/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/060717.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 Monday, July 17, 2006, Vol. 9, No. 140 Headlines A U S T R A L I A & N E W Z E A L A N D ACTIVE CRANE: Members Agree on Voluntary Liquidation AGENTIS INTERNATIONAL: Liquidator to Present Wind-Up Report AMT PROPERTIES: Creditors Must Prove Debts by July 19 ANICHETTE PTY: Members to Receive Liquidator's Wind-Up Report BEST PRACTICE: To Declare Dividend for Priority Creditors CAMPBELLFIELD AUTO: Shuts Down Business Operations CORPORATE BANKINGS: Liquidator to Present Wind-Up Report D'ANGELOZ LIMITED: Creditors Must Prove Debt by August 1 DAM CONTROL: Appoints Joint Liquidators EMINENT FINANCIAL: Members Resolve to Wind Up Firm EPICUREAN FOODS: Names Rod Slattery as Liquidator ERDYNAST HOLDINGS: To Declare Dividend on July 19 FAMILY BOATS: Creditors Resolve to Wind Up Firm FREERANGE ANIMATION: To Declare Second Dividend on July 21 GORDON INDUSTRIES: Undergoes Voluntary Wind-Up INDS01 PTY: To Declare Dividend on July 21 INDUSTRIAL LAND: Court Issues Wind-Up Order ISIK.COM PTY: Members Appoint Official Liquidators ITERRA PTY: Enters Wind-Up Proceedings JAMES HARDIE: SPF Not Qualified as Charity, PM says JARMBIE OVERLAND: Members & Creditors to Get Liquidator's Report KUNUNURRA TRANSPORT: To Declare a Final Dividend on July 19 LACRUM (CHEESE): Members and Creditors to Convene on July 19 MAKMUR AUSTRALASIA: Liquidates Business Operations MAMBOURIN PTY: Creditors Appoint Liquidator MJM MANAGEMENT: To Declare Dividend on July 19 NEV INTERIORS: Members and Creditors to Hear Wind-Up Report PLUREE PTY: Ozem Kassem Appointed as Liquidator PRBOAT PTY: Names Official Liquidator QANTAS AIRWAYS: CFO Denies Suggestions on Value Write Down QANTAS AIRWAYS: Unions Forge Web Site to Raise Public Awareness QUEENSLAND UNDERWRITERS: Liquidator to Present Wind-Up Report RANGE RECON: Faces Liquidation Proceedings RED DOLPHIN: Members and Creditors Decide to Wind Up Firm RUBIKCON PTY: To Declare Dividend for Unsecured Creditors TELSTRA CORP: Postpones FTTN Proposal Due to Pricing Dispute TE WHAI RAWA: Finnigan and Whittfield Named Joint Liquidators VILLAGE BREAD: Creditors' Proofs of Claim Due on July 27 C H I N A & H O N G K O N G CHINA SOUTHERN (AIRLINES): To Purchase 50 Airbus A320 Carriers CHINA SOUTHERN (SECURITIES): To Declare Bankruptcy, Insider Says DRAGON LINK: Court to Hear Wind-Up Petition on August 2 EURO-TEC (H.K.): Faces Wind-Up Proceedings GREAT WALL: Wind-Up Application Hearing Slated for August 9 H.K. TEMPO: Enters Wind-Up Proceedings HO CHEUNG INVESTMENT: Wind-Up Process Commenced HONGENT DEVELOPMENT: Wind-Up Hearing Slated for August 16 INCORPORATED OWNERS: Appoints Liquidators and Inspectors OCEAN GRAND: Accounting Probe Extend to Other Subsidiaries POLYAIM LIMITED: Court to Hear Wind-Up Bid on August 9 * Moody's Employs New Approach of Rating Chinese Companies I N D I A DUNLOP INDIA: Ruia to Dilute Stake to Raise Revival Funds INDIAN OIL: Mulls Tie-Up with Calik Enerji for Refinery Project GENERAL MOTORS: Fitch Says Merger May Affect Nissan's Ratings I N D O N E S I A BANK NEGARA: S&P Revises Outlook on B+ Rating to Stable NOBLE FINANCE: Fitch Assigns 'B' Long-Term Issuer Default Rating NOBLE FINANCE: S&P Places 'B' Corporate Credit Rating J A P A N DL CHINA: Liquidator Presents Wind Up Accounts on July 20 KANA SOFTWARE: Auditor Burr Pilger Expresses Going Concern Doubt OCA INC: BofA & Secured Lenders Want Equity Committee Disbanded SUMITOMO MITSUI: Moody's Upgrades Fin'l Strength Rating To D+ * Earnings Quality Key to Ratings of Major Banks, Fitch Says * Profitability & Risk Management Key For Banks, S&P Says K O R E A HYNIX SEMICONDUCTOR: STMicro Talks End Without Result * Korean Mobile Phone Industry Loses Momentum M A L A Y S I A AYER MOLEK: Awaits Court's Decision on Default Judgment Appeal BUKIT KATIL: Public Shareholding Stands at 59.85% CONSOLIDATED FARMS: Bourse Defers Delisting Pending Appeal HARVEST COURT: Public Shareholding Spread Meets Requirement MALAYSIA AIRLINES: Offers Monsoon Special Fare for Indian Routes PILECON ENGINEERING: Public Shareholding Spread Pegged at 47.10% PSC INDUSTRIES: Complies with Public Shareholding Requirement PSC INDUSTRIES: Unit Faces EUR3.8-Mln Claims Payment Suit TAP RESOURCES: AmBank Declares Event of Default WEMBLEY INDUSTRIES: Public Shareholders Hold 59.73% Shares P H I L I P P I N E S MANILA ELECTRIC: NEDA Fears Possible Monopoly MANILA ELECTRIC: Questions Php6.37-Billion Transco Bill S I N G A P O R E CHINA RESOURCES: Court to Hear Wind-Up Petition on July 21 DIGILAND INTERNATIONAL: Accepts 1,382,952,319 Rights Shares GETRONICS NV: Sets Up Biller Service Provider for ING Bank GETRONICS NV: Divests Regional Operations to Kapsch Group JIN-WEN INVESTMENT: Faces Wind-Up Proceedings MAE ENGINEERING: Eligro Deal Already in Advanced Stage MDR LIMITED: Posts Changes of Shareholders' Percentage Interest REFCO INC: Chap. 11 Trustee Taps Skadden Arps as Special Counsel REFCO INC: GAIN Capital to Purchase FX Customer Accounts REFCO INC: Refco Group Inks Settlement With West and Contractors T H A I L A N D AVANEX CORP: Reports Revised Second Quarter 2006 Net Loss MDX PCL: Earns THB6.13 Billion in First Quarter 2006 - - - - - - - - ============================================ A U S T R A L I A & N E W Z E A L A N D ============================================ ACTIVE CRANE: Members Agree on Voluntary Liquidation ---------------------------------------------------- At an extraordinary general meeting of the members of Active Crane Hire (NSW) Pty Limited on June 16, 2006, it was agreed that a voluntary wind-up of the Company is appropriate and necessary. In this regard, Peter Paul Krejci was appointed as liquidator. The Liquidator can be reached at: Peter Paul Krejci GHK Krejci, Level 9 179 Elizabeth Street Sydney, New South Wales 2000 Australia AGENTIS INTERNATIONAL: Liquidator to Present Wind-Up Report ----------------------------------------------------------- A joint meeting of the members and creditors of Agentis International Pty Limited will be held on July 19, 2006, at 10:00 a.m. During the meeting, Liquidator Kenneth W. Lamb will give final accounts of the Company's wind-up and property disposal exercises. As reported by the Troubled Company Reporter - Asia Pacific, the Company commenced a wind-up of its operations on October 12, 2005. The Liquidator can be reached at: Kenneth W. Lamb Jones Condon Chartered Accountants 77 Station Street Malvern, Victoria 3144 Australia AMT PROPERTIES: Creditors Must Prove Debts by July 19 ----------------------------------------------------- Creditors of AMT Properties Pty Ltd are required to formally prove their debts by July 19, 2006, for them to share in the Company's dividend distribution. The liquidator can be reached at: Richard Judson Members Voluntarys Pty. Ltd. 1st Floor, 10 Park Road Cheltenham 3192 Australia ANICHETTE PTY: Members to Receive Liquidator's Wind-Up Report ------------------------------------------------------------- A final meeting of the members of Anichette Pty Limited will be held on July 21, 2006, at 10:00 a.m. At the meeting, Liquidator M. E. Slaven will present final accounts of the Company's wind-up. The Liquidator can be reached at: M. E. Slaven Rangott Slaven Hundy, Chartered Accountants, Unit 12 Level 3, Engineering House 11 National Circuit, Barton Australian Capital Territory Australia BEST PRACTICE: To Declare Dividend for Priority Creditors --------------------------------------------------------- Best Practice Skills Pty Limited will declare dividend for its priority creditors on July 19, 2006. Creditors who were not able to prove their claims by July 12, 2006, will be excluded from sharing in any distribution the Company will make. The liquidator can be reached at: A. R. M. Taylor Joint & Several Trustee Meertens, Chartered Accountants Level 1, 49 Woods Street Darwin, Northern Territory 0800 Australia Telephone:(08) 8923 9239 Facsimile:(08) 8942 3250 CAMPBELLFIELD AUTO: Shuts Down Business Operations -------------------------------------------------- After their meeting on June 13, 2006, the members of Campbellfield Auto Electrics Pty Limited decided to voluntarily wind up the Company's operations. Barry Keith Taylor was subsequently appointed as liquidator at a creditors' meeting held that same day. The Liquidator can be reached at: Barry Keith Taylor B. K. Taylor & Co. 8th Floor, 608 St Kilda Road Melbourne 3004 Australia CORPORATE BANKINGS: Liquidator to Present Wind-Up Report -------------------------------------------------------- A final meeting of the members and creditors of Corporate Bankings Pty Limited will be held on July 21, 2006, at 11:30 a.m. During the meeting, Liquidator Daniel Civil will report on the Company's wind-up and property disposal exercises. The Liquidator can be reached at: Daniel Civil Rodgers Reidy Level 8, 333 George Street Sydney, New South Wales 2000 Australia D'ANGELOZ LIMITED: Creditors Must Prove Debt by August 1 -------------------------------------------------------- Liquidator Robert Laurie Merlo requires creditors of D'Angeloz Limited to file their proofs of debt by August 1, 2006. Failure to comply with the requirement will exclude a creditor from sharing in any distribution the Company will make. The Liquidator can be reached at: R. L. Merlo Merlo Burgess & Co. Limited P.O. Box 51-486, Pakuranga Auckland, New Zealand Telephone: (09) 520 7101 Facsimile: (09) 529 1360 e-mail: merloburgess&co@xtra.co.nz DAM CONTROL: Appoints Joint Liquidators --------------------------------------- On June 29, 2006, Thomas Lee Rodewald and Sheree Ann Hart were appointed joint and several liquidators to oversee the liquidation of Dam Control Ltd. The Joint Liquidators can be reached at: Thomas Lee Rodewald c/o Rodewald Hart Brown Limited P.O. Box 13-380, Tauranga New Zealand Telephone: (07) 571 6280 Facsimile: (07) 571 6281 or 38C Cavendish Drive, Manukau Auckland, New Zealand Telephone: (09) 262 3634 Web site: www.rhb.co.nz/ EMINENT FINANCIAL: Members Resolve to Wind Up Firm -------------------------------------------------- Members of Eminent Financial Group Pty Ltd convened on June 15, 2006, and passed a special resolution to voluntarily wind up the Company's operations. The liquidator can be reached at: Paul Driver c/o Hardwicke's Chartered Accountants 6 Phipps Close Deakin, Australian Capital Territory 2600 Australia EPICUREAN FOODS: Names Rod Slattery as Liquidator ------------------------------------------------- At a general meeting on June 13, 2006, the members and creditors of Epicurean Foods And Beverages Pty Limited resolved to close the Company's business operations. Subsequently, Rod Slattery was appointed as liquidator. The Company also distributed its assets on July 5, 2006, to the exclusion of creditors who were not able to file their claims. The Liquidator can be reached at: Rod Slattery PPB Chartered Accountants Level 10, 90 Collins Street Melbourne, Victoria 3000 Australia ERDYNAST HOLDINGS: To Declare Dividend on July 19 ------------------------------------------------- Erdynast Holdings Pty Limited will declare its first and final dividend on July 19, 2006. Creditors who were not able to prove their claims will be excluded from sharing in any distribution the Company will make. As reported by the Troubled Company Reporter - Asia Pacific, the Company commenced liquidation on January 24, 2006. The liquidator can be reached at: Richard Judson Members Voluntarys Pty. Ltd. 1st Floor, 10 Park Road Cheltenham 3192 Australia FAMILY BOATS: Creditors Resolve to Wind Up Firm ----------------------------------------------- The creditors of Family Boats Pty Limited held a meeting on June 16, 2006, and agreed to shut down the Company's business operations. David Anthony Hurst and Andrew Hugh Jenner Wily were appointed as liquidators. The Liquidators can be reached at: David Anthony Hurst Andrew Hugh Jenner Wily Armstrong Wily Chartered Accountants Level 5, 75 Castlereagh Street Sydney, New South Wales 2000 Australia FREERANGE ANIMATION: To Declare Second Dividend on July 21 ---------------------------------------------------------- Freerange Animation Pty Limited notifies parties-in-interest of its intention to declare a second dividend for creditors on July 21, 2006. Creditors who were not able to prove their claims will be excluded from sharing in the dividend distribution. As reported by the Troubled Company Reporter - Asia Pacific, the Company declared its first dividend on December 13, 2005. The Liquidator can be reached at: John Frederick Lord PKF Chartered Accountants Level 10, 1 Margaret Street Sydney New South Wales 2000 Australia Telephone:(02) 9251 4100 Facsimile:(02) 9240 9821 Web Site: http://www.pkf.com.au/ GORDON INDUSTRIES: Undergoes Voluntary Wind-Up ---------------------------------------------- The members of Gordon Industries Pty Limited convened on June 16, 2006, and agreed that the Company's operations be wound up voluntarily. Allan Monger was subsequently appointed as liquidator. The Liquidator can be reached at: Allan Monger Monger Baker Suite 1, 47-51 Morts Road Mortdale, New South Wales 2223 Australia INDS01 PTY: To Declare Dividend on July 21 ------------------------------------------ INDS01 Pty Limited will declare its first and final dividend for priority creditors on July 21, 2006. Moreover, it will also declare an interim dividend for non- priority claims. Creditors who were not able to file their claims by July 7, 2006, will be excluded from the dividend distribution. The liquidator can be reached at: Des Munro SimsPartners Chartered Accountants Level 4, 12 Pirie Street Adelaide, South Australia 5000 Australia INDUSTRIAL LAND: Court Issues Wind-Up Order ------------------------------------------- The Supreme Court of New South Wales ordered the wind-up of Industrial Land Development Pty Limited on June 16, 2006. In this regard, D. I. Mansfield was named liquidator. The Liquidator can be reached at: D. I. Mansfield Moore Stephens Chartered Accountants Level 6, 460 Church Street Parramatta, New South Wales 2150 Australia ISIK.COM PTY: Members Appoint Official Liquidators -------------------------------------------------- The members of Isik.Com Pty Limited held a meeting on June 15, 2006, and agreed to shut down the Company's business operations. Antony de Vries and Riad Tayeh were appointed as liquidators. The Liquidators can be reached at: Antony de Vries Riad Tayeh de Vries Tayeh Level 3/95 Macquarie Street Parramatta, New South Wales 2150 Australia ITERRA PTY: Enters Wind-Up Proceedings -------------------------------------- On June 15, 2006, the Supreme Court of New South Wales issued an order to wind up Iterra Pty Limited. Antony de Vries was consequently appointed as liquidator. The Liquidator can be reached at: Antony De Vries de Vries Tayeh Level 3, 95 Macquarie Street Parramatta, New South Wales 2125 Australia JAMES HARDIE: SPF Not Qualified as Charity, PM says --------------------------------------------------- Prime Minister John Howard supported the Australian Taxation Office's refusal to endorse the Special Purpose Fund, entered into by James Hardie Industries Ltd. and the NSW Government on Dec. 1, 2005, as a tax concession charity, according to published reports. Mr. Howard maintains that the James Hardie asbestos victims' fund does not qualify under any definition as a charity for taxation purposes, The Age relates. According to the report, James Hardie agreed last December to set up the fund to provide up to US$4.5 billion over 40 years to victims, in the condition that the fund and the company's payments to it were tax deductible. Concerns have been raised that the fund's heavy taxation level, set at 45 cents in the dollar, would impede the company's ability to compensate victims, the paper says. Mr. Howard contends that it was obligatory for the company to accept the financial burden of its actions. "There's no argument that the contributions made by the company to the fund to compensate the victims ... will be tax deductible," the Australian Associated Press cites Mr. Howard telling ABC Radio. "As it is currently constituted, it does not by any stretch of imagination meet the definition of a charity," Mr. Howard maintains. NSW Premier Morris Iemma argues that the focus of the fund should be to provide payouts for victims and not the tax office. "Let's just get on with ensuring that the victims get the maximum amount of money from this fund -- not part of it being diverted to the tax office," The Age cites Mr. Iemma telling ABC Radio. Meanwhile, opposition leader Kim Beazley says the Government has no right to make money from asbestos victims, ABC Online reports. He notes that if Mr. Howard does not agree to it, the Labor Party will use the next sitting of Federal Parliament to try to exempt the fund from income tax. Asbestos victims' leader Bernie Banton urged Mr. Howard to show "real leadership" to overturn the tax office's decision. He said that he is optimistic Mr. Howard will listen to the state and territory leaders who supported the charity call, The Age relates. About James Hardie James Hardie Industries Limited -- http://www.jameshardie.com/ -- manufactures, markets and distributes fiber cement and gypsum products, fiberglass reinforced plastic and PVC products, sanitary ware and bathroom products, insulating materials and fillers, strippers and adhesives. On July 2, 1998, the then public company announced a plan of reorganization and capital restructuring. James Hardie N.V. was incorporated in August 1998 as an intermediary holding company, with all of its common stock owned by indirect subsidiaries of JHIL. Effective as of November 1998, JHIL contributed its fibre cement businesses, its United States gypsum wallboard business, its Australian and New Zealand building systems businesses and its Australian windows business to JHNV and its subsidiaries. On July 24, 2001, JHIL announced a further plan of reorganization and capital restructuring, which reorganization was completed on October 19, 2001. In connection with the 2001 Reorganization, James Hardie Industries N.V., formerly RCI Netherlands Holdings B.V., issued common shares represented by CHESS Units of Foreign Securities on a one for one basis to existing JHIL shareholders in exchange for their shares such that JHINV became the new ultimate holding company for JHIL and JHNV. Following the 2001 Reorganization, JHINV controls the same assets and liabilities as JHIL controlled immediately prior to the 2001 Reorganization. The Company's troubles began with its "under-funded" allocation for asbestos claims, which were brought in by people who suffer or may have diseases caused by exposure to the asbestos-related products produced by JHIL. In 2001, James Hardie set up an independent entity, Medical Research and Compensation Foundation, to handle asbestos claims. The Foundation has warned that it could run out of money within five years. The Asbestos Diseases Foundation of Australia and workers unions called for all the Company's asbestos profits to be immediately placed in the fund. James Hardie was later accused of topping up the dwindling asbestos fund it established. By 2004, James Hardie's former asbestos manufacturing subsidiaries -- Amaca Pty Ltd, Amaba Pty Ltd, and ABN 60 Pty Ltd -- are three of around 150 defendants in asbestos litigation, and based on the Foundation's own figures, they account for US$1,000,000,000 of the predicted US$6,000,000,000 future asbestos liabilities in Australia. Although James Hardie stopped making asbestos products in 1987, the average 35-year latency of mesothelioma, an asbestos-related disease, means asbestos compensation funds will be needed until mid-century. In a 2005 report by a company-hired actuary from KPMG, it was predicted that 4,915 Australians would contract mesothelioma from exposure to Hardie products in the coming decades. When less serious forms of asbestos-related disease are included, James Hardie should expect to compensate 8,725 victims. On December 1, 2005, the Company announced that the NSW Government and a wholly owned Australian subsidiary of the Company -- LGTDD Pty Ltd -- had entered into a conditional agreement to provide long-term funding to a special purpose fund that will provide compensation for Australian asbestos-related personal