/raid1/www/Hosts/bankrupt/TCRAP_Public/080807.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, August 7, 2008, Vol. 11, No. 156
Headlines
A U S T R A L I A
ABC LEARNING: Completes Board Restructuring
ADELAIDE TIMBER: To Declare Dividend on August 11
BIG DOG: Members' Final Meeting Set for August 11
BILL EXPRESS: Creditors May Sue Former Auditors
CELLSITES OPERATIONS: Members and Creditors to Meet on August 11
CHALLENGER INFRASTRUCTURE: UK-Based Investor Take Court Action
DJ POOL: Members and Creditors to Meet on August 8
DUALEDGE PTY: Liquidator to Present Wind-Up Report on August 12
GR 8 PUB: Liquidator to Give Wind-Up Report on August 8
LANDRO PTY: Placed Under Voluntary Liquidation
MELBOURNE FURNITURE: Members and Creditors to Meet on August 11
NHLC PTY: Members and Creditors to Meet on August 12
RMR (WA): Members and Creditors to Meet on August 8
W.Y. MAITLAND: Placed Under Voluntary Liquidation
WORSLEY TIMBER: To Declare Dividend on August 12
* AUSTRALIA: Business Confidence Falls in June Quarter
C H I N A
ICBC: Gets OK From Federal Reserve to Set Up New York Branch
JIANGXI COPPER: Faces Low Demand from Appliance Makers
XINHUA FINANCE: To Release 1H08 Financial Results on August 28
ZTE CORP: Signs Deal With KPN for Mobile Data Devices
I N D I A
GENERAL MOTORS: Board Backs CEO Rick Wagoner Amid 2nd Qtr. Loss
GENERAL MOTORS: S&P Lowers Rating on Classes A-1, A-2 Certs to B
GEN. MOTORS: S&P Cuts Freedom Certificates Classes A, X to 'B'
SIMBHAOLI SUGARS: Board OKs Issuance of 7,50,000 Equity Shares
I N D O N E S I A
BANK INT'L: Malaysia Central Bank May Let Maybank Bid for Stake
BERAU COAL: To Invest US$140MM to Boost Annual Coal Production
MERPATI NUSANTARA: To Lay Off 1, 500 Employees Than Buy Planes
PERTAMINA: Eyes Buying Medco Energi's Six Oil & Gas Blocks
MEDCO ENERGI: Pertamina Eyes Buying Six Oil & Gas Blocks
J A P A N
FORD MOTOR: S&P Cuts Ratings on 9 Transactions to CCC
FORD MOTOR: S&P Cuts Freedom Certificates Classes A, X to 'B'
JAPAN AIR: Sees JPY12-13MM Savings on Reduced Flights & Services
K O R E A
SSANGYONG MOTOR: Plant Shutdown to Cost Company KRW2.2 Trillion
* KOREA: Economic Downturn Due in Part to Sluggish Output
* KOREA: First Half Real Trade Loss Reaches KRW54.9 Trillion
* KOREA: Shipbuilders Facing Losses on Canceled Orders
N E W Z E A L A N D
ABBOTSLEIGH RETIREMENT: Court Appoints Liquidators
ASTRAL MANAGEMENT: Commences Liquidation Proceedings
BOTRY-ZEN: Production Difficulties May Affect Cash Flow
INNOVATIVE PROJECTS: Commences Liquidation Proceedings
MW2 LIMITED: Placed Under Liquidation
NORTHSPAN CONSTRUCTION: Placed Under Liquidation
QA VILLAGES: Commences Liquidation Proceedings
SAMSONS LTD: Commences Liquidation Proceedings
TWIN SPRINGS: Placed Under Liquidation
WAIMARIE INDUSTRIES: Commences Liquidation Proceedings
P H I L I P P I N E S
ABOITIZ TRANSPORT: 1st Half Net Profit Tumbles to Php16.8 Mil.
G7 BANK: Ordered Closed, Placed Under Receivership
UCPB: Moody's Comments on Bank's Recapitalization
* PHILIPPINES: Inflation Reaches 17-Year High to 12.2%
- - - - -
=================
A U S T R A L I A
=================
ABC LEARNING: Completes Board Restructuring
-------------------------------------------
ABC Learning Centres Limited disclosed it has completed the
restructuring of its Board. ABC will appoint the following
members to its Board as Non-Executive Directors with effect from
mid-September 2008.
* Paul Binsted, Chairman of Sydney Ports Corporation
and a former Investment Banker;
* Patrice Derrington, Director of Charter Hall Property
Trust, Urban Futures Board – Brisbane and Chairman of
Brisbane Inner City Advisory Committee;
* Frank Ford, Non-Executive Director of Toll Holdings
and former Managing Partner-Victoria of Deloitte
Australia;
* Andrew Hawkyard, Chief Operating Officer of Morgan
Stanley Private Equity Asia; and
* Colin Au, Chairman of the Ivy Group and Corporate
Advisor to Temasek Holdings.
Chairman, David Ryan said, "When I became Chairman of ABC
Learning Centres, I made commitment to restructure the Board to
ensure that we have the right mix of skills and experience to
support this company going forward. I am delighted that we have
attracted such high calibre talent in the five Non-Executive
Directors we have announced.
These appointments create a Board with strong and diverse
experience across business management, operations, accounting,
finance, corporate governance, investment banking, corporate
restructuring and strategic planning. Pleasingly a majority of
the new appointees have extensive Chief Executive Officer
experience in a wide range of fields.
Such a broad range of skills will enable ABC to populate its
Board committees with multiple members with skill sets directly
relevant to the business needs.
The new Board is well placed to advise and, guide the management
of ABC through the next stage of ABC's development as ABC
continues to deliver the highest quality early childhood
education and care and rebuilds shareholder value."
About ABC Learning
A.B.C. Learning Centres Limited (ASX: ABS) --
http://www.childcare.com.au/-- provides childcare services and
education. The company operates in Australia, New Zealand, the
United States and the United Kingdom. The company's
subsidiaries include A.B.C. Developmental Learning Centres Pty
Ltd, A.B.C. Early Childhood Training College Pty Ltd, Premier
Early Learning Centres Pty Ltd, A.B.C. Developmental Learning
Centres (NZ) Ltd., A.B.C. New Ideas Pty. Ltd., A.B.C. Land
Holdings (NZ) Limited and Child Care Centres Australia Ltd.
On September 25, 2006, the company acquired Hutchison Child Care
Services Ltd. On September 7, 2006, it acquired The Children's
Courtyard LLP. On December 18, 2006, it acquired Busy Bees
Group Ltd. On January 26, 2007, it acquired La Petite Holdings
Inc. On February 2, 2007, it acquired Forward Steps Holdings
Ltd. On March 23, 2007, it acquired Children's Gardens LLP. In
September 2007, the company purchased the Nursery division
(Leapfrog Nurseries) from Nord Anglia Education PLC.
* * *
As reported by the Troubled Company Reporter-Asia Pacific, the
company's Sydney trading on Feb. 26, 2008, plunged 43% after a
slump in earnings raised concerns it may struggle to repay debt.
The drop to AU$2.14 triggered margin calls on stakes held by
some directors. Consequently, stock trading was halted as the
company entered talks on "indications of interest" for parts of
its business. More than 96% of the remaining 21.9 million ABC
Learning shares owned by directors, equivalent to 4.6% of stock
outstanding, are held in margin lending arrangements that may
result in forced sales.
ADELAIDE TIMBER: To Declare Dividend on August 11
-------------------------------------------------
The Adelaide Timber Company Pty Ltd will declare dividend on
Aug. 11, 2008.
Only creditors who were able to file their proofs of claim by
July 31, 2008, were included in the company's dividend
distribution.
The company's liquidator is:
Geoffrey Frank Totterdell
Level 19, QV1
250 St George's Terrace
Perth WA 6000
Australia
BIG DOG: Members' Final Meeting Set for August 11
-------------------------------------------------
Matthew Jess, Big Dog Telecom Pty Ltd's state liquidator, will
meet with the company's members at 11:00 a.m. on Aug. 11, 2008,
to provide them with property disposal and winding-up reports.
The company's liquidator can be reached at:
Matthew Jess
Worrells Solvency & Forensic Accountants
Level 5, 15 Queen Street
Melbourne VIC 3000
Australia
Telephone: (03) 9613 5514
Facsimile: (03) 9614 3233
Website: http://www.worrells.net.au
BILL EXPRESS: Creditors May Sue Former Auditors
-----------------------------------------------
Creditors of Bill Express Ltd are considering legal action
against former auditors KPMG and Pitcher Partners for signing
the accounts of the company, Mark Hawthorne of The Sydney
Morning Herald reports.
According to an ANZ source cited by the Herald, the company's
main financiers, including ANZ and Debtsec, are considering "any
potential claim against the auditors" of Bill Express.
On Friday, Aug. 1, 2008, the report says, creditors of Bill
Express received a report from its administrator, PPB's Craig
Crosbie, into the company's financial records.
The document, the report relates, also confirmed the corporate
and regulatory watchdogs are both investigating Bill Express, as
is the Tax Office.
According to the Herald, PPB's report to creditors examined the
accounts of Bill Express and its relationship with the listed
holding company On Q and key supplier Technology Business
Systems (TBS). All worked from the same offices, and both On Q
and TBS are now in administration, the report adds.
The PPB report cited by the Herald found that:
(a) there is AU$50 million of Bill Express fixed
assets that either cannot be located or the
ownership is disputed;
(b) payments were made to TBS between December 2005
and last March, totalling AU$80 million, despite
Bill Express not being "contractually bound to
do so;"
(c) loans of AU$94 million made to associated entities
of Bill Express that are unlikely to be collected,
including AU$51 million owed by TBS and AU$22 million
by On Q;
(d) AU$16 million of assets purchased from TBS in
December 2003 that are not included in the
Bill Express asset register;
(e) a mystery AU$5.5 million alteration to Bill
Express's ledger accounts for "balancing loan
to statement" that was not approved by the
board; and
(f) AU$2.9 million paid to Bill Express Payments.
