/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/100129.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 Friday, January 29, 2010, Vol. 13, No. 020 Headlines A U S T R A L I A CITY PACIFIC: Fund Avoids Fire Sale; AU$82-Mln. Loan Extended GRIFFIN COAL: Court Grants Extension to Convene Creditor's Meeting TZ LIMITED: QVT Supports Rescue Plan, to Swap Debt for Equity C H I N A AGRICULTURAL BANK: IPO May Not Happen This Year, China Daily Says DDS: Workers Demand Back Pay After Firm's Sudden Closure * CHINA: Dairy Products Found to Contain Melamine Recalled H O N G K O N G CASTLE FINANCE: S&P Raises Rating on EUR133 Mil. Floating Notes LUMENA RESOURCES: Moody's Downgrades Corp. Family Rating to 'B2' MAJORETTE HK: Lui and Yuen Appointed as Liquidators MARATHON ASSET: Chiu and Har Step Down as Liquidators MARUBENI CHEMICALS: Members' Final General Meeting Set for Feb. 22 MARVELLOUS ERA: Members' Final General Meeting Set for Feb. 26 MEDIA PARTNERS: Philip Brendan Gilligan Steps Down as Liquidator MOULIN GLOBAL: Creditors Get 5.9% Recovery on Claims MOULIN HOLDINGS: Creditors Get 6% Recovery on Claims NITCHES (FAR EAST): Court to Hear Wind-Up Petition on Feb. 24 OAKMAN DEAN: Barrett and Williams Appointed as Liquidators PATTERN ENTERPRISES: Annual Meetings Set for February 22 PERFECT CONCEPT: Court Enters Wind-Up Order PCCW SMATV: Seng and Lo Appointed as Liquidators PHILAND ENTERPRISES: Wong and Fung Step Down as Liquidators PHOENIX GARMENT: Contributories and Creditors to Meet on Feb. 26 PLANER INVESTMENTS: Creditors' Proofs of Debt Due February 19 POLYWIN ENGINEERING: Annual Meetings Set for February 26 PROSPERITY SILK: Court Enters Wind-Up Order ROCKWAY TECHNOLOGY: First Meetings Slated for February 10 ROYAL DOULTON: Creditors' Proofs of Debt Due February 5 SAUCONY ASIA: Creditors' Proofs of Debt Due February 22 I N D I A AIR INDIA: To Get INR1,200cr Equity Infusion from Government AIR INDIA: Third Quarter Loss Narrows to INR14.74 Million AVANI PROJECTS: Fitch Assigns 'B-' Rating with Stable Outlook BANK OF BARODA: Moody's Cuts Rating on Upper Tier 2 Notes to Ba1 BANK OF INDIA: Moody's Rating on Cuts Upper Tier 2 Notes to Ba1 EASTERN SILK: CRISIL Assigns 'BB' Rating on INR600 Mil. Term Loan HEAVEN DEALERS: CRISIL Rates INR99.5 Million Cash Credit at 'BB-' ICICI BANK: Moody's Cuts Rating on Upper Tier 2 Notes to Ba1 IDBI BANK: S&P Assigns Ratings on US$1.5 Bil. Medium-Term Notes LOHIA PAPER: CRISIL Places 'B+' Rating on INR80 Mil. Term Loan MEKKO STEEL: Delay in Term Loan Repayment Cues CRISIL Junk Ratings P & R ENGINEERING: CRISIL Puts 'D' Ratings on INR340MM Term Loan MODERN PREFAB: CRISIL Places 'B+' Rating on INR33.2 Mil. Term Loan P & R GOGRIPUR: Delays in Interest Payment Cues CRISIL 'D' Ratings R. K. & SONS: CRISIL Assigns 'BB+' Rating on INR7.5MM Overdraft S.M. AUTO: CRISIL Assigns 'BB+' Rating on INR66 Mil. Term Loan SPICEJET LTD: Expects to Post Profit This Year on Higher Traffic SREE KUMAR: CRISIL Rates INR74.4 Million Term Loan at 'B-' STATE BANK OF INDIA: Moody's Cuts Hybrid Tier 1 Secs. Rtng. to Ba2 I N D O N E S I A BANK MANDIRI: Support Cues Fitch to Upgrade Subsidiary's Ratings CHANDRA ASRI: S&P Affirms 'B+' Long-Term Corporate Credit Rating MATAHARI PUTRA: Moody's Reviews 'B1' Corporate Family Rating MATAHARI PUTRA: S&P Puts 'B+' Rating on CreidtWatch Negative J A P A N ALL NIPPON: To Promote Int'l Flights as 'Pillar' of Growth in 2010 CORSAIR NO 2: S&P Assigns Swap Risk Ratings on Swap Agreements L-JAC 6: Moody's Downgrades Ratings on Various Classes of Notes SPANSION INC: Committee Wants to Sue Spansion Japan WILLCOM INC: JCR Downgrades Ratings on Senior Debts to 'C' K O R E A KUMHO LIFE: Penalized Over Investment Losses N E W Z E A L A N D * NEW ZEALAND: Export Falls 2.8% in December 2009 Quarter X X X X X X X X FORD MOTOR: Reports $1.4-Bil. Q4 2009 Revenue in Asia, Africa * Large Companies with Insolvent Balance Sheets - - - - - ================= A U S T R A L I A ================= CITY PACIFIC: Fund Avoids Fire Sale; AU$82-Mln. Loan Extended ------------------------------------------------------------- Pacific First Mortgage Fund, formerly known as City Pacific First Mortgage Fund, has avoided an asset fire sale after Commonwealth Bank of Australia extended an AU$82 million loan facility for the beleaguered fund, The Sydney Morning Herald reports. Fund manager Balmain Trilogy said the new loan facility will now expire on June 30, 2010, and will be renewable every year if CBA remains comfortable with the fund's performance, the report says. According to the Herald, Balmain Trilogy's joint chief executive Andrew Griffin said the bank's decision enhanced the fund's ability to improve recoveries from its assets and prevented a fire sale of some assets. "As a lender to the fund CBA is entitled to act immediately to recover its loan funds," the report cited Mr. Griffin as saying in a statement. "Had they done this a fire sale of some fund assets would have been forced. Their decision to extend the loan removes this damaging consequence and enables us to better protect the asset values," he said. The report relates Mr. Griffin said CBA's loan extension was a significant win for unitholders of the fund and Balmain was comfortable the fund could comply with the new terms. "We are now able to map the future of the fund with greater certainty and finalise a strategy to restarting some payments to unitholders," he said. Unitholders, CBA and the Australian Securities and Investments Commission will be consulted throughout this process, he added. About City Pacific City Pacific Limited (ASX:CIY) -- http://www.citypac.com.au/ -- is engaged in funds management, including acting as responsible entity and manager of four registered managed investment schemes (City Pacific First Mortgage Fund (formerly City Pacific Mortgage Trust), City Pacific Income Fund, City Pacific Managed Fund and City Pacific Private Fund), property, financial services, investment/trading activities and operations. The Company conducts business in five primary segments, being funds management, property, financial services, investment/trading and operating. On July 2, 2007, the Company acquired Australian Beneficial Finance Pty Ltd., which is a mortgage manager specializing in residential mortgage origination and management, and commercial and development funding. * * * The Troubled Company Reporter-Asia Pacific reported on Aug. 4, 2009, that receivers and managers have been appointed to City Pacific Ltd following the loss of its AU$630 million mortgage fund to Balmain Trilogy. City Pacific's banker, the Commonwealth Bank, called in Ian Carson and Daniel Bryant from PPB to act as receivers and managers because the company is unable to pay debts of more than AU$100 million. PPB partner Ian Carson said City Pacific's loss of the fund had had a "significant impact upon (its) ability to service its debts and remain viable". The TCR-AP reported on Aug. 31, 2009, that City Pacific Ltd has been put into liquidation after a federal court judge ordered liquidator Andrew Wily and David Hurst of Sydney insolvency firm Armstrong Wily to wind up the company. The application to have Armstrong Wily appointed was made by creditor Hlbc Commercial on a debt of AU$3,060. GRIFFIN COAL: Court Grants Extension to Convene Creditor's Meeting ------------------------------------------------------------------ The Federal Court in Perth has granted Griffin Coal administrators an extension before they have to call another creditors meeting, The Sydney Morning Herald reports. The report says Kordamentha applied on Thursday to the federal court to delay the creditors meeting until May 1 at the latest, as it goes through the books of the Ric Stowe-controlled coal miner. According to the report, administrator Brian McMaster told a creditors meeting 10 days after Griffin went into administration on January that he would apply for the extension due to the complexity of the matter. By law, the report notes, a second creditors meeting has to be held within 30 days. Justice Neil McKerracher yesterday granted the extension, with KordaMentha able to apply for further extensions if necessary, the report notes. About Griffin Coal Based in Australia, The Griffin Coal Mining Company Pty Ltd -- http://www.griffincoal.com.au/-- is engaged in coal mining and processing. Griffin Coal operates major mines in the Collie area, approximately 220 kilometers south east of Perth. The Company is producing more than three million tons of coal per year. Griffin Coal has operations at Ewington Mine, Muja Mine and Buckingham Mine. * * * As reported by the Troubled Company Reporter-Asia Pacific on January 4, 2010, Griffin Coal Mining Co. appointed Kordamentha as administrator with total debts amounting to about AU$700 million. The coal supplier defaulted on an interest payment in December to bondholders owed US$475 million and also missed a payment to Australia's tax authority. TZ LIMITED: QVT Supports Rescue Plan, to Swap Debt for Equity ------------------------------------------------------------- QVT Fund LP and Quintessence Fund L.P. announced their support for the rescue plan proposed by the directors of TZ Limited (ASX: TZL). If passed by shareholders, this rescue plan will allow QVT to convert approximately AU$28.6 million of debt into TZ shares. QVT believes the rescue plan is in the best interests of all shareholders and will significantly benefit TZ and all shareholders, as, rather than enforcing its claim for repayment of AU$28.6 million, QVT is acquiring shares at a price that is above TZ's last trading price (AU$0.96) and agreeing to place shares in escrow for a twelve month period. QVT is a long term investor in TZ and believes that its interests are aligned with those of other shareholders. QVT believes in the company's unique technology, product development opportunities and its dedicated staff, who have remained committed during this trying period. In December 2007, QVT subscribed for AU$24 million worth of convertible notes. TZ failed to pay QVT the annual interest payments on these notes in both 2008 and 2009. Since June 2009, QVT has worked with the current board of the company on a restructure that would repay QVT without destroying value for shareholders. In furtherance of this effort, QVT invested an additional AU$2 million in the company to sustain TZ's operations and agreed to a moratorium on the outstanding debt owed to it. As set out in TZ's Notice of Annual General Meeting and other materials dispatched to shareholders and released on ASX on 27 January 2010, the company's Independent Expert, Lonergan Edwards & Associates Limited, has strongly recommended that TZ shareholders approve the rescue plan (in the absence of a superior proposal) because: * If the rescue plan is not implemented (and in the absence of a superior proposal, the likelihood of which they consider remote), TZ shareholders are highly unlikely to receive any value for their TZ shares because TZ is likely to be placed in administration; * The rescue plan implicitly values TZ's existing shares (in total) at AU$48.6 million; and * TZ shareholders will therefore be significantly better off if the rescue plan is approved. The rescue plan requires approval by TZ's shareholders at the company's Annual General Meeting on February 26, 2010. QVT urges all shareholders to support the rescue plan by voting IN FAVOUR of the resolutions. QVT itself is ineligible to vote on the rescue plan resolutions, but will vote in favor of the re-appointment of the current directors of TZ: Chairman Mark Bouris, Kenneth Ting and Willem de Vlugt. For Further Information Call: In Australia & Asia: Tim Allerton City PR +61 2 9267 4511 Worldwide: Shawn Pattison/Patrick Clifford The Abernathy MacGregor Group +1 (212) 371-5999 ========= C H I N A ========= AGRICULTURAL BANK: IPO May Not Happen This Year, China Daily Says ----------------------------------------------------------------- Agricultural Bank of China's initial public offering may not happen this year as differences still persist over the future of the bank's business related to the agriculture sector and farmers, China Daily reports citing a source familiar with the matter. "Though the bank is basically ready for the initial public offering (IPO), top policymakers are yet to reach a consensus on whether to run the lender as a commercial entity or maintain its rural finance unit as a policy lending arm of the State," the source told China Daily, on condition of anonymity due to the sensitive nature of the issue. "The crux is whether the bank's rural finance arm will continue to enjoy government subsidies after the share flotation. Otherwise, the bank could be listed as originally scheduled," the source said. China Daily had earlier reported that the bank intends to raise up to CNY150 billion through an IPO as early as April this year. Agricultural Bank has weaker capital ratios than its three largest domestic rivals even after getting US$19 billion from the government in October 2008, potentially making it less attractive to equity investors, according to Bloomberg News. Agricultural Bank of China -- http://www.abchina.com/-- one of China's largest state-owned commercial banks, specializes in financing and providing services to agricultural, industrial, commercial, and transportation enterprises in rural areas. The bank also offers personal banking, credit cards, and foreign exchange services. Founded in 1951, ABC operates approximately 31,000 branches and banking offices, as well as more than 30 provincial-level offices, serving every county in China. Overseas it operates branches in Hong Kong and Singapore, and representative offices in London, New York, and Tokyo. * * * Agricultural Bank of China continues to carry Moody's BFSR 'E+' rating and Fitch's "E" Individual Rating. DDS: Workers Demand Back Pay After Firm's Sudden Closure -------------------------------------------------------- Authorities in Shenzhen, Guangdong province, on Wednesday started paying workers whose wages have been defaulted by a courier company DDS due to its sudden closure, China Daily reports. But thousands of workers in the company's branches in other cities in the province, including Guangzhou, Foshan and Dongguan, are still in a tough run for repayment from local governments, China Daily says. The report relates that DDS closed all its businesses early last week due to an over-heated expansion of its business on the mainland, leaving thousands of workers unpaid. The company has defaulted on as much as CNY4.86 million (US$715,000) in workers' pay in Shenzhen following its closure, the report says. According to the Daily, DDS's chairman, Gao Wei, has been detained for further investigation and his assets were frozen after the company was unable to pay its debts. Founded in October 1997, Shenzhen-based DDS is a private express delivery company. It employs at least 10,000 workers and operates more than 800 branches in China and Hong Kong. * CHINA: Dairy Products Found to Contain Melamine