/raid1/www/Hosts/bankrupt/TCRAP_Public/130131.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, January 31, 2013, Vol. 16, No. 22
Headlines
A U S T R A L I A
ABC LEARNING: Court Declares Founder Bankrupt
CAPITAL STEEL: Appoints Cor Cordis as Voluntary Administrator
RETAIL ADVENTURES: Jan Cameron to Buy Back Firm for AUD72 Million
C H I N A
A123 SYSTEMS: Completes Sale of Assets to Wanxiang & Navitas
CHINA STATE CONSTRUCTION: Moody's Assigns Issuer Rating
HENGDELI HOLDINGS: Fitch Assigns 'BB+' Rating to Senior Notes
KWG PROPERTY: Moody's Assigns 'B1' Rating to Sr. Unsecured Notes
MCE FINANCE: Moody's Assigns '(P)B1' Rating to US-Dollar Bonds
MIE HOLDINGS: Fitch Affirms 'B' Long-Term Issuer Default Rating
MIE HOLDINGS: S&P Rates Proposed USD Unsecured Notes 'B+'
* CHINA: Fitch Sees Revival in Chinese Homebuilding in 2013
* CHINA: Moody's Property Developers' Liquidity Index Unchanged
* CHINA: Experts Warn of Rising Default Risk as Debt Triples
H O N G K O N G
MV SPORTS: Court to Hear Wind-Up Petition on Feb. 27
PACIFICNET POWER: Court to Hear Wind-Up Petition on Feb. 20
PO YUEN: Court to Hear Wind-Up Petition on Feb. 20
PROTON INVESTMENT: Court to Hear Wind-Up Petition on March 27
WING TAT: Court to Hear Wind-Up Petition on March 13
YAN CHAI: Court to Hear Wind-Up Petition on March 13
YU KEE: Creditors Get 10% Recovery on Claims
I N D I A
A INFRASTRUCTURE: CRISIL Reaffirms 'BB-' Rating on INR671MM Loans
ANAND MOTOR: CRISIL Puts 'CRISIL B+' Rating on INR209.7MM Loans
ALCORA CERAMIC: CRISIL Assigns 'B+' Rating to INR52.1MM Loans
CHANAKYA TECHNOS: CRISIL Ups Rating on INR15.8MM Loans to 'B-'
G S AUTOCOMP: CRISIL Reaffirms 'BB-' Rating on INR116.1MM Loans
KCS PVT: CRISIL Downgrades Rating on INR30MM Cash Credit to 'B-'
K. RAVINDRAN: CRISIL Assigns 'BB-' Rating to INR175MM Loans
MPR REFRACTORIES: CRISIL Assigns 'B+' Rating to INR116MM Loans
PARAS GLASS: CRISIL Assigns 'CRISIL B-' Rating to INR270MM Loans
SATI GRANITES: CRISIL Assigns 'B+' Rating to INR95.1MM Loans
SHREE SHYAM: CRISIL Assigns 'B-' Rating to INR0.80MM LT Loan
SINIC ELECTRONICS: CRISIL Reaffirms 'BB-' Rating on INR67MM Loan
THANGAVELU TEXTILE: CRISIL Assigns 'D' Ratings to INR100MM Loans
ZAMZAM EXPORTS: CRISIL Reaffirms 'B+' on INR150MM LT Loans
J A P A N
CORSAIR (JERSEY): S&P Rates JPY3BB Loan Series 58 'B+'
JLOC 39 TRUST: S&P Lowers Rating on Class D Trust Certs to 'D'
KAWASAKI KISEN: S&P Lowers Corporate Credit Rating to 'BB-'
N E W Z E A L A N D
CAPITAL + MERCHANT: Director Pleads Guilty to FMA Charges
S I N G A P O R E
GLOBAL A&T: Moody's Affirms 'B1' CFR; Outlook Stable
GLOBAL A&T: S&P Rates Proposed US$625MM Sr. Secured Notes 'B'
T H A I L A N D
KRUNG THAI: Moody's Affirms 'B2' Foreign Currency Hybrid Issue
V I E T N A M
* VIETNAM: Fitch Affirms 'B+' Issuer Default Rating
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A U S T R A L I A
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ABC LEARNING: Court Declares Founder Bankrupt
---------------------------------------------
SmartCompany reports that the founder of collapsed childcare
operator ABC Learning Centre, Eddy Groves, was declared bankrupt
by a court in Adelaide on January 29.
Mr. Groves failed to appear at the Federal Magistrates Court in
Adelaide and after his name was called three times outside the
court building, Registrar Patricia Christie made a sequestration
order against him, the news source relays.
SmartCompany relates that the bankruptcy proceedings were brought
by the Commonwealth Bank, which has been pursuing Mr. Groves over
a AUD5 million loan he took out to buy the Adelaide Dome, the
home stadium of the Adelaide 36ers basketball team.
Bankruptcy represents a spectacular fall from grace for the
former high flying entrepreneur who was a regular on the BRW Rich
List, according to the report.
Back in 2008, ABC's share price hit its peak of $8.62, valuing
the company at a staggering $3.4 billion and Mr. Groves' personal
fortune at around $300 million.
SmartCompany, citing Fairfax, reports that Mark Robinson, partner
at PPB Advisory and the trustee in bankruptcy proceedings, is
beginning "urgent inquiries" to track down assets associated with
Mr. Groves.
"PPB Advisory will be making urgent inquiries with Mr. Groves and
other persons of interest to determine possible assets which may
be available to pay unsecured creditors," the report quotes
Mr. Robinson as saying.
About ABC Learning
Based in Australia, ABC Learning Centres Limited provided
childcare services and education in more than 1,200 centers in
Australia, New Zealand, the United States and the United Kingdom.
In November 2008, ABC Learning Centres appointed Peter Walker and
Greg Moloney of Ferrier Hodgson as voluntary administrators of
the company and a number of its subsidiaries. Subsequent to the
appointment of administrators, the company's banking syndicate
appointed Chris Honey, Murray Smith and John Cronin of
McGrathNicol as receivers.
The Administrators filed a Chapter 15 petition for the Company
(Bankr. D. Del. Case No. 10-11711) on May 26, 2010. Joel A.
Waite, Esq., at Young, Conaway, Stargatt & Taylor, represents the
Petitioners in the Chapter 15 case. ABC's debts and assets were
estimated to be between US$100 million and US$500 million.
A separate Chapter 15 petition was filed for affiliate A.B.C.
USA Holdings Pty Ltd., listing assets and debts of at least
US$100 million.
In June 2010, ABC Learning creditors in Australia voted to wind
up the failed childcare provider.
CAPITAL STEEL: Appoints Cor Cordis as Voluntary Administrator
-------------------------------------------------------------
SmartCompany reports that Capital Steel Buildings Australia was
placed in voluntary administration on January 29, a troubling
sign for the steel industry.
Independent advisory firm Cor Cordis have appointed Ozem Kassem
-- okassem@corcordis.com.au -- and Jason Tang --
jtang@corcordis.com.au -- as administrators, according to
SmartCompany.
The first meeting of creditors is currently set for February 6.
Cor Cordis told SmartCompany they are unable to comment on the
administration at this stage.
Capital Steel Buildings Australia manufactured cold rolled steel
buildings and offered people the opportunity to start their own
business as Capital Steel Buildings (CSB) product resellers.
RETAIL ADVENTURES: Jan Cameron to Buy Back Firm for AUD72 Million
-----------------------------------------------------------------
Patrick Stafford at SmartCompany reports that Jan Cameron could
buy back the troubled Retail Adventures business this week for
AUD72 million, a significant reduction from the AUD85 million she
paid to resurrect the business from receivership in 2009.
SmartCompany says the deal, as reported by The Australian
Financial Review, comes several months after the business fell
into administration. During the past few months, Ms. Cameron has
been preparing a bid and even writing to suppliers to garner
support.
The Fairfax report claims Ms. Cameron has outbid another suitor
by AUD30 million. It also says the business owes creditors
AUD270 million, with unsecured creditors owed AUD165 million,
SmartCompany relays.
David Gordon, partner at Bentleys and retail expert, told
SmartCompany the AUD72 million price is "bizarre" -- especially
considering Ms. Cameron sold her stake for AUD247 million seven
years ago -- and noted that there are still plenty of unknowns as
to how much the business is actually worth.
"You would assume this is some sort of deed of company
arrangement where she doesn't have to throw in money straight
away," Mr. Gordon told SmartCompany.
If the bid is approved by the administrators and ANZ, Ms. Cameron
will once again regain control of the business, the report notes.
The company has been operating under a licensing structure while
in administration.
About Retail Adventures
Retail Adventures Pty Ltd is an Australia-based discount variety
retailer and operates nationally under brand names Chickenfeed,
Go-Lo, Crazy Clark's, and Sam's Warehouse. The company operates
around 270 stores across the four brands.
Deloitte Restructuring Services Partners Vaughan Strawbridge,
David Lombe and John Greig have been appointed Joint Voluntary
Administrators of Retail Adventures Pty Limited, effective
Oct. 26, 2012.
Mr. Strawbridge said a license agreement is in place between
Retail Adventures Pty Ltd and DSG Holdings Australia Pty Ltd for
them to manage the 238 Crazy Clark's and Sam's Warehouse stores.
=========
C H I N A
=========
A123 SYSTEMS: Completes Sale of Assets to Wanxiang & Navitas
------------------------------------------------------------
A123 Systems, Inc. on Jan. 29 disclosed that pursuant to the
terms of the previously announced asset purchase agreements with
Wanxiang America Corporation and Navitas Systems LLC, the company
has completed the sale of substantially all of its assets in a
transaction that was approved by the United States Bankruptcy
Court for the District of Delaware. Substantially all of A123
Systems, Inc.'s non-government business assets have been acquired
by A123 Systems, LLC, a newly formed, wholly owned subsidiary of
Wanxiang, and the company's government business, including U.S.
military contracts, has been acquired by Navitas through a
separate asset purchase agreement.
Distributions to creditors on account of their claims against
A123 Systems, Inc. will be made pursuant to a liquidating plan or
other process, in either case under the supervision and with the
approval of the Bankruptcy Court.
Additional information is available on A123's Web site at
http://www.a123systems.comor by calling A123's Restructuring
Hotline, toll-free in the U.S., at 1-800-224-7654. For calls
originating outside the U.S., please dial +1 973-509-3190. Court
documents and additional information can be found at a dedicated
Web site administrated by the Company's Claims Agent, Logan &
Company: http://www.loganandco.com
About A123 Systems
Based in Waltham, Massachusetts, A123 Systems Inc. designs,
develops, manufactures and sells advanced rechargeable lithium-
ion batteries and battery systems and provides research and
development services to government agencies and commercial
customers.
A123 is the recipient of a $249 million federal grant from the
Obama administration. Pre-bankruptcy, A123 had an agreement to
sell an 80% stake to Chinese auto-parts maker Wanxiang Group
Corp. U.S. lawmakers opposed the deal over concerns on the
transfer of American taxpayer dollars and technology to China.
A123 didn't make a $2.7 million payment due Oct. 15 on $143.75
million in 3.75% convertible subordinated notes due 2016.
A123 and U.S. affiliates, A123 Securities Corporation and Grid
Storage Holdings LLC, sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012.
A123 disclosed assets of $459.8 million and liabilities totaling
$376 million. Debt includes $143.8 million on 3.75% convertible
subordinated notes. Other liabilities include $22.5 million on a
bridge loan owing to Wanziang. About $33 million is owed to
trade suppliers.
The Hon. Kevin J. Carey presides over the case. Lawyers at
Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve
as the Debtors' counsel. Lazard Freres & Co. LLC acts as the
Debtors' financial advisors, while Alvarez & Marsal serves as
restructuring advisors. Logan & Company Inc. serves as the
Debtors' claims and noticing agent. Wanxiang America Corporation
and Wanxiang Clean Energy USA Corp. are represented in the case
by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley
Austin LLP. JCI is represented in the case by Josh Feltman,
Esq., at Wachtell Lipton Rosen & Katz LLP.
An official committee of unsecured creditors has been appointed
in the case. The Committee is represented by lawyers at Brown
Rudnick LLP and Saul Ewing LLP.
