/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/111117.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, November 17, 2011, Vol. 14, No. 228 Headlines A U S T R A L I A ADDAMO FRESH: In Liquidation; Owes Up to AUD5 Million QUANTUM MULTIMEDIA: Placed in Administration; Deloitte Appointed SEIZA AUGUSTUS: Fitch Affirms AUD19 Million Notes at 'BBsf' C H I N A NETWORK CN: Charles Liu Appointed to Board of Directors H O N G K O N G STANDARD CHARTERED: Members' Final Meeting Set for Dec. 12 STAR MICRONICS: Commences Wind-Up Proceedings SUPERB UNION: Members' Final Meeting Set for Dec. 12 UNITED KAYU: Placed Under Voluntary Wind-Up Proceedings I N D I A ACTION RETAIL: ICRA Cuts Rating on INR5cr Loan to '[ICRA]D' BIO-GEN EXTRACTS: ICRA Assigns '[ICRA]BB' to INR8cr Bank Loan BRAND ALLOYS: ICRA Places '[ICRA]B' Rating on INR85cr Term Loan CHETAN STEELS: ICRA Assigns '[ICRA]B+' Rating to INR10.75cr Loan DISHA COMM: ICRA Puts '[ICRA]BB+' Rating on INR7.25cr Loan G.C. TUBES: ICRA Assigns '[ICRA]BB-' Rating to INR35cr Loan HALDIA STEELS: ICRA Assigns [ICRA]B+ Rating to INR28cr Term Loan ISPAT DAMODAR: ICRA Assigns '[ICRA]B' Rating to INR72cr Loan JR RECREATION: ICRA Assigns [ICRA]BB+ Rating to INR90.07cr Loans K. PATEL: ICRA Assigns '[ICRA]B+' Rating to INR24cr Bank Loans KINGFISHER AIRLINES: Plans to Raise INR10 Billion in Loans KINGFISHER AIRLINES: Must Raise Fresh Funds Before Restructuring MANGE RAM: ICRA Assigns '[ICRA]B' Rating to INR1cr Cash Credit SANGHAVI SHOE: ICRA Assigns '[ICRA]BB' Rating to INR8cr Term Loan SONIC THERMAL: ICRA Assigns '[ICRA]B' Rating to INR46.4cr Loan SUKHM INFRA: ICRA Assigns '[ICRA]BB-' Rating to INR40cr LT Loan VEDANTA RESOURCES: Moody's Says Structure Behind B1 CFR Outlook I N D O N E S I A FAJAR SURYA: S&P Affirms 'B+' Corp. Credit Rating; Outlook Neg. J A P A N CORSAIR (JERSEY): S&P Puts 'B+' Tranche Rating on Watch Positive K O R E A HYNIX SEMICONDUCTOR: S&P Puts 'B+' Corporate Credit Rating N E W Z E A L A N D AMI INSURANCE: Court Denies AMI's 'My' Trademark Bid BRIDGECORP LTD: Former Directors Trial Resumes SEALEGS CORP: Half Year Net Loss Widens to NZ$1.2 Million - - - - - ================= A U S T R A L I A ================= ADDAMO FRESH: In Liquidation; Owes Up to AUD5 Million ----------------------------------------------------- Madeleine Heffernan at SmartCompany reports that Addamo Fresh Pty Ltd has collapsed after racking up more than AUD5 million in debt to banks and suppliers. SmartCompany relates that Rodgers Reidy associate director Shane Cremin -- RR@rodgersreidy.com.au -- said his company was appointed liquidators at the start of the month at the request of Addamo's solicitors. Mr. Cremin said banks are due about AUD3 million and suppliers more than AUD2 million. The Australian Taxation Office is also a creditor, SmarCompany relays. According to SmartCompany, several offers have already been filed for the business, whose revenue could have been as high as AUD20 million. The major supermarkets -- Woolworths, Coles and Aldi -- account for between 80% and 90% of patronage, the report notes. Mr. Cremin, as cited by SmartCompany, said several elements led to the collapse: the increasing price of buying from farms due to the floods earlier this year, the "general economy", and a decision by a key customer to reduce its operations. That decision sliced about $4 million in earnings over a 12-month period, Mr. Cremin said. A creditors' meeting was held on November 15. Offers for the sale of plant and equipment, truck and vehicle fleet, packaging stock and materials, business names and trademarks, workforce and existing premises will close on November 23. Based in Beaconsfield, Victoria, Addamo Fresh Pty Ltd -- http://www.addamofresh.com.au/-- trades under Addamo Packers and Cockatoo Farms, is a fresh fruit and vegetable supplier and packager. QUANTUM MULTIMEDIA: Placed in Administration; Deloitte Appointed ---------------------------------------------------------------- Patrick Stafford at SmartCompany reports that accounting firm Deloitte confirmed that Quantum Multimedia Communications has collapsed into administration. SmartCompany relates that Quantum was placed into administration on November 9, just two days after a receiver was appointed. Deloitte partners Timothy Norman -- tnorman@deloitte.com.au -- and Simon Wallace-Smith -- swallace@deloitte.com.au -- have been appointed. Although it has not disclosed any of its clients, the business claims its partners include one of the largest telcos in Australia, along with state local government agencies, and one of the country's largest food manufacturers and marketers, according to SmartCompany. Deloitte has confirmed the business has continued to operate, the report says. According to SmartCompany, Deloitte also said in a call for expressions of interest that the business has an established customer base with contracts in the telecommunications industry, along with state and local government agencies. The company is described as a national call centre operator, with locations in three Australian states, and revenues of around AUD20 million, SmartCompany adds. Quantum Multimedia Communications Pty. Ltd. was incorporated in Australia, in September 2000 as a company providing outsourcing contact center services such as information dispatching (outbound and inbound) and business process outsourcing. SEIZA AUGUSTUS: Fitch Affirms AUD19 Million Notes at 'BBsf' ----------------------------------------------------------- Fitch Ratings has affirmed three classes of notes issued by Australian Executor Trustees Limited as trustee of the Seiza Augustus Series 2007-1 Trust. The transaction closed in April 2007, and is a securitisation of small balance commercial and residential mortgages originated by Seiza Mortgage Company Pty Limited. The rating actions are as listed below: -- AUD2.23 mil. Class B (ISIN AU3FN0002457) affirmed at 'AAsf'; Outlook Stable -- AUD21.85 mil. Class C (ISIN AU3FN0002465) affirmed at 'Asf'; Outlook Stable; -- AUD19.02 mil. Class D (ISIN AU3FN0002463) affirmed at 'BBsf'; Outlook Stable "Total charge-offs have increased in the last year, due to large principal shortfalls and the consistent balance of loans in arrears for more than 300 days. The transaction has, however, amortized considerably, in turn increasing the level of credit enhancement of the rated notes. Future recoveries are expected to positively impact the notes," said James Zanesi, Director in Fitch's Structured Finance team. The transaction has paid down from initial liabilities of AUD404.7 million to liabilities of approximately AUD51.1 million as of Oct. 20, 2011, considering the level of charge-offs to- date, at which point the pool comprised 123 residential and commercial mortgages. Low-documentation loans represented 45% of the pool. As of October 2011, two loans were in arrears for more than 90+ days, accounting for 5.84% of the pool. As of the October 2011 payment date, the total cumulative mortgage shortfall amounted to AUD28m, of which AUD14.4m has been reimbursed via excess spread and income from liquidation proceeds. A unique feature of this transaction is the full charge-off of loans that are greater than 300 days in arrears. Due to this feature, the transaction has experienced a certain degree of volatility in terms of charge-offs. The class E, F and G notes, which are not rated by Fitch, have experienced charge- offs during the life of the transaction. Currently, only class F and G notes are fully charged-off while class E notes have been charged-off by AUD51,427. Charge-offs related to loan in arrears for more than 300 days amounted to AUD8.2 million as of Oct. 20, 2011. Currently, the excess and loss provision reserve have been fully used. The current liquidity facility amounts to AUD13 million, representing 25% of the collateral pool. As the mortgage portfolio decreases in size, the risk of principal losses resulting from the default of large loans becomes a relevant driver for Fitch's analysis. A cash flow analysis was performed on the transaction, stressing a combination of interest rates, defaults, default timing and prepayment rates, with each tranche passing at its respective rating level. ========= C H I N A ========= NETWORK CN: Charles Liu Appointed to Board of Directors ------------------------------------------------------- The Board of Directors of Network CN Inc. resolved to increase the authorized number of Board members from five to six members, and to appoint Charles Liu to fill the vacancy occasioned by the increase, effective as of Nov. 16, 2011. The Board also appointed Mr. Liu to serve as a member of the Company's Audit Committee and Nominating Committee as of the Effective Date. The Board has also determined that Mr. Liu qualifies as an "independent" director as that term is defined by the rules of the Nasdaq Stock Market. Mr. Charles Liu. Mr. Liu, aged 61, has over 38 years' experience in the banking industry, and has worked since January 2009 as a financial advisor to various listed and private companies. Prior to that, Mr. Liu served from August 1970 to December 2008, in various capacities with Citibank Hong Kong, and since March 2004, as Director of its Asia Pacific Regional Processing Center, focusing on syndicated loans, agencies and trusts. The Company has not entered into any written agreement with Mr. Liu, but as a non-employee director of the Company, he will be entitled to a monthly cash fee of $1,500 and will be granted an award of 75,000 shares which shall be vested on June 30, 2012, so long as he continues in his role as a director that date. There are no arrangements or understandings between Mr. Liu and any other persons pursuant to which he was selected as a director and there are no transactions between the Company and Mr. Charles Liu that would require disclosure under Item 404(a) of Regulation S-K. About Network CN Network CN Inc. (OTC QB: NWCN) -- http://www.ncnmedia.com/-- is building a multi-media, multi-application out-of-home advertising network in the key cities of China. Network CN Inc. was incorporated in the State of Delaware in 1993 and is headquartered in Causeway Bay, Hong Kong. As reported in the TCR on Mar 24, 2011, Baker Tilly Hong Kong Limited, in Hong Kong SAR, expressed substantial doubt about Network CN's ability to continue as a going concern, following the Company's 2010 results. The independent auditors noted that the Company has incurred net losses of $2.60 million and $37.38 million for the years ended Dec. 31, 2010, and 2009, respectively. As of Dec. 31, 2010, the Company recorded a stockholders' deficit of $3.52 million. The Company's balance sheet at June 30, 2011, showed $1.28 million in total assets, $5.59 million in total liabilities and a $4.30 million total stockholders' deficit. ================ H O N G K O N G ================ STANDARD CHARTERED: Members' Final Meeting Set for Dec. 12 ---------------------------------------------------------- Members of Standard Chartered Asia 2 (Hong Kong) Limited will hold their final meeting on Dec. 12, 2011, at 10:00 a.m., at 8th Floor, Gloucester Tower, The Landmark, at 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. STAR MICRONICS: Commences Wind-Up Proceedings --------------------------------------------- Members of Star Micronics Asia Limited, on Nov. 7, 2011, passed a resolution to voluntarily wind up the company's operations. The company's liquidator is: Ho Wai Ip Room 1903, 19/F World-Wide House 19 Des Voeux Road Central, Hong Kong SUPERB UNION: Members' Final Meeting Set for Dec. 12 ---------------------------------------------------- Members of Superb Union Investment Limited will hold their final general meeting on Dec. 12, 2011, at 10:00 a.m., at Level 28, Three Pacific Place, at 1 Queen's Road East, in Hong Kong. At the meeting, Ying Hing Chiu and Chan Mi Har, the company's liquidators, will give a report on the company's wind-up proceedings and property disposal. UNITED KAYU: Placed Under Voluntary Wind-Up Proceedings ------------------------------------------------------- At an extraordinary general meeting held on Oct. 28, 2011, creditors of United Kayu Agencies Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Philip Brendan Gilligan 7th Floor, Alexandra House 18 Chater Road Central, Hong Kong ========= I N D I A ========= ACTION RETAIL: ICRA Cuts Rating on INR5cr Loan to '[ICRA]D' ----------------------------------------------------------- ICRA has downgraded the long term rating assigned to the INR5.00 crore fund based working capital limits and INR6.60 crore term loan of Action Retail Ventures Private Limited from '[ICRA]BB' to '[ICRA]D'. The outlook on the long term rating has been withdrawn. The rating downgrade takes into account the stretched financial profile leading to delays in debt servicing by the company. The rating also takes into consideration the decline in profitability witnessed by the company owing to increase in raw material costs. The gearing of the company continues to remain high because of low net worth base and high borrowings. The rating is also constrained by ARVPL's moderate scale of operations, high competitive intensity, its low profitability and its high working capital intensive nature of business. However, ICRA has also noted the strengths like its experienced management and the benefits enjoyed by the company being a part of the well- established Action Group such as established brand and pan India distribution network. About Action Retail Action Retail Ventures Private Limited is a part of Action group having interest in various sectors such as Footwear, Hospitals, Iron and Steel, Power Backup Devices and Real Estate etc. The company was incorporated in FY2006 to serve as retailing arm for the footwear business of the group. The company buys footwear from Nikhil Footwear Private Limited and then sells it to the distributors. Recent Results: The company reported a net profit after tax of INR0.21 crore on an operating income of INR28.73 crore in FY 2011. BIO-GEN EXTRACTS: ICRA Assigns '[ICRA]BB' to INR8cr Bank Loan ------------------------------------------------------------- ICRA has assigned the rating of '[ICRA]BB' to the INR8.80 Crore fund based facilities of Bio-gen Extracts Private Limited. Rating Rationale ICRA's rating action factors in moderate size of the company, increasing competitive intensity in the nutraceutical business owing to limited regulatory barriers and limited bargaining power of the company with its key customers and international suppliers. The rating also factors in the limited market position of the company as it supplies predominantly to the domestic market, which also has resulted in limited market size availability for company's products. Further the rating also factors in the risks associated with the green field Dobbaspet plant of the company and limited visibility on the capacity utilization levels of the new plant in the near future beyond present production levels of the company. The capacity of the new plant is around 100 MT/ month as against the present 20 MT/ month capacity of the company. The rating also factors in the modest cash flows at the gross level, in spite of healthy profitability due to increasing working capital intensity. At the same time the rating favorably factors in the almost decade long presence of the promoters in the industry, expertise in development of the products as evidenced by a portfolio of around 30 products and filing of drug master files, acquisition and retaining of customers as evidenced by over 300 customers and almost 6-7 years of relationship with its key customers. With the help of increase in the sales of final customer products and ability to pass on the increase in the raw material prices at regular intervals, the revenues of the company have grown almost at a CAGR of 50% over last three years. ICRA also draws comfort from profitable nature of the operations and good coverage indicators, which are expected to be maintained at the present operational levels. While the outlook of nutraceutical products is good in medium to long term driven by demography and lifestyle changes and increasing awareness of preventive medication, the success of products and companies depend upon regular investment in the development activities owing to high research findings risk and perception risk inherent to the industry. While the new facility being commissioned by the company would be EU- GMP (European Union Good manufacturing practice) compliant facility, the actual certification might take longer time, minimizing its benefit in the near future. The commissioning of the Greenfield plant of the company has been delayed reducing the flexibility of moratorium; with debt repayments scheduled to start in May 2012 .There has been a moderate cost escalation on this behalf and due to changes in the plant design by the company. While funding for the escalated cost is yet to be tied up, BEPL has flexibility to use internal accruals and other forms of funding due to its limited use of cash credit facilities as against the actual working capital requirements of the business. Successful commissioning of the Dobbaspet project, with all the requisite approvals and scaling up of the sales to maintain the good coverage indicators are key rating sensitivity factors. About Bio-gen Extracts Bio-gen Extracts Private Limited was incorporated in the year 2000 and is being promoted by Mr. Piyush Mohta, Mr. Jai Shankar R. and Mr. Saif M. Mekhri. BEPL is a WHO-GMP certified company and manufactures