Recalled ---------------------------------------------------------- China Daily reports that three Chinese companies have been found selling milk products tainted with melamine, the industrial chemical responsible for the deaths of six children and injuring 300,000 in 2008. The Daily, citing local media reports, says three batches of milk products have been ordered off shelves by the health department in Guizhou province because they contain melamine. These products are: * a batch of products produced by the Shandong Zibo Lusaier Dairy Company Ltd on April 25, 2009; * a batch of popsicles produced by the Liaoning Tieling Wuzhou Food Company Ltd on April 9, 2009; and * a batch of popsicles produced by the Laoting Kaida Refrigeration Plant at Tangshan, Hebei province on March 19, 2009. According to the report, the National Business Daily said that the melamine-tainted products were found and banned in Sichuan province and Jiangsu province last December. A government body in Beijing ordered the investigation, the report says. China Daily relates Wang Dingmian, former chairman of the Guangdong Provincial Dairy Association, said the products likely contained tainted milk recalled after the 2008 scandal but which somehow made its way back into the market. ================ H O N G K O N G ================ CASTLE FINANCE: S&P Raises Rating on EUR133 Mil. Floating Notes --------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on the EUR133 million floating?rate, secured, collateralized debt obligation series 1 issued by Castle Finance I Ltd. At the same time, the rating was removed from CreditWatch with positive implications, where it was placed on Jan. 14, 2010. S&P reviewed the credit quality of the securitized assets using the synthetic rated overcollateralization scores and results from S&P's supplemental tests: the largest obligor and largest industry tests. These results measure the degree by which the credit enhancement of a tranche exceeds the stressed loss rate assumed for a given rating scenario. The SROC scores and test results show an improvement in the credit quality of the underlying portfolios, which along with a higher- than-expected recovery on defaulted reference names in the portfolios, indicate sufficient credit support at the higher rating levels. Deal Name Rating To Rating From --------- --------- ----------- Castle Finance I Ltd. Series 1 B- CCC+/Watch Pos Notes: 1. Where the final price on defaulted reference names in CDO portfolios is not known, S&P's analysis takes into consideration the auction results for these names from the International Swaps and Derivatives Association, Inc. 2. In accordance with the criteria for rating CDO transactions certain factors such as credit stability and rating sensitivity to modeling parameters may be considered in assigning ratings to CDO tranches, in addition to the supplemental tests, the Monte Carlo default simulation results, and the associated cash flow modeling. Such risks in transactions may be assessed on a case-by-case basis and the ratings may be qualitatively adjusted to a rating level different than that indicated by the various quantitative results. The tranches' final ratings reflect the result of any such qualitative adjustments. LUMENA RESOURCES: Moody's Downgrades Corp. Family Rating to 'B2' ---------------------------------------------------------------- Moody's Investors Service has downgraded Lumena Resources Corp's corporate family and senior unsecured bond ratings to B2. The rating outlooks are stable. This completes the rating review initiated on 30 December 2009, following Lumena's announcement that its controlling shareholder, Mr Suolang Duoji, had pledged a stake of about 20.5% in the company for a short term loan from Bank of China International. "The pledging of a major stake in the company by the chairman and founder for his own purpose raises Moody's concern over Lumena's corporate governance and shareholder ambitions," says Elizabeth Allen, a Moody's Vice President. "In particular, Lumena has a very short track record as a listed entity and thus lack a history of strong governance or transparency." Moody's understands that Mr. Suolang has other private investments including (1) the Hummer brand, a recent, high-profile acquisition in China, and (2) a polymer & fiber business. He considered Lumena his most significant investment. While there is generally no competition or limited related party transactions between Lumena and these companies, the share pledge brings into question the shareholder's intention and his funding needs. Admittedly, the pledge of shares by Lumena's largest shareholder may not have any immediate impact on the company's operation or financial position. However, it does add a degree of uncertainty about the stability of Lumena's financial profile and financial policy. Mr Suolang, through Nice Ace Technology Ltd, owns approximately 37.5% of the company. If the BOCI loan payment is not met and the bank takes control of the pledged shares, "change of control event" for Lumena's US$250 million 12% Senior Notes due 2014 could be triggered. In this scenario, the company would have to offer to purchase all outstanding notes -- which it may not be able to do. The B2 ratings continue to reflect Lumena's position as a small player with a single product in the broad chemical sector, balanced by its being one of the leading producers of thenardite, or anhydrous sodium sulphate, in China. The company's traditionally high profit margin is a key rating support for Lumena's financial profile and thus allows some room for price and demand volatility. However, the company's liquidity profile is weak, reflecting its high capex needs and the lack of any alternative banking facilities. The stable outlook captures these risk factors, while acknowledging that the company's business fundamentals remain largely unchanged. An upgrade to the rating in the near term is unlikely, given Lumena's relatively short track record and the recent downgrade. Upward rating pressure could emerge over time if the company can 1) maintain its sound financial profile as it goes through its investment cycle; 2) sustain its high profit margins for existing and new products; 3) strengthen its balance sheet and/or back-up liquidity arrangements and 4) demonstrate an improvement in corporate governance practices. Downward rating pressure could emerge if 1) profitability and cash flow were to decline materially; 2) the company were to carry out higher-than-expected debt-funded investments and capex; 3) evidence were to show cash leakage to major shareholders or related parties; and 4) the company's liquidity profile were to weaken. Credit metrics that Moody's would consider for a rating downgrade include Debt/EBITDA exceeding 4-4.5x and EBITDA interest coverage falling below 4x. The rating could also be downgraded should the change of control provision be invoked. The last rating action on Lumena was taken on 30 December, 2009 when Moody's placed the company's B1 corporate family and bond ratings on review for possible downgrade. Lumena Resources Corp. mines, processes, and manufactures natural thenardite products. Thenardite is also known as anhydrous sodium sulphate, a basic chemical. Lumena operates two mines and processing facilities in Sichuan Province in China with an annual production capacity of around 1.6 million tons. It was listed on the Hong Kong Stock Exchange in June 2009. MAJORETTE HK: Lui and Yuen Appointed as Liquidators --------------------------------------------------- Kennic Lai Hang Lui and Yuen Tsz Chun Frank on January 8, 2010, were appointed as liquidators of Majorette Hong Kong Limited. The liquidators may be reached at: Kennic Lai Hang Lui Yuen Tsz Chun Frank KLC Kennic Lui & Co. Ho Lee Commercial Bldg., 5/F 38-44 D'Aguilar Street Central, Hong Kong MARATHON ASSET: Chiu and Har Step Down as Liquidators ----------------------------------------------------- Ying Hing Chiu and Chan Mi Har stepped down as liquidators of Marathon Asset Management HK Limited on January 19, 2010. MARUBENI CHEMICALS: Members' Final General Meeting Set for Feb. 22 ------------------------------------------------------------------ Members of Marubeni Chemicals & Plastics (Hong Kong) Limited will hold their final general meeting on February 22, 2010, at 5:45 p.m., at the Level 28, Three Pacific Place, 1 Queen's Road East, in Hong Kong. At the meeting, Susan Y H Lo, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. MARVELLOUS ERA: Members' Final General Meeting Set for Feb. 26 -------------------------------------------------------------- Members of Marvellous Era Limited will hold their final general meeting on February 26, 2010, at 2:01 p.m., at the Level 28, Three Pacific Place, 1 Queen's Road East, in Hong Kong. At the meeting, Susan Y H Lo, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. MEDIA PARTNERS: Philip Brendan Gilligan Steps Down as Liquidator ---------------------------------------------------------------- Philip Brendan Gilligan stepped down as liquidator of Media Partners International Holdings Limited on January 12, 2010. MOULIN GLOBAL: Creditors Get 5.9% Recovery on Claims ---------------------------------------------------- Moulin Global Eyecare Holdings Limited, which is in liquidation, will pay the fourth interim dividend to its creditors on Jan. 29, 2010. The company will pay 5.9% for ordinary claims. The company's liquidators are: Desmond Chung Seng Chiong Roderick John Sutton The Hong Kong Club Building, 14/F 3A Chater Road Central, Hong Kong MOULIN HOLDINGS: Creditors Get 6% Recovery on Claims ---------------------------------------------------- Moulin Holdings (H.K.) Company Limited, which is in liquidation, paid the third interim dividend to its creditors on Jan. 22, 2010. The company paid 6% for ordinary claims. The company's liquidators are: Desmond Chung Seng Chiong Roderick John Sutton c/o Ferrier Hodgson Limited The Hong Kong Club Building, 14/F 3A Chater Road Central, Hong Kong NITCHES (FAR EAST): Court to Hear Wind-Up Petition on Feb. 24 ------------------------------------------------------------- A petition to wind up the operations of Nitches (Far East) Limited will be heard before the High Court of Hong Kong on February 24, 2010, at 9:30 a.m. OAKMAN DEAN: Barrett and Williams Appointed as Liquidators ---------------------------------------------------------- Richard Joseph Barrett and Rory John Williams on January 13, 2010, were appointed as liquidators of Oakman Dean Limited. PATTERN ENTERPRISES: Annual Meetings Set for February 22 -------------------------------------------------------- Members and creditors of Pattern Enterprises (International) Limited will hold their annual meetings on February 22, 2010, at 11:00 a.m., and 11:30 a.m., respectively at the 62/F, One Island East, 18 Westlands Road, Island East, in Hong Kong. At the meeting, Stephen Liu Yiu Keung, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. PERFECT CONCEPT: Court Enters Wind-Up Order ------------------------------------------- The High Court of Hong Kong entered an order August 26, 2008, to wind up the operations of Perfect Concept Investment Limited. The company's liquidators are Tsui Ka Kui and Wong Yin Yee. PCCW SMATV: Seng and Lo Appointed as Liquidators ------------------------------------------------ Natalia K M Seng and Susan Y H Lo on January 8, 2010, were appointed as liquidators of PCCW Smatv Limited. The liquidators may be reached at: Natalia K M Seng Susan Y H Lo Three Pacific Place, Level 28 1 Queen's Road East Hong Kong PHILAND ENTERPRISES: Wong and Fung Step Down as Liquidators ----------------------------------------------------------- Wong Ming Lai and Fung Tze Wa stepped down as liquidators of Philand Enterprises Limited on January 20, 2010. PHOENIX GARMENT: Contributories and Creditors to Meet on Feb. 26 ---------------------------------------------------------------- Contributories and creditors of Phoenix Garment Enterprises Limited will hold their first meetings on February 26, 2010, at 2:45 p.m., and 3:00 p.m., respectively at Unit 511, 5/F, Tower 1, Silvercord, 30 Canton Road, Tsimshatsui, Kowloon in Hong Kong. At the meeting, Ho Man Kit Horace and Kong Sze Man Simone, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. PLANER INVESTMENTS: Creditors' Proofs of Debt Due February 19 ------------------------------------------------------------- Creditors of Planer Investments Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by February 19, 2010, to be included in the company's dividend distribution. The company's liquidator is: Lau Vui Cheong Hong Kong Trade Centre 161-167 Des Voeux Road Central Hong Kong POLYWIN ENGINEERING: Annual Meetings Set for February 26 -------------------------------------------------------- Members and creditors of Polywin Engineering Limited will hold their annual meetings on February 26, 2010, at 2:00 p.m., and 2:30 p.m., respectively at the 62/F, One Island East, 18 Westlands Road, Island East, in Hong Kong. At the meeting, Stephen Liu Yiu Keung, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. PROSPERITY SILK: Court Enters Wind-Up Order ------------------------------------------- The High Court of Hong Kong entered an order December 24, 2009, to wind up the operations of Prosperity Silk & Fabric Limited. The company's liquidator is Mat Ng. ROCKWAY TECHNOLOGY: First Meetings Slated for February 10 --------------------------------------------------------- Contributories and creditors of Rockway Technology Limited will hold their first meetings on February 10, 2010, at 2:00 p.m., and 2:15 p.m., respectively at Unit 511, 5/F, Tower 1, Silvercord, 30 Canton Road, Tsimshatsui, Kowloon in Hong Kong. At the meeting, Ho Man Kit Horace and Kong Sze Man Simone, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. ROYAL DOULTON: Creditors' Proofs of Debt Due February 5 ------------------------------------------------------- Creditors of Royal Doulton Hong Kong Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by February 5, 2010, to be included in the company's dividend distribution. The company's liquidator is: G Jacqueline Fangonil Walsh Level 17, Tower 1 Admiralty Centre 18 Harcourt Road Hong Kong SAUCONY ASIA: Creditors' Proofs of Debt Due February 22 ------------------------------------------------------- Creditors of Saucony Asia Pacific Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by February 22, 2010, to be included in the company's dividend distribution. The company's liquidators are: Thomas Andrew Corkhill Iain Ferguson Bruce Gloucester Tower, 8th Floor The Landmark 15 Queen's Road Central, Hong Kong ========= I N D I A ========= AIR INDIA: To Get INR1,200cr Equity Infusion from Government ------------------------------------------------------------ Air India could receive INR1,200 crore as equity support from the government after the next meeting of the Group of Ministers scheduled on February 3, The Hindu Business Line reports. Official sources told