A123 sought bankruptcy protection with a deal to sell its auto-
business assets to Johnson Controls Inc. The deal with JCI is
valued at $125 million, and subject to higher offers at a
bankruptcy auction. At an auction early in December, JCI's bid
was topped by Wanxiang America's $256.6 million offer.
The Bankruptcy Court approved the sale on Dec. 11. Wanxiang is
buying most of A123, except for its government business. Navitas
Systems, a Chicago-area company spun off from Sun MicroSystems,
is buying A123's government business for $2.25 million. The sale
is expected to close come Feb. 1.
JCI has filed an appeal from the sale approval.
CHINA STATE CONSTRUCTION: Moody's Assigns Issuer Rating
-------------------------------------------------------
Moody's Investors Service has assigned a first-time Baa3 issuer
rating to China State Construction International Holdings
Limited.
The rating outlook is stable.
Ratings Rationale
CSCI's Baa3 issuer rating reflects (i) the company's fundamental
credit assessment of Ba1; (ii) a one-notch impact from debt
structural considerations at the holding company level; and (iii)
a two-notch uplift for expected support from its parent, China
Overseas Holdings Limited (COHL), a key subsidiary of state-owned
China State Construction Engineering Corporation (CSCEC).
CSCI's fundamental credit profile is supported by its solid track
record and strong market position in the construction sector in
Hong Kong and Macau.
Moody's expects steady housing demand and continuing
infrastructure improvements to help it sustain good earnings and
stable cash flows from its projects in both territories in the
next few years.
The rating is also supported by its strong business visibility,
thanks to a HKD57 billion order backlog as of end-2012, which
represents about 3x of estimated 2012 revenues.
Apart from its businesses in Hong Kong and Macau, CSCI's ample
order backlog was mainly driven by new orders related to
affordable housing and infrastructure projects on the Mainland.
Moody's expects that management's strategy of pursuing Mainland
projects, while entailing higher business risk, will strengthen
sales visibility and support significant business growth.
"CSCI's 33-year business track record -- with a solid market
position in Hong Kong -- forms a sound platform for the company
to expand into the Mainland. Importantly, its rich experience in
affordable housing projects in Hong Kong provides a unique
competitive advantage for undertaking similar government-
sponsored projects on the Mainland," says Jiming Zou, a Moody's
Analyst.
"Moreover, CSCI's sound financial management and proven access to
the onshore and offshore debt and equity markets will provide
funding for its business plan. In the last 5-6 years, its equity
raisings and rights issuances have amounted to HKD8.3 billion,
almost the same as its level of debt incurrence, and which was
indicative of the company's prudent financial management," adds
Zou, who is also the lead analyst for CSCI.
But its fundamental credit profile is constrained by its
increasing debt leverage and the level of receivables risk
expected in the next 2-3 years because of its fast growth in
large BT/BOT (Build-Transfer/ Build-Operate-Transfer) projects on
the Mainland.
High initial funding requirements and long payback periods are
the distinguishing characteristics of these projects, when
compared to customer-funded construction projects in Hong Kong.
CSCI's debt will rise in the next 2-3 years and more than double
that for 2011 to meet the funding requirements of these BT/BOT
projects, which represented about 43% of the company's order
backlog at end-2012.
According to repurchase plans for these BT/BOT projects, an
improvement in debt leverage looks only likely from 2015 onwards,
when the peak in the construction of affordable housing projects
is over.
However, such improvement depends on successful completions
without delays and cost overruns. It also depends on the timely
repurchase of outstanding receivables from customers, which are
mainly Chinese local governments. Despite careful project
selection and stringent security requirements, as well as past
timely project completion and receivables collection, CSCI's
receivables risk has risen with its increased participation in
BT/BOT projects.
Another constraint for the rating is CSCI's relatively small
business scale on a standalone basis in comparison with other
rated regional and global construction companies. Moody's expects
its undertaking of multi-billion RMB and long-term construction
projects on the Mainland will add to execution challenges.
CSCI has a strong liquidity profile. Its cash balance of almost
HKD5.4 billion as of 30 June 2012 outweighs its HKD157 million in
short-term debt. The cash balance is also almost equal to two
thirds of its total debt.
Given its equity issuance of HKD2.2 billion in July 2012 and its
newly agreed HKD1.5 billion loan agreement with China Development
Bank, Moody's expects the company to maintain its good liquidity
in the next 12 months.
With CSCI's rating, Moody's has also considered the structural
subordination risk to the debt holders at the issuer level, given
that the estimated debt outstanding at CSCI's subsidiaries was
between 15%-20% of CSCI's consolidated total assets at end-2012,
exceeding the 15% threshold for Moody's structural subordination
consideration.
CSCI's majority ownership by COHL (which is ultimately controlled
by CSCEC, a central state-owned enterprise) and its close
relationship with its parent as well as fellow subsidiaries are
beneficial for its credit profile, resulting in a two-notch
rating uplift.
For CSCEC, CSCI is its only platform for conducting construction
projects in Hong Kong and Macau and its only platform for
infrastructure investments and operations on the Mainland. In
particular, CSCI is vital for developing capital-intensive
investments for long-term returns on behalf of its parent, based
on its strong management team and good access to low-cost funding
in Hong Kong.
The rating outlook is stable, reflecting the expectation that
CSCI has uninterrupted access to the debt and equity markets to
finance business growth and its strong abilities in project
management. It can complete projects without major delays and is
strong in cash collections.
A rating upgrade is unlikely in the near term, given the expected
increase in debt leverage and the rise in its business risk
profile as it takes on more BT/BOT projects on the Mainland.
However, the rating could face upgrade pressure, if the company
a) demonstrates a track record of well-executed BT/BOT projects
on the Mainland, without major cost overruns or delays in
repurchases; b) further strengthens its market position and
broadens its business scale; and c) maintains a strong sales
visibility with an order backlog of more than 2.0x of annual
sales, and sustains its good profitability.
In terms of credit metrics, an upgrade requires a Debt/EBITDA
ratio below 2.5-3.0x and FFO/Debt above 20% on a sustainable
basis.
The company's rating could be downgraded, if a) it faces
significant execution risks, such as cost overruns or project
delays to the detriment of profitability or cash collections; b)
its new orders -- or its order backlog -- drop below 1.0x of
annual sales; c) there is a material deterioration in its
financial profile, such that Debt/EBITDA remains above 5.0x or
FFO/Debt falls below 10% in the next 2-3 years.
A weakening in parental support, or a deterioration in the credit
profile of its parent company, could also result in a downgrade.
The principal methodology used in this rating was Global
Construction Methodology published in November 2010.
China State Construction International Holdings Limited is a
general construction company for buildings and civil engineering
work. The company started its operations in Hong Kong in 1979. It
is now one of the largest construction contractors in the
territory. It has the approval of the Works Bureau in Hong Kong
to conduct public work in the categories of Buildings, Port
Works, Roads and Drainage, Site Formation and Waterworks. Since
2010, the company has expanded its business on the Mainland,
including BT and BOT affordable housing projects and
infrastructure projects.
CSCI listed on the Kong Stock Exchange in July 2005, after being
spun off from China Overseas Land and Investment Limited (Baa2
stable). CSCI is 57.1% owned by China Overseas Holdings Limited
(COHL), which is controlled by China State Construction
Engineering Corporation (CSCEC)- a state-owned enterprise in
China.
HENGDELI HOLDINGS: Fitch Assigns 'BB+' Rating to Senior Notes
-------------------------------------------------------------
Fitch Ratings has assigned China-based Hengdeli Holdings
Limited's (Hengdeli, 'BB+'/Stable) USD350 million 6.25% senior
notes due 2018 a final 'BB+' rating.
The assignment of the final rating follows the receipt of
documents conforming to information already received. The final
rating is in line with the expected rating assigned on 16 January
2013.
The ratings reflect Hengdeli's exposure to cyclical demand for
watches and inventory risk. The ratings also reflect its leading
market position in the Swiss watch retail sector in China, its
exclusive watch distribution arrangements for selected Swiss
brands, its established distribution network and lean cost
structure.
The Stable Outlook reflects Fitch's expectation that Hengdeli
will maintain its current sound financial position and that its
inventory days will gradually normalise after increasing to more
than 220 days during H112. The expected improvement is based on
the company's move to cut back on orders and adjustments to its
product mix in favor of more fast-moving items.
What Could Trigger A Rating Action?
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
- Inventory days being sustained over 220 days
- Funds from operations (FFO) net adjusted leverage rising above
2.75x on a sustained basis (2011: 1.49x)
- Weakening of Hengdeli's current leading market position
- Material negative change to key distribution agreements with
major suppliers
Positive: No positive rating action is expected unless Hengdeli
is able to substantially increase its scale without compromising
its financial metrics. This is not expected over the next two
years.
KWG PROPERTY: Moody's Assigns 'B1' Rating to Sr. Unsecured Notes
----------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to the USD
senior unsecured notes proposed by KWG Property Holding Limited.
At the same time, Moody's has affirmed the company's Ba3
corporate family rating and B1 senior unsecured debt rating.
The ratings outlook is stable.
Ratings Rationale
The proceeds of the notes will be used to refinance existing debt
and to fund property projects.
"The issuance of the new USD notes will enhance KWG's liquidity
and improve its debt maturity profile," says Franco Leung, a
Moody's Assistant Vice President and Analyst.
Moody's expects KWG's liquidity to remain adequate, and estimates
that its cash holding of RMB7-RMB8 billion -- after the notes
issuance -- and its projected operating cash flow can fully
support its committed land payments, repayment of maturing debt,
and dividend payments of around RMB4-RMB5 billion in the next 12
months.
"The proposed notes will also provide funding to facilitate KWG's
sales in 2013," adds Mr. Leung.
KWG's contract sales reached RMB12.2 billion in 2012, slightly
above its full-year target of RMB12 billion. Given the
stabilizing nature of the Chinese property market in 2013,
Moody's expects KWG's contract sales in 2013 will exceed that of
2012.
The proposed notes issuance will increase KWG's debt leverage and
interest expenses. Nevertheless, Moody's anticipates that
adjusted debt/capitalization will stay at around 55% and interest
coverage will reach around 2.5x-3.0x in the next 12-18 months.
These credit metrics will position KWG at the weaker end of the
Ba corporate family rating range. Any aggressive land
acquisitions or weakening in revenue generation could pressure
its ratings.
KWG's Ba3 corporate family rating continues to reflect its strong
brand name as supported by its quality products and diversified
product range -- office, retail and residential -- which command
premium pricing. It also recognizes KWG's good operating track
record in Guangzhou, Chengdu and Suzhou.
On the other hand, the rating is constrained by KWG's relatively
low level of geographical diversification, given that over 40% of
its land bank is located in Guangzhou, and the high execution
risk associated with its fast-growth development plan and
expansion into new markets, such as Shanghai and Hainan Province.
The stable outlook reflects the company's adequate liquidity
position, and which will support its property development
business over the next 12-18 months.
Upward rating pressure on the ratings could be limited in the
near-term. However, medium-term upgrade pressure may emerge if
KWG (1) achieves its planned sales; (2) replicates its success in
Guangzhou in other Chinese cities; and (3) shows good financial
discipline and expands cautiously, while maintaining a sound
liquidity profile and strong credit metrics.
Moody's sees EBITDA/interest coverage consistently above 4x-5x
and adjusted debt leverage below 45% as indications of a
potential rating upgrade.
On the other hand, the ratings could undergo a downgrade if KWG
(1) experiences a significant shortfall in sales; (2) materially
increases its investment in projects that impair its liquidity
position; (3) executes an aggressive land acquisition plan funded
mainly by debt; and/or (4) shows evidence of a material weakening
of its balance-sheet liquidity.
Moody's also sees EBITDA/interest falling below 2.5x-3.0x and
adjusted debt leverage consistently above 50%-55% as indications
of a potential downgrade of the ratings.
The principal methodology used in this rating was Global
Homebuilding Industry Methodology published in March 2009.
