/raid1/www/Hosts/bankrupt/TCRAP_Public/091201.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
Tuesday, December 1, 2009, Vol. 12, No. 237
Headlines
A U S T R A L I A
INDOPHIL RESOURCES: Agrees to AU$545-Mln Takeover Offer from Zijin
METAL STORM: May Call In Administrators if Funding Talks Fail
H O N G K O N G
CHEER CORPORATION: Cheuk Yee Man Steps Down as Liquidator
CITIC RESOURCES: Moody's Confirms 'Ba3' Corporate Family Rating
DRESDNER KLEINWORT: Creditors' Proofs of Debt Due December 18
HANDY FAIR: Yeung Mui Kwan David Appointed as Liquidator
MERSTON LIMITED: Placed Under Voluntary Wind-Up Proceedings
MERSEY MANUFACTURING: Creditors' Proofs of Debt Due December 24
MSIHK COMPANY: Kwok and Lan Appointed as Liquidators
QUALI FAR EAST: Creditors' Proofs of Debt Due December 28
SANYO ENERGY: Lam and Boswell Step Down as Liquidators
SILVER HERO: Yeung Mui Kwan David Appointed as Liquidator
ZERIO INVESTMENT: Members' and Creditors Meeting Set for Dec. 28
I N D I A
AIR INDIA: Pilots Union Calls Off Proposed Strike
BTM CORP: CRISIL Assigns 'BB-' Rating on INR120MM Cash Credit
JBM MA AUTOMOTIVE: ICRA Assigns LBB+ to INR1.17BB Bank Facilities
MAHAVIR DAL: CRISIL Assigns 'BB+' Ratings on Various Bank Debts
MPS STEEL: CRISIL Downgrades Rating on INR440.10MM LT Loan to 'B+'
NAVBHARAT EXPLOSIVES: CRISIL Puts 'B+' Rating on Cash Credit
NAVBHARAT FUSE: Delay in Loan Repayment Cues CRISIL 'D' Ratings
NAVYA INDUSTRIES: ICRA Assigns 'LBB-' Rating on INR50MM Term Loan
PUNJAB CROCKERY: CRISIL Places 'BB+' Ratings on Various Bank Debts
SHYAM INDUSTRIES: ICRA Puts 'LBB+' Rating on INR4.8MM Term Loan
T A PAI MANAGEMENT: ICRA Puts 'LBB+' Rating on INR520MM Term Loans
TEX-STYLES INT'L: ICRA Rates INR31.8MM LT Bank Debts at 'LBB-'
VISHWAROOP INFOTECH: Delays in Debt Payment Cue CRISIL 'D' Ratings
WOCKHARDT LTD: ICICI Backs Firm in Liquidation Battle with DBS
I N D O N E S I A
BANK CENTURY: Funds Went to Non-priority Depositors, PPATK Says
TELEKOMUNIKASI INDONESIA: Seeks US$1-Bln in Loans for Capex
J A P A N
ORSO ABS: Moody's Downgrades Ratings on Two Classes of Notes
SPANSION INC: Gets Go Signal to Reject Japan Foundry Pact
K O R E A
HYUNDAI CORP: KEB May Conclude Sale of Business by Mid-December
HYUNDAI MOTOR: Suspends Passenger Vehicle Sales in Japan
KUMHO ASIANA: Taps KT-MBK Consortium as Preferred Bidder for Unit
M A L A Y S I A
EKRAN BERHAD: 18th Annual General Meeting Set for December 17
N E W Z E A L A N D
NEW ZEALAND ASSOCIATION: S&P Puts B ST Counterparty Credit Rating
PIONEER INSURANCE: S&P Assigns 'BB-' Insurer Strength Rating
S I N G A P O R E
HO SHING: Creditors Get 100% Recovery on Claims
X X X X X X X X
* Fitch Downgrades LT Issuer Default Ratings of Two Dubai Banks
* Moody's Won't Make Rating Changes on Rated UAE Banks
* BOND PRICING: For the Week November 23 to November 27, 2009
- - - - -
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A U S T R A L I A
=================
INDOPHIL RESOURCES: Agrees to AU$545-Mln Takeover Offer from Zijin
------------------------------------------------------------------
Indophil Resources NL said it has agreed terms with Zijin Mining
Group Company Limited for a recommended takeover offer of Indophil
for AU$1.28 cash per share.
Zijin will make a cash offer for all issued shares in Indophil
held by all Indophil shareholders at AU$1.28 per share, valuing
Indophil's share capital at approximately AU$545 million (on a
fully diluted basis).
The proposal represents:
* an 18% premium to the closing price of Indophil shares
of AU$1.085 on November 26, 2009 (being the last trading
day prior to announcement of the offer); and
* a substantial 83% premium to Indophil's six month volume
weighted average price of AU$0.70.
The proposal will be implemented through an off-market takeover
offer for Indophil, which will be subject to certain conditions
including a 90% minimum acceptance condition and the obtaining of
regulatory approvals.
Indophil's Directors have resolved to unanimously recommend that
shareholders accept the offer, in the absence of a superior
proposal. The Directors will accept the offer for their own
holdings of Indophil shares (including any shares issued on the
exercise or conversion of options or performance rights)
within 14 days from the commencement of the offer, in the absence
of a superior proposal.
Pre-Bid Agreement with Xstrata
Zijin has entered into a pre-bid acceptance agreement with Xstrata
Queensland Limited, Indophil's major shareholder and majority
partner in the Tampakan Project. This provides Zijin with a
relevant interest in Indophil of 19.99%, indicating Xstrata's
support for the transaction, in the absence of a superior
proposal.
Takeover Implementation Agreement
Indophil and Zijin have entered into a Takeover Implementation
Agreement to progress the offer. The agreement restrains Indophil
from soliciting further proposals and provides for a AU$5.45
million break fee payable to Zijin in certain circumstances,
including a successful counter proposal and a withdrawal
of recommendation of any Indophil Director.
Acceleration of Arrangements with Alsons
Indophil also disclosed that it has agreed with Alsons Corporation
to immediately accelerate Indophil's acquisition of Alsons 3.27%
interest in the Tampakan Project.
Consideration for the acquisition comprises the issue of 25.9
million shares. The acceleration of the acquisition has the
effect of enabling Zijin to acquire Alsons 3.27% interest in the
Tampakan Project as well as Indophil's 34.23% interest.
Indophil is being advised by Gresham Advisory Partners Limited,
Freehills and Baker & McKenzie.
Zijin is being advised by Charltons Hong Kong and Minter Ellison.
Zijin Mining Group Company Limited is the largest gold producer
and third largest copper producer in China.
About Indophil Resources
Headquartered in Melbourne, Australia, Indophil Resources NL
-- http://www.indophil.com/-- conducts exploration and
development of gold and copper-gold opportunities in South East
Asia. The Company is a joint venture partner in the Tampakan
Copper-Gold Project in the Southern Philippines. The two segments
of the Company are Australia and the Philippines. The Company has
other exploration interests in the Philippines apart from the
Tampakan project.
* * *
Indophil Resources NL reported two consecutive net losses of
$14.84 million and $985,107 for the years ended Dec. 31, 2008 and
Dec. 31, 2007, respectively.
METAL STORM: May Call In Administrators if Funding Talks Fail
-------------------------------------------------------------
Metal Storm Ltd said it may be forced to appoint an administrator
if proposed funding won't be realized, The Australian reports.
According to the report, the company said the first tranche of
about US$35 million (AU$38.2 million) in funding from Assure Fast
Holdings that was due last Friday had not arrived and it may
"consider" the appointment of an administrator should the funds
not turn up.
Citing Metal Storm in an update dated Friday but released to the
Australian Securities Exchange on Monday, The Australian relates
Metal Storm said it had not received the funds but had been
advised "verbally" from the sending bank in Hong Kong that they
have instructions to remit the funds to Metal Storm.
"AFHL has provided the company with a copy of the instructions
they have provided to the remitting party. The company therefore
anticipates funds will be received shortly," Metal Storm said
Monday.
Metal Storm then said the $2.1 million is expected by close of
business today, December 1.
The Troubled Company Reporter-Asia Pacific reported on Oct. 23,
2009, that Metal Storm Ltd said it has secured an equity and debt
placement of up to US$35 million from international investment
company Assure Fast Holdings Limited BVI. The negotiations were
completed in Hong Kong with AFHL and its bank, the Royal Bank of
Scotland.
Metal Storm CEO, Dr. Lee Finniear, said the Company signed a
subscription agreement for the issue of a total of 1,000,000,000
fully paid ordinary shares and 100,000,000 Options for
US$17.5 million with AFHL on October 19, 2009.
About Metal Storm
Based in Brisbane, Australia, Metal Storm Limited (ASX:MST) --
http://www.metalstorm.com/-- is a development stage enterprise,
which is engaged in defense technology. The Company is working
with government agencies and departments, and the defense industry
to develop weapons systems utilizing the Metal Storm non-
mechanical, electronically initiated stacked projectile technology
with the principal focus on the 40 millimeter (mm) category of
weapons and munitions. The Company operates through its
subsidiaries, which includes Metal Storm Inc., Metal Storm USA
Limited, Digigun LLC, and ProCam Machine LLC. The Company's
products include 3GL, FireStorm, MAUL, and 40mm and 18mm Lethal
and Less Lethal ammunition.
Metal Storm Limited's balance sheet at December 31, 2008, showed
current assets of US$8,701,884 and current liabilities of
US$22,397,651, resulting in a working capital deficit of
US$13,695,767. At December 31, 2007, the Company reported a
working capital deficit of US$4,742,580.
The Company has incurred substantial losses since its formation
and anticipates incurring substantial additional losses over at
least the next few years as it continues its research and
development activities and conduct further trials of its
technology. The Company's operations have been financed primarily
from capital contributions by investors, interest income earned on
cash and cash equivalents, and grants from government agencies.
================
H O N G K O N G
================
CHEER CORPORATION: Cheuk Yee Man Steps Down as Liquidator
---------------------------------------------------------
Cheuk Yee Man stepped down as liquidator of Cheer Corporation
Limited on November 18, 2009.
CITIC RESOURCES: Moody's Confirms 'Ba3' Corporate Family Rating
---------------------------------------------------------------
Moody's Investors Service has confirmed the Ba3 corporate family
rating of CITIC Resources Holdings Ltd. and the Ba3 rating of the
US$1 billion 7-year unsecured senior notes issued by CITIC
Resources Finance (2007) Ltd and guaranteed by CITIC Resources.
The ratings outlook is stable. This concludes the rating review
initiated on August 13, 2009.
"The rating confirmation follows CITIC Resources' success in
obtaining waiver on the non-compliance of a covenant in relation
to its US$280 million syndicated loan facility, alleviating
previous concerns over the pressure on the company's liquidity
profile," says Renee Lam, a Moody's Vice President and Senior
Analyst.
"Emerging signs of price or demand recovery for CITIC Resources'
various commodities businesses should stabilize the company's
credit profile at its standalone B2 rating level," adds Lam.
