/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/090923.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 Wednesday, September 23, 2009, Vol. 12, No. 188 Headlines A U S T R A L I A BABCOCK & BROWN: Big Four Australian Banks Sell B&B Debt CENTRO NP: Seeks to Modify Terms of 2026 and 2028 Senior Notes STORM FINANCIAL: Macquarie Won't Pay 600 Victims WESTPOINT GROUP: Former Adviser Banned for Three Years C H I N A CHINA MERCHANTS: Shareholder to Sell 170 Millions Shares in Bank HUANENG POWER: Receives US$2.3-Bln Loan from Chinese Banks * CHINA: Recovery Quickens as Investments, Lending Surge, Says ADB H O N G K O N G AIR RIDER: Court Enters Wind-Up Order CS INDUSTRIAL: Appoints Wai and Fun as Liquidators DESCARTES GLOBAL: Appoints Provisional Liquidators FORTUNE STAR: Appoints Wai and Fun as Liquidators GOLDEN PATH: Court Enters Wind-Up Order JADE ALLIANCE: Court Enters Wind-Up Order JADE ALLIANCE: Court Enters Wind-Up Order JADE ALLIANCE: Court Enters Wind-Up Order KG INTELLIGENT: Court Enters Wind-Up Order KOEX ELECTRONICS: Court Enters Wind-Up Order KOGEN CORPORATION: Court Enters Wind-Up Order POLYWIN GLOBAL: Court to Hear Wind-Up Petition on October 14 SHING TAI: Appoints Wai and Fun as Liquidators SHUN HANG: Court Enters Wind-Up Order WEALTH FAIR: Court Enters Wind-Up Order WYNN RESORTS: Fitch Monitors 'B+' Issuer Default Rating YGL INTERNATIONAL: Court Enters Wind-Up Order I N D I A ASIP PRIVATE: Low Net Worth Prompts CRISIL to Assign 'BB+' Rating BAZARGAON PAPER: CRISIL Assigns 'B-' Ratings to Various Bank Debts ISHWAR ISPAT: CRISIL Rates INR67.50 Million Cash Credit at 'BB+' KINGFISHER AIRLINES: May Raise Up to US$175MM to Pay Down Debt PSA SICAL: CRISIL Assigns "P4' Rating on INR550MM Bank Guarantee * INDIA: ADB Lifts Growth Forecasts in 2009 and 2010 to 6% and 7% J A P A N HITACHI LTD: Former HR Manager Ordered Four Years Imprisonment JAPAN AIRLINES: Creditors Seek to Separate Unprofitable Operations JAPAN AIRLINES: To Slash 10% of Maintenance Jobs by March 2012 N E W Z E A L A N D BOB'S COVE: PFK Files First Receiver's Report SOUTH CANTERBURY: S&P Puts 'BB+' Rating on CreditWatch Negative * NEW ZEALAND: Out of Recession as GDP Grows 0.1% in June Qtr P H I L I P P I N E S * PHILIPPINES: ADB Sees Modest Economic Recovery in 2009-2010 S I N G A P O R E AUVENTA PTE: Creditors' Proofs of Debt Due on October 19 EC CHEMICAL: Creditors' Proofs of Debt Due on September 30 ENRON CAPITAL: Creditors' Proofs of Debt Due on October 2 STRATEGEM TECHNOLOGIES: Court to Hear Wind-Up Petition on Oct. 2 ST-KN PTE: Creditors' Proofs of Debt Due on October 19 T A I W A N HUA NAN: Moody's Withdraws 'D' Bank Financial Strength Rating X X X X X X X X MODINE MANUFACTURING: JPMorgan, Lenders Waive Technical Default * Asia Poised to Lead Recovery from Global Slowdown, ADB Says * ADB Revises Growth Prospects for Pacific in 2009 * Upcoming Meetings, Conferences and Seminars - - - - - ================= A U S T R A L I A ================= BABCOCK & BROWN: Big Four Australian Banks Sell B&B Debt -------------------------------------------------------- Martin Collins at The Australian reports that the big Australian banks have quietly sold the bulk of their loans to Babcock & Brown Limited to a range of hedge funds for between 20c and 30c in the dollar. According to the report, some two-thirds, or $2 billion of the $3.1 billion in Babcock debt, is now owned by hedge funds, which means McGrath Nicol is advising hedge funds rather than banks on progress in liquidating Babcock & Brown. The bank debt sales also effectively killed any hopes the top executives at B&B had of being paid a reported $20 million if the reorganization met several targets based on the percentage of assets sold at certain discounts to the dollar, the report relates. The Australian notes the debt represents as much as an 80% discount below most of those targets. The move by the big banks, including Westpac, ANZ, CBA and NAB, to offload their debt is a reflection that they have given up hope of reviving what was once a $5 billion empire, The Australian says. Headquartered in Sydney, Australia, Babcock & Brown Limited (ASX:BNB) -- http://www.babcockbrown.com/-- is a global alternative asset manager specializing in the origination and management of asset in sectors, where the company has a franchise and proven track record, and where there are opportunities to add scale, infrastructure, air operating leasing and selected real estate. Babcock & Brown operates from 31 offices across Australia, North America, Europe, Asia and the United Arab Emirates. The company has established a specialized funds and asset management platform across the operating divisions that have resulted in the establishment of a number of listed and unlisted focused investment vehicles in areas, including real estate, renewable energy and infrastructure. * * * As reported in the Troubled Company Reporter-Asia Pacific on March 13, 2009, Babcock & Brown appointed voluntary administrators after investors in the company's subordinated notes listed in New Zealand voted on March 13 against a special resolution to restructure the terms of the notes. Under the special resolution, the company's equity and subordinated note holders won't receive any return. Babcock & Brown appointed David Lombe and Simon Cathro of Deloitte Touche Tohmatsu as Voluntary Administrators. The TCR-AP reported on Aug. 25, 2009, that Babcock & Brown Ltd creditors voted to liquidate the assets of the company. Deloitte said the vote empowers it to investigate matters surrounding the collapse of the group, including potential conflicts of interest between the boards of Babcock & Brown and affiliated company Babcock & Brown International Pty. Ltd. which held most of the group's assets. CENTRO NP: Seeks to Modify Terms of 2026 and 2028 Senior Notes -------------------------------------------------------------- Centro NP LLC has commenced a consent solicitation with respect to amendments to the 1995 indenture governing various senior notes issued by the Company. The Consent Solicitation will expire at 5:00 P.M. (New York City Time) on September 29, 2009, unless earlier terminated or extended: Consent Fee Outstanding Per US$1,000 Put Right Principal Security Principal Repurchase CUSIP No. Amount Description Amount Date --------- ----------- ----------- ----------- ---------- 64806Q AA2 $10,000,0007.97% Senior $35.00 01/15/2014 Notes Due 2026 64806Q AD6 $25,000,000 7.65% Senior $35.00 01/15/2014 Notes Due 2026 64806Q AF1 $10,000,000 7.68% Senior $35.00 01/15/2014 Notes Due 2026 64806Q AG9 $10,000,000 7.68% Senior $35.00 01/15/2014 Notes Due 2026 64806Q AK0 $25,000,000 6.90% Senior $35.00 01/15/2014 Notes Due 2028 64806Q AL8 $25,000,000 6.90% Senior $35.00 01/15/2014 Notes Due 2028 The Company is seeking to obtain the consent of the holders of the Securities (i) to add a put repurchase right that will require the Company to offer to repurchase (but not require the holders to tender) the Securities for an amount equal to the principal amount plus accrued and unpaid interest on January 15, 2014 (which is between 12 and 14 years ahead of their 2026 and 2028 maturities), (ii) to modify certain defined terms and covenants applicable to the Securities to create a uniform method of calculating the Company’s debt incurrence ratios with the other series of notes issued by the Company and (iii) to modify the financial reporting covenant in the indenture to make it consistent with the other series of notes issued by the Company, which would permit the Company to discontinue filing annual or other reports with the Securities and Exchange Commission and instead deliver substantially the same kind of information to the trustee under the indenture (for continued availability to the holders of Securities). Upon receipt of the requisite consents (which may occur prior to the Expiration Date), the Company intends to effect the execution of the Supplemental Indenture containing the amendments. Subject to the terms and conditions of the Consent Solicitation, the Company will make a cash payment of US$35.00 per US$1,000 principal amount of Securities for which the holder has validly delivered (and not validly revoked at any time before the earlier of the execution of the Supplemental Indenture and the Expiration Date) a consent prior to the Expiration Date. It is expected that any payment due will be paid on the first business day following the Expiration Date, or as soon as practicable thereafter. The Company will not be obligated to make any payments if the requisite consents are not obtained or the other conditions to the Consent Solicitation are not satisfied or waived on or before the Expiration Date. Unless the Consent Solicitation is terminated by the Company for any reason before the Supplemental Indenture is executed, on the terms and subject to the conditions of the Consent Solicitation, the amendments will become operative upon the execution of the Supplemental Indenture. The complete terms and conditions of the Consent Solicitation are set forth in the Consent Solicitation Statement and the accompanying Consent Form that are being sent to holders of the Securities. Holders are urged to read the Consent Solicitation documents carefully. Copies of the Consent Solicitation Statement and related Consent Form may be obtained from Global Bondholder Services Corporation at (212) 430-3774 and (866) 470-3800 (toll free). BofA Merrill Lynch is the Solicitation Agent for the Consent Solicitation. Questions regarding the Consent Solicitation may be directed to BofA Merrill Lynch at (980) 388-4603 (collect) and (888) 292-0070 (toll free). As reported by the Troubled Company Reporter on September 10, 2009, Centro NP warned in an August 2009 regulatory filing it has substantial short-term liquidity obligations consisting primarily of short-term indebtedness, which it may be unable to refinance on favorable terms or at all. During the remaining six months of 2009, the Company has an aggregate of US$47.5 million of mortgage debt, notes payable and credit facilities scheduled to mature and US$13.9 million of scheduled mortgage amortization payments. If principal payments on debt due at maturity cannot be refinanced, extended or paid, the Company will be in default under its debt obligations, and it may be forced to dispose of properties on disadvantageous terms. The defaults may in turn cause cross defaults in certain of the Company's or its affiliates' other debt obligations. Centro NP also noted it is no longer permitted to make draws under an Amended July 2007 Facility. As a result, and because of the restrictions imposed on the Company by the Amended July 2007 Facility, as well as its Super Bridge Loan, its Residual Credit Facility and the Indentures, it may not be able to repay or refinance short-term debt obligations that comes due. The Company said there is substantial doubt about its ability to continue as a going concern. In addition, uncertainty also exists due to the liquidity issues currently experienced by the Company's parent and the ultimate parent investors, Centro Properties Limited and Centro Property Trust. According to the Company, the half yearly financial statements of the Company's ultimate parents, Centro Properties Limited and Centro Property Trust, which were filed with Australian regulatory bodies on February 26, 2009, identified material uncertainty (equivalent to substantial doubt) about those entities' ability to continue as a going concern. The Amended July 2007 Facility is a US$350.0 million revolving credit facility with Bank of America N.A. The Super Bridge Loan is a US$1.9 billion second amended and restated loan agreement entered into by Super LLC with JPMorgan Chase Bank, N.A., as administrative agent. The Residual Credit Facility is a US$370.0 million credit facility entered into by certain subsidiaries of Centro NP Residual Holding LLC -- Residual Joint Venture -- with JPMorgan Chase Bank, N.A., as agent and lender. The Indentures govern the unsecured senior notes issued by Centro NP's predecessor, New Plan Excel Realty Trust, Inc. U.S. Bank Trust National Association is