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/raid1/www/Hosts/bankrupt/TCRAP_Public/090820.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 20, 2009, Vol. 12, No. 164 Headlines A U S T R A L I A GOODMAN GROUP: Sells Stake in NZ Trust for NZ$88.4 Million LEHMAN BROTHERS: Australia-Based Hyro Settles With Liquidators PARMALAT SPA: ACCC Approves US$70 Million Australian Expansion STORM FINANCIAL: ASIC Defends Role in Firm's Collapse STORM FINANCIAL: ANZ Admits Breach on Lending Policies C H I N A CHINA MINSHENG: Gets Regulatory Approval for HK Share Sale H O N G K O N G ANTEX ELECTRONIC: Creditors and Contributories to Meet on Aug. 22 BIG RESOURCES: Creditors' Proofs of Debt Due on August 28 CITIC PACIFIC: Cathay Stake Sale Won't Affect Moody's 'Ba1' Rating CITIC PACIFIC: Planned Sale Won't Affect S&P's 'BB+' Rating FIRST INK: Court Enters Wind-Up Order MEYCO INTERNATIONAL: Court Enters Wind-Up Order ZFRICTION LIMITED: Court Enters Wind-Up Order I N D I A ACTION GINNI: ICRA Puts 'LBB' Rating on INR20MM Fund Based Limits ANGEL BABY: CRISIL Rates INR150 Million Term Loan at 'BB-' MAHENDRA EXPORTS: ICRA Reaffirms 'LBB+' on INR351.4MM Term Loans NANDED COOP BANK: RBI Rejects Gov't. Plan to Reopen Bank RK VICTUALS: CRISIL Places 'B+' Rating on INR185 Million Term Loan SWASTI POWER: Default on Loan Payment Cues CRISIL 'D' Rating VIRENDRA & CO.: Low Net Worth Prompts CRISIL 'BB' Ratings WINDLASS ENGINEERS: CRISIL Rates INR44.6 Million Term Loan at 'B+' I N D O N E S I A KERTAS KRAFT: Liquidation Plan Maybe Cancelled as Aceh Mulls Aid J A P A N JAPAN AIRLINES: Int'l. Traffic Down 4.5% on Summer Vacation JAPAN AIRLINES: Japan Gov't. to Set Up Restructure Panel JLOC XXIV: S&P Downgrades Ratings on Class C Certificates L-JAC THREE: S&P Downgrades Ratings on Various Classes of Notes ORIX-NRL TRUST: S&P Downgrades Ratings on Various Classes TOSHIBA CORP: Unit to Check Over 82,000 Washer-Dryers XANADEUX: Goes Belly-Up Amid Declining Film Distributor Market M A L A Y S I A TIME ENGINEERING: Posts MYR8.73M Net Income in Qtr Ended June 30 N I G E R I A INTERCONTINENTAL BANK: S&P Downgrades Counterparty Rating to 'B' P H I L I P P I N E S NATIONAL POWER: Fitch Affirms 'BB' Rating on US$500 Mil. Notes S I N G A P O R E CONTIPAC SHIPPING: Pays First and Final Dividend JURONG TECHNOLOGIES: Posts SG$502.33 Million Net Loss for FY2008 S O U T H A F R I C A FINTECH RECEIVABLES: Fitch Assigns 'BB+' Rating on Class E Notes T A I W A N SPANSION INC: Suspends Memorandum of Understanding With ASE V I E T N A M JOINT STOCK: Fitch Puts 'D' Individual Rating on Negative Watch - - - - - ================= A U S T R A L I A ================= GOODMAN GROUP: Sells Stake in NZ Trust for NZ$88.4 Million ---------------------------------------------------------- Goodman Group has sold down its stake in its New Zealand operations for about NZ$88.4 million, Carolyn Cummins at The Sydney Morning Herald reports. The deal, which was revealed by BusinessDay in June, will see Goodman's interest drop from 28% to 17% with the completed sale of 93 million units to a number of institutional investors at NZ$0.95 per unit, the report said. According to the Herald, Goodman Group chief executive, Greg Goodman, said the 17% holding in Goodman Property Trust was a long-term investment position and was in line with the group's strategy of keeping investments at a level of 15-20% in the group's funds. "The group's interests continue to be aligned with those of its investors through the retention of a significant cornerstone investment. The sell-down will assist Goodman to pursue its core operation of owning, developing and managing industrial property and business space in its key markets," the report quoted Mr. Goodman as saying. Mr. Goodman said the sale follows the recent announcement of the group's $1.8 billion capital raising and further demonstrates continued strong investor confidence and support in GMT and the group's managed fund platform. About Goodman Group Goodman Group (ASX:GMG) -- http://www.goodman.com/-- is engaged in fund management, property services, development management and investment in directly and indirectly held industrial property. The Company is based in Australia and has operations in Asia Pacific (primarily Australia, New Zealand, Hong Kong, People's Republic of China and Japan) and Europe. On December 17, 2007, it sold a 50% equity interest in Highbrook Developments Limited (HDL) to Goodman Property Trust. On March 27, 2008, it completed the disposal of its 40% interest in Ascendas MGM Funds Management Limited (AMFM) and also sold its 6.8% stake in Ascendas Real Estate Investment Trust (A-REIT). On May 31, 2008, the Company sold its investment in Goodman Property Investors Limited (GPI). * * * As reported in the Troubled Company Reporter-Asia Pacific on Aug. 10, 2009, Moody's Investors Service said it is maintaining its review for possible downgrade on Goodman Group's Baa3 issuer and senior unsecured ratings. It is also continuing its review for possible downgrade on the subordinated "Ba1" rating on Goodman's hybrid securities. The review will be concluded upon the successful completion of the recapitalization. This follows Goodman's announcement of its capital management plan -- which involves the issuance of an underwritten equity of AU$1.3 billion and preference securities of AU$500 million -- and its extension of debt at the headstock as well as the managed funds. LEHMAN BROTHERS: Australia-Based Hyro Settles With Liquidators -------------------------------------------------------------- Hyro Limited said in a statement it has discharged its AU$20,000,000 convertible note and associated interest obligations, after reaching a settlement with the liquidators of Lehman Brothers Commercial Corporation Asia Limited, the liquidators of Lehman Brothers Asia Holdings Limited and the administrators of Lehman Brothers International (Europe) which includes release of all fixed and floating charges over Hyro's business. Hyro had previously reached a binding agreement with the liquidators of LBCCAL in October 2008. Disagreement emerged, however, between KPMG, as liquidators of Hong Kong-based LBCCAL, and PriceWaterhouseCoopers, as administrators of UK-based LBIE, over which Lehman Brothers entity was the legal and beneficial owner of the convertible notes. The settlement positions Hyro to move forward with its plans for pursuing growth opportunities in the digital services market. Hyro Chairman, Rob Clarke said "This transaction is the culmination of a sustained negotiation led by Hyro CEO, Bill Votsaris. The reduction in debt leaves Hyro in a significantly better position to execute its growth strategy in one of the fastest growing and commercially important industries in Australia and Asia." "We are glad to have brought the negotiations to a successful conclusion," says Hyro CEO, Bill Votsaris. "By agreeing to move to an equity position, the administrators of Lehman Brothers International (Europe) have given the company a significant vote of confidence. We are very happy to have Lehman Brothers on our share register." "We started 2009 with a clear vision for Hyro as Australia's only, truly native digital services company, capable of providing enterprise clients with customer experience, technology and managed services. Finalising our equity deal with Lehman Brothers has removed the constraints we've had in putting our growth plans into action," Votsaris said. Pursuant to the settlement, Hyro is released from all current and future liabilities with respect to the convertible notes, with the effect that: * Repayment of the AU$20 million of convertible notes is no longer required; * Interest totalling AU$4.125 million (being AU$3.7 million current and AU$425,000 future interest) no longer needs to be paid; and * The fixed and floating charges over the Hyro group of companies have been removed. In return for these agreed terms, Hyro has provided: * Cash payment of AU$1.2 million; and * An allocation of 107,000,000 fully paid ordinary shares in Hyro Limited to LBIE. This allocation, made on August 6th, ensured that the total number of shares issued to the administrators of LBIE was roughly 17% of Hyro's post dilution share capital. Founded in 1994, Hyro is Australia's oldest Digital Services company. Hyro provides digital, technical and managed services to the enterprise and government sectors across Australia, New Zealand and Asia. This end-to-end capability uniquely positions Hyro in the Australian marketplace with its ability to understand the issues in transforming innovative business strategies and creative concepts into working technical solutions. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI The Bankruptcy Court has approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for $2 dollars plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. Lehman Brothers Japan Inc. reported about JPY3.4 trillion (US$33 billion) in liabilities in its petition. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) PARMALAT SPA: ACCC Approves US$70 Million Australian Expansion -------------------------------------------------------------- The Australian Competition and Consumer Commission has approved Parmalat's proposed US$70,000,000 purchase of certain dairy assets held by National Foods Limited, the Australian Food News reported on June 25, 2009. Parmalat confirmed on July 27, 2009, that its Australian subsidiary, Parmalat Food Products Pty, Ltd., completed the acquisition from National Foods Limited of fresh milk businesses in New South Wales and South Australia. Daniel Palmer of AFN said that as a result to the transaction, Parmalat's presence down under will increase, adding 26% to Parmalat's revenue from Australian operations. Among the assets that Parmalat will acquire are 12 National Foods depots, 13 Dairy Farmers depots in South Australia and the Lidcombe processing plant. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on December 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for Chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on December 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On January 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. STORM FINANCIAL: ASIC Defends Role in Firm's Collapse ----------------------------------------------------- The Australian Securities & Investments Commission defended its role in dealing with the collapse of Storm Financial Limited, The Australian Associated Press reports. Citing ASIC in a submission to a federal parliamentary inquiry into the collapse, the AAP relates that the corporate watchdog rejected criticism it could have taken action earlier. "Criticism has been levelled at ASIC that it should have done more to prevent the collapse of Storm . . . ASIC rejects those criticisms," the report cited ASIC as saying in its submission. According to the AAP, ASIC said "prior to 2006, there were communications between ASIC, Storm and its officers based on routine ASIC surveillance in Queensland on financial planners". But "financial disclosure matters" that arose at that time were resolved, the AAP notes. Storm Financial Limited -- http://www.stormfinancial.com.au/-- operates in the Australian wealth management industry. The company manages over one trillion dollars in investment fund assets for over nine million investors, distributed through investment administration providers and financial adviser. The 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 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. 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. On March 27, 2009, the Troubled Company Reporter-Asia Pacific reported that the Australian Securities and Investments Commission won its bid to liquidate Storm Financial Group after the Federal Court ruled that the Company be wound up. Federal court Justice John Logan appointed Ivor Worrell and Raj Khatri of Worrells Solvency and Forensic Accountants as liquidators for the Company. STORM FINANCIAL: ANZ Admits Breach on Lending Policies ------------------------------------------------------ The Sydney Morning Herald reported that the Australia and New Zealand Banking Group has joined the Commonwealth Bank of Australia in admitting that its lending to clients of Storm Financial Ltd breached its own policies. The bank's involvement with Storm is not as deep as the Commonwealth's, but marks a second troubled relationship for the ANZ on the back of its links with Opes Prime, the report said. The Herald, citing ANZ in a submission to a government inquiry, relates that ANZ had identified about 160 customers who had borrowed from the bank through Storm. "We have determined that the lending decisions for a small number of customers did not comply with ANZ's credit policies and we are undertaking further review to assess whether others could also be in that group," the report cited ANZ's submission to the Joint Committee on Corporations and Financial Services. The report notes that the bank, however, said it did not have a formal business relationship with Storm. According to the Herald, ANZ rejected overtures from Storm in November 2007 for closer links, on the basis that the financial adviser's approach to lending did not match the bank's. The submission, as cited by the report, said ANZ has set up a hardship team to work with Storm customers and was offering interest-free loans and deferred payments to some. About Storm Financial Storm Financial Limited -- http://www.stormfinancial.com.au/-- operates in the Australian wealth management industry. The company manages over one trillion dollars in investment fund assets for over nine million investors, distributed through investment administration providers and financial adviser. The 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 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. 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. On March 27, 2009, the Troubled Company Reporter-Asia Pacific reported that the Australian Securities and Investments Commission won its bid to liquidate Storm Financial Group after the Federal Court ruled that the Company be wound up. Federal court Justice John Logan appointed Ivor Worrell and Raj Khatri of Worrells Solvency and Forensic Accountants as liquidators for the Company. ========= C H I N A ========= CHINA MINSHENG: Gets Regulatory Approval for HK Share Sale ---------------------------------------------------------- China Minsheng Banking Corp. won initial approval from China's securities regulator to revive a first-time share sale in Hong Kong after shelving the plan for four years, Bloomberg News reports. The China Securities Regulatory Commission accepted the application on August 18 after examining the sale documents, Bloomberg related citing China Minsheng in a statement. The share sale is yet to be approved by regulators in Hong Kong, the report says. Minsheng yesterday reported a 22 percent increase in first-half profit on investment gains. The bank aims to boost net income by 35 percent this year after growth slowed to 25 percent in 2008, the weakest since its initial public offering in Shanghai in 2000. Minsheng's capital adequacy ratio, a key measure of financial strength, stood at 8.48 percent at the end of June, down from 9.22 percent at Dec. 31. Based in Beijing, China, China Minsheng Banking Corporation Ltd.'s mainly provides commercial banking services that include absorbing public deposits, providing short term, medium term, and long term loans, making domestic and international settlement, discounting bills and issuing financial bonds. * * * China Minsheng Banking Corporation Ltd continues to carry Fitch Ratings' individual rating of "D" and support rating at "3". ================ H O N G K O N G ================ ANTEX ELECTRONIC: Creditors and Contributories to Meet on Aug. 22 ----------------------------------------------------------------- The creditors and contributories of Antex Electronic Systems Co., Limited will hold a meeting on August 22, 2009, at 11:00 a.m. and 11:30 a.m., respectively, at Room 203 of Duke of Windsor Social Service Building, 15 Hennessy Road, in Wanchai, Hong Kong. BIG RESOURCES: Creditors' Proofs of Debt Due on August 28 --------------------------------------------------------- The creditors of Big Resources Industries Limited are required to file their proofs of debt by August 28, 2009, to be included in the company's dividend distribution. The company's liquidators are: Desmond Chung Seng Chiong Roderick John Sutton The Hong Kong Club Building, 14th Floor 3A Chater Road Central, Hong Kong CITIC PACIFIC: Cathay Stake Sale Won't Affect Moody's 'Ba1' Rating ------------------------------------------------------------------ Moody's Investors Service sees no immediate impact on the Ba1 corporate family rating of CITIC Pacific Ltd. and the Ba1 bond rating of CITIC Pacific Finance (2001) Ltd after the announced sale of CITIC Pacific's 14.5% stake in Cathay Pacific Airways Ltd for about HK$7.3 billion. The outlook on these ratings remains negative. "The sales proceeds will help CITIC Pacific better manage, albeit slightly, the deterioration evident in its credit profile over the last few years, but the action is not sufficient -- at this stage -- to affect its ratings and outlook," says Elizabeth Allen, a Moody's Vice President & Senior Credit Officer. "CITIC Pacific's underlying business risk profile had risen and its operating fundamentals remain very challenging, while its credit metrics are also weak for its rating," adds Allen. "The sale of the stake in Cathay is consistent with CITIC Pacific's strategy of focusing on core operations and disposing of non-core assets," says Allen, adding, "Aviation was identified as non-core some time ago." As indicated, CITIC Pacific's financial profile will remain under pressure -- despite this asset sale -- with adjusted debt at HK$76 billion as of December 2008. This situation translates into debt/capitalization of 57% and FFO/Debt in the low single digits. Moody's views such ratio levels as weak, especially in the context of CITIC Pacific's relatively volatile key businesses of specialty steel manufacturing, iron-ore mining and property development in China. On the other hand, the company maintains a good liquidity profile with adequate cash and undrawn committed facilities available. It also has a balanced debt maturity profile. In addition, the Cathay sale will enhance its liquidity position as it continues to go through its peak investment period. In particular, its Sino Iron project in Western Australia still requires significant investments before becoming operational in 2H2010. The Ba1 rating continues to reflect CITIC Pacific's linkages to and potential support from CITIC Group (Baa2/negative) -- and which results in its rating being 2 notches higher than it would otherwise be. The negative rating outlook reflects CITIC Pacific's modest level of cash flow generation and increasing leverage as it goes through its investment cycle. It further captures the company's business risk exposure as well as the uncertainties associated with its medium-term business direction in view of changes in top management in April 2009. The last rating action with respect to CITIC Pacific was on February 17, 2009 when the rating was upgraded from Ba2 to Ba1 with a negative outlook after CITIC Group's ownership in CITIC Pacific increased from 29% to 57.6%. CITIC Pacific Ltd, listed in Hong Kong, is a conglomerate 57.6% owned by CITIC Group. It is engaged in a range of businesses, including specialty steel manufacturing, iron-ore mining, property development and investment, power generation, infrastructure, communications and distribution. CITIC Group, headquartered in Beijing, is a conglomerate investment company wholly