/raid1/www/Hosts/bankrupt/TCRAP_Public/120326.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, March 26, 2012, Vol. 15, No. 61
Headlines
A U S T R A L I A
AIR AUSTRALIA: In Liquidation; Creditors Unlikely to Get Payment
DUBBO TURF: Secretary-Manager Dismisses Talk of Administration
MIDWEST VANADIUM: S&P Lowers Corporate Credit Rating to 'CCC+'
PAPERLINX LIMITED: Shareholder Fails to Oust Chairman
RELIANCE RAIL: S&P Gives 'CCC+' Rating on Senior Unsecured Notes
* AUSTRALIA: Insolvency Appointments Rise 13% in January 2012
C H I N A
FRANSHION PROPERTIES: Moody's Keeps Ba1 Bond Rating, Outlook Neg.
FRANSHION PROPERTIES: S&P Keeps 'BB' Notes Rating, Outlook Stable
WEST CHINA CEMENT: Moody's Changes Outlook on 'Ba3' CFR to Neg.
H O N G K O N G
LEHMAN BROTHERS: Receives $1.534 Billion From HK Affiliate
LEHMAN BROTHERS: HKMA Reports Progress of Probe on Minibond Cases
SANMINA-SCI ASIA: Members' Final Meeting Set for April 16
SELCO (HONG KONG): Annual Meetings Set for April 12
SHENSTONE LIMITED: Members' Final Meeting Set for April 17
SUPREME TASK: Sole Member' Final General Meeting Set for April 20
SYMBOL TECHNOLOGIES: Members' Final Meeting Set for April 18
SYNTECH CHEMICALS: Members' Final Meeting Set for April 16
TOTAL ABLE: Sole Member' Final Meeting Set for April 23
TRANSORIENT ORE: Members' Final Meeting Set for April 20
URBAN FASHION: Creditors' Proofs of Debt Due March 30
VISCOUNTMARINE LIMITED: Annual Meetings Set for April 12
WAELCHLI & CO.: Hok and Boswell Step Down as Liquidators
XING QI: Creditors' Proofs of Debt Due April 16
I N D I A
AE BIOFUELS: Has 5-Year License to Sell Glycerin in India
AQUENT IMPEX: CRISIL Assigns 'CRISIL BB-' Rating to INR200MM Loan
CORE EDUCATION: Moody's Confirms 'B1' Corporate Family Rating
DHARA PETROCHEMICALS: CRISIL Reaffirms 'BB-' Cash Credit Rating
EXHIBITORS SYNDICATE: CRISIL Rates INR88.5MM Loan at 'CRISIL B+'
GANAPATI FOODS: Delays in Loan Payment Cue CRISIL 'C' Ratings
HALDIA COKE: CRISIL Rates INR480 Million Loan at 'CRISIL BB-'
JAGUAR LAND: Fitch Rates New Senior Unsecured Notes at 'BB-(exp)'
JAGUAR LAND ROVER: Moody's Rates GBP500-Mil. Senior Notes 'B1'
KUSHAL TIMBER: CRISIL Puts 'CRISIL B' Rating on INR40MM Loan
LANDMARK DAIRY: CRISIL Rates INR52.5MM Loans 'CRISIL B+'
MVM HANDICRAFTS: CRISIL Rates INR155.7MM Loans 'CRISIL B+'
P NARASIMHA: CRISIL Assigns 'CRISIL BB-' Rating to INR65MM Loan
PREET REMEDIES: CRISIL Puts 'CRISIL BB+' Rating on INR10MM Loan
RAY RAYON: Inadequate Info Cues Fitch to Migrate Ratings
R.L.CONSTRUCTION: CRISIL Reaffirms 'C' Rating on INR60MM Loan
SBIW STEELS: Delay in Loan Payment Cues CRISIL Junk Ratings
SENTINI BEVERAGES: CRISIL Puts 'BB' Rating on INR300MM Loan
SHAMVIK GLASSTECH: CRISIL Puts 'B+' Rating on INR345MM Loan
SURYA PHARMA: Delays in Loan Payment Cue CRISIL Junk Ratings
VIRTUAL GALAXY: CRISIL Rates INR72.6MM Loans 'CRISIL B+'
WANBURY LTD: Inadequate Info Cues Fitch to Migrate Ratings
ZEAL TEX: CRISIL Assigns 'CRISIL B' Rating to INR34.5MM Loan
I N D O N E S I A
DAVOMAS ABADI: S&P Cuts Corporate Credit Rating to 'CC'
J A P A N
AIJ INVESTMENT: Two Directors May Face Criminal Probe
OLYMPUS CORP: Investors Express Concern Over New Board Lineup
K O R E A
JEONBUK BANK: Moody's Affirms 'D+' Bank Financial Strength Rating
N E W Z E A L A N D
FIVE STAR: Judge Denies Ex-Director's Bid to Reverse Guilty Plea
PACIFIC WOOD: To Close Wood Plants; 41 Workers Set Lose Jobs
P H I L I P P I N E S
PHILIPPINE NAT'L: Moody's Affirms 'E+' BFSR; Outlook Positive
S I N G A P O R E
* SINGAPORE: Moody's Says Proposed Covered Bond Rules Positive
X X X X X X X X
PACNET: Moody's Says Full-Years Results No Impact on 'B1' CFR
- - - - -
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A U S T R A L I A
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AIR AUSTRALIA: In Liquidation; Creditors Unlikely to Get Payment
----------------------------------------------------------------
Australian Associated Press reports that creditors of Air
Australia are likely to lose everything after the sale of the
airline's main asset fell through.
The process to sell Air Australia's engineering business had been
abandoned, creditors were told at a meeting in Brisbane on
Friday, where they unanimously voted to place the failed business
into liquidation, AAP relates.
"Interested buyers dropped off because there is a AUD1 million a
year lease attached to the land and hangar at Brisbane Airport,"
the news agency quotes a spokesman for administrators KordaMentha
as saying after the meeting.
By placing the company into liquidation, the creditors have
ensured Air Australia's 350 employees will receive some of their
unpaid wages, the report notes.
AAP states that a federal government scheme to provide basic
entitlements will give them about AUD5 million of the
AUD8 million they are owed.
About Air Australia
The Air Australia fleet consists of five Airbus A330-200 and
A320-200 aircraft, with headquarters in Hendra, Queensland.
Regular flight paths included Bali, Phuket and Honolulu as well
as Australian domestic destinations such as Melbourne, Brisbane,
Perth, Port Hedland and Derby.
On Feb. 17, 2012, Mark Korda and John Park of KordaMentha were
appointed by the Director of the Strategic Aviation Group as
voluntary administrators for the firm. The group consists of
seven companies including Air Australia, Strategic Engineering
Australia, and Strategic Aviation Charter.
ANZ was the airline's the biggest creditor, owed more than
AUD20 million, Australian Associated Press discloses.
DUBBO TURF: Secretary-Manager Dismisses Talk of Administration
--------------------------------------------------------------
Parkes Champion Post reports that Dubbo Turf Club secretary-
manager Mark Day has scoffed at rumors the club is about to enter
into administration but concedes the organization isn't flushed
with cash.
Talk swirled late last week that administrators were going to
take over the running of the club but Day denied the rumors,
according to Parkes Champion Post.
The report notes that the club was last week allocated a race
date on March 31 to replace the recently washed out Girls Day Out
meeting and Day urged the people of Dubbo to get behind the club.
"We're doing it tough and we have drawn that to the attention of
Racing NSW but it's not at the stage of us going into
administration. I don't know where that's coming from . . . .
From our perspective we are an asset-rich club but every time we
look like getting some money in the bank, a race meeting gets
washed out and we don't get that money. . . . It's frustrating
but at the same time we are in a position where we own a lot of
our own equipment outright, we're not paying that off, but we
just need a break when it comes to getting some money put away in
the bank. . . . We have our Girls Day Out meeting rescheduled to
March 31 and it would really be a boost for the club if we could
get a big crowd out to the track," the report quoted Mr. Day as
saying.
MIDWEST VANADIUM: S&P Lowers Corporate Credit Rating to 'CCC+'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit and debt ratings on Australian mining company
Midwest Vanadium Pty Ltd. to 'CCC+' from 'B-'. The outlook on the
long-term rating is negative.
"The downgrade reflects our view that MVPL's liquidity position
has deteriorated because its parent Atlantic Ltd. (not rated) has
decided to discontinue its share purchase plan, which could have
raised up to A$10 million. We consider MVPL's liquidity to be
'less than adequate'," Standard & Poor's credit analyst May Zhong
said. "Pressuring its liquidity are the company's slower-than-
expected generation of cash flows from vanadium and iron ore
sales, and the capital needed to undertake modification work to
improve the performance of MVPL's crushing, milling, and
beneficiation (CMB) plant."
"Although MVPL has successfully produced its first ferrovanadium
(FeV) in January 2012, it occurred later than expected. There has
been an underperformance of the CMB circuits due to the presence
of clay in one of the three ore zones of the iron ore body. In
addition, the sale of iron ore is much later than expected.
Further modification work is required to improve the CMB circuit
performance and to boost production ramp-up. Failure to achieve
the expected improvement is likely to severely constrain the
throughput at levels well below its expected capacity, which in
turn, will negatively affect the company's unit cash cost of
production," S&P said.
"The modifications would cost about AUD9 million (estimated by
MVPL) and are to be completed in the June 30, 2012 quarter. On
March 6, 2012, Atlantic announced that it has arranged a
AUD41 million funding package, of which AUD21 million has been
received. However, in our opinion the size of the package doesn't
provide much cushion for further cost overruns and ramp-up
delays," S&P said.
"The negative outlook reflects the higher risk that MVPL faces in
ramping up its Windimurra project to full capacity on a timely
basis. We consider that MVPL's weak liquidity position places it
in a more vulnerable position if it were to experience cost
overruns or project delays. A further downgrade could occur if
there is anymore delay in production ramp-up, or if liquidity
worsens," said Ms. Zhong. "A higher rating may be considered if
the company ramps up its production to full capacity and
maintains adequate liquidity."
PAPERLINX LIMITED: Shareholder Fails to Oust Chairman
-----------------------------------------------------
Australian Associated Press reports that a move by disgruntled
PaperlinX shareholder Andrew Price to remove the company's
chairman Harry Boon has failed.
AAP relates that in a shareholder vote at an extraordinary
general meeting in Melbourne on Friday, shareholders of the
struggling paper merchant endorsed Mr. Boon by a narrow margin.
Of the votes lodged by proxy and at the meeting, 51.84% were
against a resolution to remove Mr. Boon as a director of
PaperlinX, and 48.16% voted in favor, according to the report.
Mr. Price, an experienced and wealthy former manager in the paper
sector, holds around 30 million shares in PaperlinX, AAP
discloses.
He had sought to remove Mr. Boon and take a place on the
PaperlinX board as a director, the report relays.
According to the report, Mr. Price told shareholders that
Mr. Boon had been an integral member of the board during a time
when the company had performed poorly.
Paperlinx incurred a net loss of AUD108 million in 2011, its
third straight annual loss.
About PaperlinX
Australia-based PaperlinX Limited (ASX:PPX) --
http://www.paperlinx.com.au/-- is a fine paper merchant and
manufacturer of communication and packaging paper. PaperlinX
employs over 9,600 people in 28 countries.
RELIANCE RAIL: S&P Gives 'CCC+' Rating on Senior Unsecured Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services had withdrawn its short-term
rating of 'A-1+' on the senior-secured debt issued by Reliance
Rail Finance Pty. Ltd. "We had assigned the short-term rating
due to an administrative error. Our long-term rating on RRF's
senior-secured notes is 'CCC+' and on the junior-secured debt
'CCC-', with both ratings on stable outlooks," S&P said.
* AUSTRALIA: Insolvency Appointments Rise 13% in January 2012
-------------------------------------------------------------
SmartCompany reports that the year has started badly for company
collapses, with company liquidators reporting January was another
record month for insolvencies, while the banks' bad debt figures
stayed stubbornly high at more than AUD5 billion.
According to the report, company liquidator Cliff Sanderson said
there were 518 insolvency appointments in the first month of 2012
-- the highest for January since records started being kept in
the 1990s, and 13% higher than the previous January.
SmartCompany relates that this follows a record year for
insolvencies in 2011, at 1,386 appointments by secured creditors.
There were also six monthly insolvency records reached through
the course of last year, the report notes.
Mr. Sanderson, director of Sydney-based firm Dissolve, said
Reserve Bank figures on banks' new asset impairment charges show
that the banks' bad debts for the December quarter totalled
AUD5.4 billion. This is higher than the previous quarter's total
of AUD4.9 billion -- and well above the pre-GFC level of
AUD1.1 billion, says SmartCompany.
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C H I N A
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FRANSHION PROPERTIES: Moody's Keeps Ba1 Bond Rating, Outlook Neg.
----------------------------------------------------------------
Moody's Investors Service has changed to negative from stable the
outlook of Franshion Properties (China) Limited's Baa3 corporate
family rating and the Ba1 senior unsecured rating assigned to the
bonds issued by Franshion Development Limited and guaranteed by
Franshion.
