/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/241011.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Friday, October 11, 2024, Vol. 27, No. 205 Headlines A U S T R A L I A BLACK LAB: Second Creditors' Meeting Set for Oct. 16 CALIDUS RESOURCES: Executes DOCA with West Coast Group DUCO PTY: First Creditors' Meeting Set for Oct. 17 LIGHT TRUST 2024-1: S&P Assigns BB (sf) Rating to Class E Notes OSTRA PTY: First Creditors' Meeting Set for Oct. 17 OZ PRIME: Second Creditors' Meeting Set for Oct. 16 QUASAR CONSTRUCTIONS: Goes Bankrupt; Enters Receivership SOCIETYONE PL 2023-1: Moody's Hikes Rating on Class F Notes to Ba2 UPHOLD PTY: First Creditors' Meeting Set for Oct. 17 B A N G L A D E S H BEXIMCO GROUP: Appellate Div. Affirms Ruling Appointing Receiver I N D I A BURAKIA STEEL: ICRA Keeps B+ Debt Ratings in Not Cooperating C.E.O.A EDUCATIONAL: ICRA Withdraws B+ Rating on INR7.50cr Loan GEETANJALI ISPAT: ICRA Keeps B+ Debt Ratings in Not Cooperating HYDERABAD STEELS: ICRA Keeps C Debt Rating in Not Cooperating IL&FS TRANSPORTATION: ICRA Keeps D Ratings in Not Cooperating INDIA CLEANTECH: Fitch Affirms 'BB-' Rating on Sr. Secured Notes JHARKHAND INFRA: ICRA Moves D Debt Ratings to Not Cooperating LINERS INDIA: ICRA Keeps D Debt Ratings in Not Cooperating MAHA SAI: ICRA Keeps B Debt Ratings in Not Cooperating Category MEENA ADVERTISERS: ICRA Keeps B+ Debt Ratings in Not Cooperating MEGHA MARKETING: ICRA Keeps B+ Debt Rating in Not Cooperating N.B HI-TECH: ICRA Keeps B- Debt Ratings in Not Cooperating NEW WIN: ICRA Keeps D Debt Ratings in Not Cooperating Category ORAVEL STAYS: Fitch Affirms 'B' LongTerm IDR, Outlook Stable PATANJALI FOODS: CCI OKs Buyout of Parent's HPC Division PATEL COTTON: ICRA Keeps B+ Debt Ratings in Not Cooperating PAYISM TECHNOLOGIES: Liquidation Process Case Summary RAM RICE: ICRA Keeps B+ Debt Ratings in Not Cooperating Category RAMANA EDUCATIONAL: ICRA Keeps B Debt Rating in Not Cooperating SAHARA INDUSTRIES: ICRA Keeps B Debt Ratings in Not Cooperating SATGURU METALS: ICRA Keeps D Debt Ratings in Not Cooperating SATWI INFRA: ICRA Keeps B Debt Rating in Not Cooperating Category SHILPI CABLE: ICRA Keeps D Debt Rating in Not Cooperating SHREE COTEX: ICRA Keeps B+ Debt Ratings in Not Cooperating SILVER FAB: ICRA Keeps B+ Debt Ratings in Not Cooperating SIVA SANKAR: ICRA Keeps B+ Debt Rating in Not Cooperating SUDHA SESAMUM: ICRA Keeps B+ Debt Ratings in Not Cooperating SUNNY ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating SYSKA LED: NCLT Directs to Initiate Insolvency Proceedings VAISHNAVI LIFECARE: ICRA Keeps B+ Debt Ratings in Not Cooperating I N D O N E S I A STAR ENERGY: Fitch Affirms 'BB-' Sec. Notes Rating, Outlook Now Pos M A L A Y S I A EA TECHNIQUE: Aims to Uplift PN17 Statuts by Q1 of 2025 M O N G O L I A GOLOMT BANK: S&P Upgrades Long-Term ICR to 'B+', Outlook Stable N E W Z E A L A N D BLUE SKIES: Thomas Lee Rodewald Appointed as Receiver and Manager HUNTLO LIMITED: Court to Hear Wind-Up Petition on Oct. 18 LAKEFRONT INVESTMENTS: Creditors' Proofs of Debt Due on Nov. 4 STEVENSONS ENGINEERING: McMillian Ordered to Pay Retention Money WEKE SCAFFOLDING: Court to Hear Wind-Up Petition on Oct. 18 S I N G A P O R E ASIAN FLAVORS: Placed in Provisional Liquidation FT GLOBAL: Court to Hear Wind-Up Petition on Oct. 25 HARBORAIR LOGISTIC: Court to Hear Wind-Up Petition on Oct. 25 JSC SPACE: Court Enters Wind-Up Order NAN HUA: Creditors' Proofs of Debt Due on Nov. 8 S O U T H K O R E A QOO10: Court Rejects Arrest Warrant for CEO Over Payment Delays S R I L A N K A CITIZENS DEVELOPMENT: Fitch Affirms Sub. Debt Rating at 'BB+(lka)' - - - - - ================= A U S T R A L I A ================= BLACK LAB: Second Creditors' Meeting Set for Oct. 16 ---------------------------------------------------- A second meeting of creditors in the proceedings of The Black Lab Coffee Co. Pty Ltd has been set for Oct. 16, 2024 at 11:00 a.m. at the offices of Rodgers Reidy at Level 2A, 181 Elizabeth Street in Brisbane. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Oct. 14, 2024 at 4:00 p.m. Kaily Lyn Chua of Rodgers Reidy was appointed as administrator of the company on Sept. 16, 2024. CALIDUS RESOURCES: Executes DOCA with West Coast Group ------------------------------------------------------ TipRanks.com reports that Calidus Resources Limited and its subsidiaries have executed Deeds of Company Arrangement (DOCA) with the West Coast group, with three DOCAs already in effect, transferring operational control to the newly formed boards. According to TipRanks.com, the Deed Administrators are finalizing conditions for the remaining DOCAs, which includes a significant equity transfer application under section 444GA. Shareholders of Calidus Resources will be kept informed about the court process and the 444GA application's progress. Calidus Resources Limited (ASX:CAI) -- https://www.calidus.com.au/ -- engages in the exploration and exploitation of gold minerals in Australia. It holds interests in the Warrawoona gold project covering an area of approximately 662 square kilometers located in the East Pilbara district of the Pilbara Goldfield in Western Australia; and the Blue Spec project situated in the Pilbara Goldfield in Western Australia. The company also holds interest in Spear Hill project located in Pilbara, Western Australia. Hayden Leigh White and Daniel Hillston Woodhouse of FTI Consulting were appointed administrators of Calidus Resources Limited, Keras (Gold) Australia Pty Ltd, Millennium Minerals Pty Ltd, Calidus Otways Pty Ltd, Keras (Pilbara) Gold Pty Ltd and Calidus Blue Spec Pty Ltd on June 28, 2024. DUCO PTY: First Creditors' Meeting Set for Oct. 17 -------------------------------------------------- A first meeting of the creditors in the proceedings of Duco Pty Ltd will be held on Oct. 17, 2024 at 11:00 a.m. via teleconference. Travis Olsen and Stuart Otway of SV Partners were appointed as administrators of the company on Oct. 7, 2024. LIGHT TRUST 2024-1: S&P Assigns BB (sf) Rating to Class E Notes --------------------------------------------------------------- S&P Global Ratings assigned its ratings to six of the seven classes of prime residential mortgage-backed securities (RMBS) issued by Perpetual Corporate Trust Ltd. as trustee for Light Trust 2024-1. Light Trust 2024-1 is a securitization of prime residential mortgage loans originated by Heritage and People's Choice Ltd., which trades as People First Bank, Heritage Bank, and People's Choice Credit Union. The ratings reflect: -- S&P's view of 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. -- S&P's view that the credit support is sufficient to withstand the stresses it applies. This credit support for the rated notes comprises note subordination and lenders' mortgage insurance on 24.4% of the portfolio. -- S&P's expectation that the various mechanisms to support liquidity within the transaction, including an excess revenue reserve funded by available excess spread (subject to conditions), principal draws, and a liquidity facility equal to 1.00% of the outstanding note balance are sufficient under its stress assumptions to ensure timely payment of interest. -- The benefit of a standby fixed- to floating-rate interest-rate swap to be provided by Westpac Banking Corp. to hedge the mismatch between receipts from any fixed-rate mortgage loans and the variable-rate RMBS. -- The legal structure of the trust, which is established as a special-purpose entity, and meets our criteria for insolvency remoteness. Ratings Assigned Light Trust 2024-1 Class A, A$920.00 million: AAA (sf) Class AB, A$37.00 million: AAA (sf) Class B, A$14.00 million: AA (sf) Class C, A$10.50 million: A (sf) Class D, A$4.50 million: BBB (sf) Class E, A$7.50 million: BB (sf) Class F, A$6.50 million: Not rated OSTRA PTY: First Creditors' Meeting Set for Oct. 17 --------------------------------------------------- A first meeting of the creditors in the proceedings of Ostra Pty. Ltd., Ostra Distillers Pty Ltd, and Baron Estate Pty. Ltd. will be held on Oct. 17, 2024 at 10:00 a.m. at the offices of WLP Restructuring in Suite 19.02, Level 19, 1 Castlereagh Street in Sydney and via electronic facilities. Alan Walker and Glenn Livingstone of WLP Restructuring were appointed as administrators of the company on Oct. 5, 2024. OZ PRIME: Second Creditors' Meeting Set for Oct. 16 --------------------------------------------------- A second meeting of creditors in the proceedings of Oz Prime Group Pty Ltd has been set for Oct. 16, 2024 at 11:00 a.m. at the offices of Westburn Advisory at Level 5, 115 Pitt Street in Sydney. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Oct. 15, 2024 at 4:00 p.m. Shumit Banerjee of Westburn Advisory was appointed as administrator of the company on Sept. 10, 2024. QUASAR CONSTRUCTIONS: Goes Bankrupt; Enters Receivership -------------------------------------------------------- Sky News Political Editor Andrew Clennell reports that Quasar Constructions, one of the contractors involved in the construction of the Western Sydney Airport, has gone bankrupt. According to Sky News, National Electrical and Communications Association (NECA) has released a statement raising its concern and noting that this builder has recently been involved in other projects before entering receivership. "There has been a collapse in a building contractor involved in Western Sydney Airport leading to calls for the government to stump up for the sub-contractors," Mr. Clennell said, relates the report. About Quasar Constructions Quasar Constructions (Commercial) Pty Limited was founded in 2012. The company's line of business includes the construction of industrial buildings and warehouses. [BN] SOCIETYONE PL 2023-1: Moody's Hikes Rating on Class F Notes to Ba2 ------------------------------------------------------------------ Moody's Ratings has upgraded the ratings on three classes of notes issued by Perpetual Corporate Trust Limited as trustee of SocietyOne PL 2023-1 Trust. The affected ratings are as follows: Issuer: SocietyOne PL 2023-1 Trust Class D Notes, Upgraded to A3 (sf); previously on Jan 12, 2024 Upgraded to Baa1 (sf) Class E Notes, Upgraded to Baa3 (sf); previously on Jan 12, 2024 Upgraded to Ba1 (sf) Class F Notes, Upgraded to Ba2 (sf); previously on Jan 12, 2024 Upgraded to B1 (sf) A comprehensive review of all credit ratings for the transaction has been conducted during a rating committee. RATINGS RATIONALE The upgrades were prompted by (1) an increase in credit enhancement available for the affected notes and (2) the performance of the underlying portfolio to date. No action was taken on the remaining rated classes in the deal as credit enhancements remain commensurate with the current ratings for the respective notes. Following the September 2024 payment date, the note subordination available for the Class D, Class E and Class F Notes has increased to 22.5%, 14.9%, and 7.7% respectively, from 20.2%, 12.3% and 4.9% at the time of last rating action for these notes in January 2024. Principal collections have been distributed on a pro-rata basis among the rated notes since October 2023. Current total outstanding notes as a percentage of the total closing balance is 42.8%. As of end-August 2024, 4.0% of the outstanding pool was 30-plus delinquent and 1.5% was 90-plus delinquent. The portfolio has incurred 3.9% and 3.5% of gross and net losses to date, all of which have been covered by excess spread. Based on the observed performance to date and loan attributes, Moody's have maintained Moody's default assumption of 8.5% of the outstanding portfolio balance (equivalent to 7.6% of the original portfolio balance) and the Aaa portfolio credit enhancement (PCE) assumption at 36.0%. Moody's have updated Moody's recovery rate assumption to 7.5% from 5% at closing. The deal includes an interest rate swap agreement to mitigate the fixed-floating mismatch between underlying asset and the rated notes. Following the September 2024 payment date, the swap's notional balance covers 86% of the balance of the rated notes. In Moody's analysis, Moody's have considered the extra costs the deal may incur due to under-hedging, based on various scenarios of future interest rates and prepayment rates. Moody's analysis has also considered various scenarios involving different mean default rate, PCE, recovery rate and default timing to evaluate the resiliency of the note ratings. The transaction is a cash securitisation of a portfolio of Australian unsecured and secured consumer personal loans originated by SocietyOne Australia Pty Ltd. The principal methodology used in these ratings was "Moody's Approach to Rating Consumer Loan-Backed ABS" published in July 2024. Factors that would lead to an upgrade or downgrade of the ratings: Factors that could lead to an upgrade of the ratings include (1) performance of the underlying collateral that is better than Moody's expectations, and (2) an increase in the notes' available credit enhancement. Factors that could lead to a downgrade of the ratings include (1) performance of the underlying collateral that is worse than Moody's expectations, (2) a decrease in the notes' available credit enhancement, and (3) a deterioration in the credit quality of the transaction counterparties. UPHOLD PTY: First Creditors' Meeting Set for Oct. 17 ---------------------------------------------------- A first meeting of the creditors in the proceedings of: - Uphold Pty Ltd, JDI V&A Pty Ltd; - JDI Orion Pty Ltd; - JDI Labrador Pty Ltd; - Isaac Group Corporation Pty Ltd; - Adcon Structures Pty Ltd; - Descon NSW Pty Ltd; - Adcon Resources Group SA Pty Ltd; - Adcon Resources (ACT) Pty Ltd; and - Adcon Structures QLD Pty Ltd will be held on Oct. 17, 2024 at 10:30 a.m. at the offices of SV Partners Brisbane, 22 Market Street in Brisbane and via virtual meeting technology. David Michael Stimpson of SV Partners was appointed as administrator of the companies on Oct. 4, 2024. =================== B A N G L A D E S H =================== BEXIMCO GROUP: Appellate Div. Affirms Ruling Appointing Receiver ---------------------------------------------------------------- Dhaka Tribune reports that Justice Md Rezaul Haque, a chamber judge of the Appellate Division, affirmed on Tuesday, Oct. 1, a High Court decision appointing a receiver to oversee all assets of the Beximco Group. The High Court had ordered the appointment of the receiver on September 5, 2024, to manage all institutions of the Beximco Group, owned by Salman F. Rahman, who previously served as a private investment advisor to Sheikh Hasina, recounts Dhaka Tribune. In addition, a ruling was issued to determine why the Bangladesh Bank should not be ordered to reveal the total amount of outstanding loans held by the institutions of the Beximco Group. The Bangladesh Bank was given four weeks to respond, the report relays. A hearing on the matter before the full bench of the Appellate Division has been scheduled for October 28, adds the report. About Beximco Group BEXIMCO Group ("BEXIMCO" or the "Group") is the largest private sector group in Bangladesh that was founded in the 1970s by two brothers - Ahmed Sohail Fasihur Rahman and Salman Fazlur Rahman. It has operations and investments across a wide range of industries including textiles, pharmaceuticals, PPE, ceramics, real estate development, construction, trading, marine food, information and communication technologies, media, financial services, and energy. ========= I N D I A ========= BURAKIA STEEL: ICRA Keeps B+ Debt Ratings in Not Cooperating ------------------------------------------------------------ ICRA has kept the Long-Term rating of Burakia Steel & Alloys (BSA) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+(Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 5.00 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 4.30 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with BSA, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Established in 2011, BSA is engaged in the manufacturing of mild steel (MS) ingot. The manufacturing facility of the firm is located at Kamrup, Assam. The firm commenced its commercial operations in September 2011. Besides, the firm is also engaged in the trading of TMT bar in the domestic market. C.E.O.A EDUCATIONAL: ICRA Withdraws B+ Rating on INR7.50cr Loan --------------------------------------------------------------- ICRA has withdrawn the rating assigned to the bank facilities of C.E.O.A Educational Society, at the request of the company and based on the No Dues Certificate received from the lender, in accordance with ICRA's policy on withdrawal of ratings. The key rating drivers and their description, liquidity position, rating sensitivities have not been captured as the rated instruments are being withdrawn. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based 7.50 [ICRA]B+ (Stable); ISSUER NOT Limits COOPERATING; withdrawn CEOA Matriculation School was started in 1995 under the leadership of Mr. Raja Climax, along with a team of Central Excise officers with a student strength of 43 in Mahatma Gandhi Nagar, Madurai. By 2000-2001, the school achieved massive strength and started operating from two branches - one at Kosakulam and another at Officers Town, both functioning in owned spacious buildings. Apart from the above, the society now operates five more schools and an art and science college in various cities across Tamil Nadu and provides education to more than 9,000 students. GEETANJALI ISPAT: ICRA Keeps B+ Debt Ratings in Not Cooperating --------------------------------------------------------------- https://www.icra.in/Rationale/ShowRationaleReport?Id=130385 ICRA has kept the Long-Term rating of Geetanjali Ispat & Powers Pvt. Ltd. (GIPPL) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+(Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 8.50 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 0.50 [ICRA]B+ (Stable) ISSUER NOT Non Fund Based COOPERATING; Rating continues Others to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with GIPPL, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Geetanjali Ispat & Powers Pvt. Ltd. (GIPPL) was incorporated in 2003, and its plant is located at Bilaspur, Chhattisgarh. GIPPL has a production facility for sponge iron with an annual capacity of 30,000 MT. The current management took over the operations of the company in 2014. GEETANJALI ISPAT: ICRA Keeps B+ Debt Ratings in Not Cooperating --------------------------------------------------------------- ICRA has kept the Long-Term rating of Geetanjali Ispat & Powers Pvt. Ltd. (GIPPL) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+(Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 8.50 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 0.50 [ICRA]B+ (Stable) ISSUER NOT Non Fund Based COOPERATING; Rating continues Others to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with GIPPL, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Geetanjali Ispat & Powers Pvt. Ltd. (GIPPL) was incorporated in 2003, and its plant is located at Bilaspur, Chhattisgarh. GIPPL has a production facility for sponge iron with an annual capacity of 30,000 MT. The current management took over the operations of the company in 2014. HYDERABAD STEELS: ICRA Keeps C Debt Rating in Not Cooperating ------------------------------------------------------------- ICRA has kept the Long-Term and Short-Term ratings of Hyderabad Steels (HS) in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]C ISSUER NOT COOPERATING/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term- 4.00 [ICRA]C; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Cash Credit 'Issuer Not Cooperating' Category Short Term- 3.50 [ICRA]A4 ISSUER NOT Non Fund Based COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with HS, ICRA has been trying to seek information from the entity so as to monitor its performance Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Founded in 2008 as a proprietorship, Hyderabad Steels (HS) is involved in the trading of steel and allied products such as Mild Steel (MS) Ingots, Billets, MS Bars, MS Angles, MS Flats, Scrap, Sponge Iron etc. In 2015, the firm was reconstituted as a partnership firm.The partners of the firm Ms. J. Raghavi Reddy and Mr. M. Pavan Kumar have more than four decades of experience in iron and steel trading business. The firm procures traded products from steel rolling mills located in and around Hyderabad. The firm has its warehouse facility at Nacharam, Hyderabad. The firm caters to the demands of the customers based out of Hyderabad. IL&FS TRANSPORTATION: ICRA Keeps D Ratings in Not Cooperating ------------------------------------------------------------- ICRA has kept the Long term and Short term ratings for the of IL&FS Transportation Networks Limited (ITNL) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D/[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term- 490.00 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Term Loan 'Issuer Not Cooperating' Category Short-term- 320.00 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Cash Credit 'Issuer Not Cooperating' Category CP/CD/STD- 1000.00 [ICRA]D; ISSUER NOT COOPERATING; Commercial Rating continues to remain under Paper 'Issuer Not Cooperating' Category NCD/Debt 3963.50 [ICRA]D; ISSUER NOT COOPERATING; bonds/ Rating continues to remain under NCD/LTD 'Issuer Not Cooperating' Category NCD/Debt- 760.00 [ICRA]D; ISSUER NOT COOPERATING; Preference Rating continues to remain under Shares 'Issuer Not Cooperating' Category As part of its process and in accordance with its rating agreement with ITNL, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Incorporated in 2000, IL&FS Transportation Networks Limited (ITNL) is a surface transportation infrastructure company and Build-Operate-Transfer (BOT) road operator in India. The company is promoted by Infrastructure Leasing & Financial Services Limited which holds 71.92% equity stake in ITNL as on June 30, 2019. Since inception, ITNL has been involved in the development, construction and implementation, operation and maintenance of national and state highways, roads, flyovers and bridges. ITNL, through its wholly-owned subsidiary in Singapore, namely ITNL International Pte Ltd (IIPL) holds 100% equity stake in Elsamex S.A, a Spanish O&M operator which provides maintenance services for infrastructure facilities largely in the roads sector in Spain and the rest of Europe and 49% stake (51% being held by Chongqing Expressway Group Company Limited) in Chongqing YuHe Expressway Company Limited (CYECL), a toll-based road project in south-west China which has a long operating history of over nine years. INDIA CLEANTECH: Fitch Affirms 'BB-' Rating on Sr. Secured Notes ---------------------------------------------------------------- Fitch Ratings has affirmed India Cleantech Energy's (ICEL) USD334 million senior secured notes due 2026 at 'BB-'. The Outlook is Stable. RATING RATIONALE The note rating reflects the credit profile of a restricted group of 12 entities (Acme RG1) that are fully owned by Acme Solar Holdings Limited, although ICEL's rating is notched down from the credit assessment of Acme RG1 to reflect risk related to the orphan issuance structure. Acme RG1 operates solar generation assets with combined capacity of 450MW (or 605MWp) in eight Indian states. ICEL is an orphan financing vehicle incorporated in Mauritius that is held by a trust to which Acme Solar Holdings does not have equity or guarantee linkage. ICEL used the US dollar bond proceeds to subscribe to Indian rupee-denominated non-convertible debentures (NCDs) issued by the entities in Acme RG1. ICEL's rating headroom has reduced significantly due to a weakening financial profile as a result of a continuous depreciation of the rupee against the US dollar. This is because the adopted hedging structure has led to the bullet repayments' partial exposure to foreign-exchange volatility. The rating-case debt service coverage ratio (DSCR) is now at its downgrade sensitivity trigger for ICEL, based on the forecast exchange rate according to Fitch's September 2024 Global Economic Outlook, although the metric has not yet breached the threshold. Any sustained depreciation of the rupee will trigger a negative rating action. The rating benefits from the fully contracted revenue of the operating assets, whose counterparties include sovereign-owned entities and distribution companies owned by various Indian states. All of Acme RG1's capacity is under long-term power purchase agreements (PPAs) with 93% of the capacity subject to tariffs that are fixed through the PPA terms, which extend beyond the tenor of the US dollar notes. Fitch considers the revenue from sovereign-owned utilities as fully contracted and apply the fully contracted project threshold. However, Fitch considers it prudent to treat the revenue from state utilities as merchant revenue in light of the likelihood of payment delays, although there have been no defaults, and apply the merchant project threshold. Therefore, Fitch applies a revenue-based weighted-average threshold in determining the rating. KEY RATING DRIVERS Experienced Contractors; Proven Technology: Operation Risk - Midrange Acme RG1's polycrystalline solar projects use a proven technology with a long-established history. Fitch regards the operation as straightforward. Solar modules are provided by internationally known suppliers. Operation and maintenance works are carried out by Acme Cleantech Solutions Private Limited and its affiliate under 25-year fixed-price contracts with 4% annual price escalation. Replacement operators are readily available. The assessment is constrained to 'Midrange' as the operating cost forecast is not validated by an independent technical advisor and the operating record shows modest variability. Reasonable Forecast Spread, Adequate Operating Performance: Revenue Risk (Volume) - Midrange The energy yield forecast produced by third-party experts indicates an overall P50/one-year P90 spread of 7%, leading to the 'Midrange' assessment. The portfolio has capacity-weighted average life of about seven years with all assets operating for more than four years. Historical load factors recorded by Acme RG1's portfolio exhibit low volatility from the one-year P90 projections (about 2%). The curtailment risk is limited in India given the "must-run" status of renewable energy projects. Fixed Long-Term Prices for Almost All Contracts, Low Renewal Risk: Revenue Risk (Price) - Midrange All of Acme RG1's capacity is under long-term PPAs, with 93% of capacity under fixed-priced contracts that extend beyond the tenor of the US dollar notes, protecting the portfolio from merchant price volatility. The revenue risk (price) is constrained to 'Midrange' because 7% of Acme RG1's capacity is exposed to the national average power purchase cost, which is set annually. However, the variable tariff will apply only after the financial year ending March 2028 (FY28), which is after the maturity of the US dollar notes. The PPAs of Acme RG1's portfolio have capacity-weighted residual life of about 18 years. Contracts with sovereign-owned utilities account for 55% of alternative current capacity (or about 61% of direct current capacity) of the restricted group's total capacity while the remaining capacity is contracted with state distribution companies. Partially Amortised Bond, Manageable Refinancing Risk: Debt Structure - Weaker About 7% of the notes' principal will amortise over the note life. The refinancing risk exposure on the remaining principal is mitigated by a mandatory cash sweep, cash trap in the final year and the PPAs' remaining tenor. The US dollar noteholders benefit from a share pledge and charge over ICEL's assets, excluding the NCDs. ICEL benefits from the usual protective structural features and security package of the restricted group entities. The US dollar noteholders will have only indirect access to the NCDs' security package, which is a common structure used in several other Fitch-rated transactions. Debt structure is assessed as 'Weaker' due to a combination of substantial bullet repayments, the orphan issuance structure, and the partial exposure to rupee depreciation up to a contracted strike price in relation to the 40% remaining principal hedged using options. However, holders of the NCDs will provide a redemption premium to cover any funding shortfall between the spot exchange rate at inception and the strike price, which will mitigate the risk to bondholders. Notched Down on Orphan SPV Issuance Structure Fitch believes the orphan SPV issuer provides lower protection to the offshore US dollar noteholders in the case of a failure of a hedge counterparty and termination of hedge agreements before the notes mature. The sponsor is not legally obligated to replace hedge counterparties or allowed to cover all of the additional costs associated with these events, including the early termination amount payable to defaulting hedge counterparties. Fitch believes that notching down the rating is warranted to reflect the lower protection to US dollar noteholders on account of the issuance structure. Financial Profile Fitch assumes that the US dollar bond will be refinanced upon maturity by another debt that will amortise across the remaining PPA terms. Fitch focuses on the average annual DSCR over the refinancing period given the largely bullet structure of the bond. Fitch's base case assumes P50 generation, a 5% production haircut, 0.5% annual degradation and 11.4% refinancing interest rate. Fitch assumes the rupee/US dollar exchange rate for the portion of bullet repayment hedged with options will be around Fitch's latest Global Economic Outlook forecast. Its base case results in an average annual DSCR of 1.47x during the refinancing period. Fitch's rating case further assumes one-year P90 generation, a 5% production haircut, 0.7% annual degradation and a 10% stress on management's operating expense forecast. Fitch assumes a similar refinancing interest rate and foreign-exchange assumptions as Fitch's base case. Its rating case results in an average annual DSCR of 1.30x. PEER GROUP Fitch views ICEL as comparable with India Green Power Holdings (ReNew RG1, senior secured notes: BB-/Stable). IGPH has a similar orphan issuance and debt structure to that of ICEL, with large bullet repayments at maturity. ReNew RG1 has a stronger financial profile than Acme RG1, but the latter has a stronger portfolio configuration (100% solar portfolio) as Renew RG1 comprises a mix of wind and solar projects. Acme RG1 also has stronger counterparties, while close to 80% of Renew RG1's capacity is contracted with state distribution companies. The factors, when combined, justify their similar credit profiles, in its view. ICEL can also be compared with Clean Renewable Power (Mauritius) Pte. Ltd (CRP, senior secured notes: BB-/Stable). Similar to ICEL, CRP has large bullet repayments at maturity. CRP's portfolio has a mix of wind and solar projects, which is a weaker configuration in comparison with Acme RG1. The financial profile is also weaker than that of Acme RG1. ICEL's orphan issuance structure, however, weighs on its overall rating, which justifies rating ICEL and CRP at the same level. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Average annual DSCR across the refinancing period drops below 1.30x persistently. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Positive rating action is unlikely in the near-to-medium term as the rating-case DSCR is now at the downgrade sensitivity trigger. - Positive rating action is possible should average annual DSCR across the refinancing period increase above 1.35x persistently. CREDIT UPDATE Power generation for Acme RG1's portfolio of 12 solar assets dropped by 1% in FY24, the same decline as in FY23, due to an insured event related to a transformer issue at one of the projects. The portfolio's total generation was around 2% lower than the one-year P90 estimate in FY24. Ten of the 12 assets performed below their respective one-year P90 estimates amid lower solar irradiation and temporary grid outages in two Rajasthan projects following a transmission tower collapse, which has been rectified. Acme RG1's receivable position has improved over the last two years to around 56 days as of FYE24. This was almost a 50% improvement from a high of around 110 days in FY22. Acme RG1 has four projects contracted with sovereign-owned entities. The remaining eight projects are contracted with state distribution companies. Barring Telangana and Chhattisgarh distribution companies, receivable days have been under 85 for the other six distribution company projects in past few years. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- India Cleantech Energy India Cleantech Energy/Project Revenues - First Lien/1 LT LT BB- Affirmed BB- JHARKHAND INFRA: ICRA Moves D Debt Ratings to Not Cooperating ------------------------------------------------------------- ICRA has moved the ratings for the bank facilities of Jharkhand Infrastructure Implementation Company Limited (JIICL) to the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term– 382.67 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating moved to the 'Issuer Not Term Loan Cooperating' Category Long-term– 60.53 [ICRA]D; ISSUER NOT COOPERATING; Unallocated Rating moved to the 'Issuer Not Limits Cooperating' Category As a part of its process and in accordance with its rating agreement with JIICL, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite cooperation and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the company's rating has been moved to the "Issuer Not Cooperating category". The rating action has been taken in accordance with ICRA's policy on non-cooperation by a rated entity available at www.icra.in. Jharkhand Infrastructure Implementation Company Limited (JIICL), a wholly-owned subsidiary of IL&FS Transportation Networks Limited (ITNL), was incorporated in 2015, to develop a six-lane divided carriageway with paved shoulders on Ranchi Ring Road (section VII) on Build, Operate and Transfer (BOT) annuity basis. The project stretch starts from design chainage Km 0.000 near Kathitar Junction on NH-75 via Sukurhuttu Pithorato design chainage Km. 23.575 at Vikas on NH-33, in Jharkhand, having a length of 23.575 km. The total project cost of INR636 crore was funded by equity infusion of INR80 crore, promoter sub-debt of INR80 crore and INR476 crore of bank debt. The project achieved provisional completion certificate on November 21, 2018 and received the final completion certificate on May 16, 2019. LINERS INDIA: ICRA Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------- ICRA has kept the Long-Term and Short-Term ratings of Liners India Limited in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]D ISSUER NOT COOPERATING/[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term- 27.00 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Cash Credit 'Issuer Not Cooperating' Category Long-term- 7.20 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Term Loan 'Issuer Not Cooperating' Category Long-term/ 0.05 [ICRA]D/[ICRA]D; ISSUER NOT Short Term COOPERATING; Rating Continues to Unallocated remain under 'Issuer Not Cooperating' Category Short Term- 15.75 [ICRA]D; ISSUER NOT COOPERATING; Non Fund Rating Continues to remain under Based-Others issuer not cooperating category Fixed Deposit 5.00 [ICRA]D; ISSUER NOT COOPERATING; Rating Continues to remain under issuer not cooperating category As part of its process and in accordance with its rating agreement with Liners India Limited, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Liners India Limited was originally established in 1974 as a partnership firm by Mr. S Ganesh; the firm was reconstituted as a private limited company in 1986 and to a public limited company in 1994. LIL has two divisions: cylinder liner manufacturing and automobile components trading. LIL manufactures cylinder liners and cast-iron products. The centrifugally cast cylinder liners are used in diesel automotive engines. LIL supplies to original equipment manufacturers of heavy, medium, and light commercial vehicles, tractors, and diesel engines worldwide. The company has manufacturing units in Vijayawada (Andhra Pradesh), and Rudrapur (Uttarakhand) with an installed capacity of 24 crore liners per annum. The company has set up the trading division after acquisition of Jai Motors Ltd in January 2009. Under this division, LIL is a distributor in South India for automotive component manufacturing companies. It is an exclusive distributor of Shriram Pistons & Rings Ltd and Allied Nippon Ltd for AP, Telangana, Karnataka, Kerala, and Tamil Nadu. It is also a distributor of six other automotive component manufacturing companies in South India. MAHA SAI: ICRA Keeps B Debt Ratings in Not Cooperating Category --------------------------------------------------------------- ICRA has kept the Long-Term rating of Maha Sai Laboratories (MSL) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 4.00 [ICRA]B (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 4.75 [ICRA]B (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category Long Term- 1.25 [ICRA]B(Stable); ISSUER NOT Unallocated COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with MSL, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Maha Sai Laboratories (MSL) was set up in 2011 by Mr. CH Narasimha Reddy. MSL is involved in purification and distillation of industrial solvents. The promoter has about 20 years of experience in the pharmaceutical industry. The facility is located in Gummadidala, Medak district of Telangana and has a capacity of 58 KL with a total of five reactors. MEENA ADVERTISERS: ICRA Keeps B+ Debt Ratings in Not Cooperating ---------------------------------------------------------------- ICRA has kept the Long-Term rating of Meena Advertisers in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+(Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 8.00 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 2.00 [ICRA]B+ (Stable) ISSUER NOT Unallocated COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with Meena Advertisers, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Incorporated in 1980, Meena Advertisers is engaged in providing advertisement spaces in airports and railway stations. Based in Chennai, the entity has its marketing offices in Mumbai, Jaipur, Mangalore and New Delhi. Meena Advertisers is a proprietorship firm, promoted by Mr. V Krishnamurthy. MEGHA MARKETING: ICRA Keeps B+ Debt Rating in Not Cooperating ------------------------------------------------------------- ICRA has kept the Long-Term rating of Megha Marketing in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+(Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 15.00 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with Megha Marketing, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Megha Marketing was incorporated in March 2006 with the objective of promoting and marketing products manufactured by Megha Springs Pvt. Ltd, Megha Bottling, Megha Fruit Processing Pvt. Ltd. and Mahima Shankar Processed Food Pvt. Ltd., all of which belong to the Shankar Group of Companies. Megha Marketing is controlled by two partners Smt. Suma Bhat (45%) and Smt. Lalitha Bhat (55%). The firm markets the products in four different segments viz. bottled fruit juices under brand "Sip On", aerated beverages like club soda and soft drinks under brand "Bindu", packaged drinking water under brand "Bindu" and processed food items (mostly potato chips and packaged snacks) under the brand "Snak up". The group companies have their manufacturing units in Puttur (Karnataka). MM sells its products in Karnataka, Andhra Pradesh, Kerala,Tamil Nadu, Maharashtra, Goa and Orissa. N.B HI-TECH: ICRA Keeps B- Debt Ratings in Not Cooperating ---------------------------------------------------------- ICRA has kept the Long-Term rating of N.B Hi-Tech Cold Storage (NBCS) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B- (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 2.51 [ICRA]B- (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 8.43 [ICRA]B- (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category Long Term- (1.51) [ICRA]B- (Stable) ISSUER NOT Interchangeable COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with NBCS, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Incorporated in the year 2012, N.B. Hi-Tech Cold Storage (NBCS) commissioned commercial operations in February 2013 with its cold storage facility located at Deesa, in Banaskantha district of Gujarat. It is engaged in the business of operating a modified atmosphere cold storage to store potatoes and has a total capacity to stock 1, 40,000 bags of potato of 50 kg each or 7000 MT of potatoes. The company is promoted by Mr. Dalpat Mali along with his family members. The promoters have a long-standing experience in potato farming as well as an established track record of operating cold storages by the virtue of their association with other potato cold storages in the region. NEW WIN: ICRA Keeps D Debt Ratings in Not Cooperating Category -------------------------------------------------------------- ICRA has kept the Long-Term and Short-Term ratings of New Win Win Feeds Pvt. Ltd. (NWWFPL) in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]D; ISSUER NOT COOPERATING/ [ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term- 2.83 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Term Loan 'Issuer Not Cooperating' Category Long-term- 4.05 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Cash Credit 'Issuer Not Cooperating' Category Long Term- 7.83 [ICRA]D; ISSUER NOT COOPERATING; Unallocated Rating Continues to remain under 'Issuer Not Cooperating' Category Short-term 0.29 [ICRA]D; ISSUER NOT COOPERATING; Non-fund based Rating continues to remain under Others 'Issuer Not Cooperating' Category As part of its process and in accordance with its rating agreement with NWWFPL, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Incorporated in 2012, New Win Win Feeds Pvt. Ltd. (NWWFPL) is involved in the production of poultry feed as well as broiler farming at its facilities located in Murshidabad, West Bengal. ORAVEL STAYS: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed India-based Oravel Stays Limited's (OYO) Long-Term Foreign- and Local-Currency Issuer Default Ratings at 'B' with a Stable Outlook. Fitch has also affirmed the rating on the USD660 million senior secured term loan facility (outstanding USD446 million) due 2026 issued by OYO's fully owned subsidiary, Oravel Stays Singapore Pte Limited, at 'B'. The Recovery Rating is 'RR4'. The affirmation follows the announcement that OYO will acquire G6 Hospitality, a franchisor of the Motel 6 and Studio 6 brands in the US, for USD525 million. Fitch expects the acquisition will be funded by a combination of a long-term loan and cash on hand, which includes proceeds of USD175 million of equity raised year to date in the financial year ending 31 March 2025 (FY25). Should the company rely on short-term rather than long-term debt is used to fund this transaction, it would increase liquidity pressure and could lead to a negative rating action. Fitch expects the acquisition to lead to a temporary increase in EBITDA leverage above its negative sensitivity of 5x in FY25, though it should fall below 4x in FY26. Fitch believes the acquisition will complement OYO's existing business and increase its exposure to the developed US market. This will reduce exposure to more volatile emerging markets and support an increase in profitability. Key Rating Drivers New Acquisition Debt: Fitch expects OYO to raise long-term debt to fund the proposed acquisition of G6. Fitch also expects OYO to refinance its existing USD446 million term loan, which matures in June 2026. This will reduce refinancing risk. If a short-term loan is used to fund the refinancing or the acquisition, refinancing risk and liquidity pressure would increase. Leverage to Decline Post-Acquisition: Fitch forecasts EBITDA leverage will increase to 5.7x in FY25 (FY24: 4.3x), before declining to 3.6x in FY26. The temporary increase in leverage reflects the partly debt-funded acquisition. If Fitch includes 12 months EBITDA contribution from G6 and the smaller acquisition of Checkmyguest (CMG), EBITDA leverage would be below 4.5x in FY25. OYO targets debt/EBITDA of under 3.0x in the medium to long-term. Increased Developed Market Exposure: The proposed acquisition of G6 and the acquisition of CMG increases OYO's exposure to the US and France. Fitch believes the increased exposure to developed markets will reduce earnings volatility and improve profitability as storefronts in these markets generate higher gross booking value (GBV). Fitch expects the majority of OYO's cost base will remain in India, which will benefit profitability. Pro-forma for the acquisition, Fitch expects around 65% of EBITDA will be derived from the US and Europe. Value-Add Acquisition: Fitch believes OYO will be able to increase G6's EBITDA by implementing its revenue management system and reducing operating