owned by the State Council of the Chinese government. CITIC PACIFIC: Planned Sale Won't Affect S&P's 'BB+' Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that its rating on CITIC Pacific Ltd. (BB+/Stable/--) was not immediately affected by the company's plan to sell 12.5% and 2% of its stake in Cathay Pacific Airways Ltd. (not rated) to Air China Ltd. (not rated) and Swire Pacific Ltd. (A-/Stable/--), respectively, for a total consideration of about Hong Kong dollar (HK$) 7.3 billion. In S&P's view, although the proceeds from the disposal will improve CITIC Pacific's liquidity position, its credit profile is unlikely to change materially as the company's core businesses--iron ore, special steel and real estate in China--still require high capital expenditure in the coming year. S&P expects the company's debt leverage, as measured by a ratio of total debt to total capital, to remain at about 50%. CITIC Pacific also continues to generate negative free operating cash flow after capex. The rating on CITIC Pacific is based on the company's standalone credit quality and the benefits it derives from being strategically important to the wider CITIC Group, which owns 57.56% of the company. FIRST INK: Court Enters Wind-Up Order ------------------------------------- On August 3, 2009, the High Court of Hong Kong entered an order to wind up the operations of First Ink Manufacturing Limited. Yu Tak Yee Beryl and Choi Tze Kit Sammy were appointed as the company's liquidators. MEYCO INTERNATIONAL: Court Enters Wind-Up Order ----------------------------------------------- On June 26, 2009, the High Court of Hong Kong entered an order to wind up the operations of Meyco International Industrial Limited. Yu Tak Yee Beryl and Choi Tze Kit Sammy were appointed as the company's liquidators. ZFRICTION LIMITED: Court Enters Wind-Up Order --------------------------------------------- On June 18, 2009, the High Court of Hong Kong entered an order to wind up the operations of Zfriction Limited. Yu Tak Yee Beryl and Choi Tze Kit Sammy were appointed as the company's liquidators. ========= I N D I A ========= ACTION GINNI: ICRA Puts 'LBB' Rating on INR20MM Fund Based Limits ----------------------------------------------------------------- ICRA has assigned an 'LBB' rating to INR20 million fund based limits and INR240 million term loan of Action Ginni Devi Cancer Hospital. This is the inadequate-credit-quality rating assigned by ICRA. The rating takes into account high competitive intensity in the National Capital Region (NCR) which is expected to increase further as significant hospital room supply is planned in the short to medium term; the possibility of time and cost overruns in the project and the fact that the hospital has still to enter into contract with reputed medical practitioners and consultants. Nevertheless, the rating derives comfort from support provided by Sri Balaji Action Medical Institute (rated LBBB- by ICRA) for its oncology facilities, demonstrated support from Action group and the fact that debt has been tied-up for the project. Action Ginni Devi Cancer Hospital is a single specialty Cancer hospital promoted by Manav Sevarth Trust, a charitable trust of the Action Group. The Action Group, founded by Mr. Nand Kishore Aggarwal, commenced its business operations in 1971 as a manufacturer and supplier of footwear and its components. Currently, the group has presence in diversified business segments including Chemicals and Plastics, Computer Monitors and Peripherals, Power Back Up / Inverters, Batteries, Housing Projects, Health Care and Steel. ANGEL BABY: CRISIL Rates INR150 Million Term Loan at 'BB-' ---------------------------------------------------------- CRISIL has assigned its rating of 'BB-/Stable' to the INR150 million term loan facility of Angel Baby Products Pvt Ltd. The rating reflects Angel Baby's exposure to risks relating to concentration of revenues in its four-star hotel at Noida, its limited experience of managing hotel operations, vulnerability of business to economic cyclicalities and dependence on financial support from promoters/group companies to repay debt obligations. These weaknesses are, however, partially offset by Angel Baby's stable business risk profile, supported by location advantages, and association with Indian Tobacco Company (ITC) group of hotels. Outlook: Stable CRISIL believes that Angel Baby's occupancy rates will improve over the medium term, as operations at the hotel stabilize, and the economic conditions improve. The outlook may be revised to 'Positive' if the company's financial risk profile improves as a result of increase in occupancy levels and average room revenues (ARRs) resulting in high cash accruals. Conversely, the outlook may be revised to 'Negative' if low occupancy rates, and ARRs continue to constrain the company's debt repayment capacity. About Angel Baby Set up in 2005, Angel Baby has constructed a full-service, four- star hotel at Noida, National Capital Region (NCR). The property will feature 32 rooms, two restaurants, and a spa. The company has entered into an exclusive management agreement with Fortune Park Hotels Ltd., a wholly owned subsidiary of ITC Limited. The hotel enjoys locational benefits of being situated in Noida which has emerged as a key business destination over the last decade. The hotel commenced commercial operations in April 2009 under the name and ageis of "Fortune Inn Grazia". MAHENDRA EXPORTS: ICRA Reaffirms 'LBB+' on INR351.4MM Term Loans ---------------------------------------------------------------- ICRA has reaffirmed the 'LBB+' rating, indicating inadequate- credit-quality, assigned to the INR351.4 million term loans and the INR1.14 billion fund based limits of C. Mahendra Exports Limited. ICRA has also reaffirmed the A4+ rating, indicating risk-prone- credit-quality in the short term, assigned to the fund based limits of CMEL for an enhanced amount of INR7.50 billion (from INR5.22 billion; including INR920.0 million proposed fund based limits. ICRA has also assigned A4+ rating to the INR1.0 billion proposed non-fund based limits of CMEL. The ratings reflect the significant deterioration in CMEL's financial risk profile following the drop in demand in the export markets since the second half of 2008-09, the significant increase in working capital requirements because of build up of receivables and consequent pressure on liquidity as reflected in almost full utilization of bank limits in the last few months. The operating cash flows have also witnessed substantial pressure on account of drop in margins following increase in trading operations (owing to scale down of manufacturing activities) and sharp decline in diamond prices. Even as the potential price loss on diamonds/ inventory in the near term is likely to be mitigated to some extent by lower input costs, the margins/ cash flows remain vulnerable to high volatility in diamond prices and foreign exchange movements. The ratings also take into account the intensifying competitive pressures in the fragmented cut and polished diamonds industry. The ratings continue to also remain constrained by CMEL's highly leveraged capital structure and low debt protection indicators, which have further weakened in 2008-09 driven by the increase in working capital intensity of operations and low cash accruals. While around 17% of the debt is in the form of interest-free unsecured loans from the promoters, and is subordinate to the loans taken from other creditors, CMEL's gearing levels of 5.5 times (x) as on March 31, 2009 were high at around 2.4x even on adjusting for promoters' loans as quasi-equity. ICRA expects that the pressure on CMEL's credit risk profile will continue in the near term because of sluggish off-take from export markets. ICRA also takes note of certain non-standard accounting policies that are currently followed by the Company and the disclosure levels that have scope for improvement. CMEL had proposed a public issue of around INR3.0 billion for its expansion plans in 2008-09 across the diamond processing, jewellery manufacturing and retailing operations of the CMEL group (the group). While the Company had earlier deferred the proposed issue and expansion plans in view of the unfavourable market conditions, it now envisages a public offer in the short term. ICRA, however, notes that in the event of any delay or inability to raise equity, the Company's financial profile could be adversely impacted. The ratings, however, recognizing track record of the Company in the diamond business; and its association with the diamond mining major company, De Beers, as DTC (Diamond Trading Company) Sightholder since 1991. About C. Mahendra Exports Initially promoted as a partnership firm by Mr. Mahendra Shah, Mr. Champak Mehta and Mr. Pravin Shah in 1974, C. Mahendra Exports Limited was first incorporated as a private limited company in January 2007 and converted into a public limited company in March 2007. CMEL is closely held by the promoters'/ promoters' family. The Company is engaged in manufacturing cut and polished diamonds (ranging from 0.01 carat to 1 carat). It exports diamonds primarily to Hong Kong (HK), the United States (US) and the United Arab Emirates (UAE). The company has two manufacturing facilities at Surat (Gujarat). CMEL is the flagship entity of the CMEL group, which also has a diamond jewellery manufacturing and retailing division (under the brand name Ciemme). The group's sales and distribution network is spread across major diamond centres of the world such as HK, Chicago (US), Houston (US), Los Angeles (US), New York (US), Dubai (UAE), Antwerp (Belgium) and Bangkok (Thailand). CMEL reported a profit after tax (PAT) of INR198.9 million on an operating income of INR14,132.7 million in 2008-09, against a PAT of INR385.3 million (before prior period expenses‡) on an operating income of INR13,666.4 in 