At the same time, Moody's has affirmed both ratings.
Ratings Rationale
"The negative outlook reflects Franshion's weaker-than-expected
book sales, and the rises in net debt and interest costs for
2011, which have in turn weakened its interest coverage.
EBITDA/interest at 2.4x is substantially below the expected level
of 4-5x," says Kaven Tsang, a Moody's Assistant Vice
President/Analyst.
The lower book sales were due partly to delays in the recognition
of revenue from certain presold commercial projects. Such
recognition is now planned for FY 2012.
Franshion increased its debt to HKD28.6 billion (or RMB23
billion) (adjusted for 75% of the perpetual convertible
securities, but excluding internal trust loans supported by
pledged cash) as of December 31, 2011 to prefund expansion and
enhance liquidity -- HKD12.2 billion (RMB10 billion) in
unrestricted cash -- for the purpose of managing a challenging
property market.
This financial strategy has resulted in both higher debt and cash
balances.
Although net debt is slightly higher than expectations, interest
costs have increased to the extent that EBITDA/interest weakened
to 2.4x and recurring EBITDA/interest fell below 1x. Such metrics
are weak for its Baa3 rating.
Franshion's Baa3 corporate family rating continues to reflect the
buffer it has built in the rental income from its quality
investment properties, prime office buildings, and hotels in
Shanghai and Beijing, against business volatility.
It also takes into account Franshion's solid track record in the
development of landmark, integrated projects and in the
acquisition of strategically important projects through its
collaboration with government-related entities.
In addition, the rating reflects Franshion's diversified and
solid access to both on- and offshore funding, and which is
supported to an extent by its state-owned enterprise ("SoE")
background and its position as a subsidiary of Sinochem
Corporation.
On the other hand, Franshion's rapid growth plan will entail
execution risk, as it will have to achieve unprecedented sales
targets in an uncertain operating and regulatory environment. The
company's lack of geographic and cash flow diversity will also
raise its exposure to performance volatility.
The senior unsecured bond rating is notched down to Ba1,
reflecting structural and legal subordination. The ratio of
secured and subsidiary debt to total assets stood at 23% as of 31
December 2011.
The rating could be downgraded if Franshion (1) fails to execute
its business plan, or China's property market experiences a
significant downturn, such that cash flow is weaker than
anticipated; (2) pursues aggressive debt-funded land
acquisitions; or (3) significantly increases its investments in
residential properties with debt funding.
Moody's would regard the following financial metrics as signals
for downward rating pressure: (1) adjusted debt/capitalization
above 45-50%; (2) EBITDA interest coverage less than 4-5x; or (3)
adjusted recurring EBITDA to interest coverage ratio less than 1x
on a sustained basis.
A rating upgrade in the near term would be unlikely, given the
negative outlook. However, the outlook could revert to stable if
Franshion (1) successfully carries out its sales plan and
recognition targets; and (2) improves interest coverage
EBITDA/interest to around 4-5x and recurring EBITDA/interest to
1x.
The principal methodology used in rating Franshion was the Global
Homebuilding Industry Methodology, published March 2009.
Listed on the Stock Exchange of Hong Kong in 2007, Franshion
Properties (China) Limited is a 62.87%-owned subsidiary of
Sinochem Hong Kong (Group) Company Limited, which in turn is 98%-
owned by Sinochem Group, a state-owned enterprise under State-
Owned Assets Supervision and Administration Commission. Franshion
develops commercial and integrated properties in first-tier and
major second-tier cities in China. As at December, 2011,
Franshion had a total land bank of approximately 4.11 million sqm
of gross floor area.
FRANSHION PROPERTIES: S&P Keeps 'BB' Notes Rating, Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' long-term
corporate credit rating on China-based real estate developer
Franshion Properties (China) Ltd. The outlook is stable. "At the
same time, we affirmed the 'BB' issue rating on the company's
outstanding senior unsecured notes. We also affirmed our 'cnBBB+'
Greater China credit scale rating on Franshion and our 'cnBBB'
issue rating on its outstanding senior unsecured notes," S&P
said.
"We affirmed the rating on Franshion to reflect our view that the
company is likely to generate satisfactory property sales in 2012
and modestly improve its capital structure," said Standard &
poor's credit analyst Frank Lu. "The company's good financial
flexibility and significant and stable cash flow from high-
quality rental properties and hotels support its credit profile."
"The corporate credit rating on Franshion reflects the company's
'bb+' stand-alone credit profile (SACP) and our expectation that
Franshion may benefit from some of the potential extraordinary
government support for its parent, Sinochem Hong Kong (Group) Co.
Ltd. (Sinochem HK; BBB/Stable/--; cnA/--). In our view,
Franshion's property business is strategically important, but not
a core business, of Sinochem HK. We expect Franshion to remain a
significant profit contributor to its parent over the next two to
three years," S&P said.
"The stable outlook reflects our expectation that the company's
liquidity will be 'adequate' and it will maintain good financial
flexibility in a weak operating environment. In our base case
scenario, we expect Franshion's credit ratios to improve modestly
in 2012, mainly due to higher property deliveries. Franshion's
income from property leasing and hotels should somewhat support
its cash flow," said Mr. Lu.
"The potential upside to the rating is limited. Likely limited
improvement in Franshion's financial risk profile and modest
credit ratios for the current rating over the next two years
constrain the SACP on the company. We may raise the SACP if
Franshion materially improves its scale and project
diversification, and reduces its leverage, such that its debt-to-
EBITDA ratio falls to less than 3x," S&P said.
"We may lower the rating on Franshion if we lower Sinochem HK's
SACP. We may also lower the rating if Franshion's SACP is lowered
to 'bb-'. This could happen if the company's debt-funded
expansion is more aggressive or its contract sales and margins
are materially weaker than we expected, such that its EBITDA
interest coverage is less than 3.0x and shows no signs of
improvement," S&P said.
WEST CHINA CEMENT: Moody's Changes Outlook on 'Ba3' CFR to Neg.
---------------------------------------------------------------
Moody's Investors Service has changed to negative from stable the
outlook for West China Cement Limited's Ba3 corporate family and
senior unsecured bond ratings.
The change follows the company's release of its annual results
for 2011 and its announcement of its acquisition of Shifeng
Cement.
At the same time, Moody's has affirmed both ratings.
Ratings Rationale
"The negative outlook reflects Moody's concerns that WCC's credit
metrics, especially interest coverage, could weakened because of
its fast expansion against the backdrop of weak cement prices,"
says Jiming Zou, a Moody's analyst.
Moody's does not expect prices in 2012 to recover to the level
seen in 2H 2010 due to a slowdown in demand and competition in
central Shaanxi.
As a result operating margin could fall to 20% - 25% from
historical levels of 35% - 40%. This development would in turn
negatively affect its credit metrics. EBITDA/interest expenses
could fall below 4.0x in 2012.
The regulatory environment -- which restricts new capacity -- and
the weakness in cement prices is encouraging strong players to
consolidate their positions through acquisitions. WCC's
investment in acquisitions has amounted to RMB1.4 billion since
January 2011. Its capacity has increased to around 19 million
tonnes per annum (including the latest acquisition of Shifeng
Cement) from 12.5 million tonnes at the end of 2010.
"If WCC continues to make further debt-funded investments, its
ratings could be under pressure for a downgrade due to the
consequent deterioration in its credit metrics," says Zou.
Moody's notes that WCC's Ba3 corporate family rating continues to
reflect its top-tier position and defensible market share in
southeastern Shaanxi, and which is protected by a mountainous
barrier and good demand from infrastructure-related projects and
rural urbanization.
At the same time, WCC's rating is constrained by its exposure to
the regional economy of Shaanxi, volatile raw material costs, the
tightening regulatory environment for the cement industry in
China, and the execution risk associated with its rapid capacity
expansion.
Therefore, WCC could find it challenging to replicate its market
dominance and strong profitability in new locations, especially
in the context of increasing concerns regarding overcapacity in
the Chinese cement industry and volatile raw material prices.
Given the negative outlook, upward pressure on the ratings in the
near future is unlikely. The outlook could return to stable, if
the company (i) improves profitability, such that EBITDA/interest
is maintained at 4x or above; and (ii) reduces debt-funded
investments, such that debt leverage is maintained below 4.0x.
A ratings downgrade could be triggered by: (i) a material decline
in the company's sales and/or profitability due to an adverse
change in the local operating environment, or further declines in
cement prices; or (ii) aggressive expansion, driven by debt-
funded acquisitions, or capital expenditures; or (iii) a material
loss in WCC's market share in its core market.
Indicators for a ratings downgrade could be a deterioration in
its operating margin below 20%, an EBITDA/interest expense ratio
below 4.0x, or a debt/EBITDA ratio above 4.0x on a sustained
basis.
The principal methodology used in rating West China Cement
Limited was the Global Building Materials Industry Methodology
published in July 2009.
West China Cement ("WCC") is one of the leading cement producers
in Shaanxi Province of China. As of end-2011, the company's
production capacity had reached 16.2 million tons per annum. Most
of the company's plants are in southern Shaanxi Province where it
has a dominant market share. In addition, it is setting up a
footprint in the Xinjiang Autonomous Region, as evidenced by the
acquisition of a production facility in Hetian in May 2011 and
the construction of another cement plant in Yutian with an
expected completion in June 2012.
The company is 40.9% owned by its chairman, Mr. Zhang Jimin. It
was listed on the Hong Kong Stock Exchange in August 2010.
================
H O N G K O N G
================
LEHMAN BROTHERS: Receives $1.534 Billion From HK Affiliate
----------------------------------------------------------
Lehman Brothers Holdings Inc. said on March 19 it received a
cash distribution of $1.534 billion from Lehman Brothers Asia
Holdings.
The payment was Lehman's aggregate share of the first two
distributions of LB Asia, the company's affiliate in liquidation
in Hong Kong. It was made pursuant to a settlement agreement
entered into on July 31, 2011, which took effect upon Lehman's
emergence from bankruptcy protection on March 6.
The payment received on March 15 had been anticipated and will be
included in Lehman's initial payment to its creditors on
April 17. The company and its affiliated debtors expect
additional cash recoveries from the Hong Kong entities in the
future.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. Lehman is set to make its first payment to creditors
under its $65 billion payout plan on April 17, 2012.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
LEHMAN BROTHERS: HKMA Reports Progress of Probe on Minibond Cases
-----------------------------------------------------------------
The Hong Kong Monetary Authority (HKMA) announced on March 16
that investigation of over 99% of a total of 21,849 Lehman-
Brothers-related complaint cases received has been completed.
These include:
* 15,769 cases which have been resolved by a settlement
agreement reached under section 201 of the Securities and
Futures Ordinance (Note 1);
* 3,368 cases which have been resolved through the enhanced
complaint handling procedures required by the settlement
agreement;
* 2,437 cases which were closed because insufficient prima
facie evidence of misconduct was found after assessment or
no sufficient grounds and evidence were found after
investigation;
* 25 cases (including minibond cases) which are under
disciplinary consideration after detailed investigation by
the HKMA, of which proposed disciplinary notices are being
prepared; and
* 192 cases in respect of which investigation work has been
completed and are going through the decision process to
decide whether there are sufficient grounds for
disciplinary actions or whether the cases should be closed
because of insufficient evidence or lack of disciplinary
grounds.
Investigation work is underway for the remaining 56 cases.
A table summarizing the progress of the disciplinary and
complaint-resolution work in respect of Lehman-Brothers-related
complaints is available at http://is.gd/7a9M2Y
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Additional units, Merit LLC, LB Somerset LLC and LB Preferred
Somerset LLC, sought for bankruptcy protection in December 2009
or more than a year after LBHI and its other affiliates filed
their bankruptcy cases.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers
International (Europe) on Sept. 15, 2008. The joint
administrators have been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan
Inc. filed for bankruptcy in the Tokyo District Court on
Sept. 16. Lehman Brothers Japan Inc. reported about JPY3.4
trillion (US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates. (http://bankrupt.com/newsstand/or
215/945-7000)
SANMINA-SCI ASIA: Members' Final Meeting Set for April 16
---------------------------------------------------------
Members of Sanmina-Sci Asia Limited will hold their final meeting
on April 16, 2012, at 10:00 a.m., at Room 2702-3, C.C. Wu
Building, at 302-8 Hennessy Road, Wanchai Hong Kong.
At the meeting, Ho Sun Fung Allan, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
SELCO (HONG KONG): Annual Meetings Set for April 12
---------------------------------------------------
Members and creditors of Selco (Hong Kong) Limited will hold
their annual meetings on April 12, 2012, at 9:00 a.m., and 9:30
a.m., respectively at 22nd Floor, Prince's Building, at 10 Chater
Road, Central, in Hong Kong.
At the meeting, David R Hague, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
SHENSTONE LIMITED: Members' Final Meeting Set for April 17
----------------------------------------------------------
Members of Shenstone Limited will hold their final general
meeting on April 17, 2012, at 10:30 a.m., at 5th Floor, Jardine
House, at 1 Connaught Place, Central, in Hong Kong.
