/raid1/www/Hosts/bankrupt/TCRAP_Public/130416.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
Tuesday, April 16, 2013, Vol. 16, No. 74
Headlines
A U S T R A L I A
LM INVESTMENT: High Court Names Kordamentha as Trustees for LMPF
C H I N A
CHINA NATURAL GAS: Reports $11-Mil. Net Income in 2012
GOLDEN WHEEL: Fitch Publishes 'B' Long-Term Issuer Default Rating
GOLDEN WHEEL: Moody's Assigns First-Time B2 CFR
GRAND CHINA: Says HK Liquidation 'Jeopardises Interests'
LDK SOLAR: To Release Fourth Quarter Results on April 18
YOU ON DEMAND: UHY LLP Raises Going Concern Doubt
H O N G K O N G
CIFI HOLDINGS: Fitch Assigns 'B+' Final Rating to $275MM Notes
I N D I A
ANKIT INTERNATIONAL: ICRA Reaffirms 'BB' Rating on INR3.5cr Loan
CANARA WORKSHOPS: ICRA Reaffirms 'BB-' Rating on INR8.4cr Loan
ESSVY CONSTRUCTIONS: ICRA Assigns 'BB' Rating to INR6cr Loans
JAGDISH ALUMINIUM: ICRA Assigns 'BB+' Ratings to INR9.42cr Loans
KAUSHIK GLOBAL: ICRA Assigns 'D' Rating to INR30cr Loans
LAL BABA: ICRA Lowers Ratings on INR25.70cr Loans to 'D'
MARS CONSTRUCTION: ICRA Reaffirms 'B+' Rating on INR5.25cr Loans
SHRI SHIRDI: ICRA Rates INR10cr Long Term Loan at 'D'
SMT TARAWANTI: ICRA Assigns 'B-' Rating to INR9.59cr Loan
SUSEE AUTO: ICRA Cuts Rating on INR10.60cr Loans to 'BB'
SUSEE AUTO: ICRA Downgrades Ratings on INR14.50cr Loans to 'B+'
VEERAJ CONSTRUCTION: ICRA Assigns 'B' Rating to INR3.5cr Loan
* Indian Telcos Under-Investing Compared With Asian Peers
I N D O N E S I A
BAKRIE TELECOM: Fitch Affirms 'CCC' LT Issuer Default Rating
J A P A N
SHARP CORP: Plans to Sell 9.2% Stake in Pioneer
N E W Z E A L A N D
BRIDGECORP LTD: Insurance Policy Case Heads to Supreme Court
DOMINION FINANCE: Name Suppression Likely to be Permanent
X X X X X X X X
* BOND PRICING: For the Week April 8 to April 12, 2013
- - - - -
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A U S T R A L I A
=================
LM INVESTMENT: High Court Names Kordamentha as Trustees for LMPF
----------------------------------------------------------------
Jonathan Chancellor at Property Observer reports that the Supreme
Court of Queensland has appointed KordaMentha and its affiliate
firm Calibre Capital as joint trustees of the AUD350 million Gold
Coast-based LM Managed Performance Fund (LMPF).
Property Observer notes that the LMPF raised about AUD350 million
from unit holders and is the second largest mortgage investment
fund in the LM Group, once one of Australia's biggest mortgage
fund operators.
Most of the AUD350 million invested in LMPF came from overseas
investors, the report relates. The principal asset of the fund is
an investment in Maddison Estate, a large proposed residential
development on the Gold Coast which has recently been the subject
of debate about its value.
According to the report, the LMPF was previously under the control
of administrators of LM Investment Management Limited, which was
also the trustee.
John Park and Ginette Muller were appointed voluntary
administrators of LMIM on March 19. They then applied to the
Supreme Court to be appointed receivers however on Friday last
week the court made an order appointing KordaMentha and Calibre
Capital as joint trustees, replacing LMIM, the report relates.
KordaMentha partners David Winterbottom --
dwinterbottom@kordamentha.com -- and Simon Vertullo --
svertullo@kordamentha.com -- will handle the trusteeship for
KordaMentha, Property Observer reports.
According to the report, the law firm Piper Alderman, which
represents a group of LM investors, said in a statement at the
weekend that it was confident KordaMentha will be able to
represent their interests free from any conflicts that may be
associated with having the administrators of LMIM fulfil the role
of trustee.
The LMPF is not to be confused with the other large LM fund, the
LM First Mortgage Income Fund, which remains under the control of
its responsible entity, LMIM, Property Observer notes.
New Zealand Herald reported that voluntary administrators have
been appointed to LM Investment Management, a beleaguered
Australian firm that controlled a frozen mortage fund which
New Zealanders had more than NZ$100 million tied up in. LM
directors on March 19, 2013, appointed John Park and Ginette
Muller of FTI Consulting as voluntary administrators, blaming the
move on liquidity problems caused by a smear campaign.
LM is the responsible entity of these registered managed
investment schemes:
-- LM Cash Performance Fund;
-- LM First Mortgage Income Fund;
-- LM Currency Protected Australian Income Fund;
-- LM Institutional Currency Protected Australian Income Fund;
-- LM Australian Income;
-- LM Australian Structured Products Fund; and
-- The Australian Retirement Living Fund.
LM also operates the unregistered LM Managed Performance Fund.
=========
C H I N A
=========
CHINA NATURAL GAS: Reports $11-Mil. Net Income in 2012
------------------------------------------------------
China Natural Gas, Inc., filed its annual report on Form 10-K,
reporting net income of $11.0 million on $145.3 million of revenue
for the year ended Dec. 31, 2012, compared with net income of
$15.3 million on $124.2 million of revenue in 2011.
The Company's balance sheet at Dec. 31, 2012, showed
$288.5 million in total assets, $84.3 million in total
liabilities, and stockholders' equity of $204.2 million.
A copy of the Form 10-K is available at http://is.gd/mPvdjv
Headquartered in Xi'an, Shaanxi Province, P.R.C., China Natural
Gas, Inc., was incorporated in the State of Delaware on March 31,
1999. The Company through its wholly owned subsidiaries and
variable interest entity, Xi';an Xilan Natural Gas Co., Ltd., and
subsidiaries of its VIE, which are located in Hong Kong, Shaanxi
Province, Henan Province and Hubei Province in the People's
Republic of China ("PRC"), engages in sales and distribution of
natural gas and gasoline to commercial, industrial and residential
customers through fueling stations and pipelines, construction of
pipeline networks, installation of natural gas fittings and parts
for end-users, and conversions of gasoline-fueled vehicles to
hybrid (natural gas/gasoline) powered vehicles at 0ptmobile
conversion sites.
On Feb. 8, 2013, an involuntary petition for bankruptcy was filed
against the Company by three of the Company's creditors, Abax
Lotus Ltd., Abax Nai Xin A Ltd., and Lake Street Fund LP (Bankr.
S.D.N.Y. Case No. 13-10419). The Petitioners claimed that they
have debts totaling $42,218,956.88 as a result of the Company's
failure to make payments on the 5% Guaranteed Senior Notes issued
in 2008. The Company says it intends to oppose the motion.
Adam P. Strochak, Esq., at Weil, Gotshal & Manges, LLP, in
Washington, D.C., represents the Petitioners.
GOLDEN WHEEL: Fitch Publishes 'B' Long-Term Issuer Default Rating
-----------------------------------------------------------------
Fitch Ratings has published China-based homebuilder, Golden Wheel
Tiandi Holdings Company Limited's (GWTH) Long-Term Issuer Default
Rating of 'B' with a Stable Outlook. Fitch has also published
GWTH's senior unsecured rating of 'B'.
Key Rating Drivers
Small scale: GWTH's business scale is smaller than B-rated peers,
as reflected by recognised sales of only CNY863m in 2012. Cash
flow and sales performance can be volatile, due to concentration
on only five to six major projects at any one time. In addition,
its focus on small commercial projects linked to metro stations
may also curb the speed of expansion of business scale.
Limited diversification: GWTH has not diversified meaningfully
outside of its home base in Nanjing. In 2012, projects in Nanjing
accounted for 65% of its land bank. This, together with its small
scale, exposes GWTH to potential competition from larger regional
or national players, which may affect margins, and, eventually,
liquidity.
