expected to
lie in the range of 12.5-13 crore as on March 31, 2024.
These weaknesses are partially offset by the extensive experience
of the partners in the construction industry and the comfortable
financial risk profile of the firm.
Key rating drivers & detailed description
Weaknesses:
* Large working capital requirement: Gross current assets were
sizeable at 190 days as on March 31, 2023, driven by large
receivables of 101 days and security deposits and earnest money.
GCAs are likely to range from 180 to 200 days over the medium term.
The firm has to deposit 1% of project cost to be eligible for
bidding and 10% performance guarantee once the project is awarded.
The amount is released post completion of work. Security deposit of
5-10% needs to be deposited during the project tenure and gets
released after a year of completion. KB raises bills with a credit
of one month, which gets stretched further by 1-3 months.
* Exposure to intense competition and risks inherent in a
tender-based business: Limited investment and complexity of
operations have attracted innumerable small entities, leading to
significant fragmentation. Intense competition from several
unorganised players limits the pricing and bargaining power of
players. Threat from large integrated players, in the form of
capacity additions, also limits growth. Since bulk of business is
tender-based, revenue depends on the ability of the firm to bid
successfully. Any delay in the floating of tenders, finalising
contractors or unsuccessful bidding, could constrain the business
risk profile. Moreover, the firm is exposed to high geographical
and customer concentration in revenue.
Strengths:
* Extensive experience of the partners: The three-decade-long
experience of the partners in the construction industry, has helped
the firm build a strong customer base in Uttar Pradesh, Madhya
Pradesh, Rajasthan and Delhi. Healthy relationships with customers
have led to an inflow of multiple projects.
* Comfortable financial risk profile: Networth was moderate at
INR12.35 crore as on March 31, 2023, and is projected at INR12.5-13
crore as on March 31, 2024, driven by accretion to reserves.
Gearing and total outside liabilities to adjusted networth ratios
were healthy at 1.32 times and 1.46 times, respectively, as on
March 31, 2023, and are likely to be below 1.3 times and 1.4 times,
respectively, as on March 31, 2024. Debt protection metrics are
also comfortable with net cash accrual to adjusted debt and
interest coverage ratios of 0.17 time and 4.97 times, respectively,
in fiscal 2023, and likely to be over 0.15 time and 3.25 times,
respectively, in fiscal 2024.
Liquidity: Stretched
Bank limit utilisation averaged 97% for the 12 months through
October 2023. Expected cash accrual of INR2.5-3 crore per year
could be tightly matched against term debt obligation of INR2-2.5
crore over the medium term. However, the partners are likely to
extend support via equity and unsecured loans to cover the working
capital requirement and debt obligation. Current ratio was healthy
at 1.58 times as on March 31, 2023.
Outlook: Stable
CRISIL Ratings believes KB will continue to benefit from the
extensive experience of its partners in the construction industry
and the improving order pipeline.
Rating sensitivity factors
Upward factors
* Growth in operating income to over INR40 crore and steady
operating margin, leading to net cash accrual of more than INR3.25
crore.
* Better working capital management with GCAs below 200 days.
Downward factors
* Decline in revenue (by over 25%) and operating margin (to below
8%), leading to lower cash accrual.
* Any debt-funded capital expenditure, leading to significant
deterioration in debt protection metrics.
KB was set up in 1984 by the late Mr SS Jalan and his sons. It is
owned and managed by his sons, Mr Kamal Kumar Jalan and Mr Hari
Kishan Jalan. KB undertakes road construction projects, mainly in
Madhya Pradesh and Uttar Pradesh. It is a registered contractor
with urban municipal bodies.
KHIMJI FINSERVE: Ind-Ra Assigns BB- Loan Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Khimji Finserve
Private Limited's (KFPL) bank loan as follows:
-- INR180 mil. Bank loan assigned with IND BB-/Stable rating.
Analytical Approach: Ind-Ra has taken a standalone view of KFPL to
assign the rating.
Key Rating Drivers
Small Scale of Operations; Nascent Stage of Business: The rating
reflects KFPL's small scale of operations in the gold loan sector,
with assets under management of INR180 million as of August 2023.
Furthermore, KFPL began operations only in September 2022 and it is
yet to establish a track record of managing business across various
economic cycles.
Geographical Concentration: The rating reflects the high
geographical concentration risk, as all nine branches of the
company are located in Odisha. However, the promoters'
understanding of the local market and customer segments in Odisha
mitigates the risk to some extent. The company is likely to remain
focused on Odisha over the medium term.
Loss-Making Operations due to Early Stage of Business: The ratings
are constrained by the losses being incurred by the company due to
the nascent stage of the business. The company reported a loss of
INR23.3 million in FY23. The agency believes KFPL's profitability
over the medium term would be contingent upon an increase in the
scale of operations and efficient management of operational costs.
Part of Larger Khimji Group: The ratings are supported by KFPL
being a part of the large Khimji group. The promoters are likely to
infuse INR160 million in the company over the next two years.
Furthermore, the company has received funding (cash credit line of
INR180 million) from State Bank of India ('IND AAA'/Stable) at a
competitive rate since the company is part of the Khimji group.
However, KFPL's ability to mobilize additional debt funding remains
to be seen.
Low Leverage: The ratings factor in KFPL's low leverage levels. At
end-March 2023, the company had a net worth of INR57 million and
had borrowings of INR60.4 million by way of cash credit. Thus, the
company is operating at a low leverage; however, on a steady state,
the company would operate at a leverage of 4x.
Liquidity Indicator – Adequate: As of March 31, 2023, KFPL had
cash equivalents of INR0.19 million and unutilized cash credit of
INR19 million. The company does not have any scheduled debt
repayments.
Rating Sensitivities
Negative: The following factors could, individually or
collectively, lead to a negative rating action:
-- a significant dilution in capital buffers due to losses
-- deterioration in the asset quality (gross non-performing assets
above 3%)
-- deterioration in the liquidity position
Positive: A significant increase in the assets under management
while maintaining the asset quality, ability to mobilize debt
funding, and improvement in profitability could lead to a positive
rating action.
Company Profile
KFPL is a registered non-banking financial company headquartered in
Khorda, Odisha. The company commenced operations in September
2022, and it has nine branches in Odisha. KFPL is a part of the
Khimji group, which was incorporated in 1936, with Khimji Jewellers
('IND BBB+'/Stable) being their primary business. The group is also
involved in the dealership of automobiles, real estate and hotels.
KFPL's promoters acquired Vee Gee Credit Capital Private Limited in
2022, and post a complete change of management, the company was
renamed as KFPL.
LAKSHMI GAYATRI: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Sree
Lakshmi Gayatri Hospitals Private Limited (SLGH) continue to remain
in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 196.88 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
CARE has been seeking information from SLGH to monitor the ratings
vide email communications dated October 6, 2023, November 21, 2023
& November 22, 2023 among others and numerous phone calls. However,
despite repeated requests, the company has not provided the
requisite information for monitoring the ratings.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. The rating on Sree Lakshmi Gayatri Hospitals Private
Limited (SLGH) bank facilities will now be denoted as CARE D;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Analytical approach: Standalone
Detailed description of the key rating drivers:
Key weaknesses
* Delay in meeting the debt obligations: On account of liquidity
strain due to cash flow mismatches, the hospital has delayed in
meeting its debt obligations on time.
Liquidity: Stretched
Stretched liquidity position is marked by lower occupancy levels
resulting in losses during the period FY2021-2022 post impact of
COVID-19 settled in India, which led to mismatch in cashflows which
was addressed by availing emergency line of credit from lenders.
However, the company has cash balance of INR11.55 crore and DSRA of
INR5 crore as on March 31, 2022. Considering the overall gearing is
high at 11.90x as on March 31, 2022(P) and higher repayment
obligations for FY23, the company depends on promoter supports for
any cash shortfall.
Sree Lakshmi Gayatri Hospitals Private Limited (SLGH) was
incorporated on June 10, 2011 by Mr Dandu Sivarama Raju. SLGH has
undertaken project to set up 775 beds multi-specialty hospital at
Bachupally, Hyderabad, to promote medical tourism and to facilitate
longer stay requirements it has also undertaken to setup 120 beds
in the same premises. The hospital commenced commercial operation
from April 1,2019 onwards. The hospital offer wide range of health
care services in specialties such as Cardiology, Nephrology,
Pulmonology, Orthopedics, Plastic Surgery, Neurology, Gastro
Entomology, Gynecology, Urology, Oncology, ENT and Dental etc.
LAXMI ENTERPRISES: CARE Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Sri Laxmi
Enterprises (SLE) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 9.14 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 5.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 27,
2022, placed the rating(s) of SLE under the 'issuer
non-cooperating' category as SLE had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. SLE
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 13, 2023, August 23, 2023, September 2,
2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Sri Laxmi Enterprises (SLE) has been incorporated by Mr Om Prakash
Agarwal and his family members in the year 2003. The firm is
engaged in cotton ginning and pressing with installed capacity of
750 MT per annum. The firm primarily sources its raw material,
Kapas, from local farmers in Telangana and sells its finished
product in the states of Telangana, Maharashtra, Madhya Pradesh and
Tamil Nadu.
MAHAVIR BRIGHT: CARE Keeps C Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Shri
Mahavir Bright Steel Udyog (SMBSU) continue to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 8.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated November 24,
2022, placed the rating(s) of SMBSU under the 'issuer
non-cooperating' category as SMBSU had failed to provide
information for monitoring of the rating and had not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. SMBSU continues to be noncooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated October 10, 2023, October 20,
2023, October 30, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Shri Mahavir Bright Steel Udyog (SMBSU) is a proprietorship concern
established in 1998 by Mrs. Kusum Lata. The overall functions of
the firm are looked by her husband, Mr. Vinod Bansal. The firm is
engaged in the manufacturing of bright steel bars at its
manufacturing facility located in Rohtak, Haryana.
