/raid1/www/Hosts/bankrupt/TCRAP_Public/120910.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, September 10, 2012, Vol. 15, No. 180
Headlines
A U S T R A L I A
AUSTASIA MILLING: Faces Insolvent Trading Probe
C H I N A
CDC CORP: Confirmed Plan to Pay Up to $6.10 a Share to Equity
CHINA METALLURGICAL: Moody's Cuts Bond Ratings; Outlook Negative
* CHINA: Moody's Sees Progress in Securitization Market Move
H O N G K O N G
WALLER BROKING: Creditors' Proofs of Debt Due Oct. 3
WANG HING: Members' Final Meeting Set for Oct. 3
WANG ON: Members' Final Meeting Set for Oct. 3
YIELD LAND: Members' Final Meeting Set for Oct. 3
I N D I A
AIR CONTROL: ICRA Rates INR11.85cr Cash Credit at '[ICRA]B+'
AKASH ENTERPRISES: ICRA Assigns '[ICRA]B+' Rating to INR4cr Loan
INDIAN OIL: Moody's Lowers Baseline Credit Assessment to 'Ba2'
KAMAL TIMBERS: CARE Assigns 'CARE B+' Rating to INR6cr LT Loan
MANGALAGIRI TEXTILE: ICRA Reaffirms 'BB-' INR24.5cr Loan Rating
MARUDHAR EDUCATION: CARE Rates INR15.02cr LT Loan at 'CARE BB'
PARMESHWARI SILK: ICRA Rates INR17.20cr Loan at '[ICRA]B+'
REDDY VEERANNA: ICRA Revises Rating on INR35cr Loan to 'BB-'
SHASHANK AUTO: CARE Rates INR11.35cr Long-Term Loan at 'CARE B+'
SHRI BANKEY: ICRA Places '[ICRA]B-' Rating on INR35cr Loans
SMALL JOHNSON: ICRA Assigns '[ICRA]BB' Rating to INR12.75cr Loans
I N D O N E S I A
MNC SKY: Moody's Changes Outlook on 'B2' CFR to Positive
J A P A N
ELPIDA MEMORY: Bid to Duck Questions from Bondholders Denied
JLOC XXXIII: Deleveraging Cues Fitch to Affirm Ratings
SHARP CORP: Puts Up Properties as Collateral for Fresh Bank Loans
K O R E A
POSCO ENGINEERING: Moody's Revises Rating Outlook to Negative
N E W Z E A L A N D
NZ DAIRIES: Fonterra Obtains Commerce Commission Nod on Purchase
S I N G A P O R E
AP COMMUNICATIONS: Court Enters Wind-Up Order
CITIMEX INTERNATIONAL: Court Enters Wind-Up Order
CITIMEX MARKETING: Court Enters Wind-Up Order
EUROIMPORTS PTE: Creditors' Meetings Set for Sept. 14
FANTASY ISLAND: Creditors' Meetings Set for Sept. 20
LUTHOR LICHT: Placed Under Voluntary Wind-Up Proceedings
RASACINTA PTE: Court to Hear Wind-Up Petition on Sept. 21
SELUX ASIA: Members' Final Meeting Set for Oct. 5
SILVERSTAR INVESTMENTS: Creditors' Meetings Set for Sept. 14
TRANSCONTINENTAL TRADE: Court Enters Wind-Up Order
X X X X X X X X
* Moody's Says Asian Liquidity Stress Index Erodes in August
- - - - -
=================
A U S T R A L I A
=================
AUSTASIA MILLING: Faces Insolvent Trading Probe
-----------------------------------------------
Cowra Community News reports that the landmark Young Flour Mill,
now known as AustAsia Milling Pty Ltd, will be reported to the
Australian Securities and Investments Commission (ASIC). It may
have been trading insolvent since February 2010, the report says.
Cowra Community News relates that Sydney-based administrators of
the company, Lawler Partners, have recommended the company be
placed in liquidation.
According to the report, AustAsia Milling owes more than
AUD5.5 million to some 300 creditors, many of them Young and
district farmers and businesses now struggling to remain viable.
No offer for the sale of the business or deed of company
arrangement has been received, Cowra Community News relates
citing a report by the administrators to the company's creditors.
Cowra Community News notes that Lawler Partners also recommended
the meeting of creditors, scheduled for August 31, be adjourned
for 30 days to allow further time for a deed proposal or an offer
to be made.
A spokesman for Lawler Partners said creditors can only pursue an
insolvent trading claim if the liquidators file on their behalf,
or with the liquidator's approval, the report relays.
Cowra Community News relates that the administrators' statement
reportedly suggests further investigation if liquidation
identifies an earlier date of insolvency, but criminal
proceedings against the company is a matter for ASIC.
The administrators' statement reportedly says AustAsia Milling's
profit and loss statements show it had traded at a loss since the
company's establishment in 2009, according to Cowra Community
News.
About Young Stock Feeds
Established in 1888, AustAsia Milling Pty Ltd --
http://www.austasiamilling.com/-- is a supplier in the flour
milling, stockfeed and grain industries. The 124-year-old
business also trades as Young Stock Feeds.
As reported in the Troubled Company Reporter-Asia Pacific on
Aug. 8, 2012, SmartCompany said AustAsia Milling is on the market
after entering administration with AUD9 million in debt.
John Vouris and Bradley Tonks of Lawler Partners were appointed
as administrators on July 27, 2012, and the business was
advertised for sale "as a going concern."
=========
C H I N A
=========
CDC CORP: Confirmed Plan to Pay Up to $6.10 a Share to Equity
-------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that CDC Corp., a China-based software developer also
known as Chinadotcom, won a bankruptcy judge's approval last week
of a Chapter 11 plan under which shareholders are slated to
receive as much as $6.10 a share.
According to the report, the stock closed Sept. 6 at $5.44, up
9.9% in over-the-counter trading. The pile of cash for
shareholders resulted from a sale of CDC's 87% interest in CDC
Software Corp. that fetched a gross price of $249.8 million from
Archipelago Holding, an affiliate of Vista Equity Holdings.
The report relates that after paying a $65 million secured
judgment claim and other costs, CDC was left with a net of $172.8
million when the sale was completed in April. Unsecured
creditors with $2.9 million in claims were paid in full and thus
didn't vote on the plan. According to the disclosure statement
explaining the plan, $5.01 a share is the least shareholders
should expect to receive.
As reported by the Troubled Company Reporter, the Debtor's Plan
provides that in addition to paying creditors in full and
distributing the excess to shareholders, the plan would allow
filing lawsuits against insiders who CDC claims were behind a
motion to dismiss the case. China.com filed a competing
reorganization plan. CDC interprets the plan as giving releases
of claims that CDC's plan would prosecute instead.
The Bloomberg report discloses that in the past three years, the
stock's closing peak was $9.57 on April 12, 2010. The bottom was
7.8 cents on Dec. 1, 2011. When first announced, the sale caused
CDC's stock to double in price, closing that day at $3.05.
About CDC Corp
Based in Atlanta, CDC Corp. (Nasdaq: CHINA) --
http://www.cdccorporation.net/-- is the parent company of CDC
Software (Nasdaq: CDCS). CDC Software is based dually in
Shanghai, China, and Atlanta and produces enterprise software
applications, IT consulting services, outsourced applications
development and IT staffing. The company's owners include Asia
Pacific Online Ltd., Xinhua News Agency and Evolution Capital
Management.
CDC Corp., doing business as Chinadotcom, filed a Chapter 11
petition (Bankr. N.D. Ga. Case No. 11-79079) on Oct. 4, 2011.
James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout, PA,
in Atlanta, Georgia, serves as counsel. Moelis & Company LLC
serves as its financial advisor and investment banker. Marcus A.
Watson at Finley Colmer and Company serves as chief restructuring
officer. The Debtor estimated assets and debts at US$100 million
to US$500 million as of the Chapter 11 filing.
The Official Committee of Equity Security Holders of CDC Corp. is
represented by Troutman Sanders. The Committee tapped Morgan
Joseph TriArtisan LLC as its financial advisor.
The stock of CDC Software Corp. was sold for $249.8 million to an
affiliate of Vista Equity Holdings.
CHINA METALLURGICAL: Moody's Cuts Bond Ratings; Outlook Negative
----------------------------------------------------------------
Moody's Investors Service has downgraded the issuer and senior
unsecured bond ratings of China Metallurgical Group Corporation
to Baa3 from Baa2.