costs. OYO is likely to generate additional revenue by using its combined business development team to increase storefront expansion and by introducing dynamic pricing. The company will be able to cut operating costs at G6 by shifting staff from the US to India and by replacing existing IT contracts with in-house technology or centralised contracts. OYO's existing US business has an EBITDA margin of about 9% of GBV compared to about 3% for G6. Improving Profitability: Fitch forecasts EBITDA margins will improve from 18% in FY25 (FY24: 16%) to around 21% in FY26, supported by the higher profitability of the G6 and CMG acquisitions, modest cost synergies and the benefit of operating leverage. Fitch expects OYO will also continue to drive staff and marketing cost savings, which will lead to a sustained reduction in costs. Small Scale; Sustainable Business Model: OYO operates in the low- to mid-tier accommodation market where its EBITDA scale is smaller than that of technology-sector peers rated higher by Fitch. OYO has solid relationships with property owners and provides integrated services, but industry conditions remain competitive. The company's focus on cost efficiency and growth in its core markets has improved profitability and resilience. Rating on Standalone Basis: Fitch rates OYO on a standalone basis as there is no parent-subsidiary linkage between OYO and Softbank Group Corp, which owns 45% of the company through its subsidiary, SVF India Holdings (Cayman) Ltd, on a fully diluted basis. Softbank does not exercise control over the company. SoftBank supported OYO with equity injections and a term loan in March 2021, which has since been repaid. However, Fitch does not factor in future exceptional liquidity support from SoftBank in its ratings, given OYO's small size compared with SoftBank's overall investment portfolio. Guaranteed Term Loan: The existing USD446 million term loan facility is unconditionally and irrevocably guaranteed by OYO and certain subsidiaries within the group. The guarantee covers 121% of the outstanding principal or up to USD800 million, and Fitch considers the guarantee full and worthy. Derivation Summary US-based Expedia Group, Inc. (BBB-/Positive) has a significantly stronger business profile than OYO, with a larger scale and a much better market position. Expedia is one of the largest online travel agents and makes over half of its revenue from the merchant model, exposing it to higher working-capital requirements during downturns. Expedia has a stronger profitability than OYO with higher EBITDA margin and consistently positive FCF. Expedia also has lower gross leverage which is forecast to fall towards 2x in 2024. OYO's credit profile is in line with German-based online classified information provider Speedster Bidco GmbH (AutoScout24, B/Stable). AutoScout24 has a stronger business profile than OYO, supported by its focus on the online car dealer segment, its established platforms with low competition, a high level of immunity to new or smaller challengers, and the trend of dealers moving from offline to online platforms. This is offset by its weaker financial profile with EBITDA leverage forecast at over 8x in 2024, which is significantly higher than that of OYO. OYO has a stronger credit profile than UK-based used-vehicle digital exchange operator Constellation Automotive Group Limited (CAG, CCC+). CAG has a stronger business profile than OYO that is driven by its market leading position, density of auction networks across the UK and integrated business model. However, this is more than offset by CAG's weak financial profile. CAG has excessive leverage with EBITDA gross leverage over 10x, which increases its refinancing risk ahead of debt maturities in January and July 2027. Key Assumptions Fitch's Key Assumptions Within its Rating Case for the Issuer - Revenue growth of 25% in FY25 and 32% in FY26, driven by the acquisition of G6 and CMG, as well as organic growth - EBITDA margins of 18% in FY25 and 21% in FY26 - Capex/revenue ratio of around 1% - Acquisitions of around USD540 million in FY25, related to the G6 acquisition and cash outflow related to the CMG acquisition - Additional long-term debt raised to fund the G6 acquisition - Equity issuance of around USD175 million in FY25 - No dividends or share buybacks. Recovery Analysis Key Recovery Rating Assumptions The recovery analysis assumes that OYO would be reorganised as a going concern (GC) in bankruptcy rather than liquidated. Fitch estimates post-restructuring GC EBITDA of about INR5 billion (USD60 million), which nearly covers its annual interest cost of INR5 billion. This is at a large discount to its long-term EBITDA forecast for OYO (and does not factor the G6 acquisition). An enterprise value (EV) multiple of 5.0x is applied to the GC EBITDA to calculate a post-reorganisation EV. The multiple of 5.0x reflects OYO's business and financial profile, industry dynamics and comparable peer data, using the multiple assumption tool under Fitch's Corporates Recovery Ratings and Instrument Ratings Criteria. Fitch takes 10% of administrative claims off the EV to account for bankruptcy and associated costs. The estimated recovery is consistent with a Recovery Rating of 'RR3'. However, the Recovery Rating is capped at 'RR4' because, under Fitch's Country-Specific Treatment of Recovery Ratings Criteria, India falls into Group D of creditor friendliness, and instrument ratings of issuers with assets in this group are subject to a soft cap at the issuer's IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - Successful refinancing and extension of the term loan maturing in June 2026; - Record of consistent revenue growth driving EBITDA growth, while maintaining EBITDA leverage below 4.0x on a sustained basis; - Sustained improvement in free cash flow generation. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - Inadequate progress on debt refinancing plans over the next 12-18 months; - Lower-than-expected EBITDA growth, leading to EBITDA leverage above 5.0x. Liquidity and Debt Structure Adequate Liquidity: OYO held Fitch-defined cash and cash equivalents of around USD100 million and had access to a USD25 million undrawn revolving credit facility at end-March 2024. The only outstanding debt relates to a USD446 million term loan that matures in June 2026. Fitch forecasts the company to generate around USD60 million in free cash flow in FY25. OYO plans to raise a long-term loan to partially fund the G6 acquisition. In conjunction with the debt financing, the remaining funding for the acquisition will come from USD175 million of equity already raised in FY25 and cash on the balance sheet. Upon successful refinancing of the existing term loan OYO's debt maturity would lengthen and liquidity would improve. Issuer Profile OYO operates a technology-led platform that connects around 175,000 hotels and homes with global travellers across more than 35 countries, with a focus on the Indian, European and US markets. 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 ----------- ------ -------- ----- Oravel Stays Limited LT IDR B Affirmed B LC LT IDR B Affirmed B Oravel Stays Singapore Pte Limited senior secured LT B Affirmed RR4 B PATANJALI FOODS: CCI OKs Buyout of Parent's HPC Division -------------------------------------------------------- The Economic Times reports that the Competition Commission of India (CCI) on Oct. 8 cleared the proposed acquisition of the home and personal care business of Patanjali Ayurved by Patanjali Foods in a INR1,100 crore deal. "The proposed combination involves the acquisition of Patanjali Ayurved Ltd's (PAL) Home and Personal Care (HPC) business division (nonfood business) by Patanjali Foods Ltd (PFL)," the CCI said in a release. Patanjali Ayurved is engaged in the business of manufacturing, trading, packing and labelling of ayurvedic medicines, HPC items such as dairy items and bulk trading of rice, etc. The HPC division encompasses products under haircare, skincare, dental care and home care segment. In July this year, edible oil major Patanjali Foods announced that it will acquire Baba Ramdev-led Patanjali Ayurved's home and personal care business for INR1,100 crore, as part of its efforts to become a leading FMCG company, ET recalls. Patanjali Ayurved is one of the promoters of Patanjali Foods. The acquisition falls under related party transactions being undertaken on a fair value and arms' length basis. Patanjali Foods, which was acquired by the PAL through an insolvency process, had posted a total revenue of INR31,961.62 crore in the last fiscal as against INR31,821.45 crore in the preceding year, ET discloses. Patanjali Foods is engaged in processing of oilseeds, refining of crude oil for edible use, production of oil meal, food products from soya and value-added products from downstream and upstream processing. PATEL COTTON: ICRA Keeps B+ Debt Ratings in Not Cooperating ----------------------------------------------------------- ICRA has kept the Long-Term rating of Patel Cotton (PC) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+(Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 16.00 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 1.80 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with PC, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Patel Cotton (PC) was established as a partnership firm in 2006 and is involved in the business of ginning and pressing of cotton. PC's manufacturing facility is located in Rajkot, Gujarat and is now equipped with 50 double roller ginning machines and a pressing machine with the total capacity of producing ~11,700 metric tons per annum of cotton bales. The promoters of PC have been associated in the business of trading of raw cotton since the last 18 years. The partners of PC have been associated with the business of trading of raw cotton since last two decades. PAYISM TECHNOLOGIES: Liquidation Process Case Summary ----------------------------------------------------- Debtor: M/s. Payism Technologies India Private Limited 202, 2nd Floor, Silicon Towers, Plot No. 2&3, Silicon Valley, Hyderabad, Madhapur, Telangana, India, 500081 Liquidation Commencement Date: February 6, 2024 Court: National Company Law Tribunal, Hyderabad Bench Liquidator: Kasi Srinivas 1-2-37/14B, Flat No 4B, Jains Bhawani Residency, S No,3 Kakatiya Nagar, Habsiguda, Hyderabad 50007 Email: srinivaskashyap111080@gmail.com Flat No. 104, Kavuri Supreme Enclave, Kavuri Hills, Hyderabad-500033, Telangana Last date for submission of claims: October 5, 2024 RAM RICE: ICRA Keeps B+ Debt Ratings in Not Cooperating Category ---------------------------------------------------------------- ICRA has kept the long-term ratings of Shri Ram Rice Mill (SRRM) in the 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]B+(Stable); ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 1.25 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category Long Term- 6.75 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with SRRM, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite Information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. SRRM is a partnership concern which came into existence in 1992. Presently the company has four partners viz. Shri Govind Nuwal, Smt. Sarita Nuwal, Smt. Madhu Nuwal and Shri Satya Narayan Nuwal. The firm is primarily engaged in the business of milling and processing of basmati rice and has an installed milling capacity of 3 tons per hour of paddy and sorting capacity of 3 tons per hour. The manufacturing facility of the firm is located in Village Daulara, Bundi, Rajasthan. RAMANA EDUCATIONAL: ICRA Keeps B Debt Rating in Not Cooperating --------------------------------------------------------------- ICRA has kept the Long-Term rating of Ramana Educational Trust in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 15.00 [ICRA]B (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with Ramana Educational Trust, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Established in 1986 by Mr. MV Muthuramalingam, Velammal group of trusts operate over 50 educational institutions including 46 schools, three engineering colleges, one medical college and hospital and has total student strength of over 1,00,000. The schools and colleges of the trust are spread across Tamil Nadu in various districts including Thiruvallur, Kancheepuram, Sivagangai, Madurai, Theni & Karur marking a strong foothold in TN in the education space. Currently, the educational institutions are run under seven trusts and one private limited company – Velammal Educational Trust (VET), Velammal Chennai Educational Trust (VCET), Velammal Madurai Educational Trust (VMET), Veeramakali Memorial Welfare Trust (VMWT), Ramana Educational Trust (RET), Vallimuthu Educational Trust, Muthuramalingam Kuncharavalli Educational Trust (MKET), Learnvel Private Limited. SAHARA INDUSTRIES: ICRA Keeps B Debt Ratings in Not Cooperating --------------------------------------------------------------- ICRA has kept the Long-Term rating of Sahara Industries (SI) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 11.00 [ICRA]B (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 0.63 [ICRA]B (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category Long Term- 1.30 [ICRA]B+ (Stable) ISSUER NOT Unallocated COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with SI, ICRA has been trying to seek information from the entity so as to monitor its performance Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Formed in June 1997, Sahara Industries (SI) is a partnership firm engaged in the business of cotton ginning and pressing. SI's manufacturing facility is located at Wankaner in Gujarat and is currently equipped with 48 new ginning machines with automatic feeders and 1 pressing machine. The plant has total input capacity to process 23,040 MT of raw cotton per annum. The firm was initially promoted by three partners i.e. Mr. Ami Ali Kadiwar, Mr. Afzal Ibrahim Sipai and Mr. Mahamadhusen Nooramad Sipai. However, Mr. Mahamadhusen Nooramad Sipai retired as partner in July 2013 to concentrate on his own firm, Sipai Industries (Rated [ICRA]B+). Thereafter, the firm was reconstituted in August 2013 with the addition of two new partners. Currently, SI has four partners i.e. Mr. Ami Ali Kadiwar, Mr. Afzal Ibrahim Sipai, Mrs. Niyamat Sipai and Mrs. Sahenaj Sipai. The partners of the firm have more than a decade of experience in the cotton cultivation and ginning business. SATGURU METALS: ICRA Keeps D Debt Ratings in Not Cooperating ------------------------------------------------------------ ICRA has kept the Long-Term rating of Satguru Metals & Power Private Limited (SMPPL) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term- 4.00 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Term Loan 'Issuer Not Cooperating' Category Long-term- 4.95 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Cash Credit 'Issuer Not Cooperating' Category As part of its process and in accordance with its rating agreement with SMPPL, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Satguru