MANAPPURAM FINANCE: S&P Affirms 'BB-/B' ICRs, Outlook Stable
------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term and 'B' short-term
issuer credit ratings on India-based Manappuram Finance Ltd. The
outlook on the long-term rating is stable.
S&P affirmed the ratings on Manappuram because it expects the
company to maintain very strong capital and earnings, with a
risk-adjusted capital (RAC) ratio close to 30%. The company also
has a good market position in loans taken against household gold
jewelry (gold loans), although this segment is small in India's
overall financial sector.
Manappuram has well-matched assets and liabilities. However,
Manappuram has higher short-term debt than peers, by S&P's
estimate. This exposes the company to refinancing risk. The company
has been increasing the proportion of long-term borrowing in the
past few years. This could extend the tenor of its liabilities and
reduce refinancing risk.
Manappuram will continue to perform better than peers. Although
still very healthy, heightened competition has ensured that the
significantly high loan yields enjoyed by the gold-backed lenders
is a thing of the past. It will also limit Manappuram's ability to
completely pass on the higher funding cost to its customers. That
said, the company should continue to benefit from above-average
margins and low credit cost, which should help it to maintain
superior profitability to peers. At the end of September 2023,
Manappuram's return on average assets of about 5% was significantly
better than the average for the rated Indian finance companies.
Manappuram's asset quality continues to improve. The company had
seen significant stress in its nongold loan portfolio during the
pandemic years between 2020-2022. S&P believes the provisioning
cycle for the microfinance business to be largely over and see it
returning to pre-pandemic levels in the coming quarters.
Manappuram has extensive experience operating in this gold-based
lending segment and has been able to manage its operational risks
well, as indicated by its very low loan loss ratio in the past.
Manappuram operates in a confidence sensitive market as any
perceived governance issues can render the company prone to
reputational risks. An example is a recent money laundering
investigation, although it did not lead to any significant negative
findings for the company or promoter.
High earnings retention supported by a conservative dividend
strategy will continue to benefit growth and capitalization. S&P
expects a RAC ratio of close to about 30% for the next one to two
years.
Manappuram will maintain a good market position despite intense
competition. The company has strong brand recognition and a track
record in gold-backed financing. Although banks remain aggressive
in this lucrative segment, we expect the company to maintain its
good market position. This is given the company's experience and
expertise in this niche segment.
S&P said, "The stable outlook on Manappuram reflects our view that
the company will largely maintain its financial profile over the
next 12 months, despite intense competition.
"We could downgrade Manappuram if the company's credit costs
increase substantially more than we expect, particularly in
microfinance loans.
"We could raise the ratings on Manappuram if the company can
diversify its funding profile to more long-term and stable sources
such that short-term debt (including current maturity of long-term
debt) falls sustainably below one-third of its total funding base
including equity; and it maintains a stable and diversified funding
profile."
MUTHOOT FINANCE: S&P Affirms 'BB/B' ICRs on Strong Capitalization
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term and 'B' short-term
issuer credit ratings on India-based Muthoot Finance Ltd. The
outlook on the long-term rating is stable.
S&P said, "We affirmed the ratings on Muthoot because we expect the
company to maintain very strong capital and earnings, with a
risk-adjusted capital (RAC) ratio of more than 60%. The company
also has a very sizable market share in loans taken against
household gold jewelry (gold loans), although this segment is small
in India's overall financial sector.
"Muthoot has well-matched assets and liabilities. However, Muthoot
has higher short-term debt than peers, by our estimation. This
exposes the company to refinancing risk. The company has been
increasing its proportion of long-term borrowing in the past few
years. This could extend the tenor of its liabilities and reduce
refinancing risk. That said, similar to other finance companies,
Muthoot's funding is also confidence sensitive.
"Muthoot will continue to perform better than peers. We expect the
company's margin to decline because higher interest rates will bump
up funding costs. In addition, the Reserve Bank of India recently
increased the risk weight on exposure to nonbank financial
companies for banks. This could also increase funding costs for the
company. Muthoot may not be able to completely pass on the increase
due to competition. That said, the company will likely maintain
better profitability than Indian finance company peers given its
low credit cost and above-average margins. At the end of September
2023, Muthoot's return on average assets was about 5%, which is
significantly better than the average for rated Indian Finance
companies.
"While Muthoot's overdue loans have increased in the past 12
months, we view this as temporary. We understand Muthoot is giving
more time to borrowers to repay their loans, before auctioning
them. Typically, finance companies grant additional time to
borrowers who offer gold jewelry as collateral, provided that the
collateral adequately covers both the principal and any overdue
interest. We expect the eventual losses on this book to remain
low.
"We expect a RAC ratio of about 60% for the next one to two years.
High earnings retention and a conservative dividends strategy will
continue to support high growth and capitalization.
"Muthoot will maintain a solid market position, despite
competition. The company has strong brand recognition and a track
record in gold-backed financing. While banks have become aggressive
in this lucrative segment, we expect the company to maintain its
market position. This is given its experience and expertise in this
niche segment.
"Our stable outlook on Muthoot reflects our view that the company
will maintain its capitalization and market position in gold loans
over the next 12 months. This is despite intense competition.
"We could lower the ratings if competition intensifies such that
Muthoot's market position in the gold loan segment deteriorates.
"We could raise the ratings on Muthoot if the company can diversify
its funding profile to more long-term and stable sources such that
short-term debt (including current maturity of long-term debt)
falls sustainably below one-third of its total funding base,
including equity; and it is able to maintain a stable and
diversified funding profile."
NAIKNAVARE BUILDCON: CARE Reaffirms D Rating on INR75cr NCD
-----------------------------------------------------------
CARE Ratings has reaffirmed ratings on certain bank facilities of
Naiknavare Buildcon Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non Convertible 75.00 CARE D Reaffirmed
Debentures
Rationale and key rating drivers
The reaffirmation of the rating assigned to the instruments of
Naiknavare Buildcon Private Limited continues to factor in the
ongoing delays in repayment of NCD due to poor liquidity.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Improvement in liquidity position thereby reflected in timely
servicing of debt commitments of rated Non-Convertible Debentures
(NCDs).
Negative factors – Not Applicable
Analytical approach: Standalone
Outlook: Not Applicable
Detailed description of the key rating drivers:
Key weaknesses
* Ongoing delays in servicing of debt obligations: Owing to
stretched liquidity position of the company, there has been ongoing
delay in repayment of NCDs which was due on March 28, 2023. The
company has been in discussion with the investor/debenture holder
to extend the term of repayment to December 31, 2023, however, such
extension is still under process and could not happen before the
due date of repayment leading to delay in timely servicing of the
debt obligations as confirmed by the debenture trustee vide email
dated December 6, 2023.
Liquidity: Poor
Liquidity is marked by tightly matched accruals to debt obligations
on the NCDs.
Naiknavare Group (group) is engaged in construction business since
the past 29 years in Pune, and has transferred its three projects
namely Neelaya – Talegaon, Eagle's Nest- Talegaon, and Seven
Business Square – Shivajinagar under a newly formed Special
Purpose Vehicle (SPV) Naiknavare Buildcon Private Limited (NBPL).
The business was transferred on March 31, 2019.
NAIKNAVARE DEVELOPERS: CARE Reaffirms D Rating on INR3.0cr NCD
--------------------------------------------------------------
CARE Ratings has reaffirmed ratings on certain bank facilities of
Naiknavare Developers Private Limited (NDPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non Convertible 0.01 CARE D Reaffirmed
Debentures
Non Convertible 2.99 CARE D Reaffirmed
Debentures
Rationale and key rating drivers
The reaffirmation of the rating assigned to the instruments of NDPL
continues to factor in on-going delays in repayment of NCDs due to
poor liquidity.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Improvement in liquidity position thereby reflected in timely
servicing of debt commitments of rated Non-Convertible Debentures
(NCDs).
Negative factors – Not Applicable
Analytical approach: Standalone
Outlook: Not Applicable
Detailed description of the key rating drivers:
Key weaknesses
* Ongoing delays in servicing of debt obligations: Owing to
stretched liquidity position of the company, there has been ongoing
delay in repayment of NCDs which was due on June 30, 2023. The
company has been in discussion with the investor/debenture holder
to extend the term of repayment to March 31, 2024, however, such
extension is still under process and could not happen before the
due date of redemption leading to delay in timely servicing of the
debt obligations as confirmed by the debenture trustee vide email
dated December 6, 2023. As per the BSE fillings of the company,
only part payment was done by NPCPL on December 4, 2023.
Liquidity: Poor
Liquidity is marked by tightly matched accruals to debt obligations
on the NCDs.
Naiknavare Developers Private Limited (NDPL) belonging to Naiknavre
Group is developing a residential project through Naiknavare
Profile Constructions Private Limited (NPCPL, erstwhile Naiknavare
Profile Developers LLP) by the name of Avon Vista at Balewadi, Pune
(Project) with total saleable area of 7.83 lakh square ft (lsf).
Naiknavare group is engaged in real estate construction business
for past 28 years in Pune.
OM CONSTRUCTION: CRISIL Keeps B+ Debt Rating in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of OM
Construction - Raipur (OC) continues to be 'CRISIL B+/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 15 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with OC for
obtaining information through letter and email dated November 13,
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 OC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on OC is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of OC
continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
OC, established in 2005, is a partnership firm engaged in real
estate projects. The firm is building a township, Sapphire Greens,
in Raipur, Chhattisgarh. Its operations are managed by Mr Rajkumar
Khilwani, Mr Anchit Goyal, and Mr O P Gupta.
