/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/110428.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, April 28, 2011, Vol. 14, No. 83 Headlines A U S T R A L I A BROCKGOLD PTY: Receivers to Put Golf Course on Market This Week REDGROUP RETAIL: To Close Another Six Angus & Robertson Stores TIGER AIRWAYS: Fails to Lodge 2010 Accounts H O N G K O N G FAMOUS EXCEL: Placed Under Voluntary Wind-Up Proceedings FINE DRAGON: Court Enters Wind-Up Order FINOVERDE LIMITED: Members' Final Meeting Set for May 23 FIRST CHINA: Members' Final Meeting Set for May 30 G & H HOLDINGS: Court Enters Wind-Up Order GULIANO (HK): Herman Van De Velde Steps Down as Liquidator HANG SANG: Court to Hear Wind-Up Petition on May 18 HASTEN GROWTH: Members' Final Meeting Set for May 23 JIALI BIO: Court to Hear Wind-Up Petition on May 18 KINHILL CORPORATION: Placed Under Voluntary Wind-Up Proceedings LEGEND CAPITAL: Kong and Kong Appointed as Liquidators MACQUARIE CAPITAL: Creditors' Proofs of Debt Due May 21 METZLER INTERNATIONAL: Creditors to Get 4.0% Recovery on Claims OPUS COLLECTION: Court Enters Wind-Up Order I N D I A ASHLESHA CORPORATION: CRISIL Rates INR80MM Term Loan at 'B-' BHAGWAN VANASPATI: CRISIL Rates INR70 Million Cash Credit at 'D' FAIRY FOOD: CRISIL Reaffirms 'C' Rating on INR35MM Cash Credit HAYATH FOODS: CRISIL Reaffirms 'D' Rating on INR51.6MM LT Loan ICEBERG FOODS: CRISIL Assigns 'BB+' Rating to INR124MM Term Loan KNS OVERSEAS: CRISIL Reaffirms 'P4+' Rating on INR240MM Credit KUMINEX MINERALS: CRISIL Upgrades Rating on INR145MM Loan to 'C' MAHALAXMI POLYPACK: CRISIL Cuts Rating on INR95MM Loan to 'BB+' NAGAR DAIRY: CRISIL Upgrades Rating on INR10MM Term Loan to 'BB-' PELICAN RUBBER: CRISIL Reaffirms 'BB' Rating on INR70MM Term Loan RITURAJ HOLDINGS: CRISIL Reaffirms 'BB+' Rating on INR92MM LT Loan SAANIKA INDUSTRIES: CRISIL Reaffirms 'BB' Rating on INR128.4M Loan SHASHIN CONSTRUCTION: CRISIL Rates INR70MM Cash Credit at 'BB+' SHIV SHAKTI: CRISIL Assigns 'B' Rating to INR93.4MM Cash Credit SIVARATHISH SPINNING: CRISIL Places 'B+' Rating to INR47.3MM Loan SRI KUMARSWAMY: CRISIL Reaffirms 'D' Rating on INR529MM LT Loan VENKATESHWARA POWER: CRISIL Reaffirms INR225.6M Loan Rating at BB- J A P A N MITSUBISHI MOTORS: S&P Affirms B+ Rating; Outlook Negative TOKYO ELECTRIC: Workers Agree to Up to 25% Pay Cut K O R E A HYNIX SEMICONDUCTOR: Creditors Agree to Relaunch Stake Sale N E W Z E A L A N D WESTERN PACIFIC: Policyholder Seeks Creditors' Meeting S I N G A P O R E HAINAN ZHENLIN: Court to Hear Wind-Up Petition on May 6 KIAN SENG: Creditors Get 3.04% Recovery on Claims MUTUAL DEVELOPMENT: Court to Hear Wind-Up Petition on May 6 - - - - - ================= A U S T R A L I A ================= BROCKGOLD PTY: Receivers to Put Golf Course on Market This Week --------------------------------------------------------------- Zoe Hancock at the Gold Coast Sun reports that the Tee Trees golf course in Arundel, developed by Brockgold Pty Ltd, will be put on the market this week. Gold Coast Sun relates that receiver David Whyte, of BDO Business Recovery and Insolvency, said a marketing plan had been developed during the past few weeks in conjunction with real estate agents. The 61ha parcel in Tee Trees Boulevard will be advertised nationally for up to five weeks, the report says. According to the report, Mr. Whyte said that if no investors came forward, the receivers would re-assess the campaign. "We cannot know what will happen yet, and if no investors come forward, we will have to have another look at it," the Gold Coast Sun quotes Mr. Whyte as saying. The move to sell the 61 hectare parcel in Tee Trees Boulevard follows the appointment of receivers to Brockgold Pty, a company linked to the estate's developer Graeme Ingles, on March 18, 2011, according to goldcoast.com.au. Brockgold Pty Ltd, an Ingles Group company, develops the Tee Trees golf community. REDGROUP RETAIL: To Close Another Six Angus & Robertson Stores -------------------------------------------------------------- The administrator of REDgroup Retail announced Wednesday that another six Angus & Robertson stores will close. The closures will take place over the next four weeks and will affect 55 staff (18 permanent full-time and part-time; 37 casual). The stores to close are: -- Collins Street (Vic) -- Pacific Fair (Qld) -- Top Ryde (NSW) -- Tweed Heads (NSW) -- Warringah Mall (NSW) -- Woden Plaza (ACT) Ferrier Hodgson said in a statement that the restructure will leave 157 REDgroup outlets, including 61 Angus & Robertson and nine Borders stores in Australia and 87 stores in New Zealand. There are no store closures in New Zealand as part of this restructure. About REDgroup Retail REDgroup Retail Pty, with 260 stores and brands including Angus & Robertson and Whitcoulls, is the largest book retailer in Australia and New Zealand. It acquired Borders stores in Australia, New Zealand, and Singapore in 2008. * * * REDgroup Retail Pty. Ltd. on Feb. 17, 2011, named Ferrier Hodgson as voluntary administrators. The appointment comes less than a day after Borders Group Inc. filed for bankruptcy in the U.S. and began taking bids for 200 stores, according to Bloomberg News. The REDgroup companies in Administration include: * REDgroup Retail Pty Ltd * Spine Holdco Pty Ltd * A&R Australia Holdings Pty Ltd * REDgroup Retail Administrative Services Pty Ltd * Whitcoulls Group Holdings Pty Ltd * Spine Newco Pty Ltd * Angus & Robertson Pty Ltd * Angus & Robertson Bookworld * Calendar Club Pty Ltd * WGL Retail Holdings Ltd * Whitcoulls Group Ltd * Calendar Club New Zealand Ltd * Borders New Zealand Ltd * REDgroup Online Ltd TIGER AIRWAYS: Fails to Lodge 2010 Accounts ------------------------------------------- The Sydney Morning Herald reports that Tiger Airways Australia has yet to file its 2010 company accounts, placing its directors at risk of criminal prosecution. SMH relates that Tiger spokeswoman Vanessa Regan on Tuesday declined to explain why the airline, which has a policy of refusing late passengers, is eight months overdue filing its accounts. Under the Corporations Act, SMH notes, the accounts should have been filed within the four months after March 31, 2010. Failing to lodge financial reports is a criminal offence. Company directors can face up to six months' jail or a AU$2,750 fine; corporations can be fined AU$27,500, according to SMH. SMH says Ms. Regan would not nominate a date the overdue accounts would be filed, saying they were being finalised and would be lodged "shortly." According to the report, Tiger Australia, which depends on its Singaporean parent for financial support, was also pinged last month for safety problems by the Civil Aviation Safety Authority, which issued a "show cause" notice. SMH relates that Tiger said it had responded to CASA's concerns "in full." In addition, says SMH, it has put off plans to expand its Australian fleet, blaming Queensland's deadly storms for the delay, and last week it cancelled several Easter flights at short notice. Accounts filed with the Singapore Stock Exchange, notes SMH, deal with Tiger's Australian operation in three lines. The accounts show a 89.1% surge in Australian revenue compared with a 24.2% rise in costs, slashing 2009's loss of SG$58 million (AU$43.7 million) to just SG$600,000 in 2010. Based in Melbourne, Victoria, Tiger Airways Australia is an ultra- low cost airline. It is a subsidiary of Tiger Airways Holdings, a Singapore-based company. As of April 2011, the Tiger Airways Australia fleet consists of 11 Airbus A320. ================ H O N G K O N G ================ FAMOUS EXCEL: Placed Under Voluntary Wind-Up Proceedings -------------------------------------------------------- At an extraordinary general meeting held on April 16, 2011, creditors of Famous Excel Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Ma Pang Fai Arthur Room 702, Hing Yat House Kwai Hing Estate New Territories Hong Kong FINE DRAGON: Court Enters Wind-Up Order -------------------------------------- The High Court of Hong Kong entered an order March 21, 2011, to wind up the operations of Fine Dragon Trading Limited. The company's liquidator is Lau Siu Hung. FINOVERDE LIMITED: Members' Final Meeting Set for May 23 -------------------------------------------------------- Members of Finoverde Limited will hold their final general meeting on May 23, 2011, at 12:00 noon, at the 20/F., Prince's Building, Central, in Hong Kong. At the meeting, Rainier Hok Chung Lam, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. FIRST CHINA: Members' Final Meeting Set for May 30 -------------------------------------------------- Members of First China Property Development Limited will hold