/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/100719.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 Monday, July 19, 2010, Vol. 13, No. 140 Headlines A U S T R A L I A ING REAL: Sells New Zealand Assets to Pay Debts NUFARM LTD: S&P Downgrades Corporate Credit Rating to 'BB' PROVIK GROUP: McGrathNicol Appointed as Receiver and Manager SHENANNIGANS: Placed in Receivership; Ferrier Hodgson Appointed C H I N A E-LAND FASHION: Moody's Assigns 'Ba2' Corporate Family Rating E-LAND FASHION: S&P Assigns 'BB-' Corporate Credit Rating * CHINA: Half of Textile Firms May Collapse Amid Rising Yuan H O N G K O N G ROLLS-ROYCE INDUSTRIAL: Lai and Haughey Step Down as Liquidators SCIENTIFICATION-ATLANTA (HK): Commences Wind-Up Proceedings SUCCESS BRIGHT: Court to Hear Wind-Up Petition on August 25 SUZUKI GOLDLY: Members' Final Meeting Set for August 9 UNITECH PRECISION: Kuroiwa and Fong Step Down as Liquidators VEEHOM LIMITED: Commences Wind-Up Proceedings WEETECK LIMITED: Kong Chi How Johnson Steps Down as Liquidator YUEN & SONS: Placed Under Voluntary Wind-Up Proceedings YUEN'S COMPANY: Placed Under Voluntary Wind-Up Proceedings I N D I A ACT EDUCATIONAL: CRISIL Rates INR179MM Long Term Loan at 'D' AIR INDIA: To Use IGI's T3 Terminal as Hub; Discloses New Routes AIR INDIA: National Aviation Aims to Cut Losses by 75% in 2011 BALABHANU ENTERPRISES: CRISIL Rates INR200 Million Credit at 'P4+' BCL INDUSTRIES: CRISIL Reaffirms 'BB-' Rating on INR435MM Debts J. KIRIT: CRISIL Rates INR50 Million Letter of Credit at 'P4+' JET AIRWAYS: Inks Code Share Agreement With Kenya Airways K.S. VENKATRAMAN: CRISIL Assigns 'BB' Rating to INR5MM LT Loan KINETA MINERALS: CRISIL Upgrades Rating on INR1.2BB Loan to 'BB+' ROHAN RAJDEEP: CRISIL Puts 'B+' Rating on INR1.12B Term Loan SHIV SAI: CRISIL Reaffirms 'BB' Ratings on Various Bank Debts THENI GURU: CRISIL Assigns 'B' Ratings on Various Bank Facilities J A P A N APROCEED CO: Moody's Reviews Ratings on Four Classes of Notes JAPAN AIRLINES: To Hold Talks With Main Creditors Over Debt Waiver JAPAN AIRLINES: Proposes to Cut Pilots' Salary by 25% K O R E A KOREA EXCHANGE: MBK Partners to Bid for Lone Star's Stake SSANGYONG MOTOR: M&M Board to Decide on Ssangyong Bid by July 28 SSANGYONG MOTOR: To Sell Shipping Grounds to Shinsegae Group N E W Z E A L A N D AIR NEW ZEALAND: Denies Buying 15% Stake in Virgin Blue FINANCE & INVESTMENTS: Partners Agree to Lifetime Management Ban PSIS LTD: S&P Changes Outlook to Positive; Affirms 'BB+/B' Rating - - - - - ================= A U S T R A L I A ================= ING REAL: Sells New Zealand Assets to Pay Debts ----------------------------------------------- ING Real Estate Entertainment Fund is raising AU$65 million through new equity and the sale of its New Zealand assets to pay down debt, The Sydney Morning Herald reports. SMH relates IEF said it will raise AU$38.8 million through an equity raising comprising of a AU$2.4 million placement and a AU$36.4 million rights issue. The underwritten two-for-one rights issue at nine cents per unit has received the support of two institutional unitholders, the report notes. According to the report, contracts have been exchanged on the sale of IEF's New Zealand portfolio, with proceeds expected to be $26.3 million. The report notes that settlement on the sale will be staged over a 12-month period from August. The Troubled Company Reporter-Asia Pacific, citing The Sydney Morning Herald, reported on September 4, 2009, that ING Real Estate Entertainment Fund warned investors that it was in danger of breaching its banking covenants if the value of its portfolio of 36 pubs falls any further or if any of its pub tenants cannot pay their rent. SMH, citing a section of the notes in ING REEF's financial statements, said at the time directors of the fund have warned of "significant uncertainties" about the company's financial position in the "going concern." SMH added the company revealed that the falling value of its pubs has increased its loan-to-value ratio to a dangerously high 59.2%. Under its banking covenants it cannot exceed 60%, SMH stated. ING Real Estate Entertainment Fund reported net losses of AU$54.12 million and AU$8.56 million for the years ended June 30, 2010 and 2009, respectively. ING Real Estate Entertainment Fund (ASX:IEF) -- http://www.ingrealestate.com.au/-- is a property trust that invests in entertainment and leisure venues throughout Australia and New Zealand, and receives income from long-term leases to experienced hotel operators. The Fund's subsidiaries include Bourbon Unit Trust, ING Real Estate Entertainment Subsidiary Trust, IEF Victoria Trust, IEF NZ Subsidiary Trust and IEF NZ Trust. NUFARM LTD: S&P Downgrades Corporate Credit Rating to 'BB' ---------------------------------------------------------- Standard & Poor's Ratings Services said that it had lowered its long-term corporate credit rating on Nufarm Ltd. to 'BB', from 'BBB-', after the company's latest earnings downgrade. The rating on Nufarm's Step-Up Securities has also been lowered to 'B' from 'BB'. S&P has removed the ratings from CreditWatch with negative implications, where they were initially placed on Sept. 28, 2009. The rating outlook is negative. "The ratings downgrade reflects S&P's belief that Nufarm's business profile has deteriorated and the company will be unable to achieve a financial profile commensurate with S&P's view of an investment-grade rating despite the recent A$250 million capital raising," Standard & Poor's credit analyst Richard Creed said. In S&P's view, a key driver of the weakening of Nufarm's business profile has been a structural change in the global glyphosate market, which faces conditions of oversupply and intense price competition that S&P believes are likely to persist in the medium term. S&P notes that unfavorable climatic conditions were the primary driver for Nufarm's latest earnings downgrade, despite Nufarm's geographic diversity. Nevertheless, S&P believes this earnings downgrade highlights a business profile that continues to be vulnerable to volume and pricing pressures for its key glyphosate product. S&P considers Nufarm's financial profile to be "aggressive" due to a combination of factors. In addition to weak near-term credit metrics, the company's liquidity continues to be exposed to a significant refinancing challenge as the group rolls over its seasonal debt facilities. These facilities are essential to fund the company's heavy use of working capital in the first half of its fiscal year to build inventory for sales that peak in the second half of the year. Moreover, the company's flexibility to manage any unexpected adverse variations to its business plan is constrained by the inherent bias to sales peaking late in the second half. Mr. Creed added: "The negative outlook reflects the execution risks associated with Nufarm's ability to successfully refinance its bank lines -- of which one-third mature before the end of calendar 2010 -- to provide adequate funding for the next season. Achieving a waiver of the likely breach of Nufarm's bank interest cover covenant in the wake of the earnings downgrade, in S&P's view, will demonstrate the company retains the support of its lenders and lend confidence the company will have adequate liquidity to fund its working-capital needs. The outlook may be revised to stable following successful renewal of Nufarm's bank facilities without the imposition of any material adverse terms and conditions. The rating could be lowered if Nufarm were unable to secure its preferred level of financing, constraining its working-capital funding. Negative pressure on the ratings could also arise if S&P believes that Nufarm's funds from operations (FFO)-to-debt ratio is likely to be sustained below 15%." PROVIK GROUP: McGrathNicol Appointed as Receiver and Manager ------------------------------------------------------------ Jamie Harris, Peter Anderson and John Cronin, Partners of independent restructuring and corporate advisory firm McGrathNicol were appointed on July 15, 2010, as receivers and managers of 17 companies that comprise the Provik Pty Ltd Group of Companies. McGrathNicol's appointment followed the appointment of Robert Hutson and Scott Kershaw of KordaMentha