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, May 13, 2008, Vol. 11, No. 94 Headlines A U S T R A L I A CENTRO PROPERTIES: Richard Kirby Files Class Action Claim CENTRO NP: Moody's Keeps B3 Rating on Review ST GEORGE: Moody's Comments on Westpac's Proposed Merger ST GEORGE: Fitch Places BB+ Support Rating Floor on Pos. Watch ST GEORGE: Moody's Reviews “B” BFSR With “Direction Uncertain” ZINITEX LIMITED: Sees Lower Earnings in Second Half of 2008 ZINITEX LIMITED: Inks Accord to Dissolve Century Mining Alliance C H I N A AMERICAN AXLE: UAW Chief Balks at GM's US$200 Million Aid CHINA EASTERN: Still Flys Kunming-Xishuanbanna Route Despite Ban CHINA SOUTHERN: First Capital Keeps "Prudent Buy" Rating DANA CORP: Ad Hoc Panel Wants Court Nod on US$3.5 Mil. Legal Fee DANA CORP: Appaloosa Wants Court Nod on US$2.5MM Legal Fees DELPHI CORP: March 31 Balance Sheet Upside-Down by US$14 Billion HAINAN AIRLINES: To Offer Beijing-Berlin Flight in September H O N G K O N G CHINASAILS DEV'T: Members' Final Meeting Set for June 6 DARRACOTT LIMITED: Members' Final Meeting Set for June 6 HIP YICK: Creditors' Proofs of Debt Due June 4 HONG KONG STEEL: Commences Liquidation Proceedings KAI WING: Creditors' Proofs of Debt Due June 4 LANDWIDE DEV'T: Liquidators Quit Post MOLD-TECH: Liquidators Quit Post OCEANIC PROPERTY: Members' Final Meeting Set for June 6 SKYNET LIMITED: Commences Liquidation Proceedings I N D I A BHARTI AIRTEL: Discussion With MTN Group Cues Fitch Rating Watch J A P A N ATARI INC: Asks Nasdaq to Review Move to Delist Securities ATARI INC: Gets US$20 Million Loan from Infogrames Entertainment JVC CORP: To Integrate Operations With Kenwood on Oct. 1 NIS GROUP: JCR Holds BB Rating, Revises Outlook to Negative NISSIN SERVICER: JCR Holds BB Rating, Revises Outlook to Neg. M A L A Y S I A KOSMO TECHNOLOGY: Unable to Provide Solvency Declaration LIQUA HEALTH: Appoints Ahmad Fuad and Goh Song as Directors OCI BERHAD: Bursa to De-List Securities on May 22 PECD BERHAD: Oh Teik Tatt Quits as Non-Executive Director SATANG HOLDINGS: Overstates Revenue by MYR35.43MM, Auditor Says N E W Z E A L A N D A C MASON (1997): Creditors Must File Claims by May 23 AOTEA ENGINEERING: Joint Liquidators Appointed A&R WHITCOULLS: Posts AU$9.48MM Net Profit for First Half 2008 BRUCE HILL TRANSPORT: Court to Hear Wind-Up Petition on May 26 CONDOR FREIGHT: Creditors Must File Claims by May 20 COOL CUTZ HAIR & BEAUTY: Shareholders Appoint Liquidator ELEGANT DECORS: Joint Liquidators Appointed FLETCHER BUILDING: Buys Morinda Australia & All Steel's Assets GANBATTE NE LTD: Claims Filing Deadline is June 20 KAI TIME LTD: Court to Hear Wind-Up Petition on May 19 KARTINI EXPORT: Court to Hear Wind-Up Petition on June 6 LANDFORM NEW ZEALAND: Faces CIR's Wind-Up Petition LBD CIVIL: Creditors Must File Claims by May 23 OVAL AIR: Faces Fujitsu General's Wind-Up Petition PERRY WINDOWS & DOORS: Creditors Must File Claims by May 30 PRIME TV SERVICE: Court to Hear Wind-Up Petition on May 16 TRADITIONAL GOLF DESIGN: Joint Liquidators Appointed TT WOOD PRODUCTS: Court to Hear Wind-Up Petition on May 29 S I N G A P O R E FUNNEX INTERNATIONAL: Creditors' Proofs of Debt Due June 6 LAM GUAN: Creditors' Meeting Set for May 26 LEAD MACHINERY: To Pay First Dividend to Creditors on May 16 WELLNESS MEDIA: Court Enters Wind-Up Order T A I W A N TACHAN SECURITIES: Fitch Affirms 'BB' Issuer Default Rating X X X X X X X X * BOND PRICING: For the Week May 12 to May 16, 2008 - - - - - ================= A U S T R A L I A ================= CENTRO PROPERTIES: Richard Kirby Files Class Action Claim --------------------------------------------------------- Maurice Blackburn Pty Ltd, representing Richard Kirby, has filed before the Federal Court in Melbourne, a class action claim against Centro Properties Group and CPT Manager Limited (responsible Entity for Centro Property Trust). Centro said it will vigorously defend the proceeding in the interests of its securityholders. About Centro Properties Centro Properties Group -- http://www.centro.com.au/-- is a retail investment organisation specialising in the ownership, management and development of retail shopping centres. Centro manages both listed and unlisted retail property and has an extensive portfolio of shopping centres across Australia, New Zealand and the United States. Centro has funds under management of $24.9 billion. * * * The Troubled Company Reporter-Asia Pacific reported on Jan. 4, 2008, that Standard & Poor's Ratings Services lowered its issuer credit, senior-unsecured debt and preferred stock ratings to 'CCC+' with negative implications reflecting the potential of the group's assets to be sold in softening market conditions, particularly in the U.S. CENTRO NP: Moody's Keeps B3 Rating on Review -------------------------------------------- Moody's Investors Service stated that it will maintain Centro NP LLC's (formerly New Plan Excel Realty Trust, Inc.) B3 senior unsecured debt ratings under review direction uncertain reflecting the company's announcement that its parent, Centro Properties Group (not rated), was granted an extension until Dec. 15, 2008 on its Australian debt previously scheduled to expire May 7, 2008. This extension is subject to certain conditions being met by May 30 for finalizing an additional liquidity facility totaling US$155 million and covers Centro's interests in certain managed funds. Centro's U.S. debt is still subject to a Sept. 30, 2008 deadline. The review continues to reflect the financial difficulties and uncertainty regarding the final capital structure and strategic profile of the company in light of Centro NP's and Centro Properties Group's short-term pressure to refinance debt. Moody's will continue to monitor Centro NP's compliance with its bond covenants and the quality and composition of its portfolio as it works though these financings. Moody's stated that upwards rating movement would be contingent upon implementing a viable plan to refinance/restructure Centro Property Group's debt, in addition to Centro NP refinancing the bridge facility and line of credit on or before its Sept. 30, 2008 extension date without materially pressuring their leverage, secured debt, the value of their portfolio, and other credit metrics, while complying with bond covenants. A confirmation of the B3 rating would result from Centro NP reaching a financing plan to which the debt holders agree, with a strategic plan in place to restructure Centro Properties Group's debt. A downgrade to the Caa range or lower would most likely reflect Centro NP's continued issues refinancing its line and/or Centro Properties Group's inability to refinance its debt by the extension dates, noncompliance with bond covenants at the Centro NP level, acceleration of bond payments, a firesale of assets or a bankruptcy filing. These ratings are at B3, with review direction uncertain: * Centro NP LLC -- Senior unsecured debt at B3; medium-term notes at B3. Centro NP LLC, headquartered in New York City, owns and operates 496 community and neighborhood shopping centers in 39 states. The company had assets of US$5.7 billion and equity of US$3.2 billion at Dec. 31, 2007. Centro Properties Group (AXP: CNP), headquartered in Melbourne, Victoria, Australia, is an Australian Listed Property Trust that specializes in the ownership, management and development of retail shopping centers in Australia, New Zealand and the USA with AU$26.6 billion in assets under management. ST GEORGE: Moody's Comments on Westpac's Proposed Merger -------------------------------------------------------- Moody's Investors Service commented that it will not be taking action on Westpac Banking Corporation's ratings, following the announcement that it was in merger talks with St. George Bank Limited, until more was known about the terms and conditions of the proposed transaction. Westpac is rated Aa1 / Prime-1 for deposits and senior debt, and carries a bank financial strength rating (BFSR) of B. St. George is rated Aa2 / Prime-1 / B. "In-market mergers for shares, such as proposed by Westpac and St. George, are generally ratings-neutral to positive", commented Patrick Winsbury, Moody's Senior Vice President in Sydney. The merger would enhance both banks' franchises, improving pricing power and systemic importance. However, in-market mergers are not without their risks, and these too would have to be incorporated in a rating decision. "Even all-script transactions create goodwill," commented Winsbury, going on to note that Moody's would asses the exact impact of goodwill, costs and benefits on Westpac's financial fundamentals once a price range for share swap had been agreed. "We will also consider the impact of St. George's strong loan growth on the combined banks' funding needs and capital adequacy." That said, in view of Westpac's pro-active management of its funding and liquidity needs during the recent dislocations in wholesale markets, Moody's fully expects that Westpac will propose a conservatively financed merger transaction. As reported by the Troubled Company Reporter-Asia Pacific yesterday, Westpac Banking Corporation said in a media release that, together, Westpac and St.George would have a strong AA credit-rating, a larger balance sheet and greater access