The ratings outlook remains negative.
Ratings Rationale
"The downgrades reflect CMGC's weaker-than-expected operating
performance and its high debt leverage," says Jiming Zou, a
Moody's Analyst.
CMGC's key listed subsidiary Metallurgical Corporation of China
Ltd, which accounted for over 90% of the group's revenue and
assets, reported flat revenue growth, weak operating margins and
asset impairment of its Cape Lambert project in 1H 2012. Its debt
level also increased owing to its large capex and high working
capital needs.
MCC's performance highlights CMGC's weak operating performance.
As a result, Moody's expects that CMGC's adjusted debt/EBITDA has
deteriorated to more than 10x, a level that no longer supports
the previous baseline credit assessment of ba1.
"New contracts signed also dropped by 24% in 1H versus a year ago
and the group's different business segments are likely to
continue facing a challenging operating environment in the next
12-18 months," adds Ping Luo, Moody's Vice President and local
market analyst for CMGC.
The revenue and profit growth of CMGC's E&C segment have been
tempered by the slowdown of China's steel industry and the
overall fixed asset investment. Although Moody's expects the
company may benefit from some new infrastructure investments
recently approved by Chinese government, th rating agency has yet
to see those to be reflected in CMGC's order backlog.
The contract sales of its commercial property have also declined,
given the regulatory restrictions on the property market in
China. The money-losing resource-development segment continues to
grapple with low commodity prices and the risks of cost overruns
and project delays.
However, Moody's believes management is committed to reduce capex
and improve operating cash flow by decreasing the number of BOT
projects and which will help lower working capital needs and
contain its debt level.
The Baa3 rating combines the baseline credit assessment of ba2
and the two notches of uplift from the expected strong support
from the Chinese government under Moody's joint default analysis
approach for government-related issuers.
As one of the largest central-government-owned enterprises in
China, Moody's expects CMGC will continue to receive operational
support, including government-granted contracts.
Moody's also believes that the probability of extraordinary
support from the government in times of financial stress for the
company is high, given the government's 100% ownership and CMGC's
strategic importance to the government's policy of developing
social welfare housing and investing in overseas mining assets.
CMGC also has strong access to the domestic bank and capital
markets. It has a large uncommitted credit facility of RMB286
billion from various Chinese and foreign banks. So far this year,
the company has raised RMB11 billion of short-term financing
notes in the domestic market.
The rating outlook remains negative, as Moody's expects that CMGC
will continue to face challenges in its end-markets and which
will hamper its efforts to reduce leverage over the next 12-18
months.
The outlook could return to stable if the company: (1)
demonstrates better control of its overseas investments; (2)
achieves profitability in its resource development business; (3)
significantly improves its operating margins across its key
business lines; and (4) successfully reduces leverage, such that
adjusted debt/EBITDA trending below 9x-10x.
Downgrade pressure could emerge if: (1) its resources-development
business deteriorates further; (2) CMGC's core E&C business
declines significantly; (3) its overall profit margins continue
to drop, such that its adjusted EBITDA margin falls below 5%; and
(4) the company fails to reduce leverage and its adjusted
debt/EBITDA stays above 10x-12x on a consistent basis.
The principal methodology used in rating China Metallurgical
Group Corporation was the Global Construction Methodology
published in November 2010 and Government-Related Issuers:
Methodology Update published in July 2010.
CMGC is one of the largest engineering and construction companies
in China. It is fully owned by the State Council of China. It
focuses on engineering and construction, mainly in the
metallurgical sector. The rest of the business consists of
equipment manufacturing, resources development, property
development and paper making.
CMGC holds a 64.18% stake in Metallurgical Corporation of China
Ltd (MCC), a company listed on both Hong Kong and Shanghai stock
exchanges. MCC accounts for around 90% of CMGC's total assets.
* CHINA: Moody's Sees Progress in Securitization Market Move
------------------------------------------------------------
Moody's Investors Service says that China's regulators are making
steady progress towards establishing a securitization market, but
-- as has been the case with other jurisdictions -- the process
will be long and involved.
"As in other countries, the enactment of a securitization law in
China -- which is essential for the market -- is a time consuming
and complex process. It will involve and require collaboration
between different regulatory authorities, and we note this is
happening on the Mainland," says Jerome Cheng, a Moody's Vice
President and Senior Credit Officer.
"We also note that the People's Bank of China, the Chinese
Banking Regulatory Commission, and the Ministry of Finance have
been working together and jointly issued an announcement in May
2012 to extend a pilot program for asset securitization first
promulgated in 2005," adds Mr. Cheng.
"The extension of this program represents part of the efforts to
establish the basis for a healthy and sustainable development of
a securitization market through improvements in China's legal,
regulatory and credit control systems," says Mr. Cheng.
Cheng was speaking on the release of a Moody's report,
Identifying Key Credit Considerations for the Development of
China's Securitization Market, and which he authored.
The report further lays out the three main credit considerations
for the development of China's emergent securitization market. It
lists them as 1) the existence of a sound and predictable legal
and regulatory infrastructure, 2) the sufficiency and integrity
of data quality and audit procedures, and 3) the strength of
transaction features protecting cash flows in a stressed
environment.
"The presence of these three factors is critical for the
assignment of international standard ratings," says Cheng,
adding, "Addressing these considerations will support the credit
quality of future securitization in China because it would
strengthen transaction certainty, enhance asset risk assessment,
and protect transaction cash flows from the weakening of the
relevant transaction parties."
================
H O N G K O N G
================
WALLER BROKING: Creditors' Proofs of Debt Due Oct. 3
----------------------------------------------------
Creditors of Waller Broking Agencies Limited, which is in
members' voluntary liquidation, are required to file their proofs
of debt by Oct. 3, 2012, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Aug. 21, 2012.
The company's liquidator is:
Yeh King Yeung Albrecht
23rd Floor, Wing Hang
Finance Centre
60 Gloucester Road
Wanchai, Hong Kong
WANG HING: Members' Final Meeting Set for Oct. 3
------------------------------------------------
Members of Wang Hing Vegetables Wholesale Company Limited will
hold their final general meeting on Oct. 3, 2012, at 2:00 p.m.,
at 10/F, Allied Kajima Building, 138 Gloucester Road, Wanchai, in
Hong Kong.
At the meeting, Lam Ying Sui, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
WANG ON: Members' Final Meeting Set for Oct. 3
----------------------------------------------
Members of Wang On (HK) Limited will hold their final general
meeting on Oct. 3, 2012, at 5:00 p.m., at 10/F, Allied Kajima
Building, 138 Gloucester Road, Wanchai, in Hong Kong.
At the meeting, Lam Ying Sui, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
YIELD LAND: Members' Final Meeting Set for Oct. 3
-------------------------------------------------
Members of Yield Land Limited will hold their final general
meeting on Oct. 3, 2012, at 2:30 p.m., at 10/F, Allied Kajima
Building, 138 Gloucester Road, Wanchai, in Hong Kong.
At the meeting, Lam Ying Sui, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
=========
I N D I A
=========
AIR CONTROL: ICRA Rates INR11.85cr Cash Credit at '[ICRA]B+'
------------------------------------------------------------
ICRA has assigned the '[ICRA]B+' rating to INR11.85 crore long
term fund based limits of Air Control & Chemical Engineering Co.
Ltd. ICRA has also assigned the '[ICRA]A4' rating to INR1.50
crore (sublimit of cash credit) short term non fund based
PCL/FBP/FBD facilities, INR2.50 crore letter of credit facility
and INR3.00 crore term loan facility of ACCEL.
Amount
Facilities (INR Cr) Ratings
---------- --------- -------
Cash Credit Limit 11.85 [ICRA]B+ assigned
PCL/FBP/FBD Limit (1.50) [ICRA]A4 assigned
Letter of Credit 2.50 [ICRA]A4 assigned
Bank Guarantee 3.00 [ICRA]A4 assigned
The assigned ratings reflect ACCEL's modest scale of operations
and significantly high working capital intensity marked by high
inventories at different stages of the production cycle as well
as slow payment realization from government entities resulting in
tight liquidity position and leveraged capital structure. The
rating also takes into account the vulnerability of profitability
to adverse raw material prices fluctuations though the same is
partially mitigated with work order based raw material
procurement. ICRA further takes notes of the high competitive
intensity across its product line and foreign exchange risk in
the absence of a formal hedging policy for export revenues.
