/raid1/www/Hosts/bankrupt/TCRAP_Public/100427.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, April 27, 2010, Vol. 13, No. 081
Headlines
A U S T R A L I A
ALLCO FINANCE: Receiver Sells Record Funds Assets
CIT GROUP: BOQ to Acquire Australia and New Zealand Operations
C H I N A
GREENTOWN CHINA: S&P Downgrades Corporate Credit Rating to 'B'
HAINAN AIRLINES: Swings Back to Profit in 2009
H O N G K O N G
1S LIMITED: Creditors' Proofs of Debt Due May 20
ASIA ADVANCED: Sutton and Fok Appointed as Liquidators
B J COLLECTION: Court to Hear Wind-Up Petition on May 19
CADVISION GLOBAL: Court to Hear Wind-Up Petition on May 26
CARRIERNET CORPORATION: Creditors' Meeting Set for May 4
CHILDFUNDS HK: Creditors' Proofs of Debt Due May 28
CHINA NATIONAL: Members' Final Meeting Set for May 24
CHINA SOONG: Court to Hear Wind-Up Petition on June 9
CORSAIR NO 4: S&P Downgrades Rating on Series 5 Notes to 'CC'
COWSLIP COMPANY: Members' Final Meeting Set for May 25
CUPAC FINANCE: Members' Final Meeting Set for May 23
DAVINES ASIA: Seng Sze and Cheng Step Down as Liquidators
DEGREEASIA LIMITED: Court to Hear Wind-Up Petition on May 26
DHARMALA INTERNATIONAL: Fok and Chiong Step Down as Liquidators
EXCEL WAY: Creditors' Meeting Set for April 30
GOLD-FACE ENTERPRISES: Annual Meetings Slated for April 30
SMILE SECURITISATION: Fitch Downgrades Ratings on Junior Tranches
THUNDERBIRD INVESTMENTS: S&P Withdraws Rating on Series 21 Notes
TITAN PETROCHEMICALS: Exchange Offer Won't Move S&P's CC Rating
I N D I A
AIR INDIA: Defers Delivery of Three Boeing 777 Aircraft
GREAT EASTERN: CRISIL Assigns 'BB-' Rating on INR150MM Term Loan
GURUDEVA CHARITABLE: ICRA Puts 'LB+' Rating on INR200MM Term Loan
JEWEL POLYMERS: CRISIL Puts 'BB-' Rating on INR35 Mil. Cash Credit
MANSI INDUSTRIES: CRISIL Rates INR280MM Rupee Term Loan at 'B+'
MIHIJAM VANASPATI: Fitch Assigns 'B+' National Long-Term Rating
PARAMOUNT COMMUNICATIONS: ICRA Rates INR1.95BB Bank Debts to 'LBB'
POLYHOSE RUBBER: Fitch Assigns 'BB+' National Long-Term Rating
PUROHIT & COMPANY: Low Net Worth Prompts CRISIL 'B+' Ratings
R.K.M. POWERGEN: ICRA Places 'LBB' Rating on INR1.5 Bil. Term Loan
R. M. KNITTERS: CRISIL Assigns 'BB' Ratings on Various Bank Debts
ROHIT EXTRACTIONS: CRISIL Rates INR100 Million Cash Credit 'BB-'
SATYA PRAKASH: ICRA Assigns 'LBB+' Rating on INR135MM LT Loans
SARDA PLYWOOD: CRISIL Assigns 'B+' Rating on INR6.3 Mil. Term Loan
SAVORIT LIMITED: Fitch Assigns National Long-Term Rating at 'B-'
SCOTTISH CHEMICAL: Low Net Worth Prompts CRISIL 'P4+' Ratings
VINDHYACHAL HYDRO: ICRA Places 'LBB+' Rating on INR250MM LT Loan
J A P A N
HITACHI LTD: Sees Narrower FY2009 Net Loss of JPY110 Billion
JLOC XXXI: S&P Downgrades Ratings on Class C Certificates
LMP LOAN: Moody's Reviews Ratings on Various Series 2007-1 Notes
ORSO ABS: Moody's Reviews Ratings on Various Classes of Certs.
ORSO FUNDING: Moody's Reviews Ratings on Various Classes
TAKEFUJI CORPORATION: Saves Money to Redeem Convertible Bonds
TITAN JAPAN: Moody's Reviews Ratings on Various Classes of Notes
TOSHIBA CORP: Trims FY2009 Net Loss Forecast to JPY20 Billion
TOSHIBA CORP: To Form Nuclear Power Joint Venture With IHI Corp.
K O R E A
HANSUNG AIRLINES: Set to Resume Operations in July
SSANGYONG MOTOR: Mahindra & Mahindra Plans to Submit Bid
M A L A Y S I A
FOUNTAIN VIEW: Shah Alam Court to Hear Wind Up Petition on July 7
OILCORP BHD: PT Technic Files Suit Against Oil-Line Engineering
N E W Z E A L A N D
HEMISPHERE INSURANCE: S&P Withdraws 'NR' Suspended Rating
CRAFAR FARMS: Receivers Put 16 Farms For Sale
P H I L I P P I N E S
PHILIPPINE AIRLINES: Employees May Launch Strike on Job Cuts
PHILIPPINE AIRLINES: Outsources Call Center Job to ePLDT Ventus
T A I W A N
KUO HUA LIFE: Receivership Extended By 9 Months
WATERLAND FINANCIAL: Fitch Puts Ratings on Negative Watch
X X X X X X X X
* S&P Raises Ratings on Two Asia-Pacific CDO Tranches
* BOND PRICING: For the Week April 19 to April 23, 2010
- - - - -
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A U S T R A L I A
=================
ALLCO FINANCE: Receiver Sells Record Funds Assets
-------------------------------------------------
The receiver of failed Allco-managed Record Funds Management is
selling an office block in Sydney for as much as $60 million to
help repay creditors, The Sydney Morning Herald reports. Receiver
Ernst & Young is selling a newly redeveloped but empty Sydney
office tower at 149 Castlereagh Street, The Australian relates.
The Herald says that other significant assets up for sale in the
Record Realty portfolio include the $150 million Sydney Airport
Centre at Mascot, in which the group holds a 26% stake.
According to The Australian, Ernst & Young has appointed agents CB
Richard Ellis and Jones Lang LaSalle to sell the property, with
expressions of interest due to close on June 3.
As reported in the Troubled Company Reporter-Asia Pacific on
Aug. 13, 2009, administrators have been appointed to the
management arm of Allco Finance Group's commercial property
business, Record Funds Management Limited.
Corporate recovery specialist PPB took control of Record Funds in
August 2009, four months after receivers were appointed to the
ASX-listed trust, Record Realty, which operated under the Allco
umbrella.
A TCR-AP report on April 3, 2009, said the Bank of Scotland
International, the institutional lending arm of British lender,
HBOS, appointed Craig Shepard and Mark Korda at KordaMentha as
receivers and managers of Record Realty Trust after it failed to
pay about AU$150 million in debts.
The future of both RFML and Record Realty had been put in doubt by
the failure of Allco Finance, their ultimate parent.
Record Realty Trust is an Australia-based investment management
vehicle. It invests in commercial office buildings with longer
term leases to tenants. Record Funds Management Limited (RFML) is
the responsible entity of Record Realty. RFML has entered into a
management agreement with Allco Funds Management Limited (the
Manager), a subsidiary of Allco Finance Group Limited (AFG) under,
which the Manager is responsible for coordinating much of the day-
to-day operations of Record Realty.
Allco Finance Group Ltd. is an integrated global financial
services business, specializing in asset origination, funds
creation and funds management. The company is a fund manager of
alternative assets in its core asset classes, which include
aviation, rail, shipping, infrastructure, property, private equity
and financial assets. Its primary focus is on commercial
property, predominately completed office buildings and select
development opportunities. It also purchases new and existing
commercial passenger and cargo aircraft for lease to commercial
airlines. In March 2007, Allco HIT Limited acquired Momentum
Investment Finance Pty Limited, Allco Financial Services and
International Mezzanine Funds Management (Australia) Limited. The
company is a vendor of Momentum Investment Finance Pty Limited and
Allco Financial Services. In July 2007, it acquired Allco Equity
Partners Ltd. In December 2007, it completed the acquisition of
the remaining 79.6% stake of Rubicon Holdings(Aust) Limited.
* * *
As reported in the Troubled Company Reporter-Asia Pacific on
November 6, 2008, Allco Finance Group appointed Tony McGrath
and Joseph Hayes of McGrathNicol as the voluntary administrators
of the company and certain of its subsidiaries. Subsequent to the
appointment of administrators to Allco, the company's banking
syndicate appointed Steve Sherman and Peter Gothard of Ferrier
Hodgson as receivers. Allco has more than AU$1 billion
in total debt.
CIT GROUP: BOQ to Acquire Australia and New Zealand Operations
--------------------------------------------------------------
Bank of Queensland Ltd and CIT Group Inc. signed Monday a purchase
agreement under which BOQ will acquire Sydney-based CIT Group
(Australia) Limited and CIT Group (New Zealand) Limited.
BOQ will acquire the CIT ANZ vendor equipment finance business
which operates in the IT and office market as well as the
motorcycle and power equipment market providing finance to
customers of a number of well known vendors. The transaction is
expected to close in the second quarter of the 2010 calendar year.
As part of the transaction, CIT ANZ intends to repay its
outstanding fixed and floating rate notes (ISIN: AU300CGAL010 and
ISIN: AU300CGAL028).
BOQ currently has a successful equipment finance book of
approximately AU$3.4 billion (US$3.2 billion) and the acquisition
of CIT ANZ represents around 15% of this book. At December 31,
2009, CIT Group (Australia) had AU$525 million (US$485 million) in
assets and approximately 125 employees.
BOQ Managing Director David Liddy said, "This purchase provides
BOQ with access to a strategic specialized market and an ideal
growth platform from which to grow new vendor relationships. We
see significant growth in the vendor finance market and this
acquisition provides an ideal growth platform for BOQ. The CIT
ANZ business has a reputable track record in the domestic market
and will complement BOQ's current core competencies in the
equipment finance market.
"The business fits in with our focus on gaining greater market
share in the SME segment and augments our existing equipment
finance capabilities," Mr. Liddy continued. "We currently have a
strong presence in both the direct channel (our branch network)
and the broker network, and this purchase will round out our
offering with a strong vendor finance presence. The CIT ANZ
business has a strong balance sheet, with margins consistent with
the Bank's stated intention of growing its higher margin
portfolios. We expect the acquisition to be earnings per share
accretive immediately from completion. However, this transaction
will not have a material impact on our FY10 results."
Mr. Liddy also said that the Bank intended to operate CIT ANZ as a
stand-alone business, "CIT ANZ has a strong and experienced
management team with the ability to expand and grow the business,
and our intention is that they will continue to manage the
operations and drive this growth. This is a significant and
important partnership for BOQ and we are looking forward to
working with CIT on an ongoing basis to continue to bring global
opportunities to the local business."
Ron Arrington, President of CIT Vendor Finance, said, "This
decision supports CIT's ongoing efforts to more efficiently
operate its Vendor Finance business. The divestiture reduces our
exposure to the consumer market, allows us to focus on our core
commercial business, and ensures that we are aligned with strategy
and market conditions. We will continue to maintain our global
vendor franchise, with a strategic presence around the world."
Keith Rodwell, Managing Director of CIT Group (Australia), said,
"We remain committed to providing our vendor partners and
customers with the quality service they have come to expect. We
anticipate a seamless transition and look forward to joining the
BOQ team."
Bank of Queensland is a retail bank based in Queensland,
Australia.
About CIT Group
CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a bank
holding company with more than $60 billion in finance and leasing
assets that provides financial products and advisory services to
small and middle market businesses. Operating in more than 50
countries across 30 industries, CIT provides an unparalleled
combination of relationship, intellectual and financial capital to
its customers worldwide. CIT maintains leadership positions in
small business and middle market lending, retail finance,
aerospace, equipment and rail leasing, and vendor finance.
Founded in 1908 and headquartered in New York City, CIT is a
member of the Fortune 500.
CIT Group Inc. and affiliate CIT Group Funding Company of Delaware
LLC announced a Chapter 11 filing on November 1, 2009 (Bankr.
S.D.N.Y. Case No. 09-16565). Evercore Partners, Morgan Stanley
and FTI Consulting are the Company's financial advisors and
Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel in
connection with the restructuring plan. Sullivan & Cromwell is
legal advisor to CIT's Board of Directors.
CIT Group on November 1 announced that, with the overwhelming
support of its debtholders, the Board of Directors voted to
proceed with the prepackaged plan of reorganization for CIT Group
Inc. and a subsidiary that will restructure the Company's debt and
streamline its capital structure. None of CIT's operating
subsidiaries, including CIT Bank, a Utah state bank, were included
in the filings.
On December 8, the Court confirmed the Debtors' prepackaged plan.
On December 11, CIT emerged from bankruptcy.
=========
C H I N A
=========
GREENTOWN CHINA: S&P Downgrades Corporate Credit Rating to 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on China-based property developer Greentown China
Holdings Ltd. to 'B' from 'B+'. The outlook is negative. At the
same time, S&P lowered the issue rating on the company's
outstanding senior unsecured notes to 'B-' from 'B'.
"S&P lowered the rating on Greentown to 'B' from 'B+' because the
company's leverage remains high and its cash flow protection is
weak. Further, Greentown has maintained aggressive debt-funded
expansion even though its credit ratios have continued to
deteriorate," said Standard & Poor's credit analyst Christopher
Lee.
Greentown's 2009 annual results were weaker than S&P expected,
despite strong property sales. The company's ratio of total debt
to total capital was largely unchanged year-over-year at 68% at
the end of 2009, while its EBITDA interest coverage dropped to
0.7x from 0.9x. Profitability deteriorated despite higher
recognized prices, with the gross margin down to 26% from 28% a
year earlier. Its adjusted EBITDA margin was just 13.2%.
"These credit ratios were very weak for the previous rating, and
S&P expects limited improvement in the next 12 months. There is
limited visibility over whether Greentown's margin can improve as
the company doesn't seem to have benefited from higher prices in
the past two years. S&P expects its borrowings to increase
further to fund increased construction," said Mr. Lee.
In 2010, the company expects gross floor area under construction
to increase by about 35% to 11 million square meters. At the same
time, Greentown continues to have a large appetite for land
acquisitions. In 2009, the company acquired 37 land sites with an
outstanding land premium of Chinese renminbi (RMB) 27.6 billion.
In S&P's view, the company's risk appetite remains aggressive,
even though the market outlook is less certain.
Greentown's financial performance has been lagging behind its
property sales. While S&P expects revenue to improve with a near
doubling of GFA to be delivered in 2010 at higher average prices,
there's limited visibility over how its credit ratios can improve.