to funding. This would lower risk and costs for St.George, and position the combined business to withstand challenging funding markets and take advantage of opportunities created by the dislocation in capital markets. According to the TCR-AP, the proposed combination states that: * All Westpac and St.George brands, including Bank SA, and branch/ATM networks would be retained. The intention is that there will be no net reduction in branch or ATM numbers. The focus will be on investing more in front-line services; * The combined 10 million customers would benefit from an enhanced offering in terms of product range, expanded distribution and financial strength while preserving their relationships with employees, products, customer touchpoints and branding; and * Shareholders would own the premier AA rated financial institution in Australia, with leading market positions across key lines of business, and share in the benefits of substantial revenue synergies going forward. Westpac outlined that the combined business would be a market leader in Australia. Specifically, St.George and Westpac would be: * Australia's leading provider of home lending, with a market share of 25% * Australia's largest wealth platform provider with funds under administration of $108 billion About Westpac Headquartered in Sydney, New South Wales, Australia -- http://www.westpac.com.au/-- Westpac Banking Corporation provides a range of banking and financial services, including retail, commercial, and institutional banking, as well as wealth management services to individuals and business customers in Australia, New Zealand, and the Pacific region. Westpac reported assets of AU$401.7 billion at March 31, 2008. About St. George Bank Headquartered in Kogarah, New South Wales, Australia -- http://www.stgeorge.com.au-- St. George Bank Limited is a banking company. The Company operates in four business segments: Retail Bank (RB), Institutional and Business Banking (IBB), BankSA (BSA) and Wealth Management (WM). RB is responsible for residential and consumer lending, provision of personal financial services including transaction services, call and term deposits, small business banking and financial planners. This division manages retail branches, call centers, agency networks and electronic channels, such as electronic funds transfer at point of sale (EFTPOS) terminals, automated teller machines (ATMs) and Internet banking. On September 28, 2007, it disposed of its 100% interest in Scottish Pacific Business Finance Holdings Pty. Limited. St. George Bank reported assets of AU$136.3 billion at March 31, 2008. * * * The Troubled Company Reporter-Asia Pacific reported on March 28, 2008, that Fitch Ratings assigned a 'B' rating on the AU$1.0 million Class E bond of St. George. A subsequent TCR-AP report on April 2, 2008, said Fitch Ratings rated St. George's AU$1.7 million Class D bond a 'BB'. ST GEORGE: Fitch Places BB+ Support Rating Floor on Pos. Watch -------------------------------------------------------------- Fitch Ratings has placed the ratings of Australia's St.George Bank Limited and Westpac Banking Corporation on Rating Watch Positive, following the announcement that Westpac is considering an offer to acquire SGB using Westpac shares as consideration. The ratings are: * SGB: Long-term IDR at 'A+' on Rating Watch Positive; Short-term IDR at 'F1'; Individual Rating at 'B', Support at '3' and Support Rating Floor at 'BB+'; and * Westpac: Long-term Issuer Default Rating (IDR) at 'AA-' (AA minus) on Rating Watch Positive; Short-term IDR at 'F1+'; Individual Rating at 'B'; Support at '2' and Support Rating Floor at 'BBB+'. "A combined entity would command a strong presence in Australia's retail banking and fund management markets. At the same time, there appears to be reasonable scope for savings in the back-office, particularly where duplication exists," noted John Miles, Senior Director in Fitch's financial institutions group. Integration issues are likely to be mitigated by the fact that Gail Kelly, Westpac's newly appointed CEO, was previously CEO of SGB. According to Fitch, while the credit crunch has increased the costs of wholesale funding for all Australian banks, the impact has been disproportionate, with the higher-rated major banks generally faring better than the rest. From this perspective, SGB could potentially derive savings on its wholesale funding costs as a result of a merger. Westpac has continued to access global debt markets, and while it is issuing shorter-dated paper the proportion of short-term debt in the bank's wholesale funding mix has not changed significantly since July 2007. Credit crunch issues aside, Fitch stated that both banks enter into the negotiations in good shape. Impaired assets, though rising, are still very low and material deterioration appears unlikely - as at 31 March 2008, the ratio of impaired assets to gross loans for Westpac and SGB, respectively, was 0.32% and 0.06%. Financial performance for the six months to 31 March 2008 was also solid, with both banks reporting returns on average equity in excess of 20%. Resolution of the Rating Watch will require additional information on the terms of the offer and any likely impact on capitalisation for the combined group. However, Fitch said initial indications are that the acquisition would be funded by Westpac shares, and as a result Fitch expects that the merged entity would preserve prudent capital ratios. Should SGB shareholders agree to a proposal, regulatory approvals would be the final hurdle. About Westpac Headquartered in Sydney, New South Wales, Australia -- http://www.westpac.com.au/-- Westpac Banking Corporation provides a range of banking and financial services, including retail, commercial, and institutional banking, as well as wealth management services to individuals and business customers in Australia, New Zealand, and the Pacific region. Westpac reported assets of AU$401.7 billion at March 31, 2008. About St. George Bank Headquartered in Kogarah, New South Wales, Australia -- http://www.stgeorge.com.au-- St. George Bank Limited is a banking company. The Company operates in four business segments: Retail Bank (RB), Institutional and Business Banking (IBB), BankSA (BSA) and Wealth Management (WM). RB is responsible for residential and consumer lending, provision of personal financial services including transaction services, call and term deposits, small business banking and financial planners. This division manages retail branches, call centers, agency networks and electronic channels, such as electronic funds transfer at point of sale (EFTPOS) terminals, automated teller machines (ATMs) and Internet banking. On September 28, 2007, it disposed of its 100% interest in Scottish Pacific Business Finance Holdings Pty. Limited. St. George Bank reported assets of AU$136.3 billion at March 31, 2008. ST GEORGE: Moody's Reviews “B” BFSR With “Direction Uncertain” --------------------------------------------------------------- Moody's Investors Service has reviewed, with direction uncertain, the ratings of St.George Bank. It is rated Aa2 for deposits and senior debt, Prime-1 for short-term obligations and carries a bank financial strength rating (BFSR) of B. The rating action follows an announcement that it is in merger discussions with Westpac Banking Corporation. "St.George's ratings have been placed on review with direction uncertain, because no exact details have been disclosed about the merger's proposed pricing, or about the post-merger structure of the bank. The review with direction uncertain also addresses the potential for rival bids," said Patrick Winsbury, a Senior Vice President with Moody's Sydney office. "If St.George merges with Westpac, then there would likely be positive implications for St.George's deposit and debt ratings, due to the combined entity's systemic importance as Australia's second-largest bank by asset size." "However, if St.George merges with a lower-rated entity, there could be some potential for downward pressure." Moody's said St.George's deposit and debt ratings will also depend on its BFSR, which measures the bank's stand-alone credit profile. The impact of any merger on its BFSR will be determined by its pricing; the post-merger organisation structure; as well as the strategic direction set by the merged entity. Common ownership with Westpac, even absent a full legal integration, would likely boost St.George's access to wholesale debt markets and reduce its funding cost. This would support St.George's BFSR: the bank has grown assets rapidly in recent months off the back of a successful regional expansion strategy and strong customer satisfaction metrics, but this has brought its own challenges at a time of dislocations in global funding markets. As noted in previous research, Moody's said St.George's BFSR will depend on how well its management --- whether on its own, or in combination with that of another bank ---- deals with the challenges of funding and capitalising its asset growth against a backdrop of volatile funding conditions and weaker credit conditions. These ratings were placed on review with direction uncertain: St.George Bank Limited - Bank Financial Strength at B - Long-Term Deposits at Aa2 - Long-Term Issuer