KWG is a Chinese property developer founded in 1995. Currently,
it has a total attributable land bank of around 9 million sqm in
gross floor area in Guangzhou, Chengdu, Suzhou, Beijing,
Shanghai, Tianjin and Hainan. KWG mainly develops mid-to high-end
residential properties, office buildings, shopping malls and
hotels.
MCE FINANCE: Moody's Assigns '(P)B1' Rating to US-Dollar Bonds
--------------------------------------------------------------
Moody's Investors Service has assigned a provisional (P)B1 rating
to the US dollar bonds proposed by MCE Finance Limited.
At the same time, Moody's has affirmed the Ba3 corporate family
rating and B1 senior unsecured rating of MCE Finance, and the Ba3
secured debt rating of Melco Crown Gaming (Macau) Limited.
The above rating actions follow MCE Finance's announcement of 1)
its proposed issuance of the US dollar bonds, 2) its offer to buy
back its existing US$600 million bonds, and 3) its solicitation
of consents for amendments to the terms of the US$600 million
bonds.
The outlook for all ratings is stable.
MCE Finance, wholly-owned by Melco Crown Entertainment Limited
(unrated), owns a 100% economic interest in Melco Crown Gaming.
Melco Crown Gaming in turn runs the group's major operating
assets in Macau, including Altira Macau, the City of Dreams, and
approximately 2,100 slot machines through its Mocha Clubs.
MCE Finance plans to use the bond proceeds to redeem early its
existing US$600 million bonds and to repay part of Melco Crown
Entertainment Limited's RMB2.3 billion bonds.
The rating's provisional status will be removed upon MCE Finance
completing the bond issuance upon satisfactory terms and
conditions.
Ratings Rationale
"Moody's expects MCE Finance's gross debt will rise because MCE
Finance will use the proceeds to refinance its own debt, and also
provide funding to its parent, Melco Crown Entertainment Limited,
to take out its RMB2.3 billion debt," says Kaven Tsang, a Moody's
Vice President and Senior Analyst.
"At the same time, despite this rise in debt, MCE Finance will
maintain credit metrics within the Ba3 level because of the lower
interest rates offered by the proposed bonds and Melco Crown
Gaming's improving performance," adds Mr. Tsang.
Moody's projects MCE Finance's Debt/EBITDA to stay at 2x-2.5x and
interest coverage of around 9.5x in the next 2 years, therefore
positioning the company within the Ba3 rating.
Additionally, the new bonds will improve MCE Finance's funding
stability by lengthening its debt maturity profile.
"On the other hand, the looser covenants for MCE Finance's
proposed bonds and the consents solicitation indicate that MCE
Finance will very likely provide financial support to the group's
new project, Studio City. The latter is owned by Melco Crown
Entertainment Limited through its 60%-owned subsidiary, Studio
City Finance Limited (B2 stable)," says Tsang, adding, "For MCE
Finance's lenders, this is credit negative."
Moody's expects that MCE Finance will only use the surplus cash
after servicing payments under its secured bank loans and the
bonds to support its parent's cash needs. Thus the remaining
proceeds from the proposed bonds after servicing the existing
US$600 million bonds and approximately US$1 billion of cash in
the restricted payment basket will be available for distribution
to Melco Crown Entertainment Limited in the next 12 months.
Macau's gaming revenue grew by 13.5% year-on-year in 2012 and a
stable growth is expected for 2013. Moody's expects Melco Crown
Gaming will maintain moderate revenue growth in the next 12--18
months which in turn supports MCE Finance's liquidity position
and credit metrics.
Such expected stability assumes that MCE Finance only distributes
its surplus cash flow and does not raise further debt to upstream
to its parent.
With the bond issue, Melco Crown Entertainment Limited will draw
on MCE Finance's cash flow to support the Studio City project.
Therefore, Moody's has changed its rating approach towards MCE
Finance's ratings by also considering Melco Crown Entertainment
Limited's consolidated financials. This is to ensure that Melco
Crown Entertainment Limited's financial and liquidity profiles
will not deteriorate materially due to any project delay or cost
overrun at the Studio City project. In such case, Melco Crown
Entertainment Limited may need additional funding support from
MCE Finance.
Moody's expects MCE Finance to stay positioned at the Ba3 rating
level so long as Melco Crown Entertainment Limited can keep
consolidated Debt/EBITDA at 4.0x-4.5x and EBITDA interest at
4.5x-5.0x in the next 2 years.
Furthermore, MCE Finance's Ba3 corporate family rating continues
to reflect its stable gaming operation through Melco Crown Gaming
-- the key operating entity that holds the gaming concession and
two major casino properties, Altira Macau and the City of Dreams.
On the other hand, the rating is constrained by the group's
geographic concentration and heavy reliance on the operations of
its two major properties.
MCE Finance's B1 bond rating reflects structural and legal
subordination, and is one notch below the corporate family
rating, reflecting the risk of structural and legal
subordination. The secured and subsidiary debt -- mainly that of
Melco Crown Gaming -- represented 15-20% of the rated group's
total tangible assets as of September 2012.
The Ba3 secured loan rating for Melco Crown Gaming's secured bank
loans reflects the fact that such syndicated loans represent the
rated group's major external secured borrowings, and that all of
the rated group's key operating assets have been pledged to
support these loans.
The stable outlook reflects Moody's expectation that MCE Finance
will maintain stable operations, supported by moderate growth in
gaming revenue over the medium term in Macau.
The ratings could experience downward pressure if: (1) MCE
Finance's operating performance deteriorates due to a large
market slowdown, or higher-than-expected competition; or (2)
there is a rise in the consolidated debt leverage of Melco Crown
Entertainment Limited because it is funding new projects.
Moody's will consider a downgrade of the ratings (1) if both MCE
Finance's own Debt/EBITDA exceeds 3.5x - 4.0x and Melco Crown
Entertainment Limited's consolidated Debt/EBITDA exceeds 5.0x-
5.5x, or (2) if MCE Finance's EBTIDA interest coverage falls
below 4.0x -- 4.5x and consolidated EBITDA interest coverage
falls below 3.0x -- 3.5x.
On the other hand, upgrade pressure could emerge over the medium
term if: (1) MCE Finance demonstrates further improvements in
EBITDA throughout the cycle and maintains Debt/EBITDA below 2.0x
and EBITDA/interest above 6.0x-7.0x; and (2) Melco Crown
Entertainment Limited successfully manages the construction risks
associated with Studio City over the next two-three years, and
achieves consolidated Debt/EBITDA below 3.5x and consolidated
EBITDA/Interest above 5.5x-6.0x on a sustained basis.
The principal methodology used in this rating was Global Gaming
Industry Methodology published in December 2009.
MCE Finance Limited is a subsidiary of Melco Crown Entertainment
Limited (unrated), which is majority-owned by the Australian-
based gaming operator, Crown Limited (Baa2 stable) and Hong Kong-
listed Melco International Development Ltd (unrated), with each
company holding 33.36% equity stakes. MCE Finance also owns a
100% economic interest in Melco Crown Gaming (Macau) Limited.
Melco Crown Gaming is the key operating company within the MCE
Finance group. It holds one of six gaming concessions/sub-
concessions in Macau.
MIE HOLDINGS: Fitch Affirms 'B' Long-Term Issuer Default Rating
---------------------------------------------------------------
Fitch Ratings has affirmed China-based MIE Holdings Corporation's
Long-Term Issuer Default Rating (IDR) at 'B' with a Stable
Outlook and its senior unsecured rating at 'B'.
At the same time, the agency has assigned an expected rating of
'B(EXP) to MIE's proposed USD notes issue with a Recovery Rating
of 'RR4'. The final rating on the notes is contingent on the
receipt of information conforming to the documentation already
received.
The ratings reflect the upstream nature of MIE's operations and
the consequent exposure to potential oil price volatility as well
as its limited, albeit expanding, operating scale. Its proven
reserves and production levels are in line with other oil and gas
companies rated in the 'B' category. At end-2011, MIE had proven
oil reserves of 61 million barrels (2010: 32.9 million) with a
reserve life of about 11 years. For 2012, total net production
was about 5.3 million barrels (2011: 4.1 million barrels). The
increase in production is mostly attributed to Emir Oil in
Kazakhstan which MIE acquired in 2011. The acquisition of Emir
Oil, and to a smaller extent, of Pan-China Resources Limited and
Sino Gas & Energy Limited, both in 2012, has expanded MIE's
operating scale. Fitch sees the execution risk for Emir Oil
decreasing with increased contribution from its Kazakhstani
assets since Q411. Pan-China Resources will begin to contribute
to MIE's EBITDA from 2013.
MIE's organic reserve growth prospects from its north eastern
China oil fields -- Daan, Moliqing, Miao 3, and Kazkhstan assets
-- are moderate. The company expects reserve growth from Sino Gas
& Energy over time; however, this is still at an early stage of
development. Fitch does not envisage revenue contributions from
Sino Gas & Energy until 2015/16.
Despite increasing geographical diversity, MIE's north eastern
Chinese operations remain the key source of cash inflow. MIE
operates three oilfields with low permeability reservoirs in
China under production-sharing contracts (PSC) with PetroChina
Company Limited ('A+'/Stable). This high concentration of
production assets makes it vulnerable to any operational
disruption. Nevertheless, MIE's low-cost production in China, its
established track record, and its long-term relationship with a
strong counterparty (PetroChina) provide significant support to
its ratings.
The Stable Outlook reflects Fitch's expectations that MIE would
maintain a financial profile appropriate for its current ratings.
The proceeds from the proposed USD notes issue are to be used for
refinancing outstanding bank debt, capital expenditure, working
capital and other general corporate use, such as the development
of MIE's existing oil & gas fields.
Fitch expects MIE's financial leverage to increase following the
proposed notes issue. However, the agency also expects MIE's cash
generation to benefit from high oil prices in addition to higher
production from its north-eastern China operations and its
Kazakhstani assets. The agency expects MIE's financial leverage,
as measured by net adjusted debt/funds from operations (FFO), to
be less than 2x over the next two years (end-2011: 1.2x).
Fitch's Recovery Rating of 'RR4' of MIE's senior unsecured debt
reflects average recovery prospect and immaterial onshore bank
debt or offshore secured bank facilities. Following the proposed
notes issue and refinancing of bank debt, MIE's debt will
primarily comprise senior unsecured USD notes. If material senior
ranking debt were to be raised by subsidiaries in the future, the
instrument's rating and Recovery Rating may be negatively
affected.
What Could Trigger A Rating Action?
Negative: Future developments that may individually or
collectively lead to negative rating action include:
- FFO adjusted net leverage exceeding 3x (2011: 1.2x) on a
sustained basis
- FFO gross interest coverage under 4.5x (2011: 6.4x) on a
sustained basis
- Significant dividend payments
- Material changes in taxation in PRC and Kazakhstan leading to
adverse effect on its cash flows
- Material adverse legal disputes leading to adverse effect on
its cash flows
- Material acquisition that would weaken the risk profile before
Sino Gas & Energy can generate meaningful operating cash flows
Positive: Future developments that may individually or
collectively lead to positive rating action include:
- FFO adjusted net leverage below 1.5x on a sustained basis
- FFO gross interest coverage exceeding 6x on a sustained basis
- Proven reserves above 200mmboe
- Average daily production exceeding 80,000boepd (2011: around
12,800boepd)
MIE HOLDINGS: S&P Rates Proposed USD Unsecured Notes 'B+'
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
issue rating and 'cnBB' long-term Greater China regional scale
rating to a proposed issue of U.S. dollar-denominated senior
unsecured notes by MIE Holdings Corp. (MIEH: B+/Stable/--;
cnBB/--). The rating is subject to S&P's review of the final
documentation. The company intends to use the proceeds to
refinance bank loans and for general corporate purposes.
The rating on MIEH reflects the company's "vulnerable" business
risk profile and its "significant" financial risk profile.
MIEH's business risk profile is based on its small operating
scale and exposure to the cyclical oil upstream industry and
high-risk unconventional gas exploration. The company has a
short and yet untested record in unconventional gas exploration.
S&P's assessment of MIEH's financial risk profile remains
"significant," despite the company's increasing capital spending.
MIEH's capital spending will remain high at about US$350 million
in 2013, similar to that in 2012. S&P believes the company has
flexibility to defer the spending.
