/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/121010.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 Wednesday, October 10, 2012, Vol. 15, No. 202 Headlines A U S T R A L I A BUILDEV GROUP: Three Tinkler-Owned Firms Face Liquidation C H I N A CHINA TIANRUI: Moody's Assigns '(P)B2' Sr. Unsecured Debt Rating CHINA TIANRUI: S&P Gives 'B' Rating on USD-Denominated Notes CITIC PACIFIC: Moody's Assigns 'Ba1' Rating to EMTN Program CITIC PACIFIC: S&P Gives 'BB+' Rating on Upsized US$4.5BB Notes H O N G K O N G 80S RENAISSANCE: Wong Chau Keung Appointed as Liquidator CHINA (I.C.P.): Court to Hear Wind-Up Petition on Nov. 7 EASTERN LINK: Creditors Get 50% Recovery on Claims GLOBAL EPITECH: Court to Hear Wind-Up Petition on Oct. 17 GRE (HONG KONG): Court to Hear Wind-Up Petition on Nov. 14 IDONA INVESTMENT: Yam Kam Kwong Appointed as New Liquidator JUNGLE HOLDINGS: Court to Hear Wind-Up Petition on Nov. 21 KUDOS APPAREL: Creditors' Meeting Set for Oct. 17 NAMEBLE GARMENT: Court to Hear Wind-Up Petition on Oct. 24 O'MACY BEAUTY: Court to Hear Wind-Up Petition on Oct. 17 I N D I A BELL TEXTILES: ICRA Assigns 'BB+' Rating on INR11.75cr Loans CONTRANS LOGISTIC: ICRA Rates INR17cr Term Loans at '[ICRA]BB-' DARA CONSTRUCTION: ICRA Assigns 'B+' Rating on INR2.08cr Loans GCL INDIA: ICRA Cuts Rating on INR20.5cr Loan to '[ICRA]BB-' HINDUSTAN HYDRAULICS: ICRA Puts 'BB' Rating on INR8.5cr Loan JANKI RICE: ICRA Assigns '[ICRA]B' Rating to INR12.87cr Loans MALLESWARAMMA MEMORIAL: ICRA Rates INR5cr Term Loans at '[ICRA]B' SIMPEX OVERSEAS: ICRA Cuts Rating on INR20cr Loan to '[ICRA]BB-' SRIJI CORPORATION: ICRA Cuts Rating on INR20cr Loan to 'BB-' VRL LOGISTICS: ICRA Assigns 'BB+' Rating to INR337.93cr Loans K O R E A SSANGYONG ENG'G: To Receive KRW130BB in Loan From Creditors M O N G O L I A MONGOLIAN RESOURCES: Moody's Assigns 'B3' Corp. Family Rating MONGOLIAN RESOURCES: S&P Gives 'B-' CCR With Stable Outlook N E W Z E A L A N D SHANTON CLOTHING: In Receivership; All 39 Shops Continue to Trade P H I L I P P I N E S EXPORT & INDUSTRY: PDIC Issues Bid Terms and Conditions for Rehab S I N G A P O R E NAM FATT: Creditors' Meetings Set for Oct. 18 NAM FATT ENGINEERING: Creditors' Meetings Set for Oct. 18 OSCAR MARITIME: Court to Hear Wind-Up Petition on Oct. 19 PARADIGM SHIPPING: Court Enters Wind-Up Order QUEEN'S AVENUE: Court to Hear Wind-Up Petition on Oct. 19 X X X X X X X X * Upcoming Meetings, Conferences and Seminars - - - - - ================= A U S T R A L I A ================= BUILDEV GROUP: Three Tinkler-Owned Firms Face Liquidation --------------------------------------------------------- SmartCompany reports that three companies owned by troubled mining billionaire Nathan Tinkler have had wind-up orders made against them in the Queensland Supreme Court, in yet another frustrating development for the prominent investor's empire. SmartCompany says the past month has been a disaster for Mr. Tinkler, who was booted from the top of the BRW Rich List mainly due to a decline in commodity prices. SmartCompany relates that property groups Mirvac and Blackwood Corp have also made legal threats against Tinker's companies for failing to make payments. According to the report, mining contracting group Sedgman has made three wind-up applications against Tinkler Group Holdings, Hunter Ports, and Bolkm. The applications were made last month, but the hearing dates are set for October 15 and October 22, SmartCompany discloses. SmartCompany adds Sedgman Chief Financial Officer Ian Poole has also claimed the company had reached a schedule with the Tinkler companies for payment of AUD2 million relating to a coal project that was eventually rejected by the New South Wales Government, but that this timetable wasn't met. The report says the wind-up applications came after Tinkler missed a court-ordered deadline to pay AUD17 million for land usage in the same project to Mirvac. Both Mirvac and Tinkler's Buildev Group are set to hear out their case in court later this month. A separate dispute with building group Blackwood is also underway, with the company claiming Tinkler's Mulsanne Resources owes it AUD28.4 million, according to SmartCompany. ========= C H I N A ========= CHINA TIANRUI: Moody's Assigns '(P)B2' Sr. Unsecured Debt Rating ---------------------------------------------------------------- Moody's Investors Service has assigned a provisional (P)B2 senior unsecured debt rating to the USD senior notes to be issued by China Tianrui Group Cement Company Ltd. At the same time, Moody's has affirmed Tianrui Cement's B1 corporate family rating and has withdrawn the provisional (P)B2 senior unsecured debt rating assigned to the company's previously proposed RMB notes as the issuance has been canceled. The ratings outlook is stable. Tianrui Cement plans to use the proceeds of the proposed issuance to fund the repayment of existing short-term debt obligations, business acquisitions, and general corporate purposes. Moody's will remove the rating from its provisional status after the notes are issued on satisfactory terms and conditions. Ratings Rationale "The proposed USD senior notes will improve Tianrui Cement's debt maturity profile and its liquidity position," says Jiming Zou, a Moody's Analyst. Tianrui Cement has been funding its business mainly through short-term borrowings which represented about 71% of its gross unadjusted debt as of June 2012. In addition, the company's ability to raise additional debt in the domestic capital market becomes constrained as it has already RMB2 billion medium-term and short-term notes outstanding as of September. The latest proposed USD senior notes are intended to broaden Tianrui Cement's funding sources and partially reduce its refinancing pressure, which would in turn improve its funding stability. "Part of the proceeds of the proposed senior notes will be used for debt repayments and thus incremental debt is not expected to rise materially. Its debt leverage, as measured by Debt/EBITDA, is expected to be around 4.0 -- 5.0x with EBITDA/Interest in the range of 3.0-4.0x for the next 12 -- 18 months, which would be still within the B1 rating," adds Zou. Tianrui Cement's B1 corporate family rating continues to reflect its leading market position in Henan and Liaoning provinces, and its strong level of sales visibility, as supported by demand from urbanization and investments in infrastructure. The company maintains a well-established market position in its two key provinces by its ability to secure inputs and use efficient equipment. At the same time, Tianrui Cement's B1 rating is constrained by its short listing history and the absence of a track record of disciplined financial management and good corporate governance. Another constraint is the volatile nature of its profitability due to its lack of pricing power in a fragmented cement market. Moody's expects Tianrui Cement's profit margin will stay under pressure in the next 12 months when Chinese economic growth will remain slow. Meanwhile, the company has responded to the increased challenge by slowing capital spending to preserve liquidity. The rating for the proposed USD notes is one notch lower than the company's corporate family rating, reflecting structural and legal subordination risk. Tianrui Cement's domestic borrowings amounted to RMB6.5 billion, which represented 37% of total assets as of the end of June 2012. This ratio will remain above 15% in the next 2 years. The ratings outlook is stable, reflecting Moody's expectation that Tianrui Cement will stabilize its operating performance in the second half of 2012, successfully roll over its short-term debt, and reduce its capital spending to preserve cash. Upward rating pressure is limited. Over the longer term, it could emerge if the company can demonstrate a track record of further improving its corporate governance, market position, financial management, and debt maturity profile. In terms of its credit metrics, indicators for an upgrade would include operating margin more than 20%, EBITDA/interest expenses more than 4.0x, and Debt/EBITDA less than 3.5x-4.0x on a sustained basis. A downgrade could be triggered by: (i) a significant loss of share in its core market, (ii) a decline in sales and/or profitability due to an adverse change in the local operating environment, or weaker cement prices, and/or (iii) aggressive expansion, driven by debt-funded acquisitions or capital expenditure. In terms of