/raid1/www/Hosts/bankrupt/TCRAP_Public/120507.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, May 7, 2012, Vol. 15, No. 90
Headlines
A U S T R A L I A
1ST FLEET: Administrator Inks Agreements to Sell Two Divisions
NATIONAL AUSTRALIA: UK Unit Restructuring Won't Impact Ratings
C H I N A
BAOXIN AUTO: Moody's Assigns 'Ba3' CFR; Outlook Stable
BAOXIN AUTO: S&P Gives 'BB-' Corp. Credit Rating; Outlook Stable
GCL-POLY ENERGY: Fitch Downgrades Issuer Default Rating to 'BB+'
H O N G K O N G
AIM HIGH: Sung Mi Yin Mella Steps Down as Liquidator
ASIA BUSINESS: Placed Under Voluntary Wind-Up Proceedings
ATLANTIC WORLD: Creditors' Proofs of Debt Due May 28
BROADBAND CONSULTANTS: Creditors' Proofs of Debt Due May 28
CARNIVAL PIONEER: Wong and Wong Step Down as Liquidators
CHARTERMATE TECHNOLOGIES: Chiu Fan Wa Steps Down as Liquidator
CORE CENTRE: Members' Final General Meeting Set for May 31
COSMOS INTERNATIONAL: Commences Wind-Up Proceedings
CTN FOUNDATION: Members' Final General Meeting Set for May 28
DONNEX LIMITED: Court to Hear Wind-Up Petition on May 30
SWISS EMOTIONS: Members' Final Meeting Set for May 28
TREASURE SUCCESS: Members' Final Meeting Set for May 28
UNIQUE BUSINESS: Annual Meetings Set for May 11
YAMAGIWA TRADING: Members' Final General Meeting Set for May 28
ZYREL LIMITED: Creditors' Meeting Set for May 25
* Walkers Expands Asian Insolvency, Restructuring Practice
I N D I A
ANAND MOTOR: CARE Rates INR11.41cr Longterm Loan at 'CARE BB-'
ANKUR URZA: CARE Assigns 'CARE BB' Rating to INR48.14cr Loan
AVANI PROJECTS: Inadequate Info Prompts Fitch to Migrate Ratings
CHEMITHON ENGINEERS: CARE Puts 'BB+' Rating on INR6.95cr Loan
CONCRETE DEVELOPERS: CARE Reaffirms 'BB+' Rating on INR9.9cr Loan
JOY HOTEL: CARE Rates INR65cr Long-Term Loan 'CARE BB+'
KARUNA MANAGEMENT: Inadequate Info Cues Fitch to Migrate Ratings
KAVERI ENTERPRISES: CARE Rates INR5cr Long-Term Loan 'CARE B+'
KINGFISHER AIRLINES: Still in Talks With Developers Over Eviction
NISAN ELECTRICALS: CARE Rates INR20.12cr Loan 'CARE BB-'
PHOENIX IT: CARE Assigns 'BB-' Rating to INR9.62cr LT Loan
PRIME SHOES: CARE Assigns 'CARE B-' Rating to INR13cr LT Loans
SHANMUGA MODERN: CARE Assigns 'BB' Rating on INR5.98cr LT Loans
TARA HEALTH: CARE Assigns 'CARE BB' Rating to INR290.93cr Loans
VISHWAROOP INFOTECH: CARE Reaffirms 'CARE BB+' LT Bank Ratings
I N D O N E S I A
PT BANK: S&P Gives 'BB+/B' Issuer Credit Ratings; Outlook Stable
TOWER BERSAMA: Moody's Confirms 'Ba2' CFR; Outlook Stable
J A P A N
ELPIDA MEMORY: SK Hynix Drops Out of Bidding
K O R E A
KOREA EXCHANGE: Sued by Lone Star Over $49 Million Bill
M A L A Y S I A
RHB BANK: Moody's Bank Financial Strength Rating Remains at 'D'
M O N G O L I A
KHAN BANK: Moody's Issues Summary Credit Opinion
N E W Z E A L A N D
SOUTH CANTERBURY: Receivers Repay $645 Million to the Crown
- - - - -
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A U S T R A L I A
=================
1ST FLEET: Administrator Inks Agreements to Sell Two Divisions
--------------------------------------------------------------
De Vries Tayeh, the administrators for 1st Fleet, disclosed
Friday morning that it had entered into agreements to sell two of
1st Fleet's divisions -- the C-Store and Container divisions --
with operations recommenced immediately and "business as usual"
for the 80-strong workforce.
According to de Vries Tayeh, it will continue with negotiations
for the sale of the other business assets for the two remaining
divisions -- the Express and Line Haulage divisions -- with a
number of interested parties.
"With the generous financial support from Coface, over night we
have made arrangements for the undelivered goods held at 1st
Fleet to be returned to customers. Amongst these goods are:
(a) essential Pharmaceuticals, (b) vital engineering parts
required in Queensland for a stressed dam, and (c) firearms,
ammunition and security sensitive explosives. These and many
other items are presently being identified in order that they be
returned," de Vries Tayeh said in a news release.
"We have also been able to return all drivers to their home
states."
To the company's employees, de Vries Tayeh related that the new
operators for the C-Store and Container divisions are now running
the divisions under license while the legal documents are
finalized. Staff associated with these divisions have been re-
employed.
De Vries Tayeh also added that it is working with representatives
from the Transport Workers Union (TWU) with the view to ensuring
the employees receive the full amount of their entitlements at
the earliest time.
The administrators also clarified that the wages on April 27,
2012, were for wages paid in advance. This period started with
the appointment of the Voluntary Administrators first day of
operations being April 26, 2012, for one week ending on May 1,
2012. Any unpaid wages up to April 25, 2012, will be included in
the employees' priority claim in the administration of the 1st
Fleet Group. "We anticipate that there will be two potential
avenues for funds to come in to meet these claims. This being
monies (subject to legal priorities) from the sale of the 1st
Fleet assets/business units and if this is exhausted the
Governments Employee's Entitlement Redundancy Scheme ("GEERS").
The GEERS scheme will, subject to certain limits, cover unpaid
wages and leave entitlements."
SmartCompany reported that Stephen Brown, managing director of
1st Fleet, has slammed the actions of the company's funder, its
administrator, and its finance companies. Mr. Brown told
SmartCompany he used a French company called Coface Australia to
help make its payments, rather than a bank overdraft. In return
for payments, Coface took security over the firm's assets. Mr.
Brown says the collapse is "a friggin' disaster" and was
vitriolic in his assessment of "those dickheads", when referring
to funders Coface.
SmartCompany relates after the transport company initially
entered administration, Mr. Brown had been confident it could
survive with funding in place and was subsequently shocked to
discover Coface had pulled the funding. "How did we know they
would pull the pin in the second week, they knew what the program
was," says Mr. Brown.
Mr. Brown also told SmartCompany that 1st Fleet had been under
increasing pressure from margins being squeezed, saying finance
companies had been especially culpable in the company's demise.
Mr. Brown says all of 1st Fleet's financiers were to blame, with
Mercedes Benz being the biggest. The 1st Fleet head is also
scathing of the role administrators de Vries Tayeh played,
describing the firm as "idiots". Mr. Brown says he has "no idea"
what was going to happen to 1st Fleet's employees but it was
something he was working hard on.
Administrators de Vries Tayeh hit back at Mr. Brown's allegations
with administrator Antony de Vries telling SmartCompany "some of
the things he says are not factual." "It is a distortion of the
facts I would think. That's not the reason Coface took the
position they took," says Mr. de Vries. Mr. de Vries says in
August last year Coface advised all of its clients that it was
quitting their business in Australia and they gave them all
"ample opportunity" to rearrange their finances. "1st Fleet was
the only customer who was unable or unwilling to do so," says Mr.
de Vries. Mr. de Vries says Coface advised 1st Fleet that its
facility expired at the end of April and it would not be renewed
as Coface was shutting up shop in Australia and at the end of
April "Coface had nowhere to go and was unable to continue the
facility". "During that week when we stepped in as
administrators, the director made some undertakings to Coface
that he would be able to do certain things, so Coface advanced a
line of funding to us as administrators on a week-by-week basis,"
says Mr. de Vries. He says this was a temporary measure afforded
to the company while de Vries Tayeh fulfilled its role as
independent administrators of the company.
1st Fleet offers trucking services, along with supply chain,
warehousing and recruitment services as well. It employed around
1,200 staff.
NATIONAL AUSTRALIA: UK Unit Restructuring Won't Impact Ratings
--------------------------------------------------------------
Moody's Investors Service has commented that National Australia
Bank's (NAB) ratings (Aa2 stable; B-/a1 stable, Prime-1) are not
affected by the restructuring -- and associated charges -- of its
wholly owned UK subsidiary, Clydesdale Bank.
At the same time, Moody's continues to assess the impact of the
restructuring on Clydesdale Bank's A2 and C-/baa1 ratings, which
are under review for downgrade.
"The charges of just on AUD700m to be taken by NAB are
containable, representing about 10% of the group's expected pre-
tax profit for 2012," says Peter Tebbutt, a Moody's Vice
President and Senior Analyst based in Sydney. "Additionally, the
restructuring does not alter NAB's credit profile on a
consolidated basis."
Moody's considers the restructuring as a substantial response to
the longstanding and ongoing costs associated with Clydesdale
Bank, and represents a resolve that was, as Moody's has noted,
lacking until now.
The restructuring will enable Clydesdale Bank to focus on its
core competencies in retail operations and SME lending in
Scotland and northern England. The exercise should also enhance
NAB's ability to deal with Clydesdale Bank's problem loans in an
assertive fashion.
As it is unlikely that any further substantial losses will arise
from Clydesdale Bank -- at least in the near term -- and given
the satisfactory performance of NAB's main Australian and New
Zealand operations, the restructuring costs will not notably
impact NAB's overall financial standing.
Furthermore, Moody's notes that the losses from Clydesdale Bank
are small relative to NAB's overall profitability and that its
balance sheet strength is likely to remain intact through
earnings retention, leaving NAB well positioned for its
transition to Basel III. As such and as indicated, Moody's sees
no ratings impact on NAB from the restructuring of Clydesdale
Bank.