Compounding this is the company's complex corporate structure. A
significant number of projects are through jointly controlled
companies and associates, and this leads to limited transparency
over the cash movements between the group and its project
companies. In addition, total borrowings of non-consolidated
entities are uncertain, and Greentown could become even more
leveraged if S&P were to proportionally consolidate these
borrowings.
The rating on Greentown also reflects the group's aggressive
appetite for debt-funded expansion, its highly leveraged capital
structure, and weak liquidity. Further, the group's complex
corporate structure and extensive related-party transactions
constrain the ratings. These weaknesses are tempered by the
group's above-average sales across a cycle compared with its
peers, its good reputation and product quality in the private
high-end housing segment, and its strong presence in Hangzhou city
and elsewhere in Zhejiang province, a relatively wealthy coastal
region.
The outlook is negative, which reflects S&P's expectation that
Greentown's credit ratios will continue to be weak in 2010 due to
aggressive debt-funded expansion. Further, the company's
liquidity is weak as S&P believes Greentown is reliant on
favorable market conditions to meet its large land premium
payment, other capital commitments, and debt repayments.
S&P may lower the rating if the company's property sales are
materially below its target for 2010 of RMB67 billion, its margins
deteriorate, its gross leverage does not improve, and/or its
EBITDA interest coverage ratio is less than 1x. S&P may revise
the outlook back to stable if the company becomes less aggressive
and de-leverages, such that its gross leverage (measured by a
ratio of total debt to capital) is less than 60% and it maintains
EBITDA interest coverage at more than 2x.
HAINAN AIRLINES: Swings Back to Profit in 2009
----------------------------------------------
Hainan Airlines Co., Ltd., swung back to profitability in 2009,
helped by recovery of China's civil aviation industry and the
government's supportive policies, according to Shanghai Daily.
Hainan Airlines said net profit last year hit CNY334.67 million
compared with CNY1.41 billion loss in 2008, Shanghai Daily says.
The report says Hainan Airlines mulls expanding its business by
taking the chances of the national project to build Hainan into a
top international tourist resort and the global economic recovery.
Based in Haikou, Hainan Province, the People's Republic of China,
Hainan Airlines Co., Ltd. -- http://www.hnair.com/-- founded in
1993, is the fourth-largest carrier in China and the largest non-
government-owned airline in China. Hainan Airlines is known for
its award-winning customer service, impeccable safety record and
on-time performance. Hainan Airlines carries more than 14 million
passengers annually. Hainan Airlines currently flies to more than
60 domestic and international cities, including the capitals of
every Chinese province. Hainan Airlines' international flights
include Budapest, Brussels, Osaka and St. Petersburg.
* * *
Hainan Air continues to carry Xinhua Far East China Rating's "CC"
issuer credit rating placed on October 31, 2005 with a negative
outlook.
================
H O N G K O N G
================
1S LIMITED: Creditors' Proofs of Debt Due May 20
------------------------------------------------
Creditors of 1S Limited, which is in members' voluntary
liquidation, are required to file their proofs of debt by May 20,
2010, to be included in the company's dividend distribution.
The company commenced wind-up proceedings on April 7, 2010.
The company's liquidator is:
Chung Cheuk Kwan
16/F Tak Shing House
Theatre Lane
20 Des Voeux Road
Central, Hong Kong
ASIA ADVANCED: Sutton and Fok Appointed as Liquidators
------------------------------------------------------
Roderick John Sutton and Fok Hei Yu on April 23, 2010, were
appointed as liquidators of Asia Advanced Metal Products Company
Limited.
The liquidators may be reached at:
Roderick John Sutton
Fok Hei Yu
Ferrier Hodgson Limited
14th Floor, Hong Kong Club Building
3A Chater Road
Central, Hong Kong
B J COLLECTION: Court to Hear Wind-Up Petition on May 19
--------------------------------------------------------
A petition to wind up the operations of B J Collection (MFR)
Limited will be heard before the High Court of Hong Kong on
May 19, 2010, at 9:30 a.m.
Supershine Limited filed the petition against the company on
March 15, 2010.
The Petitioner's solicitors are:
Michael Pang & Co.
10/F, Wing On Cheong Building
5 Wing Lok Street
Central, Hongkong
CADVISION GLOBAL: Court to Hear Wind-Up Petition on May 26
----------------------------------------------------------
A petition to wind up the operations of Cadvision Global Limited
will be heard before the High Court of Hong Kong on May 26, 2010,
at 9:30 a.m.
CARRIERNET CORPORATION: Creditors' Meeting Set for May 4
--------------------------------------------------------
Creditors of Carriernet Corporation Limited will hold their
meeting on May 4, 2010, at 11:00 a.m., for the purposes provided
for in Sections 228A, 242, 243, 244 and 255 of the Companies
Ordinance.
The meeting will be held at the Room A-B, 15/F., Ritz Plaza, 122
Austin Road, Tsimshatsui, in Hong Kong.
CHILDFUNDS HK: Creditors' Proofs of Debt Due May 28
---------------------------------------------------
Childfunds Hong Kong Limited, which is in members' voluntary
liquidation, requires its creditors to file their proofs of debt
by May 28, 2010, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on April 16, 2010.
The company's liquidator is:
Ip Chung Yuen
14th Floor, Shanghai Industrial Investment Building
48 Hennessy Road
Wanchai, Hong Kong
CHINA NATIONAL: Members' Final Meeting Set for May 24
-----------------------------------------------------
Members of China National Aero-Technology H.K. Group Limited will
hold their final general meeting on May 24, 2010, at 11:00 a.m.,
at the Unit 3601, 36/F., Lippo Centre, Tower 2, 89 Queensway, in
Hong Kong.
At the meeting, Wong Poh Weng and Wong Tak Man Stephen, the
company's liquidators, will give a report on the company's wind-up
proceedings and property disposal.
CHINA SOONG: Court to Hear Wind-Up Petition on June 9
-----------------------------------------------------
A petition to wind up the operations of China Soong Ching Ling
Children's Foundation Limited will be heard before the High Court
of Hong Kong on June 9, 2010, at 9:30 a.m.
The Petitioner's solicitors are:
Samuel L. C. Yang & Co.
1st Floor, Chung Nam House
59 Des Voeux Road Central
Hong Kong
CORSAIR NO 4: S&P Downgrades Rating on Series 5 Notes to 'CC'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Corsair
(Cayman) No. 4 Series 5 to 'CC' from 'CCC-'.
The rating downgrade reflects S&P's expectation of an interest
loss to the investor on the next interest payment date. The
portfolio in the transaction suffered several credit events, which
have resulted in an aggregate loss that exceeded the available
subordination and reduced the principal amount of the notes. This
is expected to result in an interest payment shortfall on the next
recent interest payment date.
The rating action on the affected transaction is:
Transaction Rating To Rating From
----------- --------- -----------
Corsair (Cayman) No.4 Series 5 CC CCC-
COWSLIP COMPANY: Members' Final Meeting Set for May 25
------------------------------------------------------
Members of Cowslip Company Limited will hold their final meeting
on May 25, 2010, at 9:30 a.m., at the 12th Floor, CITIC Tower, 1
Tim Mei Avenue, Central, in Hong Kong.
At the meeting, Lo Wai On, the company's liquidator, will give a
report on the company's wind-up proceedings and property disposal.
CUPAC FINANCE: Members' Final Meeting Set for May 23
----------------------------------------------------
Members of Cupac Finance Limited will hold their final meeting on
May 23, 2010, at 10:00 a.m., at the Room 2108, 21st Floor, China
United Centre, 28 Marble Road, North Point, in Hong Kong.
At the meeting, Chan Kwok Tat, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
DAVINES ASIA: Seng Sze and Cheng Step Down as Liquidators
---------------------------------------------------------
Natalia Seng Sze Ka Mee and Cheng Pik Yuk stepped down as
liquidators of Davines Asia Limited on April 15, 2010.
DEGREEASIA LIMITED: Court to Hear Wind-Up Petition on May 26
------------------------------------------------------------
A petition to wind up the operations of Degreeasia Limited will be
heard before the High Court of Hong Kong on May 26, 2010, at
9:30 a.m.
DHARMALA INTERNATIONAL: Fok and Chiong Step Down as Liquidators
---------------------------------------------------------------
Fok Hei Yu and Desmond Chung Seng Chiong stepped down as
liquidators of Dharmala International Limited on April 1, 2010.
EXCEL WAY: Creditors' Meeting Set for April 30
----------------------------------------------
Creditors of Excel Way Investment Limited will hold their meeting
on April 30, 2010, at 3:00 p.m., for the purposes provided for in
Sections 228A, 241, 242, 243, 244 and 251 of the Companies
Ordinance.
The meeting will be held at the 14/F The Hong Kong Club Building,
3A Chater Road, Central, in Hong Kong.
GOLD-FACE ENTERPRISES: Annual Meetings Slated for April 30
----------------------------------------------------------
Members and creditors of Gold-Face Enterprises Limited will hold
their annual meetings on April 30, 2010, at 11:00 a.m., at the
18th Floor, Two International Finance Centre, 8 Finance Street,
Central, in Hong Kong.
At the meeting, Stephen Liu Yiu Keung, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
SMILE SECURITISATION: Fitch Downgrades Ratings on Junior Tranches
-----------------------------------------------------------------
Fitch Ratings has downgraded the junior tranche of Smile
Securitisation Company 2001-1 B.V. and affirmed the rest,
following a review based on Fitch's revised criteria for rating
European granular pools of small corporate loans. The rating
actions taken are:
-- EUR500,000,000 Class A2 senior notes (ISIN XS0140352229):
affirmed at 'AAA'; Outlook Stable; assigned Loss Severity
Rating 'LS-1';
-- EUR30,000,000 Class B2 mezzanine notes (ISIN XS0140353623):
affirmed at 'AAA'; Outlook Stable; assigned 'LS-3';
-- EUR27,500,000 Class C2 junior notes (ISIN XS0140353979):
affirmed at 'AA'; Outlook Stable; assigned 'LS-3';
-- EUR21,000,000 Class D2 subordinated notes (ISIN
XS0140354357): downgraded to 'BB' from 'BBB+'; Outlook
Negative; assigned 'LS-3'.
The affirmations reflect the relatively stable performance with
low levels of default since closing in 2001, as well as the
substantial de-leveraging which increased the credit enhancement
levels especially for the senior tranches. In addition, a reserve
fund at the required level of EUR10 million and an excess margin
of 95bps are available for loss absorption, providing extra credit
enhancement for the transaction.
The downgrade of class D2 reflects the revised assumptions of the
SME CDO rating criteria such that its current credit enhancement
level is no longer commensurate with an investment-grade rating.
The Negative Outlook reflects its vulnerability to the defaults of
the largest obligors and the long weighted average life of the
portfolio of over five years.
While the portfolio has experienced cumulative defaults of 1.1% of
its initial pool balance, the principal deficiency ledger had no
debit balance as all historical bad debt losses were offset by the
excess margin of 95bps and recoveries. After the optional
redemption date in November 2011, any excess spread will be
trapped in the transaction, acting as extra credit enhancement.
The 90-180 days delinquency has remained low at 0.24% of the
outstanding portfolio balance at end- March 2010 and 180 days +
delinquency was also low at 0.25%.
Smile 2001 is a fully-funded static cash flow collateralized loan
obligation referencing a portfolio of loans to Dutch small- and
medium-sized enterprises originated by the former ABN AMRO Bank
N.V. (currently as The Royal Bank of Scotland N.V.). The top 10
obligor exposures in the portfolio represent 6% of the current
portfolio balance at end-February 2010. The majority of the loans
in the portfolio is secured by real estate and has a loan-to-value
ratio of less than 100%.
The portfolio has amortized to 7.7% of its initial balance at end-
March 2010. The principal proceeds received since July 2009, when
class A1, B1, C1 and D1 had been paid in full, were credited to a
principal ledger account which amounted to EUR191m at end-March
2010. Any further principal repayments will continue to credit
the principal ledger and the amounts will be used to pay down the
outstanding classes sequentially after the optional redemption
date in November 2011. According to the repayment schedule, the
amortisation speed will be relatively slow.
Using its Rating Criteria for European SME CLOs, Fitch has assumed
the probability of default of the unrated SME loans to be
commensurate with the 'B' rating category. Based on observed
delinquencies of Smile 2001, the benchmark probability of default
is adjusted upward to 'BB-'. Delinquent loans are assigned a
'CCC' rating. For the recovery assumption for the first-lien real
estate backed loans, the foreclosure values of the real estate are
adjusted for market value stress based on the criteria but second
lien mortgages are treated as senior unsecured loans.
Fitch has assigned an Issuer Report Grade of 'Two Stars' to Smile
2001's investor reports. The Two Star rating reflects basic
information is provided by the performance reports. While the
reports provide good level of information such as monthly recovery
information and line-by-line priority payments, the lack of
information on obligor stratification and counter-party triggers
is holding the reports back from a higher grade.
THUNDERBIRD INVESTMENTS: S&P Withdraws Rating on Series 21 Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its rating on Series
21 notes issued by Thunderbird Investments PLC, following an
unwinding and redemption of the notes.
The rating action on the affected transaction is:
Rating lowered:
Name Rating From Rating To
---- ----------- ---------
Thunderbird Investments PLC D N.R.
Series 21
TITAN PETROCHEMICALS: Exchange Offer Won't Move S&P's CC Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services said that the rating on Titan
Petrochemicals Group Ltd. (CC/Negative/--) is not affected by the
company's proposed new exchange offer for its existing senior
unsecured notes due 2012.
Like its previous tender offer, S&P would view the current offer,
if completed, as constituting a "distressed exchange" tantamount
to an immediate default. S&P would lower the corporate credit
rating to 'SD' (for selective default) and the issue rating on the
notes to 'D' if the proposed transaction is completed.
Titan proposes to exchange each US$1,000 of the principal amount
of the existing notes for about US$600, comprising: (1) US$376 for
the principal amount of new convertible notes due 2015; and (2)
US$224 for the principal amount of new payment-in-kind notes due
2015. The company is also seeking consent from bondholders to
amend restrictive covenants, and eliminate or modify certain
events of default under the existing notes.
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I N D I A
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AIR INDIA: Defers Delivery of Three Boeing 777 Aircraft
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Air India has deferred the delivery of three long-haul Boeing 777
aircraft from next year to beyond 2012 as it tries to reduce
expenses and streamline its fleet of at least 150 aircraft,
livemint.com reports citing two airline officials.
The report, citing one of the official, relates that the carrier
also in talks with the Boeing Co. to convert the order for the
three aircraft, valued at around $450 million (around INR2,000
crore), into one for narrow body Boeing 737s, which it uses to fly
to West Asia and South-East Asia.