At the meeting, Leung Fung Yee Alice, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
SUPREME TASK: Sole Member' Final General Meeting Set for April 20
-----------------------------------------------------------------
Sole Member of Supreme Task Limited will hold a final general
meeting on April 20, 2012, at 10:50 a.m., at Level 28, Three
Pacific Place, at 1 Queen's Road East, in Hong Kong.
At the meeting, Kee Lap Tat Leonard, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
SYMBOL TECHNOLOGIES: Members' Final Meeting Set for April 18
------------------------------------------------------------
Members of Symbol Technologies Hong Kong Limited will hold their
final general meeting on April 18, 2012, at 10:30 a.m., at 19/F,
Tower A, Manulife Financial Centre, at 223-231 Wai Yip Street,
Kwun Tong, Kowloon, in Hong Kong.
At the meeting, John Chi Wai Wong, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
SYNTECH CHEMICALS: Members' Final Meeting Set for April 16
----------------------------------------------------------
Members of Syntech Chemicals Company Limited will hold their
final general meeting on April 16, 2012, at 10:00 a.m., at Flat
C, 4/F, Good Luck Industrial Building, at 105 How Ming Street,
Kwun Tong, Kowloon, in Hong Kong.
At the meeting, Au Wing Ip, the company's liquidator, will give a
report on the company's wind-up proceedings and property
disposal.
TOTAL ABLE: Sole Member' Final Meeting Set for April 23
-------------------------------------------------------
Sole member of Total Able Limited will hold their final meeting
on April 23, 2012, at 3:00 p.m., at Suite No. A, 11th Floor, Ritz
Plaza, at 122 Austin Road, Tsimshatsui, Kowloon, in Hong Kong.
At the meeting, Sung Mi Yin Mella, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
TRANSORIENT ORE: Members' Final Meeting Set for April 20
--------------------------------------------------------
Members of Transorient Ore Supplies Limited will hold their final
general meeting on April 20, 2012, at 4:30 p.m., at 19th Floor,
Sun Hung Kai Centre, at 30 Harbour Road, Wanchai, in Hong Kong.
At the meeting, Paul David Stuart Moyes, the company's
liquidator, will give a report on the company's wind-up
proceedings and property disposal.
URBAN FASHION: Creditors' Proofs of Debt Due March 30
-----------------------------------------------------
Creditors of Urban Fashion Management Limited, which is in
members' voluntary liquidation, are required to file their proofs
of debt by March 30, 2012, to be included in the company's
dividend distribution.
The company's liquidator is:
Osman Mohammed Arab
29/F, Caroline Centre
Lee Gardens Two
28 Yun Ping Road
Hong Kong
VISCOUNTMARINE LIMITED: Annual Meetings Set for April 12
--------------------------------------------------------
Members and creditors of Viscountmarine Limited will hold their
annual meetings on April 12, 2012, at 10:00 a.m., and 10:30 a.m.,
respectively at 22nd Floor, Prince's Building, at 10 Chater Road,
Central, in Hong Kong.
At the meeting, David R Hague, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
WAELCHLI & CO.: Hok and Boswell Step Down as Liquidators
--------------------------------------------------------
Rainier Hok Chung Lam and Anthony David Kenneth Boswell stepped
down as liquidators of Waelchli & Co. Limited on March 12, 2012.
XING QI: Creditors' Proofs of Debt Due April 16
-----------------------------------------------
Creditors of Xing Qi Shu Hua Hui Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by April 16, 2012, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on March 6, 2012.
The company's liquidator is:
Lam Ying Sui
10/F, Allied Kajima Building
138 Gloucester Road
Wanchai, Hong Kong
=========
I N D I A
=========
AE BIOFUELS: Has 5-Year License to Sell Glycerin in India
---------------------------------------------------------
Aemetis, Inc., formerly known as AE Biofuels, Inc., announced
that its Universal Biofuels Pvt. Ltd., has received a five-year
Pharmacopoeia license to expand its current refined glycerin
production to manufacture pharmaceutical grade glycerin at its
approximately 15,000 metric tons per year processing facility in
Kakanada, India.
Currently, UBPL is selling its refined glycerin into domestic
industrial chemical markets at the U.S. dollar equivalent of
approximately $800 per metric ton. The five-year license to
manufacture pharmaceutical grade glycerin enables UBPL to expand
into additional Indian industrial markets, including the large
generic and branded pharmaceutical and personal care industries.
"With the ability to manufacture, sell and distribute
pharmaceutical-grade glycerin, we are increasingly well
positioned to provide glycerin, natural oils, and renewable fuels
to a diverse range of industries and sectors with our products,"
said Sanjeev Gupta, chairman and managing director of Universal
Biofuels. "By investing in additional technology at our
facility, our bio-refinery can quickly adapt to changing customer
requirements and address both well-established and emerging
markets."
About AE Biofuels
AE Biofuels, Inc. (OTC BB: AEBF) -- http://www.aebiofuels.com/--
is a biofuels company based in Cupertino, California, developing
sustainable solutions to address the world's renewable energy
needs. The Company is commercializing its patent-pending next-
generation cellulosic ethanol technology that enables the
production of biofuels from both non-food and traditional
feedstocks. Its wholly-owned Universal Biofuels subsidiary built
and operates a nameplate 50 million gallon per year biodiesel
production facility on the east coast of India.
The Company reported a net loss of $1.72 million on $1.59 million
of sales for the three months ended Sept. 30, 2010, compared with
a net loss of $3.78 million on $4.05 million of sales for the
same period a year earlier.
BDO Seidman, LLP, in San Jose, Calif., expressed substantial
doubt about AE Biofuels' ability to continue as a going concern,
following the Company's 2009 results. The independent auditors
noted that the Company has incurred recurring losses, and has a
working capital deficit and total stockholders' deficit as of
December 31, 2009.
The Company's balance sheet at Sept. 30, 2010, showed
$20.23 million in total assets, $29.03 million in total
liabilities, all current, and a stockholders' deficit of
$8.80 million. The Company has not filed financial reports after
filing its Form 10-Q for the quarter ended Sept. 30, 2010.
AQUENT IMPEX: CRISIL Assigns 'CRISIL BB-' Rating to INR200MM Loan
-----------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable' rating to the long-
term bank facilities of Aquent Impex.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 200 CRISIL BB-/Stable
The rating reflects AI's modest financial risk profile and
susceptibility of its operating performance to offtake by key
customers, on the backdrop of intense competition. These rating
weaknesses are partially offset by the extensive experience of
AI's promoters in the chemical industry and established
relationships with suppliers and customers.
Outlook: Stable
CRISIL believes that Aquent Impex will maintain its stable
business risk profile over the medium term, backed by its
promoter's extensive industry experience and established
relationships with suppliers and customers. The outlook may be
revised to 'Positive' if the firm demonstrates significant
improvement in capital structure, while maintaining the growth in
revenues and profitability. The outlook may be revised to
'Negative' in case of deterioration in the capital structure or
sharp decline in its revenues or profitability or lengthening of
its working capital cycle.
About Aquent Impex
AI was set up as a proprietorship concern in 2005 by Mr. Indulal
Mehta, a Mumbai based entrepreneur. The operations commenced in
April 2009. The firm trades in various chemicals, such as
tackifiers, epoxy resins, thermoplastic polyurethane, and various
other technology product solutions. Mr. Indulal Mehta handles the
strategy of AI and Mr. Vishal Mehta (son of Mr. Indulal Mehta),
looks after its day-to-day operations. The firm sources the
chemicals from both India and abroad and sells them in the
domestic market. Besides its own branded product, it also
distributes products of companies like Exxonmobil Chemicals Asia
Pacific, Dexco Polymers LP., Cyctec Inc., Taiwan Sheensoon Co.
Ltd., and USI Corporation. It caters to various sectors, such as
adhesive and sealants, infrastructure, automotive components,
paint, coatings, and inks. AI's clientele includes Pidilite
Industries Ltd, Automark Technologies Pvt Ltd, Asian Paints Ltd,
and Henkel CAC India Pvt Ltd. The firm's registered office is in
Mumbai (Maharashtra).
AI reported a profit after tax (PAT) of INR14.0 million on net
sales of INR653.8 million for 2010-11 (refers to financial year,
April 1 to March 31), as against a PAT of INR5.6 million on net
sales of INR316.0 million for 2009-10.
CORE EDUCATION: Moody's Confirms 'B1' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service has confirmed the B1 corporate family
rating of Core Education & Technologies Limited.
The confirmation ends the review for downgrade initiated on
February 10, 2012 following the announcement of its proposed bond
transaction.
The rating outlook is negative.
Ratings Rationale
"The rating confirmation reflects the fact that the proposed bond
was not executed as outlined and therefore the transaction-
specific liquidity concerns -- as imposed by the proposed bond's
escrow structure -- have been alleviated," says Annalisa Di
Chiara, a Moody's Vice President and Senior Analyst.
"Additionally, projected revenue growth for the first 9 months of
2012 remains aligned with our expectations."
"The rating also continues to reflect CORE's strong market
position in the US education sector and the traction evident with
its implementation of Information and Communication Technology
projects in India," adds Ms. Di Chiara.
"The negative outlook considers the company's leverage position
and the rise in its debt-service requirements. Moody's estimates
debt of around INR11.5bn for the 12 months ended March 31, 2012,
or 20% above our initial expectations. We believe this
development reflects a capex-funded growth strategy more
aggressive than was originally incorporated in the rating," says
Ms. Di Chiara.
While leverage -- defined as gross adjusted debt/EBITDA -- should
remain below 2.5x over the next 12-18 months and in line with the
B1 rating category, the increased debt-service requirements will
result in bank covenant compliance tighter than Moody's had
expected over the next 2 testing periods -- March 2012 and
March 2013.
Still, Moody's expects CORE to be in compliance with its bank
covenants at March 31, 2012.
The company is expected to continue to generate negative free
cash flow owing to high working capital requirements and a
substantial capex program (around INR5 billion per annum) and is
therefore reliant on consistent access to domestic bank funding
to support its operations. As a number of its bank facilities are
subject to annual financial covenant tests, a breach of one of
these covenants could result in cross-defaults across the
company's debt. Furthermore, to attract additional funding to
support its growth, it must maintain adequate flexibility with
respect to its covenants.
Moody's would consider the maintenance of a 17-20% EBITDA cushion
on a rolling basis as more commensurate with a stable outlook,
given the risks associated with CORE's small revenue base,
exposure to federal and state funding, potential funding delays
from government-related projects, negative free cash flow
generation, and its overall debt-funding plan.
As such, the outlook could return to stable should the company
remain in compliance with covenants, and its operating
performance provides a more reasonable cushion -- under its bank
loan covenants -- to ensure the presence of adequate back-up
liquidity. Other credit metrics that are consistent with a stable
outlook include gross adjusted leverage in the 2.0-2.5x and
EBITDA-Capex/Interest sustained in the 1.5-2x range.
Conversely, if its performance leads to tighter liquidity or non-
compliance with any of its covenants, the ratings could be
lowered. Further negative ratings pressure would also arise if
(1) the company fails to expand effectively in India, resulting
in additional capital outlays, project delays, or payment delays
from the government, (2) renewal rates for its licensed and
content domain products decline materially, (3) it pursues a more
aggressive acquisition plan, or (4) its debt-service requirements
increase materially from expectations.
The principal methodology used in rating Core Education &
Technologies Ltd was the Global Business & Consumer Service
Industry Rating Methodology published in October 2010.
Core Education and Technologies (CORE), headquartered in India,
is a provider of technology-enabled products and solutions
primarily for the education sector.
DHARA PETROCHEMICALS: CRISIL Reaffirms 'BB-' Cash Credit Rating
---------------------------------------------------------------
CRISIL's ratings on Dhara Petrochemicals Pvt Ltd's bank
facilities continue to reflect DPPL's promoters' extensive
experience in the polymer trading business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50.0 CRISIL BB-/Stable (Reaffirmed)
Letter of Credit 65.0 CRISIL A4+ (Reaffirmed)
This rating strength is partially offset by DPPL's average
financial risk profile marked by small net worth and high total
outside liabilities to tangible net worth (TOL/TNW) ratio, and
its small scale of operations.
For arriving at the ratings, CRISIL has considered the combined
business and financial risk profiles of DPPL and DPPL's associate
concern, Dhara Industries, till March 31, 2010, and has
considered DPPL's standalone business and financial risk profiles
from April 1, 2010 onwards, as all of DI's assets and liabilities
have been transferred to DPPL with effect from April 1, 2010 -
all operations are currently conducted through DPPL, while DI has
no operations.
Outlook: Stable
CRISIL believes that DPPL will maintain its business risk profile
in the polymer trading industry supported by its promoters'
extensive industry experience and established relationship with
customers. The outlook may be revised to 'Positive' if there is a
substantial and sustained improvement in DPPL's revenues and
profitability from its current levels or there is a substantial
increase in its net worth on the back of equity infusion from
promoters. Conversely, the outlook may be revised to 'Negative'
if there is a steep decline in the company's profitability
margins or significant deterioration in its capital structure
because of larger-than-expected working capital requirements.