2007-08. NANDED COOP BANK: RBI Rejects Gov't. Plan to Reopen Bank -------------------------------------------------------- The Economic Times reports that the Reserve Bank of India has rejected the Maharashtra government’s plan to reopen the Nanded District Co-operative Bank, which has been under moratorium since November 2005. The report relates that Chief Minister Ashok Chavan last week sanctioned a INR110-crore grant for the ailing bank that was once led by Mr. Chavan’s brother-in-law and Nanded MP Bhaskarrao Patil Khatgaonkar, According to the report, the Banking Regulation Act doesn’t permit cooperative banks to receive a government as its principal source of fund. But the state government took the decision unilaterally and without consulting the regulator, the report notes. The RBI on Tuesday clarified that the bank is not yet ready to resume operations, the report says. The report notes that the central bank, however, has raised the amount a Nanded bank depositor can withdraw to INR3,000 from INR1,000. While keeping the “other terms and conditions” (imposed on the bank) unchanged, the regulator has noted that the “above relaxation should not be construed to imply that the RBI is satisfied with the substantive improvement of the financial position of the bank,” the ET cited an RBI communique as saying. The Nanded co-operative bank will continue to be under RBI moratorium, the report adds. RK VICTUALS: CRISIL Places 'B+' Rating on INR185 Million Term Loan ------------------------------------------------------------------ CRISIL has assigned its rating of 'B+/Stable' to RK Victuals Pvt Ltd's INR185.0 million term loan facility. The rating reflects RK Victuals' exposure to risks relating to delays in commercialization of its hotel project, vulnerability of the business to economic cyclicalities and dependence on financial support from promoters/group companies to repay its debt obligations. These weaknesses are, however, partially offset by healthy business prospects for its three-star hotel, backed by location advantages, and its operations and maintenance contract with Royal Orchid Hotels Limited. Outlook: Stable CRISIL expects RK Victuals to complete its three-star hotel project without time or cost overruns. The outlook may be revised to 'Positive' if increase in occupancy levels and average room revenues (ARRs) result in strong cash accruals, and therefore, in improvement in financial risk profile for RK Victuals. Conversely, further delays in project implementation may result in a revision in outlook to 'Negative'. About RK Victuals Set up in 2005, RK Victuals is developing a full-service, three- star hotel at Vashi, Mumbai. The property will feature 68 rooms, two restaurants, and a spa. The hotel is aimed at business and leisure travellers to Mumbai. The company has exclusive management agreement with ROHL. Currently ROHL manages 12 hotels at 6 destinations in India under its various brand extensions. The hotel is expected to commence commercial operations in October 2009. SWASTI POWER: Default on Loan Payment Cues CRISIL 'D' Rating ------------------------------------------------------------ CRISIL has assigned its rating of 'D' to the bank facility of Swasti Power Engineering Ltd, as the company has defaulted on its term loan because of weak liquidity. Facility Rating -------- ------ INR950.00 Million Long Term Loan D (Assigned) Set up in 1993, Swasti Power is promoted by Mr. Y Raveendranath Reddy and Mr. Y Vivekananda Reddy. Swasti Power is implementing a 22.5-megawatt power project, Bhilangana Hydro Power Project (BHPP), in Uttarakhand, across the Bhilangana River, which is a major tributary of the Bhagirathi River. Swasti Power has received the project on allotment basis from the Government of Uttarakhand (GoU) on a build, own, operate, and transfer (BOOT) basis. The ownership of the unit vests with Swasti Power for a period of 35 years from commercial operation date (COD), after which, the project will be transferred to GoU free of charge. Swasti Power has entered into power purchase agreements with PTC India Ltd and Uttarakhand Power Corporation Ltd. The company is expected to commercialize operations by mid-August 2009. VIRENDRA & CO.: Low Net Worth Prompts CRISIL 'BB' Ratings --------------------------------------------------------- CRISIL has assigned its ratings of 'BB/Stable/P4' to the bank facilities of M/s. Virendra & Co. Facilities Ratings ---------- ------- INR31.5 Million Cash Credit B/Stable (Assigned) INR265.0 Million Letter of Credit P4 (Assigned) INR3.5 Million Proposed Short Term P4 (Assigned) Bank Facility The ratings reflect V&C's vulnerability to cyclicality in the ship-breaking industry and fluctuations in the prices of steel scrap, weak financial risk profile marked by low net worth and small scale of operations, and exposure to risks relating to unfavorable government regulations. These weaknesses are, however, partially offset by the benefits that V&C derives from the strong track record of its promoters, and the healthy growth prospects for the ship-breaking industry. Outlook: Stable CRISIL expects V&C to maintain a stable credit risk profile over the medium term on the back of revival in the fortunes of the ship breaking industry in 2009-10. The outlook may be revised to 'Positive' if the firm benefits from the boom in the ship-breaking industry, and increases its scale of operations. Conversely, the outlook may be revised to 'Negative' if a significant fall in steel scrap prices leads to deterioration in the firm's financial risk profile. About Virendra & Co. V&C has capacity to break ships ranging from 5,000 tonnes to 22,000 tonnes at its 50-meter plot at Alang (Gujarat), the leading centre for ship-breaking and recycling in Asia. The firm breaks ships such as general cargo, oil tankers, reefers and bulk carriers. V&C's promoters, the Shah family headed by Mr. Kirit Shah, have been in the business for the past 25 years. V&C imports ships, breaks them into iron and steel plates, and sells the same to re-rolling mills in and around Bhavnagar area. V&C reported a profit after tax (PAT) of INR9.9 million on net sales of INR 371.3 million for 2008-09, as against a PAT of INR4.6 million on net sales of INR 298.3 million for 2007-08. WINDLASS ENGINEERS: CRISIL Rates INR44.6 Million Term Loan at 'B+' ------------------------------------------------------------------ CRISIL has assigned its ratings of 'B+/Stable/P4' to the bank facilities of Windlass Engineers & Services Pvt Ltd (WESPL), which is part of the Windlass group. Facilities Ratings ---------- ------- INR44.60 Million Term Loan B+/Stable (Assigned) INR47.90 Million Export Packing P4 (Assigned) Credit* INR20.00 Million Bill Discounting P4 (Assigned) INR7.50 Million Stand-by Line of P4 (Assigned) Credit INR5.00 Million Letter of Credit# P4 (Assigned) INR5.00 Million Bank Guarantee# P4 (Assigned) * contains a proposed limit of INR17.9 million and is interchangeable with Bill Discounting for INR10 million # Letter of credit and bank guarantee are fully interchangeable The ratings reflect the Windlass group's small scale of operations, weak financial risk profile, and working capital- intensive operations. The ratings also factor in WESPL's exposure to risks relating to fluctuations in crude oil prices, and to uncertainties in the business environment. These weaknesses are partially offset by the benefits that the group derives from the extensive experience of its promoters, its established distribution network in steelcraft business, and diversification of business through WESPL. As part of this rating exercise, CRISIL has combined the business and financial risk profiles of WESPL and Windlass Steelcrafts (WSC); this is because the two entities, together referred to as the Windlass group, have common ownership and management teams, shared premises, and fungible funds, despite the absence of business linkages between them. In 2008-09, the partners withdrew INR38 million from WSC, and invested the same in WESPL as interest-bearing unsecured debt. Outlook: Stable CRISIL believes that the Windlass group's scale of operations will remain small and its financial risk profile, weak. The outlook may be revised to 'Positive' in case of substantial improvement in the group's scale of operations and financial risk profile. Conversely, the outlook could be revised to 'Negative' in case the Windlass groups' financial risk profile weakens because of higher- than-expected withdrawal of capital by the partners in WSC, or significant pressure on WESPL's revenues and cash accruals amid slow down in demand from end-user industry. About the Group Set up in 1943 by the late Mr. V P Windlass, WSC produces replicas of swords, bayonets, daggers, sabres, and other historical arms and armour. The firm is the flagship entity of the Windlass group, and the official contractor to the United States Marine Corps for ceremonial swords; it also supplies its products for movie productions. WESPL and WSC share common premises at Dehradun (Uttarakhand). WESPL, promoted by the Windlass family, was incorporated in 2007. It manufactures a variety of oil-field equipment, catering mainly to the oil exploration industry. Its product portfolio consists of blow out-preventer (BOP) control units, hammer unions, high- pressure test units, gaskets, and spools. The Windlass group reported a profit after tax (PAT) of INR27 million on net sales of INR177 million for 2007-08, as against a PAT of INR37 million on net sales of INR157 million for 2006-07. For 2007-08, the company's first year of operation, WESPL reported a negative profit after tax (PAT) of INR14.57 million on net sales of INR1.36 million. ================= I N D O N E S I A ================= KERTAS KRAFT: Liquidation Plan Maybe Cancelled as Aceh Mulls Aid ---------------------------------------------------------------- The State Ministry for State