Air India will, however, induct three Boeing 777s this year. The
officials told livemint.com that Air India is seeking "bridge
loan" of $450 million from Standard Chartered Plc as a stop-gap
arrangement to purchase these aircraft, until it receives an
already approved loan from the Export-Import Bank of India.
According to livemint.com, the deferred aircraft were part of a
$11 billion order for 111 aircraft placed in 2006.
Air India already has a wide-body fleet of 35 aircraft, including
17 Boeing 777s owned by the carrier and four leased. It is also
expecting the delivery of over two dozen newly launched Boeing 787
aircraft from next year.
The report states that Indian airlines, facing a paucity of funds,
are leasing out or deferring the delivery of long-haul aircraft as
they turn their focus on the shorter West Asian and South-East
Asian routes that offer better returns compared with US and
European destinations.
Air India is in talks with Thai Airways International Public Co.
Ltd and some other carriers to lease out half a dozen Boeing 777s,
the two officials quoted above told livemint.com. The decision is
likely by June.
As reported in the Troubled Company Reporter-Asia Pacific on
June 10, 2009, the National Aviation Co. of India Ltd was seeking
INR14,000 crore in equity infusion, soft loans and grants to cope
up with mounting losses. NACIL is the holding company formed
after the merger of erstwhile Indian Airlines and Air India in
2007.
The TCR-AP, citing the Hindustan Times, reported on June 19, 2009,
that Air India has been bleeding cash due to excess capacity,
lower yield, a drop in passenger numbers, an increase in fuel
prices and the effects of the global slowdown. The carrier
incurred net losses of INR2,226.16 crore in 2007-08 and INR5,548
crore in 2008-09.
In December, the Air India board decided to initiate a series of
major steps to cut costs and enhance savings. The carrier is
focusing on cutting costs by INR1,500 crore and increasing
revenues by INR1,200 crore as per its turnaround plan, according
to the Business Standard.
The airline's turnaround plan has been broadly divided into 0-9
months, 9-18 months and 18-36 months, and has been segregated
under operational efficiency, product improvement, organization
building and financial restructuring, the Business Standard said.
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.
GREAT EASTERN: CRISIL Assigns 'BB-' Rating on INR150MM Term Loan
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CRISIL has assigned its 'BB-/Stable' rating to Great Eastern
Appliances Pvt Ltd's bank facilities.
Facilities Ratings
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INR300 Million Cash Credit BB-/Stable (Assigned)
INR150 Million Term Loan* BB-/Stable (Assigned)
*Includes proposed amount of INR17.2 Million
The rating reflects GEAPL's weak financial risk profile, marked by
small net worth, high gearing, and weak debt protection measures,
and its working-capital-intensive operations. These rating
weaknesses are partially offset by GEAPL's established presence in
the distribution of consumer electronic products in West Bengal.
Outlook: Stable
CRISIL believes that GEAPL will maintain its comfortable business
risk profile backed by widespread retail outlet network,
diversified product profile, and established relationships with
original equipment manufacturers (OEMs). The outlook may be
revised to 'Positive' if GEAPL's financial risk profile improves
because of equity infusion by promoters. Conversely, the outlook
may be revised to 'Negative' if there is significant pressure on
the company's revenues and profitability leading to deterioration
in its financial risk profile.
Set up in 1999 by Mr. Nirmal Baid, GEAPL trades in electronic
goods, including consumer durables, laptops, and mobile phones.
The company has ten retail outlets in Kolkata and the adjoining
areas in West Bengal. The company sells products of Whirlpool
India Ltd, Samsung India Electronics Ltd, Sony India (rated AA/
Negative by CRISIL), Hitachi Home and Life Solutions (India) Ltd
(rated A+/Stable/P1+ by CRISIL), Videocon India Ltd, Voltas India
Ltd, Philips Electronics India Ltd (rated AA/Stable/P1+ by
CRISIL), Godrej and Boyce Manufacturing Company Ltd (rated AA-
/Stable/P1+ by CRISIL), etc.
GEAPL reported a profit after tax (PAT) of INR8.12 million on net
sales of INR893.14 million for 2008-09 (refers to financial year,
April 1 to March 31) against a PAT of INR12.15 million on net
sales of INR685.24 million for 2007-08.
GURUDEVA CHARITABLE: ICRA Puts 'LB+' Rating on INR200MM Term Loan
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ICRA has assigned 'LB+' rating to the INR 500.0 million term loan
of Gurudeva Charitable Trust.
Facilities Ratings
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INR 300.0 million Sanctioned Term Loan LB+
INR 200.0 million Proposed Term Loan LB+
The rating takes into account concentration of GCT's operations
with a single medical college which is in its first year of
operation, project execution risk on account of ongoing capital
expenditure (capex), continuous need to incur further capex to
maintain infrastructural facilities, and funding risk as the term
loan for the on- going capex is yet to be tied-up. The rating
factors in challenges involved in attracting high quality students
and faculty by private educational institutions especially during
initial years of their operations, and the regulatory challenges
involved in the educational sector. Further, the rating is
constrained by irregularity in payment of interest on its term
loan in the last few months reflecting pressure on the liquidity
position of the trust due to delay in securing external funding
for the on-going capex.
The rating derives strength from GCT's experienced management,
healthy demand witnessed for its new medical college as evidenced
by full occupancy levels and the inherent predictability of
revenues associated with educational institutions. Further, the
trustees have made healthy contribution which has reduced the
dependence on the external financing to a certain extent and
helped in keeping the debt-equity ratio (gearing) of the trust at
moderate levels.
GCT was established in the year 2003 by followers of Sri Narayana
Guru (1855?1928) a Hindu saint, sage, prophet and social reformer
of India. The trust currently runs a medical college under the
name of Sree Narayana Institute of Medical Science (SNIMS) located
at Ernakulam (Kerala).
GCT is headed by Dr. K. R. Rajappan who has good amount of
experience in the medical profession and has also setup
Specialists' Hospital in Kochi, Kerala. As on March 31, 2009, GCT
had 345 trustees who had contributed INR 329 million towards the
trust.
JEWEL POLYMERS: CRISIL Puts 'BB-' Rating on INR35 Mil. Cash Credit
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CRISIL has assigned its 'BB-/Stable/P4' ratings to the bank
facilities of Jewel Polymers.
Facilities Ratings
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INR35 Million Cash Credit BB-/Stable (Assigned)
INR100 Million Letter of Credit P4 (Assigned)
The ratings reflect JP's weak business risk profile, marked by low
profitability due to the trading nature of its business, and small
net worth, which constrains its financial risk profile. These
rating weaknesses are partially offset by the firm's longstanding
relationships with customers.
Outlook: Stable
CRISIL believes that JP will maintain a stable financial risk
profile over the medium term on the back of a healthy order book,
and improving profit margins. The outlook could be revised to
'Positive' in case of significant improvement in JP's financial
risk profile, driven by sustained increase in its operating margin
or sizeable equity infusion by the promoter. Conversely, the
outlook could be revised to 'Negative' in case of deterioration in
the firm's liquidity because of delayed receivables, or sharp
decline in its operating margin.
JP, a New Delhi-based proprietorship firm, was set up in 1986 by
Mr. Rajiv Hasija. The firm trades in plastic polymers. It
imports most of its traded goods from Singapore and sells them
across India. The firm derives 80% of its total revenues from the
trading of polyvinyl chloride, and the remaining 20% from trading
in low-density and high-density polymers.
JP reported a profit after tax (PAT) of INR4.06 million on net
sales of INR424.46 million for 2008-09 (refers to financial year,
April 1 to March 31), against a PAT of INR2.70 million on net
sales of INR242.75 million for 2007-08.
MANSI INDUSTRIES: CRISIL Rates INR280MM Rupee Term Loan at 'B+'
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CRISIL has assigned its rating of 'B+/Stable' to the bank
facilities of Mansi Industries Pvt Ltd.
Facilities Ratings
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INR280.0 Million Rupee Term Loan B+/Stable (Assigned)
INR70.0 Million Cash Credit B+/Stable (Assigned)
The rating reflects MIPL's weak financial risk profile, and
exposure to risks relating to its short track record and small
scale of operations in the textile industry. These weaknesses
are, however, partially offset by the company's healthy operating
profitability and the benefits that it derives from its qualified
management.
Outlook: Stable
CRISIL believes that MIPL will maintain a moderate business risk
profile, driven by its satisfactory profitability. The outlook
may be revised to 'Positive' if the company receives substantial
equity infusions, leading to improvement in capital structure.
Conversely, the outlook may be revised to 'Negative' if MIPL's
operating profitability declines considerably, or the company
undertakes large, debt-funded capital expenditure, thereby
weakening its financial risk profile.
Set up as a partnership firm in 2007, MIPL manufactures grey and
dyed fabrics. The company also manufactures yarn beam, primarily
for its own consumption, and undertakes embroidery processes in
its facility in Surat (Gujarat). The company largely sells
polyester grey cloth and single colour dyed cloth to traders and
wholesalers in Surat. The company has more than 700 power looms
and 100 water jet machines. Recently, MIPL has also installed two
embroidery machines and has begun undertaking embroidery orders on
job-work basis. MIPL reported a net loss of INR8.0 million on net
sales of INR236.8 million for 2008-09 (refers to financial year,
April 1 to March 31).
MIHIJAM VANASPATI: Fitch Assigns 'B+' National Long-Term Rating
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Fitch Ratings has assigned Mihijam Vanaspati. Ltd. a National
Long-term rating of 'B+(ind)'. The Outlook is Stable. The agency
has also assigned a National rating of 'B+(ind)' to its fund based
limits aggregating INR85m (cash credit). At the same time, the
agency has assigned a rating of 'F4(ind)' to its non-fund based
limits of INR100m.
MVL's National Long-term rating reflects its comparatively small
scale of operations and its significant exposure to international
crude palm oil price volatility. Also, the company is exposed to
geographic concentration risk since its market reach is limited to
the state of Jharkhand. The agency also notes that MVL's business
is working capital intensive, and requires high working capital
funds to maintain inventories and offer necessary credit periods
to its customers -- another constraining factor for MVL's ratings.
However, the rating benefits from the fact that the company enjoys
local tax benefits from the state government, which results in
substantial savings and provides cost competitiveness to its
products. The agency also notes that the new promoters are
experienced in the import and trading of crude palm oil, which is
beneficial in terms of better raw materials procurements at
competitive terms.
Negative rating factors for the company will be a sustained net
debt/EBIDTA of more than 6x, along with EBITDA margins of below
2%. Conversely, a sustained net debt/EBITDA of below 3x and
EBITDA margins of above 4% would be positive for its ratings.
During FY09, MVL has reported a gross turnover of INR673.2 million
(INR682 million for FY08) along with an operating EBIDTA of
INR23.15 million (INR17.08 million for FY08). Over the past four
years, operating EBIDTA margins have improved from 2% to 3.4%
(FY06-FY09). MVL was acquired by the Kolkata-based Rajesh Auto
Group in 2008, and the rating also considers the advantage of its
established brands "Mamta" and "Cherry" in the local markets,
which helps the direct marketing of end products.
PARAMOUNT COMMUNICATIONS: ICRA Rates INR1.95BB Bank Debts to 'LBB'
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ICRA has downgraded the rating assigned to the INR 1.95 billion
fund based limits of Paramount Communications Limited from 'LBBB-'
to 'LBB'. ICRA has also downgraded the rating assigned rating to
the INR2.75 billion non fund based limits from 'A3' to 'A4'. The
outlook assigned is stable.
The rating revision takes into account the significant pricing
pressures on the domestic cable industry following a worsening of
the supply-demand position, which coupled with increased overheads
due to lower utilization of enhanced capacities and lower than
anticipated production and revenues has resulted in PCL reporting
losses even at the OPBDIT levels in the second and third quarter
of FY 2009-10. Going forward, the company's profitability would
remain vulnerable to the commodity price risk and foreign exchange
fluctuations. This apart, the company having incurred significant
debt funded capital expenditure and acquisitions in the recent
past, has resulted in increased gearing level and pressures on
debt service indicators.
Further, while the company has reported significant profits in Q3
FY 2010 by repurchasing USD 19.5 mn of FCCBs by PCL at a discount
of USD 9.5 million, as this purchase has been funded through
external commercial borrowings, this has not made any fundamental
improvement in the capital structure of the company. ICRA has
however driven comfort from the relatively longer tenure of its
debt following reschedulement of the term loans repayments
structure ad extinguishing of a liability of USD9.5 million on
account of outstanding FCCBs (through repurchase of USD19.5
million of FCCBs by PCL at a discount of USD9.5 million). The
ratings are also supported by PCL's established position in the
domestic power cables, telecom cables & railway cables industry
and a positive outlook on volumes in the long-term driven by the
large quantum of investments expected in the power sector & Indian
Railways, strong client base and a diversified product mix while
keeping the rating in the LBB category.
The business of Paramount Cables was established in 1955. In the
year 1978, a new unit was established under the name of Paramount
Cable Corporation which started supplying telecom cables to the
Department of Telecommunications. Subsequently, it was converted
into a public limited company in September, 1994 as Paramount
Communications Limited.
Currently, PCL is engaged in manufacturing of Power cables (ABC,
HT, LT, control & instrumentation cables) Telecom Cables (JFTC &
OFC); & Railway cables (Signaling cables & Axle counter cables).
The company products cater to many sectors of the economy viz.
Telecommunication, railways, space research, thermal & nuclear
power plants, petrochemicals, fertilizers, steel, electronics &
various other industrial projects. The equity shares of PCL are
listed at the Bombay Stock Exchange Ltd. (BSE) and National Stock
Exchange of India Ltd. (NSE). The Global Depository Receipts
(GDRs) and Foreign Currency Convertible Bonds (FCCBs) issued by
the Company are listed at Luxembourg Stock Exchange.
POLYHOSE RUBBER: Fitch Assigns 'BB+' National Long-Term Rating
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Fitch Ratings has assigned India-based Polyhose Rubber India
Private Limited a National Long-term rating of 'BB+(ind)' with a
Stable Outlook. The agency has also assigned a National Long-term
rating of 'BB+(ind)' to Polyhose's term loans of INR279.9 million
and National ratings of 'BB+(ind)'/'F4(ind)' to its fund based
working capital limits of INR70.0 million and non-fund based
working capital facilities of INR35.0 million.
The ratings reflect Polyhose's market position of as a key
supplier of rubber hoses to Caterpillar's ('A'/Stable/'F1') Italy-
based subsidiary Rapisarda Srl. The ratings also reflect the
involvement of Caterpillar as a joint venture partner providing
both equity capital (30.58% stake in the company by Caterpillar
Asia Pte Limited) and technical assistance, along with a long-term
arrangement with Rapisarda for the worldwide distribution of
Polyhose products.
