/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/091028.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, October 28, 2009, Vol. 12, No. 213 Headlines A U S T R A L I A ABC LEARNING: Michael Milkin Makes $100-Mln Bid for 705 Centers FAULKS ENTERPRISES: Placed in receivership; Assets Up for Sale H O N G K O N G CHINA FU GENERAL: Placed Under Voluntary Wind-Up Proceedings CHINA AURAL-LASERPUNCTURE: Members' Final Meeting Set for Nov. 23 CTIA VSAT: Seng and Lo Step Down as Liquidators CONSTRUCTION INDUSTRY: Commences Wind-Up Proceedings DEVETEX ASIA: Samuel Yang Sih Yu Appointed as Liquidator EASTGLEN IMPORTS: Chiu and Har Step Down as Liquidators DEREK PRINCE: Commences Wind-Up Proceedings EDUHEALTH LIMITED: Creditors' Proofs of Debt Due on November 27 FIRST SHANGHAI: Lau Cheuk Man Appointed as Liquidator FURLA FAR: Members' Final Meeting Set for November 23 I N D I A AIR INDIA: Seeks Up to INR400cr Loan from Banks COPPRROD INDUSTRIES: CRISIL Assigns 'BB' Ratings on Various Debts DEVASHREE FOODS: Low Net Worth Prompts CRISIL 'BB-' Ratings DINA IRON: CRISIL Assigns 'B+' Rating on INR25 Million Term Loan GROSPINZ FABZ: CRISIL Places 'BB-' Ratings on INR410MM Term Loan JAI HIND: CRISIL Reaffirms 'BB+' Ratings on Various Bank Debts KINGFISHER AIRLINES: Ordered to Pay Lufthansa Technik INR3.6cr SODHI BROTHERS: Delays in Interest Payment Cue CRISIL Junk Ratings UGAR SUGAR: CRISIL Reaffirms 'BB-' Ratings on Various Bank Debts VAISHNAV FIBRE: CRISIL Rates INR55.0 Mln Cash Credit Limit at 'B+' I N D O N E S I A BANK CENTURY: Bailout Not Against the Law, AGO Says BAKRIE LIFE: Clients Reject Proposed Repayment Deal CHANDRA ASRI: Moody's Assigns Corporate Family Rating at 'B2' OPTIMA GROUP: Probe Into Defaults and Losses Widened J A P A N HITACHI LTD: Expects Annual Loss to Narrow by 15% L-JAC 8: S&P Downgrades Ratings on Various Classes of Certs. JLOC 37: S&P Puts Ratings on Two Classes on CreditWatch Negative SANYO ELECTRIC: May Sell Nickel-Hydride Business SPANSION INC: Japan Creditors Object to Foundry Pact Rejection K O R E A HYNIX SEMICONDUCTOR: Swings to KRW246 Bil. Net Income in Q3 HYUNDAI MOTOR: Posts Record High KRW979.1 Bil. Third Qtr Profit M A L A Y S I A TALAM CORP: Winding Up Petitions Served Against Europlus Unit POLY TOWER: Fails to Submit Quarterly Results P H I L I P P I N E S NATIONAL POWER: To Raise PHP7-Bln for Capital Requirements X X X X X X X X * Upcoming Meetings, Conferences and Seminars - - - - - ================= A U S T R A L I A ================= ABC LEARNING: Michael Milkin Makes $100-Mln Bid for 705 Centers --------------------------------------------------------------- The Daily Telegraph reports that US billionaire Michael Milkin, through his global education company Knowledge Universe, submitted a $100 million bid for 705 ABC Learning childcare centres. Mr. Milkin, a US junk bond king who spent two years in prison for corporate crimes, is among up to six bidders for ABC, the report says. The Telegraph relates that the sale is due to be completed in two weeks, when a single new owner is expected to be chosen from the bidders. Other bidders include a number of private equity ventures and a not-for-profit consortium including Mission Australia and a number of superannuation funds, the report states. Based in Australia, ABC Learning Centers Limited (ASX: ABS) -- http://www.childcare.com.au/-- provides childcare services and education in more than 1,200 centers in Australia, New Zealand, the United States and the United Kingdom. The Company's subsidiaries include A.B.C. Developmental Learning Centers Pty Ltd., A.B.C. Early Childhood Training College Pty Ltd., Premier Early Learning Centers Pty Ltd., A.B.C. Developmental Learning Centers (NZ) Ltd., A.B.C. New Ideas Pty Ltd., A.B.C. Land Holdings (NZ) Limited and Child Care Centers Australia Ltd. On January 26, 2007, it acquired La Petite Holdings Inc. On February 2, 2007, it acquired Forward Steps Holdings Ltd. On March 23, 2007, it acquired Children's Gardens LLP. In September 2007, the Company purchased the Nursery division (Leapfrog Nurseries) from Nord Anglia Education PLC. In June 2008, the Company completed the sale of a 60% stake in its United States business to Morgan Stanley Private Equity. * * * As reported in the Troubled Company Reporter-Asia Pacific on November 6, 2008, ABC Learning Centers Limited appointed Peter Walker and Greg Moloney of Ferrier Hodgson as voluntary administrators of the company and a number of its subsidiaries. Subsequent to the appointment of administrators, the company's banking syndicate appointed Chris Honey, Murray Smith and John Cronin of McGrathNicol as receivers. FAULKS ENTERPRISES: Placed in receivership; Assets Up for Sale -------------------------------------------------------------- The Otago Daily Times reports that Faulks Enterprises Ltd has been placed in receivership due to lack of work. The report relates that the appointed receiver, Murray Frost, of Deloitte in Dunedin, said that "due to the downturn in work over the past 12 months, it was no longer sensible to continue with the business in the current economic climate". According to the report, Mr. Frost could not comment on any outstanding debt or on the value of the company or assets, but he expects that the plant and equipment will be tendered for sale next month. Faulks Enterprises Ltd provides construction, earthworks and landscaping services, along with supply of trucks and other construction equipment. ================ H O N G K O N G ================ CHINA FU GENERAL: Placed Under Voluntary Wind-Up Proceedings ------------------------------------------------------------ At an extraordinary general meeting held on October 15, 2009, members of China Fu General Business Community Chamber Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Fu Sum Lam Keybond Commercial Building, 17th Floor 38 Ferry Street Kowloon CHINA AURAL-LASERPUNCTURE: Members' Final Meeting Set for Nov. 23 ----------------------------------------------------------------- Members of China Aural-Laserpuncture Physiotherapy Association (H.K.) Limited will hold their final general meeting on Nov. 23, 2009, at 10:00 a.m., at the 2201, Hong Kong Trade Centre, 161 Des Voeux Road Central, Hong Kong. At the meeting, Lau Yui Wing, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. CTIA VSAT: Seng and Lo Step Down as Liquidators ----------------------------------------------- Natalia K M Seng and Susan Y H Lo stepped down as liquidators of CTIA VSAT Network Limited on October 13, 2009. CONSTRUCTION INDUSTRY: Commences Wind-Up Proceedings ---------------------------------------------------- Members of Construction Industry Institute (Hong Kong) Limited on October 12, 2009, passed a resolution to voluntarily wind up the company's operations. The company's liquidator is: So Kwok Keung Keith Tai Yau Building, 22/F 181 Johnston Road Wanchai, Hong Kong DEVETEX ASIA: Samuel Yang Sih Yu Appointed as Liquidator -------------------------------------------------------- Samuel Yang Sih Yu on October 12, 2009, was appointed as liquidator of Devetex Asia Limited. The company's liquidator is: Samuel Yang Sih Yu Sea View Estate Block A, Room 2, 1st Floor 2-8 Watson Road North Point, Hong Kong EASTGLEN IMPORTS: Chiu and Har Step Down as Liquidators ------------------------------------------------------- Ying Hing Chiu and Chan Mi Har stepped down as liquidators of Eastglen Imports and Exports Limited on October 19, 2009. DEREK PRINCE: Commences Wind-Up Proceedings ------------------------------------------- Members of Derek Prince Ministries Asia Limited on October 19, 2009, passed a resolution that voluntarily winds up the company's operations. EDUHEALTH LIMITED: Creditors' Proofs of Debt Due on November 27 --------------------------------------------------------------- Creditors of Eduhealth Limited are required to file their proofs of debt by November 27, 2009, to be included in the company's dividend distribution. The company commenced wind-up proceedings on October 15, 2009. The company's liquidator is: Chan Sek Kwan Rays Seabright Plaza, Unit F, 12/F 9-23 Shell Street North Point Hong Kong FIRST SHANGHAI: Lau Cheuk Man Appointed as Liquidator ----------------------------------------------------- Lau Cheuk Man Timothy on October 12, 2009, was appointed as