Business Line that the cost reduction and revenue enhancement measures that the airline has undertaken will be examined at the meeting. The Hindu reports that the meeting comes in the backdrop of the recommendations of the Parliamentary Standing Committee on Transport, Tourism and Culture that the National Aviation Company of India Limited (NACIL) be converted into a holding company of NACIL-A and NACIL-I as separate functional units for global and domestic airlines. Meanwhile, The Hindu says the Civil Aviation Ministry has dismissed as "incorrect and baseless" the reports that government was considering a de-merger of the national carrier. According to the Hindu, a spokesperson said the Ministry "has no move afoot for the AI-IA demerger. The merger was a carefully thought out process and a collective decision of all agencies of the Government of India." As reported in the Troubled Company Reporter-Asia Pacific on June 10, 2009, the National Aviation Company of India Ltd., Air India's holding company, was seeking INR14,000 crore in equity infusion, soft loans and grants to cope up with mounting losses. The TCR-AP, citing the Hindustan Times, reported on June 19, 2009, that Air India has been bleeding due to excess capacity, lower yield, a drop in passenger numbers, an increase in fuel prices and the effects of the global slowdown. Air India's losses have almost doubled to over INR4,000 crore in 2008-09 compared to INR2,226 crore in 2007-08), according to the Hindustan Times. In December, the Air India board decided to initiate a series of major steps to cut costs and enhance savings. The carrier is focusing on cutting costs by INR1,500 crore and increasing revenues by INR1,200 crore as per its turnaround plan, according to the Business Standard. The airline's turnaround plan has been broadly divided into 0-9 months, 9-18 months and 18-36 months, and has been segregated under operational efficiency, product improvement, organization building and financial restructuring, the Business Standard said. About Air India Air India -- http://www.airindia.com/-- transports passengers throughout India and to more than 40 destinations throughout the world. Affiliate Air India Express operates as a low-fare carrier, mainly between India and destinations in the Middle East, and Air India Cargo provides freight transportation. The government of India has merged Air India with another state- controlled carrier, Indian Airlines, which has focused on domestic routes. The combined airline, part of a new holding company called National Aviation Company of India, uses the Air India brand. The new Air India and its affiliates have a fleet of more than 110 aircraft altogether. AIR INDIA: Third Quarter Loss Narrows to INR14.74 Million --------------------------------------------------------- Air India posted a net loss of INR14.74 billion in its fiscal third quarter ended Dec. 31, 2009, a 9.7% improvement from the INR16.32 billion deficit reported in the year-ago period, ATW Daily News. According to the report, the carrier cited a 24.8% increase in passenger numbers to 3.2 million and a 14.4-point surge in load factor to 69.7% as drivers of the improvement. The report says revenue rose 3% to INR38.52 billion, a "modest" performance resulting from "low yields on both the domestic and international routes due to market conditions" and operating loss narrowed 25% to INR8.64 billion from INR11.52 billion in the three months ended Dec. 31, 2008. As reported in the Troubled Company Reporter-Asia Pacific on June 10, 2009, the National Aviation Company of India Ltd., Air India's holding company, was seeking INR14,000 crore in equity infusion, soft loans and grants to cope up with mounting losses. The TCR-AP, citing the Hindustan Times, reported on June 19, 2009, that Air India has been bleeding due to excess capacity, lower yield, a drop in passenger numbers, an increase in fuel prices and the effects of the global slowdown. Air India's losses have almost doubled to over INR4,000 crore in 2008-09 compared to INR2,226 crore in 2007-08), according to the Hindustan Times. In December, the Air India board decided to initiate a series of major steps to cut costs and enhance savings. The carrier is focusing on cutting costs by INR1,500 crore and increasing revenues by INR1,200 crore as per its turnaround plan, according to the Business Standard. The airline's turnaround plan has been broadly divided into 0-9 months, 9-18 months and 18-36 months, and has been segregated under operational efficiency, product improvement, organization building and financial restructuring, the Business Standard said. About Air India Air India -- http://www.airindia.com/-- transports passengers throughout India and to more than 40 destinations throughout the world. Affiliate Air India Express operates as a low-fare carrier, mainly between India and destinations in the Middle East, and Air India Cargo provides freight transportation. The government of India has merged Air India with another state- controlled carrier, Indian Airlines, which has focused on domestic routes. The combined airline, part of a new holding company called National Aviation Company of India, uses the Air India brand. The new Air India and its affiliates have a fleet of more than 110 aircraft altogether. AVANI PROJECTS: Fitch Assigns 'B-' Rating with Stable Outlook ------------------------------------------------------------- Fitch Ratings has assigned India's Avani Projects and Infrastructure Limited's cash credit limits of INR290.0 million an expected 'B-(ind)' rating with a Stable Outlook. The previously assigned expected 'B-(ind)' rating to APIL's long-term loan will now apply to a reduced amount of INR660.1m (previously INR1.0 billion). Final ratings are contingent upon receipt of final documents conforming to information already received. These rating actions update the same published by the agency on January 11, 2010, and reflects changes in APIL's debt/limits as sanctioned by the banking system. BANK OF BARODA: Moody's Cuts Rating on Upper Tier 2 Notes to Ba1 --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings on certain Indian banks' hybrid securities, in line with its revised Guidelines for Rating Bank Hybrids and Subordinated Debt, published in November 2009. Moody's downgraded Indian banks' cumulative junior subordinated debt securities ("Upper Tier 2 Notes") as well as the perpetual non-cumulative hybrid instruments ("Hybrid Tier 1 Notes"). This concludes the review for possible downgrade that began on 18 November 2009. The rating outlook for all Indian banks affected is stable. Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that support provided by national governments and central banks to support a troubled bank would, to some extent, benefit the subordinated debt holders as well as the senior creditors. The systemic support for these instruments has not been forthcoming in many cases. The above-mentioned revised guidelines largely remove previous assumptions of systemic support, resulting in the rating action. In addition, this revised methodology generally widens the notching on a hybrid's rating that is based on the instrument's features. Rating Action In Detail The starting point in Moody's revised approach to rating hybrid securities is the Adjusted Baseline Credit Assessment (Adjusted BCA). The Adjusted BCA reflects the bank's stand-alone credit strength as expressed through its Baseline Credit Assessment (BCA) and includes uplift for parental and/or cooperative support, if applicable. The Adjusted BCA excludes systemic support. The Adjusted BCA for each Moody's-rated public-sector bank in India, which reflects support from the government as parent, is: * For State Bank of India, the Adjusted BCA is Baa2 and is the same as its BCA since the parental/government support does not provide any ratings uplift. * For Bank of Baroda, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. * For Bank of India, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. * For Canara Bank, it is Baa2 and is one notch higher than its Baa3 BCA due to the parental/government support providing ratings uplift. * For Union Bank of India, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. On the other hand, the Adjusted BCA for each of the three private- sector banks in India rated by Moody's (ICICI Bank Ltd, HDFC Bank Ltd and Axis Bank Ltd) is Baa2 and is in line with their respective BCA. These private-sector banks do not benefit from any parental or systemic support in their hybrid ratings. The main features of the hybrid instruments typically issued by the above Moody's-rated Indian Banks and the way Moody's rates them are: -- The Upper Tier 2 Notes have a maturity of at least 15 years. The issuer can defer any interest payments at its discretion if its capital adequacy ratio is below the minimum regulatory requirement of 9% or if it reports a net loss, defined as a negative balance in the profit and loss account contained within reserves and surplus of the issuer's balance sheet. If the issuer has only a net loss, but does not breach the CAR trigger, then it can make interest payments provided it gets the regulator's approval. Any deferred interest is cumulative. The instrument has a junior subordinated claim in liquidation and ranks only more senior to Tier 1 Notes and common equity. Moody's generally rates this kind of junior subordinated instruments two notches below an issuer's Adjusted BCA. -- The Hybrid Tier 1 Notes are perpetual with a coupon skip mechanism similar to those in the Upper Tier 2 Notes above. However, any unpaid interest is non-cumulative. In liquidation, the Hybrid Tier 1 Notes rank junior to the Upper Tier 2 Notes and only senior to common equity. Moody's generally rates such Hybrid Tier 1 instruments three notches below an issuer's Adjusted BCA. The above-mentioned rating actions on Moody's-rated Indian banks' hybrid securities that were issued or can be issued under their existing international MTN programmes are: -- State Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the perpetual Hybrid Tier 1 securities were downgraded to Ba2 from Ba1. -- ICICI Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. -- Bank of Baroda: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Canara Bank: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- HDFC Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. -- Union Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Axis Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. The last rating action for all Moody's-rated Indian banks was taken on 17 December 2009 when their long-term foreign currency deposit rating was upgraded to Ba1 from Ba2, in line with the recent upgrade of India's foreign currency deposit ceiling. Headquartered in Mumbai, State Bank of India had assets of INR9.644 trillion (US$184.8 billion) as of end-March 2009. Headquartered in Mumbai, ICICI Bank Ltd had assets of INR3.793 trillion (US$72.7 billion) as of end-March 2009. Headquartered in Mumbai, Bank of Baroda had assets of INR2.274 trillion (US$43.6 billion) as of end-March 2009. Headquartered in Mumbai, Bank of India had assets of INR2.255 trillion (US$43.2 billion) as of end-March 2009. Headquartered in Bangalore, Canara Bank had assets of INR2.175 trillion (US$41.7 billion) as of end-March 2009. Headquartered in Mumbai, HDFC Bank Ltd had assets of INR1.833 trillion (US$35.1 billion) as of end-March 2009. Headquartered in Mumbai, Union Bank of India had assets of INR1.610 trillion (US$30.9 billion) as of end-March 2009. Headquartered in Mumbai, Axis Bank Ltd had assets of INR1.477 trillion (US$28.3 billion) as of end-March 2009. BANK OF INDIA: Moody's Rating on Cuts Upper Tier 2 Notes to Ba1 --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings on certain Indian banks' hybrid securities, in line with its revised Guidelines for Rating Bank Hybrids and Subordinated Debt, published in November 2009. Moody's downgraded Indian banks' cumulative junior subordinated debt securities ("Upper Tier 2 Notes") as well as the perpetual non-cumulative hybrid instruments ("Hybrid Tier 1 Notes"). This concludes the review for possible downgrade that began on 18 November 2009. The rating outlook for all Indian banks affected is stable. Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that support provided by national governments and central banks to support a troubled bank would, to some extent, benefit the subordinated debt holders as well as the senior creditors. The systemic support for these instruments has not been forthcoming in many cases. The above-mentioned revised guidelines largely remove previous assumptions of systemic support, resulting in the rating action. In addition, this revised methodology generally widens the notching on a hybrid's rating that is based on the instrument's features. Rating Action In Detail The starting point in Moody's revised approach to rating hybrid securities is the Adjusted Baseline Credit Assessment (Adjusted BCA). The Adjusted BCA reflects the bank's stand-alone credit strength as expressed through its Baseline Credit Assessment (BCA) and includes uplift for parental and/or cooperative support, if applicable. The Adjusted BCA excludes systemic support. The Adjusted BCA for each Moody's-rated public-sector bank in India, which reflects support from the government as parent, is: * For State Bank of India, the Adjusted BCA is Baa2 and is the same as its BCA since the parental/government support does not provide any ratings uplift. * For Bank of Baroda, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. * For Bank of India, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. * For Canara Bank, it is Baa2 and is one notch higher than its Baa3 BCA due to the parental/government support providing ratings uplift. * For Union Bank of India, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. On the other hand, the Adjusted BCA for each of the three private- sector banks in India rated by Moody's (ICICI Bank Ltd, HDFC Bank Ltd and Axis Bank Ltd) is Baa2 and is in line with their respective BCA. These private-sector banks do not benefit from any parental or systemic support in their hybrid ratings. The main features of the hybrid instruments typically issued by the above Moody's-rated Indian Banks and the way Moody's rates them are: -- The Upper Tier 2 Notes have a maturity of at least 15 years. The issuer can defer any interest payments at its discretion if its capital adequacy ratio is below the minimum regulatory requirement of 9% or if it reports a net loss, defined as a negative balance in the profit and loss account contained within reserves and surplus of the issuer's balance sheet. If the issuer has only a net loss, but does not breach the CAR trigger, then it can make interest payments provided it gets the regulator's approval. Any deferred interest is cumulative. The instrument has a junior subordinated claim in liquidation and ranks only more senior to Tier 1 Notes and common equity. Moody's generally