/raid1/www/Hosts/bankrupt/TCRAP_Public/240619.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, June 19, 2024, Vol. 27, No. 123
Headlines
A U S T R A L I A
ANC ENTERPRISES: First Creditors' Meeting Set for June 21
AWADA CIVIL: Second Creditors' Meeting Set for June 24
BLUESTONE CBA 2015: Fitch Affirms and Withdraws 'Bsf' F Note Rating
CASTER CONSTRUCTIONS: Second Creditors' Meeting Set for June 25
HS FRESH: Enters Voluntary Administration
HS FRESH: First Creditors' Meeting Set for June 26
JSTM HOLDINGS: First Creditors' Meeting Set for June 26
LIBERTY 2024-1: Fitch Assigns 'BB(EXP)sf' Rating to Class F Notes
PEPPER ASSET NO.2: Fitch Assigns 'Bsf' Final Rating to Cl. D Notes
TRITON BOND 2024-2: S&P Assigns Prelim B (sf) Rating to F Notes
XPR MINING: First Creditors' Meeting Set for June 26
C H I N A
BANK OF BEIJING: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
CHINA GUANGFA: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
CHINA MINSHENG: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
CHINA VANKE: S&P Affirms 'BB+' ICR on Active Liquidity Management
HUA XIA BANK: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
PING AN BANK: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
SHANDONG AIRLINES: Small Shareholders Move to Oust Chairman
I N D I A
AMARPARKASH RICE: CRISIL Keeps D Debt Ratings in Not Cooperating
AMBAY COKE: Insolvency Resolution Process Case Summary
ANUPAM ELECTRICALS: Insolvency Resolution Process Case Summary
ARINITS SALES: CRISIL Keeps D Debt Ratings in Not Cooperating
AVALON RANGOLI: Insolvency Resolution Process Case Summary
BAJAJ BASMATI: CRISIL Keeps D Debt Ratings in Not Cooperating
BALA BALAJI: CRISIL Keeps D Debt Ratings in Not Cooperating
DODHIA TECHNO: CRISIL Keeps D Debt Ratings in Not Cooperating
EXPOVAN: CRISIL Keeps D Debt Ratings in Not Cooperating Category
FEST HOMES: CARE Keeps D Debt Rating in Not Cooperating Category
GAJANAN GANGAMAI: CRISIL Keeps D Debt Ratings in Not Cooperating
GOAL CLOSURES: CARE Keeps D Debt Ratings in Not Cooperating
HEERA RICE: CRISIL Keeps D Debt Ratings in Not Cooperating
IMPEX FERRO: Insolvency Resolution Process Case Summary
INTEC CAPITAL: CARE Keeps D Debt Rating in Not Cooperating
J.K. INTERNATIONAL: CRISIL Keeps D Ratings in Not Cooperating
JOISTER INFOSERVE: Insolvency Resolution Process Case Summary
JUMBO FINVEST: CARE Keeps D Debt Rating in Not Cooperating
KOUSHIC PRESSURE: CRISIL Keeps D Debt Ratings in Not Cooperating
KRISHNAPING ALLOYS: CRISIL Keeps D Ratings in Not Cooperating
LAJJYA STEELS: CRISIL Keeps D Debt Ratings in Not Cooperating
LAMIFABS AND PAPERS: CRISIL Keeps D Ratings in Not Cooperating
LICHCHHWI FOODS: CRISIL Keeps D Debt Ratings in Not Cooperating
MEP INFRASTRUCTURE: To Seek Settlement with Lenders Under IBC
MPL MOTORS: CRISIL Keeps C Debt Ratings in Not Cooperating
NECTAR PRINTS: Insolvency Resolution Process Case Summary
OSIAN COMMOTRADE: CRISIL Keeps D Debt Ratings in Not Cooperating
PALLAVI CONSTRUCTIONS: CRISIL Keeps C Rating in Not Cooperating
PATWA MARKETING: CRISIL Keeps D Debt Rating in Not Cooperating
PRASAD SUGAR: CRISIL Withdraws D Rating on INR174.48cr LT Loan
PUNE TUBES: CRISIL Keeps D Debt Ratings in Not Cooperating
SEBACIC INDIA: Insolvency Resolution Process Case Summary
SUPERTECH REALTORS: NCLT Orders Insolvency Proceeding vs. Realtor
TANISHA SCAFFOLDING: NCLT Ordered to Hear Afresh Insolvency Plea
TATA MOTORS: S&P Puts 'BB+' Sr. Unsecured Debt Rating on Watch Pos.
THAUSI EXPORT: CARE Keeps D Debt Rating in Not Cooperating
TRIMULA G: CRISIL Keeps D Debt Ratings in Not Cooperating
YIBEAL TRADEX: Insolvency Resolution Process Case Summary
I N D O N E S I A
AGUNG PODOMORO: Fitch Hikes LongTerm IDR to 'CCC-'
LIPPO KARAWACI: Fitch Cuts IDR to 'C' on Distressed Debt Exchange
M A C A U
MGM CHINA: S&P Rates New $500MM Senior Unsecured Notes 'B+'
M A L A Y S I A
TH HEAVY: Court Appoints Official Receiver as Interim Liquidator
N E W Z E A L A N D
CHIWI BUILDERS: Court to Hear Wind-Up Petition on June 27
DENTAL REVOLUTION: Creditors' Proofs of Debt Due on July 12
LAYBUY HOLDINGS: BNPL Platform Placed Into Receivership
PRO BUILD: Court to Hear Wind-Up Petition on July 5
PROPOSITION LIMITED: Creditors' Proofs of Debt Due on July 15
REFLECTIONS FUNERAL: Court to Hear Wind-Up Petition on June 24
S I N G A P O R E
CANOPY TROPICS: Creditors' Proofs of Debt Due on July 18
CREDIT OPPORTUNITIES: Creditors' Proofs of Debt Due on July 17
IAG RE SINGAPORE: Creditors' Proofs of Debt Due on July 18
PRICEWATERHOUSECOOPERS: Creditors' Proofs of Debt Due on July 18
RED BOX: Creditors' Proofs of Debt Due on July 12
T H A I L A N D
[*] THAILAND: Factory Closures a Growing Concern, KKP Says
- - - - -
=================
A U S T R A L I A
=================
ANC ENTERPRISES: First Creditors' Meeting Set for June 21
---------------------------------------------------------
A first meeting of the creditors in the proceedings of ANC
Enterprises Pty Ltd will be held on June 21, 2024 at 11:00 a.m. at
the offices of SV Partners at Level 17, 200 Queen Street in
Melbourne and by way of teleconference/electronic facilities
(Microsoft Teams).
Michael Carrafa and Fabian Kane Micheletto of SV Partners were
appointed as administrators of the company on June 11, 2024.
AWADA CIVIL: Second Creditors' Meeting Set for June 24
------------------------------------------------------
A second meeting of creditors in the proceedings of Awada Civil
Engineering Pty Ltd has been set for June 24, 2024 at 11:00 a.m.
via Microsoft Teams.
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 June 20, 2024 at 4:00 p.m.
David Webb of Webb Advisory was appointed as administrator of the
company on May 17, 2024.
BLUESTONE CBA 2015: Fitch Affirms and Withdraws 'Bsf' F Note Rating
-------------------------------------------------------------------
Fitch Ratings has affirmed and subsequently withdrawn the ratings
on six Bluestone CBA Warehouse Trust 2015 classes.
Entity/Debt Rating Prior
----------- ------ -----
Bluestone CBA
Warehouse
Trust 2015
A LT AAAsf Affirmed AAAsf
A LT WDsf Withdrawn AAAsf
B LT AAsf Affirmed AAsf
B LT WDsf Withdrawn AAsf
C LT Asf Affirmed Asf
C LT WDsf Withdrawn Asf
D LT BBBsf Affirmed BBBsf
D LT WDsf Withdrawn BBBsf
E LT BBsf Affirmed BBsf
E LT WDsf Withdrawn BBsf
F LT Bsf Affirmed Bsf
F LT WDsf Withdrawn Bsf
Fitch is withdrawing the ratings on Bluestone CBA Warehouse Trust
2015 due to lack of investor interest. As a result, Fitch will no
longer provide ratings or analytical coverage of the transaction.
KEY RATING DRIVERS
Deteriorating Asset Performance but Within Stressed Portfolio:
End-April 2023 30+ and 90+ day arrears were 7.8% and 4.8%,
respectively, above Fitch's 1Q24 Dinkum Non-Conforming RMBS Index
of 3.0% and 1.3%. Arrears were up in April due partly to the sale
of assets out of the warehouse.
Its expectations of the pool's future composition are based on a
stressed proxy pool and historical data, as the transaction has a
rolling revolving period. The proxy pool is shaped by portfolio
characteristics that impact foreclosure frequency within the APAC
Residential Mortgage Rating Criteria.
Three proxy pools based on various conforming parameters were used
in Fitch's analysis. The 40% conforming proxy pool produced the
highest portfolio loss. The 'AAAsf' weighted-average foreclosure
frequency (WAFF) of 40.0% was driven by a Fitch-stressed
weighted-average (WA) unindexed loan/value ratio (LVR) of 72.9%,
loans with an LVR greater than 80% making up 28.7% of the
portfolio, Fitch-stressed non-conforming loans of 63.4%,
Fitch-stressed investment loans of 36.5% and Fitch-stressed
interest-only loans of 14.1%, as well as Fitch-adjusted 30+ day
arrears of 13.1%. The 'AAAsf' WA recovery rate (WARR) of 51.9% was
driven by the stressed portfolio's WA indexed scheduled LVR of
74.1%. Arrears for all three pools were stressed to the portfolio
parameter with the majority being stressed as 90+ day arrears.
Credit Enhancement Supports Ratings: Each tranche of rated notes
benefits from credit enhancement (CE) provided by the respective
subordinated notes and will revert to sequential paydown, building
up CE, if performance significantly deteriorates and triggers an
amortisation event or if the revolving period is not extended. The
rated notes pass Fitch's cash flow model stresses at their
respective ratings. Fitch excludes the payment of additional
interest on the class A to F notes in its rating assessment.
Low Operational and Servicing Risk: Bluestone is a non-bank lender
with extensive experience in originating, servicing and managing
its mortgage portfolio. Fitch undertook an operational review and
found that the operations of the originator and servicer were
comparable with market standards and that there were no material
changes that may affect Bluestone's ongoing ability to undertake
administration and collection activities.
Bluestone's collection timelines, policies, procedures and
origination practices are largely in line with those of other
lenders in Australia after considering the mix of conforming and
non-conforming borrowers, as evident from the transaction's
historical performance.
Tight Labour Market to Support Outlook: Portfolio performance is
supported by Australia's continued economic growth and tight labour
market, despite rapid interest rate hikes in 2022-2023. GDP growth
was 1.5% in 2023 and unemployment was 4.0% in May 2024. Fitch
expects economic conditions to stabilise in 2024, with GDP growth
slowing slightly to 1.4% and unemployment edging up to 4.2%. This
reflects Fitch's anticipated effects of China's property downturn
and the impact of recent monetary tightening on consumer spending.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Not relevant, as the ratings have been withdrawn.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Not relevant, as the ratings have been withdrawn.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
Prior to the transaction closing, Fitch sought to receive a
third-party assessment of the asset portfolio information, but none
was made available to Fitch for this transaction.
As part of its ongoing monitoring, Fitch reviewed a small targeted
sample of the originator's origination files and found the
information contained in the reviewed files to be adequately
consistent with the originator's policies and practices and the
other information provided to the agency about the asset
portfolio.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis, according to its applicable rating methodologies,
indicates that it is adequately reliable.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The issuer has informed Fitch that not all relevant underlying
information used in the analysis of the rated notes is public.
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.
CASTER CONSTRUCTIONS: Second Creditors' Meeting Set for June 25
---------------------------------------------------------------
A second meeting of creditors in the proceedings of Caster
Constructions Pty. Ltd. has been set for June 25, 2024 at 3:00 p.m.
at the offices of Romanis Cant at Level 2, 106 Hardware Street in
Melbourne.
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 June 24, 2024 at 12:00 p.m.
Manuel Hanna of Romanis Cant was appointed as administrator of the
company on May 20, 2024.
HS FRESH: Enters Voluntary Administration
-----------------------------------------
News.com.au reports that a farming business with operations across
Australia has entered voluntary administration, putting some 500
jobs at risk.
HS Fresh Food collapsed on June 14, with FTI Consulting
administrators Vaughan Strawbridge, Joanne Dunn and Ben Campbell
brought in to restructure the troubled company, news.com.au
discloses.
In a statement on June 17, the administrators said they would to
seek to restructure or sell the business while continuing
operations, which means the firm will continue to trade and workers
will hold their jobs during the administration process, news.com.au
relays.
"We are working with HS Fresh Food Group's management team and
staff, and other stakeholders to continue operations while we
secure the future of the business," Mr. Strawbridge said, notes the
report. "A sale process for the business and assets of the HS Fresh
Food Group was undertaken and in advanced stages at the time our
appointment. We intend to continue this process, while exploring
all available options, and are confident of completing a sale
and/or recapitalisation of the business in an expedited time frame
with the support of all relevant stakeholders."
HS Fresh Food specialises in fresh salads, ready-made meals,
snacks, food-to-go and pre-prepared vegetables products. The
company's brands include Houston's Farm, Sunfresh and Gourmet
Selections, with its products shipped to major retailers including
Coles and Woolworths.
The company started out in Tasmania as Houston's Farms before
expanding to operations in NSW, South Australia, Queensland and
WA.
HS FRESH: First Creditors' Meeting Set for June 26
--------------------------------------------------
A first meeting of the creditors in the proceedings of HS Fresh
Food Holding Pty Ltd, HS Fresh Food Pty Ltd, HS Fresh Farms Pty
Ltd, and HS Salads Pty Ltd will be held on June 26, 2024, at 2:00
a.m. via electronic facilities (Microsoft Teams).
Joanne Dunn, Ben Campbell and Vaughan Strawbridge of FTI Consulting
were appointed as administrators of the companies on June 14,
2024.
JSTM HOLDINGS: First Creditors' Meeting Set for June 26
-------------------------------------------------------
A first meeting of the creditors in the proceedings of JSTM
Holdings Pty Ltd will be held on June 26, 2024 at 9:30 a.m. at the
offices of Dye & Co. Pty Ltd at 165 Camberwell Road in Hawthorn
East.
Nicholas Giasoumi and Shane Leslie Deane of Dye & Co. were
appointed as administrators of the company on June 17, 2024.
LIBERTY 2024-1: Fitch Assigns 'BB(EXP)sf' Rating to Class F Notes
-----------------------------------------------------------------
Fitch Ratings has assigned expected ratings to Liberty Series
2024-1 Auto Trust's pass-through floating-rate notes. The notes are
backed by a pool of first-ranking Australian automotive loan
receivables originated by Liberty Financial Pty Ltd. The notes will
be issued by Liberty Funding Pty Limited in its capacity as issuer
of Liberty Series 2024-1 Auto Trust, which is a separate and
distinct trust created under a master trust deed.
Entity/Debt Rating
----------- ------
Liberty Series
2024-1 Auto Trust
A LT AAA(EXP)sf Expected Rating
B LT AA(EXP)sf Expected Rating
C LT A(EXP)sf Expected Rating
D LT BBB+(EXP)sf Expected Rating
E LT BB+(EXP)sf Expected Rating
F LT BB(EXP)sf Expected Rating
G LT NR(EXP)sf Expected Rating
TRANSACTION SUMMARY
The total collateral pool at the 3 April 2024 cut-off date was
AUD600 million and consisted of 15,712 receivables with a
weighted-average (WA) seasoning of 7.7 months, WA remaining
maturity of 62.3 months and an average contract balance of
AUD38,187.
KEY RATING DRIVERS
Stress Commensurate with Ratings: Fitch has assigned base-case
default expectations and 'AAAsf' default multiples for consumer
loans and commercial loans. Its default assumptions are 4.0% and
4.5%, respectively, for each sub-pool. The 'AAAsf' default
multiples are 5.75x and 5.50x. The recovery base case is 50.0%,
with a 'AAAsf' recovery haircut of 40.0% across both sub-pools. The
weighted-average (WA) base-case default assumption is 4.1% and the
'AAAsf' default multiple is 5.7x.
The portfolio performance is supported by Australia's continued
economic growth and tight labour market, despite rapid interest
rate hikes during 2022-2023. GDP growth in the year to March 2024
was 1.1% and unemployment was 4.1% in April 2024. Fitch expects
economic conditions to stabilise in 2024, with GDP growth of 1.4%
and unemployment rising to 4.2%. This reflects Fitch's anticipated
effects of China's property downturn and the ongoing impact of
recent monetary tightening on consumer spending.
Longer Default Definition: Liberty does not define a default
according to a certain number of days a loan has been in arrears.
It instead recognises default when it views that the loan can no
longer be serviced, which averaged around 250 days. This is longer
than other Australian transactions rated by Fitch, which typically
define loans in arrears for more than 120 days as being in default.
In order to avoid the choice of definition having an undue impact
on Fitch's stressed base case expectation, Fitch has derived higher
default multiples and lower recovery haircuts.
Structural Risks Addressed: Fitch's cash flow analysis incorporates
the transaction's structural features and tests each note's
robustness by stressing default and recovery rates, prepayments,
interest-rate movements and default timing. All rated notes pass
the relevant rating stresses. The class A to F notes will receive
principal repayments pro rata upon satisfaction of step-down
requirements. The percentage of credit enhancement provided by the
G notes will increase as the A to F notes amortise.
Counterparty Risks Addressed: Counterparty risk is mitigated by
documented structural mechanisms that ensure remedial action takes
place should the ratings of the swap providers or transaction
account bank fall below a certain level. The transaction includes
an interest-rate swap with a fixed schedule, with 0% prepayment
assumption. The swap is expected to be rebalanced every month,
depending on the level of prepayments and defaults, and hence the
transaction is modelled as fully hedged at all times.
Low Operational and Servicing Risk: All receivables were originated
by Liberty Financial Pty Ltd, which demonstrated adequate
capability as originator, underwriter and servicer. Servicer
disruption risk is mitigated by back-up servicing arrangements. The
nominated standby servicer is Perpetual Trustee Company Limited.
Fitch undertook an operational review and found that the operations
of the originator and servicer were comparable with those of other
auto lenders.
No Residual Value Risk (Positive): There is no residual value
exposure in this transaction. However, there is a small exposure to
balloon-payment loans.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Transaction performance may be affected by changes in market
conditions and the economic environment. Weakening asset
performance is strongly correlated with increasing levels of
delinquencies and defaults that could reduce the credit enhancement
available to the notes.
Downgrade Sensitivities
Unanticipated increases in the frequency of defaults and decreased
recoveries on defaulted receivables could produce loss levels
higher than Fitch's base case, and are likely to result in a
decline in credit enhancement and remaining loss-coverage levels
available to the notes. Decreased credit enhancement may make
certain note ratings susceptible to negative rating action,
depending on the extent of the coverage decline. Hence, Fitch
conducts sensitivity analysis by stressing a transaction's initial
base-case assumptions; these include increasing WA defaults and
decreasing the WA recovery rate.