However, the ratings are constrained by the company's relatively
small scale of operations, low levels of capacity utilization,
steep decline in EBITDA margins during FY09 and delays in the
completion of its capacity expansion project. That said, Fitch
notes that there has been an improvement in capacity utilization
in H2FY10 to above 60% from less than 50% in H1FY10. A sustained
improvement in debt/EBIDTA ratio, gearing and interest coverage is
dependent upon the timely implementation of its capex program to
increase rubber hose production capacity by 3.2 million metres,
resulting in the achievement of projected levels of capacity
utilization, revenues and profitability.
The ratings do not factor in any financial support from the other
management venture, Polyhose India Private Limited.
A sustained decline in EBIDTA margins to below 20% and interest
cover of below 2.4x could pressure the ratings negatively, whereas
a sustained improvement in capacity utilization levels of over 75%
and EBIDTA margins of over 25%, leading to an improvement in total
adjusted debt/EBIDTA below 3.5x would be positive for its ratings.
Conversely, any adverse changes in the terms of the tie-up with
Caterpillar would be negative for Polyhose's ratings.
Polyhose India (Rubber) Private Limited is a manufacturer of
rubber hoses, which is a joint venture between the founders of
Polyhose India Pvt Ltd. and Caterpillar Asia Pte Ltd. The
corporate office and manufacturing facility are located at
Chennai. Polyhose's products are developed with technical
assistance from Rapisarda, a subsidiary of Caterpillar, which
also has the rights to sell/distribute a significant portion of
Polyhose's products globally. During FY09, Polyhose reported
revenues of INR272.2 million, EBIDTA of INR42.1 million (EBITDA
margin 15.5%) and profit after tax (PAT) of INR11.8 million
(PAT margin 4.3%). Furthermore, the interest cover and
debt/EBIDTA were 4.4x and 3.5x, respectively as at FY09. During
the six month ended September 2009, the company reported revenue
INR96.9 million, EBITDA margin of 18% and PAT margin of 0.5%.
Polyhose is currently implementing a capital expenditure program
at a total cost of INR315.0 million, which is being funded with
term debt of INR250.0 million, while the remaining balance is
funded through equity.
PUROHIT & COMPANY: Low Net Worth Prompts CRISIL 'B+' Ratings
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CRISIL has assigned its 'B+/Stable' rating to Purohit & Company's
bank facilities.
Facilities Ratings
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INR21.0 Million Cash Credit B+/Stable (Assigned)
INR128.4 Million Long-Term Loan B+/Stable (Assigned)
INR15.6 Million Proposed Long-Term B+/Stable (Assigned)
Bank Loan Facility
The rating reflects Purohit & Co's fluctuating profitability in
its newspaper division, low profit margin in the cotton yarn
spinning division, and weak financial risk profile, marked by high
gearing, low net worth, and weak debt protection indicators.
These rating weaknesses are partially offset by the established
presence of Purohit & Co's English daily newspaper, The Hitavada,
aided by growing circulation and strong advertising revenues, and
the diversity in its revenue profile.
For arriving at the ratings, CRISIL has combined the financial and
business risk profiles of Purohit & Co and its newspaper division
that publishes the daily, The Hitavada. This is because the net
profit of the newspaper division is transferred to Purohit & Co at
the end of each financial year. However, the assets of the
newspaper division are never reflected in the balance sheet of
Purohit & Co; instead, the accumulated net worth of the newspaper
division is shown as 'sundry debit balances' on the asset side of
the balance sheet.
Outlook: Stable
CRISIL believes that Purohit & Co will benefit from its strong
presence in the newspaper publishing business in central India,
The Hitavada's growing readership base, and the promoters'
experience in the newspaper publication industry. However, its
financial risk profile is expected to remain weak over the medium
term due to debt-funded capital expenditure on setting up the
cotton yarn spinning business. The outlook may be revised to
'Positive' in the event of higher-than-expected improvement in
Purohit & Co's financial risk profile, leading to reduction in
gearing and improvement in debt coverage indicators. Conversely,
the outlook could be revised to 'Negative' if the Purohit group's
liquidity deteriorates, owing to additional debt-funded capital
expenditure, leading to pressures on repayment of term loan
obligations.
About Purohit & Co
Purohit & Co is a registered partnership firm promoted by the
Purohit family. It has two main divisions: the newspaper division
that publishes The Hitavada and the cotton yarn spinning division.
The firm's spinning facility in Nagpur (Maharashtra) is equipped
with 20,000 spindles. The firm also manufactures cottonseed oil.
Purohit & Co reported a profit after tax (PAT) of INR0.1 million
on net sales of INR457.6 million for 2009-10 (refers to financial
year, April 1 to March 31), against a PAT of INR0.1 million on net
sales of INR417 million for 2008-09.
R.K.M. POWERGEN: ICRA Places 'LBB' Rating on INR1.5 Bil. Term Loan
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ICRA has assigned an 'LBB' rating to the INR 1.50 billion term
loan program of R.K.M. Powergen Private Limited.
The LBB rating factors in the current competitive capital cost
structure for the project, which, together with the use of
domestic coal as a fuel, is expected to result in a competitive
unit cost of generation.
The rating also favorably factors in the progress made towards the
implementation of the 1430 MW thermal power project at
Chhattisgarh including the receipt of key approvals/clearances,
signing up of power transmission agreement with PGCIL, acquisition
of a large portion of the land required, tying up of the coal
requirement (both through captive coal blocks and coal linkage)
and long term power sale arrangements for part of the planned
capacity. The rating is however constrained by the implementation
risks inherent in greenfield projects, particularly given the
early stage of implementation, and the absence of a demonstrated
track record of the project sponsors and the major project
participants in the development of thermal power projects of
similar scale. Besides, the relatively aggressive targeted
schedule of implementation together with the execution of the
power project through the package route rather than the single EPC
contract mode would present additional challenges in execution.
Moreover, the project is also exposed to technology risks given
the proposed use of imported boiler, turbine, generator (BTG) and
balance of plant (BOP) equipment from vendors which have a limited
track record in Indian conditions till date.
ICRA notes that the project is being developed in two phases, of
which, Phase 2 (1080 MW) has not yet achieved full financial
closure with respect to debt, although sanctions have been
received for almost the entire amount of debt. Further, while the
project would entail substantial equity funding, the ability of
the sponsors to contribute such equity in a timely manner remains
to be seen.
RKM Powergen has been allocated coal linkages as well as a captive
coal block; the conversion of the Letters of Assurance (LoAs) into
firm fuel supply agreements (FSA) and the ability to develop the
captive coal block allotted would however be critical.
Further, given any shortfall in contracted quantity (on account of
short supply by South Eastern Coalfields Limited or delays in coal
block development) of coal relative to the required level, the
Company's ability to tie up the balance at competitive rates would
directly impact the unit cost of generation especially as the
captive coal block is still at a nascent stage of development.
Part of the capacity (30% of net power generated) has been
contracted to Chhattisgarh State Electricity Board (CSEB) through
a long term power purchase agreement (PPA) based on a two-part
tariff structure, while a large part of the balance capacity (700
MW net) has been contracted to PTC India Limited (PTC) for a 12-
year term. While the agreement with PTC guarantees a minimum price
of INR 3 per unit to RKM Powergen, ICRA notes that the
continuation of such an arrangement depends on the movements in
long term merchant power prices.
RKM Powergen is an SPV promoted by the Chennai based R.K. Powergen
Group (74% holding) and the Malaysia based Mudajaya Group (26%
holding) for the development of a 1430 domestic coal based thermal
power project at Chhattisgarh in 2 phases (Phase 1 of 350 MW (1 x
350) and Phase 2 of 1080 MW (3 x 360)). The equity to be infused
by Mudajaya Group would be at a substantial premium such that the
proportion of actual equity to be ontributed towards the project
cost would be in the ratio of 26:74 with the latter denoting
Mudajaya Group's contribution.
The R.K. Powergen Group operates a 20 MW biomass based power plant
in Karnataka while the Mudajaya Group is a largely engaged in EPC
works for various sectors including roads, water, power (civil
works) etc. The total project cost of INR 66.53 billion is being
funded through debt of INR 50.65 billion and equity of INR 15.89
billion. As on date, approx INR 6.06 billion has been spent on
the project which has been funded by equity of INR 4.10 billion
and the balance by debt. Unit 1 of the power plant is scheduled
to be commissioned by June 2011, with the other 3 units following
with a 3 month gap for each unit. Financial closure has been
achieved for Phase 1 and is in advanced stages in case of Phase 2.
Of the total land required of 900 acres, 739 acres have been
acquired till date; most major approvals are in place.
R. M. KNITTERS: CRISIL Assigns 'BB' Ratings on Various Bank Debts
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CRISIL has assigned its 'BB/Stable' rating to the bank facilities
of R. M. Knitters Pvt Ltd.
Facilities Ratings
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INR48.5 Million Long-Term Loan BB/Stable (Assigned)
INR45.0 Million Cash Credit BB/Stable (Assigned)
INR6.5 Million Proposed LT BB/Stable (Assigned)
Bank Loan Facility
The rating reflects RMK's financial risk profile, constrained by
high gearing and small net worth, and exposure to risks related to
its working-capital-intensive operations. These rating weaknesses
are partially offset by the benefits that RMK derives from its
healthy operating efficiencies, resulting from its diversification
into manufacture of high-value-added products and cost reduction
initiatives.
Outlook: Stable
CRISIL believes that RMK will maintain a moderate business risk
profile and diversity in its product profile, resulting in stable
revenue growth, over the near to medium term. The outlook may be
revised to 'Positive' if RMK improves its gearing and working
capital management. Conversely, the outlook may be revised to
'Negative' if RMK's financial risk profile deteriorates because of
pressure on operating profitability, or if it contracts large debt
to fund its capital expenditure.
Set up in 2002 by Mr. Narendra Jiwarajka and Mr. Surendra
Jiwarajka, RMK manufactures basic, technical, and fancy polyester
fabric. The company has an integrated facility with 74 knitting
machines and 2 texturising machines in Silvassa (Dadra and Nagar
Haveli).
RMK reported a profit after tax (PAT) of INR3.3 million on net
sales of INR287.8 million for 2008-09 (refers to financial year,
April 1 to March 31), against a PAT of INR2.2 million on net sales
of INR239.4 million for 2007-08.
ROHIT EXTRACTIONS: CRISIL Rates INR100 Million Cash Credit 'BB-'
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CRISIL has assigned its 'BB-/Stable' rating to Rohit Extractions
Pvt Ltd's cash credit facility.
Facilities Ratings
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INR100 Million Cash Credit* BB-/Stable (Assigned)
*Includes proposed amount of INR50 Million
The rating reflects REPL's below-average financial risk profile,
marked by low operating margins, moderate gearing, and weak debt
protection measures, and exposure to risks related to its average
scale of operations and intense competition in the edible oil
industry. These rating weaknesses are partially offset by the
benefits that REPL derives from its promoters' experience and
strong track record in the rice bran processing segment of the
solvent extraction business.
Outlook: Stable
CRISIL believes that REPL will continue to benefit from its
established relationships with customers and suppliers over the
medium term. The outlook may be revised to 'Positive' if REPL
improves its scale of operations, profitability, and debt
protection measures significantly. Conversely, the outlook may be
revised to 'Negative' if REPL's profit margins reduce
significantly, or if it undertakes a large, debt-funded capital
expenditure program.
Incorporated in 1990 as a private limited company, REPL processes
rice bran oil. The company manufactures unrefined rice bran oil
and de-oiled rice bran cake, which is used as animal feed. REPL
has rice bran processing capacity of 0.1 million tonnes per annum
near Hyderabad.
REPL reported a profit after tax (PAT) of INR5.50 million on net
sales of INR732.6million for 2008-09 (refers to financial year,
April 1 to March 31) against a PAT of INR5.80 million on net sales
of INR700.9 million for 2007-08.
SATYA PRAKASH: ICRA Assigns 'LBB+' Rating on INR135MM LT Loans
--------------------------------------------------------------
ICRA has assigned an 'LBB+' rating to the INR 135 million long
term bank limits of Satya Prakash Hotels Private Limited. ICRA
has assigned a stable outlook to the long term rating.
The rating is constrained by SPHPL's small scale of operations and
business concentration on a single property at Kakinada,
competition from existing as well as upcoming hotel supply which
could stress achievable Average Room Rates (ARRs) and occupancy
levels, susceptibility of revenues to erosion risks in the event
key corporate clients opt to construct their own guesthouses, the
weak debt coverage metrics on account of debt-funded capex
incurred in FY 08 and the likely deterioration in capital
structure on account of the planned expansion of the hotel, which
will be 63% debt funded. The rating, however, favorably factors
in the strong growth in ARRs and Revenue per Available Room
(RevPAR), healthy occupancy levels witnessed by the hotel, high
promoter involvement in the operations and expansion of the
property, favourable operating environment on account of large
planned investments around Kakinada and the hotel's competitive
advantage arising out of superior facilities offered compared to
competing properties.
Promoted by Mr. M. Surya Prakash, Satya Prakash Hotels Private
Limited owns and operates a 74-room 3-star hotel in Kakinada-
Hotel Ishwarya Grand. The hotel has been operational since 1992
under a different name (Tripura International Hotel) and was
acquired by the present management in 2003. Between FY 04 and FY
07 the hotel operated with 40 rooms. Following successive
capacity expansions, the number of rooms increased to 52 in FY 08
and further to 74 in FY 09. A further round of expansion is
planned which will increase the number of rooms to 95 in FY 11.
SARDA PLYWOOD: CRISIL Assigns 'B+' Rating on INR6.3 Mil. Term Loan
------------------------------------------------------------------
CRISIL has assigned its 'B+/Stable/P4' ratings to the bank
facilities of Sarda Plywood Industries Ltd-.
Facilities Ratings
---------- -------
INR227.5 Million Cash Credit Limit B+/Stable (Assigned)
INR6.3 Million Term Loan B+/Stable (Assigned)
INR80.1 Million Proposed Long-Term B+/Stable (Assigned)
Bank Loan Facility
INR180.0 Million Letter of Credit P4 (Assigned)
INR22.0 Million Bank Guarantee P4 (Assigned)
INR80.0 Million Proposed Short-Term P4 (Assigned)
Bank Loan Facility
The ratings reflect the group's weak financial risk profile,
marked by low operating margins and weak debt protection measures,
and the susceptibility of its margins to intense competition in
the plywood industry. These rating weaknesses are partially
offset by the benefits that the Sarda group derives from the
strong market positioning of its 'Duro' brand and the group's
long-standing track record in the plywood industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of Sarda Plywood Industries Ltd and its
group company, PS Plywood Products Pvt Ltd. This is because the
two companies, together referred to as the Sarda group, have
strong operational linkages between them. There is a license
agreement in place between PSPPL and SPIL under which PSPPL's
entire plywood production is on account of SPIL. In return, SPIL
pays PSPPL a license fee of INR2 million per month. Furthermore,
SPIL holds a 46.67 per cent stake in PSPPPL. The management had
earlier planned to merge PSPPL with SPIL; however, this proposal
was disallowed by the Bombay Stock Exchange (BSE).
