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/raid1/www/Hosts/bankrupt/TCRAP_Public/100225.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, February 25, 2010, Vol. 13, No. 039 Headlines C H I N A CHINA MILK: Has Funds to Repay Debts; Solvency "May be in Doubt" GENERAL MOTORS: To Wind Down Hummer as Sichuan Deal Fails H O N G K O N G PAMFORD LIMITED: Yeung Wing Yan Steps Down as Liquidator SYSTEM OVERSEAS: Placed Under Voluntary Wind-Up Proceedings TAK WO: Members' and Creditors Meetings Set for March 19 TRADE POINT: Commences Wind-Up Proceedings TRINITY FORTUNE: Members' Final Meeting Set for March 23 UNIROSS BATTERIES: Creditors' Proofs of Debt Due March 12 WELL MANDER: Creditors' Proofs of Debt Due March 19 WILHELM TEXTILES: Members' Final Meeting Set for March 19 WILMAX DEVELOPMENT: Members' Final Meeting Set for March 22 YEE TAT: Creditors' Meeting Set for February 23 I N D I A ARVIND PRODUCTS: CARE Assigns 'CARE BB-' Rating on Bank Facilities BALU SPINNING: CRISIL Assigns 'BB-' Rating on INR512.5MM Term Loan CITIGROUP INC: Expands Equities Team in India GLAZE GARMENTS: ICRA Assigns 'LBB-' Rating on INR41.2MM Loans MAHESHWARY ISPAT: CARE Puts 'CARE BB' Rating on INR415.98cr Loan RESTORATION ENGINEERS: CARE Rates INR6.11cr Loan at 'CARE BB+' SARA SUOLE: CRISIL Reaffirms 'BB-' Rating on INR75MM Cash Credit SONA OKEGAWA: Fitch Affirms 'BB-' National Long-Term Rating J A P A N ELPIDA MEMORY: Faces Infineon Patent Infringement Lawsuit TAIHEIYO CEMENT: To Halt Cement Production at Three Plants K O R E A HYUNDAI MOTOR: To Recall Sonata Sedan in US and South Korea KIA MOTORS: Expects to Lift U.S. Sales by 15% This Year KUMHO ASIANA: Petrochemical, Airline Units Set to Get Fresh Funds M A L A Y S I A AMBB (L): Moody's Cuts US$200MM Shares to B2 POLY TOWER: Obtains 90-Day Restraining Order RANHILL BERHAD: Ingersoll-Rand Files Wind Up Petition Against Unit SBB CAPITAL: Moody's Cuts US$200MM Shares to Ba3 WWE HOLDINGS: Dec. 31 Balance Sheet Upside Down by MYR6.47 Mil. WWE HOLDINGS: Disclosed Revision to 40-Mil. Shares Placement N E W Z E A L A N D GENEVA FINANCE: S&P Downgrades Long-Term Rating to 'CC' - - - - - ========= C H I N A ========= CHINA MILK: Has Funds to Repay Debts; Solvency "May be in Doubt" ---------------------------------------------------------------- China Milk Products Group Ltd. said it has enough funds in its accounts to pay holders provided China's foreign currency regulator allows it to transfer money out of the country, Bloomberg News reports. As reported in the Troubled Company Reporter-Asia Pacific on Feb. 15, 2010, Bloomberg News said that China Milk Products is defaulting on some repayment obligations because it hasn't enough money outside China to pay for early redemption of its bonds. China Milk said in a Feb. 12 filing with Singapore's stock exchange that the company was exploring different options with a view to meeting its funding requirements. The notes are China Milk's $150 million of zero coupon convertible bonds due 2012 and issued in January 2007, according to Bloomberg. China Milk now said that as a result of the default, the company can't pay its liabilities as and when they fall due, and its "ability to operate as a going concern may be in doubt," Bloomberg relates. Bloomberg recalled China Milk said Jan. 5 it had received "valid put exercise notices" from holders of about $146 million of the notes and was "awaiting clearance" from China for the remittance of $170.56 million so it could make the required payments. The delay was "administrative and procedural in nature," China Milk said at the time. The company, whose shares were suspended on Feb. 9, said on Feb. 12 it was seeking to delay the release of its third-quarter and nine-month financial results, Bloomberg notes. According to Bloomberg, China Milk said the board can't provide "realistic timelines" to resolve the company's problems due to: -- the absence of a chief financial officer; -- the inability to meet early redemption obligations; -- the adverse impact on its results of the financial Crisis; and -- the melamine scandal that hit China's dairy industry in 2008. The Company's management has started discussions with the State Administration of Foreign Exchange on the proposed movement of funds out of China, although they haven't yet made any formal application in writing to the regulator to remit funds out of China, Bloomberg notes. China Milk Products Group Limited -- http://www.chinamilkgroup.com/-- is an investment holding company. The Company, through Daqing Yinlou Dairy Co., Ltd. (Yinlou) is engaged in the production of pedigree bull semen, dairy cow embryos and raw milk in the People's Republic of China. As at March 31, 2009, the Company had a total herd size of 21,820, which includes Holsteins of Canadian, Australian and Chinese origins. The wholly owned subsidiaries of the Company are Cattan Holdings Corp. (Cattan), which is an investment holding company and Yinlou, which is engaged in dairy farm operations, including sale of dairy livestock's agricultural produce. GENERAL MOTORS: To Wind Down Hummer as Sichuan Deal Fails --------------------------------------------------------- Katie Merx at Bloomberg News reports that General Motors Co. said it will close Hummer, the maker of military-inspired sport-utility vehicles, after Sichuan Tengzhong Heavy Industrial Machinery Co. couldn't win Chinese approval to buy the unit. GM spokesman Nick Richards said winding down the brand will take several months. Some of the 3,000 people now employed at Hummer work on other vehicles, so GM doesn't know how many jobs will be lost, he said. According to Bloomberg, Mr. Richards said GM would consider "viable alternatives for all or part of the brand during wind down." Bloomberg relates Tengzhong said in a statement that it was "unable to obtain clearance of the transaction from the Chinese regulators within the proposed deal time frame." As reported in the Troubled Company Reporter on Feb. 12, 2010, China's Sichuan Tengzhong Heavy Industrial Machinery Co., and General Motors Co. have agreed to postpone until the end of February 2010 a definitive agreement that will allow the Chinese car manufacturer to acquire GM's all-terrain Hummer brand, GM officials told Bloomberg on January 31, 2010. The parties have agreed to extend the January 31 deadline as they await Beijing's approval for the deal to proceed. Sources close to the deal commented that one major challenge that the sale has to go through is to convince Chinese regulators that Hummer can make trucks that are better in terms of fuel and environment conservation than its current lineup, The Wall Street Journal said on February 2. About General Motors General Motors Company -- http://www.gm.com/-- is one of the world's largest automakers, tracing its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. GM acquired its operations from General Motors Company, n/k/a Motors Liquidation Company, on July 10, 2009, pursuant to a sale under Section 363 of the Bankruptcy Code. Motors Liquidation or Old GM is the subject of a pending Chapter 11 reorganization case before the U.S. Bankruptcy Court for the Southern District of New York. At September 30, 2009, GM had US$107.45 billion in total assets against US$135.60 billion in total liabilities. About Motors Liquidation General Motors Corporation and three of its affiliates filed for Chapter 11 protection on June 1, 2009 (Bankr. S.D.N.Y. Lead Case No. 09-50026). General Motors changed its name to Motors Liquidation Co. following the sale of its key assets to a company 60.8% owned by the U.S. Government. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Bankruptcy Creditors' Service, Inc., publishes General Motors Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by General Motors Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) ================ H O N G K O N G ================ PAMFORD LIMITED: Yeung Wing Yan Steps Down as Liquidator -------------------------------------------------------- Yeung Wing Yan stepped down as liquidator of Pamford Limited on January 29, 2010. SYSTEM OVERSEAS: Placed Under Voluntary Wind-Up Proceedings ----------------------------------------------------------- At an extraordinary general meeting held on February 1, 2010, creditors of System Overseas Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Miyajima Takako Chung Kiu Commercial Building Room 2302, 23/F 47-51 Shantung Street Mongkok, Kowloon TAK WO: Members' and Creditors Meetings Set for March 19 -------------------------------------------------------- Members and creditors of Tak Wo Metal Industrial Limited will hold their annual meetings on March 19, 2010, at 3:00 p.m., and 3:30 p.m., respectively at the Room 1601-02, 16th Floor, One Hysan Avenue, Causeway Bay, in Hong Kong. At the meeting, Jackson Ip, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. TRADE POINT: Commences Wind-Up Proceedings ------------------------------------------ Members of Trade Point Development Limited, on February 17, 2010, passed a resolution to voluntarily wind-up the company's operations. The company's liquidator is: Luk Wing Hay Surson Commercial Building, 9/F 140-142 Austin Road Tsimshatsui, Kowloon TRINITY FORTUNE: Members' Final Meeting Set for March 23 -------------------------------------------------------- Members of Trinity Fortune Limited will hold their final meeting on March 23, 2010, at 5:00 p.m., at the Room 2802, 28/F., China Resources Building, No. 26 Harbour Road, Wanchai, in Hong Kong. At the meeting, Ling Wai Ming, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. UNIROSS BATTERIES: Creditors' Proofs of Debt Due March 12 --------------------------------------------------------- Creditors of Uniross Batteries (HK) Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by March 12, 2010, to be included in the company's dividend distribution. The company's liquidators are: Kennic Lai Hang Lui Frank Yuen Tsz Chun Ho Lee Commercial Building, 5/F 38-44 D'Aguilar Street Central, Hong Kong WELL MANDER: Creditors' Proofs of Debt Due March 19 --------------------------------------------------- Well Mander Limited, which is in members' voluntary liquidation, requires its creditors to file their proofs of debt by March 19, 2010, to be included in the company's dividend distribution. The company's liquidator is: Ip Chung Yuen Shanghai Industrial Investment Building, 14/F 48 Hennessy Road Wanchai, Hong Kong WILHELM TEXTILES: Members' Final Meeting Set for March 19 --------------------------------------------------------- Members of Wilhelm Textiles Hong Kong Limited will hold their final meeting on March 19, 2010, at 10:00 a.m., at the Postfach 2964 D-66935 Pirmasens, Im Erlenteich 65 D-66935 Pirmasens, in Germany. At the meeting, Werner Wilhelm, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. WILMAX DEVELOPMENT: Members' Final Meeting Set for March 22 ----------------------------------------------------------- Members of Wilmax Development Limited will hold their final meeting on March 22, 2010, at 10:00 a.m., at the 1902 MassMutual Tower, 38 Gloucester Road, in Wanchai. At the meeting, Ngan Lin Chun Esther, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. YEE TAT: Creditors' Meeting Set for February 23 ----------------------------------------------- Creditors of Yee Tat Plumbing Drainage Engineering Company Limited will hold their meeting on February 23, 2010, at 3:00 p.m., for the purposes provided for in Sections 228A, 242, 243, 244 and 255A of the Companies Ordinance. The meeting will be held Founder's Room, 3/F., South Tower, 41 Salisbury Road, YMCA of Hong Kong, Tsimshatsui, Kowloon, in Hong Kong. ========= I N D I A ========= ARVIND PRODUCTS: CARE Assigns 'CARE BB-' Rating on Bank Facilities ------------------------------------------------------------------ CARE has assigned a 'CARE BB-' rating to the standalone Long-term Bank Facilities, 'CARE BB+ (SO)' rating to the Long-term Bank Facilities backed by the Corporate Guarantee from Arvind Ltd. and 'PR4' rating to the Short-term bank Facilities of Arvind Products Ltd. Facilities with 'Double B' rating are considered to offer inadequate safety for timely servicing of debt obligations. Such facilities carry high credit risk. This rating is applicable for facilities having tenure of more than one year. Facilities with 'PR Four' rating would have inadequate capacity for timely payment of short-term debt obligations and carry very high credit risk. Such facilities are susceptible to default. This rating is applicable for facilities having a tenure up to one year. CARE assigns '+' or '-' signs to be shown after the assigned rating (wherever necessary) to indicate the relative position of the company within the band covered by the rating. Amount Facilities (INR crore) Ratings ---------- ---------- ------- Long Term Bank Facilities 139.01 CARE BB- Long Term Bank Facilities (Backed by Corporate Guarantee from Arvind Ltd.) 40.00 CARE BB+ (SO)* Short Term Bank Facilities 34.40 PR4 * Structured Obligation Rating Rationale The rating factors in APL's weak financial profile as reflected by accumulated losses, huge debt size and tight liquidity conditions which resulted in high dependence on its parent company, Arvind, to service its debt