rates this kind of junior subordinated instruments two notches below an issuer's Adjusted BCA. -- The Hybrid Tier 1 Notes are perpetual with a coupon skip mechanism similar to those in the Upper Tier 2 Notes above. However, any unpaid interest is non-cumulative. In liquidation, the Hybrid Tier 1 Notes rank junior to the Upper Tier 2 Notes and only senior to common equity. Moody's generally rates such Hybrid Tier 1 instruments three notches below an issuer's Adjusted BCA. The above-mentioned rating actions on Moody's-rated Indian banks' hybrid securities that were issued or can be issued under their existing international MTN programmes are: -- State Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the perpetual Hybrid Tier 1 securities were downgraded to Ba2 from Ba1. -- ICICI Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. -- Bank of Baroda: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Canara Bank: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- HDFC Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. -- Union Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Axis Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. The last rating action for all Moody's-rated Indian banks was taken on 17 December 2009 when their long-term foreign currency deposit rating was upgraded to Ba1 from Ba2, in line with the recent upgrade of India's foreign currency deposit ceiling. Headquartered in Mumbai, State Bank of India had assets of INR9.644 trillion (US$184.8 billion) as of end-March 2009. Headquartered in Mumbai, ICICI Bank Ltd had assets of INR3.793 trillion (US$72.7 billion) as of end-March 2009. Headquartered in Mumbai, Bank of Baroda had assets of INR2.274 trillion (US$43.6 billion) as of end-March 2009. Headquartered in Mumbai, Bank of India had assets of INR2.255 trillion (US$43.2 billion) as of end-March 2009. Headquartered in Bangalore, Canara Bank had assets of INR2.175 trillion (US$41.7 billion) as of end-March 2009. Headquartered in Mumbai, HDFC Bank Ltd had assets of INR1.833 trillion (US$35.1 billion) as of end-March 2009. Headquartered in Mumbai, Union Bank of India had assets of INR1.610 trillion (US$30.9 billion) as of end-March 2009. Headquartered in Mumbai, Axis Bank Ltd had assets of INR1.477 trillion (US$28.3 billion) as of end-March 2009. EASTERN SILK: CRISIL Assigns 'BB' Rating on INR600 Mil. Term Loan ----------------------------------------------------------------- CRISIL has assigned its rating of 'BB/Negative' to the term loan facility of Eastern Silk Industries Ltd and has reaffirmed its rating on the company's short-term facilities at 'P4+'. Facilities Ratings ---------- ------- INR600 Million Term Loan BB/Negative (Assigned) INR964 Million Bank Guarantee and P4+ Letter of Credit@ INR3151 Million Packing Credit Limits* (Enhanced from INR2486 Mil.) P4+ *Interchangeable with bills purchase/ Standby Line of Credit The ratings reflect Eastern Silk's large exposure to group companies, geographical concentration in revenue profile, vulnerability to volatility in prices of key raw materials and to economic cycles, and weakened liquidity due to delays in payment by customers and upcoming preference and debt repayment obligations. These rating weaknesses are partially offset by the company's established position as a silk exporter with integrated processing capabilities. Outlook: Negative CRISIL believes that Eastern Silk will continue to face pressures on its realization of receivables because of the current weak market conditions. The rating could be downgraded in case continued delays in realization of receivables lead to over- utilization of bank limits or delays in meeting maturing debt obligations. Conversely, the outlook may be revised to 'Stable' if Eastern Silk's liquidity improves, most likely because of significant improvement in profitability or timely payments by customers. About Eastern Silk Set up in 1946, Eastern Silk manufactures silk yarn, fabrics and made-ups, home furnishings, fashion fabrics, handloom fabrics, double-width fabrics, and embroidered fabrics. Over the years, the company has bagged various awards from export promotion councils and is also recognised as a Golden Star Trading House by the Government of India. For 2008-09 (refers to financial year, April 1 to March 31), Eastern silk reported a profit after tax (PAT) of INR192 million on net sales of INR5.1 billion, against a PAT of INR581 million on net sales of INR4.82 billion for 2007-08. HEAVEN DEALERS: CRISIL Rates INR99.5 Million Cash Credit at 'BB-' ----------------------------------------------------------------- CRISIL has assigned its 'BB-/Stable' rating to Heaven Dealers Pvt Ltd's cash credit facility. Facilities Ratings ---------- ------- INR99.5 Million Cash Credit BB-/Stable (Assigned) The rating reflects Heaven's exposure to risks relating to funding, implementation and saleability of its large, ongoing commercial real estate project, cyclicality inherent in the Indian real estate industry, geographical concentration in its revenue profile, and limited experience of its promoters in the development of large commercial real estate projects. These rating weaknesses are partially offset by Heaven's comfortable capital structure. Outlook: Stable CRISIL believes that Heaven will remain sensitive to project implementation risks, timeliness of inflow of customer advances, and saleability of its commercial and residential units. The outlook may be revised to 'Positive' if Heaven reports high bookings and large customer advances, leading to larger-than- expected cash inflows. Conversely, the outlook may be revised to 'Negative' in case the completion of the company's ongoing project gets delayed, most likely because of delays in receipt of customer advances or lower-than-expected bookings. About Heaven Dealers Incorporated in 1995, Heaven initially traded in plastic products and plastic granules. The company diversified into construction and real estate development. Currently, the company is engaged in two lines of business?plastic processing and trading, and development of residential and commercial real estate projects. About 70 per cent of its revenues were derived from construction activities in the past three years, and the remainder from trading of plastic products and granules. The company has three ongoing projects; one involves the construction of a commercial mall at Joka (Kolkata). Heaven has also undertaken two residential projects through a joint venture with two group companies, Payal Departmental Store Pvt Ltd and Gopalka Motors Finance Ltd. Heaven also undertakes land development projects - it has developed around 500,000 square feet of land over the past four years. Heaven reported a profit after tax (PAT) of INR0.3 million on net sales of INR24.7 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR0.2 million on net sales of INR19.6 million for 2007-08. ICICI BANK: Moody's Cuts Rating on Upper Tier 2 Notes to Ba1 ------------------------------------------------------------ Moody's Investors Service has downgraded the ratings on certain Indian banks' hybrid securities, in line with its revised Guidelines for Rating Bank Hybrids and Subordinated Debt, published in November 2009. Moody's downgraded Indian banks' cumulative junior subordinated debt securities ("Upper Tier 2 Notes") as well as the perpetual non-cumulative hybrid instruments ("Hybrid Tier 1 Notes"). This concludes the review for possible downgrade that began on 18 November 2009. The rating outlook for all Indian banks affected is stable. Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that support provided by national governments and central banks to support a troubled bank would, to some extent, benefit the subordinated debt holders as well as the senior creditors. The systemic support for these instruments has not been forthcoming in many cases. The above-mentioned revised guidelines largely remove previous assumptions of systemic support, resulting in the rating action. In addition, this revised methodology generally widens the notching on a hybrid's rating that is based on the instrument's features. Rating Action In Detail The starting point in Moody's revised approach to rating hybrid securities is the Adjusted Baseline Credit Assessment (Adjusted BCA). The Adjusted BCA reflects the bank's stand-alone credit strength as expressed through its Baseline Credit Assessment (BCA) and includes uplift for parental and/or cooperative support, if applicable. The Adjusted BCA excludes systemic support. The Adjusted BCA for each Moody's-rated public-sector bank in India, which reflects support from the government as parent, is: * For State Bank of India, the Adjusted BCA is Baa2 and is the same as its BCA since the parental/government support does not provide any ratings uplift. * For Bank of Baroda, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. * For Bank of India, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. * For Canara Bank, it is Baa2 and is one notch higher than its Baa3 BCA due to the parental/government support providing ratings uplift. * For Union Bank of India, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. On the other hand, the Adjusted BCA for each of the three private- sector banks in India rated by Moody's (ICICI Bank Ltd, HDFC Bank Ltd and Axis Bank Ltd) is Baa2 and is in line with their respective BCA. These private-sector banks do not benefit from any parental or systemic support in their hybrid ratings. The main features of the hybrid instruments typically issued by the above Moody's-rated Indian Banks and the way Moody's rates them are: -- The Upper Tier 2 Notes have a maturity of at least 15 years. The issuer can defer any interest payments at its discretion if its capital adequacy ratio is below the minimum regulatory requirement of 9% or if it reports a net loss, defined as a negative balance in the profit and loss account contained within reserves and surplus of the issuer's balance sheet. If the issuer has only a net loss, but does not breach the CAR trigger, then it can make interest payments provided it gets the regulator's approval. Any deferred interest is cumulative. The instrument has a junior subordinated claim in liquidation and ranks only more senior to Tier 1 Notes and common equity. Moody's generally rates this kind of junior subordinated instruments two notches below an issuer's Adjusted BCA. -- The Hybrid Tier 1 Notes are perpetual with a coupon skip mechanism similar to those in the Upper Tier 2 Notes above. However, any unpaid interest is non-cumulative. In liquidation, the Hybrid Tier 1 Notes rank junior to the Upper Tier 2 Notes and only senior to common equity. Moody's generally rates such Hybrid Tier 1 instruments three notches below an issuer's Adjusted BCA. The above-mentioned rating actions on Moody's-rated Indian banks' hybrid securities that were issued or can be issued under their existing international MTN programmes are: -- State Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the perpetual Hybrid Tier 1 securities were downgraded to Ba2 from Ba1. -- ICICI Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. -- Bank of Baroda: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Canara Bank: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- HDFC Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. -- Union Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Axis Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. The last rating action for all Moody's-rated Indian banks was taken on 17 December 2009 when their long-term foreign currency deposit rating was upgraded to Ba1 from Ba2, in line with the recent upgrade of India's foreign currency deposit ceiling. Headquartered in Mumbai, State Bank of India had assets of INR9.644 trillion (US$184.8 billion) as of end-March 2009. Headquartered in Mumbai, ICICI Bank Ltd had assets of INR3.793 trillion (US$72.7 billion) as of end-March 2009. Headquartered in Mumbai, Bank of Baroda had assets of INR2.274 trillion (US$43.6 billion) as of end-March 2009. Headquartered in Mumbai, Bank of India had assets of INR2.255 trillion (US$43.2 billion) as of end-March 2009. Headquartered in Bangalore, Canara Bank had assets of INR2.175 trillion (US$41.7 billion) as of end-March 2009. Headquartered in Mumbai, HDFC Bank Ltd had assets of INR1.833 trillion (US$35.1 billion) as of end-March 2009. Headquartered in Mumbai, Union Bank of India had assets of INR1.610 trillion (US$30.9 billion) as of end-March 2009. Headquartered in Mumbai, Axis Bank Ltd had assets of INR1.477 trillion (US$28.3 billion) as of end-March 2009. IDBI BANK: S&P Assigns Ratings on US$1.5 Bil. Medium-Term Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned these ratings to IDBI Bank's proposed debt issues under the bank's US$1.5 billion medium-term notes program: * 'BBB-' rating on the senior unsecured notes, * 'BB+' rating on the lower Tier 2 subordinate, and * 'BB' rating on the upper Tier 2 subordinated and hybrid Tier 1 notes. The lower Tier 2 subordinated notes will have a minimum maturity of five years, or 63 months (if issued between Jan. 1 and March 31 of any year), and the upper Tier 2 subordinated notes will have a minimum maturity of 15 years. The hybrid Tier 1 notes are perpetual and have no maturity. However, a call option on the instruments (upper Tier 2 and hybrid Tier 1) is permissible, with RBI's prior approval, after the instrument has run for at least 10 years. Proceeds from these issues will be used to fund IDBI's foreign offices as well as for general corporate purposes. The senior notes will constitute direct, unconditional, unsecured and unsubordinated obligations of the bank, and shall at all times rank pari passu with all other unsecured obligations. The subordinated notes (lower Tier 2 and upper Tier 2) will constitute the unsecured and subordinated obligations. They will be subordinate to the claims of the senior debt holders. Upper Tier 2 notes will be further subordinated to lower Tier 2 notes of the bank and rank pari passu with all subordinated debt in their respective class. The payment obligation on the hybrid Tier 1 notes will rank junior to the claims of holders of senior and subordinated debt but senior to the claims of holders of preference and equity shares. The rating differential between the senior unsecured notes and the lower Tier 2 subordinated notes reflects the latter's subordinated nature. The 'BB' rating on the upper Tier 2 subordinated notes and hybrid Tier 1 notes reflects subordination as well as an interest deferral option on these notes. This interest deferral feature is linked to the compliance of the regulatory capital adequacy ratio and a "net loss" condition. A "net loss" is defined as a negative balance in the "balance in the profit and loss account," a component of the "Reserves and Surplus" as shown in the bank's most recent quarterly or as the case may be, annual unconsolidated balance sheet. If the bank's RCAR is below the minimum regulatory requirement stipulated