Unique model mitigates: GWTH has a proven track record in
developing small-sized commercial projects linked to metro
stations mainly in Nanjing. The unique locations and commercial
projects have the potential to boost the value of its investment
properties. They also allow the company to make superior margins;
at end-2012 it recorded a 52% gross profit margin and 45% EBITDA
margin. As China builds more subways in second tier cities, GWTH's
business model should remain sustainable. These factors mitigate
risks posed by its small scale.
Healthy financial position: GWTH's prudent financial management is
demonstrated by the low 7.5% net debt/adjusted inventory ratio at
end-2012. Fitch expects the ratio will rise to 15% at end-2013
following an increase in debt to fund new projects.
Investment properties strengthen profile: GWTH's recurring EBITDA
from its investment property (IP) portfolio provided a 1.7x
coverage of its gross interest expense in 2012. Fitch expects that
this ratio will range around 0.5x over the next three years, as
debt increase outpaces rental income growth. Nonetheless, its IP
portfolio, valued at CNY3.1bn at 2012, provides financial
flexibility.
Rating Sensitivities
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
- A significant year-on-year decrease in contracted sales plus
sales after completion
- EBITDA margin falling below 25% on a sustained basis
- Net debt/ adjusted inventory rising above 30% on a sustained
Basis
- Deviation from the current focus on metro-linked projects
Positive: No positive rating action is expected over the next 12-
18 months given the current small scale. However, positive rating
action may result from
- Increase in the value of investment properties to over CNY5bn
and annual contracted sales plus sales after completion to
CNY3bn
- Recurrent EBITDA interest coverage rising over 1x on a
sustained basis
GOLDEN WHEEL: Moody's Assigns First-Time B2 CFR
-----------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating to Golden Wheel Tiandi Holdings Co Ltd.
The ratings outlook is stable.
Ratings Rationale:
"Golden Wheel's B2 corporate family rating reflects its good track
record in developing a diverse mix of property projects in
Nanjing," says Franco Leung, a Moody's Assistant Vice President
and Analyst.
"Furthermore, its commercial property portfolio, which contributes
to most of its revenue, is less affected by regulatory measures,"
adds Leung, who is also the lead analyst for Golden Wheel.
Golden Wheel develops residential, office and lifestyle shopping
mall complexes in Jiangsu and Hunan provinces. In the past decade,
projects with a gross floor area of 464,490 square meters (sqm)
were completed. These were located adjacent to metro stations and
mainly in Nanjing.
As of December 2012, only about 25% of its existing land bank was
used for residential development. It plans to develop mostly small
housing units with areas of less than 120 sqm, targeting the mass
market, and which is less affected by home purchase restrictions
in China.
"The B2 rating is also supported by the company's recurring rental
income from its investment properties portfolio," says Leung.
Golden Wheel has five properties in its investment properties
portfolio generating net rental income that covers about 1.3 times
of its gross interest expense for FY 2012. However, this interest
coverage will decline as the company increases its borrowings to
fund expansion.
Golden Wheel's B2 rating is constrained by its small operating
scale and geographic concentration. The limited number of
development projects could result in cash flow concentration risk
and sales performance volatility.
Concentration risk is evident in Golden Wheel. Although the
company's book revenue reached RMB964 million in 2012, which is an
84% increase from RMB525 million in 2011, it was generated from
only four projects in 2012. Furthermore, about 60% of its
development land bank is situated in Nanjing.
Another rating constraint is the fast expansion phase that the
company is entering. Following its strong growth in 2012, the
company plans to double its turnover in two to three years.
This rapid growth strategy will inevitably raise implementation
risks -- such as project delays and cost overruns -- as well as
increase its funding needs. Golden Wheel will require financing in
addition to its IPO proceeds to fund new projects. The company is
currently developing its offshore capital market fund raising
ability.
Golden Wheel's liquidity position is adequate. It had cash-on-hand
of RMB220 million as of December 2012; together with its operating
cash flow of RMB200 million and IPO proceeds of RMB630 million,
the amount is adequate to cover its land payments of around RMB170
million.
The company has also demonstrated prudent financial management in
the past few years and funded its project development activities
with internal resources.
As a result, its adjusted EBITDA/interest was at 9.5x in 2012 and
adjusted debt/capitalization was at about 16% as at end 2012,
which is considered a healthy credit profile relative to its B-
rated Chinese developers.
The stable rating outlook reflects Moody's expectation that the
company will preserve adequate liquidity, adopt disciplined
expansion, and develop its pipeline of investment properties which
will generate stable recurring income for the company.
Upward rating pressure may emerge if Golden Wheel (1) grows its
scale through stable revenue growth; (2) achieves net rental
income that covers a significant portion of gross interest
expenses; (2) maintains its current stable financial profile amid
expansion; and/or (3) maintains a solid liquidity profile.
On the other hand, downgrade pressure could emerge if Golden Wheel
(1) experiences a significant shortfall in sales, and net rental
income to gross interest declines below 0.3x on a sustained basis;
(2) materially increases debt-funded investment projects; or (3)
fails to maintain an adequate liquidity profile.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.
Golden Wheel is an integrated commercial and residential property
developer, owner and operator focusing on developing projects in
Jiangsu and Hunan provinces and which are physically connected or
in close proximity to metro stations or other transportation hubs.
The company also engaged in the leasing and operational management
of shopping malls owned by third parties. As of December 31, 2012,
the company had a total land bank of 347,080 sqm in GFA located in
Nanjing, Yangzhou and Zhuzhou.
GRAND CHINA: Says HK Liquidation 'Jeopardises Interests'
--------------------------------------------------------
Lloyd's List reports that Grand China Logistics said the winding-
up order filed by Shagang Shipping that forced the liquidation of
GCL-affiliated Grand China Shipping last Monday "jeopardises our
interest".
Grand China Logistics spokesperson Viking Lau said Grand China
Shipping Hong Kong "reserves all its rights to appeal" against the
order, according to the report.
GCL would not confirm the Hong Kong unit's asset size, the report
says.
SinoShip News reported that Grand China Shipping, one of the
subsidiaries of Shanghai-based Grand China Logistics, is facing
the embarrassing situation of liquidation forced by the Hong Kong
High Court. According to SinoShip News, Shagang Shipping Company
submitted a petition to the High Court of Hong Kong because Grand
China Shipping is still in arrears with around $58 million
adjudicated by London arbitration last year. SinoShip News
related that Grand China objected to the petition, and explained
that the company has fixed assets of $476 million, and it is just
a short-term capital flow problem. However, the high court has
finally issued the winding-up order to Grand China.
LDK SOLAR: To Release Fourth Quarter Results on April 18
--------------------------------------------------------
LDK Solar Co., Ltd., will report financial results for the fourth
quarter ended Dec. 31, 2012, before the market opens on Thursday,
April 18, 2013. The Company will host a corresponding conference
call and live webcast at 8:00 a.m. Eastern Time (ET) the same day.
To listen to the live conference call, please dial 1-877-941-1427
(within U.S.) or 1-480-629-9664 (outside U.S.) at 8:00 a.m. ET on
April 18, 2013. An audio replay of the call will be available
through April 28, 2013, by dialing 800-406-7325 (within U.S.) or
303-590-3030 (outside U.S.) and entering the pass code 4610990#.
A live webcast of the call will be available on the Company's
investor relations Web site at http://investor.ldksolar.com
About LDK Solar
LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-
Tech Industrial Park, Xinyu City, Jiangxi Province, People's
Republic of China, is a vertically integrated manufacturer of
photovoltaic products, including high-quality and low-cost
polysilicon, solar wafers, cells, modules, systems, power
projects and solutions.
LDK Solar was incorporated in the Cayman Islands on May 1, 2006,
by LDK New Energy, a British Virgin Islands company wholly owned
by Xiaofeng Peng, LDK's founder, chairman and chief executive
officer, to acquire all of the equity interests in Jiangxi LDK
Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin
Industrial Limited.
KPMG in Hong Kong, China, said in a May 15, 2012, audit report,
there is substantial doubt on the ability of LDK Solar Co., Ltd.,
to continue as a going concern. According to KPMG, LDK Solar has
a net working capital deficit and is restricted to incur
additional debt as it has not met a financial covenant ratio
under a long-term debt agreement as of Dec. 31, 2011. These
conditions raise substantial doubt about the Group's ability to
continue as a going concern.