The final Ba3 rating continues to incorporate a two-notch uplift
based on expected support from CITIC Group (Baa2/Negative), CITIC
Resources' 54.01% parent. In Moody's opinion, the affiliation
with CITIC Group also strengthens the company's access to domestic
bank and debt markets.
The standalone B2 rating captures the company's limited oil
production growth projected for the near term, balanced by the
significant rebound in oil prices, as well as improved demand for
coal and manganese. These should allow CITIC Resources to
maintain Debt/EBITDA at around 4-5.5x and RCF/debt at around 12-
16% over the next 12-18 months. Such metrics are consistent with
the company's B2 peers.
Near-term liquidity is characterized by long debt maturities, and
high cash outflow for capital investments, although such
investments are largely pre-funded. Given significantly rebounded
oil prices and improving profits, Moody's anticipates that CITIC
Resources will meet its interest coverage covenant for 2010.
However, with a stepped-up requirement for the covenant commencing
2011, ongoing covenant compliance depends on oil production
growth, as well as improved market demand and prices for its other
commodity segments.
The stable outlook reflects the expectation that CITIC Resources'
underlying credit profile will remain in line with its standalone
B2 rating level over the next 12-18 months, based on emerging
price and demand stabilization for its various commodities
businesses, as well as steady oil production.
The potential for a rating upgrade is limited in the near term.
The rating may be upgraded if CITIC Resources 1) shows consistent
progress in its recovery enhancement program and reserve
replacements; 2) de-leverage, through continued commercialization
of its proved reserves; and 3) makes future acquisitions, if any,
in a prudent manner. Financial metrics that Moody's would
consider include a sustained RCF/debt of over 20%.
The rating would be downgraded should the company's underlying
credit strength weaken. This could occur if 1) the company fails
to meet its production targets; 2) material disappointments occur
in reserve replacements; 3) commodity market fundamentals weakens;
or 4) the company makes aggressive acquisitions. Indicators that
Moody's would consider for a downgrade include a consistent
RCF/adjusted debt at below 10%.
The rating could also be under pressure on any event -- including
covenant non-compliance -- that could hamper CITIC Resources'
access to bank funding and pressure its liquidity.
Any weakening in the company's relationship with CITIC Group that
would lower the support level will be negative for the rating.
Should there be a downgrade of CITIC Group's rating, its support
level and hence the rating uplift for CITIC Resources would also
be revisited.
The last rating action with respect to CITIC Resources was on
August 13, 2009 when it was placed on review for possible
downgrade.
CITIC Resources, based in Hong Kong, is a natural resources and
energy investment holding company, with interests in aluminium
smelting, coal, oil, manganese, and the import and export of
commodities. The company serves as the principal natural
resources and energy arm of its parent, CITIC Group.
DRESDNER KLEINWORT: Creditors' Proofs of Debt Due December 18
-------------------------------------------------------------
Dresdner Kleinwort Securities Limited, which is in members'
voluntary liquidation, requires its creditors to file their proofs
of debt by December 18, 2009, to be included in the company's
dividend distribution.
The company commenced wind-up proceedings on November 18, 2009.
The company's liquidator is:
Chan Mi Har
Ying Hing Chiu
Three Pacific Place, level 28
1 Queen's Road East
Hong Kong
HANDY FAIR: Yeung Mui Kwan David Appointed as Liquidator
--------------------------------------------------------
Christine Tong Wai Yan on November 19, 2009, was appointed as
liquidator of Handy Fair Company Limited.
The liquidator may be reached at:
Christine Tong Wai Yan
Cimbria Court, Flat A, 12th Floor
No. 24 Conduit Road
Hong Kong
MERSTON LIMITED: Placed Under Voluntary Wind-Up Proceedings
-----------------------------------------------------------
At an extraordinary general meeting held on November 9, 2009,
members of Merston Limited resolved to voluntarily wind up the
company's operations.
The company's liquidator is:
Lau Shak Wah
18th Floor, World Trust Tower
50 Stanly Street
Central, Hong Kong
MERSEY MANUFACTURING: Creditors' Proofs of Debt Due December 24
---------------------------------------------------------------
Mersey Manufacturing Limited, which is in members' voluntary
liquidation, requires its creditors to file their proofs of debt
by December 24, 2009, to be included in the company's dividend
distribution.
The company's liquidators are:
Thomas Andrew Corkhill
Iain Ferguson Bruce
8th Floor, Gloucester Tower
The Landmark
15 Queen's Road
Central, Hong Kong
MSIHK COMPANY: Kwok and Lan Appointed as Liquidators
----------------------------------------------------
David Leong Ting Kwok and Linda Mok Mun Lan were appointed as
liquidators of MSIHK Company Limited on November 17, 2009.
The Liquidators can be reached at:
David Leong Ting Kwok
Linda Mok Mun Lan
3401-2, 34th Floor
AIA Tower
183 Electric Road, North Point
Hong Kong
QUALI FAR EAST: Creditors' Proofs of Debt Due December 28
---------------------------------------------------------
Quali Far East Sourcing Limited, which is in members' voluntary
liquidation, requires its creditors to file their proofs of debt
by December 28, 2009, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on November 20, 2009.
The company's liquidators are:
Puen Wing Fai
Alice Lo Yeuk Ki
Kwan Chart Tower, 6/F
6 Tonnochy Road
Wanchai, Hong Kong
SANYO ENERGY: Lam and Boswell Step Down as Liquidators
------------------------------------------------------
Rainier Hok Chung Lam and Anthony David Kenneth Boswell stepped
down as liquidators of Sanyo Energy (Hong Kong) Company Limited.
SILVER HERO: Yeung Mui Kwan David Appointed as Liquidator
---------------------------------------------------------
Yeung Mui Kwan David on October 13, 2009, was appointed as
liquidator of Silver Hero International Limited.
The liquidator may be reached at:
Yeung Mui Kwan David
San Toi Building, 14/F
137-139 Connaught Road
Central, Hong Kong
ZERIO INVESTMENT: Members' and Creditors Meeting Set for Dec. 28
-------------------------------------------------------------
Members and creditors of Zerio Investment Limited will hold their
annual meetings on December 28, 2009, at 2:30 p.m., and 3:00 p.m.,
respectively at the Room 1901-2, 19/F, Hong Kong Trade Centre,
161-167 Des Voeux Road, Central, in Hong Kong.
At the meeting, Lai Ka Cheung, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
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I N D I A
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AIR INDIA: Pilots Union Calls Off Proposed Strike
-------------------------------------------------
The Indian Commercial Pilots Association said Sunday it has
withdrawn the strike notice given to the Air India management
following the latter's assurance that all pending issues will
resolved over the next two months, the Press Trust of India
reports.
ICPA General Secretary, R S Otaal, told PTI that "We had a
successful meeting with the management following which we have
withdrawn our strike call notice with immediate effect."
The PTI relates that ICPA, the non executive pilot body of
erstwhile Indian Airlines, had written a letter on November 2 to
the NACIL Chairman and Managing Director Arvind Jadhav threatening
to strike work from November 24, if the management did not resolve
the long pending issues, including payment of their pending
allowances.
However, says PTI, after a reconciliatory meeting with the
management on November 14 and then on November 20, the strike call
was deferred for November 30.
The Air India Board at its meeting held in Mumbai on Sept. 24
accepted the recommendation of the Committee headed by Mr. Anup
Srivastava, Director-Personnel, to review Productivity Linked
Incentive paid to employees.
The cut, applicable to all officers, including top management
personnel, in various management disciplines, will range from 25%
for those getting PLI of INR10,000 or less per month and 50% for
those receiving PLI or flying related allowances of INR2.00 lakhs
or more per month. The cut for those receiving PLI of INR10,001
to INR25,000; INR25,001 to INR50,000; and INR50,001 to INR2.00
lakhs will be 35%, 40% and 45%, respectively.
The cut will be effective from PLI payable in August 2009 onwards.
The number of employees covered by the decision will be over
7,000.
As reported in the Troubled Company Reporter-Asia Pacific on
June 10, 2009, the National Aviation Company of India Ltd. was
seeking INR14,000 crore in equity infusion, soft loans and grants.
The TCR-AP 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.
Air India incurred a net loss of INR55.48 billion for the fiscal
year ended March 30, 2009.
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.
BTM CORP: CRISIL Assigns 'BB-' Rating on INR120MM Cash Credit
-------------------------------------------------------------
CRISIL has assigned its rating of 'BB-/Stable' to BTM Corp Ltd's
cash credit facility.
Facilities Ratings
---------- -------
INR120.0 Million Cash Credit BB-/Stable (Assigned)
The rating reflects BTM's average financial risk profile, exposure
to risks relating to intense competition, short track record and
small scale of operations in the textile industry. These
weaknesses are partially offset by the benefits that the company
derives from its promoters' experience in the textile industry.
Outlook: Stable
CRISIL believes that BTM will maintain a stable credit risk
profile over the medium term on the back of promoters' experience
in the textile industry and moderate debt levels. The outlook may
be revised to 'Positive' if the company is able to register high
profitability leading to improvement in its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
the company undertakes large debt-funded capital expenditure
program, deteriorating its financial risk profile.
About BTM Corp
Incorporated in 2005, BTM manufactures cotton fabrics, polyester
viscose, and cotton-polyester. The company's plant in Bhilwara
(Rajasthan) has a capacity of 700,000 meters per month and is
being utilized at 100% capacity.
BTM reported a profit after tax (PAT) of INR0.7 million on net
sales of INR420 million for 2008-09 (refers to financial year,
April 1 to March 31), as against a PAT of INR1.1 million on net
sales of INR349 million for 2007-08.
JBM MA AUTOMOTIVE: ICRA Assigns LBB+ to INR1.17BB Bank Facilities
-----------------------------------------------------------------
ICRA has assigned LBB+/ A4+ rating to INR1,170 million bank
facilities of JBM MA Automotive Private Limited.
The rating is constrained by JBMMA's high client concentration
risk, limited scalability options, geographical limitations
imposed by the joint venture (JV) agreement, relatively large
investments coupled with uncertainties related to new business
generation. The company is exposed to high client concentration
risk with current supplies of sheet metal components limited to
the 'Indica Vista' model of Tata Motors Limited (TML) and the
'Linea' and 'Grande Punto' models of Fiat India Automobiles
Private Limited. Going forward, scalability of JBMMA's business
is going to be a function of how well these models of TML and
FIAPL (for which JBMMA has business) perform in the market and the
new model launch plans of these two main customers. JBMMA's
geographical and client concentration is likely to remain high in
future as well due to restrictions imposed by the JV agreement.
Moreover, uncertainties related to new business generation are
likely to keep the company's RoCE, leverage and debt coverage
indicators under strain over the medium term. The rating
incorporates the benefits arising from technical expertise and
experience of the promoter group and single supplier status of the
company for its existing product portfolio. JBMAA has gained new
business orders from Volkswagen (India) and Mahindra & Mahindra
(M&M) for their upcoming model launches; though the
diversification benefits are likely to be limited given their
relatively smaller size.