by the Reserve Bank of India, skipping interest payments for hybrid tier- 1 is mandatory but the bank will have the option to make interest payments for upper Tier-2, if it does not fail the profit test. As of Sept. 30, 2009, the RCAR of IDBI stood at stood at 11.9%, compared with the minimum regulatory requirement of 9%. If the bank is in compliance with the RCAR but reports a "net loss," the bank will require the regulator's permission before it can make interest payments on the notes. As of March 31, 2009, the balance in the P&L account stood at Indian rupees (INR) 712 million. For investment grade issuers, Standard & Poor's recognizes equity capital credit in the bank's adjusted total equity for hybrid capital instruments that have maturity of at least 20 years. Hence, Standard & Poor's will recognize equity capital credit of up to 33% of the bank's adjusted common equity for the proposed hybrid Tier 1 notes. No capital credit will be recognized for lower Tier 2 and upper Tier 2 capital. LOHIA PAPER: CRISIL Places 'B+' Rating on INR80 Mil. Term Loan -------------------------------------------------------------- CRISIL has assigned its 'B+/Stable/P4' ratings to Lohia Paper & Board Pvt Ltd's bank facilities. Facilities Ratings ---------- ------- INR17.5 Million Cash Credit Limit B+/Stable (Assigned) INR80.0 Million Term Loan B+/Stable (Assigned) INR3.0 Million Letter of Credit P4 (Assigned) The ratings reflect LPBPL's weak financial risk profile, small scale of operations, exposure to intense competition in the newsprint paper segment, and susceptibility to unfavorable changes in regulatory policies. These weaknesses are partially offset by the benefits that the company derives from its established customer base. Outlook: Stable CRISIL believes that LPBPL will maintain its business and financial risk profile over the medium term on the back of an established customer base and healthy operating profitability. The outlook maybe revised to 'Positive' if LPBPL's financial risk profile improves, most likely because of healthy topline growth or more-than-expected cash accruals. Conversely, the outlook maybe revised to 'Negative' in case the company's financial risk profile deteriorates, most likely because of larger-than-expected debt- funded capital expenditure. About Lohia Paper Set up in 2005, LPBPL manufactures newsprint paper from waste paper. The company's plant in Durg (Chhattisgarh) commenced commercial production in October 2008, and has a capacity of 12000 tonnes per annum (tpa). LPBPL reported a profit after tax (PAT) of INR0.6 million on net sales of INR92.8 million for 2008-09 (refers to financial year, April 1 to March 31). MEKKO STEEL: Delay in Term Loan Repayment Cues CRISIL Junk Ratings ------------------------------------------------------------------ CRISIL has assigned its 'D/P5' ratings to Mekko Steel and Power Pvt Ltd's bank facilities. The ratings reflect delay by Mekko in servicing its term loan; the delay has been because of Mekko's weak liquidity. Facilities Ratings ---------- ------- INR30 Million Cash Credit D (Assigned) INR96.4 Million Term Loan D (Assigned) INR3.2 Million Letter of Credit P5 (Assigned) INR3 Million Bank Guarantee P5 (Assigned) Mekko, set up in 2005 by Mr. Yusuf Mekkoth as a closely held company, manufactures sponge iron. It commenced commercial production in December 2008. The company has a total capacity of around 30,000 tonnes per annum at its manufacturing unit in Raigarh (Chhatisgarh). Mekko reported a net loss of INR5.7 million on net sales of INR59 million for 2008-09 (refers to financial year, April 1 to March 31). P & R ENGINEERING: CRISIL Puts 'D' Ratings on INR340MM Term Loan ---------------------------------------------------------------- CRISIL has assigned its rating of 'D' to the bank facility of P & R Engineering Services Private Limited. Facilities Ratings ---------- ------- INR340.0 Million Term Loan* D (Assigned) *Includes INR110.0 Million proposed term loan The rating reflects instances of delays in servicing of monthly interest payments to banks by 10 to 20 days. The company is setting up a 7.5 MW small hydroelectric power project (SHEP) at Brenwar, Jammu & Kashmir. The company was allotted by Jammu & Kashmir State Power Development Corporation (JKSPDC) under the state's hydel policy, 2003 vide letter of intent issued in July, 2005. The Brenwar SHEP was originally conceptualized as a 5-MW run of the river plant to be set up across the Doodhganga Nalla, the tributary of the Jhelum river. After the hydrological studies, the plant capacity was increased to 7.5 MW in the second phase. The company started generation from 5 MW plant on October 13, 2009. The company has signed a bulk transmission and wheeling agreement with JKSPDC. It is yet to sign a long-term PPA with a third party for sale of power generated by the project. Earlier, the company was incorporated in 1999, to carry out structural steel works, which was the business of P&R Engineering services, a proprietorship firm of the director. There were no operations in the company till the HEP construction activities began during 2007-08. There were no sales for the company in 2008-09. The operations of the company started in October 2009. MODERN PREFAB: CRISIL Places 'B+' Rating on INR33.2 Mil. Term Loan ------------------------------------------------------------------ CRISIL has assigned its 'B+/Stable/P4' ratings to Modern Prefab Systems Pvt Ltd's bank facilities. Facilities Ratings ---------- ------- INR170.0 Million Cash Credit B+/Stable (Assigned) INR33.2 Million Term Loan B+/Stable (Assigned) INR150.0 Million Bank Guarantee/ P4 (Assigned) Letter of Credit The ratings reflect Modern Prefab's weak financial risk profile, marked by a small net worth, high gearing, and weak debt protection metrics, working-capital-intensive operations, the vulnerability of its operating margins to fluctuations in raw material prices, and its small scale of operations. These rating weaknesses are partially offset by the benefits that Modern Prefab derives from its promoters' experience in the metal fabrication industry. Outlook: Stable CRISIL believes that Modern Prefab's financial risk profile will remain weak and scale of operations, small, over the medium term. The outlook may be revised to 'Positive' if Modern Prefab improves its financial risk profile, most likely by generating more-than- expected cash accruals by increasing its scale of operations. Conversely, the outlook may be revised to 'Negative' if the company's working capital management deteriorates, thereby weakening its liquidity, or if it undertakes large, debt-funded capital expenditure programmes. About Modern Prefab Set up in 1996 by Mr. Subhash Kapoor as a partnership firm, Modern Prefab was incorporated as a private limited company in 1997. Modern Prefab manufactures prefabricated modular re-locatable shelters, pre-engineered building roofing, wall cladding systems, heavy-duty inter-locking concrete pavers, polyurethane foam (PUF) panels, and other building materials. The company caters to the defence and paramilitary forces, government institutions, and private players. Currently, Mr. Aditya Kapoor and Mr. Jagdeep Mathur are responsible for the overall management of the company, while Mr. Subhash Kapoor is partially active in the business operations. The company has its manufacturing unit at Manesar (Haryana). Modern Prefab reported a profit after tax (PAT) of INR2.4 million on net sales of INR380 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR1.2 million on net sales of INR162.8 million for 2007-08. P & R GOGRIPUR: Delays in Interest Payment Cues CRISIL 'D' Ratings ------------------------------------------------------------------ CRISIL has assigned its rating of 'D' to the term loan facility of P & R Gogripur Hydro Power Private Limited. The rating reflects instances of delays in servicing of monthly interest payments to banks by 10 to 20 days. Facilities Ratings ---------- ------- INR150.0 Million Term Loan D (Assigned) The company is setting up a 2 MW hydroelectric power project (HEP) allotted by Haryana Renewable Energy Development Agency (HAREDA) on October 31st, 2006. PRGHPPL was established as a special purpose vehicle (SPV) by Mr. Paveljeet Singh Ruppal (Managing Director) and Mrs. Pradeep Kaur (Director), to bid for a mini hydro power project in the state of Haryana. It was awarded the 2-MW Gogripur hydro power project by Haryana Renewable Energy Development Agency (HAREDA) in October, 2006. It is a canal based small hydel project that envisages the utilization of head available at supplementary canal to main Yamuna canal in the village of Gogripur. Under the policy governing the project, PRGHPPL is required to sell its entire generated units to Haryana State Electricity Board (HSEB). The company has been offered a 40-year PPA with Haryana Power Purchase Centre (HPPC) with a price of INR 3.67/KWh for a period of five years from the day of commencement of operations (escalation of 1.5% per year). The PPA has been submitted to HPPC for approval. The project is expected to commence operations from April 2010. There is no sales history of the company as the project has not commenced operations as on date. R. K. & SONS: CRISIL Assigns 'BB+' Rating on INR7.5MM Overdraft --------------------------------------------------------------- CRISIL has assigned its 'BB+/Stable/P4+' ratings to R. K. & Sons' bank facilities. Facilities Ratings ---------- ------- INR7.50 Million Overdraft BB+/Stable (Assigned) INR120.00 Million Bank Guarantee* P4+ (Assigned) *Includes a proposed limit of INR80.00 Million The ratings reflect RK's geographically concentrated revenue profile, lack of project diversity, and exposure to risks related to the tender-based business and to intense competition in the construction industry; the ratings also factor in RK's limited eligibility to bid for large projects because of its low net worth. These rating weaknesses are partially offset by RK's healthy financial risk profile marked by healthy gearing and debt protection measures, and its promoters' extensive experience in the construction industry. Outlook: Stable CRISIL believes that RK will maintain its comfortable financial risk profile over the medium term, backed by low debt levels and a moderate order book size. The outlook may be revised to 'Positive' if RK substantially enhances its scale of operations and increases its revenue diversity, while maintaining its profitability. Conversely, the outlook may be revised to 'Negative' if the firm's profitability margins deteriorate steeply; or if it undertakes a large, debt-funded capital expenditure programme, leading to deterioration in its financial risk profile; or in case of significant withdrawal of capital by the partners. About R. K. & Sons RK was set up in 1979 as a partnership concern by Mr. R Thangavelu, Mr. R Ganesan and Mr. R Ashwin Balaji. RK executes civil construction works, with a focus on road and bridge works, for government and private sector companies. The projects are largely undertaken in Tamil Nadu, and the firm operates from its office in Salem (Tamil Nadu). RK had an order book of around INR600 million as on December 31, 2009. RK reported a profit after tax (PAT) of INR31 million on net sales of INR224 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR12 million on net sales of INR144 million for 2007-08. S.M. AUTO: CRISIL Assigns 'BB+' Rating on INR66 Mil. Term Loan -------------------------------------------------------------- CRISIL has assigned its 'BB+/Stable/P4+' ratings to S.M. Auto Engineering Pvt Ltd's bank facilities. Facilities Ratings ---------- ------- INR100 Million Cash Credit* BB+/Stable (Assigned) INR66 Million Term Loan BB+/Stable (Assigned) INR100 Million Proposed LT BB+/Stable (Assigned) Bank Loan Facility INR11 Million Letter of Credit P4+(Assigned) INR2.5 Million Bank Guarantee P4+(Assigned) *Includes FCNRB of INR40 Million The ratings reflect the expected decline in SM Auto's financial risk profile over the near to medium term, driven by its large debt-funded capital expenditure, the company's customer concentration in revenue profile, large working capital requirements, and susceptibility to fluctuations in raw material prices. These rating weaknesses are partially offset by SM Auto's established relationships with large and established automotive original equipment manufacturers (OEMs), its promoters' experience in the automotive-component manufacturing business, diverse product profile, and centralised design and development facility. Outlook: Stable CRISIL believes that SM Auto will maintain its business risk profile on the back of its established relationships with customers, over the medium term. SM Auto's financial risk profile will, however, remain constrained over the medium term, as its gearing is expected to remain high and its net worth, small. The outlook may be revised to 'Positive' if SM Auto's capital structure improves significantly, or if revenues from its new capacities are more than expected. Conversely, the outlook may be revised to 'Negative' if SM Auto undertakes further large debt- funded capex or reports a decline in its operating margin. About S.M. Auto Incorporated in 1976, SM Auto has four manufacturing plants. Its main products include two-wheeler exhaust systems, rear suspensions, heat exchangers, such as aluminium radiators, inter- cooler, oil cooler, connecting rods, rear-axle assemblies, and sheet metal and machined assemblies. The company's main customers are Bajaj Auto Ltd, Tata Motors Ltd, Mercedes Benz India Ltd, Force Motors Ltd and Piaggio Vehicles Pvt Ltd. SM Auto has also recently started exporting radiators. The company is planning to set up a fifth manufacturing unit in Pitampur (Madhya Pradesh). The company has capability to design, develop, and manufacture components, assemblies and modules for the automobile industry. Its centralised design and development facility includes tool rooms, computer-aided design (CAD) facility, and other development software. SM Auto reported a profit after tax (PAT) of INR124.8 million on net sales of INR1.32 billion for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR13.5 million on net sales of INR1.68 billion for 2007-08. SPICEJET LTD: Expects to Post Profit This Year on Higher Traffic ---------------------------------------------------------------- Anirban Chowdhury at Dow Jones Newswires reports that SpiceJet Ltd. Chief Executive Sanjay Aggarwal said the carrier expects to post a net profit in the current financial year through March because of higher passenger traffic. Mr. Aggarwal told Dow Jones Newswires that Spicejet plans to raise between $50 million and $75 million in the next fiscal year to fund its expansion plans. The company may use the funds "for either organic or inorganic growth," he said. "We are growing at a faster rate than the industry and we expect our passenger traffic to grow 15% to 20% in the fourth quarter (ending March 31)," Dow Jones quoted Mr. Aggarwal