/raid1/www/Hosts/bankrupt/TCRAP_Public/090427.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
Monday, April 27, 2009, Vol. 12, No. 81
Headlines
A U S T R A L I A
BRISCONNECTIONS: BTR Launches $1.3-Bln Class Action
JAMES HARDIE: Asbestos Claimants May Not Get Paid for 2 Years
OZ MINERALS: Treasurer Swan Approves Minmetal Deal
OZ MINERALS: Sells Martabe to China Sci-Tech for US$211 Mln.
STORM FINANCIAL: Federal Court Winds Up Subsidary
C H I N A
GREENTOWN CHINA: S&P Downgrades Corporate Credit Rating to 'B+'
ZENDAI PROPERTY: Moody's Confirms Corporate Family Rating at 'B2'
I N D I A
BANNARI AMMAN: Fitch Assigns National Long-Term Rating at 'BB-'
MONARCH INNOVATIVE: CRISIL Rates Rs.125.0 Mln Cash Credit at 'BB-'
NAVEEN COTTON: Weak Liquidity Prompts CRISIL 'C' Ratings
SEW-NAVAYUGA BARWANI: Fitch Puts 'BB+' Rating on Bank Loans
SUPREME COT-SPIN: Loan Repayments Default Cues CRISIL 'D' Ratings
* India Banks NPAs May Deteriorate in Next Two Years, CRISIL Says
I N D O N E S I A
PT MEDCO: Moody's Reviews 'B2' Corporate Family Rating
J A P A N
CITIGROUP INC: SMFG Gains Preferential Rights to Buy Nikko Cordial
SHINSEI BANK: Fitch Downgrades Individual Ratings to 'C/D'
SURUGA CORPORATION: JCR Withdraws 'D' Ratings
TOM SAWYER: S&P Junks Rating on Senior Trust Certificate From 'A'
TOYO CORP: S&P Changes Outlook on 'BB+' Rating to Negative
K O R E A
HYNIX SEMICONDUCTOR: Sets Share Sale Price at KRW11,700/share
HYNIX SEMICONDUCTOR: Q1 Loss Widens to KRW1.19 Tril.
HYUNDAI MOTOR: First Quarter Net Profit Slumps 43%
SSANGYONG MOTOR: Suppliers To Get Liquidity Aid from Gov't.
M A L A Y S I A
SATANG HOLDINGS: Bursa Extends Plan Filing Deadline to July 6
N E W Z E A L A N D
AIR NEW ZEALAND: Number of Passengers Drop 7.6% in March
BRIDGECORP: Investors May Get Less Than 10% Payout, Receivers Say
T A I W A N
AU OPTRONICS: First Qtr Loss Narrows to NT$20.2 Bln.
JIH SUN: Fitch Changes Outlook to Stable; Affirms 'BB' Ratings
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A U S T R A L I A
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BRISCONNECTIONS: BTR Launches $1.3-Bln Class Action
---------------------------------------------------
A major shareholder in BrisConnections has launched a AU$1.3
billion class action against the company and Macquarie Bank, The
Age reports citing AAP.
The report says the claim was filed in the Federal Court in Sydney
on Friday, April 24, by lawyers for Brisbane Toll Road Link
("BTR")- owned by US-based New Hampton Distressed Asset Fund and
represented by Sydney businessman Jim Byrnes - which owns 15.2% of
BrisConnections.
According to the report, Mr. Byrnes said the class action was
launched on behalf of all past and present unit holders.
The report relates Mr. Byrnes said the action alleged misleading
statements and errors in the product disclosure statement.
Lawyer Raymond Whitten of Whittens confirmed the court had
accepted on Friday the statement of claims seeking $1.3 billion.
The Troubled Company Reporter-Asia Pacific, citing The Australian,
reported on Apr. 24, 2009, that BTR requested for another
unitholder meeting on a plan replace the company's trust manager.
The Australian said BTR proposes Armstrong Corporate Capital,
based in Surfers Paradise, as the new responsible entity.
Macquarie Offers Lifeline to Investors
As reported in the TCR-AP on Apr. 22, 2009, The Sydney Morning
Herald said Macquarie Group Ltd offered a lifeline to small
investors in Brisconnections by paying their outstanding
installments if they give up their holdings for free.
According to the Herald, Macquarie Group said it will pay all
remaining liabilities to about 80 per cent of unit holders in the
BrisConnections Investment Trust, including the second instalment
of $1 per BrisConnections unit due on April 29 and a third
instalment of $1 per security on January 29, 2010.
The Herald related Macquarie's offer is open to eligible unit
holders who held fewer than 50,000 units in BrisConnections
as of April 14. The Herald said unit holders have until May 4 to
accept Macquarie's offer.
The TCR-AP, citing Reuters, reported on April 6, 2009, that
BrisConnections said one of the underwriters of its share offer,
Macquarie Bank or Deutsche Bank, may approach unitholders in a bid
to break a deadlock over funding obligations.
Reuters related that unitholders in BrisConnections are liable for
an installment payment of AU$1 per security in April, amounting to
millions of dollars.
However, Reuters said some shareholders have moved to have the
company wound up after the market value of the securities fell to
AU$0.001.
Wind Up Bid
As reported in the TCR-AP on April 15, 2009, The Australian said
a vote to wind up BrisConnections failed after renegade investor
Nicholas Bolton sold his voting rights to Leighton Holdings Ltd.
The Australian, citing Leighton Holdings in filing to the
Australian stock exchange, said the company has agreed to pay
AU$4.5 million for the voting rights associated with Mr. Bolton's
19.8 percent stake in BrisConnections.
The Australian said Mr. Bolton voted against his own motion to
wind up BrisConnections. The motion to wind the company up failed
with 63.34% of votes against the motion and 35.66% of votes in
favor, The Australian noted.
Background
BrisConnections was awarded a 45-year concession to design,
construct, operate, maintain and finance the AU$4.8 billion
Airport Link toll road in Brisbane, according to a report posted
at Core Economics Web site by Sam Wylie.
The Core Economics related the equity financing component of the
AU$4.8 billion project is raised by issuing 390 million units at
AU$3 each, $1 is paid in July and additional payments of $1 must
be met by the unit holders on April 20, 2009 and January 29, 2010.
BrisConnections has promised a payment of 5.95c to unit holders in
2009 before the first $1 installment is due.
However, the units fall in price to 41c on their first day of
listing on the ASX. The issue was undersubscribed, as evidenced
by the large number of shares held by the underwriters after the
listing.
The units continue to fall in price, falling below 5c per unit in
mid September and reaching 0.1c per unit, the lowest possible
price for a listing on the ASX, in November 2008.
BrisConnections had announced that the first distribution to unit
holders will not take place until after the receipt of the first
$1 installment in April 2009.
About BrisConnections
BrisConnections Management Company Limited (ASX:BCSCA) --
http://www.brisconnections.com.au/-- is an Australia-based
company. The company is engaged in designing, constructing,
operating, maintaining and financing Airport Link in Australia.
Airport Link is a 6.7 kilometer toll road, mainly underground,
connecting the North-South Bypass Tunnel, Inner City Bypass and
local road network at Bowen Hills, to the northern arterials of
Gympie Road and Stafford Road at Kedron, Sandgate Road and the
East West Arterial leading to the airport.
JAMES HARDIE: Asbestos Claimants May Not Get Paid for 2 Years
--------------------------------------------------------------
Madelene Pearson at Bloomberg News reports James Hardie Industries
NV’s fund to compensate asbestos victims may be unable to pay all
claims within two years after the U.S. housing recession trimmed
the company’s earnings for six straight quarters.
The report says James Hardie isn’t likely to contribute to the
fund in the year ending March 31, 2010, as the worst economic
slump since the Great Depression weighs on U.S. home sales.
The report notes it’s the second time a James Hardie fund has run
short of money to compensate asbestos victims.
According to the report, James Hardie used asbestos in its
products for more than 60 years. The company however began to
phase out blue asbestos in 1968 and all products were asbestos-
free by 1986, the report says.
The report discloses the fund, which had assets of AU$140 million
(US$99 million) as at March 31, is seeking talks with James Hardie
and the New South Wales government.
James Hardie pays a maximum 35 percent of its annual net operating
cash flow to the fund and its contributions are intended to create
a two-to-three year funding buffer, the report relates.
Netherlands-based James Hardie is the biggest seller of home
siding in the U.S.
OZ MINERALS: Treasurer Swan Approves Minmetal Deal
--------------------------------------------------
OZ Minerals Limited said Treasurer Wayne Swan of the Commonwealth
of Australia has approved the proposed acquisition by China
Minmetals Non-Ferrous Metals Co. Ltd. ("Minmetals") of all of the
assets of OZ Minerals except for Prominent Hill.
