/raid1/www/Hosts/bankrupt/TCRAP_Public/091015.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, October 15, 2009, Vol. 12, No. 204
Headlines
A U S T R A L I A
AUSTRALIAN ZIRCON: Pitcher Partners Appointed as Administrator
FORTESCUE METALS: To Self-finance Expansion After China Deal Fails
MANNWAY LOGISTICS: Ferrier Hodgson Appointed as Receivers
H O N G K O N G
CAESAR BEAUTY: Court to Hear Wind-Up Petition on November 11
DRAGON LOYAL: Wai and Fun Appointed as Liquidators
EXCEL TIME: Court to Hear Wind-Up Petition on November 25
FAR-GO EXPRESS: Court to Hear Wind-Up Petition on November 25
GOOD STUFF: Court Enters Wind-Up Order
GLOBALCAST NETWORKS: Court to Hear Wind-Up Petition on October 28
GUIDE A-WAY: Court to Hear Wind-Up Petition on October 28
GOLDEN MAGNIFICENT: Court to Hear Wind-Up Petition on November 18
GREAT HONEST: Lees and Ng Appointed as Liquidators
HONG WANG JEWELLERY: Court Enters Wind-Up Order
HONOUR GLORY: Court to Hear Wind-Up Petition on November 18
HONG KONG RESOURCES: Court to Hear Wind-Up Petition on December 2
JATRADE (H.K.): Court Enters Wind-Up Order
KEEP ON HOLDINGS: Court Enters Wind-Up Order
KING POWER: Court Enters Wind-Up Order
I N D I A
AIR INDIA: To Get INR50-Bln Capital Infusion from India Gov't.
ALAM TANNERY: CRISIL Reaffirms 'BB-' Ratings on Various Bank Debts
BARATH POWER: ICRA Cuts Rating on INR3.34BB LT Loans to 'LBB-'
BD OVERSEAS: CRISIL Assigns 'B' Rating on INR32.8 Mln Term Loan
CIEMME JEWELS: ICRA Assigns 'LBB' Rating on INR160MM Bank Debts
GLASSTECH INDUSTRIES: CRISIL Cuts Rating on LT Loan to 'BB-'
GV (GOD VISHNU): CRISIL Places 'B' Rating on INR14.7MM Term Loan
ILABS INFO: CARE Assigns 'CARE B' Rating on INR47cr LT Bank Debts
JAMMU & KASHMIR: CARE Downgrades Ratings on Bonds to 'CARE D (SO)'
JET AIRWAYS: May Raise Up to INR900cr Next Month
KITTY INDUSTRIES: CRISIL Assigns 'BB+' Rating to Bank Facilities
MAHAVIR RICE: CRISIL Rates INR10.0 Million Cash Credit at 'B'
NAP CONSTRUCTION: Low Net Worth Prompts CRISIL 'BB+' Ratings
PUNJAB CHEMICALS: CARE Revises Ratings on LT Bank Facilities
S. KUMARS NATIONWIDE: ICRA Rates INR4.5BB Term Loans at 'LB'
TATVA CHINTAN: CRISIL Assigns 'BB+' Ratings on Various Bank Debts
TREADSTONE LTD: CRISIL Puts 'B+' Rating on INR30.7MM Term Loan
TULSI EXTRUSIONS: CARE Assigns 'CARE BB' Ratings on LT Bank Debts
UNIVERSAL POWER: CRISIL Cuts Ratings on Various Bank Debts to 'BB'
I N D O N E S I A
BANK CENTURY: Fugitive Investors Deny Embezzlement Allegations
J A P A N
CAFES 3: Fitch Downgrades Ratings on Five Classes of Notes
TOKUTEI MOKUTEKI: S&P Junks Ratings on Class B Notes From 'B'
* JAPAN: Corporate Bankruptcies Drop 18% in September 2009
* JAPAN: Hospital Bankruptcies Set to Hit Record High in 2009
N E W Z E A L A N D
GLOBAL BULBS: Goes Into Liquidation Amid NZ$50,000 Unpaid Bill
PETHERICK PROPERTIES: In Receivership; KordaMentha Appointed
PROPERTY VENTURES: Director Uncooperative on Unit's Receivership
S I N G A P O R E
IT SERVICES: Narayanamohan Appointed as Liquidator
ROYAL BANK: Mass Resignation at RBS Coutts Singapore Branch
STREAM INVESTMENTS: Creditors' Proofs of Debt Due on November 13
S R I L A N K A
SRI LANKA TELECOM: Fitch Affirms Issuer Default Rating at 'B+'
T A I W A N
CHANG HWA: Fitch Affirms Individual Rating at 'C/D'
- - - - -
=================
A U S T R A L I A
=================
AUSTRALIAN ZIRCON: Pitcher Partners Appointed as Administrator
--------------------------------------------------------------
The Boards of Directors of Australian Zircon NL and its
subsidiaries, Mallee Minerals Separations Pty Ltd ACN 112 481 884,
and Steiner Holdings Pty Ltd ACN 009 461 223, appointed
Bryan Hughes of Pitcher Partners as Administrator pursuant to
Section 436A of the Corporations Act.
"The Company continues to have the full support of its largest
shareholder and intends using this process to facilitate a fully
underwritten capital raising as part of a Deed of Company
Arrangement," Mr. Hughes said in a statement. Details of this
process will be provided in the coming weeks.
"The Company had already suspended mining operations while it
implemented a strategy to further delineate the Mindarie ore body,
and continued with a feasibility study of WIM150. Processing of
some residual ore continues at the minerals separation plant in
South Australia and discussions continue with third parties
interested in processing ore through that facility."
The administrator said it is confident the Company will continue
substantially in accordance with that plan and therefore
generate cash surpluses from operations during the period of the
Administration.
A creditors' meeting will be held on October 21, at the Hilton
Adelaide at 3:00 p.m.
About Australian Zircon
Australian Zircon NL (ASX:AZC) -- http://www.auzircon.com.au/
-- is engaged in construction and commissioning of its Mindarie
Zircon mine in the South Australian sector of the Murray Basin.
In addition, the company has continued exploration for zircon and
titanium minerals on its tenements in South Australia. The
company has exploration regions in both Western Australia and New
South Wales.
FORTESCUE METALS: To Self-finance Expansion After China Deal Fails
------------------------------------------------------------------
Felicity Williams at the Herald Sun reports that Fortescue Metals
Group is pushing ahead with its big growth plans in Western
Australia's Pilbara region despite its failure to secure AU$6.7
billion in cheap Chinese loans.
According to the report, Fortescue chief executive Andrew "Twiggy"
Forrest said the company could largely self-finance its ambitions
to more than triple annual production to 95 million tonnes of the
steel ingredient each year.
Herald Sun notes Mr. Forrest comments follow Fortescue's failed
attempt to finalize a proposed US$6 billion (AU$6.7 billion)
funding deal with a consortium of Chinese banks by a self-imposed
deadline of September 30.
"Doing a deal on the available terms was not in our long-term best
interest and we decided not to continue those discussions with
China for the time being," the report quoted Mr. Forrest as
saying. "We had growing confidence in our own ability to self-
finance at the same time as we were in discussions with the
Chinese."
Headquartered in West Perth, Western Australia, Fortescue Metals
Group Limited (ASX: FM) -- http://fmgl.com.au/-- is involved in
the exploration of iron ore through a project to mine iron ore in
the Chichester Ranges, in the Pilbara region of Western Australia
and exporting it from Port Hedland.
* * *
As reported in the Troubled Company Reporter-Asia Pacific on
September 4, 2009, Moody's Investors Service lowered to B2 from B1
the Senior Secured rating of FMG Resources (August 2006) Pty Ltd
(previously FMG Finance Pty Ltd), the financing arm of the
Fortescue Metals Group. The outlook for the rating is negative.
This completes the rating review for possible downgrade commenced
in May 2009 in view of weakness in the iron ore market and
operating challenges at FMG's mining and processing operations.
MANNWAY LOGISTICS: Ferrier Hodgson Appointed as Receivers
---------------------------------------------------------
Ferrier Hodgson Partners George Georges, Brendan Richards and
Morgan Kelly have been appointed Receivers and Managers of the
Mannway Logistics, a Melbourne-based transport and logistics
group.
Mr. Georges said in a statement that the first step of the
receivership will be to undertake an urgent review of operations.
Mr. Georges stressed that it is his intention to trade the
business on a ‘business as usual’ basis with a view to
restructuring ahead of a trade sale.
"Mannway is a long-established, well-known transport business with
an impressive number of bluechip customers," Mr. Georges said.
"It has been a victim of the extraordinarily difficult economic
conditions facing the transport industry at present, but in the
hands of another transport operator will represent excellent
value."
Mannway Logistics is a large road transport operator with 330
staff, turnover of approximately AU$70 million and distribution
centres in Victoria, NSW and Qld. Mannway operates an extensive,
modern fleet of specialised equipment.
================
H O N G K O N G
================
CAESAR BEAUTY: Court to Hear Wind-Up Petition on November 11
------------------------------------------------------------
A petition to wind up the operations of Caesar Beauty Centre
Limited will be heard before the High Court of Hong Kong on
November 11, 2009, at 9:30 a.m.
DRAGON LOYAL: Wai and Fun Appointed as Liquidators
--------------------------------------------------
Li Man Wai and Tsang Lai Fun on September 28, 2009, were appointed
as liquidators of Dragon Loyal Development Limited.
The company's liquidators are:
Li Man Wai
Tsang Lai Fun
Raymond Li & Co., CPA
Tai Yau Building, Room 1001, 10th Floor
Wanchai, Hong Kong
EXCEL TIME: Court to Hear Wind-Up Petition on November 25
---------------------------------------------------------
A petition to wind up the operations of Excel Time Holdings
Limited will be heard before the High Court of Hong Kong on
November 25, 2009, at 9:30 a.m.
The Petitioner's solicitor is:
Lovells
One Pacific Place, 11/F
88 Queensway
Hong Kong
FAR-GO EXPRESS: Court to Hear Wind-Up Petition on November 25
-------------------------------------------------------------
A petition to wind up the operations of Far-Go Express Corporation
Limited will be heard before the High Court of Hong Kong on
November 25, 2009, at 9:30 a.m.