The ratings, however, favorably consider the long experience of
the promoters with an established operational track record;
reputed and stable customer base with strong supply relationship
with Indian Railways and Indian Navy for air conditioning
solutions. The ratings also derive comfort from moderate order
book position supported with positive demand outlook from the end
user segment on account of increased government spending and
growth from other private clientele.
Air Control & Chemical Engineering Co. Ltd. was incorporated in
1961 and was promoted by Mr. Surendra M. Mehta with its
production facilities located at Barejadi, Gujarat. ACCEL was
acquired by EID Parry, Murugappa group and Best & Crompton
Engineering Co. Ltd. in the year 1977 and 1984 respectively in
order to turnaround the continuous deteriorating financial
conditions. The financial condition had stretched further and in
the year 1999, ACCEL was declared as sick company by BIFR (Board
for Industrial and Financial Reconstruction). Later, in 1999, Mr.
B. R. Daga along with other shareholders had taken over the
company under the rehabilitation scheme for sick companies and
has successfully turnaround the company's profile. Thus, in the
current year (FY 2013), ACCEL has come out from sick company
status. Currently, ACCEL is engaged in manufacturing compressors
and fans as well as carrying out turnkey projects for
refrigeration and air conditioning solution.
Recent Results
For the year ended March 31, 2012, company has reported an
operating income of INR26.89 crore with a profit after tax (PAT)
of INR1.02 crore.
AKASH ENTERPRISES: ICRA Assigns '[ICRA]B+' Rating to INR4cr Loan
----------------------------------------------------------------
ICRA has assigned an '[ICRA]B+' rating to the INR4.00 crores long
term fund based limits of Akash Enterprises. ICRA has also
assigned an '[ICRA]A4' rating to INR3.00 crores short term non
fund based limits of AE.
Amount
Facilities (INR Cr) Ratings
---------- --------- -------
Fund based limits 4.00 [ICRA]B+ assigned
Non Fund based limits 3.00 [ICRA]A4 assigned
The ratings take into account the highly competitive and
fragmented nature of the electrical contracting industry and the
modest scale of operations of AE which coupled with its low net
worth has limited its ability to bid for larger projects. The
ratings also factor in AE's limited revenue diversification in
terms of number of contracts, clients and geographies, its
relatively high gearing levels and its stretched liquidity
position as reflected by high utilization of fund based working
capital limits. The ratings however draw comfort from the decade
long experience of the promoters in executing small electrical
contracts, strong profitability and return indicators of the firm
and its moderate order book position which provides revenue
visibility in the short-term. Moreover the firm also has a price
escalation clause to the extent of 5% of the order size to
prevent risk arising from increase in raw material prices.
About Akash Enterprise
Akash Enterprise is a proprietorship firm established in 1992
under the leadership of Mr. Ravindra Nayak. The firm has its
registered office located in Bangalore and is managed by Mr.
Ravindra Nayak who has 25 years of experience in electrical
contracting business. Akash Enterprise is an electrical
contracting firm and possesses 'A-Grade' government license from
the Government of Karnataka and has been certified under ISO
9001: 2008 certification on quality and infrastructure by NQAQSR
JAS-ANZ. Furthermore, it is also a Class-1 licensed electrical
contractor and engineer.
Recent Results
The firm reported a net profit of INR3.14 crore on an operating
income of INR17.97 crore in FY12 as against net profit of INR1.44
crores on an operating income of INR13.92 crore in FY11.
INDIAN OIL: Moody's Lowers Baseline Credit Assessment to 'Ba2'
--------------------------------------------------------------
Moody's Investors Service affirmed its Baa3 issuer rating on
Indian Oil Corporation with a stable outlook.
Ratings Rationale
"Whilst IOC's ratings remain unchanged, the company's fundamental
credit quality has been weakening as a result of a combination of
lower refining margins, and rising under-recoveries, which
require short-term funding before compensation is received from
the government," says Vikas Halan, a Moody's Vice President and
Senior Analyst.
"Accordingly, we have lowered our baseline credit assessment
(BCA), which reflects IOC's standalone credit quality in the
absence of any assumed government support, to Ba2 from Ba1," adds
Mr. Halan, who is also lead analyst for IOC at Moody's.
Given the strategic importance of IOC to India's domestic
economy, Moody's continues to factor high government support in
the ratings, thus maintaining IOC's final ratings at Baa3 with a
stable outlook.
Moody's believes that the company's credit metrics will remain
weak over the next 12-18 months, given the government's
reluctance to reduce fuel subsidies as well as an expected weak
refining margin environment.
Moody's estimates that the fuel subsidies in India for the fiscal
year ending March 2013 will reach close to INR1.9 trillion (USD35
billion), which will be 38% higher than the already record-high
subsidies of INR1.4 trillion for the fiscal year ending March
2012.
"Such record high subsidies result in a deterioration of IOC's
credit metrics under the current subsidy sharing framework, as
the reimbursement of subsidies from the government to IOC arrives
with a delay of up to six months or more, thus leading to
significant short-term funding needs, and incremental interest
costs of INR30-INR35 billion, which are not reimbursed by the
government," adds Mr. Halan.
Moody's expects that, if these fuel subsidies are not reduced or
the government does not provide more timely reimbursements, IOC's
consolidated borrowings for the fiscal year ending March 2013 may
surpass INR1.1 trillion from INR800 billion as of March 2012.
These additional borrowings result in incremental borrowing
costs, that are not reimbursed by the government and lower IOC's
retained cash flow (RCF). Given the current high interest rate
environment in India, this incremental interest is substantial.
IOC's cash flow is also being affected by low refining margins.
Without considering inventory valuation losses, IOC posted its
lowest refining margin of US$2.73/barrel in the quarter ending
June 2012.
"We expect IOC's refining margins to remain weak for the rest of
the year and much of next year, within a band of around USD3-
5/barrel. Such low margins will contribute to further weakening
of IOC's credit profile, which is in line with the current
cyclical downturn in the refining sector," says Mr. Halan.
Moody's currently has a negative industry outlook on the global
refining and marketing sector.
IOC's ratings remain supported by its strategic importance to the
country because of (1) its position as the largest refiner and
distributor of petroleum products, (2) its ability to borrow in
India's domestic markets without financial covenants, and (3) its
79% government ownership.
However, the company's ratings remain constrained by its weak
financial profile resulting from high fuel subsidies and
relatively low complexity refineries that generate lower refining
margins.
Given that IOC's issuer rating is currently at par with the
sovereign rating, an upgrade is unlikely.
Upward pressure on IOC's BCA may build up over time, if the
government meaningfully reduces the fuel subsidies or makes
changes to the subsidy reimbursement framework such that the
strain on IOC's balance sheet is reduced.
Credit metrics that Moody's would view appropriate for an upgrade
of IOC's BCA include RCF/debt >15% on a sustained basis, whereby
Moody's currently expects this ratio to remain below 10%.
IOC's issuer rating may face downward pressure if (1) the rating
of the sovereign is lowered or (2) the government makes changes
to the subsidy framework that are even more negative for IOC or
(3) IOC's BCA deteriorates below Ba3 or (4) government ownership
at IOC is reduced to below 51%, or government control is reduced
by some other means, which would require a reassessment of the
level of support incorporated into its ratings.
Further pressure on IOC's BCA could build, if its credits metrics
fail to recover to more appropriate levels by the end of the
fiscal year. Moody's will consider RCF/debt of 5%-10% or above as
appropriate for its current rating.
The principal methodology used in rating IOC was the Global
Refining and Marketing Rating Methodology published in December
2009. Other factors used in this rating are described in
Government-Related Issuers: Methodology Update published in
July 2010.
IOC is a leading downstream oil company specializing in the
refining, marketing, distribution, and retailing of petroleum
products. Through its 10 refineries that have a combined capacity
of 1.3 million bbl/day, the company is the largest downstream oil
company in India and controls about 31% of India's domestic
refining capacity. Listed on the Indian stock exchanges, IOC is
79% owned by the Indian government.
KAMAL TIMBERS: CARE Assigns 'CARE B+' Rating to INR6cr LT Loan
--------------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' rating bank facilities of
Kamal Timbers Private Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 6 CARE B+ Assigned
Short-term Bank Facilities 10 CARE A4 Assigned
Rating Rationale
The ratings are constrained by the small scale of operations,
highly leveraged capital structure and high working capital
intensity of the operations. The ratings are also constrained by
the vulnerability of the profit margins to volatility in timber
prices/exchange rate and intense competition in the industry.