injury claims against certain former James Hardie asbestos companies. The amount of the asbestos provision of AU$1 billion, at March 31, 2006, is the Company's best estimate of the probable outcome, which estimate includes an actuarial calculation prepared by KPMG Actuaries Pty Ltd of the projected future cash outflows, undiscounted and uninflated, and the anticipated tax deduction arising from Australian legislation which came into force on April 6, 2006. JARMBIE OVERLAND: Members & Creditors to Get Liquidator's Report ---------------------------------------------------------------- A joint meeting of the members and creditors of Jarmbie Overland Adventures Pty Limited will be held on July 21, 2006, at 11:00 a.m. During the meeting, Liquidator Peter P. Krejci will give accounts of the Company's wind-up and property disposal exercises. As reported by the Troubled Company Reporter - Asia Pacific, the Company shut down its operations through a special resolution passed by its creditors on July 4, 2005. The Liquidator can be reached at: Peter P. Krejci GHK Green Krejci Level 9, 179 Elizabeth Street Sydney, New South Wales 2000 Australia KUNUNURRA TRANSPORT: To Declare a Final Dividend on July 19 ----------------------------------------------------------- Kununurra Transport Services Pty Ltd will declare a final dividend for its creditors on July 19, 2006, to the exclusion of creditors who were not able to prove their claims. As reported by the Troubled Company Reporter - Asia Pacific, the Company declared its first dividend on March 10, 2006. The liquidator can be reached at: Kim Wallman Telephone:(08) 9480 8233 Facismile:(08) 9321 0429 e-mail: kwallman@hlbwa.com.au LACRUM (CHEESE): Members and Creditors to Convene on July 19 ------------------------------------------------------------ A joint meeting of the members and creditors of Lacrum (Cheese) Pty Limited will be conducted on July 19, 2006 at 11:00 a.m. At the meeting, Liquidator Paul Cook will present accounts of the Company's wind-up operations. The Liquidator can be reached at: Paul Cook Paul Cook & Associates 105 Macquarie Street Hobart Tasmania 7000 Australia Telephone:(03) 6223 2555 Facsimile:(03) 6223 2556 e-mail: info@pjc.com.au MAKMUR AUSTRALASIA: Liquidates Business Operations -------------------------------------------------- At an extraordinary general meeting on June 15, 2006, members of Makmur Australasia Pty Limited agreed that the Company must liquidate its business operations. Victor Raymond Dye and Nicholas Giasoumi were appointed as liquidators. The Liquidators can be reached at: Victor Raymond Dye Nicholas Giasoumi Dye & Rennie Chartered Accountants Suite 8, 260 Auburn Road Hawthorn 3122 Australia MAMBOURIN PTY: Creditors Appoint Liquidator ------------------------------------------- Members of Mambourin Pty Limited convened on June 14, 2006, and decided to wind up the Company's business operations. In this regard, Robert Molesworth Hobill Cole was appointed as liquidator at a creditors' meeting held that same day. The Liquidator can be reached at: Robert Molesworth Hobill Cole Cole Downey & Co Chartered Accountants Unit 2, 6 Moorabool Street Geelong, Victoria 3220 Australia MJM MANAGEMENT: To Declare Dividend on July 19 ---------------------------------------------- MJM Management Consultants Pty Limited will declare its first and final dividend on July 19, 2006. Creditors who were not able to file their claims by June 21, 2006, will be excluded from sharing in the Company's dividend distribution. As reported by the Troubled Company Reporter - Asia Pacific, the Company commenced a wind-up of its operations on July 12, 2005. The liquidator can be reached at: P. W. Gidley Lawler Partners Chartered Accountants 763 Hunter Street Newcastle West, New South Wales 2302 Australia NEV INTERIORS: Members and Creditors to Hear Wind-Up Report ----------------------------------------------------------- Members and creditors of NEV Interiors & Developments Pty Limited will hold a final meeting on July 21, 2006, at 11:00 a.m. During the meeting, Liquidator Schon G. Condon will present a report on the Company's wind-up and property disposal. The Liquidator can be reached at: Schon G. Condon RFD c/o Jones Condon Chartered Accountants Telephone:(02) 9893 9499 PLUREE PTY: Ozem Kassem Appointed as Liquidator ----------------------------------------------- On June 15, 2006, the members and creditors of Pluree Pty Limited convened at separate meetings and resolved to wind up the Company's business operations. Subsequently, Ozem Kassem was appointed as liquidator. The Liquidator can be reached at: Ozem Kassem Bentleys MRI Sydney Business Recovery & Insolvency Partnership Level 8, 50 Carrington Street Sydney, New South Wales Australia Telephone:(02) 8221 8477 e-mail: okassem@sydbri.bentleys.com.au PRBOAT PTY: Names Official Liquidator ------------------------------------- Members of Prboat Pty Limited held a meeting on June 19, 2006, and decided to wind up the Company's business operations. Ross W. Carman was subsequently appointed as liquidator. The Liquidator can be reached at: Ross W. Carman Carmans Chartered Accountants Unit 3, 25 Terminus Street Castle Hill New South Wales Australia Telephone:(02) 9899 3977 QANTAS AIRWAYS: CFO Denies Suggestions on Value Write Down ---------------------------------------------------------- Qantas Airways Limited denied reports that it might have to massively write down the value of its fleet, Steve Creedy writes for The Australian. As reported in the Troubled Company Reporter-Asia Pacific on July 13, a broker has raised concerns that the airline could be forced to massively write down the value of its fleet of 213 aircraft, estimated at AU$3 billion more than its market value. Qantas' chief financial officer Peter Gregg contends that there was no problem with the airline's valuation as it is based on "cash-generating units" under new international accounting standards, The Australian relates. "The simple thing that could have been done by everybody concerned would have been to check with the company," Mr. Gregg tells the paper. "[T]he auditors have agreed that you don't separate international and domestic (sectors). We separate businesses (such as) Qantas and Jetstar. The Qantas business (combines) international and domestic and, as we know, the combined entity is relatively successful," Mr. Gregg says. Talks Continue Over Delayed Deliveries Meanwhile, Mr. Gregg discloses that talks with Airbus over the double-decker A380 delivery delays are still ongoing. He says that "[w]e're working with them as to the delivery schedule -- obviously all the airlines are, because nobody wants to be disadvantaged." According to The Australian, Mr. Gregg's comments came as the Qantas group announced rises in both international and domestic yields for the year to May that came with a 4.2% rise in traffic. About Qantas Airways Headquartered in Sydney, Australia, Qantas Airways -- http://www.qantas.com.au/-- is the world's second oldest airline and is also recognized as one of the leading long- distance airlines, having pioneered services from Australia to North America and Europe. The Qantas Group employs approximately 38,000 staff across a network that spans 145 destinations in Australia, Asia-Pacific, Americas, Europe and Africa. The Qantas Group also operates a diverse portfolio of airline-related businesses, including Engineering Technical Operations and Maintenance Services, Airports and Catering, Qantas Freight, Qantas Holidays, Qantas Defence Services and Qantas Consulting. In 2003, Qantas began suffering the effects of the Iraq War and the SARS outbreak, on top of other events like the 9/11 terrorist attacks, the Afghanistan war and the terror threats, which lead to a downturn in bookings to other Asian countries, and affected most of its European routes. These affected other areas of Qantas' business including Qantas Flight Catering, Qantas Holidays and Australian Airlines. Qantas started reviewing, and widened, the range of initiatives it had put in place following the triggering events. These initiatives included the reduction of staffing numbers through the use of accumulated leave to the equivalent of 2,500 full-time employees by June 2003 and by the equivalent of 1,000 employees between July and September 2003; a restructuring program involving 1,000 redundancies, 400 permanent positions eliminated through attrition and 300 permanent positions converted from full time to part time; a freeze on capital and discretionary expenditure; expansion of the leave without pay program; increased use of part time workers; significant restructuring of work practices and activities; and reduction of capital expenditure, including retirement of some aircraft and deferral of delivery of new aircraft. In December 2003, Qantas unveiled its new low cost-carrier airline, Jetstar Asia, which later failed to gain access to crucial markets such as Indonesia and China. In June 2005, Qantas admitted it is still struggling to recover its investment in Jetstar, despite having managed to lease out four of its unused Airbus 320s. Qantas went into another round of job cuts in late June 2005, a move that was punctuated with more than 600 jobs slashed in the first half of its financial year, and yet another one announced in February 2006 amidst uncertainty of outsourcing the airline's heavy maintenance works overseas. The Troubled Company Reporter - Asia Pacific reported on May 19, 2006, that Qantas will slash 1,000 management, support and administration jobs by the end of 2006 to counter a looming AU$1-billion surge in its fuel bill. QANTAS AIRWAYS: Unions Forge Web Site to Raise Public Awareness --------------------------------------------------------------- Employee unions of Qantas Airways Limited will raise public awareness of the airline's issues under a union internet campaign, Steve Creedy writes for The Advertiser. The airline's 11 unions, which include engineers, check-in staff, pilots and flight attendants, have signed up for a joint Web site to foster public opposition to the shifting of Qantas jobs offshore, The Advertiser relates. Richard Watts, a spokesperson for the Australian Council of Trade Unions, clarifies that the unions are not trying to harm Qantas's brand but will only be raising issues of concern to the unions collectively through that site. Mr. Watts explains a possibility of linking lists of those planes, which are serviced overseas to the flight schedules "so (travellers can see) whether their plane is serviced in Australia or overseas." The Advertiser relates that Qantas is reviewing narrow-body maintenance in Melbourne and expects to make a decision within three months on whether that work will remain in Australia or be shifted to a cheaper country. As reported in the Troubled Company Reporter-Asia Pacific on July 7, Qantas will decide the fate of 450 maintenance jobs at Melbourne Airport over the next two months. The report cited executive general manager of engineering and maintenance services, David Cox, saying that options would be put to the 450-strong workforce over the next two months. The Advertiser notes that many airlines are shifting jobs to countries like China, where labor is cheaper. According to Mr. Watts, the unions' efforts had gained impetus since chief executive Geoff Dixon expressed support for the federal Government's new workplace legislation. Mr. Watts notes that "[o]utsourcing and jobs going overseas are issues that all of the group, not just the maintenance unions, have taken up as a key concern." The TCR-AP report noted that Qantas did not threaten to send jobs offshore but insisted on considering the option if savings targets are not met. It also noted that Qantas would continue to send up to 20 aircraft overseas a year for maintenance checks when the work could not be done in Australia, adding that maintenance costs the airline about AU$1.2 billion annually. About Qantas Airways Headquartered in Sydney, Australia, Qantas Airways -- http://www.qantas.com.au/-- is the world's second oldest airline and is also recognized as one of the leading long- distance airlines, having pioneered services from Australia to North America and Europe. The Qantas Group employs approximately 38,000 staff across a network that spans 145 destinations in Australia, Asia-Pacific, Americas, Europe and Africa. The Qantas Group also operates a diverse portfolio of airline-related businesses, including Engineering Technical Operations and Maintenance Services, Airports and Catering, Qantas Freight, Qantas Holidays, Qantas Defence Services and Qantas Consulting. In 2003, Qantas began suffering the effects of the Iraq War and the SARS outbreak, on top of other events like the 9/11 terrorist attacks, the Afghanistan war and the terror threats, which lead to a downturn in bookings to other Asian countries, and affected most of its European routes. These affected other areas of Qantas' business including Qantas Flight Catering, Qantas Holidays and Australian Airlines. Qantas started reviewing, and widened, the range of initiatives it had put in place following the triggering events. These initiatives included the reduction of staffing numbers through the use of accumulated leave to the equivalent of 2,500 full-time employees by June 2003 and by the equivalent of 1,000 employees between July and September 2003; a restructuring program involving 1,000 redundancies, 400 permanent positions eliminated through attrition and 300 permanent positions converted from full time to part time; a freeze on capital and discretionary expenditure; expansion of the leave without pay program; increased use of part time workers; significant restructuring of work practices and activities; and reduction of capital expenditure, including retirement of some aircraft and deferral of delivery of new aircraft. In December 2003, Qantas unveiled its new low cost-carrier airline, Jetstar Asia, which later failed to gain access to crucial markets such as Indonesia and China. In June 2005, Qantas admitted it is still struggling to recover its investment in Jetstar, despite having managed to lease out four of its unused Airbus 320s. Qantas went into another round of job cuts in late June 2005, a move that was punctuated with more than 600 jobs slashed in the first half of its financial year, and yet another one announced in February 2006 amidst uncertainty of outsourcing the airline's heavy maintenance works overseas. The Troubled Company Reporter - Asia Pacific reported on May 19, 2006, that Qantas will slash 1,000 management, support and administration jobs by the end of 2006 to counter a looming AU$1-billion surge in its fuel bill. QUEENSLAND UNDERWRITERS: Liquidator to Present Wind-Up Report ------------------------------------------------------------- Liquidator L. R. Hendy will report on the wind-up of Queensland Underwriters Limited to the Company's members and creditors on July 18, 2006, at 9:30 a.m. As reported by the Troubled Company Reporter - Asia Pacific, the Company commenced a wind-up of its operations on December 19, 2005. The Liquidator can be reached at: L. R. Hendy Lionel Hendy Chartered Accountants 26 Gladstone Road Highgate Hill Australia RANGE RECON: Faces Liquidation Proceedings ------------------------------------------ The High Court of Wellington on June 26, 2006, ordered the liquidation of Range Recon Ltd and appointment of John Howard Ross Fisk and Richard Dale Agnew as liquidators. In this regard, the Joint Liquidators require the creditors of the Company to submit proofs of claim by July 26, 2006, for them to share in any distribution the Company will make. As reported by The Troubled Company Reporter - Asia Pacific, the Commissioner of Inland Revenue filed the wind-up petition with the High Court of Wellington on May 8, 2006. The Liquidators can be reached at: Richard Dale Agnew C/O PricewaterhouseCoopers 113-119 The Terrace (P.O. Box 243) Wellington, New Zealand Telephone: (04) 462 7000 Facsimile: (04) 462 7492 RED DOLPHIN: Members and Creditors Decide to Wind Up Firm --------------------------------------------------------- The members of Red Dolphin Carpet Cleaning (Victoria) Pty Limited held a meeting on June 7, 2006, and agreed to shut down the Company's business operations. Creditors consequently appointed Robert Molesworth Hobill Cole as the liquidator. The Liquidator can be reached at: Robert Molesworth Hobill Cole Cole Downey & Co Chartered Accountants Unit 2, 6 Moorabool Street Geelong, Victoria 3220 Australia RUBIKCON PTY: To Declare Dividend for Unsecured Creditors --------------------------------------------------------- Rubikcon Pty Ltd will declare its first and final dividend for unsecured creditors on July 20, 2006, to the exclusion of those who were not able to prove their claims by June 13, 2006. The liquidator can be reached at: Ray Richards SimsPartners Level 11, 145 Eagle Street Brisbane, Queensland 4000 Australia TELSTRA CORP: Postpones FTTN Proposal Due to Pricing Dispute ------------------------------------------------------------ Telstra Corp. Ltd. will defer the release of a proposal to build a high-speed broadband network to August as it remains in dispute with the Australian Competition and Consumer Commission over pricing and cost estimates, Matt O'Sullivan writes for The Sydney Morning Herald. Telstra previously expected talks between the competition watchdog to be completed by the end of June 2006. As reported in the Troubled Company Reporter-Asia Pacific on June 16, the talks focused on: 1) rules to govern a AU$3.1 billion high-speed fibre-optic network that Telstra plans to build; and 2) wholesale prices that Telstra charges its rivals for access to its existing copper network. Telstra regulatory chief Phil Burgess says that both Telstra and the ACCC have issues, which he notes as "not an impasse, it's a disagreement on some major issues that have to be resolved." According to Mr. Burgess, the disagreement centered not on regulatory policy but "facts like costs," adding that he is not pessimistic about working through them. The paper relates that the outcome of the talks is crucial to whether the state decides to sell its remaining 51.8% stake in Telstra and how it structures the AU$24 billion sale. According to the report, resolution of the differences over any plans for an FTTN network is critical to Telstra's planned third partial offer as regulatory uncertainty would make the float harder to sell. "We have always said that anything that clarifies regulation is going to be of benefit to the sale," T3 sales team spokesman Ian Smith says. Telstra suffered a crucial regulatory setback last month when the ACCC rejected plans to charge rivals AU$30 per month to access its existing phone lines, the Morning Herald notes. The TCR-AP reported on June 19 ACCC's rejection of Telstra's proposal. According to Dow Jones Newswires, regulatory uncertainty continues about the price Telstra can charge its rivals to access its copper wire network to offer their own broadband services, which could have a major bearing on its earnings outlook. Government Stake Sale "within weeks" The TCR-AP reported on July 6, that the Government is still committed to the full sale of its 51.8% stake in Telstra with Federal Treasurer Peter Costello and Finance Minister Nick Minchin leaving open the prospect of parking the Government's stake in the Future Fund, or pushing ahead with an institutional float. In a follow up report, concerns about Telstra's share price and the regulatory environment continued to cloud the sale, but the Government intended to press ahead with full privatization, the Daily Telegraph cites Mr. Minchin, as saying. "The professional advice to us is that in terms of a retail offer, the timing should be October-November," Mr. Minchin says on ABC Television, adding, "[w]e need to make a final decision within the next few weeks." According to Dow Jones Newswires, Canberra is yet to make a decision on whether or not it will go ahead with a share sale or transfer some or all of its 51.8% stake into its so-called Future Fund, an investment vehicle set up to fund government pensions. The Daily Telegraph recounts that the Government has said it will not sell its remaining 51% stake in the telco unless it is satisfied with the share price. Mr. Minchin discloses that