/raid1/www/Hosts/bankrupt/TCRAP_Public/100805.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, August 5, 2010, Vol. 13, No. 153
Headlines
A U S T R A L I A
ONE.TEL: May Pursue Claim Against CGU, High Court Rules
SHERATON NOOSA: Maybe Liquidated Amid Dispute Between Owners
SCOTT PRINTING: Goes Into Liquidation; Creditors Refuse DOCA
C H I N A
KWG PROPERTY: Moody's Assigns 'Ba3' Corporate Family Rating
KWG PROPERTY: S&P Assigns 'BB-' Long-Term Corporate Credit Rating
H O N G K O N G
DRAGON LEAF: Placed Under Voluntary Wind-Up Proceedings
FASHION ERA: Billy Li Sze Kuen Appointed as Liquidator
FUNNY INDUSTRIAL: Members' Final Meeting Set for August 31
GLOBAL SOURCE: Members' and Creditors Meetings Set for August 26
HARBOUR ORIGIN: Creditors' Proofs of Debt Due August 30
HK I-EDUCATION: Members' Final Meeting Set for September 3
HK COMMUNITYU: Members' Final Meeting Set for September 3
HK PEOPLE: Placed Under Voluntary Wind-Up Proceedings
HING LUNG: Placed Under Voluntary Wind-Up Proceedings
INFORMA ASIA: Members' Final Meeting Set for August 30
JUMBO LIAISON: Placed Under Voluntary Wind-Up Proceedings
KENLAP CHEMICALS: Members' and Creditors Meetings Set for August 9
PLEXXOR CO: Chan and Lee Appointed as Liquidators
TA THERAPEUTICS: Creditors' Proofs of Debt Due August 20
I N D I A
ASSOCIATED BIOTECH: CRISIL Places 'BB+' Rating on INR9MM Term Loan
AVINASH DEVELOPER: CRISIL Rates INR640 Million LT Loan at 'D'
CONCEPT SHAPERS: CRISIL Assigns 'D' Rating to INR30MM Cash Credit
DES RAJ: CRISIL Rates INR80 Million Cash Credit at 'B+'
DEEPAK FASTENERS: CRISIL Cuts Ratings on Bank Debts to 'BB+'
GANPATI SUGAR: CRISIL Rates INR677.2 Million Cash Credit at 'B+'
GEO SEAFOODS: CRISIL Reaffirms 'BB+' Rating on INR5.2MM LT Loan
DALKAN SHIP: CRISIL Reaffirms 'BB' Rating on INR35MM Cash Credit
HEXAGON NUTRITION: CRISIL Assigns 'D' Rating to INR35MM Loan
JAI DADA: CRISIL Assigns 'BB-' Rating to INR120.5MM Term Loan
LANDMARK CORPORATION: CRISIL Assigns 'BB' Rating to INR30MM Debt
LODHA IMPEX: CRISIL Assigns 'B' Rating to INR8.2 Million Term Loan
MAGNUM STEELS: CRISIL Reaffirms 'BB' Rating on INR65MM Cash Credit
MANA PROJECTS: CRISIL Assigns 'B' Rating to INR32MM Cash Credit
MENON BEARINGS: CRISIL Reaffirms 'BB+' Ratings on Various Debts
RESHMIKA MINERALS: CRISIL Assigns 'B-' Ratings to Various Debts
SHEEL CHAND: CRISIL Assigns 'BB-' Rating to INR28.3MM LT Loan
SHIVA POLYMERS: CRISIL Reaffirms 'BB+' Rating on INR90MM Loan
SHREE AUTOMOTIVE: CRISIL Rates INR200 Million Cash Credit at 'B'
SHREE BALAJI: CRISIL Assigns 'D' Rating to INR10.6MM Term Loan
VIJAYKUMAR & COMPANY: CRISIL Reaffirms 'BB' Rating on INR35MM Debt
Z SQUARE: CRISIL Rates INR650 Million Term Loan at 'D'
J A P A N
JAPAN AIRLINES: Asks Crash Site Foundation to Cover Donation
K O R E A
DAEWOO ENGINEERING: KDB Wants to Acquire Firm
GENERAL MOTORS: GM Daewoo's Auto Sales Rise 49% in July
SSANGYONG MOTOR: Auto Sales in July Hit 7,369 Vehicles
N E W Z E A L A N D
ALLIED FARMERS: Plans NZ$19.3 Million Capital Raising
FELTEX CARPET: Five Former Directors Not Guilty of Charges
CAPITAL + MERCHANT: Case Against Directors Delayed Until October
STRATEGIC FINANCE: Former CEO Rules Out Any Charges
S R I L A N K A
CEYLEASE FINANCIAL: Fitch Cuts National Long-Term Rating to 'BB+'
COMMERCIAL BANK: Fitch Corrects Press Release on Ratings
INDUSTRIAL FINANCE: Fitch Affirms 'D' National Long-Term Rating
T A I W A N
TAICHUNG COMMERCIAL: Fitch Cuts Issuer Default Rating to 'BB+'
- - - - -
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A U S T R A L I A
=================
ONE.TEL: May Pursue Claim Against CGU, High Court Rules
-------------------------------------------------------
The High Court of Australia on Wednesday ruled that One.Tel Ltd.
may pursue a claim against CGU Insurance Ltd. for AU$20 million
that a former director was ordered to pay, Bloomberg News reports.
Bloomberg says the court partly overturned an appeals court
ruling, which said a bankruptcy trustee's time limit to pursue the
claim had expired.
"The effect of these arguments, if sound, would have been to give
CGU an adventitious windfall," the five-member court wrote in its
judgment, according to Bloomberg.
The High Court ruling didn't deal with the merits of the case and
CGU maintains the directors' policy wasn't valid, Iwona Polski,
spokeswoman for the insurer, told Bloomberg in a phone interview.
One.Tel failed to meet disclosure requirements, which invalidated
the policy, she said.
Bloomberg recalls that John Greaves, a former director, was
ordered by the Australian Securities and Investments Commission in
September 2004 to pay AU$20 million in compensation to One.Tel and
AU$350,000 to ASIC for having breached the Corporations Act.
Mr. Greaves turned over his property and his rights under the
Company's liability insurance for directors to a trustee.
According to the agreement, the trustee was to sell the property
and apply for payments under the insurance to settle Greaves'
debts, the court ruling said.
According to Bloomberg, the agreement stipulated the arrangement
was to expire in three years. The trustee sued CGU in October
2006 for the AU$20 million and the agreement with Greaves expired
in November of the following year. CGU argued that once it
expired, the trustee could no longer pursue the claim, the report
notes.
Bloomberg relates the court also ruled that Mr. Greaves remains
liable for the AU$20 million. That debt remains an "amount
payable," the court said, and as a result the policy must also
remain in force. "If by some happy chance Mr. Greaves became
sufficiently wealthy to pay the A$20 million, and chose to do so,
it could not validly be contended that the policy did not
respond."
About One.Tel
One.Tel Limited is an Australian-based telecommunications
company, belonging to One.Tel Group. One.Tel Ltd. was
established in 1995 soon after the deregulation of the
Australian telecommunications industry, most of which are
currently under external administration by court appointed
liquidators.
One.Tel is currently in liquidation due to financial problems.
Ferrier Hodgson was appointed as voluntary administrator on
May 29, 2001. The administrator's report stated that the company
was insolvent as of March 2001. Accordingly, the administrator
terminated approximately 3,000 employees in June that same year.
Steve Sherman and Peter Walker of Ferrier Hodgson were then
named liquidators on July 24, 2001.
SHERATON NOOSA: Maybe Liquidated Amid Dispute Between Owners
------------------------------------------------------------
NoosaNews reports that Sheraton Noosa Resort and Spa is in danger
of being placed in liquidation because of a legal dispute between
its two owners.
Stephen Ferrigno, the hotel's general manager, said the dispute
between the hotel's owners -- Sydney-based property fund manager
Ashington and the listed Valad Property Group -- had put on hold
the main elements of a $12 million redevelopment of the prestige
property.
NoosaNews, citing media reports last week, says the NSW Supreme
Court recently rejected an application by entity Ashington Capital
Pty Ltd to wind up Noosa Venture 1 Pty Ltd, which is jointly
controlled by Ashington and Valad. Noosa Venture owns the
Sheraton Noosa.
The move to have the hotel liquidated followed an ongoing dispute
between Ashington and Valad over the commitment of future funds
for the hotel's proposed upgrade.
However, Justice Paul Brereton said in his judgment that the
property could be wound up if the dispute resolution procedures
were exhausted. It is one of four court cases that has been or is
being fought between the two companies.
The NSW Supreme Court last week ordered Ashington Pty Ltd -- which
is part of the group's development and property funds management
structure -- wound up over unpaid legal fees. Mr. Ferrigno said
it would be "business as usual" even if the property was sold,
with a change of letterhead and ABN number all that would happen.
Valad originally purchased the Noosa Sheraton for $93.6 million in
2007.
SCOTT PRINTING: Goes Into Liquidation; Creditors Refuse DOCA
------------------------------------------------------------
Sydney-based Scott Printing has gone into liquidation and will
have its assets sold off at auction, ProPrint reports.
ProPrint says the company formally entered liquidation at a
meeting of creditors on July 26 after company directors elected
not to proceed with a deed of company arrangement (DOCA) devised
by insolvency firm Crouch Amirbeaggi.
Administrator Nicholas Crouch told ProPrint he was "a bit
confused" as to why directors elected not to proceed with the
DOCA, which would have seen the company continue to trade and
unsecured creditors paid 20c on the dollar after a number of
years.
Shamir Amirbeaggi has been appointed to head up the liquidation
process, which will see the company's site and equipment sold at
auction. The proceeds will then go towards secured creditor
Commonwealth Bank.
As reported in the Troubled Company Reporter-Asia Pacific on
May 5, 2010, Scott Printing entered voluntary administration on
April 27, with Crouch Amirbeaggi appointed as administrators.
The Scott Printing Group comprises Hippo Books, Centatime
Publishing and Edgecliff Print, though Edgecliff Print is believed
to be unaffected by the liquidation. Hippo Books produces
paperback books, while Centatime Publishing specialises in colour
and B&W manuals, brochures and catalogues.
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C H I N A
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KWG PROPERTY: Moody's Assigns 'Ba3' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service has assigned a first-time Ba3 corporate
family rating to KWG Property Holdings Limited. At the same time,
Moody's has assigned a provisional (P)B1 rating to its proposed
US$senior unsecured bond issuance. The outlook for both ratings
is stable.
Proceeds from the proposed bonds will be used to fund KWG's land
acquisitions and development of existing projects.
The provisional rating status of the bond rating will be removed
after KWG has successfully completed the issuance based on
satisfactory terms and conditions.
"KWG's Ba3 corporate family rating reflects its strong brand name
supported by quality products that command premium prices," says
Peter Choy, a Moody's Vice President & Senior Credit Officer,
adding, "Its diversified product range -- office, retail and
residential -- also helps to promote its brand."
"The ratings also recognize KWG's good operating track record of
property development in Guangzhou, Chengdu and Suzhou," says Mr.
Choy.
However, the company's ratings are constrained by the low
geographic diversity of its portfolio with half of its land bank
located in Guangzhou.
"In addition, the company's fast growth into new locations will
raise its property development execution risk, though this is
partly mitigated by its risk sharing through joint ventures with
major developers," says Mr. Choy.
"KWG's ratings also reflect the developing status of its offshore
banking relationship," he adds.
The bond rating has been notched down to B1 from Ba3, reflecting
the risk of structural and legal subordinations.
The stable outlook reflects the company's current adequate
liquidity position that will support its property development
business in the next 12 -- 18 months.
Upward rating pressure on the ratings could be limited in the near
future. However, medium-term upgrade pressure may emerge if KWG
(1) achieves its planned sales; (2) replicates its success in
Guangdong Province in other Chinese cities; and (3) shows good
financial discipline and expands cautiously while maintaining a
sound liquidity profile and strong credit metrics.
Moody's sees EBITDA/interest coverage consistently above 4-5x and
adjusted debt leverage below 40% - 45% as indications of a
potential rating upgrade.