The main elements of the restructuring involve the transfer of
some GBP6.2 billion of predominantly commercial real estate loans
(CRE) from Clydesdale Bank to NAB at a par value of about GBP5.70
billion, i.e. net of about GBP0. 5 billion in provisions.
These loans have been the main drag on the performance of NAB's
UK operations, a situation which has, in turn, put downward
pressure on NAB's overall performance in recent years.
Payment will be effected by Clydesdale Bank repaying GBP5.7
billion of intergroup funding to NAB. The transferred CRE loans
will then be put in runoff by NAB, with about 80% due to mature
by end-2017. To manage the runoff, some 191 staff from Clydesdale
Bank, currently involved in managing these loans, will be
transferred to NAB, and led by a senior NAB credit risk
executive.
The loans transfer will significantly improve Clydesdale Bank's
own balance sheet in terms of its risk profile, funding costs,
and capitalization. About 12% of the transferred loans are non-
performing, and 61% are covered by provisioning. Clydesdale
Bank's NPL ratio after the transfer will be about 1.8%.
Meanwhile, funding costs will decline through the repayment of
intergroup loans.
As for almost all banks in the UK and elsewhere, Clydesdale
Bank's wholesale funding costs have risen significantly over the
past year. With the repayment, its deposit funding will rise to
65% of its balance sheet from 57%. This development should aid
margins, which dropped to 2.09% in 1H2012 from 2.33% in 2H2011.
Finally, as a result of the transfer, Clydesdale Bank's
capitalization will improve to 11.3% from 10.3%. Meanwhile, NAB's
standalone Tier I CAR will decline by 17bps (11.45% at 30 Sep
2011). The impact on NAB at the group level (Tier I of 10.0% at
31 Dec 2011) will be particularly negligible, given that the
exercise is predominantly just an internal transfer of assets and
liabilities.
Other key points of the restructuring include:
* The closure of 29 of Clydesdale Bank's 73 Financial
Solutions Centres; most of the closures will be in the south
of England, where most of the to-be-transferred CRE loans
are also located. Another nine such centres will be merged
with the bank's retail branches.
* The closure of six back-office operations.
* A reduction in staff at Clydesdale Bank by about 1,400 over
the four years to September 2015 (including the 191 to be
transferred to NAB as mentioned) from its current complement
of 8,351. This will mostly be achieved through redundancies
but also through some natural attrition.
The total costs of the restructuring will be GBP195 million,
mostly consisting of redundancy costs, but also including lease-
break costs and software write-offs related to the closure of the
Financial Solutions Centres. However, the bank can recoup this
amount over time through cost savings of an estimated GBP74
million p.a. by 2015.
In addition, NAB will write off its GBP141 million of goodwill in
Clydesdale Bank, and increase provisioning for the payment
protection insurance issue by GBP120 million. In total, these
actions will reduce NAB's FY2012 pre-tax profit by about GBP456
million, or AUD700 million.
National Australia Bank is headquartered in Melbourne, and has
reported total assets of AUD750 billion (approximately US$730
billion).
Clydesdale Bank is headquartered in Glasgow, and has reported
total assets of GBP44 billion (approximately US$72 billion),
accounting for 9% of NAB's total assets.
=========
C H I N A
=========
BAOXIN AUTO: Moody's Assigns 'Ba3' CFR; Outlook Stable
------------------------------------------------------
Moody's Investors Service has assigned a Ba3 corporate family
rating to Baoxin Auto Group Limited and a provisional (P)Ba3 bond
rating to its proposed issuance of USD bonds.
The ratings outlook is stable.
This is the first time that Moody's has assigned a rating to
Baoxin.
The proceeds of the bonds will be used for the repayment of debt,
expansion of its dealership network, and other general corporate
purposes.
The provisional rating will be removed once Baoxin has issued the
bonds on satisfactory terms and conditions.
Ratings Rationale
"The Ba3 rating reflects Baoxin's strong market position in
China's fast-growing luxury car dealership segment," says
Jonathan Lee, the International Lead analyst for Baoxin and a
Moody's Vice President and Senior Analyst. "Its strategic focus
on luxury brands, stable relationships with auto manufacturers,
sound operating efficiency, and track record for organic
expansion should allow it to continue to grow revenue and
profitability".
"The rating is also supported by the rapid growth in the luxury
car market in China, supported by increasing levels of income for
consumption, the expanding size of the country's wealthy
population, passenger vehicle upgrades and the low penetration
level of luxury cars," says Ping Luo, the Lead Local Market
Analyst for Baoxin and a Moody's Vice President and Senior
Analyst.
"Furthermore, the trend towards consolidation of China's highly
fragmented auto dealership industry will give opportunities to
players like Baoxin to further expand their market shares and
enjoy better economies of scale," adds Mr. Luo.
Moody's expects the company to maintain its strong operating
capability, good cost efficiency, and stable relationships with
its auto manufacturers. Moody's also projects a financial profile
with adjusted debt/EBITDA below 3x over the next two years, which
is consistent with the Ba3 ratings.
However, the rating is constrained at the Ba3 level by three
risks: a) the large working capital and capex required for
growing the business, b) the fast pace of expansion, especially
the potential for acquisitions, which entails execution risks,
and c) the short track records of the industry and company
itself.
Moody's notes that Baoxin has consistently reported negative
operating cash flow, mainly due to its rapid expansion, as its
store count rose from 13 to 33 in three years and as its revenue
tripled from 2008 to 2011. At the same time, such developments
reflect the intensive level of working capital required for
growth.
After its IPO in December 2011, the company had plans to
accelerate growth through more new store openings and
acquisitions. While Moody's expects the business to benefit from
the resultant enhanced economies of scale and improvements to its
competitive position, Moody's also sees this rapid expansion as
likely to entail execution risks. It could also raise demand for
more working capital and capex. In such a context, the company is
likely to continue generating negative free cash flow in the near
term.
Baoxin's business, as with other Chinese car dealerships, is
still underdeveloped when compared to dealerships in the mature
markets, in terms of scale, geographic coverage, brand mix and
diversity, and the contribution of its after-sales service
department. The latter business generally generates stable
recurring revenue and higher margins.
As most of its stores are still new, it will take at least
another 1-2 years for its after-sales service business to make
more meaningful contributions to earnings.
Greater competition, lower demand for luxury vehicles due to
monetary tightening, the economic slowdown, higher fuel prices,
and/or stricter fuel-economy and emission standards could also
pose risks.
With respect to subordination risk, Moody's has not applied
notching to the proposed bonds to be issued by Baoxin. This
decision is based upon (i) recognizing 25% of the Bills Payable
as priority domestic debt in accordance with Moody's Rating
Methodology on Global Automotive Retailer Industry; and (ii)
taking Baoxin's commitment and objective to keep total priority
domestic debts at a level not more than 15% of the total assets.
In the event that the company fails to adhere to the 15% limit,
Moody's could apply notching to the bond rating to reflect the
subordination risk.
The stable outlook reflects Moody's expectation that (1) Baoxin
will maintain stable relationship with its OEMs, market share and
EBITDA margin; and (2) it will exercise prudence in its financial
management by maintaining adequate cash and bank lines for
working capital, expansion and acquisition without materially
increasing its current debt leverage.
Upward pressure on the rating could be limited, given Baoxin's
short track record, its fast expansion, and the increasingly
competitive nature of the luxury car dealership market in China.
But, medium-term upward pressure could emerge if it can expand
its network and market share without increasing its cost
structure and weakening liquidity. Increased after-sales
services, continued margin expansion, further geographic
diversification, and strengthened brand mix would also be
positive rating triggers.
Quantitatively, the rating could be upgraded if adjusted
debt/EBITDA was kept below 2.5x.
On the other hand, the rating could undergo a downgrade if Baoxin
(1) experiences a consistent decline in market share; (2) loses
one or more dealership authorizations from automotive
manufacturers; (3) shows evidence of failing to maintain its cost
efficiency and operating margin; or (4) implements a more
aggressive-than-expected approach to expanding its dealership
network or acquisitions, and which leads to the depletion of its
liquidity or weakens its credit metrics.
Quantitatively, the rating could be downgraded if adjusted
debt/EBITDA rose above 3.0x - 3.5x.
The principal methodology used in rating Baoxin was the Global
Automotive Retailer Industry Methodology published in December
2009.
Incorporated in 1999, Baoxin -- headquartered in Shanghai -- is
one of the leading luxury car dealerships in China. As of end-
2011, the company operated 33 dealership stores in China, with
authorization or letters of intent to open another 10 in 2012. It
is authorized to sell five ultra-luxury and luxury brands -- Land
Rover & Jaguar, BMW, MINI, Audi and Cadillac -- and seven mid- to
upper-market brands. Baoxin's ordinary shares were listed in Hong
Kong Stock Exchange in December 2011.
BAOXIN AUTO: S&P Gives 'BB-' Corp. Credit Rating; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' long-term
corporate credit rating to Shanghai-based auto retailer Baoxin
Auto Group Ltd. The outlook is stable. "We also assigned our
'cnBB+' Greater China scale credit rating to Baoxin. At the
same time, we assigned our 'BB-' issue rating and our 'cnBB+'
Greater China credit scale rating to the company's proposed issue
of U.S. dollar senior unsecured notes. The issue rating is
subject to our review of the final issuance documentation," S&P
said.
"The rating on Baoxin reflects the company's product and
geographic concentration risk and the execution risks associated
with its accelerated expansion. The rating also reflects Baoxin's
exposure to China's highly competitive and fragmented auto-retail
market. The market has intensifying competition and higher policy
risks than mature markets in other countries," said Standard &
Poor's credit analyst Frank Lu. "Tempering these risks are
Baoxin's established market position in east China, its low
operating cost structure, and high growth potential for the high-
end car retail market in China, on which Baoxin focuses. Baoxin
has a 'weak' business risk profile and an 'aggressive' financial
risk profile."
"We expect Baoxin's product concentration on new-car sales of a
single brand, BMW, will remain high over the next three years.
Potential volatility in the market for new cars and BMW's
performance in China could materially affect the company's
profitability and cash flow. In addition, the company has
geographic concentration, with high exposure to east China's car
market. We expect BMW new-car sales to account for more than 50%
of total revenue and revenue from east China to form more than
80% of the total for the next two years. Nevertheless, we
anticipate that the company will gradually diversify into top-end
brands, such as Land Rover and Jaguar, and the high-margin and
stable after-sales service business," S&P said.