Update
DPPL's revenues are expected to increase by around 4 per cent to
around INR425 million in 2011-12 (refers to financial year,
April 1 to March 31); the marginal revenue growth is because of
the slowdown in the automotive industry partially offsetting the
impact of the growth of 10-12 per cent in DPPL's other end-user
industries, including electrical, pump and stationary. The
company's operating margin is estimated to remain stable at
around 2.0 per cent in 2011-12 and is expected to be constrained
over the medium term because of the trading nature of its
operations and intense competitive pressures prevailing in the
polymer trading industry.
The company's operations continue to remain moderately working
capital intensive with its gross current asset (GCA) expected to
remain at around 150 days as on March 31, 2012. The net-worth of
the company is estimated to remain low at around INR20 million as
on March 31, 2012 thereby limiting its financial flexibility to
meet any exigency. Despite moderate total indebtedness, the low
net-worth of the company is estimated to result in high TOL/TNW
ratio of around 6.5 times as on March 31, 2012.
DPPL reported a profit after tax (PAT) of INR2.6 million on net
sales of INR405 million for 2010-11, against a PAT of INR4.4
million on net sales of INR276 million for 2009-10.
About Dhara Petrochemicals
DPPL was established in January 2010 by Mr. Gaurav Thanky. The
company trades in plastic polymers. These granules are
engineering polymers and are used in the automotive, appliances,
electrical, stationary and pump industries.
Mr. Gaurav Thanky initially commenced the polymer trading
business by setting up DI in 2001. All of DI's assets and
liabilities have been transferred to DPPL with effect from
April 1, 2010; DI has no operations currently.
EXHIBITORS SYNDICATE: CRISIL Rates INR88.5MM Loan at 'CRISIL B+'
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the cash
credit facility of Exhibitors Syndicate Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 88.5 CRISIL B+/Stable
The rating reflects the benefits that ESL derives from its
promoters' extensive experience in real estate industry. This
rating strength is partially offset by ESL's exposure to risks
and cyclicality in the real estate sector and implementation-
related risks associated with its ongoing real estate project
which can affect the saleability of its project, and therefore,
its operating cash flows.
Outlook: Stable
CRISIL believes that ESL will continue to benefit over the medium
term from the extensive experience of its promoters in real
estate development. The outlook may be revised to 'Positive' in
case ESL generates revenues as expected and achieves bookings
that are higher than expected, thereby strengthening its
financial flexibility and cash flow adequacy. Conversely, the
outlook may be revised to 'Negative' if the company faces time or
cost overrun in its ongoing projects or if offtake from the
ongoing project is below expectations.
About Exhibitors Syndicate
ESL was incorporated in 1935 by Kankaria group, since then it was
engaged in film financing, marketing and distribution activities.
Since 2010, the company also ventured into real estate business;
going forward, this is expected to be the main line of business
for the company. ESL is developing a 98,500 square feet retail-
cum-commercial complex, Aria Shree, in Baruipur, District 24
South Paraganas (West Bengal) with basement and ground-plus-three
floors. Commercial operations at the site are expected to start
from the last quarter of FY 2013. ESL's promoters have developed
more than 1 million square feet of real estate in and around
Kolkata over the past 15 years.
GANAPATI FOODS: Delays in Loan Payment Cue CRISIL 'C' Ratings
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL C' rating to the bank facilities
of Ganapati Foods.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL C
Working Capital
Demand Loan 35 CRISIL C
The rating reflects Ganapati Foods' weak liquidity, which has
resulted in the firm delaying in servicing its vehicle loans (not
rated by CRISIL). The rating also reflects Ganapati Foods' below-
average financial risk profile, marked by a relatively small net
worth and weak debt protection metrics, albeit moderate gearing,
and working-capital-intensive operations. These rating weaknesses
are partially offset by the benefits that the firm derives from
its partners' experience in the cashew business.
About Ganapati Foods
Ganapati Foods was set up as a partnership firm in December 2009
by two friends, Mr. C Ravi Kumar and Mr. Surendranath Swain, in
Bhubaneswar (Orissa). The firm processes raw cashew nuts and
trades in cashew kernels domestically. Ganapati Foods operates
two of its own processing facilities in Orissa; one at Ghadaghada
Palli (near Bhubaneswar; capacity of 2400 tonnes per annum [tpa])
and the other at Khandualpur (near Puri; capacity of 1680 tpa).
Both the facilities adopt the drum roasting process for
extracting cashew kernels. The capacities are currently being
utilised at 70 per cent. The firm sells cashew kernel in Kerala
(60 per cent of turnover in 2011), Delhi (27 per cent of turnover
in 2011), Maharashtra, West Bengal Bihar, and Madhya Pradesh.
Ganapati Foods' profit after tax (PAT) is at INR5.1 million on
net sales of INR301.6 million for 2010-11 (refers to financial
year, April 1 to March 31), against a PAT of INR0.8 million on
net sales of INR34.5 million for 2009-10.
HALDIA COKE: CRISIL Rates INR480 Million Loan at 'CRISIL BB-'
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable/CRISIL A4+' ratings to
the bank facilities of Haldia Coke and Chemicals Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 480 CRISIL BB-/Stable
Letter of Credit 2,520 CRISIL A4+
The ratings reflect HCCPL's established market position with its
semi-integrated nature of operations and the support from its
parent company Shriram EPC Limited (part of the Shriram Group).
The rating also factors in HCCPL's moderate financial risk
profile marked by comfortable gearing and debt protection
measures. These rating strengths are partially offset by HCCPL's
working capital intensive nature of operations primarily due to
stretched receivables, exposure to intense competition and to the
fortunes of the end user industries.
For arriving at the ratings, CRISIL has consolidated the business
and financial risk profiles of HCCPL and its subsidiaries Ieager
Minerals Inc., USA, Tiger American Minerals Inc, USA, Ennore Coke
Limited and Wellman Coke India Limited.
Outlook: Stable
CRISIL believes that HCCPL will benefit over the medium term from
its semi-integrated nature of operations and healthy capital
structure. The outlook may be revised to 'Positive' in case the
company improves its working capital management, supported by an
improvement in realisation of receivables. Conversely, the
outlook may be revised to 'Negative' if the company's receivable
collection deteriorates further or if it undertakes a large debt-
funded capital expenditure programme, or significant decline in
revenues and margins.
About Haldia Coke
Incorporated as Haldia Coke and Chemicals Ltd in 2004, HCCPL was
reconstituted as a private limited company effective from
July 2010. HCCPL is promoted by Shriram Group (held by Shriram
EPC Limited holding 48 per cent, Shriram Auto Finance Limited
holding 16 per cent and the remaining held by other Shriram Group
entities) and is engaged in trading of metallurgical coke and
coal. HCCPL also operates captive mines through its subsidiaries
IMI, USA and TAMI, USA. HCCPL is also the holding company of
Ennore Coke Limited (ECL) and Wellman Coke India Limited (WCIL)
which is enagaged in manufacturing of met coke with their
manufacturing facilities located in Haldia, West Bengal and
Nergundi, Orissa respectively. ECL and WCIL have an installed
capacity of 130,000 tonnes per annum (tpa) and 80,000 tpa,
respectively. ECL's manufacturing facilities are also integrated
with a 12-megawatt co-generation power plant (through waste heat
recovery). Apart from manufacture of coking coal, ECL and WCIL
derive close to 80 per cent of their revenues from trading of
coking coal and coal. The company's daily operations are managed
by Mr. M R Rajagopal.
JAGUAR LAND: Fitch Rates New Senior Unsecured Notes at 'BB-(exp)'
-----------------------------------------------------------------
Fitch Ratings has assigned Jaguar Land Rover PLC's proposed
senior unsecured notes issue a 'BB-(exp)' expected rating. The
final rating is contingent upon the receipt of final documents
conforming to information already received. The notes are
expected to rank equally with JLR's outstanding USD820 million
and GBP500 million senior unsecured notes, which have also been
affirmed at 'BB-'
Fitch has also affirmed JLR's and its India-based parent's --
Tata Motors Ltd -- Foreign Currency Issuer Default Ratings (IDRs)
at 'BB-' and 'BB', respectively, both with a Stable Outlook.
Using the top-down approach under its "Parent and Subsidiary
Rating Linkage Criteria", Fitch continues to rate JLR at a notch
below TML's rating to reflect strong linkages between the two
entities and JLR's strategic importance to TML, as reflected by
its large contribution to TML's consolidated revenues and EBITDA
(around 70% and 80%, respectively, in 9MFY12), and the
direct/indirect support provided by TML since the acquisition in
FY09.
JLR's ratings factor in strong revenue growth of 31% yoy to
GBP9,386.9m and high operating profitability of 16.8% (9MFY11:
16.5%) in the nine months ended Dec. 31, 2011 (9MFY12), driven by
the high volumes of Land Rover vehicles and increased
contribution from emerging markets. TML (standalone) registered
15.7% yoy revenue growth to INR379,158m in this period, although
EBITDA margins declined to 7.5% from 10.8% due to higher input
costs and pricing pressures.
On a consolidated basis, despite a significant increase in debt
in FY12 (partly attributed to JLR's notes issuances), Fitch
expects TML's leverage (net adjusted debt/operating EBITDA) to
remain below 1.6x at FYE12. This is due to JLR's large cash
balances from internal accruals and the unused portion of its
notes issuances. Despite higher interest costs in the year,
Fitch expects TML's FY12 coverage metrics to remain comfortable
at over 7.5x in line with its 9MFY12 performance.
TML's rating factors in a one-notch uplift for potential support
from the Tata Group. Any weakening of linkages between the group
and TML would be negative for the rating. Similarly, any
weakening of linkage between TML and JLR would be negative for
JLR's ratings.
Also, consolidated financial leverage (excluding TML's financial
subsidiary -- Tata Motor Finance Limited) exceeding 2.0x on a
sustained basis due to reduced sales or profitability, or higher-
than-expected debt levels would be negative for TML's unsupported
rating.
Positive rating action could result from a substantial
improvement in JLR's geographic and product diversification,
together with successful product development plans. A
significant improvement in market share in the smaller luxury
cars and SUVs segment and higher-than-expected growth in
traditional markets on a sustained basis while maintaining low
leverage would also be positive rating guidelines.
For FY11, on a consolidated basis, TML reported revenues of
INR1,231.3bn (FY10: INR925.2bn), an EBITDA of INR177.8bn
(INR86.1bn), EBITDA gross interest coverage of 8.69x (3.85x) and
a net adjusted debt/EBITDA of 1.39x (3.37x). During the same
period, JLR reported revenues of GBP9,870.7m (GBP6,527.2m), an
EBITDA of GBP1,465.3m (GBP321.5m), EBITDA gross interest coverage
of 44.27x (6.07x) and a net adjusted debt/EBITDA of 0.35x
(2.13x).
JAGUAR LAND ROVER: Moody's Rates GBP500-Mil. Senior Notes 'B1'
--------------------------------------------------------------
Moody's Investors Service has assigned a B1/loss-given default
(LGD) 3 rating to Jaguar Land Rover PLC's GBP500 million worth of
senior unsecured notes due 2020. The notes are guaranteed on a
senior unsecured basis by JLR's key operating subsidiaries Jaguar
Cars Limited, Land Rover, Jaguar Land Rover North America, LLC,
Land Rover Exports Limited and Jaguar Cars Exports Limited.
Moody's current ratings on Jaguar Land Rover Plc and its
affiliates are:
Long-Term Corporate Family Ratings (domestic and foreign
currency) of B1
Probability of Default ratings of B1
Senior Unsecured (domestic and foreign currency) ratings of B1;
47 - LGD3
Tata Motors Limited
Long-Term Corporate Family Ratings (domestic currency) of Ba3
Ratings Rationale
JLR's B1 corporate family rating reflects: (i) its small scale as
a niche player with a currently limited product range and
materially less financial strengths than other premium car
manufacturers; (ii) the strong focus on the mature markets of
Europe and North America (together 67% of unit sales) and to some
extent offset by its exposure to the growing Chinese market (17%
of unit sales); (iii) challenges to meet the required emission
and fuel consumption levels in Europe and the US for its model
range; (iv) the expectation of a sizeable increase in capex and
research & development expenditure for the envisaged model
expansion, which will burden free cash flow generation in the
short to medium term, hence the current bond issue will support
the funding requirements of JLR ; (v) the cyclical industry with
high fixed costs; (vi) a high foreign exchange rate exposure; and
(vii) the limited track record of growth and profitability.
However, JLR's B1 corporate family rating also reflects certain
positives: (i) the company's strong brand names and design teams,
which JLR can lever for the launch of new products; (ii) a
moderate leverage of 1.6x adjusted debt/ EBITDA in FYE 2010/11
and (iii) the commitment of its sole shareholder Tata Motors to
support Jaguar Land Rover.
The rating benefits from Moody's understanding that JLR's
ultimate parent Tata Motors Limited ("TML") will continue to
support the business plan and financial standing of JLR in line
with previous practice. Although, there is no legal obligation to
back the debt of JLR, Moody's nonetheless gains some comfort from
the past when TML converted GBP1.0 billion of preference shares
(treated as debt by Moody's) in JLR into equity (ordinary
shares). The strategic importance and size of JLR relative to TML
are strong arguments in Moody's view for TML also to support JLR
in the future should such need become necessary. Moody's notes
that for the nine month period April to December 2011, JLR
generated around 70% of consolidated revenues and about 80% of
consolidated reported EBITDA and thus is of considerable
strategic importance to the group.