On the other hand the ratings could undergo a downgrade if KWG (1)
experiences a significant shortfall in sales; (2) materially
increases its investment in projects but without a corresponding
increase in cash inflow; (3) executes an aggressive land
acquisition plan funded mainly by debt; and/or (4) shows evidence
of material weakening of balance sheet liquidity.
Moody's sees EBITDA/interest falling below 2.5 - 3.0x and adjusted
debt leverage consistently above 50% as indications of a potential
downgrade of the ratings.
KWG Property Holding Limited is a Chinese property developer
listed on the Hong Kong Stock Exchange in July 2007. It operates
in Guangzhou, Chengdu, Suzhou, Beijing and Hainan, developing mid-
to-high end residential properties, office buildings, shopping
malls and hotels.
KWG PROPERTY: S&P Assigns 'BB-' Long-Term Corporate Credit Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned its
'BB-' long-term corporate credit rating to China-based property
developer KWG Property Holding Ltd. The outlook is stable. At
the same time, Standard & Poor's assigned its 'B+' issue rating to
the company's proposed issue of senior unsecured notes. The
proceeds will be used to finance existing and new property
projects and for general corporate purposes. The rating on the
notes is subject to S&P's review of the final issuance
documentation.
"The rating on KWG reflects the company's short operational track
record outside Guangzhou and its volatile financial history.
These weaknesses are tempered by KWG's satisfactory performance in
new markets. In addition, it has better execution, and a more
diverse geographical coverage and product mix compared with peers'
of a similar scale," said Standard & Poor's credit analyst Bei Fu.
KWG's execution track record has been satisfactory over the past
three years while it has expanded outside its home city of
Guangzhou, where it has a solid market position. Its property
sales are satisfactory in new markets. Suzhou, Chengdu, and
Beijing accounted for more than 55% of its contracted sales in
2009, compared with 100% from Guangzhou in 2007. S&P expects
Guangzhou's contribution to sales to remain below 50% in future
years. KWG's increasingly recognized brand name in its new
markets will help reduce execution risk for the later phases of
projects, compared with their launch. As well as having a more
geographically diversified property portfolio than previously, KWG
is building an investment property portfolio.
KWG's appetite for land acquisitions remains aggressive, in S&P's
view, but has diminished compared with three years ago. S&P
believes the company is working to ensure consistent and prudent
financial management. Its financial metrics have been
historically volatile, due to the small number of projects and
expenses associated with entering new markets. S&P expects its
financial performance to improve this year and beyond as its new
markets contribute to financial performance. EBITDA interest
coverage is likely to be about 4x in 2010 onwards, compared with
2.5x in 2009. Revenue should increase by more than 50% in 2010
from Chinese renminbi (RMB) 4.3 billion a year earlier, after
taking into account contracted sales of RMB7.6 billion in 2009 and
RMB6.5 billion during the first six months of 2010. S&P expects
its EBITDA margin to improve to 30%.
KWG operates in China's high-end residential market, which, in
S&P's view, is a very sensitive segment to the highly cyclical and
competitive nature of the industry. Like its peers in the high-
end segment, KWG may be vulnerable to evolving government
policies. The company's sales may slow in the remainder of 2010,
after a good first six months, as market-cooling measures take
effect and supply increases.
"The issue rating on KWG's proposed notes is one notch lower than
the corporate credit rating to reflect S&P's opinion that offshore
noteholders would be materially disadvantaged, compared with
onshore creditors, in the event of default. In S&P's view, the
company's ratio of priority borrowings to total assets will remain
above its notching threshold of 15% for speculative-grade debt,"
said Ms. Fu.
KWG's liquidity is adequate, in S&P's view. It had about
RMB3.85 billion in cash on hand at the end of April 2010. This
is compared with short-term debt of RMB3.1 billion, RMB1.4 billion
in outstanding land premiums, and construction costs of
RMB1.8 billion for the remainder of 2010. KWG recently arranged a
Hong Kong dollar 500 million loan facility with Industrial and
Commercial Bank of China (Asia) Ltd. on top of more than RMB10
billion in an undrawn uncommitted bank facility in China. KWG is
one of the few mid-size Chinese developers that has had a
relationship with Hong Kong banks since 2008. It issued equity in
2009. In S&P's view, KWG's financial flexibility is reasonable
for its scale.
The outlook is stable. S&P expects KWG to leverage on its
established brand name and market position in Guangzhou, Suzhou,
and Chengdu to further diversify its property portfolio. This
should further improve the company's sales and financial metrics
to a level that is appropriate for the current rating. The stable
outlook also reflects the good visibility over the company's
financial performance in 2010, and S&P's expectation that its
results will materially improve over that of 2009.
S&P may raise the rating if KWG's property holdings become more
diversified and the company's financial management becomes more
disciplined, such that its financial performance is sufficiently
consistent to justify a higher rating. This would mean KWG
sustains an EBITDA margin of more than 30% and a ratio of debt to
EBITDA of less than 3.5x.
S&P may lower the rating if management embarks on a more
aggressive debt-funded expansion than S&P expected. In
particular, S&P could downgrade the company if its liquidity
becomes less than adequate due to overspending or lower-than-
expected sales, or the ratio of debt to EBITDA deteriorates to 5x
on a sustainable basis.
================
H O N G K O N G
================
DRAGON LEAF: Placed Under Voluntary Wind-Up Proceedings
-------------------------------------------------------
At an extraordinary general meeting held on July 30, 2010,
creditors of Dragon Leaf Development Limited resolved to
voluntarily wind up the company's operations.
The company's liquidator is:
Mr. Leung Kwok On
Room 402, Highgrade Building
117 Chatham Road South
Tsimshatsui, Kowloon
Hong Kong
FASHION ERA: Billy Li Sze Kuen Appointed as Liquidator
------------------------------------------------------
Billy Li Sze Kuen on July 22, 2010, was appointed as liquidator of
Fashion Era Limited.
The liquidator may be reached at:
Billy Li Sze Kuen
12/F., No. 3 Lockhart Road
Wanchai, Hong Kong
FUNNY INDUSTRIAL: Members' Final Meeting Set for August 31
----------------------------------------------------------
Members of Funny Industrial Limited will hold their final general
meeting on August 31, 2010, at 10:00 a.m., at 5th Floor, 111 Ta
Chuen Ping Street, Kwai Chung, N.T.
At the meeting, Lau Max Pui Kit, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
GLOBAL SOURCE: Members' and Creditors Meetings Set for August 26
----------------------------------------------------------------
Members and creditors of Global Source & Design Limited will hold
their annual meetings on August 26, 2010, at 2:15 p.m., and 2:30
p.m., respectively at Room 305, Carpo Commercial Building, 18-20
Lyndhurst Terrace, Central, in Hong Kong.
At the meeting, Ma Man Wai, the company's liquidator, will give a
report on the company's wind-up proceedings and property disposal.
HARBOUR ORIGIN: Creditors' Proofs of Debt Due August 30
-------------------------------------------------------
Creditors of Harbour Origin Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by August 30, 2010, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on July 16, 2010.
The company's liquidator is:
Mr. Tong Tsin Ka
1202 Takshing House
20 Des Voeux Road
Central, Hong Kong
HK I-EDUCATION: Members' Final Meeting Set for September 3
----------------------------------------------------------
Members of The Hong Kong I-Education Limited will hold their final
general meeting on September 3, 2010, at 3:00 p.m., at 11th Floor,
Li Ka Shing Tower, The Hong Kong Polytechnic University, Hung Hom,
Kowloon, in Hong Kong.
At the meeting, Heung Sai Kit, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
HK COMMUNITYU: Members' Final Meeting Set for September 3
---------------------------------------------------------
Members of Hong Kong CommunityU Limited will hold their final
general meeting on September 3, 2010, at 3:00 p.m., at 11th Floor,
Li Ka Shing Tower, The Hong Kong Polytechnic University, Hung Hom,
Kowloon, in Hong Kong.
At the meeting, Heung Sai Kit, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
HK PEOPLE: Placed Under Voluntary Wind-Up Proceedings
-----------------------------------------------------
At an extraordinary general meeting held on June 18, 2010,
creditors of Hong Kong People Limited resolved to voluntarily wind
up the company's operations.
The company's liquidator is:
Kwan Wing Yee
Room 601, 6/F Kimberley House
35 Kimberly Road
Tsim Sha Tsui, Kowloon
Hong Kong
HING LUNG: Placed Under Voluntary Wind-Up Proceedings
-----------------------------------------------------
At an extraordinary general meeting held on July 23, 2010,
creditors of Hing Lung Properties Limited resolved to voluntarily
wind up the company's operations.
The company's liquidators are:
Mr. Ng See Wah
Mr. Ng Tai Wai
Room 501-2, Lee Kiu Building
51 Jordan Road
Kowloon
INFORMA ASIA: Members' Final Meeting Set for August 30
------------------------------------------------------
Members of Informa Asia Publishing Limited will hold their final
meeting on August 30, 2010, at 10:00 a.m., at 8th Floor,
Gloucester Tower, The Landmark, 15 Queen's Road Central, in Hong
Kong.
At the meeting, Iain Ferguson Bruce, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
JUMBO LIAISON: Placed Under Voluntary Wind-Up Proceedings
---------------------------------------------------------
At an extraordinary general meeting held on July 30, 2010,
creditors of Jumbo Liaison Development Limited resolved to
voluntarily wind up the company's operations.
The company's liquidator is:
Mr. Leung Kwok On
Room 402, Highgrade Building
117 Chatham Road South
Tsimshatsui, Kowloon
Hong Kong
KENLAP CHEMICALS: Members' and Creditors Meetings Set for August 9
------------------------------------------------------------------
Members and creditors of Kenlap Chemicals Limited will hold their
meetings on August 9, 2010, at 10:00 a.m., and 10:30 a.m.,
respectively at 32nd Floor, One Pacific Place, 88 Queensway, in
Hong Kong.
At the meeting, Lai Kar Yan (Derek) and Darach E. Haughey, the
company's liquidators, will give a report on the company's wind-up
proceedings and property disposal.
PLEXXOR CO: Chan and Lee Appointed as Liquidators
-------------------------------------------------
Chan Suk Kam Ida and Lee Che Keung on July 16, 2010, were
appointed as liquidators of Plexxor Co., Limited.
The liquidator may be reached at:
Chan Suk Kam Ida
Lee Che Keung
8th Floor, 22-28 Cheung Tat Road
Tsing Yi, Hong Kong
TA THERAPEUTICS: Creditors' Proofs of Debt Due August 20
--------------------------------------------------------
Creditors of Ta Therapeutics Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by August 20, 2010, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on July 15, 2010.
The company's liquidators are:
John Robert Lees
Mat Ng
John Lees Associates
20/F, Henley Building
5 Queen's Road
Central, Hong Kong
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I N D I A
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ASSOCIATED BIOTECH: CRISIL Places 'BB+' Rating on INR9MM Term Loan
------------------------------------------------------------------
CRISIL has assigned its 'BB+/ Stable/ P4+' ratings to Associated
Biotech's bank facilities.
Facilities Ratings
---------- -------
INR126.00 Million Cash Credit Limit BB+ /Stable (Assigned)
INR9.00 Million Term Loan BB+ /Stable (Assigned)
INR50.00 Million Letter of Credit P4+ (Assigned)
The ratings reflect AB's comfortable financial risk profile,
marked by low gearing, strong debt protection metrics and low net
worth; and promoter-partners' experience in the pharmaceutical
industry. These rating strengths are partially offset by AB's
large working capital requirements, limited track record and small
scale.
Outlook: Stable
CRISIL believes that AB will continue to benefit from its
promoter-partners' industry experience and maintain its
comfortable financial risk profile, over the medium term. The
outlook may be revised to 'Positive' if AB maintains its
profitability, manages its working capital efficiently, and
increase its topline. Conversely, the outlook may be revised to
'Negative' if the firm undertakes a large, debt-funded capital
expenditure programme, or if more than expected increase in its
working capital requirement, leads to weakening of its financial
risk profile.
About Associated Biotech
Set up in 2006 as a partnership firm, AB manufactures
pharmaceutical formulations. The firm derives revenues entirely
from the domestic market; around 20 per cent of its revenues come
from sale of ethical drugs. The firm's plant in Solan (Himachal
Pradesh) enjoys excise and income tax benefits and has capacity to
manufacture 3.0 million tablets per day, 0.5 million capsules per
day, and 0.25 million units of dry syrup per day.