"In our view, Baoxin has an aggressive growth appetite. It
targets to triple its revenue within two years. Its risk and
financial management is largely untested for such accelerated
expansion. Potential execution risks include cost overruns in
building new stores or acquisitions, inefficient integration post
acquisitions, new-market risk, and a shortage of expert
personnel," S&P said.
"Tempering the risks are the company's track record of more than
10 years of organic growth and the recent satisfactory
development of new markets (such as Qingdao). In our view,
management is quite cost-sensitive, and we expect the company to
grow through organic growth and selective acquisitions," S&P
said.
"In our opinion, high-end car sales in China are likely to
continue to grow in double digits over the next two to three
years, due to the country's rapidly growing affluence and low
market penetration in the high-end car segment. Despite the
company's favorable growth potential, we believe Baoxin faces
higher policy risk (such as car licensing limits imposed in
Beijing and Shanghai) than mature markets in the U.S. and Europe.
Baoxin may also face fast-rising competition due to its
competitors' expansion," S&P said.
"We expect Baoxin to maintain a satisfactory gross margin in the
next two years at about 11% due to an increasing contribution
from high-margin after-sales service and sales of its top-end
cars. Baoxin's operating expenses are lower than that of our
rated U.S. peers, mainly due to cheaper labor costs. Its sales
and administrative expenses account for about 30% of gross profit
compared with 70%-80% for U.S. peers. In our view, the low-cost
structure provides some flexibility for Baoxin to weather an
industry downturn," S&P said.
"We anticipate that Baoxin's capital structure will remain stable
in the next two years, with strong operating profit growth
offsetting an increase in debt. In our base-case scenario, we
estimate the company's EBITDA will grow by 80%-90% in 2012 and
40%-50% in 2013, supported by the opening of new stores. We
expect Baoxin's adjusted debt-to-EBITDA ratio to be 2.5x-3.0x and
funds from operations (FFO) to debt to be 20%-25% over the next
two years. In our view, its free operating cash flow is likely to
remain negative in the next two years, due to large capital
expenditure. Baoxin's credit profile could weaken materially if
sales growth and profit margin are significantly below our
expectation," S&P said.
The company will use the proceeds from the proposed issuance for
the repayment of its short-term bank loans, the expansion of its
network of dealership stores and repair centers, and for general
corporate and working capital purposes.
"The issue rating is the same as the corporate credit rating on
Baoxin because we believe the company's ratio of priority debt to
total assets will likely remain below our threshold of 15% for
speculative-grade issuers. We believe that, in an issuer default
scenario, onshore banks may have preferential access to the
issuer's assets compared with offshore creditors. Baoxin intends
to use at least US$100 million from the proceeds of the note
issuance and at least US$100 million in additional cash from the
remaining proceeds of the company's IPO in December 2011 to
reduce its onshore debt. The company targets to lower its onshore
bank loan balance to about Chinese renminbi (RMB) 1.3 billion by
the end of 2012 from RMB2.34 billion as of Dec. 31, 2011," S&P
said.
"The stable outlook reflects our expectation that Baoxin will
broadly maintain its current financial risk profile while
pursuing accelerated expansion over the next two years. We expect
Baoxin to continue to focus on the high-end passenger car
segments and gradually improve its product diversification," said
Mr. Lu.
"We may lower the rating if the growth in Baoxin's new-car sales
or profit margin is materially below our expectation, such that
its debt-to-EBITDA ratio increases to more than 4x without any
sign of improvement. This could happen if Baoxin does not execute
its expansion well, the industry growth significantly slows down,
and competition among dealers rises substantially. The rating
could also be under downward pressure if the company's debt-
funded growth becomes more aggressive than we expected," S&P
said.
"The rating upside for the next 12 months is limited, in our
view. We may raise the rating if Baoxin executes its expansion
well, materially diversifies its concentration in brands and
revenue sources, and demonstrates disciplined financial and risk
management," S&P said.
GCL-POLY ENERGY: Fitch Downgrades Issuer Default Rating to 'BB+'
----------------------------------------------------------------
Fitch Ratings has downgraded China-based GCL-Poly Energy Holdings
Limited's (GCL-Poly) Long-Term Foreign Currency Issuer Default
Rating (IDR) and senior unsecured debt rating to 'BB+' from
'BBB-'. The Outlook is Negative. The ratings have
simultaneously been withdrawn.
The downgrade reflects deterioration in GCL-Poly's profit margins
and an increase in its financial leverage in 2011. The Negative
Outlook reflects Fitch's view that this trend of deterioration
may persist through 2012, amid an industry supply glut across the
polysilicon manufacturing value chain. The company's EBITDAR
margin dropped to 35% in 2011 from 40% in 2010, and Fitch
forecasts it may further drop below 25% in 2012 under continuous
price pressure. The margin pressure, coupled with higher capex
due to accelerated capacity expansion, resulted in its leverage
-- defined as net debt to EBITDAR -- jumping to nearly 3.0x at
end-2011 from 1.1x a year earlier. Fitch expects leverage to rise
further in 2012 as margins drop.
The 'BB+' rating reflects GCL-Poly's position as the largest and
lowest-cost polysilicon manufacturer in the world. Due to its
low costs, the company should be able to turn free cash flow
positive, even in the current difficult pricing environment, if
it scales back capex which in turn should allow it to deleverage
beyond 2012. However, the company's commitment to cutting capex
remains unproven, especially when acquisition opportunities at
distressed prices arise in a rapidly consolidating industry.
This is reflected in the Negative Outlook.
The ratings have been withdrawn as they are no longer considered
by Fitch to be relevant to its coverage. Fitch will no longer
provide ratings or analytical coverage of this issuer.
================
H O N G K O N G
================
AIM HIGH: Sung Mi Yin Mella Steps Down as Liquidator
----------------------------------------------------
Sung Mi Yin Mella stepped down as liquidator of Aim High Profits
Limited on April 18, 2012.
ASIA BUSINESS: Placed Under Voluntary Wind-Up Proceedings
---------------------------------------------------------
At an extraordinary general meeting held on April 24, 2012,
creditors of Asia Business Aviation Limited resolved to
voluntarily wind up the company's operations.
The company's liquidator is:
Chan Yee Por Simon
14th Floor, Greatmany Centre
109-115, Queen's Road
East, Wanchai
Hong Kong
ATLANTIC WORLD: Creditors' Proofs of Debt Due May 28
----------------------------------------------------
Creditors of Atlantic World Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by May 28, 2012, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on April 24, 2012.
The company's liquidator is:
Lam Ying Sui
10/F, Allied Kajima Building
138 Gloucester Road
Wanchai, Hong Kong
BROADBAND CONSULTANTS: Creditors' Proofs of Debt Due May 28
-----------------------------------------------------------
Creditors of Broadband Consultants Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by May 28, 2012, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on April 13, 2012.
The company's liquidator is:
Lam Ying Sui
10/F, Allied Kajima Building
138 Gloucester Road
Wanchai, Hong Kong
CARNIVAL PIONEER: Wong and Wong Step Down as Liquidators
--------------------------------------------------------
Wong Poh Weng and Wong Tak Man Stephen stepped down as
liquidators of Carnival Pioneer International Limited on April
20, 2012.
CHARTERMATE TECHNOLOGIES: Chiu Fan Wa Steps Down as Liquidator
--------------------------------------------------------------
Chiu Fan Wa stepped down as liquidator of Chartermate
Technologies (Hong Kong) Limited on April 10, 2012.
CORE CENTRE: Members' Final General Meeting Set for May 31
----------------------------------------------------------
Members of Core Centre Limited will hold their final general
meeting on May 31, 2012, at 11:00 a.m., at 15E, Chai Kung
Mansion, Taikoo Shing, in Hong Kong.
At the meeting, Tang Wai Hung William, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
COSMOS INTERNATIONAL: Commences Wind-Up Proceedings
---------------------------------------------------
Members of Cosmos International Shipping Agencies Limited, on
April 16, 2012, passed a resolution to voluntarily wind up the
company's operations.
The company's liquidator is:
Billy Li Sze Kuen
12/F, No. 3 Lockhart Road
Wanchai, Hong Kong
CTN FOUNDATION: Members' Final General Meeting Set for May 28
-------------------------------------------------------------
Members of CTN Foundation Limited will hold their final general
meeting on May 28, 2012, at 10:00 a.m., at Shop 95-96, 1st Floor,
Block 14, City Garden Shopping Centre, at 233 Electric Road,
North Point, in Hong Kong.
At the meeting, Hoe Hoo Han, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
DONNEX LIMITED: Court to Hear Wind-Up Petition on May 30
--------------------------------------------------------
A petition to wind up the operations of Donnex Limited will be
heard before the High Court of Hong Kong on May 30, 2012, at 9:30
a.m.
Lo Ming Tong filed the petition against the company on March 28,
2012.
SWISS EMOTIONS: Members' Final Meeting Set for May 28
-----------------------------------------------------
Members of Swiss Emotions Limited will hold their final meeting
on May 28, 2012, at 11:00 a.m., at 23rd Floor, Tung Hip
Commercial Building, at 244 Des Voeux Road Central, in Hong Kong.
At the meeting, James Anthony Frank Wadham, the company's
liquidator, will give a report on the company's wind-up
proceedings and property disposal.
TREASURE SUCCESS: Members' Final Meeting Set for May 28
-------------------------------------------------------
Members of Treasure Success Investment Limited will hold their
final general meeting on May 28, 2012, at 3:00 p.m., at 26/F,
Times Media Centre, 133 Wanchai Road, Wanchai, in Hong Kong.
At the meeting, Yang Geyan, the company's liquidator, will give a
report on the company's wind-up proceedings and property
disposal.
UNIQUE BUSINESS: Annual Meetings Set for May 11
-----------------------------------------------
Creditors and contributories of Unique Business Service (China)
Limited will hold their annual meetings on May 11, 2012, at 12:00
p.m., and 12:30 p.m., respectively at 43th Floor, The Lee
Gardens, 33 Hysan Avenue, Causeway Bay, in Hong Kong.