the trustee under the Indentures. Centro NP said management is working with both its lenders and the lenders of its affiliated entities, and also with management of the ultimate parent investors of the Company, to access a number of options that address the Company's ongoing liquidity issues. Factors that may impact this include the current and future condition of the credit market and the U.S. retail real estate market. The Company said the extension of certain debt facilities to December 31, 2010, gives it more time to consider a range of different plans to address its longer term liquidity issues and potential funding from distributions from the Residual Joint Venture and potential asset sales, among other things, should provide the Company with the ability to pay its debts as and when they become due and payable. At June 30, 2009, the Company had US$3,434,106,000 in total assets, including US$28,514,000 in cash and cash equivalents and US$9,678,000 in marketable securities; against US$1,896,991,000 in total liabilities and US$24,542,000 in redeemable non-controlling interests in partnerships. Centro NP's credit ratings are all below investment grade. Standard & Poor's current rating is CCC+; outlook negative. Fitch's current rating is CCC/RR4; rating watch negative. Moody's current rating is Caa2; negative outlook. Centro NP LLC owns and develops community and neighborhood shopping centers throughout the United States. The Company was formed in February 2007 to succeed the operations of New Plan Excel Realty Trust, Inc. STORM FINANCIAL: Macquarie Won't Pay 600 Victims ------------------------------------------------ Stuart Washington at The Sydney Morning Herald says Macquarie Group has no public plans to compensate about 600 Storm Financial clients despite evidence of failed systems in margin loans it made to retirees and pensioners. Macquarie Group maintains it has "settled" with its Storm Financial clients, the Herald says. "But BusinessDay has been contacted by several people introduced to Macquarie Group margin loans who were sold out at loan-to-value ratios of 97 per cent -- well above the maximum stated loan-to- value ratio of 80 per cent," the Herald says. "These former Storm clients have argued they were never contacted by Macquarie Group for a margin call as their shares plummeted last year." Macquarie Group has made no commitment and refused to answer questions about compensation or whether its margin loan systems had failed in relation to Storm Financial clients, the Herald says. As reported by the Troubled Company Reporter-Asia Pacific on September 18, 2009, The Herald Sun said the Australian Securities and Investments Commission will continue its investigation into the collapse of Storm Financial over the next six weeks before deciding whether to pursue legal action. ASIC chairman Tony D'Aloisio on September 16 told the federal parliamentary that inquiry into financial products and services that its probe into Storm Financial was one of the largest in history. "We felt that additional investigative work and legal analysis was needed before the commission could be in a position to make decisions, so we set the next six weeks for that additional work to be completed." the report quoted Mr. D'Aloisio as saying. The parliamentary inquiry is due to report by November 23, the Herald Sun said. About Storm Financial Storm Financial Limited -- http://www.stormfinancial.com.au/-- operates in the Australian wealth management industry. The company manages over one trillion dollars in investment fund assets for over nine million investors, distributed through investment administration providers and financial adviser. The 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 Financial 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." The TCR-AP reported on Jan. 22, 2009, that the Commonwealth Bank of Australia, Storm's largest creditor, lodged a AU$27.09 million debt claim at a first meeting of the company's creditors on January 20. Administrators Worrells Solvency & Forensic Accountants said the group's remaining creditors are owed AU$51 million, plus a provision for dividends of AU$10 million. On March 27, 2009, the Troubled Company Reporter-Asia Pacific reported that the Australian Securities and Investments Commission won its bid to liquidate Storm Financial Group after the Federal Court ruled that the Company be wound up. Federal court Justice John Logan appointed Ivor Worrell and Raj Khatri of Worrells Solvency and Forensic Accountants as liquidators for the Company. WESTPOINT GROUP: Former Adviser Banned for Three Years ------------------------------------------------------ The Administrative Appeals Tribunal has banned a former director of Glenhurst Corporation Pty Ltd, Anthony Michael Kofkin, from providing financial services for three years and holding an Australian financial services license in relation to Westpoint Group's collapse. Mr. Kofkin provided financial services as a director of Glenhurst Corporation Pty Ltd., which was based in Melbourne and held an AFS licence from 1998 to 2007. Glenhurst entered into liquidation on January 17, 2008. Mr. Kofkin was banned by the AAT following his appeal from a banning order made by the Australian Securities and Investments Commission. The AAT's decision had regard to: * insufficient due diligence being undertaken by Mr. Kofkin prior to advising his clients to invest in Westpoint financial products; * the scale of his clients losses and the period of his conduct, between 2002 and 2005; and * the need to protect investors and maintain high standards in the financial advisory industry. Mr. Kofkin provided advice to approximately 80 clients to invest in products issued by the Westpoint Group of companies. Those clients suffered significant losses following the collapse of Westpoint. Since November 2007, Mr. Kofkin has been the Chief Executive Officer of Churchill Morgan Global (CMG). Mr. Kofkin and CMG were both authorized representatives of Millenium3 Financial Services Pty Ltd, which is part of the ING group of companies. Background Twenty-three licensed advisers, including Mr. Kofkin, four unlicensed advisers, and one corporate entity who advised on Westpoint products have been banned from providing financial services. In August 2008, ASIC commenced proceedings against Glenhurst Corporation Pty Ltd on behalf of clients who had invested in Westpoint products on the advice of Glenhurst. As Glenhurst was in liquidation, ASIC subsequently commenced proceedings against the company's professional indemnity insurer QBE Insurance. ASIC said it obtained court orders on January 28, 2009, for a global mediation of all Federal Court actions commenced by ASIC, including Glenhurst, for compensation arising from the failure of the Westpoint group. ASIC continues to participate in the mediation of claims against Glenhurst and other financial services licensees. About Westpoint Group Headquartered in Perth, Western Australia, the Westpoint Group -- http://westpoint.com.au/-- is engaged in property development and owns or manages retail and commercial properties with a total value of over AU$300 million. The Group's troubles began in 2005 when the Australian Securities and Investments Commission commenced investigations on 160 companies within the Westpoint Group. The ASIC's investigation led to ASIC initiating action in late 2005 in the Federal Court of Australia against a number of mezzanine companies in the Westpoint Group, including winding up proceedings. The ASIC contends that Westpoint projects are suffering from significant shortfall of assets over liabilities so that hundreds of investors are at serious risk of not receiving repayment of their investments. The ASIC also sought wind-up orders after the Westpoint companies failed to comply with its requirement to lodge accounts for certain financial years. These wind-up actions are still continuing. In February 2006, the Federal Court in Perth issued a wind-up order against Westpoint Corporation Pty Ltd. The ASIC had applied to wind up the company on grounds of insolvency. The ASIC believes that Westpoint Corporation is responsible for arranging, managing and coordinating Westpoint Group's property projects as well as holding money for other group companies. The ASIC was concerned that Westpoint Corporation was unable to pay its debts, including its obligations under the guarantees given to the mezzanine companies to make good expected shortfalls in the repayment of amounts owed to investors. The Westpoint Group's collapse is considered by many as the largest of its type in recent years, with small investors being the biggest group affected. Investors are currently joining forces to commence a class action against Westpoint and its advisors. ========= C H I N A ========= CHINA MERCHANTS: Shareholder to Sell 170 Millions Shares in Bank ---------------------------------------------------------------- Bloomberg News, citing the China Business News, reports that a China Merchants Bank Co. shareholder plans to sell 170 million shares in the lender. The Shanghai-based newspaper didn’t identify the shareholder, Bloomberg says. China Merchants Bank -- http://www.cmbchina.com/-- is the second largest bank among China's 12 nationwide shareholding commercial banks. It was established in 1987 and listed on the Shanghai Stock Exchange in 2002. The Ministry of Communications-owned China Merchants Group is the bank's main shareholder with a 26% stake (through various companies). The bank had 410 banking outlets nationwide and 17,829 employees at end-2004. * * * China Merchants Bank continues to carry Moody's Investors Service's Baa3/P-3 long-term/short-term foreign currency deposit ratings and D+ bank financial strength rating. The ratings' outlook remains stable. HUANENG POWER: Receives US$2.3-Bln Loan from Chinese Banks ---------------------------------------------------------- Huaneng Power International, Inc., has received a SGD3.2 billion (US$2.3 billion) bank loan to fund its acquisition of Tuas Power in Singapore, Wan Zhihong at the China Daily reports. The report says under an agreement signed on Sept. 21, Huaneng will get SGD2.8 billion (US$2 billion) loan from Bank of China and SGD400 million (US$300 million) loan from China Construction Bank. The company will mainly use the money to pay for the loan it had borrowed from overseas banks for the deal last year, the Daily notes. Huaneng, the report recalls, paid SGD4.24 billion (US$3 billion) to buy Singapore's Tuas Power Ltd from Temasek in March 2008. Huaneng Power International, Inc. (SHA:600011; NYSE:HNP) -- http://www.hpi.com.cn/-- is principally engaged in the investment, planting, operation and management of power plants. The Company's electricity generation business covers the Northeast China Grid, the North China Grid, the Northwest China Grid, the East China Grid, the Central China Grid and the South China Grid, as well as grid in Singapore. During the year ended December 31, 2008, the Company together with its subsidiaries, generated approximately 184.6 billion kilowatt-hours. As of December 31, 2008, the Company wholly owned 17 operating power plants and had controlling interests in 13 operating power plants and minority interests in five operating power companies within China. Its power plants were located in 12 of China's provinces, including Liaoning, Hebei, Henan, Gansu, Shandong, Shanxi, Jiangsu, Zhejiang, Jiangxi, Hunan, Fujian and Guangdong, and in Shanghai and Chongqing Municipalities. It also had a wholly owned power subsidiary in Singapore. * * * The Troubled Company Reporter-Asia Pacific reported on Sept. 21, 2009, that Fitch Ratings downgraded Huaneng Power International, Inc's Long-term foreign and local currency Issuer Default Ratings and senior unsecured debt rating to 'BB+' from 'BBB', and its Short-term foreign and local currency IDRs to 'B' from 'F3'. The Outlook is Stable. * CHINA: Recovery Quickens as Investments, Lending Surge, Says ADB ------------------------------------------------------------------ After falling to its lowest rate in 20 years in the first quarter of this year as