AB is estimated to report a profit after tax (PAT) of INR34.6
million on net sales of INR472 million for 2009-10 (refers to
financial year, April 1 to March 31), against a PAT of INR33.4
million on net sales of INR429 million for 2008-09.
AVINASH DEVELOPER: CRISIL Rates INR640 Million LT Loan at 'D'
-------------------------------------------------------------
CRISIL has assigned its 'D' rating to the long-term loan facility
of Avinash Developer Pvt Ltd. The rating reflects delay by ADPL
in repayment of term loan obligations; the delay has been because
of ADPL's weak liquidity.
Facilities Ratings
---------- -------
INR640 Million Long-Term Loan D (Assigned)
ADPL, a part of the Raipur (Chhattisgarh)-based Avinash group, was
incorporated in 1997. The company's key promoters, Mr. Anand
Singhania (managing director) and Mr. Mukesh Singhania (director),
manage its day-to-day operations. ADPL is an ISO-certified
company, and undertakes construction of multi-storeyed residential
apartments, commercial complexes, shopping malls, and office
towers. The company is a registered coloniser with the Raipur
Municipal Corporation, under the Chhattisgarh Nagar Palika
(Registration of Coloniser, Terms and Conditions) Rules, 1998. The
company was set up by the Singhania family, which originally
exported food grains. The family then diversified into other
businesses such as automobiles dealership, transportation, and
construction. The group entered the real estate business in 1997.
ADPL reported a profit after tax (PAT) of INR57 million on net
sales of INR357 million for 2008-09 (refers to financial year,
April 1 to March 31) against a PAT of INR2 million on net sales of
INR44 million for 2007-08.
CONCEPT SHAPERS: CRISIL Assigns 'D' Rating to INR30MM Cash Credit
-----------------------------------------------------------------
CRISIL has assigned its ratings of 'D/P5' to the bank facilities
of Concept Shapers and Electronics Pvt Ltd.
Facilities Ratings
---------- -------
INR30.0 Million Cash Credit D (Assigned)
INR85.0 Million Rupee Term Loan D (Assigned)
INR10.0 Million Letter of Credit P5 (Assigned)
& Bank Guarantee
The ratings reflect delays by CSEPL's in servicing its term loan
repayment obligations, due to stretched receivables and consequent
weak liquidity.
CSEPL is further exposed to risks related to moderate business
risk profile, marked by volatility in revenues and profitability.
However, these weaknesses are partially offset by the benefits
that the company derives from its market position in the rugged
computer and electronic equipment segment with established
relationships with customers.
Set up in 1988 by Mr. M.D. Raghunarayan, CSEPL designs,
manufactures, assembles, and tests rugged portable computers, and
electronic instruments, especially for the defence sector. The
company's facilities are at Mumbai and Hyderabad Department.
CSEPL reported a net loss of INR25.2 million on net sales of
INR90.5 million for 2008-09 (refers to financial year, April 1 to
March 31), as against a profit after tax (PAT) of INR0.8 million
on net sales of INR71.7 million for 2007-08.
DES RAJ: CRISIL Rates INR80 Million Cash Credit at 'B+'
-------------------------------------------------------
CRISIL has assigned its 'B+/Stable' rating to Des Raj Ashutosh's
cash credit facility.
Facilities Ratings
---------- -------
INR80.0 Million Cash Credit B+/Stable (Assigned)
The rating reflects Des Raj's small scale of operations, weak
financial risk profile, marked by an extremely small net worth and
a high total outside liabilities to tangible net worth ratio, and
susceptibility to intense competition in the agricultural
commodities (agro-commodities) trading business and volatility in
prices of traded goods. These rating weaknesses are partially
offset by Des Raj's established market position in the agro-
commodities trading business in Delhi region.
Outlook: Stable
CRISIL believes that Des Raj will continue to have small scale of
operations in the overall agro-commodities trading industry, and a
weak financial risk profile, over the medium term. The outlook may
be revised to 'Positive' if the firm's scale of operations,
profitability or capital structure improves, leading to
considerable improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative' if the firm's
capital structure deteriorates further, because of large
withdrawal of capital by the partners or large debt-funded capital
expenditure, or if its operating income and profitability decline
sharply.
About Des Raj
Des Raj is a proprietorship firm set up by Mr. Vijaypal Garg in
1985. Des Raj trades in pulses and rice. The firm operates from
its office and warehouse in the Naya Bazaar market (New Delhi) ?
which is the hub of agricultural commodity trade in National
Capital Region (NCR). Des Raj procures pulses and rice from
commission agents across India and sells to rice and pulses
traders, brokers, and processing units.
Des Raj reported a profit after tax (PAT) of INR0.7 million on net
sales of INR399 million for 2008-09 (refers to financial year,
April 1 to March 31), against a PAT of INR0.6 million on net sales
of INR334 million for 2007-08.
DEEPAK FASTENERS: CRISIL Cuts Ratings on Bank Debts to 'BB+'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank loan facilities of
Deepak Fasteners Ltd, part of the Deepak Fasteners group, to
'BB+/Stable/P4+' from 'BBB/Stable/P3+'.
Facilities Ratings
---------- -------
INR200.0 Million Cash Credit BB+/Stable (Downgraded from
BBB/Stable)
INR51.0 Million Long-Term Loan BB+/Stable (Downgraded from
BBB/Stable)
INR100.0 Million Packing Credit P4+ (Downgraded from P3+)
INR100.0 Million Bill Discounting P4+ (Downgraded from P3+)
INR120.0 Million Letter of Credit P4+ (Downgraded from P3+)
The downgrade reflects CRISIL's belief that the Deepak Fasteners
group's financial risk profile will deteriorate over the medium
term, because of the combined impact of the heavy losses incurred
by the group's foreign subsidiary, Deepak Fasteners (Shanon), and
the group's large debt-funded capital expenditure (capex) plans.
The losses incurred by DFSL have led to the group's higher-than-
expected gearing.
The ratings reflect the deterioration in the group's financial
risk profile because of heavy losses incurred over the past two
years by its Ireland-based subsidiary DFSL, and cyclicality in
demand. These rating weaknesses are partially offset by the
group's established brand appeal and market position in the
industrial fastener industry, healthy operating efficiencies,
supported by advanced manufacturing facilities, and longstanding
experience of promoters in the fastener business.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of DFL, DFSL, Deepak Fasteners Australia
(DFA) and Deepak Fasteners UK (DFUK), collectively referred to as
the Deepak Fasteners group. This is because DFL has provided
corporate guarantees for the borrowings of its above-mentioned
foreign subsidiaries. Furthermore, all these entities have
significant management and operational linkages with each other.
Outlook: Stable
CRISIL believes that the Deepak Fasteners group's financial
flexibility will remain severely constrained because of more-than-
expected losses incurred by DFSL, and the group's large debt-
funded capex plans. The outlook may be revised to 'Positive' if
the operations at the foreign subsidiary improve, resulting in
higher-than-expected net cash accruals and consequent reduction in
the overall consolidated gearing. Conversely, the outlook may be
revised to 'Negative' if the pressure on meeting the term loan
repayment obligations sustains, or the group undertakes further
debt-funded capex over the medium term leading to further
weakening of financial risk profile.
About Deepak Fasteners
DFL was established by Mr. Kailash Kalra in 1958. The company
manufactures Fasteners and has a production capacity of 41,500
tonnes per annum (tpa). In 2008-09 (refers to financial year,
April 1 to March 31), the company acquired US-based SPS
Technologies', Unbrako brand, its entire intellectual property
rights, manufacturing facilities in Ireland, workforce, and
distribution network. DFA and DFUK are involved in marketing of
industrial fasteners in Australia and the UK. It also merged
Deepak Fasteners International Ltd with DFL in 2008-09.
The Deepak Fasteners group reported a consolidated profit after
tax of INR5.4 million on operating income of INR2.4 billion for
2008-09.
GANPATI SUGAR: CRISIL Rates INR677.2 Million Cash Credit at 'B+'
----------------------------------------------------------------
CRISIL has assigned its 'B+/Stable/P4' ratings to Ganpati Sugar
Industries Ltd's bank facilities.
Facilities Ratings
---------- -------
INR677.2 Million Cash Credit B+/Stable (Assigned)
INR40.0 Million Bank Guarantee P4 (Assigned)
The ratings reflect GSIL's weak financial flexibility constrained
by low net cash accruals against the company's debt repayments,
and susceptibility to adverse regulatory changes, and cyclicality
in the sugar industry. These rating weaknesses are partially
offset by the benefits that GSIL derives from its promoters'
experience and strategic location.
Outlook: Stable
CRISIL believes that GSIL will continue to benefit over the medium
term from its promoters' industry experience. The outlook may be
revised to 'Positive' if the company's financial flexibility and
capital structure improves, supported by larger-than-expected cash
accruals. Conversely, the outlook may be revised to 'Negative' if
GSIL undertakes a large, debt-funded capital expenditure
programme, or its liquidity is adversely impacted by a downturn in
the sugar cycle, leading to deterioration in the company's debt
servicing ability.
About Ganpati Sugar
Incorporated in 1994 by Mr. Arun Lohia, GSIL manufactures sugar
and molasses. The company has a single-unit sugar factory in
Sangareddy (Andhra Pradesh). The plant commenced operations in
1996-97. GSIL has crushing capacity of 5000 tonnes per day (tpd).
The company's 15-megawatt (MW) power plant, which was set up in
2004, uses bagasse as fuel. GSIL meets its entire power
requirement through its power plant. The company supplies the
surplus power to Transmission Company of Andhra Pradesh
(APTRANSCO), which contributed around 5 per cent of GSIL's total
sales in 2009-10 (10 per cent of the total sales in 2008-09).
GSIL reported a profit after tax (PAT) of INR58.4 million on net
sales of INR1204.9 million for 2008-09 (refers to financial year,
April 1 to March 31) against a PAT of INR55.5 million on net sales
of INR1439 million for 2007-08.
GEO SEAFOODS: CRISIL Reaffirms 'BB+' Rating on INR5.2MM LT Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Geo Seafoods continue
to reflect Geo's geographically concentrated revenue profile,
small scale of operations, and exposure to risks inherent in the
sea-food-export industry. These rating weaknesses are partially
offset by Geo's moderate financial risk profile and its promoters'
industry experience.
Facilities Ratings
---------- -------
INR5.20 Million Long-Term Loan BB+/Stable (Reaffirmed)
INR130.00 Million Export Packing Credit P4+ (Reaffirmed)
INR100.00 Million Post-Shipment Credit P4+ (Reaffirmed)
INR20.00 Million Letter of Credit/ P4+ (Reaffirmed)
Bank Guarantee
Outlook: Stable
CRISIL believes that Geo will continue to benefit from its
management's experience and maintain its moderate operating
efficiency over the medium term. The outlook may be revised to
'Positive' if Geo scales up its operations, while diversifying its
revenue profile, thereby strengthening its credit risk profile.
Conversely, the outlook may be revised to 'Negative' if the firm
undertakes a large, debt-funded capital expenditure (capex)
programme, or if its revenues and accruals decline, resulting in
deterioration in its financial risk profile.
Geo's financial performance in 2009-10 (refers to financial year,
April 1 to March 31) has been close to CRISIL's estimate. Although
Geo's sales were marginally more-than-expected at INR648 million
in 2009-10 against INR622 million in 2008-09, its net cash
accruals were as per expectations, at INR18 million in 2009-10, as
its operating margin declined to 5.1 per cent in 2009-10 from
around 7 per cent over the past few years because of adverse
foreign exchange (forex) rate movements and sluggish demand for
sea food products. CRISIL believes that Geo's turnover and
margins are not likely to improve in 2010-11 because of sluggish
demand for sea foods. The firm has comfortable liquidity, with
small term-loan related payments and moderate bank limit
utilisation level of around 75 per cent over the three months
through May 2010. Geo does not have any capex plan for the medium
term.
Geo reported a provisional profit after tax (PAT) of INR10 million
on net sales of INR648 million for 2009-10, against a PAT of INR25
million on net sales of INR622 million for 2008-09.