liquidator of First Shanghai Public Utility Investments Limited. The company's liquidator is: Lau Cheuk Man Timothy Citicorp Centre Unit 9, 17/F 18 Whitfield Road Causeway Bay, Hong Kong FURLA FAR: Members' Final Meeting Set for November 23 ----------------------------------------------------- Members of Furla Far East Limited will hold their final general meeting on November 23, 2009, at 10:00 a.m., at the 29th Floor, Caroline Centre, Lee Gardens Two, 28 Yun Ping Road, Hong Kong. At the meeting, Chen Yung Ngai Kenneth, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. ========= I N D I A ========= AIR INDIA: Seeks Up to INR400cr Loan from Banks ----------------------------------------------- The Economic Times reports that Air India Ltd and Indian Airlines are seeking an urgent loan of between INR300 crore and INR400 crore from banks to meet immediate working capital requirements like wage payments and operational expenses. "As of now, we are fast running out of funds and are seeking an urgent infusion in the form of INR2,000 crore equity and INR3,000 crore for aircraft purchase from the government. The Group of Ministers is slated to meet within a week to decide on this request," the report cited a highly placed sources as saying. 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 Troubled Company Reporter-Asia Pacific reported on June 19, 2009, that the Hindustan Times said 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 the National Aviation Company of India Ltd., the holding company for the carrier, 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. COPPRROD INDUSTRIES: CRISIL Assigns 'BB' Ratings on Various Debts ----------------------------------------------------------------- CRISIL has assigned its rating of 'BB/Stable' to the bank facilities of Copprrod Industries Pvt Ltd, part of the Copprrod group. Facilities Ratings ---------- ------- INR40.00 Million Long Term Loan BB/Stable (Assigned) INR25.00 Million Cash Credit Limit BB/Stable (Assigned) INR55.00 Million Proposed Long Term BB/Stable (Assigned) Bank Loan Facility The rating reflects the Copprrod group's exposure to risks relating to its working capital-intensive operations, to customer and supplier concentration risks, and the small scale of its operations in the intensely-competitive copper products industry. These weaknesses are partially offset by the benefits that the company derives from its promoters' experience in the copper products business, its established client relationships, and improved financial risk profile. As part of this rating exercise, CRISIL has combined the financial risk profiles of Copprrod, SCR Wire Products (SCR Wire), and Classic Wire Installations (Classic Wire). This is because, the three entities, collectively referred to as the Copprrod group, are in the same line of business, and have common promoters and fungible funds. Outlook: Stable CRISIL believes that the Copprrod group will maintain a stable credit risk profile over the medium term, driven by its healthy relationships with its customers. The outlook may be revised to 'Positive' in case of improvement in the group's scale of operations, resulting in more-than-expected cash flows, and/or improvement in its capital structure because of equity infusions. Conversely, the outlook may be revised to 'Negative' if inefficient raw material procurement affects the group's margins and cash flows, its net worth declines because of withdrawals by promoters, or if it undertakes large debt-funded capital expenditure, leading to deterioration in its debt protection measures. About Copprrod Industries Set up in 2007 by Mr. H G Chandrasekar, Copprrod manufactures copper rods, silver-plated copper wires, bus bars, flats, and strips. Based at Tumkur, Karnataka, the company commenced operations in August 2008 and operates with a manufacturing capacity of 5000 tonnes per annum. The company procures copper cathode from Sterlite Industries Ltd and Bharat Aluminium Co Ltd. It sells 60 per cent of its output to group companies, and the balance to customers such as ABB Ltd (rated 'AAA/Stable/P1+' by CRISIL), Alstom Ltd, the Kirloskar Electric Company Ltd and, Sahney Commutators Pvt Ltd. About the Group Set up in 1993 as a proprietary firm by Mr. H G Chandrasekar, SCR Wire manufactures magnet winding wire used in power and distribution transformers, motors, and auto electricals. Set up as a proprietary firm in 1997 by Mrs. Shasikala (wife of Mr. H G Chandrasekar), Classic Wire manufactures enamelled copper wires. The Copprrod group reported a profit after tax (PAT) of INR7.3 million on net sales of INR346.1 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR25.2 million on net sales of INR300.9 million for 2007-08. DEVASHREE FOODS: Low Net Worth Prompts CRISIL 'BB-' Ratings ----------------------------------------------------------- CRISIL has assigned its ratings of 'BB-/Stable ' to the bank facilities of Devashree Foods Pvt Ltd. Facilities Ratings ---------- ------- INR75.00 Million Cash Credit BB-/Stable (Assigned) INR197.70 Million Long Term Loan BB-/Stable (Assigned) The ratings reflect DFPL's weak financial risk profile, marked by low net worth, high gearing, and moderate debt protection measures, and exposure to uncertainty in revenues on account of foray into new product lines. These weaknesses are, however, partially offset by the company's strong business risk profile, and the benefits that it derives from association with Schreiber Dynamix Dairies Ltd, and the promoters' experience in the dairy industry. As part of this rating exercise, CRISIL has consolidated the business and financial risk profiles of DFPL, and its wholly-owned subsidiary Novel Agro Pvt Ltd. This is because the two companies have significant financial, management and operational linkages. Outlook: Stable CRISIL believes that DFPL will maintain stable revenue growth, backed by increasing demand for dairy products in the Indian market. The capital structure is expected to deteriorate over the medium term on account of the recent debt-funded capital expenditure. The outlook may be revised to 'Positive' upon successful market penetration of new products, resulting in high cash accruals. Conversely the outlook may be revised to 'Negative' if the company reports low revenue realisations, resulting in pressure on timely repayment of term debt obligations over the medium term. About Devashree Foods Devashree Foods Private Limited, established in 2000 is engaged in the marketing and distribution of dairy products such as cooking butter, processed cheese and skimmed milk powder. The company has recently concluded its capex of INR290 million for manufacturing of new products such as creamer cups, egg replacers and non dairy whipping cream. Devashree Foods reported a consolidated profit after tax (PAT) of INR12.8 million on net sales of INR170 million for 2007-08 (refers to financial year, April 1 to March 31), as against a PAT of INR8.3 million on net sales of INR113.8 million for 2006-07. DINA IRON: CRISIL Assigns 'B+' Rating on INR25 Million Term Loan ---------------------------------------------------------------- CRISIL has assigned its ratings of 'B+/Stable' to the various bank facilities of Dina Iron & Steel Ltd. Facilities Ratings ---------- ------- INR105 Million Cash Credit Limits B+/Stable (Assigned) INR25 Million Term Loan B+/Stable (Assigned) The ratings reflect Dina Iron's weak financial risk profile, large working capital requirements, and exposure to risks relating to the cyclical nature of the steel industry. These weaknesses are, however, partially offset by Dina Iron's average business profile. Outlook: Stable CRISIL believes that Dina Iron will maintain a stable business profile over the medium term. The outlook may be revised to 'Positive' if the company attains substantial increase in revenues, or greater integration in operations. Conversely, the outlook may be revised to 'Negative' if the company reports lower- than-expected capacity utilisation levels, leading to deterioration in operating margins, or undertakes any large, debt- funded capital expenditure. About Dina Iron Dina Iron, incorporated in 1992, manufactures billets, wire rods and TMT bars, which have application in construction, electrical and infrastructure industries. The company has capacity