its credit metrics, operating margin less than 10%, EBITDA/interest expense less than 3.0x, or Debt/EBITDA above 5.0x would trigger a downgrade. Moody's is aware of the financial difficulties of Sanmenxia Tianyuan Aluminum Company Limited (STAC), a sister company of Tianrui Cement, and is under the same parent group owned by Li Liufa. Although Tianrui Cement's business is unrelated to the aluminum business, downward rating pressure could arise in case of Tianrui Cement's cash leakage, guarantee for STAC's debt or change in the profit distribution policy of Tianrui Cement. The principal methodology used in rating China Tianrui Cement Group Cement Company Ltd was the Global Building Materials Industry Methodology published in July 2009. China Tianrui Cement Group Cement Company Ltd, which listed on the Hong Kong Stock Exchange in April 2012, is the largest cement producer in China's Henan and Liaoning provinces. The company had an annual clinker and cement production capacity of 22.25 million tons and 39.23 million tons, respectively, as of June 30, 2012. The company is 39.6% held by its Chairman, Li Liufa, and his son, Li Xuanyu; 18.7% by Tang Ming Chien; 16.7% by KKR, and 8.4% by JPMorgan. CHINA TIANRUI: S&P Gives 'B' Rating on USD-Denominated Notes ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' issue rating to a proposed issue of U.S. dollar-denominated senior unsecured notes by China Tianrui Group Cement Co. Ltd. (B+/Stable/--; cnBB/--). "At the same time, we assigned our 'cnBB-' Greater China regional scale rating to the proposed notes. The rating on the notes is subject to our review of the final documentation for the notes issuance," S&P said. "The proposed issue is rated one notch lower than the corporate credit rating on Tianrui because of priority liabilities at its operating company in China. Tianrui will use the proceeds from the proposed notes to refinance debt and for general corporate purpose," S&P said. "The proposed issuance does not affect the rating on Tianrui. The company's financial performance in the first half of 2012 was in line with our expectation, with an operating margin of about 20%. We expect the operating margin to stay above 20% in the next 12 months as large national infrastructure projects, such as the South-North Water Transfer Project, fuel demand," S&P said. "The rating on Tianrui reflects the company's untested corporate governance, short track record, heavy reliance upon short-term debt to support its capital structure, and aggressive growth plans. We also note that Tianrui operates in a competitive, cyclical, and capital-intensive industry, which we believe is in a weak cycle. The company's operating scale, reasonable geographic diversification, and relatively efficient operations due to vertical integration temper the weaknesses," S&P said. CITIC PACIFIC: Moody's Assigns 'Ba1' Rating to EMTN Program ----------------------------------------------------------- Moody's Investors Service has assigned a Ba1 rating to CITIC Pacific's proposed USD notes to be drawn under its Euro Medium Term Notes (EMTN) Program. Moody's has also affirmed CITIC Pacific's Ba1 corporate family rating and the (P)Ba1 rating of its EMTN program, which has been upsized to USD4.5 billion from USD2 billion. The ratings outlook is negative. Rating Rationale: "The notes issuance has no immediate rating impact, as the funds is expected to be used to refinance loans maturing in 2013," says Ivan Chung, a Moody's Vice President. "Despite its high leverage and weak performance year-to-date, CITIC Pacific's Ba1 rating is supported by (1) its diversified business portfolio, (2) its stable operating performance in Hong Kong, and (3) the expected high support from its parent, the CITIC Group (Baa2, stable), which is based on the strong track record of timely parental support," says Kai Hu, a Moody's Vice President and local market analyst for the company. This parental support provides a two-notch uplift from CITIC Pacific's standalone Ba3 rating. Moody's draws reassurance from CITIC Pacific's adequate liquidity. Even without the additional note issuance, its cash-on hand of HKD35.6 billion and available committed banking facilities of HKD15.5 billion are enough to cover debt maturing in 2012 and 2013 of around HKD32 billion. The proposed drawdown will further improve the company's near-term liquidity profile. "The negative outlook reflects the possibility of further delays and cost overruns of the iron ore project, against the backdrop of declining iron ore prices and weakness in its specialty steel manufacturing as well as its property business. We expect CITIC Pacific's net debt position, which is weak for its standalone rating, will continue rising before the iron ore project is completed and starts generating meaningful cashflow for deleveraging," adds Hu. Moody's will continue to monitor the progress of the company's iron ore project, the operating performance of its core businesses, and any initiatives that the company or parent decides to implement to maintain a credit profile that is appropriate for its current rating. CITIC Pacific Limited'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 CITIC Pacific Limited's core industry and believes CITIC Pacific Limited's ratings are comparable to those of other issuers with similar credit risk. Other factors used in this rating are described in Analytical Considerations in Assessing Conglomerates published in September 2007. CITIC Pacific Ltd, listed in Hong Kong, is a conglomerate that is 58% owned by CITIC Group Corporation. It was one of the first Chinese companies to list and invest outside of China. Its major businesses include special steel manufacturing, iron ore mining and property development in mainland China. It is also engaged in other businesses such as energy, tunnels, telecommunications, distribution and property development and investment in Hong Kong. CITIC Group Corporation, headquartered in Beijing, is a conglomerate investment company wholly owned by the State Council of the Chinese government. As of end-2011, it had total consolidated assets of RMB 3,277 billion. CITIC PACIFIC: S&P Gives 'BB+' Rating on Upsized US$4.5BB Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' rating to an upsized US$4.5 billion medium-term notes program of CITIC Pacific Ltd. (BB+/Negative/--; cnBBB/--). The original size of the program was US$2.0 billion. "At the same time, we assigned our 'BB+' issue rating to a proposed benchmark size senior unsecured notes issuance under this program. We have also assigned our 'cnBBB' Greater China regional scale rating to both the program and the proposed notes. We expect CITIC Pacific to use the proceeds from the proposed notes to refinance borrowings due in 2013," S&P said. "We anticipate that the company's debt will increase by the end of 2012, with its ratio of total debt to total capital reaching close to 60% as it pre-finances debt maturities in 2013. In our view, the key risk to the rating on CITIC Pacific remains the execution of the construction of the Sino Iron project in Western Australia and whether the company can start the first production line soon," S&P said. "The rating on CITIC Pacific reflects the conglomerate's weak execution record. The company's highly leveraged capital structure and its exposure to cyclical industries such as iron ore, real estate, and special steel also constrain the rating. Strong parent support and CITIC Pacific's diversified assets across industries temper these weaknesses," S&P said. ================ H O N G K O N G ================ 80S RENAISSANCE: Wong Chau Keung Appointed as Liquidator -------------------------------------------------------- Wong Chau Keung on Aug. 26, 2012, was appointed as liquidator of 80s Renaissance Limited. The liquidator may be reached at: Wong Chau Keung A, 11/F, Dao Shing BLDG 51 Heung Wo St, Tsuen Wan CHINA (I.C.P.): Court to Hear Wind-Up Petition on Nov. 7 -------------------------------------------------------- A petition to wind up the operations of China (I.C.P.) Holidays Limited will be heard before the High Court of Hong Kong on Nov. 7, 2012, at 9:30 a.m. Well Team Business Service Limited filed the petition against the company on Sept. 4, 2012. The Petitioner's solicitors are: Messrs. Kelvin Cheung & Co Unit 101, 1st Floor, Hong Kong Trade Centre 161-167 Des Voeux Road Central, Hong Kong EASTERN LINK: Creditors Get 50% Recovery on Claims -------------------------------------------------- Eastern Link Investment Limited, which is in compulsory liquidation, will declare the first preferential dividend to its creditors on Oct. 19, 2012. The company will pay 50% for preferential claims. The company's liquidators are: Lau Siu Hung Liang Yang Keng Rooms 1909-10, 19/F 173 Des Voeux Road Central, Hong Kong GLOBAL EPITECH: Court to Hear Wind-Up Petition on Oct. 17 --------------------------------------------------------- A petition to wind up the operations of Global Epitech Company Limited will be heard before the High Court of Hong Kong on Oct. 17, 2012, at 9:30 a.m. Everleap Limited filed the petition against the company on Aug. 9, 2012. The Petitioner's solicitors are: Hogan Lovells 11/F, One Pacific Place 88 Queensway, Hong Kong GRE (HONG KONG): Court to Hear Wind-Up Petition on Nov. 14 ---------------------------------------------------------- A petition to wind up the operations of Gre (Hong Kong) Limited will be heard before the High Court of Hong Kong on Nov. 14, 2012, at 9:30 a.m. Daisho Microline Limited filed the petition against the company on Sept. 10, 2012. The Petitioner's solicitors are: Johnnie Yam, Jacky Lee & Co 5th Floor, San Toi Building 137-9 Connaught Road Central, Hong Kong IDONA INVESTMENT: Yam Kam Kwong Appointed as New Liquidator ----------------------------------------------------------- Yam Kam Kwong on Sept. 20, 2012, was appointed as liquidator of Idona Investment Limited. Yam Kam Kwong replaces Lee King Yue who stepped down as the company's liquidator. The liquidator may be reached at: Yam Kam Kwong 409, Jardine House 1 Connaught Place Central, Hong Kong JUNGLE HOLDINGS: Court to Hear Wind-Up Petition on Nov. 21 ---------------------------------------------------------- A petition to wind up the operations of Jungle Holdings Limited will be heard before the High Court of Hong Kong on Nov. 21, 2012, at 9:30 a.m. Sung Ham Kin Edmund filed the petition against the company on Sept. 10, 2012. The Petitioner's solicitors are: Gallant Y. T. Ho & Co 5th Floor, Jardine House No. 1 Connaught Place Central, Hong Kong KUDOS APPAREL: Creditors' Meeting Set for Oct. 17 ------------------------------------------------- Creditors of Kudos Apparel Limited will hold their meeting on Oct. 17, 2012, at 3:00 p.m., for the purposes provided for in Sections 241, 242, 243, 244 of the Companies Ordinance. The meeting will be held at the Unit 1402, 14th Floor, Yue Xiu Building, 160-174 Lockhart Road, Wanchai, in Hong Kong. NAMEBLE GARMENT: Court to Hear Wind-Up Petition on Oct. 24 ---------------------------------------------------------- A petition to wind up the operations of Nameble Garment Limited will be heard before the High Court of Hong Kong on Oct. 24, 2012, at 9:30 a.m. The Petitioner's solicitors are: Tsangs 13th Floor, Chiyu Bank Building 78 Des Voeux Road Central, Hong Kong O'MACY BEAUTY: Court to Hear Wind-Up Petition on Oct. 17 -------------------------------------------------------- A petition to wind up the operations of O'Macy Beauty Limited will be heard before the High Court of Hong Kong on Oct. 17, 2012, at 9:30 a.m. The Petitioner's solicitors are: Chak & Associates Unit 1904, 19th Floor Far East, Finance Centre 16 Harcourt Road Admiralty, Hong Kong ========= I N D I A ========= BELL TEXTILES: ICRA Assigns 'BB+' Rating on INR11.75cr Loans ------------------------------------------------------------ ICRA has assigned a long-term rating of '[ICRA]BB+' to the fund- based facilities aggregating to INR11.75 crore of Bell Textiles Private Limited. ICRA has also assigned a short term rating of '[ICRA]A4+' to the non-fund based facilities aggregating to INR8.00 crore of BTPL. The long-term rating has a stable outlook. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Fund Based Limits 0.75 [ICRA]BB+ assigned (Term Loans) Fund Based Limits 11.00 [ICRA]BB+ assigned (Cash Credit) Non-Fund Based Limits 8.00 [ICRA]A4+ assigned (Letter of Credit) The ratings are constrained by the company's modest size of operations, high working capital intensity of operations and intensely competitive industry structure. ICRA notes that the company's profitability is exposed to the volatility in prices of key raw materials, especially pure silk yarn, owing to high supplier concentration and ability of the company to pass on escalated input costs to customers remains limited. ICRA further notes that the company's operations are also exposed to adverse fluctuations in currency markets in the absence of a firm hedging policy and also to the cyclicity observed in the textile sector. The ratings however, favorably factor in the long track record of the promoters in the silk manufacturing business, BTPL's established marketing and distributor network and diversified customer base. Bell Textile Private Limited was incorporated in March 1994 by Mr. Bharat T. Gandhi. The company commenced operations in the year 1980 as a proprietorship concern and was re-incorporated as a private limited company in the year 1994. The company is engaged in the manufacturing of Bemberg Cloth & Pure Silk Cloth and markets its products under the trade name "Batsons". The fabric manufactured by the company is primarily used for making saris and dupattas. The raw material for Bemberg is mostly imported from Japan while pure silk yarn is procured from China. The sister concerns of BTPL include Bell Finishing Works (proprietorship firm) and Elpee Textile Industries (partnership firm), both of which are engaged exclusively in doing job work for BTPL. For FY 2012, the company reported profit after tax of INR1.48 crore on an operating income of INR67.56 crore. CONTRANS LOGISTIC: ICRA Rates INR17cr Term Loans at '[ICRA]BB-' --------------------------------------------------------------- ICRA has assigned a rating of '[ICRA]BB-' to the INR17 crore, long-term, fund based facilities of Contrans Logistic Private Limited. ICRA has also assigned a rating of '[ICRA]A4' to the INR1.75 crore short-term, non-fund based facilities of CLPL. The outlook on the long term rating is Stable. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Term Loans 17.00 [ICRA]BB- assigned Bank Guarantee 1.75 [ICRA]A4 assigned The assigned ratings are constrained by the small scale of operations coupled with vulnerability of the operations to any adverse trends in trade (export-import) volumes at Pipavav Port. The ratings also take into account the moderate risk of customer concentration, dependence on agro products which results in exposure to agro climatic risks and changes in government regulations. The company has proposed large-sized expansion plans which is currently on hold, however, timing and extent of debt funding required for the same remains a key rating sensitivity. The ratings, however, favorably factor in the long experience of the promoters in container logistics industry by way of engagement with other companies, favorable location of the company's facility at Pipavav which only has one other private CFS player resulting in limited competition, and favorable outlook of container shipping trade in the long term. Ability to further scale-up the volumes so as to improve the financial performance remains crucial. Contrans Logistic Private Limited was incorporated in 2007 and is engaged in the business of operating a Container Freight Station at Pipavav port. The CFS has an annual throughput capacity of 96,000 TEUs (Twenty Foot Equivalent Units).The company is promoted and operated by Captain Navjeet Grewal and Captain Rajeev Niroola who have several years of experience in the material handling and shipping logistics industry. The promoters are associated with Mundhra CFS Pvt. Ltd at Mundra port and Aditya CFS Pvt. Ltd at Kandla port. The promoters along with their family and other group companies own about 56% of the share capital of CLPL while the remaining 44% is held by private equity firm, Eredene Capital Plc. Recent Results In FY 2012 (provisional unaudited), CLPL reported an operating income of INR13.33 crore (as against INR10.05 crore in FY 2011) and profit after tax of INR0.47 crore (as against a net loss of INR0.24 crore in FY 2011). DARA CONSTRUCTION: ICRA Assigns 'B+' Rating on INR2.08cr Loans -------------------------------------------------------------- ICRA has assigned the long-term rating of '[ICRA]B+' to the INR2.0 crore fund based limits and INR0.08 crore unallocated limits of Dara Construction Co. ICRA has also