PPB, the report notes, will recommend Bill Express be put into
liquidation at the next creditors' meeting on August 12 - a move
that could open the door for legal action against, and public
questioning of, the past auditors.
In addition, the Herald relates, PPB's report to creditors
stated that KPMG "reviewed the six monthly accounts to
December 31, 2007, and concluded they were not aware of any
matters that would lead to the accounts not providing a true and
fair view of the group's financial position".
As reported in the Troubled Company Reporter-Asia Pacific on
July 10, 2008, Bill Express went into administration with
AU$180 million in debts after a subsidiary of Saudi-based Al
Othman Group withdrew its proposal for the recapitalization and
restructuring of the company. The proposal was to include a
substantial capital injection and new bank guarantees combined
with a restructuring of the existing liabilities of the company.
In addition, the Board and management of the company were to be
substantially restructured.
The company then initiated talks with its financiers and major
suppliers, whom it has standstill agreements until Aug. 22,
2008. The suppliers and financiers indicated that they are not
willing to continue the standstill arrangements or otherwise
support the company's continued trading.
About Bill Express
Bill Express Ltd. (ASX:BXP) -- http://www.billexpressltd.com/--
is engaged in the management and development of an electronic
distribution system for pre-paid products and services across in
excess of 14,000 locations around Australia, automated ordering,
delivery and inventory control for pre-paid services including
mobile, landline and Internet services. It also processes
payments for bills and services, including bills that are
presented for payment to its outlets across Australia. The
company has an in-store media, which is a network that promotes
Bill Express Limited's and other products at the point of sale
and in-store aisles.
CELLSITES OPERATIONS: Members and Creditors to Meet on August 11
----------------------------------------------------------------
Cellsites Operations (Australia) Pty Ltd will hold a final
meeting for its members and creditors at 10:30 a.m. on Aug. 11,
2008. During the meeting, the company's liquidator, R. W.
Whitton, will provide the attendees with property disposal and
winding-up reports.
The company's liquidator can be reached at:
R. W. Whitton
Lawler Partners
Level 9, 1 O'Connell Street
Sydney NSW 2000
Australia
Telephone: (02) 8346 6000
CHALLENGER INFRASTRUCTURE: UK-Based Investor Take Court Action
--------------------------------------------------------------
In a regulatory filing filed at the Australian Stock Exchange on
Aug. 5, 2008, Challenger Listed Investments Limited (CLIL)
disclosed that Arkmile Limited has commenced proceedings in the
Supreme Court of NSW against the CLIL, as responsible entity of
the Challenger Infrastructure Fund (CIF) in relation to the
meeting of CIF securityholders scheduled to be held on Aug. 28,
2008, to consider a resolution proposed by Arkmile for the
winding up of CIF.
The company said that Arkmile is seeking declarations and orders
from the Court which, if granted, would prevent CLIL, Challenger
Life No.2 Limited and Challenger Management Services Limited
from voting any securities they hold in CIF on the winding up
resolution.
Background to the Resolution
On July 8, 2008, CLIL disclosed that it has received a letter
from its second largest securityholder, Arkmile Limited, a
subsidiary of the UK-based Consensus Business, requesting to
convene a meeting of CIF members to consider and vote on a
resolution to wind up the Fund.
In accordance with the Corporations Act 2001 (Cth), CLIL has
convened a meeting of CIF securityholders to be held on
Thursday, Aug. 28, 2008, to consider the resolution.
According to CLIL, Arkmile initially invested in CIF in November
2006, acquiring 16.3% issued ordinary units. As a result of on-
market trading, Arkmile currently holds 18.4% of CIF's issued
ordinary units. Arkmile has additional interests of 7.7%
through contract differences.
In March 2008, Arkmile approached the CLIL Board with a highly
conditional, non-binding, and indicative proposal to acquire all
of the units in CIF.
The Board decided not to continue discussions with Arkmile
because, despite extensive discussions and correspondence, CLIL
had not, and did not expect, to receive a formal approach from
Arkmile in a form that was able to be put to securityholders.
Take Over Panel Application
In a press statement, The Takeovers Panel disclosed that it has
received an application from Challenger Listed Investments
Limited, as responsible entity of Challenger Infrastructure Fund
(CIF).
At April 18, 2008, Arkmile and its associates held approximately
18.57% of the securities in CIF and cash-settled equity
derivatives in relation to approximately 7.74%. Challenger
seeks a declaration of unacceptable circumstances on the bases
that the hedge securities held by the counterparty to the cash-
settled equity derivatives give Arkmile a combined holding of
more than 20% of CIF, and that disclosure of the combined
holding was deficient.
According the the Panel, Challenger seeks interim orders
including that, subject to final orders:
* Arkmile not increase its physical holding or
equity derivative interests in CIF securities and
* the hedge securities not be voted at the general
meeting or otherwise.
Challenger seeks final orders including that:
* the hedge securities be vested in ASIC and disposed
of to parties not associated with Arkmile in accordance
with a process approved by Challenger;
* if necessary, the general meeting be postponed until
the hedge securities have been sold; and
* Arkmile pay compensation to any CIF security holder
who has suffered loss as a result of the unacceptable
circumstances.
The Takeover Panel notes that a sitting Panel has not been
appointed at this stage and no decision has been made whether to
conduct proceedings. The Panel makes no comment on the merits
of the application.
About Challenger Infracture
Based in Sydney, Australia, The Challenger Infrastructure Fund
(ASX:CIF) -- http://www.challenger.com.au/-- is engaged in the
investment of funds in a diversified portfolio of global
infrastructure assets. On June 1, 2007, CIF acquired a 66%
interest in LBC Holdings LLC.
DJ POOL: Members and Creditors to Meet on August 8
--------------------------------------------------
DJ Pool Supplies Pty Ltd will hold a final meeting for its
members and creditors at 11:00 a.m. on Aug. 8, 2008. During the
meeting, the company's liquidator, D. Mclay, will provide the
attendees with property disposal and winding-up reports.
The meeting will be held at Meeting Room 2, AH Bracks Library,
Melville Recreation Centre, corner Stock Road and Canning
Highway, in Melville.
The company's liquidator can be reached at:
D. Mclay
PO Box 1595
Booragoon WA 6954
Australia
Telephone: (08) 9330 4658
Facsimile: (08) 9330 9028
DUALEDGE PTY: Liquidator to Present Wind-Up Report on August 12
---------------------------------------------------------------
Dualedge Pty Ltd will hold a join annual and final meeting for
its members and creditors at 10:30 a.m. on Aug. 12, 2008.
During the meeting, the company's liquidator, A. R. Yeo, will
provide the attendees with property disposal and winding-up
reports.
The company's liquidator can be reached at:
A. R. Yeo
Pitcher Partners
Level 19, 15 William Street
Melbourne VIC 3000
Australia
GR 8 PUB: Liquidator to Give Wind-Up Report on August 8
-------------------------------------------------------
Cellsites Operations (Australia) Pty Ltd will hold a final
meeting for its members and creditors at 9:00 a.m. on Aug. 8,
2008. During the meeting, the company's liquidator, J. Vouris,
will provide the attendees with property disposal and winding-up
reports.
The company's liquidator can be reached at:
J. Vouris
Lawler Partners
Level 9, 1 O'Connell Street
Sydney NSW 2000
Telephone (02) 8346 6000
LANDRO PTY: Placed Under Voluntary Liquidation
----------------------------------------------
During a general meeting held on June 19, 2008, the members of
Landro Pty Ltd resolved to voluntarily liquidate the company's
business.
Kenneth Wayne Lamb was appointed as liquidator.
The liquidator can be reached at:
Wayne Lamb
Worrells Solvency & Forensic Accountants
Level 5, 15 Queen Street
Melbourne VIC 3000
Australia
Telephone: (03) 9613 5514
Facsimile: (03) 9614 3233
Website: http://www.worrells.net.au
MELBOURNE FURNITURE: Members and Creditors to Meet on August 11
---------------------------------------------------------------
Melbourne Furniture Freighters Pty Ltd will hold a final meeting
for its members and creditors at 10:00 a.m. on Aug. 11, 2008.
During the meeting, the company's liquidator, David H. Scott,
will provide the attendees with property disposal and winding-up
reports.
The company's liquidator can be reached at:
David H. Scott
Scott Partners Consulting
Level 1, 173 Burke Road
Glen Iris VIC 3146
Australia
Telephone: (03) 9500 0511
NHLC PTY: Members and Creditors to Meet on August 12
----------------------------------------------------
NHLC Pty Ltd will hold a final meeting for its members and
creditors at 10:00 a.m. on Aug. 12, 2008. During the meeting,
the company's liquidator, Matthew L. Joiner, will provide the
attendees with property disposal and winding-up reports.
The company's liquidator can be reached at:
Matthew L. Joiner
PKF Chartered
Accountants and Business Advisers
Level 6, 10 Eagle Street
Brisbane QLD 4000
Australia
RMR (WA): Members and Creditors to Meet on August 8
---------------------------------------------------
RMR (WA) Pty Ltd will hold a final meeting for its members and
creditors at 10:00 a.m. on Aug. 8, 2008. During the meeting,
the company's liquidator, D. Mclay, will provide the attendees
with property disposal and winding-up reports.
The meeting will be held at Meeting Room 2, AH Bracks Library,
Melville Recreation Centre, corner Stock Road and Canning
Highway, in Melville.
The company's liquidator can be reached at:
D. Mclay
PO Box 1595
Booragoon WA 6954
Australia
Telephone: (08) 9330 4658
Facsimile: (08) 9330 9028
W.Y. MAITLAND: Placed Under Voluntary Liquidation
-------------------------------------------------
W.Y. Maitland Pty Ltd.'s members agreed on June 24, 2008, to
voluntarily liquidate the company's business. R. A. Ferguson
was appointed to facilitate the sale of its assets.