For the first nine month April-December 2011, JLR sold approx.
216,000 units, an increase of 22% compared to the same period in
the previous year and generated revenues of nearly GBP9.4 billion
(+31% yoy). Reported profit before tax increased by 20% to GBP976
million over the nine month period 2011 compared with the same
period 2010.
The stable outlook incorporates Moody's expectation that (i) JLR
will be able to successfully execute its product and geographic
expansion plan and; (ii) JLR receives the respective consumer's
acceptance of its products; (iii) negative free cash flow will be
less than GBP500 million p.a. for the next two years (which is
more negative than JLR's expectation) and resulting in a only
moderate increase in debt levels and financial leverage compared
to FY2011 with adjusted Debt/EBITDA anticipated to remain below
2.5x.
What Could Change the Rating UP/Down
The rating could come under pressure if JLR's negative free cash
flow exceeded GBP500 million p.a. for the next two years with a
deterioration of leverage to above 2.5x gross adjusted debt/
EBITDA on a sustainable basis.
Upward pressure could result if JLR was able to maintain a gross
adjusted debt/ EBITDA ratio below 2.0x and was able to generate
positive free cash flows on a sustainable basis.
JLR has a good liquidity profile over the next 12 months. As of
December 31, 2011 the company reported available cash and cash
equivalents of around GBP1.7 billion. Together with its undrawn
committed revolving credit facilities of GBP610 million and the
anticipated funds generated from operations this should be
sufficient to cover the next 12 months expected cash uses
including capex, debt maturities, cash for day-to-day operations
and working capital needs.
The principal methodology used in rating Jaguar Land Rover Plc
was the Global Automobile Manufacture Industry Methodology,
published June 2011. Other methodologies used include Loss Given
Default for Speculative Grade Issuers in the US, Canada, and
EMEA, published June 2009.
Jaguar Land Rover, domiciled in Coventry, UK is a manufacturer of
passenger cars under the Jaguar and Land Rover brands. JLR
operates five sites in the UK, thereof three major production
facilities and two advanced design and engineering facilities. In
financial year ending (FYE) March 2011, JLR sold 243,621 units
with the large majority attributable to Land Rover and generated
revenues of approx. GBP9.9 billion. In terms of geographic
diversification in the first nine months ended December 31, 2011,
the company generates the majority of volumes in Europe (42% of
unit sales), North America (19%) and China (17%).
KUSHAL TIMBER: CRISIL Puts 'CRISIL B' Rating on INR40MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to
the bank facilities of Kushal Timber Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL B/Stable
Letter of Credit 260 CRISIL A4
The ratings reflect KTPL's weak financial risk profile, marked by
high total outside liabilities to tangible net worth (TOL/TNW)
ratio and weak debt protection metrics, and its exposure to
inventory and foreign exchange risk. These weaknesses are
partially offset by the extensive experience of KTPL's promoters
in the timber business and established distribution network .
Outlook: Stable
CRISIL believes that KTPL will maintain its business risk
profile, backed by its promoters' industry experience, over the
medium term. Its financial risk profile, marked by high TOL/TNW
and weak debt protection metrics, is, however, expected to remain
weak over the medium term, on account of low net worth and high
working capital requirements. The outlook may be revised to
'Positive' if there is improvement in KTPL's working capital
management, leading to better financial flexibility and increase
in net worth. Conversely, the outlook may be revised to
'Negative' if KTPL's financial risk profile deteriorates
significantly because of significant borrowings for capital
expenditure programmes and working capital requirements.
About Kushal Timber
KTPL was incorporated in 2003 with the merger of Kushal Timber
Traders and Garg Timber Trader. It is owned and managed by
Mr. Anant Ram Aggarwal and Mr. Pritam Kumar. KTPL trades in
timber. The company imports teak wood timber (round logs), pine
logs, and Malaysian round logs and sells them to various
wholesalers, distributors, and retailers in the domestic market.
KTPL reported a net profit of INR2.9 million on net sales of
INR595 million for 2010-11 (refers to financial year, April 1 to
March 31), against a net profit of INR1.5 million on net sales of
INR476 million for 2009-10.
LANDMARK DAIRY: CRISIL Rates INR52.5MM Loans 'CRISIL B+'
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facilities of Landmark Dairy Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2.5 CRISIL B+/Stable
Term Loan 50 CRISIL B+/Stable
The rating reflects LDPL's limited track record, small scale of
operations in fragmented industry, and exposure to government
regulations and epidemic-related factors. These rating weaknesses
are partially offset by LDPL's efficient working capital
management leading to moderate financial risk profile.
Outlook: Stable
CRISIL believes that LDPL will benefit over the medium term from
its efficient working capital management. The outlook may be
revised to 'Positive' if the company significantly increases its
scale of operations while maintaining its existing financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
LDPL's financial risk profile deteriorates, most likely because
of large debt-funded capital expenditure or significant increase
in working capital, leading to large incremental bank borrowings.
About Landmark Dairy
LDPL was incorporated by Mr. Amit Kumar and his family members in
August 2010, but the company started commercial production only
in March 2011. LDPL is engaged in dairy farming in Delhi. It has
around 500 cows as on date, of which around 85 per cent are
milking cows.
The rating reflects LDPL's limited track record, small scale of
operations in fragmented industry, and exposure to government
regulations and epidemic-related factors. These rating weaknesses
are partially offset by LDPL's efficient working capital
management leading to moderate financial risk profile.
Outlook: Stable
CRISIL believes that LDPL will benefit over the medium term from
its efficient working capital management. The outlook may be
revised to 'Positive' if the company significantly increases its
scale of operations while maintaining its existing financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
LDPL's financial risk profile deteriorates, most likely because
of large debt-funded capital expenditure or significant increase
in working capital, leading to large incremental bank borrowings.
About Landmark Dairy
LDPL was incorporated by Mr. Amit Kumar and his family members in
August 2010, but the company started commercial production only
in March 2011. LDPL is engaged in dairy farming in Delhi. It has
around 500 cows as on date, of which around 85 per cent are
milking cows.
MVM HANDICRAFTS: CRISIL Rates INR155.7MM Loans 'CRISIL B+'
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of MVM Handicrafts Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 61 CRISIL B+/Stable
Term Loan 94.7 CRISIL B+/Stable
The rating reflects MVM's average financial risk profile, marked
by high gearing and modest net worth, working-capital-intensive
operations, vulnerability to volatility in raw material prices
and foreign exchange rates, and modest scale of operations in a
fragmented stainless steel utensils industry. These rating
weaknesses are partially offset by the extensive industry
experience of MVM's promoters.
Outlook: Stable
CRISIL believes that MVM will continue to benefit over the medium
term from its promoters' extensive experience in the stainless
steel utensils industry. The outlook may be revised to 'Positive'
if the company's scale of operations and profitability improve
substantially due to enhanced capacity, leading to higher-than-
expected cash accruals and liquidity. Conversely, the outlook may
be revised to 'Negative' in case of lower-than-expected cash
accruals or higher-than-expected working capital requirements or
debt-funded capital expenditure, leading to stretched liquidity.
About MVM Handicrafts
Incorporated in 2005, MVM manufactures stainless steel utensils
made from stainless steel bars and sheets. Promoted by Mr. Vipin
Dutt Sharma and his family members, the company's manufacturing
unit in Noida (Uttar Pradesh [UP]) has capacity of 840 tonnes per
annum, expected to enhance to 1140 tonnes per annum in 2012-13.
Around 80 per cent of MVM's revenues are generated through sale
of branded products in the domestic market and the balance 20 per
cent through sale in the export market. The company's exports are
primarily to countries in Europe and the USA. MVM sell its
products through five distributors covering Delhi, UP, and
Punjab. The company sells its products in the domestic market
under the brand, Allure.
P NARASIMHA: CRISIL Assigns 'CRISIL BB-' Rating to INR65MM Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable/CRISIL A4+' ratings to
the bank facilities of P Narasimha Rao & Company. The ratings
reflect the extensive experience of PNRC's promoters in the civil
construction industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long-Term 65 CRISIL BB-/Stable
Bank Loan Facility
Bank Guarantee 40 CRISIL A4+
Cash Credit 25 CRISIL BB-/Stable
This rating strength is partially offset by the firm's modest
scale of operations in the intensely competitive civil
construction industry, and working-capital-intensive nature of
the activity.
Outlook: Stable
CRISIL believes that PNRC will continue to benefit from its
promoters' extensive experience in the civil construction
industry. The outlook may be revised to 'Positive' if the firm
reports substantial growth in its scale of operations and
profitability, while maintaining its working capital cycle. The
outlook may be revised to 'Negative' if PNRC reports
deterioration in its financial risk profile on account of a steep
decline in its revenues or profitability or due to further
lengthening of its operating cycle.
About P Narasimha Rao
P Narasimha Rao and Co., a partnership firm established in 2004,
is a civil contractor engaged in construction of roads and
bridges. The firm also undertakes contract work for the railways
which include laying and maintenance of railway tracks. The firm
was established by Mr. P Narasimha Rao along with his family
members. The firm is currently managed by Mr. P Narasimha Rao and
his son Mr. Jaganmohan Rao and has focussed on projects in Andhra
Pradesh.
PNRC reported a profit after tax (PAT) of INR6.67 million on net
sales of INR171.65 million for 2010-11 (refers to financial year,
April 1 to March 31), as against a PAT of INR5.4 million on net
sales of INR123.77 million for 2009-10.
PREET REMEDIES: CRISIL Puts 'CRISIL BB+' Rating on INR10MM Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB+/Stable/CRISIL A4+' ratings to
the bank facilities of Preet Remedies Pvt Ltd, part of the Preet
group.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 10 CRISIL BB+/Stable
Bill Discounting 15 CRISIL A4+
Cash Credit 60 CRISIL BB+/Stable
The ratings reflect the Preet group's above-average financial
risk profile, marked by a low gearing and adequate debt
protection metrics, and the benefits that the Preet group derives
from its promoters' extensive experience and its established
position in the pharmaceutical industry. These rating strengths
are partially offset by the group's working-capital-intensive
operations.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of PRPL with those of its group entities,
Quixotic Healthcare, Alpha Products, and Zen Labs India Pvt Ltd.
This is because these entities, together referred to as the Preet
group, have significant intra-group business and financial
linkages. Zen is the marketing arm for QH, Alpha, and PRPL, and
procures almost all its goods from these group concerns. Also,
PRPL is a partner in Alpha, with investment of around INR23
million as on March 31, 2011. The entities also support each
other; the support includes extended credit period to Zen, and
advance payments to Alpha as it is a new company.
Outlook: Stable
CRISIL believes that the Preet group will maintain its above-
average financial risk profile, supported by stable profitability
and cash accruals, and will continue to benefit from its
established position and track record, over the medium term. The
outlook may be revised to 'Positive' in case the group reports
significant increase in its scale of operations, while it
maintains its profitability and financial risk profile.
Conversely, the outlook may be revised to 'Negative' in case the
Preet group undertakes any larger-than-expected, debt-funded
capital expenditure programme, or reports capital withdrawal by
the promoters or substantial decline in its profitability.
About the Group
PRPL was set up in 2005 by Mr. Sanjeev Singhal, Mr. Satish
Singhal, and Mr. Harpreet Singh. The company manufactures
pharmaceutical formulations for tablets, capsules, ointments, and
lotions. It was earlier engaged only in contract manufacturing,
but has recently started marketing its products under its own
brand name through its group entity, Zen. Prior to PRPL, the
promoters were engaged in similar business through other
proprietorship concerns. The product profile includes
pharmaceutical products such as antibiotics, anti-allergics,
analgesics, anti-tuberculosis, and cardiology.
QH, set up in 2007, manufactures pharmaceuticals formulations
including cough syrups, antibiotics, analgesics, eye and ear
drops, and tonics. Alpha, set up in 2009, is a partnership firm;
it manufactures pharmaceuticals formulations such as multi-
vitamins. Zen, set up in 2008, is the marketing arm for PRPL, QH,
and Alpha.
PRPL reported a profit after tax (PAT) of INR 4.7 million on net
sales of INR 359.3 million for 2010-11 (refers to financial year,
April 1 to March 31), as against a PAT of INR 18.3 million on net
sales of INR 464.9 million for 2009-10.
RAY RAYON: Inadequate Info Cues Fitch to Migrate Ratings
--------------------------------------------------------
Fitch Ratings has migrated India-based Raj Rayon Limited's
National Long-Term 'Fitch BB+(ind)' rating with Stable Outlook to
the non-monitored category. This rating will now appear as
'Fitch BB+(ind)nm' on the agency's website.
The ratings have been migrated to the non-monitored category due
to lack of adequate information, and Fitch will no longer provide
ratings or analytical coverage of RRL. The ratings will remain
in the non-monitored category for a period of six months and be
withdrawn at the end of that period. However, in the event the
issuer starts furnishing information during this six-month
period, the ratings could be re-instated and will be communicated
through a Rating Action Commentary.