Incorporated in 2007, JBM MA Automotive Private Limited (JBMMA) is
a 50:50 joint venture (JV) between JBM Auto Limited (JAL, part of
the JBM Group) and Magnetto Automotive SpA, Italy (MA, part of the
CLN Group). The JV has been formed to undertake the manufacture
and supply of sheet metal parts namely skin panels, under body
panels and other assemblies to Tata Motors Limited (TML), Fiat
India Automobiles Private Limited (FIAPL - Tata Fiat JV), and the
Volkswagen Group. The company began commercial production from its
plant at Pune (Maharashtra) on 15th January, 2009 and is currently
supplying parts for TML's 'Indica Vista' and FIAPL's 'Linea' and
'Grande Punto' models.
MAHAVIR DAL: CRISIL Assigns 'BB+' Ratings on Various Bank Debts
---------------------------------------------------------------
CRISIL has assigned its rating of 'BB+/Stable' to the bank
facilities of Mahavir Dal Mills Pvt Ltd.
Facilities Ratings
---------- -------
INR47.0 Million Cash Credit Limit BB+/Stable (Assigned)
INR9.0 Million Term Loan BB+/Stable (Assigned)
INR59.0 Million Proposed Long Term BB+/Stable (Assigned)
Bank Loan Facility
The rating reflects MDM's large working capital requirements and
small scale of operations. These weaknesses are partially offset
by MDM's healthy financial risk profile, marked by low gearing.
Outlook: Stable
CRISIL believes that MDM will sustain its business risk backed by
its stable profit margins and the healthy demand prospects for the
food industry. The outlook may be revised to 'Positive' in case
the company increases its scale of operations by enhancing its
geographical diversification or by achieving more-than-expected
improvement in operating income. Conversely, the outlook may be
revised to 'Negative' if MDM's profitability declines or its debt
protection measures deteriorate because of larger-than-expected
debt-funded capital expenditure.
About Mahavir Dal
MDM, promoted by Mr. Mukesh Kumar Agarwal in 2005, is into
processing of pulses (mainly masoor dal). The company's
processing unit is located in Kanpur, Uttar Pradesh, and comprises
two sorting machines (that remove impurities on the basis of
colour), that were installed in 2008-09 (refers to financial year,
April 1 to March 31).
MDM reported a profit after tax (PAT) of INR4 million on net sales
of INR311 million for 2008-09, against a PAT of INR2 million on
net sales of INR258 million for 2007-08.
MPS STEEL: CRISIL Downgrades Rating on INR440.10MM LT Loan to 'B+'
------------------------------------------------------------------
CRISIL has downgraded its ratings on the bank loan facilities of
MPS Steel Castings Pvt Ltd to 'B+/Negative/P4' from 'BB+/Positive/
P4+'. MPS Steel is part of the MPS group.
Facilities Ratings
---------- -------
INR440.10 Million Long-Term Loan B+/Negative (Downgraded
from 'BB+/Positive')
INR170.00 Million Cash Credit Limit B+/Negative (Downgraded
from 'BB+/Positive')
INR420.00 Million Letter of Credit P4 (Downgraded from
'P4+')
The downgrade reflects steep deterioration in the financial risk
profile of MPS Steel because of an unexpected split in the group.
The downgrade factors in the group's diversification into
unrelated businesses and aggressive debt-funded capital
expenditure (capex), resulting in pressure on its financial risk
profile. The downgrade also indicates CRISIL's expectation that
the MPS group's liquidity will remain constrained over the medium
term because of the capex.
The ratings reflect the MPS group's exposure to risks related to
volatility in raw material prices and downtrends in the steel
industry, and its weak financial risk profile. The impact of
these weaknesses is mitigated by the group's established position
in the central Kerala market, well-recognized 'Paragon' brand, and
cost-efficient partially integrated operations.
For arriving at its ratings, CRISIL has combined the financials of
MPS Steel and MPS Steel's group companies Paragon Steels Pvt Ltd
(Paragon Steels), SMM Steel Re-Rolling Mills Pvt Ltd, and Mani
Metal Trading Corporation Pvt Ltd, collectively referred to as the
MPS group. This is because MPS Steel and its group companies have
a common set of promoters, are in the same line of business, and
have strong intra-group operational linkages, including fungible
funds.
Outlook: Negative
CRISIL believes that the MPS group's liquidity and financial risk
profile will remain under pressure over the medium term because of
the debt-funded capex. Nevertheless, CRISIL believes that the
group will service debt in a timely manner on the back of promoter
support. The rating could be downgraded in case of steeper-than-
expected deterioration in the group's credit risk profile and
profitability, time or cost overruns in the capex program, or
further unrelated diversifications. Conversely, the outlook could
be revised to 'Stable' in case of substantial and sustained
improvement in the group's margins and increase in cash flows, or
if there is fresh equity infusion into the group companies,
resulting in increase in their net worth and improvement in the
capital structure.
About the Group
Set up by the MPS group in 1996, MPS Steel manufactures sponge
iron and mild steel ingots (MS ingots). MPS Steel's plants in
Palakkad (Kerala) have capacity to produce 90,000 tonnes per annum
(tpa) of sponge iron and 60,000 tpa of MS ingots. MPS Steel
recently set up a 10-megawatt (MW) captive power plant at its
sponge iron manufacturing site; the company entered into a power
purchase agreement with Kerala State Electricity Board in December
2008 for off-take of power from its captive power plant for 10
years.
The MPS group markets thermo mechanically treated (TMT) and cold
twisted (CTD) bars under the Paragon brand in Kerala. The group
has aggressive debt-funded capex of around INR350 million over the
medium term, to be funded in a debt-to-equity mix of 2.3:1, to
expand the current facilities and to set up entities to cater to
the TMT market in Tamil Nadu. In July 2009, the MPS group
acquired a sick pharmaceutical unit, Gujarat Injects Kerala Ltd,
at a project cost of INR60 million, fully funded through term
debt. The MPS group is in negotiations with the Germany-based
Fresenius Kabi AG to manufacture IV fluids (intravenous drips)
used in hospitals.
The MPS group was established in 1969 by Mr. M Paramsivam and his
brother Mr. M Mani. In 1994, the group ventured into steel
manufacturing by acquiring a closed steel manufacturing unit
(Paragon Steels) in Palakkad. At present the group has capacities
to produce 90,000 tpa of sponge iron, 72,000 tpa of MS ingots,
41,500 tpa of TMT and CTD bars, and captive power plant with
installed capacity of 10 MW. The group markets TMT and CTD bars
under the Paragon brand in Kerala. There was a split in the
management of the MPS group in July 2009, and accordingly four of
the six group companies, including MPS Steel, Paragon Steels, Mani
Metal, and SMM Steel (collectively referred as MPS group), were
transferred to Mr. M Paramasivam and his family, and the remaining
two companies, Raja Steels Pvt Ltd and MMS Steels Pvt Ltd, were
transferred to his brother Mr. M Mani and his family.
For 2008-09 (refers to financial year, April 1 to March 31), the
MPS group reported a profit after tax (PAT) of INR2.8 million on a
turnover of INR2233.9 million, against a PAT of INR17.4 million on
a turnover of INR1699.2 million for 2007-08.
NAVBHARAT EXPLOSIVES: CRISIL Puts 'B+' Rating on Cash Credit
------------------------------------------------------------
CRISIL has assigned its ratings of 'B+/Stable/P4' to Navbharat
Explosives Company Ltd's bank facilities.
Facilities Ratings
---------- -------
INR50.00 Million Cash credit B+/Stable (Assigned)
INR15.00 Million Letter of Credit P4 (Assigned)
INR60.00 Million Bank Guarantee* P4 (Assigned)
* Interchangeability upto INR15.00 Million from BG to LC
facility
The ratings reflect NECL's weak financial risk profile, and
exposure to risks relating to working-capital-intensive
operations, customer concentration in revenue profile, and intense
competition in the explosives industry. These weaknesses are
partially offset by the benefits that the company derives from its
promoters' experience in the explosives business.
Outlook: Stable
CRISIL believes that NECL's financial risk profile will remain
weak over the medium term, due to weak debt protection measures
and stretched liquidity. The outlook may be revised to 'Positive'
if the company enhances its scale of operations and improves its
profitability, thereby strengthening its financial profile.
Conversely, the outlook may be revised to 'Negative' if the
company's operating margins decline sharply, or it undertakes
large, debt-funded capital expenditure.
About Navbharat Explosives
Set up in 1983 by Mr. Vijay Kumar Singh, NECL manufactures bulk
and cartridge explosives. The company is currently managed by
Mr. Vishal Kumar Singh, son of Mr. Vijay Kumar Singh. NECL has a
manufacturing unit at Abhanpur (Chhattisgarh), and two support
plants at Dhanpuri (Madhya Pradesh) and Korba (Chhattisgarh). The
company has capacity to manufacture 12,500 tonnes of cartridge
explosives and 20,000 tonnes of bulk explosives per annum. NECL
reported a profit after tax (PAT) of INR3 million on operating
income of INR146 million for 2008-09 (refers to financial year,
April 1 to March 31), as against losses of INR17 million on
operating income of INR199 million for 2007-08.
NAVBHARAT FUSE: Delay in Loan Repayment Cues CRISIL 'D' Ratings
---------------------------------------------------------------
CRISIL has assigned its ratings of 'D/P5' to Navbharat Fuse
Company Ltd's (NFCL's) bank facilities.
Facilities Ratings
---------- -------
INR212.50 Million Cash Credit* D(Assigned)
INR92.60 Million Working Capital Demand Loan D(Assigned)
INR29.40 Million Term Loan D(Assigned)
INR80.00 Million Letter of Credit P5 (Assigned)
INR125.00 Million Bank Guarantee P5 (Assigned)
* Interchageability up to INR50.00 Million from CC to LC
facility
The ratings reflect delay by NFCL in repayment of term loan
obligations owing to weak liquidity.
Set up in 1999, NFCL is engaged in manufacturing of explosives and
accessories. It has capacity to manufacture 24,000 tonnes per
annum (tpa) of cartridge explosives and 36,000 tpa of bulk
explosives. In 2003-04 (refers to financial year, April 1 to
March 31), the company diversified into manufacturing steel by
setting up a sponge iron plant with a capacity of 6000 tpa. NFCL
reported a profit after tax (PAT) of INR52 million on operating
income of INR964 million for 2008-09, as against losses of INR77
million on operating income of INR827 million for 2007-08.
NAVYA INDUSTRIES: ICRA Assigns 'LBB-' Rating on INR50MM Term Loan
-----------------------------------------------------------------
ICRA has assigned an 'LBB-' rating to the INR50 million term loan,
INR90 million fund based cash credit limits and INR5 million of
non fund based limits of Navya Industries Private Limited. ICRA
has also assigned an A4 rating to the INR40 million fund based
limits of NIPL. Short term fund based banklines are sublimit
within cash credit and combined utilization should not exceed
INR90 million.
The assigned ratings are constrained by the limited scale of
operations of the company (manufacturing yet to begin), high
susceptibility of plant operations to availability and prices of
soya seeds, and volatility in edible oil and de-oiled cake (DOC)
prices in international markets. The ratings also take into
account the intense competition in the solvent extraction
industry, threat from cheaper substitutes like palm oil and
regulatory risks. The assigned rating takes into account the
promoters' significant experience in the soya industry, location
advantage arising out of proximity to the raw material sources,
customers in form of oil refineries as well as major ports for
exports.