At the meeting, Alison Wong Lee Fung Ying and Alan Chung Wah
Tang, the company's liquidators, will give a report on the
company's wind-up proceedings and property disposal.
YAMAGIWA TRADING: Members' Final General Meeting Set for May 28
---------------------------------------------------------------
Members of Yamagiwa Trading (Hong Kong) Limited will hold their
final general meeting on May 28, 2012, at 10:00 a.m., at 20/F,
Prince's Building, Central, in Hong Kong.
At the meeting, Wong Poh Weng and Wong Tak Man Stephen, the
company's liquidators, will give a report on the company's wind-
up proceedings and property disposal.
ZYREL LIMITED: Creditors' Meeting Set for May 25
------------------------------------------------
Creditors of Zyrel Limited will hold their meeting on May 25,
2012, at 3:00 p.m., for the purposes provided for in Sections
241, 242, 243, 244, 251, 255A and 283 of the Companies Ordinance.
The meeting will be held at Unit A, 10/F, TAL Building, 49 Austin
Road, Jordan, Kowloon, in Hong Kong.
* Walkers Expands Asian Insolvency, Restructuring Practice
----------------------------------------------------------
Walkers, one of the world's leading specialists in cross-border
financial and transactional law, expanded its Asian Insolvency,
Restructuring and Litigation capability with the hire of new
associates Catherine Read, Xiaowei Zhang and Sophie Ireland to
join its established team in Hong Kong.
The new associates represent Walkers' efforts to further
strengthen its capability in Asia and to enable it to meet the
surge in restructuring, insolvency and litigation work emanating
from the region.
"We are delighted to welcome such an abundance of new talent to
our Hong Kong-based practice to help us continue to meet the
needs of our clients" said Fraser Hern, a lead partner in the
practice. "The market conditions in Asia, like those in other
jurisdictions, have given rise to an increase in demand from
clients for lawyers with genuine expertise in financial and
corporate restructuring and insolvency related issues, as well as
in general litigation and shareholder disputes."
Ms. Read is an insolvency and restructuring specialist from a
leading UK firm, and brings with her substantial experience
gained from working on a number of high profile restructuring and
insolvency matters in the UK and Europe, from both a contentious
and non-contentious perspective.
Ms. Zhang, a former Singapore based litigation and dispute
resolution specialist, is fluent in Mandarin, and has a depth of
experience in cross-border insolvency and litigation, and will
continue to focus on these areas of law at Walkers.
Ms. Ireland has worked on several high profile corporate and
financial restructurings in the Middle East and Asia. She
regularly acts for major international investment banks and
funds, advising on a wide variety of issues arising out of
restructuring and insolvency related matters. Her role at Walkers
will focus principally on contentious and non-contentious
corporate and financial restructuring and insolvency related
issues.
Andy Randall, the Managing Partner of Walkers' Hong office added
"The hiring of these new associates into our Asian practice
reflects the continued growth in our insolvency, restructuring
and litigation capability, and Walkers' commitment to providing
clients with real time expertise on the full spectrum of British
Virgin Islands and Cayman Islands legal issues that arise in the
transactions in which they are involved."
About The Walkers Group
From offices in the British Virgin Islands, Cayman Islands,
Delaware, Dubai, Dublin, Hong Kong, Jersey, London and Singapore,
the Walkers Group -- http://www.walkersglobal.com-- provides
legal and management services to leading FORTUNE 100 and FTSE 100
global corporations and financial institutions, capital markets
participants, investment fund managers, and growth-and middle-
market companies. The Walkers Group is comprised of leading
international law firm, Walkers and Walkers Management Services,
which specialises in corporate and fiduciary services.
Walkers' expertise has been validated by numerous awards
including "Offshore Law Firm of the Year" by Alpha Magazine, The
Lawyer, PLC Which Lawyer? and Asian Legal Business. Walkers has
also been honoured as the PLC Which Lawyer? Yearbook Leading
Cayman Islands Law Firm, Who's Who Legal Law Firm of the Year:
Cayman Islands and has shared honours for "Offshore Legal Team of
the Year" by the Society of Trust and Estate Practitioners
(STEP). Many of Walkers' attorneys have also been recognised by
the industry and their peers.
=========
I N D I A
=========
ANAND MOTOR: CARE Rates INR11.41cr Longterm Loan at 'CARE BB-'
--------------------------------------------------------------
CARE assigns 'CARE BB-' and 'CARE A4' ratings to the bank
facilities of Anand Motor Agencies Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term bank facilities 11.41 CARE BB- Assigned
Short-term bank facilities 7.00 CARE A4 Assigned
Rating Rationale
The ratings of Anand Motor Agencies Ltd are primarily constrained
by its low profitability and highly leveraged capital structure.
The ratings are further constrained due to operations in the
highly competitive automobile dealership industry, working
capital intensive nature of business with geographical
concentration risk, renewal based dealership agreement and
linkage to the fortune of Maruti Suzuki India Ltd (MSIL).
The constraints far outweigh the comfort derived from rich
experience of the promoter in the automobile dealership business,
long track record of operation and its position as one of the
largest and established dealers of MSIL for passenger car in
Uttar Pradesh.
Ability of the company to enhance its scale of operation &
profitability and improvement in capital structure along with
efficient management of working capital would remain the key
rating sensitivities.
Anand Motor Agencies Ltd. was incorporated in October 06, 1969 as
a private limited company and was converted into public limited
company in August, 1980. The company was promoted by Agarwalla
family (Late Shri A.P. Agarwalla and his son Shri Jitendra Kumar
Agarwalla) of Uttar Pradesh (U.P.). AMAL's initially started its
business as an authorised dealer for commercial vehicles and
passenger cars of Ashok Leyland and DCM Toyota respectively and
it
continued up to 1980. In 1984 the company got the dealership of
Maruti Suzuki India Ltd. (MSIL) for sales, service and spares in
U.P. Further in 2003, the company got the dealership from Maruti
'True Value' for dealing in Maruti second hand cars.
As per the audited results of FY11 (refers to the period from
Apr.1, 2010 to Mar. 31, 2011) AMAL reported a PBILDT and PAT of
INR2.9 crore (INR2.3 crore in FY10) and INR0.4 crore (INR0.3
crore in FY10) respectively on a total operating income of
INR84.9 crore (INR77.5 crore in FY10). Being an unlisted entity,
AMAL, has not compiled the working results for 9MFY12.
ANKUR URZA: CARE Assigns 'CARE BB' Rating to INR48.14cr Loan
------------------------------------------------------------
CARE assigns 'CARE BB' & 'CARE A4' ratings to the bank facilities
of Ankur Urza Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 48.14 CARE BB Assigned
Short-term Bank Facilities 5.40 CARE A4 Assigned
Rating Rationale
The ratings of the company are constrained by the risk associated
with setting up of greenfield project, lack of backward and
forward integration, dependence on the fortunes of steel
industry, intense competition from the unorganized sector and
moderate industry outlook. However, the ratings also factor in
the experience of the promoter in iron & steel business and
strategic location of the proposed ferro alloy plant with
proximity to market and raw material source. Ability of the
company to successfully execute the project without any time and
cost overrun, stabilize its operation and outlook of the steel
industry will remain the key rating sensitivities.
Ankur Urza Ltd. was incorporated by Shri Dhiraj Thard of Kolkata
in February 2007. Subsequently, in August 2008, it was converted
into a public limited company. In March 2011, the promoters
envisaged setting up a ferro alloy manufacturing plant (36,000
MTPA) in AUL to produce various types of ferro alloys like ferro
manganese, silico manganese and ferro silicon (36,000 MTPA) at
Bankura, West Bengal. The project is expected to be operational
from August 2012. The aggregate project cost of INR59.7 crore is
being financed at a debt-equity ratio of 1.33:1. The project had
been appraised by State Bank of India and United Bank of India
and financial closure has been achieved.
AVANI PROJECTS: Inadequate Info Prompts Fitch to Migrate Ratings
----------------------------------------------------------------
Fitch Ratings has migrated India-based Avani Projects and
Infrastructure Limited's (APIL) 'Fitch B(ind)' National Long-Term
rating with Stable Outlook to the non-monitored category. This
rating will now appear as 'Fitch B(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 APIL. 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 reinstated and will be communicated
through a Rating Action Commentary.
Fitch has also migrated APIL's bank loan ratings to the non-
monitored category as follows:
-- INR976.8 million long-term loans: migrated to 'Fitch
B(ind)nm' from 'Fitch B(ind)'
-- INR200 million fund-based limits: migrated to 'Fitch
B(ind)nm' from 'Fitch B(ind)'
CHEMITHON ENGINEERS: CARE Puts 'BB+' Rating on INR6.95cr Loan
-------------------------------------------------------------
CARE assigns 'CARE BB+' and 'CARE A4' rating to the bank
facilities of Chemithon Engineers Pvt. Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facility 6.95 CARE BB+ Assigned
Short-term Bank Facility 10.00 CARE A4 Assigned
Rating Rationale
The assigned ratings factor in small scale of operations with low
net worth base, fluctuating sales and profitability margins in
the past few years and higher business risk on account of
dependence on few orders and working capital intensity associated
with the operations.
However, the assigned ratings favorably factors in significant
experience and long track of promoters in manufacture and design
of chemical process equipments and technical support from
Chemithon Enterprise Inc, USA.
The company's ability to enhance the scale of operation by
securing new orders and efficient working capital management
remains key rating sensitivities.
Incorporated in 1989, Chemithon Engineers Pvt. Ltd was promoted
by Mr. Sanjay Trivedi in joint venture with Chemithon Enterprise
Inc, USA. The Chairman and Managing director, Mr. Sanjay Trivedi,
is an engineering graduate from IIT Kanpur and has over three
decades of experience in the chemical process equipments
industry. CEPL is in business of manufacturing sulfonation
process equipments, flue gas conditioning system and customised
process equipment for various process industries.
CONCRETE DEVELOPERS: CARE Reaffirms 'BB+' Rating on INR9.9cr Loan
-----------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Concrete Developers.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 9.90 CARE BB+ Reaffirmed
Rating Rationale
The ratings assigned by CARE are based on the capital deployed by
the partners and the financial strength of CD as on March 31,
2012. The ratings may undergo a change in case of withdrawal of
capital by the partners in addition to the financial performance
and other relevant factors.