The Petitioner's solicitors are:
K. W. Ng & Co.
Wings Building, 11/F
110 Queen's Road Central
Central, Hong Kong
GOOD STUFF: Court Enters Wind-Up Order
--------------------------------------
The High Court of Hong Kong on August 31, 2009, entered an order
to have Good Stuff (Central) Co., Limited's operations wound up.
GLOBALCAST NETWORKS: Court to Hear Wind-Up Petition on October 28
-----------------------------------------------------------------
A petition to wind up the operations of Globalcast Networks HK
Limited will be heard before the High Court of Hong Kong on
October 28, 2009, at 9:30 a.m.
The Petitioner's solicitors are:
Li Oldham & Nie, Solicitors
St. George's Building, Suite 503
2 Ice House Street
Central, Hong Kong
GUIDE A-WAY: Court to Hear Wind-Up Petition on October 28
---------------------------------------------------------
A petition to wind up the operations of Guide A-Way International
Food Company Limited will be heard before the High Court of Hong
Kong on October 28, 2009, at 9:30 a.m.
The Petitioner's solicitor is:
Allens Arthur Robinson
Jardin House, 10/F
1 Connaught Place
Central, Hong Kong
GOLDEN MAGNIFICENT: Court to Hear Wind-Up Petition on November 18
-----------------------------------------------------------------
A petition to wind up the operations of Golden Magnificent
Garments Limited will be heard before the High Court of Hong Kong
on November 18, 2009, at 9:30 a.m.
GREAT HONEST: Lees and Ng Appointed as Liquidators
--------------------------------------------------
John Robert Lees and Mat Ng on July 3, 2009, were appointed as
liquidators of Great Honest Finance Company Limited.
The company's liquidators are:
John Robert Lees
Mat Ng
Hong Kong Club Building, 19/F
3A Chater Road
Central HK
HONG WANG JEWELLERY: Court Enters Wind-Up Order
-----------------------------------------------
The High Court of Hong Kong on September 30, 2009, entered an
order to have Hong Wang Jewellery Limited's operations wound up.
HONOUR GLORY: Court to Hear Wind-Up Petition on November 18
-----------------------------------------------------------
A petition to wind up the operations of Honour Glory Plastic
Factory Limited will be heard before the High Court of Hong Kong
on November 18, 2009, at 9:30 a.m.
The Petitioner's solicitors are:
Y.S. Lau & Partners
Club Lusitano, 10th Floor
16 Ice House Street
Central, Hong Kong
HONG KONG RESOURCES: Court to Hear Wind-Up Petition on December 2
-----------------------------------------------------------------
A petition to wind up the operations of Hong Kong Resources
Investment Co., Limited will be heard before the High Court of
Hong Kong on December 2, 2009, at 9:30 a.m.
The Petitioner's solicitors are:
Wen Siao and Leung
Wing On Central Building, 7th Floor
26 Des Voeux Road
Central, Hong Kong
JATRADE (H.K.): Court Enters Wind-Up Order
------------------------------------------
The High Court of Hong Kong on September 30, 2009, entered an
order to have Jatrade (H.K.) Limited's operations wound up.
KEEP ON HOLDINGS: Court Enters Wind-Up Order
--------------------------------------------
The High Court of Hong Kong on September 30, 2009, entered an
order to have Keep On Holdings Limited's operations wound up.
KING POWER: Court Enters Wind-Up Order
--------------------------------------
The High Court of Hong Kong on September 30, 2009, entered an
order to have King Power Contraction Engineering Limited's
operations wound up.
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I N D I A
=========
AIR INDIA: To Get INR50-Bln Capital Infusion from India Gov't.
--------------------------------------------------------------
The government of India is planning to infuse INR50 billion (US$1
billion) into its loss-making airline, Air India, in a phased
manner, the Business Standard reports citing Union Minister of
Civil Aviation Praful Patel.
"The government has demonstrated its sincerity and agreed to an
equity infusion . . . of INR50 billion," the Standard cited
Mr. Patel as saying after a meeting with Air India management and
unions.
According to the Standard, the minister held the meeting to review
the turnaround plan for the airline. The Standard relates
Mr. Patel said Nacil, the holding company, is planning an annual
cost-cutting target of INR30 billion, along with an enhancement of
INR20 billion in revenue.
"The equity infusion will be conditional to cost-cutting measures
and revenue enhancement measures taken within the company,"
Mr. Patel said.
The Financial Times reports that analysts, however, immediately
dismissed the proposed "infusion" as too little and too late given
Air India’s dire financial condition – it has accumulated losses
of about US$3 billion.
According to the FT, analysts said Air India is struggling with
chronic inefficiency and competitive pressure from aggressive new
private-sector airlines, leading to poor aircraft utilization, and
low yields and load factors.
As reported in the Troubled Company Reporter-Asia Pacific on
June 10, 2009, the National Aviation Company of India Ltd., the
holding company for the carrier, was seeking INR14,000 crore in
equity infusion, soft loans and grants.
The TCR-AP reported on June 19, 2009, that Air India has been
bleeding due to excess capacity, lower yield, a drop in passenger
numbers, an increase in fuel prices and the effects of the global
slowdown. Air India's losses have almost doubled to over INR4,000
crore in 2008-09 (INR2,226 crore in 2007-08), according to the
Hindustan Times.
A TCR-AP report on July 10, 2009, said NACIL is working overtime
to prepare by the month-end a business plan and a financial
restructuring plan. NACIL is also expected to come up with plans
for the next six months, 12 months and 18 months for bringing in
cost reduction and improving revenue generation.
About Air India
Air India -- http://www.airindia.com/-- transports passengers
throughout India and to more than 40 destinations throughout the
world. Affiliate Air India Express operates as a low-fare
carrier, mainly between India and destinations in the Middle East,
and Air India Cargo provides freight transportation. The
government of India has merged Air India with another state-
controlled carrier, Indian Airlines, which has focused on domestic
routes. The combined airline, part of a new holding company
called National Aviation Company of India, uses the Air India
brand. The new Air India and its affiliates have a fleet of more
than 110 aircraft altogether.
ALAM TANNERY: CRISIL Reaffirms 'BB-' Ratings on Various Bank Debts
------------------------------------------------------------------
CRISIL has reaffirmed its ratings of 'BB-/Negative/P4' to the
various bank facilities of Alam Tannery Pvt Ltd.
Facilities Ratings
---------- -------
INR85 Million FBP/FBD BB-/Negative (Reaffirmed)
INR180 Million Packing Credit BB-/Negative (Reaffirmed)
INR85 Million Export Bill BB-/Negative (Reaffirmed)
Negotiation
INR7.2 Million Proposed Long BB-/Negative (Reaffirmed)
Term Facility
INR37.8 Million Term Loan BB-/Negative (Reaffirmed)
INR25 Million Letter of Credit P4 (Reaffirmed)
The ratings continue to reflect Alam Tannery's exposure to risks
relating to the highly working capital intensive nature of the
leather industry, small scale of operations, and intense
competition. These weaknesses are, however, partially offset by
the company's stable business risk profile, supported by the
experience of its promoters in the leather industry.
Outlook: Negative
CRISIL expects Alam Tannery's credit profile to be constrained by
the current slowdown in the European markets, which contribute
substantially to the company's revenues. This would lead to
stretched receivables thus impacting the liquidity position of the
company. The outlook may be revised to 'Stable' if Alam Tannery's
revenues and profitability increase more than expected.
Conversely, the outlook may be downgraded if the company's capital
structure deteriorates significantly on account of debt-funded
capital expenditure, or if the working capital requirements
increase considerably.
About Alam Tannery
Alam Tannery traces its origins to the early 1920s when
Mr. Mohammed Hanif set up a raw hide and skin trading centre in
North Bihar. The promoter family set up a firm, Maqbul Alam & Co
in 1962. The firm began operations by exporting dry salted skin
and wet blue leather to the European markets. In 1970, the
promoters shifted to Kolkata. Alam Tannery was set up by Mr.
Maqbul Alam (son of Mr. Hanif). The company has two tannery
units, and currently manufactures leather sofas and chair covers.
It markets its products in UK, South Africa, Germany, Poland,
Hungary and Australia. For 2008-09 (refers to financial year,
April 1 to March 31), Alam Tannery reported a profit after tax
(PAT) of INR32 million on net sales of INR460 million, as against
a PAT of INR 15 million on net sales of INR 455 million for
2007-08.
BARATH POWER: ICRA Cuts Rating on INR3.34BB LT Loans to 'LBB-'
--------------------------------------------------------------
ICRA has revised the rating assigned to the INR 3.34 billion long
term debt facilities of Ind Barath Power Gencom Limited from LBB+
to LBB-.
The rating revision reflects a delay of over six months in the
commissioning of Unit-I and II of 63 MW each of IBPL which is
expected to result in delays in debt servicing, which is
commencing from September 30, 2009. The rating is also
constrained by the fact the unit III is still under execution and
is subject to project execution risks although this risk is partly
mitigated by the fact that substantial physical progress that has
already taken place and unit-I has achieved synchronization and is
about to be commissioned. The rating is also constrained by the
fact that the profitable operation of the plant will depend on the
success of the group’s coal mining venture in Indonesia. The
rating also factors in the relatively high current gearing arising
out of the fact that the plant has been funded in 70:30 debt-
equity and is still under execution. However, the rating of IBPL
factors in the strengths arising out of the experience of the
promoter group in executing and operating small to medium sized
power plants and the fact that substantial progress has been made
in terms of financial closure, signing of PPAs at remunerative
rates, physical execution of projects and ability to secure coal
supplies at reasonable rates.
IBPL is an IPP promoted by the Ind Bharath group of companies. The
company is in the process of implementing a 189 MW (3*63 MW) coal
based thermal power plant in Tamil Nadu at a cost of INR 7.1
billion which will be funded in a debt equity of 2.33:1. The
financial closure has been completed and the equity component has
already been infused and the balance is expected shortly. Unit-I
is about to be commissioned, while unit II and unit III are
expected to be commissioned in November 2010 and July 2010
respectively. The company has tied up a PPA with Power Trading
Corporation of India (PTC) and the PPA assures the company of a
remunerative tariff structure. The company has entered into a coal
supply agreement with a group company which will mine coal from
owned mines in Indonesia. Commencement of mining operation is
expected by the end of CY 2009. Thus, the group’s success in coal
mining venture in Indonesia will be critical.
