/raid1/www/Hosts/bankrupt/TCRAP_Public/090312.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
Thursday, March 12, 2009, Vol. 12, No. 50
Headlines
A U S T R A L I A
BABCOCK & BROWN INFRA: Hires RBS & Dresdner to Sell PD Ports
STORM FINANCIAL: ASIC Has Until Today to File Wind Up Application
SOUTH EASTERN: Investors Gets 10c in the Dollar Initial Payout
C H I N A
NANJING STEEL: 2008 Net Profit Drops 88.08%
UBS AG: Names Henry Cai as Asia Investment Banking Chairman
WESTERN MINING: Net Profit Down 67.29% in 2008
H O N G K O N G
ARLO IV: Moody's Downgrades Ratings on Series 2006 Notes
CHAIN LIAISON: Court to Hear Wind-Up Petition on April 22
CHEERTIME LIMITED: Court to Hear Wind-Up Petition on April 22
CHI FU: Court to Hear Wind-Up Petition on April 8
COMPUTER SUPPLIES: Court to Hear Wind-Up Petition on April 22
D & G CATERING: Court to Hear Wind-Up Petition on April 15
FRIENDFIELD LABEL ET AL: Court Enters Wind Order
GOLD LINE: Court to Hear Wind-Up Petition on March 25
GOLDEN PRIDE: Court to Hear Wind-Up Petition on April 22
GOLDEN THREAD: Court to Hear Wind-Up Petition on April 22
HIP LEE: Court to Hear Wind-Up Petition on April 8
MEMORY DEVICES: Court to Hear Wind-Up Petition on April 8
MORGAN STANLEY: S&P Cuts Rating on US$17.914 Mil. CDOs to 'D'
OZ WING: Moody's Assigns Definitive Rating on Floating Rate Loan
PEACE MARK: Creditors' and Contributories' Meeting Set for April 1
SRE GROUP: S&P Changes Long-Term Corporate Credit Rating to 'B'
SUNNEL INVESTMENTS: To Pay Dividend on March 13
TOP HARBOUR: Creditors and Contributories to Meet on March 23
TUNG CHEUNG: Court to Hear Wind-Up Petition on April 8
UNI-V CO: Court to Hear Wind-Up Petition on April 15
I N D I A
GUJARAT ECO-TEXTILE: CRISIL Rates Rs.550MM Rupee Term Loan at BB-
JAWAHARLAL: CRISIL Assigns 'BB' Rating on Rs.10.0MM Cash Credit
PRAKASH OVERSEAS: CRISIL Rates Rs.50.0MM Standby Credit at 'BB'
SATYAM COMPUTER: Class Action Suits May Cost Firm Bet. $440-840MM
SATYAM COMPUTER: U.N. to Terminate Direct Contract
SUPREME TEX: CARE Assigns 'CARE BB' Rating on LT Bank Facilities
VIRDEV INTERMEDIATES: CARE Puts 'CARE BB' on Long-Term Bank Loans
VISION SPONGE: CRISIL Puts 'BB+' Rating on Various Bank Facilities
* INDIA: Textiles & Garments Sector Needs Fiscal Incentives
I N D O N E S I A
BANK DANAMON: EKN Files IDR1 Trillion Lawsuit
PRIMA INREKSA: Faces Litigation Proceedings from CV Cisarua & BNI
J A P A N
EXCELLENT COLLABORATION: S&P Junks Ratings on Class C & D of Notes
HARAJUKU HOLDING: S&P Puts 'BB' Note Rating on Negative Watch
PACIFIC HOLDINGS: Bankruptcy Filing Prompts JCR's "D" Ratings
NEW CITY: Daiwa House and DBJ Among Bidders, Says Bloomberg
RESONA HOLDINGS: To Pay Back JPY175.2 Bln In Public Funds
REX HOLDINGS: To Sell Supermarket Chain Seijo Ishii
SHINSEI BANK: Moody's Changes Outlook on 'D+' Rating to Negative
TOHOKU MISAWA: JCR Affirms 'BB+' Senior Debts Rating
* Fitch Takes Negative Rating Actions on Six Technology Companies
* JAPAN: Early Retirement Offers Increased This Year
K O R E A
HYNIX SEMICONDUCTOR: Fitch Retains Negative Watch on 'B+' Rating
HYNIX SEMICONDUCTOR: To Appeal U.S. Court Ruling on Rambus Lawsuit
P H I L I P P I N E S
LEGACY GROUP: Plan Holders Prepare to File Class Suit
PHILIPPINE LONG: Moody's Affirms 'Ba2' Foreign Currency Rating
S I N G A P O R E
DISTRI PLUS: Creditors' Proofs of Debt Due on March 23
CHARTERED SEMICONDUCTOR: Fitch Cuts Issuer Default Rating to 'BB-'
PROJECTOR ASIA: Court Enters Wind-Up Order
S O U T H A F R I C A
HARMONY GOLD: Fitch Downgrades Issuer Default Rating to 'BB'
T A I W A N
ASUSTEK COMPUTER: May Reorganize Operations, Possible Layoffs Loom
TAIWAN SEMICONDUCTOR: Fitch Affirms Issuer Default Rating
* Fitch Takes Negative Rating Actions on 3 Taiwanese PC Companies
- - - - -
=================
A U S T R A L I A
=================
BABCOCK & BROWN INFRA: Hires RBS & Dresdner to Sell PD Ports
------------------------------------------------------------
The Australian reported that Babcock & Brown Infrastructure Group
(BBI) has hired Royal Bank of Scotland and Dresdner Kleinwort to
sell UK ports operator PD Ports.
The joint mandate for the "potential sale" of the operator of six
UK ports had been granted, "in reaction to the unsolicited
interest" that Babcock & Brown Infrastructure had received, the
report cited a spokeswoman for the Australian infrastructure fund
company as saying.
The report says BBI has also shortlisted potential buyers of a
stake in its cornerstone asset, the Dalrymple Bay Coal Terminal in
Queensland State.
About Babcock & Brown Infrastructure
Based in Australian, Babcock & Brown Infrastructure Group (BBI)
specialist infrastructure company, which provides investors access
to a diversified portfolio of quality infrastructure assets.
BBI's investment focuses on acquiring, managing and operating
quality infrastructure assets in Australia and internationally.
BBI's portfolio is diversified across two asset class segments:
Energy Transmission and Distribution, and Transport
Infrastructure. The company comprises of Babcock & Brown
Infrastructure Trust (BBIT) and Babcock & Brown Infrastructure
Limited (BBIL). On July 12, 2007, Benelux Port Holdings S.A,
which is a 75% subsidiary of BBIL, acquired Manuport Group NV. On
August 2, 2007, Babcock & Brown Italian Port Holdings S.r.l, a
wholly owned subsidiary of BBIL, acquired an 80% interest in the
TRI (Estate) S.p.A group of companies. On October 11, 2007, BBI
Finnish Ports Oy, a wholly owned subsidiary of BBIL, acquired the
companies Rauma Stevedoring and Botnia Shipping.
* * *
As reported by the Troubled Company Reporter-Asia Pacific on
March 3, 2009, Moody's Investors Service confirmed Babcock & Brown
Infrastructure Group's B1 corporate family rating and B2 senior
secured rating. The outlook on the ratings is stable.
STORM FINANCIAL: ASIC Has Until Today to File Wind Up Application
-----------------------------------------------------------------
The Australian Securities and Investments Commission (ASIC) has
been given until today to file an application to wind up Storm
Financial Limited, the Age reports.
According to the report, Federal Court Justice John Logan at a
hearing in Brisbane on Wednesday gave ASIC until today to decide
whether to proceed with an application to wind up the company.
The Age says if ASIC choose to not proceed with its application,
the company's administrator will send out his report to creditors
on Monday and will convene the meeting of creditors on March 23.
The meeting, the report notes, would consider a proposal by Storm
founders Emmanuel and Julie Cassimatis for a Deed of Company
Arrangement (DOCA).
A spokeswoman for ASIC said the watchdog received the DOCA
proposal on Monday and was considering what action it might take
in the light of the proposal, the Age relates.
About Storm Financial
Storm Financial Limited -- http://www.stormfinancial.com.au/--
operates in the Australian wealth management industry that manages
over one trillion dollars in investment fund assets for over nine
million investors, distributed through investment administration
providers and financial advisers. These funds are invested
through different investment products and structures, including
superannuation, nonsuperannuation managed funds and life insurance
products. Non-superannuation managed funds, which form the
majority of Storm's products, total approximately 26.5% of total
investment fund assets in Australia, as of June 30, 2007.
* * *
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 14, 2009, Storm appointed Worrells as voluntary
administrators after the Commonwealth Bank of Australia Ltd (CBA)
demanded debt repayment of around AU$20 million.
Storm later closed its business and fired all of its 115 staff.
The closure, the company's administrators said, was due to the
significant reduction in Storm's income resulting in trading
losses being incurred "at a rate which the company could no longer
absorb."
SOUTH EASTERN: Investors Gets 10c in the Dollar Initial Payout
--------------------------------------------------------------
Investors in South Eastern Secured Investments (SESI) have
received an initial 10¢ in the dollar payout - about $18 million
all up - with the prospect of a bigger distribution just weeks
away, the Age reports.
The Age relates that the company's receivers, KordaMentha, expect
the imminent off-loading of a large chunk of the company's $148
million loan book could free up enough cash for a second
distribution within weeks.
According to the report, KordaMentha's Craig Shepard said he
expected the initial payout would be "the first of many
distributions we hope to make over the coming year".
Mr. Shepard, as cited by the report, said it was in the best
interests of investors to retain the securities rather than
offloading them in the current environment, which would
crystallize substantial losses.
As reported in the Troubled Company Reporter-Asia Pacific on
Feb. 16, 2009, the Age said SESI was placed in receivership by its
directors. Mark Korda and Craig Shepard of KordaMentha were
appointed receivers to the company.
The decision, the Age related, followed a large default from a
major debtor, looming write-downs on $17 million of collateralized
debt obligations (CDOs) and a spate of fund withdrawals after the
Federal Government's bank deposit guarantee.
SESI owes 3,000 investors more than $178 million, the Age
discloses.
South Eastern Secured Investments (SESI) is a Gippsland-based
rural finance company. SESI's headquarters are in Korumburra and
regional offices are located in Sale, Leongatha, Wonthaggi, Cowes
and Yarram. SESI was established in 1995 to lend to the local
market. It has issued 10 prospectuses, most recently in
September 2008.
=========
C H I N A
=========
NANJING STEEL: 2008 Net Profit Drops 88.08%
-------------------------------------------
Nanjing Iron & Steel United Co. Ltd has reported an 88.08 percent
decline its net profit to CNY123 million ($17.98 million) in 2008,
China Daily reports. The company's operating revenue rose 28.86
percent year-on-year to CNY28.35 billion, the report says.
According to China Daily, Nanjing attributed its loss to the
surging fuel costs, which overshadowed the price hike in its
products.
Losses at its three holding subsidiaries, the report notes,
totaled CNY50.29 million.
Nanjing, China-based Nanjing Iron & Steel United Co.,Ltd. --
http://www.600282.net/-- is primarily engaged in the smelting
and processing of ferrous metal and the production and sale of
steel products, coke and coke by-products. Its major iron and
steel products consist of steel plates, steel bars, steel bands,
billets and pig iron.
* * *
The company continues to carry Xinhua Far East China Ratings' BB+
issuer credit rating.
UBS AG: Names Henry Cai as Asia Investment Banking Chairman
-----------------------------------------------------------
UBS AG has appointed Henry Cai as chairman of its Asia investment
banking, Cathy Chan at Bloomberg News reports citing an e-mailed
memo from the company. Mr. Cai was previously the vice chairman
of Asia and chairman and head of China, investment banking.
According to Bloomberg News, UBS said Mr. Cai will continue his
leadership role in China and report to Alex Wilmot-Sitwell, co-
head of global investment banking.
The bank, the report relates, has also appointed David Chin and
Matthew Hanning as joint heads of investment banking in Asia.
Zhao Ju was also appointed chairman of China investment banking in
charge of domestic business, the report adds.
Bloomberg News, citing a company official who asked not to be
identified, relates the reshuffle comes after Rob Rankin, former
head of investment banking in Asia-Pacific, resigned.
About UBS AG
Based in Zurich, Switzerland, UBS AG (VTX:UBSN) --
http://www.ubs.com/-- is a global provider of financial services
for wealthy clients. UBS's financial businesses are organized on
a worldwide basis into three Business Groups and the Corporate
Center. Global Wealth Management & Business Banking consists of
three segments: Wealth Management International & Switzerland,
Wealth Management US and Business Banking Switzerland. The
Business Groups Investment Bank and Global Asset Management
constitute one segment each. The Industrial Holdings segment
holds all industrial operations controlled by the Group. Global
Asset Management provides investment products and services to
institutional investors and wholesale intermediaries around the
globe. The Investment Bank operates globally as a client-driven
investment banking and securities firm. The Industrial Holdings
segment comprises the non-financial businesses of UBS, including
the private equity business, which primarily invests UBS and
third-party funds in unlisted companies.
* * *
As reported in the Troubled Company Reporter-Europe on Mar. 9,
2009, Fitch Ratings downgraded UBS's Individual rating to 'D' from
'C' reflecting Fitch's concerns over the medium-term earnings
outlook for the bank amid the impact of ongoing reputational and
litigation issues on the stability of its key private banking and
wealth management franchise and persistently challenging market
conditions facing its investment banking franchise. The Rating
Watch Negative on the Individual rating has been removed.
WESTERN MINING: Net Profit Down 67.29% in 2008
----------------------------------------------
Western Mining Co Ltd said its net profit dropped 67.29 percent to
CNY570 million ($83.4 million) in 2008, China Daily reports citing
a company statement to the Shanghai Stock Exchange.
Revenue meanwhile rose 45 percent from a year earlier to CNY12.6
billion in 2008, the report says.
According to the report, the company attributed the sharp fall in
the company's profit to the collapse in nonferrous metal prices
due to the global financial crisis despite its trading business
contributing to higher revenues.
The company, as cited by China Daily, said the average price of
zinc concentrate, for example, fell 55 percent from a year
earlier, and prices of copper concentrate were down 10 percent.
Western Mining Co., Ltd. -- http://www.westmining.com-- is
principally engaged in the mining, smelting and trading of base
metals, including zinc, lead, copper and aluminum. The company
operates five ore mines, including one lead-zinc mine, one silver-
lead-zinc-copper mine and three copper mines. During the year
ended December 31, 2007, the company provides approximately 162000
metric tons of lead-zinc ore concentrate, 25000 metric tons of
lead ore concentrate, 110000 metric tons of aluminum ingot and
29000 metric tons of zinc ingot. As of December 31, 2007, the
company had eight wholly owned subsidiaries and 10 partially owned
subsidiaries.
================
H O N G K O N G
================
ARLO IV: Moody's Downgrades Ratings on Series 2006 Notes
--------------------------------------------------------
Moody's Investors Service announced it has downgraded its rating
of Series 2006 (Bichumi Global 1) notes issued by ARLO IV Ltd.
Moody's explained that the rating action taken is the result of
(i) the application of revised and updated key modeling parameter
assumptions that Moody's uses to rate and monitor ratings of
Corporate Synthetic CDOs and (ii) the deterioration in the credit
quality of the transaction's reference portfolio. The revisions
affect key parameters in Moody's model for rating Corporate
Synthetic CDOs: default probability, asset correlation, and other
credit indicators such as ratings reviews and outlooks. Moody's
announced the changes to these assumptions in a press release
published on January 15, 2009.