to produce 30,000 tonnes per annum (tpa) of billets and a rolling capacity of 20,000 tpa. For 2008-09 (refers to financial year, April 1 to March 31), Dina Iron reported a profit after tax (PAT) of INR5million on net sales of INR691 million, as against a PAT of INR6million on net sales of INR465 million for 2007-08. GROSPINZ FABZ: CRISIL Places 'BB-' Ratings on INR410MM Term Loan ---------------------------------------------------------------- CRISIL has assigned its ratings of 'BB-/Stable/P4+' to the bank facilities of Grospinz Fabz Ltd. Facilities Ratings ---------- ------- INR40.0 Million Cash Credit Limit BB-/Stable (Assigned) INR410.0 Million Term Loan BB-/Stable (Assigned) INR20.0 Million Bank Guarantee P4+ (Assigned) The ratings reflect GFL's weak financial risk profile, and exposure to risks relating to limited track record of operations in the cotton yarn business, lack of integrated operations, and to fluctuations in cotton prices. These weaknesses are, however, partially offset by the benefits that the company derives from stable demand prospects in the yarn industry, and from improving operating efficiency, following ongoing capacity enhancements. Outlook: Stable CRISIL believes that GFL will maintain a stable credit risk profile over the medium term, on the back of expected improvement in operating efficiency and the promoters' experience in the cotton business. The outlook may be revised to 'Positive' if GFL's capital structure, operating income, and profitability improve. Conversely, the outlook may be revised to 'Negative' if the company's profitability declines, and/or the management undertakes large, debt-funded capital expenditure, leading to deterioration in capital structure. About Grospinz Fabz GFL, set up by Mr. Navneet Grover in March 2008, began commercial operations in October 2008. The company manufactures cotton yarn of counts ranging from 16s to 32s at its facility at Ferozepur (Punjab). GFL procures J-34 cotton mostly from the market at Muktsar (Punjab), and manufactures cotton yarn at its facility, which has a capacity of 13,200 spindles. GFL will add another 14,400 spindles to its capacity by March 2010. GFL reported a net loss of INR7.4 million on net sales of INR156.9 million for 2008-09. JAI HIND: CRISIL Reaffirms 'BB+' Ratings on Various Bank Debts -------------------------------------------------------------- CRISIL has reclassified its short-term rating on the enhanced bank facilities of Jai Hind Wire Rod Mills Ltd (Jai Hind) as 'P4+', from the earlier 'P4'; the long-term rating has been reaffirmed. The ratings continue to reflect Jai Hind's below-average financial risk profile marked by low net worth and high gearing, and the susceptibility of its margins to fluctuations in raw material prices. These weaknesses are partially offset by Jai Hind's average operating efficiency and diverse customer base. Facilities Ratings ---------- ------- INR148.4 Million Long-Term Loan BB+/Stable (Reaffirmed) INR50.0 Million Cash Credit BB+/Stable (Reaffirmed) INR150.0 Million Letter of Credit P4+ (Reclassified from 'P4') (Enhanced from INR 51.6 Million) INR2.5 Million Bank Guarantee P4+ (Reclassified from 'P4') (Enhanced from INR 2.0 Million) Outlook: Stable CRISIL expects Jai Hind's financial risk profile to remain weak on account of its large debt-funded capital expenditure. The outlook could be revised to 'Positive' if the company's capital structure and operating margin improve significantly. Conversely, the outlook could be revised to 'Negative' if the company's gearing increases to more than 2 times, or if its cash accruals come under pressure because of volatility in steel prices. Incorporated in 1991 at Salem (Tamil Nadu) by Mr. G E Govindaraj, Jai Hind manufactures thermo-mechanically treated (TMT) rods, twisted bars, flats, squares, and other specialty products from scrap and sponge iron. The company has an ingot manufacturing capacity of 26,000 tonnes per annum (tpa), and windmills with power generating capacity of 4.1 megawatts. Jai Hind reported a provisional profit after tax (PAT) of INR17.2 million on net sales of INR644.8 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR8.8 million on net sales of INR642.2 million for 2007-08. KINGFISHER AIRLINES: Ordered to Pay Lufthansa Technik INR3.6cr -------------------------------------------------------------- The Bombay High Court has asked Kingfisher Airlines to deposit INR3.6 crore with the court registrar against its dues payable to Lufthansa Technik for the usage of engine components, The Economic Times reports. The payment to the court would cover the dues for the months of July, August and September, the report says. The matter has been adjourned to November 6. Separately, the Times says BPCL had earlier dragged Kingfisher Airlines to the Bombay High Court alleging non-payment of fuel dues of INR314 crore. The matter is pending as Kingfisher has offered an out-of-court settlement, the report states. Lufthansa Technik provides maintenance, repair and overhaul (MRO) of airplanes, components and engines. It had entered into an agreement with Kingfisher Airlines in March 2005 for undertaking MRO activities for ten years, according to the Business Standard. 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. SODHI BROTHERS: Delays in Interest Payment Cue CRISIL Junk Ratings ------------------------------------------------------------------ CRISIL has assigned its ratings of 'D/P5' to the bank facilities of Sodhi Brothers Hydro Power Project Pvt Ltd (Sodhi Brothers). Facilities Ratings ---------- ------- INR175.0 Million Term Loan D (Assigned) INR62.0 Million Proposed Long D (Assigned) Term Facility INR58.0 Million Letter of Credit P5 (Assigned) The ratings reflect delays by Sodhi Brothers in its interest repayments, owing to weak liquidity. Incorporated in 2004, Sodhi Brothers is implementing a 4 mega-watt hydroelectric power project across the Brahl Khad, a tributary of Dehar, which is, in turn, a tributary of River Beas. The project site is located in Kangra District (Himachal Pradesh). Sodhi Brothers has a power purchase (PPA) with Himachal Pradesh State Electricity Board for off-take of the entire electricity generated for a period of 40 years, from the commencement of commercial operations. The power plant is scheduled for commissioning in the second half of 2008. UGAR SUGAR: CRISIL Reaffirms 'BB-' Ratings on Various Bank Debts ---------------------------------------------------------------- CRISIL has reaffirmed its rating on the bank facilities of Ugar Sugar Works Ltd, following an announcement by Ugar Sugar that it has sold its stake in Sadashiva Sugar Ltd to EID Parry (India) Ltd. for INR224 million. Facilities Ratings ---------- ------- INR1760 Million Cash Credit Limits BB-/Stable (Reaffirmed) INR1355 Million Long-Term Rupee Loans BB-/Stable (Reaffirmed) The reaffirmation reflects CRISIL's belief that Ugar Sugar's gearing will not change significantly despite the inflow of funds. Furthermore, Ugar Sugar is expected to incur losses for the first half of 2009-10 (refers to financial year, April 1 to March 31), which will continue to constrain its financial risk profile over the medium term. The rating continues to reflect Ugar Sugar's weak financial risk profile, and its susceptibility to unfavorable changes in the already-stringent regulations related to the sugar industry. The impact of the rating weaknesses is mitigated by Ugar Sugar's moderate operating efficiency and integrated manufacturing facilities. Outlook: Stable CRISIL believes that Ugar Sugar will maintain its business risk profile over the medium term on the back of increased sugar prices. The outlook may be revised to 'Positive' in case of a significant improvement in the company's financial risk profile, driven by an increase in its scale of operations or improvement in its profitability. Conversely, the outlook may be revised to 'Negative' if Ugar Sugar's utilization level at its Jewargi plant is sub-optimal, or if its capital structure deteriorates because of larger-than-expected debt-funded capital expenditure. About Ugar Sugar Established in 1939, (Ugar Sugar) is one of India's oldest sugar mills. The company has a fully-integrated set up with sugar capacities of 10,000 tonnes crushed per day (TCD), 44 megawatt power