Outlook: Stable
CRISIL believes that the Sarda group will benefit from the
increasing share of branded products in the plywood and laminates
industry. This would help the group in increasing its scale of
operations and improving its profitability. The outlook may be
revised to 'Positive' if the company posts higher-than-anticipated
cash accruals, most likely because of better profitability and
working capital management. Conversely, the outlook may be
revised to 'Negative' in case the Sarda group's financial risk
profile deteriorates, most likely because of decline in operating
profitability led by volatility in raw material prices and forex
rates, and adverse changes in the timber export policy of foreign
countries.
About the Group
Incorporated in 1957 as a private limited company, SPIL became a
deemed public limited company in 1974 and is currently listed on
the Bombay Stock Exchange Ltd.
SPIL initially manufactured plywood and allied products with a
capacity of 6.4 million square meters per annum at its plant in
Jeypore (Assam). In 1996, in view of the orders of the Supreme
Court of India, cutting and felling of tress was banned in North-
East India, and operations of all wood-based industries took a
severe hit. Since then, SPIL started trading in plywood sourced
from other plywood manufacturers. In 2007 SPIL acquired 46.67 per
cent of PSPPPL, a company based in Rajkot (Gujarat). During the
period in which SPIL's plywood plant had to be shut down, it
started a 'bought leaf tea' processing factory, which as on date
has a processing capacity of 3.7 million kilograms of tea per
annum. Currently, the Sarda group has two business divisions -
plywood and tea. SPIL sells plywood under its 'Duro' range of
brands.
The Sarda group reported a net loss of INR22.2 million on net
sales of INR1.03 billion for 2008-09 (refers to financial year,
April 1 to March 31), against a PAT of INR2.5 million on net sales
of INR894.9 million for 2007-08.
SAVORIT LIMITED: Fitch Assigns National Long-Term Rating at 'B-'
----------------------------------------------------------------
Fitch Ratings has assigned India's Savorit Limited a National
Long-term rating of 'B-(ind)'. The Outlook is Stable. The agency
has also assigned ratings to these bank loans:
-- Fund based working capital limits of INR70.0m at 'B-
(ind)/F4(ind)';
-- Non-fund based limits of INR60.55 million at 'B-
(ind)/F4(ind)'; and
-- Outstanding term loans of INR62.34 million at 'B-(ind)'.
The ratings reflect the experience of Savorit's promoter in the
flour milling & pasta industry, and its long track record in the
Tamil Nadu market for wheat products and pasta products. The
ratings also factor the improvement in EBIDTA margins since FY08.
(FY08: -0.2%, FY09: 3.8%, 9MFY10: 4.6%).
The ratings are constrained by Savorit's low levels of interest
coverage (FY09: 1.27x), and its high levels of leverage in the
form of debt/EBIDTA (FY09: 7.08x) and gearing (FY09: 4.7x). Other
ratings restraints include the stretched levels of EBIDTA DSCR for
principal and interest obligations at 0.85x in FY09, which are
expected to rise to around 1x for FY10 and FY 11. The fragmented
and competitive nature of the flour milling industry in India,
susceptibility to agro-climatic risks, and central and state
government regulations also weigh on the company's ratings.
Fitch notes that Savorit's financial position has substantially
improved over the last five years, and the company has been able
to settle substantial amounts of debt which it had defaulted on
during 1990s. Its revenues have improved to INR655.1m in FY09
from INR95.4m in FY05, and EBITDA has turned positive from FY09
onwards. The company plans to settle a disputed loan of INR16.3m
owed to a Non-Banking Finance Company (NBFC) since the 1990's from
FY12 onwards.
Positive rating triggers include a sustained improvement in EBIDTA
margins above 4.5%, leading to a sustained decrease in total
debt/EBIDTA below 6x; while a sustained decline in EBIDTA margins
below 3.5% and a sustained fall in interest cover below 1.5x would
be considered negative rating triggers.
Savorit's flour mill in Chennai, Tamil Nadu, has a milling
capacity of 216 metric tonnes per day. The pasta division in
Dindigul, Tamil Nadu, has a production capacity of 36 metric
tonnes per day. For FY09, Savorit reported revenues of
INR655.1 million, operating EBIDTA of INR24.8 million, and net
income of INR2.6 million.
SCOTTISH CHEMICAL: Low Net Worth Prompts CRISIL 'P4+' Ratings
-------------------------------------------------------------
CRISIL has assigned its 'P4+' rating to Scottish Chemical
Industries bank facilities.
Facilities Ratings
---------- -------
INR150.0 Million Export Packing Credit P4+ (Assigned)
INR0.5 Million Bank Guarantee P4+ (Assigned)
INR2.2 Million Proposed Short-Term Bank P4+ (Assigned)
Loan Facility
The rating reflects SCI's small scale of operations, low net
worth, and exposure to risk associated with limited bargaining
power with principal, Mahan Protein Ltd. These rating weaknesses
are partially offset by SCI's satisfactory financial risk profile,
marked by moderate debt protection indicators, and low debtor and
inventory risks associated with the trading business.
SCI was established in 1986 as a partnership firm by Mr. Kamal
Khandelwal and his wife. The firm, a 100 per cent export oriented
unit, trades in and manufactures various industrial chemicals and
fluxes which are used in aluminium foundries, and distributor of
Mahan for acid casein (used as milk protein). The manufacturing
operations of the firm are ISO 9001 and 14001:2000 certified.
SCI reported a profit after tax (PAT) of INR47.3 million on net
sales of INR627.8 million for 2008-09 (refers to financial year,
April 1 to March 31) against a PAT of INR47.5 million on net sales
of INR663.8 million for 2007-08.
VINDHYACHAL HYDRO: ICRA Places 'LBB+' Rating on INR250MM LT Loan
----------------------------------------------------------------
ICRA has assigned an 'LBB+' rating to the INR250.0 million long
term fund based bank facilities of Vindhyachal Hydro Power
Limited. The outlook of the assigned rating is stable.
The rating is constrained primarily by the execution risks arising
from the large expansion plans that are being undertaken by the
group companies, where VHPL has been extending support in the form
of corporate guarantees and equity infusions. ICRA notes that the
size of these investments are significant in relation to the
existing operating cash flows of VHPL, the risks are also
heightened in view of the variability in cash flows that are
typical of Hydro power plants given that the operating units are
not covered under deemed generation clause in case of factors like
shortage of water. The rating however draws comfort from the
track record of satisfactory operations in both plants of VHPL,
firm off take arrangement with INOX Air Products Limited (INOX),
and limited demand risks due to significant energy deficit in
western India. The positives derived from the company's favorable
profitability indicators and capital structure is partly offset by
the large Contingent Liability of INR 289.0 million, consisting of
Guarantee extended towards a group company debt. The rating also
draws comfort from additional revenue generation for a period of
10 years (till FY2012) from the sale of carbon emission reduction
certificates for both the projects registered as clean development
mechanism (CDM) projects with United Nations Framework Convention
on Climate Change (UNFCCC) and a relatively low gearing at a
standalone level at 0.33x as on 31st March, 2009.
Vindhyachal Hydro Power Limited is a company promoted by Shrikant
Somani group to develop, own and operate two 3 MW small hydro
power (SHP) projects in Thane and Pune Districts of Maharashtra.
These projects are backed by MOUs with Government of Maharashtra
Irrigation Department (GOMID), and Maharashtra Krishna Valley
Development Corporation (MKVDC) respectively. The Group also
operates a 4.5 MW SHP (Sarbari-I) and is currently developing two
SHPs in the state of Himachal Pradesh.
=========
J A P A N
=========
HITACHI LTD: Sees Narrower FY2009 Net Loss of JPY110 Billion
------------------------------------------------------------
Hitachi Ltd. has revised its group net loss projection for the
fiscal year ended March 31, 2010 to JPY110 billion from an earlier
projected JPY210 billion due to improved earnings and successful
cost-cutting measures.
Hitachi said it has raised its overall revenue forecast for the
fiscal year ended March 31, 2010, of JPY260 billion from the
previous forecast issued on February 24, 2010, due predominantly
to higher-than-expected revenues in the Power & Industrial Systems
and Electronic Devices operations.
Hitachi Ltd. (NYSE:HIT) -- http://www.hitachi.co.jp/-- develops a
diversified product mix ranging from electricity generation
systems to consumer products and electronic devices. The Company
has seven segments: Information & Telecommunication Systems,
Electronic Devices, Power & Industrial Systems, Digital Media &
Consumer Products, High Functional Materials & Components,
Logistics, Services & Others and financial services. In April
2008, Hitachi acquired a majority ownership interest in M-Tech
Information Technology, Inc. In April 2008, Hitachi, Ltd.
established a wholly owned subsidiary, Hitachi Information &
Telecommunication Systems Global Holding Corporation. In March
2008, Hitachi Consulting, the global consulting company of
Hitachi, acquired JMN Associates. On March 16, 2009, the Company
made Hitachi Koki Co., Ltd. a subsidiary via share purchase. On
March 18, 2009, the Company made Hitachi Kokusai Electronic Inc. a
subsidiary via share purchase.
JLOC XXXI: S&P Downgrades Ratings on Class C Certificates
---------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'BBB' from 'A-' its
rating on JLOC XXXI Trust Certificates' class C and placed the
ratings on classes B to D on CreditWatch with negative
implications. At the same time, Standard & Poor's affirmed its
ratings on classes A and X issued under the same transaction.
On Sept. 3, 2009, S&P lowered its ratings on classes C and D as
S&P designated three of the transaction's twelve remaining
nonrecourse loans as "loans considered to be in default."
The negative CreditWatch placements are based on S&P's view that
there appears to be uncertainty over the recovery prospects of the
properties backing an additional eight of the transaction's twelve
remaining underlying loans. This is because:
With respect to four underlying loans (to all intents and purposes
one loan, as these four loans were extended to the same obligor
and represent 12.6% of the initial issuance amount of the trust
certificates, one of the four loans is due to mature in April
2010) there is greater likelihood of non-repayment by the maturity
date. Accordingly, S&P view the recovery prospects of the related
collateral property with considerable uncertainty based on the
possibility that the loan may indeed not be repaid and the related
collateral property may need to be liquidated.
S&P is of the opinion that there appears to be uncertainty over
the recovery prospects of the property backing another
(representing 0.4% of the initial issuance amount of the trust
certificates) of the eight underlying loans that is due to mature
in October 2010. The leverage ratio is rather low. On the other
hand, the collateral is a regional property.
The other three loans (representing a combined 9.0% or so of the
initial issuance amount of the trust certificates) are due to
mature in 2012, or thereafter. Hence, there remains a certain
amount of time until maturity. However, S&P has learned through
the report provided by the servicer that the cash flow of some of
the related collateral properties has declined, putting pressure
on the properties' underwriting values.
S&P downgraded class C because: although S&P has yet to finalize
S&P's assessment of the recovery prospects of the properties
backing the aforementioned eight loans, it is S&P's view that a
certain level of decline in the likely recovery amount from the
properties appears inevitable. S&P intends to review its ratings
on classes B to D after assessing the recovery prospects of the
properties backing the eight loans.
S&P affirmed its ratings on classes A and X. Ten out of the
twenty-two nonrecourse loans that initially backed the trust
certificates have already been repaid. The proceeds have been
used to make payments to the upper level tranches of the trust
certificates in a sequential order. Hence, credit enhancement for
the class A trust certificates has improved from its initial
level.
JLOC XXXI is a multi-borrower CMBS transaction. The trust
certificates were initially secured by 22 nonrecourse loans, which
were originally backed by 62 real estate properties. The
transaction was arranged by Morgan Stanley Japan Securities Co.
Ltd., and ORIX Asset Management & Loan Services Corp. is the
transaction servicer.
The ratings address the full and timely payment of interest and
the ultimate repayment of principal by the transaction's legal
final maturity date for the class A trust certificates, the full
payment of interest and ultimate repayment of principal by the
legal final maturity date for the class B to D certificates, and
the timely payment of available interest for the interest-only
class X certificates.
Rating Lowered, Placed On Creditwatch Negative
JLOC XXXI Trust Certificates
JPY24.3 billion trust certificates due February 2015
Class To From Initial Issue Amount
----- -- ---- --------------------
C BBB A- JPY0.9 bil.
Ratings Placed On Creditwatch Negative
JLOC XXXI Trust Certificates
Class To From Initial Issue Amount
----- -- ---- --------------------
B AA/Watch Neg AA JPY1.1 bil.
D B-/Watch Neg B- JPY0.7 bil.
Ratings Affirmed
JLOC XXXI Trust Certificates
Class Rating Initial Issue Amount
----- ------ --------------------
A AAA JPY21.6 bil.
X AAA JPY24.3 bil. (initial notional principal)
LMP LOAN: Moody's Reviews Ratings on Various Series 2007-1 Notes
----------------------------------------------------------------
Moody's Investors Service reviews the ratings of the Series 2007-1
Class A, B, and C Senior Beneficial Interests issued by LMP Loan
Master Trust for possible downgrade.
The Senior Beneficial Interests of the transaction were issued in
October 2007 and are backed by a pool of real estate-backed SME
loans originated by SFCG Co., Ltd., and a subsidiary.
The complete rating actions:
* Deal Name: LMP Loan Master Trust
* Initial Servicer: SFCG Co., Ltd.
-- Class A, Ba3 Placed Under Review for Possible Downgrade;
previously on August 12, 2009 Downgraded to Ba3 from Baa3
-- Class B, Caa2 Placed Under Review for Possible Downgrade;
previously on August 12, 2009 Downgraded to Caa2 from B2
-- Class C, Caa3 Placed Under Review for Possible Downgrade;
previously on August 12, 2009 Downgraded to Caa3 from B3
The rating actions reflect Moody's view that, given the limited
amount of time before final maturity, which may lead to an
increase in the number of collateral properties to be auctioned
off, the recovery rate from the collateral properties may decline
further.
SFCG, an initial servicer for this transaction, filed for civil
rehabilitation in Tokyo District Court on February 23, 2009.
On March 24, 2009, the court terminated the proceedings, and on
April 21, 2009, ordered the company to commence bankruptcy
proceedings.
The servicing and special servicing of all the loan receivables in
the transaction were thus transferred to the back-up servicer and
special servicer.
On May 13, 2009, Moody's changed one of its assumptions -- to one
that no collections from obligors can be anticipated and only
payments from the collateral properties can be expected -- and
lowered the recovery rate. (The assumed average recovery rate on
loans was approximately 50-60%.) This led to the downgrade on the
Class A through C Beneficial Interests.
On August 12, Moody's further downgraded the Class A through C
Beneficial Interests when it learned that collections would be
made through auctions.