Moody's initially analyzed and continues to monitor this
transaction using primarily the methodology for Corporate
Synthetic CDOs as described in Moody's Special Report below:
-- Moody's Approach to Rating Corporate Collateralized Synthetic
Obligations (December 2008)
The rating action is:
ARLO IV Ltd:
(1) Series 2006 (Bichumi Global 1) US$200,000,000 Secured Limited
Recourse Credit-Linked Notes due 2016
-- Current Rating: Ba2
-- Prior Rating: A3
-- Prior Rating Date: 3 November 2008, downgraded to A3 from A1
CHAIN LIAISON: Court to Hear Wind-Up Petition on April 22
---------------------------------------------------------
A petition to have Chain Liaison Investment Limited's operations
wound up will be heard before the High Court of Hong Kong on
April 22, 2009, at 9:30 a.m.
Bank of China (Hong Kong) Limited filed the petition against the
company on February 16, 2009.
The Petitioner's solicitors are:
Tsang, Chan & Wong
Wong On House, 16th Floor
No. 71 Des Voeux Road Central
Hong Kong
CHEERTIME LIMITED: Court to Hear Wind-Up Petition on April 22
-------------------------------------------------------------
A petition to have Cheertime Limited's operations wound up will be
heard before the High Court of Hong Kong on April 22, 2009, at
9:30 a.m.
The petitioner's solicitors are:
Knight & Ho
Admiralty Centre, Tower 1
Room 904B, 9th Floor
No. 18 Harcourt Road
Admiralty
Hong Kong
CHI FU: Court to Hear Wind-Up Petition on April 8
-------------------------------------------------
A petition to have Chi Fu Construction (Group) Limited's
operations wound up will be heard before the High Court of
Hong Kong on April 8, 2009, at 9:30 a.m.
World Challenge Limited filed the petition against the company on
February 3, 2009.
The Petitioner's solicitors are:
S.K. Lam, Alfred Chan & Co.
Dina House, Room 202, 2nd Floor
Ruttonjee House, No. 11 Duddell Street
Central, Hong Kong
COMPUTER SUPPLIES: Court to Hear Wind-Up Petition on April 22
-------------------------------------------------------------
A petition to have Computer Supplies Express Limited's operations
wound up will be heard before the High Court of Hong Kong on
April 22, 2009, at 9:30 a.m.
Computer Supplies Express Limited filed the petition against the
company on February 12, 2009.
The Petitioner's solicitors are:
Knight & Ho
Admiralty Centre, Tower 1
Room 904B, 9th Floor
No. 18 Harcourt Road
Admiralty
Hong Kong
D & G CATERING: Court to Hear Wind-Up Petition on April 15
----------------------------------------------------------
A petition to have D & G Catering Services Limited's operations
wound up will be heard before the High Court of Hong Kong on
April 15, 2009, at 9:30 a.m.
Chu Wai Sin filed the petition against the company on February 9,
2009.
FRIENDFIELD LABEL ET AL: Court Enters Wind Order
------------------------------------------------
The High Court of Hong Kong entered an order to wind up the
operations of:
-- Friendfield Label Manufacturing Limited on Feb. 23, 2009;
and
-- Honour Sheen Limited on January 9, 2009.
The companies' liquidators are Stephen Briscoe and Wong Teck Meng.
GOLD LINE: Court to Hear Wind-Up Petition on March 25
-----------------------------------------------------
A petition to have Gold Line Textile Limited's operations wound up
will be heard before the High Court of Hong Kong on March 25,
2009, at 9:30 a.m.
Gold Crown Investments Limited filed the petition against the
company on January 21, 2009.
The Petitioner's solicitors are:
Simon Ho & Co.,
Nan Fung Tower
Room 1407, 14th Floor
173 Des Voeux Road Central
Hong Kong
GOLDEN PRIDE: Court to Hear Wind-Up Petition on April 22
-------------------------------------------------------------
A petition to have Golden Pride Industrial Limited's operations
wound up will be heard before the High Court of Hong Kong on
April 22, 2009, at 9:30 a.m.
Bank of China (Hong Kong) Limited filed the petition against the
company on February 12, 2009.
The Petitioner's solicitors are:
Arthur K.H. Chan & Co.
United Centre, Unit C1, 15th Floor
No. 95 Queensway, Hong Kong
GOLDEN THREAD: Court to Hear Wind-Up Petition on April 22
---------------------------------------------------------
A petition to have Golden Thread Co., Limited's operations wound
up will be heard before the High Court of Hong Kong on April 22,
2009, at 9:30 a.m.
Bank of China (Hong Kong) Limited filed the petition against the
company on February 12, 2009.
The Petitioner's solicitors are:
Arthur K.H. Chan & Co.
United Centre, Unit C1, 15th Floor
No. 95 Queensway, Hong Kong
HIP LEE: Court to Hear Wind-Up Petition on April 8
--------------------------------------------------
A petition to have Hip Lee Company Limited's operations wound up
will be heard before the High Court of Hong Kong on April 8, 2009,
at 9:30 a.m.
Chu Wai Sin filed the petition against the company on February 3,
2009.
The Petitioner's solicitors are:
S.K. Lam, Alfred Chan & Co.
Dina House, Room 202, 2nd Floor
Ruttonjee House, No. 11 Duddell Street
Central, Hong Kong
MEMORY DEVICES: Court to Hear Wind-Up Petition on April 8
---------------------------------------------------------
A petition to have Memory Devices Limited's operations wound up
will be heard before the High Court of Hong Kong on April 8, 2009,
at 9:30 a.m.
The Hong Kong and Shanghai Banking Corporation Limited filed the
petition against the company on February 4, 2009.
The Petitioner's solicitor is:
JSM
Prince's Building, 18th Floor
10 Chater Road, Central
Hong Kong
MORGAN STANLEY: S&P Cuts Rating on US$17.914 Mil. CDOs to 'D'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating to 'D', from
'CCC-/Watch Neg', on Series 2007-41 US$17.914 million
collateralized debt obligations due June 2013 issued by Morgan
Stanley ACES SPC. The rating was subsequently withdrawn at the
request of the issuer, following a cancellation of the notes.
The downgrade reflects the principal loss experienced by the
noteholders. The portfolio in the transaction had suffered
several credit events, which resulted in an aggregate loss that
exceeded the available subordination and reduced the funds
available to pay off the principal amount of the notes.
The rating action on the affected transaction is:
Rating lowered
Name Rating To Rating From
---- --------- -----------
Morgan Stanley ACES SPC D CCC-/Watch Neg
Series 2007-41
Rating withdrawn
Name Rating To Rating From
---- --------- -----------
Morgan Stanley ACES SPC NR D
Series 2007-41
OZ WING: Moody's Assigns Definitive Rating on Floating Rate Loan
----------------------------------------------------------------
Moody's Investors Service has assigned a definitive rating of A2
to the Secured Floating Rate Loan borrowed by OZ Wing Cayman
Limited. The rating is based on an unconditional and irrevocable
credit facility as well as an interest rate swap provided by the
Industrial Bank of Korea (rated A2/Prime-1/D+). Deutsche Bank AG,
Hong Kong Branch acts as the arranger of the deal.
The rating addresses the expected loss posed to investors by the
legal final maturity. In Moody's opinion, the structure allows
for timely payment of interest and the scheduled principal
repayments of the loan by the relevant loan payment date. The
rating on the loan will be linked to the rating of IBK.
The complete rating action is:
Borrower: OZ Wing Cayman Limited
-- Yen 4 Billion of Secured Floating Rate Loan due April 2012,
assigned A2, previously on February 26, 2009, assigned (P)A2
In assigning the rating, Moody's considered among other things,
these factors:
1. The unconditional and irrevocable credit facility provided by
IBK
2. The IRS with IBK as the swap counterparty
3. The legal and structural protections in the transaction
4. The adequate capacity of Deutsche Bank AG and its affiliate and
subsidiaries as key transaction parties
Transaction Summary
At closing, the borrower - a newly established, bankruptcy remote,
special purpose company incorporated in the Cayman Islands -
borrowed the Yen 4 billion secured floating rate loan and use the
loan proceeds to acquire a Yen-denominated variable rate bond
issued by the bond issuer, a limited liability special
securitization company incorporated in Korea. The bond issuer
then applied the proceeds to acquire an investor beneficial
certificate from the originator, Asiana Airlines, Inc.
On the closing date, Asiana Airlines, Inc., Tokyo branch
entrusted a portfolio of Yen-denominated future airline ticket
receivables and a reserve fund to a Japanese Trust in exchange for
an investor beneficial certificate, a second investor beneficial
certificate, and a seller beneficial certificate. Asiana Tokyo
then delivered the investor beneficial certificate to Asiana based
on an inter-branch memorandum. The payments to the investor
beneficial certificate and to the second investor beneficial
certificate rank pari passu and are senior to the seller
beneficial certificate. At closing, the second investor beneficial
certificate has a zero balance and receives no payment.
The loan pays monthly Yen-Libor linked interest, and its principal
is repaid according to a pre-defined monthly amortization
schedule.
Upon satisfaction of certain conditions precedent, the borrower
may increase the loan amount up to an additional Yen 6 billion by
the first loan payment date in April 2009. The additional loan
amount will ultimately be paid to Asiana in exchange for the
second investor beneficial certificate, whose balance will be
increased from zero at closing to an amount equal to the
additional loan amount.
The loan benefits from the unconditional and irrevocable credit
facility and the IRS provided by IBK. The credit facility is Yen-
denominated in an amount designed to cover the full amount of the
loan principal repayment, the fixed swap payments payable by the
borrower under the IRS, the scheduled senior fees and expenses,
credit facility fees, and a cushion to cover extraordinary
expenses. The commitment amount under the credit facility will
decrease by an amount equal to the actual loan principal
repayments, the swap payments, the senior fees and expenses, and
the credit facility fees. The IRS entered with IBK is to mitigate
the mismatch between the fixed commitment amount under the credit
facility and floating amount payment obligation under the loan.
IBK acts as the swap counterparty and the credit facility
provider. In the event that IBK's rating changes, the rating of
the loan will be affected.
PEACE MARK: Creditors' and Contributories' Meeting Set for April 1
------------------------------------------------------------------
The creditors and contributories of Peace Mark Limited will hold
their meeting on April 1, 2009, at 2:30 p.m. and 4:00 p.m.,
respectively, at The Auditorium of Duke of Windsor Social Service
Building, 15 Hennessy Road, in Wanchai, Hong Kong.
SRE GROUP: S&P Changes Long-Term Corporate Credit Rating to 'B'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it had revised its
long-term corporate credit rating on SRE Group Ltd. to 'B' from
'B+'. The outlook is negative. At the same time, Standard &
Poor's lowered the issue rating on the company's US$200 million
senior unsecured notes due 2013 to 'B-' from 'B'.
"The rating revision reflects the likelihood that SRE will
increase its financial support for its financially weak associate
China New Town Development Co. Ltd.," said Standard & Poor's
credit analyst Christopher Lee.
This follows SRE's announcement on March 5, 2009, that it will
subscribe to new shares issued by CNTD, which will effectively
increase its stake to 49.24% from 32.03% currently. The
subscription is subject to shareholders' approval and an exemption
for SRE to make a mandatory general offer. The total
consideration for the share subscription will be Singapore dollar
(S$) 34.7 million (or Hong Kong dollar (HK$) 177.2 million), of
which S$29.1 million will be settled in cash and outstanding loans
will offset the balance.
"We believe SRE's latest move is yet another sign that SRE has
control and significant influence over CNTD. As a result, S&P now
view SRE and CNTD as a group in S&P's analysis of SRE's
probability of default, and this is independent of the outcome of
the shareholders' vote and regulatory approval. S&P will fully
consolidate CNTD in S&P's calculation of SRE's credit ratios,"
said Mr. Lee.
In addition to steadily buying shares in CNTD throughout 2008, SRE
has also guaranteed and extended borrowings as well as acquired
land from the company. S&P noted previously that CNTD is
strategically important to SRE due to its access to large land
reserves.
Although CNTD repaid some of its debt in 2008, it remained highly
leveraged and its cash position materially weakened. The
company's land sales continued to be affected by sluggish demand,
with only one land site sold (and to SRE) since September 2008.
In 2008, CNTD recorded an unaudited operating loss of
RMB26.8 million before property revaluation and other non-
recurring items. Total unaudited borrowings amounted to Chinese
renminbi 1.69 billion. S&P estimates SRE's total borrowings at
about HK$6 billion, as at the end of 2008.
SUNNEL INVESTMENTS: To Pay Dividend on March 13
-----------------------------------------------
Sunnel Invetments Limited will pay dividend on March 13, 2009.
The company paid 1% to all the received claims.
The company's liquidators are:
Fung Wing Yuen
Pang Ho Choi Robin
Xiu Ping Commercial Building
1st Floor, 2nd Floor
104 Jervois Street, Sheung Wan
Hong Kong
TOP HARBOUR: Creditors and Contributories to Meet on March 23
-------------------------------------------------------------
The creditors and contributories of Top Harbour Industrial Limited
will hold their meeting on March 23, 2009, 3:00 p.m., at The Hong
Kong Club Building, 3A Chater Road, in Central, Hong Kong.
TUNG CHEUNG: Court to Hear Wind-Up Petition on April 8
------------------------------------------------------
A petition to have Tung Cheung Construction Limited's operations
wound up will be heard before the High Court of Hong Kong on
April 8, 2009, at 9:30 a.m.
World Challenge Limited filed the petition against the company on
February 3, 2009.
The Petitioner's solicitors are:
S.K. Lam, Alfred Chan & Co.
Dina House, Room 202, 2nd Floor
Ruttonjee House, No. 11 Duddell Street
Central, Hong Kong
UNI-V CO: Court to Hear Wind-Up Petition on April 15
----------------------------------------------------
A petition to have Uni-V Co., Limited's operations wound up will
be heard before the High Court of Hong Kong on April 15, 2009, at
9:30 a.m.
Xiong Yan filed the petition against the company on February 6,
2009.
The Petitioner's solicitors are:
George Y.C. Mok & Co.
Yuen Long Trade Centre, 5th Floor
99-109 Castle Peak Road
Yuen Long, New Territories
Hong Kong
Telephone: 2475-9111
=========
I N D I A
=========
GUJARAT ECO-TEXTILE: CRISIL Rates Rs.550MM Rupee Term Loan at BB-
-----------------------------------------------------------------
CRISIL has assigned its ratings of 'BB-/Negative/P4' to the
various bank facilities of Gujarat Eco-Textile Park Ltd (GETP).
Rs.550.0 Million Rupee Term Loan BB-/Negative (Assigned)
Rs.10.0 Million Bank Guarantee P4 (Assigned)
The rating is constrained by the low revenue visibility due to
significant delays in the commissioning of operations by the
textile units and funding risk associated with the project due to
non-receipt of State subsidy. These weaknesses are partially
mitigated by the provision of critical infrastructure for the
textile park including Common Effluent Treatment Plant (CETP) and
Captive Power Plant (CPP), which are at an advanced stage of
commissioning.
Outlook: Negative
CRISIL believes that GETP will complete commissioning of the 60
MLD (million litres per day) CETP and the 4.9 MW CPP by
March 2009. However, as on date, only 5 textile units out of 62
plots have been commissioned and additional 3 units are expected
to commence its operations by March 2009. The delays in the
commissioning of the textile units are likely to significantly
impact the revenues and cash accruals of the company. The rating
may be downgraded if there are any further delays in the setting
up of the textile units, thereby impacting the debt servicing
ability of the company. Conversely, the outlook may be revised to
'Stable' if there is a significant increase in the number of
textile units which have commenced operations leading to
generation of stable and sustainable cash accruals for the
company.
About Gujarat Eco Textile Park
GETP, incorporated in Oct 2005, is a Special Purpose Vehicle (SPV)
promoted by Luthra group of companies to set up Textile Park near
Surat. The SPV was set up under the Scheme for Integrated Textile
Park (SITP), supported by the Ministry of Textiles, Government of
India and was among the first textile parks to be approved under
SITP. The Park aims to provide common infrastructure facilities
like Common Effluent Treatment Plant (CETP) for treating the
hazardous and non-hazardous effluent discharged from the process
units and natural-gas based Captive Power Plant (CPP) to supply
power required by the textile units.