obligations. These weaknesses are, however, partially offset by the operational and financial support APL derives from Arvind and benefits derived from market leadership position in voiles division. The ability to reduce heavy debt burden, improvement in overall financial risk profile and continuation of financial support from Arvind remain the key rating sensitivities. About Arvind Products APL is a 53.66% subsidiary of Arvind (rated CARE BB+/PR4). APL has four business divisions: Ankur Textiles manufactures voiles, Arvind Polycot manufactures bottom weights and khakis, Arvind Intex manufactures cotton yarn of lower counts and Arvind Cotspin manufactures finer quality of cotton yarn. APL reported net loss of INR23 crore on a total operating income of INR388 crore in FY09 as compared to PAT of INR3 crore on a total operating income of INR440 crore in FY08. The company reported net loss of INR8 crore on a total operating income of INR224 crore in H1FY10. BALU SPINNING: CRISIL Assigns 'BB-' Rating on INR512.5MM Term Loan ------------------------------------------------------------------ CRISIL has assigned its 'BB-/Stable/P4+' ratings to the bank facilities of Balu Spinning Mills (Pvt) Ltd. Facilities Ratings ---------- ------- INR500.0 Million Cash Credit Facility BB-/Stable (Assigned) INR512.5 Million Term Loan Facility BB-/Stable (Assigned) INR100 Million Letter of Credit P4+ (Assigned) The ratings reflect BSMPL's weak financial risk profile marked by a small net worth and high gearing, and the vulnerability of its profitability to raw material price volatility. These rating weaknesses are partially offset by BSMPL's established market position, with a presence in both domestic markets and merchant exports. Outlook: Stable CRISIL believes that BSMPL will benefit from the recent revival in the textile industry. However, the company's financial risk profile will remain constrained by its small net worth. The outlook may be revised to 'Positive' in case of significant, fresh equity infusion into the company, or if the company reports a better-than-expected business performance, thereby improving its debt protection measures. Conversely, the outlook may be revised to 'Negative' if BSMPL undertakes a large, debt-funded capacity expansion programme, thereby resulting in further deterioration of its capital structure. About Balu Spinning Balu Spinning Mills (Pvt) Ltd. was established in 1996 by Mrs. B Rajalakshmi. The company manufactures cotton yarn in counts of 20s, 24s, 30s, and 40s, which it supplies to hosiery garment manufacturers. It has 35,952 spindles in Dharapuram (Tamil Nadu), and 8000 spindles in Chinnaputhur, about 4 kilometres from Dharapuram. BSMPL is planning to add 3600 spindles in 2009-10 (refers to financial year, April 1 to March 31). For 2008-09, BSMPL reported a profit after tax of INR0.48 million (INR11.8 million for 2007-08) on net sales of INR1.05 billion (INR912 million). CITIGROUP INC: Expands Equities Team in India --------------------------------------------- Citigroup Global Markets India has announced a number of significant hires across its equities sales and execution business over the past few months. According to Nikhil Nagle, Head of Equities for Citi India, these appointments further underline Citi's commitment to its clients in India. "We remain committed to our clients in continuing to invest in our market leading Indian equities franchise across both the primary and secondary markets. To this end, Citi has made a number of significant hires across the sales and execution platforms in recent months. These hires have further strengthened Citi's presence in the Indian equities market to over 25 highly talented and motivated individuals," said Nikhil Nagle, Managing Director and Head of Equities, India. "India is a high priority market for the Asia Pacific region and with these new appointments, Citi is confident of continuing to be among the leading Equities franchise in India supporting our clients' needs across the market," added Nikhil Nagle. The combined experience of the newly expanded talent pool is over 100 years in equity markets, which include hires across sales, trading and execution. Some of the key new talent who have joined the Citi India team, reporting to Nikhil Nagle, include: Keshav Sanghi, Managing Director and Deputy Head of Equities, India. Prior to joining Citi, Mr. Sanghi, served as the CEO of Reliance Equities and as Head of Equities, at Deutsche. He has over fifteen years of experience in Indian Equity Sales. In his new role, he will develop long-standing relationships with a majority of Citi's key clients. Richard Macfarlane joined as the Managing Director and Head of Execution Services, India, with a focus to strengthen the Indian equities franchise, especially with Citi's offshore clients. He brings with him over twenty years of experience across Pan Asian and European markets and has the additional responsibility of overseeing the growth of Citi's electronic trading platform in the Indian market. He was earlier the Head of AP Sales Trading for UBS and then the Head of European Sales Trading for UBS. Vandana Luthra, Managing Director, India Equity Sales, brings over fifteen years of diversified equity research experience across FMCG, real estate and the metals sectors. Her earlier research assignment with Merrill Lynch across these sectors will add considerable value in strengthening and developing the Citi Equity Sales franchise especially with leading offshore accounts where she shares long standing relationships as a highly rated analyst. Chandra Sekaran, who joined as Director, Equity Sales Trading, brings over eighteen years of sales trading experience in Indian markets, across various organizations like Reliance Equities, Kotak, JP Morgan and Deutsche Bank. His experience as a buy side trader with Franklin Templeton will provide additional value to Citi equity sales trading desk. Abhijit Attavar, as Director, India Trading, brings considerable value and experience to the India trading desk. Abhijit Attavar, was earlier the Head of Small-Mid cap research at ABN Amro and has over 15 years of experience in research across markets in the region. Andrew Sutcliffe, Director, Equity Sales Trading, has a total of over thirteen years experience in equities with the last three years being in institutional sales trading at Nomura. Abhinav Khanna, Director, Equity Sales, joined from Macquarie and comes with eight years of experience in Indian equities, with the last three years in equity sales in Macquarie. Suveer Chainani, Director, Equity Sales, joined from Macquarie after four years with its