CARE Ratings Nepal Limited (CRNL) has revised the credit ratings of Himal Water Park & Village Resort Limited (HWPL), downgrading the company’s issuer and long-term bank facility ratings while placing them under the “Issuer Not Cooperating” category. The rating agency has also issued a notice of withdrawal, citing the company’s failure to provide the information required for periodic rating surveillance. The latest action reflects CRNL’s inability to obtain adequate financial and operational information from the company, making it difficult to conduct a comprehensive assessment of its current credit profile.
Issuer Rating Revised to CARE-NP C
CARE Ratings Nepal has revised the company’s Issuer Rating to CARE-NP C (Is): Issuer Not Cooperating, from the earlier CARE-NP B- rating. Similarly, the company’s long-term bank facilities worth Rs. 881.30 million have been downgraded to CARE-NP C: Issuer Not Cooperating from CARE-NP B-.
The rating agency has also placed the company’s short-term bank facilities of Rs. 1.30 million under the CARE-NP A4: Issuer Not Cooperating category. The short-term rating has likewise been moved to the “Issuer Not Cooperating” category and placed on notice of withdrawal. Overall, the revised ratings cover total banking facilities amounting to Rs. 882.60 million.
Non-Cooperation Led to Rating Revision by CARE Ratings Nepal
According to CARE Ratings Nepal, the revision does not necessarily reflect only the company’s financial position but is primarily the result of insufficient cooperation from the issuer. The rating agency stated that it had repeatedly sought updated financial and operational information from Himal Water Park & Village Resort through multiple emails, formal letters, and numerous telephone calls.
Despite these repeated requests, the company did not submit the required information necessary for regular monitoring of its credit ratings. As a result, CRNL reviewed the ratings using the best available information. However, the agency noted that the available information was not sufficient to arrive at a fair and comprehensive assessment of the company’s current creditworthiness.
Ratings Placed on Notice of Withdrawal by CARE Ratings Nepal
In accordance with the Securities Board of Nepal (SEBON) guidelines governing credit rating agencies, CARE Ratings Nepal has placed the company’s ratings on notice of withdrawal. The agency stated that it will continue to monitor the ratings for a minimum period of six months. During this period, it expects the company to cooperate by providing the necessary financial and operational information required for surveillance.
If Himal Water Park & Village Resort continues to remain unresponsive after the monitoring period, CARE Ratings Nepal may proceed with the withdrawal of the ratings. The agency said it will notify both SEBON and the general public before taking such action.
Investors and Lenders Urged to Exercise Caution
Following the rating revision, CARE Ratings Nepal has advised investors, banks, financial institutions, lenders and the general public to exercise caution while relying on the company’s current credit ratings. The agency said the company’s bank loan ratings will now be denoted as CARE-NP C (Is)/CARE-NP C/A4: Issuer Not Cooperating (Notice of Withdrawal).
The “Issuer Not Cooperating” designation indicates that the rating has been assigned based on limited publicly available information because the rated entity has not cooperated with the surveillance process. Consequently, users of the rating should carefully consider the limitations associated with the assessment.
About Himal Water Park & Village Resort Limited
Himal Water Park & Village Resort Limited (HWPL) is a private limited company incorporated on 8 August 2012. The company operates a four-star hotel in Birgunj, one of Nepal’s major commercial hubs near the Indian border. The property is spread across 11,551.53 square metres of land and features 63 guest rooms. The hotel caters to business travellers, tourists and visitors to the industrial city of Birgunj, offering accommodation, hospitality and recreational services.
Importance of Rating Surveillance
Credit rating surveillance is a continuous process through which rating agencies evaluate whether previously assigned ratings remain appropriate based on a company’s latest financial performance, liquidity position, debt servicing capacity and overall business outlook.
When a company fails to provide the necessary information during this process, rating agencies may classify it under the “Issuer Not Cooperating” category. Such a designation signals that the rating is based on incomplete information and may not fully reflect the issuer’s current financial condition.
The latest action against Himal Water Park & Village Resort underscores the importance of timely disclosure and cooperation with credit rating agencies, particularly for companies with substantial banking facilities. Transparent financial reporting and regular engagement with rating agencies help maintain investor confidence and enable lenders to make informed credit decisions.