a result of the global downturn, economic growth in the People's Republic of China (PRC) rebounded in the second quarter and is expected to record more than 8% in 2009 and 2010, according to a major new report from the Asian Development Bank (ADB). The Asian Development Outlook 2009 Update (ADO Update), released September 22, projects economic growth of 8.2% this year, with a surge in bank lending and fixed asset investments pushing growth 1.2 percentage points higher than ADB's forecast in March. The expected maintenance of the Government's fiscal stimulus and a moderate recovery in the international economy in 2010 will lift the PRC's growth rate next year to 8.9%, the report adds. "The massive fiscal stimulus announced last year and the aggressive monetary easing in 2009 has softened the blow of the global slump on the economy," said Jong-Wha Lee, ADB's Chief Economist. "The 8% growth target for 2009 set by the Government at the start of the year now looks within reach for developing Asia's largest economy and, in 2010, it will be in sight of the country's long-run sustainable growth range of about 9%." The report says that growth accelerated to 7.9% in the second quarter of 2009 from a low 6.1% in the first quarter, bringing first half growth to 7.1%. The expansion in the first 6 months was driven by investment, which contributed 6.2 percentage points of the total. Consumption contributed 3.8 percentage points, but was offset by a 2.9 percentage point decline in net exports. Fixed asset investment in real terms soared by 41.2% in the second quarter, 27 percentage points above a year earlier, reflecting the impact of the large fiscal stimulus and rapid credit expansion. Investments in agriculture, infrastructure, and public funding for projects related to health and social security all rose sharply. A flood of new bank lending, fuelled by the Government's expansionary monetary stance, was equivalent to around 50% of GDP for the first half of the year, double the average level of the previous two years. State-owned enterprises and large private businesses were the major borrowers. Industrial production regained momentum in the second quarter as firms began to rebuild inventories after a significant destocking during the worst of the crisis, in late 2008 and early 2009. However, weak external demand and overcapacity in industries, such as steel, cement, and machinery, saw total profits of enterprises fall by 22.9% in the first five months of 2009. The report says that in the second quarter of 2009, the PRC posted its smallest trade surplus ($34.9 billion) in three years, the result of a dramatic slump in exports and a slowdown in imports. A vigorous increase in consumption was bolstered by strong growth in real incomes in both urban and rural areas. The ADO Update expects mild deflation to continue through most of 2009, but higher economic growth in 2010 will contribute to inflation rising to a forecast 3%. The major drivers of growth in 2010 will be infrastructure investment, construction, and an expansion of consumption. With only a moderate recovery forecast for the international economy, net exports are expected to make only a minor contribution to growth. The main risks to the outlook, the report notes, is a significantly weaker recovery in the international economy than currently foreseen, and, on the domestic front, an earlier than expected exit from the Government's fiscal stimulus package, and concerns that the flood of bank lending, if maintained for too long, could trigger another round of severe monetary policy tightening that would pull growth down again. Asian Development Outlook, and Asian Development Outlook Update, are ADB's flagship economic reports analyzing the economic conditions and prospects in Asia and the Pacific, and are issued in March and September, respectively. ================ H O N G K O N G ================ AIR RIDER: Court Enters Wind-Up Order ------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have Air Rider International Logistics Limited's operations wound up. CS INDUSTRIAL: Appoints Wai and Fun as Liquidators -------------------------------------------------- On August 28, 2009, Li Wan Wai and Tsang Lai Fun were appointed as liquidators of CS Industrial Company Limited. The Liquidators can be reached at: Li Wan Wai Tsang Lai Fun Raymond Li & Co., CPA Tai Yau Building, Room 1001, 10th Floor Wanchai, Hong Kong Telephone: (852) 2889 8833 Facsimile: (852) 2889 8433 DESCARTES GLOBAL: Appoints Provisional Liquidators -------------------------------------------------- On August 21, 2009, Messrs. John Robert Lees and Colum Sebastian Joseph Bancroft were appointed as provisional liquidators of Descartes Global Asset Management Limited. The provisional liquidators can be reached at: John Robert Lees Colum Sebastian Joseph Bancroft John Lees & Associates Limited Henley Building, 20th Floor 5 Queen's Road Central Hong Kong FORTUNE STAR: Appoints Wai and Fun as Liquidators ------------------------------------------------- On August 28, 2009, Li Wan Wai and Tsang Lai Fun were appointed as liquidators of Fortune Star Development Company Limited. The Liquidators can be reached at: Li Wan Wai Tsang Lai Fun Raymond Li & Co., CPA Tai Yau Building, Room 1001, 10th Floor Wanchai, Hong Kong Telephone: (852) 2889 8833 Facsimile: (852) 2889 8433 GOLDEN PATH: Court Enters Wind-Up Order --------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have Golden Path Investment Limited's operations wound up. JADE ALLIANCE: Court Enters Wind-Up Order ----------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have Jade Alliance Limited's operations wound up. JADE ALLIANCE: Court Enters Wind-Up Order ----------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have Jade Alliance Metal Limited's operations wound up. JADE ALLIANCE: Court Enters Wind-Up Order ----------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have Jade Alliance Steel Limited's operations wound up. KG INTELLIGENT: Court Enters Wind-Up Order ------------------------------------------ On September 2, 2009, the High Court of Hong Kong entered an order to have KG Intelligent Systems Limited's operations wound up. KOEX ELECTRONICS: Court Enters Wind-Up Order -------------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have Koex Electronics Limited's operations wound up. KOGEN CORPORATION: Court Enters Wind-Up Order --------------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have Kogen Corporation Limited's operations wound up. POLYWIN GLOBAL: Court to Hear Wind-Up Petition on October 14 ------------------------------------------------------------ A petition to wind up the operations of Polywin Global Limited will be heard before the High Court of Hong Kong on October 14, 2009, at 9:30 a.m. Leung Tak Shing filed the petition against the company on August 10, 2009. SHING TAI: Appoints Wai and Fun as Liquidators ---------------------------------------------- On August 28, 2009, Li Wan Wai and Tsang Lai Fun were appointed as liquidators of Shing Tai Engineering Limited. The Liquidators can be reached at: Li Wan Wai Tsang Lai Fun Raymond Li & Co., CPA Tai Yau Building, Room 1001, 10th Floor Wanchai, Hong Kong Telephone: (852) 2889 8833 Facsimile: (852) 2889 8433 SHUN HANG: Court Enters Wind-Up Order ------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have Shun Hang Ki Engineering Company Limited's operations wound up. WEALTH FAIR: Court Enters Wind-Up Order --------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have Wealth Fair Technologies Limited's operations wound up. WYNN RESORTS: Fitch Monitors 'B+' Issuer Default Rating ------------------------------------------------------- Fitch Ratings is closely monitoring potential credit considerations for the 'B+' Issuer Default Rating of Wynn Resorts, Ltd. and its subsidiaries following the company's recent filing with the Hong Kong Stock Exchange and revision to its U.S. credit agreement. Despite minimal near-term capital needs, Wynn has filed an application with the Hong Kong Stock Exchange in connection with a possible equity listing. On Sept. 19, 2009, the company determined that its proposed offering could raise roughly $1.4-$1.6 billion in connection with a sale of 25% of a Macau subsidiary. In addition, Wynn Las Vegas, LLC, revised its credit agreement on Sept. 10, 2009, to allow a secured note issuance of up to $500 million until March 31, 2010. This analysis is provided so that investors and market participants understand how Fitch is currently viewing the considerations of these potential transactions. Considerations Related to the Flow of Funds As of June 30, 2009, nearly $200 million of cash was held at Wynn Resorts, roughly $70 million at Wynn LV LLC, and approximately $810-$825 million at Wynn Resorts (Macau), SA (Wynn Macau SA). The only project under construction is Encore Macau, which had roughly $340 million left on its $650 million budget as of June 30, 2009, so the project is fully funded with cash on hand. Excluding the project capex, Wynn Macau SA is generating comfortably more than $200 million of annual free cash flow (FCF). Wynn LV LLC completed Encore Las Vegas in December 2008 and has only minimal residual construction payables left to pay. After that, Fitch believes that Wynn LV LLC may be able to generate a thin amount of FCF, depending on the impact of the CityCenter opening later this year. The Macau credit facilities include a mandatory prepayment provision in the event of an equity issuance. However, lenders have the right to not require prepayment, and a change in corporate structure, in part to allow the equity issuance, was permitted by lenders in July 2009 and noted in the Information Pack that was filed on Sept. 11, 2009. If Wynn Macau SA is not required to prepay the credit facilities with the potential equity proceeds, the additional funds may be able to support future growth initiatives, such as a Cotai Strip development. Wynn's Las Vegas credit profile is significantly weaker than Macau and financial covenants will resume in 2011, with leverage required to be 6.5 times as of June 30, 2011, stepping down to 6.0x by Dec. 31, 2011. Based on Fitch's current operating outlook, it is highly unlikely Wynn LV LLC will be in compliance with the leverage covenant in 2011 without additional support. Fitch estimates that the parent company, Wynn Resorts, will be able to generate about $60 million annually from Wynn Macau SA management/royalty fees that it could use to support the Wynn LV LLC credit. So depending on property performance and the impact of the Encore Macau opening in the first half of 2010 (1H'10), Fitch estimates Wynn Resorts can receive on the order of $100-$150 million in management/royalty fees from Wynn Macau SA in 2009-2010. In addition, Wynn Resorts can receive dividends from Wynn Macau SA, subject to its credit facility's net leverage covenant (currently 5.0x, which eventually steps down to 3.5x on Dec. 31, 2012). Wynn Resorts applied all of its U.S. net operating losses against a cash dividend of $1.072 billion from Wynn Group Asia in November 2008, and the company also used most of its foreign tax credits related to the repatriation of Wynn Macau SA's earnings. Tax Implications: In order to move cash back to the U.S. tax efficiently, Fitch believes that Wynn Resorts would be able to use additional NOLs from its Las Vegas operations that began accumulating in 2009. Wynn LV LLC recorded a $142 million net loss in 1H'09. Operating losses at Wynn LV LLC are likely to continue to accumulate for the next few years unless and until the company reduces debt at that subsidiary. That should enable the company to repatriate at least some earnings from Macau tax-efficiently. Wynn Macau SA generated net income of roughly $265 million in 2008 and $117 million in 1H'09. Fitch estimates the company will likely be able to use NOLs and/or foreign tax credit carry-forwards to tax-efficiently repatriate Macau earnings on the order of $400-$600 million in 2009-2010 depending on property performance and the impact of the Encore Macau opening in 1H'10. The company is accumulating