In a statement released on April 23, Mr. Swan said the decision is
conditional on legally enforceable undertakings.
The conditions include that Minmetals will:
-- operate the acquired mines as a separate business with
commercial objectives;
-- operate the mines using companies incorporated,
headquartered and managed in Australia under a
predominantly Australian management team;
-- price all off-take on arms-length terms by a sales
team headquartered in Australia, with reference to
international observable benchmarks and in line with
market practice;
-- maintain or increase production and employment at
Century, Rosebery and Golden Grove mines, pursue
growth in Century and Rosebery mines, reopen Avebury
mine and develop Dugald River, subject to economic
conditions;
-- comply with Australian industrial relations laws and
honour employee entitlements; and
-- maintain and increase levels of Indigenous employment
in its local operations and honour agreements with
Indigenous Australian communities.
"These undertakings, which are designed to protect around 2,000
Australian jobs, ensure consistency with Australia's national
interest principles and are a condition of my approval under the
Foreign Acquisitions and Takeovers Act 1975," Mr. Swan said.
"Minmetals' revised proposal is for Golden Grove, Century,
Rosebery, Avebury and Dugald River mining operations in
Australia."
"These produce zinc, copper, lead, and silver, which are priced
with reference to the London Metal Exchange. Currently, some 80
per cent of total production from these mines is subject to life
of mine contracts."
OZ Minerals has advised that it intends to remain an ASX listed
company and to continue operating and further developing the
Prominent Hill mine.
The Troubled Company Reporter-Asia Pacific, citing Bloomberg News,
reported on Mar. 30, 2009, that Australia's treasurer blocked
China Minmetals's AU$2.6 billion (US$1.8 billion) takeover offer
for OZ Minerals due to a mine's proximity to a weapons testing
site.
"The Woomera Prohibited Area weapons testing range makes a unique
and sensitive contribution to Australia's national defense,"
Treasurer Wayne Swan said in an e-mailed statement obtained by
Bloomberg News. "It is not unusual for governments to restrict
access to sensitive areas on national security grounds."
According to the report, the Woomera site is located near OZ
Minerals Prominent Hill copper and gold mine in South Australia
state, hence, Mr. Swan said Minmetals's bid can't be approved if
it includes Prominent Hill.
As reported in the Troubled Company Reporter-Asia Pacific on
Mar. 31, 2009, OZ Minerals said under the alternative proposal,
Minmetals will acquire all of OZ Minerals' assets except for
Prominent Hill, Martabe and the company's portfolio of listed
assets, including Toro Energy Limited.
OZ Minerals may sell the assets for as much as AU$1.6 billion,
enough to repay debt owed to 11 banks, RBC Capital Markets said as
cited by Bloomberg News.
Bloomberg News says OZ Minerals has gained a one-month extension
on about AU$1.2 billion (US$830 million) of debt.
OZ Minerals Chief Executive Andrew Michelmore, as cited by
Reuters, said the company will look to pay off all its loans if
Minmetals's revised offer is approved.
Minmetals's revised proposal will provide a complete solution to
the company's refinancing issues, OZ Minerals said in a statement.
Bloomberg News said the extension of OZ Minerals's debt facilities
is a condition of Minmetals's takeover offer.
About China Minmetals
China Minmetals is one of the largest metals and minerals trading
companies in the world and the largest iron and steel trader in
China. The company exports coke, coal, and ferroalloys; imports
iron ore, steel scraps, and slabs and billets; and sells about 20
million tons of steel products annually. It has domestic iron ore
mining operations and also helps steel producers abroad with
facility construction and equipment supply. Other subsidiaries
deal in financial services, real estate development, and
transportation logistics. China Minmetals' sales network
stretches through Africa, the Americas, Asia, Australia, and
Europe. It operates more than 100 offices in China and more than
40 companies abroad.
About OZ Minerals
OZ Minerals Limited, formerly Oxiana Limited, --
http://www.ozminerals.com/-- is an Australia-based mining
company. The company is a producer of zinc, copper, lead, gold
and silver. OZ Minerals was formed through a merger of Australia-
based international mining companies Oxiana Limited and Zinifex
Limited. The company has five mining operations located in
Australia and Asia, three new mining projects in development and a
portfolio of advanced and early-stage exploration projects
throughout Australia, Asia and North America. Its projects
include the Century mine in Queensland, Sepon copper operation in
Laos, the gold operation at Sepon, the Golden Grove underground
base and precious metals mine in Western Australia, the Rosebery
mine in Tasmania, the Avebury nickel mine in Tasmania, the
Prominent Hill copper-gold project in South Australia, the Martabe
gold project in Indonesia, the Dugald River deposit in Queensland,
and the Izok Lake and High Lake copper and zinc deposits in the
Nunavut territories of Canada.
* * *
As reported by the Troubled Company Reporter-Asia Pacific on
December 12, 2008, Fitch Ratings downgraded OZ Minerals Limited's
Long-term foreign currency Issuer Default Rating to 'CC' from
'BBB-' (BBB minus), and has simultaneously withdrawn it. The
rating remained on Rating Watch Negative at the time of
withdrawal.
OZ MINERALS: Sells Martabe to China Sci-Tech for US$211 Mln.
------------------------------------------------------------
OZ Minerals Limited said it has sold its Martabe gold and silver
project in North Sumatra, Indonesia, to China Sci-Tech Holdings
Limited ("CST") for US$211 million in cash.
CST has agreed to pay a deposit of US$10 million upon signing and
the balance of US$201 million upon completion of the transaction,
which is expected by early June 2009, OZ said in a statement.
OZ Minerals will also be reimbursed by CST for an estimated
expenditure of US$7.5 million on the project since April 1 through
to the completion date.
The sale is not conditional on financing, and CST will fund the
acquisition from cash on hand. However, it is conditional on the
consent of certain of OZ Minerals' lenders, CST's shareholders and
Australia's Foreign Investment Review Board.
"The proceeds from this sale will make an important contribution
to addressing OZ Minerals’ refinancing issues," Andrew Michelmore,
Managing Director and CEO of OZ Minerals said.
"We are pleased that, in CST and its Indonesian partners, we have
been able to transact with a team who has paid an acceptable price
after a competitive bidding process and who also understand and
respect the requirements of doing business in Indonesia," said Mr.
Michelmore.
OZ Minerals' financial and legal advisors for this transaction
were Gryphon Partners and Freehills, respectively.
About CST
Hong Kong Stock Exchange-listed China Sci-Tech Holdings Limited is
an investment holding company. The Company is organized into two
operating divisions: investments in financial instruments, which
includes investment and trading of securities and commodity
contracts, and property investment, which includes rental income
from the properties letting under operating lease. Its
subsidiaries include China Sci-Tech Secretaries Limited, Cyber
Range Limited, Harbour Fair Overseas Limited, Millennium Riders
Limited, Perfect Touch Technology Inc. and Smart Ease Limited.
About OZ Minerals
OZ Minerals Limited, formerly Oxiana Limited, --
http://www.ozminerals.com/-- is an Australia-based mining
company. The company is a producer of zinc, copper, lead, gold
and silver. OZ Minerals was formed through a merger of Australia-
based international mining companies Oxiana Limited and Zinifex
Limited. The company has five mining operations located in
Australia and Asia, three new mining projects in development and a
portfolio of advanced and early-stage exploration projects
throughout Australia, Asia and North America. Its projects
include the Century mine in Queensland, Sepon copper operation in
Laos, the gold operation at Sepon, the Golden Grove underground
base and precious metals mine in Western Australia, the Rosebery
mine in Tasmania, the Avebury nickel mine in Tasmania, the
Prominent Hill copper-gold project in South Australia, the Martabe
gold project in Indonesia, the Dugald River deposit in Queensland,
and the Izok Lake and High Lake copper and zinc deposits in the
Nunavut territories of Canada.
* * *
As reported by the Troubled Company Reporter-Asia Pacific on
December 12, 2008, Fitch Ratings downgraded OZ Minerals Limited's
Long-term foreign currency Issuer Default Rating to 'CC' from
'BBB-' (BBB minus), and has simultaneously withdrawn it. The
rating remained on Rating Watch Negative at the time of
withdrawal.
STORM FINANCIAL: Federal Court Winds Up Subsidary
-------------------------------------------------
The Federal Court has placed Storm Financial Limited subsidiary
Victorian Families Retirement and Investment Group under
liquidation, The Age reports.
The report says the court has appointed provisional liquidators
Ivor Worrell and Raj Khatri of Worrells Solvency and Forensic
Accountants as the official liquidators of the company.