The rating sensitivity section provides insight into the
model-implied sensitivities the transaction faces when assumptions
- defaults or recoveries - are modified, while holding others
equal. The modelling process uses the modification of default and
loss assumptions to reflect asset performance in up and down
environments. The results should only be considered as one
potential outcome, as the transaction is exposed to multiple
dynamic risk factors.
Notes: A / B / C / D / E / F
Rating: AAAsf / AAsf / Asf / BBB+sf / BB+sf / BBsf
10% increase in defaults: AAAsf / AA-sf / Asf / BBBsf / BB+sf /
BB-sf
25% increase in defaults: AAAsf / A+sf / A-sf / BBBsf / BBsf /
B+sf
50% increase in defaults: AA+sf / Asf / BBBsf / BB+sf / BB-sf /
B-sf
10% decrease in recoveries: AAAsf / AAsf / Asf / BBB+sf / BB+sf /
BB-sf
25% decrease in recoveries: AAAsf / AA-sf / Asf / BBBsf / BBsf /
B+sf
50% increase in recoveries: AAAsf / A+sf / BBB+sf / BBB-sf / BB-sf
/ Bsf
10% increase in defaults & 10% decrease in recoveries: AAAsf /
AA-sf / A-sf / BBBsf / BBsf / B+sf
25% increase in defaults & 25% decrease in recoveries: AA+sf / Asf
/ BBB+sf / BB+sf / BB-sf / Bsf
50% increase in defaults & 50% increase in recoveries: AA-sf /
BBB+sf / BB+sf / BB-sf / B-sf / below Bsf
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Economic conditions, loan performance and credit losses that are
better than Fitch's baseline scenario or sufficient build-up of
credit enhancement that would fully compensate for credit losses
and cash flow stresses commensurate with higher rating scenarios,
all else being equal.
Notes: A / B / C / D / E / F
Rating: AAAsf / AAsf / Asf / BBB+sf / BB+sf / BBsf
10% decrease in defaults & 10% increase in recoveries AAAsf / AA+sf
/ AA-sf / Asf / BBBsf / BB+sf
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
Fitch sought to receive a third-party assessment conducted on the
asset portfolio information, but none was made available to Fitch
for this transaction.
Fitch conducted a review of a small targeted sample of the
originator's origination files and found the information contained
in the reviewed files to be adequately consistent with the
originator's policies and practices and the other information
provided to the agency about the asset portfolio.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis, according to its applicable rating methodologies,
indicates that it is adequately reliable.
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.
PEPPER ASSET NO.2: Fitch Assigns 'Bsf' Final Rating to Cl. D Notes
------------------------------------------------------------------
Fitch Ratings has assigned final ratings to Pepper Asset Securities
No.2 Trust's pass-through floating-rate notes. The notes are backed
by a pool of first-ranking Australian automotive and equipment
lease and loan receivables originated by Pepper Asset Finance Pty
Limited, a subsidiary of Pepper Money Limited (Pepper). The notes
were issued by BNY Trust Company of Australia Limited as trustee
for Pepper Asset Securities No.2 Trust.
This is a whole loan sale, where the trustee acquired all of the
seller trustee's rights, title and interest in the receivables
using funds provided by the investors under a whole loan
pass-through structure. All notes and units are held by investors.
Entity/Debt Rating Prior
----------- ------ -----
Pepper Asset
Securities No.2 Trust
A1-a LT NRsf New Rating NR(EXP)sf
A1-x LT NRsf New Rating NR(EXP)sf
B AU3FN0088803 LT BBBsf New Rating BBB(EXP)sf
C AU3FN0088811 LT BBsf New Rating BB(EXP)sf
D AU3FN0088829 LT Bsf New Rating B(EXP)sf
G AU3FN0088837 LT NRsf New Rating NR(EXP)sf
TRANSACTION SUMMARY
The total collateral pool at the 30 April 2024 cut-off date was
AUD500 million and consisted of 12,545 receivables with
weighted-average (WA) seasoning of 6.2 months, WA remaining
maturity of 55.8 months and an average contract balance of
AUD39,856.
KEY RATING DRIVERS
Stress Commensurate with Ratings: Fitch has assigned base-case
default expectations and 'AAAsf' default multiples as follows:
Novated: 1.10% (7.75x)
Non-novated risk Tier A: 2.25% (6.00x)
Non-novated risk Tier B: 8.25% (4.25x)
Non-novated risk Tier C: 19.25% (3.00x)
The recovery base case is 35.0%, with a 'AAAsf' recovery haircut of
50.0% across all risk grades. The WA base-case default assumption
was 4.4% and the 'AAAsf' default multiple was 4.45x.
Portfolio performance is supported by Australia's continued
economic growth and tight labour market, despite rapid interest
rate hikes in 2022-2023. GDP growth in the year to March 2024 was
1.1% and unemployment was 4.1% in April 2024. Fitch expects
economic conditions to stabilise in 2024, with GDP growth of 1.4%
and unemployment edging up to 4.2%. This reflects Fitch's
anticipated effects of China's property downturn and the impact of
recent monetary tightening on consumer spending.
Excess Spread Limited by Commission Note Repayment: The transaction
includes a class A1-x note to fund the purchase-price component
related to the unamortised commission paid to introducers for the
origination of the receivables and a premium. The note will not be
collateralised, but will amortise in line with an amortisation
schedule. The note's repayment limits the availability of excess
spread to cover losses, as it ranks senior in the interest
waterfall; above the class B to G notes.
Class A to G notes will receive principal repayments pro rata upon
satisfaction of stepdown criteria. Other structural features
include a reverse turbo mechanism that redirects available excess
income to repay note principal, and a loss reserve that is
initially funded by note issuance at closing and traps excess
income on or before the third payment date, which is available for
loss reimbursement. Fitch's cash flow analysis incorporates the
transaction's structural features and tests each note's robustness
by stressing default and recovery rates, prepayments, interest-rate
movements and default timing.
Counterparty Risks Addressed: Counterparty risk is mitigated by
documented structural mechanisms that ensure remedial action takes
place should the ratings of the swap providers or transaction
account bank fall below a certain level. The transaction includes
interest-rate swaps with a fixed schedule, which allows for future
over- or under-hedging, depending on the level of prepayments and
defaults. Fitch conducted additional sensitivity analysis for these
hedging scenarios.
Low Operational and Servicing Risk: All receivables were originated
by Pepper Asset Finance, which demonstrated adequate capability as
originator, underwriter and servicer. Pepper is not rated by Fitch.
Servicer disruption risk is mitigated by backup servicing
arrangements. The nominated backup servicer is BNY Trust Company of
Australia Limited. Fitch undertook an operational and file review
and found that the operations of the originator and servicer were
comparable with those of other auto and equipment lenders.
No Residual Value Risk: There is no residual value exposure in this
transaction. However, 48.3% of the portfolio by loan value,
including all novated leases, has balloon amounts payable at
maturity.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Transaction performance may be affected by changes in market
conditions and the economic environment. Weakening asset
performance is strongly correlated with increasing levels of
delinquencies and defaults that could reduce credit enhancement
(CE) available to the notes.
Downgrade Sensitivities
Unanticipated increases in the frequency of defaults and decreases
in recoveries on defaulted receivables could produce loss levels
higher than Fitch's base case, and are likely to result in a
decline in CE and remaining loss-coverage levels available to the
notes. Decreased CE may make certain note ratings susceptible to
negative rating action, depending on the extent of the coverage
decline. Hence, Fitch conducts sensitivity analysis by stressing a
transaction's initial base-case assumptions; these include
increasing WA defaults and decreasing the WA recovery rate.
The rating sensitivity section provides insight into the
model-implied sensitivities the transaction faces when assumptions
- defaults or recoveries - are modified, while holding others
equal. The modelling process uses the modification of default and
loss assumptions to reflect asset performance in up and down
environments. The results should only be considered as one
potential outcome, as the transaction is exposed to multiple
dynamic risk factors.
Notes: B / C / D
Rating: BBBsf / BBsf / Bsf
10% defaults increase: BBB-sf / BBsf / less than Bsf
25% defaults increase: BB+sf / B+sf / less than Bsf
50% defaults increase: BBsf / less than Bsf / less than Bsf
10% recoveries decrease: BBBsf / BBsf / Bsf
25% recoveries decrease: BBB-sf / BBsf / less than Bsf
50% recoveries decrease: BBB-sf / BB-sf / less than Bsf
10% defaults increase/10% recoveries decrease: BBB-sf / BB-sf /
less than Bsf
25% defaults increase/25% recoveries decrease: BBsf / Bsf / less
than Bsf
50% defaults increase/50% recoveries decrease: B+sf / less than Bsf
/ less than Bsf
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Economic conditions, loan performance and credit losses that are
better than Fitch's baseline scenario or sufficient build-up of CE
that would fully compensate for credit losses and cash flow
stresses commensurate with higher rating scenarios, all else being
equal.
Upgrade Sensitivities
Notes: B / C / D
Expected Rating: BBBsf / BBsf / Bsf
10% defaults decrease/10% recoveries increase: BBB+sf / BB+sf /
BB-sf
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
Fitch sought to receive a third-party assessment conducted on the
asset portfolio information, but none was made available for this
transaction.
As part of its ongoing monitoring, Fitch reviewed a small targeted
sample of the originator's origination files and found the
information contained in the reviewed files to be adequately
consistent with the originator's policies and practices and the
other information provided to the agency about the asset
portfolio.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis, according to its applicable rating methodologies,
indicates that it is adequately reliable.
DATE OF RELEVANT COMMITTEE
28 May 2024
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.
TRITON BOND 2024-2: S&P Assigns Prelim B (sf) Rating to F Notes
---------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to nine classes
of prime residential mortgage-backed securities (RMBS) to be issued
by Perpetual Corporate Trust Ltd. as trustee for Triton Bond Trust
2024-2 Series 1.
The preliminary ratings reflect the following factors.
S&P has assessed the credit risk of the underlying collateral
portfolio, including the fact that this is a closed portfolio,
which means no further loans will be assigned to the trust after
the closing date.
The credit support is sufficient to withstand the stresses S&P
applies. This credit support comprises mortgage lenders insurance
covering 11.6% of the loans in the portfolio as well as note
subordination for all rated notes.
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 its stress assumptions to ensure timely payment of
interest.
An extraordinary expense reserve of A$150,000, funded from day one
by Columbus Capital Pty Ltd., is available to meet extraordinary
expenses. The reserve will be topped up via excess spread if
drawn.
A fixed- to floating-rate interest-rate swap is provided by Westpac
Banking Corp. 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.
S&P said, "Our ratings also consider the legal structure of the
trust, which has been established as a special-purpose entity and
meets our criteria for insolvency remoteness.
"We understand that the class A1-AU-G notes will be issued under
the ColCap Green Bond Framework. Issuance proceeds from this bond
will be used to purchase green mortgages that meet the eligibility
criteria outlined in the ColCap Green Bond Framework. S&P Global
Ratings does not consider in its credit rating analysis the
issuer's designation of the notes as "green.""
Preliminary Ratings Assigned
Triton Bond Trust 2024-2 Series 1
Class A1-AU, A$495.00 million: AAA (sf)
Class A1-AU-G, A$100.00 million: AAA (sf)
Class A2, A$49.00 million: AAA (sf)
Class AB, A$28.35 million: AAA (sf)
Class B, A$9.45 million: AA (sf)
Class C, A$7.70 million: A (sf)
Class D, A$4.55 million: BBB (sf)
Class E, A$1.75 million: BB (sf)
Class F, A$2.10 million: B (sf)
Class G, A$2.10 million: Not rated
XPR MINING: First Creditors' Meeting Set for June 26
----------------------------------------------------
A first meeting of the creditors in the proceedings of XPR Mining
Services Pty Ltd will be held on June 26, 2024 at 11:00 a.m. via
Zoom.
Andrew Michael Smith and Robert Allan Jacobs of Auxilium Partners
were appointed as administrators of the company on June 26, 2024.
=========
C H I N A
=========
BANK OF BEIJING: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Bank of Beijing Co., Ltd.'s (BOB)
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB+',
Government Support Rating (GSR) at 'bb+', Short-Term IDR at 'B' and
Viability Rating (VR) at 'bb-'. The Outlook is Stable. The assigned
VR is in line with the implied VR but does not drive its IDRs.
KEY RATING DRIVERS
Government Support-Driven IDR: BOB's Long-Term IDR is driven by
Fitch's assessment of a moderate probability of government support,
as indicated by the assigned GSR. Its view takes into consideration
the bank's limited size and modest domestic systemic importance. It
also recognises BOB's entrenched franchise within Beijing,
including its business relationships with state-owned enterprises
(SOEs). BOB's Short-Term IDR is mapped to its Long-Term IDR.
Support Prospects Unchanged: Fitch revised the rating Outlook on
China (A+/ F1+) to Negative on 9 April 2024. However, even in the
event of a one-notch downgrade of China's sovereign rating, Fitch
does not believe the ability and propensity to support BOB would be
affected significantly, as its GSR is multiple notches lower than
China's sovereign rating.
Differentiation in D-SIB Status: China's regulators designated BOB
a domestic systemically important bank (D-SIB) in October 2021
which underpins its view on the government's propensity to support
BOB. However, Fitch views this propensity as lower than for peers
with higher systemic importance or closer government linkages. This
is because the government is likely to prioritise support for
larger D-SIBs should China's banking system experience systemic
stress.
Stable OE Outlook Despite Slower Growth: Fitch forecasts China's
GDP growth to moderate to 4.5% in 2024 and 2025, from 5.2% in 2023,
due to persistent property-sector weakness and subdued household
consumption, though partly mitigated by fiscal stimulus. This will
limit banking-sector performance in 2024, but Fitch does not expect
the authorities to introduce large-scale credit stimulus, nor do
Fitch expects a material reversal in regulatory reforms already
implemented, which have improved transparency and reduced shadow
banking over the past few years.
The operating environment (OE) score of 'bbb-'/stable is above the
'bb' category implied score, as Fitch believes China's solid
external finances as well as its large and diversified economy -
incorporated in the China's 'A+' sovereign rating - will provide
greater financial and economic stability than the implied OE score
indicates.
Local Focus Supports Business Profile: BOB has close relationships
with large state-owned enterprises in the capital city. Loan and
revenue from the Beijing area, which has one of the most resilient
local economies, accounted half and two-thirds of the total, and
the contribution has remained stable.
However, BOB's business profile score of 'bb' is lower than the
'bbb' implied category score due to issues over management and
governance. Such issues are not uncommon in China due to pressure
from the authorities to support certain borrower segments during
challenging times. The score also reflects the bank's exposure to
entrusted investment, which is above that of its peers (mid-tier
average: 7%) and was reported at 11% of total assets at end-2023.
Shadow Activities Larger Than Peers: BOB's risk-profile score of
'bb-' reflects its entrusted investments , though this is balanced
by its large business focus in the capital city and less direct
exposure to riskier sectors such as property development. BOB's
off-balance-sheet wealth-management products (WMPs) equated to 13%
of its deposits at end-2023, lower than the mid-tier average of
28%.
Stable Asset Quality: Fitch expects BOB to maintain a largely
stable reported impaired-loan ratio (1.3% at end-1Q24) in light of
its continued non-performing loan resolution. The 'bb-'
asset-quality score is below the 'bbb' category implied score, to
reflect the bank's larger growth appetite and exposure to
shadow-banking activity relative to higher-rated peers.
Stable Profitability: BOB's earnings and profitability score of
'b+' is below the 'bb' category implied score, reflecting the
understatement of risk-weight calculations from non-loan exposures.
Fitch expects its operating profit/risk-weighted assets (RWAs)
ratio, reported at around 1.1% in 2023, to benefit from its focus
in Beijing and to remain largely stable, despite continued pressure
on the net interest margin (NIM). Its revenue and net profit rose
by 8% and 5% yoy, respectively, in 1Q24.
Growth Weighs on Capitalisation: Fitch expects BOB's growth
appetite and above peers' entrusted investments to continue to
weigh on capitalisation. Its reported common equity Tier 1 (CET1)
ratio declined to 9.1% by end-1Q24, from 9.5% at end-2022. The
capitalisation and leverage score of 'b+' is below the 'bb'
category implied score, reflecting that risk-weight calculations
are likely to be understated from not fully capturing non-loan
exposures.
Stable Funding: BOB's funding and liquidity score of 'bb-' is below
the 'bbb' category implied score in light of the bank's reliance on
off-balance-sheet non-deposit funding, which may strain its
on-balance-sheet funding. That said, Fitch expects the loan/deposit
ratio - at 96% at end-2023 - to remain stable in the next two
years.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
IDRs and GSR
BOB's Long-Term IDR and GSR will come under pressure if Fitch
perceives that the central government's propensity to provide
timely extraordinary support to the bank is diminished. A lower
propensity to support may be reflected in an enhanced resolution
framework and the authorities' strong intention to permit losses on
senior debt obligations as a means of resolving banks. However,
Fitch does not expect either scenario to occur in the near term.
The state's propensity to support the bank may also decline if
there were a significant reduction in the Beijing government's
ownership or influence over BOB, in conjunction with a significant
decline in the bank's systemic importance, possibly reflected in it
no longer being classified as a D-SIB.
BOB's Short-Term IDR will be downgraded if its Long-Term IDR is
downgraded to or below 'CCC+', which Fitch considers highly
unlikely in the short- to medium-term.
VR
BOB's VR could be downgraded if the OE score is downgraded or if
the bank returns to expanding its entrusted investments or WMPs
excessively, and significantly erodes asset quality and capital
buffers. A sustained deterioration in the bank's financial metrics
without having largely addressed risks around transparency of
exposures (such as off-balance sheet and non-loan), could also lead
to a VR downgrade. This includes a combination of the following
reported core metrics:
- The four-year average of impaired loans/gross loans increasing to
- and being sustained at - around 6% (2020-2023 reported four-year
average: 1.5%), although Fitch's assessment of asset quality will
also take into consideration other indicators, such as
'special-mention' loans, loan-loss provisioning, and whether and to
what extent Fitch believes reported metrics understate any
deterioration in asset quality; and
- The CET1 ratio falling below 8.5% without a credible path to
return to existing levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
IDRs and GSR
An upgrade of China's sovereign ratings could lead to positive
rating action on the bank's GSR and its support-driven IDRs if that
were to indicate a greater ability to support BOB, with no less
propensity to support.
BOB's Short-Term IDR would be upgraded if its Long-Term IDR is
upgraded.
VR
An upgrade of BOB's VR appears unlikely in the near term as it
would require an improvement in capitalisation such that its CET1
ratio will be sustained above 10%, in conjunction with a material
reduction in risk appetite and greater transparency in its
financial statements - particularly around risks relating to
shadow-banking activity, affecting its assessment of
asset-quality.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
BOB's IDRs (xgs) are driven by its VR. Fitch has affirmed the
Long-Term IDR (xgs) at 'BB-(xgs)' and the Short-Term IDR (xgs) at
'B(xgs)'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The Short-Term IDR (xgs) could be downgraded if the VR
is downgraded below 'b-'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The Long-Term IDR (xgs) could be upgraded if the VR is upgraded.