ONWARD PLASTIC: CRISIL Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Onward
Plastic Private Limited (OPPL) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.15 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Cash 0.62 CRISIL B+/Stable (Issuer Not
Credit Limit Cooperating)
Term Loan 0.19 CRISIL B+/Stable (Issuer Not
Cooperating)
Term Loan 8.04 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with OPPL for
obtaining information through letter and email dated November 13,
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 OPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on OPPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
OPPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Promoted by Mr Ramesh Parekh, OPPL began its operations in 2007.
Currently it is managed by Mr Kunal Praekh. The company
manufactures High-density Polyethylene (HDPE) bottle caps,
injection moulds, PET (Polyethylene terephthalate) bottle, PET
(Polyethylene terephthalate) jars, plastic containers, caps and
closures. The company is located in Kolkata, West Bengal and has 1
factory in Haridwar and 1 factory in Kolkata. Recently in fiscal
2018, the company has set up another factory in Kolkata, solely
catering products for Castron India.
PARUL FOODS: CRISIL Keeps B+ Debt Ratings in Not Cooperating
------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Parul Foods
Specialities Private Limited (PFS) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B+/Stable (Issuer Not
Cooperating)
Term Loan 4 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PFS for
obtaining information through letter and email dated November 13,
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 PFS, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PFS
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PFS continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in 1992 and promoted by Mr. Dev Raj Garg and Mr.
Satish Garg, Parul manufactures glucose powder (used in
confectionery items, biscuits, breads, chocolates, and other edible
items) and glutton from broken rice and also trades milk. Facility
is located in village Khanpur Kolian, Haryana.
PATWARI FORGINGS: CRISIL Keeps B+ Debt Rating in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Patwari
Forgings Private Limited (PFPL) continues to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit/ 5 CRISIL B+/Stable (Issuer Not
Overdraft facility Cooperating)
CRISIL Ratings has been consistently following up with PFPL for
obtaining information through letter and email dated November 13,
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 PFPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PFPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PFPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in 1999, PFPL manufactures steel structures and
angles, used in the manufacturing of sheds and windows, at its
manufacturing facility in Patna. Ms Anita Patwari, Mr Sudhir Kr
Patwari, Mr Subhash Kr Patwari and Mr Namit Patwari are promoters,
directors of the company.
PATWARI STEELS: CRISIL Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Patwari Steels
Private Limited (PSPL) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 11.72 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PSPL for
obtaining information through letter and email dated November 13,
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 PSPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PSPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PSPL continues to be 'CRISIL D Issuer Not Cooperating'.
PSPL, incorporated in 1981, commenced commercial operations in
1993. The company manufactures mild-steel ingots and
thermo-mechanically treated (TMT) bars, with capacity of 33,000
tonne per annum (tpa) for ingots and 16,000 tpa (estimated to
increase to 40,000 tpa in fiscal 2021) for TMT bars; the
manufacturing facility is in Fatuha Industrial Area near Patna. Mr
Subhash Kumar Patwari, Mr Sudhir Kumar Patwari, Mr Yash Patwari and
Mr Namit Patwari are the directors.
PITAMBAR AGRO: Ind-Ra Assigns BB- Loan Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Pitambar Agro Foods
Private Limited's (PAFPL) bank facilities as follows:
-- INR110 mil. Term loan due on March 2030 assigned with IND BB-
/Stable rating; and
-- INR200 mil. Fund-based working capital limit assigned with
IND BB-/Stable/IND A4+ rating.
Analytical Approach: Ind-Ra has taken a standalone view while
assigning PAFPL's ratings.
Key Rating Drivers
The ratings reflect PAFPL's nascent stage of operations as the
company commenced operations on 27 July 2023 and the plant was
closed from 10 September till 31 October 2023 for maintenance and
resumed operations from 1 November 2023. PAFPL reported revenue of
INR272.5 million during August to October 2023. As of October 2023,
PAFPL had an order book of INR150 million, to be executed by
end-November 2023. Ind-Ra expects the company to achieve medium
scale based on the stability and regularity of operations, and
steady order inflow.
The ratings also factor in the PAFPL's modest EBITDA margin of
about 2.5% during August to October 2023 and absolute EBITDA of
INR6.9 million till October 2023. The agency expects the EBITDA
margin to remain at similar levels in FY24, majorly due to
maintenance works undertaken during September-October 2023 and
optimum utilization of capacity in FY24.
Liquidity Indicator - Stretched: PAFPL's average maximum
utilization of the fund-based limits was 32% during the four months
ended October 2023. The company has principal repayments of INR2
million in FY24 and INR9 million in FY25. The net working capital
cycle is likely to be around 55 days in FY24 following the
stabilization of operations. The cash and cash equivalents stood at
INR1.66 million at FYE23 (FYE22: INR0.61 million). Further, PAFPL
does not have any capital market exposure and relies on banks,
financial institutions and promoters to meet its funding
requirements.
However, the ratings are supported by the promoters' nearly four
decades of experience in the agriculture industry. This has
facilitated the company to establish strong relationships with
customers as well as suppliers.
Rating Sensitivities
Positive: Stabilization of operations, along with an improvement in
the overall credit metrics with the net leverage (total adjusted
net debt/operating EBITDAR) below 5.0x and an improvement in the
liquidity profile, all on a sustained basis, could lead to a
positive rating action.
Negative: A lower-than-expected growth in sales in FY24 and/or
deterioration in the overall credit metrics with pressure on the
liquidity position, could lead to a negative rating action.
Company Profile
Incorporated in December 2020, PAFPL manufactures edible oil and
de-oiled cakes with a total capacity of 500 tons per day at its
plant located in Tonk, Rajasthan.
PRASANNA PURPLE: Ind-Ra Keeps BB Loan Rating in NonCooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Prasanna Purple
Mobility Solutions Private Limited's (PPMSPL) bank facilities'
ratings in the non-cooperating category and has simultaneously
withdrawn the same.
The instrument-wise rating actions are:
-- INR41.5 mil. Fund-based working capital limit# maintained in
non-cooperating category and withdrawn; and
-- INR166 mil. Non-fund based working capital limit* maintained
in non-cooperating category and withdrawn.
Note: ISSUER NOT COOPERATING: The issuer did not cooperate, based
on the best available information.
#Maintained at 'IND BB (ISSUER NOT COOPERATING)'/Negative/'IND A4+
(ISSUER NOT COOPERATING)' before being withdrawn
*Maintained at 'IND A4+ (ISSUER NOT COOPERATING)' before being
withdrawn
Key Rating Drivers
The ratings have been maintained in the non-cooperating category
before being withdrawn because PPMSPL did not participate in the
rating exercise despite repeated requests by the agency through
emails and phone calls, and has not provided information about
interim financials, sanctioned bank facilities and utilization,
business plans and projections for next three years, information on
corporate governance, and 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 and
withdrawal request from the issuer. 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 1988, Pune-based PPMSPL is engaged in the
transportation services business. The company has introduced new
technology and efficient fleet management systems. The company uses
international transportation software solution such as Trapeze and
has real time mobile application for ticket booking and addressing
passenger concerns on the vehicle location.
PVS BUILDERS: CRISIL Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of PVS Builders
and Developers (PVSBD) continues to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 15 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PVSBD for
obtaining information through letter and email dated November 13,
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 PVSBD, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PVSBD
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PVSBD continues to be 'CRISIL D Issuer Not Cooperating'.
PVSBD is a partnership firm established in 1991 by Mr PV
Gangadharan, PV Nidhesh and Ms PV Hemlatha. It develops real estate
and currently has three ongoing projects in Kozhikode, Kerala.
R. K. NATURAL: CRISIL Lowers Ratings on INR6.8cr Cash Loan to B
---------------------------------------------------------------
Due to inadequate information and in line with the Securities and
Exchange Board of India guidelines, CRISIL Ratings had migrated its
rating on the long-term bank facilities of R. K. Natural Fibre Pvt
Ltd (RK) to 'CRISIL B+/Stable Issuer Not Cooperating'. However, the
management has subsequently shared the information required for
carrying out a comprehensive review. Consequently, the rating has
been migrated to 'CRISIL B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.8 CRISIL B/Stable (Migrated from
'CRISIL B+/Stable ISSUER NOT
COOPERATING')
Proposed Fund- 0.9 CRISIL B/Stable (Migrated from
Based Bank Limits 'CRISIL B+/Stable ISSUER NOT
COOPERATING')
Working Capital 1.3 CRISIL B/Stable (Migrated from
Term Loan 'CRISIL B+/Stable ISSUER NOT
COOPERATING')
The rating reflects modest operating margin, susceptibility to
volatility in raw material prices and average financial risk
profile. These weaknesses are partially offset by the extensive
experience of the promoters in the cotton industry and proximity of
the ginning plant to the cotton-growing region in Gujarat.
Key Rating Drivers & Detailed Description
Weakness:
* Modest operating margin and susceptibility to volatility in raw
material prices: The major raw material is cotton and the cotton
industry is highly fragmented due to numerous small, unorganised
players and a few large players. The company's operating margin
remains vulnerable to fluctuations in cotton prices, which are
highly volatile and constitute around 90% of the total production
cost. Hence, any major fluctuations in prices will impact the
company's profitability. Furthermore, operating margin has remained
volatile at 2.00-4.62% in the three fiscals through March 2023, due
to volatile cotton prices and the company's limited ability to pass
on higher prices to its customers.