as saying. Meanwhile, The Times of India reports that SpiceJet on Tuesday said it is planning to hire about 140 to 150 employees to meet the manpower requirements for the four new aircraft it would add this year, besides flying abroad. According to the Times, the low-cost airline also has plans to enter international destinations later this year. "We have applied to the regulatory authorities to fly to Sri Lanka, the Maldives, Nepal and Bangladesh," the Times quoted Mr. Aggarwal as saying. About SpiceJet SpiceJet Limited -- http://www.spicejet.com/-- is an India-based airline company. The Company operates 113 flights daily to 18 destinations, offering connectivity between metros and non-metros. During fiscal year ended March 31, 2008 (fiscal 2008), the Company inducted eight new aircrafts to its fleet taking the total fleet strength to 19 aircrafts. Out of the eight new aircraft inducted, two were Boeing 737-900. * * * SpiceJet Limited booked annual net losses of INR707.43 million in 2007 and INR1.33 billion in 2008. SREE KUMAR: CRISIL Rates INR74.4 Million Term Loan at 'B-' ---------------------------------------------------------- CRISIL has assigned its 'B-/Negative/P4' ratings to the bank facilities of Sree Kumar Agro Oils Pvt Ltd. Facilities Ratings ---------- ------- INR60 Million Cash Credit B-/Negative (Assigned) INR74.4 Million Term Loan B-/Negative (Assigned) INR0.6 Million Bank Guarantee P4 (Assigned) The ratings reflect SKAOPL's weak financial risk profile, marked by high gearing and weak debt protection metrics, and its exposure to risks related to intense competition and small scale of operations in the edible oil industry, and product concentration in revenue profile. These rating weaknesses are partially offset by the benefits that the company derives from its well-experienced management team. Outlook: Negative CRISIL believes that SKAOPL will continue to face pressures because of the company's low operating margin and hence, low cash accruals. The rating may be downgraded if there is a sharp decline in SKAOPL's revenues or operating margin, most likely because of lower-than-expected production level. Conversely, the outlook may be revised to 'Stable' in case of sustained improvement in the company's financial risk profile, most likely driven by increased revenues, more-than-expected cash accruals, and comfortable liquidity. Incorporated in October 2007, SKAOPL commenced commercial production in October 2008. It manufactures Rice Bran Oil and De- Oiled Rice Bran in its solvent extraction plant at Bhimavaram, Andhra Pradesh. The company has rice bran processing capacity of 300 tonnes per day (tpd) and refining capacity of 70 tpd. SKAOPL reported a net loss of INR4.0 million on net sales of INR158 million for 2008-09 (refers to financial year, April 1 to March 31). STATE BANK OF INDIA: Moody's Cuts Hybrid Tier 1 Secs. Rtng. to Ba2 ------------------------------------------------------------------ Moody's Investors Service has downgraded the ratings on certain Indian banks' hybrid securities, in line with its revised Guidelines for Rating Bank Hybrids and Subordinated Debt, published in November 2009. Moody's downgraded Indian banks' cumulative junior subordinated debt securities ("Upper Tier 2 Notes") as well as the perpetual non-cumulative hybrid instruments ("Hybrid Tier 1 Notes"). This concludes the review for possible downgrade that began on 18 November 2009. The rating outlook for all Indian banks affected is stable. Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that support provided by national governments and central banks to support a troubled bank would, to some extent, benefit the subordinated debt holders as well as the senior creditors. The systemic support for these instruments has not been forthcoming in many cases. The above-mentioned revised guidelines largely remove previous assumptions of systemic support, resulting in the rating action. In addition, this revised methodology generally widens the notching on a hybrid's rating that is based on the instrument's features. Rating Action In Detail The starting point in Moody's revised approach to rating hybrid securities is the Adjusted Baseline Credit Assessment (Adjusted BCA). The Adjusted BCA reflects the bank's stand-alone credit strength as expressed through its Baseline Credit Assessment (BCA) and includes uplift for parental and/or cooperative support, if applicable. The Adjusted BCA excludes systemic support. The Adjusted BCA for each Moody's-rated public-sector bank in India, which reflects support from the government as parent, is: * For State Bank of India, the Adjusted BCA is Baa2 and is the same as its BCA since the parental/government support does not provide any ratings uplift. * For Bank of Baroda, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. * For Bank of India, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. * For Canara Bank, it is Baa2 and is one notch higher than its Baa3 BCA due to the parental/government support providing ratings uplift. * For Union Bank of India, it is Baa2 and is two notches higher than its Ba1 BCA due to the parental/government support providing ratings uplift. On the other hand, the Adjusted BCA for each of the three private- sector banks in India rated by Moody's (ICICI Bank Ltd, HDFC Bank Ltd and Axis Bank Ltd) is Baa2 and is in line with their respective BCA. These private-sector banks do not benefit from any parental or systemic support in their hybrid ratings. The main features of the hybrid instruments typically issued by the above Moody's-rated Indian Banks and the way Moody's rates them are: -- The Upper Tier 2 Notes have a maturity of at least 15 years. The issuer can defer any interest payments at its discretion if its capital adequacy ratio is below the minimum regulatory requirement of 9% or if it reports a net loss, defined as a negative balance in the profit and loss account contained within reserves and surplus of the issuer's balance sheet. If the issuer has only a net loss, but does not breach the CAR trigger, then it can make interest payments provided it gets the regulator's approval. Any deferred interest is cumulative. The instrument has a junior subordinated claim in liquidation and ranks only more senior to Tier 1 Notes and common equity. Moody's generally rates this kind of junior subordinated instruments two notches below an issuer's Adjusted BCA. -- The Hybrid Tier 1 Notes are perpetual with a coupon skip mechanism similar to those in the Upper Tier 2 Notes above. However, any unpaid interest is non-cumulative. In liquidation, the Hybrid Tier 1 Notes rank junior to the Upper Tier 2 Notes and only senior to common equity. Moody's generally rates such Hybrid Tier 1 instruments three notches below an issuer's Adjusted BCA. The above-mentioned rating actions on Moody's-rated Indian banks' hybrid securities that were issued or can be issued under their existing international MTN programmes are: -- State Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the perpetual Hybrid Tier 1 securities were downgraded to Ba2 from Ba1. -- ICICI Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. -- Bank of Baroda: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Canara Bank: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- HDFC Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. -- Union Bank of India: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were confirmed at Ba2. -- Axis Bank Ltd: Upper Tier 2 Notes were downgraded to Ba1 from Baa3 and the Hybrid Tier 1 Notes were downgraded to Ba2 from Ba1. The last rating action for all Moody's-rated Indian banks was taken on 17 December 2009 when their long-term foreign currency deposit rating was upgraded to Ba1 from Ba2, in line with the recent upgrade of India's foreign currency deposit ceiling. Headquartered in Mumbai, State Bank of India had assets of INR9.644 trillion (US$184.8 billion) as of end-March 2009. Headquartered in Mumbai, ICICI Bank Ltd had assets of INR3.793 trillion (US$72.7 billion) as of end-March 2009. Headquartered in Mumbai, Bank of Baroda had assets of INR2.274 trillion (US$43.6 billion) as of end-March 2009. Headquartered in Mumbai, Bank of India had assets of INR2.255 trillion (US$43.2 billion) as of end-March 2009. Headquartered in Bangalore, Canara Bank had assets of INR2.175 trillion (US$41.7 billion) as of end-March 2009. Headquartered in Mumbai, HDFC Bank Ltd had assets of INR1.833 trillion (US$35.1 billion) as of end-March 2009. Headquartered in Mumbai, Union Bank of India had assets of INR1.610 trillion (US$30.9 billion) as of end-March 2009. Headquartered in Mumbai, Axis Bank Ltd had assets of INR1.477 trillion (US$28.3 billion) as of end-March 2009. ================= I N D O N E S I A ================= BANK MANDIRI: Support Cues Fitch to Upgrade Subsidiary's Ratings ---------------------------------------------------------------- Fitch Ratings has upgraded PT Bank Syariah Mandiri's National Long-term rating to 'AA-(idn)' from 'A+(idn)' and the bank's subordinated Islamic bond I/2007 to 'A+(idn)' from 'A(idn)'. The Outlook is Stable. BSM's rating upgrades are largely driven by support from its parent bank, state-owned Bank Mandiri (Persero) Tbk ('BB+'/'AA+(idn)'), and also its satisfactory performance with higher non performing financings mitigated by increased loan loss reserves and capitalization. Based on Fitch's assessment, the commitment from Bank Mandiri is reflected in the sole ownership and the financial and technical assistance provided in the development of BSM's sharia banking operations. Bank Mandiri continues to provide financial assistance to BSM through a planned IDR500 billion capital injection -- of this, IDR200 billion had been made until end-2009, with the rest to be injected over the next few years. The capital injection is expected to help keep BSM's total CAR at around 12% (end-9M09: 13.3%). Fitch also derives comfort from the existence of cross default clauses in Bank Mandiri's offshore borrowings to support its subsidiary, and its written commitment to the central bank to support BSM in the event of financial difficulty. BSM's core profitability -- as measured by pre-provision profit -- declined to 4.0% of average assets (2008: 4.6%; 2007: 3.8%) due to a fall of its net financing margin. During 9M09, non-performing financing was up to 5.9%, from 5.6% in 2008, mainly driven by the weakening of a few corporate borrowers; the bank is actively negotiating and monitoring this situation closely. To anticipate the increasing risk due to further asset quality deterioration, during 9M09 BSM raised its loan loss cover ratio to 89% (2008: 77%), although this is below the 130% of commercial banks' average loan loss coverage (as calculated by Fitch) at end-9M09. BSM started business as a sharia bank in 1999. BSM is a wholly- owned subsidiary of Bank Mandiri. CHANDRA ASRI: S&P Affirms 'B+' Long-Term Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it had affirmed its 'B+' long-term corporate credit rating on Indonesia-based PT Chandra Asri. The outlook is stable. At the same time, S&P affirmed its 'B+' foreign-currency issue rating on the proposed senior secured notes to be issued by Altus Capital Pte. Ltd. and guaranteed by Chandra Asri. These notes, originally scheduled for launch in the fourth quarter of 2009, were postponed because of the market conditions prevailing at the time. The issue rating on Altus' proposed notes issuance reflects the unconditional and irrevocable guarantee by Chandra Asri and its subsidiary PT Styrindo Mono Indonesia. Altus Capital, a wholly owned entity of PT Chandra Asri, was established solely for the purpose of issuing debt securities, and will lend the proceeds of the notes to Chandra Asri. The rating on the notes is subject to finalization of documentation, and confirmation of amounts and terms. S&P expects some of the proceeds from the proposed notes issue to be used to repay in full the outstanding amount on an existing term loan facility, without the company incurring any prepayment penalty. S&P also expects Chandra Asri to use any remaining amount to repay an existing subordinated loan provided by a former shareholder, Strategic Investment Holdings Ltd. "The affirmed rating on Chandra Asri reflects the company's cyclical commodity chemicals business, exposure to rising feedstock costs, and limited product and operational diversity," said Standard & Poor's credit analyst Allan Redimerio. "These risks are partially offset by the company's entrenched market position in Indonesia, its favorable domestic demand, cost advantages from its domestic vertically integrated facilities, and moderate leverage." The stable outlook on the long-term corporate credit rating on Chandra Asri reflects S&P's expectation that the company will maintain its leading market position and competitive cost advantage in Indonesia. The rating could be lowered if there is a material deterioration in the company's cash flow generation. The rating could be raised if the company improves its business risk profile, while maintaining a moderate leverage position. MATAHARI PUTRA: Moody's Reviews 'B1' Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service has placed PT Matahari Putra Prima Tbk's B1 corporate family and senior unsecured bond ratings on review for possible downgrade. The rating action is in response to the Matahari's recent announcement of its proposed sale of its subsidiary Matahari Department Store valuing at approximately US$770 million. The sale is subject to regulatory approvals. "While the proceeds to be received will greatly improve Matahari's near-term liquidity -- with the result of a net cash position -- Moody's is concerned that the sale of MDS will negatively impact the company's operating and business risk profiles," says Ken Chan, a Moody's Vice President. "The sale will result in a loss of MDS's EBITDA contribution to Matahari, which represents approximately 60-70% of the company's EBITDA annually," says Mr. Chan, adding that, "MDS is the largest department store operator in terms of market share in Indonesia and is highly profitable with EBITDA margins of 10-12%." There also remains a high level of uncertainty over the ultimate usage of the sale proceeds. Moody's notes that the bond indentures are loose on the type of replacement assets that the company can re-invest into, a situation which could result in a material change in its business risk profile. Matahari may choose to pay down a major portion of its debt. Moody's also notes that the company will need to redeem the outstanding bond amount in full if the cash portion is below 75% of the total sales proceeds under the bond indentures. Despite the potential for lower leverage, Matahari's overall credit profile may not support the original B1 rating, if it organically grows its food business, which has lower profit margins. The overall operating scale of the company will also be much smaller. In its review, Moody's will evaluate Matahari's intended use of