JAWAHARLAL: CRISIL Assigns 'BB' Rating on Rs.10.0MM Cash Credit
---------------------------------------------------------------
CRISIL has assigned its ratings of 'BB/Stable/P4' to the various
bank facilities of Jawaharlal & Sons (J&S).
Rs.10.0 Million Cash Credit BB/Stable (Assigned)
Rs.60.0 Million Letter of Credit P4 (Assigned)
The ratings reflect the Jawaharlal group's exposure to risks
relating to small scale of operations, the highly-fragmented
nature of the agriculture commodities (agri-commodities) market,
and unfavourable changes in government regulations. These
weaknesses are, however, partially offset by the benefits the
group derives from its established presence and strong
relationships with suppliers and customers in the agri-commodities
trading business, and from its proactive price and inventory risk
management initiatives.
The Jawaharlal group comprises two primary agri-commodities
trading firms — J&S and Prakash Overseas. The firms have common
partners, common management and similar business profiles. There
have also been sales and purchase transactions between the two
firms in the past. CRISIL has, therefore, taken a combined view
of the business and financial risk profiles of the two firms as
part of this rating exercise.
Outlook: Stable
CRISIL believes that the Jawaharlal group will sustain its credit
risk profile on the back of its established presence in the agro-
commodities trading business and proactive risk management. The
outlook may be revised to 'Positive' if sustained improvement in
the group's profitability leads to considerable improvement in its
net worth. Conversely, the outlook may be revised to 'Negative'
if the group's financial risk profile deteriorates substantially
owing to large withdrawals by partners or large, debt-funded
capital expenditure.
About the Group
The Jawaharlal group was set up in 1972, when J&S was registered;
Prakash Overseas was established in 2000. While J&S is an importer
cum domestic trading house, Prakash Overseas is an export house.
Both firms are focused primarily on trading of pulses, spices,
sugar and other agri-commodities. J&S has a pulse processing unit
near Indore with a capacity of 15,000 tonnes per annum (tpa). For
2007-08, (refers to financial year, April 1 to March 31), the
Jawaharlal group reported a profit after tax (PAT) of Rs.8.8
million on net sales of Rs.1373.8 million, as against a PAT of
Rs.9.9 million on net sales of Rs.1453.5 million for 2006-07.
PRAKASH OVERSEAS: CRISIL Rates Rs.50.0MM Standby Credit at 'BB'
---------------------------------------------------------------
CRISIL has assigned its ratings of 'BB/Stable/P4' to the various
bank facilities of Prakash Overseas.
Rs.50.0 Million Standby Line of Credit * BB/Stable (Assigned)
Rs.47.5 Million Bills Discounting P4 (Assigned)
Rs.77.5 Million Export Packing Credit P4 (Assigned)
* Includes ad-hoc limit of Rs.25 million.
The ratings reflect the Jawaharlal group's (Prakash Overseas is
part of this group) exposure to risks relating to small scale of
operations, the highly-fragmented nature of the agriculture
commodities (agri-commodities) market, and unfavourable changes in
government regulations. These weaknesses are, however, partially
offset by the benefits the group derives from its established
presence and strong relationships with suppliers and customers in
the agri-commodities trading business, and from its proactive
price and inventory risk management initiatives.
The Jawaharlal group comprises two primary agri-commodities
trading firms — Prakash Overseas and Jawaharlal & Sons (J&S). The
firms have common partners, common management and similar business
profiles. There have also been sales and purchase transactions
between the two firms in the past. CRISIL has, therefore, taken a
combined view of the business and financial risk profiles of the
two firms as part of this rating exercise.
Outlook: Stable
CRISIL believes that the Jawaharlal group will sustain its credit
risk profile on the back of its established presence in the agro-
commodities trading business and proactive risk management. The
outlook may be revised to 'Positive' if sustained improvement in
the group's profitability leads to considerable improvement in its
net worth. Conversely, the outlook may be revised to 'Negative'
if the group's financial risk profile deteriorates substantially
owing to large withdrawals by partners or large, debt-funded
capital expenditure.
About the Group
The Jawaharlal group was set up in 1972, when J&S was registered;
Prakash Overseas was established in 2000. While J&S is an importer
cum domestic trading house, Prakash Overseas is an export house.
Both firms are focused primarily on trading of pulses, spices,
sugar and other agri-commodities. J&S has a pulse processing unit
near Indore with a capacity of 15,000 tonnes per annum (tpa). For
2007-08, (refers to financial year, April 1 to March 31), the
Jawaharlal group reported a profit after tax (PAT) of Rs.8.8
million on net sales of Rs.1373.8 million, as against a PAT of
Rs.9.9 million on net sales of Rs.1453.5 million for 2006-07.
SATYAM COMPUTER: Class Action Suits May Cost Firm Bet. $440-840MM
-----------------------------------------------------------------
Times of India reports that the legal advisors of Spice Group has
estimated that Satyam Computer Services Limited's liabilities
arising from the dozen-odd class-action lawsuits in the US could
range between $440-$840 million.
Spice, as cited by the Times, said the estimate, which has been
given by its legal advisors, could discourage aggressive bidding
for Satyam, by lowering valuation.
"We have received a report from our legal advisors Gibson, Dunn &
Crutcher LLP and they have said that the liabilities could range
between $440-840 million. We have to factor this in," the Times
quoted Spice Group's BK Modi as saying.
According to the Times, huge liabilities arising out of lawsuits
in US could mean lower bids by suitors, that include Larsen and
Toubro, Hinduja group, Tech Mahindra and possibly IBM.
This theory, the Times relates, gains ground in the absence of a
fair assessment of Satyam's valuation as the restatement of
accounts would still take some more time and may not be available
before bidding.
The Times notes Spice Group plans to file expression of interest
(EOI) for Satyam on March 12, the last day stipulated for
registration for bidding.
Operating Statements
Meanwhile, Bloomberg News, citing the Business Standard, reports
Satyam Computer may offer operating statements for the quarters
ending December 2008 and March 2009 to potential bidders for the
company.
Bloomberg News relates the statements, which will include revenue
figures, client additions and operating margins, won't provide
details of the company's liabilities.
As reported in the Troubled Company Reporter-Asia Pacific, on
January 7, 2009, former Satyam Chairman Ramalinga Raju resigned
after saying he manipulated the company's accounts. Specifically,
Mr. Raju said that as of September 30, 2008, the company's balance
sheet carries:
(1) inflated (non existent) cash and bank
balances of 50.40 billion rupees (US$1.04 billion)
(as against 53.61 billion reflected in the books);
(2) an accrued interest of 3.76 billion rupees which
is non existent;
(3) an understated liability of 12.30 billion rupees
on account of funds arranged by Mr. Raju; and
(4) an overstated debtors position of
4.90 billion rupees (as against 26.51 billion
reflected in the books).
Mr. Raju's confession prompted investigations into the company by
different entities including Andhra Pradesh state police, the U.S.
Securities and Exchange Commission and the Securities and Exchange
Board of India. Several groups also considered filing class
action suits against the company.
A three-member board was subsequently created by the government
which appointed KPMG and Deloitte Touche Tohmatsu for re-
evaluation of the software company's books.
Mr. Raju was later found to have invented more than one quarter of
Satyam's workforce and used fictitious names to siphon Rs200
million (US$4.1 million) a month out of the company, The Financial
Times said in a report last month.
About Satyam
Headquartered in Secunderabad, India, Satyam Computer Services
Limited (BOM:500376) -- http://www.satyam.com/-- is a global
information technology (IT) services provider, offering a range of
services, including systems design, software development, system
integration and application maintenance. It offers a range of IT
services to its customers, including application development and
maintenance, consulting and enterprise business solutions,
extended engineering solutions and infrastructure management
services. Satyam BPO Limited (Satyam BPO), a majority-owned
subsidiary of the Company, is engaged in providing business
process outsourcing (BPO) services. Satyam operates in two
segments: IT services and BPO services. On January 4, 2008, the
Company acquired Nitor global Solutions Ltd. On April 4, 2008, it
acquired Bridge Strategy Group LLC. In November 2008, it
announced the take over of Motorola Inc.'s software development
centre in Malaysia.
SATYAM COMPUTER: U.N. to Terminate Direct Contract
--------------------------------------------------
The United Nations said it will terminate a direct contract with
Satyam Computer Services Limited, the Financial Express says
citing a media report.
According to the Financial Express, the Fox News in an online
report quoted a spokesman for the UN Secretariat as saying that
"one direct contract it (UN Secretariat) had with Satyam is to be
terminated".
The media report, as cited by the Financial Express, said the UN
has also asked an agency called the International Computer Centre,
which has served as an intermediary in hiring Satyam indirectly,
replace its contract with Satyam as soon as possible.
Earlier in January, the Financial Express recalls, the UN had
suspended Satyam from the Secretariat's vendor database and placed
all ongoing contracts with the company under review.
As reported in the Troubled Company Reporter-Asia Pacific, on
January 7, 2009, former Satyam Chairman Ramalinga Raju resigned
after saying he manipulated the company's accounts. Specifically,
Mr. Raju said that as of September 30, 2008, the company's balance
sheet carries:
(1) inflated (non existent) cash and bank
balances of 50.40 billion rupees (US$1.04 billion)
(as against 53.61 billion reflected in the books);
(2) an accrued interest of 3.76 billion rupees which
is non existent;
(3) an understated liability of 12.30 billion rupees
on account of funds arranged by Mr. Raju; and
(4) an overstated debtors position of
4.90 billion rupees (as against 26.51 billion
reflected in the books).
Mr. Raju's confession prompted investigations into the company by
different entities including Andhra Pradesh state police, the U.S.
Securities and Exchange Commission and the Securities and Exchange
Board of India. Several groups also considered filing class
action suits against the company.
A three-member board was subsequently created by the government
which appointed KPMG and Deloitte Touche Tohmatsu for re-
evaluation of the software company's books.
Mr. Raju was later found to have invented more than one quarter of
Satyam's workforce and used fictitious names to siphon Rs200
million (US$4.1 million) a month out of the company, The Financial
Times said in a report last month.
About Satyam
Headquartered in Secunderabad, India, Satyam Computer Services
Limited (BOM:500376) -- http://www.satyam.com/-- is a global
information technology (IT) services provider, offering a range of
services, including systems design, software development, system
integration and application maintenance. It offers a range of IT
services to its customers, including application development and
maintenance, consulting and enterprise business solutions,
extended engineering solutions and infrastructure management
services. Satyam BPO Limited (Satyam BPO), a majority-owned
subsidiary of the Company, is engaged in providing business
process outsourcing (BPO) services. Satyam operates in two
segments: IT services and BPO services. On January 4, 2008, the
Company acquired Nitor global Solutions Ltd. On April 4, 2008, it
acquired Bridge Strategy Group LLC. In November 2008, it
announced the take over of Motorola Inc.'s software development
centre in Malaysia.
SUPREME TEX: CARE Assigns 'CARE BB' Rating on LT Bank Facilities
----------------------------------------------------------------
CARE has assigned a 'CARE BB' (Double B) rating to the Long-term
Bank Facilities of Supreme Tex Mart Ltd. (STML). This rating is
applicable for facilities having tenure of over one year.
Facilities with this rating are considered to offer inadequate
safety for timely servicing of debt obligations and carry high
credit risk.
Also, CARE assigned 'PR4' (PR Four) rating to the Short-term Bank
Facilities of STML. This rating is applicable for facilities
having tenure up to one year. Facilities with this rating would
have inadequate capacity for timely payment of short-term
debt obligations and carry very high credit risk. Such facilities
are susceptible to default.
These ratings are assigned to both long-term and short-term
facilities aggregating to Rs.287.93 cr.
The ratings reflect the weak financial profile indicated by high
gearing levels as a result of debt-funded expansion, contingent
liabilities towards derivative losses and relatively small size of
operations. Further, the ratings are constrained by the
increasingly challenging operating environment for the textile
players given the slowdown in the demand, high volatility in the
raw material prices and the exposure to foreign currency
fluctuations. The constraints are however partially offset due to
STML's integrated operations across the value chain from spinning
to knitting and garmenting and also diversification into domestic
as well as the geographically-scattered export markets.
Going forward, the company's ability to sustain revenue growth and
profitability and its ability to effectively manage debt servicing
requirements in future would remain the key rating sensitivities.
STML is an integrated textile manufacturer belonging to the
Supreme Group offering comprehensive range of yarns, fabrics and
garments. The Group was set up in 1982 by Mr. Ram Lal Gupta
(promoter) at Ludhiana, Punjab. The flagship company of the group
Supreme Tex Mart Limited (formerly Supreme Yarns Limited and
Supreme Woollen Mills Limited) was incorporated in 1988 as a joint
sector company with Punjab State Industrial Development
Corporation Ltd (PSIDC). It went public in 1996. The name of the
company was changed from Supreme Yarns Ltd. to the present name
i.e. Supreme Tex Mart Ltd. on October 8, 2007.
STML has five units viz. Spinning Unit 1 (33,216 spindles),
Spinning Unit 2 (12,432 spindles and 720 rotors), Dyeing Unit
(29.5 tons per day (TPD)), Garments Unit (30,000 pieces per day)
and Hand Knitting Yarn Unit (4 TPD) as on Nov 30, 2008.
As a part of the debt-funded expansion plan during FY08 and FY09,
the production capacities are brought to the aforesaid levels.
Further expansion in Spinning Unit 2 is under implementation. The
estimated cost of project is Rs.237 cr. to be funded with a
Debt:Equity ratio of 2.42:1. The financial closure has been
achieved. The company has incurred an expenditure of Rs.201 cr
till November 2008 and the project is likely to be completed by
March 2009.
The net sales of STML experienced 39% increase in FY08 and before
that it had been increasing marginally from FY05 to FY08. The
total income also increased in line with the net sales over the
years. Consequent to increase in sales, PBILDT has increased over
the past years at a Compounded Annual Growth Rate (CAGR) of 27%.
The operating profit showed increasing trend in line with the
PBILDT.
However, it dipped slightly in FY08 as the cost of production
increased due to increase in raw material prices. Interest
expenses have increased significantly over the past years from
FY05 to FY08 on account of long-term debt taken for fresh capacity
additions under expansion program and increase in working-capital
borrowings. PAT was low in FY06 due to provision for deferred tax
liability. The same has improved in FY07 and remained stagnant in
FY08.
The financial risk profile has deteriorated in FY08 as reflected
by increased overall gearing, total debt to Net Cash Accrual (NCA)
ratio and diluted interest cover.
STML has filed a suit against ICICI Bank Ltd. in the Court of
Ludhiana accusing it to have 'induced' STML for entering into
derivative contracts and The Honorable Court had stayed the matter
pending the final decision. The company has worked out a net loss
of Rs.15.25 cr on mark-to-market basis. The aforesaid loss has
been reflected as a part of contingent liabilities in the Balance
Sheet as on March 31, 2008. In case the settlement of court is
against STML, it will have to convert the amount of Rs.15.25 cr as
actual losses in its books.
VIRDEV INTERMEDIATES: CARE Puts 'CARE BB' on Long-Term Bank Loans
-----------------------------------------------------------------
CARE assigned 'CARE BB' (Double B) rating to the long-term bank
loans / facilities and 'PR4' (PR Four) rating to the short-term
bank loans / facilities of Virdev Intermediates Pvt. Ltd. (VIPL)
for an aggregate amount of Rs.19.50 crore, including term loan of
Rs.12 crore, sanctioned fund-based working-capital limit of
Rs.3.50 crore and non-fund based limit of Rs.4 crore.
Facilities with BB rating are considered to offer inadequate
safety for timely servicing of debt obligations. Such facilities
carry high credit risk. Facilities with PR4 rating would have
inadequate capacity for timely payment of short-term debt
obligations and carry very high credit risk. Such facilities are
susceptible to default. CARE assigns '+' or '-' signs to be shown
after the assigned rating (wherever necessary) to indicate the
relative position within the band covered by the rating symbol.