The rating continues to take into account geographical
concentration of projects, low profitability margins as compared
to other players in the industry, low liquidity position and
cyclical nature of the real estate industry. Besides, the rating
is also constrained by risk pertaining to constitution being a
partnership firm.
The rating, however, derives strength from experience of the
partners, comfortable track record of developing real estate
projects in Nagpur and low funding risk for the on-going
projects. The ability of CD to improve profitability margin and
liquidity position going ahead remains the key rating
sensitivities.
Concrete Developers, established in 1995, is a partnership firm
involved in developing real estate projects in the Nagpur region.
Mr. Sanjay Paidlewar and Shri Nitish Chordia are the partners
with 50:50 share in the firm. As on December 31, 2011, the firm
has executed construction of more than 38 projects in residential
as well as commercial space in Nagpur region.
CD registered total operating income and PAT of INR17.06 crore
and INR1.37 crore respectively in FY11 compared to a total
operating income and PAT of INR13.86 crore and INR1.12 crore
respectively in FY10. As per the unaudited results for 9MFY12,
the company has achieved a total income of INR16.87 crore with
PBILDT and PAT of INR2.04 crore and INR1.03 crore respectively.
JOY HOTEL: CARE Rates INR65cr Long-Term Loan 'CARE BB+'
-------------------------------------------------------
CARE assigns 'CARE BB+' rating to the bank facilities of Joy
Hotel & Resorts Pvt. Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 65 CARE BB+ Assigned
Rating Rationale
The rating is constrained by risk involved with the
implementation of hotel project, demand offtake risk, competition
from the upcoming and existing hotels operating in the vicinity
and vulnerability of the tourism industry to economic cycle and
event risks. The rating, however, derives strength from
experienced promoters & management of JHRPL and its tie-up with
Starwood Hotels (Sheraton Brand) for branding, marketing and
operations for its hotel.
Going forward, ability of the company to complete the project
within the estimated cost and time and achieve the envisaged ARR
and occupancy levels would remain the key rating sensitivities.
Incorporated in 1972 as Air Agro Pvt. Ltd, the company was
acquired on Sept. 12, 2007 by Blue Coast Group, promoted by
Parwanoo (H.P) based Suri Family, headed by Mr. P L Suri. At the
time of acquisition, the name of the company was changed to JHRPL
and further the company changed its line of business from
manufacturing and assembling of automotive components to
development and operation of a 5-star hotel in Chandigarh. JHRPL
is developing a 5-star hotel with 178 rooms at a site measuring
2.21 acres at Chandigarh with an estimated cost of INR216 cr,
which is proposed to be funded with a debt-equity mix of 0.45:1.
As on December 31, 2011, the company had incurred INR128.16 cr on
the project, funded though INR28.23 cr of debt and remaining
through promoter's contribution.
KARUNA MANAGEMENT: Inadequate Info Cues Fitch to Migrate Ratings
----------------------------------------------------------------
Fitch Ratings has migrated India-based Karuna Management Services
Pvt Ltd's 'Fitch BB-(ind)' National Long-Term 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 Karuna. 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 reinstated and will be
communicated through a Rating Action Commentary.
Fitch has also migrated Karuna's bank loans to the non-monitored
category as follows:
-- INR242.5 million fund-based limits: migrated to 'Fitch BB-
(ind)nm'/'Fitch A4+(ind)nm' from 'Fitch BB-(ind)'/'Fitch A4+
(ind)'
-- INR45 million non-fund-based limits: migrated to 'Fitch
A4+(ind)nm' from 'Fitch A4+(ind)'
KAVERI ENTERPRISES: CARE Rates INR5cr Long-Term Loan 'CARE B+'
--------------------------------------------------------------
CARE assigns 'CARE B+' rating to the bank facilities of Kaveri
Enterprises.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 5.00 CARE B+ Assigned
Rating Rationale
The rating is constrained by relatively small scale of operations
of Kaveri Enterprises with low profitability, moderately
stretched working capital cycle and competition from private
dairies and co-operatives and its constitution being a
partnership firm. These factors far offset the benefits derived
from the experienced promoters and their financial support in the
past. The ability of Kaveri Enterprises to improve the scale of
operations and profitability as well as overall financial risk
profile and efficient management of working capital cycle are the
key rating sensitivities.
Kaveri Enterprises, a partnership firm, was established in 2007
and is part of the Dwarka group of companies which in turn is
part of Unizonn group. The firm is engaged in the business of
milk processing and Mr. Kapil Devprakash Rajput is the Managing
Director of the Group. The firm procures raw milk from local
dairy farmers and its plant is located at Latur, Maharashtra with
a capacity of 100,000 litres per day.
During FY11 (refers to April 1 to March 31), Kaveri Enterprises
reported a total income of INR35.15 crore and a PAT of INR0.71
crore as against a total income of INR13.28 crore and a PAT of
INR0.05 crore in FY10.
KINGFISHER AIRLINES: Still in Talks With Developers Over Eviction
-----------------------------------------------------------------
Press Trust of India reports that Kingfisher Airlines continues
to negotiate with two real estate developers that gave them an
eviction notice for allegedly defaulting on rent payments since
last November.
Kingfisher has a rented property in the Andheri suburb of the
city of Mumbai, from where it is running a part of its
operations, while the main administrative office is located at
the Kingfisher House, which the promoter Vijaya Mallya has been
planning to monetise to raise some working capital funds for the
airline, the report relates.
PTI relates the notice by city-based developers -- Samruddha
Realtors and Dhruvam Realtors -- is understood to have been
served on April 11 through their solicitors, giving a month's
time to vacate the space held by the airline at Andheri (East).
About Kingfisher Airlines
Headquartered in Mumbai, India, Kingfisher Airlines --
http://www.flykingfisher.com/-- formerly known as Deccan
Aviation Ltd., serves about 35 domestic destinations with a fleet
of more than 40 aircraft, including Airbus jets and ATR 72
turboprops. It maintains bases in major cities such as Delhi and
Mumbai. Kingfisher Airlines is a unit of UB Holdings, best known
for its United Breweries unit, and the carrier shares the
Kingfisher brand with a popular Indian beer. UB Holdings also
owns a stake in another domestic carrier, Air Deccan, whose
operations it combined with Kingfisher Airlines in mid-2008.
Kingfisher Airlines began flying in 2005.
* * *
Kingfisher Airlines lost money six years in a row, accumulating
net debt of INR77.2 billion (US$1.74 billion) as of March 2010,
according to data compiled by Bloomberg.
Kingfisher lost INR4.44 billion (US$90.1 million) in the fiscal
third quarter that ended in December 2011, 74.8% more than a loss
of INR2.54 billion a year earlier, The Economic Times disclosed.
The company has lost INR11.8 billion (US$240 million) in the
first nine months of the current fiscal year that ends in
March, a 35% rise from a year earlier.
NISAN ELECTRICALS: CARE Rates INR20.12cr Loan 'CARE BB-'
--------------------------------------------------------
CARE assigns 'CARE BB-' rating to the bank facilities of Nisan
Electricals (India) Pvt Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 20.12 CARE BB- Assigned
Rating Rationale
The rating assigned to the bank facilities of Nisan Electricals
(India) Private Limited is constrained on account of its nascent
stage of operations in the fragmented Compact Fluorescent Lamp
(CFL) industry, high exposure to foreign exchange rate
fluctuations and predominantly debt-funded capex.
The constraints are partially offset by the benefits derived from
the wide experience of the promoters and favourable growth
prospects of the CFL industry backed by support from the
government.
NEIPL's ability to complete the project within envisaged cost and
time parameters and stabilization of operations with improvement
in the financial risk profile by achieving the envisaged level of
sales and profit margins are the key rating sensitivities.
Ahmedabad based ISO 9001, ISO 14001 and OHSAS 19001 certified
Compact Fluorescent Lamp (CFL) manufacturer, Nisan Electricals
(India) Private Limited, was originally formed as a partnership
firm in 2009 as M/s. Nisan Electricals by the four partners. On
March 01, 2011 three more partners were added and the firm was
renamed as M/s. Nisan Electricals (India). On May 16, 2011, the
firm was converted into private limited company. Mr. Shailesh
Hirpara, Mr. Suresh Hirpara and Mr. Arvind Hirpara are the key
promoters of NEIPL.
NEIPL is currently setting up a greenfield project to manufacture
CFL with proposed installed capacity of 1,00,000 lamps per day.
The project is envisaged to be implemented in two phases with
manufacturing of CFL tubes/burners being implemented in the first
phase and manufacturing of complete CFL lamps being implemented
in the second phase of the project. The envisaged total cost
of project is INR28.53 crore which is financed with a debt to
equity ratio of 2.57 times.
As on April 30, 2011, NEIPL has completed Phase I of project and
commercial production has commenced in July 2011. Furthermore,
commercial production from Phase II of the project is envisaged
to commence from May 2012.
PHOENIX IT: CARE Assigns 'BB-' Rating to INR9.62cr LT Loan
----------------------------------------------------------
CARE assigns 'CARE BB-' and 'CARE A4' to the bank facilities of
Phoenix It Solutions Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 9.62 CARE BB- Assigned
Short-term Bank Facilities 5.00 CARE A4 Assigned
Rating Rationale
The ratings assigned are constrained by the small scale of
operations, high gearing, high collection period leading to
stretched liquidity position of the company, high client
concentration risk and intense completion in the IT industry. The
rating however favorably factors in the experience of the
promoter, established track record and domain expertise in
utility sector, moderate order book position and healthy
profitability margins. The ability of the company to effectively
manage its working capital, reduce client concentration and
increase scale of operations would be the key rating
sensitivities.
Phoenix IT Solutions Ltd is a small sized Information technology
company providing IT solutions and services to the utility sector
with a primary objective of reducing AT&C losses and improving
service delivery. PISL is primarily product based IT Company PISL
offers a wide range of integrated smart utility solutions such as
CIS,CRM, CSS, DAS Meter Data Management solutions, business
intelligence, revenue management, smart metering solutions with
the mix of products and services from its own portfolio as well
as partner offerings. The company is an ISO 9001:2000 certified
company and a member of NASSCOM. PISL was originally incorporated
in 1998 under name Phoenix Cybertech India Pvt Ltd, a private
limited company. In 2001, the company was converted into public
limited company under name Phoenix IT Solutions Ltd. PISL has
four facilities located in Vishakhapatnam and one another onshore
facility located in the US. PISL has recently won IBM Beacon
award as the best solution provider in the space of energy and
utility.