About Geo Seafoods
Set up as a partnership firm in 1968, Geo is managed by Mr. K G
Lawrence and his sons, Mr. Pradeesh Lawrence and Mr. Vivek
Lawrence. The firm procures sea food (shrimps, fish, squid and
cuttle fish) from auctions, and processes and exports the same to
the European Union, Japan, Africa, the US, and the Middle East.
Geo has capacity to process 25,200 tonnes of sea food per annum.
DALKAN SHIP: CRISIL Reaffirms 'BB' Rating on INR35MM Cash Credit
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Dalkan Ship Breaking
Ltd (Dalkan; a part of the Shah group) continue to reflect the
Shah group's stretched financial risk profile, and exposure to
risks relating to cyclicality in the shipping industry and to
changes in government regulations, specifically with respect to
environmental concerns. These rating weaknesses are partially
offset by the benefits that the Shah group derives from its
relatively superior market position due to its ownership of three
ship-breaking yards, and the healthy growth prospects of the ship-
breaking industry over the medium term.
Facilities Ratings
---------- -------
INR35.0 Million Cash Credit Limit BB/Stable (Reaffirmed)
INR200.0 Million Letter of Credit P4+ (Reaffirmed)
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of Dalkan, Paras Steel Corporation
(Paras), and Vijaykumar and Company. This is because the three
entities, together referred to as the Shah group, are under a
common management, and have operational linkages and fungible
funds.
Outlook: Stable
CRISIL believes that the Shah group will continue to benefit from
the healthy medium term growth prospects in the ship-breaking
industry, and from its promoters' industry experience. The outlook
may be revised to 'Positive' if the anticipated growth in the
group's topline is accompanied by healthy profitability.
Conversely, the outlook may be revised to 'Negative' if steel
scrap prices fall sharply, resulting in the group being unable to
recover the cost of ship purchase, and consequently in a decline
in its margins.
Update
The Shah group reported a provisional year-on-year sales growth of
17.8 per cent to INR1.19 billion in 2009-10 (refers to financial
year, April 1 to March 31), from INR1.01 billion in 2008-09, while
maintaining its operating margin at 1.0 per cent. The sales growth
was driven by attractive costing of ships available for
dismantling in 2009-10. The group has broken six ships in 2009-
10, with each ship having been purchased between USD320 and USD350
per tonne. The group continues to resort to letters of credit for
funding ship purchases.
CRISIL believes that the Shah group will maintain its credit risk
profile driven by the ongoing ship-breaking activity in its three
yards, giving near-term revenue visibility, and by the fact that
the group does not have any long-term debt obligations maturing in
2010-11.
About the Group
Set up in 1994, VKC is a proprietorship concern founded by Mr.
Chimanlal Mavjibhai Shah and his three brothers, Mr. Bhupatrai
Mavjibhai Shah, Mr. Jaysukhlal Mavjibhai Shah, and Mr. Vinaychand
Mavjibhai Shah. The family has been in the business of ship
breaking since 1985 through a partnership concern, Amar Ship
Breaking Corporation (ASBC). In 1994, the family exited from ASBC
and set up VKC. VKC owns a 50-square-metre (sq mtr) plot at Alang
ship-breaking yard in Bhavnagar (Gujarat).
The establishment of VKC was followed by the setting up of Dalkan
in 1994 and Paras in 1998. Mr. Jayasukhlal Mavjibhai Shah is the
proprietor of Paras, while the board members of Dalkan, a closely
held limited company, are all second-generation entrepreneurs of
the Shah family. Paras operates a 35-sq-mtr Plot, and Dalkan a 50-
sq-mtr plot, at Alang.
Dalkan reported a profit after tax (PAT) of INR2.2 million on net
sales of INR220 million for 2008-09; no ship-breaking activity was
undertaken in 2007-08.
HEXAGON NUTRITION: CRISIL Assigns 'D' Rating to INR35MM Loan
------------------------------------------------------------
CRISIL has assigned its 'D/P5' ratings to the bank facilities of
Hexagon Nutrition Pvt Ltd.
Facilities Ratings
---------- -------
INR35.0 Million Cash Credit D (Assigned)
INR7.5 Million Rupee Term Loan D (Assigned)
INR35.0 Million Packing Credit P5 (Assigned)
INR35.0 Million Letter of Credit P5 (Assigned)
INR27.5 Million Post Shipment Credit P5 (Assigned)
INR10.0 Million Bank Guarantee P5 (Assigned)
The ratings reflect delays by HNPL in servicing its debt repayment
obligations. The delays have been despite the company having
adequate liquidity to service these obligations.
HNPL is further exposed to risks related to small scale of
operations, working-capital-intensive operations, and exposure to
risks relating to the weak performance of the retail
neutraceuticals segment. However, CRISIL believes that HNPL will
benefit from moderate financial risk profile and its moderate
business risk profile marked by reputed customers.
About Hexagon Nutrition
Incorporated in 1993, HNPL is promoted by Mr. Arun Kelkar and
family. The company manufactures micronutrient premixes for humans
and poultry, and other nutraceutical dietary supplements. The
company has two plants, one in Nashik (Maharashtra) and the other
in Chennai (Tamil Nadu).
HNPL reported a profit after tax (PAT) of INR14.3 million on net
sales of INR217.1 million for 2008-09 (refers to financial year,
April 1 to March 31), against a PAT of INR6.8 million on net sales
of INR149.9 million for 2007-08.
JAI DADA: CRISIL Assigns 'BB-' Rating to INR120.5MM Term Loan
-------------------------------------------------------------
CRISIL has assigned its 'BB-/Stable' rating to Jai Dada Movers Pvt
Ltd's bank facilities.
Facilities Ratings
---------- -------
INR120.5 Million Term Loan BB-/Stable (Assigned)
INR10.0 Million Cash Credit BB-/Stable (Assigned)
The rating reflects Jai Dada's average financial risk profile,
marked by moderate credit protection indicators and modest scale
of operations. These rating weaknesses are partially offset by
the benefits that Jai Dada derives from its promoters' experience
in the container logistics business, its diversified service
portfolio, and strong operational synergies with Medi Drips
Carriers Pvt Ltd (CRISIL rated 'BB-/Stable/P4+'), a group company
of the promoters operating in a similar line of activity.
Outlook: Stable
CRISIL believes that Jai Dada will maintain its credit risk
profile, backed by established relationships with strong customers
and promoter's experience in this industry. The outlook may be
revised to 'Positive' if Jai Dada significantly improves its cash
accruals and debt protection measures. Conversely, the outlook may
be revised to 'Negative' if the company's financial risk profile
deteriorates due to significant deterioration in its
profitability, or significant debt funded capex resulting in
deterioration in its debt protection indicators.
About Jai Dada
Jai Dada, incorporated in 2008, by the Dayama family of Kolkata,
provides freight transportation services for various industries
such as chemicals, petrochemicals, steel and energy. It operates a
fleet of Volvo luxury buses under the brand 'Jai Dada' to provide
public transportation services from Kolkata to other major towns
in East India. It also provides container transport service across
India through its tankers and trailer division. Some of its
prominent clients in the container transport segment include
Reliance Industries Ltd (CRISIL rated 'AAA/Stable/P1+'), Indian
Oil Corporation Ltd (CRISIL rated 'AAA/Negative/P1+'), and Suzlon
Energy (CRISIL rated 'BB+/Stable/P4+').
Jai Dada reported a provisional profit after tax (PAT) of INR4.4
million on net sales of INR83.8 million for 2009-10 (refers to
financial year, April 1 to March 31), against a PAT of INR0.3
million on net sales of INR23.3 million for 2008-09.
LANDMARK CORPORATION: CRISIL Assigns 'BB' Rating to INR30MM Debt
----------------------------------------------------------------
CRISIL has assigned its 'BB/Stable/P4+' ratings to Landmark
Corporation's bank facilities.
Facilities Ratings
---------- -------
INR30.0 Million Cash Credit BB/Stable (Assigned)
INR150.0 Million Proposed Long-Term BB/Stable (Assigned)
Bank Loan Facilities
INR10.0 Million Bank Guarantee P4+ (Assigned)
The ratings reflect Landmark's average financial risk profile,
marked by small net worth and high gearing, and concerns relating
to geographical and customer concentration. These rating
weaknesses are partially offset by Landmark's promoters'
experience in the civil construction industry.
Outlook: Stable
CRISIL believes that Landmark will continue to benefit from its
promoters' extensive experience in the civil construction
industry. The outlook may be revised to 'Positive' if Landmark
diversifies its geographical and customer base leading to
significant increase in its revenues, and maintaining its
profitability and debt protection metrics. Conversely, the
outlook may be revised to 'Negative' if the firm's financial risk
profile deteriorates on account of larger than expected debt-
funded capital expenditure.
About Landmark Corp.
Landmark, a proprietorship concern of Mr. Vipin Jain started in
2005, is into civil construction activities such as construction
of roads and bridges, laying and maintaining pipelines (mainly
stormwater drainage systems), construction of school buildings and
development of gardens. The promoter floated Landmark Corporation
Pvt Ltd (LCPL) in July 2010 to take over the business of Landmark.
Landmark executes projects for government agencies such as the
Municipal Corporation of Greater Mumbai and Public Works
Department, Maharashtra. The firm has also sub-contracts project
for J. Kumar Infraprojects Ltd. As on June 2010, Landmark had
orders of around INR2.6 billion to be executed over the medium
term.
Landmark reported a provisional profit after tax (PAT) of INR50
million on net sales of INR553.7 million for 2009-10 (refers to
financial year, April 1 to March 31), against a PAT of INR14.8
million on net sales of INR397.8 million for 2008-09.
LODHA IMPEX: CRISIL Assigns 'B' Rating to INR8.2 Million Term Loan
------------------------------------------------------------------
CRISIL has assigned its 'B/Stable' rating to Lodha Impex's long-
term bank facilities, while reaffirming the short-term rating at
'P4'.
Facilities Ratings
---------- -------
INR8.2 Million Rupee Term Loan B/Stable (Assigned)
INR90.0 Million Export Packing Credit P4 (Reaffirmed)
INR40.0 Million Post Shipment Credit P4 (Reaffirmed)
INR2.8 Million Proposed Short-Term P4 (Reaffirmed)
Bank Loan facility
INR1.0 Million Inland Letter of P4 (Reaffirmed)
Credit and Bank Guarantee
The ratings reflect Lodha Impex's below-average financial risk
profile marked by a small net worth, high gearing, and weak debt
protection metrics; and the firm's exposure to intense competition
in the readymade garments industry. These rating weaknesses are
partially offset by the experience of Lodha Impex's promoter in
the readymade garments industry.
Outlook: Stable
CRISIL believes that Lodha Impex will, over the medium term,
continue to benefit from the healthy relationships with its
customers in the export market. The outlook may be revised to
'Positive' if the firm's financial risk profile improves, most
likely because of more-than-expected sales growth, improved
geographic diversification in revenues, or capital infusion.
Conversely, the outlook may be revised to 'Negative' if Lodha
Impex's debt protection metrics deteriorate further because of
large working capital requirements, or its capital structure
weakens on account of withdrawal of funds by the proprietor.
About Lodha Impex
Lodha Impex, set up as a proprietorship firm in 1993 by Mr. Dalpat
Lodha, manufactures women's garments, such as skirts, dresses,
blouses, and casuals. All product specifications, including
design, pattern and colour, are approved by customers. The firm
supplies mainly to Japan and has two manufacturing units, one each
at Jaipur (Rajasthan) and Mumbai, with a total production capacity
of 3.6 million pieces per annum. The firm's office at Jaipur had
got affected by the fire at Indian Oil Corporation's plant in
Jaipur in 2009-10 (refers to financial year, April 1 to March 31),
when manufacturing was disrupted for a month; the firm has filed
for an insurance claim of INR21.8 million, of which about INR4.3
million has been received and the remainder INR17.5 million is
still outstanding.
Lodha Impex is expected to report a book profit of INR9 million on
net sales of INR312 million for 2009-10, against a PAT of INR6
million on net sales of INR299 million for 2008-09.