there's still some uncertainty about the regulatory environment for Telstra that would cause uncertainty for investors. Dow Jones relates that according to Mr. Minchin, the Government is almost certain to transfer some of its AU$24 billion stake into its Future Fund later this year amid lackluster demand for shares. "If we do a retail offer it is unlikely that we would sell all 6 billion of our shares," Dow Jones cites Mr. Minchin telling the Australian Broadcasting Corp. in an interview. He explains that the Government would like to sell as many shares as the market can absorb, but on advice, it is unlikely that those shares will be sold in a retail offer, thus some shares may go to the Future Fund "though it may well be all of the shares." Mr. Minchin notes that a key sticking point for the Government, and investors, is the uncertainty surrounding key regulatory rulings, which could impact Telstra's earnings outlook. Consortium Plan Dismissed In another issue, the TCR-AP reported on July 13, 2006, that the consortium of Telstra Corp.'s competitors -- AAPT, Internode, iiNet, Macquarie Telecom, Optus, Powertel, Primus, Soul and TransACT -- has unveiled its alternative plan. In an update, the Sydney Morning Herald reports that Mr. Burgess dismisses the Plan even if Telstra chose not to join the consortium. Mr. Burgess claims that the plan was an attempt by Singapore Telecommunications -- which he labeled the "Singapore octopus" - - to keep prices low for the unconditioned local loop and to stop Telstra building an FTTN network. Mr. Burgess says the consortium's proposals were "hard to take seriously" because they do not contain financial operating or deployment plans. Mr. Burgess wants to know the details. Agence France Presse previously said that if the sale goes ahead, it would be the third tranche of Telstra shares sold by the Government. The first two, known as T1 and T2, were carried out in 1997 and 1999. AFP recounts that the T2 shares were offered at $7.40 each. About Telstra Headquartered at Melbourne, in Victoria, Australia, Telstra Corporation -- http://www.telstra.com.au/-- is an Australian telecommunications and information services company. Telstra offers a full range of services and compete in all telecommunications markets throughout Australia, providing more than 10.3 million Australian fixed line and more than 6.5 million mobile services. In September 2005, Telstra suffered an earnings downgrade and share price fall. The Company announced that its earnings before interest and tax in 2005/06 are expected to decline by 7-10% compared to that of 2004/05 as a result of accelerating declines in public switched telephone network revenues and softening growth in the mobiles market due to aggressive pricing. Also, the political furor surrounding Telstra has strengthened the Government's resolve to dispose of its remaining 51% majority interest in the Company. The Australian Securities and Investment Commission then commenced an investigation into Telstra in connection with the Company's compliance with its disclosure obligations following the earnings downgrade. This led to a number of Telstra shareholders and class action claimants showing anger and dismay over the telco's behavior. In November 2005, after a four-month review, Telstra Chief Executive Officer Sol Trujillo announced a major restructure of the Company, one which involves the loss of thousands of jobs over the next five years and a massive investment in new networks which will help deliver bigger profit margins. TE WHAI RAWA: Finnigan and Whittfield Named Joint Liquidators ------------------------------------------------------------- Shareholders of Te Whai Rawa Co Ltd have appointed Peri Micaela Finnigan and John Trevor Whittfield as joint liquidators for the Company. The Liquidators require the Company's creditors to submit their proofs of claims by August 6, 2006, for them to share in any distribution the Company will make. The Joint Liquidators can be reached at: Peri Finnigan McDonald Vague, P.O. Box 6092 Wellesley Street Post Office, Auckland New Zealand Telephone: (09) 303 0506 Facsimile: (09) 303 0508 Web site: www.mvp.co.nz/ VILLAGE BREAD: Creditors' Proofs of Claim Due on July 27 -------------------------------------------------------- Joint and several liquidators Henry David Levin and David Stuart Vance require the creditors of The Village Bread Baker Ltd to submit their proofs of claim by July 27, 2006. Failure to comply with the requirement will exclude a creditor from sharing in any distribution the Company will make. The Joint Liquidators can be reached at: Henry David Levin C/O Lisa Lee at McCallum Petterson Level 11, Forsyth Barr Tower 55-65 Shortland Street Auckland, New Zealand Telephone: (09) 336 0014 Facsimile: (09) 336 0010 ================================ C H I N A & H O N G K O N G ================================ CHINA SOUTHERN (AIRLINES): To Purchase 50 Airbus A320 Carriers -------------------------------------------------------------- China Southern Airlines' board had approved and has since reached an agreement to purchase 50 Airbus A320 carriers, the China Post reports. According to the China Post, the catalog price for the aircrafts total to CNY26.53 billion, but the airline said it would pay less without divulging the exact amount. The Business Week relates that the 50 planes are part of an agreement signed in December for China to buy 150 medium-range Airbus aircraft. The planes are scheduled for delivery by 2009 and 2010. Rival carrier China Eastern Airlines had previously announced a deal to buy 30 Airbus 320s, the China Post recounts. * * * Headquartered in Guangzhou, China, China Southern Airlines Co Ltd. -- http://www.cs-air.com-- engages in the operation of airlines, as well as in aircraft maintenance and air catering operations in the People's Republic of China and internationally. It provides commercial airlines, cargo services, logistics operations, air catering, utility service, hotel operation, travel services, aircraft leasing, and Internet services. On May 1, 2006, Fitch Ratings has downgraded China Southern Airlines Company Limited's Foreign Currency and Local Currency Issuer Default Ratings to B+ from BB-. The Troubled Company Reporter - Asia Pacific reported in April 2006, that the carrier posted a net loss of CNY1.85 billion for 2005 versus a net loss of CNY48 million a year earlier. CHINA SOUTHERN (SECURITIES): To Declare Bankruptcy, Insider Says ---------------------------------------------------------------- China Southern Securities is expected to declare bankruptcy as a result of illegal operation and appropriation of client deposits, an insider told the China Business Daily News. In addition, the source divulged that the courthouse had already approved the Company's bankruptcy filing. Business Daily says that once bankruptcy proceedings are commenced, the local courthouse will auction the remaining assets of the Company, the proceeds of which will be used to pay off the Company's debts. The Company is expected to settle first its individual debts over its institutional debts. The personal debts of the Company include the appropriation of the deposits of clients and compensation for staffs. Its institutional debts, on the other hand, are mostly loans from banks and entrusted financing reached a total of CNY12 billion. The Troubled Company Reporter - Asia Pacific recounts that China Jianyin Investment Co Ltd had previously undertaken a CNY8 billion loan from the central bank of China on August last year for the purpose of taking over China Southern Securities' business and individual debts. Presently, the bankrupt liquidation group is working on a settlement deal for the Company's remaining assets and debts, the Business Daily adds. * * * China Southern Securities is one of China's largest brokerage houses with a registered capital of 3.45 billion yuan (US$416.9 million) and boasts 56 major shareholders including China's largest state-owned banks and insurance companies. The Troubled Company Reporter - Asia Pacific reported in January 2004 that The China Securities Regulatory Commission and the Shenzhen government have shut down securities brokerage China Southern Securities because of mismanagement and irregularities. In April 2005, the Commission ordered for the immediate closure and liquidation of the Company. However, the liquidation proceeding was halted when China Jianying Investment decided to bail out the Company in August last year in a hope to revive the Company. DRAGON LINK: Court to Hear Wind-Up Petition on August 2 ------------------------------------------------------- The High Court of Hong Kong will hear a wind-up bid against Dragon Link Maintenance Ltd on August 2, 2006 at 9:30 in the morning. Leung Kam Wah filed the wind-up application with the Court on June 7, 2006. The solicitor for the plaintiff can be reached at: Joseph Lo For director of Legal Aid 34/F., Hopewell Centre 183 Queen's Road East Wanchai, Hong Kong EURO-TEC (H.K.): Faces Wind-Up Proceedings ------------------------------------------ An application to wind up the business operations of Euro-Tec (H.K.) Ltd will be heard before the High Court of Hong Kong on August 16, 2006, at 9:30 in the morning. Dah Sing Bank Ltd filed the application with the Court on June 16, 2006. The solicitors for the petitioner can be reached at: K.B. Chau & Co 16th Floor, Wing Lung Bank Building 45 Des Voeux Road Central Hong Kong GREAT WALL: Wind-Up Application Hearing Slated for August 9 ----------------------------------------------------------- The High Court of Hong Kong will hear a wind-up petition against The Great Wall Industrial Ltd on August 9, 2006. Ho Ka Yi, Alice presented the petition before the Court on June 12, 2006. The solicitor for the plaintiff can be reached at: Joseph Lo For director of Legal Aid 34/F., Hopewell Centre 183 Queen's Road East Wanchai, Hong Kong H.K. TEMPO: Enters Wind-Up Proceedings -------------------------------------- Woo Sai Lung on June 10, 2006, filed before the High Court of Hong Kong a petition to wind up H.K. Tempo Recycling Co Ltd. The High Court of Hong Kong will hear the petition on August 9, 2006, at 9:30 in the morning. The solicitor for the plaintiff can be reached at: Joseph Lo For director of Legal Aid 34/F., Hopewell Centre 183 Queen's Road East Wanchai, Hong Kong HO CHEUNG INVESTMENT: Wind-Up Process Commenced ----------------------------------------------- A wind-up petition filed against Ho Cheung Investment Ltd will be heard before the High Court of Hong Kong on August 9, 2006, at 9:30 in the morning. Tse Hon Kai filed the petition with the Court on June 12, 2006. The solicitor for the plaintiff can be reached at: Joseph Lo For director of Legal Aid 34/F., Hopewell Centre 183 Queen's Road East Wanchai, Hong Kong HONGENT DEVELOPMENT: Wind-Up Hearing Slated for August 16 --------------------------------------------------------- The High Court of Hong Kong will hear a wind-up petition against Hongent Development Ltd on August 16, 2006, at 9:30 in the morning. Wong Man Kit filed the petition on June 14, 2006. The solicitor for the plaintiff can be reached at: Joseph Lo For director of Legal Aid 34/F., Hopewell Centre 183 Queen's Road East Wanchai, Hong Kong INCORPORATED OWNERS: Appoints Liquidators and Inspectors -------------------------------------------------------- The Incorporated Owners of Kiu Yu and Kiu Fat Mansions on April 27, 2006, named the members of the Committee of Inspection in respect of the Company's wind-up exercises. The newly appointed Committee of Inspection members include: * Fan Chi Keung; * Building Department of H.K. S.A.R; and * Chan Li Chong. In addition, Bruno Arboit and Simon Richard Blade were also appointed joint and several liquidators. The Liquidators can be reached at: Bruno Arboit 12/F., China Merchants Tower Shun Tak Centre, 168-200 Connaught Road, Central Hong Kong OCEAN GRAND: Accounting Probe Extend to Other Subsidiaries ---------------------------------------------------------- Deloitte & Touche Forensic Services Limited would conduct an internal investigation on the alleged accounting irregularities in one of Ocean Grand Holding's subsidiary, The Infocast News reports. According to the report, the internal probe would now include Ocean Grand subsidiaries: * Ocean Grand Chemicals; * OG Aluminium Foshan; * Hing Yip (Hong Kong); * Kenlap Zhuhai; * Kenlap Chemicals; and * Kenlap PGC. The inquiry intends to ascertain the recoverability and genuineness of certain accounts receivable, accounts payable, sales and purchases and other transactions of certain subsidiaries of the group and its subsidiaries, Infocast relates. The Troubled Company Reporter - Asia Pacific recounts that the Group recently advised the Hong Kong Stock Exchange of a possible accounting fraud involving a subsidiary, OG Foshan, worth CNY6 million. * * * Ocean Grand Holding's -- http://www.ogholdings.com/-- principal activities are the manufacture and sale of aluminum extrusion products and chemicals for use in electroplating and refining of gold material produced at facilities located in Nanhai of Guangdong Province and the Hong Kong Special Administrative Region of The People's Republic of China. On July 12, 2006, Standard & Poor's Credit Rating Services placed Ocean Grand's BB- long-term corporate credit rating and US$160 million in senior unsecured notes due 2010 on CreditWatch with negative implications due to the alleged accounting irregularities the Group recently discovered. POLYAIM LIMITED: Court to Hear Wind-Up Bid on August 9 ------------------------------------------------------ The High Court of Hong Kong on June 10, 2006, received an application from Alvin Fontanilla to wind up the business of Polyaim Limited The Court will hear the wind-up petition on August 9, 2006, at 9:30 in the morning. The solicitor for the plaintiff can be reached at: Joseph Lo For director of Legal Aid 34/F., Hopewell Centre 183 Queen's Road East Wanchai, Hong Kong * Moody's Employs New Approach of Rating Chinese Companies ---------------------------------------------------------- Moody's Investors Service on July 12, 2006, advised that it is changing its approach for assigning different ratings to debt raised by the same Chinese company or group. The new process -- otherwise known as "notching" -- is said to reflect lower potential expected loss for certain debt holders due to legal and structural subordination. Ken Chan, Moody's AVP/Analyst said in a statement that "this proposed change is based on the ongoing evolution - towards accepted Western standards - in Chinese practices and market opinion on the bankruptcy process". Moody's intention is to apply this notching approach to Chinese corporate credits from August 15, 2006, onwards. It would potentially affect eight ratings. "Moody's recognizes the growing importance of China-based issuers in the global debt capital markets and the gradual improvements in China's legal system in clarifying creditors' rights and priorities," said Min Ye, Moody's managing director for China. The agency surveyed lawyers, bankruptcy teams at accounting firms and investors in the distressed-debt sector before making a decision, Mr. Chan said. "Although much remains uncertain regarding both the law and practices in this area, Moody's believes the change is further justified on the basis of current market opinion on the issue," he said. ========= I N D I A ========= DUNLOP INDIA: Ruia to Dilute Stake to Raise Revival Funds --------------------------------------------------------- Dunlop India Limited's promoter, Pawan Ruia, plans to dilute his equity stake in the Company to generate cash for the restart of its tire-making facilities, The Financial Express reveals. Mr. Ruia is likely to raise money through a private placement of convertible warrants with overseas institutions and private investors, The Express says. According to The Economic Times, the Ruia Group had already tied up with foreign banks an equity funds to infuse the much-needed INR4-billion cash for Dunlop's rehabilitation. The modality of the deal is yet to be finalized but the Group stressed it wants majority of the funds to be in foreign currency. Mr. Ruia told The Economic Times that he would not offer his stake to the investors. Instead, the Company's capital base would be expanded from the present level of INR450 million, which would lead to the reduction of his holding. On the other hand, Mr. Ruia brushed aside rumors that he has run into financial problems. He, however, admitted that he had faced difficulties raising funds from domestic financial institutions, as Dunlop is an ailing firm. As reported by the Troubled Company Reporter - Asia Pacific, Dunlop is not yet allowed to trade at the Bombay Stock Exchange and the Calcutta Stock Exchange since its former owners had not paid the listing fee for several years. While Ruia has settled the dues, the bourses say the scrip will not be listed again until Dunlop provides a clearance certificate from the Board for Industrial and Financial Reconstruction, which took the ailing Dunlop under its arms in the late 90s. Unless the Dunlop shares are listed, would-be investors are likely to shun it. Without a listing, they would not have any exit route, the TCR-AP report stated. Meanwhile, Dunlop expects to start production at its Ambattur plant later this month, while the Shahgunj unit is schedule to operate by September this year, The Express says. After closing down in 2001, Dunlop re-opened its Ambattur plant on April 10, 2006, and its Sahagunj factory on April 21 for maintenance work. Ruia remained confident the two plants will start operations as scheduled despite the ongoing dispute between Dunlop India's new management and its workers at the Sahagunj plant in West Bengal, TCR-AP reported. About Dunlop India Headquartered in Kolkota, India, Dunlop India Limited is involved principally in manufacturing and distributing automotive tires and tubes. The firm's other activities include manufacturing high-pressure hoses, steelcord belting and vibration isolators. The company had reported profit until March 1997. In January 1998, the Board of Directors decided that the Company had become sick due to the necessity of reversing the earlier decision for sale of some real estate property of the company through a subsidiary, Dunlop Investment Limited. This decision required a reversal of corresponding entry of INR1,700 million and its reflection in the accounts of the financial year 1997-98. After taking this into account, the Board of Directors decided to refer the Company to Board of Industrial and Financial Reconstruction and abruptly announced suspension of Dunlop's operations in both Sahagunj and Ambattur in February 1998. The Ministry for Law, Justice and Company Affairs had also come to the conclusion after inspection of the Books of Accounts of Dunlop India that there were serious irregularities and had moved the Company Law Board for appointment of Government Directors. In January 2006, the Ruia Group took over the Company and voted to reopen its plants. Both the Sahagunj and Ambattur plants were reopened in April 2006. INDIAN OIL: Mulls Tie-Up with Calik Enerji for Refinery Project --------------------------------------------------------------- Indian Oil Corporation is looking to team up with Turkey's Calik Enerji for the construction of a refinery and petrochemical facility in Turkey, The Associated Press reveals. The US$6-billion project also includes constructing a pipeline for transporting crude oil, AP says. According to RealTimeTrading News, the Turkish government is expected to approve the proposal by the end of this month. As reported by the Troubled Company Reporter - Asia Pacific, Indian Oil and Calik had first partnered in a joint bid for Turkish Oil Co., or Tupras, last year. The two companies continued their partnership despite losing the Tupras bid to Shell and Turkish conglomerate KOC Holdings. The Shell-KOCH consortium bid US$4.14 billion for the Turkish government's 51 percent stake in Tupras, while Indian Oil and its local partner, the Calik Enerji group, withdrew from the race after having bid US$4.12 billion. About Indian Oil Corporation Indian Oil was established as Indian Oil Company Limited in 1959. Indian Oil Corporation was formed in 1964 with the merger