As of February 2010, according to the special servicer's plan, 75%
of the 200 properties were scheduled for auction. Moody's has
received reports detailing the results of 22 of the auctions.
In addition, the special servicer is revising its business plan,
including its estimates for the collection amounts and its
collection schedules.
The final maturity of this deal takes place on March 25, 2011.
Because of the persistently depressed real estate market, Moody's
believes that the number of properties to be auctioned off may
rise before the market has a chance to recover and the recovery
rate from the collateral properties may decline further -- hence,
Moody's placed the Class A through C Beneficial Interests under
review for possible downgrade.
Moody's will decide on its ratings after reviewing actual
collection results, the auction results, and the revised business
plan.
For reference, the number of obligors in this transaction was
around 80, and collateral properties, 200, as of the end of
February 2010. Also, the deal currently comprises a certain
amount of funds in a cash reserve for liquidity, the level of
which should be monitored.
ORSO ABS: Moody's Reviews Ratings on Various Classes of Certs.
--------------------------------------------------------------
Moody's Investors Service has placed under review for possible
downgrade the ratings of the Class C through E Trust Beneficial
Interests issued by Orso ABS Funding Trust 1 -- SFFC.
The Beneficial Interests were issued in September 2007 and are
backed by a pool of real estate-backed SME loans originated by SF
Fudosan Credit Co., Limited (now, Real Estate Credit, Ltd.).
The complete rating actions:
* Deal Name: Orso ABS Funding Trust 1 -- SFFC Trust Beneficial
Interests
* Initial Servicer: SFCG Co., Ltd.
-- Class C, Ba3 Placed Under Review for Possible Downgrade;
previously on May 13, 2009 Downgraded to Ba3 from A3
-- Class D, Caa2 Placed Under Review for Possible Downgrade;
previously on November 27, 2009 Downgraded to Caa2 from B2
-- Class E, Caa3 Placed Under Review for Possible Downgrade;
previously on November 27, 2009 Downgraded to Caa3 from B3
These rating actions reflect Moody's view that the likelihood of
losses on the Class C through E Beneficial Interests may rise
because of 1) a further, substantial reduction in the Subordinated
Trust Beneficial Interest and 2) potential deterioration in the
recovery rate, in light of the collection reports and business
plan.
SFCG, an initial servicer of this transaction, filed for civil
rehabilitation in Tokyo District Court on February 23, 2009.
On March 24, 2009, the court terminated the proceedings, and on
April 21, 2009, ordered the company to commence bankruptcy
proceedings.
The servicing and special servicing of all loan receivables in the
transaction were transferred to the back-up servicer, Premier
Asset Management Company.
On May 13, 2009, Moody's changed one of its assumptions -- to one
that no collections from obligors can be anticipated and that only
payments from the collateral properties can be expected -- and
lowered the recovery rate. (The assumed average recovery rate on
loans was approximately 50-60%.) This led to the downgrade on the
Class A through E and X Beneficial Interests.
On November 27, Moody's had downgraded the Class D and E
Beneficial Interests based on the pace and recovery rate of
property sales in the collection reports, as the reports implied
that the lowered recovery rate had become much more likely and
that the likelihood of losses for the Class D and E Beneficial
Interests had grown significantly.
So far, the recovery rate for the collateral properties is within
Moody's assumptions. As the sale of collateral properties has
progressed, a portion of the Class A Beneficial Interest has been
redeemed, with only around 10% of its initial amount unredeemed as
of March 2010.
However, as the sale of the collateral properties progresses, the
amount of uncollected loan receivables will become more evident.
In Moody's view, this will result in a substantial reduction in
the Subordinated Trust Beneficial Interest, based on its
assumption that payments from obligors cannot be expected, which
will lead to a further decline in the credit enhancement for the
Class D and E Trust Beneficial Interests, whose priority with
regard to principal redemption is subordinated.
In addition, the special servicer has revised its business plan
for the collateralized properties. The number of properties that
will have to be auctioned off for collection is increasing.
Moreover, the scheduled collection amount has declined around 20%
from the estimate in the April 2009 business plan, which is lower
than Moody's assumed recovery rate.
If the pace of sales and the recovery rate remain at their current
levels, the likelihood of losses on the Class D and E Beneficial
Interests will rise. And if the collection amounts are as low as
assumed in the servicer's business plan, the Class C Beneficial
Interests will also suffer losses. Therefore, Moody's placed the
ratings on the Class C through E Trust Beneficial Interests under
review for possible downgrade.
Moody's will decide on the ratings after reviewing the actual
collection results, the auction results, and the special
servicer's collection policy.
For reference, the number of obligors in this transaction was
around 80, and properties, around 110. The final maturity is in
September 2012.
Also, the deal currently comprises a certain amount of funds in a
cash reserve for liquidity, the level of which should be
monitored.
ORSO FUNDING: Moody's Reviews Ratings on Various Classes
--------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings for the Class A through G and X Trust
Certificates issued by Orso Funding CMBS 2005-2 Trust. The final
maturity of the trust certificates will take place in July 2012.
The individual rating actions are listed below.
-- Class A, Aaa placed under review for possible downgrade;
previously on July 25, 2005 definitive rating assigned Aaa
-- Class B, Aa2 placed under review for possible downgrade;
previously, confirmed at Aa2 on June 12, 2009
-- Class C, A3 placed under review for possible downgrade;
previously, downgraded to A3 from A2 on June 12, 2009
-- Class D, Baa3 placed under review for possible downgrade;
previously, downgraded to Baa3 from Baa2 on June 12, 2009
-- Class E, Ba3 placed under review for possible downgrade;
previously, downgraded to Ba3 from Ba2 on June 12, 2009
-- Class F, B1 placed under review for possible downgrade;
previously, downgraded to B1 from Ba3 on June 12, 2009
-- Class G, B2 placed under review for possible downgrade;
previously, downgraded to B2 from B1 on June 12, 2009
-- Class X, Aaa placed under review for possible downgrade;
previously on July 25, 2005 definitive rating assigned Aaa
Orso Funding CMBS 2005-2 Trust, effected in July 2005, represents
the securitization of non-recourse loans and specified bonds to
seven borrowers. The transaction is currently secured by two non-
recourse loans.
On April 21, 2010, Moody's received a report from the transaction
trustee on the prospects of either keeping the current tenant or
finding a new one for one of the properties (an office building in
Tokyo) backing one of the non-recourse loans. The report also
provided the minutes of discussions among the transaction parties
relating to this matter. The loan will mature in July 2010.
These rating actions reflect Moody's growing concerns about
negative effect on its recovery assumptions for the property of
the prospects of keeping the current tenant or finding a new one.
As part of its review, Moody's will question the transaction
parties, including the loan's asset manager, on their exit
strategies and leasing prospects. Moody's will also review its
recovery assumptions for the property for the other loan.
TAKEFUJI CORPORATION: Saves Money to Redeem Convertible Bonds
-------------------------------------------------------------
Takefuji Corp. is saving money to be able to redeem its
convertible bonds, Bloomberg News reports citing Citigroup Inc.
Takefuji has JPY42.4 billion ($450 million) of 1.5% notes due in
2018 outstanding that investors can ask it to redeem on June 19,
according to data compiled by Bloomberg.
Bloomberg relates Katsuhide Takahashi, a credit specialist at
Citigroup Global Markets Japan, said in a note to clients on
Monday, that the company's current efforts to increase liquidity
will enable it to "prepare the necessary amount of cash."
Credit Ratings Downgrade
The Troubled Company Reporter-Asia Pacific reported on March 29,
2010, Moody's Investors Service lowered to Caa2 from Caa1 the
long-term issuer and senior unsecured debt ratings of Takefuji
Corporation, and placed them for them for possible further
downgrade.
The TCR-AP also reported on Dec. 18, 2009, that Standard & Poor's
Ratings Services revised to 'CCC-' from 'SD' its long-term
counterparty credit rating on Takefuji Corp., reflecting S&P's
assessment of the company's credit quality subsequent to the
implementation of debt restructuring. At the same time, S&P
affirmed its 'CCC-' rating on the outstanding senior unsecured
bonds issued by Takefuji. The outlook on the long-term
counterparty credit rating is negative.
S&P revised its long-term counterparty credit rating on
Takefuji to 'SD' with the intention of keeping it on 'SD' for one
day, based on S&P's opinion that a debt exchange of convertible
bonds (NR) that the company completed on Dec. 14, 2009,
constituted debt restructuring due to financial distress.
The 'CCC-' rating and negative outlook reflect S&P's view that
Takefuji's liquidity position remains severe. Ahead of the full
implementation of the amended Money Lending Business Law
(scheduled to occur by mid-2010), Takefuji's asset size and
interest income have been declining. In addition, both the burden
of refunds of overcharged interest and that of near-term debt
repayments remain high. The rating may come under further
downward pressure if the liquidity risk assumed by Takefuji
increases, or S&P sees it as likely that the company will conduct
further debt restructuring that is recognized as a default under
S&P's rating criteria. Conversely, Takefuji's credit quality
would likely benefit if the company can improve its financial
standing by securing funds through asset disposals or raising new
funds.
About Takefuji
Takefuji Corporation (TYO:8564) --http://www.takefuji.co.jp/ is a
Japan-based company mainly engaged in the consumer finance
business. The Company operates in two business segments. The
Consumer Finance segment covers the loan and credit card
businesses. The Others segment is involved in the operation of
golf courses, the development, management and leasing of real
estate, the venture capital business, as well as the investment
business, among others. The Company has eight subsidiaries.
TITAN JAPAN: Moody's Reviews Ratings on Various Classes of Notes
----------------------------------------------------------------
Moody's Investors Service has placed the Class A through D and
Class X Notes of Titan Japan, Series1 GK, a CMBS transaction, on
review for possible downgrade.
The final maturity of the Notes will take place in November 2012.
The individual rating actions are listed below.
-- Class A, Aa1 Placed Under Review for Possible Downgrade;
previously on July 8, 2009 Downgraded to Aa1 from Aaa
-- Class B, A1 Placed Under Review for Possible Downgrade;
previously on July 8, 2009 Downgraded to A1 from Aa2
-- Class C, Baa2 Placed Under Review for Possible Downgrade;
previously on July 8, 2009 Downgraded to Baa2 from A2
-- Class D, Ba2 Placed Under Review for Possible Downgrade;
previously on July 8, 2009 Downgraded to Ba2 from Baa2
-- Class X, Aa1 Placed Under Review for Possible Downgrade;
previously on July 8, 2009 Downgraded to Aa1 from Aaa
Titan Japan, Series 1 GK, effected in December 2007, represents
the securitization of six non-recourse loans. Currently, the
underlying assets of the transaction are five non-recourse loans
since one non-recourse loan had been prepaid before its maturity
date.
The rating actions reflect Moody's growing concerns about the
performance of the properties. The performances of some
properties -- in terms of occupancy rates and rent levels -- have
been deteriorating.
The rents and cash flows of the single tenants in tenant-
concentrated retail properties outside of Tokyo are likely to
decline as well. Therefore, Moody's needs to reconsider Moody's
stabilized property values.
Moody's will receive additional performance data, including PM
reports, to review the leasing conditions and the performances of
the properties. Moody's will also confirm the asset managers and
sponsors' refinancing and disposition activities through
interviews since all non-recourse loans will mature in 2010.
TOSHIBA CORP: Trims FY2009 Net Loss Forecast to JPY20 Billion
-------------------------------------------------------------
Toshiba Corp. has trimmed its group net loss projection for the
2009 business year ended March 31 to JPY20 billion from an earlier
projected JPY50 billion due to cost-cutting efforts, Japan Today
reports.
The report says the company also revised upward its group
operating profit estimate for the fiscal year to JPY117 billion
from a profit of JPY100 billion projected in January on effects of
cost reductions in fixed expenses and procurement, boosting
earnings in the digital product, electronic device and consumer
electronics segments.
The company also revised downward its group sales projection to
JPY6.38 trillion from earlier estimated JPY6.4 trillion, Japan
Today adds.
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-scale
integrated (LSI) circuits for image information systems and liquid
crystal displays (LCDs), among others. The Social Infrastructure
segment offers various generators, power distribution systems,
water and sewer systems, transportation systems and station
automation systems, among others. The Home Appliance segment
offers refrigerators, drying machines, washing machines, cooking
utensils, cleaners and lighting equipment. The Others segment
leases and sells real estate.
* * *
As of April 26, 2010, Toshiba Corporation continues to carry
Fitch Ratings 'BB' Long-term FC and LC Issuer Default Ratings,
'B' Short-term FC and LC Issuer Default Ratings and 'BB' Senior
unsecured notes ratings.
TOSHIBA CORP: To Form Nuclear Power Joint Venture With IHI Corp.
----------------------------------------------------------------
Juro Osawa at Dow Jones Newswires reports that Toshiba Corp. is in
talks with IHI Corp. over the possible joint production of steam
turbine components for nuclear power plants.
"We are in talks, but haven't reached an agreement yet," a Toshiba
spokesman told Dow Jones.
Dow Jones relates the Nikkei reported earlier Monday that Toshiba
and IHI will form a joint venture this fall to make core
components for nuclear plants, marking their first joint
manufacturing effort in a decades-long relationship.
The Nikkei said the companies aim to essentially merge their
nuclear equipment businesses to become globally cost competitive,
Dow Jones adds.
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-scale
integrated (LSI) circuits for image information systems and liquid
crystal displays (LCDs), among others. The Social Infrastructure
segment offers various generators, power distribution systems,
water and sewer systems, transportation systems and station
automation systems, among others. The Home Appliance segment
offers refrigerators, drying machines, washing machines, cooking
utensils, cleaners and lighting equipment. The Others segment
leases and sells real estate.
* * *
As of April 26, 2010, Toshiba Corporation continues to carry
Fitch Ratings 'BB' Long-term FC and LC Issuer Default Ratings,
'B' Short-term FC and LC Issuer Default Ratings and 'BB' Senior
unsecured notes ratings.
=========
K O R E A
=========
HANSUNG AIRLINES: Set to Resume Operations in July
--------------------------------------------------
The Korea Herald Herald reports that Hansung Airlines Co., which
ceased operations in October 2008, may resume operations as early
as July.
As reported in the Troubled Company Reporter-Asia Pacific on
Oct. 21, 2008, Hansung Airlines canceled all flights and halted
operations on both of its routes from Gimpo to Jeju and Cheongju
to Jeju due to surges in oil prices, the weakening won, and
failure to raise new funds.
However, the Korea Herald relates that the budget carrier got
court approval for a revival plan last month after attracting
investors. It is now in the final stage of getting its
application for court receivership approved, the report notes.