Therapeutic Enzymes, Active Pharmaceutical Ingredients [API / Chemicals] and Nutraceuticals/Dietary Supplements with manufacturing of nutraceuticals contributing to more than 90% sales. In terms of therapeutic targets BEPL is focused on Gynecology, Orthopedics, Hematology and Anti-Malarial segments. BEPL has 20 MT/ month refining capacity in Sunkadakatte in Bangalore and is presently commissioning a new manufacturing facility in Dobbaspet industrial area near Bangalore. BRAND ALLOYS: ICRA Places '[ICRA]B' Rating on INR85cr Term Loan --------------------------------------------------------------- ICRA has assigned an '[ICRA]B' rating to the INR85.0 crore term loan (including a proposed limit of INR45.0 crore) and INR54.00 crore cash credit (including a proposed limit of INR50.0 crore) facilities of Brand Alloys Limited. ICRA has also assigned an '[ICRA]A4' rating to the INR10.0 crore non fund based bank facilities (including a proposed limit of INR5.0 crore) of BAL. While assigning the ratings, ICRA has also considered the business risk profiles of BAL's group companies Haldia Steels Limited (rated at [ICRA]B+ and [ICRA]A4), Ispat Damodar Limited (rated at [ICRA]B and [ICRA]A4) and Sonic Thermal Limited (rated at [ICRA]B and [ICRA]A4), since all of them are engaged in the steel and related industries and operate under a common management. The ratings take into account the ongoing weakness in the steel industry, BAL's weak financial risk profile reflected by its low profitability and subdued coverage indicators, the high working capital intensity of the company's business impacting liquidity and the funding risks related to the captive power plant project of BAL, as the proposed debt tie up is still pending. The ratings are also constrained by the vulnerability of the company's profits and cash flows to the cyclical trend inherent in the steel industry and the substantial debt obligations of the company, which is likely to exert pressure on BAL's liquidity position in the short to medium term. The ratings, however, take into consideration the long experience of the company's promoters in the steel industry, its diversified product lines mitigating the demand risks associated with a single product, the accreditation obtained by the company from the Research Designs and Standards Organisation (RDSO) for supplying casnub bogies and some other casting products to the Indian Railways, and BAL's comfortable capital structure, though the same has deteriorated over the past few years. About Haldia Steels Incorporated in 1994, BAL has the manufacturing facilities for 20,000 tons per annum (TPA) of billets, 30,000 TPA of TMT bars, 5,000 TPA of steel fabrications and 10,000 TPA of steel castings at its plant located at Serampore, West Bengal. The company is an RDSO approved vendor for supplying casnub bogies and some other casting products to the Railways. The TMT rolling mill of the company is currently utilised for the conversion of billets into TMT bars for Tata Steel Limited. BAL has recently commissioned a sponge iron manufacturing facility and a coal washery with the estimated capacities of 60,000 TPA and 3,24,000 TPA respectively at its newly set up plant at Keonjhar, Orissa. Besides BAL, the other group companies engaged in the steel business include Haldia Steels Limited (rated at [ICRA]B+ and [ICRA]A4 by ICRA), Ispat Damodar Limited (rated at [ICRA]B and [ICRA]A4 by ICRA) and Sonic Thermal Limited (rated at [ICRA]B and [ICRA]A4 by ICRA). Recent Results: The company reported a net profit of INR0.03 crore in 2010-11 on an operating income of INR105.98 crore, as compared to a net profit of INR0.74 crore on an operating income of INR114.52 crore during 2009-10. In the first three months of 2011-12 ended June 2011, BAL posted a net profit of INR0.86 crore (provisional) on a net sale of INR40.94 crore (provisional). CHETAN STEELS: ICRA Assigns '[ICRA]B+' Rating to INR10.75cr Loan ---------------------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]B+' to the INR10.75 crore fund based limit, INR5.21 crore term loan , INR0.04 crore unallocated bank lines and a short term rating of '[ICRA]A4' to the INR5 crore non fund based limits of Chetan Steels Private Limited. The assigned rating takes into consideration CSPL's moderate scale of operation, fragmented nature of the industry with low entry barriers resulting in intensive competition and low value additive nature of the business leading to low operating and net profit margins. The rating is also constrained by the high working capital intensive nature of the business and high gearing level of 4.75 times as on March 31, 2011. Further significant dependence on Steel Authority of India Limited and Jindal Steels for the supply of raw materials limits its bargaining power. However the rating favorably factors in the established track record of CSPL and the wide experience of its promoters in the wire manufacturing business. The rating also factors in the healthy growth in its turnover with a CAGR of 42% in the last four years along with a low client concentration risk. Further, a favorable demand outlook for the real estate and consumer durables industry, both end users of the company's products, indicates a healthy growth in the revenues of the company in the future. Going forward, the company's ability to maintain operating margins in competitive environment will be critical in sustaining its competitive business profile. About Chetan Steels CSPL was incorporated in the year 1986 for manufacturing of Galvanized wire, shaped wire, copper coated wires, spring washer wire, stay wire, cables accessories etc. It is managed by its two directors Mr. G.S. Rathi and his son Mr. Raghav Rathi. The directors have wide experience in the Iron and Cement industry, especially in the steel wire drawing business. Wire drawing is a metalworking process used to reduce the cross- section of a wire by pulling the wire through a single, or series of, drawing die. There are many applications for wire drawing, including electrical wiring, cables, tension-loaded structural components, springs, paper clips, spokes for wheels, and stringed musical instruments. Chetan Steels is in the business of supplying wires for air-conditioner and refrigerator condensers and hardware components. DISHA COMM: ICRA Puts '[ICRA]BB+' Rating on INR7.25cr Loan ---------------------------------------------------------- ICRA has assigned the rating of '[ICRA]BB+' to the INR7.25 Crore fund based facilities of Disha Communications Private Limited. Rating Rationale ICRA's rating is constrained by the moderate size of operations of DCPL and modest net worth of the company, high competitive intensity of the business which results in limited profitability and counterparty risk faced by the company on its debtors. The media planning business of the company, which contributes to almost 90% of the turnover, remains susceptible to changes in regulatory policies. Currently Indian Newspaper Society rules do not allow companies to approach news papers directly except via accredited agencies. Any major changes here could constrain the business of the media planning agencies like DCPL. Further DCPL's advertising business is also exposed to economic downturns as advertising spends by companies are generally reduced during recession. Nevertheless, the rating draws comfort from long presence of the company in the industry with good track record, its experienced management team and reputed client base. The rating also factors in profitable operations o the company which has resulted in improvement of its financial risk profile over the last few years, evidenced by the decrease in the gearing levels and improvement in coverage indicators of the company. Further low fixed capital intensity of DCPL's business has resulted in limited dependence on term loans resulting in low repayment burden. Going forward the ability of the company to increase its turnover, maintain its profitability margins in an intensely competitive industry and at the same time enhance the contribution from other business segments and geographies would improve the business profile and are the key rating sensitivities. About Disha Communications Disha Communications Private Limited is a mid-sized advertising agency and has built a presence as an advertising and media planning agency for over last 25 years. Headquartered in Bangalore, it has presence in other major cities like Chennai, Hyderabad, New Delhi, Mumbai as well as tier-2 cities like Cochin, Jaipur, Meerut, Mathura, and Hubli. The revenues of the company are mainly driven from media planning business and news paper advertisements. However the company is also enhancing its presence in other business segments like TV advertising, creative's, creative