BD OVERSEAS: CRISIL Assigns 'B' Rating on INR32.8 Mln Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'B/Stable/P4' ratings to the bank
facilities of BD Overseas, part of the Mahavir Rice Mills group.
Facilities Ratings
---------- -------
INR10.0 Million Cash Credit B/Stable (Assigned)
INR32.8 Million Term Loan B/Stable (Assigned)
INR50.0 Million Packing Credit* P4 (Assigned)
INR20.0 Million Foreign Bill P4 (Assigned)
Discounting^
* Fully interchangeable with non-LC backed foreign bill
discounting ^LC backed
The ratings reflect the group's weak financial risk profile
because of working capital-intensive operations, and its exposure
to risks related to small scale of operations, unfavorable changes
in regulatory policies, volatility in raw material prices, and
dependence on monsoons. The impact of these weaknesses is
mitigated by the promoters' experience in the rice industry and
the healthy growth prospects for the industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of BDO and group entity Mahavir Rice Mills
(MRM), together referred to as the MRM group. This is because the
two entities have common partners, are engaged in a similar line
of business, and have strong mutual business linkages, including
fungible cash flows.
Outlook: Stable
CRISIL believes that the financial risk profile of the MRM group
will remain stretched over the medium term, given the group's
large working capital requirements. The scale of operations too
will continue to be small. The outlook may be revised to
'Positive' in case of a substantial and sustainable improvement in
the group's capital structure and scale of operations. Conversely,
the outlook may be revised to 'Negative 'in case of further
deterioration in the group's capital structure or pressure on its
profitability.
About the Group
The MRM group is engaged in the milling, processing, and selling
of basmati rice in the export and domestic markets. It produces
only parboiled rice, which has high demand in the Middle East and
Iran. BDO has been set up by the Garg family with the intention of
increasing the installed capacity of the MRM group. The group has
a total capacity of 7 tonnes per hour (tph) for milling, and 20
tph for sorting. This includes 12-tph grading capacity of BDO,
which started operations in February 2009, and the milling plant
of 5 tph, which is expected to start commercial production in
October 2009.
The MRM group reported a profit after tax (PAT) of INR1.2 million
on net sales of INR660 million for 2008-09 (refers to financial
year, April 1 to March 31), against a PAT of INR1 million on net
sales of INR437 million for 2007-08.
CIEMME JEWELS: ICRA Assigns 'LBB' Rating on INR160MM Bank Debts
---------------------------------------------------------------
ICRA has assigned an 'LBB' rating to INR160 million fund based
limits of Ciemme Jewels Limited. ICRA has also assigned an 'A4'
rating to the INR240 million fund based limits and INR120 million
non-fund based limits of CJL.
The ratings reflect CJL's highly leveraged capital structure
(gearing of 5.08x as of FY 2009), stretched working capital
intensity (NWC/OI of 90% as of FY 2009) along with high
utilization levels of bank limits and its susceptibility to
foreign currency fluctuations. CJL is also exposed to intense
competition from organized as well as unorganized players in the
industry. The ratings also factor in the overall negative outlook
for the industry driven by severe demand slowdown in the key
export markets coupled with decline in realization. The ratings
however favourably factors in the long-standing experience of the
promoters and the company management in the cut & polished diamond
business for over three decades and the fact that CJL has steady
supply of polished diamonds from the parent company C Mahendra
Exports Limited which enjoys DTC Sight holder' status.
Ciemme Jewels Limited is a wholly owned subsidiary of C Mahendra
International Limited. CMIL in turn is a wholly owned subsidiary
of C Mahendra Exports Limited (rated LBB+/A4+), which is the
flagship company of the C Mahendra Group. CMIL is the holding
company for all other C Mahendra group companies.
CJL was incorporated on April 03, 2003 as C.M. Jewels Private
Limited to buy, sell, export, import, deal market and manufacture
diamonds, precious stones, semi-precious stones and jewellery.
The name of the company was changed to Ciemme Jewels Private
Limited on June 6, 2003. The company was converted into a public
limited company and name was further changed to Ciemme Jewels
Limited with effect from June 28, 2007. The company is engaged in
the manufacturing and marketing of Diamond studded jewellery. The
range of jewellery offering of CJL includes rings, necklaces,
pendants, earrings, bangles, bracelet, nose pins and kadas.
During 2008-09, the company achieved net sales of INR659.5 million
and net profit of INR15.2 million.
GLASSTECH INDUSTRIES: CRISIL Cuts Rating on LT Loan to 'BB-'
------------------------------------------------------------
CRISIL has downgraded its ratings on Glasstech Industries (India)
Pvt Ltd's long-term bank facilities to 'BB-' from 'BB+', and has
revised the outlook to 'Negative' from 'Stable'; the short-term
ratings have been reaffirmed at 'P4'.
Facilities Ratings
---------- -------
INR70.0 Million Cash Credit BB-/Negative (Downgraded from
'BB+/Stable')
INR200.0 Million Long Term Loan BB-/Negative (Downgraded from
'BB+/Stable')
INR5.0 Million Bank Guarantee P4 (Reaffirmed )
The downgrade reflects deterioration in Glasstech's financial risk
profile because of lower-than-expected accruals, inventory
buildup, and delays in realizations from customers on account of
the slowdown in key end-user industries such as real estate and
construction. CRISIL expects the pressure on the company's
liquidity to continue over the near term.
The ratings continue to reflect Glasstech's exposure to risks
relating to the slowdown in its end–user sectors. These
weaknesses are partially offset by the benefits that Glasstech
derives from its promoters' experience and its established track
record in the glass manufacturing business.
Outlook: Negative
CRISIL expects Glasstech's credit risk profile to be adversely
affected by the current market scenario marked by slowdown in the
construction sector. This has resulted in delayed sales
realizations, increased inventory levels, and the resultant
reliance of the company on bank lines to support its high working
capital requirements. The ratings may be downgraded if delayed
realizations weaken the company's liquidity, or if low capacity
utilization weakens its operating margin, or if the company takes
on additional debt, leading to deterioration in its financial risk
profile. Conversely, the outlook may be revised to 'Stable' if
the company's liquidity improves with the realization of dues from
its clients, and if its accruals increase substantially.
About Glasstech
Set up in 1997, Glasstech processes glass, especially for the
construction and real estate sectors. The company initially
operated as a distributor of Asahi Glass in India, later shifting
to glass processing. The company recently expanded its capacity
for performing processes such as tempering and glazing, and has
broadened its portfolio to include processes such as lamination
and screen and heat shocking. For 2008-09 (refers to financial
year, April 1 to March 31), Glasstech reported a profit after tax
(PAT) of INR3.6 million on net sales of INR279 million, against a
PAT of INR26.7 million on net sales of INR327.2 million for
2007-08.
GV (GOD VISHNU): CRISIL Places 'B' Rating on INR14.7MM Term Loan
----------------------------------------------------------------
CRISIL has assigned its ratings of 'B/Stable/P4' to the bank
facilities of GV (God Vishnu) Rice Unit.
Facilities Ratings
---------- -------
INR10.0 Million Cash Credit B/Stable (Assigned)
INR14.7 Million Term Loan B/Stable (Assigned)
INR140.0 Million Packing Credit* P4 (Assigned)
*Completely interchangeable with foreign bill discounting.
The ratings reflect GVRU's weak financial risk profile, driven by
the working-capital-intensive nature of its business, and its
exposure to risks relating to its small scale of operations in the
fragmented rice processing industry, unfavorable changes in
regulatory policies, and fluctuations in raw material price with
dependence on the monsoon. These weaknesses are partially offset
by the benefits that the firm derives from its promoters'
experience in the rice business, and the healthy growth prospects
for the industry.
Outlook: Stable
CRISIL expects GVRU's financial risk profile to remain stretched
over the medium term because of its working capital-intensive
operations, and expects the firm's scale of operations to remain
small over the near term. The outlook could be revised to
'Positive' in case of a substantial and sustainable improvement in
the firm's capital structure and scale of operations. Conversely,
the outlook could be revised to 'Negative 'in case of further
deterioration in the firm's capital structure, or pressure on its
profitability.
About GVRU
GVRU is a partnership firm promoted by the Bansal family in 1987.
The firm is engaged in milling, processing, and selling rice in
the export and domestic markets. It produces mainly parboiled
rice which has high demand in the Middle East and Iran. GVRU is
also engaged in trading activities, whereby it procures semi-
finished rice from other small mills, grades and sorts the rice at
its plant, and exports it. The firm has its unit in Karnal
(Haryana) with capacity of 7 tonnes per hour (tph) for milling,
and 9 tph for sorting, of which 5 tph of milling capacity and 2
tph of sorting capacity was added in October 2008. The firm also
undertook rice processing on job work basis in 2008-09 (refers to
financial year, April 1 to March 31) to utilise its expanded
installed capacity.
GVRU reported a profit after tax (PAT) of INR1.7 million on net
sales of INR547.8 million for 2008-09, against a PAT of INR1.7
million on net sales of INR506.2 million for 2007-08.
ILABS INFO: CARE Assigns 'CARE B' Rating on INR47cr LT Bank Debts
-----------------------------------------------------------------
CARE has assigned a "CARE B" rating to the long term bank
facilities of iLabs Info Technology Centre (Gurgaon) Pvt Ltd
aggregating INR47 crore. This rating is applicable for facilities
having tenure of more than one year. Facilities with this rating
are considered to offer low safety for timely servicing of debt
obligations. Such facilities are susceptible to default.
CARE assigns '+' or '-' signs to be shown after the assigned
rating (wherever necessary) to indicate the relative position of
the company within the band covered by the rating symbol.
Rating Rationale
The rating factors in the absence of confirmed lease agreements
compounded by the weakness in the commercial property market and
the IT industry, the main target segment getting impacted by the
ongoing recession. Also, lack of financial track record
of the company further constrains the rating. However the fact
that the promoters are well established in the IT industry and
have past experience in executing a similar project in Hyderabad
adds strength to the rating. Also, given that substantial portion
of the work has been completed, no major cost over runs in the
project is expected.