MAGNUM STEELS: CRISIL Reaffirms 'BB' Rating on INR65MM Cash Credit
------------------------------------------------------------------
CRISIL's ratings on the bank facilities of Magnum Steels Ltd,
which is part of the Magnum group, continue to reflect MSL's
moderate financial risk profile, marked by low profitability, high
working capital requirements and large capital expenditure (capex)
plans.
Facilities Ratings
---------- -------
INR65.00 Million Cash Credit Limit BB/Stable (Reaffirmed)
INR50.00 Million Letter of Credit P4+ (Reaffirmed)
INR10.00 Million Bank Guarantee P4+ (Reaffirmed)
CRISIL has factored in the fact that MSL has stopped its high-risk
trading activities in capital markets; however, it remains a key
rating sensitivity factor. The ratings also factor in MSL's
exposure to risks relating to cyclicality in the steel business,
and concentration of revenues in the automobile sector. These
weaknesses are partially offset by the benefits that MSL derives
from its promoter's extensive experience in the spring steel
industry as well as MSL's backward integration initiatives, which
mitigate risks relating to raw material availability.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of MSL, Magnum Iron & Steel Pvt Ltd,
Deluxe Alloys Pvt Ltd, and NR Sponge Pvt Ltd, collectively
referred to, herein, as the Magnum group. This is because the
companies share the same value chain, are under a common
management, and have significant inter-company transactions.
Outlook: Stable
CRISIL believes that the Magnum group will maintain its stable
business risk profile, backed by the experience of its promoter in
the spring steel industry. The group's financial risk profile may
remain stretched owing to its large working capital requirements,
low profitability resulting in low cash accruals and large capex
plans over the medium term. The outlook may be revised to
'Positive' if the company's working capital management and
operating margin improve significantly. Conversely, the outlook
may be revised to 'Negative' in case of further deterioration in
its working capital management or strain on liquidity resulting
from decline in operating margin.
About Magnum Steels
Set up in 1991 as a private limited company by Mr. I C Jindal, MSL
manufactures spring steel flats, high strength deformed (HSD)
steel bars and thermo-mechanically treated (TMT) bars through the
electric arc process. MSL was converted to a closely-held public
company in 1995. Magnum group integrated backwards by acquiring
DA in 1990-91 (refers to financial year, April 1 to March 31) and
MISPL, formerly Vibha Steel Pvt Ltd, in 1997. In 2006-07, MSL
began manufacturing steel ingots and castings, by acquiring two
group companies, BR Associates and IRS Industries. MSL acquired
NRS in 2007.
MSL is estimated to report a profit after tax (PAT) of INR5
million on net sales of INR1219 million for 2009-10 as against a
PAT of INR6 million on net sales of INR1224 million for 2008-09.
MANA PROJECTS: CRISIL Assigns 'B' Rating to INR32MM Cash Credit
---------------------------------------------------------------
CRISIL has assigned its 'B/Stable' rating to Mana Projects Pvt
Ltd's bank facilities.
Facilities Ratings
---------- -------
INR32.00 Million Cash Credit B/Stable (Assigned)
INR18.00 Million Proposed Cash Credit B/Stable (Assigned)
The rating reflects MPPL's exposure to risks related to
implementation and sale of its residential projects, and
geographical concentration in its revenue profile. These rating
weaknesses are partially offset by MPPL's promoters' experience in
the real estate business and healthy project execution
capabilities.
Outlook: Stable
CRISIL believes that MPPL will continue to benefit from promoters'
experience in the real estate and construction industry. The
outlook may be revised to 'Positive' if MPPL completes its ongoing
projects on schedule and reports more-than-expected revenues and
profitability. Conversely the outlook may be revised to
'Negative' in case of deterioration in MPPL's financial risk
profile, because of less-than-expected revenues from, or time and
cost overruns in, its ongoing realty projects, or delays in
receivables from customers.
About Mana Projects
Set up in 2009, MPPL is into development of residential projects.
Based in Bengaluru and promoted by Mr. Kishore Reddy, the
company's maiden project is ongoing currently. The project
involves constructing residential apartments in Tirupati (Andhra
Pradesh). MPPL is also developing a residential property, Mana
Pristine, in Sarjapur Road Bengaluru. Mr. Kishore Reddy has been
into real estate development since 2000, when he set up Mana
Constructions (Bangalore) Pvt Ltd. MCPL is also into development
of residential projects, but is not undertaking any project
currently.
MENON BEARINGS: CRISIL Reaffirms 'BB+' Ratings on Various Debts
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Menon Bearings Ltd.
continue to reflect MBL's limited presence in the domestic bi-
metal bearings business and average financial risk profile marked
by a low net worth. These weaknesses are partially offset by
reduction in the working capital intensity of the company's
operations, and its moderately improved liquidity.
Facilities Ratings
---------- -------
INR70.0 Million Rupee Term Loan BB+/Stable (Reaffirmed)
INR15.0 Million Cash Credit BB+/Stable (Reaffirmed)
INR13.5 Million Line of Credit BB+/Stable (Reaffirmed)
INR40.0 Million Packing Credit P4+ (Reaffirmed)
INR50.0 Million Buyer's Credit Limit P4+ (Reaffirmed)
INR21.1 Million Bank Guarantee and P4+ (Reaffirmed)
Letter of Credit
Outlook: Stable
CRISIL believes that MBL will continue to benefit from its
established position in the bearings business over the medium
term. The outlook may be revised to 'Positive' if the company
enhances its scale of operations while maintaining its current
profitability. Conversely, the outlook may be revised to
'Negative' if the company undertakes a large, debt-funded capital
expenditure (capex) programme, or faces a decline in its operating
margin.
Update
MBL's revenues increased by around 30 per cent year-on-year in
2009-10 (refers to financial year, April 1 to March 31), in line
with CRISIL's expectations. The increase was primarily because of
new capacities added for its aluminium die-casting facility, which
increased the company's revenues by about INR90 million. The
company was also able to lower its dependence on General Motors
Corporation (GM), with GM contributing less than 10 per cent of
its sales in 2009-10 as against around 20 per cent in the previous
year.
MBL's operating margin for 2009-10, at around 20 per cent, was in
line with CRISIL's expectation. The company's profitability,
however, remains susceptible to fluctuation in the prices of raw
materials such as copper, steel, and aluminium.
MBL reduced its debtors' collection period to around 84 days in
2009-10, from around 120 days in 2008-09, as the receivables from
GM reduced substantially. Also, the company liquidated its
inventory in 2009-10, and presently holds an inventory of around
57 days. This led to an overall reduction in its working capital
requirements during 2009-10. MBL has no large debt-funded capex
plans for the medium term, and CRISIL believes that the company
will sustain its financial risk profile over this period.
MBL reported a profit after tax (PAT) of INR75 million on net
sales of INR565 million for 2009-10, as against a PAT of INR30
million on net sales of INR439 million for 2008-09.
About Menon Bearings
MBL, incorporated in 1991, is part of the Menon group. The company
manufactures auto ancillaries such as bearings, bushes, thrust
washers, and bi-metal strips. It has a manufacturing plant at
Kolhapur (Maharashtra). The group, promoted by Mr. Ram Menon and
the late Mr. Chandran Menon, is primarily engaged in the
manufacture of auto ancillary products.
RESHMIKA MINERALS: CRISIL Assigns 'B-' Ratings to Various Debts
---------------------------------------------------------------
CRISIL has assigned its 'B-/Stable' rating to Reshmika Minerals &
Chemicals Pvt Ltd's bank facilities.
Facilities Ratings
---------- -------
INR90.00 Million Cash Credit B-/Stable (Assigned)
INR120.00 Million Term Loan B-/Stable (Assigned)
INR30.00 Million Proposed Long B-/Stable (Assigned)
Term Bank Facility
The rating reflects RMCPL's start-up nature and small scale of
operations, exposure to risks related to customer concentration in
revenue profile and weak liquidity. These rating weaknesses are
partially offset by experience of RMCPL's promoters in the
chemical industry and the company's low project execution risk.
Outlook: Stable
CRISIL believes that RMCPL's liquidity will remain weak over the
near term because of the start-up phase of the company's
operations, leading to weak cash accruals vis-…-vis debt
obligations. The outlook may be revised to 'Positive' in case of
improvement in RMCPL's liquidity, most likely through significant
increase in scale of operations and cash accruals. Conversely, the
outlook may be revised to 'Negative' if the company's liquidity
weakens further because of delay in increase in scale of
operations.
About Reshmika Minerals
RMCPL is a 50:50 joint venture (JV) between the Vanarse group and
the Budhraja group. The company is setting up a plant in Panoli
(Gujarat) for conversion of manganese oxide (MnO) into manganese
sulphate (MnSO4), which is used in the production of fungicides.
The proposed plant will have initial capacity of 60,000 tonnes per
annum (tpa), that is, 200 tonnes per day (tpd). The plant is being
set up primarily to cater to the MnSO4 requirement of Indofil
Chemical Company's (ICC's) Dahej unit. Trial production is
underway at the plant, which is expected to commence commercial
production shortly.
SHEEL CHAND: CRISIL Assigns 'BB-' Rating to INR28.3MM LT Loan
-------------------------------------------------------------
CRISIL has assigned its 'BB-/Stable' rating to the bank facilities
of Sheel Chand Agroils (P) Ltd.
Facilities Ratings
---------- -------
INR110.0 Million Cash Credit* BB-/Stable (Assigned)
INR28.3 Million Long-Term Loan BB-/Stable (Assigned)
INR11.7 Million Proposed LT BB-/Stable (Assigned)
Bank Loan Facility
The rating reflects Sheel Chand's sub-optimal capacity
utilisation, low profitability, small scale of operations,
moderate financial risk profile marked by small net worth and weak
debt protection indicators, and exposure to any adverse change in
government regulations. The impact of these weaknesses is
mitigated by the industry experience of the company's promoters.
Outlook: Stable
CRISIL believes that Sheel Chand will maintain its credit risk
profile over the medium term on the back of the industry
experience of its promoters. The outlook may be revised to
'Positive' if there is a substantial increase in the company's
scale of operations and profitability. Conversely, the outlook may
be revised to 'Negative' if the company undertakes a larger-than-
expected debt-funded capital expenditure programme, or if its
sales decline or profitability deteriorates from current levels,
leading to deterioration in its financial risk profile.
About Sheel Chand
Sheel Chand was incorporated in 1994 by Mr. Mohan Goel and his
brother Mr. Pramod Goel. The company is engaged in the
manufacturing of vanaspati oil, refined palm and soya oil, and de-
oiled cakes, and soya solvent extraction. It has an integrated
production facility in Rudrapur, Bihar. The company sells its
refined oil under the brand name Hamara. Sheel Chand reported a
profit after tax of INR6 million on net sales of INR1157 million
for 2009-10 (refers to financial year, April 1 to March 31),
against a net loss of INR1.4 million on net sales of INR919
million for 2008-09.
SHIVA POLYMERS: CRISIL Reaffirms 'BB+' Rating on INR90MM Loan
-------------------------------------------------------------
CRISIL's ratings on Shiva Polymers Pvt Ltd's bank facilities
continue to reflect the SPPL group's small scale of operations,
and weak financial risk profile, marked by small net worth. These
weaknesses are partially offset by the SPPL group's above-average
business risk profile, marked by its established customer base.
Facilities Ratings
---------- -------
INR90 Million Cash Credit Limits BB+/Stable (Reaffirmed)
INR5 Million Term Loan BB+/Stable (Reaffirmed)
INR15 Million Bank Guarantee P4+ (Reaffirmed)
INR30 Million Letter of Credit P4+ (Reaffirmed)
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of SPPL and its associate company, Indusco
Plastic Pvt Ltd. This is because both the entities, collectively
referred to as the SPPL group, are under a common management, and
have similar product profiles and operational linkages.
Outlook: Stable
CRISIL believes that the SPPL group will continue to benefit from
its established customer base, over the medium term. The outlook
may be revised to 'Positive' if the group successfully stabilizes
its new capacities and sustains healthy growth in profitability.
Conversely, the outlook may be revised to 'Negative' if the
company undertakes large, debt-funded capital expenditure (capex)
programme, leading to deterioration in its financial profile.