The liquidator can be reached at:
Fergusons Chartered Accountants
Level 8, 115 Grenfell Street
Adelaide SA 5000
Australia
WORSLEY TIMBER: To Declare Dividend on August 12
------------------------------------------------
Worsley Timber 2000 Pty Ltd will declare dividend on Aug. 12,
2008.
Only creditors who were able to file their proofs of claim by
July 31, 2008, were included in the company's dividend
distribution.
The company's liquidator is:
Geoffrey Frank Totterdell
Level 19, QV1
250 St George's Terrace
Perth WA 6000
Australia
* AUSTRALIA: Business Confidence Falls in June Quarter
------------------------------------------------------
The June quarter Commonwealth Bank – ACCI Business Expectations
Survey shows a significant fall in business confidence and
reported business conditions. Business confidence fell to its
lowest level since the survey began in 1994 and general business
conditions were at the lowest level for five years.
Among the surveys indicators, only export sales were sound and
continued to grow over the quarter despite a stronger Australian
dollar.
Growth indicators such as sales, profits, employment and
investment all moved down over the quarter. On a positive note,
cost pressures eased moderately for business with wage and non-
wage labour costs growing at a slower pace. Moreover, the price
data continued to moderate.
Greg Evans, Director of Industry Policy and Economics,
Australian Chamber of Commerce and Industry, commented, "The
next two quarters remain challenging for Australian businesses.
With regard to the inflation outlook, ACCI considers moderation
in wage and non-wage growth as well as declining business
confidence and profit growth reduce the possibility of a wage-
price inflationary spiral, despite the headline inflation
hitting a 13-year high of 4.5 percent in the year to June.
Given the notable slowing in growth ACCI considers that an
interest rate cut should be considered as early as possible."
Robert De Luca, Executive General Manager, Corporate Financial
Services Commonwealth Bank, commented,"The results recorded over
the past quarter show the global liquidity crisis is clearly
impacting Australian business. However, it is encouraging to
see some buoyancy from those businesses operating outside of the
domestic market. Exporters continue to take advantage of high
commodity prices and export sales maintain steady growth,
underlining the significance of their contribution to the
overall economy. With tight operating conditions expected to
continue over the coming months, it is critical for businesses
to maximise efficiencies and streamline business practices to
see them through these challenging times."
=========
C H I N A
=========
ICBC: Gets OK From Federal Reserve to Set Up New York Branch
------------------------------------------------------------
The Industrial and Commercial Bank of China Ltd. has received
approval from the Federal Reserve Board to establish a branch in
New York, Xinhua News reports.
As reported by the Troubled Company Reporter - Asia Pacific on
May 11, 2007, the bank applied to open its first branch in New
York as part of a plan to accelerate overseas expansion and
become a global player.
"This marks an important milestone in the process of
globalization for the ICBC," Xinhua cited Wu Bin, the fifth
chief representative of the ICBC New York Representative Office,
as saying.
After establishment, Xinhua relates, the bank said its New York
Branch will become the its business platform in the United
States, actively develop its business within the permissible
scope of business, provide high quality financial services to
its customers, and promote trade, science and technology, and
cultural exchange between the two countries.
About ICBC
The Industrial and Commercial Bank of China --
http://www.icbc.com.cn/-- is the largest state-owned commercial
bank, and is authorized by the State Council and the People's
Bank of China. ICBC conducts operations across China as well as
in major international financial centers.
* * *
ICBC continues to carry Fitch Ratings' Individual D/E rating.
On May 4, 2007, Moody's Investors Service affirmed Industrial &
Commercial Bank of China Ltd's Bank Financial Strength Rating at
D-. The outlook for BFSR is stable. The outlook for the long-
term deposit rating is positive.
JIANGXI COPPER: Faces Low Demand from Appliance Makers
------------------------------------------------------
Jiangxi Copper Co. said it has tough times ahead as China's
home-appliances makers are cutting purchases of copper amid slow
shipments of air conditioners and fridges, Xiao Yu of Bloomberg
News reports.
According to the report, the company's shares fell 6.7%, the
biggest decline since March 20, to close at HK$12.72 in Hong
Kong. In Shanghai trading, the stock fell 6.6% to CNY20.27.
Zhao Mingwang, company general manager of rod and wire sales,
told Bloomberg News that metal consumption may grow less than
10% this year in China.
Manufacturers of appliances and electronics account for 20% of
copper demand in China.
Slowing global economic growth and a rising yuan have sapped
China exports growth, with shipments gaining at the slowest pace
in four months in June, the report relates. Bloomberg News says
that copper for cash delivery gained 17% this year, raising
costs for manufacturers.
Mr. Mingwang said, "[S]mall and medium-sized companies such as
air-conditioner makers were seriously hurt by a slump in
exports." Demand in the second half may improve because of a
rebound in power equipment investment, he added.
About Jiangxi Copper
Jiangxi Copper Company Limited -- http://www.jxcc.com/-- is an
integrated producer of copper in the People's Republic of China.
The company's operations consist of copper mining, milling,
smelting and refining to produce copper cathode and other
related products, including pyrite concentrates, sulphuric acid
and electrolytic gold and silver. It also provides smelting and
refining services pursuant to tolling arrangements for
customers.
* * *
The company continues to carry Xinhua Far East China Ratings'
"BB+" issuer credit rating.
XINHUA FINANCE: To Release 1H08 Financial Results on August 28
--------------------------------------------------------------
Xinhua Finance Limited will release financial results for the
six months ended June 30, 2008 on Thursday, August 28, 2008,
after the market closes in Tokyo.
XFL's earnings release and related materials will be available
on the investor relations page of its website at
http://www.xinhuafinance.com/en/for-investors/
The company will be announcing financial results for this year
within 60 days from the close of the quarter rather than the
usual 45 day period in order to allow for additional time to
consolidate the results of the company's diverse business lines
into three different reporting standards.
Following the earnings announcement, XFL's senior management
will host a conference call on August 28, 2008 at
-- 9 AM (New York),
-- 1 PM (London),
-- 9 PM (Shanghai), and
-- 10 PM (Tokyo) to discuss the results and recent business
activities.
Interested parties may dial into the conference call at
* (US) +1 617 614 3471
* (US) Toll Free) +1 800 706 7741
* (UK) +44 207 365 8426
* (Asia Pacific) +852 3002 1672;
participant code: 9399.
A telephone replay will be available two hours after the call
for one week at (US) +1 888 286 8010, Passcode: 99460342# and
(International) +1 617 801 6888, Passcode: 99460342#.
A real-time webcast and replay will be also available at:
http://www.xinhuafinance.com/en/for-investors/webcast
About Xinhua Finance Limited
Xinhua Finance Limited – http://www.xinhuafinance.com/-- is
China's premier financial information and media service provider
and is listed on the Mothers Board of the Tokyo Stock Exchange.
Xinhua Finance's proprietary content platform, comprising
Indices, Ratings, Financial News, and Investor Relations, serves
financial institutions, corporations and re-distributors
worldwide. Through its subsidiary Xinhua Finance Media Limited,
XFL leverages its content across multiple distribution channels
in China including television, radio, newspaper, magazine and
outdoor media. Founded in November 1999, XFL is headquartered
in Shanghai, with offices and news bureaus spanning 12 countries
worldwide.
* * *
Xinhua Finance Limited continues to carry Moody's "B2" LT Family
and Senior Unsecured Debt Ratings. The company also carries
S&P's "B" LT Credit Rating.
ZTE CORP: Signs Deal With KPN for Mobile Data Devices
-----------------------------------------------------
ZTE Corp. has signed a framework agreement with KPN to provide
mobile data connectivity devices for the HSDPA network of the
Dutch operator. ZTE will provide the MF628 USB modem to KPN for
its 'Mobiel Internet' customers who have high speed laptop
connectivity, enabling those users to access the Internet from
almost any location in the Netherlands – at home, in the bus or
even in the park.
ZTE's MF628 USB modem includes a microSD slot for up to 4GB of
storage to enable users to easily share and move data on
multiple devices. The modem will connect to KPN's reliable and
fast HSDPA network and is compatible with Microsoft Windows
2000, XP and Vista, and MacOS X operating systems.
"ZTE is delighted to also announce, with this agreement, a three
year extension of our partnership with KPN," said Mr Lin Cheng,
ZTE's president for Western Europe "The launch of our first
mobile data card with KPN earlier this year shows that ZTE is
able to deliver on the high quality standards and customer needs
that are key to KPN's market proposition. We are looking
forward to working with KPN to meet the demand for mobile
broadband services in the Netherlands."
Peter Westgeest Director Hardware, at KPN Group comments: "KPN
is happy to sign this framework contract with ZTE, after the
successful launch of the MF626 USB data modem in March this
year. The demand for mobile data services has been higher than
expected, so we are pleased to partner with ZTE to drive the
adoption of mobile broadband services in the Netherlands.
ZTE 's products fit well into KPN's offering, so we are looking
forward to continuing our excellent relationship with one of the
world's leading telecoms manufacturers."
Willem van Oppen, CPO at KPN Group, continued: "it is important
for KPN to have good global sourcing in place and Asian
companies like ZTE have shown to be a good fit for us in that
perspective because they are able to offer quality products and
services at highly competitive prices. KPN is committed to
establishing partnerships with companies that pursue the same
high standards in terms of quality of service and customer
relationships. ZTE has proven to be a great partner in our
drive to respond to the increasing demand for mobile data
services in the Netherlands."
ZTE's MF628 data cards will be sold in conjunction with KPN
'Mobiel Internet' services. In combination with KPN's 'Laptop
Total Plus' subscription, mobile broadband users can enjoy fast
and reliable internet via KPN's HSDPA network.