LDK Solar's balance sheet at Sept. 30, 2012, showed
US$5.76 billion in total assets, US$5.41 billion in total
liabilities, US$299.02 million in redeemable non-controlling
interests and US$45.91 million in total equity.
YOU ON DEMAND: UHY LLP Raises Going Concern Doubt
-------------------------------------------------
YOU On Demand Holdings, Inc., and subsidiaries filed on April 8,
2013, their annual report on Form 10-K for the year ended
Dec. 31, 2012.
UHY LLP, in New York, N.Y., expressed substantial doubt about YOU
On Demand's ability to continue as a going concern, citing the
Company's significant losses during 2012 and 2011 and reliance on
debt and equity financings to fund their operations.
The Company reported a net loss of $16.3 million on $6.9 million
of revenue in 2012, compared with a net loss of $12.6 million on
$7.9 million of revenue in 2011.
The Company's balance sheet at Dec. 31, 2012, showed
$22.4 million in total assets, $13.1 million in total liabilities,
$5.1 million of convertible redeemable preferred stock, and
stockholders' equity of $4.2 million.
A copy of the Form 10-K is available at http://is.gd/kFWEti
New York, N.Y.-based YOU On Demand Holdings, Inc., operates in the
Chinese media segment through its Chinese subsidiaries and
variable interest entities: (1) a business which provides to cable
providers both an integrated value-added service solution and
platform for the delivery of pay-per-view ("PPV") and video on
demand ("VOD") as well as enhanced premium content for cable
providers and (2) a cable broadband business based in the Jinan
region of China.
================
H O N G K O N G
================
CIFI HOLDINGS: Fitch Assigns 'B+' Final Rating to $275MM Notes
--------------------------------------------------------------
Fitch Ratings has assigned property developer CIFI Holdings
(Group) Co. Ltd's (CIFI, B+/Positive) US$275 million 12.25% notes
due 2018 a final rating of 'B+'. The assignment of the final
rating follows the receipt of documents conforming to information
already received and the final rating is in line with the expected
rating assigned on 14 February 2013.
Key Rating Drivers
Positive Outlook: Fitch believes that CIFI is likely to grow to a
scale commensurate with a 'BB-' profile within the next 12 to18
months, with contracted sales to rise by another 30% to CNY13bn in
2013, based on its available-for-sale amount and estimated sell-
through ratio. CIFI achieved a 76% year-on-year (yoy) growth in
contracted sales in 2012.
High sales turnover: CIFI's credit profile has been improving
since it standardised its product types and shifted its focus to
mass-market housing in 2011. The agency expects this model to
result in a rapid rise in sales turnover and contracted sales.
CIFI's contracted sales/total debt was 1.1x in 2012, and Fitch
estimates the ratio to improve to 1.4x in 2013.
National presence: CIFI has a diversified presence in Bohai
Economic Rim, Yangtze River Delta, and Central Western Region,
reducing its exposure to uncertainties inherent in local policies
and local economies, while providing more room to scale up. Fitch
expects local demand to continue to be strong and its mass-market
strategy to work well in high-tier cities. CIFI has around 95% of
its land bank in first- and second-tier cities.
Lower leverage: Net debt/adjusted inventory improved to around 30%
at end-2012 from 48% at end-2011, and following its IPO in
November 2012. Nonetheless, the company's high growth target,
together with its offshore bond in February 2013, may limit its
ability to reduce leverage further.
Limited EBITDA margin: Fitch expects the company to achieve EBITDA
margins in the high teens over the next two to three years,
compared with 20%-25% for the past two years. The focus on mass-
market housing also means that operating margins are lower than
its peers'.
Rating Sensitivities
Positive: Future developments that may, individually or
collectively, lead to positive rating
action include:
- Delivery of contracted sales target in 2013 (2012: CNY9.5bn)
- Maintaining the current strategy of high cash flow turnover,
such that contracted sales/total debt is sustained over 1.3x
- EBITDA margin over 18% on a sustained basis
- Net debt/adjusted inventory falling below 35% on a sustained
basis
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
- Failure to meet the above guidelines over the next 12-18
months, which would lead to the Outlook being revised to Stable
=========
I N D I A
=========
ANKIT INTERNATIONAL: ICRA Reaffirms 'BB' Rating on INR3.5cr Loan
----------------------------------------------------------------
ICRA has reaffirmed '[ICRA]BB' rating for INR3.50 crore fund based
limits of Ankit International. The outlook on the long term rating
is stable. ICRA has also reaffirmed '[ICRA]A4' rating for INR1.75
crore non fund based limits of AI.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Fund-based limits, 3.50 [ICRA]BB(Stable), Reaffirmed
Non-fund-based limits 1.75 [ICRA]A4, Reaffirmed
The ratings reaffirmation factors in the promoter's long track
record in the footwear industry, operational and financial support
of other group entities, its established brand image, its
extensive distribution network and its healthy profitability,
however the same declined in FY2012 because of high raw material
cost. However, the ratings are constrained by AI's modest scale of
operations, decline in its margins in FY12 and decline in its net
worth in FY12 owing to withdrawal of capital by partners thereby
leading to increased gearing. Further the ratings continue to take
into consideration vulnerability of its profitability to the
volatility in raw material prices and highly competitive nature of
the footwear industry. ICRA has also noted the risks inherent in
partnership firms like limited ability to raise capital and risk
of dissolution upon the death/retirement/insolvency of the
partners etc. The firm's ability to scale up its operations and
improve its profitability and capitalization ratios will remain
key rating sensitivities.
Ankit International is a partnership firm constituted in the year
2008. It is part of Mr. Anil Aggarwal faction within the larger
Action group that has been in the footwear business for more than
three decades. The firm is involved in manufacturing of sports
shoes and leather shoes under the "Synergy" brand of action shoes.
The firm has setup a footwear manufacturing facility at Baddi,
Himachal Pradesh with capacity of manufacturing around 5 lakh
pairs per annum. The firm started its operations in March 2010.
Recent Results
The firm reported net profit (before tax) of INR0.87 crore on an
operating income of INR6.41 crore in FY 2012.
CANARA WORKSHOPS: ICRA Reaffirms 'BB-' Rating on INR8.4cr Loan
--------------------------------------------------------------
ICRA has reaffirmed the ratings of '[ICRA]BB-' to INR8.40 Crore
fund based limits and '[ICRA]A4' to the INR1.60 Crore non fund
based limits of The Canara Workshops Limited. The outlook on the
long term rating is Stable.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Fund Based Limits 8.40 [ICRA] BB- (reaffirmed)
Non Fund Based Limits 1.60 [ICRA] A4 (reaffirmed)
Rating Rationale ICRA's rating is supported from the long track
record of the promoters in manufacturing of Leaf Springs aided by
established relations with more than 2800 dealers in the auto-
component replacement market spread across Karnataka, Tamil Nadu,
Andhra Pradesh, Kerala and Maharashtra. However ratings are
constrained by the limited product line and small scale of
operations, resulting in modest economies of scale and limited
bargaining power with customers and suppliers of key inputs. The
ratings are also constrained by moderate capacity utilization of
the manufacturing plant since last few years and weak financial
profile characterized by relatively high gearing (nevertheless has
been improving YoY), moderate coverage indicators and high working
capital intensity.
The Canara Workshops Limited was incorporated in the year 1943 and
is engaged in manufacturing of Leaf Springs for heavy commercial
vehicles, light commercial vehicles, trailers, and passenger
vehicles. The company has its manufacturing unit in Mangalore. It
is presently managed by Mr. Srinivas V. Kudva and family.
The company reported profit after tax (PAT) of INR1.26 Crore on
operating income of INR34.17 Crore in FY 2012.
ESSVY CONSTRUCTIONS: ICRA Assigns 'BB' Rating to INR6cr Loans
-------------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]BB' to the INR6.00
crore long-term fund based limits and the INR6.00 crore long-term
non fund based limits of Essvy Constructions India Pvt. Ltd. The
long term rating carries a Stable outlook.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Fund based limits 6.00 [ICRA]BB assigned
Non-fund based limits 6.00 [ICRA]BB assigned
The assigned rating factors in long track record of the promoters
in undertaking civil works for the Indian Railways, the healthy
current order book position which provides reasonable revenue
visibility and limited exposure to fluctuations in prices of raw
materials due to presence of price escalation clause in contracts
with South Central Railway & South Western Railway.