NIPL is promoted by Mithilesh Choudhary and his elder brother
Akhilesh Choudhary who had been in soybean trading and solvent
extraction business for more than 10 years. The company is setting
up a solvent extraction plant in Deoli, Wardha to extract crude
soyoil and DOC with a capacity of 400tpd. NIPL, formerly known as
Navya infrastructure private limited, was incorporated in FY07 in
Nagpur, Maharashtra. Initially it was engaged in construction of
telecom towers and road projects on a tender basis in Nagpur but
has stopped taking new orders and plan to finish existing projects
by March 2010 and focus on its solvent extraction business only.
PUNJAB CROCKERY: CRISIL Places 'BB+' Ratings on Various Bank Debts
------------------------------------------------------------------
CRISIL has assigned its ratings of 'BB+/Stable/P4+' to Punjab
Crockery House Pvt Ltd's bank facilities.
Facilities Ratings
---------- -------
INR110.00 Million Cash Credit BB+/Stable (Assigned)
INR120.00 Million Term Loan* BB+/Stable (Assigned)
INR20.00 Million Bank Guarantee P4+ (Assigned)
* Includes proposed facility of INR46.00 Million
The ratings reflect PCHPL's weak financial risk profile, and
exposure to intense competition in the retail industry. These
weaknesses are partially offset by the benefits that the company
derives from its strong track record, and its promoters'
experience in the distribution and retailing of garments, and from
changes in revenue mix and subsequently, profitability, with
higher contribution from retail business (agency model).
Currently, the distribution business contributes to around 68% of
the total sales. In the retail segment, PCHPL will operate under
the agency model wherein the company will manage retail stores for
Aditya Birla Nuvo Ltd for a fixed commission.
Outlook: Stable
CRISIL believes that PCHPL will maintain its revenue growth on the
back of its promoters' industry experience. Profitability of the
company is expected to improve due to the fixed commission
structure for a majority of the new stores. The company's
financial risk profile would however remain constrained by its
weak debt protection measures. The outlook may be revised to
'Positive' in case of a significant improvement in the company's
financial risk profile, through better-than-expected cash accruals
and improved profitability or equity infusions. Conversely, the
outlook may be revised to 'Negative' in case of deterioration in
its cash accruals or larger-than-expected debt-funded capex.
About Punjab Crockery
PCHPL was set up in 1960 by Mr. Huzur Singh as a proprietary firm
with a crockery, glassware, and cutlery retail shop in Hyderabad
(Andhra Pradesh). It was reconstituted as a private limited
company in 1995. Group concerns PCH Enterprises and PCH
Incorporated, engaged in the distribution of Peter England
garments and retailing of garments of brands such as Peter
England, Planet Fashion, Adidas, and Tommy Hilfiger, respectively,
were amalgamated into PCHPL, with effect from February 1, 2009.
PCHPL's operations are managed by Mr. Sutinder Singh.
The company proposes to have 50 retail stores operational by the
end of 2009-10 (refers to financial year, April 1 to March 31). Of
the 50 stores, the company will operate 33 garment retail stores
for Aditya Birla Nuvo Ltd as an agent. The company had already set
up 35 stores by October 2009.
PCHPL reported a profit after tax (PAT) of INR16.9 million on net
sales of INR428 million for 2008-09, against a PAT of INR6 million
on net sales of INR348 million for 2007-08.
SHYAM INDUSTRIES: ICRA Puts 'LBB+' Rating on INR4.8MM Term Loan
---------------------------------------------------------------
ICRA has assigned LBB+ rating to INR4.8 million term loan of Shyam
Industries. ICRA has also assigned an A4+ (pronounced A four
plus) rating to INR63.4 million fund based facilities of Shyam
Industries.
The assigned ratings factor in company's vulnerability to intense
competition in a fragmented industry, high dependence on exports
coupled with demand slowdown witnessed in the export markets and
susceptibility to foreign exchange fluctuation and regulatory
changes in the importing countries. The small scale of operations
restricts the pricing flexibility of the company in a competitive
market as reflected in the decline in the operating income and
operating profit margin during 2008-09. The ratings however,
favorably factor in promoters' significant experience and
established track record in the sesame seed industry, established
relationship with the customers and healthy debt coverage
indicators.
Shyam Industries is a partnership firm engaged in the
manufacturing of hulled sesame seeds. The company was originally
promoted by Mr. Sanjay L. Vachhani and his father Mr. Lalji D.
Vachhani in the year 1991- 92. Later, Mr. Deepak L. Vachhani, son
of Mr. Lalji D. Vachhani also joined the company as partner.
However in 2003-04 Mr. Lalji D. Vachhani and in 2006-07 Mr. Deepak
L. Vachhani retired from the partnership of the company.
Consequently Mrs. Sheetal S. Vachhani and Ms. Heli S. Vachhani who
are wife and daughter of Mr. Sanjay L. Vachhani were admitted as
new partners of the company.
The company has an installed capacity of processing 25 tonnes per
day (tpd) of sesame seeds in Ahmedabad, Gujarat. The company
modernized its plant and installed modern machinery form
established international suppliers such as Buhler, Satake and
Ingersoll during 1999-2000. The company is ISO 9001:2000
certified and has HACCP certification from TUV SUD, Germany since
January 2008.
T A PAI MANAGEMENT: ICRA Puts 'LBB+' Rating on INR520MM Term Loans
------------------------------------------------------------------
ICRA has assigned LBB+ rating to the term loans of T A Pai
Management Institute aggregating to INR520 million.
The rating reflects the stretched financial profile of the
institute as reflected in low cash accruals, low coverage
indicators and high gearing primarily on account of increased debt
to fund large scale capital expansion. Moreover, the increase in
batch size is yet to be witnessed, thereby impacting the
visibility of future earnings. The rating is also constrained by
the regulatory challenges involved in the private education
sector. However, the ratings take into account the strong faculty
fraternity and good infrastructure. In addition, TAPMI is
expected to benefit from the buoyant prospects for higher
education in India.
Incorporated in the year 1980, T A Pai Management Institute, has
been providing management education for over two decades. The
institute is governed by T A Pai Management Institute Trust and
the Governing Council appointed by the Trust. The institute runs
several management courses including PGDM, EPGPM, e-GPX. The
institute moved its operations to a new residential campus spread
over 40 acres of land, and currently conducts these courses in the
new campus in Manipal as well as the Center for Executive
Education in Bangalore. During FY 2008-09, TAPMI had operating
income of INR132.4 million with a PAT of INR0.1 million. November
2009.
TEX-STYLES INT'L: ICRA Rates INR31.8MM LT Bank Debts at 'LBB-'
--------------------------------------------------------------
ICRA has assigned a 'LBB-' rating to the INR31.8 million long term
fund based facilities and an A4 rating to the Rs 40 million short
term fund based facilities of Tex-Styles International Pvt. Ltd.
The rating reflects the company's limited operating history, high
competitive intensity inherent in the business line in which the
company operates, limited bargaining power because of the size of
its operations and a leveraged capital structure given that the
project had substantial debt funding. The rating however draws
comfort from the promoters' experience in the garments export
business, location advantages in terms of availability of labor
along with operational and marketing backing from the group
concerns which have well established presence in foreign markets.
Incorporated in 2008, Tex-Styles International Pvt. ltd. is
engaged in export of readymade garments manufactured on made-to-
order basis. The present directors of the firm include Mr. Deepak
Bhavnani and Mrs. Jaya Bhavnani. TSIPL derives its sales entirely
through exports and mainly caters to countries like France, UK and
USA.
TSIPL has its registered office in Mumbai. The company has set up
its manufacturing units at Vasai, with a production capacity of
0.65 million pieces per annum that is expected to be fully
operational by the end of October 2009. TSIPL's related concerns,
M/s Tex-Styles International and M/s. Hi-Tech Fashions are engaged
in the similar line of business since 1981.
TSIPL recorded a net profit of INR1.6 million on an operating
income of INR73.5 million for the year ended on March 31, 2009.
VISHWAROOP INFOTECH: Delays in Debt Payment Cue CRISIL 'D' Ratings
------------------------------------------------------------------
CRISIL has assigned its 'D' rating to Vishwaroop Infotech Pvt
Ltd's INR3.30 billion rupee term loan, as the company has been
delaying its debt-related payments.
Vishwaroop, a Wadhwa group company, is a real estate developer
based in Mumbai. The group has seven companies and three
partnership firms involved in real estate development. The group
has so far developed about 8 million square feet (sq ft) with
around 4.4 million sq ft (56%) of commercial development, and
remaining 3.5 million sq ft (44%) of residential development, in
Mumbai.
For 2008-09 (refers to financial year, April 1 to March 31),
Vishwaroop reported a loss of INR20.7 million on net sales of
INR31.4 million, against a profit after tax of INR85.3 million on
net sales of INR3.6 billion in the previous year.
WOCKHARDT LTD: ICICI Backs Firm in Liquidation Battle with DBS
--------------------------------------------------------------
The ICICI Bank has expressed support on Wockhardt Ltd's legal
battle against a group of foreign banks, which want the troubled
drug-maker liquidated, The Economic Times reported.
As reported in the Troubled Company Reporter-Asia Pacific on
Oct. 19, 2009, Singapore's DBS Bank Ltd filed a winding up
petition against Wockhardt Ltd in the Bombay High Court. DBS
wants the liquidation proceeds distributed to the Company's
various lenders. Similar winding up petitions have been filed by
Calyon and Barclays Bank, according to the ET.
Dinyar Madon, ICICI's lawyer, told ET that the bank wanted
Wockhardt to revive and will support the company in its legal
battle. Mr. Madon also said the company was in talks with DBS to
reach a settlement, for which the parties sought time from the
court.
According to the report, the foreign lenders oppose a scheme
endorsed by Indian bank, such as ICICI, which seeks to restructure
Wockhardt's debt by lengthening the repayment period and reducing
interest rates. Foreign banks oppose the restructuring scheme
saying it favors the domestic lenders, the report says.
The Economic Times reports sources familiar with the case said
even as Wockhardt and DBS try to reach an out-of-court settlement,
they were also trying to reach an interim agreement that sale of
Wockhardt's assets will not be finalized as long as negotiations
continued. Wockhardt, according to the ET, would need to inform
its creditors if it wanted to sell any of its businesses or
assets.
Justice DY Chandrachud will convene a hearing on the case on
December 15, the report notes.
About Wockhardt
India-based Wockhardt Limited (BOM:532300) --
http://www.wockhardt.com/--- is a pharmaceutical company. The
Company is a subsidiary of Khorakwala Holdings and Investments
Private Limited. The geographical segments of the Company are
India, the United States/Western Europe and Rest of the World.