The stable rating outlook reflects S&P's view that MIEH will
likely maintain its financial and operational performances over
the next 12 months. S&P expects the company's debt-to-EBITDA
ratio at 2.0x-2.5x in 2013. S&P assumes that MIEH will not
undertake any acquisition in 2013. Any new debt funded
acquisition in 2013 could negatively affect the rating.
* CHINA: Fitch Sees Revival in Chinese Homebuilding in 2013
-----------------------------------------------------------
Fitch Ratings says in a new report that it expects the
homebuilding sector in China to see rising volumes in 2013 due to
improved funding availability to developers and increased
regulatory certainty. Year-on-year increases in the first half of
2013 will be higher than in the second half, due to comparison
with weaker sales registered in H112.
Fitch expects home purchase restrictions (HPRs) to remain in
place, as the Chinese government continues to try and curb excess
price increases. However, over the long-term, the sector's growth
will continue to be underpinned by urbanisation and rising
household income.
The report also highlights that polarisation of the sector will
remain acute with large operators benefiting from their strong
financial position and substantial scale, and smaller players
continuing to be challenged by limited financial and operational
flexibility. As a result, smaller homebuilders are more
vulnerable to an environment of low liquidity and tight
regulation.
Currently Fitch rates these companies:
Beijing Capital Land Ltd. ('BB+'/Stable)
China Aoyuan Property Group Limited ('B+'/Stable)
Evergrande Real Estate Group Limited ('BB'/Stable)
Franshion Properties (China) Limited ('BBB-'/Stable)
Future Land Development Holdings Limited ('B+'/Stable)
Global Logistic Properties Limited ('BBB+'/Stable)
Hongkong Land Holdings Limited ('A'/Stable)
Hysan Development Company Limited ('BBB+'/Stable)
Nan Fung International Holdings Limited ('BBB'/Stable)
Road King Infrastructure Limited ('BB-'/Stable)
Shanghai Zendai Property Limited ('B'/Stable)
Shimao Property Holdings Limited ('BB'/Stable)
Sun Hung Kai Properties Limited ('A'/Stable)
Sunac China Holdings Limited ('BB-'/Stable)
Swire Pacific Limited ('A'/Stable)
Swire Properties Limited(' A'/Stable)
Wharf (Holdings) Limited (The) ('A-' /Stable)
Yuexiu Property Company Limited ('BBB-' /Stable)
* CHINA: Moody's Property Developers' Liquidity Index Unchanged
---------------------------------------------------------------
Moody's Investors Service, in the latest edition of its China
Property Focus newsletter, says that the credit profiles of many
of its rated developers have improved because of their sales
growth and better liquidity positions.
"Since November 2012, Moody's has taken nine positive rating
actions and only one negative action in its rated portfolio. The
number of companies with negative rating outlooks fell to 9 as of
25 January, from 12 at end-2012 and the peak of 17 in May 2012,"
says Kaven Tsang, a Moody's Vice President and Senior Analyst.
In addition, rated developers have been actively raising funds
from offshore capital markets. As of 25 January 2013, 11 rated
developers had raised funds through the issuance of senior
unsecured bonds, while two rated developers had issued hybrids --
i.e. subordinated perpetual securities -- or equity.
"These fund-raising activities are generally credit positive
because they support the liquidity levels necessary for
developers to sustain their business operations and improve their
debt maturity profiles, while maintaining overall leverage at
levels appropriate for their ratings," Tsang says.
Moody's Liquidity Index for Chinese property developers -- which
measures the number of rated developers that have weak liquidity
positions -- was unchanged in December 2012, after improving
slightly in November. The index stood at 29% in December, versus
its peak of 31% in October.
"We expect the index to improve moderately in the near term, as
many Chinese developers, including those with low ratings, have
taken advantage of the ample liquidity in the market currently to
issue long-term USD bonds to refinance their short-term debt and
to extend their debt maturity profiles," Tsang adds.
According to the newsletter, most rated developers also recorded
robust contract sales in 2012. Of the 15 property companies that
Moody's tracks, 14 either met or exceeded their targets for all
of 2012.
Moody's expects the contract sales of Mainland property companies
to maintain year-on-year growth in the first quarter of fiscal
2013.
Moody's notes that such strength will be supported by the
improving operating environment and the low base of a year ago
because of the effects of government measures to cool China's
real estate market.
Moreover, property prices in the majority of China's 70 major
cities have reversed their downward trend since November 2012.
Prices in 29 cities increased mildly in November and in 44 cities
in December, versus 14 cities in October, signaling that property
prices have bottomed.
Nevertheless, Moody's does not expect prices to increase sharply
across the board in the near-to-medium term. Among the 44 cities
where prices have risen, none has recorded growth of more than 5%
year-on-year.
In addition, developers continue to focus on mass-market housing,
which entails lower average selling prices, rather than on luxury
homes. The increased proportion of mass-market housing will also
restrict the increase in prices.
* CHINA: Experts Warn of Rising Default Risk as Debt Triples
------------------------------------------------------------
Bloomberg News reports that Chinese companies are spending more
than ever to service debt after their borrowing almost tripled
over five years, prompting strategists to warn of rising default
risk and a threat to economic growth.
Total short- and long-term borrowing by 3,895 publicly traded
non-financial companies rose to almost $1.7 trillion in their
latest filings, from $604 billion at the end of 2007, data
compiled by Bloomberg show. Financing costs, including interest,
on all forms of debt climbed to the highest level as a percentage
of gross domestic product last year, Bloomberg relates citing
Sanford C. Bernstein & Co.
According to Bloomberg, Bernstein said that means less cash for
investment to fuel the world's second-largest economy, while
Royal Bank of Scotland Group Plc said the threat of defaults will
hold back interest- rate liberalization. The average 10-year
yield for top-rated company bonds is near a 13-month high at 5.27
percent, compared with the 2.6 percent yield in a Bank of America
Merrill Lynch global corporate index, Bloomberg notes.
"There's just a lot more debt in China today than there was
really ever in the past, relative to nominal GDP," Mike Werner, a
Hong Kong-based analyst at Bernstein told Bloomberg. "More and
more of the country's resources have to be put to just financing
outstanding debt, and that itself is a headwind for economic
growth."
================
H O N G K O N G
================
MV SPORTS: Court to Hear Wind-Up Petition on Feb. 27
----------------------------------------------------
A petition to wind up the operations of MV Sports International
Limited will be heard before the High Court of Hong Kong on
Feb. 27, 2013, at 9:30 a.m.
Chen Ming Kit filed the petition against the company on Dec. 24,
2012.
The Petitioner's solicitors are:
W. K. To & Co
11th & 12th Floors, Wheelock House
20 Pedder Street
Central, Hong Kong
PACIFICNET POWER: Court to Hear Wind-Up Petition on Feb. 20
-----------------------------------------------------------
A petition to wind up the operations of Pacificnet Power Limited
will be heard before the High Court of Hong Kong on Feb. 20,
2013, at 9:30 a.m.
Johnson Controls Hong Kong Limited filed the petition against the
company on Dec. 10, 2012.
The Petitioner's solicitors are:
W. K. To & Co
11th & 12th Floors, Wheelock House
20 Pedder Street
Central, Hong Kong
PO YUEN: Court to Hear Wind-Up Petition on Feb. 20
--------------------------------------------------
A petition to wind up the operations of Po Yuen (TO's)
Enterprises Company Limited will be heard before the High Court
of Hong Kong on Feb. 20, 2013, at 9:30 a.m.
Po Yuen (TO's) Machine Factory Limited filed the petition against
the company on Dec. 12, 2012.
The Petitioner's solicitors are:
ONC Lawyers
15th Floor, The Bank of East Asia Building
10 Des Voeux Road
Central, Hong Kong
PROTON INVESTMENT: Court to Hear Wind-Up Petition on March 27
-------------------------------------------------------------
A petition to wind up the operations of Proton Investment (Asia)
Limited will be heard before the High Court of Hong Kong on
March 27, 2013, at 9:30 a.m.
Dapai International Holdings Co. Ltd formerly known as China
Zaino International Ltd filed the petition against the company on
Jan. 18, 2013.
The Petitioner's solicitors are:
Winnie Mak, Chan & Yeung
8th Floor, Two Chinachem Plaza
68 Connaught Road
Central, Hong Kong
WING TAT: Court to Hear Wind-Up Petition on March 13
-----------------------------------------------------
A petition to wind up the operations of Wing Tat International
Limited will be heard before the High Court of Hong Kong on
March 13, 2013, at 9:30 a.m.
Bank of China (Hong Kong) Limited filed the petition against the
company on Jan. 4, 2013.
The Petitioner's solicitors are:
Chu & Lau
Unit A, 33rd Floor
United Centre
No. 95 Queensway
Hong Kong
YAN CHAI: Court to Hear Wind-Up Petition on March 13
----------------------------------------------------
A petition to wind up the operations of Yan Chai Tong Traditional
Ginseng Medicine Co. Limited will be heard before the High Court
of Hong Kong on March 13, 2013, at 9:30 a.m.
Wealth Island Properties Limited filed the petition against the
company on Jan. 4, 2013.
The Petitioner's solicitors are:
Johnnie Yam, Jacky Lee & Co
5th Floor, San Toi Building
137-9 Connaught Road
Central, Hong Kong
YU KEE: Creditors Get 10% Recovery on Claims
--------------------------------------------
Yu Kee Food Company Limited declared the second and interim
dividend to unsecured creditors on or after Jan. 21, 2013.
The company paid 10% to the received claims.
The company's liquidator is:
Chan Pui Sze
602 The Chinese Bank Building
61-65 Des Voeux Road
Central, Hong Kong
=========
I N D I A
=========
A INFRASTRUCTURE: CRISIL Reaffirms 'BB-' Rating on INR671MM Loans
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of A infrastructure Ltd
continue to reflect the benefits that AIL derives from its
established position in the asbestos pipes and sheets segment.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 183.0 CRISIL BB-/Stable (Reaffirmed)
Working Capital 80.0 CRISIL BB-/Stable (Reaffirmed)
Demand Loan
Standby Line of 30.0 CRISIL BB-/Stable (Reaffirmed)
Credit
Bank Guarantee 105.0 CRISIL A4+ (Reaffirmed)
Letter of Credit 345.0 CRISIL A4+ (Reaffirmed)
Overdraft 33.0 CRISIL BB-/Stable (Reaffirmed)
Term Loan 345.0 CRISIL BB-/Stable (Reaffirmed)
This rating strength is partially offset by the company's below-
average financial risk profile, marked by a high gearing, a
modest net worth and weak debt protection metrics, large working
capital requirements, and vulnerability to adverse changes in
government regulations.
Outlook: Stable
CRISIL believes that AIL will continue to benefit over the medium
term from its promoters' extensive experience in the asbestos
cement (AC) pressure pipes and sheets segment in North India,
supported by its established dealers and distribution network.
The outlook may be revised to 'Positive' if the company
significantly scales up its operations and operating
profitability, leading to higher-than-expected cash accruals, or
if its working capital management improves, leading to lower debt
levels and improved capital structure. Conversely, the outlook
may be revised to 'Negative' if AIL registers deterioration in
its profitability or working capital management or if it
undertakes a large, debt-funded capital expenditure programme,
thereby further weakening its financial risk profile.
AIL (formerly, Shree Pipes Ltd) was set up by Mr. B K Kanoria and
Rajasthan State Industrial Investment Corporation in 1980 for the
manufacture of AC pressure pipes. AIL has been manufacturing AC
pressure pipes since its inception, and AC roofing sheets since
2006.
AIL reported a profit after tax (PAT) INR15.0 million on net
sales of INR2102.0 million for 2011-12 (refers to financial year,
April 1 to March 31), against a PAT of INR 33.0 million on net
sales of INR2072.0 million for 2010-11.
ANAND MOTOR: CRISIL Puts 'CRISIL B+' Rating on INR209.7MM Loans
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facilities of Anand Motor Agencies Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 20 CRISIL B+/Stable (Assigned)
Cash Credit 100 CRISIL B+/Stable (Assigned)
Proposed Long-Term 89.7 CRISIL B+/Stable (Assigned)
Bank Loan Facility
The rating reflects AML's weak financial risk profile and
exposure to intense competition in the automobile dealership
market and supplier concentration risk. These rating weaknesses
are partially offset by AML's longstanding presence in the
industry.