foreign tax credit carry-forwards related to the difference between the tax it pays in Macau (39% of revenues in lieu of income tax) and the 35% U.S. tax rate on income. As of Dec. 31, 2008, it had accumulated $698 million in foreign tax credit carry-forwards, although it took a valuation allowance that offset most of this, resulting in a net foreign tax credit balance of $71 million as of the end of 2008. The valuation allowance is based on whether or not the company believes it is 'more likely than not' to realize the future deferred tax benefits. Therefore, if the outlook for the realization of the deferred tax benefits changes, the valuation allowance would likely be reversed to the extent the company can use a greater portion of the foreign tax credit carry-forwards. The assumptions used to determine the valuation allowance can change, and it seems possible that a potential Cotai development in Macau supported by an equity issuance and/or Aqueduct development in New York could alter the determination of how much future deferred tax benefits the company is likely to use. If that is the case, significantly more of the foreign tax credits could become available for use by the company, subject to expiration. The consideration relating to whether or not the company could move any funds from an equity issuance back to the U.S. tax- efficiently and use its NOLs and/or foreign tax credits is based on the relative classification of the transaction as ordinary income or capital. To the extent the transaction is deemed ordinary income, the company could use the NOLs or foreign tax credit carry-forwards to minimize the tax liability. Any portion deemed a capital gain would be subject to taxation upon repatriation. Given the complex legal structure that is being revised through multiple transactions as indicated in the Information Pack, the potential tax classification of a subsidiary equity issuance in Hong Kong is unclear. Therefore, Fitch currently maintains a cautious view regarding any near-term benefit to the Wynn LV LLC credit from the Hong Kong equity issuance. Moreover, the company may be able to provide adequate support to Wynn LV LLC through existing means anyway. As indicated above, Fitch believes the company could probably move back to the U.S. roughly $500-$750 million of Wynn Macau SA earnings and management fees in 2009-2010 in a tax efficient manner. Those funds combined with the nearly $200 million in cash currently at the parent company gives the company ample flexibility to reduce the $2.57 billion of Wynn LV LLC debt as of June 30, 2009, in Fitch's view. That could support debt reduction at Wynn LV LLC to the $1.6-$1.8 billion range by 2011, which implies that EBITDA would probably need to be in the $250-$300 million range to comply with the 6.0x-6.5x leverage covenant in 2011. Although that level of Las Vegas EBITDA is slightly above Fitch's current expectation, and well above the LTM June 30, 2009 level of about $203 million, an unlimited equity cure provision from an April 2009 amendment to the credit agreement reduces covenant compliance concern in 2011. Potential U.S. Debt Issuance The 2011 credit outlook would also improve with the potential for up to $500 million in a senior secured issuance at Wynn LV LLC. The fifth amendment to the Wynn LV LLC credit agreement from Sept. 10, 2009, permits an issuance until March 31, 2010, but requires that at least 75% of potential net proceeds be used to pay down the credit facilities, which mature in 2012-2013 and had roughly $900 million outstanding as of June 30, 2009. Therefore, a secured issuance would be mostly leverage neutral, but since it will take out a substantial portion of the bank group's exposure, negotiating additional financial covenant amendments becomes much easier, if needed. If a potential senior secured issuance were at least a five-year term, it would push back the next material inflection point in Wynn LV LLC's already attractive maturity schedule to 2014, when the $1.6 billion First Mortgage Notes are due. Rating Outlook Fitch continues to maintain a cautious outlook regarding potential deleveraging for corporate gaming operators in general and Wynn specifically, which is a factor in the company's 'B+' IDR. While Wynn's underlying credit profile and solid liquidity supports meaningful debt reduction, attractive growth opportunities, such as developments on the Cotai Strip in Macau or Aqueduct in New York (for which the company is currently a bidder), could restrict near-term credit improvement. That said, if these transactions were completed, Fitch would view them positively. The IDRs of the parent and subsidiaries are currently linked, in part because Fitch believes Wynn currently has adequate flexibility with respect to the flow of funds relative to subsidiary needs. Fitch currently rates Wynn with a Stable Outlook: Wynn Resorts -- IDR 'B+'. Wynn LV LLC -- IDR 'B+'; -- $697 million senior secured bank credit facility 'BB/RR2'; -- $1.6 billion senior secured first mortgage notes 'BB/RR2'. Wynn Macau SA -- IDR 'B+'; -- $1.5 billion senior secured bank credit facility 'BB+/RR1'. YGL INTERNATIONAL: Court Enters Wind-Up Order --------------------------------------------- On September 2, 2009, the High Court of Hong Kong entered an order to have YGL International Logistics Company Limited's operations wound up. ========= I N D I A ========= ASIP PRIVATE: Low Net Worth Prompts CRISIL to Assign 'BB+' Rating ----------------------------------------------------------------- CRISIL has assigned its rating of 'BB+/Stable/P4+' to the bank facilities of ASIP Pvt Ltd. Facilities Ratings ---------- ------- INR120 Million Cash Credit Limits BB+/Stable (Assigned) INR250 Million Bank Guarantee P4+ (Assigned) The ratings reflect ASIP's small scale of operations in the civil construction business, low net worth, and the working-capital- intensive nature of its operations. These weaknesses are, however, partially offset by ASIP's healthy revenue growth and strong order book. Outlook: Stable CRISIL believes that ASIP will benefit from the strong growth prospects of the civil construction industry. The outlook may be revised to 'Positive' if ASIP strengthens its business profile by enhancing its revenue diversity, while maintaining current operating margins. Conversely, any large additional debt-funded capital expenditure or acquisition, leading to deterioration in the company's financial risk profile, may drive a revision in outlook to Negative'. About ASIP Set up as a partnership concern in 2000, ASIP Pvt Ltd converted to a private limited company in 2005. The company undertakes civil construction activities, such as construction of roads, canals and dams, and buildings, and erection of windmills. The company has completed projects in Karnataka, Madhya Pradesh, Maharashtra and Andhra Pradesh. ASIP reported a profit after tax (PAT) of INR41 million on net sales of INR757 million for 2008-09 (refers to financial year, April 1 to March 31), as against a PAT of INR9 million on net sales of INR411 million for 2007-08. BAZARGAON PAPER: CRISIL Assigns 'B-' Ratings to Various Bank Debts ------------------------------------------------------------------ CRISIL has assigned its 'B-/Negative/P4' ratings to the bank facilities of Bazargaon Paper & Pulp Mills Private Limited. The ratings reflect the weak financial risk profile, and the company's weak liquidity. Facilities Ratings ---------- ------- INR52.50 Million Cash Credit B-/Negative (Assigned) INR7.50 Million Standby Line B-/Negative (Assigned) of Credit INR17.00 Million Term Loan* B-/Negative (Assigned) INR2.00 Million Bank Guarantee P4 (Assigned) * includes proposed amount of INR0.4 million The ratings also factor in BPPM's moderate scale of operations and exposure to the cyclicality in the paper industry. The impact of these weaknesses is mitigated by the group's established market presence. For arriving at its ratings, CRISIL has combined the financial and business risk profiles of BPPM, Decor Paper Mills Ltd, Apex Paper Mills, and New Bombay Paper Mills Pvt Ltd. This is because these entities have strong intra-group operational linkages, are under a common management, and are in the same line of business. Outlook: Negative CRISIL expects BPPM's financial risk profile to remain weak over the medium term, given its capex plans and weak liquidity. The rating may be downgraded if there is steep deterioration in the company's financial risk profile, because of lower-than-expected sales and profitability. Conversely, the outlook may be revised to 'Stable' if the company's financial risk profile improves, supported by an increase in its scale of operations and profitability or improvement in capital structure. About Bazargaon Paper Bazargaon Paper & Pulp Mills Private Limited is a private limited company incorporated in 1983 by Surjabhan Agarwal, Jai Prakash Agarwal, and Sushil Kumar Agarwal. It commenced commercial operations in 1988. BPPM manufactures kraft paper ranging from 100 to 200 grams per metre (GSM) of single layer and having burst factors of 16+ to 24+, which is used as a key ingredient in the manufacture of boxes having industrial applications. The company has an installed capacity of 90 tonnes per day (32,400 tonnes per annum [tpa]). BPPM's manufacturing facilities are located in Nagpur, Maharashtra, and the manufacturing cycle is of 24 hours. The main markets for the company are Indore, Bhopal, Himachal Pradesh, Nagpur, Hyderabad, Bengaluru, and Chennai. It plans to undertake a capex programme to enhance its capacity to 36,000 tpa, at a total estimated cost of INR50 million. BPPM, on a standalone basis, reported a provisional profit after tax (PAT) of INR6.3 million on net sales of INR296 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR5.2 million on net sales of INR275 million for 2007-08. The group, on a consolidated basis, reported a provisional PAT of INR17 million on net sales of INR910 million for 2008-09, against a PAT of INR9.7 million on net sales of INR477 million for 2007-08. ISHWAR ISPAT: CRISIL Rates INR67.50 Million Cash Credit at 'BB+' ---------------------------------------------------------------- CRISIL has assigned its rating of 'BB+/Stable' to the bank facilities of Ishwar Ispat Industries Pvt Ltd. Facilities Ratings ---------- ------- INR67.50 Million Cash Credit BB+/Stable (Assigned) INR32.50 Million Proposed Long BB+/Stable (Assigned) Term Bank Loan Facility The rating reflects Ishwar's weak financial risk profile marked by low net worth and moderate gearing, and its limited market share and vulnerability to cyclicality in the steel industry. These weaknesses are partially offset by Ishwar's moderate business risk profile, backed by its increasing operating efficiencies. Outlook: Stable CRISIL believes that Ishwar will maintain a stable business risk profile on the back of its improving operating efficiencies. The outlook may be revised to 'Positive' if the company is successful in integrating its operations, and registers higher-than-expected revenues and profitability. Conversely, the outlook may be revised to 'Negative' if the company undertakes large, debt-funded capital expenditure. About Ishwar Ispat Based in Raipur (Chhattisgarh), Ishwar was incorporated in 2005 by Mr. Anil Patel. It manufactures angles of 12 inches, and has capacity of 36,000 tonnes per annum (tpa). The company is currently in the process of setting up an induction furnace of 30,000 tpa capacity, at an investment of around INR50 million, of which, INR35 million is expected to funded through debt, and the balance through internal accruals. Ishwar reported a profit after tax (PAT) of INR8 million on operating income of INR414 million for 2007-08 (refers to financial year, April 1 to March 31), as against a Net Loss of INR9 million on operating income of INR149 million for 2006-07. KINGFISHER AIRLINES: May Raise Up to US$175MM to Pay Down Debt -------------------------------------------------------------- Saikat Chatterjee at Bloomberg News reports that Kingfisher Airlines Ltd. may raise as much as US$175 million selling shares and global