Indian equities team after a stint in sales with IBM. Vaibhav Shintre, Execution Trader, joined after graduating from IIM Ahmedabad, in 2009. Vaibhav had interned with Citi in Hong Kong last year and will be a key driver of our effort to revamp the execution role. Asia Pacific Head of Equities Adrian Faure stated, "India remains a high priority market for the Asia Pacific region and with these new additions, we are confident that Citi will be able to build further on its leading position in the Indian equities market." About Citigroup Based in New York, Citigroup Inc. (NYSE: C) -- is a global diversified financial services holding company whose businesses provide a broad range of financial services to consumer and corporate customers. Citigroup has roughly 200 million customer accounts and does business in more than 140 countries. Citigroup's businesses are aligned in three reporting segments: (i) Citicorp, which consists of Regional Consumer Banking (in North America, EMEA, Asia, and Latin America) and the Institutional Clients Group (Securities and Banking, including the Private Bank, and Transaction Services); (ii) Citi Holdings, which consists of Brokerage and Asset Management, Local Consumer Lending, and a Special Asset Pool; and (iii) Corporate/Other. As reported in the Troubled Company Reporter on November 25, 2008, the U.S. government entered into an agreement with Citigroup to provide a package of guarantees, liquidity access, and capital. The U.S. Treasury and the Federal Deposit Insurance Corporation agreed to provide protection against the possibility of unusually large losses on an asset pool of roughly $306 billion of loans and securities backed by residential and commercial real estate and other such assets, which will remain on Citigroup's balance sheet. As a fee for this arrangement, Citigroup issued preferred shares to the Treasury and FDIC. The Federal Reserve agreed to backstop residual risk in the asset pool through a non-recourse loan. Citigroup, the third-biggest U.S. bank, received $45 billion in bailout aid. Other bailed-out banks, including Bank of America Corp., Wells Fargo & Co., have pledged to repay TARP money. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, repaid TARP funds in June. Citigroup is selling assets to repay the bailout funds. Citigroup is one of the banks that, according to results of the government's stress test, need more capital. GLAZE GARMENTS: ICRA Assigns 'LBB-' Rating on INR41.2MM Loans ------------------------------------------------------------- ICRA has assigned an 'LBB-' rating to the INR41.2 million term loans and INR215.0 million cash credit facilities of Glaze Garments (India) Limited. ICRA has assigned a stable outlook to the long term rating. The assigned ratings are constrained by GGIL's small scale of operations, the low value-add nature of business resulting from non-integrated operations and the past volatility in its top line and profitability which gives little comfort on future earnings. ICRA notes that the company has a very high revenue-dependence on the group company Venus Garments (India) Limited. CGIL's recent foray into trading of yarn and fabric may help the company achieve growth and reduce the dependence on VGIL; however the operating profitability could decline as trading offers lower margins. Also, the likely increase in working capital borrowings to support the trading business could weaken the capital structure. ICRA notes that the company's manufacturing business remains exposed to raw material price fluctuations as the manufacturers are left with little bargaining power given the high competitive intensity due to the fragmented nature of the industry. The rating, however, draws comfort from the experience of the promoters in the ready- made-garments industry, their established domestic retail business and their long standing relationships with the leading retailers like Wal-Mart, The Children's Place and Carrefour. GGIL was incorporated in 1998 as "Glaze Garments Private Limited" and converted into a public limited company in 2004 under the name "Glaze Garments (India) Limited". The company is involved in manufacturing of knitted hosiery readymade garments. It has a garment fabrication capacity of about 3 million pieces (mostly T- Shirts) per annum. MAHESHWARY ISPAT: CARE Puts 'CARE BB' Rating on INR415.98cr Loan ---------------------------------------------------------------- CARE has assigned a 'CARE BB' rating to the long term & medium term bank facilities of INR415.98 crore and a 'PR4' rating to the short term bank facilities aggregating INR76.00 crore of Maheshwary Ispat Ltd. While 'Double B' rating is applicable for facilities having tenure of more than one year, 'PR four' rating is applicable for facilities having tenure up to one year. Facilities with 'Double B' rating are considered to offer inadequate safety for timely servicing of debt obligations. Such facilities carry high credit risk. Facilities with 'PR4' rating would have inadequate capacity for timely payment of short-term debt obligations and carry very high credit risk. Such facilities are susceptible to default. CARE assigns '+' or '-' signs to be shown after the assigned rating (wherever necessary) to indicate the relative position within the band covered by the rating symbol. Amount Facilities (INR crore) Ratings ---------- ---------- ------- Long term bank facilities 415.98 'CARE BB' Short term bank facilities 76.00 'PR4' The above ratings are constrained by the short track record of the company in manufacturing operations, closely held nature of the company, the company being in low margin trading business, moderate financials of the company, stretched working capital cycle leading to strain on liquidity & consequential delays in servicing of interest on debt necessitating reschedulement of loans, volatility in respect of prices of raw materials & finished goods, delays in implementation of projects, cyclicality in the iron & steel industry and intense competition. The ratings also factor in experience of the promoters, strategic location of plants with proximity to market & sources of raw materials and comfortable gearing ratios. Ability to improve profitability after withstanding the pressure of cyclicality & slow recovery in the steel industry as also successful completion of the ongoing projects would remain the key rating sensitivities. About Maheshwary Ispat Maheshwary Ispat Ltd., incorporated in 1997, belongs to Shri Ajit Kumar Mundra of Kolkata. The company commenced its activity with trading of iron & steel products and commenced manufacturing operation in April, 2005 