Fitch has also classified RRL's following bank loan ratings as
non-monitored:
-- Outstanding INR695.1m term loans: migrated to 'Fitch BB+
(ind)nm' from 'Fitch BB+(ind)'
-- INR500m fund based limits: migrated to 'Fitch BB+(ind)nm'
from 'Fitch BB+(ind)'
-- INR320m non-fund-based limits: migrated to
'Fitch A4+(ind)nm' from 'Fitch A4+(ind)'
R.L.CONSTRUCTION: CRISIL Reaffirms 'C' Rating on INR60MM Loan
-------------------------------------------------------------
CRISIL ratings on the bank facilities of R.L. Construction
continue to reflect RLC's constrained liquidity because of its
large working capital requirements, resulting in instances of
delay by RLC in servicing its hire-purchase loan (not rated by
CRISIL), and geographical and product segment concentration.
These rating weaknesses are partially offset by the experience of
RLC's promoters in the civil construction industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 60.0 CRISIL A4 (Reaffirmed)
Cash Credit 15.0 CRISIL C (Reaffirmed)
Update
RLC reported revenues of INR125.5 million for the nine months
ended December 31, 2011. Its sales are expected to be around
INR200 million for 2011-12 (refers to financial year, April 1 to
March 31). The firm has an order book of INR1 billion tom INR1.2
billion as on date, which provides revenue visibility for the
medium term. Most of the revenues of the firm come from Northern
Frontier Railway (NFR) and any delay in payments by NFR adversely
affects RLC's liquidity. RLC's delays in servicing the hire-
purchase loans have been caused by delayed payments by NFR. RLC's
operating margin improved marginally to 11.22 per cent in 2010-11
from 10.56 per cent in 2009-10.
RLC reported a profit after tax (PAT) of INR15 million on net
sales of INR268 million for 2010-11, against a PAT of INR12
million on net sales of INR233 million for 2009-10.
About R.L.Construction
RLC, based in Silchar (Assam), was set up as a partnership firm
by three friends, Mr. Gouranga Paul, Mr. Mukul Paul, and Mr.
Nirmal Banik, in 1999. The firm is a Class A+ civil contractor
and undertakes civil construction projects for the Indian
Railways, primarily North Eastern Indian Railways. RLC undertakes
earthwork, construction of side drains, site development,
strengthening of bridges, and construction of minor bridges. The
firm bids for tenders issued by the North Eastern Indian
Railways.
SBIW STEELS: Delay in Loan Payment Cues CRISIL Junk Ratings
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL D' ratings to the bank facilities
of SBIW Steels Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 80.7 CRISIL D
Bank Guarantee 40 CRISIL D
Cash Credit 40 CRISIL D
The ratings reflect instances of delay by SBIW in servicing its
term debt installment and interest; the delays have been caused
by the company's weak liquidity.
SBIW also has a weak financial risk profile, marked by a negative
net worth and weak capital structure; short track record and
small scale of operations; moreover, it has losses at the
operational level and is vulnerable to volatility in raw material
prices. The company, however, benefits from its promoters'
extensive industry experience.
About SBIW Steels
SBIW was set up in 2006 by Mr. Jagdish P Goel and his family and
friends. The company manufactures and processes thermo-
mechanically treated bars from mild steel ingots and billets. Its
plant, located in West Bengal, has capacity of 60,000 tonnes per
annum and has been operational since 2009-10 (refers to financial
year, April 1 to March 31).
SBIW has reported a loss of INR 59.9 million on net sales of INR
180.3 million for 2010-11, as against a loss of INR 19.7 million
on net sales of INR 10.8 million for 2009-10.
SENTINI BEVERAGES: CRISIL Puts 'BB' Rating on INR300MM Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL BB/Stable/CRISIL A4+' ratings to
the bank facilities of Sentini Beverages Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 300 CRISIL BB/Stable
Bank Guarantee 150 CRISIL A4+
Cash Credit 40 CRISIL BB/Stable
The ratings reflect SBPL's healthy customer relationships with
established branded liquor manufacturers, its healthy financial
risk profile, marked by moderate gearing, net worth, and healthy
debt protection metrics and the healthy demand prospects for
Indian-made foreign liquor (IMFL). These rating strengths are
partially offset by SBPL's limited track record of operations in
the IMFL bottling segment, its geographical concentration in
revenue profile, and susceptibility to regulatory risks in the
IMFL sector.
Outlook: Stable
CRISIL believes that SBPL will benefit over the medium term from
its healthy tie-ups with established branded liquor manufacturers
and healthy demand prospects for IMFL in Andhra Pradesh (AP). The
outlook may be revised to 'Positive' if the company improves its
revenues and margins on a sustainable basis. Conversely, the
outlook may be revised to 'Negative' if any regulatory changes
adversely affect SBPL's revenues and margins or if the company
undertakes a large debt-funded capital expenditure programme,
leading to weakening in its capital structure, or if SBPL makes
significant investments in unrelated businesses.
About Sentini Beverages
Incorporated in 2008 as a private limited company, SBPL is
engaged in bottling IMFL. Based in Hyderabad (AP), SBPL has an
installed capacity of 20 million litres per annum. The company is
a part of the Sentini group of companies promoted by Mr. T
Seshagiri Rao, who has around four decades of experience across
the ceramic tiles industry, distillery business, and information
technology (IT)/IT-enabled services. SBL commenced commercial
operations during August 2011.
SHAMVIK GLASSTECH: CRISIL Puts 'B+' Rating on INR345MM Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Shamvik Glasstech Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 345 CRISIL B+/Stable
Term Loan 155 CRISIL B+/Stable
The rating reflects SGPL's below-average financial risk profile,
marked by low interest coverage ratio and high gearing; exposure
to risks associated with the slowdown in demand for passenger
vehicles and to competition from other car dealers. These rating
weaknesses are partially offset by diversification in SGPL's
business risk profile and the support that its operating margin
gets from its manufacturing segment.
Outlook: Stable
CRISIL believes that SGPL will benefit over the medium term from
its high profitability in the glass manufacturing and workshop
segments and promoters' extensive experience in manufacturing
machinery and spares for the glass industry. The outlook may be
revised to 'Positive' if SGPL improves its working capital cycle
(in the manufacturing segment), leading to lower bank debt
requirements, or if there is significant equity infusion by the
promoters, leading to improvement in its capital structure.
Conversely, the outlook may be revised to 'Negative' if SGPL's
working capital requirements get stretched or if there is any
significant debt-funded capex programme undertaken by the
company, leading to weakening in its financial risk profile.
About Shamvik Glasstech
SGPL was incorporated in 1973 in collaboration with Maul
Technology of the USA. The company was then known as Maul Eastern
Ltd. In 1993, the present management took over all the shares
from Maul Technology and renamed the company as SGPL. The company
was originally promoted by Mr. Shamvik Sunder Munshi and his
wife, Mrs. Kalpana Munshi, who was a non-active director;
however, after his demise in the 1990s, his son, Mr. Vikram
Munshi, became the director. In 2010, his wife, Mrs. Madhvi
Munshi, joined SGPL as a director. SGPL manufactures machineries
and spares used for manufacturing glass and also has dealership
for Tata Motors Ltd.
For 2010-11 (refers to financial year, April 1 to March 31), SGPL
reported a net profit of INR12.8 million on net sales of INR707.3
million, as against a net profit of INR3.5 million on net sales
of INR98.3 million for 2009-10.
SURYA PHARMA: Delays in Loan Payment Cue CRISIL Junk Ratings
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Surya
Pharmaceutical Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
BB+/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8,750 CRISIL D
Export Packing Credit 500 CRISIL D
Proposed Short-Term 800 CRISIL D
Bank Loan Facility
Proposed Term Loan 406.8 CRISIL D
Short-Term Loan 1,000 CRISIL D
Term Loan 2,843.2 CRISIL D
The rating downgrade reflects the fact that SPL is currently
delaying in meeting its term loan obligations. Besides the credit
strengths and weaknesses, the ratings were predicated on SPL's
management's declaration that the company was meeting, and
continued to meet, all its financial obligations on a timely
basis. However, CRISIL has now been informed that SPL has been
delaying in servicing its debt for some time, which indicates
that the company's management had provided incorrect declarations
to CRISIL regarding timely debt servicing.
The ratings continue to reflect SPL's moderate financial risk
profile marked by high gearing, and moderate debt protection
metrics. The ratings also reflect the company's working-capital-
intensive operations, and exposure to pricing pressures because
of intense competition in the international generics market.
These rating weaknesses are partially offset by SPL's established
market position in the active pharmaceutical ingredients (API)
and menthol products businesses.
About Surya Pharmaceutical
SPL, incorporated in 1992, is promoted by Mr. Rajiv Goyal. It
manufactures pharmaceuticals, mainly active pharmaceutical
ingredients (APIs), and menthol products. Within the
pharmaceuticals segment, the company manufactures formulations
and phytochemicals. SPL has five manufacturing facilities across
Punjab, Himachal Pradesh, and Jammu & Kashmir. It is one of the
top five manufacturers of penicillin-based and cephalosporin-
based APIs in India and the second-largest exporter of menthol
and mint derivatives products from India. In 2010-11 (refers to
financial year, April 1 to March 31), SPL generated 53 per cent
of its revenues from the pharmaceuticals segment and 47 per cent
from the menthol and mint derivatives segment.
For 2010-11, SPL reported a profit after tax (PAT) of INR989.1
million on net sales of INR16.0 billion, against a PAT of
INR755.4 million on net sales of INR11.3 billion for the previous
year.
VIRTUAL GALAXY: CRISIL Rates INR72.6MM Loans 'CRISIL B+'
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
loan facilities of Virtual Galaxy Infotech Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30.0 CRISIL B+/Stable
Term Loan 42.6 CRISIL B+/Stable
The rating reflects VGIPL's small scale of operations in the
intensely competitive software development industry, large
working capital requirements, and moderate financial risk profile
marked by a small net worth. These rating weaknesses are
partially offset by the extensive experience of VGIPL's promoters
in the software development industry.
Outlook: Stable
CRISIL believes that VGIPL will benefit over the medium term from
its promoters' experience in the software development industry.
The outlook may be revised to 'Positive' in case the company
substantially scales up its operations while it maintains its
operating margin, leading to higher cash accruals and larger net
worth. Conversely, the outlook may be revised to 'Negative' if
VGIPL undertakes a larger-than-expected capital expenditure
programme, thereby deteriorating its financial risk profile, or
in case of larger-than-expected, incremental working capital
requirements.
About Virtual Galaxy
Incorporated in 1997, VGIPL was founded by a team of technocrats
led by Mr. Avinash Shende and Mr. Sachin Pande. The company is a
system integrator and provides software as well as hardware
solutions to its clients. It provides core banking solutions to
the banking and financial services industry and enterprise
resource planning solution development, distribution, and
installation for various manufacturing industries. VGIPL is an
ISO 27001:2005 and ISO 9001:2000 certified company.
For 2010-11 (refers to financial year, April 1 to March 31),
VGIPL's profit after tax is estimated at INR4.2 million (INR3.6
million for the previous year) on net sales of INR7.0 billion
(INR6.5 billion for the previous year).
WANBURY LTD: Inadequate Info Cues Fitch to Migrate Ratings
----------------------------------------------------------
Fitch Ratings has migrated India-based Wanbury Ltd's 'Fitch
D(ind)' National Long-Term rating to the non-monitored category.
This rating will now appear as 'Fitch D(ind)nm' on the agency's
website.
The ratings have been migrated to the non-monitored category due
to lack of adequate information, and Fitch will no longer provide
ratings or analytical coverage of Wanbury. The ratings will
remain in the non-monitored category for a period of six months
and be withdrawn at the end of that period. However, in the
event the issuer starts furnishing information during this six-
month period, the ratings could be re-instated and will be
communicated through a rating action commentary.
Fitch has also classified Wanbury's following bank loan ratings
as non-monitored:
-- INR2,852m long-term bank loans: migrated to 'Fitch D(ind)nm'
from 'Fitch D(ind)'
-- INR410m fund-based cash credit limits: migrated to 'Fitch
D(ind)nm' from 'Fitch D(ind)'
-- INR140m fund-based limits: migrated to 'Fitch D(ind)nm' from
'Fitch D(ind)'
-- INR302m non-fund based limits: migrated to 'Fitch D(ind)nm'
from 'Fitch D(ind)'
ZEAL TEX: CRISIL Assigns 'CRISIL B' Rating to INR34.5MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to
the bank facilities of Zeal Tex Fashion Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long-Term 34.5 CRISIL B/Stable
Bank Loan Facility
Cash Credit 20 CRISIL B/Stable
Letter of Credit 40 CRISIL A4
The ratings reflect ZFPL's modest scale of operations and weak
financial risk profile marked by a modest networth base and high
gearing. These rating weaknesses are partially offset by the
extensive industry experience of the company's promoters.