plant, and 75 kilolitres per day distillery at Ugarkhurd, Karnataka. It recently set up an export-oriented unit to manufacture sugar ships for export to M/s Fragies GmbH, Germany. In 2008-09, the company commissioned one more plant with a capacity of 3500 TCD at Jewargi, Karnataka, For 2008-09, Ugar Sugar reported a profit after tax (PAT) of INR148 million on net sales of INR4.22 billion, against a PAT of INR114 million on net sales of INR416 billion in 2007-08. For the quarter ended June 2009, the company incurred a book loss of INR69.8 million on net sales of INR1.15 billion, against a PAT of INR42.46 million on net sales of INR1.25 billion in the corresponding quarter of the previous year. VAISHNAV FIBRE: CRISIL Rates INR55.0 Mln Cash Credit Limit at 'B+' ------------------------------------------------------------------ CRISIL has assigned its ratings of 'B+/Stable' to the bank facility of Vaishnav Fibre Ltd. Facilities Ratings ---------- ------- INR55.0 Million Cash Credit Limit B+/Stable (Assigned) The ratings reflect Vaishnav's exposure to risks relating to operational inefficiencies in the acquired plant, its moderately weak financial risk profile combined with small scale of operations, and cyclicality in the paper industry. These weaknesses are partially offset by the benefits that the company derives from its promoters' experience in the paper industry and company's established distribution network across India. Outlook: Stable CRISIL believes that Vaishnav will maintain a stable credit risk profile on the back of stabilization of its operations and improvement in its margins. The outlook may be revised to 'Positive' if the company reports high growth in revenue, or more- than-expected improvement in its profitability. Conversely, the outlook may be revised to 'Negative' if volatility in raw material and kraft paper prices adversely affects the company's margins. Incorporated in 1995 by the Dhaval family, Vaishnav manufactures kraft paper, core pipes, and corrugated boxes. Vaishnav is currently managed by the Ajmera family; the transfer of Vaishnav's ownership to the Ajmera family was completed in 2007. In 2003, the company was listed as a sick unit under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), with the Board of Industrial and Financial Restructuring (BIFR). The management is in discussion with BIFR to de-register the company from SICA as the previous management had agreed to a one-time settlement in September 2005 under a Government of Madhya Pradesh (GoMP) scheme. The management had a hearing at BIFR in May 2009, and has asked the board to entitle the company to certain benefits from GoMP with retrospective effect. Vaishnav reported a profit after tax (PAT) of INR1.2 million on net sales of INR170.4 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR1.6 million on net sales of INR212.8 million for 2007-08. ================= I N D O N E S I A ================= BANK CENTURY: Bailout Not Against the Law, AGO Says --------------------------------------------------- Antara News reports that the Attorney General's Office said it had not seen any indication of the decision to bailout former Bank Century running against the law or the state having suffered a loss by it. Deputy Attorney General for Special Crimes, Marwan Effendy, told Antara that "There is no indication showing that the extension of the bailout funds by the Deposit Insurance Agency (LPS) based on a recommendation from the Financial Sector Policy Committee (KKSK) was against the law and had caused a loss to the state." According to the news agency, Mr. Effendy said the decision had been made based on Perppu (government regulation in lieu of law) Number 4 of 2008 while no parameter had been made to measure the systematic impact used for making the decision. The investigation of the Bank Century case by AGO was focused on funds that had been used by the bank's shareholders now being wanted, namely Rafat Ali Rizfi and Hesyam Al Waraq, Mr. Effendy told Antara. Antara recalls the AGO's head of legal information, Didiek Darmanto, earlier said that the team of the Attorney General Deputy for Special Crimes planned to make an inventory and confiscate assets in Hong Kong and Britain in coordination with the offices concerned. 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. BAKRIE LIFE: Clients Reject Proposed Repayment Deal --------------------------------------------------- Jakarta Globe reports that a group of customers of Bakrie Life rejected the company's proposed deal to repay their lost investments. According to the report, the clients dismissed the insurer's claim that it had reached a repayment agreement with a majority of customers and accused it of threatening them to sign the agreement. The report notes Wahjudi, a Bakrie Life customer who is helping to coordinate efforts to recover money lost by investors based in Jakarta, said he doubted the company had enough money to meet its obligations. The company had again missed a payment of the monthly interest due this month, he said. Wahjudi, according to the Globe, also rejected Bakrie Life's claims that a majority of its customers had agreed to its repayment plan. Citing Tony Mulyawan, the leader of the same group of customers Wahjudi is helping to organize, the Globe relates Bakrie Life had not offered any alternatives to customers, and had put pressure on some to sign the agreement by Monday, November 2. Bakrie Life's president director, Timoer Sutanto, however, denied the company had threatened customers, the report notes. Mr. Mulyawan said the group was now considering legal action. "We'll give them a week. After that, if they haven't responded to our letter, we may go to court," the report quoted Mr. Mulyawan as saying. The Globe discloses that Wahjudi and Mr. Mulyawan represent about 70 of the 400 investors who lost a total of IDR350 billion (US$37.1 million) in the Diamond Investa product offered by Bakrie Life, formally known as PT Asuransi Jiwa Bakrie. As reported in the Troubled Company Reporter-Asia Pacific on September 24, 2009, The Jakarta Post said the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) granted Bakrie Life the one month period it had requested to settle a dispute with customers. The supervisory body launched an investigation into Bakrie Life after the company's customers complained to Bapepam-LK they had not been able to cash in their investment funds since late last year. According to the Post, the funds are invested in an investment product called Diamond Investa, in which 80% of the fund is linked to the performance of shares in the capital market. Bakrie Life is one of the Bakrie Group's units that specialize in the life insurance sector. It was established in 1996 in Jakarta, Indonesia. BNBR owns Bakrie Life through its subsidiary, Bakrie Capital, which controls 91% of ownership in the insurance company, the remaining 9% being owned by the company's cooperative network. CHANDRA ASRI: Moody's Assigns Corporate Family Rating at 'B2' ------------------------------------------------------------- Moody's Investors Service has assigned a provisional (P)B2 corporate family rating to PT Chandra Asri. At the same time, Moody's has assigned a provisional (P)B2 senior secured bond rating to the proposed senior secured notes issued by Altus Capital Pte. Ltd., an entity wholly owned and guaranteed by Chandra Asri and its subsidiaries. The outlook on both ratings is stable. This is the first time that Moody's has assigned ratings to Chandra Asri or to Altus Capital Pte. Ltd. The provisional status of the ratings will be removed upon completion of the bond issuance. US$157 million of the proceeds from the bond issuance will be used to refinance outstanding debt under an existing bank facility, while the remainder will be used to repay an existing subordinated loan from Strategic Investment Holdings Ltd, a previous shareholder of Chandra Asri. "Chandra Asri's (P)B2 rating reflects its leading position in the domestic petrochemicals market, which balances its small global presence. It also reflects the company's competitiveness in its key domestic market of Indonesia, which accounts for 80% of its revenue, derived from its vertically-integrated operations as well as a favorable import tariff structure," says Renee Lam, a Moody's