as administrators to the Provik Group. Control of the business and assets of the Provik Group now rests with the receivers and managers, McGrathNicol said in a statement. The receivers and managers have confirmed they will continue serving the Provik Group customers and tenants and trading the businesses as they establish the most appropriate way forward. John Cronin, Partner at McGrathNicol said: "Our immediate focus is to work with the key stakeholders of the business including employees, customers and the local community to understand the operations and financial position of the Provik Group. "Both the Cairns and Hemmant operations comprise valuable and strategic industrial land and businesses. "We will review and, where necessary, improve on operational, environmental and health and safety aspects of the businesses in preparation for a sale campaign. "Our plan is to continue trading the businesses to preserve their value and the employment of staff while we prepare to offer the businesses and associated real estate to the market," Mr. Cronin added. The Provik Group owns and operates industrial marine facilities in Brisbane and Cairns. It also provides ship lifting, slipway and marina operations along with marine storage facilities. The slipway services enable large-scaled marine refits and maintenance. The Provik Group employs approximately 755 staff at its Cairns slipways operation and approximately six staff at its Hemmant site. The Provik Group has approximately 360 creditors. SHENANNIGANS: Placed in Receivership; Ferrier Hodgson Appointed --------------------------------------------------------------- The Cairns Post reports that Cairns bar Shenannigans has been placed into receivership with the pub's owner also facing financial problems in Adelaide. Ferrier Hodgson has been appointed receivers for the hotel and the freehold land of the business, the report adds. The Spence St pub, which promotes itself as "the only pub-style backpackers hostel in Cairns", will continue trading until it is sold, the report says. According to the Cairns Post, Tim Michael, who is heading the receivership, said entitlements owing to the 19 casual Shenannigans staff were minimal and that wages had been paid. Mr. Michael was confident all workers would keep their jobs, but would not comment on the pub's debts, the report notes. "Our focus is more about keeping the business trading, at this early stage the debts are secondary to preserving the business," the report quoted Mr. Michael as saying. "I think it would be preferable to try and sell it during Cairns' busy period, maybe around October or November." Owner Winton Veall's Adelaide pub Glynde Hotel is also in receivership, with Ferrier Hodgson handling both cases. The Cairns Post relates Mr. Michael said Mr. Veall bought Shenannigans in 2007. It is believed the pub was bought for more than AU$10 million and was recently valued at AU$5.5 million. ========= C H I N A ========= E-LAND FASHION: Moody's Assigns 'Ba2' Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service has assigned a (P)Ba2 corporate family rating to E-Land Fashion China Holdings, Limited. Moody's has also assigned a (P)Ba2 senior unsecured rating to E-Land Fashion China's proposed inaugural US$ bond. The rating outlook is stable. This is the first time that Moody's has assigned ratings to E-Land Fashion China and the provisional status will be removed upon issuance of the bond. The bond proceeds will be used for capital expenditure, general corporate purposes and to a lesser extent, for potential acquisitions. "The provisional Ba2 ratings reflect E-Land Fashion China's growing presence in the highly fragmented women's apparel industry in China, its extensive nationwide sales networks, and robust profitability," says Chris Park, a Moody's Vice President and Senior Analyst. "The rating is also supported by the growing middle class and personal consumption in China, a favorable fundamental that will fuel ongoing growth in its key market." "The ratings, however, are counterbalanced by the company's moderate scale and significant business volatility due to high 'fashion risk,' as well as its focus on a narrow product category/consumer demographic," says Park. If all of its concession expenses were viewed as operating leases, E-Land Fashion's expected adjusted debt/EBITDA of mid-4x and retained cash flow ("RCF")/adjusted debt in the mid-teens for the next two to three years would be weak for the Ba2 rating. However, the company's financial leverage is somewhat overstated, as its concession expenses comprise an element of operating expenses. Given this and the moderate amount of funded debt at around 1x of EBITDA, its financial profile positions it solidly at the Ba2 rating level. E-Land Fashion China is a wholly owned subsidiary of E-Land World Ltd, which has a weaker credit profile, but the ratings reflect E- Land Fashion China's standalone credit quality only. This is because contractual ring-fencing mechanisms exist to protect E- Land Fashion China from undue cash demands by the parent. The stable outlook reflects Moody's expectations that E-Land Fashion China will (1) further strengthen its market position and continue to grow its scale and brand equity in tandem with the fast-growing women's apparel industry in China and (2) maintain solid liquidity position, with a significant portion of the bond proceeds to be retained as a liquidity buffer. A rating upgrade in the near term is unlikely, given E-Land Fashion China's moderate scale and the lack of business diversity outside of the women's apparel market. Upward rating pressure could emerge over the medium term if the Company can establish a more solid market position and diversify its business portfolio while improving its financial profile. This would be characterized by an adjusted debt/EBITDA of around 3.5-3.8x or less and RCF/adjusted debt above 17-20%. The rating could undergo a downgrade due to a persistent decline in the Company's market position or margins leading to erosion of liquidity or credit metrics. Ratings could also be downgraded if the Company significantly increases debt to fund a major acquisition. Quantitatively, the rating could be downgraded if adjusted debt/EBITDA remains above 5x or if RCF/adjusted debt declines to less than 12%. E-Land Fashion China is one of the leading women's apparel companies in China. The company designs, distributes, and markets six casual wear brands mainly through its directly managed shops in department stores. E-LAND FASHION: S&P Assigns 'BB-' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services said that it had assigned its 'BB-' long-term corporate credit rating to China-based women's apparel company E-Land Fashion China Holdings Ltd. The outlook is stable. At the same time, Standard & Poor's also assigned its 'BB-' issue rating to E-Land Fashion China's proposed senior unsecured notes. The rating on the notes is subject to Standard & Poor's review of the final documentation for the notes issuance. The company intends to use the bond proceeds to expand its network and for associated capital expenditure. "The rating on E-Land Fashion China reflects the company's relatively small scale on an international basis and its exposure to the highly fragmented and increasingly competitive nature of China's fashion industry. In addition, S&P see risks associated with E-Land Fashion China's evolving business strategy and the weaker credit profile of the wider E.Land Group," said Standard & Poor's credit analyst Joe Poon. "These weaknesses are counterbalanced by the robust growth in demand for quality women's apparel in China, the company's solid track record, its good brand recognition in China, and good profitability." The company has benefited from an early-mover advantage in China. It began operations there in 1994, and now has six brands in operation. Last year, turnover stood at Chinese renminbi (RMB) 3.7 billion and net profit at RMB546 million. E-Land Fashion China is a wholly owned subsidiary of Korea-based conglomerate E.Land World Ltd. (not rated), which is principally engaged in fashion, retail, hotel, and construction businesses. E-Land Fashion China is a key profit contributor to the group. E-Land Fashion