Following the partnership with KPN in the Netherlands, ZTE
expects to announce the availability of its data cards in other
European countries, including Germany and Belgium.
About ZTE Corp.
Headquartered in Shenzhen, China, ZTE Corp. has established
close partnerships with over 500 operators in more than 120
countries, and has completed several large-scale backbone
transmission network projects in different countries. Its
optical networking products have been widely deployed by several
countries and regions globally, such as Europe, Latin America,
South Asia, Commonwealth of Independent States, Africa and
Middle East. According to the latest statistics released by
Ovum RHK, ZTE is ranked second in terms of global market share
for LH Dense Wavelength Division Multiplexing (DWDM), with high
potential of maintaining its positive growth in the market.
* * *
The Troubled Company Reporter-Asia Pacific reported on April 24,
2008, that Fitch Ratings affirmed ZTE Corporation's Long-term
foreign currency and local currency Issuer Default Ratings at
'BB+'. The rating Outlook remains Stable.
In December 2006, Fitch Ratings assigned ZTE Corp. Long-term
foreign and local currency Issuer Default ratings of 'BB+'. The
rating Outlook is Stable.
=========
I N D I A
=========
GENERAL MOTORS: Board Backs CEO Rick Wagoner Amid 2nd Qtr. Loss
---------------------------------------------------------------
General Motors Corp.'s board continue to stand by chief
executive Rick Wagoner after the company reported a US$15.5
billion loss in the second quarter, The Wall Street Journal
states.
WSJ, citing GM spokesman Steve Harris, said that the board
remains supportive to Mr. Wagoner and the GM management team.
One person close to the directors said the board "is totally
behind [Mr. Wagoner], realizing nobody could deal with this
situation any better than he. It's a case of an excellent plan,
[and] delivering on all promises," according to WSJ.
WSJ quoting Calyon auto analyst Mark Warnsman says: "They're
probably in a bit of a bind. It might be good to change horses,
but disruptive to do so -- a disruption that they cannot afford
just at the moment."
According to WSJ, Mr. Wagoner has been with GM as CEO since mid-
2000 and some of his accomplishments included a US$9 billion cut
in structural costs; contract reworked with the United Auto
Workers union and an accelerated growth in markets outside the
U.S. business. The UAW deal, WSJ says, could save GM US$5
billion by 2011 and add needed flexibility to its manufacturing
footprint.
Amid all these, WSJ notes that Mr. Wagoner has struggled to
produce the desired results. WSJ states that GM's cumulative
losses for 2005, 2006 and 2007, was approximately US$50 billion
and so far this year, GM has lost more than US$18 billion.
GM shares were up 59 cents, or 5.8%, to US$10.69 apiece in 4
p.m. New York Stock Exchange composite trading Tuesday, WSJ
relates. A drop in the price of oil has helped push up GM
shares in recent trading, WSJ adds. The stock, according to
WSJ, also got a boost after GM stated its liquidity plan last
month, still, the market capitalization of about US$6 billion is
near the lowest point in five decades.
About General Motors
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.
General Motors Latin America, Africa and Middle East, with
headquarters in Miramar, Florida, is one of GM's four regional
business units. GM LAAM employs approximately 37,000 people in
18 countries and has manufacturing facilities in Argentina,
Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and
Venezuela. GM LAAM markets vehicles under the Buick,
Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and
Suzuki brands.
General Motors Corporation offers products under the Chevrolet
brand in India through its wholly owned subsidiary, General
Motors India. GM India has 95 sales points and over 110 service
centers.
At March 31, 2008, GM's balance sheet showed total assets of
US$145,741,000,000 and total debts of US$186,784,000,000,
resulting in a stockholders' deficit of US$41,043,000,000.
Deficit, at Dec. 31, 2007, and March 31, 2007, was
US$37,094,000,000 and US$4,558,000,000, respectively.
* * *
As reported in the Troubled Company Reporter on June 24, 2008,
DBRS has placed the ratings of General Motors Corporation and
General Motors of Canada Limited Under Review with Negative
Implications. The rating action reflects the structural
deterioration of the company's operations in North America
brought on by high oil prices and a slowing U.S. economy.
Standard & Poor's Ratings Services is placing its corporate
credit ratings on the three U.S. automakers, General Motors
Corp., Ford Motor Co., and Chrysler LLC, on CreditWatch with
negative implications, citing the need to evaluate the financial
damage being inflicted by deteriorating U.S. industry conditions
—largely as a result of high gasoline prices. Included in the
CreditWatch placement are the finance units Ford Motor Credit
Co. and DaimlerChrysler Financial Services Americas LLC, as well
as GM's 49%-owned finance affiliate GMAC LLC.
As related in the Troubled Company Reporter on June 5, 2008,
Standard & Poor's Ratings Services said that its ratings on
General Motors Corp. (B/Negative/B-3) are not immediately
affected by the company's announcement that it will cease
production at four North American truck plants over the next two
years. These closures are in response to the re-energized shift
in consumer demand away from light trucks. GM previously said
only one shift was being eliminated at each of the four truck
plants. Production is being increased at plants producing small
and midsize cars, but the cash contribution margin from these
smaller vehicles is far
less than that of light trucks.
GENERAL MOTORS: S&P Lowers Rating on Classes A-1, A-2 Certs to B
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class A-1 and A-2 certificates from Corporate Backed Trust
Certificates Series 2001-8 Trust to 'B-' from 'B' and removed
them from CreditWatch, where they were placed with negative
implications on July 2, 2008.
The rating actions follow the July 31, 2008, lowering of the
long-term corporate credit and other ratings on General Motors
Corp. (GM; B-/Negative/NR) and their removal from CreditWatch
negative.
Corporate Backed Trust Certificates Series 2001-8 Trust is a
pass-through transaction, and the ratings on the certificates
are based
solely on the rating assigned to the underlying securities, the
8.10% debentures due June 15, 2024, issued by GM.
The corporate rating actions on GM have no immediate rating
impact on the GM-related asset-backed securities (ABS) supported
by collateral pools of consumer auto loans, auto leases, or auto
wholesale loans.
GEN. MOTORS: S&P Cuts Freedom Certificates Classes A, X to 'B'
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
classes A and X from Freedom Certificates US Autos Series 2004-1
Trust to 'B-' from 'B' and removed them from CreditWatch, where
they were placed with negative implications on July 2, 2008.
The rating actions reflect the July 31, 2008, lowering of the
long-term corporate credit and other ratings on Ford Motor
Credit Co. (Ford Credit; B-/Negative/NR), a subsidiary of Ford
Motor Co. (Ford; B-/Negative/NR), and GMAC LLC (GMAC; B-
/Negative/C), a subsidiary of General Motors Corp. (GM; B-
/Negative/NR), and their removal from CreditWatch with negative
implications.
Freedom Certificates US Autos Series 2004-1 Trust is a pass-
through transaction, and the ratings on classes A and X are
based solely on the lower of the ratings assigned to the
underlying securities, the 7.375% bonds due Feb. 1, 2011, issued
by Ford Credit and the 7.25% notes due March 2, 2011, issued by
GMAC.
The corporate rating actions on Ford and GM and their affiliates
have no immediate rating impact on the Ford and GM-related
asset-backed securities (ABS) supported by collateral pools of
consumer auto loans, auto leases, or auto wholesale loans.
SIMBHAOLI SUGARS: Board OKs Issuance of 7,50,000 Equity Shares
--------------------------------------------------------------
Simbhaoli Sugars Ltd's Board of Directors has approved the
issuance and allotment of 7,50,000 equity shares of Rs 10/- each
to M/s. Dholadhar Investments Pvt Ltd, a warrant holder against
conversion of 7,50,000 warrants at an exercise price of Rs
42.55/- per equity share (including premium of Rs 32.55 per
equity share) in accordance with the provisions of SEBI
(Disclosure & Investor Protection) Guidelines, 2000 for
preferential issue.
The Board also approved the constitution of an allotment
committee for the issuance and allotment of equity shares.
Simbhaoli Sugar Limited (SSL), fka The Simbhaoli Sugar Mills
Limited -- http://www.simbhaolisugars.com/-- is an India-based
technology company. During the fiscal year ended March 31,
2007, SSL operated mainly in two segments: Sugar and Distillery.
SSL has three sugar plants (Simbhoali and Brijnathpur, western
Uttar Pradesh and Chilwaria, eastern Uttar Pradesh) with
combined, crushing capacity of 20,100 tons of cane per day. It
is capable of producing 1150 metric tons of refined sugar, 100
metric tons of pharma grade, specialty and cube sugars, and 660
metric tons of plantation white sugar and 200 metric tons of raw
sugar per day. SSL has two alcohol distilleries (at Simbhaoli
and Chilwaria) with a combined capacity of 150 kilo liters of
alcohol per day. It includes 45 kilo liters of alcohol per day
potable liquor; 120 kilo liters of alcohol per day of ethanol
and 20 kilo liters of alcohol per day of extra neutral alcohol
(ENA). In addition, Simbhaoli plant can produce upto 30 metric
tons of carbon dioxide.
The company recently returned to profit after incurring
consecutive quarterly net losses since December 31, 2006. For
the quarter ended March 31, 2008, the company incurred a net
profit of Rs. 32.01 million compared to a net loss of Rs. 160.09
million in the same period last year.
For the quarter ended December 31, 2007, the company incurred a
net loss of Rs. 124.35 million.
* * *
This concludes the Troubled Company Reporter-Asia Pacific's
coverage of Simbhaoli Sugars Ltd until facts and circumstances,
if any, emerge that demonstrate financial or operational strain
or difficulty at a level sufficient to warrant renewed coverage.
=================
I N D O N E S I A
=================
BANK INT'L: Malaysia Central Bank May Let Maybank Bid for Stake
---------------------------------------------------------------
Malaysia's central bank may allow Maybank to take a controlling
stake in PT Bank Internasional Indonesia Tbk if the Indonesian
authorities relax demands that Maybank cut its stake within two
years, David Chance of Reuters reports, citing an unidentified
source.