According to the report, Mr. Worrell said the application to
formally place the company into official liquidation was
inevitable given the demise of its parent company, Storm
Financial.
"The tender process for the sale of the Victorian Families
business closed recently and potential purchasers are now involved
in due diligence work," the report quoted Mr. Worrell as saying.
The report relates Victorian Families creditors' meeting is
expected in June.
Meanwhile, the report says, Storm office properties in Cairns and
Townsville are expected to be sold this week in a bid to recover
part of the $27 million owed to the Commonwealth Bank.
The properties, says The Age, include the $5 million Townsville
headquarters, which has about $1.5 million in luxury furnishings,
such as crystal chandeliers and paintings.
About Storm Financial
Storm Financial Limited -- http://www.stormfinancial.com.au/--
operates in the Australian wealth management industry that manages
over one trillion dollars in investment fund assets for over nine
million investors, distributed through investment administration
providers and financial advisers. These funds are invested
through different investment products and structures, including
superannuation, nonsuperannuation managed funds and life insurance
products. Non-superannuation managed funds, which form the
majority of Storm's products, total approximately 26.5% of total
investment fund assets in Australia, as of June 30, 2007.
* * *
As reported in the Troubled Company Reporter-Asia Pacific on
Jan. 14, 2009, Storm Financial appointed Worrells as voluntary
administrators after the Commonwealth Bank of Australia Ltd (CBA)
demanded debt repayment of around AU$20 million.
Storm later closed its business and fired all of its 115 staff.
The closure, the company's administrators said, was due to the
significant reduction in Storm's income resulting in trading
losses being incurred "at a rate which the company could no longer
absorb."
The TCR-AP, citing Sydney Morning Herald, reported on Jan. 22,
2009, that the Commonwealth Bank of Australia, Storm's largest
creditor, lodged a AU$27.09 million debt claim at a first meeting
of the company's creditors on January 20.
According to the Herald, Administrators Worrells Solvency &
Forensic Accountants said the group's remaining creditors are owed
AU$51 million, plus a provision for dividends of AU$10 million.
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C H I N A
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GREENTOWN CHINA: S&P Downgrades Corporate Credit Rating to 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it had lowered the
long-term corporate credit rating on Greentown China Holdings Ltd.
to 'B+' from 'BB-'. At the same time, it lowered the issue rating
on the company's Chinese renminbi 2.3 billion convertible bond due
2012 and US$400 million senior unsecured notes due 2013 to 'B'
from 'B+'. All the ratings were placed on CreditWatch with
negative implications.
The CreditWatch placement follows the company's announcement of a
tender offer to repurchase its US$400 million unsecured notes and
the disclosure of bond covenant breaches.
"The CreditWatch reflects our uncertainty over whether the
breaches could trigger an acceleration of other debt obligations.
This could in S&P's opinion bring severe liquidity pressure upon
the company, should the note holders declare a default, possibly
leading to a multi-notch downgrade. The CreditWatch also reflects
uncertainty over whether the company has breached covenants in its
other obligations," said Standard & Poor's credit analyst
Christopher Lee.
The ratings revisions reflect: (1) S&P's uncertainty over
Greentown's liquidity position, which could be further weakened;
(2) S&P's belief that the company's flexibility has significantly
weakened, as indicated by its willingness to accept higher cost
trust financing; and (3) the uncertain state of the company's
financial positions following the recent restructuring of its
assets and financing through trust loans.
In S&P's view, the company is refinancing its offshore debt with a
combination of cash on hand and onshore funding, which has
recently improved for property developers. Greentown's leverage
is likely to decline, assuming a successful tender offer.
Nevertheless, S&P believes its thinner liquidity buffer and
limited unrestricted cash on hand could make the company
vulnerable to a weak outlook for property sales and significant
land premium and construction commitments over 2009.
Greentown announced on April 21, 2009 that it will make an offer
to buy back all its US$400 million notes at US$850 for every
US$1,000 of notes held. The consideration includes US$75 for
early tender and consent for the amendment and wavier of
covenants.
Standard & Poor's believes the proposed tender offer does not
amount to a distressed exchange because: (1) the terms do not
appear to be coercive; and 2) the company's recent sales
performance and access to funding could support the tender offer.
The note holders have an option to reject the repurchase offer but
accept the proposed amendments and waivers to the covenants.
S&P could change its assessment of the tender offer if the company
states that its financial position is materially weaker than S&P
currently expect, such that note holders face the prospect of
Greentown being in financial duress if the tender offer is not
accepted. The latter scenario could materialize if the covenant
breaches trigger the early repayment of other borrowings. As per
the company's announcement, the tender offer expiration date is
May 19, 2009, while the consent date is May 4, 2009.
Standard & Poor's expects to resolve the CreditWatch within the
next three months -- after S&P obtains adequate information on
whether the bond covenant breaches could affect Greentown's other
obligations and S&P receives additional information to assess the
company's financial and liquidity position.
The ratings could be lowered by more than one notch if S&P
believes the bond covenant breaches could trigger the acceleration
of repayment of other obligations or if the company's liquidity is
not sufficient to meet short-term borrowings repayments, or if it
has difficulties in accessing credits for refinancing.
ZENDAI PROPERTY: Moody's Confirms Corporate Family Rating at 'B2'
-----------------------------------------------------------------
Moody's Investors Service has confirmed Shanghai Zendai Property
Ltd's B2 corporate family and senior unsecured ratings. The
ratings outlook is negative. This concludes the rating review for
possible downgrade initiated on January 22, 2009.
"Moody's has confirmed Zendai's ratings as there is no evidence
that the replacement of four executive directors has materially
interrupted the company's operations," says Kaven Tsang, an
AVP/Analyst in Moody's.
"Some of the new directors already have working relationships with
Zendai or with its related companies, while two of the directors
who resigned are still working within Zendai and managing business
operations," says Tsang, also Moody's lead analyst for the
company.
"Though the company has reported weaker than expected contracted
sales and balance sheet cash during 2008, the company's overall
credit profile -- EBITDA interest coverage at 3.8x and adjusted
debt/capitalization at 41% -- is considered appropriate for the
existing B2 rating level," says Tsang.
The negative outlook reflects Zendai's weakened liquidity with
balance sheet cash depleted to HK$386 million as of end-2008; it
also has to rely on successful execution of its sales plan to
restore near-term liquidity. Given sales activities in 1Q2009
remained slow (contract sales amounted to around RMB250 million),
its cash position has only improved slightly.
Partly mitigating these concerns, Zendai does not have material
committed land payments or near-term loan repayments; those
obligations can be covered by existing cash.
The negative outlook also reflects Zendai's high exposure to
business risk given its small and concentrated operating profile
in the context of China's evolving property market.
The possibility of a rating upgrade in the near term is limited,
given Zendai's weak liquidity and negative rating outlook.
However, the outlook could revert to stable if the company
accomplishes its business plan and sales target such that EBITDA
interest coverage remains around 3x and balance sheet liquidity
improves.
On the other hand, the ratings could be downgraded if the company
fails to restore its liquidity and cash is further depleted, such
that it drops below HK$250-300 million. This could be a result of
1) weaker than expected sales; 2) new acquisitions or aggressive
development strategies; and/or 3) failure to access financing for
its projects.
Moody's last rating action with regard to Zendai occurred on
January 22, 2009, when its ratings were put on review for possible
downgrade.
Shanghai Zendai Property Ltd is a Mainland China property
developer focusing on mid-to high-end residential and commercial
developments in Shanghai, Yangtze River Delta area, Hainan
Province, Northeast China and other cities in China.
The company has 19 projects in various stages of development and a
development land bank with an attributable gross floor area of
more than 5.3 million sqm, more than 4.5 million sqm of which have
land ownership certificates.
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I N D I A
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BANNARI AMMAN: Fitch Assigns National Long-Term Rating at 'BB-'
---------------------------------------------------------------
Fitch Ratings has assigned India's Bannari Amman Apparel Private
Ltd a National Long-term Rating of 'BB-(ind)'. The Outlook is
Stable. Fitch has also assigned ratings to BAA's bank loans:
-- Term loans totaling INR576 mil.: 'BB-(ind)' (BB minus(ind));
-- Fund based working capital limits totaling INR140 mil.: 'BB-
(ind)' (BB minus(ind)); and
-- Non fund based limits totaling INR150 mil.: 'BB-(ind)' (BB
minus(ind))/'F4(ind)' (wherever interchangeable).
The ratings reflect the challenges BAA would face in its initial
years of operations and the likely financial, operational and
marketing support its promoters will have to provide till it has a
profitable and stable operational track record.