The Short-Term IDR (xgs) could be upgraded if the VR is upgraded
above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score due to the following adjustment reason: sovereign
rating (positive).
The business profile score of 'bb' has been assigned below the
'bbb' category implied score due to the following adjustment
reasons: management and governance (negative) and business model
(negative).
The asset quality score of 'bb-' has been assigned below the 'bbb'
category implied score due to the following adjustment reasons:
non-loan exposure (negative) and underwriting standards and growth
(negative).
The earnings and profitability score of 'b+' has been assigned
below the 'bb' category implied score due to the following
adjustment reason: risk-weight calculations (negative).
The capitalisation and leverage score of 'b+' has been assigned
below the 'bb' category implied score due to the following
adjustment reason: leverage and risk-weight calculation
(negative).
The funding and liquidity score of 'bb-' has been assigned below
the 'bbb' category implied score due to the following adjustment
reason: non-deposit funding (negative) and deposit structure
(negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
BOB's IDRs are linked to China's sovereign ratings.
ESG CONSIDERATIONS
BOB has an ESG Relevance Score of '4' for Financial Transparency as
there are still structural issues around financial transparency and
disclosure. These are not captured in headline performance metrics
in China and affect its assessment of the OE and the financial
profile. BOB, like other mid-tier banks, is more exposed to this
risk relative to state banks, due to its larger exposure to WMPs
and entrusted investments stemming from the use of
off-balance-sheet transactions. This has a negative impact on the
credit profile, and is relevant to the ratings in conjunction with
other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Bank of Beijing
Co., Ltd. LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
Viability bb- Affirmed bb-
Government Support bb+ Affirmed bb+
LT IDR (xgs) BB-(xgs)Affirmed BB-(xgs)
ST IDR (xgs) B(xgs) Affirmed B(xgs)
CHINA GUANGFA: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed China Guangfa Bank Co., Ltd.'s (CGB)
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB+',
Government Support Rating (GSR) at 'bb+', Short-Term IDR at 'B' and
Viability Rating at 'b+'. The Outlook on the Long-Term IDR is
Stable. The assigned VR is in line with the implied VR, and does
not drive CGB's IDRs.
KEY RATING DRIVERS
Government Support Prospects Unchanged: CGB's Long-Term IDR
reflects Fitch's assessment of a moderate likelihood of government
support in the event of stress, as expressed by the GSR. Its view
takes into consideration the bank's limited market share nationally
and modest domestic systemic importance. CGB's 'B' Short-Term IDR
is mapped to its Long-Term IDR.
Differentiation in D-SIB Status: The Chinese authorities designated
CGB a domestic systemically important bank (D-SIB) in 2021, which
underpins its view on the government's propensity to support CGB.
However, Fitch views this propensity as lower than for peers with
higher systemic importance or closer government linkages. This is
because the government is likely to prioritise support for larger
D-SIBs should China's banking system experience systemic stress.
Stable OE Outlook Despite Slower Growth: Fitch forecasts China GDP
growth to moderate to 4.5% in 2024 and 2025, from 5.2% in 2023, due
to persistent property-sector weakness and subdued household
consumption, though partly mitigated by fiscal stimulus. This will
limit banking-sector performance in 2024, but Fitch does not expect
the authorities to introduce large-scale credit stimulus, nor do
Fitch expects a material reversal in regulatory reforms already
implemented, which have improved transparency and reduced shadow
banking over the past few years.
The operating environment (OE) score of 'bbb-'/stable is above the
'bb' category implied score, as Fitch believes China's solid
external finances as well as its large and diversified economy -
incorporated in China's 'A+' sovereign rating - will provide
greater financial and economic stability than the implied OE score
indicates.
Limited Retail Franchise: CGB's 'bb' business profile score is
below the 'bbb' implied category score, given its views on its
management and government limitations, and its exposure to
shadow-banking activity. Management and governance limitations are
not uncommon in China due to pressure from the authorities to
support segments of borrowers in challenging times. High exposure
to riskier types of unsecured consumer lending also renders CGB's
business model susceptible to market volatility and economic
challenges.
Risk Appetite Above Peers: CGB's overall risk profile is
constrained by its higher exposure to riskier types of unsecured
loans compared with other mid-tier peers. For example, CGB has a
higher exposure to credit-card lending (20% of loans at its
end-2023) relative to other Chinese mid-tier banks (average 10.6%
for mid-tier banks). Regulatory tightening could also expose
greater vulnerabilities at CGB - given its higher risk exposure
relative to peers, in addition to its limited capital and
provisioning buffers.
High Exposure to Riskier Lending: CGB's asset quality score of 'b+'
has been assigned below the implied 'bbb' category to reflects its
high risk exposure and growth appetite. Its reported non-performing
loan (NPL) ratio for property-development loans stood at 6.2% (6.6%
at end-2022) due to lingering weakness in the domestic property
sector. That said, CGB's impaired-loan ratio declined to 1.8% from
2.1% in 2021, aided by its continued NPL resolution; its loan
write-off accounted for 1.6% of total loans.
Profitability Lags Peers: Its assessment of CGB's earnings and
profitability score takes into consideration its profitability
pressure given its relatively weaker loan-pricing power and high
operating costs. CGB's net interest margin declined by 21bp to 1.6%
in 2023 on yield compression, and was among the lowest among
mid-tier bank peers. Its earnings and profitability score of 'b' is
below the 'bb' category implied score, to reflect potential
risk-weighted asset (RWA) understatement due to its high non-loan
exposure.
Limited Capital Buffers: CGB, as a D-SIB, is subject to a minimum
common equity Tier 1 (CET1) requirement of 7.75%. Its CET1 ratio
rose to 9.1% by end-2023 from 8.8% at end-2022. Nonetheless, weak
profitability and higher non-loan exposure may continue to suppress
CGB's CET1 capital. The capitalisation and leverage score of 'b' is
below the 'bb' category implied score, to reflect understatement in
its risk-weight calculations due to its high non-loan exposures.
Modest Funding Profile: CGB's funding profile remains constrained
by its limited retail deposit franchise. Its funding and liquidity
score of 'bb-' is below the 'bbb' category implied score because of
its relatively greater reliance on non-deposit funding, similar to
most other Chinese banks, and modest retail deposit franchise
relative to higher-rated peers.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
IDRs and GSR
CGB's Long-Term IDR and GSR will come under pressure if Fitch
perceives that the central government's propensity to provide
timely extraordinary support to the bank has diminished. A lower
propensity to support may also be reflected through an enhanced
resolution framework and strong intention by the authorities to
permit losses on senior debt obligations as a means of resolving
banks, though Fitch does not expect either scenario to occur in the
near term.
The state's propensity to support the bank may also decline if
there were a significant reduction in state ownership or indirect
influence over CGB through its largest shareholder, China Life
Insurance Company Limited (A/Stable), in conjunction with a
significant decline in the bank's systemic importance, possibly
reflected in it no longer being classified as a D-SIB.
The Short-Term IDR will not be downgraded unless the Long-Term IDR
is downgraded to 'CCC+' or below, which Fitch views as highly
unlikely in the short- to medium-term.
VR
The VR could be downgraded if the OE score is lowered or if Fitch
assesses the bank to have increased its risk appetite
significantly, especially in credit-card lending, or if it
increases exposure aggressively to entrusted investments or
wealth-management products (WMPs), eroding its modest capital
buffer. This would be particularly the case if risks around the
transparency of its exposures, including off-balance sheet and
non-loan exposures, were not addressed.
A sustained deterioration in financial metrics could lead to a VR
downgrade, including a combination of the following reported core
metrics:
- The four-year average of the impaired loan/gross loan ratio
increasing to and remaining at around 8%, although Fitch's
assessment of asset quality will also take into consideration other
indicators, such as 'special-mention' loans, loan-loss
provisioning, and whether (and to what extent) Fitch believes
reported metrics understate any deterioration in asset quality;
and
- The CET1 ratio falling below 8.0% without a credible path to
return to existing levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
IDRs and SSR
An upgrade of the sovereign ratings could lead to positive rating
action on the GSR and the support-driven IDRs if that were to
indicate greater ability to support the bank with no less
propensity to provide support.
The Short-Term IDR will be upgraded if CGB's Long-Term IDR is
upgraded.
VR
An improvement in CGB's capitalisation such that its CET1 ratio is
maintained at around 10% in conjunction with a further reduction in
risk appetite and greater transparency in asset-quality metrics
would be positive for its VR assessment.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
CGB's IDRs (xgs) are driven by its VR. The Long-Term IDR (xgs) and
the Short-Term IDR (xgs) have been assigned at 'B+ (xgs)' and 'B
(xgs)' respectively.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
The bank's Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The bank's Short-Term IDR (xgs) could be downgraded if
the VR is downgraded below 'b-'.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
The bank's Long-Term IDR (xgs) could be upgraded if the VR is
upgraded. The bank's Short-Term IDR (xgs) could be upgraded if the
VR is upgraded above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score for the following adjustment reason: sovereign rating
(positive).
The business profile score of 'bb' has been assigned below the
'bbb' category implied score for the following adjustment reason:
management and governance (negative) and business model
(negative).
The asset-quality score of 'b+' has been assigned below the 'bbb'
category implied score for the following adjustment reason:
non-loan exposure (negative) and underwriting standards and growth
(negative).
The earnings and profitability score of 'b' has been assigned below
the 'bb' category implied score for the following adjustment
reason: risk-weight calculation (negative).
The capitalisation and leverage score of 'b' has been assigned
below the 'bb' category implied score for the following adjustment
reason: leverage and risk-weight calculation (negative).
The funding and liquidity score of 'bb-' has been assigned below
the 'bbb' category implied score for the following adjustment
reason: non-deposit funding (negative) and deposit structure
(negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
CGB's IDRs are linked to China's sovereign ratings.
ESG CONSIDERATIONS
CGB has an ESG Relevance Score of '4' for Financial Transparency
due to structural issues around financial transparency and
disclosure. These are not captured in headline performance metrics
in China and affect its assessment of the OE and the bank's
financial profile. CGB, like other mid-tier banks, is more exposed
to this risk relative to state banks because of its larger exposure
to WMPs and entrusted investments. This stems from the use of
off-balance-sheet transactions. This has a negative impact on the
credit profile, and is relevant to the ratings in conjunction with
other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
China Guangfa
Bank Co., Ltd. LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
Viability b+ Affirmed b+
Government Support bb+ Affirmed bb+
LT IDR (xgs) B+(xgs)Affirmed B+(xgs)
ST IDR (xgs) B(xgs) Affirmed B(xgs)
CHINA MINSHENG: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed China Minsheng Banking Corp., Ltd.'s
(CMBC) Long-Term Foreign-Currency Issuer Default Rating (IDR) at
'BB+'. The Outlook is Stable. Fitch has also affirmed the bank's
Government Support Rating (GSR) at 'bb+', Short-Term IDR at 'B' and
Viability Rating (VR) at 'b+'. The assigned VR is in line with the
implied VR, but does not drive the IDRs.
KEY RATING DRIVERS
Government Support-Driven IDR: CMBC's Long-Term IDR is driven by
Fitch's assessment of a 'Moderate' likelihood of government support
in the event of stress. This takes into consideration the bank's
limited market share nationally, especially in terms of retail
deposits, lack of parental support, as well as limited regional
significance and government linkages. However, CMBC is one of the
largest of the mid-tier banks rated by Fitch. CMBC's 'B' Short-Term
IDR is mapped to its Long-Term IDR.
Differentiation in D-SIB Status: China's regulators designated CMBC
a domestic systemically important bank (D-SIB) in October 2021,
which underpins its view on the government's propensity to support
CMBC. However, Fitch views this propensity to support as lower than
for peers with higher systemic importance or closer government
linkages. This is because the government is likely to prioritise
support for larger D-SIBs should China's banking system experience
systemic stress.
Stable OE Despite Slower Growth: Fitch forecasts China GDP growth
to slow to 4.5% in 2024 and 2025, from 5.2% in 2023, due to
persistent property sector weakness and subdued household
consumption, albeit mitigated by fiscal stimulus. The operating
environment (OE) score is stable. Still, slower growth will limit
banking sector performance in 2024, but Fitch does not expect the
authorities to introduce large-scale credit stimulus, nor do Fitch
expects a material reversal in regulatory reforms already
implemented. The reforms have improved transparency and reduced
shadow banking over the past few years.
The OE score of 'bbb-' is above the 'bb' category implied score, as
Fitch believes China's solid external finances as well as large and
diversified economy, incorporated in the China's 'A+' sovereign
rating, will provide greater financial and economic stability than
the implied OE score indicates.
Modest Franchise: Fitch expects CMBC's business profile to remain
constrained by its modest deposit franchise and lack of parental
support. CMBC's business profile score is below the 'a' implied
category score to reflect management and governance limitations and
exposure to shadow-banking activities. Management and governance
limitations are common in China due to the frequent management
rotations and regulatory directives. Exposure to riskier sectors
and shadow-banking activity also renders CMBC's business model more
susceptible than that of state banks to regulatory changes.
High Risk Appetite: CMBC's risk profile takes into consideration
its larger exposure to riskier types of loans than higher rated
mid-tier banks, such as loans to micro and small enterprises (15%
of its loans at end-2023) and property development (8%). The risk
profile also reflects the bank's high non-loan credit and
shadow-banking activities relative to its capital buffers.
Modest Weakening in Asset Quality: CMBC's asset quality score takes
into consideration the large exposure to riskier types of loans as
well as low loan-loss allowances. The asset quality score remains
below the 'bbb' category implied score to reflect its large
non-loan and riskier loan exposures and its perception of its
weaker underwriting standards relative to state banks and large
mid-tier banks.
Modest Profitability: Fitch expects CMBC to remain more vulnerable
to asset quality volatility and profitability pressure than
higher-rated peers, given its larger exposure to riskier loan
types, lower risk buffers and weaker funding profile. Its earnings
and profitability score of 'b' is below the 'bb' category implied
score to reflect its higher non-loan exposures relative to state
banks and large mid-tier banks.
Limited Capital Buffers: CMBC's common equity Tier 1 (CET1) ratio
remained modest at 9.4% at end-1Q24. Fitch expects the bank's CET1
ratio to remain lower than that of higher-rated banks due to its
more modest profitability. As such, its capitalisation and leverage
score of 'b' is unchanged, and below the 'bb' category implied
score to also reflect its high non-loan exposure relative to state
banks and large mid-tier banks, which is not adequately captured in
the risk-weighted asset calculations.
Modest Funding Profile: CMBC's funding and liquidity score 'b+' is
below the 'bbb' category implied score because of the bank's higher
reliance on non-deposit funding (similar to most other Chinese
banks) and modest retail deposit franchise relative to higher-rated
peers. This will make it more vulnerable to market volatility.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
CMBC's Long-Term IDR and GSR will come under pressure if Fitch
perceives that the central government's propensity to provide
timely extraordinary support has diminished significantly. Lower
propensity to support may be demonstrated in the form of an
enhanced resolution framework or materially weaker government
support ability.
The state's propensity to support CMBC may also decline if there
were a significant decline in the bank's systemic importance,
possibly reflected in the bank no longer being classified as a
D-SIB.
The Short-Term IDR will not be downgraded unless the Long-Term IDR
is downgraded to or below 'CCC+', which Fitch views as highly
unlikely in the short to medium term.
The VR could be downgraded if the OE score is downgraded or if
Fitch assesses the bank to have materially increased its risk
appetite. This may be through a large increase in micro and small
enterprise loans and credit-card receivables, or if it aggressively
increases its exposure to entrusted investments or
wealth-management products, particularly if it does not address
risks around transparency of exposures, and erodes its modest
capital buffer.
A sustained deterioration in financial metrics could also lead to a
VR downgrade, including a combination of the following reported
core metrics:
- the four-year average impaired loan/gross loan ratio increasing
to and remaining at around 8% (2020-2023 average: 1.9%), although
its assessment of asset quality will also consider other
indicators, such as 'special-mention' loans, loan loss
provisioning, and whether and to what extent Fitch believes
reported metrics understate any deterioration in asset quality;
and
- the CET1 ratio falling below 8% without a credible path to return
to existing levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of China's sovereign ratings could lead to positive
rating action on CMBC's GSR and support-driven IDRs, if that were
to indicate greater ability to support the banks with no less
propensity to provide support.
The bank's Short-Term IDRs will be upgraded if its Long-Term IDR is
upgraded.
An improvement in CMBC's capitalisation, such that its CET1 ratio
will be sustained around 10%, in conjunction with a further
reduction in risk appetite, and greater transparency in its
financial statements - particularly around risks relating to
shadow-banking activity (eg its assessment of asset quality
metrics) - could lead to positive rating action on its VR.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
CMBC's IDRs (xgs) are driven by its VR. The Long-Term IDR (xgs) and
Short-Term IDR (xgs) have been affirmed at 'B+ (xgs)' and
'B(xgs)'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The bank's Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The bank's Short-Term IDR (xgs) could be downgraded if
the VR is downgraded below 'b-'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The bank's Long-Term IDR (xgs) could be upgraded if the VR is
upgraded. The bank's Short-Term IDR (xgs) could be upgraded if the
VR is upgraded above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score for the following adjustment reason: sovereign rating
(positive).
The business profile score of 'bb+' has been assigned below the 'a'
category implied score for the following adjustment reasons:
management and governance (negative) and business model
(negative).
The asset quality score of 'b+' has been assigned below the 'bbb'
category implied score for the following adjustment reasons:
non-loan exposure (negative) and underwriting standards and growth
(negative).
The earnings and profitability score of 'b' has been assigned below
the 'bb' category implied score for the following adjustment
reason: risk-weight calculation (negative).
The capitalisation and leverage score of 'b' has been assigned
below the 'bb' category implied score for the following adjustment
reason: leverage and risk-weight calculation (negative).
The funding and liquidity score of 'b+' has been assigned below the
'bbb' category implied score for the following adjustment reasons:
non-deposit funding (negative) and deposit structure (negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
CMBC's IDRs are directly linked to China's sovereign ratings.
ESG CONSIDERATIONS
CMBC has ESG Relevance Score of '4' for Financial Transparency
risk. There are structural issues around financial transparency and
disclosure that are not captured in headline performance metrics in
China and affect its operating environment assessment. This has a
negative effect on the bank's credit profile and is relevant to the
rating in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
China Minsheng
Banking Corp., Ltd. LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
Viability b+ Affirmed b+
Government Support bb+ Affirmed bb+
LT IDR (xgs) B+(xgs)Affirmed B+(xgs)
ST IDR (xgs) B(xgs) Affirmed B(xgs)
CHINA VANKE: S&P Affirms 'BB+' ICR on Active Liquidity Management
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' long-term issuer credit
rating on China Vanke Co. Ltd. and its 'BB' long-term issuer credit
rating on subsidiary Vanke Real Estate (Hong Kong) Co. Ltd. (Vanke
HK). At the same time, S&P affirmed its 'BB' long-term issue
ratings on Vanke HK's senior unsecured notes.