Enterprises said it might cancel a plan to liquidate PT Kertas Kraft Aceh because Aceh’s provincial government appeared willing to come to the company’s rescue, The Jakarta Globe reports. “The Aceh provincial government is studying the company’s profile now,” State Enterprises Minister Sofyan Djalil was quoted by the Globe as saying. “There is a possibility that we won’t have to liquidate the company. However, we’re still exploring the possibility, as the local government said that it would reach a compromise with the company on the shortage of raw materials.” The report relates Mr. Sofyan said Aceh Governor Irwandi Yusuf has already discussed the matter with ministry officials and Kertas Kraft’s management. “We’ll see how things turn out, but some employees will still have to be laid off,” Mr. Sofyan said. As reported in the Troubled Company Reporter-Asia Pacific on Oct. 2, 2008, PT Kertas Kraft Aceh will be likely closed down by the Indonesian Government due to the company's losses and problems in acquiring raw materials after the Aceh administration turned down the company's request to cut down pine trees to supply its raw material. About Kertas Kraft Based in Aceh province, Indonesia, PT Kertas Kraft Aceh (Persero) -- http://www.KKA-lsm.com/-- produces long fiber pulp for sack kraft used for cement sacks. It focuses on offering sack paper. * * * As reported by the Troubled Company Reporter-Asia Pacific on June 16, 2006, Bank Mandiri asked the company to settle its non-performing loans, which comprise 26.2% of its total loans, otherwise it would be forced to seek legal action against them. On Feb. 13, 2006, TCR-AP reported that the Government injected up to IDR50 billion into ailing Kertas Kraft to enable the company to resume normal operations. At that time, Minister of State Enterprises Sugiharto has said that Kertas Kraft needs up to IDR200 billion in order to resume its operations. ========= J A P A N ========= JAPAN AIRLINES: Int'l. Traffic Down 4.5% on Summer Vacation ----------------------------------------------------------- Japan Airlines Group disclosed its international and domestic passenger traffic results for the Japanese summer vacation period that stretched from August 7 to August 16 this year. The international passenger traffic on JAL Group flights during the 10-day period is 347,209, down by 4.5% on the same period last year, JAL said in a statement. However, the number of passengers that departed Japan for China, Guam and Europe in particular, showed an improvement of 31.1%, 3.1% and 1.4%, respectively, when compared to the same period last year. With the exception of routes to Hawaii and Guam, on which capacities were down by 2% and 1% respectively, capacity was down by more than 10% on all other international routes due to either reductions in scheduled flight frequency or the switch to smaller- sized aircraft from the beginning of FY2009. This contributed to a drop in the number of available seats on the Group's international network by 16.2% compared to last year. JAL also operated only half the number of extra flights it operated during the summer vacation period last year; 26 extra international flights were operated this year to such destinations as Alaska, Honolulu, Latvia and Palau. The load factors on Hawaii, transpacific, Europe and Taiwan routes exceeded 90%, and the load factor on all the other international routes from Japan were above 70%. This led to a high overall load factor of 84.5% on international routes and which represents a rise of 10.4 percentage points versus previous year. For domestic traffic, the JAL Group carried 1,312,717 domestic passengers during this period which is a 7.6% decline compared to last year's result. Seat supply on domestic routes is 3.4% lower than the same period last year and the load factor is 70.5%. 73 additional flights on domestic routes in Japan were operated during this summer vacation period, to such key vacation destinations as Okinawa, Sapporo and Kagoshima. About JAL Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan- based holding company that is active in five business segments through its 225 subsidiaries and 82 associated companies. The Air Transportation segment is engaged in the operation of passenger and cargo planes. The Air Transportation-Related segment is engaged in the transportation of passengers and cargoes, the preparation of in-flight food catering, the maintenance of aircraft and land equipment, as well as the fueling business. The Travel Planning and Marketing segment is involved in the planning and sale of travel packages. The Card and Leasing segment is engaged in the provision of finance, cards and leasing services. The Others segment is involved in businesses related to hotels, resorts, logistics, wholesale, retail, real estate, printing, construction, manpower dispatch, as well as information and communication. The Company has numerous global operating locations. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * As reported in the Troubled Company Reporter-Asia Pacific on February 11, 2009, Moody's Investors Service changed the outlook on the Ba3 long-term debt rating and issuer rating of Japan Airlines International Co. Ltd. to negative from positive. The outlook change reflects Moody's view that JALI's profitability is likely to remain pressured amid the recent sharp decline in airline passenger demand. Japan Airlines Corporation continues to carry Standard & Poor's Ratings 'B+' LT Foreign & Local Issuer Credit. The outlook is positive. JAPAN AIRLINES: Japan Gov't. to Set Up Restructure Panel -------------------------------------------------------- Japan's transport ministry will establish a panel to help restructure Japan Airlines Corp., Bloomberg News reports citing a statement by the transport ministry. Bloomberg relates the ministry said the panel's first meeting will be held Aug. 20 and include legal and academic experts. Takehiko Sugiyama, President of Hitotsubashi University, will chair the group. Development Bank of Japan, Japan Bank for International Cooperation, Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ will act as panel observers, Bloomberg relates. Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan- based holding company that is active in five business segments through its 225 subsidiaries and 82 associated companies. The Air Transportation segment is engaged in the operation of passenger and cargo planes. The Air Transportation-Related segment is engaged in the transportation of passengers and cargoes, the preparation of in-flight food catering, the maintenance of aircraft and land equipment, as well as the fueling business. The Travel Planning and Marketing segment is involved in the planning and sale of travel packages. The Card and Leasing segment is engaged in the provision of finance, cards and leasing services. The Others segment is involved in businesses related to hotels, resorts, logistics, wholesale, retail, real estate, printing, construction, manpower dispatch, as well as information and communication. The Company has numerous global operating locations. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * As reported in the Troubled Company Reporter-Asia Pacific on February 11, 2009, Moody's Investors Service changed the outlook on the Ba3 long-term debt rating and issuer rating of Japan Airlines International Co. Ltd. to negative from positive. The outlook change reflects Moody's view that JALI's profitability is likely to remain pressured amid the recent sharp decline in airline passenger demand. Japan Airlines Corporation continues to carry Standard & Poor's Ratings 'B+' LT Foreign & Local Issuer Credit. The outlook is positive. JLOC XXIV: S&P Downgrades Ratings on Class C Certificates --------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class C floating-rate trust certificates issued under the JLOC XXIV transaction and affirmed its rating on class B, and removed the ratings on both tranches from CreditWatch with negative implications, where there were placed on July 6, 2009. In addition, Standard & Poor's affirmed the ratings on classes A and X. Standard & Poor's reviewed about 100 loans (total outstanding loan balance: about JPY660 billion) backing rated CMBS transactions that are due to mature by the end of August 2010. Following the review, on July 6, 2009, S&P placed the ratings on 93 tranches of 23 CMBS transactions, including those on classes B and C of JLOC XXIV, on CreditWatch with negative implications. One of the loans backing this transaction, which is due to mature by the end of August 2010, is one of the "loans considered to be in default" as stated in the aforementioned report. Accordingly, Standard & Poor's has reviewed the property management report for the property backing the loan and spoken with the asset manager about the loan. The downgrade reflects a downward revision in S&P's assumption regarding the likely recovery amount from the aforementioned loan. Following S&P's review on July 6, it is Standard & Poor's view that there is uncertainty clouding the prospects for recovery from the loan, which accounts for about 17.7% of the initial issuance amount of the trust certificates. Although there is no major concern over cash flow from the underlying properties backing the loan, there appears to be uncertainty over loan repayment by the maturity date. As such, Standard & Poor's lowered its assumption regarding the recovery amount from the loan under the current severe real estate market circumstances if it is not redeemed by the maturity date. Standard & Poor's will continue to monitor the redemptions from the loan, performance of underlying real estate properties, and recovery prospects in case of default of the underlying loan. S&P is considering amending the rating methodology for interest- only (IO) certificates, which include class X of this transaction. If