BAA is a JV between the Bannari Amman Group and US-based Brandot
International. BAA has recently set up production facilities near
Chennai to manufacture and export undergarments for select U.S.-
based apparel brands and other developed countries. Bannari Amman
Group is a mid-sized diversified group operating out of Tamil Nadu
with interests in sugar, spinning and automotive distribution.
While assigning the ratings, Fitch first took a view of the
project -- which became operational towards the end of FY08 -- on
a standalone basis ('B(ind)') and then notched it up for Group
support. Fitch believes that the promoters of the company would
be in a position to support BAA till the project reaches self-
sustainability. To a considerable extent, the JV partners'
strengths in marketing and operations are expected to counter some
of the adverse economic conditions prevailing in the developed
markets which are addressable markets for the company.
There are several challenges faced by BAA. While India's low
labour cost advantages would likely ensure business opportunities
in apparel over the medium term, BAA would most likely face stiff
competition from China and more recently, from Bangladesh and
Vietnam. Also, BAA needs to conform to low tolerance levels in
the apparel segment in which it operates and therefore, training
of its employees is of utmost importance. Penetration into high-
value brands and products, where margins are relatively higher,
will also remain a challenge.
The current economic downturn in countries like the US where BAA's
potential customers sell their products could result in lower
discretionary spending by the ultimate buyers; this could
potentially result in delay in procurement of orders by BAA
leading to lower sales and margins and increase in receivables.
Currently, while BAA has orders for four months of production, it
faces significant competition from other players in small towns in
India with a concentration of apparel manufacturers.
Positive rating triggers are the establishment of a profitable
operational track record and significant improvement in financial
leverage. Negative rating triggers would be continued losses,
interest coverage coming under stress and any delays in debt
service. However, Fitch believes that the current sponsors would
support BAA out of any such temporary liquidity issues. As proof,
beyond the initial contribution of INR120 million. till FY08
towards capital, the partners have infused a further INR160
million in FY09.
In FY08, when operations began on a small scale, BAA's revenues
were INR23 million with an operational loss of INR11 million; at
end-March 2008, BAA's debt was INR390 million and net worth was
INR111 million. In the first nine months of FY09, BAA's revenues
were INR223 million on which it recorded an operating loss of
INR91 million.
MONARCH INNOVATIVE: CRISIL Rates Rs.125.0 Mln Cash Credit at 'BB-'
------------------------------------------------------------------
CRISIL has assigned its ratings of 'BB-/Stable/P4' to the various
bank facilities of Monarch Innovative Technologies Pvt Ltd
(MITPL).
Rs.125.0 Million Cash Credit BB-/Stable (Assigned)
Rs.125.0 Million Proposed Cash BB-/Stable (Assigned)
Credit
Rs.10.0 Million Bank Guarantee P4 (Assigned)
The ratings reflect the impact, on MITPL's credit risk profile, of
its recent foray into providing products and solutions for the
broadcasting industry, and the company's modest scale of
operations. These weaknesses are, however, partially offset by
the benefits that MITPL derives from its experienced management,
and established presence in the photography and videography
segments.
Outlook: Stable
CRISIL believes that MITPL will maintain a stable business risk
profile over the near to medium term on the back of its
established position in the videography segment. The outlook may
be revised to 'Positive' if the company's venture into the
broadcasting segment turns successful, and it is able to improve
its inventory and receivable management. Conversely, the outlook
may be revised to 'Negative' in case of a further decline in
working capital metrics or an inability to demonstrate a
sustainable volume improvement in the broadcasting segment.
About Monarch Innovative
Formed in 1996, MITPL is an IT products provider for digital photo
imaging, videography and broadcasting industries. The company is
promoted by Mr Viren Satra. MITPL operates across India through 73
channel partners. The company has also diversified into the
international market by setting up a sales office in China. MITPL
has introduced solutions such as Virtual Magic Studio (VMS) and
Virtual On Air (VOA) for the broadcasting industry. MITPL
reported a profit after tax (PAT) of Rs.51.98 million on net sales
of Rs.263.59 million for 2007-08 (refers to financial year, April
1 to March 31), as against a PAT of Rs.22.12 million on net sales
of Rs.116.61 million for 2006-07.
NAVEEN COTTON: Weak Liquidity Prompts CRISIL 'C' Ratings
--------------------------------------------------------
CRISIL has assigned its ratings of 'C/P4' to the various bank
facilities of Naveen Cotton Mill Pvt Ltd (NCMPL).
Rs.78.7 Million Cash Credit C (Assigned)
Rs.200 Million Long Term Loan C (Assigned)
Rs.29.7 Million Bank Guarantee P4 (Assigned)
Rs.1.3 Million Letter of Credit P4 (Assigned)
Rs.10 Million Line of Credit P4 (Assigned)
The ratings reflect NCMPL's stretched financial risk profile
marked by high gearing, weak liquidity and debt protection
measures. The ratings also factor in NCMPL's low networth and
small scale of operations. These weaknesses are partially offset
by the benefits that NCMPL derives from its management's
experience in the textile industry.
About Naveen Cotton
Based in Tirupur (Tamil Nadu), NCMPL was promoted as a private
limited company in 2005. Promoted by Mr. R Anandh, it
manufactures low-thread-count cotton yarns with counts of 20, 25,
and 30. It has a current installed capacity of 12000 spindles per
annum. NCMPL reported a net loss of Rs.3 million on net sales of
Rs. 93 million for 2007-08 (refers to financial year, April 1 to
March 31), as against a PAT of Rs. 0.02 million on net sales of
Rs.6 million for 2006-07.
SEW-NAVAYUGA BARWANI: Fitch Puts 'BB+' Rating on Bank Loans
-----------------------------------------------------------
Fitch Ratings has assigned a 'BBB-(ind)' rating to India's SEW-
Navayuga Barwani Tollways Private Ltd's INR5474 million senior
bank loans. The agency has also assigned a rating of 'BB+(ind)' to
SNBTPL's subordinated bank loans of INR300 million. The Outlook
is Stable.
SNBTPL, a 51:49 JV between Navayuga Engineering Constructions Ltd
and SEW infrastructure Ltd (SEW, 'AA-(ind)' (AA minus(ind)),
enjoys an 18-year concession from National Highways Authority of
India ('AAA(ind)'/Stable) to design, engineer, build, finance,
construct, operate and maintain on a Build, Operate and Transfer
(BOT) basis an 82.8km road stretch on the National Highway 3 (NH-
3) between Khalghat and Maharashtra border in the state of Madhya
Pradesh. The estimated cost of the project is INR7.9 billion and
the scheduled commercial operations date is May 19, 2011.
The ratings are constrained by the completion risk given that the
lane widening project has only recently commenced construction.
However, a fixed-price construction contract with SEW, whose terms
mirror those in the concession, offer protection. Furthermore,
more than 90% of the Right-of-Way is already in the company's
possession.
Base case debt service coverage metrics are extremely modest and
vulnerable to various deep stress tests Fitch performed. A three-
year tail in the concession allows the banks to restructure the
loans, if necessary. Some liquidity support is available in the
form of a fully funded debt service reserve account, equivalent to
three months' principal and interest payment.
Fitch has factored into its rating the operational track record
and financial strengths of the sponsors, including the credit
enhancement value of their undertaking to finance the cost and
time overruns, to replenish the senior and subordinated DSRA and
to provide unconditional and irrevocable bank guarantees in the
event project cash flows are inadequate to create the DSRA.
Additionally, SEW has undertaken to the senior lenders, through a
letter of undertaking, to infuse INR100 million, after the COD, to
augment debt payment capacity and to inject additional funds in
case operations and maintenance expenses exceed the base case
projections submitted to the banks. These letters of undertaking
have been registered with the state government of Maharashtra.
The agency believes that the road has long-term economic
potential; its locational advantage in terms of connecting the
state of Madhya Pradesh with the port city of Mumbai should have a
beneficial impact on tollable traffic. Also, it is situated on
the highway that represents the shortest distance between Mumbai
and Agra.
SUPREME COT-SPIN: Loan Repayments Default Cues CRISIL 'D' Ratings
-----------------------------------------------------------------
CRISIL has assigned its ratings of 'D/P5' to the bank facilities
of Supreme Cot-Spin Mills (India) Pvt Ltd (Supreme Cot-Spin).
Rs.52.5 Million Cash Credit Limit D (Assigned)
Rs.185.9 Million Long Term Loan D (Assigned)
Rs.25.4 Million Bank guarantee Limit P5 (Assigned)
This is because the company has defaulted on its term loan
obligations, and there are instances of its working capital
facilities being overdrawn for more than 30 days.