of Indian Refineries Limited with the Indian Oil Company Ltd. Indian Oil's countrywide network of over 22,000 sales points is backed for supplies by its extensive, well spread out marketing infrastructure comprising 167 bulk storage terminals, installations and depots, 94 aviation fuelling stations and 87 LPG bottling plants. Its subsidiary, IBP Co. Ltd, is a stand- alone marketing company with a nationwide network of over 3,000 retail sales points. In spite of its large production capacity and smooth operations, Indian Oil incurred huge losses as a result of a Government mandate, which prohibits public sector oil marketing firms from raising fuel prices despite high global prices. For years, Indian Oil has been selling fuel at subsidized prices, which is way below the costs it pays for importing fuel from overseas markets. The Company has not been able to pass on the high prices leading to large under-recoveries and losses. In early 2006, the Government has offered a bailout package to help rescue oil companies, including Indian Oil, from going bankrupt. Under the package, the Government issued Indian Oil, Bharat Petroleum, Hindustan Petroleum and IBP oil bonds worth INR10,000 crore to INR12,000 crore to compensate them for not raising LPG and kerosene prices. The move was expected to improve their balance sheets. GENERAL MOTORS: Fitch Says Merger May Affect Nissan's Ratings ------------------------------------------------------------- Fitch Ratings said that the ratings of Nissan Motor Co., Ltd. (rated 'A-'/Stable/ 'F2') could be negatively influenced if the proposal to include General Motors Corp. (rated 'B'/Watch Negative) in the current Renault-Nissan alliance becomes a reality. This despite noted positive synergies from the three- way association. Regarding the proposal initiated by Tracinda Corp., a major shareholder of General Motors, to form a new alliance by including the company in the current Renault-Nissan alliance, both Nissan and Renault S.A.'s (rated 'BBB+'/Stable) board of directors have given approval to proceed with exploratory discussions, if General Motors supports the proposal. Whether or not the deal proceeds is now largely dependent on a decision by the company's management. Given the necessity of shared strategic goals for all parties involved in a successful alliance, as shown in the case of the Renault-Nissan alliance so far, Fitch thinks the new alliance is unlikely to go ahead without General Motors management's favorable acceptance of the proposal. The agency views that there is a high possibility that the proposed new alliance, if realized, will eventually result in equity investment and managerial involvement in General Motors by Renault and Nissan under the leadership of their CEO, Carlos Ghosn. The major areas of benefit for the three companies springing from the new alliance will be cost reductions through the widening of joint procurement projects, sharing of research and development achievements, having common platforms for vehicles, and exchanging production facilities for the better usage of their production capacities. On the other hand, Fitch also underscores the probability that there will be negative aspects to the deal. Apart from channeling financial investments into General Motors, both Renault and Nissan may also have to give additional financial support, if necessary. As many of the problems General Motors currently has are deeply rooted and cannot be resolved in a short period of time, it is expected that a considerable amount of Renault and Nissan's management resources will be spent revitalizing General Motors' operations for a long time, if they are involved in the company's management. Fitch views that Nissan currently has weaker sales than expected as a result of its low level of new model introductions. In addition, Nissan has a lot to do to achieve its mid-term goals, including successful and continuous new model introductions, and research and development to prepare for keener competition, especially against its stronger Japanese rivals. Fitch believes the new partnership may hinder the company's efforts to achieve its management goals. About General Motors General Motors Corp. -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries, including India. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world's leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. On June 30, 2006, Standard & Poor's Ratings Services held all its ratings on General Motors Corp. -- including the 'B' corporate credit rating and the 'B+' bank loan rating, but excluding the '1' recovery rating -- on CreditWatch with negative implications, where they were placed March 29, 2006. On June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating (RR) of 'RR1' to General Motor's (GM) new $4.48 billion senior secured bank facility. The 'RR1' (recovery of 90%-100%) is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. On June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. Moody's said the rating outlook is negative. ================= I N D O N E S I A ================= BANK NEGARA: S&P Revises Outlook on B+ Rating to Stable ------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on the local currency counterparty credit rating on PT Bank Negara Indonesia (Persero) Tbk to stable from positive. At the same time, Standard & Poor's is affirming its foreign and local currency ratings on BNI (B+/Stable/B). The outlook revision reflects the challenges the bank faces in improving its key fundamentals, in particular its loan quality and revenue growth. BNI's loan quality had weakened as evident from its latest first-quarter 2006 financial results, where its gross non-performing assets rose to about 16.6%, from 14.4% at the end of 2005. "This weakening was mainly on account of an underlying weakening of its corporate loan portfolio in a difficult operating environment due to high interest rates and oil prices," said Standard & Poor's credit analyst Adrian Chee. "Going forward, however, the bank's loan quality is expected to stabilize, benefiting in particular from the currently proposed legislation that would differentiate state-owned banks' assets from state liabilities and thus allowing the bank to partially write-off some NPLs. Loan quality is also going to benefit from the bank's internal initiatives to improve its credit risk management process," Mr. Chee said. Nevertheless, BNI is still expected to take time to work through its NPL portfolio, especially in restructuring its corporate loans. The bank is also facing the challenge of growing its lending business. Loan growth has remained under pressure, as the bank experienced a large number of loan repayments from its corporate clients, while incremental loans have not fully taken off. This has placed some pressure on the bank's underlying profitability, especially its revenue growth and interest margins. While BNI is expected to experience some pressure in interest margins from lower loan growth and high interest cost, its efforts to develop its sources of fee income and a lower non-accrual drag resulting from a stabilizing credit quality should partially offset it. The ratings on BNI continue to be underpinned by the bank's satisfactory capitalization, its still-strong franchise as the third-largest bank in the domestic banking system with a market share of 10%-11% of system assets and deposits. BNI is 99.9% owned by the government of Indonesia. NOBLE FINANCE: Fitch Assigns 'B' Long-Term Issuer Default Rating ---------------------------------------------------------------- Fitch Ratings has assigned a 'B' Long-term foreign currency Issuer Default Rating to Noble Finance B.V. The Outlook for the rating is Stable. Fitch has also assigned an expected rating of 'B' and an expected recovery rating of 'RR4' to the proposed US$240 million senior secured notes due 2011 issued by Noble Finance B.V. The final ratings are contingent upon receipt of documents conforming to information already received. PT Mulia Intipelangi, owner of Mall Taman Anggrek; PT Mulia Intanlestari, owner of Hotel Mulia Senayan; and PT Sanggarcipta Kreasitama, owner of the Wisma Mulia office building, will unconditionally and irrevocably guarantee, jointly and severally, the interest and principal payments of the notes. The guarantors are affiliates of the Mulia group and the three properties are managed by PT Mulia International, a property management company within the group. In view of the joint and several guarantee, Fitch has assessed the credit based on the pro-forma consolidated financials of the guarantors. Noble's rating reflects the high financial leverage of the guarantors, some currency mismatch between their revenues and debt, a degree of property concentration risk and some refinancing risk at the maturity of the notes. Fitch considers the guarantors' expected post-issue combined net debt/EBITDA of around 5x by end-2006 reflects a relatively aggressive capital structure, given that earnings of the properties are exposed to the economic cycles in Indonesia. The high financial leverage also results in low interest coverage, with a pro-forma EBITDA/gross interest of 1.75x, assuming a 10.35% coupon on the notes. The guarantors have only a limited natural hedge for principal repayment as only revenues from the office and about half of the revenues from the hotel, amounting to IDR326 billion in 2005, are denominated in U.S. dollars. Though revenues from the mall are USD denominated, tenants pay in IDR, calculated at a soft exchange rate that does not move in line with the actual exchange rate movements. However, based on current revenue stream, the guarantors have adequate natural hedge for interest payments. Fitch also notes that Noble's debt servicing is dependent on cash flows from only three properties, increasing the risk of default in the event of curtailment of flows from any one of them. Given the limited scope of the business, and Fitch's view that a substantial portion of the notes will have to be refinanced at the end of the tenure, persistence of favorable conditions in the debt markets will be critical for refinancing. Fitch also notes that some of the Mulia group entities, including its affiliates MILT and SCKT, have undergone debt restructurings in the past. However, these restructurings in general had their origins during the Asian financial crisis of the late 1990s. Noble's rating is supported by the joint and several guarantee by MIP, MILT and SCKT, resulting in the entire cash flows from all three properties being available for debt servicing. Fitch considers the properties to be among the highest quality in Jakarta in their respective categories. All properties are well-located, managed efficiently and carry strong brand equity. Further support for the rating comes from the stability arising out of the recurring nature of the cash flows, subject to continued economic growth in Indonesia. In 2005, on a pro-forma consolidated basis, the three properties had a combined EBITDA of IDR377 billion, with the mall, hotel and office contributing 42%, 35% and 23% respectively. Mall Taman Anggrek is one of the largest malls in Jakarta with a net lettable area of 98,500 square meters. Being one of the best malls in Jakarta, the lowest ever occupancy rate the mall experienced in its 10-year existence was 89%. In line with the recovery of the Indonesian economy, average rentals in the mall have increased by 22% between 2002 and 2005. Located in the central business district, Hotel Mulia Senayan has 996 rooms and has achieved the highest number of room sales among five-star hotels in Jakarta for the last six consecutive years. The hotel derived about 52% of its income in 2005 from food and beverages, resulting in reduced dependence on room occupancy, which was low with an average occupancy rate of 52% in 2005. Wisma Mulia is the tallest building in Jakarta and is leased out mainly to large multi-floor users. Key tenants include mobile operator, PT Telekomunikasi Selular, and energy company, PT Energi Mega Persada. Overall occupancy is at around 70%. While some of the key leases are scheduled to expire during the tenor of the notes, they are likely to be renewed as the tenants have made large investments in interior fittings. Fitch recognizes that the transaction structure appears comprehensive and includes detailed investor protection provisions, including a cash flow waterfall mechanism and excess cash offer mechanism. The cash flow waterfall mechanism is to ensure that certain key expense items such as taxes and the interest reserve account are funded during the tenor of the notes and limits the possibility of funds being diverted for other use prior to redemption of the notes. However, Fitch notes that the mechanism creates only a "virtual", rather than an actual, sinking fund. In addition, the excess cash offer mechanism avails the noteholders of the opportunity to have some of the notes prepaid on an annual basis. Protections for the noteholders within the structure include restrictions on additional debt, related party transactions, sale of assets, dividend payouts and additional investments. Overall, these measures help to ensure that cash is conserved for the repayment of the notes. The guarantors' business operations are also restricted to those ancillary or complementary activities related to the hotel, mall and office building. Security pledged to the noteholders include pledge of shares in Noble and the three guarantors, fiduciary security over bank accounts, machinery and equipment, receivables and insurance claims of the guarantors, mortgage of the office and mall properties and fiduciary assignment of rights under the build, operate and transfer agreement of the hotel. While the security package appears comprehensive, there is uncertainty over whether security interests in Indonesia can be enforced in full and in accordance with their terms, given the absence of a track record of a consistent application of legal principles for security enforceability in the Indonesian legal system. By end August 2006, subordinated loans of US$65.3 million in SCKT are expected to be converted into equity. Thereafter, the only outstanding indebtedness remaining other than the notes, totaling US$22.7 million held at SCKT, will be subordinated with no interest or principal payment during the tenure of the notes. Fitch has treated the subordinated loans as equity in its analysis. The Stable Outlook reflects Fitch's expectation that the operating metrics of the properties will continue to improve and that the final transaction structure will conform to the terms outlined above. Material operational disruption in any property, use of issue proceeds and internal accruals in a manner that adversely affects debt servicing, and a sharp real estate downturn may trigger a negative rating action. A track record of debt servicing, significant operational improvements in the properties, and reduced financial leverage may result in a positive rating action. NOBLE FINANCE: S&P Places 'B' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services said today that it assigned its 'B' corporate credit rating to Noble Finance B.V. The outlook is stable. Noble Finance is a financing vehicle incorporated by its parent guarantors, PT Mulia Intipelangi, PT Mulia Intanlestari, and PT Sanggarcipta Kreasitama, three property holding companies based in Indonesia. Standard & Poor's also assigned its preliminary 'B' rating to the proposed five-year US$240 million 144-A secured notes due 2011 to be issued by Noble Finance. The proposed notes will be jointly and severally guaranteed by the parent guarantors and secured by the property assets held by them. Noble Finance plans to use net proceeds from the bond issue to on-lend to the parent guarantors for refinancing a similar amount of debt. The preliminary issue rating is based on the draft offering circular sent to Standard & Poor's by the company on June 12, 2006, and is subject to satisfactory final documentation on legal and tax-related matters, and the Trust Deed. "The rating on Noble Finance B.V. reflects the highly leveraged combined credit profile of its parent guarantors, their weak cash flow generation, lack of transparency in group structure, and modest business and tenant diversity of the three properties," said Standard & Poor's credit analyst Greg Pau. "The rating, however, benefits from the good asset quality and stable occupancy rate of its properties, while the structure of the proposed bond promises some discipline in debt reduction." Each parent guarantor owns a property asset in the central business district of Jakarta, Indonesia. MIP owns a retail shopping mall with condominium units, MILT owns a hotel property, and SCKT owns an office building. PT Mulia International manages these three properties. For the year ended Dec. 31, 2005, the ratio of aggregated funds from operations to total debt was very thin at 3%, with total debt to total capitalization of 94%. "Such an aggressive financial profile leaves very little buffer against a possible operating cash flow shortfall that could result from adverse changes and events affecting the operating environment for the three properties," said Mr. Pau. Nevertheless, the overall financial profile is expected to improve modestly; FFO to total debt is projected to rise to about 10%, while total debt to capitalization should remain between 65% and 72% during the next five years. Noble Finance's ability to generate its projected cash flow will depend on a rapid increase in the occupancy rate of the office building to over 90% by 2008, from 69% as of June 2006. A delay in reaching this target could have a large impact on its cash flow generation. The rating is also weakened by the record of substantive inter-company transactions, and unclear linkages between the Mulia Group entities involved and various stakeholders in the bond transaction. Mulia Group companies were the developers and asset manager, through PT Mulia International, for the three properties. Although the three properties operate in different segments, rental revenue could be affected by changes in economic performance and events affecting business and travelers' confidence in Indonesia. Noble Finance benefits from the central locations of the mall and the hotel properties, which are expected to continue generating cash flows for debt servicing. Nevertheless, supply expansion in domestic retail space in 2006 and in hotel rooms in 2007 may slow down growth in rental rates. In addition, the proposed bond structure contains some buffer for interest servicing against cash flow shortfall and provides for the possibility of early partial redemption if cash flows are better than expected. The stable outlook is based on Standard & Poor's expectation that the operations of the mall and hotel continue to provide steady cash flows for debt servicing, and that the office property improves its occupancy rate steadily in the next two years. It also assumes that the issuer and parent guarantors refrain from entering into any related-party transactions to the detriment of the issuer or parent guarantors. ========= J A P A N ========= DL CHINA: Liquidator Presents Wind Up Accounts on July 20 --------------------------------------------------------- DL China International Limited's shareholders will convene for a final meeting on July 20, 2006, at: 3-1 Marunouchi 3-chome, Chiyoda-ku Tokyo, Japan Accounts on the company's liquidation process will be presented during the meeting. The liquidator can be reached at: Ysuhisa Tsuruhashi Yoshinobu Ushioda 3-1 Marunouchi 3-chome, Chiyoda-ku Tokyo, Japan KANA SOFTWARE: Auditor Burr Pilger Expresses Going Concern Doubt ---------------------------------------------------------------- KANA Software, Inc.'s auditor, Burr, Pilger & Mayer LLP, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statement for the year ending Dec. 31, 2005. Burr Pilger pointed to the Company's recurring losses from operations, net capital deficiency, negative cash flow from operations and accumulated deficit. The Company incurred a $17.96 million net loss on $43.1 million of revenues in 2005. Total revenues decreased by 12% from $48.9 million for the year ended Dec. 31, 2004, primarily as a result of fewer license transactions in 2005 than in 2004. As