The SPPL group's performance for 2009-10 (refers to financial
year, April 1 to March 31) is estimated to have been in line with
CRISIL's expectations. The group's liquidity is likely to remain
moderate, backed by steady accruals, high bank limit utilisation,
absence of significant capex plans, and moderate loan repayment
obligations. The group reported a provisional profit after tax
(PAT) of INR6 million on provisional net sales of INR575 million
for 2009-10, as against a PAT of INR7 million on net sales of
INR635 million for 2008-09.
About the Group
SPPL (formerly, Keshavlal Khanderia Properties Pvt Ltd) was
incorporated in 1962, and acquired by the present promoters Kishan
Deo Agarwal, Mr. Sunil Kumar Agarwal, Mr. Manoj Kumar Agarwal and
Mr. Bisnu Kumar Agarwal, in 1995. The company was renamed in
November 1997. SPPL manufactures high-density poly ethylene (HDPE)
and polypropylene (PP) woven sacks that are mainly used by cement,
fertiliser, chemical, sugar, and petrochemical companies.
SHREE AUTOMOTIVE: CRISIL Rates INR200 Million Cash Credit at 'B'
----------------------------------------------------------------
CRISIL has assigned its rating of 'B/Stable' to Shree Automotive
Pvt Ltd's cash credit facility.
Facilities Ratings
---------- -------
INR200 Million Cash Credit B/Stable (Assigned)
The rating reflects SAPL's weak financial profile, and exposure to
risks relating to intense competition in the automobile dealership
industry. These weaknesses are partially offset by SAPL's
moderate business risk profile.
Outlook: Stable
CRISIL believes that SAPL will maintain a stable business risk
profile over the medium term, backed by established relationships
with suppliers. However, SAPL's financial risk profile will
remain constrained by high gearing and stretched liquidity. The
outlook may be revised to 'Positive' if there is significant
improvement in revenues and profitability, coupled with better
working capital management. Conversely, the outlook may be
revised to 'Negative' if the company undertakes large debt-funded
unrelated diversifications, thereby considerably weakening its
financial risk profile.
Set up by Mr. Sharad Kumar Kedia in February 2008, SAPL (formerly,
Shree Automobiles Pvt Ltd) is an authorised dealer of Ashok
Leyland Ltd (rated 'AA-/Negative/P1+' by CRISIL) and Mahindra &
Mahindra Ltd ('AA/Stable/P1+'), dealing in heavy vehicles (trucks,
dumpers, and mini buses), sports utility vehicles (SUVs) and
utility vehicles (pick-ups, three wheelers). Its dealership areas
include M&M in (includes Kolkata, Howrah, Hoogly, and North and
South 24 Parganas), and sole dealership in Murshidabad and Nadia
(West Bengal). It operates dealership for Ashok Leyland in entire
South Bengal covering Nadia, Murshidabad, KMDA, Burdwan,
Midnapore, Purulia, Bankura, and Birbhum.
SAPL reported a profit after tax (PAT) of INR2.4 million on
operating income of INR641 million for 2008-09 (refers to
financial year, April 1 to March 31), as against a PAT of INR2.7
million on operating income of INR812 million for 2007-08.
SHREE BALAJI: CRISIL Assigns 'D' Rating to INR10.6MM Term Loan
--------------------------------------------------------------
CRISIL has assigned its 'D/P5' ratings to Shree Balaji Agencies'
bank facilities. The ratings reflect delay by SBA in servicing
its term loan; the delay has been caused by SBA's weak liquidity.
Facilities Ratings
---------- -------
INR75.0 Million Overdraft Facility D (Assigned)
INR10.6 Million Rupee Term Loan D (Assigned)
INR45.0 Million Bank Guarantee P5 (Assigned)
SBA was set up in 1989 as a partnership firm by Mr. Arun Kumar
Sampat along with his wife, Mrs. Vasant A Sampat. SBA undertakes
infrastructure-related construction activities including the
construction of dams, canals, and earthwork for the government
sector. It is registered as a Class 1 contractor with Maharashtra
Public Works Department.
SBA reported a profit after tax (PAT) of INR9.97 million on net
sales of INR258.59 million for 2008-09 (refers to financial year,
April 1 to March 31) against a PAT of INR2.48 million on net sales
of INR155.09 million for 2007-08.
VIJAYKUMAR & COMPANY: CRISIL Reaffirms 'BB' Rating on INR35MM Debt
------------------------------------------------------------------
CRISIL's ratings on the bank facilities of Vijaykumar & Company, a
part of the Shah group, continue to reflect the Shah group's
stretched financial risk profile, and exposure to risks relating
to cyclicality in the shipping industry and to changes in
government regulations, specifically with respect to environmental
concerns. These rating weaknesses are partially offset by the
benefits that the Shah group derives from its relatively superior
market position due to its ownership of three ship-breaking yards,
and the healthy growth prospects of the ship-breaking industry
over the medium term.
Facilities Ratings
---------- -------
INR35.0 Million Cash Credit Limit BB/Stable (Reaffirmed)
INR200.0 Million Letter of Credit P4+ (Reaffirmed)
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of VKC, Dalkan Ship Breaking Ltd (Dalkan),
and Paras Steel Corporation. This is because the three entities,
together referred to as the Shah group, are under a common
management, and have operational linkages and fungible funds.
Outlook: Stable
CRISIL believes that the Shah group will continue to benefit from
the healthy medium term growth prospects in the ship-breaking
industry, and from its promoters' industry experience. The
outlook may be revised to 'Positive' if the anticipated growth in
the group's topline is accompanied by healthy profitability.
Conversely, the outlook may be revised to 'Negative' if steel
scrap prices fall sharply, resulting in the group being unable to
recover the cost of ship purchase, and consequently in a decline
in its margins.
The Shah group reported a provisional year-on-year sales growth of
17.8 percent to INR1.19 billion in 2009-10 (refers to financial
year, April 1 to March 31), from INR1.01 billion in 2008-09, while
maintaining its operating margin at 1.0 percent. The sales growth
was driven by attractive costing of ships available for
dismantling in 2009-10. The group has broken six ships in
2009-10, with each ship having been purchased between USD320 and
USD350 per tonne. The group continues to resort to letters of
credit for funding ship purchases.
CRISIL believes that the Shah group will maintain its credit risk
profile driven by the ongoing ship-breaking activity in its three
yards, giving near-term revenue visibility, and by the fact that
the group does not have any long-term debt obligations maturing in
2010-11.
About the Group
Set up in 1994, VKC is a proprietorship concern founded by Mr.
Chimanlal Mavjibhai Shah and his three brothers, Mr. Bhupatrai
Mavjibhai Shah, Mr. Jaysukhlal Mavjibhai Shah, and Mr. Vinaychand
Mavjibhai Shah. The family has been in the business of ship
breaking since 1985 through a partnership concern, Amar Ship
Breaking Corporation (ASBC). In 1994, the family exited from ASBC
and set up VKC. VKC owns a 50-square-metre (sq mtr) plot at Alang
ship-breaking yard in Bhavnagar (Gujarat).
The establishment of VKC was followed by the setting up of Dalkan
in 1994 and Paras in 1998. Mr. Jayasukhlal Mavjibhai Shah is the
proprietor of Paras, while the board members of Dalkan, a closely
held limited company, are all second-generation entrepreneurs of
the Shah family. Paras operates a 35-sq-mtr Plot, and Dalkan a
50-sq-mtr plot, at Alang.
VKC reported a profit after tax (PAT) of INR0.9 million on net
sales of INR460 million for 2008-09, as against a PAT of INR0.4
million on net sales of INR0.9 million for 2007-08.
Z SQUARE: CRISIL Rates INR650 Million Term Loan at 'D'
------------------------------------------------------
CRISIL has assigned its 'D' rating to Z Square Shopping Mall Pvt
Ltd's term loan facility. The rating reflects delay by the
Zazsons group in servicing its term loan obligations; the delay
has been caused by the Zazsons group's weak liquidity.
Facilities Ratings
---------- -------
INR650.0 Million Term Loan D (Assigned)
The Zazsons group has large high debt repayments in the mall
project; while the leather business of its holding company Zazsons
Exports Limited continues to be working capital intensive over the
medium term. However, the Zazsons group's business risk profile
is supported by established and long standing presence in the
leather processing industry.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of Z Square and its holding company ZEL.
This is because the two entities together referred to as the
Zazsons group, have guaranteed each other's bank loans and will
continue to provide need-based support to each other.
About Z Square
Z Square is setting up a large mall in Kanpur (Uttar Pradesh).
The company commenced the mall project in 2006. The mall
commenced commercial operations in May 2010. ZEL was incorporated
in 1985 by Mr. Tahir Hussain. The Hussain family of Kanpur has
been in the leather business since 1862; it initially traded in
raw hides ZEL is into leather tanning and manufacturing of
finished leather and ladies sandles. It has its manufacturing
unit in Jajmau (Kanpur). ZEL reported a profit after tax (PAT) of
INR2.7 million on net sales of INR712.3 million for 2008-09
(refers to financial year, April 1 to March 31), against a PAT of
INR10.0 million on net sales of INR800.0 million for 2007-08.
=========
J A P A N
=========
JAPAN AIRLINES: Asks Crash Site Foundation to Cover Donation
------------------------------------------------------------
Japan Airlines Corp. had to ask a foundation that holds
commemorative events for the 1985 JAL jumbo jet crash to pay its
JPY12 million contribution to help maintain a path to the crash
site on a mountain in Gunma Prefecture, Kyodo News reports citing
officials of JAL and the foundation.
The report, citing Ueno, Gunma Prefecture-based Irei-no-Sono
(Memorial Garden), says JAL and the village were to jointly bear
the cost for last year's projects to maintain the path for
climbers to the crash site on Osutaka ridge. But JAL, currently
undergoing government-backed rehabilitation, asked the foundation
to pay the money on the carrier's behalf temporarily because of
financial constraints, Kyodo says. The foundation agreed to the
request.
Of the JPY12 million, JAL paid back JPY6 million in July, it said.
"Since we were in financial difficulty, we could not come up with
money for the expenditure," a JAL official said. "We will pay back
the rest in installments over the next two years."
On Aug. 12, 1985, a JAL Boeing 747 crashed into the mountain,
killing all but four of the 524 passengers and crew members
aboard.
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, 2010, 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
=========
DAEWOO ENGINEERING: KDB Wants to Acquire Firm
---------------------------------------------
State-run Korea Development Bank is seeking to buy Daewoo
Engineering & Construction Co., the construction unit of Kumho
Asiana Group, without funding from financial investors, Yonhap
News reports citing industry sources.
Together with financial investors, main creditor KDB had pushed to
purchase a 50% stake plus one share in Daewoo Engineering by
creating a private equity fund for KRW18,000 (US$15.40) per share.
As reported in the Troubled Company Reporter-Asia Pacific on
July 1, 2009, Kumho Asiana Group decided to put Daewoo Engineering
and Construction up for sale. Kumho Asiana, which bought Daewoo
Engineering for US$5 billion three years ago, said it has not yet
determined the exact size of stake to be sold, the Financial Times
said. The size of the sale would be designed to "minimize the
group's losses and to reduce a buyer's burden." The announcement,
according to the FT, follows pressure on Kumho to raise money by
finding fresh investors in Daewoo by the end of July to ease a
liquidity crunch. Kumho has a 33% stake in Daewoo with management
control while financial investors hold a further 39%.
About Daewoo Engineering
Headquartered in Seoul, South Korea, Daewoo Engineering &
Construction Co. -- http://www.daewooenc.com/-- has become a
world leader in civil engineering, housing construction, power
and industrial plant development, architectural services, and
construction of liquid natural gas facilities. In addition to
large-scale domestic projects, Daewoo has more recently built
gas plants in Nigeria, a hospital in Libya, and the Trump World
Tower in New York, to name a few.
GENERAL MOTORS: GM Daewoo's Auto Sales Rise 49% in July
-------------------------------------------------------
GM Daewoo Auto & Technology, the South Korean unit of General
Motors Co., said its automobile sales increased 49.4% in July from
a year earlier on strong overseas demand, Yonhap News reports.
The news agency says the automaker sold a total of 67,318 vehicles
last month, compared to 45,064 units sold a year ago. Domestic
sales increased 10.4% on-year to 10,313 units in July with exports
jumping 59.6% to 57,005 units.