depository receipts to repay debt. Citing Ravi Nedungadi, chief financial officer of the airline’s parent UB Group, in an interview with UTV television channel, Bloomberg relates that the carrier may seek between US$80 million and US$100 million in a rights offer and a further US$60 million to US$75 million selling GDRs. Mr. Nedungadi, as cited by Bloomberg, said Kingfisher has INR60 billion ($1.2 billion) of debt, almost a third of it coming from payments made to purchase new aircraft. Bloomberg notes Mr. Nedungadi said Kingfisher will bring in a strategic partner if government rules permit. According to the report, Mr. Nedungadi said the company hasn’t pursued expressions of interest made by foreign airlines as Indian government rules don’t permit overseas carriers from buying stakes in local airlines. Headquartered in Mumbai, India, Kingfisher Airlines -- http://www.flykingfisher.com/-- formerly known as Deccan Aviation Ltd, serves about 35 domestic destinations with a fleet of more than 40 aircraft, including Airbus jets and ATR 72 turboprops. It maintains bases in major cities such as Delhi and Mumbai. Kingfisher Airlines is a unit of UB Holdings, best known for its United Breweries unit, and the carrier shares the Kingfisher brand with a popular Indian beer. UB Holdings also owns a stake in another domestic carrier, Air Deccan, whose operations it combined with Kingfisher Airlines in mid-2008. Kingfisher Airlines began flying in 2005. * * * Kingfisher Airlines reported a net loss of INR16.09 billion for the year ended March 31, 2009, compared with a net loss of INR1.89 billion in the year ended March 31, 2008. In the financial year ended June 30, 2007, Deccan Aviation reported a net loss of INR4.2 billion, up 23% from the INR3.41 billion loss incurred in FY 2006. PSA SICAL: CRISIL Assigns "P4' Rating on INR550MM Bank Guarantee ---------------------------------------------------------------- CRISIL has assigned its rating of 'P4+' to the bank guarantee facility of PSA SICAL Terminals Ltd. Facilities Ratings ---------- ------- INR550 Million Bank Guarantee P4+ (Assigned) The rating reflects the susceptibility of PSA SICAL's margins to changes in regulations on tariffs chargeable on loading/unloading activities at the Tuticorin port, as decided by Tariff Authority of Major Ports (TAMP), and increasing yearly royalty payments to the Tuticorin Port Trust (TPT). These weaknesses are mitigated by the company's established presence and operating efficiencies in the container-handling business, and continuing managerial support from PSA International Pte Ltd, Singapore (rated 'AA/Stable/-' by Standard & Poor's). PSA SICAL was set up in July 1998 as a joint venture (JV) between PSA India Pte Ltd (PSA India; holding a 57.5% equity stake), South India Corporation (Agencies) Ltd (SICAL; 37.5%), and Nur Investments and Trading Pte Ltd (NITPL; 5%). PSA SICAL entered into a 30-year build, operate, and transfer (BOT) agreement with TPT on July 15, 1998, for the development and maintenance of the seventh berth at the Tuticorin port as a container terminal. PSA SICAL has been executing container-handling operations at the seventh berth since December 1999. On March 31, 2009, PSA India acquired NITPL's share in PSA SICAL, thereby increasing its shareholding in the JV to 62.50%, with the remaining 37.50% stake being held by SICAL. PSA SICAL reported a net profit of INR26.7 million on net income from services of INR924 million in 2008 (refers to calendar year, January 1 to December 31), as against a net profit of INR158 million on net income from services of INR869 million in 2007. * INDIA: ADB Lifts Growth Forecasts in 2009 and 2010 to 6% and 7% ----------------------------------------------------------------- An increase in public spending, a quicker than expected return of capital inflows, stronger industrial production, and signs of improved business confidence will lift economic growth to 6% in India this year, up from an earlier estimate of 5%, the Asian Development Bank said in a major new report. The Asian Development Outlook 2009 Update (ADO Update), released September 22, said that while agricultural output for 2009 is expected to remain stunted and exports weak, adroit economic management in the form of fiscal stimulus packages and accommodative monetary policy has minimized damage from the global financial crisis and is supporting a relatively strong economic expansion again. The report forecasts growth of 7% for 2010, also an upward revision from the 6.5% projection in March when ADB launched the flagship annual economic publication ADO 2009. "The Government's strong fiscal stimulus, complementing the Reserve Bank of India's aggressive monetary policy easing, has successfully brought last year's economic slowdown to an end," said ADB Chief Economist Jong-Wha Lee. Growth in the first quarter of 2009 reached 6.1%, a modest rise on the previous two quarters, with the upturn reflecting a recovery in industrial growth to 5% from less than 2% in the previous six months. Company net profits grew strongly and external commercial borrowing rose 19% in June, the highest expansion since September 2008. Weak agricultural output in the 2nd and 3rd quarter is likely to weigh on growth, although the report says a rebound is expected in the final quarter. The report notes that growth for 2009 will continue to be driven by government expenditure, with the combination of countercyclical fiscal policies and renewed investor confidence expected to sustain an expansion in private consumption and investment. The impact of difficult weather conditions on rural incomes and consumption will be partly offset by budgetary programs to aid households in the countryside and possible supplementary support. In 2010, better rainfall, a rebound in exports as the recession ends in industrial economies, and stronger investor confidence will underpin a further improvement in the economic growth rate. The ADO Update notes that while the public expenditure-led growth strategy remains appropriate given global economic weakness, the growing federal and state government deficits are not sustainable in the long run. The Government recognizes the need to act and has announced plans to cut the federal deficit to 5.5% of gross domestic product in 2010 and 4.0% in 2011, supported by tax changes and expected improvements in the economy. The report says one downside risk to the outlook for the economy is financial crowding out of private investment as a result of the Government's stimulus program. This risk is most likely to arise in 2010, and underscores the need for the Government to follow through on its plans to make fiscal adjustments. Another potential threat is that domestic food price inflation may create a dilemma for monetary management in 2009 as the Reserve Bank of India seeks to keep inflation expectations in check, but not to choke off a recovery. Bad weather conditions are likely to put upward pressure on food prices in the coming months, although late monsoonal rains appear to be filling water reservoirs to an adequate level to insure a reasonable winter crop harvest which provides some relief. High food prices have a heavy effect on the poor and the Government stands ready to cushion the impact by using its large foodgrain stocks and by importing essential commodities. Asian Development Outlook, and Asian Development Outlook Update, are ADB's flagship economic reports analyzing the economic conditions and prospects in Asia and the Pacific, and are issued in March and September, respectively. ========= J A P A N ========= HITACHI LTD: Former HR Manager Ordered Four Years Imprisonment -------------------------------------------------------------- Joel Rosenblatt at Bloomberg News reports that a former Hitachi Ltd. human resources manager in the U.S. was sentenced to almost five years in prison after he pleaded guilty to defrauding the company’s health plan of US$6.1 million. According to Bloomberg, U.S. District Judge Colleen McMahon in New York on Tuesday, September 22, ordered Dennis M. Dowd, 53, of Yorktown Heights, to serve four years and nine months in prison. Mr. McMahon also ordered Mr. Dowd to pay Hitachi America $7.5 million in restitution, Bloomberg says. Bloomberg, citing the U.S. Attorney’s Office in New York, says Mr. Dowd worked for Hitachi America, directed insurance payments to an account not authorized by the company and used more than US$3 million for his personal expenses. Mr. Dowd in March pleaded guilty to health care fraud and money laundering, the report recalls. Hitachi America is a unit of Hitachi Ltd. As reported in the Troubled Company Reporter-Asia Pacific, citing Bloomberg News, Hitachi Ltd said its net loss will narrow this fiscal year after the company booked tax writedowns in the previous period. Bloomberg News said that according to the Tokyo-based company, net loss will contract to JPY270 billion (US$2.78 billion) in the 12 months ending March 31, 2010, from a record JPY787.3 billion deficit a year earlier, while operating profit will probably fall 76 percent to JPY30 billion as sales decline 11 percent to JPY8.9 trillion. Bloomberg News related Hitachi said it had JPY390 billion in tax- related writedowns last fiscal year, disposing of all such obligations. The company will probably book a charge of JPY200 billion, including JPY100 billion for reorganization and JPY50 billion to reflect losses at the semiconductor unit, Renesas Technology Corp., Bloomberg News cited Takashi Miyoshi, an executive vice president at Hitachi, as saying. According to Bloomberg News, the company in March said it's cutting jobs and separating its automotive systems and consumer units to trim costs by JPY500 billion this fiscal year and weather the global recession. About Hitachi Ltd Hitachi Ltd. (NYSE:HIT) -- http://www.hitachi.co.jp/-- is engaged in developing a diversified product mix ranging from electricity generation systems to consumer products and electronic devices. The Company has seven segments: Information & Telecommunication Systems, Electronic Devices, Power & Industrial Systems, Digital Media & Consumer Products, High Functional Materials & Components, Logistics, Services & Others and financial services. In April 2008, Hitachi acquired a majority ownership interest in M-Tech Information Technology, Inc. In April 2008, Hitachi, Ltd. established a wholly owned subsidiary, Hitachi Information & Telecommunication Systems Global Holding Corporation. In March 2008, Hitachi Consulting, the global consulting company of Hitachi, acquired JMN Associates. On March 16, 2009, the Company made Hitachi Koki Co., Ltd. a subsidiary via share purchase. On March 18, 2009, the Company made Hitachi Kokusai Electronic Inc. a subsidiary via share purchase. JAPAN AIRLINES: Creditors Seek to Separate Unprofitable Operations ------------------------------------------------------------------ Lenders to Japan Airlines Corp. are likely to ask the government to separate unprofitable portions of the company, John Letzing at MarketWatch reports citing the Nikkei business daily. According to the report, the daily said JAL's creditors, including the Development Bank of Japan, are pressing for a move to separate the carrier's profitable operations and routes from those that are losing money, and to cut personnel to streamline the company and facilitate an infusion of public funds. The Nikkei, as cited by MarketWatch, said lenders are reluctant to provide additional loans under current rehabilitation plans. MarketWatch notes the daily said JAL's lenders also want the government to establish "emergency legislation" that would allow for a restructuring of its roughly JPY800 billion (US$8.7 billion) in consolidated, interest-bearing debt. International Routes Cut Reuters, citing the Nikkei business daily, reports that Japan Airlines is planning to abolish about 60% of international routes at Kansai International Airport. Reuters notes the business daily said JAL is slated to scrap a total of about 21 international routes. According to Reuters, the daily said that in addition to the already announced elimination of flights between Kansai airport and London, JAL plans to discontinue service to South Korea's Incheon International Airport, Singapore and Hanoi, Vietnam at the end of fiscal 2009. Reuters relates the Nikkei said the airline plans to slash 29 routes within Japan. Inaccurate Reports Meanwhile, Bloomberg News reports that Japan Airlines, which is seeking its fourth government bailout since 2001, said reports about its reorganization and financial status aren’t accurate. “Reports of the current financial state of the company and its reorganization are inconsistent with the facts,” Bloomberg cited Japan Airlines in a statement to the Tokyo Stock Exchange. As reported by the Troubled Company Reporter on September 22, 2009, Bloomberg said JAL has hired Merrill Lynch Japan Securities Co. to advise on its search for partners and investments. Merrill Lynch will evaluate the carrier's value and select a partner who can help replenish its capital. As reported by the TCR on Sept. 15, 2009, AMR Corp. and Delta Air are in separate talks with Japan Airlines to forge an expansive joint venture with the carrier. The Wall Street Journal said that American Airlines would also consider taking a minority stake in JAL, although any such investment would likely be capped at hundreds of millions of dollars. Delta is also negotiating to acquire a minority stake of around US$300 million in JAL. The Journal relates that Delta wants JAL to join its rival SkyTeam alliance. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan- based holding company that is active in five business segments through its 225 subsidiaries and 82 associated companies. The Air Transportation segment is engaged in the operation of passenger and cargo planes. The Air Transportation-Related segment is engaged in the transportation of passengers and cargoes, the preparation of in-flight food catering, the maintenance of aircraft and land equipment, as well as the fueling business. The Travel Planning and Marketing segment is involved in the planning and sale of travel packages. The Card and Leasing segment is engaged in the provision of finance, cards and leasing services. The Others segment is involved in businesses related to hotels, resorts, logistics, wholesale, retail, real estate, printing, construction, manpower dispatch, as well as information and communication. The Company has numerous global operating locations. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * As reported in the Troubled Company Reporter-Asia Pacific on February 11, 2009, Moody's Investors Service changed the outlook on the Ba3 long-term debt rating and issuer rating of Japan Airlines International Co. Ltd. to negative from positive. The outlook change reflects Moody's view that JALI's profitability is likely to remain pressured amid the recent sharp decline in airline passenger demand. Japan Airlines continues to carry Standard & Poor's Ratings 'B+' LT Foreign & Local Issuer Credit. The outlook is positive. JAPAN AIRLINES: To Slash 10% of Maintenance Jobs by March 2012 -------------------------------------------------------------- Naoko Fujimura at Bloomberg News, citing the Nikkan Kogyo newspaper, reports Japan Airlines Corp. will cut about 600 jobs, or 10% of workers, at its four maintenance units by the year ending March 2012. The Nikkan Kogyo newspaper did not say where it got the information, Bloomberg says. According to Bloomberg, JAL will merge maintenance companies on Oct. 1 and cut routes. Japan Air, which has received three government bailouts since 2001, is in talks with Delta Air Lines Inc. and Air France-KLM on selling stakes, according to people familiar with the negotiations. As reported by the Troubled Company Reporter on September 22, 2009, Bloomberg said JAL has hired Merrill Lynch Japan Securities Co. to advise on its search for partners and investments. Merrill Lynch will evaluate the carrier's value and select a partner who can help replenish its capital. As reported by the TCR on Sept. 15, 2009, AMR Corp. and Delta Air are in separate talks with Japan Airlines to forge an expansive joint venture with the carrier. The Wall Street Journal said that American Airlines would also consider taking a minority stake in JAL, although any such investment would likely be capped at hundreds of millions of dollars. Delta is also negotiating to acquire a minority stake of around $300 million in JAL. The Journal relates that Delta wants JAL to join its rival SkyTeam alliance. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan- based holding company that is active in five business segments through its 225 subsidiaries and 82 associated companies. The Air Transportation segment is engaged in the operation of passenger and cargo planes. The Air Transportation-Related segment is engaged in the transportation of passengers and cargoes, the preparation of in-flight food catering, the maintenance of aircraft and land equipment, as well as the fueling business. The Travel Planning and Marketing segment is involved in the planning and sale of travel packages. The Card and Leasing segment is engaged in the provision of finance, cards and leasing services. The Others segment is involved in businesses related to hotels, resorts, logistics, wholesale, retail, real estate, printing, construction, manpower dispatch, as well as information and communication. The Company has numerous global operating locations. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * As reported in the Troubled Company Reporter-Asia Pacific on February 11, 2009, Moody's Investors Service changed the outlook on the Ba3 long-term debt rating and issuer rating of Japan Airlines International Co. Ltd. to negative from positive. The outlook change reflects Moody's view that JALI's profitability is likely to remain pressured amid the recent sharp decline in airline passenger demand. Japan Airlines continues to carry Standard & Poor's Ratings 'B+' LT Foreign & Local Issuer Credit. The outlook is positive. ==================== N E W Z E A L A N D ==================== BOB'S COVE: PFK Files First Receiver's Report --------------------------------------------- PFK Corporate Recovery & Insolvency, the receiver for Bob's Cove development, has completed its first report on the company. According to National Business Review's Jazial Crossley, PFK's report reveals that: -- First ranking mortgagee the New Zealand Guardian Trust is owed AU$5,223,000 for the development. -- The second mortgagee holder Strategic Nominees is owed AU$10,221,595. -- Unsecured creditors Highgate Trust Reid & McKenzie are owed AU$4 million for the project. -- Three claims have been lodged from unsecured creditors regarding debts totaling AU$108,335. PFK is continuing the receivership process, which is still in early stages, National Business Review notes. National Business Review says John Reid, Bob's Cove director and shareholder, has told receivers the first stage of the development was held back by a year and a half while approval was delayed, which caused large interest costs. By the time titles could be issued, the rural residential section market had collapsed. PFK's report indicates the company’s only known assets are the development land at Bob’s Cove and associated intellectual property such as consents, plans, drawings etc. and a back blade tractor which is held by Otago Machinery for sale. Bob's Cove is a rural residential 94-lot development by father-son developer duo Kelly and Dan McEwan. It was placed into receivership June 2009 after the McEwans were bankrupted earlier in the year and no sections at the subdivision were sold off the plans, National Business Review says. Dan McEwan, who was declared bankrupt February 2009, was responsible for the financial management of the project. SOUTH CANTERBURY: S&P Puts 'BB+' Rating on CreditWatch Negative --------------------------------------------------------------- Standard & Poor's Ratings Services said that it has placed its 'BB+' long-term rating on New Zealand-based finance company, South Canterbury Finance Ltd. on CreditWatch with negative implications. This rating action follows S&P's concern that SCF's risk profile has increased since S&P lowered the ratings on the company on Aug. 13, 2009. A CreditWatch Negative listing by Standard & Poor's implies a one-in-two likelihood of the rating being lowered within the next three months. S&P's concerns center on increasing pressure on liquidity; still- weak asset quality; and governance matters including, but not limited to, related party exposures. Since its ratings were lowered, SCF has ceased allotting securities under its existing debenture prospectus (unrated by Standard & Poor's), provided market guidance of an increase to its unaudited net after-tax loss for fiscal 2009 to NZ$69 million, and had two of its four directors resign with pending replacements. These negative developments have occurred against a backdrop of a major restructuring and recapitalization initiative that SCF has said it will announce in coming weeks. "The CreditWatch action reflects S&P's view that, with no debenture prospectus in the public domain, SCF's funding flexibility and liquidity are undermined at the 'BB+' rating level, at least in the short term," Standard & Poor's credit analyst Derryl D'silva said. Technically, SCF does not have access to the new and reinvested debenture funds, which reside in a trust account. This increases pressure on SCF's funding and liquidity. Furthermore, SCF's liquidity levels are modest after the company's decision to shift its holdings of liquid assets from cash to higher-risk and higher-yield investments, and in related- party entities of uncertain credit-standing. Additionally, U.S. private placement (facility is unrated by Standard & Poor's) investors continue to review their funding support for SCF, which, if resulted in a requirement to repay the facility, has the potential to significantly exacerbate liquidity concerns and cause a downward revision of the rating by multiple notches, potentially into the 'B' rating category. Should U.S. private placement investors continue their funding support for SCF, downward rating pressure is likely to be less severe. "The ratings may be lowered by one or more notches should SCF's debenture prospectus remain out of the market on or soon after Sept. 30, 2009, or should the confluence of actual or potential liquidity concerns that affect the company cause us to consider that SCF's financial strength is no longer congruent with S&P's 'BB' category rating," said Mr. D'silva. "Negative ratings momentum could also occur if the company were to announce any new adverse developments that could affect its audited 2009 financial statements." The 'BB+' rating continues to reflect S&P's view that SCF's primary shareholder, Mr. Allan Hubbard, will remain committed to providing timely support to SCF if required. If SCF's credit profile deteriorates, evidence of the shareholder's support would be required to keep the rating at 'BB+'. If support is not forthcoming, or is not sufficient to afford debenture- and bond- holders confidence, it is likely the company will be immediately downgraded. The ratings could be taken off CreditWatch Negative within a matter of weeks if: * SCF is able to demonstrate its ability to re-access the debenture-investor market with no long-term negative effects impacting on its debenture profile; * Its audit and subsequent fiscal-2009 audited financial statements reveal no new material adverse findings concerning its financial strength; * It is able to source two or more highly qualified independent directors to help address weaknesses in SCF's financial strength profile and guide the company through a major restructure and recapitalization; and * More generally, Standard & Poor's gains greater confidence that the support of private placement investors and bankers as well as debenture investors will be retained. The CreditWatch could be longer lasting if Standard & Poor's has uncertainties regarding SCF's restructure and recapitalization plans after they are announced. Even so, Standard & Poor's expects the CreditWatch to be resolved