the proceeds and its expansion strategy, and their resultant impact on the company's overall credit profile upon the successful completion of this transaction. The last rating action for Matahari was taken on 13 July 2009, when Moody's assigned a B1 senior unsecured rating and affirmed its B1 corporate family rating. PT Matahari Putra Prima Tbk. is a leading retailer in Indonesia with multiple retail formats. It operates department stores, hypermarkets, supermarkets and family entertainment outlets in over 50 cities in the country. The Lippo group controls about 57% of Matahari's equity interest. MATAHARI PUTRA: S&P Puts 'B+' Rating on CreidtWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B+' corporate credit rating and 'axBB' ASEAN scale rating on Jakarta-based multi-format retailer PT Matahari Putra Prima Tbk. on CreditWatch with negative implications. At the same time, Standard & Poor's also placed the issue ratings on US$200 million 10.75% senior notes due Aug. 7, 2012, issued by Matahari's wholly owned special- purpose subsidiary, Matahari International B.V., on CreditWatch with negative implications. The CreditWatch reflects the likelihood that Matahari's credit profile may weaken if this transaction takes place, which still depends on shareholders and regulatory approvals. Based on publicly available information, Matahari will indirectly own more than 20% of Meadow Asia Co., the acquirer of the department stores, with CVC Capital Partners ultimately owning the balance. "Matahari's main business, and the source of most of its cash flows, will be its food business, which for the nine months ended September 2009 contributed 46% of Matahari's consolidated sales of Indonesian rupiah (IDR) 10.4 trillion," said Standard & Poor's credit analyst Manuel Guerena. "Margins in the food business are less than half of those of Matahari Department Store (MDS), the retail unit being sold." However, while the business profile will likely be smaller and less diversified, Matahari's financial risk profile will depend on how it decides to strengthen its business once MDS' sale is executed, including its resulting debt level. As of September 2009, balance sheet financial obligations amounted to IDR4 trillion, while its cash and short-term investment balance was IDR3.7 trillion (excluding the divestment proceeds of about US$770 million). Nevertheless, the final terms negotiated for this transaction will determine if there is a direct effect on the terms and conditions of the senior notes, which are unconditionally and irrevocably guaranteed by Matahari. Matahari is the largest retailer in Indonesia, with the biggest number of stores -- about 90 department stores, 48 hypermarkets, 26 supermarkets, 53 pharmacy outlets, 90 family entertainment centers, and 11 international bookstores operating in more than 50 cities across Indonesia at the end of 2009. The company restructured its department store unit by transferring the assets to PT Pacific Utama Tbk.; Matahari currently owns 90.8% in Pacific Utama and remains the operator of the department stores. The CreditWatch placement will be resolved upon a review of the final terms and execution of the transaction, the potential direct impact on the notes, and on Matahari's plans for the sale's proceeds. The rating on the company and on the notes may be affirmed or lowered based on this review. ========= J A P A N ========= ALL NIPPON: To Promote Int'l Flights as 'Pillar' of Growth in 2010 ------------------------------------------------------------------ Kyodo News reports that All Nippon Airways Co. said it will promote its international flights as the "pillar" of its growth in fiscal 2010 by capitalizing on the "biggest business opportunity" to be created by the expansion of two core airports in the Tokyo metropolitan area. But the plan calls for closing or cutting back on operations on unprofitable routes, including between Kansai International Airport in Osaka Prefecture and Seoul's Gimpo airport, to reduce costs and improve profitability, the report says. Kyodo relates that ANA, in its business plan for the year that begins April 1, said it will start seven weekly round-trip flights between Narita airport and Munich on July 1 by taking advantage of an increase in landing and departure slots at the Chiba Prefecture airport from March 28. According to the report, ANA will also increase the number of flights between Narita and Ho Chi Minh City in Vietnam to seven per week from the current five, effective March 28, and will fly more frequently between Narita and the Chinese cities of Shenyang and Hangzhou, starting the same day. The report notes the airline is set to cash in on the Oct. 31 conversion of Haneda airport in Tokyo, long restricted to a largely domestic role, into a 24-hour hub for short and long- distance international flights to tap into demand in Asia. About All Nippon Airways All Nippon Airways Co. Ltd. -- http://www.ana.co.jp/-- is a Japan-based company engaged in three business segments. Its Air Transportation segment is engaged in the air transportation business, as well as the provision of services at airports, the provision of reservation services through telephones and the maintenance of aircrafts in the country and overseas markets. The Traveling segment develops, plans and sells tour packages under the brand names ANA Hello Tour and ANA Sky Holiday. This segment also offers services to travelers and sells travel products and air tickets. The Others segment is involved in the information communications, real estate, building management, land transportation and airplane fixture repair businesses, among others. The company has 112 subsidiaries and 40 associated companies. * * * As reported in the Troubled Company Reporter-Asia Pacific on Nov. 23, 2009, Moody's Investors Service downgraded the long-term debt ratings of All Nippon Airways Co., Ltd., to Ba2 from Baa3. The outlook is stable. CORSAIR NO 2: S&P Assigns Swap Risk Ratings on Swap Agreements -------------------------------------------------------------- Standard & Poor's Ratings Services assigned portfolio swap risk "srp" ratings to credit default swap agreements in three Japanese synthetic CDO transactions. On Oct. 29, 2009, S&P withdrew the credit ratings on Corsair (Jersey) No. 2 Ltd.'s series 45 JPY3 billion fixed rate secured portfolio credit-linked loan and series 46 JPY3 billion fixed rate secured portfolio credit-linked loan, and Eirles Two Ltd.'s JPY4 billion L1 Credit Linked Secured Loan 2004-4. The rating withdrawals reflected S&P's view that S&P lacked adequate information to continue to provide opinions on the creditworthiness of the aforementioned three tranches following the withdrawal of the credit ratings on the collateral securities of the related transactions. The "srp" ratings were assigned to each CDS agreement of the aforementioned transactions based on current portfolio information and updated CDO criteria. This type of rating takes into consideration only the creditworthiness of the reference portfolio of the CDS, and it does not address either counterparty risk (protection buyer/seller) or the specific amount of termination payments that would be payable under the swap transaction. Ratings List Corsair (Jersey) No.2 Ltd. Series 45 credit default swap Rating Amount Scheduled Termination Date ------ ------ -------------------------- CCC+srp JPY3 bil. March 16, 2012 Series 46 credit default swap Rating Amount Scheduled Termination Date ------ ------ -------------------------- B-srp JPY3 bil. April 1, 2015 Eirles Two Ltd. TAPAS 2004-4 credit default swap Rating Amount Scheduled Termination Date ------ ------ -------------------------- BB-srp JPY4 bil. Dec. 24, 2011 L-JAC 6: Moody's Downgrades Ratings on Various Classes of Notes --------------------------------------------------------------- Moody's Investors Service has downgraded these L-JAC 6 CMBS Trust Certificates; their final maturity will take place in October 2016. -- Class A, downgraded to Aa2 from Aaa; previously, Aaa placed under review for possible downgrade on December 25, 2009 -- Class B-1, downgraded to A2 from Aa2; previously, Aa2 placed under review for possible downgrade on December 25, 2009 -- Class C-1, downgraded to Baa3 from A3; previously, A3 placed under review for possible downgrade on December 25, 2009 -- Class D-1, downgraded to Ba3 from Baa3; previously, Baa3 placed under review for possible downgrade on December 25, 2009 -- Class E-1, downgraded to B2 from Ba2; previously, Ba2 placed under review for possible downgrade on December 25, 2009 -- Class F-1, downgraded to B3 from Ba3; previously, Ba3 placed under review for possible downgrade on December 25, 2009 -- Class G-1, downgraded to B3 from B1; previously, B1 placed under review for possible downgrade on December 25, 2009 -- Class X-2, downgraded to Aa2 from Aaa; previously, Aaa placed under review for possible downgrade on December 25, 2009 L-JAC 6 Trust, effected in November 2007, represents the securitization of two non-recourse loans. The current rating action reflects Moody's concerns over the need to review the sustainable value of a property backing a loan maturing in March 2010. Although the property is a large office building in central Tokyo, and more than 95% of its over 30,000 m2 rentable area is occupied by a sole tenant and its subsidiaries, the actual rent remains more than 20% lower than Moody's expectation at the time of the initial rating two years ago. Moody's interviewed the asset manager about its leasing plan, cost management, refinancing strategy, and disposition activities for the loan when it matures, in March 2010. As a result of the interview, Moody's is of the view that the fundamental profitability of the property is likely to remain lower than assumed when the rating was first assigned, for some time. Moody's has assumed an estimated average rent that is 25% lower than its initial assumption, with operating costs roughly the same as previously. As a result, sustainable net cash flow has declined 27% from Moody's initial assumption. Thus, although the property is in central Tokyo, with good traffic access and high scarcity value, Moody's value has been re-assessed at 31% less than the initial value, as profitability is lower than initially estimated. This rating action reflects Moody's concern of the likelihood of collateral recovery, according to the property's re-assessed value. However, for the senior classes, Moody's considers that a sufficient special servicing period of more than six years from loan maturity in March 2010 to the final maturity of the trust certificates in October 2016 could be effective to collection activities even if the loan defaults. Moody's Investors Service is a publisher of rating opinions and research. It is not involved in the offering or sale of any securities, nor is it acting on behalf of the offering party. This release is not a solicitation or a recommendation to buy, hold, or sell securities. SPANSION INC: Committee Wants to Sue Spansion Japan --------------------------------------------------- The Official Committee of Unsecured Creditors in Spansion Inc.'s cases seeks the U.S. Bankruptcy Court's authority to commence and prosecute certain preference claims of the Debtors' estates against Spansion Japan Limited. The Committee relates that it has conducted a detailed investigation of certain intercompany transfers and determined that a significant portion of the transfers are avoidable as preferential transfers under Section 547 of the Bankruptcy Code. "After an exhaustive analysis of information provided by the Debtors to the Committee's advisors, it is now clear that the Preferential Transfers total millions of dollars," says Blake M. Cleary, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware. "However, to date, the Debtors have refused the Committee's requests to commence an adversary proceeding against SJL seeking avoidance of any Transfers deemed to be preferential." The Debtors' statement of financial affairs and schedules of assets and liabilities for Spansion LLC filed on June 26, 2009 list intercompany transfers from Spansion LLC to Spansion Japan within the one year period prior to the Petition Date totaling in excess of $800 million. Upon investigation, the Committee has determined that approximately $48 million of the Transfers are Preferential Transfers not otherwise subject to applicable defenses. About Spansion Inc. Spansion Inc. (Pink Sheets: SPSNQ) -- http://www.spansion.com/-- is a Flash memory solutions provider. Spansion is a former joint venture of AMD and Fujitsu. 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. Bankruptcy Creditors' Service, Inc., publishes Spansion Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Spansion Inc. and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000) WILLCOM INC: JCR Downgrades Ratings on Senior Debts to 'C' ---------------------------------------------------------- Japan Credit Rating Agency, Ltd. has downgraded the ratings on senior debts and bonds of Willcom, Inc., on senior debts and bonds of the issuer from #CCC to #C, maintaining them on Credit Monitor with Negative direction. Senior debts: #C/Negative Issue Amount Issue Date Due Date Coupon Rating ----- ------ ---------- ---------- ------ ------ bonds no.1 JPY35 Bil. 06/27/2005 06/27/2012 2.35% #C/Negative JCR said that although Willcom, Inc., applied for Business Revitalization ADR procedures on September 24, 2009 and requested the financial institutions for debt rescheduling, it has not yet arrived at an agreement with financial institutions since that time 4 months earlier. A net decrease by 40,000 monthly in the number of subscribers for the PHS has continued, lowering the cash flow generation capacity. In addition, given the burden of the future capital expenditures for XGP (the next generation PHS), it is considered that likelihood of regeneration within the framework of Business Revitalization ADR was lowered than before. JCR downgraded the ratings on the Company to "C," maintaining them on Credit Monitor, because JCR considers that it is now more likely that the Company will opt for rehabilitation under bankruptcy protection and will fall into default. Willcom, Inc., provides wireless data and voice services to corporate and individual customers throughout Japan. Willcom is the largest operator employing Personal Handyphone System (PHS) technology. ========= K O R E A ========= KUMHO LIFE: Penalized Over Investment Losses -------------------------------------------- The Financial Supervisory Service has penalized Kumho Life Insurance Co. and top two executives for incurring KRW280 billion (US$241.3 million) in losses stemming from risky investments, Yonhap News reports. The report says the insurer will be prohibited from starting operations in non-insurance sectors for three years. According to the news agency, the penalties also include a ban on current Kumho CEO Park Byung-wook and previous head Choi Byung-gil from taking an executive