The rating also positively factors in the improved scale of
operations in FY 13 due to increase in order flow and
consequent healthy cash accruals and coverage indicators. The
rating however, is constrained by the scale of current operations
which would prevent the company from bidding for larger projects
and the risk of high geographic and client concentration with a
major proportion of revenues being derived from works carried out
for SCR and SWR in Andhra Pradesh and Karnataka. Further, contract
execution remains vulnerable to delays in land acquisition and
clearance issues with Railways as has been the experience of ECIPL
in the past.
Essvy Constructions India Private Limited formerly Essvy Cold
Storage Private Limited was incorporated in the year 1999 with the
objective of carrying on business of operating cold storages.
Subsequently, pursuant to a business restructuring plan the
company has take over the works contract business of Essvy
Constructions (A Partnership firm under which the promoters have
been executing Railway projects since late 1980s) with effect from
April 1, 2011. Presently, operations of the company can be divided
into two verticals 1. Construction Division & 2. Cold Storage
Division which are being managed by Mr. K Venkata Rao and Mr. K
Satyanarayana along with their family members and a team of
engineers.
Recent Results (Provisional)
ECIPL has, for the nine months ended December 31, 2012 reported an
operating income of INR33.84 crore and a net profit of INR2.95
crore as against INR19.89 crore and INR1.38 crore respectively for
2011-12.
JAGDISH ALUMINIUM: ICRA Assigns 'BB+' Ratings to INR9.42cr Loans
----------------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]BB+' to the INR1.42
crore term loan and INR8.00 crore cash credit facility of Jagdish
Aluminium Private Limited. The long term rating carries a stable
outlook. ICRA has also assigned short term rating of '[ICRA]A4+'
to the INR7.50 crore letter of credit facility and INR2.02 crore
short term sub-limits of JAPL.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Cash Credit 8.00 [ICRA]BB+ (stable) assigned
Term Loan 1.42 [ICRA]BB+ (stable) assigned
EPC/PCFC/FBD (1.00) [ICRA]A4+ assigned
Letter of Credit 7.50 [ICRA]A4+ assigned
Bank Guarantee (1.00) [ICRA]A4+ assigned
Credit Exposure Limit (0.02) [ICRA]A4+ assigned
The assigned ratings are constrained by the vulnerability of
company's profitability to fluctuating raw material prices on
account of cyclicality associated with commodity prices and
competitive business scenario caused due to the presence of large
and established players. The ratings are further constrained by
leveraged capital structure of the company characterized by high
debt levels on account of working capital intensive nature of
operations. Further, the profitability of the company remains low
on account of the low value additive nature of the business.
The assigned rating however factors in the long & established
track record of the company with a diversified product portfolio
catering to various industries and its wide customer network
having pan India presence. The ratings also positively consider
the consistent growth of the company's operating income over the
past five years at a CAGR of -20%.
Established in 1986 as a partnership firm and later incorporated
in 1991, Jagdish Aluminium Private Limited is a leading
manufacturer of aluminium coils, sheets, foils, strips and color
coated aluminium coils. The company has an installed capacity to
process 10800MT of rolled products per annum. The aluminium rolled
products ranges from 0.03mm to 1mm thickness and 10mm to 1000mm
width.
Recent Results
During FY2012, the company reported profit after tax of INR1.05
crore on an operating income of INR70.00 crore as against profit
after tax of INR1.26 crore on an operating income of INR56.68
crore in FY 2011. Further, the company has reported operating
income of INR72.23 crore and profit before tax of INR3.48 crore in
first nine months of FY 2013.
KAUSHIK GLOBAL: ICRA Assigns 'D' Rating to INR30cr Loans
--------------------------------------------------------
ICRA has assigned an '[ICRA]D' rating to the INR20.5 crore
term loans and INR9.5 crore long-term fund based bank limits of
Kaushik Global Logistics Limited. The earlier rating of [ICRA]BB+
with a stable outlook was suspended in May 2012.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Term Loan 20.50 [ICRA]D assigned
Fund Based Limit 9.50 [ICRA]D assigned
The rating factors in the delays in servicing of debt obligations
by the company in recent months, as well as the weak financial
profile of the company, characterized by the increasing debt
levels required to support the aggressive growth in operations,
and the subdued net profitability on account of a high interest
burden, together with the considerable depreciation cost for
vehicles. The low profitability also results in low cash accruals,
which combined with the moderate working capital intensity of the
business, places additional pressures on the company's liquidity
position. The company also faces challenges on account of the
significant competition prevailing in the industry, in particular
in the supply chain management segment, which has witnessed
declining profitability due to rising trailer hire charges.
Overall operating profitability was however supported by higher
share of revenue from the relatively more profitable passenger
transportation segment.
ICRA notes that although KGL's debt funded capacity expansion over
the last two years, supported by regular equity infusions to some
extent, has resulted in a high gearing, it has also led to a high
growth in the operating income for the company. While assigning
the rating, ICRA has taken note of KGL's established market
position in East and North India, which is strengthened by
arrangements with state level road transport authorities and a
reputed client base. The provision of end-to-end logistics
solutions, as well as a diverse fleet of trailers catering to
different industries, enhances the company's competitive position.
KGL was founded by Mr. Dhananjay Singh and Mr. Sanjay Singh in
2004. The company is a logistics service provider, involved in
both supply chain management as well as passenger transportation.
The company's supply chain management division handles break bulk
and containerized ocean-bound cargo for players in the steel,
power, telecom and automobile industries. The company operates a
fleet of approximately 625 trailers, which transport goods in the
East and North India, and provides logistics support, material
handling equipment and storage facilities to its clients. KGL's
passenger transportation division has operational agreements with
various State Government transportation authorities, as well as
with renowned corporations. It operates a fleet of approximately
177 VOLVO buses, which ply in the Eastern, North Eastern, and
Northern India.
During 2011-12, the supply chain management division contributed
to 58% of the company's total revenues, with the balance being
generated by the passenger transportation division. As per recent
media reports, the Central Bureau of Investigation (CBI) has
initiated proceedings against the company. ICRA will continue to
monitor developments in this regard.
Recent Results
KGL reported a profit after tax (PAT) of INR1.27 crore in 2011-12
on an operating income of INR203.08 crore, as compared to a net
profit of INR1.82 crore on an operating income of INR119.49 crore
during 2010-11.
LAL BABA: ICRA Lowers Ratings on INR25.70cr Loans to 'D'
--------------------------------------------------------
ICRA has revised downwards the long term rating assigned to the
INR11.00 crore term loan, INR13.50 crore cash credit facility and
the INR1.20 crore bank guarantee limit of Lal Baba Seamless Tubes
Pvt. Ltd. to '[ICRA]D' from '[ICRA]C'.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Term Loan 11.00 crore Revised downwards from
[ICRA]C to [ICRA]D
Cash Credit 13.50 crore Revised downwards from
[ICRA]C to [ICRA]D
Bank Guarantee 1.20 crore) Revised downwards from
[ICRA]C to [ICRA]D
The bank guarantee facility is a sub limit of the cash credit
facility. The rating downgrade takes into account the recent
delays made by LBST in servicing its debt.
Incorporated in 2006, Lal Baba Seamless Tubes has been promoted by
Mr. Murari Lal Dhanuka and Mr. Babulal Dhanuka, who have around 40
years of experience in the steel industry. The company is
engaged in the manufacturing of alloy and carbon steel seamless
tubes with an installed capacity of 36000 metric tonnes per annum
(MTPA) at its manufacturing facility in Haldia, West Bengal. The
manufacturing facility became operational in November, 2010 prior
to which LBST was engaged in trading of seamless tubes. The
company is an ISO certified organization and its products have
been approved by Engineers India Limited, Indian Boiler Regulation
(IBR), and Bureau of Indian Standards (BIS) among others.
LBST.LBST's manufacturing facility was setup with a project cost
of INR49.68 crore financed by INR22.0 crore of term loans with the
rest being equity and unsecured loans from promoters.
Recent Results
LBST recorded a net loss of INR0.99 crore on an operating income
of INR39.04 crore in FY12 as compared to a net loss of INR3.50
crore on an operating income of INR23.50 crore in FY11.