Outlook: Stable
CRISIL believes that the AML will maintain its business risk
profile because of its long standing presence in automobile
dealer industry. The outlook may be revised to 'Positive' if
AML's financial risk profile improves due to improvement in
working capital management or increase in operating margins.
Conversely, the outlook may be revised to 'Negative' if financial
risk profile deteriorates due to increase in working capital or
large debt funded capital expenditure.
Established in 1969 as Anand Motor Agencies Private Limited by
the Agarwal family, the company was reconstituted as AML in 1980.
AML is an authorized dealer for passenger vehicles for Maruti
Suzuki India Limited (rated CRISIL AAA/Stable/CRISIl A1+). The
company is having three showrooms and service workshops in
Lucknow and one showroom and workshop in Bahraich (Uttar
Pradesh).
AML reported Profit after tax (PAT) of INR2.4million on operating
income of INR792.7 million for 2011-12 (refers to financial year,
April 1 to March 31), as against a PAT of INR4.1 million on
operating income of INR933.0 million for 2010-11.
ALCORA CERAMIC: CRISIL Assigns 'B+' Rating to INR52.1MM Loans
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Alcora Ceramic.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 27.1 CRISIL B+/Stable (Assigned)
Bank Guarantee 7.0 CRISIL A4 (Assigned)
Cash Credit 25.0 CRISIL B+/Stable (Assigned)
The ratings reflect small scale of its operations in the highly
fragmented ceramics industry, vulnerability of operating margins
to raw material prices and working-capital-intensive nature.
These rating weaknesses are partially offset by the benefits that
Alcora derives from the extensive experience of its promoters and
from its unit's favorable location.
Outlook: Stable
CRISIL believes that Alcora will continue to benefit over the
medium term from its promoters' extensive industry experience.
The outlook may be revised to 'Positive' if Alcora's business
risk profile improves with more than expected revenues and
profitability. Conversely, the outlook may be revised to
'Negative' if the firm's financial risk profile deteriorates on
account of decline in profitability or revenues, low cash
accruals, or sizeable debt-funded capital expenditure.
Incorporated in 2010 by members of the Patel family, Alcora
manufactures wall tiles at its facility in Morbi (Gujarat).
Alcora reported a profit after tax (PAT) of INR2.9 million on net
sales of INR170 million for 2011-12 (refers to financial year,
April 1 to March 31), against PAT of INR1.8 million on net sales
of INR112.4 million for 2010-11.
CHANAKYA TECHNOS: CRISIL Ups Rating on INR15.8MM Loans to 'B-'
--------------------------------------------------------------
CRISIL has upgraded its rating on the bank facilities of Chanakya
Technos Pvt Ltd to 'CRISIL B-/Stable/CRISIL A4' from 'CRISIL
D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 62.5 CRISIL A4 (Upgraded from
'CRISIL D')
Cash Credit 10.0 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Standby Line of Credit 1.5 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Term Loan 4.3 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects timely servicing of debt obligations
by CTPL over the past two quarters. The upgrade also factors in
CRISIL's belief that CTPL will service its debt over the medium
term as per schedule, and the company's cash accruals will be
sufficient to meet its maturing debt obligations.
The rating reflects CTPL's modest scale of operations in the
intensely competitive civil construction industry, high
geographical concentration in its revenue profile, and exposure
to risks related to seasonality in order execution. These rating
weaknesses are partially offset by the extensive experience of
CTPL's promoters' in the construction industry and above-average
financial risk profile, marked by low gearing and above-average
debt protection metrics.
Outlook: Stable
CRISIL believes that CTPL will continue to benefit over the
medium term from its promoters' extensive experience in the
construction industry. The outlook may be revised to 'Positive'
if the company reports higher than expected revenue and
profitability resulting in improved liquidity. Conversely, the
outlook may be revised to 'Negative' in case of less-than-
expected cash accruals, because of deterioration in revenues or
profitability, or larger-than-expected working capital
requirement, leading to pressure on liquidity.
CTPL was set up as a partnership concern in 1990 by Mr. Ravi
Shankar Pathak and his brother, Mr. Mani Shankar Pathak. The firm
was reconstituted as a private limited company in 2002. CTPL
undertakes civil construction activities in the nature of
construction of roads and bridges in Bihar.
For 2011-12 (refers to financial year, April 1 to March 31), CTPL
reported a profit after tax (PAT) of INR12 million on net sales
of INR373.9 million as against PAT of INR5.2 million on net sales
of INR201.3 million for 2010-11.
G S AUTOCOMP: CRISIL Reaffirms 'BB-' Rating on INR116.1MM Loans
---------------------------------------------------------------
CRISIL's rating on the bank facilities of G S Autocomp Pvt Ltd
continue to reflect the benefits that GS Autocomp derives from
its promoters' extensive experience in the automotive ancillary
industry and the expected financial support from its promoters
and group company.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20.0 CRISIL BB-/Stable (Reaffirmed)
Letter of Credit 1.5 CRISIL A4+ (Reaffirmed)
Term Loan 46.1 CRISIL BB-/Stable (Reaffirmed)
Term Loan 50.0 CRISIL BB-/Stable (Reaffirmed)
These rating strengths are partially offset by GS Autocomp's weak
financial risk profile, marked by small net worth, large debt-
funded capital expenditure (capex), and weak liquidity. The
ratings also factor in the company's exposure to risks relating
to volatility in raw material prices, and to intense competition
in the replacement markets.
Outlook: Stable
CRISIL believes that GS Autocomp will continue to benefit over
the medium term from the promoters' extensive experience in the
automotive ancillary industry. The company's financial
flexibility is expected to remain constrained by modest cash
accruals against debt obligations over the medium term. However,
the liquidity will be backed by funding support from the
promoters. The outlook may be revised to 'Positive' if GS
Autocomp's financial risk profile improves led by strong cash
accruals. Conversely, the outlook may be revised to 'Negative' if
GS Autocomp's financial risk profile, particularly liquidity,
deteriorates owing to low accruals, or delay in funding support
from promoters, or large capital expenditure (capex) programme.
GS Autocomp, incorporated in 2006, manufactures leaf springs and
shafts used in commercial vehicles. GS Autocomp is part of the GS
group, which comprises GS Auto International Ltd and GS
Automotives Pvt Ltd (rated 'CRISIL BBB/Stable/CRISIL A3+') that
manufactures fastener components, automotive suspensions, and
ferrous and non-ferrous cast components.
GS Autocomp reported a profit after tax (PAT) of INR1.5 million
on net sales of INR117.5 million for 2011-12 (refers to financial
year, April 1 to March 31), against a PAT of INR2.6 million on
net sales of INR60.2 million for 2010-11.
KCS PVT: CRISIL Downgrades Rating on INR30MM Cash Credit to 'B-'
----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of KCS Pvt Ltd to 'CRISIL B-/Stable' from 'CRISIL B/Stable' and
reassigned rating of CRISIL A4 to its short-term bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4 (Reassigned)
Cash Credit 30 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
The rating downgrade follows the continued cash losses reported
by KCS, as its inability to procure any new tenders has led to
lower revenues, which were insufficient to cover its fixed costs.
This, coupled with reduction in its bank lines, has had a serious
impact on the company's debt servicing ability.
The rating continues to reflect KCS's modest scale of operations,
customer concentration in its revenue profile, and exposure to
risks related to the tender-based nature of its business. The
rating also factors in the company's weak financial risk profile,
marked by a small net worth, high gearing, and inadequate debt
protection metrics. These rating weaknesses are partially offset
by the benefits that the group derives from its promoters'
extensive experience.
Outlook: Stable
CRISIL believes that KCS will continue to benefit over the medium
term from its promoter's extensive industry experience. The
outlook may be revised to 'Positive' in case there is a
significant and sustainable improvement in KCS's revenues and
profitability, along with improvement in its working capital
cycle, resulting in better-than-expected cash accruals.
Conversely, the outlook may be revised to 'Negative' in case of
any delay by the company in meeting its financial obligations,
most likely due to lack of timely funding support from its
promoters.
KCS was originally established in 1971 by Mr. Kishore Chandra
Sahu as a proprietorship firm; the firm was reconstituted as a
private limited company in 1991. Based in Rourkela (Odisha), KCS
undertakes turnkey projects involving supplying, fabricating, and
erecting electrical and mechanical components, and also civil
construction.
For 2011-12 (refers to financial year, April 1 to March 31), KCS
reported a net loss of INR9.1 million on revenues of INR91
million, against a profit after tax INR4.7 million on revenues of
INR123 million for 2010-11.
K. RAVINDRAN: CRISIL Assigns 'BB-' Rating to INR175MM Loans
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable/CRISIL A4+' ratings to
the bank facilities of K. Ravindran.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 10 CRISIL BB-/Stable (Assigned)
Bank Guarantee 75 CRISIL A4+ (Assigned)
Cash Credit 165 CRISIL BB-/Stable (Assigned)
The ratings reflect KR's above-average financial risk profile,
marked by a healthy capital structure and moderate debt
protection metrics, and the extensive experience of KR's partners
in the civil construction segment. These rating strengths are
partially offset by KR's modest scale of operations and large
working capital requirements.
Outlook: Stable
CRISIL believes that KR will continue to benefit over the medium
term from the industry experience of its promoters in the civil
construction industry and its moderate order book position. The
outlook may be revised to 'Positive' if KR scales up its
operations and improves its working capital management
significantly while maintaining its healthy capital structure.
Conversely, the outlook may be revised to 'Negative' if there is
a decline in KR's revenues and margins owing to delay in
execution of various projects and or if its working capital
management deteriorates, causing its liquidity to weaken, or if
the firm undertakes a large, debt-funded capital expenditure
programme, leading to weakening in its financial risk profile.
Set up in 1985, KR is a partnership firm that undertakes civil
contracts for the Kerala government. Its daily operations are
managed by its managing partner, Mr. V Rajeendranath.
KR reported a profit after tax (PAT) of INR10.7 million on net
sales of INR161.8 million for 2011-12 (refers to financial year,
April 1 to March 31), as against a PAT of INR5.6 million on net
sales of INR82 million for 2010-11.
MPR REFRACTORIES: CRISIL Assigns 'B+' Rating to INR116MM Loans
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of MPR Refractories Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Rupee Term Loan 29 CRISIL B+/Stable (Assigned)
Proposed Long-Term 37.5 CRISIL B+/Stable (Assigned)
Cash Credit 49.5 CRISIL B+/Stable (Assigned)
Bank Loan Facility
Letter of credit & 20 CRISIL A4 (Assigned)
Bank Guarantee
Bill Discounting 4 CRISIL A4 (Assigned)
The ratings reflect MPR's large working capital requirements and
small scale of operations. These rating weaknesses are partially
offset by the benefits that the company derives from its
promoters long standing experience in the refractory industry,
and its strong and diversified customer base.
Outlook: Stable
CRISIL believes that MPR will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established customer base. The outlook may be revised to
'Positive' in case the company significantly scales up its
operations or profitability, while it maintains its financial
risk profile. The outlook may be revised to 'Negative' in case
MPR undertakes any substantial debt-funded capital expenditure
programme, or reports decrease in its scale of operations because
of receiving lesser orders, leading to pressure on its operating
margin.
MPR was set up in 1989 by Dr. M Appayya, Mr. M Chandrasekhar Rao,
and Mr. M Nagaraja Rao. is engaged in manufacturing of
conventional refractory bricks initially and then started
production of continuous casting refractories in 2009-10. (refers
to financial year, April 1 to March 31).
MPR reported a profit after tax (PAT) of INR0.1 million on net
sales of INR184.8 million for 2011-12, against a PAT of INR0.17
million on net sales of INR155.29 million for 2010-11.