About iLabs Info
iLabs Info Technology Centre Centre (Gurgaon) Pvt Ltd was promoted
by Mr.C. Srinivas Raju, who currently holds the controlling stake
in the entity. IITCG is constructing an IT park at Udyog Vihar
Phase III in Gurgaon. The total cost of the project is estimated
to be around INR80 crore. A cash credit facility of INR47 crore
has been availed from State Bank of India while the remaining
amount has been contributed by the promoter. A similar project in
Hyderabad of around one million sq ft was successfully executed by
the promoters.
JAMMU & KASHMIR: CARE Downgrades Ratings on Bonds to 'CARE D (SO)'
------------------------------------------------------------------
CARE has downgraded the rating assigned to outstanding Bonds of
Jammu & Kashmir State Power Development Corporation Ltd.
(guaranteed by the Government of Jammu and Kashmir) aggregating
Rs.322.68 crore (Series III: INR107.63 crore, Series IIIA:
INR40.86 crore and Series IV: INR174.19 crore) from CARE BB (SO)
to CARE D (SO). The rating revision is triggered by continued
delays in servicing of interest on bonds.
JET AIRWAYS: May Raise Up to INR900cr Next Month
------------------------------------------------
Jet Airways (India) Ltd. is likely to raise between INR700 crore
and INR900 crore next month as part of its plan to retire mounting
debt, The Economic Times reports citing a person familiar with the
matter.
The report says the company was in talks with institutional buyers
to sell fresh shares, which might dilute its equity by 20% to 25%,
depending on the pricing of the issue.
According to the report, the company may sell shares to
institutional buyers at around INR400 a piece, lower than the
stock's closing of INR427.75 on Monday, October 12, 2009.
Jet Airways (India) Ltd (BOM:532617) -- http://www.jetairways.com/
-- is engaged in providing air transportation business. The
geographic segments of the company are domestic and international.
The company has a frequent flyer program named Jet Privilege
wherein the passengers who uses the services of the airline become
services of the airline become members of Jet Privilege and
accumulates miles to their credit. The company's subsidiaries
include Jet Lite (India) Limited, Jetair Private Limited, Jet
Airways LLC, Trans Continental e Services Private Limited, Jet
Enterprises Private Limited, Jet Airways of India Inc., India
Jetairways Pty Limited and Jet Airways Europe Services N.V. On
April 20, 2007, the company acquired Sahara Airlines Limited.
* * *
Jet Airways posted a consolidated net loss of INR9614.10 million
for the year ended March 31, 2009, compared with consolidated net
loss of INR6538.70 million for the year ended March 31, 2008.
Consolidated total sales increased from INR109907.20 million for
the year ended March 31, 2008 to INR134488.60 million for the year
ended March 31, 2009.
KITTY INDUSTRIES: CRISIL Assigns 'BB+' Rating to Bank Facilities
----------------------------------------------------------------
CRISIL has assigned its ratings of 'BB+/Stable' to the bank
facilities of Kitty Industries Pvt Ltd (KIPL).
Facilities Ratings
---------- -------
INR50.0 Million Cash Credit Limit BB+/Stable (Assigned)
INR156.0 Million Term Loan BB+/Stable (Assigned)
INR7.5 Million Standby Line of Credit BB+/Stable (Assigned)
The ratings reflect KIPL's weak financial risk profile, and
exposure to risks relating to small scale of operations in the
bakery products market, and to fluctuations in raw material
prices. These weaknesses are, however, partially offset by the
promoters' established track record in the bakery products
business.
Outlook: Stable
CRISIL believes that KIPL will maintain a stable financial risk
profile on the back of healthy operating profitability, and
absence of large capital expenditure (capex) plans over the medium
term. The outlook may be revised to 'Positive' if the company
scales up its operations, while maintaining stable profitability.
Conversely, the outlook may be revised to 'Negative' if the
company undertakes any major debt-funded capex, thus straining its
capital structure.
About Kitty Industries
Set up in 2004, KIPL manufactures bakery products that are sold
under the brand, Kitty's. KIPL has a diversified product
portfolio that includes around 20 varieties of bread and bun, in
addition to toasts, rusks, biscuits, cakes, and traditional Indian
sweets. The company receives daily orders from wholesale depots
and bakeries in Punjab, Uttarakhand, Himachal Pradesh, Haryana,
and Jammu and Kashmir.
KIPL reported a profit after tax (PAT) of INR5.8 million on net
sales of INR412.7 million for 2008-09 (refers to financial year,
April 1 to March 31), as against a PAT of INR26.5 million on net
sales of INR430.2 million for 2007-08.
MAHAVIR RICE: CRISIL Rates INR10.0 Million Cash Credit at 'B'
-------------------------------------------------------------
CRISIL has assigned its ratings of 'B/Stable/P4' to the bank
facilities of Mahavir Rice Mills, a part of the MRM group.
Facilities Ratings
---------- -------
INR10.0 Million Cash Credit B/Stable (Assigned)
INR90.0 Million Packing Credit* P4 (Assigned)
INR30.0 Million Foreign Bill P4 (Assigned)
Discounting^
* Fully interchangeable with non-LC backed foreign bill
discounting ^LC backed
The ratings reflect the group's weak financial risk profile
because of working capital-intensive operations, and its exposure
to risks related to small scale of operations, unfavorable changes
in regulatory policies, volatility in raw material prices, and
dependence on monsoons. The impact of these weaknesses is
mitigated by the promoters' experience in the rice industry and
the healthy growth prospects for the industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of MRM and group entity BD Overseas (BDO),
together referred to as the MRM group. This is because the two
entities have common partners, are engaged in a similar line of
business, and have strong mutual business linkages, including
fungible cash flows.
Outlook: Stable
CRISIL believes that the financial risk profile of the MRM group
will remain stretched over the medium term, given the group's
large working capital requirements. The scale of operations too
will continue to be small. The outlook may be revised to
'Positive' in case of a substantial and sustainable improvement in
the group's capital structure and scale of operations.
Conversely, the outlook may be revised to 'Negative 'in case of
further deterioration in the group's capital structure or pressure
on its profitability.
About the Group
The MRM group is engaged in the milling, processing, and selling
of basmati rice in the export and domestic markets. It produces
only parboiled rice, which has high demand in the Middle East and
Iran. MRM was set up in 1984 as a partnership firm by Mr. Jai
Kumar Garg and his sons, Mr. Anil Kumar and Mr. Parveen Kumar.
BDO has been set up by the Garg family with the intention of
increasing the installed capacity of the MRM group. The group has
a total capacity of 7 tonnes per hour (tph) for milling, and 20
tph for sorting. This includes 12-tph grading capacity of BDO,
which started operations in February 2009, and the milling plant
of 5 tph, which is expected to start commercial production in
October 2009.
The MRM group reported a profit after tax (PAT) of INR1.2 million
on net sales of INR660 million for 2008-09 (refers to financial
year, April 1 to March 31), against a PAT of INR1 million on net
sales of INR437 million for 2007-08.
NAP CONSTRUCTION: Low Net Worth Prompts CRISIL 'BB+' Ratings
------------------------------------------------------------
CRISIL has assigned its ratings of 'BB+/Stable/P4+' to the bank
facilities of NAP Construction Pvt Ltd.
Facilities Ratings
---------- -------
INR142 Million Cash Credit Limits* BB+/Stable (Assigned)
INR3 Million Term Loan BB+/Stable (Assigned)
INR2 Million Corporate Term Loan BB+/Stable (Assigned)
INR23 Million Standby Line of Credit P4+ (Assigned)
INR30 Million Bank Guarantee P4+ (Assigned)
*Includes proposed amount of INR17 Million
The ratings reflect NAP Construction's small scale of operations
in the civil construction industry, low net worth, and exposure to
risks relating to geographical and customer concentration in its
revenue profile. These weaknesses are partially offset by healthy
growth in the company's revenues, and its comfortable order book.
Outlook: Stable
CRISIL believes that NAP Construction will maintain a stable
outlook on the back of healthy growth prospects in the civil
construction industry. The company's credit risk profile will,
however, remain constrained due to concentration of revenues in
West Bengal. The outlook may be revised to 'Positive' if NAP
Construction strengthens its business risk profile by diversifying
its revenue profile, while maintaining its operating margins.
Conversely, the outlook may be revised to 'Negative' if NAP
Construction takes on additional debt to fund capital expenditure,
leading to deterioration in its financial risk profile.
About NAP Construction
Set up in 1983 as a proprietorship concern by Mr. Nirmalya Ghosh,
NAP Construction undertakes civil construction projects. The
firm, a closely held company since 1994, is engaged in the
construction of housing properties, railway platforms, and
renovation of heritage properties in West Bengal.
NAP Construction reported a profit after tax (PAT) of INR21
million on net sales of INR373 million for 2008-09 (refers to
financial year, April 1 to March 31), as against a PAT of INR17
million on net sales of INR233 million for 2007-08.
PUNJAB CHEMICALS: CARE Revises Ratings on LT Bank Facilities
------------------------------------------------------------
CARE has revised the rating of Long-term Bank Facilities of Punjab
Chemicals and Crop Protection Limited from 'CARE BBB+' to 'CARE
BB+'. 'CARE BB Plus' is applicable for facilities having a tenure
of more than one year. Facilities with this rating are considered
to offer inadequate safety for timely servicing of debt
obligations. Such facilities carry high credit risk.
Further, CARE has also revised the rating of Short-term Bank
Facilities from 'PR2' to 'PR4. 'PR Four' rating is applicable to
facilities having tenure up to one year. Facilities with this
rating would have inadequate capacity for timely payment of short-
term debt obligations and carry very high credit risk. Such
facilities are susceptible to default.
CARE assigns '+' or '-' signs to be shown after the assigned
rating (wherever necessary) to indicate the relative position
within the band covered by the rating symbol.