However, the ratings derive comfort from the experienced
promoters and high sales growth achieved in the past. Going
forward, the ability to sustain profitability margins and scaling
up of operations amidst volatility in the raw material prices and
exchange rate fluctuation shall be the key rating sensitivities.
Kamal Timbers Private Ltd. incorporated in 2005 is engaged in the
trading and processing of timbers. It imports timber from South
East Asian countries like Singapore, Malayasia, Hongkong,
processes them at its saw mill units in Faridabad in Haryana and
Gandhidham in Gujarat and sells the processed timber in the
domestic market.
For FY12 (refers to the period April 1 to March 31), KTP achieved
total operating income of INR22.6 crore with PBILDT and PAT
margin of 7.55% and 2.68%, respectively.
MANGALAGIRI TEXTILE: ICRA Reaffirms 'BB-' INR24.5cr Loan Rating
---------------------------------------------------------------
ICRA has reaffirmed the long-term rating at '[ICRA]BB-' for
INR24.50 crore1 fund based limits of Mangalagiri Textile Mills
Private Limited. The outlook on the long term rating is Stable.
Amount
Facilities (INR Cr) Ratings
---------- --------- -------
Long term fund based 24.50 [ICRA]BB- (Stable)
limits Reaffirmed
The reaffirmation of the rating continues to factor in overall
weak financial risk profile characterised by moderate gearing and
stretched coverage indicators in FY12. The rating is further
constrained due to decline in operating profitability in FY11 on
account of steep correction in yarn prices during H1 FY12;
irregular power scenario in the state of AP likely to adversely
impact the operations in the absence of power back up facilities
and likely adverse impact on gearing and coverage indicators on
account of proposed debt funded capex of 21,216 spindles with a
total cost of INR46 crore over the next two years. ICRA notes
that small scale of operations and commoditized nature of the
product in the highly fragmented spinning industry limits the
company's ability to pass on the hike in input costs. However,
the rating favorably factors in experience of the promoters in
the handloom cloth and yarn trading business coupled with the
presence of experienced technical experts for managing the
operations; operational efficiencies due to recent vintage of
plant and machinery and expected savings of around 600 basis
points on interest cost from FY13 onwards on account of
conversion of Rupee denominated term loans into USD denominated
loans. The rating also takes comfort from proximity to a major
cotton growing area and lower power tariffs in the state with
fiscal incentives offered by the AP state government.
Mangalagiri Textile Mills Private Limited was incorporated in the
year 2006 and was promoted by Dr. G. Nagasaina Rao. It is engaged
in manufacturing of cotton yarn of average count of 40s. Based in
Guntur district of Andhra Pradesh, the company has total
installed capacity of 15,600 spindles; operational from October
2010. It is currently in the process of increasing its capacity
by 21,216 by the end of Q2 FY14.
MARUDHAR EDUCATION: CARE Rates INR15.02cr LT Loan at 'CARE BB'
--------------------------------------------------------------
CARE assigns 'CARE BB' rating to the bank facilities of Marudhar
Education Society.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 15.02 CARE BB Assigned
Rating Rationale
The rating assigned to the bank facilities of Marudhar Education
Society (MES) is mainly constrained on account of its presence in
the highly competitive and regulated education industry and a
declining trend observed in the enrollment ratio. The rating is
further constrained on account of its declining net margins,
leveraged capital structure and weak debt coverage indicators.
The rating, however, favorably takes into account the wide
experience of the promoters in the education industry and
established presence of the group in the education sector in
Rajasthan.
The increase in the scale of operations by sustaining a healthy
enrollment ratio and improvement in the overall financial risk
profile remains the key rating sensitivity.
Bikaner (Rajasthan)-based MES was formed as a charitable trust on
September 21, 2002, with an objective to set up educational
institutions. MES set up two colleges, namely, Marudhar
Engineering College in 2003 and Shri Keshvanand Institute of
Pharmacy in 2006 at Bikaner (Rajasthan). MES also started
providing MBA and M. Tech courses in 2007 and 2011, respectively.
Both these colleges are affiliated to Rajasthan Technical
University (RTU), Kota and run All India Council for Technical
Education (AICTE) approved graduation courses in engineering,
pharma and post-graduation courses in engineering and management
streams. Currently, Mr Govind Singh and Mr K. R. Bagaria are
Chairman and Vice Chairman of the trust, respectively, and manage
the operations of MES.
For the academic year 2012-13, MES has an approved annual intake
capacity of 780 students in engineering, 60 each in pharma & MBA
and 36 in M. Tech.
Bikaner (Rajasthan)-based MES was formed as a charitable trust on
September 21, 2002, with an objective to set up educational
institutions. MES set up two colleges, namely, Marudhar
Engineering College in 2003 and Shri Keshvanand Institute of
Pharma in 2006 at Bikaner (Rajasthan). MES also started providing
MBA in 2007 and M. Tech. in 2011. Both these colleges are
affiliated to Rajasthan Technical University, Kota and run an All
India Council for Technical Education approved graduation courses
in engineering, pharma and post-graduation courses in engineering
and management streams. Currently, Mr Govind Singh and Mr K. R.
Bagaria are Chairman and Vice Chairman of the trust and manage
the operations of MES.
For the academic year 2012-13, MES has an approved annual intake
capacity of 780 students in engineering, 60 in pharma & MBA each
and 36 in M. Tech.
PARMESHWARI SILK: ICRA Rates INR17.20cr Loan at '[ICRA]B+'
----------------------------------------------------------
ICRA has assigned '[ICRA]B+' rating to INR17.20 crore long term
fund based bank facilities of Parmeshwari Silk Mills Limited.
ICRA has also assigned a rating of '[ICRA]A4' to INR3.55 crore
short term non-fund based bank facilities of PSML.
Amount
Facilities (INR Cr) Ratings
---------- --------- -------
Long Term: Fund Based Limits 17.20 [ICRA]B+ /assigned
Short Term: Non-Fund Based 3.55 [ICRA]A4/ assigned
Limits
The assigned rating is constrained by the stretched financial
profile of the company which is on account of leveraged capital
structure and modest profitability. The debt funded capital
expenditure undertaken by the company and high working capital
borrowings, given the high working capital intensity of
operations, along with the modest profitability which is on
account of the company's limited pricing power in a fragmented
industry, given its modest scale of operations, has resulted in
stretched debt coverage indicators. Moreover, the subdued demand
along with volatile raw material prices shall keep the
profitability under pressure and debt coverage indicators
stretched in the medium term. The rating however favorably takes
into account the company's presence in the branded dress material
segment with focus on value addition such as embroidery which
results in higher operating profit margins, the satisfactory
capacity utilization of the manufacturing unit despite subdued
demand which has resulted in steady revenue growth with
profitable operations for the company and also the experience of
the promoters who have been in this line of business for more
than two decades.
Going forward, PSML's ability to maintain satisfactory capacity
utilization along with steady revenue growth given the subdued
demand, while improving the profit margins which shall be
critical for improving the financial profile of the company; and
managing its liquidity, given the high working capital intensity
of operations, would be the key rating sensitivities.
PSML was incorporated in 1993 and is engaged in selling of
shirting fabric and ladies dress material under its brand Ramtex.
The company has in-house manufacturing capacity for weaving,
embroidery and digital printing in Ludhiana (Punjab) and
presently has 72 looms (weaving capacity of 35 lac meters per
annum), 42 embroidery machines and 2 digital printing machines.
REDDY VEERANNA: ICRA Revises Rating on INR35cr Loan to 'BB-'
------------------------------------------------------------
ICRA has revised the long term rating assigned to the INR35.00
crore1 fund based limits of Reddy Veeranna Constructions Private
Limited from '[ICRA]BB' to '[ICRA]BB-' and has also reaffirmed
the short term rating to the INR60.00 crore non fund based limits
at '[ICRA]A4'. The outlook on the long-term rating is Stable.
Amount
Facilities (INR Cr) Ratings
---------- --------- -------
Fund Based (CC) 35.00 [ICRA]BB- (stable)
revised from [ICRA]BB
Non Fund Based (BG) 60.00 [ICRA] A4 reaffirmed
The rating revision takes into account de-growth in operating
income by 12.3% in FY2011-12 on account of reduced work orders
and delays in bill clearances from the government departments.