with the setting up of sponge iron unit at Panagarh, West Bengal. At present, it is engaged in manufacturing of pig iron, sponge iron and steel billets, besides carrying on trading business. MIL has recently completed its expansion of rolling mill capacity at Panagarh and an integrated steel plant with facilities comprising structural rolling mill, ferro alloy plant, coal washery and captive power plant at Rampei, Cuttack at an aggregate project cost of INR509.1 crore. However, the same got delayed by about a year and a half due to slowdown in the steel industry, resulting in cost over run of about INR40.0 crore. On a total income of INR406.4 crore in FY09 (INR425.5 crore in FY08), MIL earned PBILDT of INR42.7 crore (INR45.6 crore in FY08) and PAT (after defd. tax) of INR5.1 crore (INR12.7 crore in FY08) in FY09. While sales and profitability increased phenomenally during FY07- 08 due to gradual commissioning of plants, increased trading operation and increase in ANSPR, the same witnessed significant decline in FY09 due to the slowdown in the steel industry. Accordingly, PBILDT margin declined. In line with PBILDT, PAT (after defd. tax) also increased significantly in FY08 over FY07 but fell in FY09 due to reduced PBILDT coupled with high capital charge. Interest coverage ratio was low at 1.04 during FY09. Gearing ratios were generally comfortable. The current ratio has been moderate, as on the last three accounts closing dates. However, delay in project implementation as well as tie-up of working capital led to stretched working capital cycle. Consequently, the company had to face strain on liquidity and make delays in servicing of interest necessitating re-schedulement of term loans. RESTORATION ENGINEERS: CARE Rates INR6.11cr Loan at 'CARE BB+' -------------------------------------------------------------- CARE has assigned 'CARE BB+' rating to the long-term bank loans/facilities of Restoration Engineers. This rating is applicable to facilities having tenure of more than a year. Facilities with this rating are considered to offer inadequate safety for timely servicing of debt obligations. Such facilities carry high credit risk. Further, CARE has assigned 'PR4' rating to the short-term bank loans/facilities of RE. This rating is applicable to facilities having tenure of less than one year. Facilities with this rating would have inadequate capacity for timely payment of short-term debt obligations and carry very high credit risk. Such facilities are susceptible to default. CARE assigns '+' or '-' signs to be shown after the assigned rating (wherever necessary) to indicate the relative position within the band covered by the rating symbol. Amount Facilities (INR crore) Ratings ---------- ---------- ------- Long-term Bank Facilities 6.11 'CARE BB+' Assigned Short-term Bank Facilities 4.25 'PR4' Assigned Rating Rationale The ratings are constrained due to small scale of operations, its constitution as a partnership firm, geographical concentration with most of the project in Gujarat, low revenue diversity and increasing competition in state government projects. The ratings factor in experience of partners of RE in road construction business, moderate financial position as indicated by low debt equity ratio and moderate order backlog position with majority of the orders having a price variation clause. Timely execution of orders in hand and increase in scale of operations with improvement in profitability and overall financial position are the key rating sensitivities. About Restoration Engineers Restoration Engineers was incorporated in 2001 as a proprietorship firm owned by Mr. Jayesh Bhatia. In the year 2007, Mr. Bhatia partnered with Mr. Naved Siddiqui and Mr. Shrimul Majmudar and converted its proprietorship firm to partnership firm. The partners have a track record of executing 10 construction projects in various areas and is accredited as "AA class" (highest in the scale of AA to E) contractor from R&B Dept., Government of Gujarat (GoG). During FY09, RE reported a total operating income of INR17.02 crore (FY08: INR7.06 crore) with PBILDT and PAT margins of 12.07% (FY08: 14.20%) and 7.04% (FY08: 6.98%) respectively. The firm had an overall gearing of 1.72 times as at Mar.31, 2009 and interest coverage of 1.38 times for FY09. SARA SUOLE: CRISIL Reaffirms 'BB-' Rating on INR75MM Cash Credit ---------------------------------------------------------------- CRISIL has reaffirmed its rating on the cash credit facility of Sara Suole Pvt Ltd (Sara Suole; part of the Sara group) at 'BB- /Stable', while reclassifying the rating on the short-term bank facilities as 'P4+', from the earlier 'P4'. Facilities Ratings ---------- ------- INR75.0 Million Cash Credit Limits BB-/Stable (Reaffirmed) INR200.0 Million Export Packing P4+ (Reclassified from Credit Limits* 'P4') INR10.0 Million Letter of Credit P4+ (Reclassified from Limits 'P4') INR5.0 Million Bank Guarantee P4+ (Reclassified from Limits 'P4') * Interchangeable with foreign bills purchase/discounting limits. This rating action resulted from CRISIL's decision to introduce the 'P4+' rating in its short-term rating scale, and does not imply any change in Sara Suole's credit quality. The ratings continue to reflect the Sara group's large working requirements, and average financial risk profile marked by high gearing, small net worth, and average debt protection measures. These rating weaknesses are partially offset by the group's established position in the footwear and footwear sole manufacturing business. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Sara Suole, and Welterman International Ltd (Welterman), collectively referred to as the Sara group. This is because the two companies are engaged in the same line of business and have common promoters, and because Sara Suole and Welterman are to be amalgamated over the medium term. Outlook: Stable CRISIL believes that the Sara group will maintain its market position, given the stable demand for its products. The outlook may be revised to 'Positive' in case of a sustained improvement in the group's profitability, leading to an improved financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of deterioration in the group's capital structure or debt protection measures. About the Group Sara Suole, set up by Mr. Kayum Razak Dhanani in 2000, has capacity to manufacture about 8000 shoe soles and 3000 shoes per day. Welterman was established in 1993; it has the capacity to manufacture up to 3000 shoe soles per day. Welterman was referred to the Board for Industrial and Financial Reconstruction in 1998. Sara Suole and Welterman are to be amalgamated