The negative outlook on China Vanke reflects S&P's expectation that
the company's contracted sales could decline further over the next
12 months and its financial position could weaken if it fails to
execute asset disposals amid China's prolonged property downturn.
China Vanke is actively managing liquidity and transforming its
financing model. The company will likely continue to obtain more
secured bank loans to replace maturing unsecured borrowings for the
rest of 2024 and in 2025. S&P expects it to maintain solid
relationships with its core banks.
S&P said, "We estimate China Vanke has obtained about Chinese
renminbi (RMB) 39 billion of new borrowings from different banks
since April 2024. The company pledged its property development,
commercial property, and other assets. The amount compares with our
estimate of RMB79.1 billion for short-term debt as of end-March
2024."
According to news reports, China Vanke obtained a syndicated bank
loan of RMB20 billion in May. This was the largest syndicated loan
that domestic banks granted to a Chinese developer in recent years.
The loan is secured by China Vanke's shares in subsidiary Vanke
Logistics Development Co. Ltd. S&P estimates the group will use
about half of the loan for refinancing and the rest to improve
liquidity.
China Vanke still has adequate unpledged commercial properties. S&P
estimates the company has adequate unencumbered investment
properties with a fair value of about RMB100 billion. It could tap
these assets to secure more new loans from banks.
Other options that China Vanke could explore include commercial
mortgage-backed securities (CMBS) and REITs for retail properties,
logistics parks, and rental housing. For example, the company
issued a CMBS of RMB1.435 billion in May 2024. Its associate
company SCPG Holdings Co. Ltd. also raised RMB3.26 billion by
launching a commercial REIT.
Noncore asset disposals are on track to provide liquidity buffer
and aid deleveraging. China Vanke continues to dispose of noncore
assets, including urban renewal projects, offices, retail
properties, logistics parks, and hotels. For example, the company
has divested a mixed-use project in Shenzhen to its largest
shareholder Shenzhen Metro Group Co. Ltd. and another state-owned
enterprise in Shenzhen for RMB2.235 billion. In S&P's view, the
company could also dispose of some equity investments for more
liquidity over the next one to two years.
S&P estimates China Vanke disposed of RMB10.4 billion of noncore
assets in the first five months of 2024. This represents 52% of our
RMB20 billion estimate for annual proceeds from asset disposals
over 2024-2025.
China Vanke has made known its intention to deleverage. The company
aims to reduce interest-bearing debt by RMB100 billion in
2024-2025. It also said it wants to gradually exit noncore
businesses and concentrate on three main businesses: property
development, property management, and rental housing.
S&P said, "We expect positive operating cash flow in 2024.Our base
case continues to assume contracted sales will drop to RMB270
billion–RMB280 billion on a total basis (consolidated and
unconsolidated) in 2024-2026, from RMB376 billion in 2023. We
believe a relaxation of demand-side policies for the property
market on May 17, 2024, will help to stabilize national sales. This
could reduce downside risk for our base-case sales forecasts."
China Vanke recorded contracted sales of RMB102.2 billion in the
first five months of 2024, down 39.1% from the same period in 2023.
This was slightly better than the 44.3% average decline for the
contracted sales of the top 100 developers in China.
S&P said, "By our estimates, average monthly cash use for operating
activities by China Vanke could be about RMB17 billion on a total
basis in 2024, excluding land acquisitions. This is below our
estimate of about RMB23 billion for average monthly contracted
sales on a total basis in 2024. The company could therefore
generate positive operating cash flow in 2024, in our view.
"Our rating on Vanke HK will move in tandem with that on its
parent. Vanke HK is a wholly owned offshore subsidiary of China
Vanke. The company is China Vanke's key offshore financing platform
and issuer of all China Vanke's offshore bonds. It has a keepwell
agreement with China Vanke that provides non-binding equity
support.
"We rate Vanke HK one notch below China Vanke because we view Vanke
HK as a highly strategic subsidiary of the parent. This is given
the subsidiary's role as the sole offshore financing platform. The
rating and outlook on Vanke HK will move in tandem with those on
the parent.
"The negative outlook on China Vanke reflects our view that its
contracted sales could weaken further over the next two years amid
a prolonged market downturn. Leverage could also worsen if the
company fails to execute its asset disposal plans.
"The rating and outlook on Vanke HK reflect those on China Vanke.
In our view, Vanke HK will remain a highly strategic subsidiary of
China Vanke over the next 12-24 months."
Downside scenario
S&P may lower the rating on China Vanke if:
-- The company's performance of contracted sales is below the
industry average, cash collection is weaker than S&P expects, and
access to financing weakens, resulting in a weaker liquidity
position; or
-- The company fails to control debt through measures such as
asset disposals or its revenue recognition and profitability are
weaker than S&P expects, leading to a substantial increase in
leverage with EBITDA interest coverage falling below 3x without
signs of improvement.
S&P could lower the rating on Vanke HK if we downgrade China Vanke.
In addition, it may lower the rating on Vanke HK if:
-- S&P believes the company's importance to China Vanke has
weakened; or
-- China Vanke's control over, and supervision of, Vanke HK
weaken.
Upside scenario
S&P said, "We may revise the outlook to stable if China Vanke's
contracted sales stabilize and the company continues to raise
sufficient funds from commercial property loans from banks while
changing its financing model. At the same time, we would expect the
company to execute its asset disposal plans to manage its liquidity
and leverage.
"We could revise the outlook on Vanke HK to stable if we take the
same action on China Vanke.
"Environmental factors are a moderately negative consideration in
our credit rating analysis of China Vanke." The company's
environmental risks in property development are comparable to those
of its peer property developers. The company has a stable and
experienced management team. It also has a long record of prudent
financial management and transparent communication while achieving
its strategic and operational goals.
HUA XIA BANK: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Hua Xia Bank Co., Limited's (HXB)
Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB+',
Short-Term IDR at 'B', Government Support Rating (GSR) at 'bb+' and
Viability Rating (VR) at 'b+'. The Outlook on the Long-Term IDR is
Stable. The assigned VR is in line with the implied VR but does not
drive its IDRs.
KEY RATING DRIVERS
Government Support-Driven IDR: HXB's Long-Term IDR is driven by
Fitch's assessment of a 'Moderate' likelihood of government support
in the event of stress. This considers the bank's limited market
share and regional significance. There is no direct
central-government ownership or history of government support for
HXB. The Short-Term IDR is mapped to the bank's Long-Term IDR.
China's regulators designated HXB a domestic systemically important
bank (D-SIB) in October 2021, which underpins its view on the
government's propensity to support HXB. However, Fitch views this
propensity as lower than for peers with higher systemic importance
or closer government linkages. This is because the government is
likely to prioritise support for larger D-SIBs should China's
banking system experience systemic stress.
Stable OE Outlook despite Slower Growth: Fitch forecasts China GDP
growth to moderate to 4.5% in 2024 and 2025, from 5.2% in 2023, due
to persistent property sector weakness and subdued household
consumption, though this will be mitigated by fiscal stimulus. The
slower GDP growth will limit banking sector performance in 2024,
but Fitch does not expect the authorities to introduce large-scale
credit stimulus, nor do a material reversal in regulatory reforms
already implemented, which have improved transparency and reduced
shadow banking over the past few years.
The operating environment (OE) score of 'bbb-'/stable is above the
'bb' category implied score, as Fitch believes China's solid
external finances as well as large and diversified economy,
incorporated in the China's 'A+' sovereign rating, will provide
greater financial and economic stability than the implied OE score
indicates.
Modest Retail Franchise: Fitch expects corporate banking to remain
the largest contributor to HXB's total loans and deposits. Its
business profile score of 'bb' is below the 'bbb' implied category
score to reflect management and governance limitations and exposure
to shadow-banking activities. Management and governance limitations
are common in China due to due to the frequent management rotations
and regulatory directives. Exposure to shadow-banking activity also
renders HXB's business model more susceptible than that of state
banks to regulatory changes.
High Risk Appetite: HXB's risk profile takes into consideration its
higher overall credit exposure and larger exposure to non-loan
credit than state banks and larger mid-tier banks. Fitch generally
regards a higher exposure to non-loan credit as indicative of a
higher risk appetite because of the weaker transparency and
disclosure around these activities, which could introduce more
risks of delayed asset impairment.
Modest Weakening in Asset Quality: HXB's asset quality score
considers its limited risk buffers relative to its high credit
exposure as well as modest loan-loss allowances. The asset quality
score of 'b+' has been assigned below the 'bbb' category implied
score to reflect HXB's large non-loan exposure and high growth
appetite.
Modest Profitability: The earnings and profitability score of 'b'
has been assigned below the 'bb' category implied score to reflect
the potential understatement of risk-weighted assets (RWAs) due to
HXB's high non-loan exposure. Fitch expects its earnings and
profitability will remain constrained by its modest funding profile
and the high operating cost associated with its limited scale.
Limited Capital Buffer: The capitalisation and leverage score of
'b' has been assigned below the 'bb' category implied score to
reflect the bank's high non-loan exposure. Fitch expects HXB's high
risk appetite and modest profitability will continue to pressure
its core capitalisation. Its CET1 ratio remained stable at 9.4% at
end-1Q24, against a minimum requirement of 7.75%.
Modest Funding Profile: HXB's funding profile is still constrained
by its higher loan/deposit ratio as a result of modest retail
deposit franchise relative to higher rated peers. HXB's
loan/deposit ratio (LDR) of 110% at end-1Q24 was the highest among
Fitch-rated Chinese banks. The funding and liquidity score of 'b+'
has been assigned below the 'bbb' category implied score because of
the bank's reliance on non-deposit funding and modest retail
deposit franchise relative to higher rated peers.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
IDRS and GSR
The Long-Term IDR and GSR of HXB will come under pressure if Fitch
perceives that the central government's propensity to provide
timely extraordinary support has diminished significantly. Lower
propensity may be demonstrated in the form of an enhanced
resolution framework or materially weaker government support
ability.
The state's propensity to support the bank may also decline if
there were a significant decline in the bank's systemic importance,
possibly reflected in it no longer being classified as a D-SIB.
The Short-Term IDR on HXB will not be downgraded unless the
Long-Term IDR is downgraded to or below 'CCC+', which Fitch views
as highly unlikely in the short to medium term.
VR
The VR could be downgraded if the OE score is downgraded or if
Fitch assesses the bank to have materially increased its risk
appetite, especially in manufacturing, wholesale and retail trade
loans, as well as rising exposure to shadow-banking activity, which
would be a further drag on asset quality and capital buffers.
Failure to address risks around the transparency of the off-balance
sheet and non-loan exposures would add to this pressure.
A sustained deterioration in the bank's financial metrics could
also lead to a VR downgrade, including a combination of the
following reported core metrics:
- The four-year average impaired loan/gross loan ratio increasing
to and remaining at around 8.0% (2020-2023 average: 1.8%). Its
assessment of asset quality also takes into consideration other
indicators, such as "special-mention" loans, loan-loss provisioning
and whether (and to what extent) Fitch believes reported metrics
understate any deterioration in asset quality; and
- The CET1 ratio falling to below 8.0% (1Q24: 9.4%) without a
credible path to return to existing levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
IDRS and GSR
An upgrade of China's sovereign ratings could lead to positive
rating action on the GSRs and support-driven IDRs of HXB, if that
were to indicate the sovereign's greater ability to support the
banks with no less propensity to provide support.
The Short-Term IDR on HXB will be upgraded if its Long-Term IDR is
upgraded.
VR
An improvement in HXB's capitalisation such that its CET1 ratio is
sustained at around 10% in conjunction with a further reduction in
risk appetite and greater transparency in its financial statements
- particularly on risks from shadow-banking activity, including its
assessment of its asset-quality metrics - would be positive for its
VR assessment.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
HXB's IDRs (xgs) are driven by its VR. The Long-Term IDR (xgs) and
Short-Term IDR (xgs) have been affirmed at 'B+ (xgs)' and
'B(xgs)'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The bank's Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The bank's Short-Term IDR (xgs) could be downgraded if
the VR is downgraded below 'b-'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The bank's Long-Term IDR (xgs) could be upgraded if the VR is
upgraded. The bank's Short-Term IDR (xgs) could be upgraded if the
VR is upgraded above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score for the following adjustment reason: sovereign rating
(positive).
The business profile score of 'bb' has been assigned below the
'bbb' category implied score for the following adjustment reasons:
management and governance (negative) and business model
(negative).
The asset quality score of 'b+' has been assigned below the 'bbb'
category implied score for the following adjustment reasons:
non-loan exposure (negative) and underwriting standard and growth
(negative).
The earnings and profitability score of 'b' has been assigned below
the 'bb' category implied score for the following adjustment
reason: risk-weight calculation (negative).
The capitalisation and leverage score of 'b' has been assigned
below the 'bb' category implied score for the following adjustment
reason: leverage and risk-weight calculation (negative).
The funding and liquidity score of 'b+' has been assigned below the
'bbb' category implied score for the following adjustment reasons:
non-deposit funding (negative) and deposit structure (negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
HXB's IDRs are directly linked to China's sovereign ratings.
ESG CONSIDERATIONS
HXB has an ESG Relevance Score of '4' for Financial Transparency
due to structural issues around financial transparency and
disclosure. These are not captured in headline performance metrics
in China and affect its operating environment and financial profile
assessments. The bank is more exposed to such risks relative to the
state banks due to a greater exposure to wealth management products
and entrusted investments, stemming from the use of
off-balance-sheet transactions. This has a negative impact on its
credit profile, and is relevant to the ratings in conjunction with
other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Hua Xia Bank
Co., Limited LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
Viability b+ Affirmed b+
Government Support bb+ Affirmed bb+
LT IDR (xgs) B+(xgs)Affirmed B+(xgs)
ST IDR (xgs) B(xgs) Affirmed B(xgs)
PING AN BANK: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Ping An Bank Co., Ltd.'s (PAB) Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB+', Government
Support Rating (GSR) at 'bb+', Short-Term IDR at 'B' and Viability
Rating (VR) at 'b+'. The Outlook is Stable. The assigned VR is in
line with the implied VR but does not drive its IDRs.
KEY RATING DRIVERS
Government Support-Driven IDR: PAB's Long-Term IDR is driven by
Fitch's assessment of a moderate probability of government support,
as expressed by the GSR of 'bb+' which takes into consideration the
bank's size and modest domestic systemic importance. PAB has no
direct state ownership nor history of direct government support.
The 'B' Short-Term IDR is mapped to its Long-Term IDR.
Support Prospects Unchanged: Fitch revised the Outlook on China's
A+ rating to Negative from Stable on 9 April 2024. However, even in
the event of a one-notch downgrade of China's sovereign rating,
Fitch does not believe the ability and propensity to support PAB
would be affected significantly, as its GSR is multiple notches
lower than China's sovereign rating.
Differentiation in D-SIB Status: China's regulators designated PAB
a domestic systemically important bank (D-SIB) in October 2021,
which underpins its view of the government's propensity to support
PAB. However, Fitch views this propensity as lower than for peers
with higher systemic importance or closer government linkages. This
is because the government is likely to prioritise support for
larger D-SIBs in the event China's banking system experiences
systemic stress.
Stable OE Outlook Despite Slower Growth: Fitch forecasts China GDP
growth to moderate to 4.5% in 2024 and 2025, from 5.2% in 2023, due
to persistent property-sector weakness and subdued household
consumption, though partly mitigated by fiscal stimulus. This will
limit banking-sector performance in 2024, but Fitch does not expect
the authorities to introduce large-scale credit stimulus, nor do
Fitch expects a material reversal in regulatory reforms already
implemented, which have improved transparency and reduced shadow
banking over the past few years.
The operating environment (OE) score of 'bbb-'/stable is above the
'bb' category implied score, as Fitch believes China's solid
external finances as well as its large and diversified economy -
incorporated in China's 'A+' sovereign rating - will provide
greater financial and economic stability than the implied OE score
indicates.
Large WMPs and Consumer Loans: PAB's business profile score of
'bb+' is lower than the 'a' implied category score, reflecting its
issues over management and governance. Such issues are not uncommon
in China due to pressure from the authorities to support certain
borrower segments during challenging times. It also reflects its
large exposure to shadow-banking activity and unsecured consumer
lending.
PAB's off-balance-sheet wealth-management products (WMPs) increased
to around 29% of deposits by end-2023 from 26% at end-2022. Its
entrusted investments, at around 5% of total assets, were similar
to the mid-tier average. This increases volatility in its business
model and raises challenges around the bank's execution
capabilities.
Unsecured Lending Weighs on Risk Profile: Its assessment of PAB's
risk profile score of 'b+' reflects its larger focus on unsecured
consumer lending (mainly credit-card receivables, consumer loans
and auto lending). This constrains its assessment of its risk
profile, given the inherently higher default likelihood for
unsecured loans.
Continued NPL Resolution: PAB's reported impaired-loan ratio
remained stable at 1.1% at end-1Q24, aided by its continued NPL
resolution; its loan write-off accounted around 2% of its total
loans in 2023. That said, PAB's 'b+' asset-quality score is below
the 'bbb' category implied score due to its large non-loan exposure
and unsecured consumer lending above that of its peers, which could
leave its asset quality more susceptible to deterioration in an
economic downturn.
NIM Pressure Offset by Lower Impairments: PAB's earnings and
profitability score of 'b+' is below the 'bb' category implied
score, to reflect understatement in its risk-weight calculations
due to its high non-loan exposures. The net interest margin (NIM)
narrowed to 2.4% in 2023 from 2.8% in 2022, though remained above
most mid-tier peers due to its unsecured consumer lending focus.
That said, Fitch expects the bank to report a largely stable
operating profit/risk-weighted asset ratio (1.4% in 2023) after
lowering its impairment charges.
Non-loan Exposure Constrains Capitalisation: PAB's capital and
leverage score of 'b' is below the 'bb' category implied score, and
reflects potential understatement of the bank's risk-weight
calculations from non-loan exposures. Its reported common equity
Tier 1 (CET1) ratio was around 9.6% at end-1Q24, on a par with the
mid-tier bank average. However, Fitch expects the bank's growth
appetite will continue to pressure its capitalisation.
Non-Deposit Funding: PAB's funding and liquidity score of 'bb-'is
still below the 'bbb' category implied score, given PAB's reliance
on non-deposit funding, similar to most other Chinese banks. Its
high off-balance-sheet exposure may understate its reported
loan/deposit ratio (LDR) and strain its on-balance-sheet funding,
despite a relatively stable Fitch-calculated LDR of 101% at
end-1Q24. Fitch expects the ratio to increase modestly in the next
few years.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
IDRs and GSR
The bank's Long-Term IDR and GSR will come under pressure if Fitch
perceives that the central government's propensity to provide
timely extraordinary support to the bank has diminished. A lower
propensity to support may also be reflected through an enhanced
resolution framework and strong intention by the authorities to
permit losses on senior debt obligations as a means of resolving
banks, though Fitch does not expect either scenario to occur in the
near term.
The state's propensity to support the bank may also decline if
there were a significant decline in the bank's systemic importance,
possibly reflected in it no longer being classified as a D-SIB.
PAB's Short-Term IDR will be downgraded if its Long-Term IDR is
downgraded to or below 'CCC+', which Fitch thinks is highly
unlikely in the short- to medium-term.