Metals & Power Private Limited (SMPPL) was established in August 2008. The company started commercial production with an installed capacity of 16005 MTPA in MS ingots at its manufacturing unit in Sundargarh, Odisha. It thereafter expanded its capacity to 18,000 MTPA of MS ingots and 9000 MTPA of pig iron, with the pig iron facility having been recently commissioned in August 2012. SATWI INFRA: ICRA Keeps B Debt Rating in Not Cooperating Category ----------------------------------------------------------------- ICRA has kept the Long-Term rating of Satwi Infra in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B(Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 20.00 [ICRA]B (Stable) ISSUER NOT Unallocated COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with Satwi Infra, ICRA has been trying to seek information from the entity so as to monitor its performance Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Satwi Infra, incorporated in year 2011, is engaged in real estate business in residential and commercial projects in Bangalore. The firm laid its footage in the construction, development and real estate business in the year 2011 through Satwi's Clarinet project in Bangalore. Over the years, the firm has completed two projects, Satwi's Clarinet and Satwi's Vielle in Horamavu, Bangalore. Currently the firm has one ongoing residential project Stawi's Thavil at Panthur, Bangalore. SHILPI CABLE: ICRA Keeps D Debt Rating in Not Cooperating --------------------------------------------------------- ICRA has kept the Long term rating of Shilpi Cable Technologies Limited (SCTL) in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- NCD/Debt-Bonds/ 27.00 [ICRA]D; ISSUER NOT COOPERATING; NCD/LTD Rating Continues to remain under issuer not cooperating category As part of its process and in accordance with its rating agreement with SCTL, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite Information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. SCTL was established in July 2006 as Rosenberger Shilpi Cable Technologies Limited, a 50:50 joint venture (JV) between Shilpi Communications Private Limited and Rosenberger Hochfrequenztechnik GmbH & Co. KG, Germany. The JV was formed to manufacture and sell radio frequency (RF) feeder cables in the domestic market. The JV set up a manufacturing facility at Chopanki, Rajasthan. The facility commenced commercial production in early 2008, and during the same year the stake of the German partner was bought by the Indian promoters. Though initially SCTL was only into RF feeder cables manufacturing, it has, over the years, added products such as wiring harnesses and battery cables for automobiles, wiring harness sets and power cords for white goods, and copper conductors (magnet copper wires and bunched copper wires) to expand and diversify its offerings. SCTL thus caters to automotive, telecom, and consumer durables segments, among others. In addition, it sells house wires, circuit breakers (MCCB and RCCB), and switches through distributors under the 'SAFE' brand name. SCTL, headquartered in Delhi, has five manufacturing units in Bhiwadi. Chopanki, Bahadurgarh (owned by an associate – AGH Wires), Hosur, and Pune (Bhiwadi and Chopanki plants are owned by the company, while the remaining have been taken on lease), and has 13 sales offices across India. SCTL also has subsidiaries and joint ventures in Singapore and UAE, which trade in copper cables and other products. The company is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) since 2011. SHREE COTEX: ICRA Keeps B+ Debt Ratings in Not Cooperating ---------------------------------------------------------- ICRA has kept the long-term ratings of Shree Cotex in the 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]B+(Stable); ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 0.41 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category Long Term- 1.69 [ICRA]B+ (Stable) ISSUER NOT Unallocated COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Long Term- 7.00 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with Shree Cotex, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite Information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Shree Cotex (SC) was set up as a partnership firm in the year 2013. It is engaged in the business of manufacturing cotton bales and cotton seeds through ginning and pressing of raw cotton (kapas). The firm's manufacturing facility is located at Rajkot, Gujarat and is equipped with 30 ginning, 1 pressing machine with the processing capacity of 13,759 MT of raw cotton annually (Considering 182 working days in a year). The commercial production commenced from July 2014. SC is a partnership firm with the promoters having an extensive experience in the cotton industry. SILVER FAB: ICRA Keeps B+ Debt Ratings in Not Cooperating --------------------------------------------------------- ICRA has kept the long-term ratings of Silver Fab Suitings Private Limited (SFSPL) in the 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]B+(Stable); ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 0.56 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category Long Term- 8.50 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 0.42 [ICRA]B+(Stable); ISSUER NOT Fund Based/ COOPERATING; Rating Continues Non-Fund to remain under issuer not Based-Others cooperating category As part of its process and in accordance with its rating agreement with SFSPL, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite Information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Silver Fab Suitings Private Limited (SFSPL) was incorporated in 2003 and is promoted by Mr. Sampat Lal Chordia along with his friends and relatives. Earlier the promoters were running a partnership concern by the name of Silver Fab and Sunshine. Based in Bhilwara, Rajasthan SFSPL is engaged in manufacturing of cotton and synthetic fabrics for suiting and shirting. The two manufacturing units of the company are located in the RIICO (Rajasthan state Industrial development & Investment Corporation) Industrial area (about 10km from Bhilwara City). RIICO is a Rajasthan Government agency involved in development of land for industrial enterprises and also provides support and access to supportive infrastructure facilities in the industrial areas developed and managed by it. The location facilitates the company in having easy access to power supply, water supply and other related infrastructure facilities required for the operation of the plant. Further, as Bhilwara is a regional textile hub, the skilled labor is readily available and the company's product (yarn) gets steady market. SIVA SANKAR: ICRA Keeps B+ Debt Rating in Not Cooperating --------------------------------------------------------- ICRA has kept the long-term rating of Sree Siva Sankar Automobiles (SSSA) in the 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]B+(Stable); ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 7.50 [ICRA] B+(Stable); ISSUER NOT Fund based COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with SSSA, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite Information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Sree Siva Sankar Automobiles (SSSA) was incorporated in the year 1992 as a partnership firm. The firm is an authorized dealer of two-wheeler vehicles of Hero Moto Corp Limited (HMCL) in the Visakhapatnam region. It operates three showrooms with 3S facilities in Visakhapatnam city and 10 sub-dealers in the Visakhapatnam district. SUDHA SESAMUM: ICRA Keeps B+ Debt Ratings in Not Cooperating ------------------------------------------------------------ ICRA has kept the long-term ratings of Sri Sudha Sesamum Agro Foods and Exports Pvt. Ltd. (SSS) in the 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]B+(Stable); ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 0.96 [ICRA]B+ (Stable) ISSUER NOT Unallocated COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Long Term- 12.00 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 0.04 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with SSS, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite Information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Sri Sudha Sesamum Agro Foods and Exports Private Limited (SSS) was incorporated in the year 2010 and commenced operations in Q2 of fiscal year 2012. The company is engaged in manufacture and sales of mechanically-hulled autodried optically-sorted Sesame Seeds in Andhra Pradesh, Tamil Nadu and to countries such as Malaysia, Taiwan and Indonesia. The facility is in Tadepalligudam - 50 Km from Rajahmundry in Andhra Pradesh. The annual production capacity is 6900 MT. SUNNY ENTERPRISES: ICRA Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------------- ICRA has kept the long-term and Short-Term ratings of Sunny Enterprises in the 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]D/[ICRA]D; ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term/ 5.70 [ICRA]D/[ICRA]D; ISSUER NOT Short Term COOPERATING; Rating Continues to Unallocated remain under 'Issuer Not Cooperating' Category Long-term- 6.30 [ICRA]D; ISSUER NOT COOPERATING; Fund based Rating Continues to remain under Cash Credit 'Issuer Not Cooperating' Category As part of its process and in accordance with its rating agreement with Sunny Enterprises, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite Information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Formed in 2003 by Mrs. Sheetal Tanna, Sunny Enterprises is authorised online lottery distributor of M/s Serenity Trades Private Limited, which is one of the main distributors for state government lotteries across India. The firm appoints the lottery retailers in these states, who in turn sell the lottery tickets to the final customers. It delivers rolls and charts for the lottery draw and supplies advertisement material. To diversify its business, SE is involved as an authorised distributor for Bata Limited in October 2018, wherein it supplies Bata footwear to the multi-brand stores across Mumbai, Navi Mumbai, Palghar and Thane in Maharashtra. The firm also ventured in trading of agricultural products, namely dry coriander and jaggery. These two segments accounted for a minor share of the total operating income in FY2019. However, the firm is focused to increase this share in the near to medium term. SYSKA LED: NCLT Directs to Initiate Insolvency Proceedings ---------------------------------------------------------- The Economic Times reports that the National Company Law Tribunal (NCLT) has directed to initiate insolvency proceedings against Syska LED Lights, admitting the plea filed by its operational creditor -- Sunstar Industries. ET relates that the Mumbai bench of NCLT admitted the plea filed by Sunstar Industries, claiming total dues of INR7.70 crore and has appointed Debashis Nanda as the interim resolution professional suspending the board of Syska LED Lights, as per the provisions of the Insolvency & Bankruptcy Code (IBC). It rejected Syska LED Lights' claims of a pre-existing dispute and said the e-mail exchanged between parties establishes its liability towards its operational creditor, ET relays. "We are of the considered view that the applicant has been able to establish the existence of operational debt and its default on the part of the corporate debtor and further that the application has been filed within the period of limitation and also there is no pre-existing dispute between the parties with regard to the transaction in question. "Accordingly, we hold that it is a fit case for admission under Section 9 of the Code," said a two-member bench in its order passed on Oct. 8. Earlier, NCLT also directed the initiating of the Corporate Insolvency Resolution Process (CIRP) against Syska LED Light on a petition filed by some other operational creditor. However, the CIRP was withdrawn in May 2024 after a settlement was reached. Syska LED Lights, part of Pune-based SSK Group, operates in segments such as LED lights, personal care appliances, mobile accessories, home appliances, and smart watches. VAISHNAVI LIFECARE: ICRA Keeps B+ Debt Ratings in Not Cooperating ----------------------------------------------------------------- ICRA has kept the long-term and Short-term ratings of Vaishnavi Lifecare Pvt Ltd in the 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term/ 0.63 [ICRA]B+ (Stable)/[ICRA]A4; Short Term- ISSUER NOT COOPERATING; Unallocated Rating Continues to remain under issuer not cooperating category Long Term- 0.25 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Cash Credit to remain under 'Issuer Not Cooperating' category Long Term- 5.72 [ICRA]B+ (Stable) ISSUER NOT Fund Based- COOPERATING; Rating continues Term Loan to remain under 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with Vaishnavi Lifecare Pvt Ltd, ICRA has been trying to seek information from the entity so as to monitor its performance. Further, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. Despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite Information and in line with the aforesaid policy of ICRA, the rating has been continued to the "Issuer Not Cooperating" category. The rating is based on the best available information. Incorporated in December 2014, Vaishnavi Life Care Private Limited runs a diagnostic centre under the brand name, Image Diagnostics at Bangalore, Karnataka. VLPL is involved in the business of providing comprehensive range of diagnostic services spanning across radiology & imaging and conventional & specialist lab services. It started its commercial operations in October 2015. It operates from a lease cum rented building consisting of 5 floors (incl basement) of 17800 total sqft area in HBR layout in North Bangalore. The lease rental approximates to INR0.36 crore per annum. ================= I N D O N E S I A ================= STAR ENERGY: Fitch Affirms 'BB-' Sec. Notes Rating, Outlook Now Pos ------------------------------------------------------------------- Fitch Ratings has revised the Outlook on Star Energy Geothermal (Wayang Windu) Ltd.'s (SEGWW) USD580 million fully amortising 6.75% senior secured notes due 2033 to Positive from Stable and affirmed the rating at 'BB-'. RATING RATIONALE The Positive Outlook reflects its expectation of improved diversification and operating scale due to SEGWW's plan to add around 48MW to its installed capacity. The additional capacity will be from modifications to Unit 1 and Unit 2 and development of Unit 3. The Outlook also reflects Fitch's expectation that the expansion would lead to improvement of the company's financial profile above its positive rating action trigger, although the extent of improvement will depend on the final funding structure and the detailed operational plan for the enhanced capacity. Management is finalising the financing structure for the related capex, but Fitch expects a large part of the financing will be via equity or a shareholder loan, which will be subordinated