The ratings also take into account RVCPL's weak debt profile as
reflected by gearing of 1.60 times as on March 31, 2012 and
interest coverage ratio of 1.95 and NCA/debt of 14%. The ratings
are also constrained by the high working capital intensity of the
business as reflected in high working capital utilization and
high inventory holding of 184 days. The ratings also take into
account high exposure to public and semi-government clients that
account for 95% of the FY2012 revenue and high geographic
concentration risk with operations mainly based in Karnataka
(71%), Andhra Pradesh (7%) and Jharkhand (22%).
The rating action however takes into account improved
profitability as reflected in operating margin of 16.0% in FY2012
as against 14.5% in FY2011 and healthy order book of INR226.47 cr
as of June 30, 2012; 2.37 times of the FY2012 operating income
which provides revenue visibility for the medium term. Moreover,
the ratings favorably takes into account the synergies and
financial flexibility derived by RVCPL from being a part of
larger Reddy Veeranna group with diverse interests in real
estate, construction, mining, and power generation.
Going forward, the ability of the company to achieve stability in
operating income and profitability would be the key rating
sensitivity factors.
Founded in 1980 as a proprietorship firm M/s Reddy Veeranna & Co,
and subsequently in 2003 rechristened as M/s Reddy Veeranna
Constructions Private Limited (RVCPL), the company is the
flagship company of Bangalore based Reddy Veeranna group. Since
inception, the Company has undertaken construction of roads,
urban infrastructure works, irrigation works, construction of
reservoirs, BOT projects, real estate activities - housing /
commercial (IT campuses) etc. RVCPL has executed several projects
in these disciplines largely for government organizations in
various South India states - Karnataka, Andhra Pradesh, Madhya
Pradesh, Chhattisgarh, and Jharkhand. Reddy Veeranna group is
headed by Mr. Reddy Veeranna - a professional with three decades
of experience in construction domain. The group has diversified
interests across various verticals including - real estate,
construction, mining, and power generation.
Recent results The company reported an operating income of
INR108.88 crore and PAT of INR4.01 crore as per audited
financials of FY2010-11 and an operating income of INR95.51 crore
and PAT of INR5.04 crore as per provisional financials of FY2011-
12.
SHASHANK AUTO: CARE Rates INR11.35cr Long-Term Loan at 'CARE B+'
----------------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' to the bank facilities of
Shashank Auto Pvt Ltd.
Amount
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 11.35 CARE B+ Assigned
Short-term Bank Facilities 0.50 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Shashank Auto
Private Limited are mainly constrained by its short track record
of operations, its highly leveraged capital structure, losses
incurred during its nascent stage of operations and high
inventory holding period. The ratings are further constrained by
its presence in the highly competitive automobile dealership
market and cyclicality in the automobile sector.
The above-mentioned constraints are partially offset by the
strength derived from the experience of the promoters, authorized
dealership of Mahindra & Mahindra (M&M) multi-utility vehicles
(MUV), which has a dominant position in the MUV segment in India.
The ability of SAPL to establish its operations and achieve the
projected level of sales in a highly competitive market,
maintaining the margins as envisaged and improvement in the
capital structure are the key rating sensitivities.
Incorporated in 2010, SAPL is an authorized dealer for M&M (rated
'CARE AA+', 'CARE A1+') MUVs for Muzaffarpur, Bihar. Besides
being engaged in dealing of mid-size to high-end range of M&M
MUV's, SAPL also provides after-sales services and also sells M&M
car spare parts/accessories. Furthermore, the company also has
dealership of one of M&M's construction equipment (EarthMaster
Backhoe Loader).
SAPL has group companies, namely, Sharma Cold Storage & Ice
Factory Pvt. Ltd. involved in providing cold storage facilities
on hire basis and Balaji Hyundai Auto Pvt. Ltd., a dealer of
small and mid-size Hyundai cars in Muzaffarpur. SAPL has earned
revenue of around INR15.08 crore in Q1FY13, while for FY12 (based
on the provisional results) (refers to the period April 1 to
March 31) it earned revenue of INR1.15 crore.
SHRI BANKEY: ICRA Places '[ICRA]B-' Rating on INR35cr Loans
-----------------------------------------------------------
ICRA has assigned a long-term rating of '[ICRA]B-' to INR35.0
crore1 bank lines of Shri Bankey Bihari Pipes Limited. ICRA has
also assigned '[ICRA]A4' rating to INR16.0 crore bank lines.
Amount
Facilities (INR Cr) Ratings
---------- --------- -------
Working Capital Limits 21.0 [ICRA]B- assigned
Unallocated 14.0 [ICRA]B- assigned
Non Fund Based Limits 8.0 [ICRA]A4 assigned
Unallocated 8.0 [ICRA]A4 assigned
The assigned ratings factor in the modest profitability
indicators of the company arising out of the highly competitive
and low value additive nature of the company's core business of
steel pipe manufacturing and high interest expenses arising out
of the debt funded nature of company's operations. The rating is
also constrained by the high working capital intensity (NWC/OI of
31%) of the company's operations mainly on account of high
receivable days (89 days as on March 31,2012) which has largely
been debt funded. This has resulted in high gearing (1.7 times as
on March 31, 2012), modest debt protection indicators (interest
coverage of 1.4 times and NCA/Debt of 4.2% in FY2012) and
stretched liquidity position as reflected in fully utilized
working capital limits. Nevertheless, ICRA draws comfort from the
long track record of operations of the company, steady growth in
the operating income during the last two years, and long and
established distribution network and customer relationships.
SBBPL was incorporated in 1999 as TST Pipes Limited, however, in
January 2012 the company was renamed as Shri Bankey Bihari Pipes
Limited. Following an acquisition of the company in January 2011
from the erstwhile promoters, namely Mr. Naresh Garg and Mr.
Manish Garg, the present promoters/management of the company
includes Mr. Vinod Kumar Jain, Mrs. Mamta Jain and Mr. Sanjeev
Jain. SBBPL manufactures electric-resistance welded black and
galvanised steel pipes and tubes. The company has its
manufacturing facility in Ghaziabad (Uttar Pradesh) and has a
capacity to produce 48,000 M.T. per annum of ERW black and
galvanised pipes. The pipes are mainly used in various industries
such as irrigation and water supply sector for transportation of
water, agriculture, oil & gas, telecom, infrastructure, real
estate, automobiles, etc.
Recent Results
For FY2012, the company has achieved an operating income of
INR126.07 crore and a net profit of INR0.84 crore (as per
provisional financial results).
SMALL JOHNSON: ICRA Assigns '[ICRA]BB' Rating to INR12.75cr Loans
-----------------------------------------------------------------
ICRA has assigned an '[ICRA]BB' rating to the INR6.75 crore term
loan and INR6.00 crore cash credit facility of Small Johnson
Floor Tiles Private Limited. ICRA has assigned an '[ICRA]A4'
rating to the existing INR0.88 crore and proposed INR0.17 crore
short term non-fund based bank guarantee facility of SJFTPL. The
outlook on the long term rating is stable.
Amount
Facilities (INR Cr) Ratings
---------- --------- -------
Cash Credit 6.00 Cr [ICRA]BB(stable) assigned
Term Loan 6.75 Cr [ICRA]BB(stable) assigned
Bank Guarantee 0.88 Cr [ICRA]A4 assigned
Bank Guarantee 0.17 Cr [ICRA]A4 assigned
(Proposed)
The ratings are constrained by SJFTPL's relatively small size as
compared to organized pan India players and limited track record
of operations; highly competitive nature of the ceramic tile
industry; vulnerability of SJFTPL's profitability to the
cyclicality associated with the real estate industry and to the
increasing prices of gas, as gas is the major source of fuel. The
ratings also take into account the moderate financial profile
characterized by moderate profitability, high gearing levels and
modest coverage indicators.
However, the ratings favorably consider the benefits to SJFTPL
from its acquisition by Prism Cement Limited in terms of
operational and financial support, access to the latter's
established marketing and distribution set up and ability of the
company to fetch higher realization on account of entire sales
under the brand name of 'Johnson'. The ratings also consider the
extensive experience of SJFTPL's promoters in the ceramic
industry and stable demand for porcelain tiles in the domestic
market.
About Small Johnson
Small Johnson Floor Tiles Private Limited (formerly known as
Small Tiles Pvt. Ltd.) was established in 2010 as a partnership
firm (Small Tiles) by Mr. Gautam Patel and other family members.