MARS CONSTRUCTION: ICRA Reaffirms 'B+' Rating on INR5.25cr Loans
----------------------------------------------------------------
ICRA has re-affirmed the '[ICRA]B+' rating assigned to the INR0.25
crore term loan and INR5.00 crore cash credit facilities of Mars
Construction. ICRA has also re-affirmed the '[ICRA]A4' rating
assigned to the INR2.00 crore non fund based bank facilities of
MC.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Fund Based Limits 0.25 [ICRA]B+ reaffirmed
(Term Loan)
Fund Based Limits 5.00 [ICRA]B+ reaffirmed
(Cash Credit)
Non-Fund Based Limits 2.00 [ICRA]A4 reaffirmed
(Bank Guarantee)
The reaffirmation of the ratings take into account MC's relatively
small scale of current operations, sectoral concentration risk
arising from handling only building constructions and a highly
competitive industry resulting in pressure on margins. The ratings
continue to be impacted by the firm's presence primarily in the
Asansol-Durgapur region in West Bengal, which exposes it to the
risk of geographical concentration. The financial profile of the
firm is characterized by low profitability, an aggressive capital
structure and depressed level of coverage indicators. ICRA also
notes that MC is a partnership firm and any significant withdrawal
of capital would affect its net worth and may have an adverse
impact on the capital structure. The ratings, however, favourably
consider the experience of the management in the construction
business and a favorable demand outlook for the construction
sector, driven by Government emphasis on infrastructure
development.
Established in 2006, MC is engaged in the business of civil
construction on contract/ sub-contract basis. The firm has been
primarily operating in the Asansol-Durgapur region in the state of
West Bengal.
Recent Results
During the first nine months of 2012-13, the firm has reported an
operating income of INR8.61 crore (provisional). The firm reported
a net profit of INR0.40 crore on an operating income of INR13.22
crore in 2011-12.
SHRI SHIRDI: ICRA Rates INR10cr Long Term Loan at 'D'
-----------------------------------------------------
ICRA has assigned an '[ICRA]D' rating to the INR10.0 crore fund
based facilities of Shri Shirdi Saibaba Sansthan Trust.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Long term fund 10.00 [ICRA]D Assigned
based limits
The rating assigned by ICRA is constrained by delays in servicing
the term loan obligations. There have been delays of more than a
year in completion of the 156-room hotel Mega Dharamsala at Shirdi
which commenced its operations only recently; however, term loan
repayments have commenced in March 2013. The debt servicing for
the month of March 2013 has not been done due to insufficient cash
accruals-SSST is in talks with the lenders to postpone the date of
commencement of term loan repayments. The delays in construction
of the hotel have also resulted in cost escalations, funding for
which is yet to be tied up. ICRA however, notes that significant
portion of the cost overruns has been serviced through corpus of
the trust. Going forward, SSST's ability to significantly ramp up
its operations and service its debt obligations in a timely manner
would be a key rating sensitivity.
SSST is registered as a trust under Indian trust act and operates
Shri Shirdi Saibaba temple at Dilsukhnagar, Hyderabad. SSST owns a
single 156 room Dharamsala in Shirdi-Mega Dharamsala. SSST had
acquired 3 acre site in 2000 at around 1.5 kilometre away from the
Sai baba temple at Shirdi. The overall project cost is INR31 crore
which is being financed by debt of INR10 crore and balance being
corpus from the trust.
SMT TARAWANTI: ICRA Assigns 'B-' Rating to INR9.59cr Loan
---------------------------------------------------------
ICRA has assigned the long-term rating of '[ICRA]B-' to INR10.65
crore bank facilities of Smt. Tarawanti Educational Trust.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Long Term Fund Based Limits 9.59 [ICRA]B- /Assigned
Unallocated 1.06 [ICRA]B- /Assigned
The assigned rating takes into account the significant experience
of promoters of more than a decade in operating educational
institutions. While the rating favorably factors in the healthy
occupancy levels of around 75% in the two established schools of
the trust, Little Blossoms School (pre-primary) and Little
Blossoms School (pre-primary and primary), the occupancy levels of
LA Blossoms School remained low as it commenced operations
recently in 2011-12. As a result, despite having three operational
schools, the overall scale of operations is modest. The debt
funding availed for construction of LA blossom school resulted in
weakening of capital structure as reflected in gearing of 3.88x,
which coupled with low occupancy (-20%) witnessed in this school
resulted in weak debt coverage indicators as reflected in Total
Debt/OPBDITA of 13.11x and NCA/Total Debt of 7% as on March 2012.
The low occupancy was partially on account of delay in
commencement of operations in the new school and with scheduled
commencement of debt repayments as well as limited accruals, the
trust witnessed stretched liquidity thereby necessitating the
restructuring of the bank loans in December 2012. While as per the
terms of restructured loans, there is a moratorium period of
around 2 years with repayments commencing in October 2014 over a
period of 6 years, however the ability of the school to achieve
the desired occupancy level over the next two sessions will be
crucial for improving cash accruals and debt servicing as per
revised repayment terms. ICRA also takes a note the fact that
while the existing Little Blossoms Schools are located close to
residential areas and in the developed parts of Jalandhar, LA
Blossoms school is located near village Pholriwal, which is still
a developing part of the city and hence will face competition in
from various established schools Jalandhar; the ability of the
schools to ramp up occupancies and adequately utilize the
facilities remains the key imponderable.
Going forward, ability to improve the occupancy levels in LA
blossom school will be critical for servicing of debt obligations
in a timely manner and hence will remain the key rating
sensitivity.
Incorporated in 1998, the trust is headed by its chairman, Mr.
Sanjeev Murria. The trust has three schools under its ambit --
Little Blossoms School (pre-primary school), Little Blossoms
School (pre-primary and primary school) and LA Blossoms School
(primary and secondary school). All the three schools are located
in Jalandhar and have total student strength of around 1670
students as against the total capacity for around 3700 students
for all the three schools combined.
SUSEE AUTO: ICRA Cuts Rating on INR10.60cr Loans to 'BB'
--------------------------------------------------------
ICRA has revised the rating outstanding on the INR0.29 crore term
loan facilities (revised from INR0.65 crore), the INR2.00 crore
long term fund based facilities and the INR8.31 crore proposed
long term facilities (revised from INR7.95 crore) of Susee
Automobiles Private Limited to '[ICRA]BB' from '[ICRA]BB+'. The
outlook on the long term rating is stable.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Term loan facilities 0.29 Revised to [ICRA]BB (Stable)
from [ICRA]BB+ (Stable)
Long term fund based 2.00 Revised to [ICRA]BB (Stable)
Facilities from [ICRA]BB+ (Stable)
Proposed long term 8.31 Revised to [ICRA]BB (Stable)
Facilities from [ICRA]BB+ (Stable)
The revision in rating reflects the deterioration in SAPL's
financial profile marked by tight liquidity position in 2011-12
and H1 2012-13; this was owing to increase in working capital
requirements following higher inventory levels, amidst thin
operating profits. The high working capital requirements have
resulted in high debt levels and consequently, high interest
expenses and low accruals; these have led to stretched
capitalization and coverage indicators as well. SAPL's sales are
also susceptible to the inherent cyclicality of the automobile
industry, although the company has witnessed healthy revenue
growth in 2011-12 and H1 2012-13.
The rating, however, takes into account the established position
of the company as the sole authorised dealer in Madurai and five
other districts in Tamil Nadu for vehicles of Mahindra and
Mahindra Limited (M&M), the market leader in the domestic utility
vehicles segment, and Mahindra Navistar Automotives Limited
(MNAL), and the long standing experience of the promoters in the
auto dealership business.
While arriving at the rating, ICRA has considered the consolidated
risk profile of i) SAPL, and ii) Susee Auto Sales and Service
Private Limited (SASSPL) and the latter's subsidiaries, Susee Auto
Spares Private Limited (SASPL) and Susee Premium Automobiles
Private Limited (SPAPL).
Incorporated in 2004, Susee Automobiles Private Limited is the
sole authorised dealer for vehicles of M&M and MNAL in Madurai and
five other districts of Tamil Nadu. The company also commenced
sale of pre owned vehicles through Mahindra First Choice from
2010-11. Prior to taking over the M&M dealership in 2008-09 from a
group company, SASSPL, SAPL was engaged in dealership of vehicles
of Ford India Private Limited. This is now being addressed by
another group company, SPAPL. SAPL, which is wholly-owned by the
promoter, Mr. S. Jeyabalan and his son, Mr. J. Rajiv Subramanian,
has ten outlets across Tamil Nadu, each encompassing a showroom
and workshop.