PARAS GLASS: CRISIL Assigns 'CRISIL B-' Rating to INR270MM Loans
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to
the bank facilities of Paras Glass Ware Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 150 CRISIL B-/Stable (Assigned)
Cash Credit 120 CRISIL B-/Stable (Assigned)
Letter of Credit 30.2 CRISIL A4 (Assigned)
The ratings reflect PGWPL's weak financial risk profile marked by
low net worth, high gearing and moderate debt protection metrics,
and small scale and working capital intensive operations. These
rating weaknesses are partially offset by the extensive
experience promoters in glass packaging industry.
Outlook: Stable
CRISIL expects PGWPL's business risk profile to remain weak due
to large debt funded capital expenditure (capex). The outlook may
be revised to positive in case of better than expected cash
accruals, driven by improvement in its scale of operations or
margins. Conversely, the outlook may be revised to negative in
case of lower than expected cash accruals or higher than expected
incremental working capital requirements or another large debt
funded capex.
PGWPL was incorporated in 2002 by Mr Darshan Jain. Later during
2004, the company was taken over by Mr Sanjay Kumar Mittal, Mr
Sanjeev Kumar Mittal and Mr Satish Kumar Mittal. It is engaged in
manufacturing of glass bottle used in liquor industry. Its
manufacturing facilities are located in Firozabad, Uttar Pradesh.
For 2011-12, PGWPL reported, on provisional basis, a net loss of
INR 6.2 million on net sales of INR64.9 million, against a profit
after tax of INR1.6 million on net sales of INR82.1 million for
2010-11.
SATI GRANITES: CRISIL Assigns 'B+' Rating to INR95.1MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Sati Granites (India) Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 95.0 CRISIL B+/Stable (Assigned)
Proposed Long-Term 0.1 CRISIL B+/Stable (Assigned)
Bank Loan Facility
Letter of Credit 12.5 CRISIL A4 (Assigned)
Bill Discounting 45.0 CRISIL A4 (Assigned)
Export Packing Credit 30.0 CRISIL A4 (Assigned)
The ratings reflect SGIPL's exposure to risk related to project
stabilization and off-take, average financial risk profile marked
by modest net worth and moderate gearing, susceptibility of
margins to forex movements and working capital intensive
operations. These rating weaknesses are partially offset by
SGIPL's promoters' extensive experience in the trading and
processing of granite stones.
Outlook: Stable
CRISIL believes that SGIPL will benefit from its promoters'
extensive experience in the trading and processing of granite
stones. The outlook may be revised to 'Positive' in case SGIPL
stabilizes operations and records higher-than-expected growth in
revenues and margins. Conversely, the outlook may be revised to
'Negative' if SGIPL's revenues and margins are lower than
expected or if its financial risk profile deteriorates due to
lengthening of its working capital cycle.
SGIPL established in 2011 by Mr. Sandeep Jalan and Mr. Swastik
Jalan is part of the SATI group that is engaged the trading and
processing of granite stones. SGIPL has currently set up a
factory at Hosur (Tamilnadu) for undertaking processing and
export of granite stones.
SHREE SHYAM: CRISIL Assigns 'B-' Rating to INR0.80MM LT Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to
the bank facilities of Shree Shyam Transport Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.20 CRISIL A4 (Assigned)
Proposed Long-Term 0.80 CRISIL B-/Stable (Assigned)
Bank Loan Facility
Outlook: Stable
CRISIL believes that Shree Shyam Transport Private Limited will
continue to benefit over the medium term from the extensive
entrepreneurial experience of its promoters. The outlook may be
revised to 'Positive' if the company increases its scale of
operations and operating profitability on a sustained basis,
there by leading to an improvement in its business risk profile.
Conversely, the outlook may be revised to 'Negative' if its
relationship with its key customers deteriorates leading to a
decline in revenues and operating profitability or if the company
undertakes a larger than expected debt funded capital
expenditure, thereby leading to deterioration in its financial
risk profile.
Shree Shyam Transport Private Limited was incorporated on July 3,
2003. SSTPL specializes in transport of petroleum products. The
operations of the company are managed by Mr Sourabh Agarwal and
Mr. Gaurav Agarwal.
SINIC ELECTRONICS: CRISIL Reaffirms 'BB-' Rating on INR67MM Loan
----------------------------------------------------------------
The rating continues to reflect extensive experience of Sinic
Electronics Private Limited promoter in the bank automation
industry and established customer relationships. These rating
strengths are partially offset by SEPL's modest scale of
operations, highly competitive industry and working-capital-
intensive nature of its operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4+ (Reaffirmed)
Cash Credit 67 CRISIL BB-/Stable (Reaffirmed)
Outlook: Stable
CRISIL expects SEPL to maintain stable business and financial
risk profiles in the medium term, on the back of established
presence and demand prospects in the banking automation business
segment. The outlook may be revised to 'Positive' if the company
reports higher than expected sales growth while sustaining its
operating margins and improving its capital structure by equity
infusion. The outlook may be revised to 'Negative' if the company
reports lower than expected sales or decline in operating margins
or if company's working capital cycle deteriorates or company
undertakes large debt funded capital expenditure leading to
further deterioration of financial risk profile.
Update
SEPL reported year on year sales decline of about 7.5 percent in
2011-12. Sales decline was mainly due to pricing pressure faced
by company on prices of final product due to high competition.
Pricing pressure and orders from remote areas with comparatively
lower margins led to lower number of orders being executed in
2011-12. Combined with lower sales, operating margins of the
company were negatively impacted in 2011-12 as operating margins
reduced from about 10 percent in 2010-11 to about 7 percent in
2011-12. SEPL recorded sales of about INR160 million from April
to October and as per orders on hand CRISIL expects company to
record sales of about INR260 million for 2012-13.
Post restructuring of business that is by transferring all the
engineers on the payroll of the company to dealers and by
increasing dealer network SEPL has been successful in increasing
its operating margins to about 8.5 percent from April to October
2012. CRISIL expects SEPL to sustain margins at current level in
medium term.
SEPL financial risk profile is marked by moderate gearing level
and debt protection metrics but constrained by low networth. Net
worth of the company as on March 31, 2012 was about INR65
million. Gearing of the company in past four years have been at
around 1.2 times with gearing at about 1.1 times as on March 31,
2012. Due to absence of any term loan majority of company's debt
on books is short term debt used for funding working capital
requirements. Company's operations are working capital intensive
marked by high debtors and inventory days. Gross current asset
(GCA) days were about 219 days as on March 31, 2012. With working
capital intensive nature of business cash credit (CC) limit of
the company was utilized fully with some instances of overdrawals
for past 18 months ending at September 2012. Going forward with
better receivable management and higher cash accruals due to
higher operating margins to part fund working capital requirement
overall debt level of company is expected to come down. CRISIL
expects overall gearing level of company to be less than 1 time
in medium term.
Liquidity of the company is supported by no term debt repayment
due to absence of any major term loans. With increasing cash
accruals backed by higher operating margins and reducing debt
levels due better working capital management is expected to
provide cushion in its liquidity over the medium term. Liquidity
of the company is however constrained by high CC utilization.
Improvement in SEPL's liquidity backed by better working capital
cycle management and higher operating margins leading to higher
cash accruals which in turn will fund incremental working
capital, reduction in requirement of short term debt funding
remains a key rating sensitivity factor.
SEPL is estimated to report a profit after tax (PAT) of INR1.1
million on net sales of INR233 million for 2011-12 (refers to
financial year, April 1 to March 31), as against a PAT of INR8
million on net sales of INR252 million for 2010-11.
SEPL is engaged in manufacturing of banking automation products.
The company was set up in 1998 as a partnership firm by Mr.
Niranjan Bhatwal. In the year 2000, the firm was converted to a
private limited company and renamed as 'SEPL Electronics Private
Limited'. SEPL manufactures banking automation products, such as
currency note counting machines, counterfeit note detector,
banding and sorting machines, coin vending machines, and other
electronic products, such as ticket vending machines and self-
service kiosks. SEPL's manufacturing unit is in Himachal Pradesh
and its administrative office is in Dhule (Maharashtra).
THANGAVELU TEXTILE: CRISIL Assigns 'D' Ratings to INR100MM Loans
----------------------------------------------------------------
CRISIL's ratings on the bank loan facilities of Thangavelu
Textile Mills Ltd continue to reflect delays by TTML in servicing
its debt; the delays have been caused by the company's weak
liquidity, resulting from working-capital-intensive operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.6 CRISIL D (Reaffirmed)
Cash Credit 2.4 CRISIL D (Reaffirmed)
Long-Term Loan 40.6 CRISIL D (Reaffirmed)
Proposed Long-Term 55.4 CRISIL D (Reaffirmed)
Bank Loan Facility
TTML also has a small scale of operations and a below-average
financial risk profile marked by high gearing. The company,
however, benefits from its promoters' extensive experience in the
textile industry.
Update
During 2011-12 (refers to financial year, April 1 to March 31),
TTML's revenues declined by 24 per cent year-on-year, due to
slowdown in the textile industry and subdued orders from its top
customer, Vardhman Textiles Ltd, which contributes a sizeable
amount of the company's total revenues. TTML's operating
profitability also declined to 14.2 per cent in 2011-12 from 21.4
per cent in 2010-11, because of lower realisations as the company
had reduced the prices of its products during the year. Its
profitability is expected to improve, supported by increase in
its prices for its top customer, VTL.
TTML had a high gearing of 2.88 times as on March 31, 2012, and a
low net cash accruals to total debt ratio of 0.08 times for 2011-
12. However, its interest coverage ratio was moderate, at 2.6
times in 2011-12. CRISIL believes that TTML's financial risk
profile will remain constrained over the medium term, due to high
gearing.
TTML continues to have large working capital requirements,
resulting in full utilisation of its working capital limits of
INR2.4 million. CRISIL believes that TTML's liquidity will remain
weak because of its working-capital-intensive operations.
TTML reported a net loss of INR1.8 million on net sales of
INR56.4 million for 2011-12, against a profit after tax (PAT) of
INR6.41 million on net sales of INR74.5 million for 2010-11.
TTML, incorporated in 1995, is engaged in spinning of polyester
staple fibres into polyester yarn on a job-work basis. It is
managed by its promoter-director, Mr. P Thangavelu, and his sons,
Mr. T Surendren and Mr. T Senthilnathan.
ZAMZAM EXPORTS: CRISIL Reaffirms 'B+' on INR150MM LT Loans
----------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Zamzam
Exports Ltd continues to reflect ZZEL's weak financial risk
profile, marked by a high gearing and weak debt protection
metrics, working-capital-intensive operations, and vulnerability
of the company's margins to volatility in raw material prices.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable (Reaffirmed)
Working Capital 100 CRISIL B+/Stable (Reaffirmed)
Demand Loan
These rating weaknesses are partially offset by the extensive
industry experience of ZZEL's promoters and the funding support
that it receives from them, and the company's moderately diverse
clientele.
Outlook: Stable
CRISIL believes that ZZEL will continue to be benefit over the
medium term from its promoters' extensive experience in the
psyllium husk industry and its diverse clientele. CRISIL,
however, believes that the company's financial risk profile will
remain constrained by large working capital requirements. The
outlook may be revised to 'Positive' in case the company
registers higher-than-expected revenue growth, and its financial
risk profile improves significantly backed by better accruals.
Conversely, the outlook may be revised to 'Negative' in case
ZZEL's capital structure deteriorates on account of stretched
working capital cycle or its profitability declines in case of
volatility in raw material prices.
Update
For 2011-12 (refers to financial year, April to March 31), ZZEL
registered net sales of INR424 million, as compared to net sales
of INR417 million in 2010-11. In 2012-13, the company is expected
to achieve sales of more than INR435 million; it has registered
sales of INR250 million till December 2012. ZZEL's operating
margin has remained volatile over the years, with the company's
operating margin varying from 6 per cent to 18 per cent over the
five years ended March 31, 2012. ZZEL's profitability varies as
per the volatility in raw material prices and demand. The company
registered an operating margin of 12.9 per cent in 2011-12.
CRISIL believes that ZZEL's operating margin will remain
susceptible to raw material prices over the medium term as well.