China's established brand image and market position in China partly offsets its small size relative to international peers. In S&P's view, the aggressive entrance of other established foreign brands into the Chinese market and fast- changing consumer tastes will continue to challenge the company's brand position. E-Land Fashion China's high gross margin stems from its reasonably good pricing power, good brand recognition in China, and outsourcing of manufacturing. S&P expects E-Land Fashion China to maintain its good profitability because further expansion of its network -- including the opening of flagship and shopping mall stores in major cities -- is likely to help it maintain its brand image and pricing. In S&P's view, China's women's apparel industry will continue to grow at a strong pace over the next few years as disposable incomes rise. E-Land Fashion China's leverage will substantially increase after the issuance of the proposed notes. S&P expects its adjusted ratio of debt to EBITDA to weaken to about 2.0x following the proposed bond issuance from 0.5x at the end of 2009. The adjusted ratio of total debt to capital should fall between 45% and 60% over the next few years from 35.5% at the end of 2009. S&P anticipates that these ratios will gradually improve from 2011 onwards, assuming that the existing business maintains good profitability. E-Land Fashion China's liquidity is adequate, in S&P's view. Anticipated operating cash flow and the proposed bond proceeds should be sufficient to meet its capital expenditure and potentially higher working capital needs. S&P believes liquidity will remain sufficient, provided that the company's expansion plan and dividend payout ratio are not aggressive. As at March 31, 2010, the company had an unaudited cash balance of RMB621.5 million and short-term debt of RMB316.1 million due within one year (including RMB116.2 million due to related parties that is unsecured, non-interest bearing, and repayable on demand). The company has about RMB400 million in credit facilities from banks. Its commitment to maintaining a minimum cash balance of no less than 5% of net revenue and a dividend payout ratio of about 20% is not likely to have an impact on its liquidity position. The existing bank loans do not have any financial covenants or provisions, but other covenants apply. The proposed notes do have covenants. "The stable outlook reflects S&P's view that E-Land Fashion China is likely to maintain its market position and brand image, and that it will benefit from strong growth potential in China. In addition, S&P expects the company to continue its measured business expansion and maintain its satisfactory profitability," said Mr. Poon. S&P could lower the rating if: (1) E-Land Fashion China's financial performance or profitability deteriorates sharply, such that its adjusted operating margin falls to less than 20% and its cash-generating ability is reduced; (2) the company's financial risk profile or funding strategy becomes more aggressive, causing the company to significantly deviate from its financial policy; or (3) the parent takes aggressive action to enhance shareholders' value, for example by embarking on large debt-financed acquisitions that cause the group's financial risk profile to materially deteriorate. S&P may raise the rating if: (1) E-Land Fashion China executes its growth strategy in China and maintains its good profitability and cash flow generation; and (2) E.Land Group continues to deleverage and improve its financial performance by adhering to its stated strategy in focusing on its fashion and retail businesses. * CHINA: Half of Textile Firms May Collapse Amid Rising Yuan ------------------------------------------------------------ China National Textile and Apparel Council has warned that half of China's textile companies are at risk going to the wall if the yuan appreciates 5 percent against the US dollar, China Daily reports. China National Textile and Apparel Council Vice- President Gao Yong attributed this knife-edge existence to the industry's thin profit margins of around 3 to 5 percent, the report says. "If the yuan actually appreciates 5 percent against the US dollar, over half of China's textile companies will go bankrupt," China Daily quoted Mr. Gao as saying. China Daily says the government's yuan stress test, conducted in March, showed that labor-intensive textile companies' profit margins would decline by 1 percentage point if the currency appreciates by 1 percent. Citing the Ministry of Commerce, China Daily discloses that more than 20 million people are directly employed in China's textile industry, while a further 140 million are involved in cotton farming. Therefore, a large upward revaluation of the yuan could cost millions of jobs, the report relates. According to China Daily, the appreciation of the yuan, together with rising raw material and labor costs, has already squeezed profit margins in China's textile industry. The yuan rose 21 percent against the US dollar from 2005 to 2008, the report notes. ================ H O N G K O N G ================ ROLLS-ROYCE INDUSTRIAL: Lai and Haughey Step Down as Liquidators ---------------------------------------------------------------- Lai Kar Yan (Derek) and Darach E. Haughey stepped down as liquidators of Rolls-Royce Industrial Power (Hong Kong) Limited on June 29, 2010. SCIENTIFICATION-ATLANTA (HK): Commences Wind-Up Proceedings ----------------------------------------------------------- Members of Scientification-Atlanta (HK) Limited, on June 28, 2010, passed a resolution to voluntarily wind-up the company's operations. The company's liquidators are: Rainier Hok Chung Lam Anthony David Kenneth Boswell 22nd Floor, Prince's Building Central, Hong Kong SUCCESS BRIGHT: Court to Hear Wind-Up Petition on August 25 ----------------------------------------------------------- A petition to wind up the operations of Success Bright Limited will be heard before the High Court of Hong Kong on August 25, 2010, at 9:30 a.m. The Bank of China (Hong Kong) Limited filed the petition against the company on June 22, 2010. The Petitioner's solicitors are: Messrs. Wat & Co. 12th Floor, Chuang's Tower 30 & 32 Connaught Road Central, Hong Kong SUZUKI GOLDLY: Members' Final Meeting Set for August 9 ------------------------------------------------------ Members of Suzuki Goldly Sky Limited will hold their final general meeting on August 9, 2010, at 9:30 a.m., at Room 1005, Allied Kajima Building, 138 Gloucester Road, Wanchai, in Hong Kong. At the meeting, Leung Mei Fan, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. UNITECH PRECISION: Kuroiwa and Fong Step Down as Liquidators ------------------------------------------------------------ Mr. Norio Kuroiwa and Ms Chan Yuk Fong stepped down as liquidators of Unitech Precision (H.K.) Limited on July 9, 2010. VEEHOM LIMITED: Commences Wind-Up Proceedings --------------------------------------------- Members of Veehom Limited, on June 22, 2010, passed a resolution to voluntarily wind-up the company's operations. The company's liquidators are: Ho Man Kit Kong Sze Man Simone Unit 511, 5th Floor Tower 1, Silvercord No. 30 Canton Road Tsimshatsui, Kowloon Hong Kong WEETECK LIMITED: Kong Chi How Johnson Steps Down as Liquidator -------------------------------------------------------------- Kong Chi How Johnson stepped down as liquidator of Weeteck Limited on June 3, 2010. YUEN & SONS: Placed Under Voluntary Wind-Up Proceedings ------------------------------------------------------- At an extraordinary general meeting held on July 2, 2010, creditors of Yuen & Sons Investments Company Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Poon Wai Hung Richard Room 1410, 14/F Harbour Centre No. 25 Harbour Road Wanchai, Hong Kong YUEN'S COMPANY: Placed Under Voluntary Wind-Up Proceedings ---------------------------------------------------------- At an extraordinary general meeting held on July 2, 2010, creditors of Yuen's Company Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Poon Wai Hung Richard Room 1410, 14/F Harbour Centre No. 25 Harbour Road Wanchai, Hong Kong ========= I N D I A ========= ACT EDUCATIONAL: CRISIL Rates INR179MM Long Term Loan at 'D' ------------------------------------------------------------ CRISIL has assigned its 'D' rating to ACT Educational & Charitable Trust's term loan facility. The rating reflects delay by ACT in servicing its term loan; the delay has been caused by ACT's weak liquidity. Facilities Ratings ---------- ------- INR179.00 Million Long Term Loan D (Assigned) ACT has a below average financial risk profile and is exposed to risks related to intense competition and a high degree of regulation. However, CRISIL believes that the trust will benefit from its modern infrastructure facilities and the experience of its management. ACT was set up in 2005 by Mr. T Kumar, Mr. E N Anbuchozhan, and Mr. R Lakshmanan. The trust operates two colleges offering the bachelor's degree in education, two teacher-training institutes, and two engineering colleges in Attur and Nelvoy (Tamil Nadu). ACT reported a profit after tax (PAT) of INR42.90 million on net sales of INR80.7 million for 2008-09 (refers to financial year, April 1 to March 31) against a PAT of INR8 million on net sales of INR15.8 million for 2007-08. AIR INDIA: To Use IGI's T3 Terminal as Hub; Discloses New Routes ---------------------------------------------------------------- Air India is planning to use the new integrated terminal T3 at IGI Airport as its hub, The Economic Times reports. The Economic Times relates Air India Chairman and Managing Director Arvind Jadhav said operating from the new terminal, which would provide seamless travel for its passengers on all sectors, was likely to increase business by over 20% in the long run. Mr. Jadhav said that the airline had been waiting for an integrated terminal that would enable it to connect India with the world. "The goal for AI is to establish a dominant domestic carrier that would use narrow-body aircraft to seamlessly feed into the medium-haul and long-haul wide-body aircraft. Together, the combined network would provide the customer with an end-to-end offering that could be matched neither by the domestic low-cost carriers nor the hub-based international long-haul carriers," Mr. Jadhav was quoted by the Economic Times as saying. Jadhav also announced three new direct international routes by October, and this would increase AI's international coverage to 22 destinations from Delhi, the report relates. According to the report, the carrier will be introducing non-stop services between Delhi-Melbourne and Delhi-Chicago and resume services between Delhi-Seoul. It also has plans to increase the frequency of existing flights, the report notes. With this move, says ET, the airline would be operating 143 flights per week on the international sector with 33,000 seats, a jump of nearly 50% of its capacity. 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. * * * The Troubled Company Reporter-Asia Pacific, 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. Air India is estimated to have lost INR54 billion in the fiscal year ended March 31, 2010, according to The Wall Street Journal. In December 2009, 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. AIR INDIA: National Aviation Aims to Cut Losses by 75% in 2011 -------------------------------------------------------------- National Aviation Company Ltd., which runs Air India, aims to reduce losses by 75% by the end of 2011-12, the Business Standard reports. "We will cut our losses by 75% by the end of 2011-12. We will be able to achieve this because we have registered an increase in the number of passengers and also revenue," the report quoted Nacil Chairman and Managing Director, Arvind Jadhav, as saying. "Our losses during the last financial year were of INR5,400 crore, which will be cut down by 75% by 2011-12." Business Standard states that Air India, with an accumulated loss of over INR10,000 crore, continues to make operational losses. According to the report, the airline recently hired an expat chief operating officer, who has vowed to go ahead with the airline?s cost cutting plan. 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. * * * The Troubled Company Reporter-Asia Pacific, 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. Air India is estimated to have lost INR54 billion in the fiscal year ended March 31, 2010, according to The Wall Street Journal. In December 2009, 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. BALABHANU ENTERPRISES: CRISIL Rates INR200 Million Credit at 'P4+' ------------------------------------------------------------------ CRISIL has assigned its 'P4+' rating to the Export Packing Credit facility of Balabhanu Enterprises Pvt Ltd, part of Kineta group. Facilities Ratings ---------- ------- INR200 Million Export Packing Credit 'P4+' (Assigned) The rating reflects the geographical and client concentration in the Kineta group's revenue profile, and its susceptibility to downturns in end-user industry and adverse regulatory changes. These rating weaknesses are partially offset by the Kineta group's established relationships with its suppliers and international customers, and above-average financial risk profile. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of BEPL, Kineta Minerals & Metals Ltd (KMML), and Kineta International Pte Ltd, Singapore (KIPL), together referred to as the Kineta group. This is because all the three entities are under common management, in similar line of business, and expected to extend need-based funding support to each other ? KMML has guaranteed KIPL's bank loan facilities. BEPL, incorporated in 2003 in Bhadravati, Karnataka, was set up to undertake job-based work for Visvesvaraya Iron & Steel Ltd (VISL; unit of Steel Authority of India Ltd) on a small scale. BEPL cuts iron rods as per VISL's customer requirements. It started exporting iron ore from 2005. Set up in Hyderabad by Mr. V Balashowry in April 2006, KMML trades in iron ore. It procures iron ore fines from small and big mine owners located around the port cities of Krishnapatnam, Bellary, Mangalore, Visakhapatnam, Hospet, and Sandur, and in Goa. It exports nearly 85 per cent of the iron ore to China, and the remainder to Korea and Japan. KIPL, a wholly owned subsidiary of KMML, was set up in 2008 in Singapore, and is also into trading in iron ore; KIPL exports primarily to China. For 2009-10 (refers to financial year, April 1 to March 31), the Kineta group reported a provisional profit after tax (PAT) of INR204 million on net sales of INR5.56 billion, against a PAT of INR44 million on net sales of INR2.61 billion for 2008-09. For 2009-10, BEPL (standalone) reported a provisional PAT of INR3.1 million on an operating income of INR203.0 million, against a PAT of INR2.5 million on net sales of INR11.5 million for 2008- 09. BCL INDUSTRIES: CRISIL Reaffirms 'BB-' Rating on INR435MM Debts --------------------------------------------------------------- CRISIL's ratings on BCL Industries & Infrastructure Pvt Ltd's bank facilities continue to reflect BCL's weak debt protection metrics, average gearing, and low operating margin. Facilities Ratings ---------- ------- INR435.0 Million Cash Credit Limit BB-/Negative (Reaffirmed) INR150.0 Million Letter of Credit P4 (Reaffirmed) INR25.0 Million Bank Guarantee P4 (Reaffirmed) The ratings also factor in the company's vulnerability to intense competition in the edible oil industry and volatility in raw material prices, and its significant exposure to group companies' real estate ventures. These rating weaknesses are partially offset by BCL's integrated edible oil operations and strong track record in the edible oil industry. Outlook: Negative CRISIL believes that BCL's investments in its group companies' real estate business will continue to be high over the medium term, adversely impacting its credit risk profile. The ratings may be downgraded upon further deterioration in BCL's liquidity, capital structure, and net cash accruals. Conversely, the outlook may be revised to 'Stable' if BCL reduces its level of investments in the real estate business, while sustaining its profitability. About Bhatinda Chemicals BCL, formerly Bhatinda Chemicals Ltd, manufactures refined oil such as soyabean, sunflower, cottonseed, and rice bran oils under the Homecook brand; vanaspati under the Do Khajoor brand; and mustard oil under the Murli brand. It also trades