As per audited results for FY11 (refers to the period April 1 to
March 31), PISL has reported a total income of INR16.43 crore and
a PAT (after deferred tax) of INR2.33 crore.
PRIME SHOES: CARE Assigns 'CARE B-' Rating to INR13cr LT Loans
--------------------------------------------------------------
CARE assigns 'CARE BB- and CARE A4' ratings to the bank
facilities of Prime Shoes.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 13.00 CARE B- Assigned
Short-term Bank Facilities 4.25 CARE A4 Assigned
Rating Rationale
The ratings of Prime Shoes are constrained by weak financial risk
profile indicated by thin profitability margins, high gearing
levels and moderate debt protection metrics, highly fragmented
and government regulated industry, exposure to foreign exchange
fluctuations due to export nature of business and project
implementation risk. Its small scale of operations and
partnership nature of constitution further constrain the ratings.
The ratings, however, draw strength from the experience of the
partners in the industry and established business relations with
its customers and suppliers.
The ability of the firm to increase its scale of operations in a
fragmented industry and improve its financial risk profile
through capital infusion and better working-capital management
are the key rating sensitivities.
Prime Shoes was set up in the year 2006 as a partnership concern
by Mr.Kumaresa Pandian and Mrs.Bhavani. Prime Shoes primarily
manufactures shoe uppers and exports these products to
countries like Germany, Portugal, Spain, and Oman. The firm has
capacity to produce 1000 pairs of shoe uppers per day at its
manufacturing facility located at Unit-I, Vandalur, Chennai,
covering an overall area of around 40,000 square feet.
Prime Shoes is a part of the BDL Group, which is mainly involved
in manufacturing of finished leather and shoes. The group
concerns include Blue Diamond Leders and Sakti Footwear. All of
the manufacturing units are located at Chennai (Tamil Nadu) and
operate under a common management platform.
SHANMUGA MODERN: CARE Assigns 'BB' Rating on INR5.98cr LT Loans
---------------------------------------------------------------
CARE assigns 'CARE BB' rating to the bank facilities of Shanmuga
Modern Rice Mill.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 5.98 CARE BB Assigned
Rating Rationale
The rating is constrained by moderate utilisation of SMRM's
manufacturing capacity, exposure of profit margins to changes in
government policies and dependence on monsoons. The rating also
takes into account its small scale of operation with intense
competition level due to highly fragmented nature of the industry
and its constitution being a partnership firm. The rating is
however supported by the experience of the partners in the
industry, established market presence and comfortable revenue
growth & moderate financial performance of SMRM over the years.
Ability of the firm to operate at optimum capacity utilisation
levels along with its ability to maintain growth in income while
sustaining its profitability will be key rating sensitivities.
M/s Shanmuga Modern Rice Mill is a part of the 'Maharaja Group'
promoted by the late Mr. P. Duraiswamy Gounder. The group
consists of two other rice mill units viz. M/s Maharaja Modern
Rice Mill and M/s Sri Venkatachalapathy Modern Rice Mill. SMRM
was promoted as a proprietary concern in 1980 and it was
reconstituted as a partnership firm in 2003. The premium brand
'Maharaja' rice, produced by SMRM and its two other associates,
is a fine variety and commands good market in Chennai,
Coimbatore, Tirupur and Erode.
The firm reported PAT (after deferred tax) of INR0.68 cr on a
total operating income of INR13.24 cr in FY11 (refers to period
from April 1 to March 31). For the nine months ended December
2011, SMRM reported a total operating income of INR17.36 cr.
TARA HEALTH: CARE Assigns 'CARE BB' Rating to INR290.93cr Loans
---------------------------------------------------------------
CARE assigns 'CARE BB' and 'CARE A4' ratings to the bank
facilities of Tara Health Foods Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 290.93 CARE BB Assigned
Short-term Bank Facilities 10.00 CARE A4 Assigned
Rating Rationale
The ratings are constrained by high working-capital intensity of
operations with elongated operating cycle leading to stressed
cash flows, relatively high gearing level as well as high
competition from both organised and unorganised sectors in cattle
feed and edible oil business.
The ratings, however, draws comfort from the experienced
management, established and long track record of operation,
consistent increase in scale of operations with healthy
profitability margins overthe years and strong distribution
network.
Going forward, ability of the company to efficiently manage its
working-capital requirements, larger than anticipated capex and
its funding pattern and ability to sustain profitability margins
shall be the key sensitivities
Tara Health Foods Ltd was incorporated in 1977 and was acquired
in 2004 by the current promoters. The company is currently owned
and managed by Mr. Balwant Singh, Managing Director, who is a
first-generation entrepreneur with approximately nine years of
experience in the compounded cattle feed industry. Tara is
engaged in the production and supply of compounded cattle feed
and refining and processing edible oil, including olive oil and
blended oil, primarily in northern India.
For FY11 (refers to the period April 1 to March 31), Tara
registered a total operating income of INR397.57 cr with a PAT of
INR51.50 cr. For H1FY12, the company achieved a total operating
income of INR259.69 cr with a PAT of INR33.74 cr.
VISHWAROOP INFOTECH: CARE Reaffirms 'CARE BB+' LT Bank Ratings
--------------------------------------------------------------
CARE reaffirms the ratings assigned to the bank facilities of
Vishwaroop Infotech Pvt Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 397.64 CARE BB+ Reaffirmed
Rating Rationale
The rating is constrained by inadequacy of monthly lease rentals
to meet the debt obligations, the rollover risk of the existing
lease agreements, high gearing levels and the cyclical nature of
the industry.
The rating, however, continues to derive strength from the
presence of lease agreements for 92% of the leasable area, ready
inventory of 0.70 lakh square feet (lsf) of retail shops in
Raguleela Arcade which can be monetized and favourable location
of these properties in Vashi (Navi Mumbai). The rating also
derives strength from extensive experience of VIPL's promoters
in the Mumbai real estate industry.
VIPL's ability to achieve the desired occupancy levels and
mobilise funds from the group to bridge the liquidity mismatches
remain key rating sensitivities.
Vishwaroop Infotech Pvt. Ltd., incorporated in February 2004, is
a Wadhwa group company. In the past, it has completed a
commercial project namely Vishwaroop IT Park and a mall project,
Raghuleela Arcade at Vashi, Navi Mumbai. Currently it is engaged
in leasing of both the premises. Vishwaroop IT Park is located
opposite Vashi station, and offers 6.04 lakh square feet (lsf) of
IT / ITES office space. As on February 29, 2012 97.5% (i.e 5.89
lsf) of the said premises are leased out. Raghuleela Arcade in
Vashi is a three-storied mall with six screen multiplex, retail
outlets and restaurants with two level basement parking as well
as surface parking for 400 cars. It has a total area of 3.27 lsf
out of which the company has leased out 2.80 lsf i.e 86% of the
leasable area as on February 29, 2012. The company also proposes
to sell 0.70 lsf of area which is over and above total leasable
area for Raghuleela Arcade.
On the total income of INR273.79 crore, the company posted a loss
of INR45.51 crore during FY11 (refers to the period April 1 to
March 31).
=================
I N D O N E S I A
=================
PT BANK: S&P Gives 'BB+/B' Issuer Credit Ratings; Outlook Stable
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' long-term
and 'B' short-term issuer credit ratings to PT Bank Rakyat
Indonesia (Pereso) Tbk. (BRI). The outlook on the long-term
rating is stable. "At the same time, we assigned 'axBBB+' long-
term and 'axA-2' short-term ASEAN regional scale issuer credit
ratings to BRI," S&P said.
"We base our ratings on BRI on the bank's 'strong' business
position, 'adequate' capital and earnings, 'moderate' risk
position, 'above-average' funding, and 'strong' liquidity, on top
of our 'bb' anchor for a bank operating predominantly in
Indonesia. We assess the bank's stand-alone credit profile [SACP]
to be 'bb+'," said Standard & Poor's credit analyst Terry Sham.
"Our bank criteria use our banking industry country risk
assessment (BICRA) economic risk and industry risk scores to
determine a bank's anchor, the starting point in assigning an
issuer credit rating. The BICRA score for Indonesia is based on
our evaluation of the country's economic risk. We view Indonesia
as a low-income economy, with development constrained by
infrastructure shortfalls, legal uncertainties, corruption, and
labor market rigidities. Economic imbalances appear mild, but
credit risk in the economy stems from a weak debt capacity, and
significant weaknesses in payment culture and rule of law. With
regard to industry risk, the banking industry in Indonesia
operates within a weak institutional framework, with a weak
regulatory track record. However, a strong customer deposit base
supports the banking industry. Risk appetite is generally
moderate," S&P said.
"BRI's well-established and recognized franchise, extensive
branch network in Indonesia, and resilient revenue stream support
its business position. The bank is the second largest in
Indonesia, with total assets at Indonesian rupiah 427 trillion at
the end of March 2012, and a market share of more than 10% in
both loans and customer deposits. BRI's diversified branch
network and market leader position in microfinance enable it to
generate strong interest income, and attract and retain deposits
from a wide base of customers. We expect the bank's business
growth over the next two years to be largely from serving micro,
small, and midsized enterprises in Indonesia," S&P said.
"Our assessment of BRI's capital and earnings as 'adequate'
reflects our expectation that the bank's risk adjusted capital
(RAC) ratio will stay close to 7% over the next 12-18 months. We
anticipate that the bank will maintain its strong profitability
and high profit retention to mitigate the pressure on
capitalization stemming from its continuously strong loan growth.
We also expect the bank to maintain a simple capital structure,"
S&P said.
"We expect BRI's overall credit costs to remain fairly high. This
is because a substantial portion of the bank's loan book is in
high-yield segments in Indonesia. Nevertheless, we recognize the
bank's business model and risk exposures as simple, and expect
the bank's loan growth to be largely in line with the fairly high
industry average," S&P said.
"Customer deposits form the bulk of the bank's funding base.