to the existing bond. Under this scenario, SEGWW is likely to increase its revenue base and cash flow from operating activities, while debt service will not increase significantly. Fitch will review the impact of expansion after receiving the finalised funding structure and detailed forecast. The rating continues to reflect SEGWW's solid operational track record; Fitch expects a reliable supply of geothermal resources, subject to appropriate and timely maintenance and drilling campaigns. SEGWW benefits from long-term contracts to use geothermal resources and sell electricity to Indonesia's state-owned power company, PT Perusahaan Listrik Negara (Persero) (PLN, BBB/Stable). Its take-or-pay electricity sales contract (ESC) with a flat tariff for Unit 1 and fixed-indexed-tariff for Unit 2 eliminates most volume and merchant price risks. The company now has visibility on Unit 1's contract renewal risk through an agreement with PLN in 2023, which will likely result in contract extension beyond 2030. In any case, Fitch sees limited renewal risk given the robust outlook for renewable power demand in Indonesia. SEGWW's low excess operating cash generation could limit its ability to fund capex if the spending needs to be accelerated or if the company faces other unexpected costs. However, its cash reserves provide some cushion against capex or costs that are higher-than-expected. KEY RATING DRIVERS Robust Operating Record; Exposed to Cost Overruns: Operation Risk - Weaker SEGWW has a solid record of high average availability and capacity factors of above 95% for both units since starting operation, excluding a 2015 outage due to a landslide. SEGWW operates the power plant and the lack of a fixed operation and maintenance contract poses risks of cost overruns and cost variability, especially for drilling activities. This is mitigated by a detailed investment plan for drilling new wells and maintaining existing ones until 2057, which external technical consultant GeothermEx is satisfied with, but the timing is uncertain due to the assets' nature. Its factor assessment is constrained by a lack of detailed operating cost analysis and verification by a third-party technical advisor. A reserve account will prefund 25% of the well drilling cost in each half-year period for major drilling programmes, with capex exceeding USD100 million over the next two years. The reserve account will also provide for the next six months of planned maintenance costs. Fitch also considers its single-site operation with only two units as a limiting factor. Expansion, with the addition of the third unit would alleviate the operational risk. Well-Supported Production Forecast: Revenue Risk - Volume: Midrange The volatility and decline inherent in geothermal resources introduce supply risk to electricity generation. However, SEGWW has maintained steam supply through a continuous well intervention programme and make-up well drilling, with the next one due in 2025-2026 after a successful campaign in 2020-2021. Steam supply was 483 kilogram/second (kg/s) at end-June 2024, which is 33kg/s above the steam requirement. SEGWW's resources are sufficient to support 280 MW of electricity generation for 30 years from 2025 until 2055, based on GeothermEx's November 2022 study. Curtailment risk is limited by the take-or-pay nature of the ESC, which requires PLN to pay for 95% of the rated capacity of each generator if PLN does not dispatch all the electricity nominated by SEGWW due to failure in PLN's electrical system. Supportive Long-Term Power Purchase Agreement (PPA): Revenue Risk - Price: Stronger SEGWW is not exposed to merchant price risk as all power generated is sold to PLN under long-term ESCs. As agreed with PLN in 2023, SEGWW obtains a fixed tariff for Unit 1 at 10.59 US cents/kWh from June 2022 until the end of its production period, and SEGWW is entitled to extend the contract to coincide with the production period of any expansion unit based on project material contracts. The bond covenants require SEGWW to add USD50 million to the debt reserve account if it does not receive an acceptable extension of Unit 1's ESC by end-2028 to provide cash cushion between 2030 and the bond maturity in 2033. The tariff for Unit 2 is indexed using straightforward, broad-based publicly available indexation formulas until February 2031, after which the tariff will be flat. The tariff is denominated in US dollars but partially indexed to the US dollar-Indonesian rupiah exchange rate, such that SEGWW's revenue in US dollar terms will decline if the Indonesian rupiah depreciates against the dollar. SEGWW does not enter into foreign-exchange hedges, leaving it exposed to exchange-rate risk. Fully Amortising Debt: Debt Structure - Midrange The senior rank, full amortisation and fixed coupon rate of the debt are all stronger features. The six-month debt service reserve account is a midrange attribute and the lock-up regime, at 1.1x backward-looking debt service coverage ratio (DSCR), is considered weak and there is no cash sweep mechanism. The full amortisation that begins in the first year results in steady deleveraging, but the annual cash flows and DSCRs are sensitive to capex timing. Incurrence of additional debt would be subject to the forward-looking DSCR being at least 1.3x. However, the additional debt to fund Unit 3's development could expose SEGWW to higher interest rates and possible ring-fencing of the Unit 3 cash flows and security, depending on the type of debt issued. The project debt is denominated in US dollars, providing a natural hedge against US dollar revenue. However, some costs, particularly employee compensation costs, are denominated in rupiah, which exposes the project to foreign-exchange risk. Financial Profile The Fitch base case (FBC) assumes a capacity factor of 97% for both generation units and uses management's forecast for operating expenses (opex) and capex. Under the FBC, SEGWW has an average annual DSCR of 1.47x and a minimum DSCR of 1.38x. The Fitch Rating Case (FRC) applies several stresses. Fitch assumes a capacity factor of 95% for both units, in line with the lowest level in the recent years, as well as 15% and 5% stresses to opex and capex, respectively. The FRC results in an average annual DSCR of 1.34x and a minimum DSCR of 1.27x. Both FBC and FRC exclude the additional capacity that the company is planning. The average annual DSCR under the FRC has remained stable over the last few years. The achieved coverage level reflects the higher lifecycle capex risks associated with geothermal facilities compared to other renewable projects. The FRC DSCR is below 1.40x, which is the 'BBB-' threshold for concentrated solar power (CSP) in Fitch's Renewable Energy Projects Rating Criteria but above the 'BB-' threshold of 1.20x. Underperformance of the geothermal resource, higher-than-expected capex, or reduced operational efficiency could impair SEGWW's ability to service its debt payments. PEER GROUP Fitch rates the senior secured notes of Star Energy Geothermal (Salak-Darajat) Restricted Group (SEGSD RG), SEGWW's sister company, at 'BBB-' with Stable Outlook. Both companies operate under long-term take-or-pay ESCs with PLN and their geothermal resources are validated by engineering consultants. However, the rating SEGSD RG's notes is higher than that for SEGWW as it benefits from a longer operating history, economies of scale and diversification from operating 655.5MW of installed capacity across nine generation units in two sites. SEGSD RG also has lower required capex/MW of installed capacity, partly because the restricted group does not own and operate four of its nine units, which are operated and maintained by PLN. It also benefits from detailed cost analysis by technical advisor, which is absent for SEGWW. In addition, SEGSD RG benefits from a stronger reserve feature, with a major maintenance reserve account (MMRA) equal to a third of total capex in the next three years. In comparison, SEGWW's MMRA equals its planned maintenance costs for the next six months and prefunding of 25% of the major drilling programme for each half-year period over the next two years. SEGSD RG has higher a lock-up ratio at 1.15x on the basis of a 12-month backward-looking DSCR, compared to SEGWW's at 1.10x. SEGSD RG's DSCR under the FRC is also much higher at 1.67x, supported by a lower initial debt load, despite SEGWW's higher tariff. Fitch rates PT Sorik Marapi Geothermal Power's (SMGP) notes at 'BB+'/Stable. SEGWW and SGMP operate single sites under long-term take-or-pay ESCs with PLN and both receive tariffs that are either fixed or indexed. SMGP's take-or-pay sales contract covers a minimum 90% of the latest unit rated capacity, while SEGWW's ESC is for a minimum 95%. SMGP will operate five units with total net installed generation capacity of around 182MW, with the existing four units currently having net capacity of 159MW. In comparison, SEGWW has larger installed capacity of 230.5MW. However, SMGP is rated two notches higher than SEGWW due to its better financial profile. SMGP's metric of a 2.9x DSCR during the refinancing period under its rating case is significantly stronger than SEGWW's of around 1.3x, which is partly due to lower initial debt/MW and ongoing capex/MW. Fitch also views that SEGWW is more exposed to risk of a landslide, which is heightened by its limited diversification and operating scale. Fitch believes these sufficiently counterbalance SMGP's higher refinancing risk, which is due to partial amortisation and a mandatory cash sweep, shorter operational record, its less proven technology and higher uncertainty about its production decline. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - The Outlook will revert to Stable if projected average DSCR is below 1.35x in the FRC after incorporating detailed forecasts for the planned expansion. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Projected average DSCR sustained above 1.35x in the FRC after the inclusion of a detailed expansion plan and its planned funding structure. TRANSACTION SUMMARY SEGWW is part of the Star Energy Group, the largest geothermal energy producer in Indonesia and the third-largest in the world. SEGWW has the exclusive right to use geothermal resources in the Wayang Windu area in West Java, Indonesia, about 40km south of the city of Bandung. SEGWW operates two power generation units with a combined gross installed capacity of 230.5MW. Unit 1, which has 113.5MW, began commercial operations in June 2000, while Unit 2's 117MW started in March 2009. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Star Energy Geothermal ( Wayang Windu) Ltd. Star Energy Geothermal (Wayang Windu) Ltd./Project Revenues - First Lien/1 LT LT BB- Affirmed BB- =============== M A L A Y S I A =============== EA TECHNIQUE: Aims to Uplift PN17 Statuts by Q1 of 2025 ------------------------------------------------------- Malay Mail reports that after more than two years of preparations to exit its Practice Note 17 (PN17) status, EA Technique (M) Bhd (EATech) aims for an upliftment by the first quarter (Q1) of 2025. According to Malay Mail, CEO Nasrul Asni Muhammad Dain said that the oil and gas, marine transportation, and offshore storage company is on track to meet the requirements for exiting PN17. "Yes, many people want to know what's next. For us, it is about uplifting the company from PN17, which requires two consecutive profitable quarters - specifically, Q3 and Q4," Nasrul told Malay Mail in an interview at EATech's headquarters. "We have already achieved a utilisation rate of 97 per cent. Given our current order book and utilisation, we are confident in our ability to uplift the company from PN17 by recording profits in these two quarters." A company listed under the PN17 category lacks a core business or has failed to meet the minimum capital requirements or shareholders' funds mandated by Bursa Malaysia. Malay Mail says Nasrul provided a brief recap of the factors leading to EATech's PN17 classification. The primary reason was a deterioration in shareholders' equity, stemming from the inability to complete an EPCIC (engineering, procurement, construction, installation, and commissioning) contract to convert a tanker into a floating production storage and offloading (FPSO) facility. "The project has been completed, but we had to pay a significant variation order to MMHE (Malaysia Marine and Heavy Engineering Holdings Bhd), resulting in our shareholders' equity falling below the 25 per cent threshold imposed by Bursa Malaysia," the report quotes Nasrul as saying. "The project, awarded in 2015, marked EATech's foray into EPCIC, which involves extensive engineering analysis and procurement, taking considerable time. "Complications arose with the American charterer, leading to delays due to negotiations and the Covid-19 pandemic. Consequently, the project was only completed in 2021, incurring a RM150 million variation." Despite this setback, Nasrul said that EATech has been profitable for the past 30 years, barring the time spent on the EPCIC venture, which resulted in its PN17 status. "Fast forward to today, we launched a scheme of arrangement, received court sanction in January 2023, and submitted a proposal to Bursa for approval. In May 2024, Bursa approved our regularisation plan, which was fully implemented by June 28." "Therefore, we anticipate exiting PN17 by January or February 2025," he added. About E.A. Technique E.A. Technique (M) Bhd owns and operates marine vessels focusing on marine transportation and offshore storage of oil and gas, and provision of port marine services. The Company also owns a shipyard involved in shipbuilding, ship repair and minor fabrication of steel structures. EATech slipped into Practice Note 17 (PN17) status in February 2022, as its shareholders' equity of MYR5.96 million as at Dec. 31, 2021 was less than 50% of its share capital of MYR179.76 million, according to theedgemarkets.com. The company was therefore required to submit a regularisation plan to the Securities Commission Malaysia within 12 months. For the nine-month period ended Sept. 30, 2022, EATech narrowed its net loss to MYR2.94 million from MYR45.37 million a year earlier, amid lower depreciation, gain on disposal of vessels and lower foreign exchange losses. Nine-month revenue, however, decreased to MYR111.91 million from MYR124.57 million mainly due to expiry of certain contracts. =============== M O N G O L I A =============== GOLOMT BANK: S&P Upgrades Long-Term ICR to 'B+', Outlook Stable --------------------------------------------------------------- S&P Global Ratings raised long-term issuer credit ratings on Golomt Bank JSC and Trade and Development Bank JSC's (TDB) to 'B+' from 'B'. S&P affirmed the 'B' short-term issuer credit ratings on these Mongolia-based banks. The outlooks on the long-term ratings are stable. At the same time, S&P raised the issue rating on Golomt's U.S. dollar-denominated senior unsecured notes to 'B+'. S&P said, "Economic risks for Mongolian banks have reduced, in our view. The country has