in no more than 90 days. Even if SCF were able to satisfactorily address these rating pressures, at best -- after the CreditWatch is resolved -- it is likely the rating would be affirmed with a negative outlook, reflecting near-term pressures on SCF's financial profile, and medium-term uncertainty concerning restructuring and recapitalization initiatives. An alleviation of negative rating pressures is not likely until SCF can address liquidity, asset quality, and governance concerns. * NEW ZEALAND: Out of Recession as GDP Grows 0.1% in June Qtr ------------------------------------------------------------- New Zealand’s economy has emerged from its worst recession in three decades, unexpectedly expanding for the first time in six quarters on rising consumer spending and exports of logs and dairy products, Tracy Withers at Bloomberg News reports. Statistics New Zealand said that economic activity, as measured by Gross Domestic Product (GDP), was up less than 0.1% in the June 2009 quarter. This growth in economic activity follows five quarters of contraction in the New Zealand economy. Activity in the primary industries was up 1.5% in the June 2009 quarter, mainly driven by forestry and logging (up 8.0%). The increase in forestry and logging production was related to an increase in exports of logs to the People's Republic of China. Activity in the goods-producing industries contracted 0.5% in the June 2009 quarter. The manufacturing (down 1.3%) and construction (down 1.9%) industries both declined. A 5.9% increase in electricity, gas and water partly offset these declines. Activity in the services industries was flat this quarter. Service industries that increased were real estate and business services (up 1.5%) and communications (up 1.7%). Offsetting these increases were declines in wholesale trade (down 2.1%), transport and storage (down 3.3%), and government administration and defense (down 0.4%). The expenditure measure of GDP, released concurrently with the production measure, was up 0.4% in the June 2009 quarter. Household consumption expenditure, which measures the volume of spending by New Zealand households, was up 0.4%. This increase in household spending was driven by non-durables (mainly motor fuel) and services. Household spending on durable items fell. Export volumes were up 4.7% in the June 2009 quarter, with exports of dairy and wood products the main contributors. Import volumes decreased 3.8% in the same period, with the largest declines in intermediate goods, and machinery and plant equipment. The combination of higher exports, lower imports, and a decline in manufacturing led to a large, $1.1 billion run down in inventories. ===================== P H I L I P P I N E S ===================== * PHILIPPINES: ADB Sees Modest Economic Recovery in 2009-2010 ------------------------------------------------------------- The Asian Development Bank said that economic activity in the Philippines will pick up in the second half of 2009, and reach modest growth rates in 2010. The Asian Development Outlook 2009 Update (ADO Update), released September 22, said the economy will expand 2.2% in the second half of the year, up from a lower-than-expected 1% in the first half of 2009. The report projects full year growth in 2009 at 1.6%, slightly below the ADB's March projection of 2.5%, rising to 3.3% in 2010. A sharper than anticipated slowdown in private consumption in the first half of 2009, coupled with a slump in exports and weak investment environment, has cut the growth rate more than expected, the report added. "There were positive factors, though, such as the steady growth in remittances and business process outsourcing services, stability in domestic financial markets and strength in external liquidity position," said Neeraj Jain, Country Director of ADB's Philippines Country Office. "Recent improvements in business and consumer sentiment are also encouraging." Activity is expected to pick up in the latter half of this year and improve again next year, the report says, supported by the Government's fiscal stimulus measures and the gradual global recovery. Merchandise exports are projected to edge higher as overseas demand improves. Imports will also pick up, in line with stronger private consumption and the restocking of inventories. Steadily rising remittance inflows and a surplus in trade services, mainly from the business process outsourcing sector, will keep the current account in surplus. A key risk to the 2010 outlook is a weaker-than-anticipated global economic recovery. That would hurt exports, foreign investment inflows, and consumer and business sentiment which, while showing early signs of improvement, remain fragile, the report says. It adds that uncertainties leading up to the General Elections in May 2010 will likely keep private investment subdued. On the other hand, domestic demand is expected to strengthen, supported by election spending, a gradual global recovery, and a lift in consumer and business sentiment, assuming a smooth election and transition in government in May. The updated forecasts assume that the monetary stance would gradually tighten in 2010, with the timing depending on inflation and growth trends. The report is forecasting an annual average inflation of 3.2% this year, and 4.5% for 2010, lower than the earlier forecasts. Asian Development Outlook, and Asian Development Outlook Update, are ADB's flagship economic reports analyzing the economic conditions and prospects in Asia and the Pacific, and are issued in March and September, respectively. ================= S I N G A P O R E ================= AUVENTA PTE: Creditors' Proofs of Debt Due on October 19 -------------------------------------------------------- Auventa Pte. Ltd., which is in members' voluntary liquidation, requires its creditors to file their proofs of debt by October 19, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on September 18, 2009. The company's liquidator is: Chia Lay Beng 1 Scotts Road #21-08 Shaw Centre Singapore 228208 EC CHEMICAL: Creditors' Proofs of Debt Due on September 30 ---------------------------------------------------------- EC Chemical Technologies (S) Pte Ltd, which is liquidation, requires its creditors to file their proofs of debt by September 30, 2009, to be included in the company's dividend distribution. The company's liquidator is: Yin Kum Choyc c/o K C Yin & Co Certified Public Accountants, Singapore 100 Tras Street #16-01 Amara Corporate Tower Singapore 079027 Telephone: 6323 1613 Facsimile: 6323 1763 ENRON CAPITAL: Creditors' Proofs of Debt Due on October 2 --------------------------------------------------------- Enron Capital And Trade Resources Singapore Pte Ltd, which is in creditors' voluntary liquidation, requires its creditors to file their proofs of debt by October 2, 2009, to be included in the company's dividend distribution. The company's liquidator is: Goh Thien Phong c/o PricewaterhouseCoopers LLP 8 Cross Street #17-00 PWC Building Singapore 048424 STRATEGEM TECHNOLOGIES: Court to Hear Wind-Up Petition on Oct. 2 ---------------------------------------------------------------- A petition to wind up the operations of Strategem Technologies Pte Ltd will be heard before the High Court of Singapore on October 2, 2009, at 10:00 a.m. Sentinel Developments Limited filed the petition against the company on September 3, 2009. The Petitioner's Solicitors are: Khattarwong No. 80 Raffles Place #25-01 UOB Plaza 1 Singapore 048624 ST-KN PTE: Creditors' Proofs of Debt Due on October 19 ------------------------------------------------------ ST-KN Pte Ltd, which is in members' voluntary liquidation, requires its creditors to file their proofs of debt by October 19, 2009, to be included in the company's dividend distribution. The company's liquidators are: Kelvin Thio Terence Ng c/o Ardent Business Advisory Pte Ltd 146 Robinson Road #12-01 Singapore 068909 =========== T A I W A N =========== HUA NAN: Moody's Withdraws 'D' Bank Financial Strength Rating ------------------------------------------------------------- Moody's Taiwan Corporation has withdrawn its national scale ratings on Hua Nan Commercial Bank, Ltd. Moody's has withdrawn these ratings for business reasons. This action does not reflect a change in the creditworthiness of the issuer. HNCB's global scale ratings are unaffected. The rating withdrawal follows Moody's decision to reorganize certain aspects of its business in Asia, including the closing of its offices in Taiwan and Indonesia. These ratings have been withdrawn: * HNCB: Aa2.tw national scale long-term bank deposit rating (negative outlook) and TW-1 national scale short-term deposit rating (stable outlook). These ratings are unaffected: * HNCB: D bank financial strength rating, A3 local and foreign currency long-term deposit rating, and P-1 local currency and foreign currency short-term deposit rating. The outlook of these ratings is negative. Moody's last rating action with respect to HNCB was taken on June 18, 2009, when the outlook of certain ratings was changed from stable to negative. Hua Nan Commercial Bank, headquartered in Taipei, Taiwan, is a wholly owned subsidiary of Hua Nan Financial Holdings Co., Ltd. HNCB had assets of NT$1.7 trillion and shareholders' equity of NT$79.8 billion as of end-June 2009 on a consolidated basis. =============== X X X X X X X X =============== MODINE MANUFACTURING: JPMorgan, Lenders Waive Technical Default --------------------------------------------------------------- Modine Manufacturing Company on September 15, 2009, entered into these agreements: -- Second Amendment to Credit Agreement amending the Amended and Restated Credit Agreement, as amended, with JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA (main office Chicago)), a national banking association, as Swing Line Lender, as LC Issuer and a lender and as Agent and Bank of America, N.A., M&I Marshall & Ilsley Bank, Wells Fargo Bank, N.A., Dresdner Bank AG (Commerzbank AG), U.S. Bank, National Association and Comerica Bank See http://ResearchArchives.com/t/s?4540 -- Waiver and Third Amendment to Note Purchase Agreement (2006) amending the Note Purchase Agreement dated as of December 7, 2006, as amended, pursuant to which the Company issued US$50,000,000 of 5.68% Senior Notes, Series A due December 7, 2017 and $25,000,000 of 5.68% Senior Notes, Series B due December 7, 2017 See http://ResearchArchives.com/t/s?4541 -- Waiver and Third Amendment to Note Purchase Agreement (2005) amending the Note Purchase Agreement dated as of September 29, 2005, as amended, pursuant to which the Company issued US$75,000,000 of 4.91% Senior Notes due September 29, 2015 See http://ResearchArchives.com/t/s?4542 The Company entered into the September 15 Amendments to waive certain events of default existing under the Credit Agreement, the 2006 Note Purchase Agreement and the 2005 Note Purchase Agreement and amend other provisions of the Credit Agreement, the 2006 Note Purchase Agreement and the 2005 Note Purchase Agreement. Pursuant to the terms of the September 15 Amendments: -- A technical default involving the Company's commitment to increase the capital of Modine Thermal Systems (Changzhou) Co., Ltd. in the aggregate amount of $1,500,000 was waived and the amount of such capital increase was applied against the Company's basket for permitted loans and advances; -- A technical default resulting from the Company's optional principal prepayment under the Credit Agreement that reduced the aggregate outstanding principal amount of the advances to US$82,000,000 was waived. To the extent that optional principal prepayments reduce the advances below US$94,000,000, the Company is required to deposit such sums into a cash collateral account for the benefit of the Lenders and the holders of the 2006 Notes and the 2005 Notes. Upon the effectiveness of the September 15 Amendments, the Company borrowed $12,000,000 and deposited that amount in a cash collateral account; -- The Company may acquire a Dutch holding company and conduct these transactions: (i) sell Modine UK Dollar, Limited, a wholly owned subsidiary of the Company, to