About Supreme Cot-Spin
Incorporated in 2005 by Mr. Gopalasamy, Supreme Cot-Spin is part
of the Supreme group. The company has a capacity of 16,800 owned
spindles and is engaged in the production and sale of cotton yarn
and grey cloth. The Supreme group has six firms engaged in
spinning, sizing, and weaving operations, with total capacities of
16,800 owned and 24,500 leased spindles, 10 power looms, and
sizing capacities of 3600 tonnes per annum. For 2007-08 (refers
to financial year, April 1 to March 31), Supreme Cot-Spin reported
a profit after tax (PAT) of Rs.4 million on net sales of Rs.213
million, as against a PAT of Rs.7 million on net sales of Rs.167
million for 2006-07.
* India Banks NPAs May Deteriorate in Next Two Years, CRISIL Says
-----------------------------------------------------------------
The quality of Indian banks' assets is likely to deteriorate over
the next two years, according to CRISIL. This will be driven by
the slowdown in the economy, and by the aging of loans made in
recent years: banking sector advances have grown roughly four-fold
over the past seven years, to an estimated Rs.27.7 trillion.
CRISIL projects that, by end-March 2011, the sector's gross non-
performing assets (GNPAs) will increase to around 5 per cent of
its advances, from 2.3 per cent at end-March 2008; in absolute
terms, this will mean a tripling of NPAs to Rs.1.9 trillion.
Nevertheless, CRISIL believes that the banking sector's strong
capitalisation will allow it to comfortably absorb the effect of
the increased NPAs.
Mr. Raman Uberoi, Senior Director, CRISIL Ratings, said, “The
increase in NPAs will be driven by delinquencies in corporate
loans; this asset class accounts for about 56 per cent of banks'
advances.” The GNPA ratio in this segment is projected to more
than double by March 2011, to around 4.1 per cent, from the
March 31, 2008 figure of 1.6 per cent. “The deterioration in the
asset quality of corporate loans will result from the increasing
intensity of the demand slowdown, a lack of access to funding at
reasonable rates, movements in foreign exchange rates, and the
lengthening working capital cycle. The effect of these factors on
loans made to small and medium enterprises will be severe”, Mr.
Uberoi added.
In the retail loan book, a combination of dilution in underwriting
standards in the recent past, and the aging of loans in the
portfolio after a period of rapid growth, will drive delinquencies
higher. The GNPA ratio in the retail portfolio, which constitutes
more than 20 per of banks' total advances, is expected to increase
to 4.7 per cent by March 31, 2011, from 3.2 per cent as on
March 31, 2008.
However, banks are strongly capitalised, cushioning the impact of
higher NPAs. The capital coverage for NPAs has increased sharply
over the past ten years: the ratio of net worth to net NPAs was
12.8 times as of end-March 2008, against 2.2 times as of end-March
1998.
Mr. Tarun Bhatia, Head, CRISIL Ratings, said, “Given the increase
in banks' net worth over the past ten years, and the reduction in
their NPAs, capital coverage for NPAs in the sector is at a very
high level. Therefore, even with the expected jump in NPAs, we
project the ratio of net worth to net NPAs at 5 times as on
March 31, 2011. This provides sufficient coverage for losses that
might arise out of these NPAs.”
In addition, the banking sector's assets are far more diversified
than they were in 1998, with a greater proportion of the exposure
being to retail loans and the service sector.
=================
I N D O N E S I A
=================
PT MEDCO: Moody's Reviews 'B2' Corporate Family Rating
------------------------------------------------------
Moody's Investors Service has put on review for possible downgrade
PT Medco Energi Internasional Tbk's B2 corporate family rating and
B3 senior unsecured rating (Senior 8.75% bonds due 2010 issued by
MEI Euro Finance Ltd).
"The rating action reflects the significant refinancing risk faced
by Medco for its upcoming IDR1.2 trillion local currency bonds
maturing on July 11, 2009," says Renee Lam, a Moody's Vice
President and Senior Analyst.
"While Medco has the internal resources to redeem in May 2009
convertible bonds put back by note holders, the company has not
yet secured definitive long-term refinancing to meet the IDR bond
maturity in July," states Ms. Lam.
"Moody's also notes that Medco's capital expenditure is quite
flexible, which could help alleviate the company's liquidity
pressure; however, prolonged underinvestment could damage the
company's medium to long-term cash flow generation ability," she
adds.
In its review, Moody's will focus on Medco's refinancing plans for
its IDR1.2 trillion local currency bonds, alternative sources of
liquidity including potential sale of short term investments or
other assets, and other funding plans for its budgeted capital
expenditure, which is estimated to cost between US$300-350 million
in 2009.
The previous rating action with regard to Medco was taken on 4
March, 2009, when the company's corporate family and unsecured
debt ratings were downgraded to B2 and B3 respectively, with
negative rating outlook.
Headquartered in Jakarta, Medco is a predominantly oil & gas E&P
company with additional operations in drilling, downstream oil &
gas activities and power generation.
Through the acquisition of Novus Petroleum of Australia in 2004,
Medco gained a platform to expand overseas to the US, Middle East
(including Libya, Tunisia, Oman and Yemen) and Cambodia.
=========
J A P A N
=========
CITIGROUP INC: SMFG Gains Preferential Rights to Buy Nikko Cordial
------------------------------------------------------------------
Sumitomo Mitsui Financial Group ("SMFG") has gained preferential
negotiating rights to buy Nikko Cordial Securities from Citigroup
Inc, Kyodo News reports citing sources familiar with the matter.
According to the report, SMFG offered the highest bid of JPY500
billion (US$5.2 billion) among three major Japanese commercial
banks.
Kyodo News relates the sources said SMFG is expected to hold
negotiations with Citigroup on a more detailed assessment of Nikko
Cordial's assets with an eye to reaching an agreement next month
or after.
The acquisition would likely allow SMFG to sharply expand the
scope of its securities business, Kyodo News says.
The Troubled Company Reporter-Asia Pacific, citing Reuters,
reported on April 22, 2009, that Citigroup closed the final
bidding on Monday, April 20, for its planned sale of Nikko Cordial
Securities and part of Nikko Citigroup Ltd.
Reuters, citing five people with direct knowledge of the sale,
related that Mitsubishi UFJ Financial Group, Mizuho Financial
Group and Sumitomo Mitsui Financial Group have submitted bids to
buy the Japanese retail brokerage unit of Citigroup in a deal that
could raise about JPY600 billion (US$6 billion).
According to Reuters, the people said the sale includes part of
Nikko Citigroup Ltd, the wholesale brokerage unit of Citigroup,
but not Nikko Asset Management, its fund management arm that may
be sold off in a separate transaction.
About Citigroup
Based in New York, Citigroup Inc. (NYSE: C) --
http://www.citigroup.com-- is organized into four major segments
-- Consumer Banking, Global Cards, Institutional Clients Group,
and Global Wealth Management. Citi had $2.0 trillion in total
assets on $1.9 trillion in total liabilities as of Sept. 30, 2008.
As reported in the Troubled Company Reporter on Nov. 25, 2008, the
U.S. government entered into an agreement with Citigroup to
provide a package of guarantees, liquidity access, and capital.
As part of the agreement, the U.S. Treasury and the Federal
Deposit Insurance Corporation will provide protection against the
possibility of unusually large losses on an asset pool of
approximately $306 billion of loans and securities backed by
residential and commercial real estate and other such assets,
which will remain on Citigroup's balance sheet. As a fee for this
arrangement, Citigroup will issue preferred shares to the Treasury
and FDIC. In addition and if necessary, the Federal Reserve will
backstop residual risk in the asset pool through a non-recourse
loan.
SHINSEI BANK: Fitch Downgrades Individual Ratings to 'C/D'
----------------------------------------------------------
Fitch Ratings has downgraded Japan's Shinsei Bank Ltd.'s, and
Shinsei Trust and Banking Co., Ltd's Long-term foreign and local
currency Issuer Default Ratings to 'BBB' from 'BBB+' and
Individual ratings to 'C/D' from 'C'. Shinsei's and Shinsei
Trust's Short-term foreign and local currency IDRs have been
affirmed at 'F2'. The Outlook is Negative.
These rating actions follow Fitch's review of Shinsei's
performance and prospects, and resolve the RWN (Rating Watch
Negative) the agency had placed on Shinsei's and Shinsei Trust's
Long-Term IDRs, Short-term IDRs and Individual rating on 6
February 2009.
The downgrades reflect the impact of the financial crisis on
Shinsei's performance and capitalization and the challenging
outlook arising from the severe recession affecting Japan's
economy. Shinsei expects to report a significant net loss for the
financial year to end March (FYE09) and the results are, in
Fitch's opinion, likely to be, at best, break-even for the current
financial year (FYE10). It is therefore difficult for Shinsei to
generate capital internally and it has been undertaking various
actions to strengthen its weakened capital ratios. It raised
JPY48 billion Tier 1 capital in the form of preferred securities
in March; for FYE09 it targets a Tier 1 Capital ratio of 7%,
though this will be assisted by the adoption of the temporary
concession to exclude unrealized losses on available for sale
securities, which Fitch estimates benefited it by about 50 bp.