The ratings take into account long standing track record of the
company and promoters, good clientele, moderate financial risk
profile and Schedule-M complied manufacturing facility of VIPL.
The ratings were, however, constrained by negative sales growth in
last couple of years, high level of working capital utilization
coupled with instances of LC devolvement, delay in the project
implementation, exchange rate and interest rate fluctuation in
addition to threat from Chinese import and moderate delay in the
payment to raw material suppliers.
About VIPL
VIPL was incorporated in 1994 and commenced its commercial
production in 1995. Promoted by Shri Dharmesh Shah, Shri Narendra
Jariwala and Shri Sanjay Solanki, VIPL has Schedule – M compliant
manufacturing capacity of 96 tonne per annum for bulk drug,
located at about 20 kms away from Surat at Village Palsana.
VIPL manufactures APIs and intermediates of generic drugs for
Indian pharmaceutical companies which are primarily meant for
unregulated markets. VIPL's products cater to the Osteoporosis,
Inflammatory, Arthritic, Hypertension and Bacterial related
therapeutic segments.
VIPL is expanding its API manufacturing capacity, R&D & QC
laboratory, godown capacity, office block and allied
infrastructure at its Palsana plant in order to cater to the USFDA
approved API requirement. Total project cost of Rs.20.40 crore is
proposed to be financed by way of unsecured loans of Rs.1 crore,
term loans of Rs.12 crore and rest by internal accruals. The
company has already expended Rs.9.39 crore as on November 15, 2008
for the project.
For FY08, VIPL reported a profit after tax (PAT) of Rs.0.88 crore
on total income of Rs.24.37 crore as against a PAT of Rs.0.72
crore on total income of Rs.27.03 crore for FY07. During H1FY09,
VIPL reported profit before tax of Rs.0.62 crore on total income
of Rs.12.29 crore.
VISION SPONGE: CRISIL Puts 'BB+' Rating on Various Bank Facilities
------------------------------------------------------------------
CRISIL has assigned its ratings of 'BB+/Stable/P4' to the various
bank facilities of Vision Sponge Iron Pvt Ltd (VSIPL).
Rs.220 Million Cash Credit Limits * BB+/Stable (Assigned)
Rs.780 Million Proposed Term Loan BB+/Stable (Assigned)
Rs.50 Million Letter of Credit/Bank P4 (Assigned)
Guarantee ^
* Includes Proposed facility of Rs.209 millio.
^ Includes Proposed facility of Rs.46 million.
The ratings reflect the company's aggressive, debt-funded capital
expenditure (capex) plans, and exposure to fluctuations in raw
material prices. These weaknesses are partially offset by VSIPL's
stable operating margins, resulting from backward linkages for raw
material and healthy growth in topline.
Outlook: Stable
CRISIL expects VSIPL to maintain its business profile backed by
improving operational efficiency. However, the company's credit
risk profile may weaken over the medium term on account of its
large debt-funded capex plans. The outlook may be revised to
'Positive' if its gearing improves as a result of equity infusion
for the capex, or better-than-expected profitability. The outlook
may, however, be revised to 'Negative' if VSIPL takes on more debt
than expected to fund its capex, leading to a further
deterioration in debt protection measures.
About VSIPL
VSIPL was incorporated in March 2002 by its promoters,
Mr. Shri Gopal Jhunjhunwala and Mr. Sandeep Jhunjhunwala. The
company manufactures sponge iron, a raw material used for
manufacturing steel bars. The company's integrated steel plant in
Purulia District, West Bengal, has capacity to produce 60,000
tonnes per annum of sponge iron.
For 2007-08, VSIPL reported a net profit of Rs. 26.9 million on
sales of Rs.440.4 million, as against a net profit of Rs.8.6
million and sales of Rs.157.3 million in the previous year.
* INDIA: Textiles & Garments Sector Needs Fiscal Incentives
-----------------------------------------------------------
In a bid to revive textiles and garment industry, The Associated
Chambers of Commerce and Industry of India (ASSOCHAM) has urged
the government to maximize fiscal policy support as also ensure
interest subvention scheme so that it gradually comes out of its
current recessionary plight.
The weakening rupee against dollar normally should have given some
relief to textile exporters but due to persistent long power cuts
and sluggish market conditions, textiles and garments continued to
be extremely stressed sectors, said the ASSOCHAM.
Therefore, the government needs to further extend and maximize its
fiscal incentives to textiles and garments, especially to fresh
investments since investors are still keen to diversify their
operations in textiles and garments as these will find markets
even if the slowdown continues for longer in economies of scale.
"From the sunrise sector, textile sector is at verge of again
slipping back to stagnant phase. Thus, some more tax concessions
should still be extended to textiles and garments so that India is
able to retain its competitiveness, especially at time when these
industries are required to keep pace with stiff competition,
emerging from India's neighbour.
Mr. Jindal said, "while the Eleventh Five Year Plan, targets 22
per cent growth in Indian textile exports, the growth rate has
decelerated from 16.6 per cent in 2005-06 to less than 12 per cent
now. The orders for textiles and garments have substantially
fallen especially from US, European Union and even ASEAN as their
economies are under severe financial crisis."
According to ASSOCHAM, India needs to change the direction of its
exports from the US and Europe to regions in Middle East, Africa
and entire Gulf nations. Only 12.5 per cent and nine per cent of
textile exports are directed towards Africa and Middle East
respectively and these can be substantially increased provided the
quality of Indian textiles and garments are subjected to further
improvement which could be possible with certain more incentives.
Huge potential lies ahead for strategic expansion of the export
market, but unstable economic conditions at the short term period
in African regions calls for special fiscal and monetary
incentives for the new venture for a specified time period.
The growth rate in production of cloth by the mill sector
decelerated from four per cent in 2006-07(April-March) to one per
cent in the same period of FY'08. The cloth production by the
power loom sector also witness slowdown from seven per cent to
five per cent for the same periods. Similarly, growth of cloth
production by handloom sector also witness marginal slip from
seven per cent in 2006-07 (April-March) to six per cent in 2007-08
(April-March). The cascading effect is that the textile mills are
likely to cut production further by 20-25 per cent, while some
units have been closed down with millions getting unemployed.
Mr. Jindal pointed out that the second largest employment
generating sector next to agriculture that accounts for 21 per
cent of the total employment generation in the economy is expected
to generate 17.37 million new direct and indirect jobs during the
11th five year period. On the contrast, the sector is already
trailing behind and the crisis in turn have added the pressure as
almost 1.5 million people across the textile verticals have lost
job since last year, few more millions are going to join the
group.
ASSOCHAM demands that the government should draft a 5 year
targeted agenda and work jointly with industry and labour unions
to refine the stringent labour laws in a phased approach towards
the integrated development of industry and work force.
Vocational training institutes should be developed in the rural
and sub-urban areas by the government to provide the working
knowledge of textile designing, weaving and spinning through short
term courses, as the sector witness lack of skilled manpower,
suggests ASSOCHAM.
The high cost of credit is forcing textile companies to postpone
their expansion and modernization plans as they are unable to pass
the cost to the customers, said ASSOCHAM.
ASSOCHAM also suggests that interest subvention scheme for the
textile sector needs to be continued up to March 2010 without any
changes. As per the scheme, the exporters are compensated for
reduced profits.
The Asian counterparts including China and Pakistan are offering
fiscal and monetary assistance to the sector, like China has
increased the rates of VAT refund from 9 per cent to 14 per cent
for synthetic textile products, ASSOCHAM, feels that the Indian
government also needs to provide R&D, fiscal and monetary
assistance to the sector.
The textile units across states of Maharashtra, Andhra Pradesh,
Tamil Nadu and Kerela are facing power supply crisis with
interrupted and low quality electricity with costlier supply.
ASSOCHAM suggests state governments to support the sector by
providing power at subsidized rates.
=================
I N D O N E S I A
=================
BANK DANAMON: EKN Files IDR1 Trillion Lawsuit
---------------------------------------------
PT Esa Kertas Nusantara (EKN) has filed a lawsuit against Bank
Danamon, seeking IDR1 trillion (US$84 million) in damages, Jakarta
Post reports.
According to the report, EKN accused Bank Danamon for selling
"misleading derivative products".
Citing Chengwy Karlam, EKN’s financial advisor representative, the
report relates that Danamon had allegedly sold the products aimed
at speculative gains rather than for hedging purposes.
"The losses can be more than IDR1 trillion as some contracts have
not yet come to maturity," Mr. Karlam was quoted by The Post as
saying.
In response to the allegation, Danamon Vice President Director
Joseph Luhukay told The Post that the bank is in the middle of
restructuring it (the contract).
However, Mr. Chengwy claimed that the restructuring scheme offered
by the bank was considered unclear, the report noted.
The Post, citing Mr. Chengwy, recounts that EKN started buying
Danamon derivative products in 2007, and since then Danamon
continued to offer other similar products, but in different forms.
About Bank Danamon
Headquartered in Jakarta, Indonesia, PT Bank Danamon Indonesia
Tbk provides a range of products and services, including
Consumer Banking, Small to Medium-Sized Enterprise and
Commercial, Trade Finance, Treasury Product, Cash Management,
Other Services, Financial Planning and e-Banking. Danamon
Syariah is the Bank's business unit that provides its customers
with syariah banking products and services. The bank also
operates Danamon Simpan Pinjam, which caters to micro banking
customers. DSP is divided into two groups: DSP to serve and
help enterprises in micro and small-scale banking, and DSP for
individual customers with fixed income. Bank Danamon is
supported by 86 domestic branch offices, 325 domestic supporting
branch offices, 25 domestic cash office, 739 supporting branches
for DSP, six personal banking branch offices, 10 syariah branch
offices and one overseas branch.
* * *
As reported by the Troubled Company Reporter - Asia Pacific on
July 28, 2008, Fitch Ratings affirmed the ratings of PT Bank
Danamon Indonesia Tbk as: Long-term foreign currency Issuer
Default Rating at 'BB' with a Stable Outlook, Short-term foreign
currency IDR at 'B', National Long-term Rating at 'AA(idn)' with
a Stable Outlook, Individual Rating at 'C/D', Support Rating at
'3', Support Rating Floor at 'BB-'.
PRIMA INREKSA: Faces Litigation Proceedings from CV Cisarua & BNI
----------------------------------------------------------------
Bank Negara Indonesia (BNI) and CV Cisarua have filed bankruptcy
litigation against PT Prima Inreksa Industries (PII), after it
failed to pay its debts worth more than US$37 million, Jakarta
Post reports.
CV Cisarua decided to file legal steps against the company as it
has observed that PII is still operating and employing about 5,000
workers but still claims that it doesn’t have the money to pay
them, The Post cited Yakobus Eko Adrianto, the lawyer of CV
Cisarua as saying.
The litigation was scheduled to begin on Tuesday, but due to the
absence of a representative from PII, it was adjourned until next
week, the report relates.
"Should they fail to appear in next week’s trial, we will still
proceed with the case. [The court] will proceed [in absentia],"
Atty. Yakobus was quoted by The Post as saying.
PII has IDR2 billion (US$168,000) debts to Cisarua, and a
US$37.25 million outstanding debt to BNI, the report notes.
The Post, citing data from the Industry Ministry, recounts that
last year, PII also had debts amounting to US$8 million to its
suppliers.
PII was one of the six Indonesian companies manufacturing sport
shoes for Adidas Group before the partnership ended last year, The
Post recounts.
=========
J A P A N
=========
EXCELLENT COLLABORATION: S&P Junks Ratings on Class C & D of Notes
------------------------------------------------------------------
Standard & Poor's Ratings Services downgraded three classes of
Excellent Collaboration Tokutei Mokuteki Kaisha's series 1 notes,
due in July 2010. The ratings were removed from CreditWatch,
where they had been placed with negative implications on Jan. 13,
2009. At the same time, Standard & Poor's affirmed its 'AAA'
rating on the class A notes.
The downgrades reflect Standard & Poor's views on the accelerating
deterioration of the transaction's available credit support due to
defaults of privately placed bonds issued by small and midsize
enterprise obligors in the pool, information obtained during
interviews with Mizuho Bank Ltd., the administrative agent of the
transaction, as well as the possible negative impact on the
transaction of the Japanese recession.
Standard & Poor's expects Japanese SMEs to face continued
difficulties amid challenging conditions in the Japanese economy
and financial markets for the next 12 months. Based on S&P's
expectations of economic conditions, as well as information
obtained through interviews with Mizuho Bank, Standard & Poor's
believes that the performance of the underlying asset pool for
this transaction will likely see similar developments to the asset
pool for the CBO All Japan transaction. The cumulative default
rate of the CBO All Japan transaction now stands at about 12.7% of
the initial outstanding balance, with 35 months of seasoning
having passed since closing. As bullet redemption of privately
placed bonds issued by SME obligors is due this month, the
ultimate cumulative default amount is expected to further
increase, leading to a rise in the cumulative default rate.
The cumulative default amount of the Excellent Collaboration
transaction as of Feb. 28, 2009, stood at JPY980 million,
accounting for 5.7% of the initial outstanding balance. Assuming
that excess spread is equivalent to 2.8% of the initial principal
balance, in addition to 0.3% of the initial cash deposit, the
remaining credit support available for the 13 months until the
redemption of the underlying bonds is 68.7% for the class A notes,
8.7% for the class B notes, 5.8% for the class C notes, and 2.9%
for the class D notes. As this transaction is backed by a pool of
privately placed bonds issued by 263 SME obligors, a default by
one SME obligor has a relatively large impact on the transaction
compared to a more diversified pool, such as that for the CBO All
Japan transaction. Conversely, an improvement in the
creditworthiness of SME obligors in the pool would limit the
negative impact on the transaction. The ultimate loss amount of
this transaction will be influenced by Japanese financial market
conditions relating to the underlying SME bonds when they are
redeemed in March 2010, as well as the recovery amount from the
defaulted SME bonds.
Ratings Lowered, Removed From Creditwatch Negative
Excellent Collaboration Tokutei Mokuteki Kaisha
JPY16.39 billion fixed-rate series 1 class A to D notes issued
on March 23, 2007
Legal Final
Class To From Initial Issue Amount Maturity
----- -- ---- --------------------
-----------
B B A/Watch Neg JPY10.40 bil. July 2010
C CCC BB/Watch Neg JPY0.50 bil. July 2010
D CCC B/Watch Neg JPY0.50 bil. July 2010
Rating Affirmed
Class Rating Initial Issue Amount Legal Final Maturity
----- ------ -------------------- --------------------
A AAA JPY4.99 bil. April 2010
HARAJUKU HOLDING: S&P Puts 'BB' Note Rating on Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BBB' rating on JLOC
XXVIII's class D senior trust certificates, as well as its 'BB'
rating on Harajuku Holding TMK's Series 4-2 floating-rate
specified bonds, on CreditWatch with negative implications. At
the same time, Standard & Poor's affirmed its ratings on the class
A to C senior trust certificates.
The CreditWatch placements reflect slower-than-expected
liquidation of the real estate properties that ultimately secure
the aforementioned senior trust certificates and specified bonds,
as well as increased uncertainty regarding liquidation prices.
The affirmations, meanwhile, are based on expected principal
repayments to be achieved via sales of underlying real estate
properties.
Nakano Holding TMK's senior specified bonds, which had backed the
senior trust certificates, and Nakano Holding TMK's Series 3-2
floating-rate mezzanine specified bonds, were repaid in July 2006.
The aggregate amount of repaid specified bonds accounts for about
49% of the initial issue amount.
Standard & Poor's intends to review the ratings on the class D
senior trust certificates and Harajuku Holding TMK's Series 4-2
specified bonds, including considering prospects for repayment,
based on various information provided by the asset manager,
including the performance of the specified bonds and sales reports
relating to the underlying real estate.
This transaction was originally secured by 567 real estate
properties. Morgan Stanley Japan Securities Co. Ltd. served as
the arranger for this transaction.