their final general meeting on May 30, 2011, at 10:00 a.m., at 38th Floor, Tower One, Lippo Centre, 89 Queensway, in Hong Kong. At the meeting, Sy Mei Ling, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. G & H HOLDINGS: Court Enters Wind-Up Order ------------------------------------------ The High Court of Hong Kong entered an order March 2, 2011, to wind up the operations of G & H Holdings Limited. The company's liquidator is Lau Siu Hung. GULIANO (HK): Herman Van De Velde Steps Down as Liquidator ---------------------------------------------------------- Herman Van De Velde stepped down as liquidator of Guliano (HK) Limited on April 6, 2011. HANG SANG: Court to Hear Wind-Up Petition on May 18 --------------------------------------------------- A petition to wind up the operations of Hang Sang Engineering Factory Limited will be heard before the High Court of Hong Kong on May 18, 2011, at 9:30 a.m. Ho Po Yeng filed the petition against the company on March 16, 2011. The Petitioner's Solicitors are: Messrs. Chan & Tsu Room 1601, 16th Floor No. 160-174 Lockhart Road Wanchai, Hong Kong HASTEN GROWTH: Members' Final Meeting Set for May 23 ---------------------------------------------------- Members of Hasten Growth Limited will hold their final general meeting on May 23, 2011, at 12:30 p.m., at the 20/F., Prince's Building, Central, in Hong Kong. At the meeting, Rainier Hok Chung Lam, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. JIALI BIO: Court to Hear Wind-Up Petition on May 18 --------------------------------------------------- A petition to wind up the operations of Jiali Bio Group Limited will be heard before the High Court of Hong Kong on May 18, 2011, at 9:30 a.m. HSH Norbank AG, Singapore Branch, filed the petition against the company. The Petitioner's Solicitors are: Stephen Mok & Co. In association with Eversheds LLP 21/F, Gloucester Tower The Landmark 15 Queen's Road Central Hong Kong KINHILL CORPORATION: Placed Under Voluntary Wind-Up Proceedings --------------------------------------------------------------- At an extraordinary general meeting held on April 14, 2011, creditors of Kinhill Corporation Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Chan Ka Chi Room 506, Gold and Silver Commercial Building No. 12 Mercer Street Sheung Wan, Hong Kong LEGEND CAPITAL: Kong and Kong Appointed as Liquidators ------------------------------------------------------ Kong Sze Man Simone and Kong Sau Wai on April 8, 2011, were appointed as liquidators of Legend Capital Profits Limited. The liquidators may be reached at: Kong Sze Man Simone Kong Sau Wai Unit 511, 5th Floor Tower 1, Silvercord No. 30 Canton Road Tsimshatsui, Kowloon Hong Kong MACQUARIE CAPITAL: Creditors' Proofs of Debt Due May 21 ------------------------------------------------------- Creditors of Macquarie Capital Funds (Asia) Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by May 21, 2011, to be included in the company's dividend distribution. The company commenced wind-up proceedings on April 12, 2011. The company's liquidator is: Sy Mei Ling 38th Floor, Tower One Lippo Centre 89 Queensway Hong Kong METZLER INTERNATIONAL: Creditors to Get 4.0% Recovery on Claims --------------------------------------------------------------- Metzler International (Asia) Limited, which is in liquidation, will pay the third interim dividend to its creditors on May 31, 2011. The company will pay 4.0% for ordinary claims. The company's liquidators are: Desmond Chung Seng Chiong Roderick John Sutton The Hong Kong Club Building, 14/F 3A Chater Road Central, Hong Kong OPUS COLLECTION: Court Enters Wind-Up Order ------------------------------------------- The High Court of Hong Kong entered an order March 1, 2011, to wind up the operations of Opus Collection Limited. The company's liquidator is Lau Siu Hung. ========= I N D I A ========= ASHLESHA CORPORATION: CRISIL Rates INR80MM Term Loan at 'B-' ------------------------------------------------------------ CRISIL has assigned its 'B-/Negative' rating to the term loan facility of Ashlesha Corporation Ltd. Facilities Ratings ---------- ------- INR80.0 Million Term Loan B-/Negative (Assigned) The rating reflects ACL's weak financial flexibility and cyclicality in the industry. These rating weaknesses are partially offset by the benefits accrued by ACL because of the advantageous location of its hotel. Outlook: Negative CRISIL believes that ACL will commence operations by April 2011. The repayment obligations for the term loan taken for the project are also starting in April 2011, thereby leaving ACL no time to stabilise its operations. The company is expected to witness liquidity constraints over the near to medium term as the timely payment of debt obligations will depend on early stabilization of hotel operations. The outlook may be revised to 'Stable' if ACL is able to manage the short-term liquidity constraints despite the delay in commencement of operations. Conversely, the rating may be downgraded if there are further delays in commencement of operations and/or ACL's liquidity weakens further. Incorporated in 2005, ACL is developing a three-star hotel at Ranchi (Jharkhand). The hotel has 54 rooms, and also a swimming pool, banquet hall, coffee shop, and discotheque, besides other amenities. Hotel operations are expected to commence in April 2011. BHAGWAN VANASPATI: CRISIL Rates INR70 Million Cash Credit at 'D' ---------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Bhagwan Vanaspati Mills Ltd to 'D' from 'B+/Stable'. Facilities Ratings ---------- ------- INR70.0 Million Cash Credit Limit D (Downgraded from 'B+/Stable') The downgrade reflects BVML's overdrawn cash credit limit for the last six months and its non-payment of interest on the same. The management has closed the plant since October 2010, stating that operating its plant was not economically feasible. The account has been classified as a non-performing asset by its bank. Incorporated in 1994 by Mr. Hari Bhagwan Agarwal, BVML manufactures vanaspati oil. Its plant in Budaun (Uttar Pradesh) has an installed capacity of 62.5 tonnes per day. The plant has been shut since October 2010, and the management has stated that operating the plant would not be economically feasible. FAIRY FOOD: CRISIL Reaffirms 'C' Rating on INR35MM Cash Credit -------------------------------------------------------------- CRISIL's ratings on the bank facilities of Fairy Food Products Pvt Ltd continue to reflect the delays by Hayath Foods, one of the group entities, in servicing its term loans; the delays have been caused by weak liquidity because of low cash accruals, large working capital requirements, and moderate debt-funded capital expenditure. The ratings also reflect the Fairy group's below- average financial risk profile, marked by high gearing and weak debt-protection measures, and geographically concentrated revenue profile. These rating weaknesses are partially offset by the Fairy group's established market position in the fruit processing industry. Facilities Ratings ---------- ------- INR35.00 Million Cash Credit C (Reaffirmed) INR80.00 Million Packing Credit P4 (Reaffirmed) INR105.00 Million Bill Purchase- P4 (Reaffirmed) Discounting Facility INR75.00 Million Letter of Credit P4 (Reaffirmed) INR2.50 Million Bank Guarantee P4 (Reaffirmed) For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Fairy Food, Hayath Foods, Navaras Food Products Ltd, Safa Food Products Pvt Ltd, and Sreenivasa Processed Foods, collectively referred to as the Fairy group. This is because all these entities are in the same line of business, have intra-group operational and financial linkages, including fungible cash flows, and are under a common management. The Fairy group consists of five entities that manufacture fruit pulp from mango and guava. The Bengaluru (Karnataka)-based group has a total capacity of around 18 tonnes per hour. Set up in 1968 by Mr. Syed Mateen Aga, the Fairy group is part of the larger Aga group which trades in fruits and manufactures fruit pulp. Around 75% of the Fairy group's revenues come from exports, almost entirely to the Middle East. The Fairy group reported a profit after tax of INR3.7 million on net sales of INR453.4 million for 2009-10 (refers to financial year, April 1 to March 31), against a profit after tax of INR10.4 million on net sales of INR498.7 million for 2008-09. HAYATH FOODS: CRISIL Reaffirms 'D' Rating on INR51.6MM LT Loan -------------------------------------------------------------- CRISIL's ratings on the bank facilities of Hayath Foods, which is part of the Fairy group, continue to reflect the delays by the firm in servicing its term loans; the delays have been caused by weak liquidity because of low cash accruals, large working capital requirements, and moderate debt-funded capital expenditure. Facilities Ratings ---------- ------- INR51.60 Million Long-Term Loan D (Reaffirmed) INR10.00 Million Cash Credit D (Reaffirmed) INR45.00 Million Packing Credit P5 (Reaffirmed) INR50.00 Million Bill Purchase- P5 (Reaffirmed) Discounting Facility INR45.00 Million Letter of Credit P5 (Reaffirmed) INR15.00 Million Bank Guarantee P5 (Reaffirmed) The Fairy group also has a below-average financial risk profile, marked by a high gearing and weak debt protection metrics, and a geographically concentrated revenue profile. However, the Fairy group benefits from its established market position in the fruit processing industry. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Fairy Food Products Pvt Ltd, Hayath Foods, Navaras Food Products Ltd, Safa Food Products Pvt Ltd, and Sreenivasa Processed Foods, collectively referred to as the Fairy group. This is because all these entities are in the same line of business, have intra-group operational and financial linkages, including fungible cash flows, and are under a common management. The Fairy group consists of five entities that manufacture fruit pulp from mango and guava. The Bengaluru (Karnataka)-based group has a total capacity of around 18 tonnes per hour. Set up in 1968 by Mr. Syed Mateen Aga, the Fairy group is part of the larger Aga group which trades in fruits and manufactures fruit pulp. Around 75% of the Fairy group's revenues come from exports, almost entirely to the Middle East. The Fairy group reported a profit after tax of INR3.7 million on net sales of INR453.4 million for 2009-10 (refers to financial year, April 1 to March 31), against a profit after tax of INR10.4 million on net sales of INR498.7 million for 2008-09. ICEBERG FOODS: CRISIL Assigns 'BB+' Rating to INR124MM Term Loan ---------------------------------------------------------------- CRISIL has assigned its 'BB+/Stable/P4+' ratings to the bank facilities of Iceberg Foods Ltd. The ratings reflect the Iceberg group's exposure to risks related to a large, debt-funded capital expenditure (capex) programme, small scale of operations in intensely competitive Indian beverages market, and vulnerability to adverse regulatory changes, coupled with seasonality in demand for its products. These weaknesses are partially offset by the improvement in IFL's sales, supported by established distribution network and stable business risk profile, on account of product and geographical diversification in its revenue profile. Facilities Ratings ---------- ------- INR200 Million Cash Credit BB+/Stable (Assigned) INR124 Million Term Loan BB+/Stable (Assigned) INR50 Million Letter of Credit P4+ (Assigned) For arriving at its ratings, CRISIL has consolidated the business and financial risk profiles of IFL, Paras Natural Spring Water Pvt Ltd, Abhiruchi Aqua Pvt Ltd, Iceberg Aqua Pvt Ltd, and Trinity Beverages Pvt Ltd, together referred to as the Iceberg group. This is because the entities are in similar lines of business and under common management. Furthermore, the group entities extend financial support to each other. Also, IFL has guaranteed the bank facilities of IAL, and purchases carbonated soft drinks (CSD) and packaged drinking water from AAL and TBL. Outlook: Stable CRISIL believes that the Iceberg group will benefit from its exclusive franchisee agreement with United Breweries Ltd (UBL) and Cott Beverages Inc. The group is expected to scale up its operations, supported by its established distribution network across India. The outlook may be revised to 'Positive' in case the group achieves more-than-expected sales while maintaining profitability and improving its capital structure. Conversely, the outlook may be revised to 'Negative' in case of significant deterioration in the group's financial risk profile, due to larger-than-expected working capital requirements or a large, debt-funded capex, or in case adverse regulatory changes affect the group's profitability. Incorporated in 1999, IFL is managed by Mr. Kishore Aggarwal and his family. The company has an exclusive franchisee agreement with UBL to manufacture and market packaged drinking water and soda under the Kingfisher brand in all but the eastern region of India. IFL is also the master franchisee for manufacturing and marketing CSD for CBI under the RC Cola brand in India. The company's manufacturing units are in Jhajjar (Haryana) and Jaipur (Rajasthan). They have a combined manufacturing capacity of 16.2 million litres per annum (mlpa) for CSDs, 28.8 mlpa for packaged drinking water, and 1.8 mlpa for soda. AAL has a facility for packaged drinking water in Mumbai. It has a capacity of 8.6 mlpa. AAL also has an agreement with UBL to manufacture and market its brand of packaged drinking water. TBL has a CSD manufacturing unit in Hyderabad with an installed capacity of 23.3 mlpa. TBL has an agreement with CBI to manufacture and market its RC Cola brand. PNS is a wholly owned subsidiary of IFL and has a packaged drinking water manufacturing unit in Haridwar (Uttar Pradesh), with a capacity of 24.1 mlpa. IFL acquired PNS for INR65 million, funded through term loan of INR50 million and internal accruals. IAL manufactures PET bottles used by IFL, AAL, and TBL. IAL also supplies PET bottles to contract manufacturers of packaged drinking water of UBL. For 2009-10, IFL reported a profit after tax of INR19 million on net revenue of INR518 million, against INR10 million and INR354 million, respectively, in the previous financial year. KNS OVERSEAS: CRISIL Reaffirms 'P4+' Rating on INR240MM Credit -------------------------------------------------------------- CRISIL's rating on the export packing credit facility of KNS Overseas Pvt Ltd continues to reflect KNS's susceptibility to adverse regulatory changes, to volatility in iron ore prices, to cyclicality in the end-use industry, and geographical and client concentration in revenue profile. These rating weaknesses are partially offset by the experience of KNS's promoter in the iron ore trading business. Facilities Ratings ---------- ------- INR240.00 Million Export Packing Credit P4+ (Reaffirmed) Update KNS generated revenues of about INR834 million, in line with CRISIL's expectations, in 2009-10 (refers to financial year, April 1 to March 31). The company is expected to record revenues of about INR420 million in 2010-11, much lower than CRISIL's expectations of about INR850 million, primarily because of the export ban of iron ore in Karnataka. With the lift of the export ban with effect from April 20, 2011, CRISIL believes that the company's revenues will increase over the medium term. Furthermore, KNS opened a branch office in Goa in February 2011; this is expected to execute an export order of about INR300 million in April 2011. The company's profitability margins were lower than expected, primarily because of lower-than-expected revenues. KNS's financial risk profile was weaker than expectations, marked by a high estimated gearing of 3.49 times as on March 31, 2011, and weak debt protection metrics as a result of lower accruals. The company's financial risk profile is expected to strengthen over the medium term as a result of improved accruals and lack of debt-funded capital expenditure during this period. KNS's liquidity will remain adequate for the rating category, as the company is expected to generate net cash accruals of about INR20 million vis-a-vis nil debt obligations; however, the bank limit utilization was high at nearly 97% over the 12 months through March 2011 because of large inventory stocking requirements in the year-end pertaining to the export order. About KNS Overseas Set up in 2008, Bengaluru (Karnataka)-based KNS exports iron ore fines of grades Fe60 to Fe64. The company is named after its promoter, Mr. K N Surendra, who has been in the business of trading in iron ore, civil construction, and real estate development through sole proprietorship concern KN Surendra, KNS Mines and Minerals (a registered partnership concern), and KNS Infrastructure Pvt Ltd, respectively, for nearly a decade. KNS reported profit after tax of INR22 million on net sales of INR834 million for 2009-10, against a net loss of INR4 million on net sales of INR5 million for 2008-09. KUMINEX MINERALS: CRISIL Upgrades Rating on INR145MM Loan to 'C' ---------------------------------------------------------------- CRISIL has upgraded its ratings on the bank facilities of Kuminex Minerals Pvt Ltd to 'C' from 'D'. Facilities Ratings ---------- ------- INR145 Million Proposed Long-Term Loan C (Upgraded from 'D') The upgrade reflects Kuminex's repayment of its entire term loan in January 2011. Kuminex currently does not have any term loan outstanding. However, the company's rating is constrained by instances of delay in debt servicing by group company Sri Kumarswamy Mineral Exports. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of SKME and Kuminex, together referred to as Sri Kumarswamy group. This is because the two companies, together referred to as the Sri Kumarswamy group, are under a common management, into similar lines of business, and have extended corporate guarantees to each other. The Sri Kumarswamy group is promoted and managed by Mr. Shantesh Gureddi, Mr. Ravindranath Alva, and Mr. Bhavani Prasad. Set up in 1992 as a partnership firm, SKME is an export-oriented unit at Bellary, Karnataka. It has acquired iron ore mines on lease from the Government of Karnataka. SKME also derives revenues from its windmill division, with capacity of 22.5 megawatt (MW) as on March 31, 2011. Kuminex was incorporated in 2004, and provides logistics and ancillary services to SKME. Kuminex also derives revenues from its windmill division, which had a capacity of 6.75 MW as on March 31, 2011. The Sri Kumarswamy group reported a profit after tax (PAT) of INR9.8 million on net sales of INR306.3 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR260.7 million on net sales of INR1.71 billion for 2008-09. MAHALAXMI POLYPACK: CRISIL Cuts Rating on INR95MM Loan to 'BB+' --------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Mahalaxmi Polypack Pvt Ltd to 'BB+/Stable/P4+' from 'BBB- /Stable/P3'. Facilities Ratings ---------- ------- INR60.0 Million Cash Credit Limit BB+/Stable (Downgraded from 'BBB-/Stable') INR95.0 Million Term Loan BB+/Stable (Downgraded from 'BBB-/Stable') INR5.0 Million Letter of Credit P4+ (Downgraded from 'P3') INR5.0 Million Bank Guarantee P4+ (Downgraded from 'P3') The downgrade reflects deterioration in MPPL's financial risk profile, especially liquidity, in the recent past because of its large, debt-funded capital expenditure (capex) and increased working capital requirements arising out of its increased capacities. The ratings reflect MPPL's high gearing, and exposure to intense competition in the fragmented plastic packaging industry. These rating weaknesses are partially offset by MPPL's above-average debt protection metrics and operational efficiencies, and its promoters' experience in the plastic packaging business. Outlook: Stable CRISIL believes that MPPL's sales will continue to increase over the medium term, supported by its promoters' industry experience, but the liquidity will remain stretched. The outlook may be revised to 'Positive' if MPPL's financial risk profile, especially liquidity, improves, most likely because of more-than-expected sales and profitability. Conversely, the outlook may be revised to 'Negative' if the company is unable to maintain its profitability, leading to decline in its cash accruals, or if its capital structure weakens because of larger-than-expected debt- funded capex. Incorporated in 2005, MPPL commenced commercial operations in June 2007. It manufactures high-density polyethylene (HDPE) and polypropylene (PP) woven sacks. Its manufacturing unit in Rudrapur (Uttarakhand) has capacity to weave 13,200 tonnes of fabric per annum. NAGAR DAIRY: CRISIL Upgrades Rating on INR10MM Term Loan to 'BB-' ----------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Nagar Dairy Pvt Ltd to 'BB-/Stable' from 'D'. Facilities Ratings ---------- ------- INR220.0 Million Cash Credit BB-/Stable (Upgraded from 'D') INR10.0 Million Term loan BB-/Stable (Upgraded from 'D') The rating upgrade reflects NDPL's track record of timely repayment of term loan principal and interest instalments to the State Bank of India for the past 11 months. NDPL's net cash accruals, estimated at INR25 million to INR30 million for 2011-12 (refers to financial year, April 1 to March 31), are expected to be adequate for meeting its term loan obligation of INR5 million maturing during the year. NDPL's liquidity is supported by increased job-work income from Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF; INR150 million estimated for 2010-11). NDPL reported an operating income growth of 39% in 2009-10 over that in 2008-09, driven by increase in capacity utilization of its milk processing facilities. The rating reflects NDPL's constrained financial flexibility because of its working-capital-intensive operations, low operating profitability, small scale of operations, and susceptibility to adverse regulatory changes and environmental conditions, including epidemic-related risks. These rating weaknesses are partially offset by the established milk procurement network and market position of NDPL in the dairy industry. Outlook: Stable CRISIL expects NDPL's operating income to increase over the medium term, driven by its established position in the dairy industry and increasing job-work for GCMMF. NDPL's financial risk profile is expected to remain constrained over the medium term on account of large working capital requirements and low operating margin. The outlook may be revised to 'Positive' if NDPL's scale of operations and cash accruals increase more than expected and working capital management improves, leading to improvement in its capital structure and debt protection metrics. Conversely, the outlook may be revised to 'Negative' if the company undertakes a larger- than-expected debt-funded capital expenditure programme or there is significant pressure on its profitability, leading to deterioration in its capital structure. About Nagar Dairy Incorporated in 2003-04 (refers to financial year, April 1 to March 31), NDPL manufactures dairy products-ghee and skimmed milk powder (SMP). It has a milk processing capacity of 0.4. million litres per day (lpd) at its unit in Hapur (Uttar Pradesh). It sells the products under the brand Nagar. In 2008-09, NDPL bagged an annual contract from GCMMF for processing milk and milk products, and has processing capacity of 0.65 million lpd, which will be increased to 1.0 million lpd in 2011-12. NDPL reported a profit after tax (PAT) of INR19.1 million on net sales of INR1, 895.3 million for 2009-10, against a PAT of INR17.5 million on net sales of INR1, 364.0 million for 2008-09. PELICAN RUBBER: CRISIL Reaffirms 'BB' Rating on INR70MM Term Loan ----------------------------------------------------------------- CRISIL's ratings on the bank facilities of Pelican Rubber Ltd continue to reflect Pelican's below-average financial risk profile marked by high gearing, average debt protection metrics, and low net worth, and the company's exposure to risks relating to fluctuations in the prices of butyl rubber and in the rupee value. These weaknesses are partially offset by Pelican's established market position in the butyl rubber tubes segment, aided by its experienced management. Facilities Ratings ---------- ------- INR197.5 Million Cash Credit BB/Stable (Reaffirmed) INR70 Million Term Loan BB/Stable (Reaffirmed) INR72.5 Million Letter of Credit P4+ (Reaffirmed) and Bank Guarantee Outlook: Stable CRISIL believes that Pelican will benefit from its established market position in the butyl rubber tubes segment, and from its capacity expansions, over the medium term. The outlook may be revised to 'Positive' if Pelican strengthens its business risk profile, through significant increase in revenues, while sustaining its operating margin, leading to improvement in its cash accruals and debt protection metrics. Conversely, the outlook may be revised to 'Negative' if the company undertakes an unexpected, large, debt-funded capital expenditure (capex) programme, leading to deterioration in its financial risk profile. Update For 2009-10 (refers to financial year, April 1 to March 31), Pelican's revenues, at INR804 million, were stagnant at around the 2008-09 levels, and lower than CRISIL's expectation. During the year, the company's operations were impacted by the Telangana bandhs and curfews imposed in Hyderabad, leading to loss of production time. The company's manufacturing facility is located on the outskirts of Hyderabad, and it lost 30 to 40 working days due to this issue. However, the company's operating profitability, at 10.5%, was marginally higher than CRISIL's expectation, driven by better realizations. There has been a recovery in Pelican's sales in 2010-11, with the company posting revenues of around INR850 million till Feb. 28, 2011, driven by stable production and increased export sales. The company is estimated to post revenues of around INR950 million for 2010-11, which is around 20% higher than 2009-10 revenues. Pelican, however, continues to