* Average financial risk profile: The financial risk profile is
constrained by low networth of INR1.8 crore, and high adjusted
gearing and total outside liabilities to adjusted networth ratio of
4.76 times and 5.39 times, respectively, as on March 31, 2023,
because of limited accretion to reserves. Debt protection metrics
were weak, as indicated by interest coverage ratio of 1.14 times
for fiscal 2023. The total outside liabilities to tangible networth
(TOLTNW) ratio is estimated to be 3.60 times and leverage 3.11
times as on March 31, 2023.
Strengths:
* Extensive experience of the promoters: The promoters' experience
of more than a decade in the cotton business, strong understanding
of local market dynamics and healthy relationships with customers
and suppliers will continue to support the business.
* Proximity to the cotton-growing belt: The ginning unit in Bodeli
is close to Gujarat's cotton-growing region, which provides easy
access to raw materials and reduces transportation cost.
Liquidity: Stretched
Bank limit utilisation was high at 96% on average during the 12
months through July 2023. Cash accrual is expected to be over INR30
lakh, which is insufficient against term debt obligation of INR43
lakhs over the medium term.
Outlook: Stable
CRISIL Ratings believes RK will continue to benefit from the
extensive experience of the promoters.
Rating Sensitivity Factors
Upward factors
* Improvement in the capital structure
* Increase in revenue and profitability, leading to cash accrual of
more than INR0.55 crore
Downward factors
* Decline in revenue or profitability leading to net cash accrual
below INR25 lakh
* Deterioration in the financial risk profile
Established in 2009, RK is based in Bodeli, Gujarat, and owned and
managed by the Patel family. The company is engaged in the ginning
and pressing of raw cotton (kapas) to make cotton bales, wash oil
and de-oiled cake from cotton seeds. The directors of the company
include Mr Atul Patel, Mr Divyesh Patel and Mr Natvarlal Patel.
RADHA KRISHNA: CRISIL Keeps B+ Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Radha Krishna
Rice Mill - Raipur (RKRM) continue to be 'CRISIL B+/Stable Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL B+/Stable (Issuer Not
Cooperating)
Cash Credit 3 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Fund- 0.27 CRISIL B+/Stable (Issuer Not
Based Bank Limits Cooperating)
Term Loan 0.47 CRISIL B+/Stable (Issuer Not
Cooperating)
Term Loan 0.26 CRISIL B+/Stable (Issuer Not
Cooperating)
Warehouse Receipts 3 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with RKRM for
obtaining information through letter and email dated November 13,
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 RKRM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RKRM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
RKRM continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Established by Mr Mohan Lal Aggarwal, RKRM processes rice and
started its commercial operations in 1989. It has an installed
paddy milling capacity of 8 tonne per hour. Its rice mill is
located in Raipur, Chhattisgarh.
RAJ KISHORE: CRISIL Keeps B+ Debt Rating in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the rating on bank facilities of Raj Kishore
Developers Private Limited (RKDPL) continues to be 'CRISIL
B+/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 12.5 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with RKDPL for
obtaining information through letter and email dated November 13,
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 RKDPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RKDPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
RKDPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in 2007, RKDPL is a Chennai (Tamil Nadu) based
residential real estate Development Company. The company's
operations are managed by the director, Mr. S. Rajasekaran.
RANSAN PACKAGING: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Ransan
Packaging Private Limited (RPPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 1.6 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 4.5 CRISIL D (Issuer Not
Cooperating)
Working Capital 0.4 CRISIL D (Issuer Not
Term Loan Cooperating)
CRISIL Ratings has been consistently following up with RPPL for
obtaining information through letter and email dated November 13,
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 RPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on RPPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
RPPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Incorporated in 2013 and promoted by Mr V A Prabhakaran and Mr A
Srenivasan, Chennai-based RPPL manufactures and prints mono-cartons
and corrugated boxed used in the packaging industry.
RELIANCE INFRASTRUCTURE: Ind-Ra Affirms D Loan Rating
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed the ratings of
Reliance Infrastructure Limited's (R-Infra) debt instruments as
follows:
-- INR35 mil. Bank facilities (Long-term/Short-term) affirmed
with IND D rating; and
-- INR3.85 mil. Non-convertible debentures (NCDs, Long-term) ISIN
INE036A07567 issued on June 13, 2018 coupon rate 12.5% due on
December 15, 2021 affirmed with IND D rating.
Analytical Approach: Ind-Ra continues to take consolidate view of
R-Infra and its subsidiaries to arrive at the ratings because of
strong strategic and operational, and moderate-to-strong legal
linkages among them.
Key Rating Drivers
Liquidity Indicator - Poor: The ratings reflect R-Infra's ongoing
delays in servicing of the rated debt instruments according to the
company's disclosure on the National Stock Exchange of India Ltd
and the BSE Ltd.
Rating Sensitivities
Positive: Timely debt servicing for at least three consecutive
months could result in a rating upgrade.
Company Profile
R-Infra is the flagship company of the Reliance Group, led by Anil
Dhirubhai Ambani, with a focus on the energy and infrastructure
businesses. The company has an in-house engineering, procurement
and construction division that is active in the power and road
segments.
RITZY CHEMICALS: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
Chemicals Private Limited (RCPL) continue to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/ 315.00 CARE D/CARE D; ISSUER NOT
Short Term COOPERATING; Rating continues
Bank Facilities to remain under ISSUER NOT
COOPERATING category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 30,
2022, placed the rating(s) of RCPL under the 'issuer
non-cooperating' category as RCPL had failed to provide information
for monitoring of the rating and had not paid the surveillance fees
for the rating exercise as agreed to in its Rating Agreement. RCPL
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated August 16, 2023, August 26, 2023, September 5,
2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Incorporated in 1992, RCPL is promoted and closely held by the
Sethi family (PCL group). It is engaged in manufacturing and
trading of PVC resin, Phthalic Anhydride, 2-Ethyl Hexanol (2EH),
Iso-Butyl Alcohol (IBA), Polymer additives and various other allied
chemicals. Located in Daman, RCPL's manufacturing facility has a
capacity of manufacturing 96,000 MTPA as on March 31, 2018 of
solvents and softeners which find their application in wood polish,
printing ink, paints, washing PVC medical and surgical products
etc.
SIGMA CHEMTRADE: Ind-Ra Affirms BB+ Loan Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Sigma Chemtrade Pvt. Ltd.'s (SCPL) bank facilities:
-- INR42.5 mil. Fund-based working capital limits affirmed with
IND BB+/Stable rating;
-- INR100 mil. Non-fund-based working capital limits affirmed
with IND A4+ rating;
-- INR57.5 mil. Fund-based working capital limits assigned with
IND BB+/Stable rating; and
-- INR95 mil. Non-fund-based working capital limits assigned with
IND A4+ rating.
Key Rating Drivers
The affirmation reflects SCPL's continued small scale of operations
with its revenue increasing at a CAGR of 47.58% over the past three
financial years to INR4,405.84 million in FY23 (FY22; INR2,092.93
million; FY21; INR1,692.04 million), on account of increased demand
for pressure pipe systems in the industry. The company's sales
volume of the product, which accounted for 41.3% of its revenue in
FY23 (FY22: 23.3%), increased 4x. Ind-Ra expects the revenue to
improve marginally in FY24, on account of continued demand for the
products and the management's plans to enter new markets by
spending additional marketing costs. However, SCPL's plan to enter
new markets would be restricted due to the impact of ongoing
Israel-Hamas war on global logistics and supply chain as the
company also imports from Europe.
Liquidity Indicator- Stretched: SCPL's cash flow from operations
(CFO) remained negative INR30.82 million in FY23 (FY22: negative
INR22.85 million; FY21: INR32.54 million), on account of
unfavorable changes in its working capital. Ind-Ra expects the cash
flow from operations to turn positive in FY24, due to an increase
in absolute EBITDA (FY23: INR118.25 million; FY22: INR88.79
million; FY21: INR54.45 million) and a change in the working
capital. The average monthly utilization of its fund-based and
non-fund-based working capital limits stood at 60% and 80%,
respectively, for the 12 months ended September 2023. The average
utilization is likely to remain at a similar level in October 2023.
The working capital cycle reduced to 24 days in FY23 (FY22: 35;
FY21: 26), due to a fall in its inventory days to 31 days (38) and
an increase in the creditor days to 22 (17). The cash and cash
equivalents stood at INR10.45 million in FYE23 (FYE22: INR56.41
million; FYE21: INR12.18 million). SCPL does not have any repayment
obligations as the company does not have any term debt as of March
2023. SCPL does not have any capital market exposure and relies on
banks and financial institutions to meet its funding requirements.
SCPL imports majority of its products, further exposing it to forex
rate fluctuations, and the industry is highly fragmented, highly
competitive, with many unorganized market participants. Higher
fragmentation limits the company's price flexibility and bargaining
power. SCPL hedges the majority of its forex exposure through
entering into forward contracts.
SCPL's EBITDA margin remained healthy but deteriorated to 2.68% in
FY23 (FY22: 4.24%; FY21: 3.22%), on account of volatility in
product prices which are derivatives of crude oil prices. Its
return on capital employed stood at 38% in FY23 (FY22: 40.5%; FY21:
34.4%). Ind-Ra expects the margins to remain at 3%-4% in FY24, on
account of the trading nature of its business.