Ratings at Aa2 - Senior Unsecured at Aa2 - Subordinated Debt at Aa3 - Preferred Stock at A1 - Short-Term Deposits at Prime-1 - Short-Term Issuer Ratings at Prime-1 - Commercial Paper at Prime-1 St.George Insurance Australia Pty Ltd - Insurance Financial Strength at Aa3 About Westpac Headquartered in Sydney, New South Wales, Australia -- http://www.westpac.com.au/-- Westpac Banking Corporation provides a range of banking and financial services, including retail, commercial, and institutional banking, as well as wealth management services to individuals and business customers in Australia, New Zealand, and the Pacific region. Westpac reported assets of AU$401.7 billion at March 31, 2008. About St. George Bank Headquartered in Kogarah, New South Wales, Australia -- http://www.stgeorge.com.au-- St. George Bank Limited is a banking company. The Company operates in four business segments: Retail Bank (RB), Institutional and Business Banking (IBB), BankSA (BSA) and Wealth Management (WM). RB is responsible for residential and consumer lending, provision of personal financial services including transaction services, call and term deposits, small business banking and financial planners. This division manages retail branches, call centers, agency networks and electronic channels, such as electronic funds transfer at point of sale (EFTPOS) terminals, automated teller machines (ATMs) and Internet banking. On September 28, 2007, it disposed of its 100% interest in Scottish Pacific Business Finance Holdings Pty. Limited. St. George Bank reported assets of AU$136.3 billion at March 31, 2008. ZINITEX LIMITED: Sees Lower Earnings in Second Half of 2008 ----------------------------------------------------------- Zinifex Limited said that its second half earnings may be lower than expected because of a decline in zinc prices and rising costs, Jesse Riseborough of Bloomberg writes. According to the report, citing a statement to the Australian Stock Exchange, the substantially lower average zinc prices and gains in treatment charges for zinc and lead concentrate output will offset increased production in the six months ending June 30. Zinifex Limited, one of the world's largest integrated zinc and lead companies -- http://www.zinifex.com/-- is headquartered in Melbourne, Australia. The company owns and operates two mines and four smelters. The mines and two of the smelters are located in Australia and supply the growing industrial markets of the Asian-Pacific region, including China. The company also has a zinc smelter in the Netherlands and the United States. The company sells a range of zinc metal, lead metal, and associated alloys in 20 countries. More than 80% of the company's products are distributed outside Australia, particularly in Asia, which is experiencing significant growth in construction activity and vehicle production. Zinc is used for steel galvanizing and die-casting and lead for lead acid batteries used mainly in cars and other vehicles. * * * The Troubled Company Reporter-Asia Pacific reported on Dec. 18, 2007, that Fitch Ratings affirmed Zinifex Limited's 'BB+' long-term foreign currency Issuer Default Rating (IDR), following the announcement of an all cash offer for Allegiance Mining NL (Allegiance). Fitch's Web site as of April 21, 2008, says the rating outlook is positive. ZINITEX LIMITED: Inks Accord to Dissolve Century Mining Alliance ---------------------------------------------------------------- Zinifex Century Mine's management and Downer EDI Mining had mutually agreed to dissolve the successful Century Mining Alliance. To ensure a smooth transition, both Downer EDI Mining and Zinifex have agreed to stage the transition between July 1, 2008 and June 30, 2009. Formed in 2004, the Century Mining Alliance was intended to build the capacity necessary to allow Zinifex to become an owner-operator of the mine. Downer EDI Mining and Zinifex Century Mine are proud of the capacity built by their people during the four years of their Alliance. In that time, Zinifex Century Mine has grown to produce around 1 million tonnes of zinc and lead concentrates annually. It is Australia's largest zinc mine, and one of the world's largest zinc mines. Zinifex Century Mine generated revenues of approximately U$1.4 billion in FY07, and employs nearly 1,000 people. Downer EDI Mining will continue to support operations during this business as usual transition phase, and has agreed that its employees on site may become employees of Zinifex Century Mine. General Manager of Zinifex Century Mine, John Lamb, said, "Zinifex Century Mine values the contribution made by Downer EDI employees to the success of the mine. For that reason, Zinifex intends to offer jobs to all current Downer EDI Mining employees. They will be transferred across to Zinifex over this 12-month period and will become Zinifex employees. It is expected that some will choose to continue with Downer. " Job losses are not expected, and very few roles will be duplicated in the transition process. Transmission of business laws commit Zinifex to offer jobs to all Downer EDI Mining employees currently working at Zinifex Century Mine. About Zinifex Limited Zinifex Limited, one of the world's largest integrated zinc and lead companies -- http://www.zinifex.com/-- is headquartered in Melbourne, Australia. The company owns and operates two mines and four smelters. The mines and two of the smelters are located in Australia and supply the growing industrial markets of the Asian-Pacific region, including China. The company also has a zinc smelter in the Netherlands and the United States. The company sells a range of zinc metal, lead metal, and associated alloys in 20 countries. More than 80% of the company's products are distributed outside Australia, particularly in Asia, which is experiencing significant growth in construction activity and vehicle production. Zinc is used for steel galvanizing and die-casting and lead for lead acid batteries used mainly in cars and other vehicles. * * * The Troubled Company Reporter-Asia Pacific reported on Dec. 18, 2007, that Fitch Ratings affirmed Zinifex Limited's 'BB+' long-term foreign currency Issuer Default Rating (IDR), following the announcement of an all cash offer for Allegiance Mining NL (Allegiance). Fitch's Web site as of April 21, 2008, says the rating outlook is positive. ========= C H I N A ========= AMERICAN AXLE: UAW Chief Balks at GM's US$200 Million Aid --------------------------------------------------------- United Auto Workers union president Ron Gettelfinger criticized General Motors Corp.'s US$200 million aid to American Axle & Manufacturing Holdings Inc., saying that instead of resolving the labor dispute, GM's action will make the talks more difficult, John D. Stoll of The Wall Street Journal, citing a radio interview, reports. As reported in the Troubled Company Reporter on May 9, 2008, GM agreed to provide Axle with upfront financial support capped at US$200 million to help fund employee buyouts, early retirements and buydowns to facilitate a settlement of the work stoppage. WSJ relates that the UAW chief predicts that Axle will make firm demands following GM's move. The auto supplier now intends to close a factory in Cheektowaga, New York. Axle believes that the labor protest will be settled either if the UAW eases off or GM intervenes, WSJ quotes people familiar with the matter. The TCR disclosed on April 24, 2008, that approximately 3,650 associates are represented by the UAW at five facilities in Michigan and New York affected by the strike. AAM and the UAW are working to reach a new collective bargaining agreement for the original U.S. locations. Although AAM has made several economic proposals to the UAW with "all-in" hourly wage and benefit packages that were considerably higher than the market rate of AAM's UAW-represented competitors in the U.S., the UAW has repeatedly rejected these economic proposals. About GM Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly owned subsidiary, American Axle & Manufacturing, Inc., manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States (in Michigan, New York and Ohio), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom. The company has a 15,794-square meter manufacturing facility in the Changshu Economic Development Zone near Shanghai. The city of Changshu features one of the 10 largest ports in China, providing excellent geographic access to all vehicle manufacturers throughout Asia * * * As reported in the Troubled Company Reporter on April 4, 2008, Moody's Investors Service placed American Axle & Manufacturing Holdings, Inc.'s Ba3 Corporate Family Rating under review for downgrade. CHINA EASTERN: Still Flys Kunming-Xishuanbanna Route Despite Ban ---------------------------------------------------------------- China Eastern Airlines Corp. Limited did not stop flying the Kunming-Xishuanbanna flight, which was banned as a punishment for its fault on pilot management, Sinocast News reports. As reported in the Troubled Company Reporter-Asia Pacific on April 29, 2008, the Southwest Management Bureau of the Civil Aviation Administration of China (CAAC) suspended flights between Kunming and Xishuangbanna, and to Dali as punishment for the March 31 incident when some pilots