post in any financial institution for three years. The FSS said Mr. Park can stay in his current position, but is barred from running for a second term, Yonhap relates. Yonhap reports that the financial regulator held the two CEOs and the firm accountable for KRW280 billion in losses stemming from investments in overseas derivatives, equities and real-estate funds made between 2002 and 2008. The Troubled Company Reporter-Asia Pacific reported on June 8, 2009, that Kumho Asiana Group has been looking for a buyer for its life insurance arm Kumho Life Insurance since September 2008 but the insurer's huge deficit is hampering the move. The insurer would need further capital infusion from its parent group first to attract a potential buyer. Kumho Life Insurance saw its deficit grow to nearly KRW200 billion for the fiscal year 2008, much bigger than the originally estimated KRW100 billion, under new accounting standards. Its solvency margin ratio stands at around 120% as of April, far below the 150% recommended by regulators, according to the Korea Times. Established in 1988, Kumho Life Insurance Co, Ltd. is a South Korean insurance company with headquarters in Sinmunro-1-ga Jongno-gu Seoul, Korea. ==================== N E W Z E A L A N D ==================== * NEW ZEALAND: Export Falls 2.8% in December 2009 Quarter --------------------------------------------------------- New Zealand's merchandise import values declined 3.2% in the December 2009 quarter, compared with the September 2009 quarter, the fifth consecutive quarterly fall, according to the country's statistics agency. Statistics New Zealand said the decline for the December 2009 quarter was widespread, with falls in capital goods, intermediate goods, and consumption goods being partly offset by increases in passenger cars and petrol and avgas. Similarly, merchandise export values fell 2.8% in the December 2009 quarter, after removing seasonal effects, the fourth consecutive quarterly decrease for exports. The decline for the December 2009 quarter was dominated by falls in milk powder, butter, and cheese, and crude oil. In the December 2009 quarter milk powder, butter, and cheese recorded the largest decrease and is now at its lowest value since the September 2007 quarter. Quarterly seasonally adjusted imports and exports both recorded their highest ever values in the 2008 year, and have consistently declined since then. Imports have dropped 24.6% since peaking in the September 2008 quarter, while exports have dropped 17.3 percent since peaking in the December 2008 quarter. The seasonally adjusted trade balance for the December 2009 quarter was a deficit of $170 million (1.8% of exports), following deficits of 2.6% and 2.3% of exports in the June and September 2009 quarters respectively. The most recent quarterly seasonally adjusted trade surplus was in the December 2001 quarter. In the month of December 2009, merchandise imports declined 18.6% ($776 million) from December 2008, led by mechanical machinery and equipment. Merchandise exports declined 11.3% ($433 million) in December 2009, compared with December 2008, with the largest falls coming from milk powder, butter, and cheese; aircraft and parts; and meat and edible offal. Since peaking in the latter part of 2008 the trends for imports and exports have declined 25.0% and 14.9% respectively, although the rate of decline appears to have eased in recent months. =============== X X X X X X X X =============== FORD MOTOR: Reports $1.4-Bil. Q4 2009 Revenue in Asia, Africa ------------------------------------------------------------- Ford Motor Company says for the fourth quarter of 2009, Ford Asia Pacific Africa reported a pre-tax operating profit of $19 million, compared with a loss of $208 million a year ago. The improvement reflects primarily favorable net pricing, China joint venture profits and structural cost reductions. Fourth quarter revenue was $1.6 billion, up from $1.4 billion a year ago. On Thursday, Ford reported a full year 2009 pre-tax operating profit, excluding special items, of $454 million, a $7.3 billion improvement over a year ago. The company said it now expects to be profitable for full year 2010 on a pre-tax basis excluding special items, for North America, total Automotive and total company, with positive Automotive operating-related cash flow. Ford's fourth quarter revenue was $35.4 billion, up $6.4 billion from a year ago. Revenue for the full year was $118.3 billion, a decline of $19.8 billion versus a year ago. Ford posted full year net income of $2.7 billion, or 86 cents per share, driven in part by favorable net pricing, structural cost reductions, net gains on debt reduction actions and strong Ford Credit results. This marks the company's first full year of positive net income since 2005 and a $17.5 billion improvement over 2008. A full-text copy of Ford's earnings release is available at no charge at http://ResearchArchives.com/t/s?4ef6 Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles across six continents. With about 200,000 employees and about 90 plants worldwide, the company's automotive brands include Ford, Lincoln, Mercury and Volvo. The company provides financial services through Ford Motor Credit Company. At Sept. 30, 2009, the Company had US$203.106 billion in total assets against US$210.376 billion in total liabilities. On March 4, 2009, Ford deferred future interest payments on its 6.50% Junior Subordinated Convertible Debentures due January 15, 2032, beginning with the April 15, 2009 quarterly interest payment. As reported by the Troubled Company Reporter on Nov. 4, 2009, Moody's Investors Service upgraded the senior unsecured rating of Ford Motor Credit Company LLC to B3 from Caa1. This follows Moody's upgrade of Ford Motor Company's corporate family rating to B3 from Caa1, with a stable outlook. Ford Credit's long-term ratings remain on review for further possible upgrade. On Nov. 3, 2009, S&P raised the corporate credit ratings on Ford Motor Co. and Ford Motor Credit Co. LLC to 'B-' from 'CCC+'. Ford Motor Co. carries a long-term issuer default rating of 'CCC', with a positive outlook, from Fitch Ratings. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Total Shareholders Company Ticker Assets Equity ------- ------ ------ ------------ AUSTRALIA ADVANCE HEAL-NEW AHGN 16933460.19 -8226075.95 ALLSTATE EXPLORA ALX 21373717.63 -54574080.32 ALLSTATE EXPL-PP ALXCC 21373717.63 -54574080.32 AMA GROUP LTD AMA 39033742.73 -860795.01 ANTARES ENERGY L AZZ 13709735.08 -1955765.01 ARC EXPLORATION ARX 56832942.08 -15049619.84 AUSTAR UNITED AUN 508844538.84 -310055789.75 AUSTRAILIAN Z-PP AZCCA 77741918.88 -2566335.24 AUSTRALIAN ZIRC AZC 77741918.88 -2566335.24 BIRON APPAREL LT BIC 19706736.59 -2220069.65 CENTRO PROPERTIE CNP 14725100625.83 -495299520.84 CHALLENGER INF-A CIF 2307005549.62 -104582562.08 CHEMEQ LIMITED CMQ 25194855.59 -24254413.72 CITY PACIFIC LTD CIY 171501648.08 -6383353.75 ELLECT HOLDINGS EHG 18245003.37 -15487781.92 HEALTH CORP LTD HEA 13258849.69 -7106.81 HYRO LTD HYO 21498880.13 -14825700.09 JAMES HARDIE NV JHXCC 2120699904.00 -153000000.00 JAMES HARDIE-CDI JHX 2120699904.00 -153000000.00 MAC COMM INFR-CD MCGCD 8104415200.76 -103343256.49 RESIDUAL ASSC-EE RAGXF 597329874.01 -126963316.48 SHELL VILLAGES A SVC 13472214.88 -1656427.12 TERRITORY RESOUR TTY 78228985.46 -3340627.52 TOOTH & CO LTD TTH 108860665.87 -69404500.26 VERTICON GROUP VGP 14221690.08 -24604525.15 CHINA ALONG TIBET CO-A 600773 10464676.88 -1595236.07 AMOI ELECTRONI-A 600057 186715365.62 -176172893.15 ANHUI KOYO GROUP 979 43547087.40 -32057139.66 BAO LONG ORIENTA 600988 16377750.71 -3240606.18 CHANG LING GROUP 561 38762049.02 -11329795.61 CHENGDU UNION-A 693 52165432.95 -7597323.86 CHINA EAST AIR-A 600115 10663617937.55 -669018244.31 CHINA KEJIAN-A 35 83777990.18 -182385776.83 DANDONG CHEM F-A 498 100503616.60 -111136778.31 DONGGUAN FANGD-A 600656 62015004.14 -10113540.83 DONGXIN ELECTR-A 600691 20724702.93 -6133630.21 GAOXIN ZHANGTO-A 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145706493.29 -114873890.12 USHA INDIA LTD USHA 12064900.61 -54512967.31 VENTURA TEXTILES VRTL 14254627.45 -325402.59 WINDSOR MACHINES WML 14500894.45 -28144999.02 WIRE AND WIRELES WNW 102422193.22 -37057061.49 WIRE AND WIRE-PP WNWPP 102422193.22 -37057061.49 JAPAN ARDEPRO 8925 345613037.14 -207111362.39 COMMERCIAL RE 8866 296849343.44 -346788.57 COSMOS INITIA CO 8844 1652687333.82 -564005337.19 DDS INC 3782 10683845.35 -5696657.23 FLIGHT SYS CONSU 3753 14883586.17 -1071275.60 HARAKOSAN CO 8894 265026322.03 -21407690.82 ICHITAN CO LTD 5645 99161219.02 -4383920.24 JIPANGU HOLDINGS 2684 15052085.28 -8379329.03 L CREATE CO LTD 3247 42344509.56 -9146496.90 LCA HOLDINGS COR 4798 49522402.78 -2236206.52 NESTAGE CO LTD 7633 11772250.32 -12201325.38 PLACO CO LTD 6347 16492585.21 -1881199.74 PROPERST CO LTD 3236 303290475.27 -415757169.31 RAYTEX CORP 6672 61494851.76 -3494531.45 SAIKAYA CO LTD 8254 398458490.74 -17564816.07 SHINWA OX CORP 2654 61394021.32 -12954325.95 SOWA JISHO CO LT 3239 17454464.16 -33842442.80 SUMIYA CO 9939 54843407.50 -9480273.64 TERRANETZ CO LTD 2140 11633353.37 -4293462.63 KOREA AJU MEDIA SOL-PF 44775 13822171.46 -1245278.05 CL LCD CO LTD 35710 55585277.13 -14793655.63 DAHUI CO LTD 55250 186003859.24 -1504246.54 DAISHIN INFO 20180 740500919.30 -158453978.78 ELIM EDU CO LTD 46240 34029159.88 -3747735.09 KYSYS CO LTD 15390 10671544.09 -6267111.24 MOBO CO LTD 51810 196643340.38 -11979182.85 ORICOM INC 10470 82645454.13 -40039161.33 PRIME ENTMT 17170 31473002.90 -19371600.20 ROCKET ELEC-PFD 425 68584186.91 -2140474.00 ROCKET ELECTRIC 420 68584186.91 -2140474.00 SAMT CO LTD 31330 303858255.56 -77572655.65 SIMM TECH CO LTD 36710 314177541.38 -34486443.29 SOLAR & TECH CO 30390 11466591.81 -588035.38 STARMAX CO LTD 17050 50131660.74 -25436154.88 TAESAN LCD CO 36210 187935112.10 -546263614.46 TONG YANG MAGIC 23020 355147750.92 -25767007.75 YOUILENSYS CORP 38720 166697877.68 -12337148.33 MALAYSIA AXIS INCORPORATI AXIS 35439077.46 -79330358.60 HARVEST COURT HAR 11122745.59 -7475186.80 HO HUP CONSTR CO HO 71664888.88 -1269790.93 LITYAN HLDGS BHD LIT 14275991.47 -29485796.94 POLY TOWER VENTU PTV 58061878.76 -5453946.31 RHYTHM CONSOLIDA RCB 11079452.15 -1316222.07 WONDERFUL WIRE WW 11541456.48 -15637491.13 WWE HOLDINGS BHD WWE 66483348.25 -1524729.65 NEW ZEALAND DOMINION FINANCE DFH 258902749.12 -55312405.88 PHILIPPINES APEX MINING 'B' APXB 51256351.82 -8972145.85 APEX MINING-A APX 51256351.82 -8972145.85 BENGUET CORP 'B' BCB 75486651.08 -37047223.67 BENGUET CORP-A BC 75486651.08 -37047223.67 CYBER BAY CORP CYBR 12926776.59 -79228223.36 EAST ASIA POWER PWR 50796443.41 -139420756.07 FIL ESTATE CORP FC 37286935.14 -11355841.65 FILSYN CORP A FYN 22000423.40 -10278638.86 FILSYN CORP. B FYNB 22000423.40 -10278638.86 GOTESCO LAND-A GO 18684576.24 -10863822.41 GOTESCO LAND-B GOB 18684576.24 -10863822.41 MRC ALLIED MRC 13040098.81 -3682026.54 PICOP RESOURCES PCP 105659068.50 -23332404.14 PRIME ORION PHIL POPI 90349299.63 -5122560.28 STENIEL MFG STN 28673457.47 -1478015.89 UNIVERSAL RIGHTF UP 45118524.67 -13478675.99 UNIWIDE HOLDINGS UW 52802040.71 -56176026.28 VICTORIAS MILL VMC 178060236.02 -36659989.09 SINGAPORE ADV SYSTEMS AUTO ASA 11785309.58 -12808326.82 ADVANCE SCT LTD ASCT 67584937.13 -14047619.58 CARRIERNET GLOBA CARG 14286897.57 -17258.04 CHUAN SOON HUAT CSH 29973005.08 -19287440.50 FALMAC LTD FAL 10117655.63 -6803815.35 HL GLOBAL ENTERP HLGE 93731888.39 -15671356.22 JURONG TECH IND JTL 98760092.87 -227275152.06 LINDETEVES-JACOB LJ 160478836.62 -86703612.98 OCEAN INTERNATIO OCEAN 61659790.45 -13720371.73 PACIFIC CENTURY PAC 17857346.66 -4522591.85 SUNMOON FOOD COM SMOON 19286019.65 -10665672.56 TIGER AIRWAYS TGR 122904989.42 -71923417.81 TT INTERNATIONAL TTI 303817166.63 -38088237.05 WESTECH ELECTRON WTE 28290170.94 -12855750.98 THAILAND ABICO HLDGS-F ABICO/F 12066621.69 -9544714.91 ABICO HOLDINGS ABICO 12066621.69 -9544714.91 ABICO HOLD-NVDR ABICO-R 12066621.69 -9544714.91 BANGKOK RUBBER BRC 86997154.46 -64963399.72 BANGKOK RUBBER-F BRC/F 86997154.46 -64963399.72 BANGKOK RUB-NVDR BRC-R 86997154.46 -64963399.72 CENTRAL PAPER IN CPICO 10220356.04 -216074904.26 CENTRAL PAPER-F CPICO/F 10220356.04 -216074904.26 CENTRAL PAPER-NV CPICO-R 10220356.04 -216074904.26 CIRCUIT ELEC PCL CIRKIT 17385099.26 -87998004.08 CIRCUIT ELEC-FRN CIRKIT/F 17385099.26 -87998004.08 CIRCUIT ELE-NVDR CIRKIT-R 17385099.26 -87998004.08 DATAMAT PCL DTM 12690638.93 -6132014.29 DATAMAT PCL-NVDR DTM-R 12690638.93 -6132014.29 DATAMAT PLC-F DTM/F 12690638.93 -6132014.29 ITV PCL ITV 33788130.19 -87508840.66 ITV PCL-FOREIGN ITV/F 33788130.19 -87508840.66 ITV PCL-NVDR ITV-R 33788130.19 -87508840.66 K-TECH CONSTRUCT KTECH 83204235.85 -5693045.29 K-TECH CONSTRUCT KTECH/F 83204235.85 -5693045.29 K-TECH CONTRU-R KTECH-R 83204235.85 -5693045.29 KUANG PEI SAN POMPUI 17146363.89 -12117287.24 KUANG PEI SAN-F POMPUI/F 17146363.89 -12117287.24 KUANG PEI-NVDR POMPUI-R 17146363.89 -12117287.24 MALEE SAMPRAN MALEE 56296560.19 -3455814.54 MALEE SAMPRAN-F MALEE/F 56296560.19 -3455814.54 MALEE SAMPR-NVDR MALEE-R 56296560.19 -3455814.54 PATKOL PCL PATKL 51025749.96 -29867507.54 PATKOL PCL-FORGN PATKL/F 51025749.96 -29867507.54 PATKOL PCL-NVDR PATKL-R 51025749.96 -29867507.54 PICNIC CORPORATI PICNI 162041208.32 -79858191.23 PICNIC CORPORATI PICNI/F 162041208.32 -79858191.23 PICNIC CORPORATI PICNI-R 162041208.32 -79858191.23 PONGSAAP PCL PSAAP 25968933.80 -4736785.73 PONGSAAP PCL PSAAP/F 25968933.80 -4736785.73 PONGSAAP PCL-NVD PSAAP-R 25968933.80 -4736785.73 SAFARI WORLD PUB SAFARI 102742653.97 -23192106.86 SAFARI WORLD-FOR SAFARI/F 102742653.97 -23192106.86 SAFARI WORL-NVDR SAFARI-R 102742653.97 -23192106.86 SAHAMITR PRESS-F SMPC/F 31177710.43 -14940579.60 SAHAMITR PRESSUR SMPC 31177710.43 -14940579.60 SAHAMITR PR-NVDR SMPC-R 31177710.43 -14940579.60 SUNWOOD INDS PCL SUN 19863687.56 -13033623.14 SUNWOOD INDS-F SUN/F 19863687.56 -13033623.14 SUNWOOD INDS-NVD SUN-R 19863687.56 -13033623.14 THAI-DENMARK PCL DMARK 15715462.27 -10102519.69 THAI-DENMARK-F DMARK/F 15715462.27 -10102519.69 THAI-DENMARK-NVD DMARK-R 15715462.27 -10102519.69 TRANG SEAFOOD TRS 11523557.41 -1253602.35 TRANG SEAFOOD-F TRS/F 11523557.41 -1253602.35 TRANG SFD-NVDR TRS-R 11523557.41 -1253602.35 UNIVERSAL S-NVDR USC-R 97741967.74 -40287801.61 UNIVERSAL STARCH USC 97741967.74 -40287801.61 UNIVERSAL STAR-F USC/F 97741967.74 -40287801.61 TAIWAN CHIEN TAI CEMENT 1107 202446919.23 -22407739.40 HELIX TECH-EC 2479T 23385923.43 -24115022.26 HELIX TECH-EC IS 2479U 23385923.43 -24115022.26 HELIX TECHNOL-EC 2479S 23385923.43 -24115022.26 PAPERCOREA INC 1020 310528990.10 -154086330.59 TAIWAN KOL-E CRT 1606U 507206787.88 -147139297.70 TAIWAN KOLIN-EN 1606V 507206787.88 -147139297.70 TAIWAN KOLIN-ENT 1606W 507206787.88 -147139297.70 VERTEX PREC-ENTL 5318T 43037265.55 -2305484.43 VERTEX PRECISION 5318 43037265.55 -2305484.43 YEU TYAN MACHINE 8702 39574168.04 -271070409.72 ********* 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 2010. 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 ***