Vice President. "Key challenges Chandra Asri faces include the inherently cyclical nature of the petrochemical industry, leading to highly volatile earnings and cash flow. The company's upcoming capital expenditures over the next 3-4 years, which are expected to coincide with an industry cyclical downturn and major capacity maintenance overhaul, are also likely to pressure its credit metrics," adds Lam, also Moody's Lead Analyst for the company. Chandra Asri's liquidity profile is characterized by minimal near- term refinancing needs post bond issuance, and improving covenant headroom. Yet, its financial flexibility is constrained by the limited alternative banking facilities, though the company is actively expanding its banking relationships with domestic financial institutions. Additionally, the company's private shareholding structure has led to concerns over corporate governance, although Moody's takes comfort from the involvement in the company's management from Temasek Holdings, an investment holding company wholly-owned by the Ministry of Finance of Singapore, and 30% shareholder in Chandra Asri. Chandra Asri's stable outlook is underpinned by its leading position in the domestic petrochemical industry, as well as moderate debt use, which should help it weather the current industry downturn. Upward rating pressure could develop if (1) demand and prices for petrochemicals and feedstock stabilize, leading to improved profitability and cash flow; (2) the company maintains low debt leverage through industry cycles; and (3) it maintains its liquidity profile while improving its financial flexibility. Credit metrics that will support an upgrade include adjusted Debt/ Book Capitalization below 20-25% and adjusted EBITDA margins at above 8-12% on a sustained basis. Downward pressure could emerge if market conditions deteriorate more steeply than currently anticipated, or if Chandra Asri increases its debt leverage, which could arise from new acquisitions, substantial capital expenditures, or shareholder returns. Such pressure may be evidenced by adjusted Debt/Book Capitalization exceeding 35% or adjusted EBITDA loss occurring. In addition, Moody's would be concerned should there be any change in the relationship between Temasek and Chandra Asri, which includes, but is not limited to, a substantial reduction in ownership or change in Temasek's involvement in management. PT Chandra Asri, based in Jakarta, is the largest petrochemical company in Indonesia. As at 30 June 2009, it had olefins production capacity comprising 600,000 tpa of ethylene, 320,000 tpa of propylene, 280,000 tpa of py-gas and 220,000 tpa of crude C4. The company also operates two polyethylene production trains, with a combined production capacity of 320,000 tpa. OPTIMA GROUP: Probe Into Defaults and Losses Widened ---------------------------------------------------- Jakarta Globe reports that the Capital Market and Financial Institutions Supervisory Agency's (Bapepam-LK) is widening its investigation into two units of the Optima Group -- PT Optima Kharya Capital Securities and its subsidiary, PT Optima Kharya Capital Management -- and their proposed takeover by PT Garuda Capital Investama. The report says the investigation follows reported defaults and substantial losses on the two units unlicensed investment products. According to the Globe, the takeover, which was announced earlier this month, could complicate efforts to resolve legal issues surrounding Optima Capital's failure to redeem an investment in a discretionary fund by insurer AJB Bumiputera 1912 in April and major losses suffered by at least three state-owned enterprises with investments at the company. The report, citing Bapepam-LK Director Nurhaida, says the agency would summon executives from Optima Securities and Optima Capital Management next week to request explanations of the default and the planned acquisition. PT Optima Securities' shares have been suspended from trading in the Indonesia Stock Exchange (IDX) following a request from Bapepam, the Globe notes. ========= J A P A N ========= HITACHI LTD: Expects Annual Loss to Narrow by 15% ------------------------------------------------- Bloomberg News reports that Hitachi Ltd narrowed its full-year net loss forecast by 15%, citing the impact of global economic stimulus measures and cost cuts. The report relates Hitachi said net loss will probably narrow to JPY230 billion (US$2.5 billion) in the 12 months ending March 31, compared with its earlier forecast of a JPY270 billion loss. The company last year reported a record JPY787.3 billion loss. Hitachi said operating profit is expected to increase to JPY80 billion from a previous projection of JPY30 billion. The company lowered its revenue forecast 2.2% to JPY8.7 trillion. 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. L-JAC 8: S&P Downgrades Ratings on Various Classes of Certs. ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on the class A to H trust certificates issued under the L-JAC 8 Trust Beneficial Interest transaction and removed the ratings from CreditWatch with negative implications. On July 28, 2009, Standard & Poor's had placed its ratings on classes A to C on CreditWatch negative, and lowered its ratings on classes D to H and kept them on CreditWatch with negative implications. Standard & Poor's also affirmed its ratings on classes I to K and X, issued under the same transaction. The transaction's two underlying nonrecourse loans are both backed by regional commercial properties. Among the two loans, one (representing about 75% of the initial issuance amount of the notes) had defaulted in July 2009, and the servicer is proceeding with recovery procedures in accordance with the rules specified in the transaction's agreement. Meanwhile, the other loan (representing about 25% of the initial issuance amount of the notes) is scheduled to mature in December 2010. Both loans have the same sponsor. The downgrades are based on these factors: (1) according to various types of information, including information provided by the servicer on the progress of collection procedures, S&P understand that there is considerable uncertainty over the recovery prospects of the collateral property backing the defaulted loan as the collateral is a regional retail property. Accordingly, S&P has lowered its assumption with respect to the likely recovery amount from that property; (2) with regard to the loan maturing in December 2010, there is a high possibility that the loan may not be paid by the maturity date, considering that the collateral is a regional retail property and the level of leverage is high. In addition, S&P holds the view that the recovery amount from the collateral property is very likely to be significantly lower than S&P's initial assumption, in the case of a loan default. S&P has lowered its assumptions with respect to the likely recovery amounts from the properties backing the two loans, mostly by applying higher cap rates. Accordingly, S&P has assumed that the recovery amounts from the properties would be about 59% of the average initial estimates of the property values. At this point, Standard & Poor's has affirmed its rating on the class X trust certificates. However, S&P is considering amending the rating methodology for interest-only certificates, which include the class X trust certificates of this transaction. If the proposal is adopted, it could affect the rating on class X. This deal is a multi-borrower CMBS transaction that was originally backed by two loans extended to two obligors. The loans were originally secured by one real estate beneficial interest and one real estate property. The transaction was arranged by Lehman Brothers Japan Inc. Premier Asset Management Co. is the transaction servicer. Ratings Lowered And Removed From Creditwatch Negative L-JAC 8 Trust Beneficial Interest Trust certificates due January 2013 Class To From Initial issue amount Coupon type ----- -- ---- -------------------- ----------- A A+ AAA/Watch Neg JPY8.78 bil. Floating Rate B BBB AA/Watch Neg JPY1.68 bil. Floating rate C B A/Watch Neg JPY1.68 bil. Floating rate D B- B+/Watch Neg JPY1.68 bil. Floating rate E CCC B/Watch Neg JPY0.79 bil. Floating rate F CCC B-/Watch Neg JPY0.76 bil. Floating rate G CCC B-/Watch Neg JPY0.77 bil. Floating rate H CCC