About General Motors
With its global headquarters in Detroit, Michigan, General Motors
Company -- http://www.gm.com/-- is one of the world's largest
automakers. GM employs 207,000 people in every major region of
the world and does business in some 140 countries. GM and its
strategic partners produce cars and trucks in 34 countries, and
sell and service these vehicles through the following brands:
Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Opel,
Vauxhall and Wuling. GM's largest national market is the United
States, followed by China, Brazil, Germany, the United Kingdom,
Canada, and Italy. GM's OnStar subsidiary is the industry leader
in vehicle safety, security and information services.
GM acquired its operations from General Motors Company, n/k/a
Motors Liquidation Company, on July 10, 2009, pursuant to a sale
under Section 363 of the Bankruptcy Code. Motors Liquidation or
Old GM is the subject of a pending Chapter 11 reorganization case
before the U.S. Bankruptcy Court for the Southern District of New
York.
At March 31, 2010, GM had US$136.021 billion in total assets,
total liabilities of US$105.970 billion and preferred stock of
US$6.998 billion, and non-controlling interests of US$814 million,
resulting in total equity of US$23.053 billion.
About Motors Liquidation
General Motors Corporation and three of its affiliates filed for
Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case
No. 09-50026). General Motors changed its name to Motors
Liquidation Co. following the sale of its key assets to a company
60.8% owned by the U.S. Government.
The Honorable Robert E. Gerber presides over the Chapter 11 cases.
Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors
in their restructuring efforts. Al Koch at AP Services, LLC, an
affiliate of AlixPartners, LLP, serves as the Chief Executive
Officer for Motors Liquidation Company. GM is also represented by
Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as
counsel. Cravath, Swaine, & Moore LLP is providing legal advice
to the GM Board of Directors. GM's financial advisors are Morgan
Stanley, Evercore Partners and the Blackstone Group LLP.
Bankruptcy Creditors' Service, Inc., publishes General Motors
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by General Motors Corp. and its various affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
SSANGYONG MOTOR: Auto Sales in July Hit 7,369 Vehicles
------------------------------------------------------
Yonhap News reports that Ssangyong Motor Co. sold more than 7,000
vehicles for the fourth consecutive month in July, helped by
strong overseas demand for its large sport utility vehicles.
According to Yonhap, the company sold a total of 7,369 vehicles in
July, down 0.7% from a month earlier. The report says the company
sold only 71 vehicles in July 2009 amid a prolonged strike and
occupation of its plant by workers that lasted nearly 100 days
from May to August.
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
====================
ALLIED FARMERS: Plans NZ$19.3 Million Capital Raising
-----------------------------------------------------
Allied Farmers has disclosed a partially underwritten $19.30
million capital raising as the company seeks further cash
injections to achieve longer term business plans and reduce debt.
The capital raising, which has been partially underwritten by
McDouall Stuart Group Limited for $9 million, will consist of two
parts:
* An institutional placement raising $2.25 million at
2.5 cents per new share; and
* A rights issue to current Allied Farmers shareholders
entitling them to 1 new share at 2.5 cents for every
3 shares held.
Allied Chairman John Loughlin said McDouall Stuart had arranged a
placement of $2.25 million to a number of institutions and
professional investors, which when combined with the underwritten
component of the total capital raising would mean that at least
$9 million would be raised. "I am also encouraging our current
shareholders to take up their rights, not only to support the
business and its future plans, but also to avoid any dilution
effect from the capital raising."
"In raising any capital we are mindful of the interest that has
been shown by a number of our investors in supporting the company.
We have decided that the rights issue with a placement is the
best current option for us to bring in fresh capital to launch
some of our planned initiatives and gives us the time needed to
realise good value from our asset portfolio, and continue our
focus on reducing debt. We are conscious of giving existing
investors the opportunity to further invest in the company and
believe rights issues are the appropriate format to look after the
interests of existing investors."
The new shares will be offered at 2.5 cents per share, which
represents a discount to Allied Farmers' current share price of
approximately 5.5 cents per share.
In addition, to protect investors in the capital raising from any
future erosion in the net tangible assets of Allied Farmers, the
number of shares issued will be increased next year if the Group's
net tangible assets are less than the issue price at the June 30,
2011 financial year end. The details of this adjustment mechanism
will be set out in the prospectus.
John Loughlin said that given the continuing challenges in the
rural and finance sectors, coupled with the current market for the
realization of the ex-Hanover and United assets, the company felt
it was appropriate to recognize and protect the downside risk for
investors.
As an additional benefit, the rights to new shares will be
renounceable. This means that shareholders who do not wish to
subscribe for more shares can sell their rights, which may have a
value, through the NZX rights trading facility. However, for
those shareholders who want to invest more than their entitlement,
provision has been made for oversubscriptions (allowing
shareholders to apply for additional new shares).
Allied Farmers has also, subject to compliance with its placement
rights under the Listing Rules, provided the sub underwriters with
a right (but not obligation) to apply for any shares not taken up
in the offer or committed under the underwriting.
Mr. Loughlin said, "Allied Farmers' expects the finance sector and
asset values to recover in time and the recently completed sale of
Five Mile, for close to its latest valuation, demonstrates what
Allied Farmers can achieve from the former Hanover assets.
However, in a market in which demand and finance for property
development was flat, realising good value from further asset
sales would continue to take time."
"We continue to seek opportunities for realising value from those
assets and we have a number of initiatives planned for our rural
services businesses that will differentiate our business and
stimulate our market share."
"It will take time to fully realise that value, attract fresh
capital to implement initiatives and reduce debt levels. The
recent extension to our banking arrangements with Westpac, albeit
with restructuring and capital raising milestones that are
required to be met, signalled confidence in our plans, which we
too are confident provide a solid foundation for our future
growth."
"We are seeing some signs of recovery in the rural sector --
especially on the back of the dairy payout -- and we have
confidence that the rural services sector, including the finance
sector, will recover. But that recovery will also take time."
Mr. Loughlin expected the prospectus to be lodged early next week
with the document in the mail to shareholders from about
August 11.
As reported in the Troubled Company Reporter-Asia Pacific on
October 23, 2009, Allied Farmers Limited breached its banking
covenants for the September 2009 quarter. Allied Farmers Chairman
John Loughlin said, "We are continuing to experience tough trading
conditions, a situation which has been ongoing for a number of
months, and we are carefully examining how we can improve
operating performance." The company said it is currently
undertaking an extensive review of its structure, market presence
and operations.
About Allied Farmers
Based in New Zealand, Allied Farmers Limited (NZE:ALF) --
http://www.alliedfarmers.co.nz/-- is engaged in livestock, real
estate, finance, wool brokering and manufacturing (meat and
timber). Rural Services comprises livestock, merchandise and real
estate operations. The Company's Rural Services activities are
carried out in Taranaki, Waikato, King Country and Manawatu. Its
Financial Services activities are carried out by Allied Nationwide
Finance Limited in Auckland, Wellington and Christchurch. Timber
processing comprises the Company's discontinued sawmilling
operations. On June 29, 2007, Allied Nationwide Finance Limited,
Nationwide Finance Limited and Allied Prime Finance Limited were
amalgamated, with Nationwide Finance Limited being the continuing
entity. Nationwide Finance Limited subsequently changed its name
to Allied Nationwide Finance Limited.
FELTEX CARPET: Five Former Directors Not Guilty of Charges
----------------------------------------------------------
Five former directors of Feltex Carpets have been found not guilty
of Financial Reporting Act breaches, The National Business Review
reports.
According to NBR, the five directors of the once NZX-listed Feltex
Carpets -- Peter Hunter, Peter Thomas, Michael Feeney, John Hagen
and former chairman Tim Saunders -- faced two charges under the
Financial Reporting Act 1993, to which they pleaded not guilty.
These related to failing to publish a breach of Feltex's banking
covenants and not properly classifying its AU$119.5 million
(NZ$157 million) debt facility with the ANZ bank in the company's
December 2005 half-year accounts, the report says.
NBR notes that the directors had accepted the interim accounts did
not meet the new accounting standards, but argued they took all
reasonable and proper steps to ensure compliance, including
employing specialist accounting firm Ernst & Young to audit the
statements.
Delivering her verdict, Auckland District Court Judge Jan Doogue
said the directors had taken all reasonable and proper steps to
ensure IFRS was complied with in the financial statements, NBR
notes.
About Feltex Carpets
Headquartered in Auckland, New Zealand, and established over 50
years ago, Feltex Carpets Limited -- http://www.feltex.com/--
has built a reputation for being one of the world's leading
manufacturers of superior-quality carpet. The Feltex operation
includes a wool scouring plant, six spinning mills, three tufted
carpet mills, a woven carpet mill and offices in New Zealand,
Australia and the United States. The company also leads the way
in exports, with customers throughout South East Asia, Japan,
the United States, the Middle East and other key world markets.
NZ Bank placed the company in receivership on Sept. 22, 2006, and
named Colin Nicol, Peter Anderson and Kerryn Downey, of
McGrathNicol+Partners, as receivers and managers.
The TCR-AP reported on Oct. 4, 2006, that Godfrey Hirst acquired
Feltex as a going concern, including its assets and undertakings
in New Zealand, Australia, and the United States. Proceeds of the
sale will be used to ease the company's NZ$128-million debt to ANZ
Bank.
On Dec. 13, 2006, the High Court in Auckland ruled in favor of an
application by the Shareholders Association against Feltex Carpets
putting the carpet maker into liquidation. John Vague was
appointed as liquidator.
CAPITAL + MERCHANT: Case Against Directors Delayed Until October
----------------------------------------------------------------
The New Zealand Herald reports that the case against the directors
of Capital + Merchant has been adjourned to October 6 because the
judge who was due to hear proceedings is unwell.
Owen Tallentire, Neal Nicholls, Colin Ryan and Robert Sutherland,
together with Wayne Douglas, who was registered as a director in
2007, face criminal charges filed against them by the Securities
Commission. The charges relate mainly to related party lending
and loan management.
As reported in the Troubled Company Reporter-Asia Pacific on
March 22, 2010, the Securities Commission laid criminal charges
and issued civil proceedings against Capital + Merchant Finance
directors Neal Nicholls, Owen Tallentire, Colin Ryan and Robert
Sutherland. Criminal charges have also been laid against Wayne
Douglas, who resigned as a director in February 2007. "The
Commission alleges that Capital + Merchant Finance's offer
documents and advertisements misled investors by misrepresenting
the investment risks, especially in relation to related party
lending, insurance cover and liquidity," Commission Chairman Jane
Diplock said. The Commission alleged that the directors made
untrue statements in the registered prospectus and investment
statement dated August 15, 2006, mainly in respect of related
party lending and loan management.
About Capital + Merchant
Capital + Merchant Finance, along with subsidiary Capital +
Merchant Investments Ltd., went into receivership on November 23,
2007, due to breaches in respect of general security agreements
issued by the companies in favor of creditor Fortress Credit
Corporation (Australia) 11 Pty Ltd.
Fortress appointed Tim Downes and Richard Simpson of Grant
Thornton, chartered accountants, while trustee Perpetual Trust
have called in KordaMentha.
Capital + Merchant owes about NZ$190 million to 7,000 investors.
Fortress reportedly has a prior charge over assets and was owed
around NZ$70 million in total.
STRATEGIC FINANCE: Former CEO Rules Out Any Charges
---------------------------------------------------
Former Strategic Finance CEO Kerry Finnigan doesn't expect that he
or the rest of the company's leadership will face any charges
stemming from investigations into the demise of the property
lender, interest.co.nz reports.
Mr. Finnigan told interest.co.nz last week's appointment of
liquidators by Perpetual Trust was probably just a process the
trustee wants to go through.
"We don't think we've done anything wrong," interest.co.nz quoted
Mr. Finnigan as saying. "We think we tried to deliver a good
outcome for investors in a very trying and difficult time,"
Mr. Finnigan added. "Unfortunately we weren't successful."
According to the report, Matthew Lancaster, Perpetual Trust's head
of corporate trust, said the liquidators -- Corporate Finance's
John Cregton and Andrew McKay -- were appointed because it was
anticipated there would be a shortfall for Strategic's investors
and they had more power than receivers to look into Strategic's
transactions, looking for any that could be over turned to get a
better recovery for investors.