of Dec. 31, 2005, the Company's balance sheet reported assets amounting to $35.71 million and debts totaling $45.5 million. As of Dec. 31, 2005, the Company reported a $9.79 million equity deficit from a $3.16 million positive equity at Dec. 31, 2004. In December 2005, the Company consolidated its research and development operations into one location in Menlo Park, California to optimize the Company's research and development processes and decrease overall operating expenses. As a result, the Company terminated the employment of 15 employees based in New Hampshire. As a result of this consolidation, the Company incurred a restructuring charge of $282,000 related to employee termination costs. Additionally, the Company recorded a $186,000 restructuring charge during 2005 related to a change in evaluation of the real estate conditions in the United Kingdom, a change in the sublease estimates in the United States and the consolidation of our research and development operations in Menlo Park, California. A full-text copy of the Company's Annual Report in Form 10-K filed with the United States Securities and Exchange Commission is available for free at: http://ResearchArchives.com/t/s?d7d KANA Software, Inc., provides multi-channel customer service software applications. KANA's integrated solutions allow companies to deliver service across all channels, including e- mail, chat, call centers and Web self-service, so customers have the freedom to choose the service they want, how and when they want it. The Company's target market is the Global 2000 with a focus on large enterprises with high volumes of customer interactions, such as banks, telecommunications companies, high- tech manufacturers, healthcare organizations and government agencies. The Company is headquartered in Menlo Park, California, with offices in Japan, Hong Kong, Korea and throughout the United States and Europe. OCA INC: BofA & Secured Lenders Want Equity Committee Disbanded --------------------------------------------------------------- Bank of America, N.A., as agent for the secured lenders of OCA, Inc., and its debtor-affiliates, asks the United States Bankruptcy Court for the Eastern District of Louisiana to disband the Official Committee of Equity Security Holders. B. Franklin Martin, III, Esq., at McGlinchey Stafford, PLLC, in New Orleans, Louisiana, asserts that the Court should disband the Equity Committee for these reasons, among others: (a) the Debtors' equity security holders are not entitled to a distribution under the absolute priority rule; (b) the Debtors are on the eve of soliciting votes on a plan that provides for contingent payments to equity holders, notwithstanding their lack of legal entitlement to that distribution; (c) the Equity Committee's promised litigation tactics and delay will destabilize the Debtors' cases and business operations, thereby jeopardizing value and risking the loss of the current plan payments to equity security holders; (d) tremendous recent trading volume in the delisted common stock of OCA has resulted in a number of investment funds and other sophisticated parties, who can adequately represent themselves, becoming some of the largest equityholders of OCA; and (e) the costs of the Equity Committee will be borne only by the senior creditors and not the equity class, creating a "no risk, all upside" dynamic for the Equity Committee that is disruptive to the Debtors' attempts to stabilize their operations. Appointment of an equity committee is only justified when there is a substantial likelihood that shareholders will receive a meaningful distribution pursuant to the strict application of the absolute priority rule and the shareholders are unable to represent their interests in the case without an official committee. Upon the Debtors' emergence, their obligations to the secured lenders would amount to $103 million. The Debtors currently estimate its unsecured claims to aggregate $6 million. The Debtors have prepared a valuation of the Reorganized Debtors' enterprise value, estimated to be between $73 million and $94 million. The Debtors clarified that a significant portion of this projected value is entirely speculative and may not be realized by the Reorganized Debtors for a considerable time after their emergence, if at all. The estimated value of what the Debtors call "core assets" -- assets directly related to the operation of servicing orthodontists -- is only in the range of $46 million and $68 million. BofA and the secured lenders believe the Debtors' actual value is materially lower than the Debtors' projections. About OCA Based in Metairie, Louisiana, the United States, OCA, Inc. -- http://www.ocai.com/-- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Debtor's client practices provide treatment to patients throughout the United States and in Japan, Mexico, Spain, Brazil and Puerto Rico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06- 10179). Three Debtors also filed for bankruptcy protection on June 1, 2006 (Bankr. E.D. La. Case No. 06-10503). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. Patrick S. Garrity, Esq., and William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC represent the Official Committee of Unsecured Creditors. Carmen H. Lonstein, Esq., at Bell Boyd & Lloyd LLC and Robin B. Cheatham, Esq., at Adams and Reese LLP represent the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $545,220,000 in total assets and $196,337,000 in total debts. SUMITOMO MITSUI: Moody's Upgrades Fin'l Strength Rating To D+ ------------------------------------------------------------- Moody's Investors Service has upgraded the bank financial strength rating of Sumitomo Mitsui Banking Corporation to D+ from D. The 'D' BFSR of SMBC Europe Plc, a wholly owned subsidiary of SMBC, was placed on review for possible upgrade. All long-term and short-term ratings of SMBC and its subsidiaries, including senior unsecured debt, deposit and other long-term ratings, are unaffected by the review. The outlooks for all credit ratings and SMBC's BFSR are stable. The BFSR upgrade is prompted by SMBC's delayed but successful recovery of a stable relationship between its pre-provision earnings and credit expenses, which enabled its parent, Sumitomo Mitsui Financial Group, to manage down its large amount of government-held preferred shares outstanding to approximately JPY896billion, or less than 20% of its Tier I capital (JPY4.6trillion as of March 2006). While the recovery of the operating environment surrounding Japanese banks has been a major factor behind this development, Moody's also highly evaluates SMFG's management's ability to make this turnaround after its net losses for FYE3/2005. SMFG's large scale and diverse presence in the Japanese economic and financial system mean that its franchise and its performance should benefit from the generally positive environment. In Moody's view, SMBC is the most efficiently managed institution among Japanese megabanks, and on a risk adjusted assets basis, its ROA -- pre-provision profit -- has been the highest among peers. In Moody's view, SMBC's concentration exposure remains high, with significant residual exposure to affiliated insurers. However, the overall quality of these exposures has shown improvements. The bank's potential scale of market risks also remain large, as it has substantial JGB exposures and reduced but still sizeable equity risk, although it has managed down its market risk appetite to cope with emerging opportunities in business lines such as domestic middle markets and retail consumer banking. Moody's expects that SMFG's capital structure, Tier I ratio, and SMBC's BFSR will remain constrained due to its plan to redeem its remaining government-held preferred shares outstanding during FYE3/2007 and its long-term need to deal with its large amount of other preferred securities held by its private investors. SMBC's evolving risk appetite, involving booking assets inside and outside Japan, may also add to its capital requirements. Although the impact of Basle II on SMBC's minimum capital requirements is not clear at this moment, SMFG's capital level will remain constrained. Review of SMBCE's BFSR will focus on its standalone financial fundamentals and franchise. This rating was upgraded: * Sumitomo Mitsui Banking Corporation: bank financial strength rating to D+ from D This rating was placed on review for possible upgrade: * SMBC Europe Plc: bank financial strength rating of D * Earnings Quality Key to Ratings of Major Banks, Fitch Says ------------------------------------------------------------ Fitch Ratings comments that profitability continues to be a challenge for Japan's major banks, despite the record high net income for the year ended March 2006. The agency published these and other findings in a special report this week, noting that this was in spite of Japan banks' asset quality problems now being a thing of the past and the improvement in capital quality. The special report follows a review of the results for the year ended March 2006 for six main Japanese banking groups: 1. Mizuho Financial Group, 2. Mitsubishi UFJ Financial Group, 3. Sumitomo Mitsui Financial Group, 4. Resona Holdings, 5. Mitsui Trust Holdings, and 6. Sumitomo Trust & Banking. Fitch noted that, in aggregate, the record high profit for FYE06 was fuelled by the reversal of loan loss reserves that masked modest underlying profitability. "As capital constraints and credit and market risks are reduced, management at the banks' have become more confident and forward looking in their planning. The challenge for them now is how to increase underlying profitability and retained earnings," said Reiko Toritani, senior director, Financial Institutions, Japan. Asset quality problems, which had lasted for more than a decade, are no longer a concern. Disclosed NPLs fell by 36% in FYE06, and at the end of the term, NPLs, net of reserves, accounted for a mere 0.5% of total loans or 7% of the banks' Tier 1 capital. Loan loss provisioning for FYE06, excluding the write-back of reserves, was about 30 basis points of the banks' total loans. Fitch considers this is provisioning under a normal operating environment for Japanese banks. At the same time, capital quality has improved substantially over the past three years fuelled by accumulation of retained earnings, a reduction in deferred tax assets and the banks, excluding Resona Holdings, had repaid 50% of previously-injected public funds by end-March 2006. Subsequently, following full repayment by Mitsubishi UFJ Financial Group and Mizuho Financial Group, Sumitomo Mitsui Financial Group will repay the remainder of public funds owed by end-March 2007. Market risk exposure in the form of stock investments fell to about 50% of the banks' Tier 1 capital at end-March 2006, from over 200% in 2000. While stock market exposure has reduced, market risk on interest rates has increased. Although a rise in yen interest rates is beneficial for the banks' loan to deposit spread, it will negatively affect their bond portfolios and the banks' funding and liquidity costs will start to increase albeit slowly. Liquidity of the banks is expected to remain abundant for some time, supported by the still weak loan growth and a high level of JGB investments following the increasing trend in deposits. Many of the banks' Long-term IDRs are on Positive Outlook, reflecting the ongoing improvements in their balance sheets. Although the "quantity of capital" still lags that of banks in the 'AA' range, "quality of capital" is no longer a primary concern for management. Consequently, "quality of earnings" will be the main theme for the banks' growth going forward and for Fitch's ratings. By the banks' forecasts, their ROE, at a consolidated basis, will be 10% for the current year ending March 2007. This compared with around 15% for large European banks, which are on average also in the 'AA' range. The report, titled "Japan Major Banks-Review for 2006 and Outlook", is available on http://www.fitchratings.com * Profitability & Risk Management Key For Banks, S&P Says --------------------------------------------------------- As asset deterioration risks diminish, profitability and risk management are becoming key credit factors for Japan's banks, Standard & Poor's Ratings Services said in a report released on July 14, 2006. The report details recent revisions to Japanese banking regulations and accounting rules, from both the perspective of assumed government support and stand-alone credit quality. Standard & Poor's raised its ratings on Japan's six major banking groups a number of times between 2004 and the first half of 2006, reflecting an economic turnaround in Japan and a reduction in the banks' asset erosion risk. Meanwhile, Japan's 25 rated regional banks generally improved their fundamental profitability and made progress in NPL disposals, which helped improve their capitalization. As a result, Standard & Poor's raised its ratings on 11 regional banks between January 2005 and June 2006. Backed by strengthened financial profiles, we believe there is low risk of significant deterioration in the major Japanese banks' and rated regional banks' credit quality in the near future, and that it is highly likely they will be able to maintain their present ratings. The net NPL ratio of Japan's six major bank groups declined to 0.6% as of March 31, 2006, which was on par with that of major banks in Europe. At the same time, the regional banks' average ratio improved to 2.4%, indicating that Japan's rated banks have turned the corner in fixing their bad loan troubles. Nevertheless, it would be premature too say that the NPL problem has been solved. Many loans that emerged from non-performing status were reclassified as normal or precautionary loans following financial restructuring, such as debt-for-equity swaps and loan forgiveness. In addition, there are some regional banks that are lagging in NPL disposals. A key rating factor for Japan's banks will be their ability to maintain fundamental profitability while absorbing credit costs. The ratio of operating profit before credit costs to total assets over the past five years averaged 0.80% for Japan's three megabanks, which is still much lower than the 2.59% average for major banks in the U.S. Although the interest rate spread -- interest rates on loans minus interest rates on deposits -- is over 3% at many U.S. banks, it remains a modest 0.96% - 1.69% at Japan's major banks. A key issue will be whether Japan's banks can successfully improve profitability via their efforts to increase lending to small and midsize enterprises, strengthen fee income and derivative products, and dispose of low-profit equity holdings. Improving capital quality remains a key issue for major banks. The banks have made progress in reducing deferred tax assets, which had inflated their capitalization substantially, but the amount of outstanding preferred shares and preferred securities in the market remains high. The repayment of public funds, which were injected mainly in the form of preferred shares, is progressing. However, this repayment will not completely eliminate the quality problem of preferred shares and securities, as most of the redemptions are achieved by selling another round of preferred stocks or securities to the private sector. Therefore, Japanese banks are pressed to reduce their preferred stocks and securities held by the private sector and improve the quality of their capitalization through the accumulation of retained earnings. Upward pressure on market interest rates greatly increases the importance of interest rate risk management. Higher market interest rates tend to increase net interest income as lending rates surpass those paid out on deposits. On the other hand, the main negative impact of higher interest rates is devaluation losses on bond holdings. Generally, higher interest rates positively affect the overall earnings of Japanese banks, as the increase in lending income exceeds losses on bonds. However, it is possible that short-term interest rates could remain temporarily flat while long-term interest rates rise, so a bank's ability to deal with an increase in solely negative factors is important. Presently, the major banks and stronger regional banks have risk management systems capable of adjusting to a drop in the value of bond holdings. However, regional banks remain comparatively vulnerable due to the long durations of their bond holdings. Standard & Poor's incorporates potential government support as well as assessments of financial profiles in determining its ratings on Japanese banks. Risk factors regarding government support include: -- Credit ratings reflect a mid- to long-term perspective, and government support for banks could change in the long term. -- The regulatory stance could shift toward market discipline amid globalization and deregulation trends. -- The counter-party rating incorporates the obligor's overall debt servicing ability, including subordinated debt. In some cases, subordinated creditors have incurred losses, and government support has not necessarily protected sub-debt creditors. The government's ability to provide capital injections to prevent insolvency has grown via Article 102 of the Deposit Insurance Law and the Law on Enhancement of the Functions of the Financial System. Furthermore, the 2003 capital injection into Resona Bank Ltd. and the crisis management of Ashikaga Bank Ltd. have basically shown that the measures provide protection for subordinated debt and that implicit government support exists for banks over a certain size. The full report "Bank Industry Risk Analysis: Japan" is available in Japanese on Standard & Poor's Research Online at http://www.researchonline.jpor via CreditWire Japan on Bloomberg Professional at SPCJ . ========= K O R E A ========= HYNIX SEMICONDUCTOR: STMicro Talks End Without Result ----------------------------------------------------- Hynix Semiconductor Inc. said that discussions on a proposal by STMicroelectronics SA for "strategic" options on Hynix's memory chip business have ended without result, AFX News Limited states. STMicro had offered to discuss how to strategically deal with Hynix's memory chip operations, but Hynix saw the talks as having ended without specific agreements, AFX News says, citing a Hynix disclosure with the stock exchange. According to the report, Hynix's statement came as a response to the stock market's request for details regarding the talks. According to local reports in July 2005, STMicro offered to transfer its NOR flash memory lines to Hynix and buy a 5% to 10% stake in the South Korean chipmaker. About Hynix Semiconductor Headquartered in Ichon, South Korea, Hynix Semiconductor Inc. -- http://www.hynix.com/-- is a semiconductor manufacturer. Through a merger with LG Semiconductor in 1999, Hynix Semiconductor now has the world's largest dynamic random access memory chip production capacity as well as the industry's best technical development capacity by fully exploiting synergies resulting from the historical integration of both companies. In October 2001, the Company was placed under joint management by the members of the Creditor Financial Institutions' Council and since then, the Company has been working towards improving its financial condition through debt restructuring and execution of various self-rescue plans such as disposals of business divisions, business work-out and achievement of a KRW1.70- trillion net income in 2004. Hynix was rescued from debt in December 2002 through a KRW3.25- trillion bailout by bank creditors. The Creditor Council terminated the joint management earlier than the original date after the Company raised external funds in an aggregate amount of US$1.80 billion in July 2005. In July 2005, Moody's Investor Service affirmed its B1 senior unsecured rating for Hynix Semiconductor's US$500 million bonds upon its successful closing. At the same time, Moody's has affirmed its Ba3 corporate family rating for Hynix, removing both ratings from provisional status. The TCR-AP reported on July 5, 2006, that Standard & Poor's Ratings Services revised to positive from stable the outlooks on its 'B+' long-term corporate credit ratings on Hynix Semiconductor and its U.S. subsidiary, Hynix Semiconductor Manufacturing America Inc. * Korean