Ratings Placed On Creditwatch Negative
JLOC XXVIII Senior Trust Certificates
JPY88.9 billion trust certificates due October 2012
Class Rating Original Issue Amount
----- ------ ---------------------
D BBB/Watch Neg JPY7.2 bil.
Harajuku Holding TMK
Series 4-2 floating-rate specified bonds due 2012
Rating Original Issue Amount
------ ---------------------
BB/Watch Neg JPY3.6 bil.
Ratings Affirmed
JLOC XXVIII Senior Trust Certificates
JPY88.9 billion trust certificates due Oct 2012
Class Rating Original Issue Amount
----- ------ ---------------------
A AAA JPY62.8 bil.
B AAA JPY10.1 bil.
C AA- JPY8.8 bil.
PACIFIC HOLDINGS: Bankruptcy Filing Prompts JCR's "D" Ratings
-------------------------------------------------------------
Japan Credit Rating Agency, Ltd. (JCR) has downgraded the ratings
on senior debts, bonds and shelf registration of Pacific Holdings,
Inc., from #CCC/Negative to D, from #CCC/Negative to D and from
#CCC/Negative to D.
Senior debts: D
Issues Amount(bn) Issue Date Due Date Coupon Rating
------ --------- ---------- -------- ------ ------
bonds no. 3 JPY10 03/15/2007 03/15/2012 2.94% D
bonds no. 4 JPY7 02/27/2008 02/26/2010 3.43% D
Shelf Registration: preliminary D
Maximum: JPY30 billion
Valid: two years effective from March 26, 2007
Pacific Holdings, Inc., resolved the filing of a petition for the
civil rehabilitation proceedings at the board of directors'
meeting held today and filed it with the Tokyo District Court and
it was accepted by the Court. JCR has downgraded its ratings on
the company to D.
NEW CITY: Daiwa House and DBJ Among Bidders, Says Bloomberg
-----------------------------------------------------------
Daiwa House Industry Co. and Development Bank of Japan (DBJ) plan
to jointly bid for failed New City Residence Investment Corp.,
Bloomberg News reports citing three people familiar with the
matter, who declined to be identified because the information has
not been made public.
Oaktree Capital Management LP, a U.S. private-equity fund, is also
among of the bidders for New City, which filed for bankruptcy on
Oct. 9 with JPY112.4 billion of debt, the news agency adds.
According to the report, the bids may exceed JPY110 billion.
"While New City struggled to finance their business, their assets
remain quite attractive, so the outcome could potentially lead to
a revival in the Japanese REIT market," Bloomberg News quoted
Junko Miyagawa, a senior analyst at Shinsei Securities Co. in
Tokyo as saying.
New City extended to April 7, the deadline to submit its
restructuring plan, which includes announcing a successful bidder,
because it needed more time to undertake due diligence, the report
cited the firm as saying in a statement.
Nikko Citigroup Ltd. is managing the sale, the report notes.
New City Residence Investment Corporation is a Japanese real
estate investment trust that invests in residential properties.
* * *
As reported by the Troubled Company Reporter-Asia Pacific on
Feb. 05, 2009, Moody's Investors' Service downgraded the
issuer and senior unsecured long-term debt ratings of New City
Residence Investment Corporation to Caa1 from B1 (under review for
possible further downgrade). The outlook was stable.
RESONA HOLDINGS: To Pay Back JPY175.2 Bln In Public Funds
---------------------------------------------------------
Reuters reports that Resona Holdings Inc said it will return
JPY175.2 billion (US$1.8 billion) of bailout money by buying back
preferred shares from the government.
According to Reuters, the bank said it will return JPY175.2
billion (US$1.8 billion) worth of bailout money by buying back up
to JPY200 billion worth of its preferred shares. The buyback,
Reuters notes, will take place tomorrow, March 13.
The Troubled Company Reporter-Asia Pacific, citing Japan Today,
reported on March 4, 2009, that Resona Holdings said it will repay
perpetual subordinated loans worth JPY45 billion to the government
by March 31.
Japan Today relates that the repayments will reduce Resona's
outstanding balance of such funds to JPY2,085.2 billion.
The bank, effectively nationalized after it nearly collapsed under
a mountain of bad loans, received JPY3 trillion ($30 billion) of
taxpayer money in its 2003 bailout and earlier recapitalizations
of Japanese banks, Reuters recalls.
About Resona Holdings
Japan-based Resona Holdings Inc. -- http://www.resona-gr.co.jp/--
is a holding company. Through its subsidiaries and associated
companies, the Company is engaged in general banking, trust
operation, credit card and financial services. The company is
comprised of 15 domestic subsidiaries and 21 overseas
subsidiaries, as well as two associated companies. It has
operations in Japan, the United Kingdom, Indonesia, Thailand and
the Cayman Islands.
REX HOLDINGS: To Sell Supermarket Chain Seijo Ishii
----------------------------------------------------
Rex Holdings Company Limited plans to sell its wholly owned
supermarket chain Seijo Ishii Co., Japan Today reports citing
sources familiar with the matter.
Japan Today, citing sources, relates that the company is sounding
out Itochu Corp., Marubeni Corp. and other trading houses as
potential buyers
According to the report, major supermarket chains are also showing
interest in buying Seijo Ishii, a time-honored retailer known for
its wide lineup of imported foods and its network of about 60
retail outlets in Tokyo, Osaka, Nagoya and other urban locations.
Rex Holdings Company Limited formerly known as Reins International
Incorporated operates direct and franchised restaurants in Japan.
The Group is also involved in the construction of direct-run
stores and franchise store works. The operations are carried out
through the following divisions: Sale from Direct -run stores;
Franchise revenues; Franchise store works; FC Distribution;
Convenience Store; Super-market and Other.
SHINSEI BANK: Moody's Changes Outlook on 'D+' Rating to Negative
----------------------------------------------------------------
Moody's Investors Service has revised its outlook to negative from
stable for the D+ bank financial strength rating, the Baa3
baseline credit assessment, the A3/P-2 long- and short-term
deposit ratings and A3 senior unsecured debt rating, the Baa1
senior and junior subordinated debt ratings, and the Baa3
preferred securities rating for Shinsei Bank, Limited.
The outlook change reflects Moody's growing concern that Shinsei
Bank's overall revenue and profitability will remain under
pressure because of (1) weak revenue from its Institutional Group
due to increased challenges for the wholesale investment banking
business, and (2) an increase in credit costs resulting from
weakness in the domestic and global economies. The change also
reflects Moody's view that the worsening economic climate may
negatively affect the revenue contributions from the retail and
consumer finance businesses as well, which are positioned as key
revenue generators to its targeted earnings.
Shinsei Bank reported a consolidated net loss of JPY32.1 billion
for the nine months ended December 31, 2008. It also lowered its
FYE3/2009 earnings forecast of consolidated net profit of JPY12
billion to a consolidated net loss of JPY48 billion. This
downward revision is attributable mainly to 1) a sharp decline in
revenue from its Institutional Group, 2) another markdown and the
provision of additional reserves for European asset-backed
investments/securities and other European investments, 3) an
increase in credit costs, and 4) restructuring costs.
The performance of Shinsei Bank's retail and consumer finance
businesses has been relatively solid to date, but in light of the
worsening domestic environment, Moody's is taking a cautious view
on the bank's revenues and earnings prospects from this line of
business.
Under the leadership of the new CEO, Shinsei Bank is expected to
implement a number of initiatives to cope with the current
difficulties and stabilize earnings, including further
strengthening of the retail banking and consumer finance
businesses. In the institutional banking businesses, the bank is
refocusing on basic banking, real estate finance, and principal
transactions in the domestic market.
Further negative pressure on the ratings could emerge should
revenues and profitability continue to deteriorate as a result of
1) earnings deterioration in its retail and consumer finance
business, 2) an unexpected rise in credit expenses in its domestic
loan portfolio, or 3) further inflation of sizeable losses
relating to overseas securitization products.
The rating outlooks may return to stable when Shinsei Bank would
demonstrate its ability to generate stable revenue streams from
such emphasized line of business.
Moody's last rating action with respect to Shinsei Bank was taken
on November 6, 2008, when the bank's ratings were downgraded.
Shinsei Bank, Limited, headquartered in Tokyo, had consolidated
total assets of JPY12.2 trillion as of December 31, 2008.
TOHOKU MISAWA: JCR Affirms 'BB+' Senior Debts Rating
----------------------------------------------------
Japan Credit Rating Agency, Ltd. (JCR) has affirmed the BB+ rating
on senior debts of the issuer, revising the rating outlook from
Stable to Negative.
Tohoku Misawa Homes Co., Ltd. is a consolidated subsidiary of
Misawa Homes Co., Ltd. The company extended its sales territory
to the whole Tohoku area after mergers with Misawa Homes Kitanihon
in October 2007 and Misawa Homes Fukushima in October 2008. These
mergers were carried out as a strategic measure based on the
medium management plan of the Misawa Homes Group and the measure
intensified a unity as the group. The company strengthens its
sales structure in Miyagi and Fukushima Prefecture where there is
larger housing demand relatively in the Tohoku area and also takes
several steps including centralization of its headquarters
functions and trimming its administration units in terms of staff
and costs. However, its earnings have been weak and JCR considers
that such mergers do not have a positive effect on its financial
performance at the moment. Its financial structure has been
deteriorating. JCR considers it necessary for the company to
increase its net assets by accumulating retained earnings and cut
interest bearing liabilities by promoting sales of houses and lots
for sale.
* Fitch Takes Negative Rating Actions on Six Technology Companies
-----------------------------------------------------------------
Further to the release issued earlier this week on the back of an
Asia-Pacific Technology sector-wide review, Fitch Ratings has
taken negative rating actions on six major Japanese Technology
Companies -- Panasonic Corporation, Sharp Corporation, Hitachi,
Ltd., Sony Corporation, NEC Corporation and Toshiba Corporation.
These actions include one to three notch downgrades of the Long-
term Issuer Default ratings for all six companies, an Outlook
revision to Negative in the case of NEC, and either maintaining or
placing the remaining five companies on Rating Watch Negative.
Details of the revised ratings for the six Japanese entities and
rationale for the same are given below, together with a complete
list of rating actions which Fitch has simultaneously taken on 17
rated technology names across Asia-Pacific is provided at the end
of this press release
Overall, the rating actions reflect Fitch's view that the recent
poor operating and financial performance of these Japanese
technology companies, as evident by their Q3FY2008 results, is
likely to continue during FY2009 and possibly FY2010. Across the
six companies, Q3FY2008 revenues declined on average, by 17% yoy,
and the average EBITDAR margin declined to 4.3% from 10.5%
compared with the prior year period. Notably, operating income
turned negative for all six companies with the exception of
Panasonic, with the average operating profit margin falling to
-2.6% in Q3FY2008, compared with 4.6% yoy.
In Fitch's view, these six export-oriented companies have been
adversely impacted by the combined forces of the global economic
slowdown and the strong Japanese Yen. These six companies are
likely to witness further deterioration in operating performance,
in light of recent economic data revealing a 45%-47% yoy decline
in Japanese exports during January and initial data based on the
first 20 days of February. Fitch expects the economic turmoil
currently affecting Japan and its major export markets will be
protracted, lasting for the next 18 months.
"2008's supply-side problem of over-capacity in major technology
sub-sectors, including semiconductors and display panels, has now
been compounded as corporations and consumers' ability to buy or
upgrade various electronic products has collapsed in consequence
of the global financial crises and the negative GDP growth
currently evident in both Japan and its major export markets,"
notes Matt Jamieson, Senior Director and Head of Fitch's Asia
Pacific Telecommunications, Media and Technology team. "Moreover,
the problems facing the Japanese exporters have been accentuated
by the appreciation of the Japanese Yen, which has afforded an
opportunity for competing technology companies in other countries,
particularly Korea, to take a greater share of the reduced level
of demand," adds Mr. Jamieson.
The agency notes that unlike the auto industry, Japanese
electronic products do not enjoy a significant brand premium above
Korean or Taiwanese products. As potential cost reductions are
unlikely to materially offset the impact of collapsing demand, the
agency expects FCF generation and financial leverage of the six
Japanese companies to deteriorate during FY2009. Further negative
rating actions could be triggered by ongoing negative free cash
flow generation resulting from continuing weak profitability,
higher borrowings, increased capex and larger dividend payouts.
Panasonic Corporation:
-- Long-term foreign currency and local currency IDRs
downgraded to 'A+' from 'AA-' (AA minus); RWN maintained;
-- Short-term FC and LC IDRs downgraded to 'F1' from 'F1+'; RWN
removed; and
-- Senior unsecured notes downgraded to 'A+' from 'AA-' (AA
minus).
The downgrades of Panasonic's Long-term and Short-term ratings
reflect its weak operating and financial performance in recent
quarters, its more pessimistic forecast for the fiscal year ending
March 2009 and Fitch's expectation of the company's likely weaker
performance in the next two fiscal years. Mainly due to the
appreciation of the Japanese Yen, sluggish consumer spending and
intensified price competition, Panasonic's profitability declined
substantially for the quarter to end-December 2008, with its
quarterly revenue falling 19.8% yoy, EBITDA margin decreasing to
6.2% from 10.4% a year ago, and operating profit plunging to
JPY26.4 billion from JPY165.4 billion a year earlier. Panasonic
has revised its financial forecast for the fiscal year ending
March 2009, projecting JPY7,750 billion revenues, JPY60 billion
operating profit and JPY380 billion net loss.
Panasonic's ratings remain on RWN in view of the proposed capital
and business alliance between Panasonic and Sanyo Electric, under
which Sanyo is likely to become a subsidiary. The RWN will be
resolved by Fitch's assessment of the potential consolidation
synergies and impact on Panasonic's financial condition as a
result of the combination of the two entities' operations. The
extent of a negative action on the IDRs (if any) will depend,
among other factors, on the acquisition cost and the transaction
structure.
Sharp Corporation:
-- Long-term FC and LC IDRs downgraded to 'A' from 'A+'; Placed
on RWN;
-- Short-term FC and LC IDRs affirmed at 'F1'; Placed on RWN;
and
-- Senior unsecured notes downgraded to 'A' from 'A+'.
The downgrade of Sharp's Long-term IDR reflects its deteriorated
operating and financial performance in recent quarters, revised
forecast for the fiscal year to end-March 2009 and the company's
likely weaker performance in the following two fiscal years.
Mainly due to sluggish private consumption, intensified price
competition and the appreciation of the Japanese Yen, Sharp
incurred an operating loss of JPY15.9 billion for the quarter to
end-December 2008 when its quarterly sales plunged by 20.2% yoy
and EBITDA margin fell to 8.7% from 12.7% a year ago. In view of
its recent weak quarterly result and the highly challenging
outlook reflecting muted demand as a consequence of the global
recession, Sharp has revised its financial forecast for the
current fiscal year, projecting JPY2,900 billion revenues,
JPY30 billion operating loss and JPY100 billion net loss.
The resolution of the RWN will reflect the potential for further
negative rating actions as Fitch assesses the future credit
profile of this company in the context of ongoing adverse economic
conditions. Specifically the agency will closely consider Sharp's
operating result for the current fiscal year, and may further
downgrade the company if its leverage as measured by adjusted net
debt to EBITDAR rises above 2.4x.
Hitachi, Ltd:
-- Long-term FC and LC IDRs downgraded to 'BBB+' from 'A-' (A
minus); Placed on RWN;
-- Short Term FC and LC IDRs affirmed at 'F2'; Placed on RWN;
and
-- Senior unsecured notes downgraded to 'BBB+' from 'A-' (A
minus).