the Dutch holding company; (ii) transfer its beneficial interest in Modine Korea, LLC, also a wholly owned subsidiary of the Company, to the Dutch holding company; and (iii) sell its wholly owned subsidiary, Modine Austria Holding GmbH, to Modine Holding GmbH, also a wholly Owned subsidiary of the Company. The transfers among the Company and its subsidiaries are Excluded Sales for purposes of mandatory prepayments of Asset Sale Net Proceeds; and -- The existing loan between the Company and Modine Korea, LLC may remain outstanding after the disposition of Modine Korea, LLC to a third party in the event such transaction occurs. On September 18, 2009, the Company entered into these agreements: -- Third Amendment to the Credit Agreement amending the Credit Agreement See http://ResearchArchives.com/t/s?4543 -- Fourth Amendment to the 2006 Note Purchase Agreement See http://ResearchArchives.com/t/s?4544 -- Fourth Amendment to the 2005 Senior Note Agreement See http://ResearchArchives.com/t/s?4545 The Company entered into the September 18 Amendments to amend certain provisions of the Credit Agreement, the 2006 Note Purchase Agreement and the 2005 Note Purchase Agreement in anticipation of the Company's public offering of common stock, $0.625 par value per share. Pursuant to the terms of the September 18 Amendments: -- Certain financial covenants were modified so the amount of cash restructuring charges that may be added back to Consolidated Net Income for covenant purposes will be increased by US$20,000,000, permitted capital expenditures will be increased by US$5,000,000 for the current fiscal year, and any amount of unused capital expenditure for the current fiscal year (not to exceed US$5,000,000) may be carried over to the next fiscal year, and the amount of off balance sheet liabilities for sale leasebacks after February 17, 2009 and the interest component of such sale leasebacks that are excluded from total debt and interest expense for covenant purposes is increased from US$20,000,000 to US$30,000,000; -- The funds in the cash collateral account described in the provisions of the September 15 Amendments will be released; and -- The terms of the documents, other than certain conforming definitions, become effective automatically on the date of the closing of the Offering, subject to certain conditions. About Modine Modine Manufacturing Company -- http://www.modine.com/-- with fiscal 2009 revenues of US$1.4 billion, specializes in thermal management systems and components, bringing heating and cooling technology and solutions to diversified global markets. Modine products are used in light, medium and heavy-duty vehicles, heating, ventilation and air conditioning equipment, off-highway and industrial equipment, refrigeration systems, and fuel cells. The Company employs roughly 7,000 people at 32 facilities worldwide in 15 countries. * Asia Poised to Lead Recovery from Global Slowdown, ADB Says ------------------------------------------------------------- Developing Asia is proving to be more resilient to the global downturn than was initially thought, the Asian Development Bank said in a new major report. The Update to ADB's flagship annual economic publication, Asian Development Outlook (ADO) 2009, released on September 22, forecasts economic expansion in developing Asia to come in at 3.9% in 2009, up from the 3.4% expected in March when the ADO 2009 was released. In 2010, the growth projection is likewise upgraded to 6.4% from 6.0%. Stronger growth in East Asia and South Asia underpinned the improved prospects. "Despite worsening conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown," said ADB Chief Economist Jong-Wha Lee. Firm action by many governments and central banks, the relatively healthy state of financial systems prior to the global crisis, and the rapid turnaround in the region's larger, less export-dependent economies, all enhanced developing Asia's growth prospects. However, there are notable divergences in the outlook across subregions and across economies. Economic growth in East Asia is upgraded to 4.4% in 2009, from the 3.6% projected in ADO 2009. In the People's Republic of China, aggressive monetary easing and the massive fiscal stimulus package rolled out by the Government bolstered the region's largest economy, which is now expected to grow by 8.2% in 2009 and 8.9% in 2010, up from the March forecast of 7% and 8% respectively. A shallower contraction in the Republic of Korea is also expected on the back of effective fiscal stimulus measures. Meanwhile, the economies of Hong Kong, China and Taipei, China are likely to shrink more sharply on account of the severe drop in the demand for their exports. Prospects for South Asia improved to 5.6% this year, up from the ADO 2009 forecast of 4.8% as the outlook for five of the eight subregional economies were upgraded. The subregion's limited reliance on trade partly shielded it from the adverse effects of the global slump. Emerging signs of a recovery in private business confidence and a continued large fiscal stimulus announced in the July 2009 budget helped bolster India's projected economic expansion to 6.0% this year, upgraded from 5% in March. Bleaker prospects are projected for the Maldives, on account of weak tourism receipts, and for Pakistan and Sri Lanka due to tight domestic demand and the weak global economy. Aggregate growth in Southeast Asia is projected to slow to 0.1% this year, compared to expectations of 0.7% growth in ADO 2009. The more positive outlook for Indonesia and Viet Nam failed to offset the deteriorating prospects for the more open (Malaysia and Thailand) and smaller (Brunei Darussalam and Cambodia) economies in the subregion. Projections for Central Asia are much bleaker now than in ADO 2009 due to lower commodity prices, a deeper downturn in the Russian Federation (the subregion's main trade and financial partner), and weaker capital inflows, investments, and remittances. Growth is forecast to slow to 0.5% this year, compared to the March forecast of 3.9%. Kazakhstan's economy is expected to shrink to -1.0% in 2009, as it grapples with a fallout from a banking crisis and lower oil prices. Economic expansion in the Pacific Islands is slightly downgraded to 2.8% this year compared with 3.0% in ADO 2009, largely as a result of falling incomes from remittances and tourism. "The improved regional outlook should not make developing Asian economies complacent. A protracted global slowdown or the hasty withdrawal of stimulus packages can degrade the region's ongoing recovery," said Dr. Lee. To develop more resilient economies, developing Asia should broaden the scope and structure of its openness. Reducing its vulnerability to external shocks requires policy makers to tackle the geographically unbalanced structure of its trade, capital flows, and movement of workers. By promoting closer economic linkages within the region and a more balanced internal economic structure with a bigger role for domestic demand, policy makers in developing Asia will be able to achieve rapid yet stable growth for the region. Asian Development Outlook, and Asian Development Outlook Update, are ADB's flagship economic reports analyzing the economic conditions and prospects in Asia and the Pacific, and are issued in March and September, respectively. * ADB Revises Growth Prospects for Pacific in 2009 -------------------------------------------------- Economic growth in the Pacific will slow sharply in 2009, with five economies in the region expected to contract as the global economic slump continues to erode incomes from tourism and remittances, according to a major new report from the Asian Development Bank. The Asian Development Outlook 2009 Update (ADO Update) released September 22, projects growth for the 14 island economies to slow to 2.8%, down from 5.2% in 2008. Only the region's mining and petroleum exporters -- Papua New Guinea (PNG) and Timor-Leste, and Vanuatu, a key reformer in the area of private sector oriented growth -- are expected to grow at a reasonable rate in 2009. The Cook Islands, Fiji Islands, Palau, Samoa, and Tonga are all projected to contract. Solomon Islands is now expected to record no growth because log exports are declining sharply. ADO Update slightly downgrades an earlier ADB estimate of 3% for full-year growth in the Pacific region. The revision to the March forecast is mainly driven by a less optimistic forecast for Timor- Leste, from 12% to 8%, after it trimmed public spending to more sustainable levels since the easing of world oil prices. The report says that, since March, PNG's prospects have improved slightly to 4.5%, as export earnings benefit from a faster than anticipated recovery in key commodity prices. Growth forecasts for Vanuatu have also been revised up to 4% for 2009, reflecting strength in tourism and signs of an improvement in domestic demand. In 2010, ADO Update forecasts that the region will benefit from improved prospects in the international economy. The report says a modest recovery is considered achievable if the Pacific continues to pursue private sector development reform activities such as increasing access to finance opportunities, reforming state-owned enterprises, and involving the private sector participation in the delivery of essential services. However, much of the overall growth of 3.1% is likely to be accounted for by the region's two biggest economies, Papua New Guinea and Timor-Leste, which are expected to be bolstered by higher average global oil and mineral prices. Excluding Papua New Guinea and Timor-Leste, the rest of the region will grow at just 0.8%, assuming a slow, gradual pickup from tourism and remittances and the implementation of effective policy responses to this year's slowdown. "The beginning of a modest economic recovery will be within the reach of most Pacific economies during 2010," says S.Hafeez Rahman, Director General of ADB's Pacific Department. "Sustainable economic recovery will require concerted action by the region's governments.” Lower prices this year for imported fuel and food have trimmed inflation forecasts for the region and provided some relief to vulnerable groups that were seriously hurt by high prices in 2008. The report projects inflation will slow to an average 6.1% this year, down from 9.5% in 2008. However, the report warns that a recent rise in crude oil prices may push up inflation in the remainder of the year. Asian Development Outlook, and Asian Development Outlook Update, are ADB's flagship economic reports analyzing the economic conditions and prospects in Asia and the Pacific, and are issued in March and September, respectively. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Sept. 10-11, 2009 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 2, 2009 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown University Law Center, Washington, D.C. Contact: http://www.abiworld.org/ Oct. 7-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Oct. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Paris Las Vegas, Las Vegas, Nev. Contact: http://www.abiworld.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 21-23, 2010 INSOL International Annual Regional Conference Madinat Jumeirah, Dubai, UAE Contact: 44-0-20-7929-6679 or http://www.insol.org/ Apr. 29-May 2, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2010 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Conference The Ritz-Carlton Amelia Island, Amelia, Fla. Contact: http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 6-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE 22nd Annual Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 31-Apr. 3, 2011 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 9-12, 2011 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ Dec. 1-3, 2011 AMERICAN BANKRUPTCY INSTITUTE 23rd Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ ********* 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. Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante, 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$625 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***