Mobile Phone Industry Loses Momentum --------------------------------------------- Korea's mobile handset industry is showing signs of losing its momentum, as many local handset makers are facing crisis due to squeezed market shares and lower profit margins, The Hangkyoreh reports. The Hangkyoreh recounts that last week, VK Corporation declared bankruptcy. The report says that VK's bankruptcy is another example of how local mobile handset makers are grappling with a two-pronged challenge: price competition from global companies and a stronger local currency that is raising prices for Korean goods overseas. According to The Hangkyoreh, local handset makers have failed to respond to fast-changing market conditions. Moreover, the South Korean won's appreciation against the U.S. dollar has compounded the problem, making sales sluggish in overseas markets. "As global competitors have played a strong game of catch-up in those areas where South Korean companies previously held the upper hand, such as uniqueness of design and diversity of models, the weaknesses of local firms have become more conspicuous," the report cites Roh Geun-chang, an analyst at Korea Investment & Securities Co., as saying. The Hangkyoreh notes that as of the end of May 2006, exports of handsets stood at US$6.88 billion, down 9.9% from the same period in 2005. The operating profit rate for the handset business of Samsung Electronics Co. tumbled to 10% in the first quarter of this year from the 20% recorded during its heyday. LG Electronics Inc. also posted KRW30.9 billion in operating losses during the January-March period of 2006. Samsung Electronics, the world's No. 3 mobile handset maker, saw its gap with second-ranked Motorola widened from 2.5% in the first quarter of last year to 7.4% in the first quarter of this year. Additionally, No. 5 mobile phone manufacturer Sony Ericsson Mobile Communications Ltd. has narrowed its gap with South Korea's LG Electronics, the No. 4 maker, The Hangkyoreh relates. The report states that LG Electronics is also focusing its efforts on the sale of premium model Chocolate Phone in order to make a comeback in the market. Rumors are circulating that its mobile phone business will soon be up for acquisition in a merger. Pantech is also struggling not to lag behind within ever- worsening market conditions, The Hangkyoreh adds. =============== M A L A Y S I A =============== AYER MOLEK: Awaits Court's Decision on Default Judgment Appeal -------------------------------------------------------------- The Kuala Lumpur High Court will on September 15, 2006, release its decision on The Ayer Molek Rubber Company's application to set aside a default judgment entered against it by Mirra Sdn Bhd. As reported in the Troubled Company Reporter - Asia Pacific, the Kuala Lumpur High Court on April 13, 2006, heard a wind-up petition filed by Mirra Sdn Bhd against Ayer Molek Rubber Company Berhad. Through its Petition, Mirra asserts a MYR3,224,690 claim against Ayer Molek, as at December 8, 2005. The claim relates to a Judgment in Default dated November 22, 2005, obtained by Mirra in its favor, on account of work done for Ayer Molek. The interest under the statement of claim is at 8% per annum on the judgment sum of MYR2,097,316, from March 24, 1999, up to the full settlement of the claim. Since 1999, Ayer Molek was in constant negotiation with Mirra to pay the amount it allegedly owed, but taking into account the fact that the development plans by the Company, which involved the conversion of land, was aborted. Hence, the Company argued that Mirra should not claim the contracted sum but rather the abortive fees. In August 2005, the parties had reached a settlement amount of MYR300,000 on account of Mirra's work for Ayer Molek. Yet, due to several conditions, which were not fulfilled by Mirra, the settlement arrangement came to a standstill. Following the breakdown of negotiations, the wind-up petition was presented against Ayer Molek. Subsequently, the Court issued a wind-up order against Ayer Molek. Ayer Molek's solicitor immediately filed an appeal of the Wind- Up Order with the Court of Appeals and filed an application for stay of the execution proceeding. On May 17, 2006, the Kuala Lumpur High Court then granted a stay of the Wind-up Order pending the Ayer Molek's Appeal. The Company was also ordered to deposit MYR2,097,316 into the Court pending the Appeal, and to abide with any further directives. About Ayer Molek Rubber Company Headquartered in Kuala Lumpur, Malaysia, Ayer Molek Rubber Company Berhad is principally engaged in the leasing of its entire plantation land to a third party. It operates solely in the domestic market. Ayer Molek has suffered recurring losses since the early 90s, which prompted the Company to propose a rescue and restructuring scheme to fully redeem and settle outstanding debts. For the quarter ended March 31, 2006, the Group did not register revenues following a wind-up order issued by the Kuala Lumpur High Court against the Company on April 13, 2006. The Group booked accumulated losses of MYR21,177,000 as of March 31, 2006. BUKIT KATIL: Public Shareholding Stands at 59.85% ------------------------------------------------- Bukit Katil Resources Berhad's public shareholding spread as of June 30, 2006, is 59.85% comprising 6,242 shareholders holding not less than 100 shares each. Consequently, Bukit Katil has complied with the public shareholding spread requirement of Bursa Malaysia Securities Berhad. The Bourse requires a listed issuer to have at least 25% of its listed shares in the hands of a minimum of 1,000 public shareholders holding not less than 100 shares each. About Bukit Katil Berhad Headquartered in Kuala Lumpur, Malaysia, Bukit Katil Resources Berhad is engaged in money lending and oil palm and rubber production. Other activities include investment holding, software development, property investment and development and manufacturing of bricks and ceramic products. Operations are carried out in Malaysia and India. The Company has defaulted on several loan facilities and admits that it does not have sufficient cash to pay its debts. As of December 31, 2005, the Company recorded a deficit of MYR129,981,000. The Company, on Dec. 16, 2005, presented an application to regularize its financial condition through debt restructuring, which was subsequently rejected by the Securities Commission. As of March 31, 2006, the Company's balance sheet showed MYR57,148,000 in total assets and MYR135,320,000 in total liabilities, resulting in a stockholders' equity deficit of MYR78,172,000. CONSOLIDATED FARMS: Bourse Defers Delisting Pending Appeal ---------------------------------------------------------- Bursa Malaysia Securities Berhad has deferred the removal of Consolidated Farms Berhad's securities from the Official List pending decision on the Company's appeal against the delisting. The Company will further announce the decision of the Appeals Committee in due course. Bursa Malaysia Securities Berhad has decided to delist the securities of Consolidated Farms Berhad from the Official List on July 17, 2006, as the Company "does not have an adequate level of financial condition" to warrant continued listing on the Bourse, TCR-AP recounts. TCR-AP also reported on May 31, 2006, that the Bourse has decided to suspend Consolidated Farms' securities effective June 5, 2006, until further notice as the Company has failed to regularize its financial condition within the prescribed timeframe stipulated by Bursa Malaysia Securities Berhad pursuant to the Listing Requirements. The Bourse advised that it may commence delisting procedures against the Company if it fails to meet the requirement. About Consolidated Farms Headquartered in Kuala Lumpur, Malaysia, Consolidated Farms Bhd -- http://www.confarm.com/-- is engaged in poultry farming which includes operating of breeder farm, production and processing of organic fertilizer, feed milling and manufacturing and sale of egg trays. Other activities include manufacturing and processing of eggs into pasteurized eggs and de-shelled hard-boiled eggs. The Company is a Practice Note 4 concern currently undergoing a restructuring exercise to address its debt problem. The company had appointed Deloitte KassimChan Business Services Sdn Bhd as advisor for the restructuring exercise. Consolidated Farms was mired with MYR122-million debt on account of its expansion plan, which included the purchase of equipment and facilities. As of March 31, 2006, Confarm said that it will not be able to settle all its debts in full when they fall due within the next 12 months and hence, the Company is unable to provide a solvency declaration. The Company's April 30, 2006, balance sheet showed total liabilities of MYR203,323,000 exceeding total assets of MYR133,822,000, resulting into a stockholders' equity deficit of MYR69,501,000. The Company also recorded a negative cashflow of MYR10,220,000 in the quarter ended April 30, 2006. HARVEST COURT: Public Shareholding Spread Meets Requirement ----------------------------------------------------------- Harvest Court Industries Berhad said it has complied with Bursa Malaysia Securities Berhad's public spread rule, which requires a listed issuer to have at least 25% of its listed shares in the hands of a minimum of 1,000 public shareholders holding not less than 100 shares each. The Company's public shareholding spread as of June 30, 2006, is 63.78% and the number of public shareholders with not less than 100 shares is 2,423. About Harvest Court Industries Headquartered in Selangor, Malaysia, Harvest Court Industries Berhad -- http://www.harvestcourt.com/-- is engaged in kiln drying, saw milling and manufacturing of timber doors and related products. Other activities include development of residential and commercial properties and jetty services and provision of construction works and related maintenance services. The Group is also involved in the provision of marketing and management services and investment in shares and securities. The Group operates in Malaysia and Australia. The Group has defaulted on several loan facilities because of a reduction in sales from 2002 onwards due to a weak global market as a result of the Iraqi and the severe acute respiratory syndrome, or SARS, as well as its inability to raise funds via the equity market due to weak market sentiment. Due to its financial position, Harvest Court had embarked on an exercise to restructure the Company, including a debt restructuring and capital reduction. The Company's proposed corporate exercise was rejected by the Securities Commission in November 2005, on grounds that the proposals are not comprehensive and are not capable of resolving all financial problems of the Company. Its appeal to reconsider the rejection was also junked by the Commission on February 24, 2006. The Harvest Court Board is now in talks with lenders and major creditors for its next course of action. MALAYSIA AIRLINES: Offers Monsoon Special Fare for Indian Routes ---------------------------------------------------------------- Malaysia Airlines will offer return tickets from India to Kuala Lumpur at INR10,300 under a discount scheme, Business Standard reports. The special discount scheme called "online monsoon airfare" would be applicable on the airlines' five Indian destinations such as Bangalore, Chennai, Delhi, Hyderabad and Mumbai, the report says. The online monsoon airfare is valid only for the month of July, with the outbound journey to be completed by August 7, 2006. Bookings would be open until July 31. Malaysia Airlines' offer followed a recent order by the Cabinet to allow the carrier to offer discounted fares through the lifting of the carrier's floor price. As reported by the Troubled Company Reporter - Asia Pacific, As reported by the Troubled Company Reporter - Asia Pacific on July 11, 2006, the Government reversed an earlier decision to impose a minimum floor price on Malaysia Airlines for its 22 domestic routes from August 1, 2006, as part of the rationalization of the domestic routes to allow AirAsia to take over the bulk of the local flights. About Malaysia Airlines Headquartered in Selangor, Malaysia, Malaysia Airlines -- http://www.malaysiaairlines.com/-- services domestic and international flights. Its global network comprised 32 domestic and 86 international destinations. Of the 86 international destinations, 17 were operated in collaboration with our airline partners. The carrier made a loss after tax of MYR1.3 billion for fiscal year 2005, due to high fuel and operating costs, and unprofitable routes. In late February 2006, it unveiled a radical rescue plan to raise MYR4 billion in order to stay afloat and return to profitability by 2007. Under the restructuring plan, the airline pledged to cut its budget by 20% across the board, terminate many unprofitable routes, freeze recruitment except for front-line staff, crack down on corruption by encouraging Whistle-blowing and stop corporate sponsorship. PILECON ENGINEERING: Public Shareholding Spread Pegged at 47.10% ---------------------------------------------------------------- The public shareholding spread of Pilecon Engineering Berhad as of June 30, 2006, is 79.42% comprising of 25,889 public shareholders holding not less than 100 shares each. Hence, the Company has complied with Bursa Malaysia Securities Berhad's public shareholding rule, which requires a listed issuer to have at least 25% of its listed shares in the hands of a minimum of 1,000 public shareholders holding not less than 100 shares each. About Pilecon Engineering Berhad Headquartered in Selangor Darul Ehsan, Pilecon Engineering Berhad is engaged in building construction and civil engineering works. The Company is also involved in trading and hiring of plant and equipment for foundation engineering and civil engineering works. It also undertakes resort operation and complex management services. The Group operates in Malaysia, Hong Kong and Singapore. The Company is currently undergoing a MYR354-million debt-restructuring exercise. The scheme, however, was placed in jeopardy following the Securities Commission's rejection of an inter-conditional proposal to acquire a piece of land in Johor at a cost of MYR75 million. The Commission also rejected the Company's scheme of arrangement with certain secured creditors. PSC INDUSTRIES: Complies with Public Shareholding Requirement ------------------------------------------------------------- PSC Industries Berhad advised that as of June 30, 2006, 48.07% of the Company's total shares are in the hands of 3,877 public shareholders holding not less than 100 shares each. As such, Lityan has complied with the public shareholding spread requirement of Bursa Malaysia Securities Berhad. The Bourse requires a listed issuer to have at least 25% of its listed shares in the hands of a minimum of 1,000 public shareholders holding not less than 100 shares each. About PSC Industries Berhad PSC Industries Berhad's principal activities are shipbuilding and ship repairing. It is also involved in heavy engineering construction, provision of shipping management services, manufacturing of aluminium fast passenger sea ferries, supplies equipment and machineries, marketing and distributing Exocet Weapon system, manufacturing of confectioneries, snack food and related products, general trading, power plant construction and its support activities, printing, property development, and property and investment holding. The Group operates in Malaysia, Australia and the Republic of Ghana. The Company is currently formulating a regularization plan for the Group pursuant to Practice Note 17/2005 of the Bursa Malaysia Securities Berhad's Listing Requirements. The Company is also looking at various measures to improve its financial solvency. As of March 31, 2006, the Company's balance sheet showed MYR212,330,000 in total assets and MYR677,272,000 in total liabilities, resulting in a MYR464,942,000 stockholders' equity deficit. PSC INDUSTRIES: Unit Faces EUR3.8-Mln Claims Payment Suit --------------------------------------------------------- On July 7, 2006, the Registrar of Kuala Lumpur High Court had allowed Tractors Malaysia (1982) Sdn Bhd's application for summary judgment against PSC Industries Berhad's subsidiary, PSC-Naval Dockyard Sdn Bhd. Under the Judgment, Tractors Malaysia is asserting a EUR3,795,000 claim for unpaid services. PSC Industries intends to appeal the decision. About PSC Industries Berhad PSC Industries Berhad's principal activities are shipbuilding and ship repairing. It is also involved in heavy engineering construction, provision of shipping management services, manufacturing of aluminium fast passenger sea ferries, supplies equipment and machineries, marketing and distributing Exocet Weapon system, manufacturing of confectioneries, snack food and related products, general trading, power plant construction and its support activities, printing, property development, and property and investment holding. The Group operates in Malaysia, Australia and the Republic of Ghana. The Company is currently formulating a regularization plan for the Group pursuant to Practice Note 17/2005 of the Bursa Malaysia Securities Berhad's Listing Requirements. The Company is also looking at various measures to improve its financial solvency. As of March 31, 2006, the Company's balance sheet showed MYR212,330,000 in total assets and MYR677,272,000 in total liabilities, resulting in a MYR464,942,000 stockholders' equity deficit. TAP RESOURCES: AmBank Declares Event of Default ----------------------------------------------- TAP Resources Berhad's Redeemable Convertible Secured Loan Stocks holder, AmBank Berhad, on July 12, 2006, declared an event of default and that the loan stocks are due and payable. The declaration is pursuant to a trust deed entered into between TAP Resources and AmTrustee on May 8, 2003. The Company was required to settle by July 15, 2006, all the outstanding amount of MYR19,047,348 being the redemption of the RCSLS, interests and default interests. AmTrustee will institute appropriate proceedings against the Company to enforce the RCSLS, the provisions of the Trust Deed and the security documents. The Troubled Company Reporter - Asia Pacific recounts that the 35,716,932 three-year nominal value 5% coupon Redeemable Convertible Secured Loan Stocks totaling MYR35,716,932 issued on June 30, 2003, to the three RCSLS holders -- AmBank Berhad, AmMerchant Bank Berhad and Hong Leong Bank Berhad -- in respect of the various Trust Deeds entered into between TAP Resources Berhad and AmTrustee Berhad has matured on June 30, 2006. As of June 30, 2006, a total of MYR3,982,551 RCSLS has been converted into new ordinary shares of TAP. The Company has defaulted in the redemption of the balance of MYR31,734,381 RCSLS. It has also defaulted in the payment of interests, default interests and overdue interests totaling approximately MYR3.1 million. About TAP Resources Berhad TAP Resources Berhad is principally engaged in property development. Its other activities include general contracting; manufacturing and general trading of building materials, construction chemicals, ready mixed concrete and non-baked bricks; installing air-conditioners, process control and switch gear automation; selling of electrical goods; and investment holding. The Group operates wholly in Malaysia. As of April 30, 2006, the Company registered a net loss of MYR3.57 million and a net current deficit of MYR48.56 million. WEMBLEY INDUSTRIES: Public Shareholders Hold 59.73% Shares ---------------------------------------------------------- Wembley Industries Holdings Berhad has fully complied with Paragraph 8.15 of the Bursa Malaysia Securities Berhad's Listing Requirements whereby a listed issuer must ensure that at least 25% of the total listed shares are in the hands of a minimum public shareholders holding not less than 100 shares each. As of June 30, 2006, 59.73% of Wembley shares were held by 10,402 shareholders holdings not less than 100 shares each. About Wembley Industries Holdings Headquartered in Sarawak Malaysia, Wembley Industries Holdings Berhad is a developer of commercial properties and investment holding. Its other activities are the development of the inter- state bus and taxi terminal, the retail podium and the