Outlook: Stable
CRISIL believes that ZFPL will continue to benefit over the
medium term from its promoters' extensive experience in the
garments industry. The outlook may be revised to 'Positive' if
the company reports significantly higher than expected revenues
and accruals leading to an improvement in debt servicing
indicators. Conversely, the outlook may be revised to 'Negative'
in case there is significant deterioration in its profitability
or a stretch in its working capital cycle, leading to
deterioration in debt protection metrics or the company or the
company undertakes a large, debt-funded capital expenditure
(capex).
About Zeal Tex
Initially started in 1995 as a partnership firm of Mr. Samir Das
and his wife, and later converted to a private limited company in
2008, ZFPL manufactures jute and cotton bags, and scarves and
stoles as well as T-shirts and shorts for men and women. The
company exports jute and cotton bags and scarves and stoles to
Europe, Japan, Chile, and South Korea; it sells the T-shirts and
shorts in the domestic market in Kolkata (West Bengal). The
company's manufacturing facilities are in Kolkata and Srirampur
(West Bengal). Mr. Das handles the day to day operations of the
company.
ZFPL reported a profit after tax (PAT) of INR0.8 million on net
sales of INR113 million for 2010-11 (refers to financial year,
April 1 to March 31), against a PAT of INR0.3 million on net
sales of INR32 million for 2009-10.
=================
I N D O N E S I A
=================
DAVOMAS ABADI: S&P Cuts Corporate Credit Rating to 'CC'
-------------------------------------------------------
Standard & Poor's Ratings Services lowered the long-term
corporate credit rating on Indonesia-based cocoa processor PT
Davomas Abadi Tbk. to 'CC' from 'CCC+'. "At the same time, we
lowered the rating on Davomas' senior secured notes maturing in
2014 to 'CC' from 'CCC+'. We subsequently withdrew all the
ratings because we no longer have access to the company's
management," S&P said.
"We had placed the ratings on CreditWatch with negative
implications on March 9, 2012. At the time of the rating
withdrawal, the outlook was negative," S&P said.
"The rating actions followed our inability to confirm whether
Davomas paid a $3.561 million coupon on its senior secured notes
due March 7, 2012. In our view, it is likely that a payment
default has occurred. Without access to management, we no longer
have visibility over the company's intentions toward bond
payments or clarity over its current financial position," S&P
said.
The Indonesian stock exchange suspended trading in Davomas shares
on March 9, 2012.
=========
J A P A N
=========
AIJ INVESTMENT: Two Directors May Face Criminal Probe
-----------------------------------------------------
Bloomberg News reports that Japan's Securities and Exchange
Surveillance Commission said Friday that two directors of AIJ
Investment Advisors Co may face a criminal probe for their role
in the case.
Bloomberg relates that the SESC said AIJ President Kazuhiko
Asakawa, and director Shigeko Takahashi allegedly conspired to
conceal trading losses and fabricate reports on the assets
managed to attract pension funds. The firm oversaw
JPY145.8 billion (US$1.8 billion) of clients' money and lost
JPY109.2 billion from derivatives trades directed by Mr. Asakawa
over nine years, the commission, as cited by Bloomberg, said.
According to the report, regulators on Friday searched AIJ's
Tokyo headquarters and revoked its registration. They ordered
brokerage ITM Securities Co. to halt business for six months for
allegedly selling the funds with the knowledge that reports of
their value were false, Bloomberg relays.
The SESC said Mr. Asakawa steered AIJ's derivatives trading,
which centered on Nikkei 225 options and Japanese government bond
futures, Bloomberg reports. Wrong-way bets on bond interest
rates fueled the losses, an SESC official told Bloomberg. Some
of the instruments were traded through an unidentified brokerage
firm in Singapore, Bloomberg relays citing the SESC.
Bloomberg relates the commission said assets remaining at AIJ
include JPY8.1 billion in cash held in Japan and Hong Kong. The
commission, citing figures from an unnamed custodian, said AIJ
purported to manage JPY209 billion in a fund as of March 2011,
when its true assets amounted to JPY25.1 billion, according to
Bloomberg.
Regulators are probing whether Mr. Asakawa hid money in secret
bank accounts, a government official with knowledge of the matter
told Bloomberg.
According to Bloomberg, the SESC said convictions following any
criminal proceedings would involve a maximum three years in
prison or a fine of up to JPY3 million.
The commission said AIJ and ITM gave false reports to at least 66
pensions, Bloomberg relays. Through affiliates, AIJ owns about
80 percent of ITM, which is located in the same building, the
SESC, as cited by Bloomberg, said.
As reported in the Troubled Company Reporter-Asia Pacific on
Feb. 27, 2012, Bloomberg News said the Financial Services Agency
on Feb. 24 ordered AIJ Investment to halt its business after
finding the asset manager's clients funds of about
JPY183.2 billion may be "adversely affected" and started a probe
into the 263 asset managers operating in Japan.
Tokyo-based asset-management firm AIJ Investment Advisors Co.,
led by Kazuhiko Asakawa, was established in April 1989, and had
120 clients including pension plans with JPY183.2 billion in
assets as of the end of 2010. It has 12 employees.
OLYMPUS CORP: Investors Express Concern Over New Board Lineup
-------------------------------------------------------------
Kyodo News reports that a group of overseas shareholders of
Olympus Corp. expressed "disappointment" Wednesday that its
creditor banks have exercised influence on the proposed lineup of
the scandal-hit company's new top management.
"To accept a bank-led rehabilitation would be a setback, in our
view, to the interests of shareholders," nine overseas
shareholders including U.S. investment fund Southeastern Asset
Management said in an open letter to the Olympus management,
according to Kyodo.
The news agency relates that the shareholders added that such an
influence would dent efforts of the Japanese Financial Services
Agency and the Tokyo Stock Exchange to improve corporate
governance standards in Japan.
"The board of directors should represent the best interests of
all stakeholders. Creditors are important, but their interest
diverge from those of other stakeholders," the letter said.
As reported in the Feb. 29, 2012, edition of the Troubled Company
Reporter-Asia Pacific, Bloomberg News said Olympus Corp. proposed
an 11-member board to replace President Shuichi Takayama and
other directors following the Japanese camera maker's admission
of a 13-year cover-up of investment losses. The company said
Hiroyuki Sasa, 56, head of marketing at the medical systems unit
that is now Olympus's biggest earner, was nominated as president,
relates Bloomberg. Shareholders will vote in April on the
nominees, who include Yasuyuki Kimoto, a former executive at main
creditor Sumitomo Mitsui Financial Group Inc., as chairman.
About Olympus Corp.
Based in Japan, Olympus Corporation (TYO:7733) --
http://www.olympus-global.com/-- manufactures and sells medical
products, life and industrial products, imaging products,
information communication products and other products. As of
March 31, 2011, the Company has 188 subsidiaries and 11
associated companies.
The Troubled Company Reporter-Asia Pacific reported on Nov. 9,
2011, that Block & Leviton LLP, a Boston-based law firm
representing investors seeking to recover money lost due to
investment fraud, said it is investigating possible securities
fraud claims involving Olympus Corp.
On Oct. 14, 2011, Olympus's Board of Directors fired the
Company's then-President and Chief Executive Officer, Michael
Woodford, after Mr. Woodford attempted to force an inquiry into
Olympus's acquisition of British medical device maker Gyrus in
2008. At issue were the $687.0 million in advisory fees paid to
a relatively obscure financial firm in relation to the
acquisition. The fees were approximately one-third of the
$2.0 billion acquisition price, which is almost 30 times higher
than normal.
On Nov. 8, 2011, the Company admitted to an accounting cover-up,
stating that the advisory fees paid in connection with the Gyrus
deal and other acquisitions were used to hide steep investment
losses that began in approximately 1990. Speaking at a press
conference, the Company's President, Shuichi Takayama, confessed
that "[w]e have conducted extremely improper accounting" and that
"[o]ur previous statements were in error."
The Company's admission, released just prior to the opening of
trading on the Tokyo Stock Exchange, where Olympus's common stock
is traded, sent shares spiraling downward by 29% over the prior
day's close to JPY734 (or $9.40). The Company's American
Depository Receipts also plummeted on the news, losing 31%
compared to the prior day's close of $13.72. Since mid-October,
when Mr. Woodward's allegations first surfaced, the Company's
stock has lost approximately 70% of its market value.
The Japanese Securities and Exchange Surveillance Commission is
said to be investigating along with the U.S. Federal Bureau of
Investigation, and the U.S. Securities and Exchange Commission.
=========
K O R E A
=========
JEONBUK BANK: Moody's Affirms 'D+' Bank Financial Strength Rating
-----------------------------------------------------------------
Moody's Investors Service has downgraded the long-term global
local and foreign currency deposit ratings of Jeonbuk Bank to
Baa1 from A3 as a result of the bank's aggressive asset growth.
The standalone bank financial strength rating (BFSR) of D+ has
been affirmed. However, the BFSR now maps to a baseline credit
assessment of Ba1 compared to Baa3 previously.
Moody's continues to assume that the probability of systemic
support for Jeonbuk Bank is high, reflecting its dominant market
position in Jeonbuk Province and the generally high systemic
support Moody's assumes for Korean banks. This results in a
three-notch uplift from the baseline credit assessment.
The bank's short-term rating were downgraded to Prime-2 from
Prime-1.
All ratings have a stable outlook.
Ratings Rationale
The rating action reflects the fact that during the fourth-
quarter of 2011, the bank's core Tier 1 capital ratio fell to
8.05%. Moody's had previously indicated that Jeonbuk's rating
could come under pressure if the Tier 1 ratio slipped below 8.5%.
The downgrade also takes into account potential asset quality
concerns from aggressive loan growth.
The decline in the Tier 1 ratio was affected by changes in
provisioning rules set by the regulatory authorities that lowered
the core Tier 1 ratio by 32 basis points. These were out of the
bank's control and were not, by themselves, credit negative since
the decline in capital was matched by a rise in loan loss
reserves thereby preserving loss-absorbing resources within the
bank. However, faster-than-expected loan growth towards the end
of the year was also a cause for the Tier 1 ratio falling to a
greater extent than Moody's had anticipated.
The tighter provisioning rules required the bank to set aside
additional regulatory loan-loss reserves of KRW24.7 billion
(USD21.3 million). Consequently, its non-performing loans
coverage ratio jumped to 173%, from 137%.
Moody's understands that the bank is planning to restore capital
ratios closer to the bank's targets. However, Moody's is
concerned that Jeonbuk's business growth is relatively aggressive
in that it assumes frequent capital injections to offset rapid
asset growth.
In addition, tighter regulation on risk weighted assets will add
further downward pressure to its core Tier 1 capital. Moody's
expects the bank's Tier 1 ratio to drop by 5-10 basis points in
first-quarter 2012.
Asset growth is likely to remain rapid when compared with many
other domestic banks. Jeonbuk recorded a 22% loan growth in 2011.
In 2012, it plans to moderate loan growth to 9.7%, which is still
2-3 percentage points higher than Korea's nominal GDP growth. The
challenge for Jeonbuk Bank is to ensure that it can maintain its
capital levels to support its asset growth and that asset quality
does not weaken materially as newly-booked loans season.
In this context Moody's is concerned about the bank's is
diversification into less familiar areas, such as the Seoul
metropolitan region and non-banking financial services through
Woori Capital.
Moody's views upward pressure is limited following the recent
downgrade but Moody's could consider upgrade the rating, if the
bank can manage its expansion while preserving strong capital and
maintaining the current levels of credit metrics, such as an NPL
ratio of 1% and net interest margin of 3%.
Moody's would consider downgrading the ratings if the bank's: (1)
core Tier 1 ratio drops below 7.5%, or (2) NPL ratio, on a
consolidated basis, rises above 4.5% (it was about 2.2% in
December 2011).
The methodologies used in this rating were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
and Incorporation of Joint-Default Analysis into Moody's Bank
Ratings: A Refined Methodology published in March 2007.
Jeonbuk Bank is based in Korea's Jeonbuk province, which
generated gross regional domestic production of KRW30 trillion,
equal to 3.0% of the country's GDP in 2010. Established in 1969,
it is the dominant bank in Jeonbuk province. As of December 2011,
it had assets of KRW10.8 trillion (about US$9.3 billion).
====================
N E W Z E A L A N D
====================
FIVE STAR: Judge Denies Ex-Director's Bid to Reverse Guilty Plea
----------------------------------------------------------------
Hamish Fletcher at nzherald.co.nz reports that Neill Williams,
the former director of the Five Star Group, has again failed to
reverse an earlier guilty plea.
nzherald.co.nz says Mr. Williams originally pleaded guilty in
October 2010 to Securities Act charges for allegedly misleading
Five Star investors.
But in the Auckland District Court earlier this month
Mr. Williams' lawyer, Andrew Speed, argued his client only did so
because he was too ill to endure a trial and believed a guilty
plea could result in home detention instead of prison, the report
relates.
According to nzherald.co.nz, defence witness Dr. Richard Coleman
said the accused had a long history of health issues including
heart disease, bowel cancer and melanoma. Dr. Coleman, who
recommended in 2010 Mr. Williams was unfit to go through court
proceedings, said he was concerned at the time a trial could have
ended with "a dead Mr. Williams".
