Hotel Eastern Nepal Private Limited (HENPL) has had its credit ratings withdrawn by CARE Ratings Nepal Limited (CRNL) after the company failed to provide the information required for periodic rating surveillance. According to CARE Ratings Nepal, the rating withdrawal takes effect immediately following prolonged non-cooperation from the issuer during the monitoring process.
Ratings Withdrawn After Six-Month Monitoring Period
CARE Ratings Nepal stated that it has withdrawn the “CARE-NP B; ISSUER NOT COOPERATING” rating assigned to the company’s long-term bank facilities and the “CARE-NP A4; ISSUER NOT COOPERATING” rating assigned to its short-term bank facilities. The agency explained that HENPL did not provide the necessary financial and operational information required for rating monitoring despite repeated requests.
In accordance with the guidelines issued by the Securities Board of Nepal (SEBON), CARE Ratings Nepal had earlier placed the ratings on Notice of Withdrawal for a period of six months while continuing to review the company based on the limited information available.
However, the agency concluded that the available information was insufficient to conduct a fair and reliable assessment of the company’s credit profile. As the issuer continued to remain non-cooperative even after the monitoring period, the ratings have now been formally withdrawn.
CARE Advises Investors and Lenders to Exercise Caution
Following the withdrawal, CARE Ratings Nepal has urged investors, lenders, and other stakeholders to exercise caution when relying on the previously assigned ratings. The agency noted that the withdrawal reflects the absence of adequate information necessary to maintain a credible opinion on the company’s creditworthiness and should not be interpreted as an improvement or deterioration in its financial condition.
Five-Star Hotel Under Construction in Jhapa
Hotel Eastern Nepal Private Limited was incorporated on April 27, 2018, under the Companies Act, 2006. The company is developing a five-star hotel in Dhulabari, Jhapa, with a planned capacity of 88 rooms, including suite and deluxe accommodations. The project is intended to strengthen the hospitality sector in eastern Nepal by offering premium accommodation facilities. However, the current status of the hotel’s construction and financing has not been disclosed in the latest rating update.
What the Rating Withdrawal Means
A rating withdrawal due to issuer non-cooperation does not necessarily indicate financial distress. Instead, it signifies that the credit rating agency no longer has sufficient information to monitor and maintain an informed opinion on the company’s credit quality. As a result, financial institutions, investors, and other market participants are advised to conduct independent due diligence before making lending or investment decisions involving Hotel Eastern Nepal Private Limited.