B-/Watch Neg JPY0.87 bil. Floating rate Ratings Affirmed Class Rating Initial issue amount Coupon type ----- ------ -------------------- ----------- I CCC JPY0.84 bil. Floating rate J CCC JPY0.6 bil. Floating rate K CCC JPY0.32 bil. Floating rate X AAA JPY18.77 bil. (Initial notional principal) JLOC 37: S&P Puts Ratings on Two Classes on CreditWatch Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class A1 and A2 notes issued under the JLOC 37 LLC transaction on CreditWatch with negative implications, and kept its ratings on classes B1 to D2 on CreditWatch with negative implications, where they were placed on July 6, 2009. At the same time, Standard & Poor's affirmed its ratings on the class X notes issued under the same transaction. Standard & Poor's reviewed the repayment prospects of about 100 loans (total outstanding loan balance: about JPY660 billion) backing rated CMBS transactions that are due to mature by the end of August 2010. Following the review, on July 6, 2009, S&P placed the ratings on 93 tranches of 23 CMBS transactions, including those on classes B1 to D2 of JLOC 37 LLC, on CreditWatch with negative implications. One of the transaction's seven remaining underlying nonrecourse loans (representing about 9.5% of the total initial issuance amount of the notes) is due to mature by the end of August 2010 and is a "loan considered to be in default," as stated in the aforementioned report. In addition, another four underlying loans (representing a combined 43.6% or so of the total initial issuance amount of the notes) have defaulted, and collection procedures relating to the sale of the collateral properties backing the defaulted loans are underway, in accordance with rules specified in the servicing agreement. One of these four loans is a property sales-type loan. S&P has learned from the servicer that the loan defaulted on Oct. 1, 2009, due to a credit event involving the sponsor. Standard & Poor's placed the ratings on classes A1 and A2 on CreditWatch with negative implications because: (1) the aforementioned sales-type loan had defaulted on Oct. 1, 2009, before progress was made in the sale of the properties backing the loan. As such, collection from the loan will have to be made with a loan-to-value ratio that is higher than initially anticipated; (2) as the two remaining performing loans (loans that have not defaulted or are not "loans considered to be in default") have low LTV ratios, S&P sees little risk of non-repayment by the loans' respective maturity dates. Even so, since the transaction uses a pro-rata redemption method, the LTV ratios of A1 and A2 may rise if these two loans are repaid by their maturity dates, as payments would be made to each class of the transaction (including the lower classes) on a pro-rata basis. Standard & Poor's intends to review its ratings on the relevant tranches after considering the recovery prospects of the collateral properties backing the abovementioned "loan considered to be in default" and the four loans that have defaulted. Although S&P affirmed its rating on class X, S&P is considering amending the rating methodology for interest-only certificates, which include class X of this transaction. If the proposal is adopted, it could affect the rating on class X. JLOC 37 LLC is a multi-borrower CMBS transaction. The notes were originally secured by loans extended to 10 obligors, which were initially backed by 61 real estate properties and real estate trust certificates. The transaction was arranged by Morgan Stanley Japan Securities Co. Ltd., and ORIX Asset Management & Loan Services Corp. acts as the servicer for this transaction. Ratings Placed On Creditwatch Negative JLOC 37 LLC JPY81.22 billion notes issued on July 11, 2007, due January 2015 Class To From Initial issue amount ----- -- ---- -------------------- A1 AAA/Watch Neg AAA JPY53,800 mil. A2 AAA/Watch Neg AAA EUR12.1 mil. Ratings Kept On Creditwatch Negative Class Rating Initial Issue Amount ----- ------ -------------------- B1 AA/Watch Neg JPY7,900 mil. B2 AA/Watch Neg EUR4.85 mil. C1 A/Watch Neg JPY7,000 mil. C2 A/Watch Neg EUR8.45 mil. D1 B/Watch Neg JPY8,000 mil. D2 B/Watch Neg EUR1.95 mil. Rating Affirmed Class Rating Initial Issue Amount ----- ------ -------------------- X* AAA JPY81,220 mil. (initial notional principal) * Interest-only SANYO ELECTRIC: May Sell Nickel-Hydride Business ------------------------------------------------ Mariko Yasu at Bloomberg News reports that Sanyo Electric Co. is considering a sale of a battery business to clear antitrust regulation for the planned takeover by Panasonic Corp. "Nothing has been decided on the sale as of now," Hiroyuki Okamoto, a Tokyo-based spokesman for Sanyo, told Bloomberg. Bloomberg relates the Yomiuri newspaper said earlier that the company will sell a subsidiary that makes nickel-hydrogen batteries used in personal computers and video-game machines. Headquartered in Osaka, Japan, Sanyo Electric Co. Ltd. -- http://www.sanyo.com/-- is one of the world's leading manufacturers of consumer electronics products. The company has global operations in Brazil, Germany, India, Ireland, Spain, the United States and the United Kingdom, among others. * * * Sanyo Electric continues to carry Moody's Investors Service "Ba1" long term bank deposits rating and "D" Bank Financial Strength rating. It also continues to carry Fitch Ratings "D" Individual rating. SPANSION INC: Japan Creditors Object to Foundry Pact Rejection -------------------------------------------------------------- Spansion Inc., and its debtor affiliates are seeking the Court's authority to reject a Second Amended and Restated Foundry Agreement, dated as of March 2007, with Spansion Japan Limited. Spansion LLC and Spansion Japan are parties to the Foundry Agreement pursuant to which Spansion Japan manufactures integrated flash memory circuits for the Debtors. The pricing under the Foundry Agreement was based on a "cost plus" formula that resulted in a price per unit well in excess of the prevailing prices in the market. Historically, Spansion Japan, which is 100% owned by Spansion LLC, was centrally managed with Spansion LLC and its affiliates. On February 10, 2009, Spansion Japan filed a proceeding under the Corporate Reorganization Law of Japan to obtain protection from Spansion Japan's creditors. The Spansion Japan Proceeding was formally commenced on March 3, 2009, when the Tokyo District Court entered the commencement order and appointed the incumbent represented director of Spansion Japan as trustee. As a result of the Spansion Japan Proceeding, Spansion Japan is no longer centrally managed with the Debtors' global operations. In addition, due to Spansion Japan's insolvency, any above-market amounts that would be paid by Spansion LLC to Spansion Japan under the Foundry Agreement would effectively become trapped in Spansion Japan's bankruptcy estate and would not inure, whether directly or indirectly, to the Debtors' benefit as had been the case prior to the Spansion Japan Proceeding. Sommer L. Ross, Esq., at Duane Morris, LLP, in Wilmington, Delaware, relates that since the commencement of the Spansion Japan Proceeding, the Debtors have engaged in numerous discussions with Spansion Japan and those administering its bankruptcy estate concerning the terms under which Spansion LLC would be willing to continue its commercial relationships with Spansion Japan. In these discussions, Ms. Ross notes, the Debtors have consistently stressed that they could not and would not continue that relationship on the original terms of the Foundry Agreement due to, among other things, the above-market pricing. Thus, the Debtors have insisted that the Foundry Agreement be amended to make it commercially justifiable for Spansion LLC as a condition to maintaining their commercial arrangements with Spansion Japan. On May 20, 2009, Spansion LLC and Spansion Japan negotiated the terms of an amendment to the Foundry Agreement, which terms included: (a) a modification of the pricing terms of the Foundry Agreement, retroactive to March 3, 2009, so that they more closely conform to market prices; (b) the establishment of production levels that are more in line with the Debtors' global needs; and (c) shortened payment terms for Spansion LLC. Ms. Ross tells the Court that after the parties