VR
PAB's VR could be downgraded if the OE score is downgraded or if
the bank resumes aggressive growth in its off-balance-sheet WMPs or
entrusted investments, or there is excessive growth in credit-card
receivables. This would be especially the case if accompanied by
lower underwriting standards or significant deterioration in
household affordability, particularly if the bank does not address
risks around transparency of exposures, including off-balance-sheet
and non-loan transactions. This could in turn lead to a sustained
deterioration in the bank's financial metrics, including a
combination of the following reported core metrics:
- The four-year average of the impaired loan/gross loan ratio
increasing to and sustained at around 8% (2020-2023 four-year
average of 1.2% on a reported basis), although Fitch's assessment
of asset quality will also take into consideration other
indicators, such as 'special-mention' loans, loan-loss
provisioning, and whether (and to what extent) Fitch believes
reported metrics understate any deterioration in asset quality;
and
- The CET1 ratio falling below 8% without a credible path to return
to existing levels.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
IDRs and GSR
An upgrade of China's sovereign ratings could lead to positive
rating action on the bank's GSR and its support-driven IDRs if that
were to indicate greater ability to support PAB, with no less
propensity to support.
PAB's Short-Term IDR would be upgraded if its Long-Term IDR is
upgraded.
VR
An improvement in PAB's capitalisation such that its CET1 ratio is
sustained at around 10% or above in conjunction with a further
reduction in risk appetite and greater transparency in
asset-quality metrics would be positive for its VR assessment.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
PAB's IDRs (xgs) are driven by its VR. The Long-Term IDR (xgs) and
the Short-Term IDR (xgs) have been assigned at 'B+(xgs)' and
'B(xgs)', respectively.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The bank's Long-Term IDR (xgs) could be downgraded if the VR is
downgraded. The Short-Term IDR (xgs) could be downgraded if the VR
is downgraded below 'b-'.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
The bank's Long-Term IDR (xgs) could be upgraded if the VR is
upgraded. The Short-Term IDR (xgs) could be upgraded if the VR is
upgraded above 'bb+'.
VR ADJUSTMENTS
The OE score of 'bbb-' has been assigned above the 'bb' category
implied score due to the following adjustment reason: sovereign
rating (positive).
The business profile score of 'bb+' has been assigned below the 'a'
category implied score due to the following adjustment reason:
management and governance (negative) and business model
(negative).
The asset quality score of 'b+' has been assigned below the 'bbb'
category implied score due to the following adjustment reason:
non-loan exposure (negative) and underwriting standards and growth
(negative).
The earnings and profitability score of 'b+' has been assigned
below the 'bb' category implied score due to the following
adjustment reason: risk-weight calculations (negative).
The capitalisation and leverage score of 'b' has been assigned
below the 'bb' category implied score due to the following
adjustment reason: leverage and risk-weight calculation
(negative).
The funding and liquidity score of 'bb-' has been assigned below
the 'bbb' category implied score due to the following adjustment
reason: non-deposit funding (negative) and deposit structure
(negative).
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
PAB's IDRs are linked to China sovereign ratings.
ESG CONSIDERATIONS
PAB has an ESG Relevance Score of '4' for Financial Transparency as
there are still structural issues around financial transparency and
disclosure. These are not captured in headline performance metrics
in China and affect its assessment of the OE and the financial
profile. PAB, like other mid-tier banks, is more exposed to this
risk relative to state banks, due to its larger exposure to WMPs
and entrusted investments stemming from the use of
off-balance-sheet transactions. This has a negative impact on the
credit profile, and is relevant to the ratings in conjunction with
other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Ping An Bank
Co., Ltd. LT IDR BB+ Affirmed BB+
ST IDR B Affirmed B
Viability b+ Affirmed b+
Government Support bb+ Affirmed bb+
LT IDR (xgs) B+(xgs)Affirmed B+(xgs)
ST IDR (xgs) B(xgs) Affirmed B(xgs)
SHANDONG AIRLINES: Small Shareholders Move to Oust Chairman
-----------------------------------------------------------
Yicai Global reports that more than 90 minor shareholders of
Shandong Airlines proposed a motion to depose its chairman for his
careless and irresponsible behavior that led the Chinese regional
carrier to be delisted.
Yicai relates that the request aims to dismiss Xu Chuanyu as
Shandong Airlines' board director, which would, in turn, relieve
him from the role of chairman, a minor shareholder who participated
in the motion told Yicai.
The minor shareholders who participated in the motion hold a total
of over 12 million shares in Shandong Airlines, accounting for over
3 percent of the Jinan-based company's total equity.
Besides removing Xu, the minor shareholders also put forward other
extraordinary motions, including buying back shares and naming a
representative of medium and small shareholders as a board
director, Yicai learned.
Shandong Airlines was delisted from the Chinese B-share market in
July last year because of insolvency, Yicai notes. When the firm
was delisted, its share price was HKD2.73 (35 US cents) apiece,
down over 91 percent from its record-high of HKD31.20 (USD4) in
June 2015.
According to Yicai, Shandong Airlines turned losses into profits
six months after delisting and achieved a net profit of CNY214
million (USD29.5 million) last year. Minor shareholders then
proposed that the company go public again, but the board of
directors rejected the proposal.
B-shares are Chinese yuan-denominated special shares subscribed to
and traded in foreign currencies issued by companies incorporated
and listed in the Chinese mainland and traded on the Shanghai Stock
Exchange and Shenzhen Stock Exchange, Yicai notes. They were
initially exclusive for offshore investors but were opened to
onshore investors in 2001.
Shandong Airlines owns 134 Boeing 737 aircraft and operates over
290 passenger and freight routes. Apart from domestic destinations,
it also flies to South Korea, Japan, Thailand, India and Cambodia.
=========
I N D I A
=========
AMARPARKASH RICE: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Amarparkash
Rice Exports Private Limited (AREPL) continue to be 'CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.5 CRISIL D (Issuer Not
Cooperating)
Term Loan 9.5 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with AREPL for
obtaining information through letter and email dated May 15, 2024
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 AREPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AREPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AREPL continues to be 'CRISIL D Issuer Not Cooperating'.
Punjab-based AREPL, incorporated in 2013, is promoted by Mr
Rupinder Pal and Mr Narinder Kumar.
AMBAY COKE: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Ambay Coke Industries Private Limited
13/2A Priya Nath Mullick Road, P.S-Bhawanipore,
Kolkata WB-700026 India
Insolvency Commencement Date: May 22, 2024
Estimated date of closure of
insolvency resolution process: November 18, 2024
Court: National Company Law Tribunal, Kolkata Bench
Insolvency
Professional: Avishek Gupta
CK-104, Sector 2, Salt Lake
Kolkata, West Bengal 700091
E-mail: avishek@optimusresolution.net
E-mail: cirp.acipl@gmail.com
Last date for
submission of claims: June 5, 2024
ANUPAM ELECTRICALS: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Anupam Electricals and Engineering Industries Private
Limited
15 Dadi Seth Agiary Lane,
4th floor, Kanchan Bhawan,
Kalbadevi Road, Mumbai 400002
Insolvency Commencement Date: May 14, 2024
Estimated date of closure of
insolvency resolution process: November 10, 2024
Court: National Company Law Tribunal, Mumbai Bench-VI
Insolvency
Professional: Anish Gupta
105, Lutos Business Park,
Ram Baug Lane, Off S V Road,
Malad (WEST), Mumbai-400064
E-mail: ipanishgupta@gmail.com
E-mail: cirp.anupamelectricals@gmail.com
Last date for
submission of claims: June 4, 2024
ARINITS SALES: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Arinits Sales
Private Limited (ASPL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 6 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 5 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 24 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 5 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with ASPL for
obtaining information through letter and email dated May 15, 2024
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 ASPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ASPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ASPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Set up as a partnership concern, Arinits Sales Corporation, in
1997, by Mr. Ashish Chopra and his wife Mrs. Anusha Chopra, ASPL
was reconstituted as a private limited company under the current
name in 2003. ASPL trades in chemicals such as phenol, PVC resins,
melamine, linear low-density polyethylene, and ethylene vinyl
acetate. Sales of phenol and PVC resins contribute about 75% to the
revenue.
AVALON RANGOLI: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Avalon Rangoli, Dharuhera, Rewari Haryana
(A Unit of M/S GRJ Distributors and Developers Private
Limited)
64, Scindia House, Connaught Place, New Delhi-110001
Insolvency Commencement Date: May 10, 2024
Estimated date of closure of
insolvency resolution process: November 12, 2024 (180 Days)
Court: National Company Law Tribunal, New Delhi Bench
Insolvency
Professional: Ranjan Chakraborti
1/22, Second Floor, Asaf Ali Road,
NeW Delhi -110002
E-mail: ranjanns@gmail.com
17D/522, Konark Vasundhara,
Ghaziabad (NCR), U.P.-201012
E-mail: cirp.grjdistributors@gmail.com
Representative of
creditors in a class: 1. Mr. Avind Mittal
2. Mr. Hans Raj Bhogra
3. Mr. Loveneet Handa
Last date for
submission of claims: May 30, 2024
BAJAJ BASMATI: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Bajaj Basmati
Private Limited (BBPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 38 CRISIL D (Issuer Not
Cooperating)
Term Loan 19 CRISIL D (Issuer Not
Cooperating)
Warehouse Financing 10 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with BBPL for
obtaining information through letter and email dated May 15, 2024
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 BBPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BBPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BBPL continues to be 'CRISIL D Issuer Not Cooperating'.
BBPL was incorporated in April 2010 by Mr. Krishan Bajaj and Mr.
Sahil Bajaj. It mills and processes paddy into rice, rice bran,
broken rice, and husk. Its two rice mills, in Jalalabad and Muktsar
(both in Punjab), have combined installed paddy milling capacity of
17 tonnes per hour.
BALA BALAJI: CRISIL Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Bala Balaji
Srinivasa Poultries (BBSP) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 0.20 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 1.03 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.50 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with BBSP for
obtaining information through letter and email dated May 15, 2024
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 BBSP, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on BBSP
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
BBSP continues to be 'CRISIL D Issuer Not Cooperating'.
Set-up in 1989 by Mr Gannamani Sree Ramarao, BBSP is engaged in
hatchery business and has capacity to breed 2 lakh layering birds.
DODHIA TECHNO: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Dodhia Techno
Engineering Private Limited (DTEPL) continue to be 'CRISIL D/CRISIL
D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.1 CRISIL D (Issuer Not
Cooperating)
Cash Credit 6 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 0.4 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 1 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with DTEPL for
obtaining information through letter and email dated May 15, 2024
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 DTEPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on DTEPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
DTEPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
DTEPL, established in 1996 by the Mumbai-based Dodhia family, is a
100-per-cent export-oriented unit. It undertakes turnkey projects
in Africa for various industries including plastics, food and
beverages, chemicals, packaging, and sugar. Mr. Bipin Dodhia
oversees the company's operations.
EXPOVAN: CRISIL Keeps D Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Expovan
continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Export Packing 6 CRISIL D (Issuer Not
Credit Cooperating)
Export Packing 35 CRISIL D (Issuer Not
Credit Cooperating)
Export Packing 30 CRISIL D (Issuer Not
Credit Cooperating)
Foreign Exchange 0.7 CRISIL D (Issuer Not
Forward Cooperating)
Proposed Long Term
Bank Loan Facility 1.8 CRISIL D (Issuer Not
Cooperating)
Working Capital 3 CRISIL D (Issuer Not
Term Loan Cooperating)
Working Capital 3.5 CRISIL D (Issuer Not
Term Loan Cooperating)
CRISIL Ratings has been consistently following up with Expovan for
obtaining information through letter and email dated May 15, 2024
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 Expovan , which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on
Expovan is consistent with 'Assessing Information Adequacy Risk'.
Based on the last available information, the ratings on bank
facilities of Expovan continues to be 'CRISIL D Issuer Not
Cooperating'.
Expovan was set up in 2015 by Mr R Mahendran as a partnership firm.
Expovan is a 100% export-oriented unit and has set up a 22,000
square feet factory in Pollachi, Tamil Nadu for processing and
exporting of natural Vanilla -- its beans, pods and powder.
FEST HOMES: CARE Keeps D Debt Rating in Not Cooperating Category
----------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Fest Homes
Developers Private Limited (FHDPL) continue to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 127.00 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 April 20, 2023,
placed the rating(s) of FHDPL under the ‘issuer non-cooperating'
category as FHDPL 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. FHDPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
March 5, 2024, March 15, 2024, March 25, 2024.
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).
Fest Homes Developers Private Limited was incorporated in April,
2016 and the company is into real estate development. It is a part
of the Lotus Group.
GAJANAN GANGAMAI: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Gajanan
Gangamai Industries LLP (GGIL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 25 CRISIL D (Issuer Not
Cooperating)
Cash Credit 40 CRISIL D (Issuer Not
Cooperating)
Cash Credit 9.4 CRISIL D (Issuer Not
Cooperating)
Cash Credit 40 CRISIL D (Issuer Not
Cooperating)
Cash Credit 10 CRISIL D (Issuer Not
Cooperating)
Term Loan 25.6 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with GGIL for
obtaining information through letter and email dated May 15, 2024
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 GGIL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on GGIL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
GGIL continues to be 'CRISIL D Issuer Not Cooperating'.
GOPL is a part of the Gajanan group and is promoted by Mr Nitin
Jadhav and his family. The company extracts soya and wash cotton
seed oil, and refines soya, cotton and palm oils. GOPL was
incorporated in December 2015 to undertake expansion of the brown
field project acquired from Bhaskar Foods Pvt Ltd of the Dainik
Bhaskar group.
GSL is a closely held public-limited company set up in 2010. It
extracts oil from cotton seeds and soya and also sells the
by-products, husk, DOC and lint to varied industries. The company
has its plant in Buldhana.
GIL is a closely held public-limited company set up in 2007. It
refines cotton and soya oil into edible oil in its facility in
Buldhana.
NOAL is a traditional oil mill that manufactures edible oil.
GGIL is a partnership concern incorporated in 2014 that extracts
oil from soya seed and sells by-product, DOC, to varied industries.
GGIL has its plant at Hingoli.
GOAL CLOSURES: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Goal
Closures (GC) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 29.60 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 5.19 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
CARE Ratings Ltd. had, vide its press release dated April 12, 2023,
placed the rating(s) of GC under the 'issuer non-cooperating'
category as GC 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.
GC continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated February 26, 2024, March 7, 2024, March 17,
2024.
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).
M/s. Goal Closures (GC), a partnership firm based in Coimbatore,
was established in March 2007 by Ms. R. Vichitra and Ms. R. Latha.
In March 2016, the partnership was reconstituted and the present
partners of the firm are Ms. R. Vichitra and Mr. V.
Ponnusamy. The firm is engaged in the manufacturing of Aluminium
ROPP (Roll-On-Pilfer-Proof) caps which finds its applications in
the pharmaceutical, distilleries and other allied industries. The
firm has its registered office located in Coimbatore, Tamil Nadu
and operates as a monopoly in Tamil Nadu for aluminum caps and
closures in pharmaceutical sector.
HEERA RICE: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Heera Rice
Mills (HRM) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 17.50 CRISIL D (Issuer Not
Cooperating)
Proposed Fund- 0.22 CRISIL D (Issuer Not
Based Bank Limits Cooperating)
Term Loan 1.28 CRISIL D (Issuer Not
Cooperating)
Warehouse Receipts 7.50 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with HRM for
obtaining information through letter and email dated May 15, 2024
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 HRM, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HRM
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
HRM continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 2008, HRM is engaged in milling and sorting of
basmati and non-basmati rice. It produces polished as well as
unpolished rice to be sold to exporters in the domestic market. The
firm has total milling capacity of 12 tons per hour (TPH) and
sorting capacity of 20 TPH in Assand, Haryana. The firm is managed
by Mr. Satish Goel and his family members.
IMPEX FERRO: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Impex Ferro Tech Limited
35 C R Avenue, 4th Floor,
Kolkata-700013, West Bengal
Insolvency Commencement Date: May 2, 2024
Estimated date of closure of
insolvency resolution process: October 29, 2024 (180 Days)
Court: National Company Law Tribunal, Kolkata Bench
Insolvency
Professional: Rajiv Kumaragarwal
7 Grant Lane, Room No 317,
3rd Floor, Kolkata 7000012
West Bengal
E-mail: cirp.iftl@gmail.com
E-mail: rajiv@kvrassociates.in
Last date for
submission of claims: May 16, 2024
INTEC CAPITAL: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Intec
Capital Limited (ICL) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 95.36 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
CARE Ratings Limited (Care Ratings), vide its press release dated
January 7, 2021, has placed ratings of ICL under the 'issuer
non-cooperating' category, as ICL had failed to provide information
for monitoring the rating exercise as agreed to in its rating
agreement. Intec continues to be non-cooperative, despite repeated
requests for submission of information through e-mails dated
February 27, 2024, February 17, 2024, and February 7, 2024.
In line with the extant SEBI guidelines, CARE Ratings has reviewed
the rating based on best available information, which however, in
CARE Ratings' opinion is not sufficient to arrive at a fair rating.
Rating reaffirmation for long-term bank facilities of ICL at CARE
D; ISSUER NOT COOPERATING factors in ongoing delays in
servicing of the company's scheduled debt obligations.
Users of this rating (including investors, lenders and public at
large) are hence requested to exercise caution while considering
above rating(s).
Analytical approach: Standalone
Outlook: Not applicable
Detailed description of key rating drivers:
At the time of the last rating on March 24, 2023, following were
key rating strengths and weaknesses (updated from information
available from registrar of company):
Key weaknesses
* Ongoing delays: Per annual report 2023 and 9MFY24 results, the
company has defaulted in repayment of term loan and working
capital. The default has been continuing since 2019.
* Weak asset qualities: The company's asset quality remains high as
on March 31, 2023, with gross non-performing assets (GNPA) and Net
NPA (NNPA) ratios at 89% and 75% respectively.
* Decline in business and profitability parameters: The company's
net loan book has been shrinking over the years, since ending
fiscal 2019 from INR144.41 crore to INR69.39 crore as on March 31,
2023. In FY23, the company reported net loss of INR26.64 crore as
against profit of INR3.59 crore, due to high provisions. Total
income is on similar level in FY23 to INR4.67 crore from INR4.26
crore in FY22.
Key strengths
* Experienced promoters and management: ICL was founded by Sanjeev
Goel, who has more than two decades of experience in financial
services. He is a chartered accountant and holds master's in
international finance from the University of Iowa. ICL has been
operating in SME equipment financing for the last two decades.
ICL (formerly known as Intec Securities Limited) was established in
February 1994, as a private limited company by Sanjeev Goel (Ex.
Finance Manager, Jai Bharat Maruti Ltd, CA and MBA) and Rajeev Goel
(B. Tech from IIT Kanpur and MS from USA). ICL was converted into a
public limited company in October 1994, and subsequently in
September 2009, its name was changed to the present name. ICL is
registered with RBI as non-deposit accepting (ND) NBFC and is
listed at BSE. Post-merger with Unitel Credit Private Limited on
February 11, 2011, ICL became a systemically important (SI) NBFC.