BRI's branch network, with above-average coverage across rural
areas, enables it to tap into a wide customer deposit base. We
expect BRI to maintain a large pool of liquid assets, mainly
short-term government securities and cash, to cover its liquidity
needs," S&P said.
"The issuer rating on BRI is at the same level as the bank's
SACP. In our view, there is a 'high likelihood' that the
government of Indonesia will provide extraordinary support to
BRI, if needed. Our view is based on our assessment that BRI has
a 'high' systemic importance in Indonesia. We believe the
government is 'highly supportive' toward its banking sector. That
said, BRI's SACP is already at the same level as the sovereign
rating on Indonesia (BB+/Positive/B; axBBB+/axA-2)," S&P said.
"The stable outlook reflects our expectation that BRI will manage
its loan quality so as to limit its credit costs and maintain
strong profitability. We expect the bank's loan growth to be
largely in line with the industry average, with a similar pace of
growth in customer deposits. In addition, we believe that the
bank will maintain its strong franchise and competitive advantage
in microfinance within Indonesia," said Mr. Sham.
"We consider an upgrade of BRI unlikely in the next 12-18 months.
We may downgrade the bank if we believe that it is expanding
aggressively, its loan quality deteriorates substantially, or its
funding profile weakens. We could also lower the rating on the
bank if we take a similar action on the foreign currency
sovereign rating on Indonesia," S&P said.
TOWER BERSAMA: Moody's Confirms 'Ba2' CFR; Outlook Stable
---------------------------------------------------------
Moody's Investors Service has confirmed the Ba2 Corporate Family
Rating of Tower Bersama Infrastructure Tbk ("TBI") with a stable
outlook.
This action concludes the review for downgrade which commenced on
February 9, 2012, following the company's announced acquisition
of 2,500 towers from Indosat Tbk (Indosat, Ba1 stable).
The rating confirmation reflects Moody's view that the
acquisition of Indosat's towers can be accommodated within the
parameters of TBI's Ba2 rating.
Ratings Rationale
"The deal will enhance TBI's overall tenant quality and we
estimate that its Tier One revenue contribution -- being revenues
attributable to Indosat, PT Telekomunikasi Indonesia (Baa1
stable), PT Telekomunikasi Selular (Baa1 stable) and XL Axiata
(Ba1 stable) -- will increase to approximately 73% from 69%. The
transaction should also make TBI the largest independent tower
provider in Indonesia (in terms of total telecommunication sites,
including shelters and DAS), a position from which it should
benefit, given the growing number of collocations and increased
acceptance of tower sharing by telecom operators in Indonesia,"
says Nidhi Dhruv, a Moody's Analyst and also Lead Analyst for
TBI.
"Although the transaction will lead to TBI exceeding the downward
triggers for its rating in 2012, mainly due to timing -- with
only six months revenues from the Indosat towers -- the EBITDA-
accretive nature of the business will naturally result in
deleveraging over the next year. However, the rating now has
limited tolerance for substantially debt-funded acquisitions in
the near-term," says Ms. Dhruv.
In the absence of any further material acquisitions, Moody's
expects the leverage ratio to range over 3.5 -- 4.0x over the
next two years (based on full-year historical adjusted EBITDA
rather than run rate-adjusted EBITDA).
The tower acquisition will be funded predominantly through bank
borrowings under TBI's existing US$2 billion debt program. The
company will utilize the remaining amount of US$145 million under
the existing Series 3 facility, and has signed facility
agreements with its banks for Series 4 and 5 of the debt program
for a combined amount of US$250 million.
"Although the Indosat tower deal is TBI's largest acquisition so
far, its track record of past acquisitions provides some comfort
on its ability to integrate and successfully manage the new
assets as well as grow the tenancy ratio. Indonesia's growing
demand for 3G and data services, as well as the growing
acceptance of tower sharing should also support the growth in
TBI's towers and tenancies," adds Dhruv.
In April 2012, TBI received shareholder approval for the
acquisition. Given its increased share price, the final cash
portion of the acquisition price may be lower than the US$350
million that Moody's has factored into its assumptions.
The acquisition awaits the consent from Indosat's creditors, and
Moody's expects the transaction to be completed within Q2 2012.
The outlook on the ratings is stable on the expectation that TBI
will successfully integrate the Indosat tower acquisition, while
continuing to grow and de-leverage in accordance with its
business model. The stable outlook also reflects Moody's
expectation that the regulatory environment remains benign.
Upward rating pressure in the near term is limited, given TBI's
small scale. However, the rating may experience upward pressure
should TBI grow the business in accordance with projections and
improve its fundamental credit profile; in particular Moody's
would like to see adjusted debt/EBITDA fall and remain below 3.0-
3.5x on a consistent basis and for interest cover, as measured by
(FFO + interest)/interest, to rise above 4.0x.
Downward pressure could arise should competition intensify such
that TBI cannot meet its business plan. Such pressures would be
evidenced in adjusted debt/EBITDA rising above 4.5x and (FFO +
interest)/interest falling below 2.0x on a consistent basis.
In addition, Moody's would be concerned should the proportion of
revenues contributed by its key customer group -- comprising PT
Telekomunikasi Indonesia, PT Telekomunikasi Selular, PT Indosat
Tbk and PT XL Axiata Tbk -- fall below 50-55%.
The principal methodology used in rating PT Tower Bersama
Infrastructure Tbk was the Global Communications Infrastructure
Rating Methodology published in June 2011.
TBI is the holding company of the Tower Bersama Group ("TBG"),
one of the 2 leading independent tower operators in Indonesia,
with 5,100 telecommunication sites serving 7,680 tenants as of 31
March 2012. It leases space on its communications towers to
cellular telecommunications operators on long-term contracts.
=========
J A P A N
=========
ELPIDA MEMORY: SK Hynix Drops Out of Bidding
--------------------------------------------
Yonhap News Agency reports SK hynix Inc., the world's second
largest memory chipmaker, has decided to give up its bid to buy
Elpida Memory Inc., the head of the company's parent business
group said Friday.
Jun Yang, Naoko Fujimura and Takashi Amano at Bloomberg News note
that SK Hynix's decision not to participate in the second round
of bidding worsened the Japanese company's chances of finding
another suitor as it tries to restructure after filing for
bankruptcy. The Bloomberg News reporters pointed out that SK
Hynix was the only company that had publicly expressed interest
in buying Elpida.
According to Yonhap News, SK Group Chairman Chey Tae-won said in
a directors meeting that close analysis of overall conditions
revealed that it is not advantageous for SK hynix to buy the
Japanese chipmaker at present. "When a decision has to be made
on buying a company, one must check to see if a deal is worth the
effort," the head of South Korea's third-largest family-owned
conglomerate said. He, however, said that if there are other
good mergers and acquisition prospects, SK will consider them.
Yonhap News notes that related to Chey's decision, sources said
there has been considerable debate within the business group in
regard to the practicality of buying Elpida in the face of
sluggish global semiconductor prices. There have also been
concerns raised about the need to borrow money to take over the
struggling chipmaker, which can increase SK's overall financial
burden, Yonhap News adds.
SK hynix announced in late March that it submitted a letter of
intent (LOI) to bid for Elpida, which filed for bankruptcy
protection on Feb. 27. The LOI was made after SK Group took over
Hynix Semiconductor Inc. for 3.37 trillion won (US$2.97 billion)
in mid February.
According to Bloomberg News, private equity firm TPG Capital also
planned a bid, a person familiar with the matter said April 6.
Jochen Legewie, a spokesman for TPG in Tokyo, declined to comment
in an e-mail to Bloomberg News.
Bloomberg News relates Yukio Sakamoto, Elpida's president, is
heading the company's restructuring efforts after getting court
approval to serve as its trustee March 23. The company plans to
submit its revival plan Aug. 21.
Bloomberg News further notes that while Elpida's creditors may
ask for at least $3 billion to $4 billion, bidders won't probably
offer more than $2 billion, Bank of America Merrill Lynch said in
a March 30 report. Also, a buyer would have to spend $3 billion
during the next 12-18 months to help restore Elpida's
competitiveness, making the deal risky, according to the report.
About Elpida Memory
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
After semiconductor prices plunged, Japan's largest maker of DRAM
chips filed for bankruptcy in February with liabilities of 448
billion yen ($5.6 billion) after losing money for five quarters.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc.,
filed for corporate reorganization proceedings in Tokyo District
Court on Feb. 27, 2012. The Tokyo District Court immediately
rendered a temporary restraining order to restrain creditors from
demanding repayment of debt or exercising their rights with
respect to the company's assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
Elpida Memory Inc. sought the U.S. bankruptcy court's recognition
of its reorganization proceedings currently pending in Tokyo
District Court, Eight Civil Division. Yuko Sakamoto, as foreign
representative, filed a Chapter 15 petition (Bankr. D. Del. Case
No. 12-10947) for Elpida on March 19, 2012.
=========
K O R E A
=========
KOREA EXCHANGE: Sued by Lone Star Over $49 Million Bill
-------------------------------------------------------
Bloomberg News reports that five units of Lone Star are asking
Singapore's High Court to rule that Korea Exchange Bank should
compensate them for payments made to Olympus Capital, according
to court papers filed.
According to Bloomberg News, an international arbitration
tribunal in Singapore ordered Lone Star and Korea Exchange Bank
in December to pay $37.3 million compensation and another $11.7
million in legal costs to Olympus Capital, according to the
complaint. Olympus Capital, a Hong Kong-based private equity
firm, had sought compensation for losses it incurred from the
sale in 2003 of a stake it held in Korea Exchange Bank's credit
card unit.
Bloomberg News relates that Marjorie A. Harrigan, a lawyer
assigned to support Lone Star's deals in Asia, said in an
April 25 court filing "KEB should contribute 100 percent towards
the liability" for the payment to Olympus Capital. The
arbitration tribunal didn't specify the split of liability
between Lone Star and Korea Exchange Bank.
The report adds Lone Star declined to comment on the lawsuit.
Korea Exchange Bank will deal with the lawsuit according to legal
procedures, it said in an e-mail to Bloomberg News, declining to
comment further.
The Troubled Company Reporter-Asia Pacific reported on
January 30, 2012, that South Korea's financial regulator approved
Hana Financial Group Inc.'s takeover of the Korea Exchange Bank.