assigned the short term rating of I[ICRA]A4 to INR6.0 crore non-fund based limits of DCC. Amount Facilities (INR Cr Ratings ---------- -------- ------- Fund Based 2.0 [ICRA]B+ (Assigned) Unallocated Limited 0.08 [ICRA]B+ (Assigned) Non-fund Based Limits 6.0 [ICRA]A4 (Assigned) The ratings takes into account the healthy revenue visibility as reflected by pending order book of INR74 crore as on June 30, 2012 and long track record of the proprietor in the civil construction industry. Notwithstanding its modest scale of operations, the ratings also draw support from the adequate debt coverage indicators as reflected by interest coverage and gearing of 3.6 times and 0.44 times respectively as on March 31, 2012. The ratings, however, are constrained on account of exposure to sectoral and geographic risks emanating from DCC's pending order book, which is highly concentrated towards the state of Rajasthan and water segment (laying of pipes). Further, DCC's high dependence on government entities for orders exposes the firm to risks arising out of budgetary allocation and spending of such government entities. Moreover, ICRA expect the working capital requirements to rise in order to execute the pending order book in timely manner. The same is likely to be funded through working capital borrowing; availability of which may be constrained on account of its constitution. Going forward, satisfactory execution of the existing order book and timely collections from the clients will remain key rating sensitivities along with the firm's ability to secure incremental projects while maintaining profit margins. Dara Construction Co. is a proprietorship concern of Mr. Pappu Ram Vishnoi set up in 1998. The concern is engaged in civil construction work, primarily focusing on laying of pipe lines. The firm is based out of Jodhpur and has work experience across Rajasthan, Madhya Pradesh and Gujarat. DCC is registered as "AA" class contractor in P.H.E.D and "A" class contractor in M.E.S. As per the provisional numbers, the firm achieved an operating income of INR39.45 crore in FY12 and had a pending order book of INR74.14 crore as on June 30, 2012. Recent Results For the 12 months ending March 31, 2012, DCC reported Profit Before Tax (PBT) of INR1.33 crore on a turnover of INR39.45 crore as compared to INR0.83 crore on a turnover of INR25.81 crore a year ago. GCL INDIA: ICRA Cuts Rating on INR20.5cr Loan to '[ICRA]BB-' ------------------------------------------------------------ ICRA has revised the long term rating assigned to the INR20.50 crore (enhanced from INR13.00 Cr) fund based bank facilities of GCL India Pvt Ltd from '[ICRA]BB+' to '[ICRA]BB-'. ICRA has also revised the short term rating assigned to the INR1.50 Cr (enhanced from INR1.00 Cr) non fund based facilities of GCLIPL from '[ICRA]A4+' to '[ICRA]A4'. The outlook on the long term rating is Stable. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Fund Based Limits 20.50 [ICRA]BB- (stable) Revised from [ICRA]BB+ (stable) Non-Fund Based Limits 1.50 [ICRA]A4 Revised from [ICRA]A4+ The revision in the ratings takes into account decline in operating income as well as profitability, on account of decreased industry requirement as well as lack of improvement in operational efficiencies, along with an increase in gearing levels from 2.07 times as on March 31, 2011 to 2.8 times as on March 31, 2102. The ratings also factor in the stretched liquidity position of the company, on account of high working capital blockage owing to stretched receivable levels, as evidenced by negative free cash flows generated by the company and very high utilization of working capital limits. The rating however, is favorably supported by GCLIPL's experienced management, its long track record of operations and its established position in the domestic market. The ratings also take into account the steps taken by the company to diversify its product profile and addition of tape extrusion unit to its portfolio. GCLIPL started its operations in the year 1986 as a partnership concern in the name of Girish Circular Looms by Mr. Harish B Kamath who is an engineer by profession. The firm was later on converted into a private limited company in the name of GCL India Private Limited in 1996. Initially, the firm started manufacturing 4 shuttle circular looms for weaving fabrics of Poly Propylene / Poly Ethylene (PP/PE) tapes under the technology transfer agreement from M/s Phyllis Co., Taiwan. Gradually the company developed several models of circular looms and also widened its product range. So far the company has been primarily dealing in circular looms only however recently it has started manufacturing Extruders also. The Extruders will be manufactured in technical collaboration with SIMA Group, Italy. Recent Results The company reported (provisionally) net profit of INR0.72 crore on a turnover of INR57.12 crore for the year ending March 2012 as against a net profit of INR2.70 crore on an operating income of INR67.53 crore for year ending March 2011. HINDUSTAN HYDRAULICS: ICRA Puts 'BB' Rating on INR8.5cr Loan ------------------------------------------------------------ ICRA has assigned a rating of '[ICRA]BB' to the INR8.5 crore fund based limits of Hindustan Hydraulics Private Limited. ICRA has also assigned a short term rating of '[ICRA]A4' to the INR10.0 crore non-fund based limits of HHPL. The outlook on the long term rating is 'Stable' Amount Facilities (INR Cr) Ratings ---------- -------- ------- Fund Based limits 8.50 [ICRA]BB assigned Non Fund Based limits 10.00 [ICRA]A4 assigned The ratings are constrained by HHPL's modest scale of operations resulting in modest economies of scale and susceptibility of its profitability to volatility in prices of raw material due to fixed price nature of contracts. Further the ratings are constrained by high debtor days of HHPL with a large proportion of debtors outstanding as on Mar 31, 2012 being due for more than six months. However, the ratings derive comfort from the established track record of the company in the manufacturing of hydraulic machines, established client base as reflected by repeat orders as well as adequate capitalisation and coverage indicators. In ICRA's view, HHPL's ability to scale up its operations in a profitable manner, manage working capital intensity and maintain a healthy financial risk profile in the context of the small scale of operations would remain the key rating sensitivities. Hindustan Hydraulics Private Limited was incorporated in 1968 and is currently managed by Mr. M.M.S Khosla. The company is engaged in the manufacturing of CNC Hydraulic Press Brakes and NC/CNC Hydraulics Shearing machine. Till date, HHPL has supplied over 2500 CNC press brakes and NC Hydraulic Shearing machines.HHPL caters to various industries including railways and automobiles. Its manufacturing unit is located in Jalandhar, Punjab. Recent results HHPL reported a profit after tax (PAT) of INR2.87 crores on an operating income of INR48.72 crores in FY 2011-12 as against, PAT of INR1.89 crores on an operating income of INR38.88 crores in FY 2010-11. JANKI RICE: ICRA Assigns '[ICRA]B' Rating to INR12.87cr Loans ------------------------------------------------------------- The rating of '[ICRA]B' has been assigned to the INR1.87 crore term loans and the INR11.00 crore cash credit facility of Janki Rice & Solvent Industries Private Limited. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Term Loan 1.87 [ICRA]B assigned Cash Credit facility 11.00 [ICRA]B assigned The assigned rating is constrained by the small scale of operations and weak financial profile of the company reflected in low profit margins, stretched capital structure and modest coverage indicators. The rating also takes into account the inherently low value addition in the rice milling business; the highly fragmented nature of the industry and vulnerability of profit margins to volatility in paddy prices which are in turn a function of seasonality and variations in crop harvests and regulatory risks. The assigned rating, however, favorably factors in the long experience of the promoters in the rice milling and trading business, favorable location of the company's manufacturing unit in close proximity to the paddy belt in Gujarat and favorable outlook for rice realisations following the lifting of the export ban from September 2011. Janki Rice & Solvent Industries Private Limited was incorporated in 2008 by Ramwani and Vaghela families and is engaged in the business of milling par boiled rice. The company operates from its plant located at Sanand (near Ahmedabad, Gujarat) and started commercial production in FY10; the company's production capacity stands at 192 TPD (Tonne per Day). Recent Results For the year FY2011-12, the company reported an operating income of INR55.63 crore (against INR44.50 crore in FY 2010-11) and profit after tax of INR0.19 crore (against INR0.18 crore in FY 2010-11). MALLESWARAMMA MEMORIAL: ICRA Rates INR5cr Term Loans at '[ICRA]B' ----------------------------------------------------------------- ICRA has assigned long-term rating of '[ICRA]B' to INR5.00 crore term loan limits of Smt. Kanchamreddy Malleswaramma Memorial Educational Society. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Term loans 5.00 [ICRA]B assigned The assigned ratings are constrained by the limited track record of the school having been established in 2011-12; debt funded capital expenditure resulting in high gearing and losses in the first year resulting in weak coverage indicators for FY2012. However, the ratings favorably factor in the stable fee based income and healthy student enrolments providing fair degree of revenue visibility in the medium term and favorable demand prospect for school education in India. Going forward, the society ability to maintain enrollment levels and improve profitability levels are the key rating sensitivities from credit perspective. Founded in 2009, Smt. Kanchamreddy Malleswaramma Memorial Educational Society runs Akshrara International School (AIS) at Anantapur town, Andhra Pradesh. The society is promoted by Mr. K Jagadeeshwar Reddy. The school started operations in academic year (AY) 2011-12 with an intake capacity of around 300 students which was increased to 700 students in AY2012-13. Recent Results For FY2012 (provisional and unaudited), the company reported an operating income of INR1.64 crore and deficit of INR1.20 crore. SIMPEX OVERSEAS: ICRA Cuts Rating on INR20cr Loan to '[ICRA]BB-' ---------------------------------------------------------------- ICRA has revised the rating assigned to the INR20 crores (enhanced from INR12 crores) fund-based limits of Simpex Overseas Private Limited to '[ICRA]BB-' from '[ICRA]BB'. The outlook on the long-term rating is stable. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Fund based limits 20.00 Revised to [ICRA]BB- (Stable) from [ICRA]BB (stable) The rating revision takes into the deterioration in financial profile of the company as reflected by decline in net profits, increase in gearing levels and deterioration in debt coverage indicators of the company. The rating also factors in the intensely competitive nature and low value additive nature of the metal trading industry, SOPL's modest scale of operations, which results in limited economies of scale, and its low profitability and modest cash accruals. Low profitability coupled with high working capital borrowings have resulted in moderate debt coverage indicators. The margins of the company are exposed to foreign exchange fluctuations due to large volumes of imported raw materials as well as movement in traded goods prices. Nevertheless, the rating draws comfort from SOPL's experienced management and demonstrated financial support from promoters. Going forward, ICRA expects SOPL's profitability to remain under pressure while working capital requirements to increase in line with the growth in scale of operations. SOPL was incorporated in 1994 by Mr. Om Prakash Maheshwari. SOPL is a closely held company with entire shareholding with promoters and their group companies. Currently the company is managed by Mr. Maheshwari and his friend Mr. Prakash Trivedi. The company is involved in trading of scrap of metals and alloys such as steel, stainless steel, brass, copper, zinc, aluminium etc. For the financial year ended 31st March 2012, the company reported an operating income of INR151.59 crores and a profit after tax of INR0.46 Crore. The Company has achieved a turnover of 91 crores in 4MFY13. SRIJI CORPORATION: ICRA Cuts Rating on INR20cr Loan to 'BB-' ------------------------------------------------------------ ICRA has revised the rating assigned to the INR20 crores (enhanced from INR10 crores) fund-based limits of Sriji Corporation Private Limited to '[ICRA]BB-' from '[ICRA]BB'. The outlook on the long-term rating is stable. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Fund based limits 20.00 [ICRA]BB-(Stable) from [ICRA]BB (stable) The rating revision takes into account the deterioration in financial profile of the company as reflected by decline in net profits, increase in gearing levels and deterioration in debt coverage indicators of the company. The rating also reflects the intensely competitive nature of the industry, SCPL's modest scale of operations its low profitability and moderate debt coverage indicators. The rating is also constrained by susceptibility of SCPL's earnings to adverse movement in traded goods prices as well as foreign exchange fluctuations. Nevertheless, the rating draws comfort from SCPL's experienced management and long track record of promoters in the industry. SCPL was incorporated in 1997 by Mr. Ashok Maheshwari. SCPL is a closely held company with entire shareholding with promoters and their group companies. Currently the company is managed by Mr. Maheshwari and his friend Mr. Mahesh Chandra Sharma. The company is involved in trading of scrap of metals and alloys such as steel, stainless steel, brass, copper, zinc, aluminium etc. For the financial year ending March 31, 2012, the company reported an operating income of INR141.36 crores and a profit after tax of INR0.45 crore. The company achieved a turnover of INR75 crores in 4MFY13. VRL LOGISTICS: ICRA Assigns 'BB+' Rating to INR337.93cr Loans ------------------------------------------------------------- ICRA has reaffirmed the long term rating at '[ICRA]BB+' assigned to the INR337.93 crore1 (Enhanced from INR211.22 crore) fund based limits of VRL Logistics Limited. The outlook assigned on the long term rating is Stable. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Fund Based Limits- 55.00 [ICRA]BB+ (Stable) Cash Credit Term Loans 282.93 ICRA]BB+ (Stable) The rating reaffirmation takes into account the company's long track record in the transportation business, economies of scale derived from its large fleet of owned vehicles, together with captive body-designing and maintenance facilities and company's presence in the high margin LTL (less than truck load) segment. The rating reaffirmation is also supported by betterment in capital structure and current improvement in debt profile following temporary reduction in external borrowings on account of investment of INR125 crore by private equity firm New Silk Route. The rating is however constrained by the debt funded capital intensive business model of fleet ownership which reduces operating flexibility and makes profit margins susceptible to any slowdown in transportation activity as witnessed in a reduction in profitability margins by 170 basis points in FY2012 which is mainly attributable to reduction in profitability of passenger division. The rating also takes into account high annual debt repayments in relation to the net cash accruals of the company. For example, the net cash accruals during FY2012 were under INR90 crore whereas the scheduled principal debt repayment of INR101.74 crore during FY2013 is substantial even after assuming growth in cash accruals during FY2013 over FY2012. The scheduled debt repayments in FY2014 and FY2015 exceed INR100 crore per annum given the overall high dependence on vehicle financing loans. VRL had total borrowings of INR603.41 crore as on March 31, 2012 and total Debt/OPBDITA ratio of 3.09 times for FY2013. However post PE transaction total borrowings and total Debt/OPBDITA ratio stood at INR482.03 crore and 1.92 times respectively. The rating is however, supported by timely infusion of equity by PE investor during Q1 FY2013; the company used the sale proceeds from the PE investment for pre-closure of term loans to the tune of INR97.96 crore; post the same the scheduled debt repayment during FY2013 is INR101.74 crore. The rating also takes into account proposed capital expenditure of about INR250.00 crore evenly spread over FY2013 and FY2014 and the projected borrowings of around INR193.00 crore over the same