Instrument Amount Ratings
---------- ------ -------
Long-term Bank Facilities INR195cr 'CARE BB+'
Short-term Bank Facilities INR29cr 'PR4'
Rating Rationale
The ratings revision takes into account the deterioration in
profitability of the company in FY09 due to high volatility in raw
material prices and losses on derivative contracts. Further, the
company's operating cycle was also adversely impacted due to the
twin impact of increase in receivables days (as most of the
clients started delaying payments) and decrease in creditors days
(as the company had to purchase more material on cash basis due to
unavailability of non-fund-based limits and reluctance of
suppliers to supply material on open credit), leading to liquidity
crunch.
Further, PCCPL had earlier envisaged equity infusion of about
INR100 crore during FY09 which would have improved its leverage
profile at the consolidated level significantly. However due to
the adverse market conditions, the same did not materialize.
Also, the company's bank borrowings increased as on March 31, 2009
to support the higher working capital requirement due to
deterioration in the overall operating cycle. Due to these
factors, the overall gearing on a consolidated basis as on
March 31, 2009, was very high at 5.26x, presenting a high degree
of financial risk profile.
The ratings continue to consider the experience of PCCPL's
promoters and established position in the agrochemicals market.
The company's ability to improve its profitability and overall
operating cycle, regularise its debt servicing and achieve
improvement in overall leverage profile remain the key rating
sensitivities.
About Punjab Chemicals
Punjab Chemicals and Crop Protection Limited, incorporated in
1976, is involved in manufacturing of various agro chemicals,
industrial chemicals and chemicals for pharmaceutical industry.
Agro chemicals division is the major focus area of PCCPL. The
company is present in the entire value chain including
intermediates, technicals, bulk formulations and branded
formulations. In past few years the company has grown
inorganically by acquiring companies in Argentina and
Netherlands.
Net sales on a standalone basis increased from INR434 crore in
FY08 to INR464 crore in FY09. However high volatility in raw
material prices impacted the profitability at the operating level
and PBILDT declined from INR69 crore in FY08 to INR58 crore in
FY09. PAT declined sharply from INR29.5 crore in FY08 to INR6.76
crore in FY09 due to subdued profitability at the operating level,
higher interest cost and losses on derivative contracts.
S. KUMARS NATIONWIDE: ICRA Rates INR4.5BB Term Loans at 'LB'
------------------------------------------------------------
ICRA has assigned an 'LB' rating to the INR4.50 billion (enhanced
from INR3.72 billion), term loans and the INR5.60 billion
(enhanced from INR5.16 billion), long-term, fund based limits of
S. Kumars Nationwide Limited. ICRA has also reaffirmed its A4
(pronounced A Four) rating on the INR651 million, short-term, non-
fund based facilities of SKNL.
The ratings reflect delays by the company in meeting some of its
debt servicing obligations. Despite a robust growth in revenues
and profitability, the company's liquidity remains stretched on
account of high working capital intensity, large capital
expenditure and significant in-organic investments.
SKNL has been in the process of rapidly scaling up its various
businesses – requiring substantial capital outlay. While the
immediate funding burden in luxury textiles and retail are partly
mitigated through creation of separate entities, the overall
capital outlay in its high value fine cotton fabric and home
textiles remains substantial. SKNL incurred a total capital
expenditure of INR6.5 billion during 2008-09. This apart, the
company has also made two substantial in-organic investments in
recent periods - Leggiuno S.p.A (Leggiuno), Italy (INR1.65
billion) and Hartmarx Corporation (Hartmarx), USA (-INR1.6
billion) during 2008-09 and Q1, 2009-10 respectively. While SKNL
management expects significant benefits in the long run from the
global customer base of these two overseas acquisitions, the
funding requirements for these have substantially strained the
financial profile of the company. Also, during 2008-09, the
management was expecting -INR2 billion from conversion of equity
warrants subscribed by a financial investor. However, due to weak
equity market conditions, the conversion did not materialize
creating a further funding gap.
During 2008-09, SKNL hived-off its luxury textiles business into a
subsidiary Reid & Taylor India Limited and demerged its retail
business into a separate company Brandhouse Retails Limited, with
the purpose of bringing in a sharper focus on these businesses.
These demergers have also substantially reduced the funding
requirements of SKNL by opening up alternative funding avenues in
these two entities. During 2008-09, SKNL raised INR7.9 billion in
RTIL by diluting 23.03% stake to an affiliate of Singapore
Government's GIC Special Investment. RTIL in turn lent INR4.4
billion to SKNL, helping it prepay some of its existing CDR debt
(INR4 billion) during 2008-09.
Incorporated in 1990, S. Kumars Nationwide Limited is the flagship
company of the Nitin Kasliwal led SKNL group, and is one of
India's leading branded textile and apparel manufacturers with
presence in five segments - Consumer Textiles, Luxury Textiles
(now under its subsidiary Reid & Taylor India Limited, RTIL), Home
Textiles, Total Wardrobe Solutions and High Value Fine Cotton, a
new line of business added during Q1, FY 2010. The company
manufactures branded textiles and apparels catering to all socio-
economic segments ranging from economy to luxury/super premium
segment.
In 2008-09, SKNL acquired Leggiuno S.p.A (Leggiuno), an Italian
company, with expertise in manufacture of high quality cotton
shirting fabric and Hartmarx Corporation, US (Hartmarx), one of
the leading tailored clothing companies in USA with 34 brands, in
Q1, 2009-10. For the three months ended June 2009, SKNL reported
profit after tax of INR0.62 billion on revenues of INR7.08 billion
as against profit after tax of INR1.96 billion on revenues of
INR22.65 billion for FY 2009.
TATVA CHINTAN: CRISIL Assigns 'BB+' Ratings on Various Bank Debts
-----------------------------------------------------------------
CRISIL has assigned its ratings of 'BB+/Stable/P4+' to the bank
facilities of Tatva Chintan Pharma Chem Pvt Ltd.
Facilities Ratings
---------- -------
INR60.0 Million Cash Credit Limit BB+/Stable (Assigned)
INR34.4 Million Term Loan BB+/Stable (Assigned)
INR20.0 Million Letter of Credit P4+ (Assigned)
INR1.0 Million Bank Guarantee P4+ (Assigned)
The ratings reflect Tatva Chintan's moderate financial risk
profile, and small scale of operations in the intensely
competitive bulk drug and pharmaceutical chemical intermediates
industry. These rating weaknesses are mitigated by the benefits
that the company derives from its promoters' experience in the
industry.
Outlook: Stable
CRISIL believes that Tatva Chintan will maintain its stable
financial risk profile over the medium term, supported by its
promoters' strong industry track record. The outlook may be
revised to 'Positive' if the company is able to increase the scale
of its operations with sustained profitability. Conversely, the
outlook may be revised to 'Negative' in case Tatva Chintan's
revenues from the active pharmaceutical ingredient (API) segment
are lower-than-expected, its performance and realizations are
adversely affected by lack of certifications from the US Food and
Drug Administration (FDA) and World Health Organization (WHO), or
its financial risk profile deteriorates because of large, debt-
funded capital expenditure.
About Tatva Chintan
Tatva Chintan was incorporated by Mr. Shah, Mr. Patel and
Mr. Somani in 1996. The company manufactures APIs, quaternary
ammonium compounds (QUATS), phase transfer catalysts (PTC), ionic
liquids, and glymes at its plant in Ankleshwar (Gujarat), with
production capacity of 2000 tonnes per annum.
Tatva Chintan reported a profit after tax (PAT) of INR10.3 million
on net sales of INR218.9 million for 2008-09 (refers to financial
year, April 1 to March 31), as against a PAT of INR8 million on
net sales of INR148 million for 2007-08.
TREADSTONE LTD: CRISIL Puts 'B+' Rating on INR30.7MM Term Loan
--------------------------------------------------------------
CRISIL has assigned its 'B+/Stable/P4' ratings to the bank
facilities of Treadstone Ltd.
Facilities Ratings
---------- -------
INR30.7 Million Term Loan B+/Stable (Assigned)
INR90.3 Million Proposed Long Term B+/Stable (Assigned)
Bank Loan Facility
INR30.0 Million Pre Shipment Packing P4 (Assigned)
Credit*
INR30.0 Million Foreign Bill P4 (Assigned)
Purchase**
INR5.0 Million Letter of Credit*** P4 (Assigned)
INR4.0 Million Bank Guarantee P4 (Assigned)
* Fungeability of INR 20.0 million with foreign bills
purchased.
** Fungeability of INR 20.0 million with packing credit.
*** Fungeability of INR 2.0 million with bank guarantee.
The ratings reflect Treadstone's diversification into real estate
development and risks related with unrelated diversification,
declining profitability in equestrian products with increase in
competition, and average financial risk profile. The impact of
theses weaknesses is mitigated by Treadstone's established
clientele in equestrian products.
Outlook: Stable
CRISIL expects Treadstone to sustain its business risk profile
over the medium term on the back of its established clientele in
the international market. The outlook may be revised to
'Positive' if the company is able to complete and sell its real
estate projects in a timely manner, thus generating higher cash
accruals and profitability than contributed by its equestrian
business. Conversely, the outlook may be revised to 'Negative' in
case of a steep decline in profitability, or if the company
undertakes a higher-than-expected debt-funded capital expenditure
programme, leading to deterioration in its debt protection
measures.
About Treadstone
Treadstone, promoted by Mr. K.K. Wadhwa in 1987, is engaged in the
manufacture of riding shoes, breeches, and rugs (collectively
referred to as equestrian products), which contributed 70% to its
operating income in 2008-09 (refers to financial year, April 1 to
March 31). The company is a 100 per cent export-oriented unit
with manufacturing locations in Faridabad (Haryana), Kanpur (Uttar
Pradesh), Noida (Uttar Pradesh), and New Delhi. It markets its
products under the brand Chetak. Treadstone has, since 2007-08,
entered into real estate development projects - 30% of operating
income in 2008-09 - and is currently developing properties in many
locations in New Delhi: Mehrauli, Dwarka, Janakpuri, Vikaspuri,
and Kondli. These projects are expected to involve an investment
of around INR400 million.
Treadstone reported a profit after tax (PAT) of INR12 million on
net sales of INR342 million for 2007-08, against INR3 million and
INR170 million, respectively, for 2006-07.