the proposal is adopted, it could affect the rating on class X. At this point, however, Standard & Poor's has affirmed its rating on class X. This is a multi-borrower CMBS transaction that was initially backed by a pool of 12 nonrecourse loans that were secured by 56 real estate properties. The arranger for this transaction is Morgan Stanley Japan Ltd., and the servicer is ORIX Asset Management & Loan Services Corp. Rating Lowered, Off Creditwatch Negative JLOC XXIV JPY252.8 billion floating-rate trust certificates due May 2014 Class To From Initial Issue Amount ----- -- ---- -------------------- C BBB A/Watch Neg JPY1.8 billion Ratings Affirmed, Off Creditwatch Negative Class To From Initial Issue Amount ----- -- ---- -------------------- B AA AA/Watch Neg JPY2.2 billion Ratings Affirmed Class Rating Initial Issue Amount ----- ------ -------------------- A AAA JPY18.8 billion X AAA JPY22.8 billion* * Notional principal L-JAC THREE: S&P Downgrades Ratings on Various Classes of Notes --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on classes D1 to I issued under the L-JAC Three Trust Beneficial Interest transaction and removed the ratings from CreditWatch with negative implications. In addition, Standard & Poor's affirmed the ratings on classes B and C and removed them from CreditWatch with negative implications. The ratings on classes D1 to I and classes B and C were placed on CreditWatch negative on July 6, 2009, following the aforementioned review. Meanwhile, Standard & Poor's also affirmed its ratings on other classes of this transaction. Standard & Poor's reviewed about 100 loans (total outstanding loan balance: about JPY660 billion) backing rated CMBS transactions that are due to mature by the end of August 2010. Following the review, on July 6, 2009, S&P placed the ratings on 93 tranches of 23 CMBS transactions, including those on classes B and C and classes D1 to I of L-JAC Three Trust Beneficial Interest, on CreditWatch with negative implications. Two of the transaction's underlying nonrecourse loans, which are due to mature by the end of August 2010, are "loans considered to be in default," as stated in the aforementioned report. Accordingly, Standard & Poor's has reviewed the property management reports for the properties backing the two loans and met with the asset manager. The downgrades reflect a downward revision in S&P's assumption regarding the likely recovery amount from the two aforementioned loans. Following S&P's review on July 6, it is Standard & Poor's view that uncertainty clouds the prospects for recovery from the two loans, which account for about 43.7% of the initial issuance amount of the beneficial interests. Although there is no major concern over cash flow for the two loans and negotiations for refinancing have commenced for one of the two loans that account for about 36.8% of the total initial issuance amount, there appears to be uncertainty over loan repayment by the maturity date considering the overall leverage levels. As such, Standard & Poor's lowered its assumption regarding the recovery amount from these two loans under the current severe real estate market circumstances if they are not redeemed by the maturity date. Standard & Poor's will continue to monitor the redemptions from these loans, performance of underlying real estate properties, and recovery prospects in case of defaults. S&P is considering amending the rating methodology for interest- only (IO) certificates. If the proposal is adopted, it could affect the ratings on the IO certificates of this transaction. This is a multi-borrower CMBS transaction that was initially backed by a pool of seven nonrecourse loans that were secured by 17 real estate properties. The arranger for this transaction is Lehman Brothers Japan Inc., and the servicer is Capital Servicing Co. Ltd. Ratings Lowered, Off Creditwatch Negative L-JAC Three Trust Beneficial Interest JPY70.889 billion floating-rate trust certificates due April 2013 Class To From Initial Issue Amount ----- -- ---- -------------------- D-1 BBB- BBB/Watch Neg JPY4.0 billion E-1 BB+ BBB-/Watch Neg JPY1.4 billion F-1 BB BB+/Watch Neg JPY1.4 billion G-1 BB- BB/Watch Neg JPY1.5 billion H-1 B+ BB-/Watch Neg JPY1.0 billion I B- B+/Watch Neg JPY0.583 billion Ratings Affirmed, Off Creditwatch Negative Class To From Initial Issue Amount ----- -- ---- -------------------- B AA AA/Watch Neg JPY7.0 billion C A A/Watch Neg JPY7.0 billion ORIX-NRL TRUST: S&P Downgrades Ratings on Various Classes --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class D to H trust certificates issued under the ORIX-NRL Trust 13 transaction and removed the ratings from CreditWatch with negative implications, where they had been placed on July 6, 2009. Meanwhile, Standard & Poor's also affirmed its ratings on classes A to C and X issued under the same transaction. Standard & Poor's reviewed the repayment prospects of about 100 loans (total outstanding loan balance: about JPY660 billion) backing rated CMBS transactions that are due to mature by the end of August 2010. Following the review, on July 6, 2009, S&P placed the ratings on 93 tranches of 23 CMBS transactions, including those on classes D to H of ORIX-NRL Trust 13, on CreditWatch with negative implications. Two of the transaction's underlying loans (representing a combined 18.3% or so of the initial issuance amount of the trust certificates) are "loans considered to be in default," as stated in the aforementioned report, and the loans are due to mature by the end of August 2010. In addition, S&P hold the view that uncertainty is mounting over interest payments relating to one of the underlying specified bonds of this transaction (representing about 12.6% of the initial issuance amount of the trust certificates). The specified bond was not subject to the aforementioned review. Yet, Standard & Poor's understands that the anchor tenant of the office building backing that bond has experienced a credit event, causing significant deterioration in the performance of the collateral property. Accordingly, Standard & Poor's has reviewed the property management report for the property backing the specified bond and interviewed the asset manager about the specified bond. S&P downgraded classes D to H because: (1) S&P expects the likely recovery amounts from the collateral properties relating to the aforementioned "loans considered to be in default" to be lower than S&P's initial assumptions, based on the possibility that the loans may not be redeemed by the maturity date and the properties may need to be liquidated; and (2) S&P see a risk that interest payments on the aforementioned specified bond may not be made, and S&P expects the likely recovery amount from the property that backs the specified bond to be considerably lower than S&P's initial assumption, based on the possibility that the specified bond may default and the property may need to be liquidated. Standard & Poor's intends to continue to monitor progress in the repayment of the aforementioned loans and specified bond, as well as the performance and recovery prospects of the related collateral properties. S&P is considering amending the rating methodology for interest- only (IO) certificates, which include class X of this transaction. If the proposal is adopted, it could affect the rating on class X. At this point, however, Standard & Poor's has affirmed its rating on class X. This is a multi-borrower CMBS transaction. The trust certificates were initially secured by 12 nonrecourse loans and specified bonds (tokutei shasai) extended to 11 obligors, which were originally backed by 21 real estate certificates and real estate properties. The transaction was arranged by ORIX Corp., and ORIX Asset Management & Loan Services Corp. is the transaction servicer. Ratings Lowered, Off Creditwatch Negative ORIX-NRL Trust 13 JPY21.1 billion trust certificates due September 2013 Class To From Initial Issue Amount ----- -- ---- -------------------- D BBB- A/Watch Neg JPY1.1 bil. E B+ BBB/Watch Neg JPY0.4 bil. F B BB/Watch Neg JPY0.6 bil. G B- BB-/Watch Neg JPY0.2 bil. H B- B/Watch Neg JPY0.3 bil. Ratings Affirmed Class Rating Initial Issue Amount ----- ------ -------------------- A AAA JPY15.4 bil. B AA JPY1.7 bil. C AA JPY1.4 bil. X* AAA JPY21.1 bil. (Initial notional principal) * Interest only TOSHIBA CORP: Unit to Check Over 82,000 Washer-Dryers ----------------------------------------------------- Toshiba Home Appliances Corp. said Tuesday it will check free of charge 82,985 washer-dryers after one caught on fire, The Japan Times reports. According to the report, Toshiba Home said the drum-type units, were manufactured between November 2001 and May 2007. These units include the TW-853EX, TW-853V6 and nine other models produced for retailer Ryohin Keikaku Co. and the Japanese unit of General Electric Co. under their brands. Japan Times relates that Toshiba Home said one of the machines caught fire in Kyoto in June, possibly because the insulator of a lead wire was damaged by liquid detergent. No injuries have been reported, the report says. Toshiba Corporation (TYO:6502) --- http://www.toshiba.co.jp/--- is a Japan-based manufacturer involved in five business segments. The Digital Products segment offers cellular phones, hard disc devices, optical disc devices, liquid crystal televisions, camera systems, digital versatile disc (DVD) players and recorders, personal computers (PCs) and business phones, among others. The Electronic Device segment provides general logic integrated circuits (ICs), optical semiconductors, power devices, large-scale integrated (LSI) circuits for image information systems and liquid crystal displays (LCDs), among others. The Social Infrastructure segment offers various generators, power distribution systems, water and sewer systems, transportation systems and station automation systems, among others. The