In April 2014, the company received categorisation of Asset Finance
Company (AFC) from RBI. Since, the loan portfolio came below INR500
crore in fiscal year ending March 31, 2018; the company became
non-systemically important NBFC. ICL is primarily into providing
funding for office equipment, medical equipment, plant & machinery,
computer peripherals, among others to small and medium enterprises
(SME), government, semi-government, and private sector customers.
J.K. INTERNATIONAL: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of J.K.
International (JKI) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.55 CRISIL D (Issuer Not
Cooperating)
Cash Term Loan 4.45 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with JKI for
obtaining information through letter and email dated May 15, 2024
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 JKI, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on JKI
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
JKI continues to be 'CRISIL D Issuer Not Cooperating'.
Established in 2004 and based in Jalandhar, Punjab, JKI is a
partnership concern of Mr Sarjit Singh Kang and Mr Bikramjit Singh
Kang. The firm manufactures and processes architectural and
automotive glass. The firm has its manufacturing facilities at
Jalandhar and Kharla, Himachal Pradesh. Mr Sarjit Singh Kang
manages the day-to-day operations.
JOISTER INFOSERVE: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Joister Inforserve Private Limited
Gala No. 136, Shiv Shakti Industrial Estate
Opp. Mittal Industrial Estate
Andheri-Kurla Road, Andheri-E,
Mumbai City, Mumbai Maharashtra-400059
Insolvency Commencement Date: May 21, 2024
Estimated date of closure of
insolvency resolution process: November 17, 2024
Court: National Company Law Tribunal, Mumbai Bench
Insolvency
Professional: Garima Diggiwal
91, Moji Colony, Malviya Nagar,
Jaipur Rajasthan-302017
E-mail: garima286@gmail.com
E-mail: cirp.joisterinfo@gmail.com
Last date for
submission of claims: June 4, 2024
JUMBO FINVEST: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Jumbo
Finvest (India) Limited (JFIL) continue to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 525.03 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
CARE Ratings Limited (CARE Ratings) had, vide its press release
dated November 8, 2019, placed the rating of JFIL under the 'issuer
non-cooperating' category as JFIL had failed to provide information
for monitoring of the rating exercise as agreed in its rating
agreement including no default statement since October 2019. JFIL
continues to be noncooperative despite repeated requests for
submission of information through e-mails dated May 14, 2024, May
4, 2024, and April 24, 2024. In line with the extant Securities and
Exchange Board of India (SEBI) guidelines, CARE Ratings has
reviewed the rating based on the best available information which,
however, in CARE Rating's opinion is not sufficient to arrive at a
fair rating. The rating reaffirmation of the facilities/instruments
of JFIL at CARE D; ISSUER NOT COOPERATING factors in ongoing delays
in servicing of the company's scheduled debt obligations.
Users of this rating (including investors, lenders, and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Analytical approach: Standalone
Outlook: Not applicable
Detailed description of key rating drivers:
At the time of last rating on June 9, 2023, following were the key
rating strengths and weaknesses (updated from information available
from registrar of company):
Key weaknesses
* Ongoing delays: According to the annual report FY23, there are
ongoing delays in debt servicing of principal and interest on term
loan due to poor liquidity.
JFIL was promoted by Ajay Singh and his family in 1998 for carrying
on a tractor dealership in the name of Ajay Tractors Pvt. Ltd. In
2003, its tractor dealership business was discontinued and the
company was registered as a non-deposit taking non-banking finance
company (NBFC) with Reserve Bank of India (RBI). JFIL is engaged in
secured and unsecured lending mainly for loan against property,
personal loans, and vehicle financing through its 150 operational
branches (as on June 30, 2018) in Rajasthan, Maharashtra, and
Madhya Pradesh.
KOUSHIC PRESSURE: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Koushic
Pressure Vessels Private Limited (KPVPL) continue to be 'CRISIL
D/CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 5 CRISIL D (Issuer Not
Cooperating)
Cash Credit 10 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with KPVPL for
obtaining information through letter and email dated May 15, 2024
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 KPVPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on KPVPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
KPVPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Incorporated in 1999 at Vellore (Tamil Nadu), KPVPL manufactures
and erects unified pressure vessels, oil storage tanks,
Desalination plant and liquefied petroleum gas bullets. KPVPL is
owned & managed by Mr K. Srinivasan.
KRISHNAPING ALLOYS: CRISIL Keeps D Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Krishnaping
Alloys Limited (KAL) continue to be 'CRISIL D/CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 20 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with KAL) for
obtaining information through letter and email dated May 15, 2024
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 KAL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on KAL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
KAL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
For arriving at the ratings, CRISIL Ratings has combined the
business and financial risk profiles of KAL and Krishnaping
Minerals Pvt Ltd (KMPL), together referred to as 'Krishnaping
group'. This is because both the companies are in the same line of
business, work under a common management, and have strong
operational linkages and financial fungibility.
KMPL and KAL, incorporated in 1996, undertakes mining and
beneficiation of manganese ore along with manufacturing of ferro
manganese alloys. The group is promoted and managed by Mr Sanjeev
Khandelwal. KMPL has a factory unit in Vizag, Andhra Pradesh and
KAL has factory unit in Chindwara, Madhya Pradesh.
LAJJYA STEELS: CRISIL Keeps D Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Lajjya Steels
Limited (LSL) continue to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 18 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.5 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Standby Line 1.5 CRISIL D (Issuer Not
of Credit Cooperating)
CRISIL Ratings has been consistently following up with LSL for
obtaining information through letter and email dated May 15, 2024
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 LSL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on LSL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
LSL continues to be 'CRISIL D Issuer Not Cooperating'.
Incorporated in 2009 and promoted by the Soni family of Ludhiana,
Punjab, LSL trades in wire rods and engages in wire drawing. The
company has been a dealer of JSW Steel Ltd and Rashtriya Ispat
Nigam Ltd for over seven years. LSL also trades in yarn.
LAMIFABS AND PAPERS: CRISIL Keeps D Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Lamifabs and
Papers Private Limited (LPPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.75 CRISIL D (Issuer Not
Cooperating)
Cash Credit 11 CRISIL D (Issuer Not
Cooperating)
Long Term Loan 9.30 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 3.15 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 3.80 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with LPPL for
obtaining information through letter and email dated May 15, 2024
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 LPPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on LPPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
LPPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
Incorporated in 1982, LPPL manufactures plastic woven fabrics
(HDPE, polyethylene, and polypropylene), vermi beds, irrigation
pipes, pond linings, HDPE tarps, tarpaulins, and tents. The company
has two manufacturing units in Aurangabad, Maharashtra, with total
capacity of 3,200 tonne per annum.
LICHCHHWI FOODS: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Lichchhwi
Foods India Private Limited (LFIPL) continue to be 'CRISIL D Issuer
Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL D (Issuer Not
Cooperating)
Proposed Long Term 0.49 CRISIL D (Issuer Not
Bank Loan Facility Cooperating)
Term Loan 2.74 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with LFIPL for
obtaining information through letter and email dated May 15, 2024
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 LFIPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on LFIPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
LFIPL continues to be 'CRISIL D Issuer Not Cooperating'.
LFIPL, incorporated in 1998, offers cold storage facilities to
potato farmers in Hajipur, Bihar. LFIPL has a holding capacity of
13,500 metric tonne per annum with 10 different
temperature-controlled chambers. Mr. Avinash Kumar, Mr. Alok Kumar
and Mr. Arun Kumar are the directors.
MEP INFRASTRUCTURE: To Seek Settlement with Lenders Under IBC
-------------------------------------------------------------
The Economic Times reports that MEP Infrastructure Developers
(MIDL) will submit a plan under Section 12A of the Insolvency and
Bankruptcy Code (IBC) and seek a settlement with lenders, its
chairman told ET.
ET relates that Jayant Mhaiskar said that before being admitted to
bankruptcy, the company had planned to bring in a new investor.
This plan will be pursued, he said. Section 12 A of IBC allows a
promoter to settle dues with creditors and withdraw the insolvency
application if 90% of the lenders agree to the plan. "We had
already proposed a settlement. Now that the IBC process has
started, we will wait for more clarity and (see) how the company is
valued and submit a plan accordingly," ET quotes Mhasikar as
saying.
Debt-laden MIDL was admitted to insolvency in late March after Bank
of India (BoI) filed a petition, ET notes. BoI and IDBI Bank are
the primary creditors to the company. ET could not ascertain how
much the company owes to the lenders, since creditors claims are
yet to be made public.
Total banking sector exposure to the MIDL group is estimated to be
close to INR1,500 crore, including some with local co-operative
banks, but most of it is in subsidiary companies or special purpose
vehicles like MEP Infrastructure (MIPL), which was earlier
operating the Bandra-Worli sea link, ET discloses.
MIDL has about 38 subsidiaries and joint ventures for different
projects. Some contracts have been scrapped due to delay in project
execution. "It is unclear whether the court wants to consolidate
all the group exposure into a single insolvency process or wants to
do it separately for all SPVs as well. We will know as the case
progresses," said a senior bank executive, ET relays.
According to ET, Ravindra Kumar Goyal has already been appointed as
resolution professional (IRP). He has already called for claims
from creditors to determine the dues of the company. Two meetings
of committee of creditors have taken place, the company informed
the stock exchanges.
ET adds the admission of BoI's petition came just over a month
after MIDL sought shareholder approval to bring a new investor and
infuse INR225 crore under the pre-packaged insolvency resolution
process (PPIRP). The plan was that the company will issue shares to
Nagpur-based Ashmi Road Carriers post shareholder approval.
However, with the company's default topping INR1 crore, PPIRP may
not be feasible, according to regulations.
MPL MOTORS: CRISIL Keeps C Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of MPL Motors
Private Limited (MMPL) continue to be 'CRISIL C Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.6 CRISIL C (Issuer Not
Cooperating)
Inventory Funding
Facility 2.5 CRISIL C (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with MMPL for
obtaining information through letter and email dated May 15, 2024
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 MMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on MMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
MMPL continues to be 'CRISIL C Issuer Not Cooperating'.
MMPL, incorporated in 1998, is an authorised dealer for commercial
vehicles of M&M in Chennai. MAAPL, incorporated in 2000, authorised
dealer for passenger vehicles of M&M in Chennai. The group is
promoted by Mr. S. Ashok and his family.
NECTAR PRINTS: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Nectar Prints Private Limited
Bunglow No. 7, Gulab Park,
Dr. C G Road, Near Basant Cinema,
Chembur, Mumbai City Mumbai,
Maharashtra, India, 400074
Insolvency Commencement Date: May 18, 2024
Estimated date of closure of
insolvency resolution process: November 14, 2024
Court: National Company Law Tribunal, Mumbai Bench
Insolvency
Professional: Mr. Milind Kasodekar
KMDS & Associates, Company Secretaries
3rd floor, Satyagari Apartments
77, Vijayanagar Colony,
2147, Sadashiv Peth, Pune-41130
Email: milind.kasodekar@kmdscs.com
Last date for
submission of claims: June 1, 2024
OSIAN COMMOTRADE: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Osian
Commotrade Private Limited (OCPL) continue to be 'CRISIL D/CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.2 CRISIL D (Issuer Not
Cooperating)
Letter of Credit 1.8 CRISIL D (Issuer Not
Cooperating)
Proposed Cash 2.8 CRISIL D (Issuer Not
Credit Limit Cooperating)
Proposed Letter 14.2 CRISIL D (Issuer Not
of Credit Cooperating)
CRISIL Ratings has been consistently following up with OCPL for
obtaining information through letter and email dated May 15, 2024
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 OCPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on OCPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
OCPL continues to be 'CRISIL D/CRISIL D Issuer Not Cooperating'.
OCPL was incorporated on March 31, 2010, promoted by Mr Pankaj
Baid. The company trades in multiple products such as plastic
granules, hard coke, steel and steel spares, cotton yarn, synthetic
yarn, and agricultural commodities such as pulses, rice, and cashew
nuts, in the domestic market.
PALLAVI CONSTRUCTIONS: CRISIL Keeps C Rating in Not Cooperating
---------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Pallavi
Constructions- Hyderabad (PC) continue to be 'CRISIL C/CRISIL A4
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 7 CRISIL A4 (Issuer Not
Cooperating)
Secured Overdraft 7 CRISIL C (Issuer Not
Facility Cooperating)
CRISIL Ratings has been consistently following up with PC for
obtaining information through letter and email dated May 15, 2024
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 PC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PC is
consistent with 'Assessing Information Adequacy Risk'. Based on the
last available information, the ratings on bank facilities of PC
continues to be 'CRISIL C/CRISIL A4 Issuer Not Cooperating'.
Established in 1996 as a partnership firm, Pallavi Constructions
(PC) in engaged in civil construction activities mainly
construction of railway over bridges (ROB) and excavation work
related activities. Based in Hyderabad, Telangana, the firm is
promoted by Mr. P Chandrashekhra Reddy, Mr. K Madhusudhan Reddy,
Mr. K Ashok Reddy, Ms.P Yamuna, Mr. P Pavan Kumar Reddy and Ms.P
Pallavi.
PATWA MARKETING: CRISIL Keeps D Debt Rating in Not Cooperating
--------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Patwa
Marketing Private Limited (PMPL; part of the Patwa group) continue
to be 'CRISIL D Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PMPL for
obtaining information through letter and email dated May 15, 2024
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 PMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PMPL continues to be 'CRISIL D Issuer Not Cooperating'.
UANPL and PMPL were incorporated in 1989 and 1995, respectively,
and are promoted by Mr Surendra Patwa. The companies are del
credere agent (DCAs) for RIL's polymer products. PMPL is also a
carry and forwarding agent for Torrent Pharma Limited (TPL).
Registered office is in Indore. The promoter is also engaged in
automobile dealership through other entities.
PRASAD SUGAR: CRISIL Withdraws D Rating on INR174.48cr LT Loan
--------------------------------------------------------------
CRISIL Ratings has withdrawn its rating on the bank facilities of
Prasad Sugar and Allied Agro Products Limited (PSAPL) on the
request of the company and after receiving no objection certificate
from the bank. The rating action is in-line with CRISIL Rating's
policy on withdrawal of its rating on bank loan facilities.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.75 CRISIL D (ISSUER NOT
COOPERATING; Migrated from
'CRISIL D'; Rating Withdrawn)
Long Term Loan 70.34 CRISIL D (ISSUER NOT
COOPERATING; Migrated from
'CRISIL D'; Rating Withdrawn)
Long Term Loan 5.52 CRISIL D (ISSUER NOT
COOPERATING; Migrated from
'CRISIL D'; Rating Withdrawn)
Long Term Loan 18.93 CRISIL D (ISSUER NOT
COOPERATING; Migrated from
'CRISIL D'; Rating Withdrawn)
Pledge Loan 174.48 CRISIL D (ISSUER NOT
COOPERATING; Migrated from
'CRISIL D'; Rating Withdrawn)
Proposed Long Term 26.98 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Migrated from
'CRISIL D'; Rating Withdrawn)
CRISIL Ratings has been consistently following up with PSAPL for
obtaining information through letter and email dated April 17, 2024
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 PSAPL. This restricts CRISIL
Ratings' ability to take a forward looking view on the credit
quality of the entity. CRISIL Ratings believes that rating action
on PSAPL is consistent with 'Assessing Information Adequacy Risk'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL Ratings has migrated the ratings on
the bank facilities of PSAPL to 'CRISIL D' Issuer not
cooperating'.
PSAPL, incorporated in 2007, is owned and managed by Mr Shusilkumar
Deshmukh and Mr Prasad Tanpure, and their family members. The
company manufactures sugar at its plant in Rahuri Taluka in the
Ahmednagar district of Maharashtra, with an installed capacity of
4,000 tonne crushed per day and an ethanol plant with 60 KLPD
capacity.
PUNE TUBES: CRISIL Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Pune Tubes
Manufacturing Private Limited (PTMPL) continue to be 'CRISIL D
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.50 CRISIL D (Issuer Not
Cooperating)
Proposed Cash 7.25 CRISIL D (Issuer Not
Credit Limit Cooperating)
Term Loan 8.25 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with PTMPL for
obtaining information through letter and email dated May 15, 2024
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 PTMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on PTMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
PTMPL continues to be 'CRISIL D Issuer Not Cooperating'.
Established in 2011, PTMPL, promoted by Mr Prakash Saxsena, Mr Atul
Dudhe, Mr Nitin Sathe, and Mr NM Parande, was set up a plant for
manufacturing ERW pipes in Pimpari Saandas near Pune (Maharashtra).
Commercial operations began October 2016. Its registered office is
in Pune.
SEBACIC INDIA: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Sebacic India Limited
Plot No. 461, 462, ECP Channal,
Village Umraya, Taluka-Podra,
Vadadora, Gujarat-391440 India
Insolvency Commencement Date: May 15, 2024
Estimated date of closure of
insolvency resolution process: November 11, 2024
Court: National Company Law Tribunal, Ahmedabad Bench
Insolvency
Professional: Mr. Manish Kumar Bhagat
B-1204, Shilp Corporate Park,
Rajpath Rangoli Road, Next to Aaron Spectra,
Bodakdev, Ahmedabad-380054
E-mail: mbhagat2003@gmail.com
E-mail: sebacic.cirp@gmail.com
Last date for
submission of claims: May 29, 2024
SUPERTECH REALTORS: NCLT Orders Insolvency Proceeding vs. Realtor
-----------------------------------------------------------------
The Economic Times reports that the National Company Law Tribunal
(NCLT) has ordered initiating an insolvency proceeding against
Supertech Realtors, which is developing a residential apartment,
office, retail and luxury hotel at its Supernova project. A
two-member Delhi bench of NCLT admitted the insolvency plea filed
by the Bank of Maharashtra over a default of INR168.04 crore and
appointed Anju Agarwal as interim resolution professional (IRP),
suspending the board of Supertech Realtors, a step-down subsidiary
of Supertech, ET discloses.
Supertech is also facing a Corporate Insolvency Resolution Process
(CIRP).
Supertech Realtors is developing Supernova project at a cost of
INR2,326.14 crore on a land admeasuring 70,002 square metres at
Sector 94, Noida, ET notes.
As per the plans, Supernova project will have 80 floors and will be
the tallest building in Delhi-NCR at a height of 300 metres.
For the project, Supertech Realtors approached a consortium of
lenders led by Union Bank of India seeking a financial assistance
of INR7,35.58 crore. Out of this, it had also requested for a
credit facility of INR150 crore, which was granted by Bank of
Maharashtra, according to ET.
In December 2012, a term loan of INR150 crore was granted. The term
loan was repayable in quarterly installments in the consolidated
door-to-door tenor for 10 years and 4 months by March 2023.
However, Supertech Realtors failed to maintain financial discipline
and defaulted in properly maintaining the said accounts in addition
to committing other breaches and violations of the credit limit,
leading to accumulation of huge outstanding, ET relates.
This was also acknowledged by the realty firm and despite repeated
reminders and requests, no further payments of the dues were made,
the corporate debtor (Bank of Maharashtra) said. Following this, it
approached NCLT.