TULSI EXTRUSIONS: CARE Assigns 'CARE BB' Ratings on LT Bank Debts
-----------------------------------------------------------------
CARE has assigned a 'CARE BB' rating to the Long-term bank
facilities of Tulsi Extrusions Ltd. aggregating INR23.17 crore.
This rating is applicable for facilities having tenure of more
than one year. Facilities with this rating are considered
to offer inadequate safety for timely servicing of debt
obligations. Such facilities carry high credit risk.
Further, CARE has assigned a 'PR4' rating to the Shortterm
Bank Facilities of TEL aggregating INR4.50 crore. This rating is
applicable for facilities having tenure up to one year.
Facilities with this rating would have inadequate capacity for
timely payment of short-term debt obligations and carry very
high credit risk. Such facilities are susceptible to default.
CARE assigns '+' or '-' signs to be shown after the assigned
rating (wherever necessary) to indicate the relative position
within the band covered by the rating symbol.
Instrument Amount Ratings
---------- ------ -------
Term Loan INR5.17cr 'CARE BB'
Fund Based working capital limits INR18.00cr 'CARE BB'
Non-Fund Based working capital INR4.00cr 'PR4'
limits
Short term loan INR0.50cr 'PR4'
Rating Rationale
The ratings are constrained by limited ability of the company to
pass on raw material costs to customers coupled with near-
monopolistic supplier, delay in ongoing project which exacerbates
project execution risk, concentration of sales in single end-user
segment viz. farmers, relatively small size of operations,
Auditor's qualification and operating loss in H1FY09.
The ratings factor in comfortable gearing ratios, wide-spread
distribution network of the company, ISO quality certification and
potential of the industry. The ability of the company to manage
costs in a scenario of volatile raw material prices and economic
downturn are the key rating sensitivities.
About Tulsi Extrusions
The company was incorporated as Tulsi Extrusions Private Limited
on September 16, 1994. TEL's first manufacturing facility was set
up in 1994 by Mr. Pradip Mundhra at Jalgaon for the manufacture of
various types of Poly Vinyl Chloride (PVC) pipes and fabricated
fittings, with an installed capacity of 1,440 metric tons.
Further on June 5, 1995, the company was converted into a public
limited company and it acquired its present name. TEL is
principally engaged in the business of manufacturing and trading
in PVC granules, pipes, fittings, and any other plastic granules
and items. The company also commenced manufacturing Low Linear
Density Polyethylene (LLDPE) pipes, High-Density Poly Ethylene
(HDPE) pipes and PVC fabricated fittings by acquisition of two
group companies in FY06 and FY07, who were engaged in these
businesses.
In FY08, TEL posted a 42% growth in total income, mainly driven by
volume growth from manufacturing activities. PBILDT margin was
stagnant in FY08 vis-a-vis FY07 due to substantial increase in raw
material cost. PAT margin too declined in FY09 due to large
increase in interest expenses. TEL's net worth posted substantial
increase in FY08 mainly due to the Initial Public Offering (IPO)
of INR48.45 crore. This resulted in substantial improvement in
gearing ratios as on March 31, 2008 compared to March 31, 2007.
The auditors have made certain qualifications in the annual report
of FY08 with regard to valuation of inventory and employee
benefits. TEL also witnessed certain delays in commissioning of
the ongoing project and cost over run thereof.
UNIVERSAL POWER: CRISIL Cuts Ratings on Various Bank Debts to 'BB'
------------------------------------------------------------------
CRISIL has downgraded its ratings on Universal Power Transformer
Pvt Ltd to 'BB/Negative/P4+' from 'BBB+/Stable/P2'.
Facilities Ratings
---------- -------
INR180.0 Million Cash Credit BB/ Negative (Downgraded from
BBB+/ Stable)
INR147.50 Million Term Loan BB/ Negative (Downgraded from
BBB+/ Stable)
INR250.00 Million Proposed LT BB/ Negative (Downgraded from
Bank Facility BBB+/ Stable)
INR300.00 Million Letter of P4+ (Downgraded from P2)
Credit / Bank Guarantee
INR62.50 Million Proposed Short P4+ (Downgraded from P2)
Term Bank Facility
The rating revision reflects UPT's stretched liquidity owing to
delay in realization of receivables, and an inventory pile-up due
to deferment of orders by key customers. The ratings also factor
in UPT's moderate financial risk profile, and exposure to risks
relating to fluctuations in raw material prices, and the working-
capital-intensive nature, and small scale, of its operations in
the power transformer industry. These weaknesses are mitigated by
UPT's promoters' experience in the transformers industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of UPT and UPT Fabrication Pvt Ltd. This
is because UPT and UPTF (together referred to as the UPT group)
have common promoters, operational synergies, and fungible funds,
and are in the same line of business.
Outlook: Negative
CRISIL expects the UPT group's liquidity to remain constrained
over the near to medium term because of delayed realisation of
receivables and deferment of offtake on orders by key customers.
The rating may be downgraded if the group's liquidity deteriorates
further, if its order book reduces, or if its margins continue to
decrease over the medium term. Conversely, the outlook may be
revised to 'Stable' if UPT's receivables and inventory positions
improve, resulting in comfortable liquidity, supported by
sustainable growth in operating revenues and margins, and timely
execution of orders.
About Universal Power
Magnum Electric Machine Manufacturers Pvt Ltd (Magnum), which was
incorporated in January 2002, acquired Universal Transformers
(UT), a proprietorship business formed in 1978, in June 2003. UT
was converted into a private limited company, promoted by
Mr. Dhruva Talwalkar, in 2003. To retain the Universal brand,
Magnum was renamed UPT in August 2003. UPT manufactures power
transformers and executes turnkey projects. The company initially
manufactured distribution and power transformers ranging from 1
kilovolt-ampere to 30 megavolt-ampere. It currently manufactures
a wide range of products including power and distribution
transformers in both the oil-filled and dry variants, industrial
batteries (both lead acid and dry varieties), and switch gears.
The company caters to both the domestic and international markets.
The UPT group reported a net loss of INR31 million on net sales of
INR1.25 billion for 2008-09 (refers to financial year, April 1 to
March 31), against a profit after tax of INR28.4 million on net
sales of INR1.15 billion for 2007-08.
=================
I N D O N E S I A
=================
BANK CENTURY: Fugitive Investors Deny Embezzlement Allegations
--------------------------------------------------------------
The Jakarta Globe reports that two former PT Bank Century
shareholders, accused of stealing more than a billion dollars from
the failed bank, claim to have lined up an unnamed Middle Eastern
investor willing to takeover the bank, repay out-of-pocket
investors and return the IDR6.7 trillion (US$710 million) the
government injected into the bank.
In a joint written statement obtained by the Jakarta Globe, Hesham
Al Warraq and Rafat Ali Rizvi said they are willing to assist
Indonesian police investigating the case and help recover assets
embezzled by former primary Bank Century shareholder Robert
Tantular, who was convicted of fraud and sentenced to four years
in prison last month for his role in the scam.
"We are pleased to announce that we have a major Middle Eastern
investor that is willing to take over Century in a manner that
will ensure that the depositors who lost money through PT Antaboga
Delta Sekuritas will get it back as well as ensuring that the
State Deposit Insurance Agency (LPS) is paid back in full," the
Globe cited the statement.
According to the report, Mr. Rafat has invited representatives of
selected media, including the Jakarta Globe-affiliated Investor
Daily, to the Shangri-La hotel in Singapore to deny allegations
linking him and Mr. Hesham with Mr. Tantular.
Mr. Rafat claimed both he and Mr. Hesham were only passive
investors in the bank, did not have any signing authority and had
actually been at the bank only a handful of days over the past few
years, the report notes.
Mr. Rafat, as cited by the Globe, also blamed Bank Indonesia for
its poor supervision of Bank Century, and questioned why it was
allowed to keep trading for several years despite a significant
mismatch between its deposit base and assets.
Messrs. Rafat and Hesham are still being sought by Indonesian
police and have been placed on an Interpol list of fugitives for
their alleged roles in defrauding Bank Century investors,
according to the Globe.
As reported in the Troubled Company Reporter-Asia Pacific on
December 2, 2008, the National Police detained Robert Tantular,
one of the key controlling shareholders of PT Bank Century Tbk,
for allegedly requesting the bank's management to breach the
existing banking regulations.
According to the Post, National Police chief detective Comr.
Gen. Susno Duadji said Mr. Tantular had put the bank at risk by
regularly interfering in its management, preventing them from
doing their jobs in line with banking regulations.
"We're charging him with breaching Articles 50 and 50a of the
banking law. He has made the bank run counter to principles of
prudent banking," the Post quoted Comr. Gen. Susno as saying.
The Post noted Mr. Tantular has been confirmed by the central bank
as a controlling shareholder in Century, along with Rafat Ali
Rivsi, from the UK, and Hesham Alwarraq from Saudi Arabia. Mr.
Tantular's father Hashim Tantular founded the bank in 1989.
The Post also said that Bank Indonesia (BI) accused Century's
controlling shareholders of hiding the bank's assets, worth around
US$123 million, in Singapore and the United Kingdom in the form of
securities portfolios.
BI had said, the Post noted, the Century fiasco was due to an
"inherited problem" resulting from the imprudent purchase in 2002
of high-risk notes worth US$225 million. On Oct. 30, Century
defaulted on loan repayments for the note exchange amounting to
US$56 million.
Bank Century is a relatively small lender with total assets of
IDR15 trillion (US$1.3 billion). The Post said the government
decided to take over Bank Century -- the first such move since the
1997-1998 crisis -- to save it from collapse and restore
confidence in the banking sector. The bank received a capital
injection of IDR6.76 trillion from the Deposit Insurance
Corporation (LPS).
About Bank Century
Headquartered in Jakarta, Indonesia, PT Bank Century Tbk --
http://www.centurybank.co.id/-- is a financial institution. The
Bank's products and services include deposits, savings, loans,
mutual funds, bank notes, export and import financing, credit and
commercial banking. The Bank is supported by 27 branch offices,
30 supporting offices and eight cash offices nationwide.