period with balance of almost INR58.00 crore estimated to be funded through internal accruals. ICRA has also noted receivables of 90 days equivalent to about INR1.75 crore as on March 31, 2012 from Hubli Electricity Supply Company Limited (HESCOM) for the sale of power from windmills. However significant amount of debt linked to the same has been pre-closed through private equity infusion. The rating reaffirmation factors in current slowdown in the manufacturing sector which can impact VRL's operating income and profitability margin stemming from a reduction in the overall load availability and limited ability to pass on the diesel price increases to its customers. Going forward, the ability of the company to maintain adequate debt profile in the view of the proposed capital expenditure and to maintain stable profitability margins in the current weak economic scenario would be the key rating sensitive factors. Founded in 1976 by Mr. Vijay Sankeshwar, VRL Logistics is engaged in the business of providing transportation of goods (~77% of FY2012 turnover) and passenger services (~19% of FY2012 turnover) across India. It is currently listed in the Limca Book of Records as the largest single owner of commercial fleet of 3298 vehicles as of March 31, 2012. VRL also operates in three other business segments: wind power generation (~3% of FY2012 turnover), courier services and air charter business. The company currently has 34 windmills in Gadag (Karnataka) with a total capacity of 42.5MW supported by a 20-year PPA (power purchase agreement) with the Hubli Electricity Supply Company Ltd (HESCOM) expiring in 2026, which provides visibility to revenues. HESCOM is required to pay INR3.40/kWh for the first 10 years from the commercial operation date without any escalation. The windmill segment recorded a turnover of INR35.53 crore which constitutes 3.2% of the FY2012 revenue with earnings before interest and tax (EBIT) of INR16.98 crore resulting in an EBIT margin of 47.8% for FY2012. The segment had an outstanding debt of INR107.63 crore as of March 31, 2012. In April 2012, the private equity firm New Silk Route invested INR125 crore in VRL; INR84.19 crore was used to repay a significant portion of this debt with current outstanding debt of INR23.44 crore as of July 31, 2012. The balance funds were used to fund working capital requirements and partly fund the planned capital expenditure in the transportation business. Recent Results For FY2012, VRL turnover grew by 27.1% over FY2011 reporting an operating income of INR1132.80 crore whereas its net profit decreased by 20.5% to INR41.06 crore from INR51.67 crore over the same period. During Q1 FY2013 VRL's turnover increased by 27.3% to INR328.18 crore from INR257.84 crore in Q1 FY2012 on the back of strong growth in passenger transportation segment. VRL's net profit grew by 19.7% to INR16.98 crore during Q1 FY2013 from INR14.19 crore in Q1 FY2012. With infusion of INR125 crore of private equity funds, the company's total debt reduced to INR473.36 crore as of June 30, 2012 from INR603.41 crore as of March 31, 2012. ========= K O R E A ========= SSANGYONG ENG'G: To Receive KRW130BB in Loan From Creditors ----------------------------------------------------------- Yonhap News reports that creditor banks of cash-strapped Ssangyong Engineering & Construction Co. said Tuesday that they will provide KRW130 billion (US$116.9 million) in a bid to help the firm turn around. The news agency says the creditors, led by Hana Bank, will extend the loan to Ssangyong Engineering, currently up for sale after it was released from a creditor-led debt workout program in Oct. 2004. Yonhap News relates that the move came on the heels of a recent liquidity injection worth KRW70 billion by state-run debt-clearer Korea Asset Management Corp. (KAMCO) last month. It owns a 38.8% in the builder, the report discloses. According to the report, market watchers said the latest financial assistance is expected to improve the capital base of the company, a former arm of Ssangyong Group. KAMCO has been trying to sell the company for years, but the deal fell through in August when a preferred bidder dropped its intent to buy the firm due to failure in term negotiations, Yonhap News reports. Based in Seoul, Korea, Ssangyong Engineering & Construction Co., Ltd. -- http://www.ssyenc.com/eng/-- is involved in the areas of construction and engineering. =============== M O N G O L I A =============== MONGOLIAN RESOURCES: Moody's Assigns 'B3' Corp. Family Rating ------------------------------------------------------------- Moody's Investors Service has assigned a B3 corporate family rating to Mongolian Resources Corporation ("MRC"). At the same time, Moody's has assigned a provisional (P)B3 rating to the proposed USD bonds to be issued by the company. The ratings outlook is stable. This is the first-time Moody's has assigned ratings to MRC. Moody's will remove the provisional status of the bond rating when the issuance is completed on satisfactory terms and conditions. The proceeds of the USD bonds will be used by MRC for debt repayment and capital expenditures. Ratings Rationale "MRC's B3 corporate family rating reflects its competitive low costs for iron ore production -- when compared to global levels -- and its proximity to its consumers, iron and steel plants in Xinjiang and Gansu provinces in Western China," says Alan Gao, a Moody's Vice President and Senior Analyst. MRC adopts an open-pit operation and currently has one large open-pit mine and 4 proposed satellite pits. Moreover, the company's ore deposits have a relatively high level of iron when compared with those of its Asian peers. As a result, the company has a very competitive cost structure with the production cost of its iron ore concentrate standing at around US$45 per tonne in 2011. MRC operates in an environment characterized by geographic barriers. The iron and steel plants in Western provinces in China are far from the traditional global iron ore supply chain. High inland transportation costs make the use of imported seaborne ore prohibitively expensive in Western China. Therefore, MRC's mine -- which is around 168 km from the Chinese border -- has advantage in terms of proximity to its end-users. Moreover, the robust state of steel production in Western China - - where Chinese government policies are encouraging development in a region which economically lags the country' coastal areas -- has buoyed demand for MRC's iron ore. "On the other hand, MRC's B3 rating is constrained by its short operating history, ramp-up risk, small level of reserves, short mining life, single mine, narrow product, and the evolving nature of the regulatory environment," adds Mr. Gao, who is also the Lead Analyst of MRC. MRC has a short operating track record and has yet to demonstrate its ability to achieve the company's ambitious ramp-up targets. Its credit metrics could remain weak as it demonstrates a high level of execution risk, which includes potential project delays, a common phenomenon in the mining industry. Moreover, the company plans to spend up to US$300 million in the next 12-18 months on key infrastructure projects to support its production ramp-up. This implies that debt leverage will not fall materially in the next 2 years and even when production rises. The scale of MRC's operation is small by international standards. For the 12-month period up to June 30, 2012, the company generated revenue totaling US$120 million and its total assets were US$170 million. Its total proven and probable reserves of 91.7 million metric tonnes with a Fe iron grade of 38-40% are also small when they are compared with those of other international mining companies. As the company plans to more than double its annual concentrate production in 2013, its current proven and probable reserves would only support approximately 10 years of mining life. Concentration risk is substantial for MRC as it has a single producing mine, produces a single commodity, and sells all its products to a limited number of customers in Western China. Furthermore, Mongolian mining legislation is still evolving, with frequent major changes occurring. For example, the country's president on April 20, 2010 had suspended all new mining and exploration licenses. The National Security Council then modified this directive, and later completely lifted it in December 2010. MRC's debt-servicing ability could be affected by