While Fitch is generally positive about Shinsei's transition to
the revised business model of being a customer-oriented commercial
bank, the agency will monitor the developments and direction in
achieving this.
Fitch considers Shinsei's liquidity position as adequate,
supported by its ability to raise retail deposits, with a view to
reduce its reliance on wholesale market financing; based on this,
the agency has affirmed its Short-term IDR.
The complete list of ratings is:
-- Shinsei: Long-term foreign and local currency IDRs downgraded
to 'BBB', Short-term foreign and local currency IDRs affirmed
at 'F2', Individual downgraded to 'C/D', Support at '3',
Support Rating Floor at 'BB+', senior unsecured notes at
'BBB', subordinated notes at 'BBB-' (BBB minus), junior
subordinated notes at 'BB' and preferred securities at 'BB'.
-- Shinsei Trust: Long-term foreign and local currency IDRs
downgraded to 'BBB', Short-term foreign and local currency
IDRs affirmed at 'F2', Individual downgraded to 'C/D' and
Support at '2'.
SURUGA CORPORATION: JCR Withdraws 'D' Ratings
---------------------------------------------
Japan Credit Rating Agency Ltd (“JCR”) has withdrawn the D ratings
on senior debts, bonds and shelf registration of Suruga
Corporation.
Senior Debts: D
Issues Amount(bn) Issue Date Due Date Coupon Rating
------ --------- ---------- -------- ------ -----
bonds no.1 JPY11 10/20/2006 10/20/2009 2.89% D
bonds no.2 JPY10 03/15/2007 03/15/2010 2.95% D
Shelf Registration: D
Maximum: JPY39 billion
Valid: two years effective from September 28, 2007
JCR announced the downgrade of the ratings on senior debts,
outstanding bonds and shelf registration of Suruga Corporation to
"D" on June 24, 2008, upon its filing of a petition for
proceedings under protection of Civil Rehabilitation Law with the
Tokyo District Court. Its rehabilitation plan was resolved at the
creditors' meeting held on March 24, 2009. The plan was approved
by the Court on the same date. The court approval became final on
April 21, 2009 and the plan came into force now.
JCR withdraws the ratings on senior debts and the outstanding
bonds of Suruga Corporation because the court ruling of approval
of the plan will modify all of the claims and rights including
claims and rights with respect to the rated bonds.
TOM SAWYER: S&P Junks Rating on Senior Trust Certificate From 'A'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'CCC-' from 'A' its
rating on the senior trust certificate issued under the Tom Sawyer
Trust Funding transaction and removed the rating from CreditWatch
with negative implications, where it had been placed on Feb. 24,
2009.
Since a servicer replacement event occurred in February 2009,
collections from the underlying assets have not been transferred
from the originator/servicer to the trustee. Nevertheless, the
trustee has continued to carry out timely dividend payments on the
trust certificate by drawing on the liquidity reserves that have
been set aside to cover the payments. Since February, the
transaction's counterparties have attempted to move forward with
backup servicing measures, but irregularities relating to the
originator/servicer and the underlying loans have significantly
delayed those measures in the counterparties' initial plan.
The downgrade reflects Standard & Poor's view that there is a high
possibility that the timely payment of dividends on the senior
trust certificate will be missed in the near term as the full
amount of liquidity reserves is likely to be withdrawn before a
backup servicer takes up the servicing job.
The senior trust certificate is ultimately backed by loans to
small and midsize enterprises.
Rating Lowered, Off Creditwatch Negative
Tom Sawyer Trust Funding
JPY10.6 billion senior trust certificate due April 2014
To From Initial Issue Amount Coupon Type
-- ---- -------------------- -----------
CCC- A/Watch Neg JPY10.6 bil. Fixed Rate
The transaction's closing date was in March 2006.
TOYO CORP: S&P Changes Outlook on 'BB+' Rating to Negative
----------------------------------------------------------
Standard & Poor's Ratings Services revised to negative from stable
the outlook on its 'BB+' long-term corporate credit rating on Toyo
Corp., reflecting increased downward pressure on the earnings of
the trading company. Toyo has been negatively affected by the
Toyota group companies' sharp drop in auto production since fall
2008, amid the flagging global automobile market. At the same
time, Standard & Poor's affirmed its 'BB+' long-term corporate
credit rating on Toyo.
Toyo has expanded its earnings over the past few years in tandem
with the growth of its largest customer, Aisin Seiki Co. Ltd.
(AA-/Negative/A-1+), and the Toyota group companies. However, S&P
estimates that the company's revenues and profits decreased
considerably in fiscal 2008 (ended March 31, 2009), due to the
rapid deterioration in the automobile market. Toyo has been
negatively affected by sluggish sales and production cuts at
Toyota Motor Corp. (AA+/Negative/A-1+). This is because sales to
major Toyota suppliers, including Aisin, account for the majority
of its total sales. Although S&P currently expects Toyota group
companies to ease their drastic production cuts in the first
quarter of fiscal 2009 (ending June 30, 2009) when excess
inventories are eliminated, S&P believes Toyo's earnings are
likely to remain under downward pressure at least for the next 24
months. This is considering the poor prospects for a prompt
recovery in the global economy and the automobile market, as well
as S&P's expectations that there will be a considerable reduction
in capital expenditure at Toyota group companies in the near term.
Standard & Poor's estimates that, in fiscal 2008, Toyo's funds
from operations to total debt ratio and total debt to capital
ratio worsened to below 10% and over 70%, respectively. S&P is of
the opinion that the risk of further deterioration in the
company's financial profile would be amplified by a protraction of
the downturn in the business environment. Toyo's cash flow and
financial profile are highly volatile due to its small size, which
is one of the company's financial weaknesses. As such, it is
uncertain whether these financial metrics will show sustained
recovery over the medium term.
Standard & Poor's affirmed its rating on Toyo based on these
opinions:
-- The company is likely to demonstrate a certain degree of
resilience to the severe and sharp deterioration in the
business climate, backed by anticipated operating profits in
fiscal 2008, which it is likely to have achieved through
substantial and prompt cost reduction.
-- The demand for cutting tools, Toyo's core product, is likely
to recover in the medium to long term, in tandem with the
production recovery at Toyota group companies, while the
demand for these tools is less volatile than for industrial
machines.
-- Toyo is likely to maintain sufficient liquidity, backed by
ample cash on hand and its favorable relationship with main
creditor banks.
The rating may come under downward pressure if S&P comes to
believe that Toyo's financial profile will worsen further prompted
by operating losses and negative free cash flow as a result of the
continuing severe business environment. In addition, Standard &
Poor's deems the stable relationship with Aisin and other major
suppliers to Toyota Motor as a crucial factor in the maintenance
of the current ratings on the company. The outlook may be revised
to stable if Toyo's financial profile looks likely to recover,
backed by clear prospects for an improvement in earnings and cash
flow, although this is not a likely scenario in the short term.
Ratings List
Ratings Affirmed; CreditWatch/Outlook Action
Toyo Corp.
To From
-- ----
Corporate Credit Rating BB+/Negative/-- BB+/Stable/--
=========
K O R E A
=========
HYNIX SEMICONDUCTOR: Sets Share Sale Price at KRW11,700/share
-------------------------------------------------------------
Hynix Semiconductor Inc has tentatively set the price of 70
million new shares it would sell under a shareholder-led fund-
raising plan at KRW11,700 each, Reuters reports.
The report says Hynix and its shareholders, former creditors of
the company, announced on April 22 a fresh funding plan of about
KRW1.3 trillion, including a new share issue and loans.
According to Reuters, the final pricing for the share offer, to be
issued in mid-May, will be decided later.
Hynix Semiconductor Inc. (HSI) of Icheon, Korea --
http://www.hynix.com/-- is a memory semiconductor supplier
offering Dynamic Random Access Memory chips ("DRAMs") and Flash
memory chips to a wide range of established international
customers. The company's shares are traded on the Korea Stock
Exchange, and the Global Depository shares are listed on the
Luxemburg Stock Exchange.
* * *
As reported by the Troubled Company Reporter-Asia pacific on
Dec. 29, 2008, Standard and Poor's Ratings Services lowered to
'B+' from 'BB-' its long-term corporate credit and senior
unsecured debt ratings on Korea-based Hynix Semiconductor Inc. to
reflect the extremely challenging market situation and the rapid
deterioration in the company's financial risk profile. The
outlook on the long-term corporate credit rating is negative.