The downgrade of Hitachi's Long-term IDRs reflects its weak
operational and financial performance in recent quarters, the
downward revision to its forecast for the fiscal year ending 31
March 2009, and Fitch's expectation of the company's likely weaker
performance in the following two fiscal years. Mainly due to the
appreciation of the Japanese Yen as well as rapidly falling demand
for automobiles, semiconductors, and industrial equipment, Hitachi
incurred an operating loss of JPY14.5 billion for the quarter,
with sales declining by 16.5% yoy and EBITDA margin down to 5.0%
from 8.2% relative to the same period a year earlier. Hitachi's
Power & Industrial Systems and Digital Media & Consumer Products
incurred operating losses of JPY25.4 billion and JPY16.1 billion,
respectively, in Q3FY08. In view of this very weak quarterly
result and the extremely challenging outlook for the sector --
reflecting much weaker demand as a result of the global recession
-- Hitachi has revised downwards its financial forecast for the
current fiscal year and now estimates JPY10,200 billion in
revenues, JPY40 billion in operating income and a JPY700 billion
net loss.
The resolution of the RWN reflects the potential for further
negative rating actions as Fitch assesses the future credit
profile of this company in the context of ongoing adverse economic
conditions. Specifically the agency will closely consider
Hitachi's operating result for the fiscal year ended March 31,
2009, and may take further negative rating action if Hitachi's
financial leverage, as measured by adjusted net debt to EBITDAR
rises above 3.8x.
Sony Corporation:
-- Long-term FC and LC IDRs downgraded to 'BBB+' from 'A-' (A
minus); RWN maintained;
-- Short-term FC and LC IDRs affirmed at 'F2'; Placed on RWN;
and
-- Senior unsecured notes downgraded to 'BBB+' from 'A-' (A
minus).
The downgrade of Sony's Long-term IDRs reflects its deteriorated
operating and financial performance in recent quarters, the
downward revision to its forecast for the fiscal year ended
March 31, 2009, and Fitch's expectation of the company's likely
weaker performance in the following two fiscal years. Due to the
appreciation of the Japanese Yen, the slowdown of global economy
and intensified price competition, Sony incurred an operating loss
of JPY18.0 billion for the quarter, with sales falling by 12.0%
yoy and EBITDA margin declining to 5.9% from 14.9% compared to the
same period a year earlier. While Sony's Electronics division
incurred a quarterly operating loss of JPY15.9 billion, the
operating income of Sony's Gaming unit fell to a negligible
JPY0.4 billion from JPY12.9 billion a year ago. In view of this
weak quarterly result and the poor trading outlook reflecting
weakened demand as a consequence of the global recession, Sony has
revised its financial forecast for the current fiscal year. The
company is now projecting JPY7,700 billion revenues,
JPY260 billion operating loss and JPY150 billion net loss.
The resolution of the RWN reflects the potential for further
negative rating actions as Fitch assesses the future credit
profile of this company in the context of ongoing adverse economic
conditions. Specifically the agency will closely consider Sony's
operating result for the quarter to end-March 2009, and may take
further negative rating actions if Sony's financial leverage as
measured by adjusted net debt to EBITDAR rises above 3.8x for the
year ended March 31, 2009.
NEC Corporation:
-- Long-term FC and LC IDRs downgraded to 'BBB-' (BBB minus)
from 'BBB'; Outlook revised to Negative from Stable;
-- Short-term FC and LC IDRs downgraded to 'F3' from 'F2'; and
-- Senior unsecured notes downgraded to 'BBB-' (BBB minus) from
'BBB';
The downgrade of NEC's Long-term IDRs and the revision of the
Outlook to Negative mainly reflects the recent poor operating and
financial performance of NEC which, in Fitch's view, is likely to
continue during FY2009 and possibly FY2010. NEC's Q3FY2008
revenues declined by 9.9% yoy, and the operating profit margin
declined to -2.6% from 1.5% in the same period a year earlier. In
reaction to its weakened operating performance, NEC recently
revised its forecast for the fiscal year ending March 2008, and
now expects consolidated sales to decrease to JPY4.2 trillion from
its previous forecast of JPY4.6 trillion. NEC also lowered its
earnings forecast substantially to an operating loss of
JPY30 billion from its previous forecast of a JPY120 billion
operating profit. Fitch believes that compared to other Japanese
technology names, NEC is better protected from the current rapidly
declining global economy thanks to its considerable exposure to
the relatively stable domestic telecommunication industry as a
network equipment provider. However, at the same time the agency
expects that the profitable IT/NW business division's operating
income will not be enough to offset the losses of other divisions,
especially the potential losses of the Electronic Devices
(semiconductor) business which reported an operating loss of
JPY 20.2 billion and was responsible for the large majority of
NEC's total consolidated loss during Q3FY2008. Given NEC's
intrinsically low profit margin, Fitch views it as unlikely that
the company will recover its profitability and financial health
within a short period of time.
Fitch may take further negative rating action if the current
negative EBIT margins continue on a quarterly basis.
Toshiba Corporation:
-- Long-term FC and LC IDRs downgraded to 'BB' from 'BBB'; RWN
assigned;
-- Short-term FC and LC IDRs downgraded to 'B' from 'F2'; and
-- Senior unsecured notes downgraded to 'BB' from 'BBB';
Fitch's three notch downgrade and the RWN assignment reflect the
agency's view that Toshiba's significantly weaker operating and
financial performance, as evident by their Q3FY2008 results, is
likely to continue during FY2009 and possibly FY2010. Toshiba's
Q3FY2008 revenues declined by 20.7% yoy, and its operating profit
margin declined to -10.7% from 2.2% in the same period a year ago.
Toshiba also revised its forecast for its full year results for
FY2008 during the Q3FY2008 earnings release. According to the
revised forecast, Toshiba expects consolidated sales to decrease
to JPY6.7 trillion from its previous forecast of JPY7.7 trillion.
Toshiba also lowered its operating income forecast substantially
to an operating loss of JPY280 billion from its previous forecast
of a JPY150 billion operating profit.
The key drag on Toshiba's operating and financial performance is
the Electronic Device segment which produces NAND Flash memory.
An operating loss of JPY340 billion is now expected in this
division for FY2008 due to the combination of the prolonged over-
supply situation in the industry during H12008 and significantly
slower demand in H2. Although NAND Flash memory prices recovered
during January and February 2009, thanks to the reduced production
capacity of global players including Toshiba, Fitch is doubtful
that the industry can sustain the improved price levels due to
weaker than expected demand in the portable consumer electronics
sector. In Fitch's view, substantial risks exist in terms of the
potential erosion of Toshiba's competitiveness due to steep cuts
in its capital spending and R&D.
The resolution of the RWN reflects the potential for further
negative rating action as Fitch assesses the future credit profile
of this company in the context of ongoing adverse economic
conditions.
The negative rating actions taken on the above six Japanese names
form part of a sector-wide rating review conducted by Fitch on its
17 rated technology issuers across Asia-Pacific. Accordingly, the
agency has simultaneously released separate press releases
detailing these rating actions (with the list below summarizing
the rating actions taken pertaining to the Long-Term FC IDR):
China:
-- ZTE Corporation: Affirmed at 'BB+' with Stable Outlook.
Japan:
-- Panasonic Corporation: Downgraded to 'A+' from 'AA-' (AA
minus); Rating Watch Negative (RWN) maintained;
-- Sharp Corporation: Downgraded to 'A' from 'A+'; Placed on
RWN;
-- Hitachi, Ltd: Downgraded to 'BBB+' from 'A-' (A minus);
Placed on RWN;
-- Sony Corporation: Downgraded to 'BBB+' from 'A-' (A minus);
RWN maintained;
-- NEC Corporation: Downgraded to 'BBB-' (BBB minus) from 'BBB';
Outlook revised to Negative from Stable;
-- Toshiba Corporation: Downgraded to 'BB' from 'BBB'; Placed on
RWN.
Korea:
-- Samsung Electronics Co., Ltd.: Affirmed at 'A+'; Outlook
revised to Negative from Stable;
-- LG Electronics Co., Ltd.: Affirmed at 'BBB'; Outlook revised
to Negative from Stable;
-- Hynix Semiconductor Inc.: 'B+'; RWN maintained.
Singapore:
-- Chartered Semiconductor Manufacturing Ltd.: Downgraded to
'BB-' (BB minus) from 'BB+'; Negative Outlook maintained.
Taiwan:
-- Taiwan Semiconductor Manufacturing Company Limited: Affirmed
at 'A'; Stable Outlook;
-- United Microelectronics Corporation: Affirmed at 'BBB';
Stable Outlook;
-- Acer Inc.: Affirmed at 'BBB-' (BBB minus); Outlook revised to
Negative from Stable;
-- ASUSTeK Computer Inc.: Downgraded to 'BB+' from 'BBB-' (BBB
minus); Placed on RWN;
-- Quanta Computer Inc.: Affirmed at 'BB'; Outlook revised to
Negative from Positive;
-- AU Optronics Corporation: Downgraded to 'BB-' (BB minus) from
'BB+'; Outlook revised to Negative from Positive.
* JAPAN: Early Retirement Offers Increased This Year
----------------------------------------------------
More listed Japanese firms have offered early retirement programs
as at March 5 this year than last year's total of 68, Japan Today
reports Tokyo Shoko Research.
According to the private research agency's data, as cited by the
report, 81 companies had already announced voluntary retirement
programs from January until March 5 this year.
Seventy of these firms, Japan Today relates, announced that they
were soliciting a total of 6,665 voluntary retirees.
The report notes the 81 companies included 13 electrical and
electronic equipment makers, the largest by sector, as well as 10
wholesalers and eight real estate companies.
=========
K O R E A
=========
HYNIX SEMICONDUCTOR: Fitch Retains Negative Watch on 'B+' Rating
----------------------------------------------------------------
Further to the release issued earlier this week on the back of an
Asia-Pacific Technology sector-wide review, Fitch Ratings has
revised its rating Outlook on Samsung Electronics Co., Ltd. and LG
Electronics Inc to Negative from Stable. At the same time, Hynix
Semiconductor Inc.'s Long-term foreign currency (IDR and senior
unsecured debt ratings, which are currently at 'B+', remain on
Rating Watch Negative. Details on the ratings for these three
Korean entities and the rationale for the same are given below,
and a complete list of rating actions which Fitch has
simultaneously taken on 17 rated technology names across Asia-
Pacific is also provided at the end of this press release
The rating actions reflect Fitch's view that the negative impact
stemming from the global economic slowdown on the three Korean
technology names is likely to deepen as 2009 progresses. Fitch
now expects that the economic downturn currently affecting Korea
and its major export markets will be protracted, lasting for the
next 18 months. Reflecting the depressed state of the panel
display industry, which both SEC and LGE are also heavily exposed
to, revenue for AU Optronics ('BB-' (BB minus)/Negative) in Taiwan
declined by 62% yoy in Q408, and its operating margin plunged to -
44% compared with a gain of 22% a year earlier.
While the sharp depreciation of the Korean Won during Q408 helped
both SEC and LGE record positive yoy sales growth of 18% and 14%,
respectively, meaningful declines in unit prices across all major
business areas (semiconductors, liquid crystal/plasma panel
displays and handsets) coupled with higher raw material and
marketing costs resulted in both companies reporting an operating
loss in Q408, and significantly in SEC's case its first ever
quarterly loss since it commenced reporting on a quarterly basis
in Q300. Notably, both companies gave up providing key operating
and financial guidance for 2009, citing low visibility in demand
across all business areas.
Accordingly, Fitch does not expect SEC and LGE's recent market
share gains to result in improved profitability, at least in the
short term. Moreover, the agency stresses that concern over
globally weak demand for consumer electronics products is a
vitally more important consideration at this juncture.
SEC:
-- Long-term FC IDR affirmed at 'A+'; Outlook revised to
Negative from Stable.
The revision to Negative Outlook reflects the agency's view that
SEC's recent poor operating performance in Q408 is likely to
continue during FY2009 and possibly FY2010. While SEC's
consolidated revenue increased by 18% during Q408 with the help of
the sharp depreciation of the KRW, its operating profit margin
declined to -2.0% from 9.5% in the same period a year ago. The
losses mostly stem from its struggling semiconductor and LCD panel
business division. Although the agency believes that possible
consolidation in the DRAM industry and substantial capex cuts by
LCD panel players during H208 may help supply side dynamics, the
global financial crises and the negative GDP growth currently
evident in both Korea and its major export markets suggests that
overall demand for PC and display components will remain depressed
for some time and accordingly the DRAM and display panel
industries are unlikely to recover in 2009.
Nevertheless, Fitch does not expect SEC to encounter any financial
difficulties in the near future, in light of its extremely strong
financial flexibility. However, in the context of the highly
cyclical nature of the semiconductor and LCD industries, the
prospect of SEC reporting ongoing quarterly operating losses while
maintaining substantial capital investments, even after a
significant reduction of the same, implies that SEC's credit
metrics are likely to weaken. Accordingly, Fitch will consider
downgrading SEC's Long-term FC IDR if the current weak memory
semiconductor and LCD panel pricing environment is protracted and,
together with the company's capital investment policy, results in
a less robust credit profile.
LGE:
-- Long-term FC IDR affirmed at 'BBB'; Outlook revised to
Negative from Stable.
LGE's Outlook was revised to Negative from Stable on the
expectation that the weak operating and financial performance of
the company in Q408 is likely to continue during FY2009 and
FY2010. As per the case of SEC, the sharp depreciation of the KRW
helped LGE's revenue increase during Q4, but its operating
profitability deteriorated into negative territory. LGE's key
business divisions are experiencing similar difficulties as SEC's
major business divisions. Its operating profit margin in the
handset businesses deteriorated to 5.2% in Q408 from 8.8% in Q407,
and LG Display (not rated), LGE's 37.9%-owned LCD panel producing
subsidiary, reported a -6.9% operating loss in Q4 2008 versus a
20.1% operating profit in Q407. Fitch also noted that LGE's home
appliance division, which previously has been a steady cash cow,
is likely to have recorded a negative operating profit margin in
Q408 even after adjusting for one-off expenses.
LGE's Long-term FC IDR could be downgraded if ongoing depressed
demand levels for its major products, including handsets, TVs and
LCD panels, leads the company to report negative EBIT margins on a
quarterly basis.
Hynix:
-- Long-term FC IDR:'B+'; Remains on RWN.
-- Senior unsecured notes:'B+'; Remains on RWN.
Hynix's sales declined by 18% yoy in Q408, with its EBITDA margin
turning to negative 4.6% (versus positive 17.4% a year ago), and
its operating margin declining steeply to negative 52% (versus
negative 17% in Q407). Largely in anticipation of Hynix's poor
operating and financial performance during H208, the agency
downgraded Hynix to 'B+' from 'BB' and placed it on RWN in
December 2008. Hynix's ratings are likely to be revisited once
the company has released its Q109 earnings and consolidated full
year end result for 2008 in April 2009.
The list below summarizes the rating actions taken on Fitch's 17
rated technology names across Asia-Pacific, with specific
reference to the Long-term foreign currency IDR:
China:
ZTE Corporation: Affirmed at 'BB+' with Stable Outlook.
Japan:
-- Panasonic Corporation: Downgraded to 'A+' from 'AA-' (AA
minus); Rating Watch Negative (RWN) maintained;
-- Sharp Corporation: Downgraded to 'A' from 'A+'; Placed on
RWN;
-- Hitachi, Ltd: Downgraded to 'BBB+' from 'A-' (A minus);
Placed on RWN;
-- Sony Corporation: Downgraded to 'BBB+' from 'A-' (A minus);
RWN maintained;
-- NEC Corporation: Downgraded to 'BBB-' (BBB minus) from 'BBB';
Outlook revised to Negative from Stable;
-- Toshiba Corporation: Downgraded to 'BB' from 'BBB'; Placed on
RWN.
Korea:
-- Samsung Electronics Co., Ltd.: Affirmed at 'A+'; Outlook
revised to Negative from Stable;
-- LG Electronics Co., Ltd.: Affirmed at 'BBB'; Outlook revised
to Negative from Stable;
-- Hynix Semiconductor Inc.: 'B+'; RWN maintained.