be exposed to fluctuations in raw material prices, as it imports all its butyl rubber requirements from abroad, while its chemical requirements are met mostly from the domestic markets. However, till now, Pelican has been able to manage the risk and pass on any price increase to its end customers. Pelican's financial risk profile has been below average, marked by low net worth of INR179 million and a gearing of 1.63 times as on March 31, 2010. The company had average debt protection metrics, with its net cash accruals to total debt and interest coverage ratios at 0.11 times and 2.06 times, respectively, for the year ended March 31, 2010. Pelican's financial risk profile is likely to remain constrained in the near term, considering its substantial debt-funded capex plans, involving the setting up of a tyre manufacturing unit at an estimated cost of INR500 million. Pelican's working capital requirements have been generally high, with the company maintaining an inventory level of 70 to 90 days, on an average. Its liquidity remains below average, with its bank limits of INR155 million utilized at an average of around 97% during 2010-11. The company had a moderate current ratio of 1.29, and its cash and bank balance was around INR192 million, as on March 31, 2010. However, its cash accruals are likely to be sufficient to meet its maturing debt obligations over the medium term. Pelican reported a profit after tax (PAT) of INR20.53 million on net sales of INR788.5 million for 2009-10, as against a PAT of INR51.2 million on net sales of INR805.3 million for 2008-09. About Pelican Rubber Incorporated in 1996 and promoted by Mr. Shiv Shanker Agarwal and his brother Mr. Shyam Sunder Agarwal, Pelican manufactures around 180 sizes of butyl rubber tubes used in tyres sold under the Avis brand. The product range includes tubes for two- and three- wheelers, passenger cars, jeeps, trucks, and earth movers. The company supplies tubes directly to tyre manufacturers, state governments for their state transport vehicles, distributors, and dealers across the country. RITURAJ HOLDINGS: CRISIL Reaffirms 'BB+' Rating on INR92MM LT Loan ------------------------------------------------------------------ CRISIL's rating on the bank facilities of Rituraj Holdings Pvt Ltd continues to reflect Rituraj's small scale of operations, and exposure to high degree of competition in the yarn industry. These rating weaknesses are partially offset by Rituraj's moderate financial risk profile, marked by strong growth in revenues and healthy debt protection metrics, and established market position in the yarn business. Facilities Ratings ---------- ------- INR92 Million Long-Term Loan BB+/Stable (Reaffirmed) INR58 Million Cash Credit BB+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that Rituraj will maintain its business risk profile over the medium term, supported by its established customer relationships, healthy operating margin, and stable inflow of orders. The outlook may be revised to 'Positive' if steady profitability and increased net worth help strengthen Rituraj's financial risk profile. Conversely, the outlook may be revised to 'Negative' if there is a significant decline in Rituraj's business volumes, revenues, or margins, or if the company undertakes large, debt-funded capital expenditure (capex) programme, thereby adversely affecting its gearing and debt protection metrics. Update Rituraj's sales are estimated to grow by about 35% in 2010-11 (refers to financial year, April 1 to March 31) to more than INR440 million from INR326 in 2009-10. Sales growth has been driven by high demand for chenille yarn, largely used as a furnishing fabric; chenille yarn contributes about 60% to Rituraj's sales. Sales growth was also supported by high prices of chenille yarn during the year. The company also added dyed chenille yarn to its product profile. Operating profitability for the nine months ended December 2010 improved to 20.7% from 10.4% in 2009-10, as the company's realizations increased because of strong demand. Furthermore, value additions by the company, in the form of slub yarn, contributed to higher profitability. Rituraj reported a profit after tax (PAT) of INR9.9 million on net sales of INR326 million for 2009-10, against a PAT of INR15.7 million on net sales of INR232 million for 2008-09. As on Dec. 31, 2010, Rituraj's gearing was moderate at about 1 time. The company expanded its capacity in chenille yarn to 150 tonnes per month, funded partially by a term loan of INR50 million during the year. Further capex and acquisition plans are also likely to be funded partially by term loans, and this may increase the company's gearing over the medium term. Rituraj has adequate liquidity, with sufficient net cash accruals, estimated at INR35 million for 2010-11, to meet its maturing debt obligations of about INR16 million. The company has a short working capital cycle, with credit of up to a month extended to customers and an inventory holding period of less than a month. As a result, its average bank limit utilization for the nine months ended December 31, 2010 was moderate at 65%. About Rituraj Holdings Set up in 1994, by Mr. G D Mundra, Rituraj manufactures stretched yarn used in denim products, and suiting and shirting, and chenille yarn used in furnishing fabric. The company has a manufacturing unit in Daman. SAANIKA INDUSTRIES: CRISIL Reaffirms 'BB' Rating on INR128.4M Loan ------------------------------------------------------------------ CRISIL has reaffirmed its rating on the long-term bank facilities of Saanika Industries Pvt Ltd at 'BB/Stable'. The rating on its short-term bank facilities has been reaffirmed at 'P4+'. Facilities Ratings ---------- ------- INR128.4 Million Long-Term Loan BB/Stable (Reaffirmed) (Enhanced from INR105.2 Million) INR175.0 Million Cash Credit Limits BB/Stable (Reaffirmed) INR39.4 Million Proposed LT Bank BB/Stable (Reaffirmed) Loan Facility (Enhanced from INR38.3 Million ) INR7.2 Million Bank Guarantee P4+ (Reaffirmed) CRISIL believes that SIPL will sustain its improved business risk profile over the medium term; its operating income is expected to continue to achieve growth, due to an uptrend in man-made fibre industry. SIPL increased its scale of operations over the past two years while maintaining healthy working capital position and operating efficiencies. The ratings reflect SIPL's average financial risk profile, marked by high gearing, low operating margin, and its limited pricing power. These weaknesses are partially offset by SIPL's promoters' extensive experience and established track record in the textile business in Surat (Gujarat). Outlook: Stable CRISIL believes that SIPL will maintain its moderate business risk profile over the medium term, supported by its increased scale of operations and the uptrend in the man-made fibres industry. The outlook may be revised to 'Positive' in case of fresh equity infusion, leading to improvement in net worth and gearing. Conversely, the outlook may be revised to 'Negative' in case of a larger-than-expected debt-funded capital expenditure programme or significant decline in the operating margin, leading to further deterioration in the capital structure and debt protection metrics. About Saanika Industries SIPL, incorporated in February 2006, is a synthetic yarn- processing unit based in Surat. The company processes partially- oriented yarn into polyester filament yarn. The various varieties the company manufactures are textured, twisted, intermingled (low/high), non-intermingled, and dyed yarns. SIPL's management is headed by Mr. Om Prakash Agarwal, who is assisted by members of his family. For 2009-10 (refers to financial year, April 1 to March 31), SIPL reported a profit after tax (PAT) of INR18 million on net sales of INR1.16 billion, as against a PAT of INR13 million on net sales of INR817 million in the preceding year. SHASHIN CONSTRUCTION: CRISIL Rates INR70MM Cash Credit at 'BB+' --------------------------------------------------------------- CRISIL has assigned its 'BB+/Stable/P4+' ratings to the bank facilities of Shashin Construction Company. Facilities Ratings ---------- ------- INR70.0 Million Cash Credit BB+/Stable (Assigned) INR105.0 Million Bank Guarantee P4+ (Assigned) INR5.0 Million Letter of Credit P4+ (Assigned) The ratings reflect SCC's small net worth, small scale of operations in the intensely competitive infrastructure construction segment, and susceptibility to geographic concentration in revenues. These rating weaknesses are partially offset by SCC's above-average financial risk profile, marked by low gearing and strong debt protection metrics, and healthy growth prospects in