a promising economic outlook. We forecast its real GDP growth will average about 6% annually through 2027, backed by robust exports of commodities such as coal and copper." Moderating inflation and higher public sector wages have also increased household consumption. The removal of border restrictions from China, the primary trading partner for Mongolia, has led to a strong economic rebound for Mongolia in 2023. Such momentum will likely continue over the next few years. Mongolia's increased economic resilience should improve operating conditions for banks. Robust demand for credit as the economy expands and decreased volatility in banks' asset quality underpin our view. Reduced economic risks could also result in lower risk weights in S&P's analysis of the banks' risk-adjusted capital (RAC) ratios. This could increase capital buffers against unexpected losses. The industry risk trend of the banking sector is also improving. This is in view of Mongolia's evolving institutional framework, although the banking regulations in the country are relaxed compared with the international standards. S&P believes the Bank of Mongolia's (BOM; the central bank) asset quality review targeted at domestic systemically important banks (D-SIBs) in 2022 has improved their asset-quality classification, assessment of collateral, and adequacy of provisioning. The implementation of International Financial Reporting Standard 9 (IFRS 9) by 2021, though somewhat delayed from the initial timeline, has also enhanced banks' recognition of asset impairment. A 4% additional capital conservation buffer for D-SIBs over the minimum regulatory Tier-1 capital ratio of 9% since July 1, 2022, should also support their loss-absorbing capacity and contain excessive growth. Banks' enhanced asset quality and ability to generate good profits in a sustainable manner would indicate lower industry risk. S&P expects the banking sector's systemwide (including Development Bank of Mongolia) regulatory nonperforming loan ratio to decline to about 8% over the next one to two years, from about 11.3% at end-2023. The ratio has steadily fallen from about 15% at end-2021. An improvement in industry risk score could lead to a higher anchor (the starting point of its rating) of 'bb-' for banks mainly operating in Mongolia, from the current 'b+'. S&P said, "We expect Mongolian banks to maintain sound profitability despite some moderation.Credit losses for these banks will likely increase moderately as the temporary benefits of large recoveries and net reversals on corporate exposures in recent years fade away. Meanwhile, banks' net interest margins are likely to contract owing to policy rate cuts and intense competition in the banking system. We forecast the sector's return on average assets (ROAA) at about 2.0% over the next one to two years. Profitability has turned around materially from 2022, after an average ROAA of about 0.6% during 2017-2021. "The Mongolian banking sector's governance and transparency is also improving, in our view. The listing of D-SIBs by June 2023 in accordance with the regulation has led to better disclosure of information by banks. We also expect these banks to be more cautious about their governance structure, management strategy, and risk control under more public oversight." Related party lending is closely monitored by the BOM. Related party lending should not exceed 5% of a bank's total capital for a single related party, and 20% of total capital for all related parties lending. The listing of new shares has also added to some capital buffer. High credit growth will test banks' ability to manage credit risks. Credit demand in Mongolia should remain strong, benefitting from favorable economic conditions, along with policy rate cuts. S&P believes banks' strengthened capital buffer, rebalancing of asset portfolios in favor of more loans over lower-yielding fixed-income securities, and digitalization also contribute to high growth. Such growth, however, could result in higher credit losses when the loan book seasons over time. S&P said, "We believe Mongolian banks will focus on securing some buffers against the regulatory capital requirements. We therefore forecast loan growth will decrease to 15%-20% over the next one to two years, after very high growth of about 30% in 2024. Loan growth picked up from 2023, after relatively low growth of about 5% on average during 2019-2022. In July 2024, the BOM tightened the regulatory limit for the debt service-to-income ratio for banks' new consumer lending. It lowered the ratio to 55% from 60% to curb excessive growth. "In our opinion, Mongolia's economy is still highly vulnerable to exogenous shocks. The country's heavy dependence on commodities could pose downside risks to the growth trajectory." The risks include a significant slowdown in global demand, fluctuations in commodity prices, and dependence on China, which could heighten volatility of the economy. These could result in a rapid increase in nonperforming assets (NPAs) and a surge in credit losses, beyond S&P's base-case expectations. Mongolian banks are exposed to inherently high credit risks due to sizable corporate exposures such as mining and construction. The Mongolian government is likely to be supportive of banks. This is in view of the government's materially improved fiscal position amid favorable economic conditions. That said, such support does not lead to any rating uplift for Golomt and TDB at the current rating level. Golomt Bank JSC S&P said, "The upgrade reflects our view of the bank's strengthened business stability, indicated by improved profitability and asset quality metrics. Golomt's well-established business franchise in Mongolia and diversified loan portfolio across corporate and retail segments underpin its credit profile. The bank is Mongolia's second-largest bank in terms of loans and the third largest in terms of deposits among domestic banks with a market share of about 19% each at end-June 2024. Golomt's efforts to tighten its underwriting standards and clean up its balance sheet over the past few years support improvement in its asset quality. The bank's gross NPA ratio, based on the sum of stage 3 loans, restructured loans, and repossessed loans under IFRS, has been improving. We estimate the NPA ratio fell to about 6.2% at end-June 2024, compared with about 16.0% at end-2021. Rapid loan growth, however, could mask some deterioration in asset quality. The seasoning of Golomt's loan book through the economic cycle could strain its asset quality. The bank's gross loans grew by about 37% year-to-date in the first half of 2024 (25% in full year 2023). The high loan growth was largely funded by rebalancing of the asset portfolio. This included dues from banks as well as proceeds from senior unsecured bond issuances (US$300 million) in May 2024. Golomt's total assets grew 7% year-to-date in the first half of 2024. In S&P's view, Golomt's large and stable nationwide customer deposit base, backed by a solid retail franchise, will support its funding profile. The bank's loan-to-deposit ratio remained low at about 79% as of end-June 2024, although it was rapidly rising from about 59% at end-2023. Golomt will likely maintain its current level of capitalization. S&P said, "Lowered economic risks translate into lower risk weights on the bank's domestic exposures, adding some buffer to our calculation of its RAC ratio. We estimate Golomt's RAC ratio will stay at 3.7%-4.2% over the next two years, compared with about 4.2% as of end-2023." This capital buffer is not sufficient to warrant a higher rating despite a potential improvement in industry risk in Mongolia's banking sector. Outlook The stable rating outlook on Golomt reflects S&P's view that the bank will maintain its well-established market presence with its diversified business portfolio and current level of capitalization over the next 12-18 months. Despite Golomt's notable improvement in asset quality metrics in recent years, its inherent credit risks arising from cyclical corporate sectors and record of high volatility in the past will likely weigh on the rating over the next 12-18 months. The bank's very high loan growth could also test its risk management capability. Downside scenario S&P could lower the ratings on Golomt if the bank's asset quality deteriorates significantly below the industry average with a surge in credit losses. Upside scenario S&P could upgrade Golomt if it raises the sovereign credit rating on Mongolia and our assessment of the bank's stand-alone credit profile (SACP) improves. S&P's assessment of Golomt's SACP could improve if the bank establishes a record of strengthened risk management indicated by improvement in asset quality and credit losses on a sustainable basis while its growth appetite remains controlled. Trade and Development Bank JSC S&P said, "The upgrade reflects our view of TDB's strengthened business stability, as demonstrated by the bank's improved profitability to a level comparable with that of peers in countries with similar banking industry risks and ongoing diversification of the loan portfolio. We believe TDB's well-established business franchise with a strength in corporate banking will underpin its credit profile. The bank held domestic market shares of about 18% loans and 21% deposits as of end-June 2024. "In our view, TDB's efforts to diversify its loan portfolio could mitigate earnings volatility and boost resilience through the cycles. The bank has expanded into higher-yielding retail and small and medium enterprises (SME) loans over the past few years, which led to better margins. As of end-June 2024, TDB's loan portfolio comprised about 55% corporate loans (76% as of end-2020), 28% retail loans (14%), and 17% SME loans (10%). "We believe TDB has capital buffers to meet high credit demand despite some moderation in profitability over the next two years. The bank's gross loans grew by about 13% year-to-date through the first half of 2024. This follows about 16% annual loan growth in 2023, after a 10% contraction in 2022. "Steady internal capital retention and our view of lowered economic risks for Mongolian banks will translate into lower risk weights on TDB's domestic exposures. We project the bank's RAC ratio will be about 4.7%-5.2% in the next two years, compared with about 5.4% as of end-2023. This capital buffer is not sufficient to warrant a higher rating despite a potential improvement in industry risk in Mongolia's banking sector." TDB's exposure to cyclical corporate sectors poses inherent credit risks. The bank has a record of incurring sizable credit losses from mining and construction industries. S&P said, "We expect TDB's gross NPA ratio to improve steadily but stay high relative to that of other major domestic bank peers. We estimate the bank's gross NPA ratio (based on the sum of stage 3 loans, restructured loans, and repossessed assets under IFRS) materially improved to about 12.9% as of end-June 2024 from about 23.5% as of end-2022. "We anticipate TDB's large and stable customer deposit base and sufficient liquid asset holdings will mitigate potential funding risks associated with rapid loan growth." Outlook S&P said, "The stable rating outlook on TDB reflects our view that the bank will maintain its well-established market presence with strength in corporate banking and its current level of capitalization over the next 12-18 months. "We believe TDB's inherent credit risk emanating from its concentrated corporate exposures will weigh on the rating. This is despite tightened regulatory oversight and improvements in asset quality metrics." Downside scenario S&P could lower the ratings on TDB if the bank's asset quality deteriorates significantly below the industry peer average with a surge in credit losses. Upside scenario S&P could upgrade TDB if it raises the sovereign credit ratings on Mongolia and revise upward our assessment of the bank's SACP. S&P could revise upward the bank's SACP if it believes industry risk has diminished, demonstrated by sustainably enhanced asset quality and profits in the banking sector, and TDB's capitalization improves such that its RAC ratio remains comfortably above 5%. BICRA Score Snapshot* Mongolia TO FROM BICRA group 9 9 Economic risk 8 9 Economic resilience High risk Very high risk Economic imbalances High risk High risk Credit risk in the economy Extremely Extremely high risk high risk Trend Stable Stable Industry risk 9 9 Institutional framework Extremely Extremely high risk high risk Competitive dynamics High risk High risk Systemwide funding Very high risk Very high risk Trend Positive Stable *Banking Industry Country Risk Assessment (BICRA) economic risk and industry risk scores are on a scale from 1 (lowest risk) to 10 (highest risk). Ratings Score Snapshot Golomt Bank JSC TO FROM ISSUER CREDIT RATING B+/STABLE/B B/STABLE/B SACP b+ b Anchor b+ b+ Business position Strong (+1) Adequate (0) Capital and earnings Constrained (0) Constrained (0) Risk position Moderate (-1) Moderate (-1) Funding and Liquidity Adequate and Adequate and adequate (0) adequate (0) Comparable ratings analysis 0 0 Support 0 0 ALAC support 0 0 GRE support 0 0 Group support 0 0 Sovereign support 0 0 Additional factors 0 0 ALAC--Additional loss-absorbing capacity. GRE--Government-related entity. SACP--Stand-alone credit profile. Trade and Development Bank JSC TO FROM ISSUER CREDIT RATING B+/STABLE/B B/STABLE/B SACP b+ b Anchor b+ b+ Business position Strong (+1) Adequate (0) Capital and earnings Constrained (0) Constrained (0) Risk position Moderate (-1) Moderate (-1) Funding and Liquidity Adequate and Adequate and adequate (0) adequate (0) Comparable ratings analysis 0 0 Support 0 0 ALAC support 0 0 GRE support 0 0 Group support 0 0 Sovereign support 0 0 Additional factors 0 0 ALAC--Additional loss-absorbing capacity. GRE--Government-related entity. SACP--Stand-alone credit profile. ===================== N E W Z E A L A N D ===================== BLUE SKIES: Thomas Lee Rodewald Appointed as Receiver and Manager ----------------------------------------------------------------- Thomas Lee Rodewald of Rodewald Consulting on Oct. 8, 2024, was appointed as receiver and manager of Blue Skies GCO Limited. The receiver and manager may be reached at: C/- Rodewald Consulting Limited Level 1, The Hub 525 Cameron Road PO Box 15543 Tauranga 3144 HUNTLO LIMITED: Court to Hear Wind-Up Petition on Oct. 18 --------------------------------------------------------- A petition to wind up the operations of Huntlo Limited will be heard before the High Court at Auckland on Oct. 18, 2024, at 10:45 a.m. Body Corporate 185696 filed the petition against the company on Aug. 13, 2024. The Petitioner's solicitor is: Conall MacFadyen c/- Level 2 87 Central Park Drive Henderson Auckland 0650 LAKEFRONT INVESTMENTS: Creditors' Proofs of Debt Due on Nov. 4 -------------------------------------------------------------- Creditors of Lakefront Investments Limited are required to file their proofs of debt by Nov. 4, 2024, to be included in the company's dividend