Singapore:
-- Chartered Semiconductor Manufacturing Ltd: Downgraded to
'BB-' (BB minus) from 'BB+'; Outlook revised to Negative from
Stable;
Taiwan:
-- Taiwan Semiconductor Manufacturing Company Limited: Affirmed
at 'A'; Stable Outlook;
-- United Microelectronics Corporation: Affirmed at 'BBB';
Stable Outlook;
-- Acer Inc.: Affirmed at 'BBB-' (BBB minus); Outlook revised to
Negative from Stable;
-- ASUSTeK Computer Inc.: Downgraded to 'BB+' from 'BBB-' (BBB
minus); Placed on RWN;
-- Quanta Computer Inc.: Affirmed at 'BB'; Outlook revised to
Negative from Positive;
-- AU Optronics Corporation: Downgraded to 'BB-' (BB minus) from
'BB+'; Outlook revised to Negative from Positive.
HYNIX SEMICONDUCTOR: To Appeal U.S. Court Ruling on Rambus Lawsuit
------------------------------------------------------------------
Hynix Semiconductor Inc. said Wednesday that it is considering
appealing a U.S. court ruling ordering it to pay chip designer
Rambus Inc. US$396 million in a long-running patent dispute,
Reuters reports.
On March 10, 2009, the United States District Court for the
Northern District of California entered its judgment in one of the
Rambus cases.
Reuters relates the judgment of US$349,035,842 in damages and an
additional US$47,845,402 in interest accompanies a compulsory
license agreement that allows Hynix to continue to sell dynamic
random access memory, or DRAM, in the United States.
In a statement, Hynix said it respectfully disagrees with the
judgment and now that it has been entered Hynix said it may pursue
its appeal to the Federal Circuit.
Hynix said it will seek a stay of the damages judgment while the
appeal is pending and that it does not expect that the judgment
will have any impact on its business operations while the case
continues.
A Troubled Company Reporter-Asia Pacific report on June 23, 2006,
said Hynix Semiconductor is a defendant to certain lawsuits
brought by Rambus Inc., with respect to alleged infringements of
Rambus patents by the company's manufacture, sale, offer for
sale, use or otherwise disposal of Single Data Rate Synchronous
Dynamic Random Access Memory and Double Data Rate SDRAM
products. These litigations have been brought in Germany,
France, the United Kingdom and the United States.
Rambus is a developer of high-bandwidth chip connection
technologies.
In 2004, the European Patent Office revoked Rambus' certain key
patent asserted against Hynix in the European territory.
Accordingly, the litigation in the United Kingdom was dismissed
in 2005.
Also in 2004, Rambus filed a lawsuit against the company, its
subsidiary in the United States, and other major memory chip
manufacturers, alleging that these companies kept Rambus Dynamic
Random Access Memory products from entering the market.
Moreover, in 2005, Rambus brought another lawsuit against Hynix
and its subsidiary in the United States, alleging that the
company and its subsidiary's DDR2 and Graphic DDR SDRAM products
have infringed on its patents.
Hynix Semiconductor Inc. (HSI) of Icheon, Korea --
http://www.hynix.com/-- is a memory semiconductor supplier
offering Dynamic Random Access Memory chips ("DRAMs") and Flash
memory chips to a wide range of established international
customers. The company's shares are traded on the Korea Stock
Exchange, and the Global Depository shares are listed on the
Luxemburg Stock Exchange.
* * *
As reported by the Troubled Company Reporter-Asia pacific on
Dec. 29, 2008, Standard and Poor's Ratings Services lowered to
'B+' from 'BB-' its long-term corporate credit and senior
unsecured debt ratings on Korea-based Hynix Semiconductor Inc. to
reflect the extremely challenging market situation and the rapid
deterioration in the company's financial risk profile. The
outlook on the long-term corporate credit rating is negative.
Moody's Investors Service downgraded to B1 from Ba3 Hynix
Semiconductor Inc's corporate family and senior unsecured bond
ratings on Dec. 26, 2008. The outlook for both ratings remains
negative.
=====================
P H I L I P P I N E S
=====================
LEGACY GROUP: Plan Holders Prepare to File Class Suit
-----------------------------------------------------
The affected plan holders of Legacy Group are preparing a class
suit against Legacy's owner, Celso de los Angeles, Business World
reports.
The Senate Committee on Trade and Commerce is helping the plan
holders to file a class action suit before the Justice Department,
Sen. Mar Roxas was cited by the report as saying in a radio
interview.
However, Sen Roxas did not say when the cases would be filed, the
report noted.
"We just have to wait for the cases to be filed", Noel M. Malaya,
legal counsel of Mr. De los Angeles, was quoted by the report as
saying.
The Bangko Sentral ng Pilipinas recently filed the second
syndicated estafa case against the Legacy Group involving a
PHP487-million worth of deposits allegedly stolen by Legacy's
officials, Business World reports, the Troubled Company Reporter-
Asia Pacific reported on March 10, 2009, citing the Businessworld.
House Probe
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 27, 2009, the Philippine Daily Inquirer said the Legacy Group
allegedly amassed between PHP15 billion and PHP25 billion in
deposits over the last three years due to an aggressive marketing
scheme, which promised depositors 20 percent in annual returns.
To address risk concerns, the Inquirer stated, the cash deposits
are spread out through the Legacy chain of banks to keep each
deposit within the maximum limit of the PDIC.
According to the Inquirer, Mr. Delos Angeles is the owner of 13
banks with 29 branches nationwide under the Legacy banner.
In 2008, the Inquirer recalled, the BSP shuttered the Rural Bank
of Parañaque; Rural Bank of Bais (in Negros Oriental province);
Pilipino Rural Bank (in Cebu); Rural Bank of San Jose (in
Batangas); Philippine Countryside Bank (in Cebu); Dynamic Bank
(Rural Bank of Calatagan, in Batangas); San Pablo City Development
Bank; Nation Bank (in Bacolod City) and the Bank of East Asia (in
Cebu) due to insolvency.
About Legacy Group
Headquartered in Quezon City, Philippines, The Legacy Group --
http://www.legacy.com.ph/thelegacy.html-- is a conglomerate of
banks and pre-need companies. The banks offer various financial
products and pre-need firms have pension, education and memorial
plans. Other members of The Group are companies that provide
credit cards, micro-lending and automotive financing services.
PHILIPPINE LONG: Moody's Affirms 'Ba2' Foreign Currency Rating
--------------------------------------------------------------
Moody's Investors Service has placed Philippine Long Distance
Telephone Company's Baa2 senior unsecured local currency issuer
rating under review for possible upgrade. At the same time,
Moody's has affirmed PLDT's Ba2/positive foreign currency bond
rating.
"The review has been prompted by PLDT's ability to retain a
consistently strong operating and financial profile despite a
slowing economic environment and rapidly deepening cellular
penetration," says Laura Acres, a Moody's Vice President.
"The company currently holds a 52% subscriber market share in the
Philippines wireless segment and 60% in the fixed-line business
both of which contribute to PLDT's healthy free cash flow
generation capabilities," adds Acres also Moody's Lead Analyst for
PLDT.
While PLDT maintained its high dividend payout and large capex in
2008, its financial profile with adjusted debt/EBITDA of around
1.0x and EBITDA - capex/Interest of over 9x, remained strong for
its current rating level.
The review will focus on: 1) growth prospects at the consolidated
level given near saturation levels of tele-density; 2) PLDT's
ongoing capex requirements for maintenance and rollout of next
generation technologies; 3) its financial polices over the next 2
years especially with regard to leverage and uses of cash; and 4)
the company's liquidity risk profile.
Moody's affirmation of PLDT's foreign currency bond rating
reflects the fact that the rating is unlikely to rise without an
improvement in the Philippines foreign currency country ceiling.
The last rating action was taken on 19th March 2008 when PLDT's
senior unsecured local currency issuer rating was affirmed at Baa2
and the outlook changed to positive. At the same time foreign
currency bond rating was affirmed at Ba2/positive.
PLDT is an integrated provider of fixed-line, broadband, cellular
and ICT (Information and Communications Technology) services. As
at December 31, 2008, it had 35.2 million cellular, 1.8 million
fixed-line and 1.0 million broadband subscribers and is the
country's leading telecommunications service provider. It has a
52% subscriber market share for cellular telephony, 60% for fixed-
line services and over 70% for broadband.
Major shareholders are First Pacific and NTT Communications/NTT
DoCoMo, with effective common shareholdings of 26.3% and 20.9% as
of January 2009. The remaining common shares are publicly held.
=================
S I N G A P O R E
=================
DISTRI PLUS: Creditors' Proofs of Debt Due on March 23
------------------------------------------------------
The creditors of Distri Plus Pte Ltd are required to file their
proofs of debt by March 23, 2009, to be included in the company's
dividend distribution.
The company's liquidators are:
Kon Yin Ton
Aw Eng Hai
c/o Foo Kon Tan Grant Thornton
47 Hill Street #05-01
Singapore Chinese Chamber of Commerce
& Industry Building
Singapore 179365
CHARTERED SEMICONDUCTOR: Fitch Cuts Issuer Default Rating to 'BB-'
------------------------------------------------------------------
As part of an Asia-Pacific Technology sector-wide review, Fitch
Ratings has downgraded Chartered Semiconductor Manufacturing Ltd's
Long-term foreign currency Issuer Default rating and outstanding
senior unsecured debt to 'BB-' (BB minus) from 'BB+'. The Outlook
has been revised to Negative from Stable. Details of the revised
ratings and the rationale for the same are given below, together
with a complete list of rating actions Fitch has simultaneously
taken on 17 rated technology names across Asia-Pacific.
"The rating action incorporates Fitch's expectation that the sharp
weakening of CSM's financial profile in Q408 is likely to continue
through 2009, and possibly 2010, driven by weakening end-market
demand in the current recessionary environment," says Priya Gupta,
Director in Fitch's Asia-Pacific Telecommunications, Media and
Technology team.
CSM's revenues declined 24% sequentially in Q408, which
underpinned a sharp decline in margins as a large proportion of
its costs are fixed in nature. In an effort to contain costs, CSM
has retrenched about 8% of its workforce, instituted temporary
salary reductions, and indicated a 35% cut in capex and flat R&D
outlays for 2009. However, in Fitch's view, these measures are
unlikely to significantly offset the impact of collapsing demand,
and consequently the agency expects credit metrics to deteriorate
sharply in 2009. The company's net adjusted leverage (as total
adjusted net debt divided by Operating EBITDAR) stood at 3.4x at
FYE08 and 5.7x (annualized) for Q408, and is expected to exceed
10x by FYE09.
Near-term liquidity is adequate, as CSM held unrestricted cash
balances of US$524.5 million and undrawn banking facilities of
US$1007.9 million at FYE08, against debt maturities of
US$157.5 million and a capex target of US$375 million in 2009.
Further, the company expects to raise approximately US$300 million
by mid-April 2009, from a 27-for-10 rights offering with parent
Singapore Technologies Semiconductors Pte Ltd (a wholly-owned
subsidiary of Temasek Holdings, the investment arm of the
Singapore Government) acting as stand-by purchaser for up to 90%
of the offering. Nonetheless, Fitch notes that liquidity risk in
2010 remains significant, with substantial debt maturities of
about US$542 million in principal payments and an additional
US$266 million in maturing convertible redeemable preference
shares.
CSM's ratings consider the government's majority beneficial
ownership through Singapore Technologies Semiconductors. The
agency's support rationale is based on the company's strategic
importance within Singapore's electronics and technology sector,
and track record of financial support from its controlling
shareholder.
The Negative Outlook reflects Fitch's expectation that CSM's
operating and financial performance will remain challenged over
the intermediate-term due to the ongoing slowdown in semiconductor
demand. In this regard, the agency notes that a sustained
deterioration in the company's stand-alone credit profile could
result in further ratings downgrades.
Incorporated in 1987, CSM is a pure-play IC foundry based in
Singapore which provides comprehensive wafer fabrication services
and technologies to semiconductor suppliers and electronics
systems manufacturers.
The list below summarizes the rating actions taken on Fitch's 17
rated technology names across Asia-Pacific, with specific
reference to the Long-term foreign currency Issuer Default
Ratings.
China:
-- ZTE Corporation: Affirmed at 'BB+' with Stable Outlook.
Japan:
-- Panasonic Corporation: Downgraded to 'A+' from 'AA-' (AA
minus); Rating Watch Negative (RWN) maintained;
-- Sharp Corporation: Downgraded to 'A' from 'A+'; Placed on
RWN;
-- Hitachi, Ltd: Downgraded to 'BBB+' from 'A-' (A minus);
Placed on RWN;
-- Sony Corporation: Downgraded to 'BBB+' from 'A-' (A minus);
RWN maintained;
-- NEC Corporation: Downgraded to 'BBB-' (BBB minus) from 'BBB';
Outlook revised to Negative from Stable;
-- Toshiba Corporation: Downgraded to 'BB' from 'BBB'; Placed on
RWN.
Korea:
-- Samsung Electronics Co., Ltd.: Affirmed at 'A+'; Outlook
revised to Negative from Stable;
-- LG Electronics Co., Ltd.: Affirmed at 'BBB'; Outlook revised
to Negative from Stable;
-- Hynix Semiconductor Inc.: 'B+'; RWN maintained.
Singapore:
-- Chartered Semiconductor Manufacturing Ltd: Downgraded to
'BB-' (BB minus) from 'BB+'; Outlook revised to Negative from
Stable.
Taiwan:
-- Taiwan Semiconductor Manufacturing Company Limited: Affirmed
at 'A'; Stable Outlook;
-- United Microelectronics Corporation: Affirmed at 'BBB';
Stable Outlook;
-- Acer Inc.: Affirmed at 'BBB-' (BBB minus); Outlook revised to
Negative from Stable;
-- ASUSTeK Computer Inc.: Downgraded to 'BB+' from 'BBB-' (BBB
minus); Placed on RWN;
-- Quanta Computer Inc.: Affirmed at 'BB'; Outlook revised to
Negative from Positive;
-- AU Optronics Corporation: Downgraded to 'BB-' (BB minus) from
'BB+'; Outlook revised to Negative from Positive.
PROJECTOR ASIA: Court Enters Wind-Up Order
------------------------------------------
On March 2, 2009, the High Court of Singapore entered an order to
have Projector Asia Pte Ltd's operations wound up
The company's liquidator is:
Don Ho Mun Tuke
Don Ho & Associates
20 Cecil Street
#12-02 Equity Plaza
Singapore 049705
======================
S O U T H A F R I C A
======================
HARMONY GOLD: Fitch Downgrades Issuer Default Rating to 'BB'
------------------------------------------------------------
Fitch Ratings has downgraded South Africa-based Harmony Gold
Mining Company Ltd's Long-term Foreign Currency Issuer Default
Rating to 'BB' from 'BB+', and its South African National Long-
term rating to 'BBB-(BBB minus)(zaf)' from 'BBB(zaf)'. The
Outlooks on both ratings are Stable. The full list of ratings is
attached below.
The rating actions reflect Fitch's view that, over the next three
to five years, rising operating costs, particularly in respect of
employee wages, will erode Harmony's long-term competitiveness and
profitability. This impact will, however, be masked over the next
12-18 months by historically high gold prices, which Fitch expects
to average in excess of US$750 per ounce. Over the next 18
months, the agency expects Harmony to record significantly
improved profitability with EBITDAR of approximately
ZAR4 billion - 5 billion in FY09 and remain strongly free cash
flow-positive.
Labor costs currently comprise around 60% of Harmony's total
production cost base; Fitch expects labor cost inflation of 10-12%
in 2009 and 7-8% for 2010-2011. In addition, although electricity
usage accounts for less than 10% of the company's total costs,
significant cost inflation is expected, with Fitch's base case
forecasts incorporating 25% increases in both 2009 and 2010. From
an operational perspective, Harmony is currently a medium-to-high
cost producer with significant operational leverage. Whilst Fitch
recognizes the cost benefit of recent portfolio restructuring to
close higher-cost operations, and increased production from new,
long-life, higher-grade mines (e.g. Phakisa, Doornkop), the agency
believes this is unlikely to fully offset the impact of cost
increases over the long term.