had agreed upon the terms of the Amendment, Spansion Japan netted the amounts it owed Spansion LLC for the month of March under the FASL Japan Distribution Agreement against the amounts Spansion LLC owed to Spansion Japan for the month of March under the Foundry Agreement based on the pricing terms agreed to in the Amendment, and remitted the difference to Spansion LLC as to the March Settlement Payment. This same process was subsequently followed to settle payments due between the parties for activity in the month of April, Ms. Ross adds. However, Ms. Ross notes, after the Settlement Payment for April 2009 activity, which was made during the week of June 29, 2009, Spansion Japan has taken a number of steps that indicate that it might not honor the terms of the Amendment, but instead might seek to enforce the pre-Amendment terms of the Foundry Agreement. For example, no Settlement Payment has been made for activity in May or thereafter. Ms. Ross relates that Spansion Japan continues to delay making that payment, while balking at executing the Amendment, making statements questioning the validity of the Amendment and threatening to enforce the pre- Amendment pricing terms of the Foundry Agreement. According to Ms. Ross, the difference between the pricing terms originally set forth in the Foundry Agreement and those in the Amendment would equate to tens of millions of dollars in additional postpetition costs for Spansion LLC. In light of the ongoing assertions by Spansion Japan and GE Financial Services Corporation that the pricing under the Foundry Agreement is still binding on the Debtors, the Debtors have determined to reject the Foundry Agreement. GE & Spansion Japan Object GE Financial Services Corporation, as administrative agent, security agent, and secured lender, for itself and on behalf of members of an official committee of secured creditors of Spansion Japan Limited, asks the Court to deny the Rejection Motion because damages flowing from rejection of the Foundry Agreement are likely to be enormous. Spansion LLC is required under the plain terms of the Foundry Agreement to purchase no less than 95% of the total capacity of SJL for each quarter for an indefinite time. Should LLC fail to make these purchases, it is required to use reasonable efforts to find an alternative purchaser and to make up the payment shortfall. GE asserts that although the costs of rejection are concrete and significant, any corresponding benefits of rejection at this time are speculative at best. Moreover, GE notes, the reported assumption of the Foundry Agreement by the SJL Trustee in the SJL Reorganization Proceeding prior to the entry of an order approving LLC's rejection of that same agreement gives rise to issues of comity. According to GE, the rejection is also premature because issues involving the Debtors' rights to certain intellectual property remain unresolved. The receivables generated by the Foundry Agreement are the collateral of SJL Secured Lenders, and the proposed rejection would give rise not only to potentially enormous rejection damages but also to huge administrative claims, likely negating any benefit that may possibly be achieved by the rejection. For its part, Spansion Japan Limited tells the Court that it is no coincidence that it has yet to assert in excess of $340 million in administrative claims against the Debtors. According to Spansion Japan, the limited information it has been able to learn during this time seriously calls into question whether the Debtors would realize any value from rejection, especially when one considers the substantial impact rejection will have on the Debtors' estates and their reorganization effort, including: * Rejection damage claims against the Debtors' estates resulting to the loss of more than $1 billion of the value that Spansion Japan would have realized from the parties' performance of the Foundry Agreement over the next 20 years; and * Spansion Japan would be under no further obligation to ship wafers to the Debtors and, as a result, understand that the Debtors' operations will suffer a revenue shortfall of approximately $43 million during the fourth quarter 2009. Spansion Japan asserts that a final evidentiary hearing on the Motion should be scheduled for a later date, which will provide it with the opportunity to seek limited expedited discovery from the Debtors and prepare an evidentiary presentation that will permit the Court to make the necessary factual findings for adjudication of the Motion. However, Spansion Japan maintains, if the Court determines to authorize rejection now, it requests that any rejection be conditioned on: (a) an effective date of rejection of October 27, 2009, given that the Debtors continued to request product from Spansion Japan and Spansion Japan delivered to the Debtors based on those requests after October 9, 2009; (b) a time period of at least 60 days from the date of that rejection order for Spansion Japan to file its rejection damage claim against the Debtors given the complexities of that claim and the fact that the Debtors will suffer little, if any, harm from allowing Spansion Japan at least 60 days in which to file that claim; and (c) Spansion Japan's retention of its intellectual property rights under the Foundry Agreement and related documents, pursuant to Section 365(n) of the Bankruptcy Code. About Spansion Inc. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) ========= K O R E A ========= HYNIX SEMICONDUCTOR: Swings to KRW246 Bil. Net Income in Q3 ----------------------------------------------------------- Hynix Semiconductor Inc. disclosed earnings results for third quarter ended September 30, 2009. The company posted third quarter net income of KRW246 billion, compared with a KRW58 billion net loss in the second quarter. Hynix reported a KRW1.65 trillion net loss in the third quarter ended September 30, 2008. Consolidated sales of the third quarter of FY2009 totaled KRW2.12 trillion, increased by 26% compared to previous quarter's KRW1.68 trillion with ASP and shipment of both DRAM and NAND Flash sequentially increased. DRAM ASP and shipment increased by 26% and 12% respectively quarter-over-quarter. NAND Flash ASP climbed by 4% while shipment rose 5% sequentially. Operating income recorded KRW209 billion with operating margin of 10%, turning around from previous quarter's operating loss of KRW211 billion. Driven by sales performance and business strategy focused on profitable products contributed to increasing operating income. Depreciation and amortization expenses during the third quarter was KRW676 billion. EBITDA amounted to KRW885 billion increased by 94% from the second quarter, representing EBITDA margin of 42%. Aims to Lower Debt Level Reuters reports that Hynix Semiconductor CEO Kim Jong-kap said the company would aim to lower its debt level significantly next year, by repaying a large portion of its maturing debt. Reuters relates Mr. Kim said Hynix was unlikely to need large outside funding even when the next industry downturn comes, as it lowers debt level and manages cash flow. About Hynix Semiconductor Hynix Semiconductor Inc. -- http://www.hynix.com/-- is an Icheon, South Korea-based memory semiconductor supplier offering Dynamic Random Access Memory chips and Flash memory chips to a wide range of established international customers. The Company's shares are traded on the Korea Stock Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. * * * As reported in the Troubled Company Reporter-Asia Pacific on July 6, 2009, Fitch Ratings affirmed Hynix Semiconductor Inc.'s Long-term foreign currency Issuer Default Rating at 'B+' and assigned a Negative Outlook. Accordingly, the Rating Watch Negative status previously assigned to the company's IDR on December 12, 2008, has now been resolved. At the same time, the agency downgraded the ratings for its outstanding senior unsecured debt to 'B'/'RR5' from 'B+' and removed it from RWN. Moody's Investors Service downgraded to B1 from Ba3 Hynix Semiconductor Inc's corporate family and senior unsecured bond ratings on Dec. 26, 2008. The outlook for both ratings remains negative. HYUNDAI MOTOR: Posts Record High KRW979.1 Bil. Third Qtr Profit --------------------------------------------------------------- Hyundai Motor Co. reported a record high