SAPL is the flagship company of the Susee Group of companies,
which is an established group in Madurai in the automobile
dealership space and has over fifty branches in spread across
Tamil Nadu. The group, which was started as an agricultural
business in the late 1930s by Mr. Subramania Nadar and Ms.
Seeniyammal and later expanded its horizon into other businesses
like distribution of FMCG products and gas stations, currently has
eleven companies including four companies in automobile dealership
business, one in automobile spares, one dealing with multi brand
accessories, a non banking finance company (NBFC), a company
engaged in business process outsourcing and three non-operational
entities.
Recent results
SAPL reported net profit of INR0.01 crore on operating income of
INR204.1 crore during 2011-12 against net profit of INR0.3 crore
on operating income of INR156.1 crore for the corresponding
previous fiscal year. According to unaudited results, the company
recorded profit before depreciation and tax (PBDT) of INR1.1 crore
on operating income of INR116.6 crore for the six month period
April - September 2012.
SUSEE AUTO: ICRA Downgrades Ratings on INR14.50cr Loans to 'B+'
---------------------------------------------------------------
ICRA has revised the rating outstanding on the INR7.25 crore long
term fund based facilities and the INR7.25 crore proposed long
term facilities of Susee Auto Spares Private Limited to '[ICRA]B+'
from '[ICRA]BB-'. ICRA has also reaffirmed the rating outstanding
on the INR4.50 crore short term non fund based facilities of the
company at '[ICRA]A4'.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Long term fund based 7.25 Revised to [ICRA]B+ from
Facilities [ICRA]BB- (Stable)
Proposed long term 7.25 Revised to [ICRA]B+ from
Facilities [ICRA]BB- (Stable)
Short term non fund 4.50 Reaffirmed at [ICRA]A4
based facilities
While arriving at the ratings, ICRA has considered the
consolidated risk profile of i) Susee Automobiles Private Limited
(SAPL, rated [ICRA]BB (Stable)) ii) Susee Auto Sales and Service
Private Limited (SASSPL, rated [ICRA]B+/[ICRA]A4) and its
subsidiaries, SASPL and Susee Premium Automobiles Private Limited.
The rating revision reflects the i) deterioration in financial
profile of the company characterised by net losses in 2011-12 and
H1 2012-13 and consequent weakening of capital structure and
coverage metrics, and, ii) the stretched financial profile of the
parent, SASSPL. Moreover, the small scale of operations restricts
scale economies, although the Mobil lubricants distributorship
commenced in H2 2012-13 is likely to aid in revenue growth going
forward.
The ratings, however, positively factor in the long standing
experience of the promoters, the established presence of the group
in the auto dealership and spares space in Tamil Nadu and the
reputed position of the company as an authorised distributor for
Maruti Genuine Parts (MGP), Bajaj spares, Mahindra spares, Mobil
lubricants and those of other original equipment manufacturers
(OEMs) including Fenner, Bosch and TVS Tyres to name a few, in
various regions in Tamil Nadu.
Incorporated in 2004, Susee Auto Spares Private Limited is the a)
sole authorised distributor for Maruti Genuine Parts (MGP) in
Chennai and various other tier 2/ 3 cities of Tamil Nadu, b) sole
authorised distributor for Mahindra spares for commercial vehicles
in Chennai and Trichy, c) authorised distributor for Bajaj spares
for two wheelers, three wheelers and commercial vehicles in
Chennai and Madurai, and d) distributor for Mobil lubricants in
South Chennai, apart from distributing spare parts of several
other original equipment manufacturers (OEMs) including Bosch,
Fenner and TVS Tyres to name a few. The company is a subsidiary of
Susee Auto Sales and Service Private Limited, which handles
dealerships for Mahindra Tractors and Club Mahindra holiday
packages in various regions of Tamil Nadu.
SASPL is part of the Susee Group of companies, which is an
established group in Madurai in the automobile dealership space
and has over fifty branches in spread across Tamil Nadu. The
group, which was started as an agricultural business in the late
1930s by Mr. Subramania Nadar and Ms. Seeniyammal and later
expanded its horizon into other businesses like distribution of
FMCG products and gas stations, currently has eleven companies
including four companies in automobile dealership business, SASPL,
one dealing with multi brand accessories, a non banking finance
company (NBFC), company engaged in business process outsourcing
and three non-operational entities.
VEERAJ CONSTRUCTION: ICRA Assigns 'B' Rating to INR3.5cr Loan
-------------------------------------------------------------
ICRA has assigned the '[ICRA]B' rating to INR3.50 crore long term
fund based limits of Veeraj Construction. ICRA has also assigned a
short term rating of '[ICRA]A4' to INR4.50 crore non fund based
limits of VC.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Long term, fund based 3.50 [ICRA]B (assigned)
Limits-Cash Credit
Short term ,Non Fund 4.50 [ICRA]A4 (assigned)
based limits-Term Loans
The assigned ratings factor in healthy order book of Veeraj
Construction, long standing experience of promoters in field of
irrigation and water supply project execution. The ratings also
take into account planned capex by Central and State Government
which is expected to augur well for the firm. The assigned ratings
however are constrained by modest scale of operations of the firm
along with stretched financial risk profile as indicated by high
gearing and extended receivables. The ratings further factor in
high geographical concentration of projects with receipts mostly
from government entities of Maharashtra State which have
experienced execution delays in the past.
Based out of Nashik, Maharashtra and established by Mr. Sanjay
Kotecha as a proprietorship firm in 2006 converted to a
partnership firm in 2009, Veeraj Construction is involved in
executing irrigation and water supply projects on a turnkey basis.
* Indian Telcos Under-Investing Compared With Asian Peers
---------------------------------------------------------
Indian telcos plan to invest a significantly lower proportion of
their revenues over the next two years than their Chinese,
Indonesian and Philippine peers. Fitch Ratings believes this is
due to the weaker balance sheets of the Indian operators, and
raises the likelihood of capex needing to rise significantly over
the medium term. India's growth in data traffic is likely to be
significant, and will require infrastructure investment -- similar
to other developing Asian telco markets.
The Indian, Chinese, Philippines and Indonesian markets are at
about the same stage of data penetration. However, Indian telcos
are indicating that capex will decline -- while it will step up in
the other three countries as operators will invest in data
infrastructure and expand their 3G/long-term evolution (LTE)
networks. For example, Chinese telcos have raised their 2013 capex
forecasts by 12%-15%.
The Indian telcos' combined 2013 capex guidance (USD5bn-6bn)
represents just 17%-19% of industry revenue compared with 30% in
China and Indonesia, and 20%-21% for the Philippines (USD55bn-
60bn, USD4bn-5bn and USD1bn-1.5bn, respectively).
Operators remain uncertain about the pace of take-up of data
services in the Indian market, but we believe the principal reason
for lower investment is higher balance-sheet leverage. Balance
sheets have become stretched due to intense competition and large
spectrum payments during 2010-2012. The average funds flow from
operations-adjusted net leverage for large Indian telcos is around
3.0x-5.0x versus 1.5x for the Chinese and 1.0x-2.0x for the
Philippine and major Indonesian telcos.
Capex per subscriber for Indian telcos is also much lower
(USD6/subscriber) than in China (over USD50/subscriber), Indonesia
and the Philippines (both USD16/subscriber). Subscribers per MHz
of spectrum per operator are about 10-15 million for Indian telcos
compared with 5-6 million for Chinese, Philippine and Indonesian
telcos, which also indicates that Indian telcos may need to invest
more to decongest their network.
Bharti Airtel Limited (BBB/Negative) has indicated lower capex of
USD2.2bn-2.3bn in FY14 (to March 2014), of which USD500m-600m will
be spent on its African operations. We believe that Bharti may
have to raise investment in the medium term, which could put some
pressure on free cash flow (FCF) generation. However, barring
Indian regulatory-related payments, Fitch expects Bharti's annual
FCF to be at least USD500m-700m, which will support its
deleveraging efforts. Its FFO-adjusted net leverage is likely to
improve to 2.6x-2.7x in 2013 (end-March 2012: 3.0x).