Harmony's key operational sensitivities are to the US$ gold price,
the ZAR/US$ exchange rate and changes in its level of operating
cost inflation. Future gold and exchange rate movements are
inherently uncertain. In assigning ratings to companies in the
metals & mining sectors Fitch models a range of future commodity
and exchange rate scenarios including one which utilizes long-term
average prices and exchange rates. In the case of Harmony Fitch
has used a long-term average gold price assumption of US$550 per
ounce and a long-term average exchange rate of 6.8ZAR/US$. The
agency notes that a continuation of the long-term depreciation of
the ZAR/US$ exchange rate would support future revenue generation
and the company's ratings.
The company's ratings continue to be supported by its historically
conservative capital structure and financial approach. In this
regard Fitch positively notes the company's decision to issue new
shares in November/December 2008 to repay debt, and its recently
announced target of having zero net debt by FYE09 (June 2009).
Fitch believes this target to be achievable.
The Stable Outlook reflects the expectation of historically high
gold prices (in excess of US$750/oz) over the next 12-18 months.
Over this period Fitch will continue to monitor the company's
operating cost inflation against the success of its cost reduction
programmes. A material increase in debt levels and/or
deterioration in the company's capital structure could cause
downward rating pressure.
-- Long-term Foreign Currency IDR: downgraded to 'BB' from
'BB+'; Outlook Stable
-- Short-term Foreign Currency IDR: affirmed at 'B'
-- National LT: downgraded to 'BBB-(BBB minus)(zaf)' from
'BBB(zaf)'; Outlook Stable
-- National ST: affirmed at 'F3(zaf)'
===========
T A I W A N
===========
ASUSTEK COMPUTER: May Reorganize Operations, Possible Layoffs Loom
------------------------------------------------------------------
ASUSTeK Computer Inc. may again reorganize its operations for the
second time this year, Reuters reports citing a company official
said.
Citing local media reports, Reuters relates, the company could cut
its number of departments to three from six, and lay off 5-10
percent of its staff.
However, according to Reuters, the official, speaking on condition
that his name not be used because he was not authorized to speak
to the media on the company's behalf, said no concrete plans or
specific timeframe have been finalised yet, including the
possibility of layoffs.
According to Reuters, that reduction would come after Asustek said
in January it was halving its number of departments to six
following its first-ever quarterly loss in the last three months
of 2008.
Based in Taipei, Taiwan, ASUSTeK Computer Inc. --
http://www.asus.com.tw-- is principally engaged in the provision
of computers, communications and consumer electronics (3C)
solutions. The company offers desktop motherboards, server
motherboards, three-dimension graphics display cards, audio cards,
laptops, servers, ultra mobile personal computers (PCs), mobile
telephones, liquid crystal display (LCD) monitors, broadband
products, pocket PCs, peripherals, optical storages and Eee PCs.
In 2007, the company sold approximately 59 million pieces of
motherboards and 7.1 million notebook computers. The company
distributes its products within the domestic market and to
overseas markets, including Asia-Pacific, the United States,
Canada, Europe and Africa. As of December 31, 2007, the company
had 19 wholly owned subsidiaries.
* * *
As reported by the Troubled Company Reporter-Asia Pacific on
March 11, 2009, Fitch Ratings downgraded ASUSTeK Computer Inc.'s
long-term foreign currency issuer default ratings to 'BB+' from
'BBB-' (BBB minus); placed on Rating Watch Negative.
TAIWAN SEMICONDUCTOR: Fitch Affirms Issuer Default Rating
---------------------------------------------------------
Further to the release issued earlier this week on the back of an
Asia-Pacific Technology sector-wide review, Fitch Ratings has
affirmed Taiwan Semiconductor Manufacturing Company Limited's
Long-term foreign and local currency Issuer Default Ratings at 'A
', and United Microelectronics Corporation's FC/LC IDRs at 'BBB'.
The Outlook on all ratings is Stable. Fitch has also
simultaneously withdrawn the ratings and will no longer provide
rating analysis or analytical coverage on TSMC and UMC. Details
of the rationale for affirming TSMC and UMC's ratings are given
below, as well as a complete list of rating actions which Fitch
has simultaneously taken on 17 rated technology names across Asia-
Pacific.
"The affirmation of TSMC's and UMC's ratings takes into account
their strong capability to weather the global economic downturn,
as well as their balance sheets with net cash positions and
positive FCF generation," comments Kevin Chang, Director in
Fitch's Asia-Pacific Telecommunications, Media and Technology
team. "As long as both companies are able to maintain decent
profit margins, their credit metrics are likely to stay in line
with their existing rating levels, despite diminished demand
momentum amid the likely unfavorable operating environment over
the next 18 months," adds Mr. Chang.
Both TSMC and UMC reported weaker profitability in Q408 as a
result of their customers' inventory adjustments, triggered by the
recent collapse in demand for electronic products. TSMC's sales
declined by 31.2% yoy and its EBITDA margin fell nearly 10
percentage points to 51.1% in Q408, reducing its quarterly EBITDAR
by 42.2% yoy.
In UMC's case a 32.9% yoy decline in sales lead to its EBITDAR
falling by 27.1% yoy. However, UMC was still able to improve its
EBITDA margin to 43.0% for the quarter (compared with 39.8% in
Q407) thanks to its customers' greater adoption of the more
advanced and efficient 40/45 nanometer production technology.
TSMC and UMC are, respectively, the world's No. 1 and No.2
suppliers of dedicated integrated circuit foundry services for
broad product applications and have the strongest financial
flexibility in this sector. Since 2005, they have consistently
generated free cash flows and maintained conservative capital
structures with very strong coverage on interest and fixed
charges.
On the other hand, Fitch has downgraded Chartered Semiconductor
Manufacturing Ltd's LT FC IDR and outstanding senior unsecured
debt rating to 'BB-' (BB minus) from 'BB+' and revised the Outlook
to Negative from Stable. The rating action incorporates Fitch's
expectation that the sharp weakening of CSM's financial profile in
Q408 driven by weakening end-market demand is likely to continue
through 2009, and possibly 2010.
The rating affirmations on TSMC and UMC form part of a sector-wide
rating review conducted by Fitch on 17 rated technology issuers
across Asia-Pacific. The list below summarizes the rating actions
taken with specific reference to the Long-term foreign currency
Issuer Default Ratings.
China:
ZTE Corporation: Affirmed at 'BB+' with Stable Outlook.
Japan:
-- Panasonic Corporation: Downgraded to 'A+' from 'AA-' (AA
minus); Rating Watch Negative (RWN) maintained;
-- Sharp Corporation: Downgraded to 'A' from 'A+'; Placed on
RWN;
-- Hitachi, Ltd: Downgraded to 'BBB+' from 'A-' (A minus);
Placed on RWN;
-- Sony Corporation: Downgraded to 'BBB+' from 'A-' (A minus);
RWN maintained;
-- NEC Corporation: Downgraded to 'BBB-' (BBB minus) from 'BBB';
Outlook revised to Negative from Stable;
-- Toshiba Corporation: Downgraded to 'BB' from 'BBB'; Placed on
RWN.
Korea:
-- Samsung Electronics Co., Ltd.: Affirmed at 'A+'; Outlook
revised to Negative from Stable;
-- LG Electronics Co., Ltd.: Affirmed at 'BBB'; Outlook revised
to Negative from Stable;
-- Hynix Semiconductor Inc.: 'B+'; RWN maintained.
Singapore:
-- Chartered Semiconductor Manufacturing Ltd: Downgraded to 'BB-
' (BB minus) from 'BB+'; Outlook revised to Negative from
Stable.
Taiwan:
-- Taiwan Semiconductor Manufacturing Company Limited: Affirmed
at 'A'; Stable Outlook;
-- United Microelectronics Corporation: Affirmed at 'BBB';
Stable Outlook;
-- Acer Inc.: Affirmed at 'BBB-' (BBB minus); Outlook revised to
Negative from Stable;
-- ASUSTeK Computer Inc.: Downgraded to 'BB+' from 'BBB-' (BBB
minus); Placed on RWN;
-- Quanta Computer Inc.: Affirmed at 'BB'; Outlook revised to
Negative from Positive;
-- AU Optronics Corporation: Downgraded to 'BB-' (BB minus) from
'BB+'; Outlook revised to Negative from Positive.
* Fitch Takes Negative Rating Actions on 3 Taiwanese PC Companies
-----------------------------------------------------------------
Further to the release issued earlier this week on the back of an
Asia-Pacific Technology sector-wide review, Fitch Ratings has
taken negative rating actions on three Taiwanese personal computer
companies -- Acer Inc., ASUSTeK Computer Inc. and Quanta
Computer Inc. The agency has revised its rating Outlook on Acer
and Quanta to Negative from Stable. Also, it has downgraded
ASUSTeK's Long-term foreign and local currency Issuer Default
Ratings and National Long-term rating by one notch, and placed
these ratings on Rating Watch Negative. At the same time, China's
ZTE Corporation's Long-term FC/LC IDRs have been affirmed with a
Stable Outlook. Details of the revised ratings and the rationale
for the same are given below, and a complete list of rating
actions which Fitch has simultaneously taken on 17 rated
technology names across Asia-Pacific is also provided at the end
of this press release.
Acer:
-- Long-term FC and LC IDRs affirmed at 'BBB-' (BBB minus);
Outlook revised to Negative from Stable.
-- National Long-term rating affirmed at 'A(twn)'; Outlook
revised to Negative from Stable.
ASUSTeK:
-- Long-term FC and LC IDRs downgraded to 'BB+' from 'BBB-' (BBB
minus); Placed on RWN.
-- National Long-term Rating downgraded to 'A-(twn)' (A
minus(twn)) from 'A(twn)'; Placed on RWN.
Quanta:
-- Long-term FC and LC IDRs affirmed at 'BB'; Outlook revised to
Negative from Positive.
-- National Long-term Rating affirmed at 'BBB+(twn)'; Outlook
revised to Negative from Positive.
ZTE:
-- Long-term FC and LC IDRs affirmed at 'BB+'; Outlook remains
Stable.
"The rating actions on the Taiwanese PC companies reflect Fitch's
view that a deterioration in operating performance will be
inevitable in 2009 due to the current global economic turmoil
which is expected to last until at least midway through 2010. The
PC companies are likely to face significant demand contraction as
corporations and consumers' abilities to buy or upgrade their
computers has diminished, particularly in recession plagued
developed countries," says Kevin Chang, Director in Fitch's Asia-
Pacific Telecommunications, Media and Technology team.
In Fitch's view, Acer's revenue and margins are likely to decline
in 2009. While the company achieved a 10.7% yoy sales increase
(unconsolidated) in Q408, and it was successful in closing the gap
with Dell Inc. ('A'/Stable) in terms of worldwide PC market share,
and also successful in achieving a global notebook PC market share
very close to that of Hewlett-Packard Co. ('A+'/Stable). Fitch's
negative GDP growth forecasts for its major markets -- Europe
and US -- strongly suggest that Acer is unlikely to be exempted
from being negatively affected by the global economic slowdown.
Quanta, the world's largest notebook PC producer, experienced a
15% yoy revenue decline in Q408. The agency believes that Quanta
is likely to face challenges in maintaining its profit margins in
2009 given the high level of competition in its contract
manufacturing service business. Fitch believes Quanta's
customers, PC brand companies, will place greater emphasis on
cost-reduction solutions in light of the weakening operating
environment.
ASUSTeK's own-brand sales decreased by 6.3% yoy and suffered an
EBITDA margin of negative 7.2% in Q408. Fitch says ASUSTeK
remains strong in product design but is losing its first-mover
advantage on netbook (low-cost mini-notebook) PCs, as competitors
are catching up in this segment. Also, Pegatron, its 100%-owned
subsidiary, is not only experiencing reduced orders from its
parent (as ASUSTeK executes a production-diversification strategy
in 2009), it is also facing unstable contract manufacturing demand
from PC brands competing against ASUSTeK.
Accordingly, the agency expects funds from operations (not
including change in working capital) of the three Taiwanese PC
companies to deteriorate during FY2009. Further negative rating
actions could be triggered by ongoing negative free cash flow
generation or higher financial leverage resulting from continuing
weak profitability, higher borrowings, increased capex and larger
dividend payouts, if any.
On the other hand, Fitch believes that ZTE is less affected by the
current economic downturn than its telecom-equipment peers which
focus on advanced economies. This is mainly because growth in
local revenues in China is poised to more-than-offset the slowdown
in other parts of the world. The company's exports have mainly
focused on supplying cheap handsets to developing countries in
Asia and Africa where underlying subscriber growth potential
remains, as opposed to exporting network equipment to developed
countries.
Following China's 3G licensing in early 2009, domestic orders for
telecom equipment are likely to increase significantly. While the
local Chinese market only represented 36% of ZTE's total revenues
in H108, ZTE's leading position in TD-SCDMA technology, which is
unique to China and China Mobile ('A+'/Stable), as well as its
strong capabilities in WCDMA and CDMA2000 3G technologies (to be
rolled out by China Unicom and China Telecom ('A-' (A
minus)/Stable)), suggest a sufficient level of insulation to
weather the global economic downturn. Accordingly the agency
expects ZTE's credit metrics to remain stable during 2009.
The list below summarizes the rating actions taken on Fitch's 17
rated technology names across Asia-Pacific, with specific
reference to the Long-term foreign currency Issuer Default
Ratings.
China:
-- ZTE Corporation: Affirmed at 'BB+' with Stable Outlook.
Japan:
-- Panasonic Corporation: Downgraded to 'A+' from 'AA-' (AA
minus); Rating Watch Negative (RWN) maintained;
-- Sharp Corporation: Downgraded to 'A' from 'A+'; Placed on
RWN;
-- Hitachi, Ltd: Downgraded to 'BBB+' from 'A-' (A minus);
Placed on RWN;
-- Sony Corporation: Downgraded to 'BBB+' from 'A-' (A minus);
RWN maintained;
-- NEC Corporation: Downgraded to 'BBB-' (BBB minus) from 'BBB';
Outlook revised to Negative from Stable;
-- Toshiba Corporation: Downgraded to 'BB' from 'BBB'; Placed on
RWN.
Korea:
-- Samsung Electronics Co., Ltd.: Affirmed at 'A+'; Outlook
revised to Negative from Stable;
-- LG Electronics Co., Ltd.: Affirmed at 'BBB'; Outlook revised
to Negative from Stable;
-- Hynix Semiconductor Inc.: 'B+'; RWN maintained.
Singapore:
-- Chartered Semiconductor Manufacturing Ltd: Downgraded to
'BB-' (BB minus) from 'BB+'; Outlook revised to Negative from
Stable;
Taiwan:
-- Taiwan Semiconductor Manufacturing Company Limited: Affirmed
at 'A'; Stable Outlook;
-- United Microelectronics Corporation: Affirmed at 'BBB';
Stable Outlook;
-- Acer Inc.: Affirmed at 'BBB-' (BBB minus); Outlook revised to
Negative from Stable;
-- ASUSTeK Computer Inc.: Downgraded to 'BB+' from 'BBB-' (BBB
minus); Placed on RWN;
-- Quanta Computer Inc.: Affirmed at 'BB'; Outlook revised to
Negative from Positive;
-- AU Optronics Corporation: Downgraded to 'BB-' (BB minus) from
'BB+'; Outlook revised to Negative from Positive.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
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. Pius Xerxes V. Tovilla, Valerie C. Udtuhan,
Marites O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante,
Marie Therese V. Profetana, Frauline S. Abangan, and Peter A.
Chapman, Editors.
Copyright 2009. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed
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mail. Additional e-mail subscriptions for members of the same
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thereof are US$25 each. For subscription information, contact
Christopher Beard at 240/629-3300.
*** End of Transmission ***