ZZEL's operations remain working capital intensive, marked by
gross current asset (GCA) days of 551 as on March 31, 2012,
largely on account of higher inventory days of 223 and higher
debtor days of about 103. CRISIL believes that though ZZEL's
working capital management will improve, the GCA days are
expected to remain high at more than 400 days over the medium
term. ZZEL's large working capital requirements have negatively
impacted the company's financial risk profile, as reflected in
its high gearing and weak debt protection metrics. ZZEL's gearing
has remained high at 2.44 times as on March 31, 2012, while its
interest coverage and net cash accruals to total debt ratios were
weak at 1.1 times and 0.01 times respectively for 2011-12. CRISIL
believes that ZZEL's financial risk profile will remain weak on
account of the company's reliance on debt to meet its working
capital requirements. The promoters also support the operations
with unsecured loans, which were at INR178 million as on March
31, 2012. CRISIL believes that ZZEL will have a gearing of about
1.75 times over the medium term.
For 2011-12, ZZEL reported a profit after tax (PAT) of INR2.4
million on net sales of INR424 million; the company reported a
PAT of INR2.8 million on net sales of INR417 million for 2010-11.
ZZEL was incorporated in 1982. In 2004, the company was acquired
by Mr. Anil Patel and Ms. Rashmi Patel. ZZEL manufactures
psyllium husk from isabgol seeds at its unit in Brahmanwada
(Gujarat).
=========
J A P A N
=========
CORSAIR (JERSEY): S&P Rates JPY3BB Loan Series 58 'B+'
------------------------------------------------------
Standard & Poor's Ratings Services said that it has raised its
swap risk rating on the reference portfolio of Corsair (Jersey)
No. 2 Ltd.'s series 46 credit default swap (CDS) by one notch to
'BBsrp (sf)', and removed the rating from CreditWatch with
positive implications. At the same time, S&P kept its rating on
Corsair (Jersey) No. 2 Ltd.'s series 58 fixed-rate credit-linked
loan on CreditWatch with negative implications, following S&P's
monthly review of synthetic collateralized debt obligation (CDO)
transactions. S&P has kept the rating on series 58 on
CreditWatch negative since Jan. 18, 2013.
The upgrade of the series 46 CDS reflects, among other factors,
the tranche's synthetic rated overcollateralization (SROC) ratio,
which exceeded 100% at a higher rating level and met S&P's
minimum required cushion for an upgrade as of its January review,
as well as its sensitivity analyses in line with its criteria.
On the other hand, the SROC ratio of the series 58 loan was less
than 100% as of the January review. However, assuming no rating
migration of the reference names in the portfolio, S&P projects
that the loan's SROC would exceed 100% in 90 days. As a result,
S&P kept its rating on series 58 on CreditWatch negative.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Reports
included in this credit rating report are available at:
http://standardandpoorsdisclosure-17g7.com
RATING KEPT ON CREDITWATCH NEGATIVE
Corsair (Jersey) No. 2 Ltd.
Fixed rate credit-linked loan series 58
Rating Amount
B+ (sf)/Watch Neg JPY3.0 bil.
RATINGS RAISED, REMOVED FROM CREDITWATCH POSITIVE
Corsair (Jersey) No. 2 Ltd.
Series 46 credit default swap
To From Amount
BBsrp (sf) BB-srp (sf)/Watch Pos JPY3.0 bil.
JLOC 39 TRUST: S&P Lowers Rating on Class D Trust Certs to 'D'
--------------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered to 'D
(sf)' from 'CCC- (sf)' its rating on the class D trust
certificates issued in December 2007 under the JLOC 39 Trust
Certificate (JLOC 39) transaction. At the same time, S&P kept
its rating on the class A trust certificates on CreditWatch with
negative implications.
One of the transaction's underlying specified bonds, which has
defaulted, has been impaired. The specified bond originally
represented about 11% of the total initial issuance amount of the
trust certificates. S&P has confirmed that the trustee wrote
down the principal on class D--the lowest-level tranche--on the
principal and interest payment date in January 2013, following
the impairment of the specified bond. Accordingly, S&P has
lowered to 'D (sf)' its rating on this class.
One underlying property -- a single office building in Tokyo --
backs the transaction at this point, and the specified bond that
this property backs has already defaulted. The specified bond
originally represented about 38.5% of the total initial issuance
amount of the trust certificates.
S&P kept its rating on the class A trust certificates on
CreditWatch negative because it may revise downward the likely
collection amount from the property backing the remaining
specified bond, subject to the status of the sale of that
property. S&P intends to review its rating on class A after
considering the status of the collateral sale.
JLOC 39 is a multiborrower commercial mortgage-backed securities
(CMBS) transaction. Specified bonds and a loan issued by 10
obligors secured the trust certificates at the outset of the
transaction, and 34 real estate properties and real estate trust
certificates initially backed the specified bonds and loan.
Morgan Stanley Japan Securities Co. Ltd. arranged the
transaction, and ORIX Asset Management & Loan Services Corp. acts
as the
servicer.
The ratings reflect S&P's opinion on the likelihood of the full
and timely payment of interest and the ultimate full repayment of
principal by the transaction's legal final maturity date in April
2014 for the class A certificates.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com.
RATING LOWERED
JLOC 39 Trust Certificate
JPY40.3 billion trust certificates due April 2014
Class To From Initial issue amount Coupon type
D D (sf) CCC- (sf) JPY2.2 bil. Floating rate
RATING KEPT ON CREDITWATCH NEGATIVE
JLOC 39 Trust Certificate
Class Rating Initial issue amount Coupon type
A AA (sf)/Watch Neg JPY28.8 bil. Floating rate
KAWASAKI KISEN: S&P Lowers Corporate Credit Rating to 'BB-'
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit and debt ratings on Kawasaki Kisen Kaisha Ltd.
to 'BB-' from 'BB'. At the same time, S&P removed the ratings
from CreditWatch, where S&P placed them Nov. 5, 2012. The
outlook on the corporate credit rating is stable.
The downgrade reflects S&P's opinion that the shipping industry's
weak fundamental conditions and Kawasaki Kisen's limited ability
to alleviate volatility in its financial performance are likely
to slow a recovery in its profitability and delay restoration of
its financial standing to a level commensurate with the 'BB'
rating. At the same time, S&P is of the opinion that Kawasaki
Kisen is likely to gradually improve its profitability and
financial standing--albeit at a slower pace than S&P had
expected--because it assumes that shipping markets are likely to
remain depressed but not to deteriorate significantly and that
management is committed to capping annual investment cash flow at
JPY50 billion, which is less than its depreciation expense of
about JPY60 billion.
"In our opinion, ongoing weak fundamentals in the shipping
industry and ongoing challenges Kawasaki Kisen faces to manage
currency fluctuations are likely to produce weaker profitability
than we initially anticipated in our base-case scenario. We also
expect the company's profitability to remain volatile.
Structural overcapacity in the shipping industry and economic
slowdowns in Europe and China will likely continue to depress dry
bulk and container markets in 2013 and possibly in 2014, in our
view. In addition, while the company remains one of the world's
leading carriers, its profitability remains sensitive to currency
fluctuations, largely destabilizing its cost position and
diluting operating efficiency. Kawasaki Kisen has been taking
steps to reduce costs, such as slow steaming to lower fuel oil
consumption and deploying large vessels. We expect Kawasaki
Kisen's car carrier business to improve steadily in the next two
to three years. Moreover, in our base-case scenario, we assume
some benefits will arise from a reduction in the strength of the
yen. Still, tough market conditions in the company's dry bulk
and container segments, which generally contribute two-thirds of
its revenues, will continue to materially weigh on the company's
profitability, in our view. We also believe Kawasaki Kisen's
limited ability to alleviate volatility in its financial
performance is a major weakness," S&P said.
"Expectations of a slower recovery in profit and cash flow lead
us to conclude Kawasaki Kisen is unlikely to restore its
financial standing to a sufficient level for a 'BB' rating. We
had assumed the ratio of its debt adjusted to exclude surplus
cash to EBITDA would fall below 5x in fiscal 2013 (ending March
31, 2014). We now anticipate the company's EBITDA margin will be
around 6% in fiscal 2012, gradually increasing to 10% in fiscal
2014 along with a slower industry recovery. Although we continue
to assume debt to EBITDA for Kawasaki Kisen will fall from the
extremely high level of over 40x in fiscal 2011, we currently
anticipate the company can only slowly lower its debt to EBITDA
to 8x in fiscal 2012 and is unlikely to achieve debt to EBITDA
below 5x at least until fiscal 2014. We expect its funds from
operations (FFO) to debt be 13% in fiscal 2012 and to gradually
recover to above 20% in fiscal 2014. From the debt, we exclude
surplus cash, which we define as any cash beyond minimum cash
required for operations and liquidity--JPY30 billion under our
assumptions, based on the company's good record," S&P added.
"We view Kawasaki Kisen's liquidity to be "adequate" according to
our criteria, with sources of liquidity likely to equal or exceed
1.2x uses over the next 12 months. As of Sept. 30, 2012, the
company had approximately JPY152.5 billion in cash, deposits, and
short-term securities, compared with JPY77 billion in outstanding
short-term debt. For the next 12 months, we assume the company's
sources of liquidity will include slightly over JPY70 billion in
FFO and its uses of cash will include JPY50 billion in
investments. In addition, Kawasaki Kisen has unused committed
credit facilities. The company also has good access to loans
from government-related and other financial institutions in
Japan, and it has a record of stable funding in capital markets.
Furthermore, Kawasaki Kisen has assets it can sell, including
marketable securities. Thus, we believe the company's short-term
liquidity faces little risk," S&P noted.
The stable outlook reflects S&P's opinion that Kawasaki Kisen
will gradually improve its profitability and financial standing
and will maintain "adequate" liquidity, reflecting S&P's
assumptions that shipping markets are likely to remain depressed
for the next one to two years but not to deteriorate
significantly and that management is committed to capping
investment cash flow at JPY50 billion.
S&P may lower its rating further if it believes the ratio of
Kawasaki Kisen's FFO to debt adjusted for surplus cash is
unlikely to improve to 12% or if its liquidity materially
weakens. This scenario could materialize if the company posts a
large net loss or large negative free cash flow due to further
deterioration in the shipping market or a management failure to
control capital expenditure. Conversely, S&P may consider
raising its rating if S&P believes the company can accelerate a
recovery in profitability and restore FFO to debt to 20% on a
sustainable basis.
====================
N E W Z E A L A N D
====================
CAPITAL + MERCHANT: Director Pleads Guilty to FMA Charges
---------------------------------------------------------
The New Zealand Herald reports that Capital + Merchant Finance
director Owen Francis Tallentire, who is already serving a
sentence of five years in jail, has pleaded guilty to three
charges laid by the Financial Markets Authority.
The Herald relates that Mr. Tallentire, in his mid-60s, pleaded
guilty to two charges of making an untrue statement in a
registered prospectus and one charge of distributing
advertisements which included an untrue statement.
The charges, laid under the Securities Act, carry a maximum
penalty of five years imprisonment or fines of up to NZ$300,000
and Mr. Tallentire will also be banned from managing a company
for five years, the report relays.
According to the Herald, Mr. Tallentire will be sentenced in
March but the FMA's case against other directors of Capital +
Merchant Finance will still go ahead next month, beginning in the
High Court at Auckland on February 11.
In this case, the report says, former C + M directors Wayne
Douglas, Neal Nicholls, Colin Ryan and Robert Sutherland will
face similar charges to those Mr. Tallentire pleaded guilty to.
The FMA also alleges Messrs. Nicholls and Ryan knowingly mislead
the market watchdog.
Messrs. Douglas, Tallentire and Nicholls were all found guilty
last year of charges for theft by a person in a special
relationship in a separate set of proceedings, the Herald
discloses.
About Capital + Merchant
Capital + Merchant Finance Ltd, operating in property finance,
was one of the bigger finance companies in New Zealand.
Capital + Merchant Finance, along with subsidiary Capital +
Merchant Investments Ltd., went into receivership on Nov. 23,
2007, due to breaches in respect of general security agreements
issued by the companies in favor of creditor Fortress Credit
Corporation (Australia) 11 Pty Ltd. Fortress appointed Tim
Downes and Richard Simpson of Grant Thornton, chartered
accountants, while trustee Perpetual Trust have called in
KordaMentha.
Capital + Merchant owes about NZ$190 million to 7,000 investors.