Home Appliance segment offers refrigerators, drying machines, washing machines, cooking utensils, cleaners and lighting equipment. The Others segment leases and sells real estate. * * * As reported in the Troubled Company Reporter-Asia Pacific on May 20, 2009, Moody's Investors Service assigned a rating of Ba1 to JPY180 billion The 1st Series Unsecured Interest Deferrable and Early Redeemable Subordinated Bonds solely for qualified institutional investors (Tekikaku Kikan Toshika Gentei) issued by Toshiba Corporation. The rating outlook is negative. The TCR-AP reported on Aug. 13, 2009, that Fitch Ratings affirmed the FC and LC IDRs of Toshiba Corporation: -- Long-term FC and LC IDRs affirmed at 'BB'; Off RWN; Negative Outlook assigned; -- Short-term FC and LC IDRs affirmed at 'B'; and -- Senior unsecured notes affirmed at 'BB'. XANADEUX: Goes Belly-Up Amid Declining Film Distributor Market -------------------------------------------------------------- Xanadeux became the latest small to medium-sized Japanese distributor to go out of business, according to Screendaily.com. Xanadeux president and founder, Hiroki Numata, has been missing since June while its phones, websites and offices are gone, the report said. According to the report, the company has struggled in the current declining market. Screendaily.com said the box office failure of 170-screen March 2008 release Postman and subsequent horror release Shinizokonai No Ao are said to have been the start of the company's serious financial problems. According to Screendaily.com, the closure is one of a string of bankruptcies and upheavals in the local industry which has seen the shuttering of Movie-Eye Entertainment, Wise Policy and the near collapse of film fund operation Japan Digital Contents. Several more small-to-medium sized companies are in financial trouble but have yet to make public announcements, the report added. Xanadeux is a Tokyo-based film distributor. Founded in 1996, Xanadeux gained notice for the Tamil-language release Muthu (aka The Dancing Maharaja) in 1998, which grossed $2 million of its $6 million worldwide box office in Japan, and made Tamil superstar Rajnikanth famous among Japanese audiences. =============== M A L A Y S I A =============== TIME ENGINEERING: Posts MYR8.73M Net Income in Qtr Ended June 30 ---------------------------------------------------------------- Time Engineering Berhad swung to an MYR8.73 million net income in the second quarter ended June 30, 2009, from MYR90,000 net loss in the same quarter in 2008. For the current quarter, the Group recorded higher revenue of MYR38.5 million, compared to MYR37.0 million for the preceding year’s corresponding quarter mainly due to the partial revenue recognition of new projects. The Group recorded a higher operation profit margin before tax of 30% compared to preceding year’s corresponding quarter of 26%. The improved operation performance was mainly due to cost control initiatives and contributions from new projects. For the six months ended June 30, 2009, the Group recorded lower revenue of MYR63.7 million, compared to MYR90.9 million for the six months 2008. The decrease was attributable to the completion of the PPSMI project Phase V in the first quarter of 2008. The Group’s operation remained profitable with the current period operation profit margin before taxation of 31% as compared to 29% for the six months 2008. The improved margin resulted from controlled spending and contributions from new projects. As of June 30, 2009, the Group's consolidated balance sheet showed MYR551.89 million of total assets, MYR400.11 million of total liabilities and shareholders' equity of MYR151.77 million. About TIME Engineering TIME Engineering Berhad is an investment holding company engaged in information technology, telecommunications and engineering services. The company operates through three segments. The information communication technology segment is engaged in the supply, delivery, installation, testing, commissioning and maintenance of teaching aids equipment; development, management and provision of business to business e-commerce, and computerized transaction facilitation services; provision of media and electronic communications services; provisioning of managed and Internet-related services, and total systems integrators and information technology consultancy. The telecommunication segment is engaged in the provision of telecommunications, Internet and multimedia facilities, and services of an associate. The others segment is engaged in the supply, installation and maintenance of engineering and other equipment for expressways, telecommunications network and other general engineering works. * * * As reported in the Troubled Company Reporter-Asia Pacific on May 9, 2008, Time Engineering Berhad was considered as an affected listed issuer of the Practice Note No. 17/2005 of Bursa Malaysia Securities Berhad as the auditors have expressed a modified opinion on the company's going concern status and on its shareholders' equity, which is less than 50% of its total issued and paid-up share capital. ============= N I G E R I A ============= INTERCONTINENTAL BANK: S&P Downgrades Counterparty Rating to 'B' ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its long- term global scale counterparty credit rating on Intercontinental Bank PLC to 'B' from 'BB-'; the short-term global scale rating remains at 'B'. S&P has also lowered the long- and short-term Nigeria national scale ratings on Intercontinental to 'ngBBB-/ngA- 3' from 'ngA/ngA-1'. All ratings have been placed on CreditWatch with negative implications. The downgrade of the ratings on Intercontinental follows the announcement on Aug. 14, 2009, by the Central Bank of Nigeria that senior management of five domestic Nigerian banks (Intercontinental, Oceanic Bank (not rated), Union Bank PLC (not rated), Afribank PLC (not rated), and Finbank PLC (not rated) (collectively, Banks and individually, a Bank)) had been removed due to the uncovering of "excessively high" asset quality problems that, according to the CBN, were endangering the Banks' solvency. Standard & Poor's understands that the Banks account for about 30% of the Nigerian banking system's assets. The CBN has reportedly provided liquidity support through its "Expanded Discount Window" mechanism and has announced the injection of capital funds to the amount of Nigerian naira (NGN) 400 billion ($2.5 billion, at NGN157: $1) to help stabilize the Banks' liquidity and solvency. "We have currently limited the downgrade to two notches in light of the capital and liquidity support provided to Intercontinental by the Federal Republic of Nigeria via the CBN, given the bank's systemically important status in Nigerian banking and the CBN's own objective to prevent bank failure," said Standard & Poor's credit analyst Matthew Pirnie. According to the CBN, its capital injection into the Banks will stabilize and enable them to continue normal business. Furthermore, the CBN states that the capital injection is a temporary measure as the government intends to divest its holdings as soon as new investors recapitalize the Banks. Although the ratings on Intercontinental continue to reflect its stand-alone creditworthiness, and thus do not include any uplift for extraordinary external support, temporary capital and liquidity support provided by the CBN has partly mitigated the impact of the deterioration in Intercontinental's credit profile. "To resolve the CreditWatch placement, S&P will review information from Intercontinental's new management team and the CBN (which now effectively controls Intercontinental) to assess the extent of the bank's deteriorated financial profile and the adequacy of the CBN's emergency financial support," said Mr. Pirnie. Specifically, S&P will need to review information detailing the extent of current and expected asset quality deterioration and the related impact on capital. S&P also expects to review management's plans for improving Intercontinental's governance, internal procedures, and risk management framework. In the event that Intercontinental's financial profile deteriorates further, without receiving more capital and/or liquidity support from the government, further downgrades would be likely. S&P could, on the other hand, resolve the CreditWatch by affirming the ratings if S&P feel that government-sponsored support sufficiently stabilizes the bank's financial profile and that measures to be taken by new management also provide for a significant moderation in Intercontinental's risk profile going forward. ===================== P H I L I P P I N E S ===================== NATIONAL POWER: Fitch Affirms 'BB' Rating on US$500 Mil. Notes -------------------------------------------------------------- Fitch Ratings has affirmed the rating of the notes issued by National Power Corporation in the Philippines in 2006 and maintained a Stable Outlook. -- US$500 million fixed rate notes affirmed at 'BB'; Outlook Stable The notes are irrecoverably and unconditionally guaranteed by the Republic of the Philippines, and hence the rating of the notes is based on the ROP's Long-term foreign currency Issuer Default Rating of 'BB', with a Stable Outlook. The rating addresses the timely payment of interest and the ultimate payment of principal of the notes by the legal final maturity in November 2016. Rating Outlooks have been published for all newly issued Asia Pacific Structured Finance tranches since June 2008, and concurrently with rating actions for tranches issued prior to June 2008. Unlike a Rating Watch which notifies investors that there is a reasonable probability of a rating change in the short term as a result of a specific event, Rating Outlooks indicate the likely direction of any rating change over a one- to two-year period. ================= S I N G A P O R E ================= CONTIPAC SHIPPING: Pays