According to the report, Hansung?s capital stock was sharply
reduced from KRW14.5 billion ($13.07 million) to KRW700 million
when it initially applied for court receivership. But the firm
reported to the Ministry of Land, Transport and Maritime Affairs
that that figure bounced back to KRW15.7 billion with the help of
its investors, the report notes.
The Korea Herald says the carrier has relocated its base from
Cheongju, North Chungcheong Province, to Seoul and it is planning
on hiring new recruits for its upcoming flight operations.
Launched in 2005, Hansung Airlines is South Korea's first budget
airline. It operated flights from both Cheongju, North
Chungcheong and Gimpo Airport to Jeju Island.
SSANGYONG MOTOR: Mahindra & Mahindra Plans to Submit Bid
--------------------------------------------------------
Bloomberg News, citing the Korea Economic Daily, reports that
Mahindra & Mahindra Ltd. is planning to participate in the bidding
for Ssangyong Motor Co. The Korean-language newspaper said
Mahindra recently sent a letter to Ssangyong saying it wants to
acquire the South Korean automaker.
Mahindra & Mahindra Ltd., part of the Mahindra Group, manufactures
cars & automobiles in India.
Headquartered in Kyeonggi-Do, South Korea, Ssangyong Motor Co.
Ltd. -- http://www.smotor.com/-- is a manufacturer of automobiles
primarily engaged in production of sports utility vehicles (SUVs)
and recreational vehicles (RVs). The company's production is
grouped into four lines: SUVs under brand names REXTON, KYRON and
ACTYON; sports utility trucks (SUTs) under the brand name ACTYON
Sports; passenger cars under brand name Chairman, and multi-
purpose vehicles (MPVs) under the brand name Rodius. It also
provides automobile parts such as coolers, diesel engines and
others.
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 12, 2009, Ssangyong Motor Co. filed for receivership with the
Seoul Central District Court to stave off a complete collapse. In
February, the Seoul Central District Court accepted Ssangyong's
application to rehabilitate under court protection. The court
named former Hyundai Motor Co. executive Lee Yoo-il and Ssangyong
executive Park Young-tae to run the automaker.
A TCR-AP report on Sept. 16, 2009, said Ssangyong Motor submitted
a revival plans to the Seoul Central District Court seeking
capital reduction and a debt-for-equity swap by creditor. A
South Korean bankruptcy court approved in December Ssangyong
Motor's restructuring plan despite opposition by some bondholders,
the TCR-AP reported on Dec. 18, 2009. Yonhap News said Ssangyong
vowed to get itself in order over the next three years.
===============
M A L A Y S I A
===============
FOUNTAIN VIEW: Shah Alam Court to Hear Wind Up Petition on July 7
-----------------------------------------------------------------
The Shah Alam High Court will hear a winding up petition against
Fountain View Land Sdn Bhd, a wholly owned subsidiary of Fountain
View Development Berhad, on July 7, 2010.
Ngiam Kian Lin filed the petition against Fountain View Land on
June 4, 2009.
NKL is claiming the sum of MYR110,268.49 being liquidated
ascertained damages together with interest at 8% per annum from
June 3, 2004, until full payment and cost of MYR1,842.00 for late
delivery of one unit of 2-storey shop office in Taman Industri
Seri Sulong, Batu Pahat, in Johor.
Fountain View Land had signed a Sale & Purchase Agreement with NKL
dated July 23, 1996, for the sale of one unit of 2-storey shop
office in Taman Industri Seri Sulong, Batu Pahat, in Johor.
Vacant possession of the said property was to be handed over to
NKL within twenty four (24) calender months from the date of the
SPA. The due date for vacant possession of the said property is
on or before July 22, 1998, but FVLSB only managed to hand over
the property on March 16, 2004.
NKL is claiming LAD from FVLSB and had via its Solicitors issued a
Statutory Demand pursuant to Section 218 of the Companies Act,
1965 dated June 2, 2009.
Fountain View Development Berhad is a Malaysia-based investment
holding company. The Company operates in four segments:
Plantation, Property development, Investment and Elimination. The
Company principally operates in Malaysia. Its subsidiaries
includes Citra Tani Sdn. Bhd., Everange Sdn. Bhd., Fountain View
Land Sdn. Bhd., Invescor Ventures Sdn. Bhd., Bentayan Holdings
Sdn. Bhd., Fountain View Realty Sdn. Bhd., Bentayan Properties
Sdn. Bhd., Mujur Zaman Sdn. Bhd., MZ Development Sdn. Bhd. and
Extrogold Sdn. Bhd.
Fountain View Development Berhad has been considered as an
Affected Listed Issuer under Practice Note No. 17 of the Bursa
Malaysia Securities Berhad as it has triggered Paragraph 2.1(h) of
the PN17 for having an insignificant business or operation.
The Company's unaudited second quarterly financial result ended
June 30, 2009, recorded no revenue resulting in the Company
triggering Paragraph 2.1 (h) of the PN17.
OILCORP BHD: PT Technic Files Suit Against Oil-Line Engineering
---------------------------------------------------------------
OilCorp Berhad disclosed that PT Technic (M) Sdn. Bhd. had filed a
suit against Oil-Line Engineering & Associates Sdn. Bhd, a wholly
owned subsidiary of Oilcorp.
By way of an agreement dated December 29, 2003, between Claimant
and OLEA, both parties had entered into an unincorporated joint
venture known as PTT-OLEA JV. A portion of OLEA?s credit
facilities with CIMB Bank Berhad amounting to MYR18,630,000.00 is
intended for the Joint Venture's project. As part of the security
for this portion of the facility, 10% of all progress payments
received by the Joint Venture shall be placed in a Joint Venture
Fixed Deposit. An Ex-Parte Order was obtained by Claimant in the
Shah Alam High Court on April 19, 2010, and the sealed copy was
received by OLEA on April 23, 2010.
OLEA is required to provide verification on oath within 7 days
from the Order granted whether or not the Joint Venture FD or any
part thereof together with interest accrued thereon are still
available to date. The Order requires OLEA to secure and place
into a joint solicitors bank account as stakeholder pending the
final disposal of this action to a sum sufficient to satisfy the
following sum.
The claim under the Order amounted to MYR1,538,478.96.
Oilcorp said that these proceedings will have a major impact on
the financial and operational aspects of the group only if OLEA is
eventually wound up.
OLEA is contesting the Ex Parte Order.
Oilcorp Berhad is a Malaysia-based investment holding company.
The Company operates in five segments: oil and gas and
engineering, which includes engineering, procurement, construction
and contract-related services in oil and gas related industries;
property investment/resort, which includes property and resort
operations and related activities and services; investment
holding, which includes investment holding; fisheries, which
includes deep sea fishing operations and related activities, and
overseas special project (construction), which includes
engineering, procurement, construction and contract-related
sources in non oil and gas industries related industries. Its
wholly owned subsidiaries include Oil-Line Engineering &
Associates Sdn. Bhd., D'Tiara Corp Sdn. Bhd., Layar Visi Sdn. Bhd.
and D'Tiara Corp Limited.
Oilcorp Berhad has been classified as an Affected Listed Issuer
under Practice Note 17/2005 of Bursa Malaysia Securities Berhad
as the Company is unable to provide a solvency declaration to
Bursa Securities following a default in its interest payments
pursuant to Practice Note 1/2001.
====================
N E W Z E A L A N D
====================
HEMISPHERE INSURANCE: S&P Withdraws 'NR' Suspended Rating
---------------------------------------------------------
Standard & Poor's Ratings Services said that the suspended 'NR'
rating on New Zealand-registered Hemisphere Insurance Co. Ltd. has
been withdrawn due to continued information uncertainty.
On Feb. 11, 2009, the rating was lowered to 'CCC-' and placed on
negative outlook and subsequently suspended due to uncertainty of
information and a transient strategy. To date, audited accounts
for Hemisphere's financial year ended June 30, 2009, have not been
received. Standard & Poor's has withdrawn the rating as it is
unlikely that S&P will obtain information in a timely enough
manner to reinstate, or maintain its surveillance on, the rating.
CRAFAR FARMS: Receivers Put 16 Farms For Sale
---------------------------------------------
Sixteen farms in the Crafar Farms group have been placed onto the
open market for sale by Crafar's receivers through Bayleys Real
Estate, The New Zealand Herald reports.
The Herald relates Bayley's said the receivership sale is the
single largest receivership sale of farms in New Zealand history.
According to the report, the farms are reputed to be worth more
than NZ$100 million, although a slump in dairy farm prices in
recent months mean a lower combined price is possible.
The 16 farms employ nearly 200 staff and managers and cover 8,000
hectares. They are located in the Waikato, near Benneydale in the
King Country, Reporoa, Atiamuri, Waverley, Hawera and Bulls.
The Herald recalls Natural Dairy Holdings and May Wang had been in
talks to buy the Crafar Farms as a single lot for over NZ$100
million, but it has become bogged down in applications to the
Overseas Investment Office.
The Herald relates receiver Michael Stiassny of Kordamentha said
"We have no signed agreement with either Natural Dairy (NZ)
Holdings or UBNZ Assets Holdings."
"They have expressed an interest in the Crafar properties, but we
have no formal agreements in place with either company at the
present time," Mr. Stiassny said.
The report says the farms are being sold domestically and
internationally through a tender process closing on June 23.
Buyers will be able to review the farms in early May, the report
adds.
About Crafar Farms
Crafar Farms, New Zealand's largest family owned dairy business,
runs about 20,000 milking cows, and carries about 10,000 of other
stock. The company employs 200 staff.
Crafar Farms was placed in receivership by its lenders Westpac
Banking Corp., Rabobank Groep and PGG Wrightson Finance. The
banks are owed around NZ$200 million and put KordaMentha partners
Michael Stiassny and Brendon Gibson in as receivers after Crafar
Farms breached covenants on its loans.
The New Zealand Herald said CraFarms' banks have been working with
the Ministry of Agriculture and Forestry, Federated Farmers and
Fonterra to ease the Crafars out of their business. This follows
multiple convictions for environmental lapses and animal neglect
in recent years and the revelation on September 28, 2009, from
interest.co.nz of animal neglect on one of its large farms in the
King Country near Benneydale.
=====================
P H I L I P P I N E S
=====================
PHILIPPINE AIRLINES: Employees May Launch Strike on Job Cuts
------------------------------------------------------------
The Philippine Daily Inquirer reports that Philippine Airlines'
employees may launch a strike to stop the company's management
from pushing through with a plan to cut up to 3,000 jobs to help
lower costs.
PAL Employees Association President Gerardo Rivera told the
Inquirer in an interview that the union recently met with
management over the airline's plan to outsource non-core services
to lower expenses and help the company keep up with the
competition.
"PAL management still wants to push through with the spin-off and
outsourcing, but we made it clear to them that we are opposing
this completely," Mr. Rivera told the Inquirer.
While the union understood many of the airline?s concerns about
cutting costs and turning the company into a leaner organization,
Rivera said cutting jobs should only be a last resort.
"We saw a lot of their points, but we believe there are still
other areas where the airline can cut costs," he said, claiming
that outsourcing was not yet necessary.
The Inquirer adds that PALEA said it would continue to negotiate
with PAL in hopes that a compromise could save the workers? jobs.
PALEA filed a notice of strike with the Labor department last
January, the report says. The group also urged the government to
bail PAL out of its current financial situation.
As reported in the Troubled Company Reporter-Asia Pacific on
April 21, 2010, the Manila Bulletin said that the Philippine
Airlines is spinning off its three non-core units as a last resort
to avoid bankruptcy.
PAL will spin off its three non-core units: inflight catering
services; airport services, including ground handling, cargo
handling and ramp handling; and call center reservations by
May 31, the Manila Bulletin said.
According to The Manila Standard Today, the PAL Employees Union
estimated that 2,000 to 4,000 employees assigned to those
departments could be retired.
The Manila Standard related that PAL president Jaime Bautista said
competition from overseas carriers, slower global economic growth,
and higher oil prices had prompted the airline to slash its non-
core businesses.
According to the Manila Standard, the carrier had approached
several investors but failed to secure financial help, and equity
had dropped to a worrisome US$1.1 million as of February. "We
approached the government for help but it, too, was in dire
financial straits," the Manila Standard quoted Mr. Bautista as
saying.
The Manila Standard disclosed the airline reported a net loss of
$40.2 million in the first nine months of the fiscal year that
ended in December, from a net loss of $330.2 million a year
earlier. The Manila Standard said PAL'S revenues rose 15% to
$1.08 billion, but expenses, at $1.1 billion, overran the cash
flow, threatening debt payments to foreign creditors.
About Philippine Airlines
Philippine Airlines -- http://www.philippineairlines.com/-- is
the Philippines' national airline. It was the first airline in
Asia and the oldest of those currently in operation. With its
corporate headquarters in Makati City, Philippine Airlines flies
both domestic and international flights. First taking off in
1941, the carrier has grown into a fleet of about 40 aircraft
(including five Boeing 747-400s) flying to more than 20 domestic
points and about 30 foreign destinations.
PHILIPPINE AIRLINES: Outsources Call Center Job to ePLDT Ventus
---------------------------------------------------------------
Philippine Airlines has appointed ePLDT Ventus to handle all of
its contact center service requirements, the Daily Tribune
reports.
According to the report, PAL president Jaime Bautista and ePLDT
Ventus president Maulik Parekh last week jointly signed an
agreement formalizing the partnership -- a key feature of which is
a commitment from ePLDT Ventus to extend job offers to all
affected employees of PAL's reservations sales units in Manila and
Cebu, and Mabuhay Miles Center, which will be phased out on
June 1.
The Daily Tribune relates that the agreement calls for ePLDT
Ventus to provide a dedicated team of call-center agents on a 24-
hours-a-day, seven-days-a-week basis to service the broad range of
PAL's requirements, including reservations, ticketing and general
inquiries.
Affected staff of PAL's reservations sales and Mabuhay Miles
Center will be given first priority in filling the approximately
600 agent positions at ePLDT Ventus, the Daily Tribune says.
ePLDT Ventus is a wholly owned subsidiary of telecommunications
firm Philippine Long Distance Telephone Co.
About Philippine Airlines
Philippine Airlines -- http://www.philippineairlines.com/-- is
the Philippines' national airline. It was the first airline in
Asia and the oldest of those currently in operation. With its
corporate headquarters in Makati City, Philippine Airlines flies
both domestic and international flights. First taking off in
1941, the carrier has grown into a fleet of about 40 aircraft
(including five Boeing 747-400s) flying to more than 20 domestic
points and about 30 foreign destinations.
===========
T A I W A N
===========
KUO HUA LIFE: Receivership Extended By 9 Months
-----------------------------------------------
The Financial Supervisory Commission has extended the receivership
of Kuo Hua Life Insurance Co. by another nine months to allow
investors to bid for the firm, Alex Pevzner at Dow Jones Newswires
reports. The receivership period was to end May 3, the report
says.