the infrastructure construction segment. Outlook: Stable CRISIL believes that SCC will continue to benefit from its low gearing and strong debt protection metrics, over the medium term. The outlook may be revised to 'Positive' if the firm scales up its operations substantially, improves profitability, and diversifies its revenue profile. Conversely, the outlook may be revised to 'Negative' if there is a material decline in revenues and profitability, or if its capital structure and debt protection metrics deteriorate as a result of larger-than-expected debt- funded capital expenditure or large capital withdrawal by the partners. Large exposure in group entity, involved in real estate development, would also have a negative bearing on outlook. About Shashin Construction SCC, based in Gujarat was set up in 1994 by Mr. Jayanti Patel. The firm undertakes government contracts and is mainly involved in construction of canals, dams, and railway bank lines. SCC is managed by Mr. Jayanti Patel, his son, and son-in-law. The firm undertakes civil construction activities mainly in Gujarat. SCC is a Class AA contractor, registered with the government of Gujarat, and is eligible to bid directly for a single contract of upto INR500 million. SCC reported a net profit of INR2.14 million on net sales of INR350.2 million for 2009-10 (refers to financial year, April 1 to March 31), as against a net profit of INR4.45 million on net sales of INR119.5 million for 2008-09. SHIV SHAKTI: CRISIL Assigns 'B' Rating to INR93.4MM Cash Credit --------------------------------------------------------------- CRISIL has assigned its 'B/Stable' rating to the bank facilities of Shiv Shakti Ginning And Pressing Pvt. Ltd. Facilities Ratings ---------- ------- INR93.4 Million Cash Credit B/Stable (Assigned) INR42.6 Million Proposed LT Bank B/Stable (Assigned) Loan Facility The rating reflects SSGP's average financial risk profile, marked by small net worth, high gearing, and weak debt protection metrics, and susceptibility to adverse regulatory changes. These rating weaknesses are partially offset by the extensive experience of SSGP's promoters in the cotton ginning industry. Outlook: Stable CRISIL believes that SSGP will continue to benefit from the established track record of its promoters in the cotton ginning industry, over the medium term. The outlook may be revised to 'Positive' if significant improvement in profitability and cash accruals results in lower gearing. Conversely, the outlook may be revised to 'Negative' if lower-than-expected operating margin weakens its cash accruals, or if it undertakes a large debt-funded capital expenditure programme, thereby weakening its capital structure. About Shiv Shakti Ginning SSGP was incorporated in 2007, and commenced commercial production in December 2008. Based in Kutch (Gujarat), the company undertakes ginning and pressing of raw cotton (kapaas) to make cotton bales, and separates the seeds in the process. During the off-season, the company also trades various commodities such as castor, kapasia oil, and raydo. SSGP reported a profit after tax (PAT) of INR0.46 million on net sales of INR422.05 million for 2009-10 (refers to financial year, April 1 to March 31), as against a PAT of INR0.28 million on net sales of INR253.28 million for 2008-09. SIVARATHISH SPINNING: CRISIL Places 'B+' Rating to INR47.3MM Loan ----------------------------------------------------------------- CRISIL has assigned its 'B+/Stable' rating to the bank facilities of Sivarathish Spinning Mills Pvt Ltd. Facilities Ratings ---------- ------- INR35.00 Million Cash Credit B+/Stable (Assigned) INR47.30 Million Term Loan B+/Stable (Assigned) The rating reflects SSM's small scale of operations in the intensely competitive cotton industry, significant customer concentration, large working capital requirements, susceptibility to volatility in prices of raw material and erratic power supply, and weak financial risk profile marked by small net worth, and average gearing and debt protection metrics. These rating weaknesses are partially offset by the extensive industry experience of SSM's promoters. Outlook: Stable CRISIL believes that SSM will continue to benefit from its promoters' extensive industry experience, over the medium term. However, the company's credit risk profile will remain constrained by its small scale of operations. The outlook may be revised to 'Positive' if SSM scales up its operations significantly, while managing its working capital requirements efficiently. Conversely, the outlook may be revised to 'Negative' if the company's liquidity weakens, most likely because of large, incremental working capital requirements or larger-than-expected debt-funded capital expenditure. About Sivarathish Spinning Set up in 1995, SSM manufactures cotton yarn. Its manufacturing facilities are in Vellakovil (Tamil Nadu). The company has an installed capacity of 13,800 spindles, and has plans to add 2,400 spindles in 2011-12 (refers to financial year, April 1 to March 31). SSM produces cotton yarn in counts of 30s and 40s. SSM reported a profit after tax (PAT) of INR1.86 million on net sales of INR152.60 million for 2009-10, against a PAT of INR1.16 million on net sales of INR132.61 million for 2008-09. SRI KUMARSWAMY: CRISIL Reaffirms 'D' Rating on INR529MM LT Loan --------------------------------------------------------------- CRISIL's ratings on the bank facilities of Sri Kumarswamy Mineral Exports continue to reflect instances of delay by the Sri Kumarswamy group in servicing its debt; the delays have been caused by the group's weak liquidity. Facilities Ratings ---------- ------- INR529 Million Long-Term Loan D (Reaffirmed) INR400 Million Packing Credit P5 (Reaffirmed) The Sri Kumarswamy group is exposed to the risk of susceptibility of margins to volatility of iron ore prices and the cyclical nature of the end user industry. However, the group benefits from the promoters' experience in the iron ore mining business. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of SKME and Kuminex Minerals Pvt Ltd (Kuminex), together referred to as Sri Kumarswamy group. This is because the two companies are under common management, in similar lines of business, and have extended corporate guarantees to each other. The Sri Kumarswamy group is promoted and managed by Mr. Shantesh Gureddi, Mr. Ravindranath Alva, and Mr. Bhavani Prasad. Set up in 1992 as a partnership firm, SKME is an export-oriented unit at Bellary, Karnataka. It has acquired iron ore mines on lease from the Government of Karnataka. Kuminex was incorporated in 2004, and provides logistics and ancillary services to the export activity of SKME. The Sri Kumarswamy group reported a profit after tax (PAT) of INR9.8 million on net sales of INR306.3 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR260.7 million on net sales of INR1.71 billion for 2008-09. VENKATESHWARA POWER: CRISIL Reaffirms INR225.6M Loan Rating at BB- ------------------------------------------------------------------ CRISIL's ratings on the bank facilities of Venkateshwara Power Project Ltd continue to reflect VPPL's weak financial risk profile, marked by high leverage and a small net worth, and a small scale of operations. These rating weaknesses are partially offset by VPPL's recently completed expansion of its power co- generation capacity to 33 megawatts (MW) from 10 MW; this could help diversify the company's revenue profile over the medium term. Moreover, VPPL benefitted from an improved working capital position in 2010-11 (refers to financial year, April 1 to March 31), enabling the company to reduce its debt and maintain its financial ratios commensurate with its rating category. Facilities Ratings ---------- ------- INR1.25 Billion Cash Credit BB-/Stable (Enhanced from INR450 Million) INR225.6 Million Long-Term Loan BB-/Stable (Enhanced from INR56.1 Million) INR28.6 Million Short-Term Loan P4+ (Reaffirmed) (Reduced from INR140 Million) Outlook: Stable CRISIL believes that VPPL will maintain its current financial position marked by high leverage but adequate liquidity, as reflected in its low bank limit utilization and healthy cash and cash equivalents, over the medium term. An outlook revision to 'Positive' would depend on sustained improvement in profitability and reduction in gearing to moderate levels. Conversely, the outlook may be revised to 'Negative' if the profitability deteriorates further or higher-than-expected gearing leads to deterioration in the company's debt protection metrics. About Venkateshwara Power VPPL has a sugar manufacturing facility in Karnataka, with a crushing capacity of 5000 tonnes per day. It also has a bagasse- based