budget hotel. The Company has been placed under the Practice Note 4 category due to its tight cash flow position. On January 7, 2003, Malaysia's Foreign Investment Committee approved the Company's regularization plan. Subsequently, on April 7, 2003, the FIC revised its approval to include the possible participation of Daewoo Corporation, the former turnkey contractor of Plaza Rakyat Project in the Company's Proposed Debt Restructuring. The Company's ability to continue as a going concern hinges on the successful implementation of the Scheme. As of March 31, 2006, the Company's balance sheet revealed total assets of MYR422,729,000 and total liabilities of MYR1,214,178,000, resulting in a MYR791,749,000 stockholders' equity deficit. The Company's accumulated losses as of March 31, 2006, have reached MYR1,063,555,000. ===================== P H I L I P P I N E S ===================== MANILA ELECTRIC: NEDA Fears Possible Monopoly --------------------------------------------- The National Economic and Development Authority has warned against monopoly over power generation and distribution by Lopez-controlled Manila Electric Company, The Manila Standard says. NEDA director general Romulo Neri had urged the Government to tighten its rules on cross-ownership between the distribution and generation sectors amid the possibility of a Meralco affiliate taking over the 600-megawatt Masinloc power plant in Zambales province, The Standard relates. According to the report, Mr. Neri recommended that the Government should work to avoid private monopolies as it continues to divest stakes in the generation sector. He said Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001, should be reviewed as the Masinloc experience showed a conflict of interest when parties involved have a stake in both generation and distribution sectors. "The failure of the Masinloc winning bidder YNN to secure a power supply contract underscores the importance of concluding negotiations between National Power Corp. and electric distributors for power supply contracts prior to bidding, as stipulated in the Epira, Mr. Neri said. As reported by the Troubled Company Reporter - Asia Pacific, YNN Pacific Consortium submitted the highest bid of US$561.74 million for Masinloc plant in a public bidding held in December 2004. Masinloc was sold without a power supply contract, leaving it up to the winning bidder to obtain its own deal with electric power distributors. YNN has started negotiations with the Lopez-controlled Meralco. The only other bidder, First Generation Holdings Corp. -- which is also controlled by the Lopez family -- submitted a bid of US$274.85 million, which was less than half the bid of YNN and 30% below the government's reserve price of US$388 million. FirstGen and Meralco are the power generation subsidiary and power distribution associate, respectively, of First Philippine Holdings Corp. About MERALCO Headquartered in Ortigas, Pasig City, the Manila Electric Company -- http://www.meralco.com.ph/-- is the largest utility in the Philippines, providing power to 4.1 million customers in metropolitan Manila and more than 100 surrounding communities. As deregulation takes effect, Meralco is reducing its dependence on state-owned National Power Corp. by increasing the amount of power it purchases from independent power producers. Meralco is also preparing for competition by moving into non-regulated activities, including energy consulting, independent power production, engineering, fiber optics, e-commerce, and real estate. * * * A March 31, 2006 report by the Troubled Company Reporter - Asia Pacific stated that the Company posted a 79.7% decrease in its 2005 net losses to PHP411 million from PHP2.03 billion in 2004, due to provisions for probable losses while awaiting a Supreme Court final decision on a pending unbundling rate case, and the adoption of new accounting standards. The TCR-AP further stated on April 27, 2006, that the Company filed a report with the Philippine Stock Exchange, indicating a 66.1% decline in its net loss from January to March 2006 to PHP748 million, against a PHP2.2 billion loss for the same period in 2005. According to a subsequent TCR-AP report on April 24, 2006, Manila Electric cannot seek a loan to expand its facilities unless it repays outstanding short-term debts amounting to around PHP4.7 billion. MANILA ELECTRIC: Questions Php6.37-Billion Transco Bill ------------------------------------------------------- Manila Electric Company has questioned a bill from National Transmission Corporation worth Php6.37 billion, the bulk of which represents overdue charges for ancillary services, The Philippines daily Inquirer reports. In a disclosure to the Philippines Stock Exchange, Meralco confirmed the amount but said it was refuting certain items in the billing. Meralco is currently verifying the amounts stated and is in the process of consulting with Transco regarding the validity of certain items in the said billing statement, The Inquirer reveals. About MERALCO Headquartered in Ortigas, Pasig City, the Manila Electric Company -- http://www.meralco.com.ph/-- is the largest utility in the Philippines, providing power to 4.1 million customers in metropolitan Manila and more than 100 surrounding communities. As deregulation takes effect, Meralco is reducing its dependence on state-owned National Power Corp. by increasing the amount of power it purchases from independent power producers. Meralco is also preparing for competition by moving into non-regulated activities, including energy consulting, independent power production, engineering, fiber optics, e-commerce, and real estate. * * * A March 31, 2006 report by the Troubled Company Reporter - Asia Pacific stated that the Company posted a 79.7% decrease in its 2005 net losses to PHP411 million from PHP2.03 billion in 2004, due to provisions for probable losses while awaiting a Supreme Court final decision on a pending unbundling rate case, and the adoption of new accounting standards. The TCR-AP further stated on April 27, 2006, that the Company filed a report with the Philippine Stock Exchange, indicating a 66.1% decline in its net loss from January to March 2006 to PHP748 million, against a PHP2.2 billion loss for the same period in 2005. According to a subsequent TCR-AP report on April 24, 2006, Manila Electric cannot seek a loan to expand its facilities unless it repays outstanding short-term debts amounting to around PHP4.7 billion. ================= S I N G A P O R E ================= CHINA RESOURCES: Court to Hear Wind-Up Petition on July 21 ---------------------------------------------------------- A wind-up petition against China Resources (Singapore) Pte Ltd will be heard before the High Court of the Republic of Singapore on July 21, 2006, at 10:00 a.m. The wind-up petition was filed by China Resources (Holdings) Co. Ltd on June 27, 2006. The Plaintiffs' solicitors can be reached at: Messrs Madhavan Partnership No. 80 Robinson Road #08-01/02 Singapore 068898 DIGILAND INTERNATIONAL: Accepts 1,382,952,319 Rights Shares ----------------------------------------------------------- Digiland International Limited has received valid acceptances and excess applications for a total of 1,382,952,319 Rights Shares with 5,531,809,276 Warrants as of the Book Closure Date on July 10, 2006. Pursuant to the undertaking, Dr. Vincent Tan Kim Yong subscribed for the whole of his entitlement under the Rights Issue, being 506,831,000 Rights Shares with 2,027,324,000 Warrants. The Company received valid acceptances for a total of 63,372,441 Rights Shares with 2,653,489,764 Warrants, representing approximately 95.27% of the total number of Rights Shares with Warrants under the Rights Issue. Valid applications for excess Rights Shares with Warrants were received for a total of 719,579,878 Rights Shares with 2,878,319,512 Warrants, representing approximately 103.34% of the total number of Rights Shares with Warrants under the Rights Issue. The balance of 32,923,572 Rights Shares with 131,694,288 Warrants, which were not validly accepted or subscribed for, were allocated to satisfy the excess applications. The Company had, in determining the basis of allocation of the excess Rights Shares with Warrants, given preference to the Shareholders for the rounding of odd lots, and ranked substantial shareholders and Directors last in priority. About Digiland International Limited Digiland International Limited -- http://www.digiland.com.sg/-- is a major distributor of IT products and provider of IT services in the Asia-Pacific. The Digiland International group of Companies was set up initially as the distribution arm of GES International Limited to handle sales, marketing and distribution of GES products, specifically the Datamini brand of Personal Computer, designed and manufactured by GES International Limited. It was renamed Digiland International Private Ltd in 1998 and has since expanded geographically to cover most countries in Asia-Pacific. The Company has been reporting a string of losses in the recent years due to the negative impact of the highly cyclical nature of the computer industry. Sales were adversely affected by the shortening product cycles of IT products and downward pressure on selling prices as newer and more technologically advanced products enter mass production. Aside from recurring losses, the Company's subsidiaries have also been bombarded by wind-up petitions filed by creditors. GETRONICS NV: Sets Up Biller Service Provider for ING Bank ---------------------------------------------------------- ING Bank and Getronics N.V. will be working together to develop a European platform for the electronic distribution and processing of payment slips. The two companies have formally joined forces in order to assist businesses with sending and processing billing and invoice information for private individuals. On July 10, ING Bank and Getronics PinkRoccade signed a memorandum of understanding to create a Biller Service Provider joint venture. The new Biller Service Provider anticipates the increasing integration of invoicing and payment streams and will initially be aimed at businesses providing services to private individuals. The BSP also intends to provide services in due course for business-to-business invoicing. In addition to processing payment slips, the new system will, in the future, also be capable of handling other types of documents. The Biller Service Provider provides businesses with the opportunity to send electronic payment slips to private individuals Internet banking facilities. The individual concerned can then read the digital payment slip and pay it with a single click, without having to endlessly fill in details, as is now the case in the Netherlands. With a couple of mouse clicks, individuals will also be able to view the relevant invoice on the Internet in a highly secure environment. Once payment has been made, the digital payment slips and relevant invoices will be archived immediately. Getronics PinkRoccade is market leader in the Netherlands in the production and fulfilment of transaction documents, such as payment slips. Clients who are presently outsourcing the production and processing of their payment slips to Getronics PinkRoccade, and potential clients, now have the possibility of using digital payment slips. Getronics PinkRoccade is developing and managing the secure ICT-platform for the Biller Service Provider. Getronics PinkRoccade will mainly be using existing, market-proven products in order to ensure that the Biller Service Provider provides a fully cost-effective, secure and high quality service. ING Bank is market leader in processing payments for business. ING bank is providing and developing financial services for the joint venture, which will further improve INGs service provision and its position in the area of international and national payments & cash management. About Getronics Headquartered in Amsterdam, Netherlands, Getronics N.V. -- http://www.getronics.com/-- designs, integrates and manages ICT infrastructures and business solutions for many of the world's largest global and local companies and organizations, helping them maximize the value of their information technology investments. Getronics has some 27,000 employees in over 30 countries and approximate revenues of EUR3 billion. The company has regional offices in Boston, Madrid and Singapore. Its shares are traded on Euronext Amsterdam. * * * As reported in the TCR-Europe on March 9, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Dutch IT services group Getronics N.V. to 'B' from 'B+'. At the same time, Standard & Poor's lowered its ratings on Getronics' senior unsecured notes to 'CCC+' from 'B-', still two notches below the corporate credit rating. Standard & Poor's also lowered its ratings on Getronics' EUR300 million senior secured bank loan to 'B' from 'B+', the same as the corporate credit rating. The loan has a '3' recovery rating, indicating expectation of meaningful (50%-80%) recovery of principal in the event of a payment default. GETRONICS NV: Divests Regional Operations to Kapsch Group --------------------------------------------------------- Getronics N.V. and Kapsch Group -- a family-owned specialist Austrian Communications and Information Technology company -- disclosed an agreement under which Kapsch will acquire the business activities of Getronics in Austria, the Czech Republic, Slovakia and Poland. Getronics will continue to maintain a strong presence in the region through its Global Service Centre in Budapest. Getronics, the international workspace ICT services company, has signed an agreement with Kapsch group whereby the business assets and liabilities of Getronics Austria, and all shares in Getronics Czech Republic, Slovakia and Poland will be transferred to Kapsch. The agreement, conditional upon regulatory (anti-trust) procedures, is expected to close by mid- September 2006. The deal is proceeding in full accordance with all relevant laws and regulations. The decision to sell Getronics' operations in Austria, the Czech Republic, Slovakia and Poland was the result of a thorough strategic review of the company's operations in late 2005. Early in 2006, Getronics, assisted by KPMG Corporate Finance, began looking for a suitable strategic business partner in the region. Kapsch was selected because of its excellent reputation and the considerable potential synergies arising from the deal. By acquiring Getronics' Austrian, Czech, Slovak and Polish operations, Kapsch will be able to expand its presence in the ICT market, leveraging the high quality ICT services delivery capabilities and the skilled personnel of the Getronics operation and its coverage in the region. This deal enables Getronics to focus on strengthening and expanding its core businesses worldwide while continuing to provide the same high levels of service to its international clients in the Austrian, Czech, Slovak and Polish markets through its strategic business partner and its Global Service Centres. Getronics' Hungarian operations and, in particular, its Global Service Center in Budapest will continue to play an important role in Getronics' global operations and will remain a key hub for servicing its clients in Eastern Europe and the rest of the world. Getronics' Austrian, Czech and Polish operations employ approximately 270 people and had a turnover in 2005 of approximately EUR45million. No further financial details will be disclosed. About Getronics Headquartered in Amsterdam, Netherlands, Getronics N.V. -- http://www.getronics.com/-- designs, integrates and manages ICT infrastructures and business solutions for many of the world's largest global and local companies and organizations, helping them maximize the value of their information technology investments. Getronics has some 27,000 employees in over 30 countries and approximate revenues of EUR3 billion. The company has regional offices in Boston, Madrid and Singapore. Its shares are traded on Euronext Amsterdam. * * * As reported in the TCR-Europe on March 9, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Dutch IT services group Getronics N.V. to 'B' from 'B+'. At the same time, Standard & Poor's lowered its ratings on Getronics' senior unsecured notes to 'CCC+' from 'B-', still two notches below the corporate credit rating. Standard & Poor's also lowered its ratings on Getronics' EUR300 million senior secured bank loan to 'B' from 'B+', the same as the corporate credit rating. The loan has a '3' recovery rating, indicating expectation of meaningful (50%-80%) recovery of principal in the event of a payment default. JIN-WEN INVESTMENT: Faces Wind-Up Proceedings --------------------------------------------- Lau Chin Huat on June 23, 2006, filed before the High Court of the Republic of Singapore an application to wind up Jin-Wen Investment Ltd. The High Court will hear the wind-up petition on July 21, 2006, at 10:00 a.m. The Plaintiff's solicitors can be reached at: Messrs Rajah & Tann No. 4 Battery Road #15-01 Bank of China Building Singapore 049908 MAE ENGINEERING: Eligro Deal Already in Advanced Stage ------------------------------------------------------ A share and purchase agreement between MAE Engineering Limited and Eligro Sdn Bhd is already in the advanced stage. The Agreement is in respect of a proposal made by Mae Engineering Limited and Eligro on December 29, 2005, for the purchase a substantial 38% of the issued and paid up share capital of Lereno Sdn Bhd. The two parties have mutually agreed to extend the exclusive period for the conduct of the due diligence, negotiation and finalization for the proposed acquisition for another three months until September 29, 2006. All terms in the preliminary agreement remain unchanged. The negotiation for the Sale and Purchase Agreement is progressing smoothly. The Company will provide further updates on the Proposed Acquisition as and when there is further material development. About MAE Engineering Limited Headquartered in Singapore, MAE Engineering Limited is engaged in the provision of integrated electrical and mechanical engineering services including designing, planning and procurement. These services are categorized into electrical installations, mechanical installations, electrical power supply installations, instrumentation and building automation as well as maintaining electrical and mechanical systems. The Group also offers consulting and specialist services to oceanariums and aquariums. The Group has disposed off its prawn and fish farming as well as edutainment businesses, after suffering accumulated losses of SGD48 million as of September 30, 2005. The Company also suffered a liquidity crunch since September 30, 2005, when its total current liabilities of SGD23,695,000 exceeded its total current assets of SGD5,582,000. As of March 31, 2006, the Company's balance sheet showed SGD7,404,000 in total assets and SGD27,257,000 in total liabilities, resulting in a SGD19,853,000 stockholders' equity deficit. The Company's March 31 balance sheet also revealed strained liquidity with SGD6,346,000 in total current assets available to pay SGD27,200,000 in total current liabilities coming due within the next 12 months. MDR LIMITED: Posts Changes of Shareholders' Percentage Interest --------------------------------------------------------------- On July 13, 2006, mDR Limited posted a series of changes to its substantial shareholders' percentage level. The Company's substantial shareholders with the respective change in the percentage level are: * Economic Development Board -- from 11.02% to 7.34%; * EDB Investments Pte Ltd -- from 11.02% to 7.34%; * EDBV Management Pte. Ltd. -- from 11.02% to 7.34%; * PLE Investments Pte Ltd -- from 8.69% to 5.79%; * Semitech Electronics Ltd -- from 4.24% to 6.37%; * Ronnie Poh Tian Peng -- from 7.49% to 9.18%; * Henry Tan Hor Thye -- from 9.09% to 13.28%; * Goh Thiam Poh -- from 3.36% to 5.05%; * Temasek Holdings (Pte.) Limited -- from 8.69% to 5.79%; * Fullerton Fund Investments Pte Ltd. -- from 8.69% to 5.79%); and * Seletar Fund Investments Pte Ltd -- from 8.69 % To 5.79%. The change in interest was due to the allotment and subsequent listing and quotation of 513,150,742 Rights Shares. About mDR Limited mDR Limited -- formerly Accord Customer Care Solutions -- is the leading provider