ET says the realty firm opposed the plea on technical grounds and
submitted that the date of default in the said petition varies and
is in contradiction to each other.
It alleged that the non-performing asset as per the creditor is
reckoned to be September 28, 2018. Thereby the said application is
not only defective but also barred by limitation and liable to be
dismissed.
Further, it submitted that it was a victim of the economic slowdown
and financial crunches that crippled the real estate industry, ET
relates. Also, due to farmers' and land-owners' objections and
additional compensations, the period from 2010 to 2015 was
completely unfavourable and disturbing.
However, the NCLT said on a perusal of documents, it is satisfied
that the Bank of Maharashtra comes within the definition of
financial creditor and the loan was disbursed to Supertech Realtors
and there exists a debt and a default.
"Thus, it is clear that when a default takes place i.e., the debt
becomes due and is not paid, the Insolvency Resolution Process
shall begin against the corporate debtor . . . we are satisfied
that the present application is complete in all respects . . . the
present company application stands admitted and the CIRP is hereby
initiated against Supertech Realtors," the tribunal said.
ET adds the NCLT also put a moratorium on all transactions related
to Supertech Realtors, as per the provision of the Insolvency &
Bankruptcy Code.
"We direct that public announcement shall be made by the Interim
Resolution Professional immediately" about the admission of the
insolvency application, said the 34-page NCLT order.
TANISHA SCAFFOLDING: NCLT Ordered to Hear Afresh Insolvency Plea
----------------------------------------------------------------
The Business Standard reports that the National Company Law
Appellate Tribunal (NCLAT) has directed the NCLT to hear afresh the
insolvency plea filed by APL Apollo Tubes against Tanisha
Scaffolding, one of its purchasers of goods.
A two-member bench came down heavily on the Bengaluru bench of the
National Company Law Tribunal (NCLT) for rejecting claims of APL
Apollo Tubes on the "hypothetical interpretation".
According to the report, the NCLAT said the tribunal "should
refrain from stepping into the shoes of a litigating party by
substituting their own finding in the absence of there being any
pleading evidence".
The appellate tribunal has directed the NCLT to make all efforts to
decide proceedings as expeditiously as possible.
Business Standard notes that the NCLAT order came over a petition
filed by APL Apollo Tubes against an order of the NCLT, which, on
September 9, 2019, dismissed its insolvency plea filed as an
operational creditor against Tanisha Scaffolding.
Tanisha Scaffolding was engaged in marketing the products
manufactured by APL Apollo Tubes. Some amount against supplies was
not remitted and fell due to be paid and therefore, APL Apollo
Tubes filed the insolvency plea, the report states.
This was rejected by the NCLT, saying the debt was not due on the
ground that there was no documentary evidence, which was furnished
by the appellant to establish that the debt was due and payable.
However, the appellate tribunal said this inference has been drawn
by the NCLT merely based on a hypothetical interpretation given to
the contents of the invoices without there being any evidence or
pleadings to the contrary, according to the report.
"There was no occasion for the NCLT to draw an inference in the
absence of there being any pleading to the contrary made by the
Respondent as to what implications the Purchase Order would have
over the Demand Notice and the prior invoices, which were issued by
the Appellant, with regard to the amount due to be paid by the
Appellant," it said.
Moreover, even in the proceedings of the NCLAT, Tanisha
Scaffolding, despite several opportunities having been granted, has
not filed any objections or even a written statement to controvert
it.
Setting aside the order, the NCLAT said tribunals created under a
statute while adjudicating between the parties have to confine
their finding limited to the extent of respective pleadings and
evidence laid by the parties, Business Standard says.
"The Tribunals or the Courts are not expected to substitute their
own stand or finding in supporting case of either of the parties
before it in the absence of there being any pleading raised before
it to controvert the pleading raised by the other side in support
of their case.
"We are of the view that it would meet the ends of justice if the
Impugned Order dated September 5, 2019, is quashed and the matter
is remitted back to the NCLT, Bangalore Bench, to decide afresh
after providing an opportunity to the Respondent to file their
objection to the Application under section 9 and to decide the same
afresh," the NCLAT, as cited by Business Standard, said.
TATA MOTORS: S&P Puts 'BB+' Sr. Unsecured Debt Rating on Watch Pos.
-------------------------------------------------------------------
S&P Global Ratings placed its ratings on six Tata group entities on
CreditWatch with positive implications. These companies are Tata
Steel Ltd., Tata Motors Ltd., Jaguar Land Rover Automotive PLC
(JLR), Tata Power Co. Ltd., TML Holdings Pte. Ltd., and ABJA
Investment Co. Pte. Ltd.
The rating actions come ahead of S&P's review of the relationship
between the group's holding company, Tata Sons Pte Ltd. (unrated)
and its subsidiaries.
The review will assess whether the potential of extraordinary
support for the group entities from Tata Sons is greater than what
we previously factored. This is due to increasing operational and
management linkages within the group.
Tata Sons has a record of supporting group entities in events of
stress. For example, the group provided material extraordinary
financial support to entities such as Tata Teleservices Ltd. and
Coastal Gujarat Power Ltd., an erstwhile subsidiary of Tata Power,
which has now been merged with Tata Power.
S&P is also undertaking the review because it believes operational
integration between Tata Sons and group entities, as well as
between group entities, will continue to increase. Examples of such
coordination in the future include:
Battery plants that Agratas, a wholly owned subsidiary of Tata
Sons, is setting up in the U.K. and India. The units will supply
most of their output to Tata Motors and JLR. S&P believes the key
reason for Tata Sons' investment in this business is the presence
of Tata Motors and JLR in the electric vehicle (EV) segment. The
battery plant will reduce capital expenditure for the two
companies, and will help them secure customized battery supply.
Details of the commercial arrangement are still not known, and
production will likely commence in 2026.
Planned platform-sharing partnership between Tata Motors and JLR to
develop Tata Motors' Avinya series of EVs. The tie-ups would likely
represent arms-length commercial agreements between the entities.
In the EV business, Tata Power, Tata Chemicals Ltd. (unrated), Tata
Consultancy Services Ltd. (TCS; unrated), and Tata Communications
Ltd. (unrated) collaborate with Tata Motors for technology and
charging infrastructure.
Tata Motors' proposal to merge its captive finance unit with Tata
Capital Ltd. (BBB-/Stable/A-3). This indicates greater cohesion
within the group, with streamlining of businesses, exploration of
potential synergies, and increasing future linkages.
In addition, S&P notes the continued close involvement of Tata Sons
in the strategies of group entities. For example, the holding
company led negotiations with the U.K. government for setting up
the battery plant and securing government support for the
restructuring of Tata Steel's U.K. facility.
Tata Sons has a clear imprint on the group's financial strategy, in
line with a groupwide focus on managing leverage.
The review will also consider Tata Sons' improving flexibility to
provide support, and the group's more balanced cash flow
generation. The market value of some of Tata Sons' key holdings has
increased significantly over the past few years, in line with a
material improvement in their financial performance.
S&P's Our review will also assess whether the difference in the
ratings on Tata Motors and JLR is warranted. This is given the
possibility of increasing integration between the two companies. We
will also assess whether JLR, as an offshore step down subsidiary,
would receive a comparable level of support as Tata Motors and
other directly owned subsidiaries of Tata Sons.
"We intend to resolve the CreditWatch in the next six to eight
weeks.
"We could raise the ratings by at least one notch if we assess that
the group status of these companies is higher than the current
moderately strategic importance. This would depend on our view of
operational and management linkages, and the strength of expected
group support.
"We could affirm the ratings on the six companies if our review
concludes that the expected support for the entities is not strong
enough to warrant a rating uplift."
RATINGS LIST
CREDITWATCH ACTION
TO FROM
ABJA INVESTMENT CO. PTE. LTD.
TATA STEEL LTD.
Issuer Credit Rating BBB-/Watch Pos/-- BBB-/Positive/--
TML HOLDINGS PTE. LTD.
TATA MOTORS LTD.
Issuer Credit Rating BB+/Watch Pos/-- BB+/Positive/--
JAGUAR LAND ROVER AUTOMOTIVE PLC
Issuer Credit Rating BB/Watch Pos/-- BB/Positive/--
Senior Unsecured BB/Watch Pos BB
TATA POWER CO. LTD.
Issuer Credit Rating BB+/Watch Pos/-- BB+/Stable/--
ABJA INVESTMENT CO. PTE. LTD.
Senior Unsecured BBB-/Watch Pos BBB-
TML HOLDINGS PTE. LTD.
Senior Unsecured BB+/Watch Pos BB+
TATA MOTORS LTD.
Senior Unsecured BB+/Watch Pos BB+
THAUSI EXPORT: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Thausi
Export (TE) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
CARE Ratings Ltd. had, vide its press release dated April 20, 2023,
placed the rating(s) of TE under the 'issuer non-cooperating'
category as TE 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.
TE continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated March 5, 2024, March 15, 2024, March 25, 2024.
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).
Thausi Exports was established as a proprietorship firm in the year
1986 under HUF status. The firm is engaged in trading and
manufacturing of textiles in domestic and export market. The firm
is dealing in all kind of fabrics, readymade garments, sarees and
towels. The firm's registered office is located at D.no 8/1 A, Anna
Street, Salem, Tamil Nadu - 636001.
TRIMULA G: CRISIL Keeps D Debt Ratings in Not Cooperating
---------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Trimula G
Basmati Private Limited (TBPL) continue to be 'CRISIL D Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL D (Issuer Not
Cooperating)
Cash Credit 6.25 CRISIL D (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with TBPL for
obtaining information through letter and email dated May 15, 2024
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 TBPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on TBPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
TBPL continues to be 'CRISIL D Issuer Not Cooperating'.
TBPL was incorporated by Mr Sudhir Kumar, Mr Shilpi Kumar, and Mr
Ankur Kumar in 2009. It mills basmati rice at its unit in Nehtaur
(Uttar Pradesh). The facility has milling and sorting capacity of 5
tonne per hour each.
YIBEAL TRADEX: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: YIBEAL TRADEX PRIVATE LIMITED
9/2A, Topsia Road (South),
Kolkata, Kolkata,
West Bengal, India, 700046
- and -
228, Santipally, Block BA-1,
1st Floor, Sarat Park,
Rajdanga Main Road, Kolkata,
West Bengal, India, 700107
Insolvency Commencement Date: May 22, 2024
Estimated date of closure of
insolvency resolution process: November 18, 2024
Court: National Company Law Tribunal, Kolkata Bench
Insolvency
Professional: Pankaj Kumar Tibrewal
Chitra 3E, Duke Residency,
13, Chanditala Lane, Near Chalia More,
Tollygunge, Kolkata, West Bengal 700040
E-mail: tibrewalpankaj@yahoo.com
AAA Insolvency Professionals LLP
15B, Ballygunge Circular Road,
Kolkata 700019
E-mail: yibealtradexpvtltdibc@gmail.com
Last date for
submission of claims: June 5, 2024
=================
I N D O N E S I A
=================
AGUNG PODOMORO: Fitch Hikes LongTerm IDR to 'CCC-'
--------------------------------------------------
Fitch Ratings has upgraded Indonesia-based developer PT Agung
Podomoro Land Tbk's (APLN) Long-Term Issuer Default Rating (IDR) to
'CCC-', from 'CC', following the repayment of its US dollar notes
on 2 June 2024.
The upgrade reflects Fitch's view of reduced liquidity and
refinancing pressure in the next 12-18 months. APLN's debt maturity
profile has been extended through refinancing its US dollar notes
with a secured bank loan due in January 2027. Nevertheless, its
weak liquidity is exacerbated by its forecast of negative free cash
flow (FCF). APLN can choose to take on additional debt or sale of
assets to fund the amortisation.
KEY RATING DRIVERS
Bond Redeemed with New Loan: APLN has redeemed its USD132 million
bond due 2 June 2024 with a bank loan due January 2027, which has
alleviated immediate refinancing pressure. However, Fitch expects
debt-servicing requirements to increase as the cost of the bank
loan, at 10.25%, is markedly higher than the bond's coupon of
5.95%. Nevertheless, APLN is no longer exposed to hedging costs and
foreign-exchange risk.
Flat Pre-sales: Fitch expects consolidated net pre-sales in 2024 to
remain flat (2023: IDR1.2 trillion), due to further risks from
pre-sales cancellation or delays in new project launches. Pre-sales
in 1Q24 increased by around 95% yoy on the one-off sale, accounting
for around 25% of marketing sales. Excluding the one-off sale, 1Q24
pre-sales were around IDR355 billion, an increase of 46% yoy from
the low base.
Liquidity Stretched: Fitch expects FCF to turn negative in 2024 by
IDR380 billion (2023: IDR849 billion) due to flat sales and higher
interest expenses. APLN will require external financing or sale of
assets to cover amortisation requirements, of around IDR500 billion
to IDR700 billion per year starting in 2024, and working capital.
The company still has significant debt maturities of IDR2.95
trillion due in January 2027 even after the extension of its debt
maturity profile.
Weak Holdco Interest Coverage: APLN's holding company (holdco)
liquidity will remain under pressure despite the refinancing. The
holdco will most likely have to rely on higher dividends from
operating subsidiaries that hold its property projects to meet
interest payments, even as cash flow at the subsidiaries tightens
from weak pre-sales.
DERIVATION SUMMARY
APLN's ratings reflect its weak liquidity profile, exacerbated by
its expectation of flat pre-sales and high interest expenses.
APLN's rating is three notches below that of its closest peer, PT
Kawasan Industri Jababeka Tbk (KIJA, B-/Stable). KIJA's rating
reflects its view of its improved liquidity such that its cash and
equivalents will remain steady over the medium term, despite rising
loan amortisations. This is supported by neutral-to-positive FCF
and improved access to domestic banks that Fitch believes the
company may use to fund capex and construction costs as required.
However, KIJA's cash balance could deplete unless the company
regains access to new financing to fund near-term debt maturities.
KIJA's contracted sales will remain small with exposure to cyclical
industrial land sales, counterbalanced by improving non-development
cash flow from its power plant, dry port and estate-management
services, covering its interest expense.
PT Lippo Karawaci Tbk's (LPKR) rating of CCC/RWN reflects Fitch's
view that LPKR's proposed tender offer, combined with consent
solicitation, constitutes a distressed debt exchange. Fitch
believes the transaction is being conducted to avoid a default on
the US dollar notes, taking into consideration LPKR's unsustainable
liquidity profile. LPKR is rated one notch higher than APLN because
steady pre-sales and improving FCF supports higher EBITDA interest
coverage compared with APLN.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Consolidated pre-sales of IDR1.2 trillion in 2024-2025
(attributable pre-sales excluding minorities' share: around IDR1
trillion);
- EBITDA margin of about 28% in 2024-2025 (2023: 31%);
- Cash flow from operations after interest and tax of around
negative IDR200 billion to IDR220 billion in 2024 and 2025 (2023:
IDR968 billion);
- Consolidated FCF of about negative IDR350 billion to negative
IDR400 billion in 2024 and 2025 (2022: IDR849 billion).
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating action is unlikely until the company can improve
its liquidity.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Further weakening in liquidity and inability to refinance
maturing debt.
LIQUIDITY AND DEBT STRUCTURE
Weak Liquidity: APLN's consolidated cash balance of IDR670 billion
as of 31 March 2024 is insufficient to repay its remaining
obligations of IDR355 billion and fund its operational cash
requirements. Fitch believes APLN will have to rely on additional
debt or the sale of assets to close the negative FCF gap in the
next three years.
ISSUER PROFILE
APLN is an Indonesian property developer with exposure to
residential and commercial properties. It has pre-sales from key
projects in Jakarta, Bandung and Medan, and also owns and operates
malls, hotels and offices.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG CONSIDERATIONS
APLN has ESG Relevance Scores of '4' for Management Strategy and
Governance Structure due to the company's high development risk
profile, a key part of its strategy. This hampers financial
flexibility, which has a negative impact on the credit profile, and
is relevant to the ratings in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
PT Agung Podomoro
Land Tbk LT IDR CCC- Upgrade CC
LIPPO KARAWACI: Fitch Cuts IDR to 'C' on Distressed Debt Exchange
-----------------------------------------------------------------
Fitch Ratings has downgraded PT Lippo Karawaci Tbk's (LPKR)
Long-Term Issuer Default Rating (IDR) to 'C', from 'CCC'. Fitch has
also downgraded the rating on LPKR's US dollar notes due January
2025 and October 2026 issued by Theta Capital Pte. Ltd. to 'C',
from 'CCC', with a Recovery Rating of 'RR4'.
Fitch Ratings Indonesia has simultaneously downgraded LPKR's
National Long-Term Rating to 'C(idn)' from 'B-(idn)'. All ratings
have been removed from Rating Watch Negative.
The downgrade follows LPKR's announcement that it will proceed with
a tender offer, subject to the satisfaction of the conditions in
the offering memorandum. Based on its criteria, the tender offer,
combined with consent solicitation, which Fitch believes were
conducted to avoid a default, constitute a distressed debt exchange
(DDE).
LPKR said on 6 June 2024 that it received valid tenders on USD178
million of the 2025 notes (75% of outstanding notes) and USD50
million of the 2026 notes (26% of outstanding notes), and consents
to sell 10.4% of a restricted subsidiary, PT Siloam International
Hospitals (SILO). Settlement for the note purchase is scheduled for
25 June 2024.
Fitch will downgrade LPKR's IDR to 'Restricted Default' (RD) on
completion of the DDE, and concurrently reassess the ratings based
on the post-restructuring capital structure.
'C' National Ratings denote a default or default-like process has
begun, or for a closed funding vehicle, payment capacity is
irrevocably impaired.
KEY RATING DRIVERS
Tender Exchange Date Confirmed: LPKR plans to redeem a maximum of
USD219.5 million of its 2025 and 2026 US dollar notes in total. The
company expects to receive sales proceeds of around USD237 million
from the disposal of the 10.4% stake in SILO, in which it now owns
58%. SILO will cease to be a restricted subsidiary after the
disposal.
Refinancing Risk to Reduce: The completion of the tender offer will
reduce the short-term refinancing risk, as only USD67 million of
unsecured notes will be outstanding on maturity in January 2025.
Fitch expects LPKR to rely on external funding to address this
reduced maturity, as its free cash flow (FCF) is improving but
remains insufficient for principal servicing. The company also
plans to redeem over USD49 million of its 2026 notes using proceeds
from the SILO stake sale. Fitch believes that LPKR will still face
a liquidity shortfall for the remaining USD145.8 million of its
October 2026 notes.
Buyback to Lift Financial Profile: Fitch expects LPKR's EBITDA
post-redemption, excluding SILO and PT Lippo Cikarang Tbk (LPCK),
to cover interest costs by around 2x from 2025 (2024F: 1x), up from
below-1x over the past three years. The improved coverage ratio
will not only benefit from the total debt reduction, but also lower
foreign-currency debt and associated hedging cost amid a weakening
rupiah to the US dollar. Fitch expects LPKR's EBITDA net leverage
to improve but remain above 5x until 2025.