=================
I N D O N E S I A
=================
BAKRIE TELECOM: Fitch Affirms 'CCC' LT Issuer Default Rating
------------------------------------------------------------
Fitch Ratings has affirmed Indonesia-based PT Bakrie Telecom's
(BTEL) Long-Term Foreign- and Local-Currency Issuer Default
Ratings at 'CCC'. The May 2015 USD380m bond fully guaranteed by
BTEL has been affirmed at 'CCC' with a Recovery Rating of 'RR4'.
The Outlook is Stable.
Key Rating Drivers
Stretched liquidity: Fitch estimates that cash on hand and cash
generated from operations will be insufficient to meet 2013's
obligations comprising USD15m of bank loan amortisations, USD42m
of finance lease principal, USD25m equipment payables, minimum
USD60m interest payments and, at least, USD25m of capex. Under the
terms of its USD bond, BTEL can raise fresh debt of only a maximum
of USD30m as it continues to be in breach of an incurrence
covenant. Its consolidated debt/last 12 months EBITDA was 5.2x at
end-December 2012, compared with the incurrence covenant of 4.75x.
Any indication of cash generated from operations falling below
Fitch's current expectations is likely to lead to a downgrade as
the company's liquidity position is relatively weak even for a
'CCC' rating.
Deteriorating credit profile: Fitch expects BTEL's funds flow from
operations (FFO)-adjusted net leverage to remain over 5.0x for
2013 and 2014. EBITDA is likely, at best, to remain flat as CDMA
technology struggles to maintain its market share in a GSM-
dominated industry. BTEL's EBITDA declined by about 28% to USD102m
in 2012 from USD121m in 2011 and USD141m in 2010. The decline was
mainly due to a reduction in subscribers to 11.6 million in
December 2012 from 13 million in 2010, increased competition from
GSM telcos and higher operating costs including higher frequency
fees.
Low capex: BTEL has limited flexibility to expand its network
infrastructure in 2013. Its 2013 capex guidance of USD25m or 10%-
11% of its revenue is much lower than Indonesia's top three GSM
operators, which will invest at least 25%-30% of their revenues to
expand their data franchises. As a result, BTEL will struggle to
grow its data revenue and would likely lose its competiveness
against larger GSM operators, by failing to invest adequately in
its network to support fast-growing data traffic.
CDMA consolidation: Struggling CDMA operators - including BTEL and
PT Smartfren Telecom Tbk (Smartfren, CC(idn)) - may participate in
consolidation, as they face tight liquidity amid weak
profitability. CDMA operators are struggling due to a lack of
variety of CDMA handsets and a narrowing of the tariff spread
between CDMA and GSM operators. PT Telekomunikasi Indonesia Tbk's
(Telkom, BBB-/Stable) CDMA unit, Flexi, which had discussed an
unsuccessful merger plan with BTEL in 2010, could acquire one of
the smaller CDMA operators to strengthen its customer base.
Rating Sensitivities
Positive: BTEL has limited upside given its liquidity constraints.
However, future developments that may, individually or
collectively, lead to positive rating action include:
- A significant improvement in business performance leading to
improved liquidity, although Fitch regards this as unlikely
- An M&A transaction with a larger operator/stronger investor
which improves its financial and operating performance
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
- Further deterioration in liquidity that confirms the company's
inability to meet its 2013 obligations
=========
J A P A N
=========
SHARP CORP: Plans to Sell 9.2% Stake in Pioneer
-----------------------------------------------
Kyodo News reports that Sharp Corp. plans to sell its 9.2% stake
in Pioneer Corp. to finance restructuring measures and is looking
for a buyer, sources revealed Saturday.
The report says the struggling electronics maker is Pioneer's top
stockholder. According to Kyodo, the company is expected to use
the proceeds from selling its 30 million shares in the maker of
car navigation systems and home electronics to meet the redemption
in September of around JPY200 billion in convertible bonds.
Kyodo notes that Sharp has been thinking of selling its Pioneer
shares since last year as part of a restructuring push. Sources
said the two companies, which formed a capital and business tie up
in 2007, intend to keep collaborating and Pioneer will retain its
0.8% stake in Sharp, Kyodo relays.
About Sharp Corp.
Based in Osaka, Japan, Sharp Corporation (TYO:6753) --
http://sharp-world.com/-- manufactures and sells electronic
telecommunication devices, electronic machines and components.
Standard & Poor's Ratings Services said earlier this month that it
had lowered to 'B' from 'B+' its senior unsecured debt rating on
Sharp Corp. At the same time, S&P kept the senior unsecured debt
rating and 'B+' long-term and 'B' short-term corporate credit
ratings on Sharp and its overseas subsidiaries -- Sharp
Electronics Corp. and Sharp International Finance (U.K.) PLC -- on
CreditWatch with negative implications. S&P lowered the senior
unsecured debt rating by one notch from the issuer rating because
it believes Sharp's priority liabilities have increased and will
likely remain high against the company's assets in the next six to
12 months.
Fitch Ratings also said continued support from main creditor banks
will be essential for a sustained recovery of Sharp Corporation's
('B-'/Rating Watch Negative) operating performance. The Japanese
electronics manufacturer's liquidity position remains vulnerable
despite a turnaround to post marginally positive EBIT margins in
the third quarter of financial year ending March 2013 (Q3FY13).
====================
N E W Z E A L A N D
====================
BRIDGECORP LTD: Insurance Policy Case Heads to Supreme Court
------------------------------------------------------------
The New Zealand Herald reports that the receivers of failed
finance company Bridgecorp Ltd have been given leave to appeal to
the Supreme Court in a stoush over an insurance policy worth up
NZ$20 million.
The Herald notes that before the criminal trial of the Bridgecorp
bosses -- which wrapped up last year -- directors Peter Steigrad
and Bruce Davidson went to the High Court in a dispute over access
to a directors and officers insurance policy.
The policy, taken out with QBE Insurance, indemnifies the men
against liability they might incur as a result of their actions as
directors, the report says. It also provides cover for costs they
might incur in defending proceedings that seeks to establish this
liability.
However, Bridgecorp's receivers claimed they had a "charge" over
the money payable in the policy for the amount they intended to
claim from the directors in civil proceedings, the Herald relays.
After hearing the dispute, the High Court's Justice Graham Lang
ruled in 2011 that the charge applied to the money, which then
prevented Steigrad, Davidson and Gary Urwin from having access to
the insurance money, the Herald recalls.
The Herald relates that Mr. Steigrad then went on to appeal
against that decision in September, which was allowed in
December by Justices Mark O'Regan, Terence Arnold and Rhys
Harrison, who quashed the High Court declaration.
However, the Bridgecorp receivers were on Monday given leave to
appeal that decision in the Supreme Court, the report says.
A date has not been set for this hearing, which will essentially
focus on which court's decision was correct about the charge, the
report adds.
According to the Herald, PwC has filed a civil claim against
Messrs. Steigrad, Davidson and Urwin for $442 million, for an
alleged "breach of duty". Messrs. Davidson, Steigrad and Urwin
have all been convicted in a criminal case brought by the
Financial Markets Authority of making untrue statements in
Bridgecorp offer documents. If the directors win the insurance
dispute, it may mean there is less money to distribute to out-of-
pocket Bridgecorp investors if the receivers' civil claim is
successful.
About Bridgecorp Ltd
Based in New Zealand, Bridgecorp Ltd. was a property development
and finance company. The company was placed in receivership on
July 2, 2007, after failing to pay principal due to debenture
holders. John Waller and Colin McCloy, partners at
PricewaterhouseCoopers, were appointed as receivers. Bridgecorp
owes around 14,500 investors, which liquidators estimate to
approximate NZ$500 million. Bridgecorp's nine Australian
companies were also placed into voluntary administration, owing
about 100 investors about AUD24 million (NZ$27 million).
DOMINION FINANCE: Name Suppression Likely to be Permanent
---------------------------------------------------------
The New Zealand Herald reports that a man who escaped conviction
following the Dominion Finance trial is likely have his name
suppressed permanently.
The man was found on Monday not guilty on three charges of theft
by a person in a special relationship by Justice Graham Lang
following a five-week trial in the High Court at Auckland earlier
this year, the Herald relates.
Following the man's acquittal, Justice Lang said name suppression
was granted in a High Court order last year and that he did not
have the authority to revisit it, according to the report.