The bid is the second the accused has made -- his first
application was declined by Judge Roderick Joyce QC in March last
year, nzherald.co.nz says.
nzherald.co.nz recalls that Mr. Speed argued earlier this month
that there was fresh evidence to support Mr. Williams' case since
the initial bid.
But Crown lawyer Ian Brookie said there was "nothing truly new
about the application" and claimed it relied on the same line of
defence Williams had used all along, the report relates.
Judge David Harvey on Friday dismissed the application and said
"in essence there is nothing new that advances Mr. Williams'
contention that was so soundly rejected by Judge Joyce,"
nzherald.co.nz reports.
As reported in the Troubled Company Reporter-Asia Pacific on
Aug. 27, 2010, the Serious Fraud Office laid over 100 charges
under the Crimes Act against Nicholas Kirk, Marcus MacDonald,
Anthony Bowden and Neill Williams who are associated with the
collapsed Five Star Finance Group. The offences each carry a
maximum penalty of seven years imprisonment. Messrs. Kirk,
McDonald and Bowden are former directors of Five Star Finance
Ltd, while Mr. Williams was heavily involved in its management.
The Companies Office also laid criminal charges in Auckland
District Court against Messrs. MacDonald, Bowden, Kirk and
Williams. The case was referred to it by the Securities
Commission.
About Five Star
Established in 1992, Five Star Finance Limited focused on
financing real estate loans following a restructuring exercise
that created Five Star Consumer Finance in New Zealand and Five
Star Consumer Finance Pty in Australia.
Five Star Debenture Nominee Limited acted as debenture holder on
behalf of unsecured depositors and appeared to lend all of the
money it raised to Five Star Finance.
Five Star Finance Limited went into receivership on September 5,
2007. Five Star Debenture Nominee Limited went into liquidation
on November 5, 2007. At the start of the liquidation in June
2009, the shortfall of assets to liabilities was NZ$51.7 million,
according to The Dominion Post. The Post says joint liquidator
Paul Sargison, of Gerry Rea & Associates, said the firm's
directors attributed the group's failure to the economic crisis
but his own appraisal is that Five Star has been insolvent since
no later than March 31, 2005.
PACIFIC WOOD: To Close Wood Plants; 41 Workers Set Lose Jobs
-------------------------------------------------------------
Patrick O'Sullivan at Hawke's Bay Today reports that Pacific Wood
Products (PWP) is set to close with the loss of 41 jobs.
According to the report, managing director Doug Ducker and chief
executive Tony Clifford said in a joint statement that the
company's Pandora plant had started an "orderly closure" to allow
employees and contractors to find new jobs and for customer
commitments to be fulfilled.
"The business has struggled to maintain financial viability,
given the current conditions of low demand for its products," the
statement said.
Pacific Wood Products (PWP) manufactures a range of timber
products for appearance grade use in house construction and
renovation. It employs 41 staff. PWP is a wholly owned
subsidiary of Japan-owned Pan Pac Forest products NZ.
=====================
P H I L I P P I N E S
=====================
PHILIPPINE NAT'L: Moody's Affirms 'E+' BFSR; Outlook Positive
-------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Philippine
National Bank and Allied Banking Corporation.
For PNB, the ratings are:
(i) E+ bank financial strength rating (BFSR), which now maps to
a B1 baseline credit assessment (BCA), from B2 previously;
(ii) Ba2/NP local currency and foreign currency long-term/short-
term deposit rating; and
(iii) Ba3 local currency subordinated debt rating.
The outlook on PNB's BFSR was revised to positive from stable.
The outlook on its other ratings remains stable.
For ABC, the ratings are:
(i) E+ BFSR, which maps to a B1 BCA;
(ii) Ba3/NP foreign currency long-term/short-term deposit
rating; and
(iii) B1 local currency subordinated debt rating.
The outlook on all of ABC's ratings was revised to positive from
stable.
Ratings Rationale
PNB
"The upward revision of PNB's BCA to B1 from B2 reflects the
gradual improvement in the bank's financial profile, but asset
quality and efficiency remain relatively weak. It also reflects
the bank's consistently strong capitalization and liquidity
profile. Such features now position it comfortably at the upper
range of the E+ rating band," says Simon Chen, a Moody's analyst.
"Although PNB's asset quality is still weaker than the rated
Philippine bank average, it has shown consistent improvements
over the past three years. At end-September 2011, the bank's non-
performing loans fell to 6% of its total loans from 8.1% at end-
December 2010 and 11.3% at end-December 2008," says Chen.
"Its high levels of capitalization and loan loss provisioning
provide sufficient loss absorption capacity at its current rating
levels to withstand systemic stresses over the next 12-18
months," adds Mr. Chen.
The positive outlook on its BFSR reflects expectation that
further improvements in its financial performance, in particular
cost efficiency and asset quality, are more likely to bring its
credit profile closer to the industry average in the near to
medium term.
PNB's planned merger with ABC will strengthen PNB's domestic and
international franchise, funding mix and profitability. Moody's
also expects substantial scope for PNB, as the surviving entity,
to tighten costs and improve efficiency as it works through the
integration process over the 12-18 months following regulatory
approvals for the merger.
PNB's Ba2 local currency long-term deposit rating is supported by
(1) the bank's B1 BCA and (2) Moody's assessment of the moderate
probability of systemic support, in the event of need.
This assessment is predicated on PNB's entrenched and stable
market position, which in turn underpins Moody's view of its
systemic significance in the Philippine banking sector.
ABC
"The affirmation of ABC's ratings reflects the modest state of
its credit fundamentals, and which are, in turn, underpinned by
its consistently satisfactory capital and liquidity profiles,
relative to similar Ba-rated peer banks. At the same time, it
takes into consideration our view of the bank's weaker asset
quality and risk-adjusted profitability relative to other rated-
Philippine banks," says Chen.
When compared with Moody's global Ba-rated bank average metrics,
ABC has consistently maintained higher Tier 1 and Total capital
ratios over the past three years. Its liquidity profile is also
stronger, as reflected in lower loan-to-deposit ratios and higher
proportions of liquid assets in its asset base.
ABC's foreign currency long-term deposit ratings of Ba3 are
supported by (1) its B1 BCA and (2) Moody's assessment of a
moderate probability of systemic support, when required.
This assessment is predicated on the bank's stable and sizable
market position, which in turn underpins Moody's view of its
systemic significance to the Philippine banking sector.
The positive outlook on the bank's ratings reflects the
expectation that it will maintain large buffers in its liquidity
position and capital relative to its current rating level to
withstand systemic stresses over the next 12-18 months.
Rating Triggers
The following factors could result in upward pressure on PNB's
and ABC's BFSR and BCA: (1) a substantial slowdown in the
formation of new non-performing assets, leading to a fall in its
non-performing loans to below 4.5% of its total gross loans;
and/or (2) improved risk-adjusted profitability that results in a
decline by its cost-income ratio to below 50%.
The banks' deposit ratings could be upgraded if: (1) their BFSR
and BCA are upgraded; and/or (2) systemic support for the banks
is assessed to have increased. PNB's foreign currency deposit
rating is currently capped at the sovereign ceiling of Ba2.
Therefore, an upgrade of the sovereign ceiling could result in an
upgrade of this rating.
Conversely, the following factors could result in downward
pressure on PNB's and ABC's BFSR and/or BCA: (1) a deterioration
in loss-absorption capacity, as reflected by the Tier 1 ratio
falling below 12% and/or non-performing loan coverage ratio
falling below 90%; and/or (2) increased exposure to related-party
risks and credit concentration in large borrowers.
The banks' deposit ratings may be pressured downwards if: (1)
their BFSR and BCA are downgraded; and/or (2) the systemic
support for the banks is assessed to have fallen; and/or (3) the
foreign currency sovereign ceiling is downgraded to below Ba2.
Principal Methodologies
The methodologies used in these ratings were Bank Financial
Strength Ratings: Global Methodology published in February 2007,
Incorporation of Joint-Default Analysis into Moody's Bank
Ratings: A Refined Methodology published in March 2007, and
Moody's Guidelines for Rating Bank Hybrid Securities and
Subordinated Debt published in November 2009.
Headquartered in Manila, Philippines, Philippine National Bank
reported total assets of PHP319 billion (US$7.4 billion) as at
September 30, 2011.
Headquartered in Manila, Philippines, Allied Banking Corporation
reported total assets of PHP196 billion (US$4.6 billion) as at
September 30, 2011.
=================
S I N G A P O R E
=================
* SINGAPORE: Moody's Says Proposed Covered Bond Rules Positive
--------------------------------------------------------------
Moody's Investors Service says that a consultation paper on
covered bonds by the Monetary Authority of Singapore includes
proposals that would provide protection to investors in the areas
of quality covered assets, as well as through specifying minimum
overcollateralization levels and a requirement for ongoing
monitoring of risk.
"But they do not cover areas such as legal protection of cover
pool segregation, and do not provide enough detail on operations
and servicing," says Jerome Cheng, a Moody's Vice President and
Senior Credit Officer. "These areas would have to rely on the
protection of the existing legal framework, and the incorporation
of contractual arrangements into covered bond programs."
Mr. Cheng was speaking on the release of a Moody's report on the
proposed rules which were issued on March 9. The report --
authored by Cheng -- is entitled, "Proposed Covered Bond Rules in
Singapore Should Benefit Investors in Terms of Contribution to
Maintaining Asset Quality and Requirements for Monitoring."
Covered bonds are new to Singapore and no programs have been
issued as of March 21.
"According to the proposals, covered assets can only include
residential mortgage loans and derivatives held for the purpose
of hedging risks arising from covered bond issuance. These
restrictions would be credit positive as residential mortgage
loans have proven to be the best performing assets on bank
balance sheets," says Mr. Cheng.
"In addition, the report says that the appointment of qualified
external third-party transaction parties would improve monitoring
of assets," says Mr. Cheng. "The appointment of a cover pool
monitor would provide an additional layer of checks and balances,
mitigating operational and fraud risks, as well as offering
additional protection to investors."
However, unless the proposed rules are enacted to law, the
separation of the cover pool from the bankruptcy estate of the
defaulted issuer would still rely on the current legal regime.
The processes, procedures, and formats under which a bank
segregates the cover pool would have to comply with all existing
legal and regulatory requirements.
===============
X X X X X X X X
===============
PACNET: Moody's Says Full-Years Results No Impact on 'B1' CFR
-------------------------------------------------------------
Moody's Investors Services says that Pacnet's performance for FY
2011 was in line with Moody's expectations and has no immediate
impact on its B1 corporate family and senior unsecured bond
ratings.
The ratings outlook remains negative.
Pacnet reported US$134.5 million in revenues for the fourth
quarter of 2011 and which was consistent with the previous
quarter, as new revenues were offset by continued price declines.
The reported operating loss for the fourth quarter was US$23
million, which was just marginally lower than the loss of US$24
million in the previous quarter.
For FY2011, Pacnet recorded US$528.6 million in revenues, up 4.4%
from a year ago, driven primarily by increases in the data
service and whole sale voice segments. Adjusted EBITDA, excluding
non-cash Employee Stock Option Plan (ESOP) costs, was US$82
million for FY2011, an increase 2.2% from the prior year.
"While the company has generated adjusted EBITDA above our
expected US$80 million, our concerns regarding the sustainability
of its operating performance over the near-to-intermediate term
remains," says Annalisa Di Chiara, a Moody's Vice President and
Senior Analyst.
"We believe Pacnet faces significant competitive pressures in
2012 and the company's ability to grow revenues at a fast enough
pace to continue to offset the impact of price erosion is still
uncertain. Furthermore, adjusted leverage of around 4.0x is
considered aggressive, given the vulnerability of operating
profit and competitive pressures," says Ms. Di Chiara.
Moody's ongoing view of Pacnet's credit will continue to focus on
the sustainability of EBITDA growth, an assessment of its
competitive positioning, and any changes to its overall growth
strategy.
The rating could come under additional pressure if operating
income does not show meaningful quarterly growth, such that
EBITDA is likely to remain below the US$90 million-US$100 million
level.
This development could be due to larger-than-expected price
declines, an elevated cost structure, or an inability to generate
volume growth given the ongoing competitive pressures.
Furthermore, if a weaker performance leads to tighter liquidity
or non-compliance with any of its bank covenants, the ratings
would be lowered.
The outlook could return to stable, if operating performance
shows sustained improvements on a quarterly basis, such that
gross adjusted debt/EBITDA stays below 3.5x and Pacnet maintains
a reasonable amount of cushion, under its bank loan covenants, to
ensure adequate back-up liquidity.
Pacnet, incorporated in Bermuda in 2006, wholly owns and operates
the EAC-C2C network, Asia's largest privately-owned submarine
cable infrastructure of 36,800km, as well as the EAC Pacific
network which spans 9,620km from Japan to the US. The cables land
at 21 cable landing stations across Asia and the US. Pacnet
provides data connectivity solutions to major telecommunications
carriers, large multinational enterprises and small- and medium-
sized enterprises in Asia Pacific with a need for multinational
IP-based solutions and connectivity.
*********
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, Ivy B. Magdadaro, Frauline S.
Abangan, and Peter A. Chapman, Editors.
Copyright 2012. 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
Peter Chapman at 240/629-3300.
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