The source, the report relates, said that if Indonesian
regulators revised the rule to demand a partial sale after five
years that would be enough to allow Bank Negara Malysia to
withdraw its objections to the proposed acquisition.
Maybank told the news agency that it was still in talks with
Temasek Holdings, unit of Fullerton Financial Holdings, on the
deal valued at US$2.7 billion.
Maybank's shares have risen after the Malaysian central bank
blocked its plan to buy the controlling stake in BII, as
analysts said the Malaysian acquirer was overpaying at about 4.6
times book value, the report says.
About Bank Internasional
PT Bank Internasional Indonesia Tbk -- http://www.bii.co.id/--
engages in general banking services and in other banking
activities based on Syariah principles. The bank's services are
divided into three categories: Personal Services, consisting of
Funding, Credit Card Services, Loan, Reksadana and
Bancassurance; Corporate Services, consisting of Funding, Credit
Card Services, Loan and Investment Banking, and Platinum
Services, consisting of Platinum Access, Syariah Platinum Access
and Platinum MasterCard. The bank is headquartered in Jakarta,
Indonesia.
With a total customer deposit base of more than IDR34 trillion
and over IDR47 trillion in assets, Bank Internasional is one of
the largest banks in Indonesia with an international network
that comprises over 230 branches and 700 ATMs across Indonesia,
as well as a banking presence in Mauritius, Mumbai and the
Cayman Islands.
As reported by the Troubled Company Reporter - Asia Pacific on
Aug. 1, 2008, Standard & Poor's Ratings Services has affirmed
all its ratings on PT Bank Internasional Indonesia Tbk (BII),
including its 'B+/B' counterparty credit ratings, and removed
them from CreditWatch, where they were placed with positive
implications on March 28, 2008. The outlook is stable.
On March 3, 2008, Fitch Ratings affirmed PT Bank Internasional
Indonesia Tbk's (BII) long-term foreign currency Issuer Default
Rating at 'BB', following Fullerton Financial Holdings'
announcement of its intentions to pursue the sale of its
interest in BII. FFH is a wholly owned subsidiary of Temasek
Holdings.
BERAU COAL: To Invest US$140MM to Boost Annual Coal Production
--------------------------------------------------------------
PT Berau Coal said it will invest up to US$140 million to
finance infrastructure expansion, including a seaport and stock
piling facility, aimed to increase its annual coal production to
30 million tons in 2013 from 12.5 million tons last year, Antara
News reports.
Company President Bob Kamandanu, the report relates, hopes the
company will be able to finance the project without a loan.
According to the report, in the first seven months of 2008,
Berau Coal produced 7 million tons of coal and it is set to turn
out 15 million tons in the whole of the year.
Headquartered in East Kaliman, PT Berau Coal --
http://www.beraucoal.co.id/-- is Indonesia's fifth largest
producer and exporter of thermal coal. It operates three active
mines at a single site in East Kalimantan. It has estimated
resources of 654.2 million tons with probable reserves estimated
at 61.6mt and proven mineable reserves of 127.6mt.
* * *
The Troubled Company Reporter - Asia Pacific reported on
Feb. 7, 2008, Fitch Ratings has affirmed PT Berau Coal's 'B+'
Long-term foreign and local currency Issuer Default Ratings, and
'A(idn)' National Long-term rating. The Outlooks for all ratings
remain Stable. At the same time, Fitch affirmed the 'B+' senior
unsecured rating of Berau's US$325 million senior notes due in
2011.
The company continues to carry Moody's B1 LT Corporate Family
Rating, and Standard and Poor's B LT Issuer Credit Ratings.
MERPATI NUSANTARA: To Lay Off 1, 500 Employees Than Buy Planes
--------------------------------------------------------------
PT Merpati Nusantara Airlines decided to lay off 1,500 of its
employees, rather than purchase more aircraft, to keep the
company on its feet, Antara News reports.
"Some time in the past, the airline company planned to buy new
planes at a cost of IDR600 billion, but abandoned the plan,"
Company Finance Director Roby Eduardo Quento told Antara, in
view of the government's plan to raise the state's equity
participation of IDR350 billion in the state airline company
this year, which include IDR200 billion for rationalization.
Mr. Quento, the report relates, said he is still waiting for a
government clarification on the fresh money injection.
According to the report, the airline company's 2,590 employees
were considered superfluous in the operation of the company with
its 22 aircraft. "However, the implementation of the plan to
lay off 1,500 employees still has to go through a long process,
including possible negotiations with the employees," Mr. Quento
said.
Antara recounts that Chairman of Merpati Employees Solidarity I
Wayan Suarna, earlier questioned the rationalization plan,
saying it would be more productive if the IDR200 billion
rationalization fund is used to buy more planes to increase the
company's income.
In response, Mr. Quento said the implementation of the Merpati
restructuring plan will be intensified this year. "This has to
be done because the airline company is still in a critical
condition. We are still losing IDR20 billion every month," he
added.
Mr. Quento also pointed out that even the plan to move the
office to Makassar still stands as it will cost only Rp15
billion, Antara says.
About Merpati Nusantara
Headquartered in Jakarta, Indonesia, PT Merpati Nusantara
Indonesia -- http://www.merpati.co.id/-- is a state-owned
carrier that services predominantly international routes. The
carrier is facing the threat of being declared bankrupt with
IDR1.6 trillion in accumulated losses.
According to reports, Merpati suffered from high fuel prices and
hurt by the weaker rupiah. The bombings in Bali in October 2005
hit the airline pretty hard in its revenue flow. The airline is
also struggling to cope with new competition within Indonesia,
both from domestic airlines and from other airlines coming into
Indonesia internationally.
The Troubled Company Reporter - Asia Pacific reported in January
2006, the government promised to inject up to IDR400 billion
into the Company. However, since it is also cash-strapped, the
government said it would disburse the amount in installments,
and initially meted out IDR75 billion for the company to
continue its business.
As of fiscal year end 2005, the company had an equity deficit of
IDR1.24 trillion.
On July 24, 2004, the Indonesian Government invited applications
from financial and legal advisers to help devise a privatization
scheme for the carrier. The Government proposed a strategic
sale of the state's 51% stake in Merpati to help fund the
carrier's operations.
PERTAMINA: Eyes Buying Medco Energi's Six Oil & Gas Blocks
----------------------------------------------------------
PT Pertamina (Persero) is interested in six oil and gas blocks
planned to be sold by PT Medco Energi Internasional, Antara News
reports.
Medco, the report relates, said it would sell all or part of its
stakes in the Jeruk Block in Madura, Kakap Block in Riau, Rimau
PSC and Lematang in South Sumatra and Langsa Block in East Aceh
and Bawean PSC Block in East Java.
According to the report, Company Spokesman Wisnuntoro said
Pertamina is especially interested in the blocks in which it is
a shareholder.
Medco will sell all its stakes in the blocks in which it is not
the operator including Jeruk Blok, Kakap Block and Langsa Blok,
the report relates.
About PT Pertamina
PT Pertamina (Persero) -- http://www.pertamina.com/-- is a
wholly state-owned enterprise. The enactment of Oil and Gas Law
No. 22/2001 in November 2001 and Government Regulation
No.31/2003 has changed its legal status from a special state
owned enterprise into a Limited Liability Company. In carrying
out its activities, PT Pertamina implements an integrated system
from upstream to downstream. Pertamina operates seven oil
refineries with a total output capacity of around 1 million
barrels per day. However, these refineries only cover about
three-quarters of domestic oil demand, the rest is supplied by
imports.
Despite reporting a net profit of IDR3.03 trillion for the first
six months of 2005, Pertamina's failure to service its financial
obligations was pegged as one of the contributors to Indonesia's
decreased income for the year.
In August 2005, Pertamina's debt to United States firm Karaha
Bodas Company rose from IDR2.54 trillion to IDR2.99 trillion.
The debt had increased when, in 2003, a U.S. court ordered the
Company to pay compensation to KBC, relating to an international
arbitration decision, when the Indonesian Government halted a
geothermal project in Karaha Bodas, East Java. Since that time,
the debt has steadily risen due to the Company's failure to pay
the compensation immediately.
MEDCO ENERGI: Pertamina Eyes Buying Six Oil & Gas Blocks
--------------------------------------------------------
PT Pertamina (Persero) is interested in six oil and gas blocks
planned to be sold by PT Medco Energi Internasional, Antara News
reports.
Medco, the report relates, said it would sell all or part of its
stakes in the Jeruk Block in Madura, Kakap Block in Riau, Rimau
PSC and Lematang in South Sumatra and Langsa Block in East Aceh
and Bawean PSC Block in East Java.
According to the report, Company Spokesman Wisnuntoro said
Pertamina is especially interested in the blocks in which it is
a shareholder.
Medco will sell all its stakes in the blocks in which it is not
the operator including Jeruk Blok, Kakap Block and Langsa Blok,
the report relates.
Headquartered in Jakarta, Indonesia, Medco Energi Internasional
Tbk PT (JAK:MEDC) -- http://www.medcoenergi.com/-- is an
integrated energy company. The company is engaged in oil and
gas exploration and production, drilling services, methanol
production and the power generation industry. The company holds
working interests in various exploration and production blocks
in Indonesia and overseas, producing more than 21 million barrel
of oil and 61 million cubic feet of gas annually. In addition,
it has 10 onshore rigs and four offshore rigs (swamp barge) and
operates one methanol plant, one liquefied petroleum gas plant
and three power plants. The company's Indonesian operations
span from Aceh in Indonesia's western border to Papua in the
eastern territory.