SJFTPL commenced commercial production from October 2011.The firm
was converted in to a Private Limited Company in October 2011
after Prism Cement Limited acquired 50% stake in the same. SJFTP
manufactures porcelain floor tiles and has a capacity of 2.3
million square meters per annum.
SJFTP subsequently acquired 100% shares of Solid Ceramics Private
Limited which is currently engaged in manufacturing of floor
tiles of size 12 x 12 with a capacity of 2.4 million square
meters per annum. Recent Results During FY 2012, the company
reported a profit after tax of INR0.25 crore and operating income
of INR10.29 crore.
=================
I N D O N E S I A
=================
MNC SKY: Moody's Changes Outlook on 'B2' CFR to Positive
--------------------------------------------------------
Moody's Investors Service has changed to positive from stable the
outlook for PT MNC Sky Vision Tbk's B2 corporate family and
senior unsecured bond ratings.
Ratings Rationale
"The change in outlook reflects Sky Vision's strong liquidity and
financial profile following the completion of its IPO in July,"
says Annalisa Di Chiara, a Moody's Vice President and Senior
Analyst.
"The company received around IDR1.2 trillion (USD127 million)
from the sale of its primary shares. Proceeds from the IPO will
alleviate funding pressures related to the company's capex and
growth strategy over the next one to two years," adds Ms. Di
Chiara.
Approximately 70% of the proceeds from the IPO are earmarked for
capex including the purchase of set-top boxes and other
supporting broadcast equipment. The balance of the proceeds will
be used to repay debt, including intercompany loans from its
parent, PT Global Mediacom Tbk, and for working capital purposes.
Sky Vision is the largest pay-TV provider in Indonesia, with a
market share of around 70%.
"Sky Vision is favorably positioned for continued organic growth
given Indonesia's low Pay-TV market penetration rate of 4.8% in
2011," says Ms. Di Chiara.
"However, despite the company's solid market position, we
continue to view as a potential threat emerging competition from
other telco operators. These competitors may boost their product
offerings and seize market share by bundling voice, broadband, TV
and mobile services to gain subscribers," adds Ms. Di Chiara.
Moody's believe that over the intermediate term, competition in
the pay-TV sector will exert pressure on the average revenues per
user, increase churn rates and subscriber acquisition costs.
These factors, combined with higher expenditure on promotions and
discounts to attract new subscribers, could pressure Sky Vision's
operating margins.
Still, Moody's expects the company's EBITDA margins will be
maintained at or above 40%.
The positive outlook reflects the company's solid momentum as
seen through its average growth in subscribers of around 35% over
the last three years.
While Sky Vision is expected to generate negative free cash flow
through at least 2014, Moody's believes that the company's cash
balance is sufficient to support its expected growth over that
same period. Cash balance as of July 31, 2012 was approximately
IDR850 billion.
Moody's would consider an upgrade of the ratings, if the company
continues to grow its market share over the next 12 -- 18 months,
maintains a sufficient cash cushion to support negative free cash
flow, and improves margins to levels at around 45%.
Moody's would also view positively the company's move towards
positive free cash flow.
Downward pressure is unlikely given the positive outlook.
However, the outlook could revert to stable, if competition
intensifies and results in a decline in the company's market
share. Any reduction in PT Global Mediacom Tbk's shareholding of
Sky Vision -- resulting in a change in the parent company's
undertakings and ability to support Sky Vision -- will also have
a negative impact on Sky Vision's ratings.
Sky Vision's ratings were assigned by evaluating factors that
Moody's considers relevant to the credit profile of the issuer,
such as the company's (i) business risk and competitive position
compared with others within the industry; (ii) capital structure
and financial risk; (iii) projected performance over the near to
intermediate term; and (iv) management's track record and
tolerance for risk. Moody's compared these attributes against
other issuers both within and outside Sky Vision's core industry
and believes Sky Vision's ratings are comparable to those of
other issuers with similar credit risk.
Headquartered in Jakarta, Sky Vision is a provider of direct-to-
home, pay-TV services. The company is 66%-owned by PT Global
Mediacom Tbk, a diversified media company, which in turn is 51%-
owned by PT Bhakti Investama Tbk. Both Global Mediacom and Bhakti
Investama are publicly listed in Indonesia.
=========
J A P A N
=========
ELPIDA MEMORY: Bid to Duck Questions from Bondholders Denied
------------------------------------------------------------
Dow Jones Daily Bankruptcy Review reports that Elpida Memory Inc.
lost a bid on Thursday to duck questions from bondholders who are
positioning themselves to take action in the U.S. if they don't
like the ultimate price on the Japanese chip maker's proposed
sale to Micron Technology Inc.
According to the report, Judge Christopher Sontchi granted
investors power to question an Elpida executive about the
company's U.S. assets, which are shielded in a Chapter 15 case.
Dow Jones DBR relates that the questions come in advance of a
Sept. 17 hearing in bankruptcy court, where bondholders will seek
modifications in the order protecting Elpida's U.S. assets. The
report notes that the modifications are aimed at allowing
creditors to move swiftly if they don't like how the company's
main restructuring in Japan turns out.
In Japan, where a Tokyo court is overseeing the central action,
bondholders are backing an alternative to the Micron sale that
forms the core premise of the Elpida reorganization, Dow Jones
DBR reports. While they seek to flex their muscle in the
Japanese system, the bondholders are also pondering making a move
against U.S. assets if they can't beat out Micron or improve the
deal in Japan, according to Dow Jones DBR.
"There has been a growing concern that the sale process that is
going on . . . that it's going to go forward at a price which
does not reflect reality and may go off even below the
liquidation value of the company," the report quotes bondholder
attorney Christopher Shore of White & Case LLP as saying at a
hearing in the U.S. Bankruptcy Court in Wilmington, Del., on
Thursday.
Mr. Shore said bondholders aren't asking the U.S. court to
interfere with the sale. What investors are after is "a stop-
look-and-listen after the sale takes place," meaning time and
information to see what they can do about assets in the U.S.
Dow Jones DBR says Elpida has warned that a move against its U.S.
assets would fly in the face of laws meant to ease international
restructuring and could possibly snarl the deal with Micron.
On Thursday, the report relates, Judge Sontchi cleared the way
for questions about what Elpida owns in the U.S., and how it
plans to transfer ownership of those assets if the deal with
Micron goes through.
According to Dow Jones DBR, the judge warned bondholders to
confine their questions to Elpida's U.S. assets, noting he was
"particularly concerned about interfering with the proceeding
going on in Japan."
Unhappy with the price on the Micron deal, US$2.5 billion,
bondholders have filed a rival restructuring plan that values the
company at US$3.85 billion, Dow Jones DBR adds.
As reported in the Troubled Company Reporter-Asia Pacific on
July 3, 2012, Micron Technology, Inc., and the trustees for
Elpida Memory have signed a definitive sponsor agreement for
Micron to acquire and support Elpida. The agreement has been
entered into in connection with Elpida's corporate reorganization
proceedings conducted under the jurisdiction of the Tokyo
District Court.
Under the agreement, JPY200 billion -- approximately US$2.5
billion assuming JPY80/US$ -- total consideration, less certain
reorganization proceeding expenses, will be used to satisfy the
reorganization claims of Elpida's secured and unsecured
creditors. Micron will acquire 100% of the equity of Elpida for
JPY60 billion -- approximately US$750 million -- to be paid in
cash at closing. In addition, JPY140 billion -- approximately
US$1.75 billion -- in future annual installment payments through
2019 will be paid from cash flow generated from Micron's payment
for foundry services provided by Elpida, as a Micron subsidiary.
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
JPY448 billion ($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.
JLOC XXXIII: Deleveraging Cues Fitch to Affirm Ratings
------------------------------------------------------
Fitch Ratings has affirmed JLOC XXXIII Trust's trust beneficiary
interests (TBIs) due July 2013. The transaction is a Japanese
multi-borrower type CMBS securitisation.
-- JPY1.77bn* Class C TBIs affirmed at 'CCCsf'; Recovery
Estimate revised to 95% from 85%
-- JPY1.66bn* Class D TBIs affirmed at 'Dsf'; Recovery Estimate
0%
*as of Sept. 5, 2012
Fitch has affirmed the class C TBIs to reflect its view that de-
leveraging of the notes to date may be offset by potentially
weaker recovery from collateral properties given the remaining
time to maturity in July 2013.