=========
J A P A N
=========
CAFES 3: Fitch Downgrades Ratings on Five Classes of Notes
----------------------------------------------------------
Fitch Ratings has downgraded five classes of trust beneficiary
interest from Cafes 3 Trust due August 2014, and affirmed the
other two classes following the implementation of the recently
published criteria for Japanese CMBS surveillance. Full details
of the rating actions are:
-- JPY17.32 billion* Class A TBIs affirmed at 'AAA'; off RWN;
Outlook
Stable;
-- JPY2.83 billion* Class B TBIs downgraded to 'A' from 'AA';
off RWN; Outlook Negative;
-- JPY2.26 billion* Class C TBIs downgraded to 'BBB' from 'A';
off RWN; Outlook Negative;
-- JPY1.79 billion* Class D TBIs downgraded to 'B' from 'BBB';
off RWN; Outlook Negative;
-- JPY0.54 billion* Class E TBIs downgraded to 'CCC' from
'BBB-'; remains on RWN; assigned a Recovery Rating of 'RR4';
-- JPY0.16 billion* Class F TBIs downgraded to 'CCC' from 'BB';
remains on RWN; assigned a Recovery Rating of 'RR5'; and
-- Class X TBIs (dividend-only) affirmed at 'AAA'; Outlook
Stable.
* as of October 9, 2009
Classes E and F TBIs have been downgraded to reflect Fitch's
concern over potential recovery amounts from the one underlying
loan backed by two office properties, which will mature in late
October 2009. Fitch has maintained the RWN on these classes,
reflecting the possibility that further rating action may follow,
depending on the progress of collection activity initiated by the
asset manager and servicer, including property disposition.
Classes B, C and D TBIs have been downgraded to reflect the
revision of Fitch's assumptions, including property valuations.
In line with the recently published criteria, properties have been
revalued in accordance with the respective underlying loan status
and time to loan maturity, adopting values that were 27.9% lower
on average than the initial valuations. The recent cash flow
performance of some properties has been lower than Fitch's
original expectations, and as a result, the agency has revised the
cash flow expectations for these properties downwards. There is
one liquidation-type underlying loan in the portfolio, and no
property backing this loan has been sold to date. Fitch's
analysis has been revised, assuming no property dispositions will
occur during the remaining underlying loan term. Negative
Outlooks were assigned to these classes due to the continued
uncertainty about the future of the Japanese commercial real
estate market and the commercial real estate finance environment.
Class A TBIs have been affirmed, as credit enhancement for this
class is expected to remain at a level sufficient to support the
rating. Principal repayments from the underlying loans will be
applied to the repayment of all TBIs in accordance with the
allocated amount set at closing. However, proceeds from defaulted
loans will be allocated on a sequential basis, which would improve
credit enhancement for Class A TBIs.
The ratings on the dividend-only Class X TBIs address only the
likelihood of receiving dividend payments, while principal on the
related TBIs remain outstanding.
This transaction is a securitization of seven non-recourse loans
extended to six borrowers and four TMK (Tokutei Mokuteki Kaisha)
specified bonds, which are ultimately backed by 20 commercial
properties. To date, two underlying loans which were extended to
one borrower have been repaid, and therefore, the transaction is
currently secured by nine underlying loans backed by 19
properties.
Note that the reports have been published simultaneously and are
intended to be read in conjunction with each other. The criteria
report describes the approach and framework of the methodology,
and the special report details the application and assumptions
adopted for the 2009 surveillance review.
Rating Outlooks have been published for all newly issued Asia
Pacific Structured Finance tranches since June 2008, and
concurrently with rating actions for tranches issued prior to June
2008. Unlike a Rating Watch which notifies investors that there
is a reasonable probability of a rating change in the short term
as a result of a specific event, rating Outlooks indicate the
likely direction of any rating change over a one- to two-year
period.
TOKUTEI MOKUTEKI: S&P Junks Ratings on Class B Notes From 'B'
-------------------------------------------------------------
Standard & Poor's Ratings Services downgraded three classes of
Excellent Collaboration Tokutei Mokuteki Kaisha's series 1 notes,
due in July 2010. Standard & Poor's lowered its rating on the
class B notes to 'CCC+' from 'B', its rating on class C to 'CCC-'
from 'CCC', and its rating on class D to 'CCC-' from 'CCC'. At
the same time, Standard & Poor's affirmed its 'AAA' rating on the
class A notes.
The rating actions on classes B to D reflect: (1) the continued
deterioration of the transaction's available credit support
resulting from defaults in the underlying small and midsize
enterprise obligors pool; (2) the deterioration in the financial
profiles of the SME obligors that issued the bonds backing the
aforementioned notes; and (3) S&P's view regarding the risk of a
potential increase in defaults of the underlying SME bonds at the
bullet repayment date in March 2010.
Ratings Lowered
Excellent Collaboration Tokutei Mokuteki Kaisha
JPY16.39 billion fixed-rate series 1 class A to D notes issued on
March 23, 2007
Class To From Initial Issue Amount Legal Final Maturity
----- -- ---- -------------------- --------------------
B CCC+ B JPY10.40 bil. July 2010
C CCC- CCC JPY0.50 bil. July 2010
D CCC- CCC JPY0.50 bil. July 2010
Rating Affirmed
Class Rating Initial Issue Amount Legal Final Maturity
----- ------ -------------------- --------------------
A AAA JPY4.99 bil. April 2010
* JAPAN: Corporate Bankruptcies Drop 18% in September 2009
----------------------------------------------------------
Bloomberg News reports that Japanese corporate bankruptcies fell
at the fastest pace in more than four years in September 2009.
Bloomberg, citing Tokyo Shoko Research Ltd., discloses that
business failures dropped 18% from a year earlier to 1,155 cases.
It was the biggest decline since April 2005, when they fell 23.5%,
Bloomberg notes.
Total debt involved dropped 94.2% to JPY308.8 billion from last
September, when debt soared due to the bankruptcy of Lehman
Brothers' Japan unit, Reuters says citing Tokyo Shoko.
Reuters notes that compared with the previous month, the number of
bankruptcies fell 6.9% in September, but the amount of bankruptcy
debt rose 8.6%.
Parts of the economy "are still supported by government measures,
but the worst is over," Akiyoshi Takumori, chief economist at
Sumitomo Mitsui Asset Management Co. in Tokyo told Bloomberg.
"Things are starting to stabilize," and funding conditions for
small and medium-sized companies "are gradually improving," he
said.
* JAPAN: Hospital Bankruptcies Set to Hit Record High in 2009
-------------------------------------------------------------
Toru Fujioka at Bloomberg News reports that Japanese hospital
bankruptcies are set to reach a record this year, depleting
resources the ruling Democratic Party of Japan needs to care for
one of the world's fastest-growing aging populations.
Citing data from Tokyo Shoko Research Ltd., Bloomberg says some 53
hospitals filed bankruptcy from January through September. Tokyo
Shoko has been tracking the data since 1988.
According to the report, Prime Minister Yukio Hatoyama, who took
office last month, has pledged to provide better healthcare to
taxpayers in the world's second-largest economy. Bloomberg
relates that in a bid to contain the largest debt in the
industrialized world, the former ruling Liberal Democratic Party
reduced financial assistance to hospitals, a policy that the DPJ
has said has reduced the quality of the nation's healthcare.
====================
N E W Z E A L A N D
====================
GLOBAL BULBS: Goes Into Liquidation Amid NZ$50,000 Unpaid Bill
--------------------------------------------------------------
The Southland Times reports that an outstanding bill of about
NZ$50,000 with CRT has landed West Otago-based horticulture
company Global Bulbs Ltd. in court-ordered liquidation.
The company, owned by Gore accountant Alan Macdonald, of Macdonald
Pearce Perniskie, and Roy Smak, has been operating from the
Tapanui site of former award winning exporter Tulip International
Ltd, which went into receivership in 2004 owing about NZ$3.6
million.
According to the report, PricewaterhouseCoopers' liquidator
Malcolm Hollis said Global Bulbs had bought the business and
assets of Tulip International.
Mr. Hollis said it was unknown at this stage exactly how much
Global Bulbs owed.
Global Bulbs Limited -- http://www.globalbulbs.co.nz/--is a
wholesale/retail cut flower and bulb enterprise located in West
Otago in the South of the South Island of New Zealand.
PETHERICK PROPERTIES: In Receivership; KordaMentha Appointed
------------------------------------------------------------
Nick Churchouse at The Dominion Post reports that Petherick
Properties, the property company of Rich Lister property developer
Steve Petherick, has been placed in receivership.
The Post says receivers McGrathNicol were appointed Tuesday as the
company's receivers by the backers of the four Wellington
commercial properties in its portfolio, mainly ASB and Marac
Finance.
According to the Post, Alan Isaac, of receiver McGrathNichol, said
challenges in the relationship between the owners of the company,
Mr. Petherick and his wife, Alexa, were behind the receivership.
"There have been some tensions within the ownership structure,"
the Post quoted Mr. Isaac as saying.
The receiver, the Post notes, had taken over management of Clayton
Ford House and Morrison Kent House on The Terrace, Petherick Tower
in Waring Taylor St and the Guardian Trust Building in Willeston
St.
The report discloses that Mr. Petherick started his career as a
hairdresser before getting into commercial property in the 1980s,
a lucrative industry he described as "like taking candy from a
baby". According to the Post, Mr. Petherick was listed this year
in the National Business Review rich list as being worth NZ$80
million, down from NZ$110 million last year.
PROPERTY VENTURES: Director Uncooperative on Unit's Receivership
----------------------------------------------------------------
Martin Van Beynen at The Press reports that Christchurch property
developer David Henderson has been labeled "unco-operative" by
accountants handling the receivership of one of his companies,
Tuam Ventures.
Citing Colin Gower and Stephen Tubbs, of BDO Spicers in their
first report, filed in the Companies Office on October 7, the
Press says the company was placed in receivership by the Bank of
New Zealand on July 27 after it failed to meet payments.
The bank is owed NZ$7.49 million, South Canterbury Finance NZ$3.19
million and unsecured creditors NZ$67,347.
According to the Press, the receivers' report said "the director
[Mr. Henderson] has been unco-operative in making information
available for the purposes of this report and the receivership in
general."