any unfavorable change in legislation. MRC's current liquidity position is weak. As of June 2012, it had a total cash balance of USD8 million against total debt of USD105 million, 70% of which will fall due in one year. Thus its operations rely on its ability to refinance debt. However, Moody's draw some comfort that MRC's debt is owed mainly to its shareholders and then related parties, including the Trade and Development Bank of Mongolia and the European Bank for Reconstruction and Development. Moody's has not notched the proposed USD bonds for subordination risk as MRC is expected to use the proceeds to refinance all existing secured onshore debt. MRC's stable outlook reflects Moody's expectation that MRC's existing infrastructure facilities and financial resources are enough to support its current production and it has some flexibility in its capital expenditure program. Near-term upward rating pressure is limited, given MRC's short operating track record and substantial debt-funded capital expenditure program. However, positive rating pressure could emerge if MRC (1) can achieve its production targets, (2) successfully starts its new processing plant and upgrades the road serving its operations within planned times and budget, (3) secures new sales contracts and diversifies its customer base, and (4) improves its liquidity position and capital structure by raising more equity. Evidence of upgrade pressure would be a trend of positive free cash flow and adjusted Debt/EBITDA below 3x - 3.5x on a sustained basis. Downward rating pressure would emerge if (1) MRC delays its production ramp-up and fails to complete its key infrastructure projects, as evidenced by weak sales growth and poor liquidity, (2) industry fundamentals further deteriorate, as indicated by declining iron ore prices, or high levels of inventory, or (3) changes in laws and regulations that adversely affect MRC's business occur, resulting in a decline in operating cash flow, thereby constraining MRC's ability to service its debt. In term of credit metrics, Moody's would consider as a trigger for downgrade adjusted consolidated debt/EBITDA rising above 5x on a sustained basis. The principal methodology used in rating MRC was Moody's Global Mining Industry, published in May 2009. Mongolian Resources Corporation (MRC) is an integrated iron ore producer principally engaged in operating its major mine Tayan Nuur in the Govi-Altai province of Mongolia. MRC is 70.7% owned by Euro 7 Investment, which is an investment holding company wholly owned by Mr Bazar Radnaabazar, MRC's founder and Chairman. The Trade and Development Bank of Mongolia is the second largest shareholder with an 11.0% stake. The European Bank for Reconstruction & Development has a 4.0% stake in MRC. MONGOLIAN RESOURCES: S&P Gives 'B-' CCR With Stable Outlook ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' long-term corporate credit rating to Mongolia-based iron-ore producer Mongolian Resources Corp. The outlook is stable. "At the same time, we assigned our 'B-' issue rating to the company's proposed issue of up to US$300 million in senior secured notes," S&P said. "The rating on MRC reflects the company's production and sales ramp-up risks, its high customer and mineral concentration, and high debt," said Standard & Poor's credit analyst Xavier Jean. "MRC's second-quartile cost position and positive demand prospects in the northwest Chinese iron ore market partly offset these limitations. The rating factors in the company's proposed senior secured notes issuance." "We believe there is a high risk associated with a ramp-up in the company's production and sales volumes over the next 12-18 months. MRC's target of doubling annual production and sales to 3.7 million tons in 2013, from the 1.8 million tons it expects in 2012, is aggressive, in our opinion. We view the company's record of growing production and sales at such a pace and scale as mostly untested. MRC's high customer concentration also heightens its sales ramp-up risk, in our view. The company's two largest clients accounted for about 95% of its revenues for the six months ended June 30, 2012," S&P said. "We view MRC's risk tolerance as high. As of June 30, 2012, more than 50% of the company's debt stems from a 2011 debt-funded buy- out of the shares held by Deutsche Bank AG (A+/Negative/A-1) in Euro 7 Investment, MRC's major shareholder, and in Altain Khuder LLC (not rated), MRC's main operating subsidiary. Some of these shares were subsequently granted to business partners of Mr. Bazar Radnaabazar, who owns Euro 7 Investment. MRC failed to pay its working capital loans from Golomt Bank of Mongolia (B+/Positive/B) when they fell due in March and May 2012, although it fully repaid these loans in September 2012. In our view, these events highlight the limitations of the company's internal controls and its lack of established financial discipline," S&P said. "MRC intends to uses the proceeds of the proposed notes to repay existing indebtedness and for capital spending and general corporate purposes. Because the company plans to use the proceeds to repay all existing secured indebtedness, we expect its ratio of priority debt to total assets to be less than 15% over the next two years. MRC's major cash-generative subsidiaries Altain Khuder LLC and Million Vision Group Ltd. will guarantee the notes. The company will be able to incur additional indebtedness subject to a number of incurrence covenants," S&P said. "The stable outlook reflects our expectation that MRC's financial risk profile will remain 'highly leveraged,' as defined in our criteria, in the next 12 months, despite higher sales volumes. The stable outlook is also contingent on the company issuing the proposed notes," S&P said. "We could raise the rating if MRC demonstrates an ability to expand its earnings base substantially by increasing sales volumes, such that it can sustain a debt-to-EBITDA ratio at less than 4.5x for more than 12 months. We believe this could happen if the company's sales volumes exceed 2.8 million tons in 2013 and 750,000 tons over the first quarter of 2014, with an average selling price of more than US$85, implying a gross profit per ton excluding depreciation and amortization in excess of US$40 over the period," S&P said. "We could lower the rating if MRC's liquidity profile weakens materially due to: (1) a delay in the proposed notes; (2) an increase in working capital because of slower sales; or (3) a fall in the average selling price of its iron ore concentrate to below US$70 per ton for more than 12 months that pushes gross profit per ton before depreciation and amortization to less than US$30. We could also lower the rating if the company's capital spending is higher than our expectation," S&P said. ==================== N E W Z E A L A N D ==================== SHANTON CLOTHING: In Receivership; All 39 Shops Continue to Trade ----------------------------------------------------------------- Bay of Plenty Times reports that Shanton Clothing has gone into receivership. The report relates that the receiver said all 39 shops will continue trading pending completion of a going-concern sale. Receiver Anthony Harris said store employees have been told they can keep their jobs and will receive all outstanding wages within a week, the report relays. He said gift vouchers, credits, refunds and laybys will be honoured in full, according to Bay of Plenty Times. Shanton Clothing is a retail clothing chain. ===================== P H I L I P P I N E S ===================== EXPORT & INDUSTRY: PDIC Issues Bid Terms and Conditions for Rehab ----------------------------------------------------------------- The Philippine Deposit Insurance Corporation has issued the terms and conditions of bid and bidding procedure for Tranche 1 for the rehabilitation of the closed Export & Industry Bank (EIB). EIB's rehabilitation will involve two tranches. Tranche 1 will be for the purchase of assets and assumption of liabilities of EIB. The bid will reflect the recovery to the uninsured depositors and other ordinary creditors of EIB. Bids for Tranche 1 will be received from 9:00 a.m. to 12 noon on October 18, 2012, at the Penthouse, SSS Bldg., 6782 Ayala Avenue corner V. A. Rufino St., Makati City. Bids will be opened at 1:00 p.m. Meanwhile, Tranche 2 will be for the disposition of the commercial bank license of EIB and will be governed by separate pre-qualification requirements and