of after market services for consumer mobile communication and digital electronic devices in Asia Pacific. ACCS is a spin-off from supply network solutions provider Accord Express Holdings Pte Limited. ACCS provides a wide spectrum of after market services to both its trade partners and end consumers. ACCS provides professional, efficient and convenient services to its end consumers by establishing one-stop single brand or multi-brand proximity centers that are conveniently and strategically located. ACCS has been posting consecutive losses since the first quarter of 2005 due to bad investments, when it incurred a net loss of SGD3.79 million. Meanwhile, 12 of its former executives are facing an ongoing case over a cheating scam involving mobile phone giant Nokia. The executives were accused of falsifying phone repair claims to cheat Nokia out of SGD4.3 million. They were also charged with falsifying financial documents and overstating profits. The Company is currently in negotiations with its lenders to restructure its financial obligations. As part of the negotiations with the lenders, these obligations are intended to be repaid out of the proceeds from the Company's recovery of its investments in non-operational assets. The timing of receipt of proceeds from the recovery is dependent on stock market conditions and conclusion of negotiations. REFCO INC: Chap. 11 Trustee Taps Skadden Arps as Special Counsel ---------------------------------------------------------------- Marc S. Kirschner, the Chapter 11 trustee of the estate of Refco Capital Markets, Ltd., asks the U.S. Bankruptcy Court for the Southern District of New York for authority to employ Skadden, Arps, Slate, Meagher & Flom LLP, as his special counsel. Mr. Kirschner says that Skadden Arps provides various legal services to the Debtors, including Refco Capital Markets, Ltd. In this regard, Mr. Kirschner, wants Skadden to continue providing some, but not all, of those services to RCM, including: (a) continuing advice with respect to the litigation matters that were stayed pursuant to the Court's November 28, 2005 order and the Refco Securities Lawsuit; (b) claims resolution where the claim has been asserted against one or more Other Refco Companies as well as RCM -- other than claims by other Chapter 11 Debtors against RCM; (c) matters involving ACM Advanced Currency Markets S.A., and RCM's ownership interest in ACM; (d) matters involving consolidated tax returns filed or to be filed by the Chapter 11 Debtors; (e) recoveries against third parties arising under "cross margin" agreements, whether or not involving the Other Chapter 11 Debtors; (f) pending litigation between Cargill, Incorporated and the Chapter 11 Debtors; (g) in consultation with Bingham McCutchen LLP, the Trustee's general bankruptcy counsel, the prospective settlement between the Refco Companies and BAWAG P.S.K. Bank fur Arbeit und Wirtschaft und Osterreichische Postsparkasse Aktiengesellschaft and its affiliates; (h) any matters remaining in the preference action -- or enforcement of the settlement -- against the SPhinX Funds; (i) continuing advice with respect to the pending investigations by the United States Department of Justice and the Securities and Exchange Commission; and (j) motions, applications, answers, orders, reports and papers necessary to the administration of the RCM estate other than in connection with matters with respect to which RCM wishes to take a position different than the position taken by the Other Chapter 11 Debtors. Among other things, Skadden will not be rendering services to RCM with respect to: (a) whether and on what terms RCM or its creditors participate in a Chapter 11 plan with the Other Chapter 11 Debtors; (b) claims between RCM and the Other Chapter 11 Debtors arising out of intercompany transactions; and (c) advice with respect to "corporate actions" that may be necessary or desirable relating to various securities held by RCM. With respect to intercreditor and intercompany issues in the Chapter 11 cases, Skadden will: -- not, without a waiver from RCM, represent the Other Chapter 11 Debtors in litigation against RCM; -- continue to provide information and analysis to the Chapter 11 Debtors regarding intercompany claims; -- continue to represent the Other Chapter 11 Debtors in formulating a plan of reorganization; and -- continue to investigate intercompany claims as provided in the Engagement Letter. Skadden and the Debtors have previously agreed that the firm's bundled rate structure will apply to these cases. Skadden's hourly rates under the bundled rate structure range from: $585 to $830 for partners; $560 to $640 for counsel; $295 to $540 for associates; and $90 to $230 for legal assistants and support staff. Skadden will allocate its fees and disbursements among the various Chapter 11 Debtors, including RCM, to charge each estate appropriately for the services provided on behalf of the estate. Skadden, RCM and the Other Refco Debtors have agreed that: * 2/3 of the fees and expenses Skadden incurred in connection with the "stockbroker" litigation culminating in the order appointing the RCM Trustee will be allocated to RCM and 1/3 to the Other Refco Debtors; and * Skadden's other fees incurred appropriately on behalf of all the Refco Companies will be allocated 40% to RCM and 60% to the Other Refco Debtors. J. Gregory Milmoe, a member of Skadden, assures the Court that the firm does not have any connection with the Debtors, their affiliates, their creditors, any other party-in-interest, their attorneys and accountants, and the United States Trustee or any person employed in the Office of the United States Trustee. Moreover, Skadden is a disinterested person as defined under Section 101(14) of the Bankruptcy Code and does not represent any interest that is adverse to the estates of the Chapter 11 Debtors, including RCM. About Refco Inc. Based in New York, New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for Chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. Refco LLC, an affiliate, filed for Chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006. REFCO INC: GAIN Capital to Purchase FX Customer Accounts -------------------------------------------------------- In a motion filed with the U.S. Bankruptcy Court for the Southern District of New York on June 30, 2006, Refco Inc. proposed to enter into an agreement with privately held GAIN Capital Group, under which GAIN would acquire the Refco FXA retail customer account information and related assets. The proposed agreement provides RFXA customers with the potential to recover up to 100% of account balances. The proposed agreement is reflected in a non-binding term sheet that is subject to documentation and Bankruptcy Court approval, among other conditions. RFXA currently has 15,000 retail foreign exchange trading accounts. Upon the closing date of the proposed transaction, 40% of RFXA's customers could receive a full recovery of their account balances, if they open an account with GAIN and execute at least one trade. Customers with larger deposits can also receive up to 100% recovery provided they meet certain trading thresholds, as outlined in the term sheet. "We chose to work with GAIN for a number of reasons," Refco's Chief Restructuring Officer David Pauker said. "GAIN is a leader in the industry and expressed early interest in the RFXA clients. They also have both the financial and operational resources necessary to help achieve a smooth transition for customers and to offer continued support for their ongoing trading needs. Just as important, GAIN and FOREX.com have an exemplary record with the National Futures Association and, unlike RFXA, are regulated as a futures commission merchant. Their reputation in the industry speaks for itself." "The proposed agreement benefits creditors by reducing a portion of the pre-petition customer claims against RFXA," continued Mr. Pauker. These claims, which include customer deposits, total over $100 million. "At the same time, the proposed transaction with GAIN represents a much improved recovery for RFXA customers," Mr. Pauker said. "We are pleased to be able to offer Refco FX clients the ability to recover up to 100 percent of their assets and at the same time to trade forex with a regulated firm," said GAIN's Chief Executive Officer Mark Galant. GAIN Capital Group and FOREX.com are registered with the National Futures Association as a Futures Commission Merchant. "In addition, if a RFXA customer chooses to opt into the program but does not recoup the full amount of their online account balance, they would still retain all their rights to the balance of their claim as a general unsecured creditor of Refco," Mr. Galant said. Terms of the Proposed Agreement Under the terms of the proposed agreement, GAIN will offer RFXA clients the option to open an account at FOREX.com, GAIN's retail division. For RFXA clients who opt to do so, GAIN has agreed to immediately fund an amount equal to the lesser of the customer's aggregate RFXA account balance or $150 per account when the client activates a new account. Clients with balances of $40 or less would be able to withdraw their funds immediately upon opening their account at FOREX.com. For customers with larger deposits, GAIN has agreed to reimburse customers up to their full account balance, payable in 25% increments every six months, provided they meet certain trading thresholds. Mr. Pauker said that, at present, it is not expected that RFXA will have sufficient assets to pay its creditors in full. In addition to customer and trade liabilities, which exceed $140 million, RFXA is a guarantor of Refco's secured bank debt and unsecured bonds, which total in excess of $1 billion. RFXA has approximately $54 million of cash and securities, much of which is claimed as collateral by Refco's secured lenders. RFXA is also owed money by some Refco affiliates, but the timing and amount of those recoveries is uncertain; Refco's lenders also assert claims to those receivables. About GAIN Capital Group Headquartered in Bedminster, New Jersey, GAIN Capital Group -- http://www.gaincapital.com/-- is a leading provider of foreign exchange services, including direct-access trading and asset management. Founded in 1999 by Wall Street veterans, GAIN Capital Group is one of the largest, most respected firms in the online forex industry, servicing clients from more than 140 countries and supporting trade volume in excess of $100 billion per month. The company operates sales offices in New York and Shanghai. The company operates two full service web portals. FOREX.com services individual investors of all experience levels with a full-service trading platform, lower account minimums and extensive education and training. The company's flagship service, GAIN Capital focuses on the needs of professional forex traders, including hedge funds and money managers. About Refco Inc. Based in New York, New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for Chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for Chapter 11 protection on June 6, 2006. REFCO INC: Refco Group Inks Settlement With West and Contractors ---------------------------------------------------------------- Refco Group Ltd., LLC, Albert Togut, the Chapter 7 Trustee appointed to oversee the liquidation of Refco, LLC's estate, West Loop Associates LLC and the Contractors, Alps Construction, Inc., KCE Ltd. and Griswold, Heckel & Kelly Associates, Inc., have reached a comprehensive settlement to resolve West Loop's request, the Mechanic's Liens and the Claims. In a stipulation approved by the Hon. Robert Drain of the United States Bankruptcy Court for the Southern District of New York, each of the Contractors agree to: (i) reduce by 5% the outstanding principal amount of each of its Claim pertaining to the Properties; (ii) waive all attorney's fees and accrual of any interest to which each Contractor may be entitled; (iii) take the necessary steps to discharge and release the Mechanic's Liens so that the threatened default against West Loop may be averted; (iv) release Refco LLC from any further claims relating to the Contracts, the Mechanic's Liens, and their Claims; (v) withdraw their Claims against Refco LLC; and (vi) file no additional proofs of claim against Refco LLC. Refco Group will pay the Contractors $747,579 in the aggregate in full satisfaction of the Mechanic's Liens, the Claims, and any other amounts due in connection with the Contracts. West Loop's Motion to Compel West Loop had asked the Court to compel Refco Group to comply with its postpetition lease obligations. Refco Group leases seven floors of an 18-story office building owned by West Loop in the central business district of Chicago, Illinois. Refco, LLC, occupied some or all of the leased premises. Refco Group continues to occupy the Premises pursuant to a March 2006 Stipulated Order among Debtors, West Loop and Man Financial, Inc. The Stipulated Order contemplates rejection of the Lease effective August 15, 2006. Sidney P. Levinson, Esq., at Hennigan, Bennett & Dorman LLP, in Los Angeles, California, contends that until the effective rejection date, RGL is required "to timely perform all obligations under the Lease to the extent required by Section 365(d)(3) of the Bankruptcy Code. Among those obligations, Mr. Levinson said, is a Lease covenant to either discharge or bond any mechanic's liens filed against the Property as a result of work performed or alleged to have been performed on the Premises. Mr. Levinson noted that Refco LLC has entered into a series of agreements with Alps Construction, Inc., KCE Ltd. and Griswold, Heckel & Kelly Associates, Inc., for the construction work to be performed at the leased Premises. The Contractors have sought relief from the bankruptcy stay to commence a foreclosure action in Illinois against RGL, Refco LLC, and West Loop. The Contractors assert that Refco LLC or RGL failed to pay for the work, leaving a balance in excess of $700,000, including amounts owed for work that was not completed until nearly one month after RGL's bankruptcy filing. The Contractors have filed mechanic's liens of more than $700,000 against the Property. Although the Bankruptcy Court denied the Contractors' request, the ruling did not fully resolve the problems West Loop faced. Mr. Levinson relates that by letter dated April 19, 2006, West Loop's mortgage lender, Greenwich Capital Financial Products, Inc., issued a notice of default to West Loop based on the existence of the Mechanic's Liens. The notice of default provides that, unless the Mechanic's Liens are discharged or bonded, West Loop will be held in default under its purchase money loan agreement dated October 7, 2005. Unless the Court compels RGL to discharge or bond the Mechanic's Liens, West Loop and, by consequence, RGL's estate will suffer substantial damages that could and should otherwise be avoided if RGL complies with its lease obligations, Mr. Levinson told Judge Drain. RGL Costs Reimbursement Mr. Togut, informed the Court that he reviewed West Loop's request and RGL's contracts with Alps, KCE and GHK. Mr. Togut believed that the Contractors' Claims and Mechanic's Liens are legitimate obligations and that Refco LLC is responsible for payment of the Claims. Thus Mr. Togut asks the Court for permission to reimburse $747,579 to RGL for the payment of the Claims, pointing out that Refco LLC was the contracting party and the beneficiary of the Contractors' services. About Refco Inc. Based in New York, New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. Refco Capital Markets Ltd. is Refco's operating subsidiary based in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for Chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for Chapter 11 protection on June 6, 2006. =============== T H A I L A N D =============== AVANEX CORP: Reports Revised Second Quarter 2006 Net Loss --------------------------------------------------------- Avanex Corp. disclosed that in connection with the filing of its quarterly report on Feb. 14, 2006, to the U.S. Securities and Exchange Commission, the net loss for its second fiscal quarter has been revised. The company finalized the accounting treatment for the extinguishment of the capital leases at the company's French subsidiary. In the previously announced results, the one-time non-cash gain of US$4.5 million was recognized as other income in the company's second quarter financial statements. The final accounting treatment will spread this gain over the twelve-year term of the remaining lease. The company previously reported a net loss of US$13.4 million. The revised net loss included in the Form 10-Q for the second fiscal quarter is US$18.5 million. For the second fiscal quarter, excluding certain items, the company previously reported a non-GAAP net loss of US$9.3 million. The revised non-GAAP net loss for the second fiscal quarter is US$9.1 million. Going Concern Doubt Deloitte & Touche LLP expressed substantial doubt about Avanex Corporation's (Nasdaq: AVNX) ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 30, 2005. The auditing firm pointed to the Company's recurring losses and negative cash flows from operations. About Avanex Avanex Corp. -- http://www.avanex.com/-- provides Intelligent Photonic Solutions(TM) to meet the needs of fiber optic communications networks for greater capacity, longer distance transmissions, improved connectivity, higher speeds and lower costs. These solutions enable or enhance optical wavelength multiplexing, dispersion compensation, switching and routing, transmission, amplification, and include network-managed subsystems. Avanex was incorporated in 1997 and is headquartered in Fremont, Calif. Avanex also maintains facilities in Elmira, N.Y.; Shanghai, China; Nozay, France; San Donato, Italy; and Bangkok, Thailand. MDX PCL: Earns THB6.13 Billion in First Quarter 2006 ---------------------------------------------------- M.D.X. Public Company Ltd. disclosed its financial results for the first quarter ended March 31, 2006. The company posted a THB6.13 billion net profit in the first three months of 2006, compared to a THB49.86 million net loss for the quarter ended Dec. 31, 2006. Moreover, the auditor of the Company, Somchai Kurujitkosol of S.K. Accountant Services, relates that the Central Bankruptcy Court has released the Company from the rehabilitation plan as it was already duly complied. The Court ordered the cancellation of the plan on May 9, 2006. Mr. Kurujitkosol said that the Company gained from the cancellation of the plan, as it was able to relieve them of liabilities amounting to THB6.35 billion in the company's consolidated financial statements. At March 31, 2006, M.D.X. Pcl's balance sheet showed: (in thousand Baht) 03/31/06 12/31/05 --------- ---------- Total current assets 1,417,549 1,223,755 Total assets 3,829,184 3,719,038 Total current liabilities 114,190 187,016 Total liabilities 1,715,237 8,062,476 Total liabilities and Shareholders' equity 3,829,184 3,719,038 A full-text copy of the Company's Balance Sheet for the Fiscal Year ending March 31, 2006, is available for free at: http://bankrupt.com/misc/MDXE1.xls About the Company M.D.X. Public Company Limited and its subsidiaries develop industrial estates for plants and factories. The Group develops, provides and manages infrastructure as well as all necessary facilities and utilities such as power, water, wastewater treatment, telecommunications, and solid waste disposal systems. The Company has been operating with a capital deficit for years, with a THB8.85 billion deficit in 2002 as the highest in the last five years. In its annual report for the year ended December 31, 2005, MDX reported a reduced of THB5.83 billion, compared with the THB6.23 billion in 2004. In January 2006, MDX filed for a petition with the Central Bankruptcy Court to cancel the Company's Rehabilitation Plan since it was already duly complied. The Court in May 2006, approved the petition to release the company from the plan. ********* 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., Frederick, Maryland, USA. Catherine Gutib, Valerie Udtuhan, Francis Chicano, Erica Fernando, Reiza Dejito, Freya Natasha Fernandez, and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is $575 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***