in non-basmati rice. BCL sells its products mainly in North India, and has around 300 dealers spread over the entire northern region. The company's facilities are located in Bhatinda (Punjab). BCL is promoted by the Mittal group of Bhatinda. The group operates in two segments: real estate and edible oils. The companies in the edible oils segment are Kisan Fats Ltd, BCL, and RK Exports. Those in the real estate sector are Ganpati Estates, Ganpati Township Ltd, Chavan Rishi Resorts Pvt Ltd, Creative Buildwell Pvt Ltd, Gee City Builders Pvt Ltd, Ansal Mittal Township Pvt Ltd, and Sheesh Mahal Developers Ltd. BCL reported a profit after tax (PAT) of INR11 million on net sales of INR2963 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR33 million on net sales of INR4525 million for 2008-09. J. KIRIT: CRISIL Rates INR50 Million Letter of Credit at 'P4+' -------------------------------------------------------------- CRISIL has assigned its 'P4+' rating to J. Kirit & Brothers' letter of credit facility. Facilities Ratings ---------- ------- INR50.0 Million Letter of Credit P4+ (Assigned) The rating reflects JKB's low net worth and small scale of operations, and absence of adequate price and inventory risk management practices. These rating weaknesses are partially offset by JKB's strong financial risk profile marked by healthy debt protection metrics and modest gearing, and efficient working capital management. JKB, a partnership firm set up in 1973, trades in chemicals used in resins, paints, adhesives and other applications. The firm imports around 75 per cent of its products from countries such as Germany, France, Taiwan, USA, and Korea. The firm is also an agent for Arkema Group, Reliance Industries Ltd (CRISIL rated 'AAA/Stable/P1+'), and SI Group India Ltd, and sells various chemical products manufactured by these entities. The firm sells around 70 per cent of its products directly to manufacturers, while the rest comes through its dealer network. JKB reported a profit after tax (PAT) of INR3.8 million on net sales of INR283.9 million for 2009-10 (refers to financial year, April 1 to March 31) against a PAT of INR2.1 million on net sales of INR221.4 million for 2008-09. JET AIRWAYS: Inks Code Share Agreement With Kenya Airways --------------------------------------------------------- Jet Airways has entered into a code-sharing agreement with Kenya's national carrier Kenya Airways that will enable passengers to travel on each other's flights, The Hindu reports. The Hindu says Jet Airways does not have a direct flight from Mumbai to Nairobi so this agreement would enable passengers to travel there on Kenya Airways flights on a Jet ticket and vice versa. "In addition to our direct service to Johannesburg, there is significant demand from our customers to travel to Kenya and beyond. We are confident that this partnership will translate into greater air traffic between India and Africa," the report quoted Jet Airways CEO Nikos Kardassis as saying. The two carriers have also entered into network-wide frequent flyer partnership, which will be effective from July 22, 2010, The Hindu adds. About Jet Airways Jet Airways (India) Ltd (BOM:532617) -- http://www.jetairways.com/ -- provides air transportation. The geographic segments of the company are domestic and international. The company has a frequent flyer program named Jet Privilege wherein the passengers who uses the services of the airline become services of the airline become members of Jet Privilege and accumulates miles to their credit. The company's subsidiaries include Jet Lite (India) Limited, Jetair Private Limited, Jet Airways LLC, Trans Continental e Services Private Limited, Jet Enterprises Private Limited, Jet Airways of India Inc., India Jetairways Pty Limited and Jet Airways Europe Services N.V. On April 20, 2007, the company acquired Sahara Airlines Limited. * * * Jet Airways posted a consolidated net loss of INR9,614.10 million for the year ended March 31, 2009, compared with consolidated net loss of INR6,538.70 million for the year ended March 31, 2008. Consolidated total sales increased from INR109,907.20 million for the year ended March 31, 2008 to INR134,488.60 million for the year ended March 31, 2009. K.S. VENKATRAMAN: CRISIL Assigns 'BB' Rating to INR5MM LT Loan -------------------------------------------------------------- CRISIL has assigned its 'BB/Stable/P4+' ratings to the bank facilities of K.S. Venkatraman & Co Pvt Ltd, part of the KSVR. Facilities Ratings ---------- ------- INR5.00 Million Long Term Loan BB/Stable (Assigned) INR45.00 Million Cash Credit BB/Stable (Assigned) INR50.00 Million Bank Guarantee Limit P4+(Assigned) The ratings reflect the KSVR group's exposure to risks relating to fluctuations in raw material prices, large working capital requirements, and small scale of operations. These rating weaknesses are partially offset by the KSVR group's above-average financial risk profile marked by comfortable gearing and debt protection measures, and the experience of its promoters in the construction industry. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of KSVR, Kumar Agencies, and Ashwin Agencies, collectively referred to as the KSVR group. This is because all the three entities are managed by the same promoter family, and have operational and financial linkages with each other. Outlook: Stable CRISIL believes that the KSVR group will maintain its healthy capital structure and benefit from its moderate order book, over the medium term. The outlook may be revised to 'Positive' if the KSVR group enhances its scale of operations substantially and diversifies its revenue profile, while increasing its profitability. Conversely, the outlook may be revised to 'Negative' if the group's profitability deteriorates steeply, or if it undertakes a large, debt-funded capital expenditure programme, weakening its financial risk profile. About the Group KSVR was set up in 1940 as a partnership concern, and was reconstituted as a private limited company in year 1948. KSVR executes various infrastructure-related works (construction of factory sheds/buildings, warehouses, schools, military barracks, and air strips, among others) for both private and government sector entities. Most of the operations of the company are in Tamil Nadu. KSVR is currently managed by Mr R RamKumar (Managing Director) and his family members, operating from Chennai (Tamil Nadu). Kumar Agencies, a sole proprietorship concern of Mr RamKumar, is a distributor of India Cements Ltd for Chennai. Ashwin Agencies is a sole proprietorship concern of Ms. Hema RamKumar (Director of KSVR). It owns drilling equipment and provides services to KSVR. The KSVR group reported a profit after tax (PAT) of INR4 million on net sales of INR291 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR8 million on net sales of INR299 million for 2007-08. KINETA MINERALS: CRISIL Upgrades Rating on INR1.2BB Loan to 'BB+' ----------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facility of Kineta Minerals & Metals Ltd, part of the Kineta group, to 'BB+/Stable' from 'BB/Stable', while reaffirming its rating on the company's short-term bank facilities at 'P4+'. Facilities Ratings ---------- ------- INR1200 Million Proposed Long-Term Loan 'BB+/Stable' (Upgraded from 'BB/Stable') INR1000 Million Proposed Short-Term Loan 'P4+' (Reaffirmed) INR1300 Million Export Packing Credit/Foreign Bill Discounting 'P4+' (Reaffirmed) The upgrade reflects improvement in the Kineta group's financial risk profile, marked by a decrease in its total outside liabilities to total net worth ratio to below 1.5 times as on March 31, 2010, from above 4.0 times as on March 31, 2008. The improvement was driven by the group's efficient working capital management and increase in net worth. CRISIL expects the Kineta group's financial risk profile to remain comfortable over the medium term backed by its sound working capital management policy and established relationships with its customers, resulting in steady profitability. However, the ratings also reflect the Kineta group's exposure to risks related to geographical and client concentration in its revenue profile, cyclicality in the end-user industry, and government regulations. These rating weaknesses are partially offset by the Kineta group's established relationships with its suppliers and international customers, and above-average financial risk profile. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of BEPL, KMML, Kineta International Pte Ltd, Singapore, and Balabhanu Enterprises Pvt Ltd, together referred to as the Kineta group. This is because all the three entities are under common management, in similar line of business, and expected to extend need-based funding support to each other - KMML has guaranteed KIPL's bank loan facilities. Outlook: Stable CRISIL believes that the Kineta group will continue to benefit from its established relationships with its suppliers and international customers. The outlook may be revised to 'Positive' in case of significant diversification in the group's customer base, or more-than-expected improvement in its profitability with an increase in its scale of operations. Conversely, the outlook may be revised to 'Negative' in case of any adverse change in Government of India's policy on iron ore exports, or significant support to other group companies. Set up in Hyderabad by Mr. V Balashowry in April 2006, KMML trades in iron ore. It procures iron ore fines from small and big mine owners located around the port cities of Krishnapatnam and Visakhapatnam (Andhra Pradesh); Bellary, Sandur, and Mangalore (Karnataka); and Hospet (Tamil Nadu); and in Goa. It exports nearly 85 per cent of the iron ore to China, and the remainder to Korea and Japan. KIPL, a wholly owned subsidiary of KMML and set up in 2008 in Singapore, is also engaged in trading of iron ore, and exports primarily to China. BEPL, incorporated in 2003 in Bhadravati (Karnataka), was set up to undertake job-based work for Visvesvaraya Iron & Steel Ltd (VISL; unit of Steel Authority of India Ltd) on a small scale. BEPL cuts iron rods as per VISL's customer requirements. It started exporting iron ore from 2005. For 2009-10 (refers to financial year, April 1 to March 31), the Kineta group is expected to report a provisional profit after tax (PAT) of INR204 million on net sales of INR5.56 billion, as against a PAT of INR44 million on net sales of INR2.61 billion for 2008-09. For 2009-10, KMML (standalone) is expected to report a provisional PAT of INR9 million on net sales of INR288 million, as against INR16 million and INR2.15 billion, respectively, for 2008-09. ROHAN RAJDEEP: CRISIL Puts 'B+' Rating on INR1.12B Term Loan ------------------------------------------------------------ CRISIL has assigned its 'B+/Stable/P4' ratings to Rohan Rajdeep Rajasthan Infra Projects Pvt Ltd's bank facilities. Facilities Ratings ---------- ------- INR1125.0 Million Rupee Term Loan B+/Stable (Assigned) INR40.0 Million Bank Guarantee P4 (Assigned) The ratings reflect RRRIPPL's exposure to construction risks, given that RRRIPPL is an SPV for an ongoing road project which is in the initial stage and the complexity associated with tunnel construction, and to earnings risks inherent in toll-based road projects. These rating weaknesses are partially offset by RRRIPPL's construction contract with Rohan Rajdeep Tollways Ltd (RRTL), which has experience in executing road construction projects; also, the road is being constructed using concrete, thereby entailing lower routine maintenance charges. Outlook: Stable CRISIL believes that RRRIPPL will complete its ongoing project and start toll collection on schedule. The outlook could be revised to 'Positive' if the toll income is higher than expected, resulting in better debt protection metrics for RRRIPPL. Conversely, the outlook could be revised to 'Negative' in case RRRIPPL faces significant time or cost overrun in its ongoing project, or generates considerably less-than-expected toll income. About Rohan Rajdeep Rohan Rajdeep Rajasthan Infra Projects Pvt Ltd is a special purpose vehicle (SPV) promoted by Rohan Builders (I) Pvt Ltd, a Rohan group company; Rajdeep Buildcon Pvt Ltd, a Rajdeep group company; and RRTL, a Rohan and Rajdeep group joint venture, to undertake the project involving the designing, engineering, financing, construction, operation and maintenance of a four-lane alternate route to Ghat-Ki-Guni by construction of a tunnel in Jhalana Hills to connect National Highway 11 (Agra Road), Jaipur on build, operate and transfer basis. The project involves construction of a 647-metre tunnel across Jhalana Hills for a total project cost of INR1.5 billion, to be funded in a debt-to- equity ratio of 3:1. The concession agreement was signed with Jaipur Development Authority (concessionaire, JDA) in November 2009, for a concession period of 13 years, 5 months and 20 days, starting April 2010. The project is expected to be operational by December 2011. The Rohan group undertakes industrial and infrastructure construction projects. The group also has a presence in the real estate sector. The Rajdeep group operates in the industrial and infrastructure construction segment, and has completed a large number of projects in Maharashtra. SHIV SAI: CRISIL Reaffirms 'BB' Ratings on Various Bank Debts ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Shiv Sai Infrastructure Pvt Ltd (Shiv Sai; part of the Shiv Sai group) continue to reflect the Shiv Sai group's moderately weak financial risk profile marked by moderate net worth, weak debt protection measures, limited track record in real estate development, and exposure to risks relating to concentration of revenues in Faridabad (Haryana), and to completion and funding of projects, Shiv Sai I and Ozone Centre. These weaknesses are partially offset by the benefits that the group derives from low saleability risk of, and advance bookings for, its ongoing project, Ozone Park. Further, Shiv Sai has large term loan becoming due for repayment between August and December 2010; the company's liquidity management and timely repayment of these loans will be key rating sensitivity factors in the near term. Facilities Ratings ---------- ------- INR200.0 Million Term Loan BB/Stable (Reaffirmed) INR10.0 Million Proposed LT Loan BB/Stable (Reaffirmed) INR40.0 Million Bank Guarantee P4+ (Reaffirmed) For arriving at the ratings, CRISIL has combined the business and financial risk profiles of Shiv Sai, and Shiv Sai's wholly owned subsidiaries, SSIPL Pvt Ltd and SMG Estates Pvt Ltd. This is because Shiv Sai and its subsidiaries (collectively referred to as the Shiv Sai group) have a common line of business, and Shiv Sai has made significant investments in the subsidiaries. Outlook: Stable CRISIL believes that the Shiv Sai will maintain a stable financial risk profile over the medium term, supported by the moderate saleability of its projects and buoyancy in the Faridabad real estate market. The outlook may be revised to 'Positive' if the group's financial risk profile improves considerably owing to better than expected accruals, or if it enters new geographies, while improving its operating margin. Conversely, the outlook may be revised to 'Negative' if the group takes on large debt to fund future projects, or faces low offtake on current and future projects. About Shiv Sai Set up in 2005 by Mr. Sandeep Gupta, Mr.Vikram Dhawan, and Mr Anurag Sharma, Shiv Sai has two on-going real estate projects: Ozone Park Apartments, which has 500 residential units, and Sai Park-I, which has 240 residential units. Ozone Park Apartments, the company's first project, is expected to be completed by December 2010. SSIPL is a wholly owned subsidiary of Shiv Sai, holding a 30 acres land in Palwal, Faridabad. Shiv Sai acquired SMG for INR11.2 crores in 2007 and took over the 3630 sq meter of land. Currently SMG is undertaking a commercial project, 'Ozone Centre', having a total construction cost of INR31 crores. Shiv Sai reported a profit after tax (PAT) of INR11.3 million on net sales of INR445 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR16.7 million on net sales of INR210.4 million for 2007-08. Shiv Sai had no sales prior to 2007-08. THENI GURU: CRISIL Assigns 'B' Ratings on Various Bank Facilities ----------------------------------------------------------------- CRISIL has assigned its 'B/Stable/P4' ratings to Theni Guru Krishna Textile Mills Pvt Ltd's bank facilities. Facilities