co-generation facility which has been expanded to 33 MW in October 2010 from the previous 10 MW. The company plans to sell a part of the power generated by the facility to Karnataka Power Transmission Corporation Ltd (rated 'BBB+/Stable' by CRISIL). For 2009-10, VPPL recorded a loss of INR44 million on net sales of INR1529 million, against a profit of INR33 million on net sales of INR1098 million for the previous financial year. ========= J A P A N ========= MITSUBISHI MOTORS: S&P Affirms B+ Rating; Outlook Negative ---------------------------------------------------------- Standard & Poor's Ratings Services revised to negative from stable its outlooks on the ratings on six Japanese automakers and suppliers, based on its expectations that the companies are likely to experience deteriorated operating and financial performance in fiscal 2011 (ending March 31, 2012) due to significant production cuts resulting from parts shortages following the March 11 earthquake. "We revised the outlooks to negative on Toyota Motor Corp., Honda Motor Co. Ltd., Nissan Motor Co. Ltd., Aisin Seiki Co. Ltd., Denso Corp., and Toyota Industries Corp. The outlook revisions also reflect our opinion that extended production cuts may erode Japanese automakers' market shares and competitive positions in the longer term," S&P noted. "At the same time, we affirmed our ratings on the entities based on our view that anticipated deterioration in performance is unlikely to be as serious as in fiscal 2008 (ended March 31, 2009) and that significant deterioration in financial profiles is unlikely given a lower likelihood of negative free cash flow and the strong financial profiles and liquidity of most of the rated automakers. We also affirmed our ratings on Mitsubishi Motors Corp., the outlook on which was already negative," S&P stated. Supply chain disruptions are posing a greater challenge for Japanese automakers than Standard & Poor's initially anticipated, and have forced virtually all Japanese automakers to significantly cut output in Japan. The impact is also starting to spread to production outside Japan. At most Japanese automakers, overall domestic and overseas output is currently at about 50% of initial production plans. "Although we currently expect parts shortages to be largely resolved by around July, we believe that full production is unlikely to recover in the summer due to expected electricity shortages in the Tokyo metropolitan and surrounding areas in the summer, and a time lag for parts to be delivered to overseas plants. We currently expect automakers to eventually return to full or near full production by around October. We also think the timing may vary among automakers by one to two months as Toyota Motor announced that it expects its production to normalize around November or December," according to S&P. S&P continued, "Although we expect increased output in the latter half of fiscal 2011 to partly make up for lost production, we believe automakers are likely to experience deteriorated financial performance given that significant production cuts are likely to continue until July. We anticipate demand to be weak in the domestic market in 2011. In our opinion, stagnant economic activity and depressed consumer confidence as a result of the earthquake, as well as electricity shortages in parts of eastern Japan, may further dampen already weak automobile demand in the domestic market. Moreover, production cuts for an extended period may erode Japanese automakers' market shares and competitive positions in the longer term, in our opinion." "The ratings affirmations are based on our view that the anticipated deterioration in performance is unlikely to be as serious as in fiscal 2008 (ended March 31, 2009) and that significant deterioration in financial profiles is unlikely given a lower likelihood of large negative free cash flow and the strong financial profiles and liquidity at most of the rated automakers. Unlike after the Lehman Shock, vehicle demand prospects remain solid in North America and emerging markets, and automakers could partially make up for lost production by increasing output in the latter half. We also believe automakers' improved break-even points should help prevent the very serious performance deterioration we saw in fiscal 2008. Lower capital expenditures and vehicle inventories should also make large negative free cash flows less likely. In our view, the improved financial standing of rated Japanese automakers and suppliers in the past two years, with many having accumulated historically high liquidity, will help them to withstand temporary pressure on operating performance and cash flow," S&P elaborated. "We revised our outlooks on the three Toyota group suppliers to negative from stable reflecting our anticipation that the suppliers' financial performance would be negatively affected by significant production cuts at Japanese automakers, due to their high exposure to business with Toyota Motor. The outlook revision on Toyota Industries also reflects the rating constraint on Toyota Industries from the rating on Toyota Motor as the rating on Toyota Industries incorporates uplift for extraordinary support from Toyota Motor," S&P noted. "We affirmed the ratings based on our view that the suppliers' strong competitive positions in non-Toyota businesses should help to partially offset the negative impact from production cuts at Toyota Motor and help them withstand temporary pressure on their operating performance and financial profiles," continued S&P. "If normalization of production is delayed further than our current assumptions, such as into 2012, then we will likely view this as a major setback for automakers restoring their profitability, which may prompt us to lower the ratings on Japanese automakers depending on the situation facing each company. Conversely, we may revise the outlooks back to stable if parts shortages are largely resolved and we see clear signs of output increasing and sales recovering, and we conclude that the companies' competitive positions are maintained and profitability is recovering," S&P added. Ratings List Outlook Action; Ratings Affirmed To From Aisin Seiki Co. Ltd. A+/Negative/A-1 A+/Stable/A-1 Denso Corp. AA-/Negative/A-1+ AA- /Stable/A-1+ Honda Motor Co. Ltd. A+/Negative/A-1 A+/Stable/A-1 American Honda Finance Corp. Honda Canada Finance Inc. Nissan Motor Co. Ltd. BBB+/Negative/A-2 BBB+/Stable/A-2 Nissan Motor Acceptance Corp. Nissan International Finance (Netherlands) B.V. Nissan North America Inc. Toyota Motor Corp. AA-/Negative/A-1+ AA- /Stable/A-1+ Toyota Credit Canada Inc. Toyota Finance Australia Ltd. Toyota Finance Corp. Toyota Finance New Zealand Ltd. Toyota Financial Services Corp. Toyota Motor Credit Corp. Toyota Motor Finance (Netherlands) B.V. Toyota Motor Sales USA Inc. Toyota Industries Corp. AA-/Negative/A-1+ AA- /Stable/A-1+ Ratings Affirmed Mitsubishi Motors Corp. B+/Negative/-- TOKYO ELECTRIC: Workers Agree to Up to 25% Pay Cut -------------------------------------------------- Bloomberg News reports that Tokyo Electric Power Co. workers agreed to a management proposal to cut their pay by as much as 25% out of a sense of responsibility for the world's worst nuclear disaster since Chernobyl, their union said. "Most union members didn't object to a pay cut, considering the situation at the company and the effect on society from the nuclear accident," Koji Sakata, secretary-general of the Tokyo Electric Power Workers Union, told Bloomberg. According to Bloomberg, the utility known as Tepco is battling radiation leaks at the Fukushima Dai-Ichi power plant north of Tokyo after a March 11 earthquake and tsunami knocked out its cooling systems, causing the biggest atomic accident in 25 years. More than 50,000 households were forced to evacuate and Bank of America Corp.'s Merrill Lynch estimates Tepco may face compensation claims of as much as JPY11 trillion ($135 billion). "Tepco is facing a situation that no other Japanese company has before," Bloomberg quotes Keiichiro Hamaguchi, research director at the Japan Institute for Labor Policy and Training, as saying. "In tough financial situations, Japanese companies hold labor- management talks on wages. Companies normally prioritize protecting jobs." Bloomberg notes that the company said on April 20 it will start compensating residents evacuated from areas around its crippled nuclear power station. The government has said it will support Tepco's aid efforts. Spokesman Tetsuya Terasawa said at a briefing in Tokyo that the utility will begin distributing claim forms and payments will be made as soon as possible, Bloomberg reports. Initial compensation totaling