Tuam Ventures, which is fully owned by Property Ventures, owns
investment properties worth NZ$14.9 million and has total
liabilities of NZ$13.8 million, the Press discloses.
Property Ventures Limited -- http://www.propertyventures.co.nz/--
is a New Zealand-based real estate development and investment
company.
=================
S I N G A P O R E
=================
IT SERVICES: Narayanamohan Appointed as Liquidator
--------------------------------------------------
The Registrar of Co-operative Societies of Singapore on October 9,
2009, appointed Rangarajan Narayanamohan as liquidator of IT
Services Limited.
ROYAL BANK: Mass Resignation at RBS Coutts Singapore Branch
-----------------------------------------------------------
Reuters reports that more than a quarter of the staff at the
Singapore office of private bank RBS Coutts, part of Royal Bank of
Scotland Group Plc, have quit in a mass resignation.
According to Reuters, RBS Coutts said on Tuesday "a little over 70
people" had resigned from the bank.
The departures come a few months after Hanspeter Brunner, former
co-CEO of RBS Coutts, and Raj Sriram, head of its South Asia unit,
left the wealth manager to join Swiss rival BSI, Reuters relates
citing unnamed sources.
Reuters says factors contributing to the exodus of RBS Coutts
employees include moves by parent RBS to defer staff bonuses as
well as concerns about asset sales by RBS in Asia.
An RBS Coutts spokesman in Singapore told Reuters that the staff
who left were about 28% of the Singapore staff and 15% of the
wealth manager's Asia staff. He did not say why the staff left,
Reuters adds.
Reuters, meanwhile, reports that RBS Coutts spokesman said the
bank plans to hire 200 more staff in Asia over the next five years
and aims to double its assets in the same period. Currently it
has a staff of 500 and manages CHF17 billion (US$16.6 billion) in
Asia.
On Aug. 10, 2009, the Troubled Company Reporter-Europe, citing
Bloomberg News, reported RBS posted a net loss of GBP1.04 billion
in the first half of 2009, compared with GBP827 million a year
earlier after setting aside GBP7.52 billion (US$12.62 billion) to
cover bad loans and declining assets. Bloomberg said about 70% of
RBS's losses came from its so-called non-core division, which
includes assets the bank plans to sell or discontinue. According
to Bloomberg, the bulk of the division is comprised of parts of
the global banking and markets businesses, which include propriety
trading and higher risk assets.
The government owns 70% of RBS after it invested GBP20 billion
last year to rescue the bank.
About RBS Coutts
RBS Coutts Bank Ltd -- http://www.rbscoutts.com/-- is the
international private banking arm of The Royal Bank of Scotland
Group. The Bank offers tailored wealth management solutions as
well as trust and fiduciary services.
About RBS
The Royal Bank of Scotland Group plc (NYSE:RBS) --
http://www.rbs.com/-- is a holding company of The Royal Bank of
Scotland plc (Royal Bank) and National Westminster Bank Plc
(NatWest), which are United Kingdom-based clearing banks. The
company's activities are organized in six business divisions:
Corporate Markets (comprising Global Banking and Markets and
United Kingdom Corporate Banking), Retail Markets (comprising
Retail and Wealth Management), Ulster Bank, Citizens, RBS
Insurance and Manufacturing. On October 17, 2007, RFS Holdings
B.V. (RFS Holdings), a company jointly owned by RBS, Fortis N.V.,
Fortis SA/NV and Banco Santander S.A. (the Consortium Banks) and
controlled by RBS, completed the acquisition of ABN AMRO Holding
N.V. (ABN AMRO). In July 2008, the company disposed its entire
interest in Global Voice Group Ltd.
STREAM INVESTMENTS: Creditors' Proofs of Debt Due on November 13
----------------------------------------------------------------
Creditors of Stream Investments Pte Ltd, which is in members'
voluntary liquidation, are required to file their proofs of debt
by November 13, 2009, to be included in the company's dividend
distribution.
The company's liquidators are:
Kon Yin Tong
Wong Kian Kok
Aw Eng Hai
c/o 47 Hill Street, #05-01
Singapore Chinese Chamber of Commerce & Industry Building
Singapore 179365
================
S R I L A N K A
================
SRI LANKA TELECOM: Fitch Affirms Issuer Default Rating at 'B+'
--------------------------------------------------------------
Fitch Ratings has affirmed Sri Lanka Telecom PLC's Long-term
foreign currency Issuer Default Rating at 'B+', and simultaneously
revised the Outlook to Stable from Negative. Also, the agency has
affirmed SLT's local currency IDR at 'BB-' with a Negative
Outlook, National Long-term rating at 'AAA(lka)' with a Stable
Outlook and its senior unsecured notes due in 2009 at 'B+' based
on a recovery rating of 'RR4'.
The revision of the Outlook on SLT's foreign currency IDR follows
the revision of the Outlook on the Democratic Socialist Republic
of Sri Lanka's FC IDR to Stable from Negative on 9 October 2009.
SLT's FC IDR continues to be constrained by Sri Lanka's FC IDR of
'B+'. Although SLT is majority-owned by the Government of Sri
Lanka, Fitch notes the company's strong stand-alone financial
profile and track record of limited cash returns to shareholders,
and has taken the view that rating SLT above the sovereign's LC
IDR is still appropriate.
SLT's ratings continue to reflect its established position as an
integrated telecom operator with strong market shares in major
operating segments. Despite pressure on profitability due to
intense competition and weak macroeconomic conditions in Sri
Lanka, SLT's cash generation continues to be strong. In the six
months ended June 2009, SLT reported revenues and EBITDAR of
LKR23.58bn and LKR7.9bn, respectively (H108: LKR23.6bn and
LKR10.4bn, respectively). Profitability as measured by EBITDAR to
revenue slipped to 33.5% in H109 from 44.6% a year ago. SLT's
traditional wire-line revenues (around a third of total revenues),
a major source of operating cash generation, have come under
pressure due to mobile substitution, churn and disconnections due
to bad debts.
The Negative Outlook on SLT's LC IDR reflects risks stemming from
a weak regulatory framework and opaque regulatory policies,
intense competition and the still weak macroeconomic conditions in
Sri Lanka. Furthermore, a new interconnection framework to be
implemented in 2010 could add to pressures on SLT's margins and
cash generation.
At the same time, SLT's capex will remain high during 2009-2010
leading to negative free cash flow generation. SLT's transition
to a next-generation network is estimated to cost around LKR7bn
through 2011 and is a non-cash accretive investment. The company
also expects to spend some LKR3.5bn in improving telecom
infrastructure in the northern and eastern regions following the
end of the civil war. At the same time, some of SLT's new
investments, namely, IPTV and Wi-Max operations are expected to
take several years to break even, requiring SLT to fund their
capex and operating losses in the initial years. Fitch expects
these factors to further deteriorate SLT's margins and weigh on
its cash generation. However, following several years of intense
price competition, Fitch expects pressure on tariffs to ease with
the implementation of the proposed interconnect framework, and
hopefully aided by sufficient intervention by the regulator to
ensure the financial health of operators.
The Stable Outlook on SLT's FC IDR and the National Long-term
rating reflects Fitch's view that SLT can maintain an operating
and financial profile appropriate for those ratings. SLT's
leverage as measured by adjusted debt net of cash to EBITDAR was
0.4x at June 2009 (FY08: 0.1x). Fitch expects SLT's leverage to
increase in the three years to 2011 due to negative free cash flow
generation and pressure on earnings, but remain under 1.5x. SLT's
cash reserves are adequate to repay the US$100m notes due in
November 2009. SLT is yet to formalize its long-term funding
plan, though Fitch notes that SLT's liquidity is supported by its
good access to banks.
Negative rating action can be taken on the FC IDR and LC IDR if
SLT's leverage is sustained above 2.5x and 1.5x, respectively, if
there is sustained negative free cash generation beyond 2010, and
if there are negative regulatory developments. As it is
constrained by the sovereign, SLT's IDRs and their Outlooks will
also be affected by changes to Sri Lanka's ratings.
===========
T A I W A N
===========
CHANG HWA: Fitch Affirms Individual Rating at 'C/D'
---------------------------------------------------
Fitch Ratings has affirmed Chang Hwa Bank's Long-term foreign
currency Issuer Default Rating at 'BBB+', Short-term foreign
currency IDR at 'F2', National Long-term rating at 'AA-(twn)',
National Short-term rating at 'F1(twn)', Individual rating at
'C/D', Support rating at '2' and Support Rating Floor at 'BBB+'.
The Outlook is Stable.
CHB's Long-term ratings are underpinned by strong government
support, given its significant market position and legacy of state
ownership. CHB's Individual rating mainly reflects its adequate
capitalization and asset quality, and good liquidity, while its
weak core profitability is the main offsetting factor.
CHB continues to be managed independently in spite of Taishin
Financial Holdings Company's dominant stake since October 2005.
Fitch notes that uncertainty about a possible merger between CHB
and TFHC has increased due to opposition from CHB's minority
shareholders and that the government, CHB's second-largest
shareholder, still exerts significant influence over the merger
and the bank's management.
CHB's profitability slowed further in H109, with an annualized
ROAE of 1.3% amid the severe economic recession (2008: 7.7%). The
agency expects CHB's bottom-line profits as likely to remain under
pressure in 2009-2010 as weak economic growth persists. CHB's NPL
ratio remained stable at 1.7% at end-H109 and loan loss reserve
covered 75.2% of problem exposures. Although the problem loans
excluded the restructured debts of some financially weak
corporations, Fitch believes the bank is financially equipped to
absorb the potential credit risk.
CHB's liquidity remains strong. It has a strong deposit-gathering
franchise and has been acting as a major liquidity provider in
Taiwan's interbank markets. CHB is adequately capitalized, with a
Tier 1 ratio of 7.1% and a total capital ratio of 10.1% at end-
H109. It intends to keep its Tier 1 and capital adequacy ratios
above 7% and 10%, respectively.
CHB is one of the major state-affiliated money-centre commercial
banks in Taiwan. TFHC is CHB's largest shareholder with a 22.55%
stake and appointed the majority of its board of directors.
*********
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 ***