The company's subsidiary, PT Apexindo Pratama Duta Tbk, is a
heavy equipment provider. Apexindo Pratama has five
subsidiaries, namely PT Antareja Jasatama, Apexindo Asia Pacific
B.V., Apexindo Khatulistiwa B.V., Apexindo Offshore Pte. Ltd.
and Apexindo Raniworo Pte. Ltd.
* * *
Medco Energi continues to carry Moody's Investors Service's "B1"
long-term corporate family rating and Standard & Poor's Rating
Services' "B+"long-term foreign and local issuer credit ratings.
All ratings have a negative outlook.
=========
J A P A N
=========
FORD MOTOR: S&P Cuts Ratings on 9 Transactions to CCC
-----------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on nine
Ford Motor Co.-related transactions and removed them from
CreditWatch, where they were placed with negative implications
on
July 2, 2008.
The rating actions reflect the July 31, 2008, lowering of the
long-term corporate credit and senior unsecured debt ratings on
Ford Motor Co. (Ford; B-/Negative/NR) and its related entities
and
their removal from CreditWatch with negative implications.
The nine transactions are pass-through transactions, and the
ratings on the trusts are based solely on the senior unsecured
ratings assigned to the underlying collateral. The underlying
collateral consists of securities issued by Ford.
The corporate rating actions on Ford and its affiliates have no
immediate rating impact on the Ford-related asset-backed
securities (ABS) supported by collateral pools of consumer auto
loans or auto wholesale loans.
RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE
Corporate Backed Trust Certificates Ford Motor Co. Debenture-
Backed Series 2001-36 Trust
Rating
Class To From Underlying collateral
A1 CCC CCC+/Watch Neg 7.7% deb due 05/15/2097
A2 CCC CCC+/Watch Neg 7.7% deb due 05/15/2097
Corporate Backed Trust Certificates Ford Motor Company Note-
Backed
Series 2003-6 Trust
Rating
Class To From Underlying collateral
A-1 CCC CCC+/Watch Neg 7.45% Global Landmark Secs
(GlobLS) notes due 07/16/2031
CorTS Trust For Ford Debentures
Rating
Class To From Underlying collateral
Certs CCC CCC+/Watch Neg 7.4% deb due 11/01/2046
CorTS Trust II For Ford Notes Series 2003-3
Rating
Class To From Underlying collateral
Certs CCC CCC+/Watch Neg 7.45% Global Landmark Secs
(GlobLS) notes due 07/16/2031
PPLUS Trust Series FMC-1
Rating
Class To From Underlying collateral
Certs CCC CCC+/Watch Neg 7.45% Global Landmark Secs
(GlobLS) notes due 07/16/2031
PreferredPlus Trust Series FRD-1
Rating
Class To From Underlying collateral
Certs CCC CCC+/Watch Neg 7.4% deb due 11/01/2046
Public STEERS Series 1998 F-Z4 Trust
Rating
Class To From Underlying collateral
A CCC CCC+/Watch Neg 7.7% deb due 05/15/2097
B CCC CCC+/Watch Neg 7.7% deb due 05/15/2097
SATURNS Trust No. 2003-5
Rating
Class To From Underlying collateral
Units CCC CCC+/Watch Neg 7.45% Global Landmark Secs
(GlobLS) notes due 07/16/2031
Trust Certificates (TRUCs) Series 2002-1 Trust
Rating
Class To From Underlying collateral
A-1 CCC CCC+/Watch Neg 7.7% deb due 05/15/2097
About Ford Motor Co
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles
in 200 markets across six continents. With about 260,000
employees and about 100 plants worldwide, the company's core and
affiliated automotive brands include Ford, Jaguar, Land Rover,
Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company
provides financial services through Ford Motor Credit Company.
The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom. The company also distributes its brands in
various Latin-American regions, including Argentina and Brazil.
FORD MOTOR: S&P Cuts Freedom Certificates Classes A, X to 'B'
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on
classes A and X from Freedom Certificates US Autos Series 2004-1
Trust to 'B-' from 'B' and removed them from CreditWatch, where
they were placed with negative implications on July 2, 2008.
The rating actions reflect the July 31, 2008, lowering of the
long-term corporate credit and other ratings on Ford Motor
Credit Co. (Ford Credit; B-/Negative/NR), a subsidiary of Ford
Motor Co. (Ford; B-/Negative/NR), and GMAC LLC (GMAC; B-
/Negative/C), a subsidiary of General Motors Corp. (GM; B-
/Negative/NR), and their removal from CreditWatch with negative
implications.
Freedom Certificates US Autos Series 2004-1 Trust is a pass-
through transaction, and the ratings on classes A and X are
based solely on the lower of the ratings assigned to the
underlying securities, the 7.375% bonds due Feb. 1, 2011, issued
by Ford Credit and the 7.25% notes due March 2, 2011, issued by
GMAC.
The corporate rating actions on Ford and GM and their affiliates
have no immediate rating impact on the Ford and GM-related
asset-backed securities (ABS) supported by collateral pools of
consumer auto loans, auto leases, or auto wholesale loans.
JAPAN AIR: Sees JPY12-13MM Savings on Reduced Flights & Services
----------------------------------------------------------------
Japan Airlines International Company Limited plans to cut
service or reduce flights on 21 routes including ones to London
this business year to battle soaring fuel costs, Reuters
reports, citing Nikkei business daily.
The company, the report relates, expects to save JPY12-13
billion (US$111 million-US$120 million) a year by this move.
A JAL spokesman declined to confirm the Nikkei report, but said
the airline plans to announce its plan on route cuts or
reductions at an earnings briefing soon, the report relates.
According to Reuters, the news comes as surging oil prices hit
the airline industry, with carriers worldwide shedding thousands
of jobs and scrapping routes as losses mount, threatening some
of them with insolvency.
About Japan Airlines
Tokyo-based Japan Airlines International Company Limited --
http://www.jal.com/en/-- was created as a result of the merger
of Japan Airlines and Japan Air Systems to boost domestic
coverage. Japan Airlines flies to the United States, Brazil and
France.
* * *
In April 2008, Fitch Ratings revised the Outlook on Japan
Airlines Corporation and its wholly owned operating subsidiary,
JAL International Co., Ltd.'s Long-term Issuer Default ratings
to Stable from Negative. At the same time, Fitch affirmed both
companies' Long-term IDRs and ratings of outstanding bonds at
'BB-'. The Outlook revision follows JAL's operational
turnaround and better liquidity.
In February 2007, Standard & Poor's Ratings Services affirmed
its 'B+' long-term corporate credit and issue ratings on Japan
Airlines Corp. (B+/Negative/--) following the company's
announcement of its new medium-term management plan. S&P said
the outlook on the long-term corporate credit rating is
negative.
=========
K O R E A
=========
SSANGYONG MOTOR: Plant Shutdown to Cost Company KRW2.2 Trillion
---------------------------------------------------------------
Ssangyong Motor Co. said an 18-day shutdown of its sole plant in
Korea will cause it to lose KRW2.2 trillion (US$2.16 billion) in
lost production, Yonhap News reports.
According to the report, Ssangyong has shut its auto assembly
plant in Pyeongtaek, about 65 kilometers south of Seoul, from
July 31 until Aug. 17, to adjust production in reaction to
slowing sales.
Yonhap News earlier reported that the plant shutdown will be the
first for Ssangyong since it idled some of its production lines
in May because of sluggish demand.
During the shutdown period, the report said workers will receive
70 percent of their monthly salary.
Analysts told the news agency that higher diesel prices in South
Korea and a stagnant economy have led Ssangyong to curtail
production.
Last month, Yonhap News relates, Ssangyong saw its domestic
sales plunge 67 percent on-year to 1,902 units, and during the
first six months of this year, the company sold 26 percent fewer
vehicles as consumers shunned its gas-guzzling sport-utility
vehicles.
However, Kevin Lee, a Ssangyong spokesman, told Yonhap News that
the shutdown was aimed at retooling its painting equipment at
the plant, rather than cutting production to reduce its
inventory.
"In the first 20 days of July, our sales rose 120 percent from a
year earlier," Mr. Lee said declining to say how many vehicles
the company sold during the period.
Yonhap News notes that Ssangyong was the only automaker among
the country's five players to post a decline in vehicle sales
last month, and, as local brokerage Shinyoung Securities said,
would find it difficult "to recover its sales under current
business conditions."
Meanwhile, Yonhap News says workers at Ssangyong recently voted
to approve a new wage agreement, putting an end to a series of
partial strikes.
According to Yonhap News, 64% of some 5,200 union members
approved a 4.6 percent increase in monthly basic salary and a
bonus payment of KRW2 million (US$2,000) to encourage them to
"overcome a management crisis."
About Ssangyong Motor Co. Ltd.
Headquartered in Kyeonggi-Do, South Korea, Ssangyong Motor Co.
Ltd. -- http://www.smotor.com/kr/index.jsp/-- is a manufacturer
of automobiles primarily engaged in production of sports utility
vehicles (SUVs) and recreational vehicles (RVs). The Company's
production is grouped into four lines: SUVs under brand names
REXTON, KYRON and ACTYON; sports utility trucks (SUTs) under the
brand name ACTYON Sports; passenger cars under brand name
Chairman, and multi-purpose vehicles (MPVs) under the brand name
Rodius. It also provides automobile parts such as coolers,
engine oil filters, headlamp bulb and others. During the year
ended December 31, 2007, the Company had a production capacity
of 219,220 units of vehicles and its actual production output
was 122,857 units of vehicles. The Company has two
manufacturing factories in Pyeongtaek and Changwon.
* KOREA: Economic Downturn Due in Part to Sluggish Output
---------------------------------------------------------
South Korea's weak industrial production and relatively high
inventory level underline the country's overall economic
downturn, Yonhap News reports citing a state think-tank.
According to a Korea Development Institute monthly report cited
by Yonhap News, South Korea also faces continuing high inflation
coupled with sluggish domestic consumption and soft job
creation.