Moody's Investors Service downgraded to B1 from Ba3 Hynix
Semiconductor Inc's corporate family and senior unsecured bond
ratings on Dec. 26, 2008. The outlook for both ratings remains
negative.
HYNIX SEMICONDUCTOR: Q1 Loss Widens to KRW1.19 Tril.
----------------------------------------------------
Bloomberg News' Kevin Cho reports that Hynix Semiconductor Inc.
reported its sixth straight quarterly loss due to weak chip prices
amid global recession.
The report, citing Hynix, says the first-quarter net loss widened
to KRW1.19 trillion from KRW674.8 billion a year earlier. Sales
fell 24 percent to KRW1.2 trillion.
Bloomberg News says that according to the median estimate in a
Bloomberg survey of 15 analysts, Hynix was expected to report a
net loss of KRW1.05 trillion and revenue of KRW1.2 trillion.
The operating loss, which excludes currency-related losses, was
KRW652.5 billion, compared with the median estimate for a deficit
of KRW585 billion in the survey, the report relates.
According to the report, Hynix said it incurred losses related to
foreign currency of about KRW389 billion in the three months ended
March 31 as the Korean won fell 7.4 percent against the dollar in
the period.
Hynix Semiconductor Inc. (HSI) of Icheon, Korea --
http://www.hynix.com/-- is a memory semiconductor supplier
offering Dynamic Random Access Memory chips ("DRAMs") and Flash
memory chips to a wide range of established international
customers. The company's shares are traded on the Korea Stock
Exchange, and the Global Depository shares are listed on the
Luxemburg Stock Exchange.
* * *
As reported by the Troubled Company Reporter-Asia pacific on
Dec. 29, 2008, Standard and Poor's Ratings Services lowered to
'B+' from 'BB-' its long-term corporate credit and senior
unsecured debt ratings on Korea-based Hynix Semiconductor Inc. to
reflect the extremely challenging market situation and the rapid
deterioration in the company's financial risk profile. The
outlook on the long-term corporate credit rating is negative.
Moody's Investors Service downgraded to B1 from Ba3 Hynix
Semiconductor Inc's corporate family and senior unsecured bond
ratings on Dec. 26, 2008. The outlook for both ratings remains
negative.
HYUNDAI MOTOR: First Quarter Net Profit Slumps 43%
--------------------------------------------------
Hyundai Motor Co. said first-quarter net profit fell 43 percent
due to weak sales amid global economic downturn, The Wall Street
Journal reports.
According to WSJ, Hyundai said net profit for January-March
quarter fell to KRW225 billion from KRW392.7 billion a year
earlier. Operating profit fell 71 percent year-to-year to
KRW153.8 billion while sales declined 26 percent to KRW6.032
trillion.
WSJ says the company posted an 18% drop in domestic sales and a
12% decline in exports for the quarter ended March, bringing total
sales to 616,325 units, a 14% decline from a year earlier.
"Strong demand for small fuel-efficient cars and a favorable
[dollar/won] exchange rate fell far short of offsetting a sharp
decline in vehicle sales in the first quarter," Lee Soo-young,
deputy general manager of Hyundai's investor relations team, was
cited by WSJ as saying.
WSJ, citing T.H. Chung, senior executive vice president of the
financial and accounting division, says the company is looking to
raise its U.S. market share to more than 5% this year from 4.3% in
the first quarter with fuel-efficient vehicles and differentiated
marketing strategies.
Hyundai said it will seek to boost profitability this year by
launching new models and continuing to exploit the favorable
exchange rate, WSJ relates.
About Hyundai Motor
Headquartered in Seoul, South Korea, Hyundai Motor Company
(SEO:005380) -- http://www.hyundai-motor.com/-- is an automobile
manufacturer in Korea. The company markets the Atoz Prime, Getz,
Accent, Elantra, Hyundai Coupe, Sonata, Grandeur XG and Centennial
passenger cars; the Trajet, Terracan, Tucson, Santa Fe, H-1 and
Matrix recreational vehicles, and commercial vehicles, which
include trucks, buses, tractors, and specialty vehicles, such as
refrigerated vans, ready mixed concrete (remicon) mixers and oil
tankers. It operates overseas plants in North America, India and
China, and research and development centers in North America,
Japan and Europe. During the year ended December 31, 2007, the
company produced 1,706,727 vehicles sold around the globe.
* * *
As reported by the Troubled Company Reporter-Asia Pacific on
Jan. 16, 2009, Fitch Ratings downgraded Hyundai Motor's long-term
foreign currency Issuer Default Ratings to 'BB+' from 'BBB-' (BBB
minus), and the Short-term ratings to 'B' from 'F3'. The agency
revised the Outlook to Negative from Stable.
SSANGYONG MOTOR: Suppliers To Get Liquidity Aid from Gov't.
-----------------------------------------------------------
South Korean government said it plans to provide KRW240 billion
(US$177.4 million) of liquidity support to parts suppliers for
both Ssangyong Motor and GM Daewoo, The Korea Herald reports.
The liquidity support, the Herald relates, came from a joint loan
guarantee fund made by the local governments and financial firms.
According to the report, officials said the Ministry of Knowledge
Economy and the Financial Services Commission agreed with Incheon
Metropolitan City, Gyeonggi Province and five heads of financial
companies to support the cash-strapped parts suppliers in Incheon
and Gyeonggi.
The report says the KRW240 billion guarantee fund will come from
the Korea Credit Guarantee Fund and the KIBO Technology Fund.
The fund will get KRW5 billion each from Incheon City and Gyeonggi
Province, and KRW10 billion pooled from the Industrial Bank of
Korea, Shinhan Bank and the National Agricultural Cooperative
Federation of Korea, the report notes.
The Herald relates the ministry said the total KRW20 billion fund
is worth a KRW240 billion credit guarantee.
The government, according to the Herald, has introduced
"coexisting guarantee programs" through which conglomerates and
banks invest money in a credit guarantee fund to help temporarily
liquidity-squeezed small partner firms stay afloat in the face of
the global financial crisis.
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.
* * *
As reported in Troubled Company Reporter-Asia Pacific on Jan. 12,
2009, the International Herald Tribune said Ssangyong filed for
receivership with a Seoul district court in a bid to stave off a
complete collapse. The Tribune related that the decision to file
for receivership, which is similar to bankruptcy protection in the
United States, came a day after the Ssangyong board met in
Shanghai. "After our talks with the banks failed to produce an
agreement, it became inevitable to file for court receivership to
ease the critical cash flow problem," the company said in a
statement obtained by the Tribune.
===============
M A L A Y S I A
===============
SATANG HOLDINGS: Bursa Extends Plan Filing Deadline to July 6
-------------------------------------------------------------
The Bursa Malaysia Securities Bhd further extended the deadline
for Satang Holdings Berhad to submit its regularization plan to
the relevant authorities to July 6, 2009.
Satang Holdings Berhad, formerly Satang Jaya Holdings Berhad, is
engaged in the maintenance, repair and overhaul of aviation and
safety equipment and operations and principally in Malaysia.
Through its subsidiaries, the company is also engaged in the
supply and distribution of environmental products, providing
training and seminar in respect of environmental management
system and other related services; providing consultancy and
solution services and implementing of high-technology and
surveillance security systems and its related services;
supplying and servicing of pipe cleaning products and equipment,
and supplying and maintenance of marine safety and survival
equipment and accessories. Its subsidiaries include Satang
Environmental Sdn. Bhd., Satang Cylinder Services Sdn. Bhd., SAR
Services (M) Sdn. Bhd., Satang Hi-Tech Security Sdn. Bhd.,
Satsang-ICS global Sdn Bhd. and Port Marine Safety Services Sdn.
Bhd.
* * *
As reported by the Troubled Company Reporter-Asia Pacific on
May 13, 2008, the company triggered Paragraph 2.1 of the Amended
Practice Note 17/2005 as its independent auditor, Anuarul Azizan
Chew & Co., has concluded in its Audit Investigative Reports
that out of the MYR39.27 million alleged overstated revenue of
the company, MYR35.43 million represents invalid sales which
should not be recorded in the books for the financial year ended
September 30, 2007.
====================
N E W Z E A L A N D
====================
AIR NEW ZEALAND: Number of Passengers Drop 7.6% in March
--------------------------------------------------------
Air New Zealand has reported a big drop in passenger figures in
March.
The airline said it carried 1,242,000 passengers in the month,
down 7.6% on the same month last year, though partly affected by
the timing of Easter which fell in March last year but was in
April this year.
The airline’s capacity was reduced by 10.2% on last March and the
Group’s passenger load factor declined by 2.8 percentage points.