distribution. The High Court at Auckland appointed Kristal Pihama and Leon Francis Bowker of KPMG as liquidators on Oct. 3, 2024. STEVENSONS ENGINEERING: McMillian Ordered to Pay Retention Money ---------------------------------------------------------------- Stuff.co.nz reports that a construction company has been told in the High Court it had no right to withhold retention money from an embattled Horowhenua subcontractor it used for two regional projects. According to Stuff, McMillian & Lockwood (PN) Ltd and McMillian & Lockwood Central withheld more than NZD200,000 in retention money owed to Stevensons Structural Engineers Ltd for steel work on a new maintenance facility at Linton Army Base, and the Sarjeant Gallery redevelopment in Whanganui, after the Tokomaru-based engineering firm went into liquidation in 2023. Retention money is the sum held back from a subcontractor in trust, as security for their work, should the head contracting business fail. It is typically 5% of the total contract and paid out on completion of a project, in accordance with the Construction Contracts Act 2002. In his decision, released August 27, Associate Judge Andrew Skelton outlined that Stevensons Engineering had completed 99% of "Project Cannon" at Linton upon its liquidation, for which McMillian & Lockwood was still withholding NZD125,897, Stuff relays. For the gallery work, 74% and 66% of the two-phased project had been completed, with just over NZD100,000 retained. When liquidators for Stevensons Engineering issued a letter of demand for release of the retention sums for both projects in July last year, McMillian & Lockwood declined to pay it, Stuff says. At a hearing in May, its counsel argued any rights to the retention money had been forsaken when liquidators disclaimed Stevensons' subcontracts, and given Stevensons had not fulfilled its subcontract obligations, conditions for releasing the funds could not be satisfied. But the judge took issue with the subcontracts, which had conditions tethering the release of retention money to a 30-day window from a certificate of practical completion being issued. He said such a certificate was reliant on factors beyond the performance obligations of the plaintiff, Stevensons Engineering, and the provision was prohibited under contract law. Stuff notes that all retention provisions in the subcontract were ruled to be void and of no legal effect. Stuff adds that the judge said retention money was held in trust for the benefit of the subcontractor, an entitlement that did not cease when Stevensons became insolvent. "The defendants are not entitled to retain the retention money as security for performance. The plaintiff has had an accrued right under the subcontracts to payment of the retention money throughout." WEKE SCAFFOLDING: Court to Hear Wind-Up Petition on Oct. 18 ----------------------------------------------------------- A petition to wind up the operations of Weke Scaffolding Limited will be heard before the High Court at Auckland on Oct. 18, 2024, at 10:45 a.m. The Commissioner of Inland Revenue filed the petition against the company on July 23, 2024. The Petitioner's solicitor is: Cloete Van Der Merwe Inland Revenue, Legal Services 5 Osterley Way Manukau City Auckland 2104 ================= S I N G A P O R E ================= ASIAN FLAVORS: Placed in Provisional Liquidation ------------------------------------------------ Farooq Ahmad Mann of M/s Mann & Associates PAC on Oct. 3, 2024, was appointed as provisional liquidator of Asian Flavors Pte. Ltd. The provisional liquidator may be reached at: Farooq Ahmad Mann Mann & Associates PAC 3 Shenton Way #03-06C Shenton House Singapore 068805 FT GLOBAL: Court to Hear Wind-Up Petition on Oct. 25 ---------------------------------------------------- A petition to wind up the operations of FT Global Pte Ltd will be heard before the High Court of Singapore on Oct. 25, 2024, at 10:00 a.m. Maybank Singapore Limited filed the petition against the company on Oct. 2, 2024. The Petitioner's solicitors are: Shook Lin & Bok LLP 1 Robinson Road #18-00 AIA Tower Singapore 048542 HARBORAIR LOGISTIC: Court to Hear Wind-Up Petition on Oct. 25 ------------------------------------------------------------- A petition to wind up the operations of Harborair Logistic Pte Ltd will be heard before the High Court of Singapore on Oct. 25, 2024, at 10:00 a.m. Maybank Singapore Limited filed the petition against the company on Sept. 30, 2024. The Petitioner's solicitors are: M/s Advent Law Corporation 111 North Bridge Road #25-03 Peninsula Plaza Singapore 179098 JSC SPACE: Court Enters Wind-Up Order ------------------------------------- The High Court of Singapore entered an order on Sept. 27, 2024, to wind up the operations of JSC Space Pte. Ltd. Maybank Singapore Limited filed the petition against the company. The company's liquidator is: Gary Loh Weng Fatt c/o BDO Advisory 600 North Bridge Road #23-01 Parkview Square Singapore 188778 NAN HUA: Creditors' Proofs of Debt Due on Nov. 8 ------------------------------------------------ Creditors of Nan Hua Maritime (Pte) Ltd and Nan Hui Maritime (Pte) Ltd are required to file their proofs of debt by Nov. 8, 2024, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Sept. 19, 2024. The company's liquidators are: Abuthahir Abdul Gafoor Yessica Budiman AAG Corporate Advisory 144 Robinson Road #14-02 Robinson Square Singapore 068908 ===================== S O U T H K O R E A ===================== QOO10: Court Rejects Arrest Warrant for CEO Over Payment Delays --------------------------------------------------------------- Yonhap News Agency reports that a Seoul court on Oct. 10 rejected an arrest warrant for Qoo10 CEO Ku Young-bae on fraud and embezzlement charges related to his e-commerce group's large-scale payment delays to vendors. According to Yonhap, the Seoul Central District Court made the decision following a hearing attended by Ku, citing the need to "guarantee his right to defense" and the low probability he will flee or destroy evidence. Yonhap relates that the court also denied arrest warrants for Ryu Kwang-jin and Ryu Hwa-hyun, CEOs of Qoo10's e-commerce subsidiaries TMON and WeMakePrice, respectively, following hearings earlier in the day. Both are accused of involvement in the massive insolvency incident. Earlier on Oct. 10, Ku denied speculations that he had known about his group's potential insolvency for two years but allowed vendors to continue operating on the group's e-commerce platforms, only for their remittances to default, Yonhap relays. "Once again, I sincerely apologize to the victims and the public," he said, notes the report. In late July, TMON and WeMakePrice filed for corporate rehabilitation with the Seoul Bankruptcy Court after failing to make payments to vendors using their platforms, resulting in over KRW1.5 trillion (US$1.1 billion) in overdue payments, recalls the report. Prosecutors have since launched an investigation, accusing the corporate heads of defrauding vendors by having them continue business on their platforms despite knowing that they could not make vendor remittances, Yonhap notes. They are also accused of causing nearly KRW70 billion of losses to TMON and WeMakePrice by funneling orders to another Qoo10 subsidiary, QXPRESS, and embezzling KRW67.1 billion from TMON and WeMakePrice to finance the parent firm's takeover of the American online e-commerce platform Wish. Yonhap say prosecutors suspect the CEOs recognized signs of potential insolvency two years ago but underreported their overdue vendor payments to financial authorities, reporting only 46 billion won as of the end of 2022, which accounted for one-tenth of the actual amount. About Qoo10 Qoo10 retails e-commerce products. The Company offers personal care, sports apparel, consumer electronics, home furnishing, food, toys, and other consumer products. Qoo10 serves customers worldwide. Qoo10 owns online marketplaces TMON and WeMakePrice. As reported the Troubled Company Reporter-Asia Pacific on Sept. 11, 2024, the Seoul Bankruptcy Court on Sept. 10 granted a rehabilitation process for liquidity crisis-hit e-commerce platforms TMON and WeMakePrice, allowing them to restructure their debts to creditors under the supervision of court-appointed custodians. According to Yonhap News Agency, the decision came more than a month after TMON and WeMakePrice filed for court-supervised rehabilitation, following overdue payments to vendors operating on their platforms that reached nearly KRW1 trillion (US$744 million). ================= S R I L A N K A ================= CITIZENS DEVELOPMENT: Fitch Affirms Sub. Debt Rating at 'BB+(lka)' ------------------------------------------------------------------ Fitch Ratings has affirmed Citizens Development Business Finance PLC's (CDB) National Long-Term Rating at 'BBB(lka)' with a Stable Outlook. Fitch has also affirmed CDB's subordinated debt rating at 'BB+(lka)'. Key Rating Drivers Standalone Profile Underpins Rating: CDB's National Long-Term Rating reflects its established market presence, with 6%-7% market share in sector assets and deposits, and majority exposure to lower-risk motor cars, which underpin its asset-quality performance. These advantages are offset by its moderate profitability, higher leverage and lower loss-absorption buffers compared with other Fitch-rated large finance and leasing companies (FLCs). Stabilising Operating Environment: The operating environment for Sri Lankan FLCs continues to stabilise, with improving GDP growth (1H24: 5.0% yoy; 2023: -2.3%), normalising inflation and reduced market interest rates. This should support the sector's credit growth, asset quality and profitability. A gradual easing in vehicle import bans may further underpin growth, albeit with some collateral value risk. Large Motor-Car Portfolio: CDB is one of Sri Lanka's largest FLCs with key exposure to vehicle financing and gold-backed lending, which accounted for 75% and 18% of gross loans, respectively, at the end of the financial year to March 2024 (FY24), from 73% and 19% at end-FY23. Within vehicle financing, motor cars constituted the majority (55%) of gross loans, while three-wheelers accounted for 17% at end-FY24 (end-FY23: 47% and 21%). Fitch expects three-wheeler exposure to decline further while gold and four-wheeler loans continue to grow. This should be mildly positive for blended asset quality, if managed well. Largely Collateralised Portfolio: CDB's loan portfolio is nearly 98% secured by vehicles, gold articles, properties, fixed deposits and shares. The collateral coverage helps to mitigate credit losses in the case of delinquencies. CDB's overall risk profile should also improve incrementally as its exposure to riskier three-wheelers gradually declines. Nonetheless, CDB has a high growth appetite that may lead to unintended risks and weaken loss-absorption buffers despite its intention to target lower-risk lending products. Lingering Provisioning Risk: Fitch expects the improved economic conditions and CDB's appetite for lower-risk products to sustain its asset quality. Its reported stage 3 non-performing loan (NPL) ratio, comprising 90-day past due loans net of interest in suspense (IIS), fell to 12.1% by end-FY24 (end-FY23: 15.7%). Credit cost stayed low at 0.8% of average gross loans in FY24, but may rise moderately as CDB resolves its lingering NPLs. Its stage 3 provision coverage ratio (including IIS) of 38.8% at end-FY24 was lower than the rated peer average but slightly higher than the sector average of 35.8%. Recovering Profitability: Fitch expects the lagged effect of lower interest rates to support CDB's profitability in the near-to-medium term. The company's pre-tax return on average assets increased to 3.9% in FY24 (FY23: 2.9%) as increased lending and investments in high-yielding treasury bills boosted interest income and supported higher net interest margins. That said, Fitch expects CDB's profitability to remain lower than rated peers' due to its focus on lower-yielding motor car loans, despite its better operating efficiency. Leverage Above Peers: CDB's debt/tangible equity ratio increased to 5.2x by end-FY24, from 4.7x a year ago, and remains the highest among the Fitch-rated standalone FLCs. Fitch believes CDB's growth plan may place further pressure on its capitalisation and leverage, which could reduce rating headroom at the current rating level. CDB's Tier 1 and total capital ratios stood at 15.5% and 15.9% at end-FY24 (FY23: 16.2% and 17.4%, respectively), but the total capital ratio improved to 18.7% by end-1QFY25, supported by a LKR3 billion subordinated facility qualifying as Tier 2 capital. Reduced Negative Maturity Gap: Fitch believes that the improved market liquidity benefits the company's access to wholesale term borrowings, similar to peers. CDB's cumulative 12-month negative asset-liability maturity gap narrowed significantly to -5.2% of total assets by end-FY24, from -11.5% at end-FY23, as an USD30 million long-term foreign loan helped to improve its liability maturity profile. Nonetheless, a significant part of CDB's funding is likely to remain short-tenor - like that of other deposit-funded FLCs. Public deposits comprised 71% of its funding at end-FY24, of which 91% are short term. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The National Rating is sensitive to a change in CDB's credit profile relative to other rated Sri Lankan issuers. Negative action may result from a sustained deterioration in the risk profile caused by aggressive growth into risky loan products without adequate risk mitigation and an enhanced risk buffer. A sustained increase in debt/tangible equity beyond its expectation, or material reduction in loan-loss provision and capital buffers, would also place pressure on the rating. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The rating may be upgraded if the operating environment improves and CDB is able to enhance its credit profile, including reducing leverage to a level that is more comparable with that of peers, while maintaining moderate asset quality, stable risk profile and acceptable profitability relative to peers. DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS CDB's subordinated debentures are rated two notches below its National Long-Term Rating to reflect their subordination to senior unsecured obligations. This is in line with Fitch's baseline notching for loss severity for subordinated debt and reflects its expectations of poor recoveries in the event of default. There is no additional notching for non-performance risk, as Fitch believes it is adequately captured in the National Long-Term Rating. DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES The ratings of the subordinated debentures will move in tandem with CDB's National Long-Term Rating. Entity/Debt Rating Prior ----------- ------ ----- Citizens Development Business Finance PLC Natl LT BBB(lka) Affirmed BBB(lka) Subordinated Natl LT BB+(lka) Affirmed BB+(lka) ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. 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