The Company's subsidiaries includes Wockhardt Biopharm Limited,
Vinton Healthcare Limited, Wockhardt Infrastructure Development
Limited, Wockhardt UK Holdings Limited, CP Pharmaceuticals
Limited, Wallis Group Limited, The Wallis Laboratory Limited,
Wallis Licensing Limited, Wockhardt UK Limited, Wockhardt France
(Holdings) S.A.S., Girex S.A.S., Niverpharma S.A.S., Laboratoires
Negma S.A.S., DMH S.A.S., Phytex S.A.S., Scomedia S.A.S. and Mazal
Pharmaceutique S.A.R.L. In August 2009, the Company completed the
divestment of its Animal Health Division to Vetoquinol, France.
* * *
As reported in the Troubled Company Reporter-Asia Pacific on
June 17, 2009, Fitch Ratings downgraded Wockhardt Limited's
National Long-term rating to 'D' from 'C(ind)'. Fitch
simultaneously downgraded Wockhardt's long-term debt instruments:
-- INR2,000 million long-term non-convertible debenture
programme downgraded to 'D' from 'C(ind)'
-- INR2,500 million long-term loans and INR2,500 million
non fund-based cash credit facilities downgraded to 'D'
from 'C(ind)'
The rating of Wockhardt's INR1,450 million non fund-based limit
was downgraded to 'F5(ind)' on April 8, 2009.
=================
I N D O N E S I A
=================
BANK CENTURY: Funds Went to Non-priority Depositors, PPATK Says
---------------------------------------------------------------
The Jakarta Post reports that the Financial Transactions Report
and Analysis Center (PPATK) has found that 50 Bank Century
customers who were recipients of the government-issued bailout
funds were non-priority depositors.
The depositors had personal, professional or financial ties with
the bank, and therefore should have had lower priority, the Post
cited PPATK chairman Yunus Husein as saying in an interview
broadcast live Saturday on Metro TV. "Bank Indonesia itself
acknowledged these depositors were linked to the bank, so they
were not on the priority list," Mr. Yunus said.
According to the report, Mr. Yunus said the Supreme Audit Agency
(BPK) had requested the PPATK examine the transfer of funds from
Bank Century to the 50 depositors, which involved 124
transactions.
The Post notes that Mr. Yunus stressed the PPATK did not find any
direct transfer of the bailout funds to certain political parties,
and promised to continue examining the money flow.
Bank Century is a relatively small lender with total assets of
IDR15 trillion (US$1.3 billion). The government took 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 government initially injected IDR1 trillion (US$106
million) to increase liquidity at Bank Century after Indonesia's
Deposit Insurance Corp. seized it on Nov. 21, 2008, over a week
after the bank failed to comply with a IDR5 billion obligation.
Bank Century then received a total capital injection of IDR6.76
trillion from the LPS.
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.
TELEKOMUNIKASI INDONESIA: Seeks US$1-Bln in Loans for Capex
-----------------------------------------------------------
The Jakarta Post reports that PT Telekomunikasi Indonesia is
seeking US$1 billion in loans to finance next year's capital
expenditure, estimated to require a total of US$2 billion.
The report, citing Telkom finance director Sudiro Asno, says the
firm also expects to raise funds from issuing bonds and securing
vendor financing deals.
"We have signed vendor financing deals with Huawei and ZTE with a
total value of US$400 million, from which we have only used US$60
million so far," Mr. Sudiro was quoted by the Post as saying.
The Post notes Mr. Sudiro also said that the company was still in
the process of selecting the underwriters for its plan bond
issuance.
Based in Bandung, Indonesia, PT Telekomunikasi Indonesia Tbk
-- http://www.telkom-indonesia.com/-- provides local and long
distance telephone service in Indonesia. Known as Telkom, the
company also offers fixed wireless service, leased lines, and
data transport through affiliates.
* * *
P.T. Telekomunikasi Indonesia Tbk continues to carry 'BB' Long-
term foreign and local currency Issuer Default ratings from Fitch
Ratings with stable outlook. The ratings were affirmed by Fitch
in November 2008.
=========
J A P A N
=========
ORSO ABS: Moody's Downgrades Ratings on Two Classes of Notes
------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of Class D
and E Trust Beneficial Interests. The Trust Beneficial Interests
were issued by Orso ABS Funding Trust 1 -- SFFC in September 2007.
The transaction is backed by a pool of real estate-backed SME
loans originated by SF Fudosan Credit Co., Limited (currently,
Real Estate Credit., Ltd.).
The complete rating actions follow:
Deal Name: Orso ABS Funding Trust 1 -- SFFC Trust Beneficial
Interests
Initial Servicer: SFCG Co., Ltd.
-- Class D, Downgraded to Caa2; previously on May 13, 2009,
Downgraded to B2 from Ba1
-- Class E, Downgraded to Caa3; previously on May 13, 2009,
Downgraded to B3 from B2
Due to the sale of collateral properties, the amount of
uncollected loan receivables has increased. These rating actions
reflect Moody's view that, based on the assumption that no
additional payments from obligors can be expected, the
Subordinated Trust Beneficial Interest has deteriorated
substantially.
SFCG, an initial servicer of this transaction, filed for civil
rehabilitation proceedings in the Tokyo District Court on
February 23, 2009. On March 24, 2009, the court terminated the
civil rehabilitation proceedings. Then, on April 21, 2009, the
court ordered the company to commence bankruptcy proceedings.
The servicing and special servicing of all loan receivables in the
transaction had been transferred to the back-up servicer, Premier
Asset Management Company.
On May 13, 2009, Moody's downgraded the ratings of the Class A
through E and X Trust Beneficial Interests, having revised two of
its assumptions to these: (1) most obligors were considered as
having defaulted, and no payments from obligors were to be
expected; and (2) the assumed recovery rate from the disposal of
collateral properties was lowered. (The average recovery rate on
the loan was lowered to 50-60%, from the initial 60-70%.)
The assumptions were revised for these reasons: 1) payments from
SME obligors on the loans continued to worsen, with no sign of
improvement; thus, most of the securitized loans had become
delinquent on either principal or interest payments; 2) because of
the slowdown in the real estate market in Japan, the liquidation
of the properties was taking longer, while prices also remained
under stress. In Moody's view, a recovery in the real estate
market in the near term cannot be expected.
Since the previous rating actions, Moody's has carefully monitored
the results of the servicing of the collateral properties --
results that are within Moody's recovery assumptions thus far --
as well as the credit enhancement levels. The outstanding balance
of the Class A Trust Beneficial Interest was, as of end-October
2009, approximately 30% of its initial issued amount, following
redemption by amounts collected through the collateral property
sales.
However, the amount of uncollected loan receivables, evident after
the property sales, has increased, resulting in a substantial
reduction in the Subordinated Trust Beneficial Interest, in light
of Moody's assumption that no additional payments from obligors
can be expected. Therefore, the credit enhancement for the Class
D and E Trust Beneficial Interests, whose priority of principal
redemption is subordinated, has been declining.
In light of the results of the servicing of the properties in the
depressed real estate market and possibility of this pace and
recovery rate continuation, Moody's believes that its assumed
recovery rate has become more likely to prevail. Thus, the
possibility of losses in the Class D and E Trust Beneficial
Interests has become much higher, and Moody's has therefore
downgraded the ratings of these two Beneficial Interests. In
addition, the loss rate for these two classes may increase due to
the level of any more uncollected loan receivables, which could be
a negative factor.
As of end-October 2009, the deal comprised approximately 80
obligors and 140 properties. The final maturity is September
2012.
Currently, the deal also comprises a certain amount of funds in a
cash reserve for liquidity, the level of which should be
monitored.
SPANSION INC: Gets Go Signal to Reject Japan Foundry Pact
---------------------------------------------------------
Spansion Inc., and its debtor affiliates obtained 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.
* * *
The Court authorized the Debtors to reject the Foundry Agreement
effective as of October 9, 2009. The Court directed GE Financial
Services Corporation and Spansion Japan Limited to file a claim
for rejection damages arising as a result of the rejection. The
Court further ordered Spansion Japan to file any election under
Section 365(n) of the Bankruptcy Code with respect to the Foundry
Agreement on or before the first 45 calendar days after the entry
of the Court's order and serve that election upon counsel to the
Debtors, the Official Committee of Unsecured Creditors and the Ad
Hoc Consortium of Noteholders.
The Court held that GE and Spansion Japan's objections are deemed
withdrawn with the consent of the Debtors.
Prior to the Court's entry of its order, the Debtors filed on
November 13, 2009, a proposed form of the order authorizing the
rejection of the Second Amended and Restated Foundry Agreement
with Spansion Japan, a full-text copy of which is available for
free at http://bankrupt.com/misc/Spansion_PropOrdFoundry.pdf
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
=========
HYUNDAI CORP: KEB May Conclude Sale of Business by Mid-December
---------------------------------------------------------------
Korea Exchange Bank said Monday it will seek to complete the sale
of Hyundai Corp. by no later than mid-December, Yonhap News
reports.
"Creditors will decide on whether to approve the sale plan by
Friday [December 4] and if approved, we plan to cap the clinching
of the final deal (with Hyundai Heavy Industries) no later than
mid-December," Yonhap cited KEB in a statement.
As reported in the Troubled Company Reporter-Asia Pacific on
Sept. 30, 2009, Reuters said Hyundai Heavy Industries Co. has been
picked as the preferred bidder for Hyundai Corp.'s controlling
stake.
Hyundai Heavy, the world's biggest shipbuilder, was named a
primary negotiation partner for a 50% stake plus one share in
Hyundai Corp, worth KRW201.5 billion (US$169 million).
A consortium led by STX Group had also submitted a bid for Hyundai
Corp but pulled out of the deal, Reuters related.
Hyundai Corp. was placed under a workout debt program in June
2003, according to Yonhap News Agency. Though the company has
normalized its business operations, creditors decided at the end
of last year to extend the workout debt program for Hyundai due to
the global economic credit crunch. The creditors, including Woori
Investment Securities Co., state-run Korea Development Bank and
Korea Exchange Bank, holds 50% stake plus one share in Hyundai.
Hyundai Corporation is a multinational trading company based in
Korea. Its trading business is comprised of seven divisions. The
ship division organizes, coordinates, finances and brokers ship-
related businesses. The plant division manufactures industrial
facilities such as power, chemical and marine, and various small-
to mid-sized plants. The machinery division supplies machinery and
electrical equipment for use in major industrial sectors, markets
automobiles and automotive goods, and sells construction
equipment. The automobile and rolling stocks division deals with
passenger cars, commercial vehicles, special purpose vehicles,
military vehicles, engines, automobile parts and rolling stocks
and railing equipment. The steel division is engaged in the
domestic steel and metal industry. The information and
telecommunication division focuses on infrastructure, systems
integration and e-commerce in information technology products. The
chemical division supplies petrochemical products.
HYUNDAI MOTOR: Suspends Passenger Vehicle Sales in Japan
--------------------------------------------------------
Hyundai Motor Co. said it will pull out of the Japanese passenger
vehicle market amid sluggish sales, Shanghai Daily reports.
"Hyundai Motor has decided to suspend passenger vehicle sales in
Japan and will instead allocate its resources to focus on
commercial vehicle sales in the country," the Daily cited
Hyundai's a statement on Saturday. If the market environment
improves in Japan it could resume passenger car sales there, it
said.