The rating reflects SCPL's continued comfortable credit metrics
with its gross interest coverage (operating EBITDA/gross interest
expense) reducing to 6.05x in FY23 (FY22: 12.28x; FY21: 11.25x), on
account of higher interest expense on unsecured loans which were
repaid at year-end. The net leverage (total adjusted net
debt/operating EBITDAR) reduced to 1.23x in FY23 (FY22: 1.50x;
FY21: 1.55x), due to the increase in its absolute EBITDA. Ind-Ra
expects the metrics to improve in FY24 on account of an increase in
its top line, leading to an improvement in its absolute EBITDA.
The rating is also supported by SCPL's promoters' over three
decades of experience in the trading and distribution of polymer,
leading to established relationships with its customers as well as
suppliers.
Rating Sensitivities
Positive: A substantial improvement in the scale of operations,
along with an improvement in liquidity and the maintenance of the
credit metrics could result in a positive rating action.
Negative: A decline in the scale of operations and/or deterioration
in the liquidity position or the interest coverage reducing below
2.25x, on a sustained basis, could result in a negative rating
action.
Company Profile
Indore-based SCPL was set up in 2007 and trades in polymers and
plastic raw materials such as high-density polyethylene,
low-density polyethylene, polypropylene and chemicals. The
company's operations spread across Maharashtra, Gujrat,
Chhattisgarh, Rajasthan, Delhi, Chennai and in the Union
Territories of Daman and Silvassa. Vijay Goyal and Nina Goyal are
the main promoters of the company.
SINDHANUR GANGAVATHI: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Sindhanur
Gangavathi Tollway Private Limited (SGTPL) continue to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 180.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated September 28,
2022, placed the rating(s) of SGTPL under the 'issuer
non-cooperating' category as SGTPL had failed to provide
information for monitoring of the rating and had not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. SGTPL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter/email dated August 14, 2023, August 24,
2023, September 3, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Sindhanur Gangavathi Tollway Private Limited (SGTPL) is a Special
Purpose Vehicle (SPV) promoted in July 2012 by GKC Projects Limited
(GKC), for implementing a project envisaging development of
existing 2-lane Sindhanur-Gangavati-Ginigera section from Km. 79.00
to Km. 162.00 (length 83 km) of SH-23 in the state of Karnataka to
2-lane with paved shoulders (widening by about 3 m) on DBFOT toll
basis. Government of Karnataka (GoK) has entrusted Karnataka Road
Development Corporation Ltd. (KRDCL), to invite proposals for
selection of entrepreneurs for taking up construction, widening and
strengthening of the State Highways in Karnataka on BOT basis. GKC
was declared as the successful bidder for the project quoting
lowest grant of INR4.59 crore. KRDCL has issued Letter of Award
(LoA) to GKC on June 22, 2012. SGTPL was incorporated on July 11,
2012 as the Project SPV to implement the project. SGTPL has signed
Concession Agreement (CA) with KRDCL on August 24, 2012. The
concession period is 24 years (including construction period of 2
years). The project has achieved its COD dated December 5, 2015
against expected date of January 8, 2016.
STERLING AND WILSON: Ind-Ra Cuts Bank Loan Rating to BB
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
action on Sterling and Wilson Private Limited's (SWPL) bank
facilities:
-- INR2.080 bil. Fund-based limits Downgraded; maintained on
Rating Watch with Negative Implications with IND BB/Rating
Watch with Negative Implications/IND A4+/Rating Watch with
Negative Implications rating;
-- INR1.570 bil. Proposed fund-based limits downgraded;
maintained on Rating Watch with Negative Implications with
IND BB/Rating Watch with Negative Implications/IND A4+/Rating
Watch with Negative Implications rating;
-- INR20.241 bil. Non-fund-based limits# downgraded; maintained
on Rating Watch with Negative Implications with IND BB/Rating
Watch with Negative Implications/IND A4+/Rating Watch with
Negative Implications rating; and
-- INR5.110 bil. Proposed non-fund-based limits downgraded;
maintained on Rating Watch with Negative Implications with
IND BB/Rating Watch with Negative Implications/IND A4+/Rating
Watch with Negative Implications rating.
#Includes INR1,060 million limits with fund-based fungibility
ANALYTICAL APPROACH: Ind-Ra continues to take a consolidated view
of SWPL and its subsidiaries to arrive at the ratings, on account
of the strong operational and strategic linkages between them.
Ind-Ra has downgraded the ratings and maintained the Rating Watch
with Negative Implications in view of the lack of visibility
regarding the availability of adequate sources of funds in the
short term to repay the large upcoming debt repayment of INR7.4
billion in 4QFY24 (early January 2024). SWPL is exploring several
options to raise the necessary funds, including monetization/
strategic investments as well as infusion of funds from the
promoter group. However, Ind-Ra believes that the fructification of
such strategies might require a timeline beyond the scheduled debt
repayment date, and also, the infusion of such large amounts from
the promoter group might require fund raise/asset monetization at
their level.
Furthermore, there has been a delay in the sale of balance assets
of Sky Power Southeast Solar India Private Limited (Skypower).
Key Rating Drivers
Liquidity Indicator – Poor: On a consolidated basis, SWPL had
unencumbered cash and cash equivalents of INR0.1 billion at FYE23.
SWPL had raised INR7.5 billion of short-term debt in FY22 and the
current outstanding of INR7.4 billion is repayable in January 2024.
The management expects this to be repaid through a combination of
monetization events as well as sale of some company
property/pledged shares of other group companies, and the deficit
/timing mismatch through equity infusion by the promoter group -
Shapoorji Pallonji Company Private Limited (SPCPL, ultimate
beneficiary of about 66% shareholding) and Khurshed Daruvala, who
holds the balance shareholding. However, Ind-Ra believes that there
could be a delay in the fructification of monetization strategies,
and any infusion of such large amounts from the promoter group
might also require fund raise/ asset monetization at their level.
Hence, timely servicing of the debt obligations remains a key
monitorable. The average utilization of fund-based working capital
limits was 87% for the 12-month period ended September 2023.
The promoter group has demonstrated the strategic importance of the
entity by continuously providing tangible support. The promoter
group infused net INR4.6 billion into SWPL in FY22. In FY23, about
INR2.6 billion was infused incrementally by Khurshed Daruvala. The
management has informed that there is no other long-term debt at
the consolidated level except the upcoming repayment in January
2024. At the consolidated level, the working capital cycle remained
broadly stable with gross working capital (GWC)/revenue of 127% in
FY22 (FY21: 137%, FY20: 125%) and net working capital/revenue of
55% (49%, 60%). The receivables and unbilled revenue contribute to
a higher GWC due to the supply-intensive nature of works as well as
stuck receivables from the Skypower assets. The expected sale of
gas peaking power plant in UK group company (sub-contracted to
SWPL) and Skypower assets over FY24-FY25 could lead to some
moderation in the GWC. Further, the company's new order booking
strategy is focusing on better terms for advances/retention money,
among others, and thereby expected to contribute favorably towards
the working capital cycle.
Measures Adopted to Turnaround Operations: SWPL has undertaken
several measures to improve its gross margins and minimize
overheads to improve its overall profitability. The company is
curtailing its presence in small-scale mechanical, electrical and
plumbing (MEP) projects and transitioning towards higher margins
and/or higher ticket-size orders in data centers, MEP mega,
industrial firefighting, and transmission and distribution (T&D).
This has resulted in fewer projects, which can entail lower
overhead expenses. The unexecuted order book as on 31 March 2023
stood at INR36.0 billion (1.9x FY23 revenues), of which about 70%
was booked in FY22 and FY23 in line with the aforementioned
strategies and prevalent commodity pricing.
The management has informed Ind-Ra that the company has provided
for foreseeable losses on the legacy order book, which constitutes
the balance 30% and hence, it likely to generate margins of 7-9%.
Ind-Ra expects that this portion of the orderbook could generate
only minimal margins. The company has undertaken significant
manpower reduction and is winding down its regional offices to
operate in a more centralized manner to reduce the overhead costs.
Further, SWPL is reducing its physical presence in the offshore
markets including the Middle East and is taking up mainly those
projects in the offshore markets, which can be largely managed out
of India. Ind-Ra expects the turnaround to fructify gradually with
the closure of the legacy order book as well as scaling up of the
revenue that could lead to profitable operations.
SWPL is also taking several measures towards diversification into
more profitable sub-segments specially the growing data center
market, where it has established itself as a significant player and
hence, is able to garner profitable margins on account of its skill
sets. Further, it would continue to focus on MEP/heating,
ventilation and air conditioning segments in larger orders such as
metros as well as continue with T&D with strong counterparties in
the domestic and offshore markets. Further, the company has
tightened its order booking strategy with a focus on double-digit
gross margins as well as favorably negotiated payment terms, which
could gradually improve the working capital cycle.
Resolution of Dispute with Skypower: Skypower's Telangana solar
asset Kamareddy was monetized in 1QFY23 and SWPL realized its EPC
dues for this project in June 2022. Of the pending two solar assets
in Madhya Pradesh, one asset of 50MW is already generating power
and the second 50MW asset has received favorable judgement from the
Supreme Court in November 2022 for non-termination of power
purchase agreement (PPA). The company is awaiting a formal approval
for energizing the facility, post which the process of power
offtake under the PPA would begin. Subsequently, post the expiry of
PPA shareholding change restrictions, the company will look for
potential buyers for the two assets on a combined basis. Management
expects to receive INR5 billion-5.5 billion from its two-third
share of asset sale.
Liquidity at Shapoorji Group Level: During 1QFY23, Shapoorji Group
company, Goswami Infratech Pvt. Limited raised non-convertible
debentures of INR143 billion with redemption in April 2026 and
primarily backed by credit support from Cyrus Investment P Ltd. and
further backed by the monetization events comprising of port assets
as well as Afcons Infrastructure Limited. The company has informed
the agency that the Shapoorji Group is planning to raise additional
funds of about USD 1.6 billion-1.7 billion.
