CARE Ratings Nepal Limited (CRNL) has revised the credit rating of Hotel Lalchan Private Limited (HLPL), downgrading its long-term bank facility rating to CARE-NP B+: Issuer Not Cooperating from CARE-NP BB- after the company failed to provide the necessary information required for rating surveillance. The rating has also been placed on notice of withdrawal, with the agency warning investors and lenders to exercise caution while relying on the current rating.
The latest action follows repeated attempts by CARE Ratings Nepal to obtain updated financial and operational information from the company. However, despite multiple requests through emails, formal letters and telephone calls, the company did not cooperate with the surveillance process, prompting the rating agency to revise the rating in accordance with regulatory guidelines.
Long-Term Bank Facilities of Rs. 2.26 Billion Affected
The revised rating applies to Hotel Lalchan Private Limited’s long-term bank facilities amounting to Rs. 2.259 billion. CARE Ratings Nepal has assigned the facility a rating of CARE-NP B+: Issuer Not Cooperating, replacing the earlier CARE-NP BB- rating. Alongside the downgrade, the rating has been moved into the “Issuer Not Cooperating” category and placed on notice of withdrawal. The agency stated that the revised rating reflects the absence of adequate information required to conduct a comprehensive assessment of the company’s current financial position and debt-servicing capability.
Company Failed to Provide Information for Rating Surveillance
According to CARE Ratings Nepal, it made several attempts to obtain updated information from Hotel Lalchan Private Limited to complete its routine rating surveillance. The agency sent official communications to the company on July 3, July 7, July 9, and July 15, 2026, in addition to making numerous telephone calls requesting the submission of relevant financial and operational data.
Despite these repeated efforts, the company did not provide the required information. As a result, CARE Ratings Nepal reviewed the company’s rating based only on the best information available in the public domain. However, the agency stated that the available information was insufficient to arrive at a fair and reliable credit assessment.
Rating Placed by CARE Ratings Nepal on Notice of Withdrawal
In line with the Securities Board of Nepal (SEBON) guidelines governing credit rating agencies, CARE Ratings Nepal has placed the company’s rating on notice of withdrawal. The agency said it will continue monitoring the rating for a minimum period of six months. During this period, the company will have an opportunity to cooperate by providing the information required for surveillance. If Hotel Lalchan Private Limited continues to remain unresponsive after the monitoring period, CARE Ratings Nepal may proceed with the withdrawal of the rating and will notify both SEBON and the public before taking such action. The company’s bank loan rating will now be denoted as CARE-NP B+: Issuer Not Cooperating (Notice of Withdrawal).
Investors and Lenders Advised to Exercise Caution
Following the revision, CARE Ratings Nepal has urged banks, financial institutions, investors, lenders, and the general public to exercise caution while using the company’s current credit rating. The agency explained that ratings under the “Issuer Not Cooperating” category are based on limited available information because the rated entity has not participated in the surveillance process. Consequently, such ratings may not accurately reflect the company’s latest financial performance or repayment capacity.
Five-Star Hotel Project Under Development
Hotel Lalchan Private Limited was incorporated on 5 September 2018 and is one of the hospitality ventures under the Lalchan Group. The company is currently developing a five-star hotel project in Maharajgunj, Kathmandu, with plans to establish a premium business and leisure destination in the capital. The hotel is being constructed on approximately 152,481 square feet of land and is planned to feature 135 guest rooms, comprising nine suites, nine junior suites and 117 standard rooms. The project is expected to offer modern hospitality facilities targeting both domestic and international business travellers as well as leisure tourists visiting Kathmandu.
Partnership with Hilton’s DoubleTree Brand
To strengthen its international positioning, Hotel Lalchan Private Limited entered into a Comprehensive Management Agreement with Hilton Worldwide Manage Limited on 20 December 2020. Under the agreement, the hotel is expected to operate under the globally recognised “DoubleTree by Hilton” brand, enabling the property to benefit from Hilton’s international marketing network, operational standards, reservation systems and brand recognition. The partnership is intended to position the hotel among Kathmandu’s premium hospitality properties once commercial operations commence.
Importance of Timely Disclosure
The latest rating action highlights the importance of transparency and regular financial disclosure for companies seeking to maintain their credit ratings. Credit rating agencies rely on updated financial statements, operational performance, and other relevant information to assess an issuer’s creditworthiness and ability to meet its debt obligations. When companies fail to cooperate with the surveillance process, rating agencies may revise or withdraw ratings in accordance with regulatory requirements.
For Hotel Lalchan Private Limited, future rating actions will depend on its willingness to provide the necessary information during the monitoring period. Continued cooperation could enable a fresh evaluation of the company’s financial profile, while prolonged non-cooperation may ultimately result in the withdrawal of its credit rating.
