India: VRL Logistics Ltd, Hopson Development, Sukhbir Agro Energy Limited (SAEL) and more

• VRL Logistics (VRLL) announced a capex plan of INR5.6b to purchase 1,600 trucks (~25,000t carrying capacity) spread over the next 12-18 months.
• This capex is essential to: a) replace its older fleet that moves out due to the vehicle scraping policy and b) capture the pick-up in demand in the LTL segment.
• We believe VRLL would be very well placed to capitalize on the growth opportunity after this capacity addition.

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Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. China Hongqiao
2. Times China
3. China Jinmao Holdings
4. Guangzhou R&F Properties
5. Sunac China Holdings

and more…

SAEL Limited is roadshowing a USD 7NC4 green notes offering, with the proceeds to be used for refinancing all existing debt and capex of the restricted group (RG). The integrated player has three business lines: Renewable Energy, Warehousing Infrastructure, and Agri-processing & Solvent Extraction. 

We view SAEL as “Medium Risk” on our LARA scale. We note favourably the utility nature of the business, with contractual and visible revenue and cash flows for the RG that will hold SAEL’s renewable power plants (solar and waste-to-energy). Conversely, the credit is weighed down by the: [1] RG’s small scale and short track record of the associated assets (less than three years); [2] weak corporate governance, especially the private ownership; and [3] execution risk for the proposed organisational restructuring.

Our Credit Bias is “Stable”, given the revenue visibility and contractual cash flows under PPAs.

We expect the proposed notes to price at 7%.