printings, event management, retainership etc and going forward has plans to enter social media and mobile advertising etc. In FY-2011 DCPL recorded an OPBITDA of INR1.25 crores and PAT of INR0.83 crores on turnover of INR72.51 crores. G.C. TUBES: ICRA Assigns '[ICRA]BB-' Rating to INR35cr Loan ----------------------------------------------------------- ICRA has assigned long-term rating of '[ICRA]BB-' to the INR35.00 crore fund based limits of G.C. Tubes Pvt Ltd. The outlook for the long term rating is stable. The assigned ratings take into consideration GCTPL moderate scale of operations, low profitability and low value add nature of company's operations given its presence in trading business, limited bargaining power vis-�-vis customers which are relatively larger entities. Low profitability coupled with relatively high gearing (2.95 times as on March 31, 2011) has translated into low debt protection indicators (Net Cash Accruals/Debt of 2.39% and interest coverage of 1.30 times in FY 2011) for the company. The ratings however draw comfort from firm's long track record of operations and the experience of the management in steel pipes and tubes trading business; established past relations with its key customers which this has resulted in repeat orders from some of its customers. The rating also find comfort from the favorable demand outlook for the steel industry driven by increased demand from residential and commercial buildings, infrastructure, agriculture, furniture, automobile etc. About G.C. Tubes G.C. Tubes Pvt. Ltd incorporated in year 2000 is wholesale dealer and distributor of pipes and tubes. Mr. Mahavir Prasad Jain and Vinod Kumar Jain, promoters of this company have been in this pipe trading business for more than two decades. The promoters also have a group concern R T Tubes which is into trading of black and square pipes and tubes. Recent Results: In 2010-11, the company has reported an operating income (OI) of INR125.26 crore with a profit after tax of INR0.81 crore compared to an OI of INR108.71 crore and profit after tax INR0.80 crore in 2009-10. HALDIA STEELS: ICRA Assigns [ICRA]B+ Rating to INR28cr Term Loan ---------------------------------------------------------------- ICRA has assigned an '[ICRA]B+' rating to the INR28.0 crore term loan and INR35.0 crore cash credit facilities of Haldia Steels Limited. ICRA has also assigned an '[ICRA]A4' rating to the INR30.0 crore non fund based bank facilities of the company. The cash credit limit of the company has a sub-limit of INR10.0 crore towards short term fund based facilities, for which ICRA has assigned an '[ICRA]A4' rating. While assigning the ratings, ICRA has also considered the business risk profiles of HSL's group companies Brand Alloys Limited (rated at [ICRA]B and [ICRA]A4), Ispat Damodar Limited (rated at [ICRA]B and [ICRA]A4) and Sonic Thermal Limited (rated at [ICRA]B and [ICRA]A4), since all of them are engaged in the steel and related industries and operate under a common management. The ratings take into account the ongoing weakness in the steel industry, HSL's low profitability and improving but modest coverage indicators reflecting a weak financial profile, the vulnerability of the company's profits and cash flows to the cyclical trends inherent in the steel industry, the exchange rate fluctuation risks to which the company remains exposed because of its significant export sales and the execution risks related to the expansion programme taken up by HSL. However, the ratings also consider the experience of the promoters in the steel industry and a comfortable operational profile of the company supported by vertical integration to an extent, satisfactory levels of capacity utilisations at its existing facilities, the presence of a waste heat recovery based captive power plant which reduces cost of operations and a conservative capital structure of the company. About Haldia Steels Limited Incorporated in 1996, Haldia Steels Limited is currently engaged in the production of ferro alloys, sponge iron and billets. The manufacturing facilities of the company are located at Durgapur of West Bengal, with the capacities of 36,000 TPA of ferro alloys, 1,20,000 TPA of sponge iron and 1,20,000 TPA of billets. HSL also has a waste heat based captive power plant of 8 MW. Besides HSL, the other group companies engaged in the steel business include Brand Alloys Limited (rated at [ICRA]B and [ICRA]A4 by ICRA). ISPAT DAMODAR: ICRA Assigns '[ICRA]B' Rating to INR72cr Loan ------------------------------------------------------------ ICRA has assigned an '[ICRA]B' rating to the INR72.00 crore term loan and INR43.00 crore cash credit facilities (including the stand by line of credit limit of INR5.00 crore) of Ispat Damodar Limited. ICRA has also assigned an '[ICRA]A4' rating to the INR22.20 crore non-fund based bank facilities of IDL. While assigning the ratings, ICRA has also considered the business risk profiles of IDL's group companies Brand Alloys Limited (rated at [ICRA]B and [ICRA]A4), Haldia Steels Limited (rated at [ICRA]B+ and [ICRA]A4) and Sonic Thermal Limited (rated at [ICRA]B and [ICRA]A4), since all of them are engaged in the steel and related industries and operate under a common management. The ratings take into account IDL's weak financial profile as reflected by its low net profitability and return on capital employed, depressed level of coverage indicators and a highly working capital intensive nature of operations, which in turn impacts its liquidity position adversely. The ratings also factor in the significant delay in the implementation of the ongoing ferro alloy unit, which may lead to cost overrun of the project and the cyclicality inherent in the steel business, which is passing through a difficult phase, is likely to adversely impact the profitability of the players in the steel industry including IDL. ICRA notes that the company incurred substantial operating losses in 2010-11; however, the net profits were supported by significant non operating income. IDL is currently expanding its billet and ferro alloys capacities and is also setting up a captive power plant. While this would strengthen its operating profile post commissioning, the company would face project related risks in the near term. IDL has substantial debt repayment obligations in the near term that may adversely affect the liquidity of the company. The ratings, however, consider the experience of IDL's promoters in the steel industry, its diversified product portfolio, which reduces the demand risks associated with a single product, location of the manufacturing unit in proximity to raw material sources that reduce freight costs, and a comfortable capital structure of the company. JR RECREATION: ICRA Assigns [ICRA]BB+ Rating to INR90.07cr Loans ---------------------------------------------------------------- ICRA has assigned '[ICRA]BB+' rating to INR90.07 crore term loans of JR Recreation Clubs and Resorts Limited. The outlook on the rating is stable. The rating factors in the favorable location of the hotel property being developed by the company at Jaipur which is an important tourist destination. ICRA also draws comfort from the fact that the financial closure for the project has been achieved and initially envisaged equity contribution has been brought in by the promoters. ICRA also takes into consideration JRRCRL's association with InterContinental Hotels Group (Asia Pacific) Pte Ltd (IHGAP - Crowne Plaza Brand) which provides strong brand recognition and offer JRRCRL access to IHGAP's global reservation systems. These strengths are however tempered by the project execution risks, including risks of cost and time overrun, that are typical of greenfield hotel projects although the fact that the company has engaged eminent and reputed agencies for project execution and that key project approvals have been obtained partly mitigate these risks. The rating is also constrained by relatively high cost per room which might limit the profitability and elongate the payback period; market risks owing to high competition and the expected increase in room supply in the city which are likely to result in pressures on occupancy rates and Average Room Revenues (ARRs) once the project becomes operational. Further, as it would take some time for the hotel to reach optimal occupancy levels, the returns for the projects in the initial years of operations are likely to remain modest. Nevertheless, ICRA draws comfort from the financial strength of the promoter company - (Dharampal Satyapal Limited (rated [ICRA]A+ (Stable)/[ICRA]A1)) and their commitment to JRRCRL in case of any contingency. About JR Recreation JR Recreation Clubs & Resorts Limited is a wholly owned subsidiary of DS Hotel & Resorts (India) Limited (DSHRL - rated [ICRA]BBB-(stable) by ICRA), a company promoted by Dharampal Satyapal Limited (DSL). JRRCRL is setting up 218 rooms five star hotel in Jaipur and the hotel will be branded as Crowne Plaza. The project is in the initial stages of development and is scheduled to be operational by January 2013. The total cost for the project is INR180.14 crore which is to be funded by INR90.07 crore term loans and INR90.07 of equity contribution. K. PATEL: ICRA Assigns '[ICRA]B+' Rating to INR24cr Bank Loans -------------------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]B+' to the INR24.00 crore fund-based bank facilities and INR2.39 crore term loan facilities of K. Patel Metal Industries Pvt Ltd. ICRA has also assigned a short term rating of '[ICRA]A4' to the INR1.00 crore non-fund based bank facilities of KPMIPL. ICRA has also assigned an [ICRA]A4 rating to the INR3.00 crore fund-based and INR15.50 crore non-fund based bank facilities which are sub- limits of INR24.00 crore long term fund based facilities. Rating Rationale The assigned ratings are constrained by KPMIPL's highly adverse capital structure and weak coverage indicators, reflecting an adverse financial risk profile; and limited value adding nature of the manufacturing process leading to thin profitability of the company. ICRA also notes KPMIPL's small scale of current operations which limits the company's bargaining power vis-a-vis both suppliers and customers. The ratings are also constrained by KPMIPL's high working capital intensity on account of a high credit period given to customers, which leads to a liquidity squeeze; and KPMIPL's exposure to the cyclicality associated with the copper industry, which is likely to make cash flows volatile. Nevertheless, the ratings favourably factor in the significant experience of the promoters of KPMIPL in the copper wire industry; its reputed and diversified customer base; and the favourable outlook for the power and heavy engineering sectors, which are the company's key consuming sectors. About K. Patel Incorporated in 1992, K. Patel Metal Industries Pvt Ltd has been in the business of manufacturing enamelled copper wires from continuous cast copper (CC) rods. KPMIPL has a manufacturing facility, with an annual production capacity of 3,180 metric tonnes of copper wires. The products manufactured by KPMIPL find application in power and heavy engineering industries. CC rod, which is the key raw material, is procured from reputed copper manufacturers. K Patel Group has presence in real estate as well as dyes and pigments. K. Patel Chemopharma Pvt Ltd is a reputed supplier of dyes and pigments and has significant presence in the export market. KINGFISHER AIRLINES: Plans to Raise INR10 Billion in Loans ---------------------------------------------------------- Bloomberg News reports that Kingfisher Airlines Ltd. plans to raise INR10 billion in loans, said Ravi Nedungadi, chief financial officer of parent UB Group. Mr. Nedungadi told reporters in Mumbai on Tuesday that the carrier has sought a term loan of INR1.5 billion to reconfigure its aircraft, Bloomberg relates. Bloomberg relates that Mr. Nedungadi said it may also hold a rights offer before the end of March and sell property in Mumbai to raise funds. Mallya Denies Kingfisher Air May Collapse Meanwhile, Bloomberg News reports that Vijay Mallya, the billionaire chairman of Kingfisher Airlines, dismissed speculation the carrier may collapse as it cuts flights, seeks new loans and asks for government assistance. "To suggest an immediate grounding of the airline is neither fair nor reasonable," Bloomberg quotes Mr. Mallya as saying at a press conference in Mumbai on Tuesday. Cancellations "have been blamed on entirely the wrong reasons," he said. Mr. Mallya said an Indian investor has also approached Kingfisher about buying a stake, the report relates. Mr. Mallya also called on the government to ease restrictions on overseas carriers investing in Indian airlines and to lower taxes on jet fuel, according to Bloomberg. Mr. Mallya, as cited by Bloomberg, said that Kingfisher hadn't asked for a government bailout and that it wouldn't fire any of its about 7,000 employees. The carrier has asked banks to boost working-capital facilities and also sought to lower interest costs, he said. Reliance Denies Report on Stake-Buy Talks Reuters reports that a spokesman for Reliance Industries denied on Wednesday a newspaper report the Indian energy major was in talks to buy a stake in Kingfisher Airlines. According to Reuters, The Business Line newspaper had reported that Reliance might make a financial investment or pick up a stake through a preferential offer by the carrier, which could be followed up by an open offer to public shareholders. Citing an unnamed person close to the airline, the paper said Reliance was understood to have engaged a merchant banker to carry out due diligence of the carrier, says Reuters. About Kingfisher Airlines Headquartered in Mumbai, India, Kingfisher Airlines -- http://www.flykingfisher.com/-- formerly known as Deccan Aviation Ltd., serves about 35 domestic destinations with a fleet of more than 40 aircraft, including Airbus jets and ATR 72 turboprops. It maintains bases in major cities such as Delhi and Mumbai. Kingfisher Airlines is a unit of UB Holdings, best known for its United Breweries unit, and the carrier shares the Kingfisher brand with a popular Indian beer. UB Holdings also owns a stake in another domestic carrier, Air Deccan, whose operations it combined with Kingfisher Airlines in mid-2008. Kingfisher Airlines began flying in 2005. * * * Kingfisher Airlines has lost money six years in a row, accumulating net debt of INR77.2 billion (US$1.74 billion) as of March 2010, according to data compiled by Bloomberg. As reported in the Troubled Company Reporter-Asia Pacific on Sept. 16, 2011, The Economic Times said Kingfisher Airlines Ltd. has found itself parrying questions about its survival after its auditor raised doubts over the company's ability to stay in business for long. Audit firm BK Ramadhyani & Co, which examined the books of the airline, said in remarks published in the airline's annual report that Kingfisher's ability to remain a "going concern" will depend on its promoters bringing in money into the company. The auditors also said Kingfisher has not deposited with the government money it collected from employees as tax deducted at source and provident fund contribution, painting a dire picture of the airline's finances, The Economic Times reported. The Times of India reported last week that Kingfisher Airlines cancelled 12 flights from Delhi and several more from across India reportedly due to a shortage of cabin crew and pilots. The airline is also facing severe fuel problems due to non-payment of dues. KINGFISHER AIRLINES: Must Raise Fresh Funds Before Restructuring ---------------------------------------------------------------- Dow Jones' DBR Small Cap reports that Kingfisher Airlines Ltd. -- which is facing serious headwinds due to a severe cash crunch -- must raise about INR8 billion ($158.8 million) to reduce its debt, bankers to India's second-largest airline by market share have demanded. As reported in the Troubled Company Reporter-Asia Pacific on Nov. 3, 2011, The Economic Times reported that Kingfisher Airlines denied it was going for another debt restructuring but said it had sought lenders' help to substitute high-cost rupee borrowings with low-cost foreign current debt. According to the report, Ravi Nedungadi, President and group Chief Financial Officer, said in a statement that the carrier has also asked banks to "appraise working capital requirements in the usual course, to account for changes in international prices of fuel and the change in rupee- dollar parity." "The banks are in active consideration of these requests and there is absolutely no question of another debt recast," the report quotes Mr. Nedungati as saying. About Kingfisher Airlines Headquartered in Mumbai, India, Kingfisher Airlines -- http://www.flykingfisher.com/-- formerly known as Deccan Aviation Ltd., serves about 35 domestic destinations with a fleet of more than 40 aircraft, including Airbus jets and ATR 72 turboprops. It maintains bases in major cities such as Delhi and Mumbai. Kingfisher Airlines is a unit of UB Holdings, best known for its United Breweries unit, and the carrier shares the Kingfisher brand with a popular Indian beer. UB Holdings also owns a stake in another domestic carrier, Air Deccan, whose operations it combined with Kingfisher Airlines in mid-2008. Kingfisher Airlines began flying in 2005. * * * Kingfisher Airlines has lost money six years in a row, accumulating net debt of INR77.2 billion (US$1.74 billion) as of March 