The Short Haul airline flew 5.8% less passengers in March. Air
New Zealand reduced capacity by 7.0% through schedule changes to
minimize the drop in passenger load factor to 0.5 percentage
points on the same month last year. The Domestic airline’s load
factor increased by 2.8 percentage points while the Tasman /
Pacific load factor fell by 2.4 percentage points.
Long Haul passenger numbers decreased by 17.2% on the same month
last year. On North America / UK routes passenger numbers fell by
21.1% and Asia / Japan / UK routes fell by 13.3%. Air New Zealand
has continued to proactively manage capacity in Long Haul by down
gauging aircraft size and reducing frequencies. Long Haul
capacity was reduced by 12.2% compared to last March resulting in
a load factor drop of 4.1 percentage points.
Group-wide yields for the year-to-date were up 8.3% on the
comparable period last financial year. Short Haul and Long Haul
yields were up by 2.8% and 14.3% respectively. Removing the
impact of foreign exchange, Group-wide yields were up 3.2%.
Meanwhile, Air New Zealand said it has appointed Sarah Williamson
as General Manager Mount Cook Airline.
Ms. Williamson has been with Air New Zealand since 1999, most
recently as General Manager Direct Sales based in Auckland. Prior
to this role, she was General Manager Human Resources for Pacific
and Regional Airlines.
Mount Cook Airline is a fully-owned Air New Zealand subsidiary,
operating nearly 290 return trips a week to regional destinations
throughout New Zealand with its fleet of 11 ATRs.
About Air New Zealand
Based in Auckland, New Zealand, Air New Zealand Ltd --
http://www.airnewzealand.com/--is the country's flag air carrier,
with domestic and international passenger and freight operations,
and an aviation engineering business. Air New Zealand flies to
the United States, United Kingdom, Canada, Europe and other Asian
cities.
* * *
On Aug. 5, 2008, Moody's Investor's Service affirmed Air New
Zealand Limited's Ba1 Senior Unsecured Issuer rating. At the
same time, it changed the outlook on the rating to stable from
positive.
BRIDGECORP: Investors May Get Less Than 10% Payout, Receivers Say
-----------------------------------------------------------------
The receivers of Bridgecorp Ltd has warned secured investors they
might now get less than 10 cents in the dollar back of the $460
million owed, David Hargreaves at BusinessDay reports.
Citing receivers Colin McCloy and Maurice Noone of
PricewaterhouseCoopers in their latest report to investors,
BusinessDay relates the receivers said that excluding any
recoveries from overseas assets and ongoing legal matters
regarding insurance and the actions of other directors/other
parties prior to receivership, "we regret to advise that the
return to secured debenture investors from other recoveries is
likely to be less than 10c in the dollar".
The receivers, as cited by the report, said delays in being able
to give updates on the time and quantum of returns are due to
ongoing delays in the realisation of material overseas assets
"over which Bridgecorp has no direct control."
As reported by the Troubled Company Reporter-Asia Pacific on
Aug. 1, 2007, the receivers originally estimated that the
secured debentures could recover 25% to 74% of their original
investment from the company's assets.
PwC, in a letter to investors, said that the lower estimated
recoverability is due to deteriorating market conditions and
subsequent events. "[S]ignificant complexity still remains in
respect of recoveries from the Momi development in Fiji," the
receivers added.
BusinessDay relates that by the middle of last year - the last
time an estimated figure was given - this had been pared back to
between 13 cents and 44 cents.
About Bridgecorp
New Zealand-based Bridgecorp Ltd was placed in receivership on
July 2, 2007, after failing to pay principal due to debenture
holders. John Waller and Colin McCloy, partners at
PricewaterhouseCoopers, were appointed as receivers. The
company owes around 1,800 debenture holders, which liquidators
estimate hold approximately NZ$500 million.
===========
T A I W A N
===========
AU OPTRONICS: First Qtr Loss Narrows to NT$20.2 Bln.
---------------------------------------------------
AU Optronics Corp. reported a NT$20.2 billion ($597 million) net
loss in January-March quarter amid weakening demand for computers
and televisions, various reports say.
AFP relates the figure compares with a NT$29.66 billion profit at
the same point last year but is an improvement on the NT$26.57
billion loss in the final quarter of 2008.
According to AFP, AU Optronics said shipments and prices had
started to increase as it tries to weather the global economic
downturn.
AU Optronics Corp. (AUO) -- http://auo.com/-- manufactures thin
film transistor liquid crystal display panels (TFT-LCD). AUO
provides customers a full range of panel sizes and comprehensive
applications, offering TFT-LCD panels in sizes ranging from 1.5
inches to greater than 65 inches. AUO generated NT$480.2 billion
(US$14.8 billion) in sales revenue in 2007 and now houses the
staff of more than 42,000 employees throughout its global
operations spreading across Taiwan, Mainland China, Japan,
Singapore, South Korea, the U.S., and Europe. Additionally, AUO
is the first pure TFT-LCD manufacturer to successfully list at the
New York Stock Exchange (NYSE).
* * *
The company continues to carry Fitch Ratings' 'BB+' long-term
foreign and local currency Issuer Default ratings. The Outlook
is Positive.
JIH SUN: Fitch Changes Outlook to Stable; Affirms 'BB' Ratings
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on Jih Sun Financial Holding
Co., Ltd and its wholly-owned subsidiaries, Jih Sun International
Bank and Jih Sun Securities Corp., Ltd to Stable from Negative.
At the same time, the agency has upgraded JSH and JSIB's
Individual ratings and affirmed all other ratings.
The favorable rating actions are in response to the completion of
the group's cash call for NT$9.4 billion, which represents a 43.5%
addition to the group's consolidated equity. The group's existing
leading shareholder Japan's Shinsei Bank ('BBB+'/Negative Watch)
and US-based Capital Target Ltd, contributed 28.2% and 59.0%
respectively to this rights issue. The fund is to be used solely
to recapitalize JSIB, which is saddled with chronic impaired
credits and underprovided loan loss reserves.
The upgrades of JSH's and JSIB's Individual ratings reflect their
improved capacity for loss absorption as a result of the capital
injection. The new capital should help clean up the bank's
balance sheet and raise its capitalization to a healthy level for
a fresh restart. JSIB has aggressively reined in lending and seen
its outstanding loans decline 23% during 2006-2008. However,
Fitch remains concerned about the vulnerability of JSIB's asset
quality as a result of the ongoing economic recession and the
challenges management faces in turning around its commercial
banking operations. The bank's lack of track records of
performance in asset quality and profitability are the key
constraining factors for the group in achieving higher long-term
ratings.
Established in February 2002, JSH ranked as the second smallest
Taiwanese financial holding company by consolidated assets at end-
2008. JSH has a relatively sizeable securities firm, JSS and a
small bank, JSIB. Capital Target and Shinsei Bank emerged as the
two largest shareholders after this share transaction, each having
around a 30% equity interest in JSH. However, Shinsei Bank's
ownership could increase to 36% if it chooses to fully convert its
preferred shares in JSH in 2011.
JSH:
-- Long-term Foreign Currency IDR affirmed at 'BB';
-- Short-term Foreign Currency IDR affirmed at 'B';
-- National Long-term rating affirmed at 'BBB+(twn)';
-- National Short-term rating affirmed at 'F2 (twn)';
-- Individual rating: upgraded to 'D' from 'D/E';
-- Support rating affirmed at '5';
-- Support Rating Floor affirmed at 'NF'; and
-- Senior Unsecured Debt rating affirmed at 'BBB(twn)'.
JSIB:
-- Long-term Foreign Currency IDR affirmed at 'BB';
-- Short-term Foreign Currency IDR affirmed at 'B';
-- National Long-term rating affirmed at 'BBB+(twn)';
-- National Short-term rating affirmed at 'F2 (twn)';
-- Individual rating upgraded to 'D' from 'D/E'; and
-- Support rating affirmed at '3'.
JSS:
-- Long-term Foreign Currency IDR affirmed at 'BB+';
-- Short-term Foreign Currency IDR affirmed at 'B';
-- National Long-term rating affirmed at 'A-(twn)' (A
minus(twn));
-- National Short-term rating affirmed at 'F2(twn)';
-- Individual rating affirmed at 'C/D';
-- Support rating affirmed at '5'; and
-- Support Rating Floor affirmed at 'NF'.
*********
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. Pius Xerxes V. Tovilla, Valerie C. Udtuhan,
Marites O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante,
Marie Therese V. Profetana, Frauline S. Abangan, and Peter A.
Chapman, Editors.
Copyright 2009. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
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Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$625 for 6 months delivered via e-
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*** End of Transmission ***