Shanghai Daily relates Hyundai spokesman Ki Jin-ho said the timing
of the pullout will be decided after consulting with dealerships
in Japan.
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
Nov. 13, 2009, Moody's Investors Service revised to stable from
negative the outlook of the Baa3 issuer and senior unsecured bond
ratings for Hyundai Motor Company and its guaranteed subsidiary
Hyundai Motor Manufacturing Alabama LLC. Moody's also revised the
Ba1 Corporate Family Rating outlook of Kia Motors Corp. to stable
from negative.
The TCR-AP reported on Jan. 16, 2009, that 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.
KUMHO ASIANA: Taps KT-MBK Consortium as Preferred Bidder for Unit
-----------------------------------------------------------------
Yonhap News Agency reports that Kumho Asiana Group has selected a
KT-MBK consortium as the preferred bidder for its car rental unit,
Kumho Rent-a-car Co.
According to the news agency, Kumho Asiana said it plans to
finalize the deal with the consortium to sell the stake in the car
rental unit, which is wholly owned by Korea Express Co., the
group's logistics unit, by January 2010.
The consortium consists of KT Corp., South Korea's largest
broadband Internet operator, and local private equity fund MBK
Partners Ltd., Kumho Asiana said.
The Troubled Company Reporter-Asia Pacific, citing The Korea
Herald, reported on August 6, 2009, that Kumho Asiana has been
suffering from a liquidity crisis, which observers describe as a
typical case of acquisition indigestion. In a bid to ease a cash
shortage, the conglomerate in July decided to re-sell the
controlling stakes and management rights of Daewoo Engineering &
Construction, three years after acquiring it for KRW6.4 trillion,
according to the Korea Herald.
Bloomberg related Kumho Asiana has sold properties and stakes in
affiliates to help it repay debt stemming from its 2006 purchase
of Daewoo Engineering. Bloomberg said creditors including Shinhan
Bank may force the company to repay KRW3.9 trillion (US$3.2
billion) by June if they exercise an option to sell Daewoo
Engineering shares they hold back to Kumho Asiana.
Kumho Asiana is seeking to sell between 50% and 72% of the
builder, Bloomberg said citing people with knowledge of the
matter.
Established in 1946, Kumho Asiana Group is a large South Korean
conglomerate, with subsidiaries in the automotive, industry,
leisure, logistic, chemical and airline fields. The group is
headquartered at the Kumho Asiana Main Tower in Sinmunno 1-ga,
Jongno-gu, Seoul, South Korea.
===============
M A L A Y S I A
===============
EKRAN BERHAD: 18th Annual General Meeting Set for December 17
-------------------------------------------------------------
Ekran Berhad will hold its 18th Annual General Meeting on Dec. 17,
2009, at 11:00 a.m. The meeting will be held at the Boardroom,
Lot 5428-5429, Block 16, KCLD, Lorong Lapangan Terbang Baru 1,
93350 Kuching, in Sarawak.
At the meeting, shareholders will be asked to:
* receive and adopt the company's audited financial statements
for the year ended June 30, 2009, together with the Reports
of the Directors and Auditors;
* approve the payment of Directors' fees for the financial year
ended June 30, 2009;
* re-elect Dato' Stanley Isaacs, Dato' Muhammad Shafee bin Md
Abdullah, and Datuk William Lau Kung Hui as Directors who
retire pursuant to Article 93 of the Company's Articles of
Association and being eligible, have offered themselves for
re-election;
* re-appoint Messrs. Ernst & Young as Auditors of the Company
until the conclusion of the next Annual General Meeting and
to authorize the Directors to fix their remuneration; and
* transact any other business for which due notice shall have
been given in accordance with the Companies Act, 1965.
Ekran Berhad is a Malaysian company engaged in investment holding
and the provision of management services to its subsidiary
companies. Through its subsidiaries, the company is engaged in
property development; the provision of property management
services; timber logging and saw milling; the sale of timber
products, and the operation of oil palm plantations. The
company's operations are mainly concentrated in Malaysia, China
and the Philippines.
* * *
Ekran has been classified as an affected listed issuer under
Amended Practice Note 17, when auditors expressed a disclaimer
opinion on the company's audited financial report for the
financial year ended June 30, 2005, and for defaulting on various
credit facilities.
====================
N E W Z E A L A N D
====================
NEW ZEALAND ASSOCIATION: S&P Puts B ST Counterparty Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has assigned its
'BB' long-term counterparty credit rating to New Zealand
Association of Credit Unions. At the same time, S&P assigned its
'B' short-term counterparty credit rating. The outlook is
negative. Standard & Poor's has also assigned its 'BB-' insurer
financial strength and counterparty credit ratings to Pioneer
Insurance Co. Ltd., a private motor insurance subsidiary of NZACU.
The rating outlook is negative, mirroring that on NZACU's ratings.
"NZACU's credit profile is heavily tied to the success and
strength of its member credit unions," Standard & Poor's credit
analyst Peter Sikora said. "Favorable features of NZACU's credit
profile include the company's embedded principal position as a
service provider to the New Zealand credit union sector, its
moderate credit risk profile, and its sound liquidity and funding
profile."
However, the ratings on NZACU also factor in S&P's concerns about
its credit profile. These include the association's history of
modest earnings, its diminished customer base due to industry
consolidation, and a weak capital adequacy position that has been
undermined by recent impairment losses and sizeable related-party
investments. The establishment of Platinum Direct, a wholly owned
group finance company, led to significant losses for NZACU; this
has also detracted from S&P's opinion of NZACU's credit profile.
The ratings on Pioneer recognize some rating benefit from
ownership by NZACU, with Pioneer classified as a "strategically
important" subsidiary and capped one notch below NZACU under S&P's
group methodology. Pioneer maintains adequate solvency, having
benefited from capital injections since its acquisition by NZACU
in July 2007. With a renewed focus on core credit union business,
Pioneer is expected to return to profitability following three
years of losses.
The negative outlook reflects NZACU's weakening financial profile
and increased member dissatisfaction with its performance. With
its weakened capital adequacy position, it will need to gain
member support to inject enough capital to meet the new regulatory
requirements set for 2010. The rating could be lowered if NZACU
were to fail to improve its capital position or if any unforeseen
financial losses were to emerge.
"To see the outlook revised to stable, NZACU would need to
maintain its solid and relevant market position as a service
provider to the New Zealand credit union sector and improve its
profitability and capital adequacy to a level more supportive of
its current rating," said Mr. Sikora. "We would also need to see
evidence of increased member support for, and confidence in, NZACU
and its board and management after recent board changes and
following the appointment of a new chief executive officer."
NZACU's rating would likely be raised one notch were it to
recapitalize to the level required under the forthcoming
regulatory framework. This upside is, however, moderated by S&P's
view that sector consolidation will continue and might reduce the
company's operating performance and relevance to the New Zealand
market if larger credit unions were to start relying less on
NZACU's products and services.
PIONEER INSURANCE: S&P Assigns 'BB-' Insurer Strength Rating
------------------------------------------------------------
On Nov. 27, 2009, Standard & Poor's Ratings Services assigned its
'BB-' insurer financial strength and counterparty credit ratings
to Pioneer Insurance Co. Ltd., a private motor insurance
subsidiary of New Zealand Association of Credit Unions
(BB/Negative/B). The rating outlook is negative, mirroring that
on NZACU's rating.
The ratings on Pioneer recognize some rating benefit from
ownership by NZACU, with Pioneer classified as a "strategically
important" subsidiary and capped one notch below NZACU under S&P's
group methodology. Pioneer maintains adequate solvency, having
benefited from capital injections since its acquisition by NZACU
in July 2007. With a renewed focus on core credit union business,
Pioneer is expected to return to profitability following three
years of losses.
Pioneer is classified as a strategically important subsidiary, as
distinct from a core subsidiary. While S&P considers NZACU a
supportive parent, the core status (and equalized rating) does not
currently apply given the relatively short duration of ownership
and the possibly that Pioneer could be easily sold and the motor
insurance product offering underwritten by an external insurer.
Pioneer's contribution to the group for the year to June 30, 2009,
was a pretax loss of NZ$2.6 million. Much of the loss from
Pioneer in the past two fiscal years has related to legal costs
after action was taken against the former directors and auditors
of the company relating to the alleged misappropriation of funds
and mismanagement. Under stronger management, and with a more
focused business strategy targeting core credit union member
business, profitability is currently showing signs of improvement.
Pioneer is likely to generate profits in the next year or two.
Pioneer's activities contribute to NZACU's business diversity, and
provide member credit unions a complementary insurance offering
around the extension of motor finance to customers. While
previously associated with NZACU as a recommended insurance
provider to the credit union sector, Pioneer was acquired on
July 6, 2007, as part of a rescue package designed to protect the
interests of member credit union policyholders. NZACU injected
NZ$6.5 million into Pioneer as part of its recapitalization; the
company had negative net worth on acquisition. This negative net
worth of NZ$4.0 million was recognized as goodwill on acquisition
and was fully written-off in fiscal 2009. Pioneer now has a net
worth of NZ$3.7 million -- offset by intangibles of
NZ$1.2 million -- resulting in an adequate solvency position for
the premium level and risk of its retail motor line.
The rating outlook is negative, mirroring that on NZACU's rating.
The outlook would move to stable if NZACU's existing outlook were
changed to stable. Positive rating movement is not likely given
the scale, performance, and strategic ownership of Pioneer.
Downside rating movement will be closely aligned with any downside
rating action on NZACU. There is some flexibility for ratings
tolerance of a deterioration in Pioneer's stand-alone business and
financial profile, however, given the implied group support.
New Rating; CreditWatch/Outlook Action
New Zealand Association of Credit Unions
Counterparty Credit Rating BB/Negative/B
Pioneer Insurance Co. Ltd.
Counterparty Credit Rating
Local Currency BB-/Negative/--
Financial Strength Rating
Local Currency BB-/Negative/--
=================
S I N G A P O R E
=================
HO SHING: Creditors Get 100% Recovery on Claims
-----------------------------------------------
Ho Shing Construction Co. (Pte) Ltd will declare the first and
final dividend on December 11, 2009.
The company will pay 100% to the received claims.
The company's liquidators are:
Chee Yoh Chuang
Lim Lee Meng
c/o Stone Forest Corporate Advisory Pte Ltd
8 Wilkie Road
#03-08 Wilkie Edge
Singapore 228095
===============
X X X X X X X X
===============
* Fitch Downgrades LT Issuer Default Ratings of Two Dubai Banks
---------------------------------------------------------------
Fitch Ratings has downgraded the Long-term Issuer Default Ratings
of Dubai Bank (to 'BBB-' from 'BBB+'), Tamweel PJSC (to 'BB' from
'BBB') and TAIB Bank (to 'BB' from 'BBB-'). The Outlooks on Dubai
Bank and TAIB Bank are Negative. Tamweel remains on Rating Watch
Evolving.