Consolidated Weak Operating Performance in FY22-FY23: The company
has been reporting EBITDA losses at the consolidated level for the
past few fiscals on account of its lower margin legacy order book
and high fixed costs due to smaller scale jobs. Further, the
consolidated revenue decreased to INR19 billion in FY23 (FY22:
INR25 billion) due to strategically lower order booking to first
execute the legacy order book and implementation of other
restructuring plans simultaneously such as larger-scale orders,
segmental diversification, cost trimming measures, among others.
Management expects the company to generate an annual consolidated
turnover of INR20 billion-22 billion from FY24.
Standalone Profile: On a standalone basis, SWPL reported operating
revenue of INR13.0 billion in FY23 (FY22: INR21.4 billion) with
EBITDA losses of INR3.7 billion (FY22: INR2.3 billion EBITDA loss)
as it booked lesser orders in FY21 and FY22 with a focus to execute
the legacy order book and execute strategies for business
transition. In 1QFY24, on a standalone basis, the company generated
an operating income of INR3.0 billion and it reported positive
EBITDA and PAT of INR0.3 billion and INR0.05 billion,
respectively.
A gradual turnaround is likely from FY24 at both standalone and
consolidated levels; however, Ind-Ra believes the company shall
require steady execution of orders and liquidity from working
capital limits over the next six-to-eight quarters to generate
sustainable profits.
Rating Sensitivities
The Rating Watch with Negative Implications indicates that the
ratings may be either downgraded or affirmed upon resolution.
Ind-Ra will review the liquidity condition in connection to the
large debt repayment once again prior to the repayment date
scheduled in January 2024.
Company Profile
SWPL is a leading provider of MEP services in India, with
international operations in the Middle East and Africa. Established
in 1927 as Wilson Electric Works, SWPL was formed in 1971. SPCPL
owns a 66.33% stake in the company, while the balance is held by
Mr. Khurshed Daruwala. Since FY20, the company has also forayed
into engineering, procurement and construction activities for T&D,
construction of data centers and projects related to hybrid energy
services, involving multiple sources of fuel.
SUMRAN AGRO: Ind-Ra Assigns BB Loan Rating, Outlook Stable
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Sumran Agro Private
Limited's (SAPL) bank facilities as follows:
-- INR270 mil. Fund-based working capital limit assigned with IND
BB/Stable/IND A4+ rating.
Key Rating Drivers
The ratings reflect SAPL's small scale of operations. The revenue
grew to INR1,374.46 million in FY23 (FY22: INR952.82 million) due
to a steady flow of orders from a diversified customer base.
Furthermore, its revenue share from the international market
increased to 94% in FY23 (FY22: 67%); the remaining was from the
domestic market. The company booked revenue of INR500 million in
1HFY24. Ind-Ra expects the revenue to remain at similar levels in
FY24.
The ratings also factor in SAPL's modest EBITDA margins of 3.47% in
FY23 (FY22: 3.43%) with a return on capital employed of 5.30%
(4.4%). Ind-Ra expects the EBITDA margins to be at similar levels
over the medium term due to the similar nature of operations.
The ratings also reflect the company's modest credit metrics. The
interest coverage (operating EBITDA/gross interest expense)
deteriorated to 1.61x in FY23 (FY22: 1.98x) and net leverage (total
adjusted debt/operating EBITDA) to 9.72x (4.53x) owing to an
increase in the total debt to INR490.40 million (INR158.31million)
and the consequent rise in the interest expenses to INR29.63
million (INR16.49 million). Of the total debt at FYE23, 50.62% was
fund-based limits and 49.37% was unsecured loans from directors and
relatives. Ind-Ra expects the credit metrics to remain comfortable
over the medium on account of the absence of any major debt-funded
capex and a likely improvement in the operating EBITDA in the near
term.
Liquidity Indicator - Stretched: SAPL's peak average utilization of
the fund-based working capital limits was 94% during the 12 months
ended August 2023 and is likely to have remained at similar levels
in September and October 2023. The cash flow from operations
continued to be negative and deteriorated further to INR306.33
million in FY23 (FY22: negative INR116.67 million) owing to
unfavorable changes in working capital. The company had an
unencumbered cash balance of around INR26.71 million at FYE23
(FYE22: INR11.33 million). SAPL has does not have any term loan.
The working capital cycle was stretched at 246 days in FY23 (FY22:
227 days) owing to an increase in the inventory holding period to
119 days (93 days). Ind-Ra expects the working capital cycle to
remain at similar levels in FY24 on account of the long inventory
holding period and receivable period (FY23: 130 days, FY22: 135
days) owing to the seasonal nature of raw material and the long
credit period offered to customers (130 days, 135 days). SAPL does
not have any capital market exposure and relies on banks and
financial institutions to meet its funding requirements.
The ratings are also constrained by the seasonality inherent to the
tea industry. Although the demand for tea is mostly constant
throughout the year, but the supply varies according to the various
regions where its cultivated, climatic conditions, along with
various other factors such as pest infestations, among others.
Hence, the business continues to remain cyclical in nature,
resulting in high variations in profitability.
However, the ratings are supported the promoters experience of 20
years in the tea industry. Ind-Ra believes the company's presence
in the market and the experience of the management will continue to
aid the performance of the company.
Rating Sensitivities
Negative: A decline in the scale of operations or EBITDA margins or
any deterioration in the liquidity position or the interest
coverage falling below 1.5x, all on a sustained basis, would lead
to a negative rating action.
Positive: An improvement in the scale of operations with an
increase in the EBITDA margin, along with an improvement in the
liquidity position and credit metrics, all on a sustained basis,
will be positive for the ratings.
Company Profile
Incorporated in 2000, Kolkata-based SAPL is engaged in the
blending and trading of black tea to the international market. The
company is promoted by Pradeep Kumar Agarwal, Dipti Agarwal and
Shalini Agarwal. SAPL is engaged in blending and adding flavor to
the tea as per the requirements of the customers. The company
procures tea through auction and private purchases, and majorly
exports to Iran, Russia and the Middle East.
TIRUMALA SEVEN: Ind-Ra Affirms BB- Loan Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Tirumala Seven Hills
Private Limited's (TSHPL) facilities as follows:
-- INR9.60 mil. (reduced from INR10 mil.) Term loan due on August
31, 2024 affirmed with IND BB-/Stable rating;
-- INR200.00 mil. Fund-based limit affirmed with IND BB-/Stable/
IND A4+ rating; and
-- INR170.00 mil. (reduced from INR220 mil.) Non-fund-based limit
affirmed with IND A4+ rating.
ANALYTICAL APPROACH Ind-Ra continues to assess the company on a
standalone basis.
Key Rating Drivers
The affirmation reflects TSHPL's continued small scale operations
even as its revenue increased to INR576.02 million in FY23 (FY22:
INR397.05 million), as the supply of telecommunication equipment
improved, particularly from China, on account of the lifting of the
COVID-19 restrictions. The revenue recorded in 1HFY24 was INR380.15
million. However, the revenue remains constrained due to higher
custom duty on the import of the equipment. Ind-Ra expects TSHPL's
revenue to grow over the medium term, owing to a sustained demand
and a further easing of the COVID-19 restrictions in China.
The ratings also reflect Ind-Ra's expectation of TSHPL's EBITDA
recovering and turning positive on account of the reduced cost of
goods sold during FY24. During 1HFY24, TSHPL achieved an EBITDA
margin of 3.88%. The EBITDA margin deteriorated to negative 4.54%
in FY23 (FY22: 3.94%; FY21: 5.94%), owing to an increase in cost of
goods sold to 78.10% (67.19%; 63.67%) due to an increased custom
duty on imports from China during the year. TSHPL's absolute EBITDA
turned negative at INR26.15 million in FY23 (FY22: INR15.66
million). The return on capital employed turned negative at 7.50%
in FY23 (FY22: 4.10%).
The ratings also reflect Ind-Ra's expectation of TSHPL's credit
metrics improving in FY24, on account of the increased EBITDA,
scheduled debt repayments and the absence of any debt-led-capex. In
FY23, TSHPL's credit metrics were modest due to the operating loss
incurred during the year, along with an increase in its total debt
to INR153.39 million (FY22: INR136.56 million). The gross interest
coverage (operating EBITDA/gross interest expense) turned negative
at 1.79x in FY23 (FY22: 1.10x) and the net leverage (adjusted net
debt/operating EBITDA) was negative 3.13x (5.52x).
Liquidity indicator - Stretched: The working capital cycle remained
elongated despite improving to 175 days in FY23 (FY22: 271 days,
FY21: 242 days, FY20: 103 days), due to high receivable days of 148
(211, 205, 93), coupled with reduced-but-high inventory days of 94
(171, 128, 72). The increase in the receivable days and the
inventory days in FY21 and FY22 was due to COVID-19. TSHPL does
not have any capital market exposure and relies on banks and
financial institutions to meet its funding requirements. The peak
average utilization of the company's fund-based working capital
limits was 77.70% and that of its non-fund-based working capital
limits was 35.92% for the 12 months ended September 2023. The cash
flow from operations was at INR14.09 million in FY23 (FY22:
INR24.37 million), owing to favorable changes in its working
capital. The free cash flow stood at INR11.03 million in FY23
(FY22: INR22.26 million). The cash and cash equivalents stood at
INR71.56 million in FY22 (FYE22: INR50.13 million). The company has
repayment obligations of INR4.52 million in FY24 and INR1.53
million in FY25.