2010, according to data compiled by Bloomberg. As reported in the Troubled Company Reporter-Asia Pacific on Sept. 16, 2011, The Economic Times said Kingfisher Airlines Ltd. has found itself parrying questions about its survival after its auditor raised doubts over the company's ability to stay in business for long. Audit firm BK Ramadhyani & Co, which examined the books of the airline, said in remarks published in the airline's annual report that Kingfisher's ability to remain a "going concern" will depend on its promoters bringing in money into the company. The auditors also said Kingfisher has not deposited with the government money it collected from employees as tax deducted at source and provident fund contribution, painting a dire picture of the airline's finances, The Economic Times reported. The Times of India reported last week that Kingfisher Airlines cancelled 12 flights from Delhi and several more from across India reportedly due to a shortage of cabin crew and pilots. The airline is also facing severe fuel problems due to non-payment of dues. MANGE RAM: ICRA Assigns '[ICRA]B' Rating to INR1cr Cash Credit -------------------------------------------------------------- ICRA has assigned a long-term rating of '[ICRA]B' to Fund Based Cash Credit of INR1.00 crore and '[ICRA]A4' rating to the captioned LOC of INR5.00 crore to Mange Ram Dilbag Singh. The ratings are constrained by intensely competitive nature of the business characterized by low margins. The ratings also take into account the firm's modest scale of operations and vulnerability of its profits to fluctuations in product prices. However, the ratings draw comfort from the firm's experienced promoters with long track record in trading of agricultural and other commodities, strong revenue growth in the last two years and its established relations with customers which have enabled it to secure repeat orders from them in the past. Mange Ram Dilbag Singh is a proprietorship concern established in 1984, with Mr. Dilbag Singh as its sole proprietor. MRDS is primarily engaged in import and trading of fruits and vegetables. Apart from agricultural commodities, the firm also trades in commodities such as copper and aluminum rods, PVC, Resin, Bitumin, wood, etc. The firm is based out of Sonepat, Haryana and sells its products under its registered brand 'MRDS'. In FY2011, the company reported operating income of INR6.76 crore and profit before tax of INR0.15 crore. SANGHAVI SHOE: ICRA Assigns '[ICRA]BB' Rating to INR8cr Term Loan ----------------------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]BB' to the INR8.0 crore term loans and INR7.0 crore fund based limits of Sanghavi Shoe Accessories Private Limited. The outlook on the long term rating is stable. The rating favorably factors in the long experience of the promoters in the shoe last manufacturing business and the healthy operating margins of the company. However the rating is constrained by the company's modest scale of operations, relatively slow revenue growth which largely depend on shoe manufacturers introducing new designs, vulnerability of raw material prices to fluctuations in price of crude oil, low net profit margin, low asset turnover ratios and stretched capital structure characterized by high gearing and weak coverage indicators. About Sanghavi Shoe Sanghavi Shoe Accessories Private Limited was established in 1982 & has been involved in manufacturing of plastic shoe-lasts since then. It has its corporate office in Mumbai and bulk production units in Halol, Vellore and Agra. Apart from this it has prototype development cum mini production centres at Chennai & Kanpur. Recent Results The company reported a net profit of INR0.4 crore on net sales of INR21.8 crore in FY11 as compared to a net profit of INR0.3 crore on net sales of INR19.9 crore in FY10. SONIC THERMAL: ICRA Assigns '[ICRA]B' Rating to INR46.4cr Loan -------------------------------------------------------------- ICRA has assigned an '[ICRA]B' rating to the INR46.40 crore term loan and INR10.00 crore cash credit facilities of Sonic Thermal Limited. ICRA has also assigned an '[ICRA]A4' rating to the INR27.72 crore non-fund based bank facilities of STL. While assigning the ratings, ICRA has also considered the business risk profiles of STL's group companies Brand Alloys Limited (rated at [ICRA]B and [ICRA]A4), Ispat Damodar Limited (rated at [ICRA]B and [ICRA]A4) and Haldia Steels Limited (rated at [ICRA]B+ and [ICRA]A4), since all of them are engaged in the steel and related industries and operate under a common management. The ratings take into account the ongoing weakness in the steel industry, STL's small scale of current operations and lack of captive power plant which is likely to adversely affect the cost structure of the company. The ratings also take into consideration the weak financial profile of the company characterized by a low net profitability, aggressive capital structure and depressed levels of coverage indicators, and the cyclicality inherent in the steel business, which makes margins and cash flows volatile. Moreover, a highly working capital intensive nature of operations impacts the liquidity position of the company. STL has substantial debt repayment obligations in the short to medium term that may adversely affect the liquidity of the company. The ratings, however, consider the experience of the promoters in the steel and ferro-alloy industries and the location of the manufacturing unit in proximity to raw material sources, leading to low landed costs of input materials. ICRA, however, notes that the company has successfully commissioned a manganese ore beneficiation and a briquetting plant, which is likely to lead to an improvement in its operating efficiency going forward. About Sonic Thermal STL, incorporated in 2002, is engaged in the manufacturing of ferro alloys. The company has two submerged EAFs with an installed capacity of 27,000 MTPA. The manufacturing facilities of the company are located at Barjhora, Bankura in West Bengal. Besides STL, the other group companies engaged in the steel business include Brand Alloys Limited (rated at [ICRA]B and [ICRA]A4), Ispat Damodar Limited (rated at [ICRA]B and [ICRA]A4) and Haldia Steels Limited (rated at [ICRA]B+ and [ICRA]A4). SUKHM INFRA: ICRA Assigns '[ICRA]BB-' Rating to INR40cr LT Loan --------------------------------------------------------------- ICRA has assigned '[ICRA]BB-' rating to INR40.00 crore long term fund-based facilities of Sukhm Infrastructures Private Limited. The outlook on the long term rating is stable. The rating takes into account benefits accruing to SIPL from the operational and financial support of financial investors and experienced senior management, which coupled with an attractive project location surrounded by developed residential area of Mohali is expected to result in satisfactory sales realizations. The rating also favorably factors in alleviated funding risk as majority of promoter funding has been infused and the funding requirement for the development purposes has been tied through term loans. However, rating is constrained on account of track record of significant delays in the project as reflected in extension of timeline provided by Punjab Government till March 2012 vis-a-vis original project completion date of October 2009; further, the development work at the site is still at nascent stage; and hence SIPL may require further extension in timeline from the state government. The scope of the project, which included construction of towers and encompassed total investment of around INR900 crore has now been reduced to land development with minimal construction activity; as a result, the investment required in the project has now reduced to about INR200 crore and has also minimized the execution time, risk and funding requirements. While the company has currently received bookings for about 50% of industrial plots, the residential and commercial portions of the project are yet to be launched for bookings. Further, the project concentration risk is high, as SIPL is a project SPV floated by Sree Vrindavan Housing & Builders Private Limited for executing this project (Integrated IT Mega Project in Mohali, Punjab). The level of the sales will also be impacted by the cyclicality inherent in the sector and slowdown in demand owing to recent hikes in interest rates. Going forward, successful completion of development work within budgeted cost and timelines stipulated by Punjab Government; level of bookings, sale rate achieved and timely collections of payments from customers will remain key rating sensitivities. About Sukhm Infrastructures Incorporated in 2005, Sukhm Infrastructures Private Limited is a special purpose vehicle floated by Sree Vrindavan