This follows the announcement by Dubai World, wholly-owned by the
government of Dubai, that it is requesting to postpone debt
repayments until at least May 2010. This request has implications
for the creditworthiness of the government of Dubai, as it
demonstrates that the government of Dubai's ability to support its
wholly-owned subsidiaries is increasingly constrained and the
government is making a clearer distinction between its own direct
obligations and the indebtedness of its subsidiaries.
Fitch believes there is a distinction between the probabilities of
support for UAE banks depending on the sources of support (See
"Fitch Downgrades 7 UAE Banks," 24 September 2009.). Fitch
believes that UAE banks would be supported by the UAE authorities.
In early 2009, Abu Dhabi-based banks received direct capital
injections from the government of Abu Dhabi, and Fitch believes
that a few institutions, with close links to the government of
Dubai, would look primarily to the government of Dubai for
support. The request for a standstill agreement in respect of
Dubai World and its property development subsidiary, Nakheel PJSC,
and possibly other subsidiaries, implies a further weakening of
the government of Dubai's ability to provide such support.
Fitch is also reviewing the potential effect of the debt
standstill request on the financial position and Individual
ratings of any banks with large exposures to Dubai World and its
subsidiaries.
Dubai Bank is a small bank wholly-owned by Dubai Banking Group
which in turn is 70% owned by Dubai Holding (ultimately the ruler
of Dubai) and 30% owned by the property developer, Emaar (32%
owned by the government of Dubai). Fitch expects that potential
support would flow primarily from the Dubai authorities. However,
as a bank regulated by the UAE Central Bank, support could
ultimately also be forthcoming from the UAE authorities. Fitch
has placed the Individual rating on Rating Watch Negative to
reflect Dubai Bank's high exposure to Dubai corporate entities and
the government.
Tamweel is a Shari'ah-compliant residential mortgage company
operating in the UAE. Core shareholders are Dubai Holding (owned
by the ruler of Dubai), Istithmar (owned by Dubai World) and Dubai
Islamic Bank (part owned by the government of Dubai). The UAE
authorities have established a steering committee to propose a new
ownership structure and remedies for its funding requirements. As
its future ownership and role in the UAE economy are unclear, the
company's IDRs remain on Rating Watch Evolving, but currently
reflect potential support from the Dubai authorities.
TAIB Bank is a Bahrain-based financial institution that
repositioned itself as a private bank in 2004. TAIB Bank is
focused on wealth management, providing real estate investment,
asset management, private equity investment, as well as brokerage
and trust services. TAIB's main (60%) shareholder is Dubai
Financial Group, the financial institutions holding company of
Dubai Holding, which is effectively wholly-owned by the ruler of
Dubai. The Long-term IDR now reflects TAIB Bank's stand-alone
financial position. Uncertainty regarding the bank's future
strategy is reflected in the Negative Outlook.
Dubai Bank:
-- Long-term IDR: downgraded to 'BBB-' from 'BBB+'; Outlook
Negative
-- Senior unsecured debt: downgraded to 'BBB-' from 'BBB+'
-- Short-term IDR: downgraded to 'F3' from 'F2'
-- Individual rating: 'C/D' placed on Rating Watch Negative
-- Support rating: affirmed at '2'
-- Support Rating Floor: downgraded to 'BBB-' from 'BBB+'
Tamweel:
-- Long-term IDR: downgraded to 'BB' from 'BBB'; remains on
Rating Watch Evolving
-- Senior unsecured debt: downgraded to 'BB' from 'BBB'; remains
on RWE
-- Short-term IDR: downgraded to 'B' from 'F3'; remains on RWE
-- Individual rating: affirmed at 'E'
-- Support rating: downgraded to '3' from '2'; remains on RWE
-- Support Rating Floor: downgraded to 'BB' from 'BBB'; remains
on RWE
TAIB Bank:
-- Long-term IDR: downgraded to 'BB' from 'BBB-', Outlook
Negative
-- Short-term IDR: downgraded to 'B' from 'F3'
-- Individual Rating: affirmed at 'C/D'
-- Support Rating: downgraded to '4' from '2'
* Moody's Won't Make Rating Changes on Rated UAE Banks
------------------------------------------------------
Based on an initial assessment of the exposures of rated banks in
the United Arab Emirates to Dubai World and its subsidiary
Nakheel, Moody's Investors Service says that it will not implement
any rating changes for now given that the banks that have sizeable
exposures to Dubai World are either already on review for possible
downgrade or carry a negative outlook on their deposit ratings.
Moody's announcement is in response to the decision by the
government of Dubai to seek a six-month "standstill" period for
repaying the debts that are due by Dubai World, one of the largest
Dubai government entities, and its subsidiary Nakheel, the
property development company.
Moody's has reviewed the potential repercussions of the
government's action for the standalone as well as supported
ratings of UAE banks. The rating agency concludes that, if the
repercussions remain confined to exposures to Dubai World and
Nakheel, and based on current assumptions and expectations, UAE
banks are likely to be able to absorb potential stress at their
current rating levels.
Moody's notes that Dubai-based banks are generally more heavily
exposed to Dubai World and Nakheel than their counterparts in Abu
Dhabi, with the exception of Abu Dhabi Commercial Bank and First
Gulf Bank, whose ratings carry negative outlooks. Indeed, the UAE
banks that are on review for downgrade are Dubai-based banks:
Emirates NBD, Mashreqbank, and Dubai Islamic Bank. Moody's
expects to complete the rating reviews over the coming weeks.
Although the recent developments have increased the likelihood of
downgrades of bank financial strength ratings for the banks that
are already on review, Moody's notes that their debt and deposit
ratings will continue to benefit from systemic support from the
federal government of the UAE.
Given the unclear and evolving situation, Moody's says that it
will monitor developments and review all bank ratings in the event
of a further escalation or spread of the credit event surrounding
Dubai World and Nakheel to other areas. The comments by Moody's
should therefore not be viewed as conclusive.
Moody's acknowledges the possibility that the proposed
restructuring of Dubai World and Nakheel could be a sign that the
Dubai government may allow other government-related issuers to
restructure or even default on their obligations. If this is
proven to be the case, such an eventuality could have major
repercussions on the banks' financial strength ratings in the
country and possibly the region, as other non-UAE based banks as
well as foreign banks are heavily exposed to Dubai's government-
related issuers, known collectively as "Dubai Inc." However,
Moody's also acknowledges that the stand-still period for
negotiating debt and restructuring of Dubai World and Nakheel
could potentially leave the Dubai government in a better position
to support its other government-related companies.
Moody's has no reason to believe that the UAE's federal government
would abstain from supporting banks in Dubai or in other emirates.
However, Moody's assessments impute higher probabilities of
support for banks owned by the government of Abu Dhabi due to
stronger local government support, in addition to the federal
support. The rating agency observes that the Abu Dhabi
government, which holds the bulk of the federation's oil reserves
and is the main contributor to UAE's gross domestic product, has
demonstrated a strong willingness and ability to provide support
to its local banks. Moody's notes, however, that a change in the
likely support assumptions could negatively impact on the debt and
deposit ratings of the banks.
Moody's previous rating action on UAE banks was implemented on 10
August 2009, when the rating agency performed asset quality stress
tests and placed three banks on review for downgrade: Emirates NBD
(which at the time comprised Emirates Bank International and
National Bank of Dubai), Mashreqbank and Dubai Islamic Bank.
Moody's ratings for UAE banks remain:
Abu Dhabi Commercial Bank:
-- Bank Financial Strength Rating of C-; negative outlook.
-- Global Local Currency Deposit Ratings of Aa3/Prime-1.
-- Foreign Currency Deposit Ratings of Aa3/Prime-1.
-- Foreign Currency Debt Rating for senior debt obligations of
Aa3.
-- Foreign Currency Debt Rating for subordinated obligations of
A1.
-- Commercial Paper Rating of Prime-1.
All Long-term ratings carry negative outlook.
Abu Dhabi Islamic Bank:
-- BFSR of D.
-- Global Local Currency Issuer Ratings of A2/Prime-1.
-- Foreign Currency Issuer Ratings of A2/Prime-1.
-- Foreign Currency Debt Rating for senior debt obligations
(Sukuk) of A2.
All Ratings carry stable outlook.
Commercial Bank of Dubai:
-- BFSR of D+.
-- Global Local Currency Deposit Ratings of A2/Prime-1.
-- Foreign Currency Deposit Ratings of A2/Prime-1.
All ratings carry a stable outlook.
Dubai Bank:
-- BFSR of D.
-- Global Local Currency Issuer Ratings of A3/Prime-2.
-- Foreign Currency Issuer Ratings of A3/Prime-2.
-- Foreign Currency Debt Rating for senior debt obligations
(Sukuk) of A3.
All ratings carry a stable outlook.
Dubai Islamic Bank:
-- BFSR of D+; on review for possible downgrade.
-- Global Local Currency Issuer Ratings of A1/Prime-1.
-- Foreign Currency Issuer Ratings of A1/Prime-1.
-- Foreign Currency Debt Rating for senior debt obligations
(Sukuk) of A1.
All long-term ratings are under review for possible downgrade.
Emirates NBD PJSC:
-- BFSR of C-; on review for possible downgrade.
-- Global Local Currency Deposit Ratings of A1/Prime-1.
-- Foreign Currency Deposit Ratings of A1/Prime-1.
-- Foreign Currency Debt Rating for senior debt obligations of
A1.
-- Foreign Currency Debt Rating for subordinated obligations of
A2.
-- Commercial Paper Rating of Prime-1.
All long-term ratings are under review for possible downgrade.
First Gulf Bank:
-- BFSR of D+; negative outlook.
-- Global Local Currency Deposit Ratings of A2/Prime-1.
-- Foreign Currency Deposit Ratings of A2/Prime-1.
-- Foreign Currency Debt Rating for senior debt obligations of
A2.
-- Foreign Currency Debt Rating for subordinated obligations of
A3
All Long-term ratings carry a negative outlook.
HSBC Bank Middle East Ltd
-- BFSR of C; stable outlook.
-- Global Local Currency Deposit Ratings of Aa3/Prime-1.
-- Foreign Currency Deposit Ratings of Aa3/Prime-1.
-- Foreign currency Debt Rating for senior debt obligations of
Aa3.
-- Foreign Currency Debt Rating for subordinated obligations of
A1.
All long-term ratings carry a negative outlook.
HSBC Bank Middle East Ltd (UAE Branches):
-- Global Local Currency Deposit Ratings of Aa3 (negative
outlook) and Prime-1.
MashreqBank:
-- BFSR of C-; on review for possible downgrade.
-- Global Local Currency Deposit Ratings of A2/Prime-1.
-- Foreign Currency Deposit Ratings of A2/Prime-1.
-- Foreign Currency Debt Rating for senior debt obligations of
A2.
-- Foreign Currency Debt Rating for subordinated obligations of
A3.
All long-term ratings are under review for a possible downgrade.
National Bank of Abu Dhabi:
-- BFSR of C.
-- Global Local currency Deposit Ratings of Aa3/Prime-1.
-- Foreign Currency Deposit Ratings of Aa3/Prime-1.
-- Foreign Currency Debt Rating for senior debt obligations of
Aa3.