However, the ratings are supported by the promoter's more than
three decades of experience in the telecom sector.
Rating Sensitivities
Negative: Any decline in the revenue or operating EBITDA, leading
to deterioration in the credit metrics, or deterioration in the
liquidity position, all on a sustained basis, will be negative for
the ratings.
Positive: A substantial increase in the revenue and operating
EBITDA, leading to an improvement in the credit metrics with the
gross interest coverage improving above 1.7x, and an improvement in
the liquidity position, all on a sustained basis, would be positive
for the rating.
Company Profile
Established in 1990, TSHPL trades in telecommunication equipment
and provides services including installation and maintenance of the
equipment. TSHPL is based is Kolkata. It serves private sector
telecom companies in India. The company imports telecommunication
equipment from China and European countries.
VECTOR INFRAPROP: Ind-Ra Hikes Loan Rating to BB+, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Vector Infraprop
Pvt. Ltd.'s (VIPL) term loan as follows:
-- INR420 mil. Term loan due on December 2029 upgraded with IND
BB+/Stable rating.
ANALYTICAL APPROACH: To arrive at the ratings, Ind-Ra has factored
in the support from its group entity, Luna Chemical Industries
Private Limited (LCIPL; 'IND BBB'/Positive), given the clarity on
LCIPL's credit profile and its linkages with VIPL. Ind-Ra believes
the two entities have moderate-to-strong operational, strategic and
legal ties and LCIPL has constantly provided financial support to
VIPL.
The upgrade reflects a change in the rating approach to factor in
the support from LCIPL. The entities have moderate-to-strong
operational, strategic and legal linkages. LCIPL has also extended
funding support through equity investments and loans and advances
to VIPL's ongoing project.
Key Rating Drivers
The rating reflects the strong legal and strategic linkages as
evidenced by the funding support extended by LCIPL through its 50%
of the equity investment worth INR62.05 million along with loans
and advances of INR191.95 million for VIPL's ongoing project
execution as on 20 November 2023. The management expects continued
funding support from LCIPL during the project execution. Moreover,
LCIPL has provided a corporate guarantee for VIPL's term loan
availed for the project. VIPL and LCIPL belong to the same the
promoter family having common management which supports strong
operational linkage.
The rating reflects the nascent stage of VIPL's proposed project of
setting up a distillery to produce ethanol. The company has
received all the requisite permissions from the central and state
governments for the construction of the project. So far, the civil
work has been completed and the plant and building are under
construction. The company has given the project to a consultant
firm on a turnkey basis. The project will be developed on 24.99
acres of land. The management expects the project to commence
operations in April 2024. The total estimated cost of the project
is INR765.6 million, which will be funded by a term loan of INR420
million and the remaining from equity infusion and unsecured loans
from the promoters.
Liquidity Indicator- Stretched: The company received the sanction
for a term loan of INR420 million, of which INR29.4 million was
disbursed as on 20 November 2023. As on 20 November 2023, its
promoters infused INR124.2 million towards the equity infusion
along with INR191.95 million as unsecured loans. As of November
20, 2023, the company had cash and cash equivalents of INR0.03
million. VIPL does not have any capital market exposure and relies
on banks and financial institutions to meet its funding
requirements. The company has repayment obligations of INR21
million for FY25 and INR84 million for FY26.
The rating also factors in the promoters, Raman Goyal and Rahul
Goyal, who hold more than two decades of experience in the ethanol
and chemical industry, leading to established relationships with
oil marketing companies in Gujarat.
The rating is also supported by the healthy demand for ethanol in
the country and the presence of off-take contracts with oil
marketing companies, aiding medium-term revenue visibility. VIPL
has participated in bidding with Bharat Petroleum Corporation
Limited that are under assessment. The project also enjoys
locational advantages due to its proximity to ample raw material
sources and the supply from Food Corporation of India ('IND
AAA'/Stable), along with its ability to reach out to various oil
blending depots in the nearby areas. It will be entitled to receive
various fiscal benefits under the National Biofuel Policy 2018 with
the presence of approval from respective departments, which is
likely to support its profitability post the commencement of
operations. The advancement of the central government's ethanol
blending target to 2025 from 2030, has created strong demand for
ethanol, and thus, supports the financial performance of distillery
units for manufacturing ethanol.
Rating Sensitivities
Positive: The timely commencement of the operations and the
subsequent achievement of a stable operating profitability along
with continued strengthening of linkages with of LCIPL could lead
to a positive rating action.
Negative: Any delay in the commencement of operations and achieving
stability in the operating performance after the commencement of
the commercial operations, affecting the company's debt
serviceability or a substantial cost overrun for the proposed
project or weakening of linkages with LCIPL could lead to a
negative rating action.
Company Profile
Incorporated in 2010, VIPL is the flagship company of the RLG
group, owned and managed by the Goyal family through Raman Goyal
and Rahul Goyal. VIPL is setting up a distillery to produce 125
kilo liters per day ethanol at Oplad, Surat in Gujarat. The company
currently has no operations and is in the construction phase of
facility. The project is expected to begin its commercial
operations by April 2024.
VINAY STEEL: CARE Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Vinay
Steel (VS) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated December 2,
2022, placed the rating(s) of VS under the 'issuer non-cooperating'
category as VS had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. VS continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
October 28, 2023, November 7, 2023, December 5, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
VS, based out of Nagpur (Maharashtra) is a proprietorship firm and
commenced operation on September 1, 2015. VS is engaged in the
trading of iron & steel products such as Thermo Mechanically
Treated (TMT) bars, round bars, angles, channels, beams, flats,
amongst others, which find application in industries like
construction, infrastructure and engineering.
YOGENDRA JAISWAL: CARE Keeps C Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Yogendra
Jaiswal (YJ) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 3.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Short Term Bank 6.00 CARE A4; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated November 10,
2022, placed the rating(s) of YJ under the 'issuer non-cooperating'
category as YJ had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. YJ continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
September 26, 2023, October 6, 2023, October 16, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Indore (Madhya Pradesh) based YJ was formed in 2010. The firm is
engaged in the retailing of country made and Indian Made Foreign
Liquor (IMFL) in Madhya Pradesh. The shops are allotted in Madhya
Pradesh by the state government through a competitive bidding
process for a period of one year. However, the firm had not license
for any shop for FY19 and FY20.
ZEE ENTERTAINMENT: Sony Unit Says No Extn. Yet of Merger Deadline
-----------------------------------------------------------------
Reuters reports that Sony Group Corp's Indian unit said on Dec. 19
that it has not yet agreed to prolong a merger deadline with
India's Zee Entertainment Enterprises, days after the latter sought
an extension.
Reuters relates that the merger to create a $10 billion media and
entertainment powerhouse, which was announced in 2021, had a Dec.
21 deadline to close.
"The notice (from Zee) triggers an existing contractual provision
in the deal that allows for both parties to discuss the possibility
of extending the deadline," Sony Pictures Networks India (SPNI)
said in a statement, Reuters relays.
"SPNI is required to start those conversations but has not yet
agreed to a deadline extension," it said, adding that it would hear
Zee's proposals and how it plans to complete the remaining critical
closing conditions.
About Zee Entertainment
Based in Mumbai, India, Zee Entertainment Enterprises Limited,
together with its subsidiaries, engages in broadcasting satellite
television channels.
As reported in the Troubled Company Reporter-Asia Pacific in early
September 2023, the National Company Law Appellate Tribunal (NCLAT)
on Aug. 31 issued notice to Zee Entertainment Enterprises Ltd
(ZEEL) in a plea by IDBI Bank to initiate insolvency proceedings
against the company.
According to Hindu BusinessLine, IDBI Bank, in its plea, said it
was unable to recover unpaid dues of around INR150 crore from Zee.
Many banks, including IndusInd, Standard Chartered, Axis Bank and
IDBI, have initiated insolvency proceedings against Zee ahead of
its merger with Sony. So far, Zee has reached a settlement with
IndusInd and Standard Chartered.
===============
M A L A Y S I A
===============
SAPURA ENERGY: Gets Financiers' Nod for $2.2BB Debt Restructuring
-----------------------------------------------------------------
Reuters reports that Sapura Energy said it had received
confirmation that at least 75% of financiers of its MYR10.3 billion
(US$2.19 billion) multi-currency financing facilities have approved
a debt restructuring scheme proposed by the company.
Reuters relates that the oil and gas services provider said in a
statement on Dec. 13 that the confirmation marks a "significant
milestone" in its reset plan, which includes addressing its debts
and amounts owed to trade creditors.
According to Reuters, the company said negotiations with the
financiers on the proposed restructuring scheme had been ongoing
since September last year.
Sapura Energy added that the restructuring exercise also involved
around MYR1.5 billion in claims from vendors.
"This is indeed a positive step towards regularising our financial
position, ultimately helping Sapura Energy exit from its status as
a Practice Note 17 company," the report quotes Sapura Energy Group
CEO Mohd Anuar Taib as saying.
About Sapura Energy
Sapura Energy Berhad, formerly SapuraKencana Petroleum Berhad, is
engaged in investment holding and the provision of management
services to its subsidiaries. The Company's segments include
Engineering and Construction (E&C), Drilling, Energy and
Corporate.
Sapura Energy Bhd announced on May 31, 2022, that it has been
classified as a PN17 listed issuer due to going concerns on its
shareholders' equity position less than 50% of its share capital.
Sapura Energy has become an affected listed issuer under PN17 on
the basis that its shareholders' equity position of MYR85 million
as at Jan. 31, 2022 was less than 50% of its share capital of
MYR10.9 billion.