Steady Pre-Sales, Improving FCF: Consolidated marketing pre-sales
of IDR1.5 trillion in 1Q24 represent 28% of its 2024 target of
IDR5.4 trillion and a 24 % yoy increase. Fitch expect improved
pre-sales and reduced debt, partly offset by a decline in dividend
income upon the SILO stake sale, to support FCF to improve to
positive IDR250 billion in 2024 (2023: negative IDR287 billion).
Fitch expects dividend income from SILO of IDR125 billion-140
billion annually for next three years (2023: IDR148 billion).
Some Unencumbered Land Bank: LPKR has some unencumbered assets.
Excluding land inventory booked under its subsidiary, LPCK, LPKR
had around IDR13.5 trillion of land at book value that is mostly
unpledged. LPKR pledged a book value of IDR1.25 trillion of land as
security for syndication loans it obtained for the tender offer of
its capital-market debt in January 2023.
Rating Based on Standalone Profile: Fitch assesses LPKR's rating
based on the standalone company and closely held subsidiaries, and
exclude its key listed subsidiaries, LPCK and SILO. This is to
reflect limited cash fungibility between LPKR, which is the obligor
of most of the consolidated group's debt, and its key listed
subsidiaries.
DERIVATION SUMMARY
LPKR's Long-Term IDR of 'C' and the 'C' rating on its senior
unsecured notes reflect the company's announced progress on the
tender offer on its outstanding unsecured notes. Fitch believes the
tender offer constitutes a DDE.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer
Include:
- Pre-sales, excluding bulk land at standalone level, of IDR3.5
trillion-3.7 trillion a year over 2024-2026;
- FCF improves to IDR250 billion in 2024 and stay around IDR600
billion to IDR750 billion during 2025-2026;
- Annual dividend income from key subsidiaries of IDR125 billion-
IDR140 billion during 2024-2026;
- Neutral EBITDA from recurring-income businesses, such as hotels,
malls and property management by 2024.
RECOVERY ANALYSIS
Recovery Rating Assumptions:
- LPKR, excluding SILO, Lippo Malls Indonesia Retail Trust (LMIRT,
CCC) and LPCK, will be liquidated during bankruptcy because it is
primarily an asset-trading company;
- 10% administrative claims;
- A 25% haircut on trade receivables, in line with domestic and
regional peers;
- A 50% haircut on the book value of adjusted inventory, in line
with domestic and regional peers;
- A 50% haircut on net property, plant and equipment;
- Proceeds from the disposal of LPKR's 47.65% stake in SILO and 47%
stake in LMIRT will be available during a liquidation. Fitch used
SILO's share price (IDR2,620) and LMIRT's unit price (SGD0.013) on
10 June 2024 as the basis to calculate the recovery value from both
entities' shares.
- A 60% haircut on SILO's and LMIRT's market value given LPKR's
substantial stake;
- Fitch estimates, based on its calculation of the adjusted
liquidation value after administrative claims, the recovery rate of
the senior unsecured bonds to be 100%, which corresponds to a
Recovery Rating of 'RR2'. However, Fitch has rated the senior
unsecured bonds 'C'/'RR4' because Indonesia falls into Group D of
creditor-friendliness under its Country-Specific Treatment of
Recovery Ratings Criteria and the instrument ratings of issuers
with assets in this group are subject to a soft cap at 'RR4'.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Positive rating action is not expected until after the ratings
are downgraded to 'RD' when the exchange offer is completed.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Fitch will downgrade LPKR's Long-Term IDR to 'RD' when the
exchange offer is completed, and subsequently will reassess the
company's ratings based on the post-restructuring capital
structure.
LIQUIDITY AND DEBT STRUCTURE
Unsustainable Liquidity: LPKR's tender offer will reduce the notes
maturing in January 2025 to around USD67 million, from USD237
million. Fitch believes LPKR will then rely on additional debt or
sale of assets to fund this maturity as its FCF will be
insufficient to address these maturities as well as bank loan
amortisation and bullet maturities that Fitch estimates to be above
IDR500 billion annually until 2028. LPKR had a cash balance of
around IDR1.4 trillion at end-March 2024.
Therefore, Fitch believes the tender offer is vital to addressing
the notes' maturity, and that alternative options are limited given
LPKR's weak financial flexibility.
ISSUER PROFILE
LPKR is an Indonesia-based homebuilder with over 1,000 hectares of
land bank, which the company says is sufficient for more than a
decade of development. It also has a small portfolio of investment
properties consisting of retail malls and hotels, and a property
and portfolio management business.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
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 Recovery Prior
----------- ------ -------- -----
PT Lippo
Karawaci Tbk LT IDR C Downgrade CCC
Natl LT C(idn)Downgrade B-(idn)
LC LT IDR C Downgrade CCC
senior
unsecured LT C Downgrade RR4 CCC
Theta Capital
Pte. Ltd.
senior
unsecured LT C Downgrade RR4 CCC
=========
M A C A U
=========
MGM CHINA: S&P Rates New $500MM Senior Unsecured Notes 'B+'
-----------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating to
Macao-based casino resort owner and operator MGM China Holdings
Ltd.'s proposed $500 million senior unsecured notes due 2031. The
company is a majority-owned subsidiary of MGM Resorts International
(MGM). S&P expects the company to use net proceeds from this
offering to repay a portion of the amounts outstanding under its
revolving credit facility and for general corporate purposes. S&P
views the transaction as neutral for leverage, and therefore it
does not affect its 'B+' issuer credit ratings on MGM China and
MGM.
MGM is the majority owner of MGM China, which gives it the ability
to exercise significant influence over these entities. S&P said,
"As a result, we base our issuer credit ratings on MGM Resorts and
MGM China on the consolidated group credit profile, incorporating
all of the debt and cash flow at these entities. We consider MGM
China to be core to the ultimate parent, and therefore rate it at
the same level as MGM Resorts. We believe MGM China is integral to
MGM's identity and future strategy and is unlikely to be sold. MGM
China operates in the same line of business as MGM, shares a common
brand, and represents a growth vehicle for further international
developments, a key focus of the company. We believe MGM China is
closely linked to MGM's reputation and brand and contributes to and
benefits from MGM's M life loyalty program. In addition, MGM
maintains a controlling ownership position and consolidates MGM
China within its financial statements. MGM China also represents
about 17% of the company's 2023 property-level EBITDAR, which we
believe is significant. Furthermore, MGM has the ability to
influence MGM China's dividend policy and historically has been
able to extract cash flows from MGM China in a normal operating
environment. Furthermore, MGM has demonstrated its willingness to
use liquidity at MGM Resorts to support MGM China during the
pandemic-related shutdowns by providing access to a revolver.
ISSUE RATINGS – SUBORDINATION RISK ANALYSIS
S&P said, "We apply our subordination risk criteria to rate MGM
China's unsecured notes in lieu of assigning recovery ratings
because we do not assign recovery ratings to debt issued in Macau.
We have not published an insolvency report for the jurisdiction and
have not ranked it because there is limited historical precedent
for a large-scale bankruptcy filing of a foreign-owned entity in
Macau. The jurisdiction is a special administrative region of the
People's Republic of China. Furthermore, even if lenders have a
good claim with a registerable interest in the real estate, we
believe there is significant uncertainty surrounding the
application of the insolvency process and lenders' ability to
realize asset value in this jurisdiction."
Capital structure:
MGM China's capital structure solely comprises unsecured debt,
including two revolvers and several series of unsecured notes.
Analytical conclusions:
S&P rates the unsecured notes 'B+', the same as its issuer credit
rating on MGM China, because there are no significant elements of
subordination risk present in its capital structure.
===============
M A L A Y S I A
===============
TH HEAVY: Court Appoints Official Receiver as Interim Liquidator
----------------------------------------------------------------
Hafiz Yatim at theedgemalaysia.com reports that the High Court
(Commercial Division) has allowed three creditors of TH Heavy
Engineering Bhd (THHE) to appoint an official receiver (OR) as an
interim liquidator (IL) of the troubled delisted company.
The OR as ordered by the High Court shall have the full functions
and powers of a liquidator under the 12th Schedule of the Companies
Act 2016 (CA).
According to the report, the order was granted on May 27, with the
sealed order issued by High Court judge Datuk Mohd Arief Emran
Arifin on June 4 on the application by Globalmariner Offshore
Services Sdn Bhd, Boomslang Technology Sdn Bhd (formerly known as
Blackstone Technology Sdn Bhd) and Dynac Sdn Bhd.
In addition to the appointment of the OR as the interim liquidator,
the person would take possession of all books, records, papers and
documents related to the business and assets of THHE, take custody
of the audit and management account of the company, and preserve
THHE's assets, theedgemalaysia.com relays.
The interim liquidator, the order said, shall take possession of
all assets and property belonging to THHE, and that it be
indemnified of costs and charges in the execution of its functions
by THHE.
theedgemalaysia.com says the interim liquidator is also required by
the court to deliver an interim report as to the status and
business affairs of THHE.
The order was granted by Mohd Arief to Globalmariner, Boomslang and
Dynac, which were represented by David Thomas Matthews, who
appeared with Olivia Loh and Lai Ann Xing, theedgemalaysia.com
says.
An OR is a public officer who may be appointed by the High Court to
act as the liquidator of companies or limited liability
partnerships. Its role as a liquidator is to expeditiously recover
and realise the assets of the wound-up company for the distribution
of dividends to creditors, and administer any outstanding matters
involving the wound-up company.
According to theedgemalaysia.com, the judge earlier dismissed an
application by another THHE creditor, Star Kris Services Sdn Bhd,
represented by S Ravenesan, to appoint Gabriel Toh as the IL,
following objection from Mr. Matthews after Star Kris did not
obtain leave under Section 451 (2) of the CA.
Mohd Arief also dismissed an application by THHE represented by
Datuk K Kirubakaran to challenge the petition filed by the three
companies to appoint the OR as the interim liquidator.
The outcome was confirmed to The Edge by Mr. Matthews, who gave a
copy of the court order.
On Feb. 2, the High Court allowed an application by Globalmariner,
Boomslang and Dynac to allow the compulsory winding-up of THHE and
THHE Fabricators Sdn Bhd under Section 464(2) (d) of the CA,
theedgemalaysia.com notes.
The provision allows the court to order a compulsory winding-up,
even if the company is wound up voluntarily, if the court is
satisfied that the voluntary winding-up cannot protect the
interests of the creditors or contributories.
Globalmariner, Blackstone and Dynac had sought leave from the
court, as they claimed the voluntary winding-up exercise by both
companies (THHE and TH Fabricators) had various breaches of
statutory duties that had been carried out, theedgemalaysia.com
adds.
About TH Heavy
TH Heavy Engineering Berhad is an investment holding company. The
Company is engaged in the provision of management services. The
Company is engaged in the fabrication of offshore steel structures
and the provision of other related offshore oil and gas engineering
services in Malaysia.
=====================
N E W Z E A L A N D
=====================
CHIWI BUILDERS: Court to Hear Wind-Up Petition on June 27
---------------------------------------------------------
A petition to wind up the operations of Chiwi Builders Limited will
be heard before the High Court at Auckland on June 27, 2024, at
10:45 a.m.
Buildhub Limited filed the petition against the company on May 2,
2024.
The Petitioner's solicitor is:
Mark W. Swan
Molloy Hucker Lawyers
Fifth Floor, Hobson Towers West
26–28 Hobson Street
Auckland
DENTAL REVOLUTION: Creditors' Proofs of Debt Due on July 12
-----------------------------------------------------------
Creditors of Dental Revolution Limited, Freedom Project Aotearoa
Limited and Instaspace Limited are required to file their proofs of
debt by July 12, 2024, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on June 10, 2024.
The company's liquidator is Kevyn Botes.
LAYBUY HOLDINGS: BNPL Platform Placed Into Receivership
-------------------------------------------------------
Radio New Zealand reports that buy-now-pay-later service Laybuy has
been placed into receivership.
RNZ relates that founder Gary Rohloff said the economic downturn
had been more drawn-out than expected and had hurt the business.
"I am absolutely heartbroken at today's decision to request the
appointment of receivers to the Laybuy Group," RNZ quotes Mr.
Rohloff as saying in a statement. "This is a devastating time for
the Laybuy team, and I will be doing everything I can to support
them as we go through this process."
He said the business had been working "incredibly" hard to execute
a plan to achieve profitability after years of rapid growth.
"While we have been making good progress over the last two years,
the economic downturn has been longer than we expected, and this
had had a significant impact on the retail sector in both New
Zealand and the United Kingdom.
"As a result, we have see reduced consumer spending, higher credit
losses, and increased fraudulent activity. This alongside increased
financing costs created a perfect storm that was difficult to
recover from."
He said the business had tried "everything" including an attempted
sale, but this had fallen over at the last hurdle.
"This left the board with no option but to make the gut-wrenching
decision to voluntarily request the appointment of Deloitte as
receivers.
This is a difficult time for our team and I am devastated."
He said his priority was to work with receivers to ensure the best
outcome for staff, creditors, suppliers and merchants, RNZ relays.
Customers could continue to make their payments as normal.
The company listed in the Australian stock exchange in 2020 and
shares traded as high as AUD2.30. But they had dropped to AUD0.6c
before a decision was made last year to delist, RNZ notes.
PRO BUILD: Court to Hear Wind-Up Petition on July 5
---------------------------------------------------
A petition to wind up the operations of Pro Build Contracting
Auckland Limited will be heard before the High Court at Auckland on
July 5, 2024, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on May 2, 2024.
The Petitioner's solicitor is:
Hosanna Tanielu
Inland Revenue, Legal Services
5 Osterley Way
Manukau City
Auckland 2104
PROPOSITION LIMITED: Creditors' Proofs of Debt Due on July 15
-------------------------------------------------------------
Creditors of Proposition Limited are required to file their proofs
of debt by July 15, 2024, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on June 12, 2024.
The company's liquidators are:
Gareth Russel Hoole
Raymond Paul Cox
Ecovis KGA Limited, Chartered Accountants
PO Box 37223
Parnell
Auckland
REFLECTIONS FUNERAL: Court to Hear Wind-Up Petition on June 24
--------------------------------------------------------------
A petition to wind up the operations of Reflections Funeral
Directors and Advisors Limited will be heard before the High Court
at Tauranga on June 24, 2024, at 10:00 a.m.
Tauranga City Council filed the petition against the company on May
21, 2024.
The Petitioner's solicitor is:
Jeffrey Gray Ussher
Level 19, 191 Queen Street
Auckland
=================
S I N G A P O R E
=================
CANOPY TROPICS: Creditors' Proofs of Debt Due on July 18
--------------------------------------------------------
Creditors of Canopy Tropics Pte. Ltd. are required to file their
proofs of debt by July 18, 2024, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on June 12, 2024.
The company's liquidators are:
Farooq Ahmad Mann
c/o 3 Shenton Way
#03-06C Shenton House
Singapore 068805
CREDIT OPPORTUNITIES: Creditors' Proofs of Debt Due on July 17
--------------------------------------------------------------
Creditors of Credit Opportunities I Pte. Limited are required to
file their proofs of debt by July 17, 2024, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on June 10, 2024.
The company's liquidators are:
Lim Loo Khoon
Tan Wei Cheong
6 Shenton Way
OUE Downtown 2, #33-00
Singapore 068809
IAG RE SINGAPORE: Creditors' Proofs of Debt Due on July 18
----------------------------------------------------------
Creditors of IAG Re Singapore Pte. Ltd. are required to file their
proofs of debt by July 18, 2024, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on June 14, 2024.
The company's liquidator is:
Lai Seng Kwoon
c/o 12 Marina View #15-01
Asia Square Tower 2
Singapore 018961
PRICEWATERHOUSECOOPERS: Creditors' Proofs of Debt Due on July 18
----------------------------------------------------------------
Creditors of Pricewaterhousecoopers Consulting (Myanmar) Pte. Ltd.
are required to file their proofs of debt by July 18, 2024, to be
included in the company's dividend distribution.
The company commenced wind-up proceedings on June 13, 2024.
The company's liquidator is:
Sam Kok Weng
Lie Kok Keong
c/o 7 Straits View
Marina One East Tower, Level 12
Singapore 018936
RED BOX: Creditors' Proofs of Debt Due on July 12
-------------------------------------------------
Creditors of Red Box Recorders Pte. Ltd. are required to file their
proofs of debt by July 12, 2024, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on June 3, 2024.
The company's liquidator is:
Yee Kit Hong
Kit Yee & Co.
10 Eunos Road 8
#13-06 Singapore Post Centre
Singapore 408600
===============
T H A I L A N D
===============
[*] THAILAND: Factory Closures a Growing Concern, KKP Says
----------------------------------------------------------
Bangkok Post reports that Kiatnakin Phatra Financial Group (KKP)
has expressed growing concern over the weakening of Thailand's
manufacturing sector after a surge in factory closures.
According to KKP Research, Thailand's manufacturing production
index declined over a 15-month period between December 2022 and
March 2024, despite a global trade recovery which began late last
year.
The number of factory closures in the country has been rising,
particularly since the second half of last year, Bangkok Post
discloses. In 2021, the average number of factory closures per
month stood at 57. The average increased to 83 per month in 2022
and surged to 159 per month in the second half of 2023.
"From 2023 through the first quarter of 2024, about 1,700 factories
closed, affecting roughly 42,000 workers," said the research house,
Bangkok Post relays.
Moreover, the rate of new factories opening has lagged behind the
rate of closures, leading to a contraction or no growth in new
factories. From January 2023 to March 2024, the cumulative number
of factories closing exceeded the number of new factory openings.
On average, 150 new factories per month opened from January to July
2023, but from July 2023 to January 2024 the average number of new
factories opening fell to around 50 per month, Bangkok Post
relays.
KKP Research noted that factory closures and openings vary across
industries. Sectors such as leather, rubber, agriculture, wood and
machinery have faced significant challenges, experiencing both a
contraction in manufacturing and higher closure rates.
Bangkok Post relates that the research centre said most closures
involved large factories, while most openings were small factories.
This trend suggests that structural issues are a significant
problem rather than just business operations. The closure of large
factories underscores the growing challenges facing the country's
manufacturing sector.
Additionally, rising bad debt within the manufacturing sector is a
critical concern, emphasising structural problems and weakening
debt service capabilities, Bangkok Post relays. Vulnerable
factories that are classified as non-performing loans (NPLs) often
eventually close.
"Factories classified as an NPL have continued to increase,
indicating that more closures are likely," KKP Research reported.
Bangkok Post says that amid a global economic and trade recovery,
Thai manufacturing products with great potential and
competitiveness, accounting for about 47% of total manufacturing
value, are expected to benefit. Products offering great potential,
which accumulated a relatively high level of inventory during the
pandemic, should recover in line with the global rebound.
However, some products, particularly hard disk drives and steel,
representing about 35% of the country's manufacturing value, face
heightened challenges due to lower competitiveness, even amid the
global recovery, the research house, as cited by Bangkok Post,
said.
Following the US presidential election, KKP Research warned that
increased trade tensions between the US and China could further
deteriorate Thailand's competitiveness, particularly in the
automotive segment, based on the rise of electric vehicles produced
by Chinese firms, Bangkok Post adds.
*********
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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Editors.
Copyright 2024. All rights reserved. ISSN: 1520-9482.
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