Five underlying collateral properties have been sold at prices
higher than Fitch's expectations since the last rating action in
October 2011. This has led to deleveraging of the class C TBIs,
resulting in the recovery estimate being revised to 95% from 85%.
Although Fitch believes that the likelihood of full repayment of
the class C TBIs has improved, it is sensitive to the sale price
of each of the remaining four properties. Fitch's analysis
indicates vulnerability to a decline in recovery prospects.
The 'Dsf' rating on class D TBIs reflects the principal write-
down incurred in October 2011.
Class B TBIs were fully redeemed in January 2012.
This transaction was originally a securitisation of five TMK
specified bonds, four non-recourse loans and the senior portion
of one TBI backed by a non-recourse loan, ultimately backed by
110 commercial properties located throughout Japan. The
transaction is currently backed by two bonds and one loan,
secured by four properties in total.
SHARP CORP: Puts Up Properties as Collateral for Fresh Bank Loans
-----------------------------------------------------------------
The Japan Times Online reports that Sharp Corp. said it has put
up some of its properties, including its Osaka headquarters and
flagship Kameyama plant in Mie Prefecture, as collateral for
JPY150 billion in fresh bank loans, confirming earlier news
reports.
The Japan Times Online says the move underlines the deteriorating
finances of the major maker of TVs and LCDs, which is saddled
with massive short-term debts due this month.
Of Sharp's JPY1.2 trillion in overall debt as of the end of June,
as much as JPY362 billion in commercial paper matures this month,
the report notes.
According to The Japan Times Online, redemption of the short-term
security is destabilizing the troubled company's cash flow, and
its major creditor banks -- Mizuho Corporate Bank and Bank of
Tokyo Mitsubishi UFJ -- have urged it to take drastic steps to
turn around its loss-making business as soon as possible.
"It is true we put up the collateral for a maximum of 75 billion
in loans from each of the banks," The Japan Times quotes Sharp
spokeswoman Miyuki Nakayama as saying, confirming domestic media
reports. She added that the properties include some other
buildings and offices in Japan, but declined to specify them, the
report relays.
The Japan Times notes that market players apparently believe
Sharp's risk of bankruptcy has significantly increased. Its
credit default swap premium, which is widely regarded as an
indicator of credit risk, has more than tripled since early
August and stood at 1,915.41 basis points Wednesday [Sept. 5],
The Japan Times discloses, citing the Tokyo Financial Exchange
Inc.
About Sharp Corporation
Based in Osaka, Japan, Sharp Corporation (TYO:6753) --
http://sharp-world.com/-- manufactures and sells
electronic telecommunication devices, electronic machines and
components.
As reported in the Troubled Company Reporter-Asia Pacific on
Sept. 4, 2012, Standard & Poor's Ratings Services lowered to
'BB+' its long-term corporate credit and senior unsecured debt
ratings on Sharp Corp. and its overseas subsidiaries, Sharp
Electronics Corp. and Sharp International Finance (U.K.) PLC. "At
the same time, we lowered our short-term ratings on the companies
to 'B' from 'A-2'. We kept Sharp's long- and short-term ratings
on CreditWatch with negative implications," S&P said.
"Sharp's liquidity position is weakening, in Standard & Poor's
view. Internal cash flow remains weak, and financial market
conditions for the company have deteriorated. The company has
forecast an expected JPY250 billion net loss for fiscal 2012
(ending March 31, 2013), exceeding its budgeted depreciation
expense of JPY200 billion. As of June 30, 2012, Sharp had a high
dependence on short-term borrowings. It had JPY336 billion in
short-term debt and JPY362 billion in commercial paper. In recent
weeks, the company has faced unfavorable financial market
conditions, as evidenced by a recent rise in spreads on credit
default swaps, which has added to its difficulty in issuing new
commercial paper. Weak internal cash flow has forced the company
to repay its commercial paper primarily with bank borrowings.
Because its current liquidity needs exceed sources, we view
Sharp's liquidity position as 'less than adequate.' Under our
ratings criteria, we assign an issuer credit rating no higher
than 'BB+' to a company with 'less than adequate' liquidity," S&P
said.
The TCR-AP reported on Aug. 7, 2012, that Moody's Investors
Service downgraded its short-term ratings on Sharp Corporation
and its supported subsidiaries, Sharp International Finance (UK)
plc and Sharp Electronics Corporation, to Prime-3 from Prime-2.
The ratings remain under review for further downgrade. The rating
action reflects Moody's increasing concern that the company's
weak operating performance and additional restructuring costs
will continue to pressure its cash flow downwards, thereby
increasing its dependence on external sources for liquidity.
=========
K O R E A
=========
POSCO ENGINEERING: Moody's Revises Rating Outlook to Negative
-------------------------------------------------------------
Moody's Investors Service has revised the outlook for the Baa3
issuer rating of POSCO Engineering & Construction Co. Ltd. (POSCO
E&C) to negative from stable.
Ratings Rationale
"The rating action primarily reflects an increasing likelihood
that POSCO E&C's financial profile will remain weak for its Ba2
standalone rating over the next 12-18 months, given its tepid 1H
2012 results and the challenges it faces in boosting profits,"
says Chris Park, a Moody's Vice President/Senior Credit Officer.
POSCO E&C's operating profit slumped 68% to KRW47 billion in 1H
versus a year ago, with noticeable weakness in civil engineering
and plant engineering, partly because of one-off expenses.
As a result of weaker earnings and higher investments, Moody's
expects POSCO E&C's adjusted debt/EBITDA to exceed 8x in 2012, a
level that will not support the Ba2 standalone rating.
Although the company's financial leverage should decrease in 2013
on the back of a recovery in earnings, the degree of improvement
remains uncertain.
This is particularly so, given POSCO E&C's limited track record
of sustaining adequate and stable margins in its key businesses,
and its persistent working capital consumption and sizeable
investments.
These concerns are partly offset by the relatively good revenue
visibility stemming from the company's ample order backlogs, as
well as the business stability from the sizeable captive orders
from group affiliates. Additional equity through a potential IPO
would also help restore its financial profile to a level more
commensurate with its standalone rating, but the timing of the
IPO remains uncertain.
The Baa3 rating continues to factor in a two-notch uplift based
on the high willingness and financial capability of its parent
POSCO (A3, review for downgrade) to provide financial support in
case of need. This assumption is supported by POSCO E&C's
expertise in building its parent's steel plants and POSCO's
larger size and strong financial capacity, all of which are
reflected in its A3 rating.
The rating outlook could revert to stable if POSCO E&C
successfully reduces leverage by containing working capital
deficits and/or investments, enhancing earnings, or reducing debt
by raising equity, such that its adjusted debt/EBITDA stays below
6x and adjusted FFO (funds from operation)/debt exceeds 12% on a
sustained basis.
The rating could be downgraded if margins weaken further, or
operating cash flow deteriorates substantially as a result of
protracted housing problems and poor project management. Downward
pressure may also arise from the materialization of significant
contingent liabilities, such that adjusted debt/EBITDA
consistently remains above 6x and adjusted FFO/debt falls below
12%.
The principal methodology used in rating POSCO E&C was Moody's
Rating Methodology for the Global Construction Industry,
published in November 2010.
POSCO E&C is one of the major construction companies in Korea,
ranking fifth in 2012 in the Korean Construction Association's
construction capacity appraisal. It is 89.5%-owned by POSCO.
====================
N E W Z E A L A N D
====================
NZ DAIRIES: Fonterra Obtains Commerce Commission Nod on Purchase
----------------------------------------------------------------
APNZ reports that the Commerce Commission said it had cleared
Fonterra to acquire the dairy processing assets of New Zealand
Dairies, which is in receivership.
NZ Dairies processes raw milk at its Studholme factory near
Waimate, in the South Island.
According to the news agency, the commission said it was
satisfied that the acquisition was not likely to result in a
substantial lessening of competition.
APNZ relates that Chairman Mark Berry said the commission
considered that Fonterra's cooperative structure and the
regulatory environment in which it operates, together with its
national raw milk pricing strategy, removed any incentive for it
to depress the price it pays farmers for raw milk in the South
Canterbury and North Otago regions.
Mr. Berry, as cited by APNZ, said that given that the Studholme
factory produces milk products for export rather than domestic
consumption, and would likely continue to do so whoever acquired
it, the commission has not had to consider downstream markets in
New Zealand.