Dow Jones relates the commission said in a statement that Kuo Hua
Life, which was put into receivership in August 2009, has cut its
capital by NT$3 billion and raised NT$6 billion in fresh capital
from the Taiwan Insurance Guarantee Fund, but "that was still not
enough to completely improve its finances."
A senior official at Taiwan Insurance Guarantee Fund told Dow
Jones that prospective investors had until April 28 to pay a
NT$300,000 fee and register to conduct due diligence before they
could bid for Kuo Hua Life.
According to Dow Jones, the official said less than five investors
have registered for due diligence, but declined to name them or
specify the exact number. The official also declined to say when
the fund will complete its inspection of the potential investors,
a necessary step before they can start due diligence, but said the
process of finding a new owner for Kuo Hua Life can be completed
in nine months, Dow Jones notes.
The Troubled Company Reporter-Asia Pacific reported on Aug. 6,
2009, that the Financial Supervisory Commission took over Kuo Hua
Life Insurance Co. due to its weak finances.
The Insurance Stabilization Fund took over the management and
business operations of Kuo Hua Life with the assistance from the
Taiwan Insurance Institute. The commission said Kuo Hua has
failed several times to raise its capital as requested.
Kuo Hua's total assets was NT$246 billion but had run into a net
deficit of NT$57.9 billion as of the end of June 2009.
Kuo Hua's non-life insurance affiliate has already been taken over
by the government due to financial woes. In January 2009, the FSC
asked the Taiwan Insurance Institute to take over the operation of
financially troubled Walsun Insurance Limited, a non-life insurer,
to help deal with its liabilities and assets and safeguard
customers' interests.
Kuo Hua Insurance Co. Ltd. is a Taiwan-based life insurer.
WATERLAND FINANCIAL: Fitch Puts Ratings on Negative Watch
---------------------------------------------------------
Fitch Ratings has placed the ratings of Taiwan's Waterland
Financial Holdings and those of its subsidiaries International
Bills Finance Corporation and Waterland Securities Corporation on
Rating Watch Negative:
-- WFH: Long-term foreign currency Issuer Default Rating 'BBB-'
(BBB minus), Short-term foreign currency IDR 'F3', National
Long-term 'A(twn)', and National Short-term 'F1(twn)';
-- IBF: Long-term foreign currency IDR 'BBB', Short-term foreign
currency IDR 'F3', National Long-term 'A+(twn)', and National
Short-term 'F1(twn)'; and
-- WSC: Long-term foreign currency IDR 'BBB-', Short-term
foreign currency IDR 'F3', National Long-term 'A(twn)', and
National Short-term 'F1(twn)'.
The agency has also affirmed these ratings:
-- WFH: Individual at 'C', Support at '5' and Support Rating
Floor at 'NF';
-- IBF: Individual at 'C', Support at '4' and Support Rating
Floor at 'B+';
-- WSC: Individual 'D' and Support at '2'.
The placement of RWN reflects Fitch's view that WFH's acquisition
of MetLife Taiwan, the Taiwan operations of U.S. life insurer
MetLife Inc., will somewhat strain WFH's capital strength. WHF
plans to fund half the investment by its own cash and the other
half by bank borrowings, without any increase in its equity. This
will negatively impact the company's (including its subsidiaries')
credit profile. In addition, WFH may face greater capital
pressure and earnings volatility after the inclusion of MetLife
Taiwan's operations, as prolonged low interest rates have
exacerbated the negative interest burden of Metlife Taiwan's
legacy insurance policies. WFH said it will buy the entire stake
of MetLife Taiwan for US$112.5m (TWD3.6 billion), a discount from
the insurer's reported book value of TWD8.3 billion at end-Q3
2009. The transaction is subject to regulatory approval and is
likely to be finalized within six months.
The RWN is likely to be resolved in Q4 2010 upon more information
being made available by WHF's management on its business strategy
and capital planning, as well as an assessment of the group's
consolidated credit profile after the completion of the
transaction. A clear weakening in WHF's capital strength as a
result of the announced leveraged acquisition, coupled with any
execution difficulties, and/ or any significant decline in overall
profitability (either due to this acquisition or at its principal
subsidiary, IBF) could lead to a group-wide downgrade; although
this is likely to be limited to a one-notch move given the group's
still reasonable financial flexibility and its leading market
position in Taiwan's bills finance segment.
===============
X X X X X X X X
===============
* S&P Raises Ratings on Two Asia-Pacific CDO Tranches
-----------------------------------------------------
Standard & Poor's Ratings Services raised the ratings on two Asia-
Pacific (excluding Japan) collateralized debt obligation tranches.
At the same time, S&P removed the ratings from CreditWatch with
positive implications, where they were placed on April 14, 2010.
S&P also lowered the rating on one other tranche, and removed it
from CreditWatch negative, where it was placed on April 14, 2010.
To assess the creditworthiness of each class, S&P reviewed the
credit quality of the securitized assets using the synthetic rated
overcollateralization scores and results from supplemental tests.
These results measure the degree by which the credit enhancement
of a tranche exceeds the stressed loss rate assumed for a given
rating scenario.
Tranches that had the ratings raised had SROC scores greater than
100% at the current rating level and at a higher rating level
(based on the maximum scenario loss rate, largest obligor test,
and largest industry test). SROC scores rising above 100% reflect
an improvement in the credit quality of the underlying portfolio.
The rating on Obelisk Trust Series 2007-1 Sonoma Valley Class B
was lowered as its SROC fell below 100% at its current rating
level.
Where the SROC is less than 100%, scenarios that project the
current portfolio 90 days into the future are run, assuming no
asset rating migration. Where this projection indicates that the
SROC would return to a level above 100%, the rating is maintained,
but placed on CreditWatch negative. If the projection indicates
that the SROC would remain below 100%, the rating is immediately
lowered.
Transaction RATING FROM RATING TO
----------- ----------- ---------
Beech Trust Series 1 A-/Watch Pos A+
Obelisk Trust 2005-3 Mica B+/Watch Pos BB-
Obelisk Trust 2007-1
Sonoma Valley Class B AA/Watch Neg AA-
Notes:
1. Where the final price on defaulted reference names in CDO
portfolios is not known, S&P's analysis takes into
consideration the auction results for these names from the
International Swaps and Derivatives Association, Inc.
2. In accordance with the criteria for rating CDO transactions,
certain factors such as credit stability and rating
sensitivity to modeling parameters may be considered in
assigning ratings to CDO tranches, in addition to the
supplemental tests, the Monte Carlo default simulation
results, and the associated cash flow modeling. Such risks in
transactions may be assessed on a case-by-case basis and the
ratings may be qualitatively adjusted to a rating level
different than that indicated by the various quantitative
results. The tranches' final ratings reflect the result of
any such qualitative adjustments.
The Global SROC Report with the SROC analysis as at end-March 2010
will be published shortly. In the week following the publication
of the report, a full review of the affected tranches of Asia-
Pacific synthetic CDOs will be performed and appropriate rating
actions, if any, will be taken. The Global SROC Report provides
SROC and other performance metrics on more than 3,000 individual
CDO tranches.
* BOND PRICING: For the Week April 19 to April 23, 2010
-------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
AUSTRALIA
---------
ADVANCED ENERGY 9.50 01/04/2015 AUD 1.05
AINSWORTH GAME 8.00 12/31/2011 AUD 0.84
AMP GROUP FINANC 9.80 04/01/2019 NZD 0.97
ANTARES ENERGY 10.00 10/31/2013 AUD 2.00
AUROX RESOURCES 7.00 06/30/2010 AUD 0.96
BECTON PROP GR 9.50 06/30/2010 AUD 0.44
CBD ENERGY LTD 12.50 01/29/2011 AUD 0.16
CHINA CENTURY 12.00 09/30/2010 AUD 0.86
FIRST AUSTRALIAN 15.00 01/31/2012 AUD 0.45
GRIFFIN COAL MIN 9.50 12/01/2016 USD 63.00
GRIFFIN COAL MIN 9.50 12/01/2016 USD 59.65
HEEMSKIRK CONSOL 8.00 04/29/2011 AUD 2.32
JPM AU ENF NOM 1 3.50 06/30/2010 USD 7.37
MINERALS CORP 10.50 09/30/2011 AUD 0.39
NATIONAL WEALTH 6.75 06/16/2026 AUD 69.73
NEW S WALES TREA 1.00 09/02/2019 AUD 62.34
PRAECO P/L 7.13 07/28/2020 AUD 70.72
RESOLUTE MINING 12.00 12/31/2012 AUD 1.12
SUN RESOURCES NL 12.00 06/30/2011 AUD 0.55
VERO INSURANCE 6.15 09/07/2025 AUD 60.15
CHINA
-----
JIANGXI COPPER 1.00 09/22/2016 CNY 74.72
HONG KONG
---------
RESPARCS FUNDING 8.00 12/29/2049 USD 40.50
INDIA
-----
AFTEK INFOSYS 1.00 06/25/2010 USD 70.00
GEMINI COMMUNICATION 6.00 07/18/2012 EUR 66.75
SUBEX AZURE 2.00 03/09/2012 USD 65.50
INDONESIA
---------
MOBILE-8 TELECOM 12.37 06/15/2017 IDR 54.75
JAPAN
-----
AIFUL CORP 1.20 01/26/2012 JPY 69.75
AIFUL CORP 1.22 04/20/2012 JPY 69.87
AIFUL CORP 1.63 11/22/2012 JPY 51.21
AIFUL CORP 1.74 05/28/2013 JPY 51.62
AIFUL CORP 1.99 10/19/2015 JPY 44.85
AIFUL CORP 1.74 05/28/2013 JPY 51.20
FUKOKU MUTUAL 4.50 09/28/2025 EUR 74.25
JPN EXP HLD/DEBT 0.50 09/17/2038 JPY 58.39
JPN EXP HLD/DEBT 0.50 03/18/2039 JPY 57.80
TAKEFUJI CORP 9.20 04/15/2011 USD 67.90
TAKEFUJI CORP 9.20 04/15/2011 USD 69.50
TAKEFUJI CORP 4.00 06/05/2022 JPY 53.04
MALAYSIA
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ADVANCED SYNERY 2.00 01/26/2018 MYR 0.07
ALIRAN IHSAN RES 5.00 11/29/2011 MYR 1.02
CRESENDO CORP B 3.75 01/11/2016 MYR 0.95
DUTALAND BHD 4.00 04/11/2013 MYR 0.35
DUTALAND BHD 4.00 04/11/2013 MYR 0.77
EASTERN & ORIENT 8.00 07/25/2011 MYR 0.98
EASTERN & ORIENT 8.00 11/16/2019 MYR 0.99
EG INDUSTRIES 5.00 06/16/2010 MYR 0.37
KRETAM HOLDINGS 1.00 08/10/2010 MYR 1.25
KUMPULAN JETSON 5.00 11/27/2012 MYR 1.66
MITHRIL BHD 3.00 04/05/2012 MYR 0.68
NAM FATT CORP 2.00 06/24/2011 MYR 0.16
OLYMPIA INDUSTRI 6.00 04/11/2013 MYR 0.22
OLYMPIA INDUSTRI 2.80 04/11/2013 MYR 0.18
OLYMPIA INDUSTRI 6.00 04/11/2013 MYR 0.51
PUNCAK NIAGA HLD 2.50 11/18/2016 MYR 0.65
REDTONE INTL 2.75 03/04/2020 MYR 0.08
RUBBEREX CORP 4.00 08/14/2012 MYR 1.30
SCOMI ENGINEERING 4.00 03/19/2013 MYR 1.10
SCOMI GROUP 4.00 03/19/2013 MYR 0.11
TRADEWINDS PLANT 2.00 02/08/2012 MYR 0.70
TRADEWINDS PLANT 3.00 02/28/2016 MYR 1.10
TRC SYNERGY 5.00 01/20/2012 MYR 1.00
WAH SEONG CORP 3.00 05/21/2012 MYR 3.05
WIJAYA BARU GLOB 7.00 09/17/2012 MYR 0.32
YTL CEMENT BHD 5.00 11/10/2015 MYR 2.08
NEW ZEALAND
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ALLIED NATIONWID 11.52 12/29/2049 NZD 48.75
CONTACT ENERGY 8.00 05/15/2014 NZD 1.03
FLETCHER BUI 8.50 03/15/2015 NZD 8.00
FLETCHER BUI 7.55 03/15/2011 NZD 7.00
GMT BOND ISSUER 7.75 06/19/2015 NZD 0.11
INFRASTR & UTIL 8.50 09/15/2013 NZD 9.20
INFRATIL LTD 8.50 11/15/2015 NZD 12.50
INFRATIL LTD 10.18 12/29/2049 NZD 65.50
KIWI INCOME PROP 8.95 12/20/2014 NZD 1.35
MANUKAU CITY 6.15 09/15/2013 NZD 1.01
MANUKAU CITY 6.90 09/15/2015 NZD 1.01
MARAC FINANCE 10.50 07/15/2013 NZD 0.88
NZ FINANCE HLDGS 9.75 03/15/2011 NZD 44.51
SKY NETWORK TV 4.01 10/16/2016 NZD 57.42
SOUTH CANTERBURY 10.50 06/15/2011 NZD 0.89
SOUTH CANTERBURY 10.43 12/15/2012 NZD 0.63
ST LAURENCE PROP 9.25 05/15/2011 NZD 65.28
TOWER CAPITAL 8.50 04/15/2014 NZD 1.02
TRUSTPOWER LTD 8.50 09/15/2012 NZD 7.10
TRUSTPOWER LTD 8.50 03/15/2014 NZD 7.55
TRUSTPOWER LTD 7.60 12/15/2014 NZD 1.00
TRUSTPOWER LTD 8.60 12/15/2016 NZD 1.00
UNI OF CANTERBUR 7.25 12/15/2019 NZD 0.95
VECTOR LTD 7.80 10/15/2014 NZD 1.00
VECTOR LTD 8.00 12/29/2049 NZD 7.20
SINGAPORE
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BLUE OCEAN 11.00 06/28/2012 USD 36.00
DAVOMAS INTL FIN 5.50 12/08/2014 USD 57.62
UNITED ENG LTD 1.00 03/03/2014 SGD 1.84
WBL CORPORATION 2.50 06/10/2014 SGD 2.13
SOUTH KOREA
-----------
DAEWOO MTR SALES 6.55 03/17/2011 KRW 73.83
DAEWOO MTR SALES 5.88 06/21/2012 KRW 65.32
SRI LANKA
---------
SRI LANKA GOVT 7.00 10/01/2023 LKR 64.35
TAIWAN
------
TAIWAN GB-A90106 3.75 08/07/2016 TWD 74.80
*********
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 T. Fernandez, Joy A. Agravante, Frauline S. Abangan,
and Peter A. Chapman, Editors.
Copyright 2010. 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 ***