SAPURA ENERGY: Gets Second Extension to Submit PN17 Revamp Plan
---------------------------------------------------------------
theedgemalaysia.com reports that Sapura Energy Bhd has been granted
a second extension of up to May 31 next year to submit its Practice
Note 17 (PN17) regularisation plan, which was supposed to be due on
Nov. 30, 2023.
"The extension of time would enable the company to continue
building a robust regularisation plan based on the ongoing debt
restructuring exercise, which is well underway following the
confirmation for its proposed restructuring scheme
approval-in-principle from the Corporate Debt Restructuring
Committee," said Sapura in a stock exchange filing on Dec. 14.
Shares of Sapura were the most actively traded on Dec. 14 across
all Bursa securities, with 193.68 million shares changing hands
though its share price was unchanged at five sen, valuing it at
MYR798.95 million, according to theedgemalaysia.com.
theedgemalaysia.com says the stock piqued investors' interest after
receiving in-principal approval from its MYR10.3 billion lenders
for its proposed debt restructuring scheme.
The group recorded core net loss of MYR390.1 million for the nine
months ended Oct. 31, 2023 (9MFY2024), more than Public Investment
Bank's full-year net loss estimate of MYR297.2 million and the
street's forecast of MYR256.5 million, theedgemalaysia.com
discloses. The variance was broadly due to the underperformance of
the group's engineering and construction as well as operations and
maintenance divisions.
Sapura's order book stood at MYR5.4 billion, while its joint
ventures and associates held another MYR3.6 billion.
"Challenges to access working capital and bank guarantees remain,
however, until its financial condition is fully resolved," said
Public Investment Bank, which maintained its 'underperform' call
and target price of 3.5 sen, theedgemalaysia.com relays.
About Sapura Energy
Sapura Energy Berhad, formerly SapuraKencana Petroleum Berhad, is
engaged in investment holding and the provision of management
services to its subsidiaries. The Company's segments include
Engineering and Construction (E&C), Drilling, Energy and
Corporate.
Sapura Energy Bhd announced on May 31, 2022, that it has been
classified as a PN17 listed issuer due to going concerns on its
shareholders' equity position less than 50% of its share capital.
Sapura Energy has become an affected listed issuer under PN17 on
the basis that its shareholders' equity position of MYR85 million
as at Jan. 31, 2022 was less than 50% of its share capital of
MYR10.9 billion.
=====================
N E W Z E A L A N D
=====================
42GLASS LIMITED: Creditors' Proofs of Debt Due on Feb. 21
---------------------------------------------------------
Creditors of 42Glass Limited, Nichecom Limited, Tawa Plant Limited,
Total Assets Limited and Weasel Coffee Limited are required to file
their proofs of debt by Feb. 21, 2024, to be included in the
company's dividend distribution.
42Glass Limited commenced wind-up proceedings on Dec. 12, 2023.
Nichecom Limited, Tawa Plant Limited, Total Assets Limited and
Weasel Coffee Limited commenced wind-up proceedings on Dec. 13,
2023.
The company's liquidator is:
Brad Burness
BDO Wellington
Level 1
50 Customhouse Quay
Wellington 6011
AGHA JOON: Creditors' Proofs of Debt Due on Feb. 9
--------------------------------------------------
Creditors of Agha Joon Limited, MHRJ Management Limited and Rhayne
Limited are required to file their proofs of debt by Feb. 9, 2024,
to be included in the company's dividend distribution.
Agha Joon Limited commenced wind-up proceedings on Dec. 8, 2023.
MHRJ Management Limited commenced wind-up proceedings on Dec. 5,
2023.
Rhayne Limited commenced wind-up proceedings on Dec. 14, 2023.
The company's liquidators are:
Benjamin Francis
Garry Whimp
Blacklock Rose Limited
PO Box 6709
Victoria Street West
Auckland 1142
AUJLA HOSPITALITY: Creditors' Proofs of Debt Due on Jan. 17
-----------------------------------------------------------
Creditors of Aujla Hospitality Limited are required to file their
proofs of debt by Jan. 17, 2024, to be included in the company's
dividend distribution.
Colin Sanderson and Boris van Delden of McDonald Vague were
appointed joint and several liquidators of Aujla Hospitality
Limited by a special resolution of the shareholder of the company
on Dec. 1, 2023.
FIAFIA CONTRACTORS: Court to Hear Wind-Up Petition on Feb. 23
-------------------------------------------------------------
A petition to wind up the operations of Fiafia Contractors Limited
will be heard before the High Court at Auckland on Feb. 23, 2024,
at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on Nov. 21, 2023.
The Petitioner's solicitor is:
Hosanna Tanielu
Inland Revenue, Legal Services
5 Osterley Way
Manukau City
Auckland 2104
HAPPY VALLEY: Liquidators Call in Agents to Sell Land
-----------------------------------------------------
BusinessDesk reports that the liquidators of the Happy Valley
Nutrition subsidiary, which holds the collapsed wannabe milk
processor's assets, have started to call in agents to sell off its
land.
According to BusinessDesk, the ASX-listed company was planning to
build a dairy factory in the Waikato town of Ōtorohanga, but the
project was stalled after it essentially ran out of cash.
Happy Valley Nutrition and its subsidiary, Five Redland Road
Limited, were put into administration nearly six months ago with
both entities getting a Deed of Company Arrangement (DoCA) to
potentially save the project.
NEST OR INVEST: Creditors' Proofs of Debt Due on Feb. 2
-------------------------------------------------------
Creditors of Nest Or Invest Coronation Limited, Development Group
Auckland Limited and 748 Holding Trustee Limited are required to
file their proofs of debt by Feb. 2, 2024, to be included in the
company's dividend distribution.
Nest Or Invest Coronation commenced wind-up proceedings on Dec. 13,
2023.
Development Group Auckland Limited and 748 Holding Trustee
commenced wind-up proceedings on Dec. 14, 2023.
The company's liquidators are:
Craig Young
PO Box 87340
Auckland
=================
S I N G A P O R E
=================
FEMALE DAILY: Creditors' Proofs of Debt Due on Jan. 15
------------------------------------------------------
Creditors of Female Daily Pte. Ltd. are required to file their
proofs of debt by Jan. 15, 2024, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Dec. 13, 2023.
The company's liquidators are:
Ong Shyue Wen
Lim Bee Lian
c/o EA Consulting
1 North Bridge Road
#23-05 High Street Centre
Singapore 179094
FLEX GLOBAL: Court Enters Wind-Up Order
---------------------------------------
The High Court of Singapore entered an order on Dec. 8, 2023, to
wind up the operations of Flex Global (S) Pte. Ltd.
Maybank Singapore Limited filed the petition against the company.
The company's liquidators are:
BDO Advisory Pte Ltd
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
HPL OLYMPIA: Creditors' Proofs of Debt Due on Jan. 15
-----------------------------------------------------
Creditors of HPL Olympia Pte Ltd are required to file their proofs
of debt by Jan. 15, 2024, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Dec. 13, 2023.
The company's liquidators are:
Leow Quek Shiong
Gary Loh Weng Fatt
Seah Roh Lin
c/o BDO Advisory Pte. Ltd.
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
MCMING INVESTMENTS: Creditors' Proofs of Debt Due on Jan. 15
------------------------------------------------------------
Creditors of Mcming Investments Pte Ltd are required to file their
proofs of debt by Jan. 15, 2024, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Dec. 13, 2023.
The company's liquidators are:
Leow Quek Shiong
Gary Loh Weng Fatt
Seah Roh Lin
c/o BDO Advisory Pte. Ltd.
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
MCSHOPE INVESTMENTS: Creditors' Proofs of Debt Due on Jan. 15
-------------------------------------------------------------
Creditors of Mcshope Investments Pte Ltd are required to file their
proofs of debt by Jan. 15, 2024, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Dec. 13, 2023.
The company's liquidators are:
Leow Quek Shiong
Gary Loh Weng Fatt
Seah Roh Lin
c/o BDO Advisory Pte. Ltd.
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
MINWYN INVESTMENTS: Creditors' Proofs of Debt Due on Jan. 15
------------------------------------------------------------
Creditors of Minwyn Investments Pte Ltd are required to file their
proofs of debt by Jan. 15, 2024, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on Dec. 13, 2023.
The company's liquidators are:
Leow Quek Shiong
Gary Loh Weng Fatt
Seah Roh Lin
c/o BDO Advisory Pte. Ltd.
600 North Bridge Road
#23-01 Parkview Square
Singapore 188778
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T H A I L A N D
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[*] THAILAND: Cabinet OKs Debt Support for Smaller Firms, Debtors
-----------------------------------------------------------------
Reuters reports that Thailand's cabinet has approved debt
suspension for smaller businesses and support for retail debtors,
the prime minister said on Dec. 19, in the government's latest move
to address the country's festering debt issues.
According to Reuters, the programme is part of a plan to help the
10.3 million people who are struggling to service debt, a drag on
Southeast Asia's second-largest economy, where household debt stood
at 90.7% of gross domestic product at the end of the second
quarter.
Reuters relates that the government will also try to keep diesel
prices at about THB30 ($0.86) per litre and electricity bills at up
to THB4.2 per unit to help lower energy costs, Prime Minister
Srettha Thavisin told reporters.
The diesel price cap would be for three months and supported by tax
measures and the national oil fund, Energy Minister Pirapan
Salirathavibhaga said.
New electricity bills would be decided in January, he added, but
vulnerable groups will be offered the current rate of THB3.99 per
unit, he said, Reuters relays.
Government subsidies have helped keep inflation low, with the
headline inflation rate coming at -0.44% in November, the lowest in
nearly three years.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
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Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
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