Ratings ---------- ------- INR160.00 Million Cash Credit B/Stable (Assigned) INR25.00 Million Standby Line B/Stable (Assigned) of Credit INR455.30 Million Term Loan B/Stable (Assigned) INR74.65 Million Proposed Long Term B/Stable (Assigned) Bank Facility INR35.00 Million Letter of Credit P4 (Assigned) INR0.05 Million Bank Guarantee P4 (Assigned) The ratings reflect Theni Guru's below-average financial risk profile and exposure to risks relating to volatility in raw material prices and to fluctuations in value of the Indian rupee. These weaknesses are partially offset by the benefits that the company derives from its experienced management, established relationships with customers, and moderate operating efficiencies. Outlook: Stable CRISIL believes that Theni Guru will continue to benefit from its integrated operations over the medium term. The outlook may be revised to 'Positive' if Theni Guru's accruals and capital structure improve significantly from current levels. Conversely, the outlook may be revised to 'Negative' if Theni Guru's financial risk profile deteriorates because of higher-than-expected derivative losses, large debt-funded capex, or significant decline in capacity utilisation or operating profitability. About Theni Guru Set up in 2005, Theni Guru primarily exports readymade bed sheets, pillow covers, and blankets manufactured from different blends of raw material including cotton, polyester, and polycotton. The company has integrated operations with spinning, weaving, and bleaching facilities. The company is part of the ATK group which was promoted by Mr. A T Krishnaswamy. The group is now managed by Mr. T K Ramasamy, Mr. T K Srinivasan, Mr. T K Ponraj, and Mr. S Rajasekar. Theni Guru posted a provisional profit after tax of INR41 million on net sales of INR976 million for 2009-10 (refers to financial year, April 1 to March 31), as against a net loss of INR19.4 million on net sales of INR693.4 million for 2008-09. ========= J A P A N ========= APROCEED CO: Moody's Reviews Ratings on Four Classes of Notes ------------------------------------------------------------- Moody's Investors Service has placed four classes of Aproceed Co. CMBS bonds under review for possible downgrade. The final maturity of these bonds will take place in February 2012. The individual rating actions are listed below. -- Class A, Aaa placed under review for possible downgrade; previously on June 18, 2009 confirmed at Aaa -- Class B, Aa3 placed under review for possible downgrade; previously on June 18, 2009 downgraded to Aa3 from Aa2 -- Class C, Baa1 placed under review for possible downgrade; previously on June 18, 2009 downgraded to Baa1 from A2 -- Class D, Ba2 placed under review for possible downgrade; previously on June 18, 2009 downgraded to Ba2 from Baa2 CMBS Transaction-Aproceed Co., Ltd., effected in March 2007, represents the securitization of a portfolio of five properties located in Tokyo and in smaller cities throughout the country. At this time, the relevant party aims to sell the five properties in one lot before August 2010. After August 2010, backing properties can be sold individually. The current review has been prompted by Moody's growing concerns about the need to reconsider its recovery assumptions because the fundamental profitability -- in terms of rents and occupancy rates -- of the properties is likely to be lower than assumed and will be for some time. In its review, Moody's will re-assess its recovery assumptions for the properties, incorporating their leasing status and the associated disposal activities. Moody's Investors Service is a publisher of rating opinions and research. It is not involved in the offering or sale of any securities, nor is it acting on behalf of the offering party. This release is not a solicitation or a recommendation to buy, hold, or sell securities. JAPAN AIRLINES: To Hold Talks With Main Creditors Over Debt Waiver ------------------------------------------------------------------ Japan Airlines Corp. Chairman Kazuo Inamori is seeking to meet with the leaders of the company's three main creditor banks for talks on its request for an additional debt waiver, Kyodo News reports citing sources familiar with the matter. According to Kyodo, source said JAL plans to hold separate meetings with the Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corp and Mizuho Corporate Bank between the end of July and early August to discuss its corporate rehabilitation plans before the deadline at the end of August for the airline to submit a rehabilitation plan to the Tokyo District Court. Kyodo says representatives from the Enterprise Turnaround Initiative Corp of Japan, the state-backed administrator overseeing the airline's rehabilitation, are likely to take part in the meetings as well. Kyodo notes that its sources also said JAL is likely to ask the creditor banks to expand the amount of waivers in unsecured loans to around JPY400 billion from about JPY358.5 billion the airline planned to ask for initially. Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JAPAN AIRLINES: Proposes to Cut Pilots' Salary by 25% ----------------------------------------------------- The Yomiuri Shimbun reports that Japan Airlines Corp. has proposed to labor unions the abolishment of pilots' monthly guaranteed minimum allowances to further reduce manpower costs. The proposal targets employees of Japan Airlines International Co., a core subsidiary of JAL, the report adds. The report discloses that the proposal equates to pilot salary reductions of about 25%, in addition to the 5% across-the-board salary cuts for all employees implemented in April. The monthly allowances for pilots, which are for 65 hours of flight time, have been guaranteed regardless of actual hours flown, the report notes. The Yomiuri Shimbun says JAL has also proposed belt-tightening policies for other positions at the subsidiary, such as abolishing similar guaranteed minimum allowances for flight attendants and reducing allowances for ground workers' holiday and night work. JAL intends to further reduce its total personnel cost by adopting a salary system to reflect the company's performance, the report adds. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ========= K O R E A ========= KOREA EXCHANGE: MBK Partners to Bid for Lone Star's Stake --------------------------------------------------------- Private-equity firm MBK Partners plans to submit a bid for Lone Star Funds' 51% stake in Korea Exchange Bank, Dow Jones Newswires reports citing a person familiar with the situation. According to Dow Jones, the person said Lone Star has set a deadline of end-July for binding bids and that there have been no specific discussions on a price for the stake that is currently valued at KRW4.09 trillion (US$3.4 billion). The person added that MBK is also prepared to form a consortium to pull off the deal if needed, but didn't name specific firms that MBK may enlist for the bid, Dow Jones says. Lone Star, a U.S.-based private-equity fund, has had a number of setbacks in trying to exit from its $1.3 billion investment in KEB, which it bought in 2003, Dow Jones notes. Analysts have said Lone Star's sale efforts could be delayed due to its inability to drum up enough interested bidders because of uncertainties such as Europe's fiscal woes as well as the South Korean government's efforts to divest its 57% stake in Woori Finance Holdings Co., the country's second-largest financial holding company by assets, the report relates. According to Dow Jones, Australia & New Zealand Banking Group Ltd. remains the only firm to publicly acknowledge interest in KEB. MBK is being advised by Nomura Holdings Inc., while Credit Suisse is advising Lone Star for the sale, the report adds. About Korea Exchange Bank Korea Exchange Bank -- http://www.keb.co.kr/-- established in 1967, is one of seven national banks in South Korea with over 300 domestic branches and 28 overseas networks, including Canada, the United States, Panama and Germany, constituting the most extensive global banking network of any Korean bank. KEB Futures -- http://www.kebf.com/-- is a clearing member of KOFEX and is a subsidiary of Korea Exchange Bank, the official F/X settlement bank for Korean