First and Final Dividend ------------------------------------------------ Contipac Shipping Lines Pte Ltd, which is in creditors' voluntary liquidation, paid the first and final dividend on August 18, 2009. The company paid 10% to all admitted unsecured claims. JURONG TECHNOLOGIES: Posts SG$502.33 Million Net Loss for FY2008 ---------------------------------------------------------------- Jurong Technologies Industrial Corp. Ltd. disclosed its financial results for the year ended December 31, 2008. The company posted a net loss of SG$502.33 million on revenue of SG$110.57 million, compared with a net loss of SG$114.31 million on revenue of SG$218.95 million in the prior year. As of December 31, 2008, the company's consolidated balance sheet showed SG$141.85 million in total assets and SG$468.31 million in total liabilities, resulting in stockholders' deficit of SG$326.45 million. The company's consolidated balance sheet as of December 31, 2008, also showed strained liquidity with SG$107.77 million in total current assets available to pay SG$468.10 million in total current liabilities. Full-text copy of the company's consolidated financial statements for the year ended December 31, 2008, is available for free at: http://ResearchArchives.com/t/s?423c About Jurong Technologies Based in Singapore, Jurong Technologies Industrial Corpn. Ltd -- http://www.jurtech.com-- is an investment holding company. Through its subsidiaries, it provides assembling of electronic products, assembling printed circuit boards, electronics contract manufacturing and acting as electronics supplier, provision of surface mount technology manufacturing services, marketing of telecommunication products, manufacture of uninsulated wire (electronic component wire and bonding wire), original development manufacturing and research and development services of various electronic and designing and sale of multimedia products. On February 20, 2009, the High Court of Singapore entered a judicial management order for Jurong Technologies Industrial Corpn. Ltd. ====================== S O U T H A F R I C A ====================== FINTECH RECEIVABLES: Fitch Assigns 'BB+' Rating on Class E Notes ---------------------------------------------------------------- Fitch Ratings has assigned final National ratings and Loss Severity ratings to the term notes issued by Fintech Receivables 2 (Pty) Limited (Fintech 2): -- ZAR232.55 million class A Series A1C floating rated notes: 'AAA(zaf)'; Outlook Stable; Loss Severity Rating LS-1 -- ZAR70.84 million class E Series D1C floating rated notes: 'BB+(zaf)'; Outlook Stable; Loss Severity Rating LS-3 Fitch has simultaneously affirmed the National Long-term ratings for these securities previously issued by Fintech 2: -- ZAR50.0 million class A2A affirmed at 'AAA(zaf)'; Outlook Stable; Loss Severity Rating LS-1 -- ZAR306.3 million class A2B affirmed at 'AAA(zaf)'; Outlook Stable; Loss Severity Rating LS-1 -- ZAR31.4 million class B2B affirmed at 'AA(zaf)'; Outlook Stable; Loss Severity Rating LS-4 -- ZAR44.1 million class C2B affirmed at 'A(zaf)'; Outlook Stable; Loss Severity Rating LS-4 -- ZAR31.8 million class D2B affirmed at 'BBB(zaf)'; Outlook Stable; Loss Severity Rating LS-4 -- ZAR14.0 million class E3B affirmed at 'BB+(zaf)'; Outlook Stable; Loss Severity rating LS-3 The new notes were issued to refinance these notes that have reached their scheduled maturity dates: -- ZAR300.0 million class A1B floating rate notes: 'Paid in Full' -- ZAR19.9 million class D1B floating rate notes: 'Paid in Full' The transaction is a securitization of equipment leases originated by Fintech Underwriting (Proprietary) Limited, which is wholly owned by Fintech (Proprietary) Limited. The transaction is an existing pool of assets that was included in a ZAR2 billion multi-seller asset-backed note programme established in August 2008 with the issuance of the first series of notes. Under the programme, the issuer, from time to time, may issue securities with maturities of less than 365 days (CP) and longer-dated maturities (term notes). No CP has been issued to date. Credit enhancement for the class A notes equal 32.45% of the ZAR848.4 million collateral and is provided by subordination of the class B, C, D and E notes, subordinated loan and the available Arrears Reserve Fund. The issuer can, after the inception date, issue CP, which will rank senior to the class A notes. The issuance of CP is subject to the issuer meeting certain issuance conditions prior to funding. The final ratings on the term notes address the payment of interest on the notes according to the terms and conditions of the transaction documents, subject to an interest deferral trigger on the class B, C, D, and E notes, as well as the repayment of principal by legal final maturity for each note. Should a deferral trigger be hit on the class B, C, D or E notes, interest may not be received for a certain period, but will, in Fitch's judgment, be received by legal final maturity. No unpaid interest will accrue on the deferred interest. =========== T A I W A N =========== SPANSION INC: Suspends Memorandum of Understanding With ASE ----------------------------------------------------------- Lisa Wang at Taipei Times reports that Spansion Inc., as part of restructuring efforts, has backed out of its memorandum of understanding with Advanced Semiconductor Engineering Inc. Taipei Times says that Spansion and ASE had planned to form a chip testing and packaging venture. According to Taipei Times, Spansion corporate marketing director John Nation said that the restructuring will focus on cutting costs, strengthening efficiency, and improving asset management. The report quoted Mr. Nation as saying, "We signed the MOU last year. It did not go anywhere since we filed for Chapter 11 protection" in March. Spansion wanted to achieve greater flexibility in its manufacturing strategy by subcontracting part of capacities to other companies, Taipei Times states, citing Mr. Nation. Mr. Nation, according to Taipei Times, said Spansion would keep its partnership with contract chipmakers, including Taiwan Semiconductor Manufacturing Co. and SMIC. Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On February 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, have been tapped as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, is the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee has appointed an official committee of unsecured creditors in the case. As of September 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. It said that Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. ============= V I E T N A M ============= JOINT STOCK: Fitch Puts 'D' Individual Rating on Negative Watch --------------------------------------------------------------- Fitch Ratings has placed Joint Stock Commercial Bank for Foreign Trade of Vietnam's Individual rating of 'D' on Rating Watch Negative. The Support rating has been affirmed at '4'. "There are concerns regarding Vietcombank's weak balance sheet strength due to potential under-provisioning associated with loan quality deterioration as the country's trade-dependent economy slows," says Sabine Bauer, Director in Fitch's Financial Institutions Team. "Fitch would consider downgrading the Individual rating if it cannot gain sufficient comfort from the bank's loans quality, in particular the differences in loan classifications using international and local accounting standards," adds Ms. Bauer. The Individual rating also reflects solid profitability and the bank's strong franchise as one of four major state-owned banks with 10% of system assets. Under IFRS, Vietcombank's NPLs rose to a very high 18% at end-May 2008 (2007: 14%) and net NPLs stood at 115% of equity. In addition, special-mention loans were very high at 23%. Audited IFRS 2008 accounts are not yet available, but Fitch anticipates that loans quality will have deteriorated further due to very high inflation and interest rates in H208 and a slowing economy. NPLs under local accounting standards (increased moderately to 4.3% of end-H109 loans from 3.3% at FYE07; this is however well above the system's 2.5%. In addition, special-mention loans rose to 5.4% from 2.0%. Loan quality may deteriorate further given strong loan growth over H109 (16% for the bank versus 17% for the system), particularly if borrowing rates rise with the state ultimately having to remove its current subsidization of them. In addition, Vietcombank is exposed to a depreciation of the Vietnamese Dong as 40% of its loans are in foreign currency. Pre-provision profit has remained solid (2.9% of assets in H109; 3.0% in 2008), but is somewhat under pressure as limited availability for deposits drives up funding costs and squeezes margins, especially as lending rates are capped. Meanwhile, liquidity tightened slightly in H109 as the bank funded its loan growth through liquid assets as customer and bank deposits contracted. While capital appears adequate under VAS, based on IFRS loans quality data, there is the potential for it to be significantly eroded. That said, the bank holds significant loan collateral. At end-June 2009, the regulatory total CAR stood at 8.8% (2008: 9.3%). Vietcombank is 90.7%-owned by the state and is Vietnam's third- largest bank. It employs 9,056 staff and has 65 branches. Its shares were listed in June 2009. In Fitch's rating criteria, a bank's standalone risk is reflected in its Individual Rating and the prospect of external support is reflected in the Support Rating. Collectively these ratings drive the agency's Long-and Short-term IDRs. ********* 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. Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante, 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 without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$625 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***