While the suppression could be lifted by the Court of Appeal,
prosecutor Brian Dickey said the Crown took a neutral position on
the issue, the report says.
The original order granting name suppression and the reasons for
doing so are, in turn, suppressed.
According to the Herald, Dominion Finance director Robert Barry
Whale was also found not guilty on the charges he faced.
However, former Dominion Finance chief executive Paul William
Cropp was found guilty on four charges of theft by a person in a
special relationship.
The Serious Fraud Office, which brought the proceedings against
the men, alleged the trio knowingly and deliberately breached the
requirements of Dominion's debenture trust deed or that of its
sister company, North South Finance.
About Dominion Finance
Based in Auckland, New Zealand, Dominion Finance Holdings
Limited was engaged in the provision of financial services
through the raising of debenture stock. The company operated
through its wholly owned subsidiaries Dominion Finance Group
Limited and North South Finance Limited, and investment vehicle
Dominion Investment Fund Limited. Both Dominion Finance Group
Limited and North South Finance Limited accepted debenture stock
investments and apply them (in conjunction with its own funds)
towards the provision of certain loans and other financial
accommodation.
Dominion Finance was put into receivership in September 2008
owing about NZ$176.9 million to more than 5,900 investors. It was
put into liquidation by the High Court at Auckland in May 2009.
Associate Judge Faire appointed William Black and Andrew Grenfell
of McGrathNicol as liquidators of the firm. Receiver Rod
Partington of Deloitte said the liquidation application will not
affect the progress of the receivership.
North South Finance went into receivership in July 2010.
In total, the group is estimated to owe creditors NZ$400 million.
===============
X X X X X X X X
===============
* BOND PRICING: For the Week April 8 to April 12, 2013
------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
AUSTRALIA
---------
COM BK AUSTRALIA 1.50 04/19/2022 AUD 75.18
MIDWEST VANADIUM 11.50 02/15/2018 USD 63.38
MIDWEST VANADIUM 11.50 02/15/2018 USD 57.88
NEW S WALES TREA 0.50 09/14/2022 AUD 70.58
NEW S WALES TREA 0.50 10/07/2022 AUD 69.40
NEW S WALES TREA 0.50 10/28/2022 AUD 69.22
NEW S WALES TREA 0.50 11/18/2022 AUD 69.30
NEW S WALES TREA 0.50 12/16/2022 AUD 70.53
NEW S WALES TREA 0.50 02/02/2023 AUD 70.10
NEW S WALES TREA 0.50 03/30/2023 AUD 69.60
TREAS CORP VICT 0.50 08/25/2022 AUD 72.38
TREAS CORP VICT 0.50 03/03/2023 AUD 70.66
TREAS CORP VICT 0.50 11/12/2030 AUD 49.69
CHINA
-----
CHINA GOVT BOND 4.86 08/10/2014 CNY 102.47
CHINA GOVT BOND 1.64 12/15/2033 CNY 69.69
INDIA
-----
CORE PROJECTS 7.00 05/07/2015 USD 50.47
DR REDDY'S LABOR 9.25 03/24/2014 INR 5.00
JCT LTD 2.50 04/08/2011 USD 20.00
MASCON GLOBAL LT 2.00 12/28/2012 USD 10.00
PRAKASH IND LTD 5.63 10/17/2014 USD 67.35
PRAKASH IND LTD 5.25 04/30/2015 USD 64.59
PUNJAB INFRA DB 0.40 10/15/2024 INR 32.35
PUNJAB INFRA DB 0.40 10/15/2025 INR 29.49
PUNJAB INFRA DB 0.40 10/15/2026 INR 26.91
PUNJAB INFRA DB 0.40 10/15/2027 INR 24.59
PUNJAB INFRA DB 0.40 10/15/2028 INR 22.50
PUNJAB INFRA DB 0.40 10/15/2029 INR 20.61
PUNJAB INFRA DB 0.40 10/15/2030 INR 18.92
PUNJAB INFRA DB 0.40 10/15/2031 INR 17.39
PUNJAB INFRA DB 0.40 10/15/2032 INR 16.01
PUNJAB INFRA DB 0.40 10/15/2033 INR 14.77
PYRAMID SAIMIRA 1.75 07/04/2012 USD 1.00
REI AGRO 5.50 11/13/2014 USD 72.46
REI AGRO 5.50 11/13/2014 USD 72.46
RELIGARE FINVEST 11.75 02/08/2015 INR 3.50
SHIV-VANI OIL 5.00 08/17/2015 USD 38.21
SREI INFRA FIN 8.90 03/22/2022 INR 27.95
SUZLON ENERGY LT 7.50 10/11/2012 USD 65.13
SUZLON ENERGY LT 5.00 04/13/2016 USD 50.79
JAPAN
-----
EBARA CORP 1.30 09/30/2013 JPY 99.99
ELPIDA MEMORY 2.03 03/22/2012 JPY 9.50
ELPIDA MEMORY 2.10 11/29/2012 JPY 9.50
ELPIDA MEMORY 2.29 12/07/2012 JPY 9.50
JPN EXP HLD/DEBT 0.50 09/17/2038 JPY 71.32
JPN EXP HLD/DEBT 0.50 03/18/2039 JPY 70.92
KADOKAWA HLDGS 1.00 12/18/2014 JPY 116.45
SHARP CORP 2.07 03/19/2019 JPY 72.40
SHARP CORP 1.60 09/13/2019 JPY 71.12
TOKYO ELEC POWER 2.37 05/28/2040 JPY 70.38
MALAYSIA
--------
AMAN SUKUK 4.25 03/08/2028 MYR 4.16
PHILIPPINES
-----------
BAYAN TELECOMMUN 13.50 07/15/2006 USD 22.75
BAYAN TELECOMMUN 13.50 07/15/2006 USD 22.75
SINGAPORE
---------
BAKRIE TELECOM 11.50 05/07/2015 USD 35.88
BAKRIE TELECOM 11.50 05/07/2015 USD 34.31
BLD INVESTMENT 8.63 03/23/2015 USD 69.00
BLUE OCEAN 11.00 06/28/2012 USD 36.25
BLUE OCEAN 11.00 06/28/2012 USD 36.25
CAPITAMALLS ASIA 2.15 01/21/2014 SGD 99.92
CAPITAMALLS ASIA 3.80 01/12/2022 SGD 103.50
DAVOMAS INTL FIN 11.00 12/08/2014 USD 29.13
DAVOMAS INTL FIN 11.00 12/08/2014 USD 29.13
F&N TREASURY PTE 2.48 03/28/2016 SGD 100.72
F&N TREASURY PTE 3.15 03/28/2018 SGD 101.50
INDO INFRASTRUCT 2.00 07/30/2049 USD 1.88
SOUTH KOREA
-----------
CHEJU REGION DEV 3.00 12/29/2034 KRW 68.78
EXP-IMP BK KOREA 0.50 08/10/2016 BRL 73.90
EXP-IMP BK KOREA 0.50 09/28/2016 BRL 73.53
EXP-IMP BK KOREA 0.50 10/27/2016 BRL 72.99
EXP-IMP BK KOREA 0.50 11/28/2016 BRL 72.39
EXP-IMP BK KOREA 0.50 12/22/2016 BRL 69.01
EXP-IMP BK KOREA 0.50 10/23/2017 TRY 72.11
EXP-IMP BK KOREA 0.50 11/21/2017 BRL 66.54
EXP-IMP BK KOREA 0.50 12/22/2017 TRY 71.91
EXP-IMP BK KOREA 0.50 12/22/2017 BRL 65.95
SINBO 14TH ABS 8.00 02/02/2015 KRW 30.35
SRI LANKA
---------
SRI LANKA GOVT 6.20 08/01/2020 LKR 73.60
SRI LANKA GOVT 7.00 10/01/2023 LKR 67.06
SRI LANKA GOVT 5.35 03/01/2026 LKR 56.50
SRI LANKA GOVT 9.00 07/01/2028 LKR 74.25
SRI LANKA GOVT 8.00 01/01/2032 LKR 69.57
THAILAND
--------
BANGKOK LAND 4.50 10/13/2003 USD 6.38
G STEEL 3.00 10/04/2015 USD 8.25
MDX PUBLIC CO 4.75 09/17/2003 USD 4.00
*********
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, Julie Anne L. Toledo, 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
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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-
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*** End of Transmission ***