* KOREA: First Half Real Trade Loss Reaches KRW54.9 Trillion
------------------------------------------------------------
Korea's real trade loss hit an all-time high of KRW54.9 trillion
(US$54 billion) in the first half, reflecting worsening terms of
trade, The Korea Herald reports citing data from the Bank of
Korea.
The report says this implies that the economy lost real income
equal to KRW54.9 trillion in the first half, based on the
condition that trade terms had remained the same as 2000, the
base year.
According to the Herald, due to the worsening terms of trade in
Asia's fourth-largest economy, the real trade loss showed a
sliding trend from KRW12.6 trillion in the first half of 2004 to
the KRW37.1 trillion posted in the first half of 2007.
The net terms of trade index for goods also went down to 81.9 in
the first five months of the year, falling 14 percent from 95 in
the same period of last year, the Herald says.
Kwon Soon-woo, a researcher at the Samsung Research Economic
Institute, told the Herald that the major reason behind the
worsening terms of trade is Korean exporters, whom he says are
still relatively incompetent in global markets.
Mr. Kwon says many are failing to match consumer prices rises
with the increased costs of raw materials.
However, the Herald relates, the BOK downplayed the significance
of the real trade loss data, stressing that the overall increase
in trade volume is also a major determinant of increasing the
real trade loss.
"The real trade loss has been exacerbated by the simultaneous
effects of worsening trade terms and increased trade volume,"
Chung Young-taek, head of the national income team at the
central bank, was cited by the Herald as saying.
"The real trade index is one factor considered in calculating
the real gross national income. Because it is a hypothetical
figure based on 2000, it doesn't mean an actual income loss,"
Mr. Chung added.
Meanwhile, the Herald says Korea recorded a deficit of US$6.2
billion in trade in the first half of the year and a US$3.5
billion trade deficit is seen this year due to high energy and
food costs.
* KOREA: Shipbuilders Facing Losses on Canceled Orders
------------------------------------------------------
Korea's domestic shipbuilders are facing order cancellations
from buyers who are struggling to make the huge payments on
time, The Korea Times reports.
According to the report, Daewoo Shipbuilding & Marine
Engineering, the world's third-largest shipyard, said Friday
that an unnamed European client failed to make a pre-payment for
an order worth KRW619 billion (US$619 million) to build eight
container ships.
The same day, the report says, Hyundai Mipo Dockyard, a unit of
the world's largest shipbuilder Hyundai Heavy Industries, also
announced a canceled order for four product carriers worth
KRW197 billion.
Experts interviewed by the Times say losses could last longer,
as slowing market growth could force more customers to cancel
orders.
Analysts in Korea, the Times relates, agreed that the latest
turn of events will have a significant effect on profit, and
stressed the need for risk management.
"The long-term prospects still look bright, but some immediate
variables could work against domestic shipbuilders," Jo In-gap,
an analyst at Good Morning Shinhan Securities was cited by the
Times as saying.
He noted that Korean shipyards' collective orders sealed in the
first half of the year dipped 19.7 percent in amount year-on-
year, adding a further decline is possible due to seasonal
factors.
Still other factors affecting the shipbuilding industry are the
soaring price of heavy steel plates and lower logistics.
"It's clear that the boom seen over the past 10 years will not
come again, but there's still more room for growth for domestic
shipbuilders," one analyst told the Times.
====================
N E W Z E A L A N D
====================
ABBOTSLEIGH RETIREMENT: Court Appoints Liquidators
--------------------------------------------------
The High Court has appointed David Donald Crichton and
Keiran Anne Horne, chartered accountants of Crichton Horne &
Associates Limited, as liquidators of Abbotsleigh Retirement
Home Ltd.
Only Creditors who were able to file their proofs of debt by
July 30, 2008, were included in the company's dividend
distribution.
Creditors and shareholders may direct their inquiries to:
Marie Inch
Crichton Horne & Associates Limited
Old Library Chambers
109 Cambridge Terrace (PO Box 3978)
Christchurch
Telephone (03) 379 7929
ASTRAL MANAGEMENT: Commences Liquidation Proceedings
----------------------------------------------------
The High Court at Christchurch convened a hearing on July 28,
2008, to consider an application putting Astral Management Ltd
into liquidation.
The application was filed on June 24, 2008, by White Fox and
Jones.
The plaintiff's address for service is at:
ABN AMRO Craigs House
90 Armagh Street (PO Box 1353)
Christchurch
Telephone: (03) 353 0650
Facsimile: (03) 353 0652
M. A. Jones is the plaintiff's solicitor.
BOTRY-ZEN: Production Difficulties May Affect Cash Flow
-------------------------------------------------------
Botry-Zen Ltd disclosed in a regulatory filing that it has
encountered some production difficulties for "BOTRY-Zen" and
"ARMOUR-Zen" which, if unresolved, would have significant
implications for the company's production targets.
The company said that through last season the "BOTRY-Zen"
production line operated smoothly and was successful in
manufacturing (and selling) everything produced, over 8.5
tonnes of product, on the local New Zealand market.
The impact of the "ARMOUR-Zen" filtration problems encountered
through the mid-season period (up until which time the company
sold all 6000 litres produced) is well documented and the
solution to this, for the main part, has been resolved.
Over the last few weeks, the company said, it has however
experienced sporadic and unpredictable yield outcomes on "BOTRY-
Zen" fermenter runs and the company has been working strenuously
to address what it believes are deficiencies on aspects of the
sterilization process and issues with inoculum strength.
In addition, it is possible that the grain the company has been
utilizing recently as its substrate has actually received an
unwanted chemical treatment at some stage of the growing cycle.
All these matters are under close review.
On the "ARMOUR-Zen" line the alteration to product formulation
has indeed improved the outcome of the final filtration step
but, after several further production runs, it is clear that the
'speed of filtration' is not up at the precise level we had
planned.
The combined effect of these production hurdles is such that the
directors have this week re-assessed the company's ability to
meet the production targets upon which the forecasts provided to
Bank of New Zealand and the proposed subscribers to convertible
notes and options were based.
The conclusion of that reassessment has been that if the
production issues are not able to be resolved, then those
targets would not be met, with a consequential adverse effect on
the company's cashflow.
The company said that the directors and management will be
discussing with Bank of New Zealand and the subscribers to the
proposed convertible notes and option issue their respective
responses to these production difficulties over the next few
days.
About Botry-Zen
Headquartered in Dunedin, New Zealand, Botry-Zen Limited --
http://www.botryzen.co.nz/-- is engaged in the research,
development and commercialization of biological control agents
for use in the agriculture and horticulture industry. The
company operates in New Zealand, and is engaged in the
production and marketing for sale of the BOTRY-Zen product.
BOTRY-Zen is a live spore preparation of a non-pathogenic
saprophytic fungus.
* * *
The company incurred three consecutive annual net losses of
NZ$1.22 million, NZ$1.67 million and NZ$1.58 million for the
years ended March 31, 2008, 2007 and 2006, respectively.
INNOVATIVE PROJECTS: Commences Liquidation Proceedings
------------------------------------------------------
The High Court at Christchurch convened a hearing on July 28,
2008, to consider an application putting Innovative Projects
Limited into liquidation.
The application was filed on June 17, 2008, by Eureka Tiles
(NZ) Pty Limited.
The plaintiff's address for service is at:
Credit Consultants Debt Services NZ Limited
Level 3, 3-9 Church Street
PO Box 213 or DX SX 10069
Wellington
Telephone: (04) 470 5972
Dianne S. Lester is the plaintiff's solicitor.
MW2 LIMITED: Placed Under Liquidation
-------------------------------------
Pursuant to Section 241(2)(a) of the Companies Act 1993, the
shareholders of MW2 Limited resolved that the company be
liquidated and appointed Grant Bruce Reynolds, as liquidator.
Only Creditors who were able to file their proofs of debt by
July 30, 2008, were included in the company's dividend
distribution.
Creditors and shareholders may direct their inquiries to:
Reynolds & Associates Limited
PO Box 259059
Greenmount, Auckland
Telephone: (09) 526 0743
Facsimile: (09) 526 0748
NORTHSPAN CONSTRUCTION: Placed Under Liquidation
------------------------------------------------
Pursuant to Section 241(2)(a) of the Companies Act 1993, the
shareholders of Northspan Construction Ltd resolved that the
company be liquidated and appointed Grant Bruce Reynolds, as
liquidator.
Only Creditors who were able to file their proofs of debt by
July 30, 2008, were included in the company's dividend
distribution.
Creditors and shareholders may direct their inquiries to:
Reynolds & Associates Limited
PO Box 259059
Greenmount, Auckland
Telephone: (09) 526 0743
Facsimile: (09) 526 0748
QA VILLAGES: Commences Liquidation Proceedings
----------------------------------------------
The High Court at Christchurch convened a hearing on July 28,
2008, to consider an application putting QA Villages Ltd into
liquidation.
The application was filed on June 24, 2008, by Chris Shearer
Builders Limited.
The plaintiff's address for service is at:
White Fox and Jones
ABN AMRO Craigs House
90 Armagh Street (PO Box 1353)
Christchurch
Telephone: (03) 353 0650
Facsimile: (03) 353 0652
M. A. Jones is the plaintiff's solicitor.
SAMSONS LTD: Commences Liquidation Proceedings
----------------------------------------------
The High Court at Auckland convened a hearing on July 25, 2008,
to consider an application putting Samsons Limited into
liquidation.
The application was filed on May 6, 2008, by Auckland Finance
Limited.
The plaintiff's address for service is at:
Grove Darlow & Partners
Level 10
WHK Gosling Chapman Tower
51-53 Shortland Street
Auckland
T. J. G. Allan is the plaintiff's solicitor.
TWIN SPRINGS: Placed Under Liquidation
--------------------------------------
Pursuant to Section 241(2)(a) of the Companies Act 1993, the
shareholders of Twin Springs Limited resolved that the company
be liquidated and appointed Colin F. Currie, of Hamilton, as
liquidator.