Futures Exchange. * * * The Troubled Company Reporter-Asia Pacific reported on May 8, 2007, that as part of the application of its refined joint default analysis and updated bank financial strength rating methodologies, Moody's Investors Service upgraded Korea Exchange's Bank Financial Strength Rating to C- from D. On November 7, 2008, Moody's Investors Service changed the outlook on the C- bank financial strength rating (BFSR) of Korea Exchange Bank (KEB) to negative from stable. Its debt and deposit ratings are unaffected and carry a stable outlook. SSANGYONG MOTOR: M&M Board to Decide on Ssangyong Bid by July 28 ---------------------------------------------------------------- Mahindra & Mahindra Ltd. said it will take a decision on its bid for Ssangyong Motor Co. at its board meeting on July 28, Satish Sarangarajan at Dow Jones Newswires reports. As reported in the Troubled Company Reporter-Asia Pacific on June 7, 2010, Ssangyong Motor Co. selected Nissan Motor Co., Renault SA and four other bidders for due diligence on the company. Ssangyong Motor began accepting letters of intent on May 10 from potential buyers, who will take over a majority of its stake valued at around KRW300 billion. Samjong KPMG, a South Korean unit of the global services firm KPMG, and Macquarie Securities are managing the sale. Deadline for submitting binding bids is on Aug. 10 Meanwhile, Reuters, citing the China Business News, reports that SAIC Motor Corp. might continue to slash its holdings in Ssangyong Motor. Reuters relates the paper said SAIC, which now holds 3.79 percent of Ssangyong, will not rule out cutting down its stake further via the stock market. About Ssangyong Motor 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. SSANGYONG MOTOR: To Sell Shipping Grounds to Shinsegae Group ------------------------------------------------------------ Ssangyong Motor Co. has entered into a memorandum of understanding with Shinsegae Group, JoongAng Daily reports. Under the MOU, Shinsegae Group will acquire the automaker?s shipping grounds in Anseong, Gyeonggi, valued at KRW104 billion. "Ssangyong is in a continuous process of liquidating its assets, as well as preparing for a merger and acquisition, and a mere 100 billion won will not completely normalize our operations," a Ssangyong representative told JoongAng Daily. "But the fact that Shinsegae has made clear its intent to buy the land does allow for a little breathing room." According to the report, Ssangyong Motors head Park Yeong-tae said: "This land is something we wanted to keep until the end. It is crucial to the company?s future, but through this sale the firm will fight to normalize as soon as possible." About Ssangyong Motor 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. ==================== N E W Z E A L A N D ==================== AIR NEW ZEALAND: Denies Buying 15% Stake in Virgin Blue ------------------------------------------------------- Tracy Withers at Bloomberg News reports that Air New Zealand Ltd. denied a report it has bought a stake in Virgin Blue Holdings Ltd. as the two airlines await a ruling on a proposed alliance. Bloomberg relates Air New Zealand said it is conscious that alliances such as the one planned with Virgin Blue, Australia's second-largest carrier, frequently include an equity aspect, but their proposal does not do so. According to Bloomberg, The Sydney Morning Herald reported Friday that the New Zealand carrier may be preparing to buy as much as 15 percent of Virgin, citing people it didn't name. Bloomberg discloses that Air New Zealand and Virgin are seeking approval from regulators for an alliance on their services between New Zealand and Australia. Co-operation may help the carriers compete with Qantas Airways Ltd. and Emirates on routes flown by more than 5 million passengers a year, the report notes. Bloomberg adds that Air New Zealand said the necessary regulatory approvals are still in process and it has had no indication of the outcome of this decision. A final decision on the alliance is expected by the end of the year, the report relates. About Air New Zealand Based in Auckland, New Zealand, Air New Zealand Ltd. -- http://www.airnewzealand.com/--is the country's flag air carrier, with domestic and international passenger and freight operations, and an aviation engineering business. Air New Zealand flies to the United States, United Kingdom, Canada, Europe and other Asian cities. * * * Air New Zealand Ltd. continues to carry Moody's Investors Service "Ba1" Senior Unsecured Issuer rating with stable outlook. FINANCE & INVESTMENTS: Partners Agree to Lifetime Management Ban ---------------------------------------------------------------- The Securities Commission has accepted enforceable undertakings Andrew Harding and Murray Scholfield, the partners of Finance & Investments. Under the terms of the undertaking, Mr. Harding and Mr. Scholfield agree not to take part in the management of any company at any time in the future. The regulator said they also agree not to offer or promote an offer of securities at any time in the future. The regulator said the partners offered securities to the public without an investment statement or registered prospectus. Based in Tahanui, Finance & Investments was founded in 1973 to provide vehicle financing and subsequently expanded into other areas of finance. The principals of Finance & Investments, Andrew Harding and Murray Scholfield placed the finance company into receivership in September 2007. The company owed about NZ$16 billion to 370 investors. PSIS LTD: S&P Changes Outlook to Positive; Affirms 'BB+/B' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it had revised its rating outlook on New Zealand mutual company PSIS Ltd. to positive, from stable. At the same time, S&P affirmed the ratings on PSIS at 'BB+/B'. "The positive rating outlook reflects S&P's expectations that the ratings could be raised to 'BBB-/A-3' if the company continues to successfully manage its low-risk and sound credit profile through to 2011, a period when the nonbank deposit-taking sector in New Zealand is expected to come under pressure," Standard & Poor's credit analyst Peter Sikora said. Industry pressures anticipated include the expiry of the existing New Zealand government retail deposit guarantee on Oct. 12, 2010, heightened competition for retail funding, and the prospect that additional NBDT failures could undermine confidence in the sector and affect all NBDTs. The rating affirmation reflects PSIS' strong member support and its sound financial profile through the recent very difficult operating environment in New Zealand, particularly for nonbank deposit-takers. PSIS' ongoing commitment to maintaining a low credit risk profile by focusing lending activities on low-risk residential mortgage lending has underpinned its solid financial profile. The low credit risk profile has also helped offset limitations regarding PSIS' concentrated business risk profile, stemming from its single-sector and narrow product focus. PSIS' lending activities, together with its conservative underwriting practices, have supported the company's good asset-quality experience, evidenced by the low level of nonperforming assets and sound operating performance, which has been superior compared with most rated mutual-based credit unions and building societies in New Zealand. Mr. Sikora added: "The outlook could be revised to stable should there be signs that deposit support was not as strong as anticipated or if PSIS was not successful in maintaining its sound financial risk profile, which helps offset some of the limitations regarding its business risk profile." The rating would also come under downward pressure if there was any observed increase in the company's risk appetite through aggressive growth, a material weakening of underwriting standards, or expansion into higher risk activities. An early indicator of this could be a material increase in the level of nonperforming loans from recent and historical levels. Downward rating pressure would also emerge from any unexpected loss that undermines S&P's overall view of PSIS' risk management capability or weakens capital materially. ********* 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 ***