In November 2010, Hana Financial agreed with the U.S. private
equity fund to buy the latter's 51.02% stake in KEB for KRW4.69
trillion (US$4.11 billion)
About Korea Exchange Bank
Korea Exchange Bank -- http://www.keb.co.kr/-- established in
1967, is one of seven national banks in South Korea with over
300 domestic branches and 28 overseas networks, including
Canada, the United States, Panama and Germany, constituting the
most extensive global banking network of any Korean bank. KEB
Futures -- http://www.kebf.com/-- is a clearing member of KOFEX
and is a subsidiary of Korea Exchange Bank, the official F/X
settlement bank for Korean Futures Exchange.
* * *
Korea Exchange Bank continues to carry Moody's Investors Service
"C-" Bank Financial Strength Rating. KEB also carries Fitch
Ratings "C" Individual Rating.
===============
M A L A Y S I A
===============
RHB BANK: Moody's Bank Financial Strength Rating Remains at 'D'
---------------------------------------------------------------
Moody's Investors Service has assigned an A3 rating to RHB Bank
Berhad's five-year USD-denominated senior unsecured fixed-rate
notes. The rating outlook is stable.
Moody's current ratings on RHB Bank Berhad are:
-- D on its bank financial strength rating (BFSR), translates to
a standalone credit assessment of ba2
-- A3/P-1 on its long-term/short-term foreign-currency deposits
-- (P)A3/(P)P-1 on its foreign-currency senior unsecured Medium
term Note (MTN) programme
The outlook on RHB Bank's BFSR is positive. All its other ratings
are on a stable outlook.
Ratings Rationale
The USD-denominated notes will be issued pursuant to RHB Bank
Berhad's USD500 million Euro MTN programme for issuance of senior
debt instruments.
The notes represent direct, senior, unsubordinated and unsecured
obligations of RHB Bank. As such, they will rank pari passu with
the bank's unsecured and unsubordinated obligations.
The rating was assigned on the condition that no material changes
are made to the draft terms and conditions of the notes reviewed
prior to the launch of the issuance.
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: Global Methodology published in March 2012.
RHB Bank is headquartered in Kuala Lumpur, and reported total
assets of RM143 billion (approximately US$45 billion) at end-
December 2011.
===============
M O N G O L I A
===============
KHAN BANK: Moody's Issues Summary Credit Opinion
------------------------------------------------
Moody's Investors Service issued a summary credit opinion on Khan
Bank LLC and includes certain regulatory disclosures regarding
its ratings. The release does not constitute any change in
Moody's ratings or rating rationale for Khan Bank LLC.
Moody's current ratings on Khan Bank LLC are:
Long Term Issuer (domestic and foreign currency) ratings of Ba3,
on review for downgrade
Senior Unsecured MTN Program (domestic and foreign currency)
ratings of (P)Ba3, on review for downgrade
Long Term Bank Deposits (domestic currency) ratings of Ba3, on
review for downgrade
Long Term Bank Deposits (foreign currency) ratings of B2
Bank Financial Strength ratings of D-, on review for downgrade
Subordinate MTN Program (domestic and foreign currency) ratings
of (P)B1, on review for downgrade
Short Term Bank Deposits (domestic and foreign currency) ratings
of NP
RATINGS RATIONALE
Moody's assigns a bank financial strength rating (BFSR) of D- to
Khan Bank, which translates to a baseline credit assessment (BCA)
of ba3. The rating reflects Khan's (1) strong franchise in
Mongolia as the largest bank in terms of deposits and loans with
an extensive nationwide branch network, (2) current adequate
capital position, and (3) stability in asset quality. However,
these strengths are offset by the Mongolia's volatile operating
environment and narrow-based economy. Both are vulnerable to
external factors.
The operating environment has been improving due to the recovery
in the mining industry. Moody's believes that the benefits of the
Oyu Tolgoi copper and gold project and Tavan Tolgoi coking coal
project will be transformational for the economy. But the
historic boom-bust cycle of the economy adds to the volatile
operating environment for the banking business.
According to the IMF, the current Mongolian economy is
overheating, raising concerns of a hard landing if external
shocks hit the country. The European sovereign crisis could also
lead to a significant drop in copper and coal prices. The IMF
does not believe that the size of the country's foreign currency
reserves and its swap line with the People's Bank of China (PBOC)
are enough to defend an exchange rate target. In addition,
inflation of 15-16% may accelerate as fiscal policy is expected
to be challenged by political pressure for pro-cyclical spending.
In terms of shareholders, the bank is 52.98% owned by Sawada
Holdings (Japan) and 22.35% by Tavan Bogd Trade Company Ltd
(Mongolia). In July 2003, Sawada Holdings sold a 40% stake to
Tavan Bogd Trade Company Ltd (Mongolia). The International
Finance Corporation (IFC) has a 9.07% stake. A Mongolian
individual, Mrs. D. Hulan, related to Tavan Bogd, owns a 12.97%
stake.
The probability of systemic support for Khan is high, given the
bank's large market presence in Mongolia. The systemic support
indicator for Mongolia's government is B1, which leaves the
bank's local currency bank deposit rating at its standalone
rating of Ba3. Its foreign currency deposit rating is at B2,
which is constrained by the country ceiling. The foreign currency
debt rating for its senior unsecured obligations is Ba3.
Khan Bank's deposit and debt ratings incorporate three main
elements: (1) the bank's BFSR of D-; (2) Moody's assessment of
moderate systemic support from the Mongolia government, a
component of Joint Default Analysis (JDA), with a systemic
support indicator of B1; and (3) the seniority of its deposits
and debt.
- Strong franchise holding the No. 1 position in both deposits
and loans
- Strength in retail and MSME (micro, small and medium
enterprise) business with the largest branch network
nationwide and extensive reach into rural areas
- Solid capital position despite rapid asset growth
- Maintaining good asset quality while pursuing loan growth in
corporate banking and in the Ulaanbaatar (UB) metropolitan
area
- Narrowing profit margin due to intense competition and the
bank's migration into the corporate sector
Rating Outlook
The BFSR, local currency bank deposits rating, issuer rating,
foreign currency long-term senior unsecured debt rating, foreign
currency long-term senior unsecured MTN/subordinate MTN are on
review for downgrade. The foreign currency deposit rating carries
a stable outlook.
What Could Change the Rating - Up
There is no upside pressure on the rating in the short term
captured by the current review for downgrade.
During the review, Moody's will focus on the following factors
that could mitigate the banks' credit correlation with that of
the sovereign: (1) their relative low direct exposure to
government debt, apart from central bank bills; (2) the sizeable
presence of foreign shareholders at many of these banks; (3) any
changes in the vulnerability of the Mongolian banking system to
shocks when compared to the 2008 crisis; and (4) the size of the
liquidity buffers - in both domestic and foreign currency - held
by these banks.
What Could Change the Rating - Down
Additional factors that could exert negative pressure on the
rating include (1) asset quality deteriorating significantly,
possibly due to aggressive expansion, (2) NPLs surpassing 4.5%,
(3) the new NPL formation rate of gross loans exceeding 8%, (4)
its Tier 1 ratio falling below 9%, (5) profitability
deteriorating significantly, with net income less than 1.4% of
average RWA, or, (6) signs of strains in the bank's liquidity
position, a decline in the Mongolian economy, or a system-wide
confidence crisis, which could threaten the bank's franchise.
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: Global Methodology published in March 2012.
====================
N E W Z E A L A N D
====================
SOUTH CANTERBURY: Receivers Repay $645 Million to the Crown
-----------------------------------------------------------
Marta Steeman at Fairfax NZ News reports that the receivers of
South Canterbury Finance have repaid the Crown $645 million
18 months after the financial empire of the late Allan Hubbard
collapsed.
That leaves the taxpayer still footing a bill of $1.1 billion
after the Government forked out $1.58 billion to debenture
holders and depositors in October 2010 under the Crown Deposit
Guarantee Scheme and paid another $175m for priority security
holders, the report adds.
Ms. Steeman writes that Kerryn Downey and William Black of
McGrathNicol released their third six monthly report in which
they said they had repaid the Crown $125 million in the period
September 1 last year to February 29 this year, the third
reporting period. That brought the total of repayments to $470
million from the SCF group plus the $175 million they had repaid
earlier. At the end of February the receivers held another $108
million in cash and investments.
According to Fairfax NZ, the receivers are in discussion with the
Government to finalize the Crown's purchase of certain SCF assets
which will be transferred to a new company Crown Asset
Management. That company is managing the recovery of the
remaining assets of six collapsed finance companies subject to
the Crown guarantee.
The report notes that Downey and Black said the main transactions
in the six month reporting period were the sale of SCF's 33.6 per
cent stake in Dairy Holdings, a huge corporate dairy farmer, for
$56.4 million and loan recoveries of $74.8 million. In the six
months receivership fees amounted to $3.1 million and legal fees
$2.2 million.
About South Canterbury
Based in New Zealand, South Canterbury Finance Limited
(NZE:SCFHA) -- http://www.scf.co.nz/-- was engaged in the
provision of financial services. The Company's principal
activities were borrowing funds from public and institutional
investors and on lending those funds to the business, plant and
equipment, property, rural and consumer sectors. It typically
advanced funds by means of hire purchase, floor plans, leasing of
plant, vehicles and equipment, personal loans, business term
loans and revolving credit facilities, mortgages against
property, and other financial instruments, including consumer
loan insurance.
On Aug. 31, 2010, Trustees Executors Limited, as trustee for
South Canterbury Finance charging group, appointed Kerryn Downey
and William Black of McGrathNicol as receivers of the charging
group's secured assets.
"As Trustee, we have had South Canterbury Finance under
heightened surveillance since 2008. As part of that, SCF was
granted a Trustee waiver in February 2010 to allow it time to
recapitalize. Unfortunately, the Company's Directors have
advised us that they have not been successful with respect to a
recapitalization and requested us to appoint a receiver. At this
point we, as Trustee, agree that it is the best interests of
debenture, deposit and bond holders to do that," said Yogesh
Mody, Southern Regional Manager for Trustees Executors Limited.
The New Zealand government repaid South Canterbury's 35,000
depositors and stockholders NZ$1.6 billion under the Crown
retail deposit guarantee scheme.
*********
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
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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.
*** End of Transmission ***