Creditors and shareholders may direct their inquiries to:
Colin F. Currie
PO Box 19296
Hamilton
Telephone: (0274) 571 928
Facsimile: (07) 838 1600
Direct dial (07) 838 1666
WAIMARIE INDUSTRIES: Commences Liquidation Proceedings
------------------------------------------------------
The High Court at Christchurch convened a hearing on July 28,
2008, to consider an application putting Waimarie Industries
Limited into liquidation.
The application was filed on April 24, 2008, by Mainfreight
International Limited.
The plaintiff's address for service is at:
Credit Consultants Debt Services NZ Limited
Level 3, 3-9 Church Street
PO Box 213 or DX SX 10069
Wellington
Telephone: (04) 470 5972
Dianne S. Lester is the plaintiff's solicitor.
=====================
P H I L I P P I N E S
=====================
ABOITIZ TRANSPORT: 1st Half Net Profit Tumbles to Php16.8 Mil.
--------------------------------------------------------------
Aboitiz Transport System Corp.'s net profit tumbled to Php16.8
million in the first six months from Php366.6 million a year
earlier due to rising costs, particularly fuel, Business World
reports.
According to the report, despite a 9% revenue hike in the first
quarter to Php6 billion from Php5.5 billion last year, the total
costs and expenses jumped by 15% "largely due to the higher fuel
and charter-related expenses."
Freight revenues, which constitute the bulk of the revenues,
went up by 12% compared with last year to reach Php3.7 billion
in the first half, Business World says.
"The continued rise in fuel prices has eroded margins, although
this has been partly mitigated by the growth in its value-added
services," the company said in a statement cited by the Business
World.
Aboitiz Transport, the report notes, recorded an after-tax gain
of Php247.5 million last year.
Meanwhile, Business World relates that passenger revenues
totaled Php1.4 billion, 5% lower than Php1.5 billion in the same
period last year due to decreasing ridership stemming from
vessel sales and the conversion of passenger capacity into
freight.
As of June 30, Business World says the company's consolidated
assets amounted to Php8.6 billion, cash and cash equivalents
stood at Php766.2 million, while stockholders' equity stood at
Php4.5 billion.
Aboitiz Transport System Corporation (PSE:ATS) --
http://www.atsc.com.ph/-- is an integrated transport solutions
provider in Philippines. The Company's principal business units
are engaged in the movement of people operating under brand
names SuperFerry, SuperCat and Cebu Ferries, and the movement of
cargos operating under the brand name 2GO. Its array of
services focussing on cargo movements includes containerization,
RoRo services, logistics and supply chain solutions. It also
provides ship management and manpower solutions worldwide under
the Aboitiz-Jebsen group of companies. As of December 31, 2008,
it had a total fleet of 17 operating vessels, 15 of which were
Company-owned ships. The fleet consists of four fast crafts
under the brand name SuperCat, nine RoRo/Pax vessels, including
six under the SuperFerry brand, four vessels under Cebu Ferries
brand and two Freighters. ATS vessel fleet has a combined gross
registered tonnage of 85,936 metric tons, and a total passenger
capacity of approximately 15,656 passengers.
G7 BANK: Ordered Closed, Placed Under Receivership
--------------------------------------------------
The Monetary Board ordered the closure of G7 Bank Inc. (Rural
Bank of Nabua Inc.) and placed it under the receivership of the
Philippine Deposit Insurance Corporation (PDIC) by virtue of MB
Resolution No. 961 dated July 31, 2008. PDIC is the statutory
receiver of closed banks.
In a statement, PDIC assured depositors of the Bank that the
state deposit insurer will conduct payout of valid claims for
insured deposits as soon as possible. This is in keeping with
the Corporation's commitment to protect the interests of
depositors by providing them immediate access to their insured
deposits. The PDIC conducts rigorous examination of available
bank records to ascertain the validity of claims, and the speed
of the payout depends on the availability of bank records upon
takeover. For deposit insurance claims that are deemed valid,
payout operations normally start in nine days or less. But, for
claims that need further verification, more in-depth
examinations are conducted which may include interviewing
claimants and requesting them to submit additional supporting
documents.
G7 Bank Inc. is a seven-unit bank with branches mostly in the
Bicol Region. Its head office is in Naga City and its branches
are in Daraga, Albay; Ligao, Albay; Naga-E. Angeles-Panganiban
Streets; Polangui, Albay; Nabua, Camarines Sur; and Pasig City
in Metro Manila.
PDIC took over G7 Bank on August 1, 2008. Based on the Bank's
latest report, it has total estimated deposits of about Php3.4
billion as of June 30, 2008.
UCPB: Moody's Comments on Bank's Recapitalization
-------------------------------------------------
Moody's Investors Service says the announced recapitalization
agreement between United Coconut Planters Bank (UCPB) and three
government agencies should help stabilize the bank's financial
condition.
Moody's currently assigns to UCPB a bank financial strength
rating of E and foreign currency deposit ratings of B1/Not-
Prime. The outlook for all ratings is stable.
The government agencies are the Department of Finance,
Presidential Commission on Good Government and Philippine
Deposit Insurance Corp (PDIC).
Under the agreement, PDIC will convert the remaining PHP12
billion of its PHP20 billion Financial Assistance Package
provided to UCPB in 2003 into special Tier 1 capital qualifying
instruments.
The notes will be issued under a special authority granted in
January 2008 to PDIC by the Bangko Sentral ng Pilipinas (BSP)
for banks under rehabilitation.
"From a bondholders' perspective, these instruments are
equivalent to equity in their loss-absorbing capacity," says
Richard Lung, a Moody's VP/Senior Analyst. "If the bank is
liquidated, they are subordinated to its depositors, senior
creditors, and holders of lower and upper tier 2 subordinated
debt."
"However, the instruments are not common shares in that they do
not automatically convey ownership rights to their holders,"
says Lung. "Only with BSP approval can PDIC transfer or convert
these instruments into preferred shares convertible into common
equity. BSP approval is also required if UCPB exercises its
call option."
"Because of potential complications in converting these
instruments into shares, they only marginally increase the
bank's financial flexibility," says Lung, adding, "The bank's
inability -- due to disputes over its ownership -- to issue new
capital has long served as a constraint on its ratings."
"While PHP12 billion in new capital is a good step towards the
bank's rehabilitation, more capital will be needed for positive
pressure to develop on UCPB's ratings," says Lung. In analyzing
UCPB's capital position, Moody's takes into consideration that,
if not for regulatory forbearance, its equity as of end-2006
would have been PHP21.73 billion lower than reported.
The Department of Finance has provided additional support to the
bank by pledging to maintain at least PHP25 billion in deposits,
but which can only be invested in government securities.
The agreement points to the bank's continuing reliance on
external government support and is consistent with its E bank
financial strength rating.
While the agreement better positions UCPB for recovery, Moody's
says it still faces significant challenges in rebuilding its
weakened franchise amid a competitive banking sector and
volatility in Philippine government bond prices.
Since UCPB was first put under sequestration over 20 years ago,
its market position has been eroded. From being positioned as
the 6th largest bank with 4.9% of total commercial bank assets
in 1985, it is now in 15th place with only 2.3% as of end-2007.
At the same time, Moody's says this agreement has no impact on
UCPB's B1/NP foreign currency deposit ratings, which already
incorporate a high probability of systemic support as a result
of the government's control of the bank and past support.
The outlook on all of the bank's rating is stable. The less
benign operating environment evident in the Philippines places
the bank in a difficult position in trying to gain momentum even
with this support.
UCPB, headquartered in Makati, is a universal bank offering a
full range of extended commercial banking services, corporate
banking, international trade financing, treasury and money
market operations, trust banking, investment banking and
consumer financing. It has been run by government-appointed
professionals since major shareholders' holdings were
sequestered in 1986.
* PHILIPPINES: Inflation Reaches 17-Year High to 12.2%
------------------------------------------------------
Headline inflation climbed to 12.2 percent year-on-year in July,
bringing the inflation rate to its highest level since 1991,
according to the Bangko Sentral ng Pilipinas.
July's inflation was higher than the 11.4 percent posted in
June, and brought the year-to-date average to 8.3 percent. Most
major commodity groups, led by food, beverages and tobacco,
posted higher inflation rates relative to their levels in the
previous month. However, month-on-month headline inflation was
lower at 1.5 percent in July from 2.3 percent in June. Core
inflation, which excludes certain specific food and energy items
to obtain an underlying measure of generalized price pressures,
was also slightly down at 6.3 percent year-on-year in July from
6.6 percent in June.
Higher prices of food products pushed inflation higher in July.
The food items that drove inflation were rice, cereal
preparations, fruits and vegetables, and miscellaneous food
items (mainly coffee, cocoa, tea, salt, and cooking oil). While
domestic rice prices declined in July relative to June, lower
prices a year ago yielded higher year-on-year rice inflation in
July. Recent typhoons affected the supply of fruits and
vegetables while more expensive flour drove the prices of cereal
products higher. Elevated global oil prices were reflected in
higher domestic pump prices of petroleum products and transport
fares in July.
The BSP is determined to keep a firm grip on inflation and
inflation expectations and will respond appropriately to
safeguard price stability. Monetary policy will ensure that
inflation expectations remain anchored to avoid a wage-price
spiral and minimize the adverse impact on economic activity.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland, USA. Marites M. Claro, Rousel Elaine C. Tumanda,
Valerie C. Udtuhan, Marie Therese V. Profetana, Frauline S.
Abangan, and Peter A. Chapman, Editors.
Copyright 2008. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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electronic re-mailing and photocopying) is strictly prohibited
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Information contained herein is obtained from sources believed
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thereof are US$25 each. For subscription information, contact
Christopher Beard at 240/629-3300.
*** End of Transmission ***