All ratings carry stable outlook.
National Bank of Ras-Al-Khaimah:
-- BFSR of D+.
-- Global Local Currency Deposit Ratings of Baa1/Prime-2.
-- Foreign Currency Deposit Ratings of Baa1/Prime-2.
-- Foreign Currency Debt Rating for senior debt obligations of
Baa1.
All ratings carry a stable outlook.
National Bank of Umm Al-Qaiwain:
-- BFSR of D.
-- Global Local Currency Deposit Ratings of Baa2/Prime-2.
-- Foreign Currency Deposit Ratings of Baa2/Prime-2.
All ratings carry a stable outlook.
Union National Bank:
-- BFSR of D+.
-- Global Local Currency Deposit Ratings of A1/Prime-1.
-- Foreign Currency Deposit Ratings of A1/Prime-1.
-- Foreign Currency Debt Rating for senior debt obligations of
A1.
All ratings carry a stable outlook.
* BOND PRICING: For the Week November 23 to November 27, 2009
-------------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
AUSTRALIA
---------
AINSWORTH GAME 8.00 12/31/2009 AUD 0.84
AMP GROUP FINANC 9.80 4/1/2019 NZD 0.92
ANTARES ENERGY 10.00 10/31/2013 AUD 2.00
AUROX RESOURCES 7.00 6/30/2010 AUD 0.79
BECTON PROP GR 9.50 6/30/2010 AUD 0.54
BOUNTY INDUSTRIE 10.00 6/30/2010 AUD 0.03
CAPRAL ALUMINIUM 10.00 3/29/2012 AUD 72.00
CBD ENERGY LTD 12.50 1/29/2011 AUD 0.17
CHINA CENTURY 12.00 9/30/2010 AUD 0.7
FIRST AUSTRALIAN 15.00 1/31/2012 AUD 0.5
GRIFFIN COAL MIN 9.50 12/1/2016 USD 67.75
GRIFFIN COAL MIN 9.50 12/1/2016 USD 74.5
HEEMSKIRK CONSOL 8.00 4/29/2011 AUD 2.3
JPM AU ENF NOM 1 3.50 6/30/2010 USD 7.0
MINERALS CORP 10.50 12/31/2009 AUD 0.8
NATIONAL CAP II 5.49 12/29/2049 USD 72.53
NEW S WALES TREA 1.00 9/2/2019 AUD 62.93
NYLEX LTD 10.00 12/8/2009 AUD 0.84
ORCHARD INVEST 7.36 12/15/2010 AUD 29.5
RESOLUTE MINING 12.00 12/31/2012 AUD 1.06
SUN RESOURCES NL 12.00 6/30/2011 AUD 0.5
SUNCORP METWAY I 6.75 10/6/2026 AUD 73.19
SYDNEY AIRPORT F 3.12 11/20/2030 AUD 68.17
TIMBERCORP LTD 8.90 12/1/2010 AUD 26.1
VERO INSURANCE 6.15 9/7/2025 AUD 47.2
CHINA
-----
CHINA GOVT BOND 4.86 8/10/2014 CNY 108.39
JIANGXI COPPER 1.00 9/22/2016 CNY 71.5
SICHUAN CHANGHON 0.80 7/31/2015 CNY 72.9
HONG KONG
---------
RESPARCS FUNDING 8.00 12/29/2049 USD 22.08
INDONESIA
---------
BAHTERA ADIMINA 16.00 6/5/2010 IDR 14.2
BAKRIELAND DEV 12.85 3/11/2013 IDR 69.57
BANK DKI 12.25 3/4/2018 IDR 69.72
MOBILE-8 TELECOM 5.00 6/15/2017 IDR 51.50
INDIA
-----
AFTEK INFOSYS 1.00 6/25/2010 USD 65
AKSH OPTIFIBRE 1.00 1/29/2010 USD 68.5
GEMINI COMMUNICA 6.00 7/18/2012 EUR 68
GHCL LTD 1.00 3/21/2011 USD 73.75
KEI INDUSTRIES 1.00 11/30/2011 USD 72.5
SUBEX AZURE 2.00 3/9/2012 USD 67.5
WANBURY LTD 1.00 4/23/2012 EUR 69.5
JAPAN
-----
AIFUL CORP 1.14 10/19/2010 JPY 52.38
AIFUL CORP 2.93 6/28/2010 JPY 59.28
AIFUL CORP 0.80 7/20/2010 JPY 56.29
AIFUL CORP 5.00 8/10/2010 USD 60.00
AIFUL CORP 1.50 10/20/2011 JPY 41.35
AIFUL CORP 6.00 12/12/2011 USD 43.13
AIFUL CORP 6.00 12/12/2011 USD 45
AIFUL CORP 1.20 1/26/2012 JPY 34.95
AIFUL CORP 1.99 3/23/2012 JPY 36.5
AIFUL CORP 1.63 11/22/2012 JPY 33.98
AIFUL CORP 5.00 8/10/2010 USD 60.00
AIFUL CORP 1.74 5/28/2013 JPY 30.94
AIFUL CORP 1.22 4/20/2012 JPY 34.42
AIFUL CORP 1.99 10/19/2015 JPY 30.34
COVALENT MATERIA 2.87 2/18/2013 JPY 61.26
CSK CORPORATION 0.25 9/30/2013 JPY 58.5
FUKOKU MUTUAL 4.50 9/28/2025 EUR 67.00
JAPAN AIRLINES 3.10 1/22/2018 JPY 71.37
JPN EXP HLD/DEBT 0.50 9/17/2038 JPY 58.94
JPN EXP HLD/DEBT 0.50 3/18/2039 JPY 58.32
NIS GROUP 9.56 6/20/2012 USD 73.5
PROMISE CO LTD 2.10 4/21/2014 JPY 63.99
PROMISE CO LTD 1.37 6/4/2013 JPY 67.86
SHINSEI BANK 5.63 12/29/1949 GBP 75.02
SHINSEI BANK 3.75 2/23/2016 EUR 83.01
TAKEFUJI CORP 9.20 4/15/2011 USD 44.75
TAKEFUJI CORP 9.20 4/15/2011 USD 44.75
TAKEFUJI CORP 8.00 11/1/2017 USD 9.88
TAKEFUJI CORP 4.00 6/5/2022 JPY 52.77
TOKYO METRO GOVT 4.27 11/29/2035 EUR 74.7
WILLCOM INC 2.35 6/27/2012 JPY 43.92
MALAYSIA
--------
ADVANCE SYNERGY 2.00 1/26/2018 MYR 0.08
ALIRAN IHSAN RES 5.00 11/29/2011 MYR 1.1
BERJAYA LAND 5.00 12/30/2009 MYR 3.82
CRESCENDO CORP B 3.75 1/11/2016 MYR 0.74
DUTALAND BHD 4.00 4/11/2013 MYR 0.4
DUTALAND BHD 4.00 4/11/2013 MYR 0.73
EASTERN & ORIENT 8.00 11/16/2019 MYR 0.89
EASTERN & ORIENT 8.00 7/25/2011 MYR 1.00
EG INDUSTRIES 5.00 6/16/2010 MYR 0.39
HUAT LAI RESOURC 5.00 3/28/2010 MYR 0.43
KRETAM HOLDINGS 1.00 8/10/2010 MYR 1.09
KUMPULAN JETSON 5.00 11/27/2012 MYR 2.3
LION DIVERSIFIED 4.00 12/17/2013 MYR 1.71
MITHRIL BHD 3.00 4/5/2012 MYR 0.6
NAM FATT CORP 2.00 6/24/2011 MYR 0.21
OLYMPIA INDUSTRI 2.80 4/11/2013 MYR 0.18
OLYMPIA INDUSTRI 4.00 4/11/2013 MYR 0.25
PUNCAK NIAGA HLD 2.50 11/18/2016 MYR 0.67
RUBBEREX CORP 4.00 8/14/2012 MYR 1.08
TRADEWINDS CORP 2.00 2/8/2012 MYR 0.7
TRADEWINDS PLANT 3.00 2/28/2016 MYR 1.1
TRC SYNERGY 5.00 1/20/2012 MYR 1.28
WAH SEONG CORP 3.00 5/21/2012 MYR 3.21
WIJAYA BARU GLOB 7.00 9/17/2012 MYR 0.27
YTL CEMENT BHD 5.75 11/10/2015 MYR 1.96
NEW ZEALAND
-----------
ALLIED FARMERS 9.60 11/15/2011 NZD 52.12
ALLIED NATIONWID 11.52 12/29/2049 NZD 25.00
BBI NTWKS NZ LTD 9.00 11/30/2012 NZD 0.44
BLUE STAR PRINT 9.10 9/15/2012 NZD 74.5
CAPITAL PROP NZ 8.00 4/15/2010 NZD 9.00
CONTACT ENERGY 8.00 5/15/2014 NZD 1.04
FLETCH BUILD FIN 8.85 3/15/2010 NZD 8.00
FLETCHER BUI 8.50 3/15/2015 NZD 8.20
FLETCHER BUILDIN 7.55 3/15/2011 NZD 7.5
INFRASTR & UTIL 8.50 9/15/2013 NZD 9.7
INFRATIL LTD 8.50 11/15/2015 NZD 11.75
INFRATIL LTD 10.18 12/29/1949 NZD 60
MANUKAU CITY 6.90 9/15/2015 NZD 1.02
MARAC FINANCE 10.50 7/15/2013 NZD 0.93
NZ FINANCE HLDGS 9.75 3/15/2011 NZD 40.22
PROVENCOCADMUS 2.00 4/15/2010 NZD 0.81
SKY NETWORK TV 4.01 10/16/2016 NZD 54.75
SOUTH CANTERBURY 10.50 6/15/2011 NZD 0.94
SOUTH CANTERBURY 10.43 12/15/2012 NZD 0.77
ST LAURENCE PROP 9.25 5/15/2011 NZD 50.4
TOWER CAPITAL 8.50 4/15/2014 NZD 1.00
TRUSTPOWER LTD 8.50 9/15/2012 NZD 8.00
TRUSTPOWER LTD 8.50 3/15/2014 NZD 7.4
VECTOR LTD 8.00 12/29/1949 NZD 7.75
VECTOR LTD 7.80 10/15/2014 NZD 1.01
SINGAPORE
---------
BLUE OCEAN 11.00 6/28/2012 USD 27.97
BLUE OCEAN 11.00 6/28/2012 USD 27.97
LAND TRANSPORT 4.17 5/10/2016 SGD 1.06
SENGKANG MALL 8.00 11/20/2012 SGD 0.1
UNITED ENG LTD 1.00 3/3/2014 SGD 1.2
WBL CORPORATION 2.50 6/10/2014 SGD 2.1
KOREA
-----
HYNIX SEMI INC 7.88 6/27/2017 USD 74.14
WOORI BANK 6.21 5/2/2037 USD 72.5
SRI LANKA
---------
SRI LANKA GOVT 7.00 10/1/2023 LKR 73.35
THAILAND
--------
G STEEL 10.50 10/4/2010 USD 21.99
*********
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 ***