As reported in the Troubled Company Reporter-Asia Pacific on
June 18, 2012, TVNZ said Fonterra agreed to buy the South
Canterbury milk powder plant of New Zealand Dairies. No price
was disclosed for the plant at Studholme, which can process about
150 million litres of milk a year, TVNZ noted.
About NZ Dairies
New Zealand Dairies Limited engages in dairy processing, baby
food production and distribution. NZ Dairies is owned by Russian
firm Nutritek. The company is based in Studholme, New Zealand.
VTB Capital Limited, secured creditor of New Zealand Dairies
Limited, has appointed Colin Gower, Stephen Tubbs and Brian Mayo
Smith of BDO Chartered Accountants as Receivers. The receivership
includes New Zealand Dairies Limited and related Companies
Studholme Corporation Limited and Dairy Exports New Zealand
Limited. VTB Capital is owed about NZ$28 million, according to
NBR Online.
=================
S I N G A P O R E
=================
AP COMMUNICATIONS: Court Enters Wind-Up Order
---------------------------------------------
The High Court of Singapore entered an order on Aug. 31, 2012, to
wind up the operations of AP Communications Pte Ltd.
Marina Bay Sands Pte Ltd filed the petition against the company.
The company's liquidator is:
The Official Receiver
Insolvency & Public Trustee's Office
The URA Centre (East Wing)
45 Maxwell Road #06-11
Singapore 069118
CITIMEX INTERNATIONAL: Court Enters Wind-Up Order
-------------------------------------------------
The High Court of Singapore entered an order on Aug. 22, 2012, to
wind up the operations of Citimex International (S'pore) Pte Ltd.
Standard Chartered Bank filed the petition against the company.
The company's liquidators are:
Messrs Chay Fook Yuen
Bob Yap Cheng Ghee
Tay Puay Cheng
c/o KPMG Services Pte Ltd
16 Raffles Quay
#22-00 Hong Leong Building
Singapore 048581
CITIMEX MARKETING: Court Enters Wind-Up Order
---------------------------------------------
The High Court of Singapore entered an order on Aug. 22, 2012, to
wind up the operations of Citimex Marketing (S'pore) Pte Ltd.
Standard Chartered Bank filed the petition against the company.
The company's liquidators are:
Bob Yap Cheng Ghee
Tay Puay Cheng
c/o KPMG Services Pte Ltd
16 Raffles Quay
#22-00 Hong Leong Building
Singapore 048581
EUROIMPORTS PTE: Creditors' Meetings Set for Sept. 14
-----------------------------------------------------
Euroimports Pte Ltd, which is in compulsory liquidation, will
hold a meeting for its creditors on Sept. 14, 2012, at 3:30 p.m.,
at 6 Shenton Way, #32-00, DBS Building Tower Two, in Singapore
068809.
Agenda of the meeting include:
a. to update on the liquidation administration;
b. to approve the professional fees (liquidators and
solicitors);
c. to approve the Liquidators' application to Court for
release & discharge and destruction of the Company's books
and records; and.
d. discuss other business
The company's liquidator is Lim Loo Khoon.
FANTASY ISLAND: Creditors' Meetings Set for Sept. 20
----------------------------------------------------
Fantasy Island Pte Ltd, which is in compulsory liquidation, will
hold a meeting for its creditors on Sept. 20, 2012, at 10:30
a.m., at 8 Wilkie Road #03-08 Wilkie Edge, in Singapore 228095.
Agenda of the meeting include:
a. to approve Liquidators' fees; and
b. discuss other business
The company's liquidators are:
Chee Yoh Chuang
Lim Lee Meng
c/o 8 Wilkie Road
#03-08 Wilkie Edge
Singapore 228095
LUTHOR LICHT: Placed Under Voluntary Wind-Up Proceedings
--------------------------------------------------------
At the first creditors' meeting held on Sept. 4, 2012, creditors
of Luthor Licht Design (Asia) Pte Ltd resolved to voluntarily
wind up the company's operations.
The company's liquidator is:
Chee Fung Mei
138 Cecil Street #305-03,
Singapore 069538
RASACINTA PTE: Court to Hear Wind-Up Petition on Sept. 21
---------------------------------------------------------
A petition to wind up the operations of Rasacinta Pte Ltd will be
heard before the High Court of Singapore on Sept. 21, 2012, at
10:00 a.m.
CT Vegetables & Fruits Pte Ltd filed the petition against the
company on Aug. 24, 2012.
The Petitioner's solicitors are:
M/s C P Lee & Co
1 North Bridge Road #10-03
Singapore 179094
SELUX ASIA: Members' Final Meeting Set for Oct. 5
-------------------------------------------------
Members of Selux Asia Pacific Private Limited will hold their
final meeting on Oct. 5, 2012, at 10:30 a.m., at 1 Scotts Road,
at #21-08 Shaw Centre, in Singapore 228208.
At the meeting, Chia Lay Beng, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
SILVERSTAR INVESTMENTS: Creditors' Meetings Set for Sept. 14
------------------------------------------------------------
Silverstar Investments Pte Ltd, which is in compulsory
liquidation, will hold a meeting for its creditors on Sept. 14,
2012, at 3:00 p.m., at 6 Shenton Way, #32-00, DBS Building Tower
Two, in Singapore 068809.
Agenda of the meeting include:
a. to update on the liquidation administration;
b. to approve the professional fees (liquidators and
solicitors);
c. to approve the Liquidators' application to Court for
release & discharge and destruction of the Company's books
and records; and.
d. discuss other business
The company's liquidator is Lim Loo Khoon.
TRANSCONTINENTAL TRADE: Court Enters Wind-Up Order
---------------------------------------------------
The High Court of Singapore entered an order on Aug. 24, 2012, to
wind up the operations of Transcontinental Trade & Investment
Pte Ltd.
TMF Singapore Pte Ltd filed the petition against the company.
The company's liquidator is:
The Official Receiver
Care of The URA Centre (East Wing)
45 Maxwell Road #06-11
Singapore 069118
===============
X X X X X X X X
===============
* Moody's Says Asian Liquidity Stress Index Erodes in August
------------------------------------------------------------
Moody's Investors Service says that its Asian Liquidity Stress
Index (LSI) deteriorated in August, with 21.8% of its
speculative-grade portfolio demonstrating weak liquidity versus
16.8% in July.
"We saw the largest month-on-month change since Sep 2010, and it
reflects a net increase of five companies to the lowest
speculative-grade liquidity score category (SGL-4), which now
totals 22 companies," says Laura Acres, a Moody's Senior Vice
President.
"The index, which increases when speculative-grade liquidity
appears to decrease, is at its highest level since the first
quarter of 2010, but is also well below the high of 37% posted
during the fourth quarter of 2008 amid the financial crisis,"
adds Acres.
Acres was speaking on the release of Moody's latest report on the
index, entitled "Asian Liquidity Stress Index."
The steady improvement of the liquidity sub-index for Chinese
speculative-grade companies also reversed in August. At 20.4%,
the sub-index is now at its highest level since Moody's began
publishing it in April 2011, and is up from 16.3% in July.
"The liquidity sub-index of Chinese property companies also rose
to 25.0% from 17.9% in July, but it is still lower than in March,
when it touched a peak of 26.9%. Now, almost one in four of the
high-yield Chinese property companies we rate is considered to
have weak liquidity," Acres adds.
During July and August, the ratio of corporate family rating
downgrades to upgrades was 5:1. It was the fifth consecutive
quarter where downgrades outpaced upgrades, and Q3 also showed
the highest ratio of downgrades to upgrades since Q2 2009.
The percentage of speculative-grade companies with a negative
rating outlook or on review for downgrade remained nearly
unchanged from July at 35.6%.
In August, the net amount of high-yield debt rated by Moody's in
Asia rose slightly to US$40.9 billion versus US$40.7 billion in
July, as a result of Sound Global's (Ba3 stable) US$150 million
senior unsecured bond due 2017.
But, for the rest of the year, debt issuance will likely remain
slow as long as uncertainty in the euro area continues. If the
sovereign-debt problems hurt economic growth in Asia or cause
lenders to tighten their lending standards further, this will
impact lending rates to speculative-grade companies and may
result in deteriorating liquidity for some.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante,
Rousel Elaine T. Fernandez, Ivy B. Magdadaro, Frauline S.
Abangan, and Peter A. Chapman, Editors.
Copyright 2012. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$625 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 240/629-3300.
*** End of Transmission ***