Fortress reportedly has a prior charge over assets and was owed
around NZ$70 million in total.
=================
S I N G A P O R E
=================
GLOBAL A&T: Moody's Affirms 'B1' CFR; Outlook Stable
----------------------------------------------------
Moody's Investors Service has affirmed the B1 corporate family
rating of Global A&T Electronics Limited, after the company said
that it will re-launch its proposed issuance of US$625 million
first lien senior secured notes due 2019.
Moody's has also affirmed the provisional (P)B1 rating of the
proposed issue and the B2 rating for GATE's existing second lien
facilities totaling US$543 million due 2015.
The ratings outlook remains stable.
The company will use cash, combined with proceeds from the notes,
to refinance the entire amount outstanding under the existing
senior secured term-loan facility of US$589.6 million and senior
secured revolving credit facility of US$36.5 million, both of
which are rated Ba3. These ratings remain unchanged and will be
withdrawn following the completion of the refinancing
transaction.
The company will also execute a new US$125 million first lien
first out secured revolving credit facility (unrated) in
conjunction with the proposed bond transaction. This facility
will be undrawn at close.
The provisional rating on the proposed notes reflects Moody's
opinion of the transaction only. Upon a conclusive review of the
final documentation, Moody's will assign definitive ratings to
the notes.
Ratings affirmed:
* Corporate family rating at B1, with a stable outlook
* US$237.5 million second lien secured fixed rate loan due 2015
at B2
* US$305.5 million PIK senior second lien secured floating rate
loan due 2015 at B2
* Provisional US$625 million first lien senior secured notes at
(P)B1 due 2019
Ratings to be withdrawn upon the completion of the refinancing:
* US$150 million first lien senior secured revolving credit
facility due 2013 at Ba3
* US$589.6 million first lien senior secured term loan due 2014
at Ba3
Ratings Rationale
"The proposed issue was originally scheduled for November 2012
but was later delayed. With the re-launch of this transaction, we
still expect pro forma adjusted debt/EBITDA to improve to around
4.5x by year-end December 2013. This level is in line with the
company's current rating," says Annalisa DiChiara, a Moody's Vice
President and Senior Analyst.
"Additionally, as we understand it, the terms and conditions of
the proposed bond are unchanged, and so we have affirmed the
provisional bond rating at B1", adds Ms. Di Chiara
The principal methodology used in this rating was Global
Semiconductor Industry Methodology published in December 2012.
Global A&T Electronics Ltd. is a leading provider of
semiconductor assembly and test services operating under the name
UTAC with manufacturing facilities in Singapore, Taiwan, Thailand
and China. UTAC was privatized through a leverage buy-out by a
private equity group led by TPG Capital and Affinity Equity
Partners in October 2007.
GLOBAL A&T: S&P Rates Proposed US$625MM Sr. Secured Notes 'B'
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' long-term
issue rating to a proposed issue of US$625 million six-year
senior secured notes by Global A&T Electronics Ltd. (GATE:
B/Positive/--; axBB-/--). S&P's rating is subject to its review
of the final issuance documentation. GATE intends to use the
proceeds from the notes to refinance existing debt.
In accordance with S&P's criteria, it has equalized the issue
rating with the long-term corporate credit rating on GATE. S&P
estimates that the company's ratio of priority debt and other
liabilities to total assets will be less than 13%, which is below
S&P's notching threshold of 15%. GATE has indicated that it will
not draw down a proposed US$125 million revolving credit
facility, and this will result in the ratio being less than 6%.
In S&P's calculation of GATE's total assets, S&P excludes
goodwill of more than 10% of total assets.
The issue rating reflects the proposed notes' senior secured
status and guarantees from GATE's key operating subsidiaries.
The rating also reflects S&P's view that the proposed revolving
credit facility is senior to the proposed notes even though they
both share the same collateral. This is because the revolver
will ensure priority for payment in the event of liquidation.
The
issue rating also reflects structural subordination because GATE
operates through an operating subsidiary/holding company
structure. S&P considers the outstanding debt at subsidiaries,
current taxes, and third party liabilities for non-guarantors as
priority liabilities.
Most of GATE's key operating subsidiaries in Singapore, Thailand,
and Taiwan guarantee the proposed issue with liens on their
operating assets; none of the company's China-based subsidiaries
provides any guarantees or liens. S&P assumes that GATE will
complete the legal processes associated with the guarantees and
liens in a reasonable time, such that noteholders' recovery
prospects would not be undermined in the event of liquidation.
S&P did not assign a recovery rating to the proposed notes
because GATE has been gradually diversifying outside Singapore,
into markets and jurisdictions where Standard & Poor's does not
assign recovery ratings. The company has been expanding revenues
and operations in China, Thailand, and Taiwan, where Standard &
Poor's has yet to review the bankruptcy regimes.
===============
T H A I L A N D
===============
KRUNG THAI: Moody's Affirms 'B2' Foreign Currency Hybrid Issue
--------------------------------------------------------------
Moody's Investors Service has affirmed the Krung Thai Bank Public
Company Limited's local and foreign currency deposit ratings of
Baa1 and the related short-term debt rating of P-2. Moody's has
also revised the outlook on those ratings to stable from
negative.
The bank's foreign currency deposit rating is Baa1, constrained
by Thailand's country foreign currency deposit ceiling. The
foreign currency hybrid issue was also affirmed at B2. All these
ratings also carry stable outlooks.
Ratings Rationale
The rating actions result from two main elements: (1) the
parallel decision to upgrade KTB's bank financial strength rating
(BFSR) of D, which maps to a baseline credit assessment (BCA) of
ba2 on the long-term scale, and which the primary input into
issuers' ratings; and (2) the very high probability of systemic
support from the government, based on the government's majority
ownership of the bank, as well as its importance to the banking
system. The expected support from the government results in a
four-notch uplift to the bank's deposit rating from its BCA of
ba2.
The improvement in KTB's standalone credit profile is reflected
in the fact that the bank has met in substance the main upgrade
triggers that Moody's had laid out previously -- among other
improving trends. That is; improved asset quality, as showed by
its latest non-performing loan (NPL) ratio of 3.88%; better
coverage of non-performing loans, with NPLs as a proportion of
shareholders equity and loan loss reserves (LLR) of 25.3%; and
higher capital levels, including a significantly improved Tier 1
ratio of 10.17%. Moody's assessment of KTB's standalone credit
profile also takes into account its position relative to other D
/ ba2-rated banks.
Moody's very high support assumptions for KTB are based on the
fact that the government has maintained a majority control
participation of 55% in the bank's shareholding, as well as the
bank's importance arising from its 13% market share in both
assets and deposits, and 12% market share in terms of loans,
including the largest proportion of state enterprises and
government employees deposits of all Thai banks.
The principal methodology used in rating Krung Thai Bank was
Moody's Consolidated Global Bank Rating Methodology, published in
June 2012.
Krung Thai Bank, headquartered in Bangkok, reported total assets
of THB2.25 trillion as of 31 December 2012.
=============
V I E T N A M
=============
* VIETNAM: Fitch Affirms 'B+' Issuer Default Rating
---------------------------------------------------
Fitch Ratings affirmed Vietnam's Long-Term Foreign- and Local-
Currency Issuer Default Ratings (IDRs) at 'B+'. The Outlooks on
the ratings are Stable. The agency has also affirmed the Country
Ceiling at 'B+' and the Short-Term Foreign-Currency IDR at 'B'.
Rating Rationale
Vietnam's ratings are underpinned by its track record of strong
economic growth and a favorable environment for foreign direct
investment that has rendered the economy less vulnerable to
external shocks and raised its potential growth rate. The ratings
are also supported by favorable overall levels of external debt
and debt service relative to rated peers as well as by high
levels of domestic savings and investment. Fitch estimates that
Vietnam's domestic savings and investment rates have averaged 28%
and 36% respectively over the past five years.
The ratings are constrained by higher and more volatile consumer
price inflation than peers that renders the economy and exchange
rate vulnerable to adverse economic and financial shocks. Despite
rapid economic growth and development over the last two decades,
human capital and the value-added per person remain low relative
to single 'B' and 'BB' rated peers. The quality and timeliness of
economic and financial data in Vietnam are also rating
weaknesses, particularly the lags in the release of data on the
stock of official foreign exchange reserves.
The principal constraint on Vietnam's sovereign rating is the
potential risk to macro-financial stability and to public
finances posed by a large and opaque banking sector. In
particular, the potential fiscal cost of restructuring the
banking sector is highly uncertain. Fitch's base-case estimate is
a recapitalisation cost of 10% of 2012 GDP but there is a wide
range of possible outcomes around this estimate, depending on the
evolution of the economy, structural reform and the role of
foreign capital.
The State Bank of Vietnam's (SBV) admission that non-performing
loans (NPLs), which accounted for 8.8% of total loans at end-
September 2012, were higher than previously reported by banks is
a positive step toward addressing the structural weakness of the
sector. The SBV is also reportedly considering setting up a state
asset-management company to help restructure banks. Improvements
on the quality of financial reporting and governance as well as
greater confidence in the size of the fiscal risk posed by the
banking sector would lift a key constraint on Vietnam's ratings.
The Stable Outlook reflects Fitch's expectation that the policy
authorities will remain committed to macroeconomic stability,
including lower inflation, a stable currency, and avoiding an
excessive current account deficit.
Vietnam has rebalanced its current account while avoiding a steep
recession, in contrast to certain emerging and advanced
economies. Fitch estimates the current account surplus rose to
7.2% of GDP in 2012 (0.2% in 2011). Foreign-exchange reserves may
have reached around USD24bn at end-2012 as a result. This should
provide Vietnam with a larger buffer to cope with any further
capital flight.
The worst of the downturn is over after Vietnam's economy slowed
rapidly in response to austerity measures implemented in February
2011 under Resolution 11's objectives of achieving macroeconomic
stability. Real GDP grew 5.5% yoy in H212, following a 4.4% yoy
increase in H112. Fitch forecasts real GDP to grow 5.5% in 2013
versus 5% in 2012.
Headline CPI inflation slowed rapidly, averaging 9.1% in 2012
versus 18.7% in 2011. This allowed SBV to cut benchmark interest
rates by 600bp in 2012. However, Fitch believes monetary policy
is unlikely to be loosened further as this could erode support
for the exchange rate. Core inflation pressures also remain high.
Fitch expects the government to slightly tighten its fiscal
stance in 2013. Fitch estimates that Vietnam's budget deficit,
including off-budget spending, will narrow to 5.1% of GDP in 2013
from 5.9% of GDP in 2012. The general government debt/GDP ratio
remained stable at 44% of GDP in 2012, in line with 'B' and 'BB'
peer group medians.
RATING OUTLOOK - STABLE
The main factors that could lead to a positive rating action are:
- A sustained improvement in the overall macroeconomic outlook
consistent with sustainable economic growth with moderate and
stable inflation and external equilibrium
- Greater clarity on the potential cost of resolving non-
performing loans or improvement in the standalone credit
quality of the banking sector
- An acceleration in structural reforms, particularly with
regard to state-owned enterprises and public investment
The main factors that could lead to a negative rating action are:
- Higher-than-expected losses in the banking sector, which
would require large-scale sovereign support and potentially
threaten macro-financial stability
- Abandoning Resolution 11 macro-economic stability objectives
and adoption of policies that threaten price and external
stability
- A sharp, sustained deterioration in public finances which
leads to a large increase in Vietnam's general government
debt-to-GDP ratio
KEY ASSUMPTIONS AND SENSITIVITIES
- Fitch assumes that Vietnam's authorities will continue to
adhere to policies aimed at achieving macroeconomic stability
of slower GDP growth, lower inflation and a healthier current
account Balance
- Fitch assumes that the potential cost of restructuring the
banking sector will be broadly in line with the agency's
base-case of 10% of GDP
- Fitch assumes that political stability will persist in the
medium-term
- Fitch also assumes global growth, with world real GDP growth
projected to rise 2.4% and 2.9% in 2013 and 2014
respectively, compared with an estimate of 2% in 2012
*********
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., Washington, D.C., 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 2013. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 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 215-945-7000 or Nina Novak at 202-241-8200.
*** End of Transmission ***