The report relates Mr. Lancaster said the liquidators would
particularly look at deals dating from about June 2008 until
receiver PricewaterhouseCoopers' appointment in March this year
and they could report anything untoward to the likes of the
Securities Commission.
Mr. Finnigan said, however, Strategic's board had acted in a
professional manner discharging its duties in the best way
possible, interest.co.nz adds.
About Strategic Finance
Headquartered in Wellington, New Zealand, Strategic Finance
Limited (NZE:SFLHA) -- http://www.strategicfinance.co.nz/--
operates as a specialist finance company offering financial
services, primarily to the property sector. The Company also
provides specialist financial and advisory services to the
property and corporate sectors. The Company operates in
New Zealand, Australia and Pacific Islands. The Company's
operating subsidiaries include Strategic Advisory Limited,
Strategic Nominees Limited, Strategic Mortgages Limited and
Strategic Nominees Australia Limited. The Company's non-operating
subsidiary is Strategic Properties No.1 Limited. In May 2009, the
Company incorporated a subsidiary, Gulf Property Holdings Limited.
Strategic Finance Limited's parent company, Strategic Investment
Group, is wholly owned by Australian-based finance company Allco
HIT Limited.
* * *
The Troubled Company Reporter-Asia Pacific reported on March 15,
2010, that PricewaterhouseCoopers partners John Fisk and Colin
McCloy were appointed receivers of Strategic Finance Limited and
related companies Strategic Advisory Limited, Strategic Mortgages
Limited, Strategic Nominees Limited, and Strategic Nominees
Australia Limited. This ends the moratorium arrangement that has
been in place since December 2008. The companies' trustee,
Perpetual Trust, appointed receivers after SFL failed to generate
sufficient loan recoveries for its milestone payment on January 7,
2010. The company owed NZ$417 million to 13,000 investors.
Perpetual Trust Ltd. on July 27, 2010, appointed liquidators to
Strategic Finance. The High Court in Wellington made an order
that Corporate Finance's John Cregten and Andrew McKay be
appointed liquidators.
================
S R I L A N K A
================
CEYLEASE FINANCIAL: Fitch Cuts National Long-Term Rating to 'BB+'
-----------------------------------------------------------------
Fitch Ratings Lanka has downgraded Ceylease Financial Services
Ltd's National Long-term rating to 'BB+(lka)' from 'BBB-(lka)' and
simultaneously revised the Outlook to Negative from Stable. The
agency has also withdrawn the 'BB+(lka)' rating on CFSL's proposed
subordinated debenture issue, due to non-issuance.
The downgrade reflects Fitch's view that the weakening of CFSL's
stand-alone financial profile is partly structural, as reflected
in the sharper deterioration of its asset quality and
profitability compared to peers. The Outlook revision reflects
the potential challenges faced by the company in improving its
current weak asset quality and successfully implementing recently
instituted stringent credit controls. Conversely, the rating
continues to derive comfort from the strength of its key
shareholder, the state-owned Bank of Ceylon (BOC; 'AA(lka)'/Stable
Outlook; 55% ownership), and its demonstrated support.
A dilution in BOC's ownership stake or a continued unchecked
deterioration in CFSL's net NPL/equity ratio or profitability, or
the company's inability to successfully implement credit controls
and consequently stem NPL accretion on incremental lending over
the next 12-18 months, could result in a further downgrade.
CFSL's gross NPL ratio (at the three-month arrears level) and its
net (un-provided) NPL/equity remain a key concern at present.
Both ratios remained weak as at end-Q110 at 27.42% and 117.16%,
respectively, although showing some improvement in H209 due to
recovery of early delinquencies. However, NPL slippage into the
'above 12-month arrears' category was sharp between June 2009 and
March 2010, and in Fitch's opinion, could prove challenging to
recover over the medium-term, despite the company's renewed
efforts.
CFSL recorded a post-tax loss of LKR105.95m in FY09 due to
thinning net interest margin and a spike in credit costs
(provisions). Its post-tax losses reduced to LKR5.3m in Q110,
helped by a sharp reduction in borrowing costs, which is in line
with market interest rates. Over the medium-term, incremental
provisions will remain the key risk to CFSL's profitability, as
continued NPL slippage into lower categories that require higher
provisioning cannot be fully discounted.
CFSL's assets accounted for 1.3% of the specialized leasing
company sector at end-December 2009, while its liabilities
excluding equity amounted to 0.2% of BOC's liabilities.
BOC owns a 1.78% share in Fitch Ratings Lanka Ltd. No shareholder
other than Fitch Ratings Limited of the UK is involved in the day-
to-day operations of, or rating reviews undertaken by, Fitch
Ratings Lanka Ltd.
COMMERCIAL BANK: Fitch Corrects Press Release on Ratings
--------------------------------------------------------
Fitch Ratings has corrected its August 2, 2010 press release on on
Commercial Bank of Ceylon PLC. Fitch has included a disclaimer on
Commercial Bank's shareholding in Fitch Ratings Lanka that was
missing from the August 2 version.
Fitch Ratings Lanka has downgraded Commercial Bank of Ceylon PLC's
National Long-term rating to 'AA(lka)' from 'AA+(lka)' and its
Individual rating to 'D/E' from 'D'. The agency has also
downgraded the rating on CB's subordinated debentures to 'AA-
(lka)' from 'AA(lka)'. Fitch has simultaneously affirmed CB's
Support rating at '5'. The Outlook is Stable.
The ratings reflect the relative deterioration in CB's credit
profile in terms of its asset quality and solvency indicators.
The Stable Outlook reflects Fitch's view that the bank could stem
the further decline and strengthen its asset quality and solvency
indicators supported by an improved economic environment,
concerted recoveries, increased provisioning and stronger equity
accretion and/ or infusion. The agency considers that the
restoration of CB's credit profile to historical norms that were
considerably superior to that of its peers could be challenging.
A contraction in CB's loan book amidst retarded credit growth
(FY09: -4.5%), NPL accretion against a backdrop of sluggish
economic activity and in Fitch's opinion, inadequate monitoring of
its collection performance resulted in the bank's gross NPL ratio
peaking at 8.9% at H109 before improving to 6.9% in FY09 (FY08:
5.2%) supported in part by a containment of delinquencies through
restructuring. This along with a reduced specific provision
coverage (FY09: 28.5%; FY08: 35.5%) resulted in CB's solvency as
indicated by net NPL/equity deteriorating to 28.6% in FY09 (FY08:
22.3%).The agency notes that although the expected economic
rebound should ease the pressure on the accumulation of NPLs and
facilitate their declassification, the restoration of CB's asset
quality indicators to historical norms considerably better than
peers is contingent upon aggressive NPL resolution and the
recovery of the bank's retail customer base from which the
majority of NPLs originated.
Following a directive from the Controller of Exchange of the
Central Bank of Sri Lanka, CB halted payments due to foreign
counterparty banks under disputed oil derivative contracts in June
2009. The bank reported a payable of LKR710m in FY09, although
about 67% of this exposure could be offset through a deposit
maintained at a counterparty. However, the bank maintains that
the non-payment of dues under these transactions has not resulted
in its classification as non-performing by the counterparties.
Subsequent to the set off in FY10 of a counterparty deposit
maintained at CB, the receivable under these contracts reduced to
LKR271m in Q110.
CB has expanded its presence in Bangladesh since its acquisition
of the operations of Credit Agricole Indosuez in 2003. In FY09,
CB's Bangladesh operations comprised 9.2% of assets and 14.9% of
net income. Fitch notes that CB's expansion in Bangladesh has
thus far been prudently executed with delinquencies remaining very
low (below 1%).
CB reported healthy profitability (return on assets of 1.35%) with
strong tier 1 and total capital ratios (11.69% and 13.66%,
respectively) in Q110.
Established in 1969, CB is the largest private bank and the third-
largest Licensed Commercial Bank in Sri Lanka. It accounted for
10.7% of total banking system assets at December 2009.
CB has a 1.78% shareholding in Fitch Ratings Lanka but is not
involved in either the day-to-day operations or credit rating
reviews undertaken by Fitch Ratings Lanka.
INDUSTRIAL FINANCE: Fitch Affirms 'D' National Long-Term Rating
---------------------------------------------------------------
Fitch Ratings Lanka has affirmed and withdrawn Industrial Finance
Ltd's National Long-term rating of 'D(lka)'.
Fitch will no longer provide ratings or analytical coverage on
IFL.
===========
T A I W A N
===========
TAICHUNG COMMERCIAL: Fitch Cuts Issuer Default Rating to 'BB+'
--------------------------------------------------------------
Fitch Ratings has downgraded Taiwan-based Taichung Commercial
Bank's Long-term Issuer Default Rating to 'BB+' from 'BBB-',
Short-term IDR to 'B' from 'F3', National Long-term rating to 'A-
(twn)' from 'A(twn)', National Short-term rating to 'F2(twn)' from
'F1(twn)', and outstanding subordinated debts to 'BBB+(twn)' from
'A-(twn)'. At the same time, the agency has affirmed all other
ratings of TCB. Fitch has revised the Outlook on TCB's Long-term
IDR and National Long-term rating to Stable from Negative. A
detailed list of all ratings actions follows at the end of this
release.
The rating downgrade is driven by TCB's weakness in earnings
generation and core capitalization, which in Fitch's view compares
somewhat unfavorably with similarly rated institutions at the
Individual Rating, Long-term IDR, and National Rating levels.
Moreover, the agency does not anticipate any meaningful
improvement in these facets in the near-to-medium term despite
Taiwan's generally sound economic prospects. However, the current
ratings do also consider the bank's satisfactory asset quality and
sound liquidity.
Owing to sharp margin compression affected by the Taiwanese
central bank's adoption of lower interest rate policy to stimulate
the economy in 2008 and 2009, the bank reported a significant
decline in net interest revenue and hence its core earnings in
2009. While TCB's loan loss charges decreased substantially in
2009, the large specific provisions against its exposure to the
fraudulent Private Equity Management Group took a toll on its
earnings performance. TCB has provided reasonable reserves (end-
Q110: coverage of 52.3%) against its PEMG exposures, although the
reclaim/eventual loss prospect remains uncertain. Fitch expects
TCB's 2010 earnings prospect to be subdued due to limited revenue
growth but anticipated higher loan loss charges following 2009's
unusually small provisions expense. However, given Fitch's
expectation of no material change in TCB's financial or risk
profile over the near-term, the Outlook for TCB is considered
Stable.
TCB maintains sound asset quality in its lending portfolio. At
end-Q110, TCB's NPL ratio was 1.2% and its reserve coverage ratio
was 104.6%. TCB's core capitalization is acceptable, albeit lower
than other private banks with similar Individual Ratings; the bank
reported a Tier 1 ratio of 7.1% and a CAR of 10.2% at end-Q110,
compared with 7.9% and 9.3% respectively at end-2008. TCB has
maintained a sound liquidity profile through the global financial
crisis with loans/deposits ratios consistently at around 80% (in
2007-Q110), thanks to its well-established deposit-taking
franchise in the greater Taichung area.
Aggressive loan growth strategy, which outpaces the bank's
internal capital generation and/or compromises its currently
favorable asset quality profile, resulting in a substantially
decreased core capitalization would trigger Fitch to lower its
ratings.
TCB is a privately owned bank in Taiwan, commanding a 1.1% market
share of deposits at end-May 2010. TCB's strategy is to expand
SME financing and wealth management business by exploiting its
well-established and comprehensive SME network in greater Taichung
area. China Man-Made Fiber Corp. and its investment associate is
its largest shareholder, with an equity stake of 22.3%.
TCB:
-- Long-term foreign currency IDR downgraded to 'BB+' from
'BBB-'; Outlook revised to Stable from Negative
-- Short-term foreign currency IDR downgraded to 'B' from 'F3';
-- National Long-term rating downgraded to 'A-(twn)' from
'A(twn)'; Outlook revised to Stable from Negative
-- National Short-term rating downgraded to 'F2(twn)' from
'F1(twn)';
-- Individual rating affirmed at 'C/D';
-- Support rating affirmed at '5';
-- Support Rating Floor affirmed at 'NF'; and
-- Subordinated bonds downgraded to BBB+(twn) from 'A-(twn)'.
*********
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 ***