of China Eastern Airlines' flights refused to land at their destinations and instead returned to their departure points. The pilots were reportedly seeking higher wages and freedom to work for another airline. About 1,000 passengers were stranded at Kunming Airport in the southern China. A total of 21 flights from southeastern Yunnan province were affected. Some pilots and the general manager of China Eastern's Yunnan unit were suspended. China Eastern was also fined CNY1.5 million or US$215,000 for the pilots' strike. However, Sinocast News relates, the airline continues to operate the fights and accept ticket orders based on information from ctrip.com, an online travel service provider in China. According to the report, He Jinri, deputy director of the Department of Air Transportation of General Administration of Civil Aviation, said that if China Eastern is not allowed to fly the Kunming-Xishuangbanna route, there will be no other flights for two most popular tourist destinations in the province. About China Eastern Headquartered in Shanghai, China, China Eastern Airlines Corporation Limited's -- http://www.ce-air.com-- principal activity is operation of domestic and international commercial air transportation. The Group also is involved in the common aircraft industry. Other activities include general aviation, air catering, advertisement, import and export, equipment manufacturing, real estate, hotel business, finance and training. The fleet includes more than 60 large and medium size airplanes, Airbus and Boeing mostly. Its operation centering from Shanghai to the whole People's Republic of China and linking to Asia, Europe, America and Australia. * * * On April 28, 2006, Fitch Ratings downgraded China Eastern's foreign currency and local currency issuer default ratings to B+ from BB-. Fitch said the outlook on the IDRs is stable. Xinhua Far East China Ratings gave the company a BB+ issuer credit rating. CHINA SOUTHERN: First Capital Keeps "Prudent Buy" Rating -------------------------------------------------------- Chinese broker First Capital has kept the rating for China Southern Airlines Co. Limited at "prudent buy" with a target A- share price of CNY17.6, Xinhua News reports. As reported by the Troubled Company Reporter-Asia Pacific on April 22, 2008, China Southern Airlines's net profit for the first quarter ended March 31, 2008, reached to RMB796 million or earnings of RMB0.18 per share, against the RMB188 million net loss in the same period last year. According to Xinhua, First Capital attributed the exchange gain from constant appreciation of the Chinese currency as the reason for the airline's profit making in the first quarter. Meanwhile, the airline posted stable rise in transport volume and load factor boosted by the increased demand of aviation transport for the snow-disaster in China earlier this year, Xinhua relates. The broker, Xinhua says, deemed that constant high domestic jet fuel price is the largest risk for China Southern, however, it pointed out that considering the big inflation pressure in China, it is unlikely that the country's economic planner will raise jet fuel price in short term. First Capital predicted that the EPS of China Southern will stay at CNY0.88, and P/E ratio at 20 in 2008, Xinhua adds. About China Southern Headquartered in Guangzhou, China, China Southern Airlines Co. Ltd. -- http://www.cs-air.com-- engages in the operation of airlines, as well as in aircraft maintenance and air catering operations in the People's Republic of China and internationally. It provides commercial airlines, cargo services, logistics operations, air catering, utility service, hotel operation, travel services, aircraft leasing, and Internet services. * * * As reported in the Troubled Company Reporter-Asia Pacific on March 3, 2008, Fitch Ratings affirmed China Southern Airlines Co. Ltd.'s Long-term Foreign Currency and Local Currency Issuer Default Ratings at 'B+'. The Outlook on the ratings is Stable. DANA CORP: Ad Hoc Panel Wants Court Nod on US$3.5 Mil. Legal Fee ---------------------------------------------------------------- The Ad Hoc Committee of Dana Corp. noteholders asks the U.S. Bankruptcy Court for the Southern District of New York to allow as administrative expenses the US$3,568,768 in professional fees and expenses of its counsel, Stroock & Stroock & Lavan LLP, for services rendered from March 3, 2006, through Feb. 29, 2008, pursuant to Section 503(b) of the Bankruptcy Code. The Ad Hoc Committee has been a guiding presence from start to finish, acting as the voice for creditors holding in excess of US$1.4 billion of claims, representing more than two-thirds of the total allowed claims in the general unsecured class, Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, in New York, says. Additionally, Mr. Hansen says, the Ad Hoc Committee played an integral role in: * the consensual negotiation and approval of, the Interim and Final Orders Establishing Notice and Hearing Procedures for Trading in Claims and Equity Securities; * the consensual negotiation and resolution of the Debtors' executive compensation program; * negotiating and brokering significant aspects of the Global Settlement that served as the cornerstone of the Debtors' Plan of Reorganization; * the negotiation of the Disclosure Statement and Plan itself, as well as the Plan structure; * negotiating the B-2 Backstop Commitment Letter in connection with the Debtors' issuance of New Series B Preferred Stock; and * providing a substantial amount of the financing required to implement the Plan in the form of the subscription to and purchases by members of the Ad Hoc Committee of New Series B Preferred Stock. Absent the Ad Hoc Committee's efforts to build consensus and facilitate the progress of the Debtors' Chapter 11 Cases, the Debtors' reorganization would have faced significant delays and might have been jeopardized altogether, Mr. Hansen avers. Reorganized Debtors Support Request The Reorganized Debtors support the application of the Ad Hoc Committee for payment of US$3,568,768 in fees and expenses to Stroock & Stroock, comprising: -- US$3,431,673 in fees incurred, -- US$112,094 in expenses incurred, and -- US$25,000 in fees and expenses to be incurred in connection with the preparation and prosecution of the Application. Corinne Ball, Esq., at Jones Day, in New York, says the Ad Hoc Committee has made substantial contributions to the Debtors' estate and should be reimbursed of fees and costs, citing that: * Certain of the Ad Hoc Committee members made an actual and substantial cash contribution of a significant portion of the US$540,000,000 invested for the purchase of New Series B Preferred Stock, without which the Debtors would have been unable to emerge from Chapter 11. * The Ad Hoc Committee served as a potential additional source of financing for the Debtors: -- The Ad Hoc Committee played a valuable role in helping to negotiate the Global Settlement with the Debtors' unions and other significant parties-in- interest, which helped pave the Debtors' path out of bankruptcy by allowing the Debtors to achieve savings with their unions while avoiding certain costs in claims and litigation. -- After the Global Settlement was approved by the Court, a subset of the Ad Hoc Committee agreed, on terms that were reasonably favorable to the Debtors, to commit to serve as the backstop for US$250,000,000 in financing needed by the Debtors. The execution of the B-2 Backstop Commitment Letter gave the Debtors increased certainty that they would obtain the funding they needed to emerge from bankruptcy. * The Ad Hoc Committee took an active role in facilitating and negotiating the Plan by being actively involved in negotiations with the Debtors, the Official Committee of Unsecured Creditors and Centerbridge Capital Partners L.P. regarding the contents of the Disclosure Statement and the Plan; and participated in the drafting of the Disclosure Statement and Plan. Ms. Ball points out the contributions made by the Ad Hoc Committee were unique and were generally not duplicative of the efforts of any other Court-appointed official committee, including the Creditors Committee. Centerbridge also supports the Application. The Debtors ask the Court to cap all fees and expenses related to the application and its prosecution at US$25,000. About Dana Corp. Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total assets and US$7,665,000,000 in total debts resulting in a total shareholders' deficit of US$534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 12, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's US$650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's US$1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. DANA CORP: Appaloosa Wants Court Nod on US$2.5MM Legal Fees ----------------------------------------------------------- Dana Corp. equity holder Appaloosa Management, L.P., seeks allowance of an administrative expense claim aggregating US$2,507,657, for professional fees and expenses incurred by its counsel, White & Case LLP, and US$454,017 in expert fees and expenses incurred by Blackstone Advisory Services, L.P., its financial advisor. J. Christopher Shore, Esq., at White & Case, LLP, in New York, says the application seeks recovery of the actual reasonable fees and expenses incurred by Appaloosa in making a substantial contribution in Dana Corp. and its debtor-affiliates' Chapter 11 cases. Mr. Shore says payment of the fees and expenses will compensate Appaloosa for its critical role in bringing about what were unquestionably material enhancements to the plan investment agreement, which ultimately became the cornerstone of the Debtors' now-confirmed Plan of Reorganization. He contends that without Appaloosa's willingness to incur the material costs of retaining attorneys and financial advisors who challenged the material shortcomings of the sequential proposals made by Centerbridge Capital Partners L.P., the creditors of the Debtors would have received significantly less in the Chapter 11 cases. Mr. Shore says that several judges in the U.S. Bankruptcy Court for the Southern District of New York noted that the success of large multi-faceted bankruptcy cases -- cases in which one set of management, attorneys and committees are representing divergent interests -- often depends on the willingness of individual stakeholders to step forward, thoroughly examine the issues, and, if warranted, press for relief, even when those contributions cause the incurrence of material fees and expenses. For that reason, Appaloosa should be reimbursed, he asserts. Objections (1) U.S. Trustee Diana G. Adams, the United States Trustee for Region 2, says Appaloosa has not met its burden of proof or persuasion for receipt of a "substantial contribution" award. "Appaloosa is, in essence, a losing bidder in an equity investment of the Debtors who stands in sharp contrast to Centerbridge," she says. After an openly protracted involvement, Appaloosa did not end up entering into an investment agreement with the Debtors, which the Debtors eventually entered into with Centerbridge. The U.S. Trustee adds that Appaloosa, which pursued membership on the Official Committee of Equity Security Holders only to resign six months later and then unsuccessfully pursue an investment opportunity in the Reorganized Debtors, has not overcome the presumption that it acted for its own interest. Furthermore, even if the Court were to find that Appaloosa has made a substantial contribution, Appaloosa cannot be reimbursed for the financial advisory fees and expenses incurred by Blackstone Advisory Services, L.P., its financial advisors, as there is no statutory basis under Sections 503(b)(3)(D) and (b)(4) of the Bankruptcy Code, which expressly limit their benefits to only "attorneys and accountants," Ms. Adams avers. (2) Ad Hoc Committee The Ad Hoc Committee of Noteholders opposes assertions by Appaloosa that it has made a substantial contribution to the Debtors' bankruptcy cases because: * Appaloosa's actions did not result in a direct monetary benefit to the Debtors' estate; * Appaloosa's actions did not cause the significant improvements to the Centerbridge Investment, which it claims to have been a response to its proposals; and * Appaloosa's actions did not result in an increased recovery for unsecured creditors. The Ad Hoc Committee further asserts that Appaloosa is not entitled to a substantial contribution award for acting in its own interest as an unsuccessful bidder. Courts have consistently held that a prospective bidder, by definition, acts in its own economic interest and any incidental benefit to the estate resulting from its bids does not rise to the level of a "substantial contribution" within the meaning of Section 503(b), the Ad Hoc Committee notes. About Dana Corp. Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed US$7,131,000,000 in total assets and US$7,665,000,000 in total debts resulting in a total shareholders' deficit of US$534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 12, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's US$650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's US$1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. DELPHI CORP: March 31 Balance Sheet Upside-Down by US$14 Billion ---------------------------------------------------------------- Delphi Corp. and its debtor-affiliates reported first quarter 2008 financial results ended March 31, 2008. At March 31, 2008, the company's balance sheet showed total assets of US$14.2 billion, and total liabilities of US$28.1 billion, resulting in a US$14.0 billion stockholders' deficit. The company reported revenues of US$5.3 billion, and a net loss of US$589 million. First Quarter Financial Results * Global Revenue: Revenue of US$5.3 billion, down from US$5.7 billion in Q1 2007. * Non-GM Revenue: Non-GM revenue for the quarter was US$3.6 billion, up from US$3.5 billion in Q1 2007, primarily attributable to the favorable impact of foreign currency exchange rates. Excluding the impact of foreign currency exchange rates, non-GM revenue decreased 4%. Non- GM business represented 69 percent of Q1 revenues, compared to year-ago levels of 62 percent, primarily due to decreases in GM North America volume of 18 percent, which includes the impact related to a work stoppage at a Tier 1 supplier to GM, and contractual price reductions. * Cash Flow: Cash flow used in operating activities was US$290 million, as compared to US$414 million used in operating activities for Q1 2007. Cash used in operations was improved in Q1 2008 compared to Q1 2007 due to a net reduction in U.S. employee workforce transition program payments of US$146 million. * Net Loss: Net loss of US$589 million, or US$1.04 per share compared to Q1 2007 net loss of US$533 million. Included in the Q1 2008 net loss is US$79 million of reorganization expenses for previously capitalized Equity Purchase and Commitment Agreement fees expensed as a result of the EPCA termination. Additionally, Delphi's financial results were further impacted by increased workforce transition program charges of approximately US$42 million. * Liquidity: With the extension and refinancing of the DIP Credit Facility and availability of advances from GM, Delphi believes it will continue to have adequate access to liquidity throughout 2008. As of March 31, 2008, Delphi had liquidity of US$1.8 billion, comprised of cash, cash equivalents and available liquidity under the prior DIP credit facility. Pension Funding Matters Delphi reaffirmed its commitment to funding and freezing at emergence its U.S. Hourly and Salaried Pension Plans. Delphi expects to be able to meet its pension funding strategy through a combination of cash contributions and transfers of certain unfunded pension liabilities to a plan sponsored by GM, without the benefit of the previously issued pension funding waivers. Accordingly, Delphi has not applied to the IRS or PBGC to extend such waivers. "The relatively favorable funded position of the Delphi plans as of the Oct. 1, 2007 valuation date triggered a technical ERISA contribution limit that determines the required emergence contribution for the current plan year," John Sheehan, Delphi vice president and chief restructuring officer, said. "Achieving this limit means we no longer need the waivers to efficiently effect the transfer of certain liabilities to GM," he said. "We appreciate the constructive support of the IRS and PBGC that we have received throughout our Chapter 11 proceedings and look forward to the continued support of these agencies as Delphi seeks to meet its commitment to fund its pension plans at emergence," added Mr. Sheehan. DIP Facility Refinancing and Extension Delphi also disclosed the refinancing and extension of the terms of its Debtor-In-Possession Credit Facility to Dec. 31, 2008. Based on positive DIP lender participation and subject to approval by the U.S. Bankruptcy Court for the Southern District of New York, Delphi will increase the requested capacity of its DIP Credit Facility from the previously announced US$4.1 billion to US$4.35 billion, providing the company with US$250 million in additional liquidity. In addition, Delphi stated that GM has agreed to advance amounts anticipated to be paid to Delphi upon the effectiveness of the GM settlement and restructuring agreements. These actions provide the company with sufficient liquidity to support the ongoing implementation of Delphi's transformation plan. Delphi Corporation, et al. Unaudited Consolidated Balance Sheet As of March 31, 2008 (In Millions) ASSETS Current assets: Cash and cash equivalents US$1,310 Restricted cash 175 Accounts receivable, net: General Motors and affiliates 1,226 Other third parties 2,991 Inventories, net: Productive material 1,341 Finished goods 503 Other current assets 592 Assets held for sale 655 -------- Total current assets 8,793 Long-term assets: Property, net 3,820 Investments in affiliates 387 Goodwill 406 Other 798 -------- Total long-term assets 5,411 -------- Total assets US$14,204 ======== LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities not subject to compromise: Current portion of long-term debt US$4,212 Accounts payable 2,960 Accrued liabilities 2,401 Liabilities held for sale 426 -------- Total current liabilities not subject to compromise 9,999 -------- Long-term liabilities not subject to compromise: Other long-term debt 62 Employee benefit plan obligations and other 475 Other 1,201 Liabilities