bidding procedures that PDIC will release at a later date. The PDIC explained that the winning bid for Tranche 1 will be that which will give the highest amount of recovery for depositors and ordinary creditors. The bid will be indicated in Philippine peso and will represent the amount the qualified bidder will pay for the uninsured deposits and other ordinary credits of EIB. It will also indicate the repayment terms. For purposes of determining the highest bid, the bids will be expressed in present value terms using a discount rate of 5%. The bid will be valid for a period of 60 days from submission of bid. Under the bidding procedures, the PDIC Board will determine the reserve price, or the amount that the PDIC has determined as the minimum amount of recovery that depositors and ordinary creditors should receive considering the net value of the free or unencumbered assets and the net benefits to the acquirer of the rehabilitation. The terms and condition and bidding procedure for Tranche 1 are posted in the PDIC website, www.pdic.gov.ph. Prospective bidders have been evaluated under the qualification process based on the following criteria: 1) capital adequacy ratio of at least 12% before and after the EIB transaction, as computed by the Bangko Sentral ng Pilipinas (BSP); 2) compliance with capital requirements for branching, according to BSP regulations; 3) minimum CAMELS rating of "3", provided that Management rating will at least be "3"; 4) no findings of unsafe and unsound banking practice; and 5) not under the prompt and corrective action (PCA) by the BSP. PDIC conducted the qualification process in consultation with the BSP. PDIC did not disclose the identities and number of qualified bidders due to confidentiality agreements. This qualification process is also intended to meet the parameters for rehabilitation of a closed bank i.e., capital strengthening, liquidity, sustainability and viability; and governance. Headquartered in Makati City, Manila, Export & Industry Bank -- http://exportbank.com.ph/-- has 50 branches and has revived former Urban Bank unit under new names. Its principal activity is the provision of commercial banking services such as deposit taking, loans and trade finance, domestic and foreign fund transfers, treasury, foreign exchange and trust services. As reported in the Troubled Company Reporter-Asia Pacific on April 27, 2012, The Philippine Deposit Insurance Corporation (PDIC) took over the Export & Industry Bank on April 27, 2012, to implement Monetary Board Resolution No. 686 dated April 26, 2012. As Receiver, PDIC will gather all the assets of the closed bank and verify and validate all bank records. ================= S I N G A P O R E ================= NAM FATT: Creditors' Meetings Set for Oct. 18 --------------------------------------------- Nam Fatt Marketing (S) Pte Ltd Limited will hold a meeting for its creditors on Oct. 18, 2012, at 10:30 a.m., at 8 Robinson Road #11-00 ASO Building, in Singapore 048544. Agenda of the meeting include: (a) receiving a statement of the Company's affairs together with a list of creditors and the estimated amounts of their claims; (b) confirming the appointment of Liquidators appointed by the Shareholder of the Company; (c) appointing a Committee of Inspection of not more than 5 members, if thought fit; (d) resolving that the books, accounts and records of the Company and of the Liquidators be destroyed one day after the dissolution of the Company pursuant to Section 320(3) of the Companies Act, Cap. 50; (e) resolving that the Liquidators be at liberty to open, maintain and operate any bank account or an account for monies received by them as Liquidators of the Company, with such bank as the Liquidators deems fit; (f) resolving that the Liquidators be at liberty to appoint a Solicitor to assist them in their duties, if required; and (g) any other business. NAM FATT ENGINEERING: Creditors' Meetings Set for Oct. 18 --------------------------------------------------------- Nam Fatt Engineering (S) Pte Ltd Limited will hold a meeting for its creditors on Oct. 18, 2012, at 10:30 a.m., at 8 Robinson Road #11-00 ASO Building, in Singapore 048544. Agenda of the meeting include: (a) receiving a statement of the Company's affairs together with a list of creditors and the estimated amounts of their claims; (b) confirming the appointment of Liquidators appointed by the Shareholder of the Company; (c) appointing a Committee of Inspection of not more than 5 members, if thought fit; (d) resolving that the books, accounts and records of the Company and of the Liquidators be destroyed one day after the dissolution of the Company pursuant to Section 320(3) of the Companies Act, Cap. 50; (e) resolving that the Liquidators be at liberty to open, maintain and operate any bank account or an account for monies received by them as Liquidators of the Company, with such bank as the Liquidators deems fit; (f) resolving that the Liquidators be at liberty to appoint a Solicitor to assist them in their duties, if required; and (g) any other business. OSCAR MARITIME: Court to Hear Wind-Up Petition on Oct. 19 --------------------------------------------------------- A petition to wind up the operations of Oscar Maritime Pte Ltd will be heard before the High Court of Singapore on Oct. 19, 2012, at 10:00 a.m. Eastern Bulk Pte Ltd filed the petition against the company on Sept. 24, 2012. The Petitioner's solicitors are: Messrs. Lee & Lee 50 Raffles Place #06-00 Singapore Land Tower Singapore 048623 PARADIGM SHIPPING: Court Enters Wind-Up Order --------------------------------------------- The High Court of Singapore entered an order on Sept. 21, 2012, to wind up the operations of Paradigm Shipping Pte Ltd. Chimbusco International Petroleum (Singapore) Pte Ltd filed the petition against the company. The company's liquidators are: Andrew Grimmett Lim Loo Khoon Deloitte & Touche LLP care of 6 Shenton Way #32-00 DBS Building Tower Two Singapore 068809 QUEEN'S AVENUE: Court to Hear Wind-Up Petition on Oct. 19 --------------------------------------------------------- A petition to wind up the operations of Queen's Avenue Tampines Pte Ltd will be heard before the High Court of Singapore on Oct. 19, 2012, at 10:00 a.m. United Overseas Bank Limited filed the petition against the company on Sept. 26, 2012. The Petitioner's solicitors are: Yeo-Leong & Peh LLC 10 Shenton Way 9th Floor, MAS Building Singapore 079117 =============== X X X X X X X X =============== * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 18, 2012 AMERICAN BANKRUPTCY INSTITUTE International Insolvency & Restructuring Symposium Parco dei Principi Grand Hotel & Spa, Rome, Italy Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 26, 2012 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program San Diego Marriott Marquis and Marina, San Diego, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 1-2, 2012 AMERICAN BANKRUPTCY INSTITUTE Corporate Restructuring Competition Wharton University of Pennsylvania, Philadelphia, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 12, 2012 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference [Location Undetermined] Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 26, 2012 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Nov. 29-30, 2012 MID-SOUTH COMMERCIAL LAW INSTITUTE 33rd Annual Bankruptcy & Commercial Law Seminar Nashville Marriott at Vanderbilt, Nashville, Tenn. Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 29 - Dec. 1, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 4-8, 2012 AMERICAN BANKRUPTCY INSTITUTE ABI/SJUSL Mediation Training Symposium St. John's University, Queens, N.Y. Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 20-22, 2013 AMERICAN BANKRUPTCY INSTITUTE VALCON Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ Apr. 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ June 13-16, 2013 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Mich. Contact: 1-703-739-0800; http://www.abiworld.org/ July 11-13, 2013 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800; http://www.abiworld.org/ July 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 8-10, 2013 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 22-24, 2013 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nev. Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800; http://www.abiworld.org/ ********* 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 ***