over the medium term; the relevant scheme of amalgamation has been submitted to the BIFR. For 2008-09 (refers to financial year, April 1 to March 31), Sara Suole reported a profit after tax (PAT) of INR11.65 million on net sales of INR750.8 million, against a PAT of INR22.45 million and net sales of INR603.93 million for the preceding year. SONA OKEGAWA: Fitch Affirms 'BB-' National Long-Term Rating ----------------------------------------------------------- Fitch Ratings has assigned India's Sona Okegawa Precision Forging Limited a National Long-term rating of 'BB-(ind)'. The agency has also assigned a 'BB-(ind)' rating to SOPFL's existing term loans of INR1130.4 million, 'BB-(ind)'/'F4(ind)' ratings to its fund- based working capital limits of INR200 million and 'BB- (ind)'/'F4(ind)' ratings to its non-fund based limits of INR180 million. The Outlook is Stable. SOPFL's ratings take into account the experience and technical expertise of its promoters, India-based Sona Group (75%) and Mitsubishi Materials Corporation (MMC; 25%) - in the auto component industry. SOPFL has a diversified portfolio of customers across the automobile industry, with limited customer concentration. Its largest customer, Maruti Suzuki India Limited, contributed about 20% to total standalone revenues in FY09 (versus 16.3% over the previous two years). SOPFL's technology agreement with MMC helps reduce product development cycle. SOPFL's adoption of precision forging technology has given it an edge over peers, in terms of cost effectiveness and output quality. The agency has taken a consolidated view of SOPFL's and its subsidiaries' business and financial positions. SOPFL's January 2008 debt-led acquisition of precision forging facilities in international markets coincided with a period of slowdown in the automotive industry, leading to high financial leverage. This, coupled with erosion of profitability, mounted pressure on its German subsidiary's debt repayment ability, and eventually led to restructuring of a part of the borrowings by the subsidiary. The agency notes that SOPFL may continue to witness pressure on its cash flows in the near term, until the international automotive markets revive, as large capacities are located with the German subsidiary. Negative rating drivers would include an inability to improve its consolidated financial performance, or an increase in borrowings resulting in worsening of consolidated financial leverage (Total adjusted Debt/EBIDTA) or restructuring of debt by the company or its subsidiaries in future. On the other hand, improvement in revenues and profitability with contribution from international subsidiaries and consistent de-leveraging of the company leading to improved financial profile would act as positive rating guidelines. SOPFL's standalone revenues declined to INR1174.3 million in FY09 (FY08: from INR1348.2 million), given the slowdown in the domestic automotive sector, in particular the commercial vehicles segment. Financial leverage - total Debt/operating EBIDTA) on a standalone basis was 9.5x in FY09 (FY08: 9.8x). The operating profit margin, also on a standalone basis, was 18.6% in FY09; however higher interest on term loans undertaken to support international subsidiaries, and notional forex losses on such loans led to a net loss of INR34.6m in FY09. SOPFL is a JV between Sona Autocomp Holding (the investment holding arm of the Sona Group) and MMC. The company commenced operations in 1998 and is engaged in the manufacturing of precision forged bevel gears, differential case assemblies and synchroniser rings at its two manufacturing plants in Gurgaon and Pune. SOPFL acquired the precision forging facilities of ThyssenKrupp Prazisionsschmiede GmBH in January 2008, and consequently made them subsidiaries. ========= J A P A N ========= ELPIDA MEMORY: Faces Infineon Patent Infringement Lawsuit --------------------------------------------------------- Infineon Technologies AG filed an infringement lawsuit for unfair trade practices against Elpida Memory Inc. on February 19 with the U.S. International Trade Commission, Dow Jones Newswires reports. Dow Jones relates that Infineon claims Elpida has made DRAM semiconductors and products that infringe four of Infineon's patents for import into the U.S and sold them in the U.S. According to Dow Jones, Infineon's complaint with the ITC seeks an exclusion order to bar the infringing DRAM semiconductors and products that are imported by or on behalf of Elpida from entry into the U.S. Hermann Eul, a member of Infineon's Management Board, said Infineon will protect its intellectual property rights. Based in Neubiberg, Germany, Infineon Technologies AG designs, develops, manufactures, and markets a range of semiconductors and systems solutions used in a variety of microelectronic applications, including computer systems, telecommunications systems, consumer goods, automotive products, industrial automation and control systems, and chip card applications. About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. * * * As of December 9, 2009, Elpida Memory Inc. continues to carry Mikuni Credit Ratings 'B' mortgage debt rating and 'B' senior debt ratings. TAIHEIYO CEMENT: To Halt Cement Production at Three Plants ---------------------------------------------------------- Taiheiyo Cement Corp. said it will halt cement production at three plants by September to reduce its annual group production capacity by 3.1 million tons, or some 13%, Japan Today reports. According to the report, the company expects to book JPY15 billion valuation losses on the production stoppage at the plants in Kochi, Oita and Saitama prefectures for fiscal 2009 ending next month. Taiheiyo Cement is also considering production capacity cuts at three of its affiliates as well as Tosoh Corp., which produces cement for Taiheiyo at a plant in Yamaguchi Prefecture, the report says. Taiheiyo Cement reported net loss of JPY2.54 billion for the quarter ended Dec. 31, 2009, compared with a net loss of JPY21.93 billion in the same period in 2008. The Company's balance sheet as at Dec. 31, 2009, showed strained liquidity with JPY360.97 billion in total current assets available to pay JPY486.59 billion in total current liabilities. Headquartered in Tokyo, Japan, Taiheiyo Cement Corporation -- http://www.taiheiyo-cement.co.jp/-- formed by the 1998 merger of Chichibu Onoda Cement and Nihon Cement, is Japan's leading cement manufacturer. Taiheiyo's other interests include minerals and aggregates, construction materials (ready-mix concrete and concrete products), and real estate. The company also operates materials recycling