subject to compromise 16,363 -------- Total liabilities 28,100 -------- Commitments and comtingencies 164 Stockholders' deficit: Total stockholders' deficit (14,060) -------- Total liabilities and stockholders' deficit US$14,204 ======== Delphi Corporation, et al. Unaudited Consolidated Statement of Operations Three Months Ended March 31, 2008 (In Millions) Net sales: General Motors and affiliates US$1,641 Other customers 3,611 -------- Total net sales 5,252 Operating expenses: Cost of sales 4,897 U.S. employee workforce transition program charges 36 Depreciation and amortization 222 Selling, general and administrative 364 -------- Total operating expenses 5,519 -------- Operating loss (267) Interest expense (contractual interest expense was US$129 million and US$124 million, respectively) (110) Other income, net 19 Reorganization items, net (109) Income tax expense (63) Minority interest, net of tax (11) Equity income, net of tax 11 -------- Loss from continuing operations before discontinued operations, net of tax (530) -------- Loss from discontinued operations, net of tax (59) -------- Net loss (US$589) ======== Delphi Corporation, et al. Unaudited Consolidated Statement of Cash Flows Three Months Ended March 31, 2008 (In Millions) Cash flows from operating activities: Net cash used in operating activities (US$290) Cash flows from investing activities: Capital expenditures (255) Proceeds from sale of property 21 Proceeds from sale of non-U.S. trade bank notes 62 Proceeds from divestitures, net 87 Increse in restricted cash (2) Other, net 3 Discontinued operations (70) -------- Net cash used in investing activities (154) -------- Cash flows from financing activities: Net borrowings under refinanced DIP facility 452 Net borrowings under other debt arrangements 210 Divident payments of consolidated affiliates (7) Discontinued operations 11 -------- Net cash provided by financing activities 666 -------- Effect of exchange rate fluctuations 52 Decrease in cash and cash equivalents 274 Cash and cash equivalents at beginning of period 1,036 -------- Cash and cash equivalents at end of period US$1,310 ======== A full-text copy of Delphi's first quarter results is available for free at http://ResearchArchives.com/t/s?2bc1 About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company and its subsidiaries, including Delphi China LLC and Delphi Automotive Systems Thailand, Inc., filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and US$23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 128; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) HAINAN AIRLINES: To Offer Beijing-Berlin Flight in September ------------------------------------------------------------ Hainan Airlines Co. Limited will offer direct flights between Beijing and Berlin starting on September 5, Xinhua News reports, citing Hainan and Berlin airport authorities. According to the report, Hainan Airlines will offer four nonstop flights a week between the two capital cities using Airbus A330- 200 aircraft. Berlin will then become the fourth German city to have direct flights to China, after Frankfurt, Munich and Dusseldorf. The report relates that Zhao Bin, the Chinese minister counselor to Germany, said the launch of the new route will help expand economic, cultural and tourism cooperation between China and Germany, and will contribute to the friendly cooperation between their capital cities. About Hainan Airlines Based in Haikou, Hainan Province, the People's Republic of China, Hainan Airlines Co., Ltd. -- http://www.hnair.com/-- is an airline company that operates nearly 500 domestic routes in more than 80 major cities. It also provides scheduled and non- scheduled international flights from Hainan Province to Southeast Asia and other Asian countries. The airline currently holds Xinhua Far East China Rating's CC issuer credit rating that was placed on October 31, 2005. ================ H O N G K O N G ================ CHINASAILS DEV'T: Members' Final Meeting Set for June 6 ------------------------------------------------------- Members of Chinasails Development Company Limited will have their final general meeting on June 6, 2008, at Yardley Commercial Building, Room A, 8th Floor, 3 Connaught Road West, Sheung Wan, in Hong Kong to hear the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Fan Wai Yuen Yardley Commercial Building Room A, 8th Floor, 3 Connaught Road West Sheung Wan, Hong Kong DARRACOTT LIMITED: Members' Final Meeting Set for June 6 ------------------------------------------------------- Members of Daracott Limited will have their final general meeting on June 6, 2008, at China Insurance Group Building, Room 1101, 11th Floor, 141 Des Voeux Road Central, in Hong Kong to hear the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Chan Wai Chun, Heather China Insurance Group Building, Room 1101, 11th Floor 141 Des Voeux Road Central Hong Kong HIP YICK: Creditors' Proofs of Debt Due June 4 ---------------------------------------------- Creditors of Hip Yick Company Limited are required to file their proofs of debt by June 4, 2008, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 28, 2008. The company's liquidator is: Au Yan, Alfred Hang Wai Commercial Building, 24th Floor 231-233 Queen's Road East, Wanchai Hong Kong HONG KONG STEEL: Commences Liquidation Proceedings -------------------------------------------------- Hong Kong Steel Traders Association Limited's members agreed on April 21, 2008, to voluntarily liquidate the company's business. The company has appointed Au Chun Keung to facilitate the sale of its assets. The liquidator can be reached at: Au Chun Keung Village Gardens, Flat B, 14th Floor 17 Fa Po Street, Yau Yat Chuen KOwloon, Hong Kong KAI WING: Creditors' Proofs of Debt Due June 4 ---------------------------------------------- Creditors of Kai Wing Estates Limited are required to file their proofs of debt by June 4, 2008, to be included in the company's dividend distribution. The company commenced liquidation proceedings on April 21, 2008. The company's liquidators are: Lai Ching Wong Yu Lau Chow San Building, 1st Floor 229 Nathan Road, Kowloon Hong Kong LANDWIDE DEV'T: Liquidators Quit Post ------------------------------------- On April 18, 2008, Tam Chun Wan and Tse Chiang Kwok, Nassar stepped down as liquidator for Landwide Development Company Limited. MOLD-TECH: Liquidators Quit Post -------------------------------- On May 2, 2008, Natjalia Seng Sze Ka Mee and Cynthia Wong Tak Yee stepped down as liquidator for Mold-Tech Limited. OCEANIC PROPERTY: Members' Final Meeting Set for June 6 ------------------------------------------------------- Members of Ocenaic Property and Investments Limited will have their final general meeting on June 6, 2008, at 1403 Dominion Centre, 43 Queen's Road East, in Hong Kong to hear the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Charles Fearn 403 Dominion Centre 43 Queen's Road East Hong Kong SKYNET LIMITED: Commences Liquidation Proceedings -------------------------------------------------- Skynet Limited's members agreed on April 21, 2008, to voluntarily liquidate the company's business. The company has appointed Au Chun Keung to facilitate the sale of its assets. The liquidator can be reached at: Ho Wau IP World Wide House, 19th Floor 19 Des Voeux Road Central Hong Kong ========= I N D I A ========= BHARTI AIRTEL: Discussion With MTN Group Cues Fitch Rating Watch ---------------------------------------------------------------- Fitch Ratings has commented that it will monitor closely the disclosure by Bharti Airtel Limited (Bharti, 'BB+'/Stable) that it is in discussion with the shareholders of South Africa-based telecommunications company, MTN Group Limited (MTN, National Long-term rating 'A+(zaf)'/Stable), regarding the potential acquisition of a stake in the latter. Fitch understands that the discussions are at a preliminary stage and that Bharti has not yet made any commitment to purchase a stake in MTN. However, in the event that Bharti does end up successfully acquiring a major stake in MTN, then depending on the extent of debt financing used to fund the acquisition, Fitch cautions that its ratings could come under downward pressure. Given the early stages of the discussions, the likelihood of other competitive bids being placed, and the associated uncertainties surrounding any investment in MTN or its terms, Fitch has refrained from taking any formal rating action at this stage. The agency is monitoring this situation and would take rating action as warranted by any developments. Should the discussions currently underway lead to Bharti acquiring a stake in MTN, Fitch would consider the investment involved, the financing structure and the level of cash flows from MTN that would support any incremental debt assumed by Bharti for the transaction prior to reviewing its ratings. South Africa-based MTN is one of the largest global system for mobile communications operators in Africa and the Middle East by number of subscribers. At end-December 2007, it had 61 million subscribers across 16 African countries, 5 countries in the Middle East and operations in Cyprus. MTN is also listed on the JSE Limited. Currently, 63.7% of MTN's shareholding structure is free float, with the