third-quarter profit on weaker won and surging sales in the U.S. and China, according to The Korea Times. Citing Hyundai in a regulatory filing, the Times discloses that net profit for the three months ended Sept. 30 soared to a record KRW979.1 billion (US$826.2 million), up sharply from a profit of KRW264.7 billion a year earlier. Sales climbed nearly 34% year-on-year to KRW8.09 trillion in the same period, while operating profit increased more than five times to KRW586.8 billion, the Times notes. According to Bloomberg News, Hyundai's U.S. sales jumped 29% as the government's "cash-for-clunkers" rebates spurred demand for the Elantra compact and a weaker won helped it lure customers from Toyota Motor Corp. and Honda Motor Co. The Seoul-based automaker forecast a 17% increase in U.S. industrywide auto sales next year as the economy rebounds, Bloomberg states. Sells Equus Luxury Sedan in Vietnam Yonhap News Agency reports that Hyundai Motor Co. has begun selling the Equus luxury sedan in Vietnam, as part of its efforts to push into the luxury segment of Southeast Asia. According to Yonhap, the launch of the Equus, which comes equipped with either a 3.8- or 4.6-liter gasoline engine, coincided with a visit by South Korean President Lee Myung-bak to Vietnam. Hyundai did not reveal its sales target for the Equus in Vietnam, Yonhap says. About Hyundai Motor Headquartered in Seoul, South Korea, Hyundai Motor Company (SEO:005380) -- http://www.hyundai-motor.com/-- is an automobile manufacturer. The company markets the Genesis, Genesis Coupe, Azera, Sonata, Elantra, Accent, Getz, i30, i30cw, i20 and i10 passenger cars; the Veracruz, Santa Fe, Tucson, Matrix, H-1 recreational vehicles, and commercial vehicles, which include medium and heavy duty trucks, van trucks, tank lorries, bulk cement carriers, bulk cement tractors and others. * * * As reported by the Troubled Company Reporter-Asia Pacific on Jan. 16, 2009, Fitch Ratings downgraded Hyundai Motor's long-term foreign currency Issuer Default Ratings to 'BB+' from 'BBB-' (BBB minus), and the Short-term ratings to 'B' from 'F3'. The rating agency revised the Outlook to Negative from Stable. =============== M A L A Y S I A =============== TALAM CORP: Winding Up Petitions Served Against Europlus Unit ------------------------------------------------------------- Talam Corporation Berhad disclosed in a regulatory filing that a winding up petition was served on its wholly owned subsidiary, Europlus Corporation Sdn Bhd: (A) by Choy Khin Ming, through Kuala Lumpur High Court Winding Up Petition No. 28NCC-111-09, on October 19, 2009. Europlus owed the petitioner MYR50,287.70 consisting of MYR29,886.00 being the principal amount and MYR20,401.7000 (as at September 12, 2008) being the interest awarded at 8% per annum based on the Judgment dated September 12, 2008. (B) by Tan Bing Huat, through Kuala Lumpur High Court Winding Up Petition No. 28NCC-110-09, on October 19, 2009. Europlus owed the petitioner MYR20,843.90 consisting of MYR10,672.20 being the principal amount, the costs of MYR1,510.00 and interest on the sum of MYR12,182.20 at the rate of 8% per annum from October 19, 2000, until the date of full settlement based on the Judgment dated July 10, 2008. (C) by Seah Bee Lee, through Kuala Lumpur High Court Winding Up Petition No. 28NCC-111-09, on October 19, 2009. Europlus owed the petitioner MYR41,851.36 consisting of MYR30,633.73 being the principal amount and MYR11,217.63 (as at May 5, 2005) being the interest awarded at 8% per annum based on the Judgment dated May 5, 2005. The winding up petitions have been fixed for hearing December 17, 2009. Headquartered in Kuala Lumpur, Malaysia, Talam Corporation Berhad -- http://www.talam.com.my/-- is principally engaged in property development. Its other activities include trading building materials, manufacturing of ready mixed concrete, provision for higher educational programs, development and management of hotel, golf and country club horticulturists, agriculturists and landscaping designers and contractors and investment holding. Operations of the group are carried out in Malaysia and China. The Troubled Company Reporter-Asia Pacific reported on Sept. 11, 2006, that based on the Audited Financial Statements of Talam Corporation for the financial year ended Jan. 31, 2006, the Auditors Ernst & Young were unable to express their opinion on the Company's Audited Accounts. As such, the company is an affected listed issuer of the Amended Practice Note 17 category. In accordance with PN 17, the company is required to submit and implement a plan to regularize its financial condition. POLY TOWER: Fails to Submit Quarterly Results --------------------------------------------- Poly Tower Ventures Berhad was unable to submit its quarterly report for the financial period ended May 31, 2009, to Bursa Malaysia Securities Bhd for public release within the stipulated timeframe. The consequences of non-compliance of the requirement under the Bursa Securities Listing Requirements may result in the Company being suspended or delisted by Bursa Malaysia Securities Berhad. Based in Malaysia, Poly Tower Ventures Berhad (KUL:POLYTWR) -- http://www.polytowerventures.com/-- is an investment holding Company. The Company's segments include investment holding and property investment, manufacturing, and trading. The Company is engaged in manufacturing, marketing and exportation of plastic bags, films, related products, trading of plastic packaging, recycling of materials used by plastic industry, and property investment. The Company's subsidiaries include Poly Carriers Industries (Malaysia) Sdn. Bhd, Poly Packaging Products Pty. Ltd., Kinsplastic Sdn. Bhd., Kinsplastic Vietnam Co. Ltd, and Bestari Palms Sdn. Bhd. Poly Tower Ventures Berhad has been considered as an Affected Listed Issuer under Practice Note No. 17/2005 of the Bursa Malaysia Securities Berhad as the Company defaulted in its principal and interest payments pursuant to Practice Note No.1/2001 and is unable to provide a solvency declaration. ===================== P H I L I P P I N E S ===================== NATIONAL POWER: To Raise PHP7-Bln for Capital Requirements ---------------------------------------------------------- National Power Corp. intends to raise about PHP7 billion within the year for the company�s capital requirements, BusinessWorld Online reports. According to the report, Napocor President Froilan A. Tampinco said it might raise the amount either through loans or bonds, where the bulk of the proceeds will be used to finance Napocor�s missionary electrification requirements under its Small Power Utilities Group (SPUG). The report relates Mr. Tampinco said part of the amount may also cover operational requirements for next year. Napocor might tap the international debt market next year for the company�s medium-term requirements, which is about PHP10 billion, Mr. Tampinco added. Napocor has yet to finalize the details with the Department of Finance, the report says. Headquartered in Quezon City, Philippines, National Power Corporation -- http://www.napocor.gov.ph/-- is a state-owned utility that builds and operates nuclear, hydroelectric, thermal, and alternative power generating facilities. It works with independent producers under a build-operate-transfer program. With a generating capacity of more than 11,500 megawatts, Napocor sells electricity to distributors and industrial companies. To comply with the privatization bill approved by the Philippine Congress, the company has begun selling off its generation assets to help pay for its estimated debt of PHP600 billion. It also separated its transmission operations into a new subsidiary, the National Transmission Corporation. * * * As reported in the Troubled Company Reporter-Asia Pacific on July 27, 2009, Moody's Investors Service upgraded the senior unsecured debt rating of National Power Corporation to Ba3 from B1. The rating outlook is stable, in line with the sovereign outlook. This rating action follows Moody's decision to upgrade the Philippines government's long-term foreign currency rating to Ba3 from B1. =============== X X X X X X X X =============== * Upcoming Meetings, Conferences and Seminars --------------------------------------------- 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 ***