Housing & Builders Private Limited, which has entered into a joint development agreement with Arcane Developers Private Limited to execute integrated IT mega project over 100 acres of land at Sector 66-A, Mohali. The maiden project of SIPL (integrated IT mega project) was approved by Government of Punjab in October 2006, and comprises of 60% IT/non polluting business related industrial plots; 30% Residential space and 10% Commercial space. The project was scheduled to be finished within three years from October 2006; however, Punjab Government has provided extension till March 2012. VEDANTA RESOURCES: Moody's Says Structure Behind B1 CFR Outlook --------------------------------------------------------------- Moody's Investors Service says that Vedanta Resources PLC's key credit issues arising from the Group's structure and its strategic direction have remained undiminished over these past few years, and are behind the negative outlook for its Ba1 corporate family rating and its Ba2 senior unsecured bond rating. "Various credit issues have been largely unaddressed or unchanged through the last few years, and despite its larger organization and broader footprint, some of Vedanta's issues are now more pronounced, and weigh on the company's credit profile and ratings, culminating in the current rating and outlook," says Alan Greene, a Moody's Vice President and Senior Credit Officer. "Vedanta's condition as reflected by its consolidated EBITDA is impressive. However, its acquisition policy is based on control and not full ownership, and on pro-rata basis its leverage is higher. At the same time, further subordination pressure is building on the parent company's debt which cannot be readily eased, as its Indian subsidiaries face restrictions on guaranteeing such debt," adds Greene, also Moody's lead analyst for Vedanta. Greene was speaking on the release of a Moody's analysis of Vedanta, looking at the credit strengths which drive the CFR as well as the challenging group structure which impacts the senior unsecured debt rating at the parent level. The report was authored by Greene and Nidhi Dhruv, a Moody's Associate Analyst. "The disparity in the Vedanta group -- between the cash- generating operations in India with minimal third-party debt and the heavily indebted parent, with low cash upstreaming from its subsidiaries beyond servicing their intercompany loans with it -- is stark," says Greene. "At the same time, Vedanta has seemed reluctant to upstream dividends from operating companies through the myriad of holding companies to the Parent plc. As a result, loans taken to fund acquired equity stakes are not being covered by returns from the investments, leading to the accumulation of debt and losses at the Parent. This has led Vedanta to convert capital reserves at various levels in the structure into distributable reserves in order to stop the run of losses and allow Parent company dividends to be paid", says Greene. Moody's notes that interim dividends have been declared by two Indian subsidiaries, Hindustan Zinc Limited and Sterlite Industries India Limited, in October 2011. However, these initial payments merit caution, and a regular pattern of distribution is required in Moody's view. The report further notes that doing business in India requires perseverance and Vedanta faces challenges on many fronts, from mining rights, land ownership, settlement compensation, pollution to export bans. Furthermore, given various uncertainties -- such as regulatory issues in India -- and the multi-directional growth strategy that the company tends to pursue, Moody's notes a high degree of event risk associated with Vedanta's credit profile. However, Moody's also derives comfort from the company's track record in executing new projects, its low cost operations, and the fact that the inorganic and organic growth initiatives support its geographic and product diversification. ================= I N D O N E S I A ================= FAJAR SURYA: S&P Affirms 'B+' Corp. Credit Rating; Outlook Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on Indonesia-based packaging paper producer PT Fajar Surya Wisesa Tbk. to negative from stable. "At the same time, we affirmed our 'B+' long-term corporate credit rating on the company," S&P said. "The outlook revision reflects our view that Fajar's financial risk profile could weaken because the company could face difficulties in complying with its bank loan covenant," said Standard & Poor's credit analyst Vishal Kulkarni. "The covenant requires Fajar to maintain a ratio of debt to EBITDA of less than 3.5x. As of June 30, 2011, the company was in compliance with this covenant, with the ratio at 3.4x. Fajar's compliance will be tested next on Dec. 31, 2011." "We believe Fajar is unlikely to be able to significantly increase EBITDA or reduce debt in the fourth quarter of 2011, and could breach the loan covenant. We expect Fajar's margins to remain under pressure for the next two to three quarters due to weak global macroeconomic conditions and the company's limited ability to pass on rising costs of raw material to end consumers. Fajar's EBITDA margins for the nine months ended September 2011 were slightly weaker than in the fiscal year ended December 2010 due to higher costs for a packaging paper manufacturing machine the company commissioned in the first quarter of 2011," S&P said. "Fajar is also unlikely to meaningfully reduce the debt it took to finance its working capital," said Mr. Kulkarni. "This is because we expect the company to use a major part of its cash flow to meet planned capital expenditure. A substantial improvement in cash flow is likely only from 2013 on the commissioning of new capacity." "Fajar maintains that a breach of covenant is unlikely. Nevertheless, we believe that the company's debt reduction and EBITDA improvement targets are aggressive and a timely and seamless waiver will be important to avoid a technical default on the covenant," S&P said. "We may lower the rating if: (1) Fajar is unable to comply with the loan covenant, banks do not waive the covenant requirement, and they take negative action that jeopardizes the company's cash flow adequacy; or (2) Fajar takes up higher debt than we expected, its cost of raw material rises, or paper demand and prices weaken, such that the company's debt-EBITDA ratio is more than 4.0x on a sustained basis," S&P said. "We are unlikely to raise the rating in the next one year. However, we may revise the outlook to stable if Fajar is compliant with the loan covenant with sufficient headroom. This may result from: (1) Fajar's stronger cash flows due to an improvement in the company's market position; (2) the company's stable margins due to a continued improvement in the operating environment; and (3) Fajar's adequate liquidity after considering capital expenditure," S&P said. ========= J A P A N ========= CORSAIR (JERSEY): S&P Puts 'B+' Tranche Rating on Watch Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on three tranches relating to three Japanese synthetic collateralized debt obligation (CDO) transactions on CreditWatch with positive implications. "At the same time, we affirmed our ratings on two tranches relating to two Japanese synthetic CDOs and removed the ratings from CreditWatch with negative implications," S&P said. "During our monthly run of transactions on version 5.1 of our CDO evaluator, the two tranches placed on CreditWatch positive had synthetic rated overcollateralization (SROC) levels in excess of 100% at higher ratings than the current ratings as of Oct. 31, 2011. Meanwhile, the SROC levels of the tranches on which the ratings were affirmed and removed from CreditWatch negative recovered to 100% or above as of the same date," S&P said. "For all the transactions that we ran on our CDO evaluator, we applied the top obligor and industry test SROCs, as well as the results of the Monte Carlo default simulation," S&P said. "By the end of the month, we intend to review the tranches listed below with ratings that we placed on CreditWatch positive, along with any other tranches with ratings that are presently on CreditWatch negative or positive, in accordance with our current CDO criteria," S&P related. Ratings Placed On CreditWatch Positive Corsair (Jersey) No. 2 Ltd. Floating rate secured portfolio credit-linked series 52 (Portfolio F360) To From Issue amount B+ (sf)/Watch Pos B+ (sf) JPY1.0 bil. Fixed rate credit-linked loan series 58 To From Issue amount B+ (sf)/Watch Pos B+ (sf) JPY3.0 bil. Signum Vanguard Ltd. Class A secured fixed rate credit-linked loan 2005-3 To From Issue amount A+ (sf)/Watch Pos A+ (sf) JPY4.0 bil. Ratings Affirmed, Removed From Creditwatch Negative Hummingbird Securitisation Ltd. Series 2 loan Class To From Issue