about JPY50 billion was promised by Tepco last week. About TEPCO Tokyo Electric Power Company (TEPCO) is the largest electric power company in Japan and the largest privately owned electric utility in the world. TEPCO supplies electricity to meet the increasingly diversified and sophisticated demands of its over 28.09 million customers in the metropolitan Tokyo, which is the political, economic, and cultural center of Japan, and eight surrounding prefectures. Bloomberg News said Tepco's market value had plunged 86% since the March 11, 2011 earthquake and tsunami damaged the nuclear plant's cooling equipment, resulting in a partial meltdown. The company has JPY5 trillion in debt, making it the fourth- biggest borrower among members of the Nikkei 225 stock average, according to data compiled by Bloomberg. ========= K O R E A ========= HYNIX SEMICONDUCTOR: Creditors Agree to Relaunch Stake Sale ----------------------------------------------------------- The Wall Street Journal reports that creditors-turned-shareholders of Hynix Semiconductor Inc. on Tuesday agreed to restart the sale of their controlling stake in the company marking the third divestment attempt in as many years. The Journal says the creditors' collective 15% stake is valued at around KRW3.08 trillion ($2.85 billion) based on Tuesday's [April 26] closing market price but the chip industry's volatile market cycles and high capital expenditure requirements remain major hurdles for the sale. According to the Journal, the nine creditors -- all financial firms -- have been trying for years to divest from Hynix, which they took control of in 2001 following several debt-for-equity swaps after the chipmaker nearly collapsed due to weak market conditions. They have yet to find anyone willing to buy their stake in entirety, after the latest attempt to sell the shares in early 2010 ended without any bidders, the Journal notes. The creditors consequently pared their stake from 28% to 15% through two block sales. The Journal relates that Korea Exchange Bank, the lead creditor, said the shareholders could issue a public notice for the stake as early as the second half of May. The creditors will be more flexible in how interested parties can structure their bid, including a potential issue of new Hynix shares, the Journal says citing KEB0. The creditors, which include Woori Bank and Shinhan Bank as well as Korea Finance Corp., have been tapping the market for potential bidders. But companies mooted as possible candidates have repeatedly denied any interest and it is unclear whether any bidders will emerge this time around, the Journal adds. Hynix Semiconductor Inc. -- http://www.hynix.com/-- is an Icheon, South Korea-based memory semiconductor supplier offering Dynamic Random Access Memory chips and Flash memory chips to a wide range of established international customers. The Company's shares are traded on the Korea Stock Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. * * * As reported in the Troubled Company Reporter-Asia Pacific on Nov. 26, 2010, Standard & Poor's Ratings Services revised the outlook on its long-term corporate credit rating on Korea-based Hynix Semiconductor Inc. to positive from stable, reflecting its improving financial risk profile. At the same time, Standard & Poor's affirmed the 'B+' long-term corporate credit rating on Hynix. In addition, S&P raised the ratings on Hynix's senior unsecured bonds to 'B+' from 'B', reflecting its opinion that the potential for recovery in the event of default has improved. ==================== N E W Z E A L A N D ==================== WESTERN PACIFIC: Policyholder Seeks Creditors' Meeting ------------------------------------------------------ Marta Steeman at BusinessDay.co.nz reports that Roger O'Callaghan, a Christchurch policyholder of Western Pacific Insurance, is seeking a creditors' meeting concerned at how any reinsurance money might be divided. BusinessDay.co.nz relates that a service-station owner, Mr. O'Callaghan, wrote to the owner-appointed liquidators on April 26, 2011, to seek the meeting. "I actually want a creditors' committee working with the liquidators," BusinessDay.co.nz quotes Mr. O'Callaghan as saying. "I think there are a lot of legal issues regarding the matters. I think it is a little bit more legally difficult than a general liquidation." BusinessDay.co.nz says one of the issues was whether the reinsurance money from WPI's reinsurers could be used to satisfy all creditors' claims upon the company or just policyholders' claims. According to the report, Mr. O'Callaghan's service station in Burwood was badly damaged in the September 4 earthquake. About 155 earthquake-related claims exist on WPI, but the majority of its policyholders, about 7,000, are not affected by that. BusinessDay.co.nz notes that the liquidators' first report shows preferential creditors -- the IRD and employees are respectively owed NZ$20,440 and NZ$41,522. Secured and unsecured creditors also exist. The liquidators' report did not say how much reinsurance cover Western Pacific had, BusinessDay.co.nz says. Mr. O'Callaghan, as cited by BusinessDay.co.nz, said a creditors' committee could have a say in what actions the liquidators took in recovering money, and action against directors. A creditors' committee could also decide to change the liquidators, BusinessDay.co.nz relates. BusinessDay.co.nz adds that Mr. O'Callaghan would prefer a government liquidator, the Official Assignee. Mr. O'Callaghan had also written to local Members of Parliament about government support for WPI as AMI had received. The liquidators, David Ruscoe and Simon Thorn, of Grant Thorton, said Tuesday they were cancelling all WPI's insurance policies because they were unable to sell, transfer or assign the business. "Under Section 269 of the Companies Act 1993, we disclaim the insurance policies as onerous property, the effect of which is the cancellation of all policies immediately," they said. As reported in the Troubled Company Reporter-Asia Pacific on April 6, 2011, The National Business Review said David Ruscoe and Simon Thorn, of Grant Thornton New Zealand, have been appointed liquidators to Western Pacific Insurance, a small Queenstown-based insurance company with around 150 claims relating to earthquakes in Christchurch. NBR related that Mr. Ruscoe and Mr. Thorn were appointed liquidators on April 1, 2011, after directors of Western Pacific became concerned about the solvency of their company. Western Pacific owes creditors an initial estimated NZ$3.8 million and has NZ$1.9 million of unsettled insurance claims, according to first liquidators report. The liquidators called for creditors to lodge claims by April 28. Western Pacific is a New Zealand-owned and operated insurance company. It was established in April 2005, and is principally a broker brand that offers a broad range of commercial, domestic and specialty products as well as programmes for affinity groups, underwriting agents and preferred brokers. It has about 7,000 policy holders in New Zealand. ================= S I N G A P O R E ================= HAINAN ZHENLIN: Court to Hear Wind-Up Petition on May 6 ------------------------------------------------------- A petition to wind up the operations of Hainan Zhenlin Industry Company Pte Ltd will be heard before the High Court of Singapore on May 6, 2011, at 10:00 a.m. Infinity Corporate Services Pte Ltd filed the petition against the company on April 13, 2011. The Petitioner's solicitors are: Rajah & Tann LLP No. 9 Battery Road #25-01 Straits Trading Building Singapore 049910 KIAN SENG: Creditors Get 3.04% Recovery on Claims ------------------------------------------------- Kian Seng Lee (1488) Food Manufacturers Pte Ltd declared the second and final dividend on April 29, 2011. The company paid 3.04% to the received claims. The company's liquidator is: Don M Ho c/o Don Ho & Associates Equity Plaza 20 Cecil Street #12-02 Singapore 049705 MUTUAL DEVELOPMENT: Court to Hear Wind-Up Petition on May 6 ----------------------------------------------------------- A petition to wind up the operations of Mutual Development Pte Ltd will be heard before the High Court of Singapore on May 6, 2011, at 10:00 a.m. The Comptroller Of Income Tax filed the petition against the company on April 14, 2011. The Petitioner's solicitors are: Infinitus Law Corporation 77 Robinson Road #16-00, Robinson 77 Singapore 068896 ********* 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 U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Psyche A. Castillon, Julie Anne G. Lopez, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2011. 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 ***