largest individual shareholders being Public Investment Corporation (13.5%), Newshelf 664 Limited(13.0%), and M1 Limited (9.8%). Headquartered in New Delhi, India, -- Bharti Airtel Limited's -- http://www.bhartiairtel.in-- is a telecom services provider. The company has three business units: Mobile Services, Broadband & Telephone Services and Enterprise Services. ========= J A P A N ========= ATARI INC: Asks Nasdaq to Review Move to Delist Securities ---------------------------------------------------------- Atari Inc. plans to request a review from the Nasdaq Listing and Hearing Review Council, which could alter or dismiss the Nasdaq Listing Qualifications Panel's determination to delist Atari Inc.'s securities from the Nasdaq Global Market and to suspend trading of Atari Inc.'s shares effective May 9, 2008. On May 7, 2008, Atari Inc. received a letter from The Nasdaq Stock Market stating the Panel's action on Atari Inc.'s securities. The request for review will not delay the suspension of trading. Atari Inc. expects to be quoted on the Pink Sheets, an electronic quotation service maintained by Pink Sheets LLC. The Pink Sheets allow continued trading of securities of delisted companies. Atari Inc. expects its common stock to be traded on the Pink Sheets under the symbol "ATAR" or "ATAR.PK". Atari Inc.'s common stock may also be quoted on the OTC Bulletin Board(R), a regulated quotation service for over-the-counter securities, provided one or more market makers apply to quote Atari Inc.'s securities. On Dec. 21, 2007, the Nasdaq Listing Qualifications Department notified Atari Inc. that, pursuant to Nasdaq Marketplace Rule 4450(e)(1), unless the market value of Atari Inc.'s publicly held shares maintained an aggregate market value of US$15 million or more for a minimum of 10 consecutive business days prior to March 20, 2008, Atari Inc.'s securities would be subject to delisting. The value of Atari Inc.'s publicly held shares did not reach that level within the required period, and on March 24, 2008, the Nasdaq Listing notified Atari Inc. that the Nasdaq Staff had determined that Atari Inc.'s securities were subject to delisting unless Atari Inc. requested a hearing before a Nasdaq Listing Qualifications Panel. Atari Inc. requested a hearing on March 27, 2008, which stayed the delisting process until the hearing was held and the hearings panel delivered a decision. The hearing was held on May 1, 2008. The Nasdaq hearings panel thereafter ruled to proceed with the delisting process and, effective May 9, 2008, Atari Inc.'s common stock will no longer trade on The Nasdaq Global Market. Atari Inc. plans to request that the Nasdaq Listing and Hearing Review Council review the Nasdaq hearings panel decision. Atari Inc. relates that its delisting from The Nasdaq Stock Market will not affect the pending merger transaction with its majority shareholder Infogrames Entertainment S.A. Infogrames holds approximately 51.4% of Atari Inc.'s common shares. About Atari Inc. Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) -- http://www.atari.com/-- publishes and distributes interactive entertainment software in the U.S. The company's 1,000+ published titles distributed by the company include hard-core, genre-defining franchises such as Test Drive(R); and mass-market and children's franchises such Dragon Ball Z(R). Atari Inc. is a majority-owned subsidiary of France- based Infogrames Entertainment SA, an interactive games publisher in Europe. Atari has offices in Brazil, the United Kingdom and Japan. Going Concern Doubt New York-based Deloitte & Touche LLP expressed substantial doubt about Atari's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's significant operating losses. As disclosed on March 21, 2008, the forbearance period granted by BlueBay High Yield Investments (Luxembourg) S.A.R.L., the lender under Atari's senior secured credit facility, has expired and Atari is currently in discussions with BlueBay with respect to, among other things, an extension of the forbearance period. As reported in the Troubled Company Reporter on Feb. 20, 2008, Atari Inc.'s consolidated balance sheet at Dec. 31, 2007, showed US$43.5 million in total assets and US$60.3 million in total liabilities, resulting in a US$16.8 million total stockholders' deficit. ATARI INC: Gets US$20 Million Loan from Infogrames Entertainment ---------------------------------------------------------------- Atari Inc. and Infogrames Entertainment, S.A. entered into a credit agreement, under which IESA committed to provide up to US$20 million in loan availability at an interest rate equal to the applicable LIBOR rate plus 7% per year, subject to the terms and conditions of the IESA Credit Agreement, in connection with both parties' proposed US$11 billion merger agreement reported in the Troubled Company Reporter on May 6, 2008. Atari will use borrowings under the New Financing Facility to fund its operational cash requirements during the period between the date of the Merger Agreement and the closing of the merger. The obligations under the New Financing Facility are secured by liens on substantially all of our present and future assets, including accounts receivable, inventory, general intangibles, fixtures, and equipment. Atari has agreed that it will make monthly prepayments on amounts borrowed under the New Financing Facility of its excess cash. Atari will not be able to reborrow any loan amounts paid back under the New Financing Facility other than loan amounts prepaid from excess cash. Also, the Company is required to deliver to IESA a budget, which is subject to approval by IESA in its commercially reasonable discretion, and which shall be supplemented from time to time. A full-text copy of the IESA Credit Agreement is available for free at http://ResearchArchives.com/t/s?2bb6 Intercreditor Agreement Under an intercreditor agreement among IESA, BlueBay High Yield Investments (Luxembourg) S.A.R.L. and Atari, IESA has agreed that for so long as obligations under the Existing Credit Facility are not discharged, it will: i) not seek to exercise any rights or remedies with respect to the shared collateral for a period of 270 days (provided that, in any event, IESA may not exercise such rights or remedies while BlueBay is exercising its rights and remedies as to the collateral), ii) not take action to hinder the exercise of remedies under the BlueBay Credit Facility, and iii) waive any rights as a junior lien creditor to object to the manner in which BlueBay may enforce or collect obligations under the BlueBay Credit Facility. A full-text copy of the Intercreditor Agreement is available for free at http://ResearchArchives.com/t/s?2bb7 Waiver, Consent and Fourth Amendment The company is party to a credit agreement, dated as of Nov. 3, 2006, and amended on Oct. 23, 2007, further amended on Nov. 6, 2007, and further amended on Dec. 4, 2007, with its lenders, relating to an asset-based secured credit facility consisting of a revolving line of credit in an amount up to US$14 million. In order to permit the signing of the merger agreement and the establishment of the new financing facility with IESA, the company entered into a waiver, consent and fourth amendment to the existing credit facility under which, among other things: i) BlueBay agreed to waive the company's non-compliance with certain representations and covenants under the credit agreement, ii) BlueBay agreed to consent to the company's entering into the new credit facility with IESA, iii) BlueBay agreed to consent to the Company's entering into the Merger Agreement with IESA, and iv) BlueBay and the company agreed to certain amendments to the existing credit facility with respect to the intercreditor agreement referenced above regarding the parties' respective security interests in the company's assets, the company's operational covenants and events of default. A full-text copy of the Waiver, Consent and Fourth Amendment to credit Agreement is available for free at http://ResearchArchives.com/t/s?2bb8 About Atari Inc. Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) -- http://www.atari.com/-- publishes and distributes interactive entertainment software in the U.S. The company's 1,000+ published titles distributed by the company include hard-core, genre-defining franchises such as Test Drive(R); and mass-market and children's franchises such Dragon Ball Z(R). Atari Inc. is a majority-owned subsidiary of France- based Infogrames Entertainment SA, an interactive games publisher in Europe. Atari has offices in Brazil, the United Kingdom and Japan. Going Concern Doubt New York-based Deloitte & Touche LLP expressed substantial doubt about Atari's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's significant operating losses. As disclosed on March 21, 2008, the forbearance period granted by BlueBay High Yield Investments (Luxembourg) S.A.R.L., the lender under Atari's senior secured credit facility, has expired and Atari is currently in discussions with BlueBay with respect to, among other things, an extension of the forbearance period. As reported in the Troubled Company Reporter on Feb. 20, 2008, Atari Inc.'s consolidated balance sheet at Dec. 31, 2007, showed US$43.5 million in total assets and US$60.3 million in total liabilities, resulting in a US$16.8 million total stockholders' deficit. * * * As reported in the Troubled Company Reporter on March 28, 2008, Atari Inc. received a Staff Determination Letter from the Nasdaq Listing Qualifications Department stating that Atari Inc. has not gained compliance with the requirements of Nasdaq Marketplace Rule 4450(b)(3), and that its securities are therefore subject to delisting from The Nasdaq Global Market. On Dec. 21, 2007, the Nasdaq Listing Qualifications Department notified Atari Inc. that, pursuant to Nasdaq Marketplace Rule 4450(e)(1), unless the market value of Atari Inc.'s publicly held shares, which is calculated by reference to Atari Inc.'s total shares outstanding, less any shares held by officers, directors or beneficial owners of 10% or more, maintains an aggregate market value of US$15 million or more for a minimum of 10 consecutive business days prior to March 20, 2008, Atari Inc.'s securities would be subject to delisting. JVC CORP: To Integrate Operations With Kenwood on Oct. 1 -------------------------------------------------------- Victor Co. of Japan aka JVC Corp. agreed to integrate its operations with Kenwood Corp. through a joint holding company, Jiji Press reports. According to the report, the transaction, which is set to occur on Oct. 1, 2008, will be capitalized at JPY10 billion. Each JVC share will be exchanged for two shares in the holding company, while each Kenwood share will be swapped for one share in the holding firm. Jiji Press relates that the holding firm aims to achieve group sales of JPY830 billion in the year ending in March 2011, against combined sales of JPY823.7 billion at JVC and Kenwood for the year that ended in March. Operating profit is targeted at JPY39 billion, compared with JPY9.6 billion. The holding firm will be known as JVC Kenwood Holdings Inc. and Kenwood Chairman Haruo Kawahara will become its chairman while JVC President Kunihiko Sato will be its president. About JVC Corp. Headquartered in Kanagawa Prefecture, Japan, Victor Company of Japan, Limited (JVC) -- http://www.jvc-victor.co.jp/-- is primarily engaged in the manufacture and sale of audiovisual (AV) equipment, information and communications equipment, electronic products and others. The Company has five business segments. The Consumer Equipment segment offers various types of televisions, digital video cameras, car audio systems, as well as players and related equipment for video, mini disc (MD), compact disc (CD) and digital versatile disc (DVD) systems. The Industrial Equipment provides visual inspection devices, audio and video equipment, as well as projectors. The Electronic Devices segment offers monitors, optical pickups, high density buildups, multilayer boards and display parts. The Software and Media segment provides music and visual software and recording media. The Others segment is engaged in businesses related to interior furniture and production facilities. It has 96 subsidiaries and seven associated companies. * * * JVC incurred three consecutive annual net losses: JPY7.89 billion for the fiscal year ended March 31, 2007; JPY30.61 billion for the fiscal year ended March 31, 2006; and JPY1.86 billion for the fiscal year ended March 31, 2005. NIS GROUP: JCR Holds BB Rating, Revises Outlook to Negative ----------------------------------------------------------- Japan Credit Rating Agency Ltd. has affirmed its BB and preliminary BB rating on senior debts and shelf registration of NIS Group Co., Ltd. while revising rating outlook from Stable to Negative. Similarly, JCR has affirmed its BB rating on senior debts of Nissin Servicer Co. Ltd., revising the rating outlook from Stable to Negative. NIS Group Shelf Registration: Maximum: JPY100 billion Valid: two years effective from Dec. 3, 2007 JCR stated that NIS Group revised downwards the forecasts for operating performance for FY2007 ended March 31, 2008. Although NIS Group's net assets will lower than originally forecasted due to the expanded net loss, NIS Group is estimated to have secured net assets amounting about JPY58 billion (as of the end of March 2008 (20% capital to total assets ratio). According to the rating agency, the write-downs on inventory and additional loan loss provisions made the Company's financial risk derived from weakened real estate and stock markets smaller. JCR gave the Company high marks for the increased capital through issue of common stock for JPY20 billion in February this year, the undertakings towards business selection and concentration and also enhancement of governance based on the "management reform program", lowered proportion of consumer finance business to the entire business portfolio and the fact that loss on consumers' claims for refunds of excess interest payments has been limited to the assumptions as supporting factors for the rating for the Company. On the other hand, JCR said changes in lending postures of financial institutions and realization of the growth strategy over the medium term will depend on external environment to a large degree. There are constraints on the rating with respect to these factors. Although risk of deterioration in asset quality was reduced, downward pressures are being put on medium- term business plan and profitability of the real estate related business, which is one of the core businesses for the Company. JCR revised rating outlook for the Company from Stable to Negative, based on the fact that JCR will have to pay more attention to the above. Similarly, JCR revised rating outlook for Nissin Servicer, which has strong unity with the Company in human affairs and fundraising. NISSIN SERVICER: JCR Holds BB Rating, Revises Outlook to Neg. ------------------------------------------------------------- Japan Credit Rating Agency Ltd. has affirmed its BB and preliminary BB rating on senior debts and shelf registration of NIS Group Co., Ltd. while revising rating outlook from Stable to Negative. Similarly, JCR has affirmed its BB rating on senior debts of Nissin Servicer Co. Ltd., revising the rating outlook from Stable to Negative. NIS Group Shelf Registration: Maximum: JPY100 billion Valid: two years effective from Dec. 3, 2007 JCR stated that NIS Group revised downwards the forecasts for operating performance for FY2007 ended March 31, 2008. Although NIS Group's net assets will lower than originally forecasted due to the expanded net loss, NIS Group is estimated to have secured net assets amounting about JPY58 billion (as of the end of March 2008 (20% capital to total assets ratio). According to the rating agency, the write-downs on inventory and additional loan loss provisions made the Company's financial risk derived from weakened real estate and stock markets smaller. JCR gave the Company high marks for the increased capital through issue of common stock for JPY20 billion in February this year, the undertakings towards business selection and concentration and also enhancement of governance based on the "management reform program", lowered proportion of consumer finance business to the entire business portfolio and the fact that loss on consumers' claims for refunds of excess interest payments has been limited to the assumptions as supporting factors for the rating for the Company. On the other hand, JCR said changes in lending postures of financial institutions and realization of the growth strategy over the medium term will depend on external environment to a large degree. There are constraints on the rating with respect to these factors. Although risk of deterioration in asset quality was reduced, downward pressures are being put on medium- term business plan and profitability of the real estate related business, which is one of the core businesses for the Company. JCR revised rating outlook for the Company from Stable to Negative, based on the fact that JCR will have to pay more attention to the above. Similarly, JCR revised rating outlook for Nissin Servicer, which has strong unity with the Company in human affairs and fundraising. =============== M A L A Y S I A =============== KOSMO TECHNOLOGY: Unable to Provide Solvency Declaration -------------------------------------------------------- Kosmo Technology Industrial Berhad has been considered as an Affected Listed Issuer under Practice Note No. 17/2005 of the Bursa Malaysia Securities Berhad as the company was unable to provide a solvency declaration. The company is currently encountering cash flow problems and has been unable to meet its obligations in payment of loans and to creditors. A notice of demand has been issued to Kosmo by Zul Rafique & Partners for and on behalf of CapOne Berhad and Malaysian Trustees Berhad for the repayment of the whole loan facility together with all interest payable amounting to MYR52,029,322. Morover, Kosmo was unable to service the interest payment due and payable resulting in a situation of default under the Facility Agreement dated September 9, 2005. The default also gave rise to a possible recall of the loan facility amounting to MYR30 million granted by RHB Investment Bank Berhad pursuant to their Facility Agreement dated Jan 8, 2007. Both the loan facilities are unsecured term loan facilities. Kosmo is planning to embark on a debt restruct