amount #2 Loan CCC (sf) CCC (sf)/Watch Neg JPY3.0 bil. Signum Vanguard Ltd. Class A secured fixed rate credit-linked loan series 2005-04 To From Amount CCC+ (sf) CCC+ (sf)/Watch Neg JPY4.0 bil. ========= K O R E A ========= HYNIX SEMICONDUCTOR: S&P Puts 'B+' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' long-term corporate credit rating on Korea-based Hynix Semiconductor Inc. on CreditWatch with positive implications over SK Telecom Co. Ltd.'s (A/Watch Neg/--) plans to acquire a major stake in the company. "At the same time, Standard & Poor's also placed its 'B+' rating on Hynix's senior unsecured notes on CreditWatch with positive implications. For the rating action media release on SK Telecom, see 'Rating On Korea's SK Telecom Placed On CreditWatch Negative On Planned Acquisition Of Major Stake In Hynix Semiconductor,'" S&P said "Hynix creditors revealed Nov. 11, 2011, that the company had chosen SK Telecom as preferred bidder to acquire a 20% stake in the company, which we estimate to be valued at about Korean won (KRW) 3.4 trillion. Given that Hynix says it plans to issue SK Telecom 101.85 million new shares under the deal, we expect Hynix will raise about KRW2.3 trillion in capital if the deal goes ahead. In our view, this increase in capital may positively impact Hynix's capital structure and financial flexibility," S&P related. "We plan to resolve the CreditWatch on or soon after completion of the transaction. We currently expect Hynix and SK Telecom to close the deal in early 2012," S&P said. In resolving the CreditWatch, S&P will examine these factors: Final execution of the transaction and the resulting injection of capital into Hynix; Hynix's standalone operating and financial performance; Changes to Hynix's business and financial strategies under the new management structure; and Positioning of Hynix in the SK Telecom group's strategy and the likelihood of additional group support. "At this stage, we expect the possible change in the rating on Hynix will be one notch if the acquisition proceeds as planned," S&P said. ==================== N E W Z E A L A N D ==================== AMI INSURANCE: Court Denies AMI's 'My' Trademark Bid ---------------------------------------------------- BusinessDay.co.nz reports that AMI Insurance has lost its battle to trademark 15 common insurance terms with the prefix "my", such as "my insurance". The trademarks were approved for registration by the Intellectual Property Office last year, the report recalls. But rivals AA Insurance, IAG New Zealand, Tower Insurance and Vero Insurance united to appeal against the decision to the High Court at Wellington in June, according to BusinessDay.co.nz. BusinessDay.co.nz relates that they claimed the terms were generic to the industry, and were not distinctive enough to qualify as a trademark and could confuse consumers. According to the report, Justice Joe Williams said in his judgment that a large number of "my marks" had been registered in relation to goods and services, such as "My Money", a trademark for a Bank of New Zealand account and Sky Television's "My Sky". But these did not use generic product names, unlike the words AMI was seeking to register, Justice Williams said. BusinessDay.co.nz notes that AMI's application was the first in the insurance industry to try to trademark generic industry terms, including "my insurance, my car insurance and "my house insurance". AMI said that the words it wanted to register were not used in the way its competitors would use them, BusinessDay.co.nz adds. As reported in the Troubled Company Reporter-Asia Pacific on April 8, 2011, The New Zealand Herald said New Zealand's government had announced a support package for AMI Insurance that Finance Minister Bill English acknowledges could top NZ$1 billion and leave the Crown liable for up to NZ$200 million a year in ongoing claims. Interest.co.nz said the government stepped in to guarantee AMI policy holders if the insurance company had exhausted its own reserves due to the financial hit caused by the two Christchurch earthquakes on Sept. 4, 2010, and Feb. 22, 2011. AMI has since been seeking alternative sources of capital to replace the government backing, BusinessDay.co.nz reported. About AMI AMI Insurance -- http://www.ami.co.nz/-- is the largest wholly New Zealand owned fire and general and personal lines insurance company. The company has 73 branches, two contact centres and 21 agencies throughout New Zealand, nearly 1,000 staff, and around 500,000 New Zealand customers holding 1.2 million policies. BRIDGECORP LTD: Former Directors Trial Resumes ---------------------------------------------- ONE News reports that the trial of three former directors of the failed finance company Bridgecorp resumed Monday. ONE News relates that Rod Petricivic, Rob Roest and Peter Steigrad are accused of misleading thousands of investors in various documents, particularly the company prospectus. A fourth director, Gary Urwin, who was also charged over the finance company's failure, pleaded guilty last week, the report says. Bridgecorp collapsed in 2007 owing more than NZ$450 million to 14,500 New Zealanders. According to the report, the Crown alleges public documents signed off by the company directors made untrue statements about a company that was in freefall. It said Bridgecorp was defaulting on payments while calling for further investment. ONE News says two former Bridgecorp directors fronted up in court, Rod Petricivic and Rob Roest, but lawyers for all three said their clients had relied on advice and expertise from Bridgecorp staff. The court heard written statements from a number of investors who say they put their trust in Bridgecorp, according to ONE News. A former Bridgecorp risk manager also told the court information was regularly audited and provided to management, the report adds. The case, says ONE News, is due to continue for many months yet. About Bridgecorp Ltd Based in New Zealand, Bridgecorp Ltd. is a property development and finance company. Bridgecorp was placed in receivership on July 2, 2007, after failing to pay principal due to debenture holders. John Waller and Colin McCloy, partners at PricewaterhouseCoopers, were appointed as receivers. Bridgecorp owes around 14,500 investors, which liquidators estimate to approximate NZ$500 million. Bridgecorp's nine Australian companies were also placed into voluntary administration, owing about 100 investors about AUD24 million (NZ$27 million). SEALEGS CORP: Half Year Net Loss Widens to NZ$1.2 Million --------------------------------------------------------- BusinessDay.co.nz reports that Sealegs Corporation Limited has extended its interim losses by 24.8% as increased costs from its restructuring programme sapped improved sales. BusinessDay.co.nz, citing the company's half year financials, discloses that the net loss for the six months ending September 30 was NZ$1.2 million, up from $941,000 in the same period last year. The report relates that the loss was due to a NZ$1.4 millin spike in costs as the company restructured its operations to concentrate on the lucrative east coast market in the US, which helped it reap a 70% increase sales to NZ$6.7 million compared to last year. During the period it sold 49 boats compared to 29 a year ago, the report relays. "The company took the decision to take greater control of its sales and marketing activities, and to focus on a smaller number of target markets which the directors believe can generate significant boat sales moving forward," BusinessDay.co.nz quotes chairman Eric Series as saying. BusinessDay.co.nz says the increased costs were almost entirely made up from increased administrative, distribution, markets, occupancy and research expenses, which rose by NZ$1.2 million in the period. That put a dent in the company's cash reserves, with its bank balance falling to NZ$3.8 million in the six month period, down from NZ$7.2 million last year, although Sealegs said this was sufficient to continue with its current strategy, according to. BusinessDay.co.nz The company, as cited by BusinessDay.co.nz, said the restructuring will bear fruit in the second half of the year, having already shaved $800,000 off its cost base by reducing staff numbers. In May, the company posted a full year loss of NZ$3.6 million, the report discloses. Sealegs Corporation Limited (Public, NZE:SLG)is engaged in manufacturing of amphibious marine craft. The Company imports amphibious marine craft. The Company subsidiaries include Sealegs International Limited, Sealegs Australia Pty Limited, Sealegs (US) Corporation, Sealegs Amphibious Boats Canada Limited and Sealegs Europe. ********* 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, 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 ***