businesses that include the conversion of sewage sludge from power plants. Taiheiyo provides real estate management services in the Tokyo area. ========= K O R E A ========= HYUNDAI MOTOR: To Recall Sonata Sedan in US and South Korea ----------------------------------------------------------- Hyundai Motor Co. said Wednesday it will recall 47,300 units of the new version of its Sonata sedan in the United States and South Korea due to a door lock problem, Yonhap News reports. The news agency, citing a company official, relates that Hyundai will begin "voluntarily" recalling 1,300 vehicles of the 2011 Sonata in the U.S. and another 46,000 sold in South Korea. The glitch of front-door latches on the 2011 Sonata could trap front-seat passengers when they try to open their doors from the inside while depressing the lock button at the same time, according to Yonhap. Headquartered in Seoul, South Korea, Hyundai Motor Company (SEO:005380) -- http://www.hyundai-motor.com/-- is an automobile manufacturer. The company markets the Genesis, Genesis Coupe, Azera, Sonata, Elantra, Accent, Getz, i30, i30cw, i20 and i10 passenger cars; the Veracruz, Santa Fe, Tucson, Matrix, H-1 recreational vehicles, and commercial vehicles, which include medium and heavy duty trucks, van trucks, tank lorries, bulk cement carriers, bulk cement tractors and others. * * * As reported in the Troubled Company Reporter-Asia Pacific on December 11, 2009, Fitch Ratings revised the Outlook on Hyundai Motor's and Kia Motors' foreign currency Long-term Issuer Default Ratings to Positive from Negative, and simultaneously affirmed them at 'BB+'. The agency also affirmed the 'BB+' rating on both companies' senior unsecured debt and the Short-term IDRs at 'B'. HMC's and Kia's Long-term IDR was downgraded to 'BB+' with Negative Outlook in January 2009, due to concerns that the global auto market downturn would negatively impact the profitability and key credit metrics of the companies to an extent that is not commensurate to investment grade levels. KIA MOTORS: Expects to Lift U.S. Sales by 15% This Year ------------------------------------------------------- Kia Motors Corp. said Tuesday it expects to boost U.S. sales by 15% this year as it started production at its first factory in the U.S., according to Yonhap News. Company officials said Kia plans to sell 347,000 cars in the U.S. this year, compared with some 300,000 units sold in Korea last year, Yonhap relates. Kia Motors Corporation (SEO:000270) -- http://www.kia.com/-- is a Korea-based automobile manufacturer. The Company provides its products under three categories: sport utility vehicles (SUVs) and multipurpose vehicles (MPVs), passenger vehicles and commercial vehicles. Its SUVs and MPVs include leisure vehicles under the brand name Carens, Carnival, Sportage, Mohave and Sorento. Its passenger vehicles include passenger cars under the brand name Soul, Picanto, Rio, Cerato, Magentis, Optima, Opirus and Amanti. Its commercial vehicles include trucks and buses. The Company also offers concept vehicles and automobile parts. The Company's products are distributed in both domestic and overseas markets. * * * As reported in the Troubled Company Reporter-Asia Pacific on December 11, 2009, Fitch Ratings revised the Outlook on Hyundai Motor's and Kia Motors' foreign currency Long-term Issuer Default Ratings to Positive from Negative, and simultaneously affirmed them at 'BB+'. The agency also affirmed the 'BB+' rating on both companies' senior unsecured debt and the Short-term IDRs at 'B'. HMC's and Kia's Long-term IDR was downgraded to 'BB+' with Negative Outlook in January 2009, due to concerns that the global auto market downturn would negatively impact the profitability and key credit metrics of the companies to an extent that is not commensurate to investment grade levels. KUMHO ASIANA: Petrochemical, Airline Units Set to Get Fresh Funds ----------------------------------------------------------------- Yonhap News reports that Kumho Asiana Group's creditor banks are set to provide fresh funds to its petrochemical and airline units in a bid to help them ease a liquidity squeeze. Yonhap, citing financial sources, says the Korea Development Bank, Kumho Asiana's main creditor, plans to seek agreements from other creditor banks starting this week over whether to supply KRW120 billion in funds to Asiana Airlines. Sources also told Yonhap that the KDB is in the process of seeking agreement among creditors over whether to provide a fresh KRW60 billion to Korea Kumho Petrochemical Co. The creditors decided on Dec. 30 to put two other ailing units -- Kumho Industrial Co. and Kumho Tire Co. -- under a debt rescheduling program. Meanwhile, the group's other two units -- Korea Kumho Petrochemical Co. and Asiana Airlines Inc. -- will have to improve their financial health through rigorous self- restructuring efforts as earlier agreed with creditors. The creditors would offer a total of KRW560 billion in funds to Kumho Asiana Group's four affiliates if the plan goes smoothly, according to Yonhap. As reported in the Troubled Company Reporter-Asia Pacific on August 6, 2009, The Korea Herald said Kumho Asiana has been suffering from a liquidity crisis, which observers describe as a typical case of acquisition indigestion. In a bid to ease a cash shortage, the conglomerate in July decided to re-sell the controlling stakes and management rights of Daewoo Engineering, after acquiring it in 2006 for KRW6.4 trillion. Bloomberg said creditors including Shinhan Bank may force the company to repay KRW3.9 trillion (US$3.2 billion) by June if they exercise an option to sell Daewoo Engineering shares they hold back to Kumho Asiana. Kumho Asiana unveiled a restructuring plan on January 5 that involves raising KRW1.3 trillion (US$1.1 billion) by selling off assets, while cutting costs via a 20% reduction in executive positions and wages, Yonhap reported. According to Bloomberg data, the group's net debt was KRW2.21 trillion as of September 30, 2009 -- more than double the KRW998.5 billion it had at the end of 2005 before Kumho Asiana bought 72% of Daewoo Engineering for KRW6.43 trillion. Kumho Tire's net debt stood at KRW1.71 trillion at the end of September 2009. About Kumho Asiana Established in 1946, Kumho Asiana Group is a large South Korean conglomerate, with subsidiaries in the automotive, industry, leisure, logistic, chemical and airline fields. The group is headquartered at the Kumho Asiana Main Tower in Sinmunno 1-ga, Jongno-gu, Seoul, South Korea. =============== M A L A Y S I A =============== AMBB (L): Moody's Cuts US$200MM Shares to B2 -------------------------------------------- Moody's Investors Service has downgraded the ratings on the hybrid Tier 1 capital securities of four Malaysian banks, in line with Moody's revised Guidelines for Rating Bank Hybrids and Subordinated Debt, published in November 2009. The affected banks are AmBank (M) Berhad and its subsidiary AMBB (L) Capital Ltd, CIMB Bank Berhad and its subsidiary SBB Capital Corporation, Malayan Banking Berhad and Public Bank Berhad. This concludes Moody's reviews for possible downgrade that began on November 18, 2009. Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that the support provided by national governments and central banks to a troubled bank would, to some extent, benefit subordinated debt holders as well as senior creditors. But, in many cases, systemic support for these instruments has not been forthcoming. Moody's revised methodology largely removes our previous assumptions of systemic support, resulting in the rating actions. In addition, the revised methodology generally widens the notching on a hybrid's rating that is based on the instrument's features. Summary Rating Action The characteristics of Moody's-rated Malaysian banks' hybrid Tier 1 capital securities enable them to be broadly classified into two categories, namely non-cumulative and cumulative. Non-cumulative securities with relatively weak coupon skip triggers are generally notched 3 notches from the bank's Adjusted BCA. On the other hand, cumulative securities with relatively weak coupon skip triggers are generally notched 2 notches below the bank's Adjusted BCA. The rating of the US$200 million Fixed-to-Floating Rate Step-up Non-cumulative Non-voting Guaranteed Preference Shares issued by AMBB (L) Capital Ltd, AMBB's subsidiary was lowered from Ba2 to B2, which is 3 notches below the Adjusted BCA of Ba2. The outlooks of these hybrid Tier 1 capital securities and AMBB's other ratings are stable. The rating of the US$200 million Non-Cumulative Guaranteed Preference Shares issued by SBB Capital Corp., CIMBB's subsidiary was lowered from Baa3 to Ba3, which is 3 notches below the Adjusted BCA of Baa3. The rating outlook of these securities is positive and in line with the positive outlook of CIMBB's BFSR; the outlook for the bank's other ratings are stable. The rating of the S$600 million Capital Securities with Step-up in 2018 issued by MBB was lowered from A3 to Baa2, which is 2 notches below the Adjusted BCA of A3. The outlooks for the bank's Tier 1 capital securities' rating and other ratings are stable. The rating of the US$200 million Innovative Tier 1 Capital Securities Callable with Step-up in 2016 issued by PBB was lowered from A3 to Baa2, which is 2 notches below the Adjusted BCA of A3. The outlooks for the bank's Tier 1 capital securities' rating and other ratings are stable. Rating Action in Detail The starting point in Moody's revised approach to rating hybrid securities is the Adjusted Baseline Credit Assessment. The Adjusted BCA reflects the bank's stand-alone credit strength, including parental and/or cooperative support, if applicable. The Adjusted BCA excludes systemic support. The Adjusted BCA is Ba2 for AMBB and is the same as the BCA, given that parental and/or cooperative support does not apply. The Adjusted BCA is Baa3 for CIMBB and is the same as the BCA, given that parental and/or cooperative support does not apply. The Adjusted BCA is A3 for MBB and is the same as the BCA, given that parental and/or cooperative support does not apply. The Adjusted BCA is A3 for PBB and is the same as the BCA, given that parental and/or cooperative support does not apply. The main features of the hybrid instruments issued by these banks and a discussion of the way Moody's rates them follow. The hybrid Tier 1 capital securities of AMBBC and SBBC have similar structures. Each of their hybrid Tier 1 capital securities consists of perpetual preference shares issued by them (with a subordinated guarantee by their parents), the proceeds of which are on-lent to their parents for working capital. Conditions for non-payment of interest include prevention by the regulator; the risk of breaching regulatory capital requirements as a result of the payment; or insufficient distributable reserves to make the payment. Deferred interest is non-cumulative. The preference shares only rank in priority to common equity. Moody's generally rates these securities 3 notches below the banks' Adjusted BCAs. MBB's hybrid Tier 1 capital securities have a maturity of 60 years. Interest may be deferred if no dividend has been declared or paid on ordinary shares during the 6 months prior to the securities' interest payment dates. However, interest will not be paid if it results in a breach of the minimum capital adequacy ratio. Any deferred interest is cumulative, but subject to a deferral limit. The deferred interest shall be settled with cash raised via the issuance of ordinary shares not exceeding 2% of weighted average shares (including treasury shares) or in the form of non-innovative Tier 1 capital instruments if market condition or share price performance is not supportive of the issuance of ordinary shares. The securities only rank in priority to common equity. Moody's generally rates these securities 2 notches below the banks' Adjusted BCAs. PBB's hybrid Tier 1 capital securities have a maturity of 30 years. Interest deferral may not be paid if common dividends are not declared or paid during the 12 months prior to the securities' interest payment dates. The interest payments are also cumulative, but subject to a deferral limit. The deferred interest shall be settled with cash raised via the issuance of ordinary shares, subject to market condition or share price performance. Moreover, a breach of the minimum capital adequacy ratio may result in the full redemption of the securities via cash from the sale of ordinary shares, the settlement of which would depend on market condition or the share's price performance. The securities only rank in priority to common equity. Moody's generally rates these securities 2 notches below the banks' Adjusted BCAs. The last rating actions for MBB and PBB were on November 18 when its hybrid Tier 1 capital securities were put on review for possible downgrade. The last rating action for CIMBB was on December 3, 2009 when the outlook for its Bank Financial Strength Rating was revised from Stable to Positive. The last rating action for AMBB was on February 22, 2010 when its BFSR was revised from D- to D and Baa2/P-3 deposit ratings were confirmed with stable outlooks. AmBank (M) Berhad, headquartered in Kuala Lumpur, had assets of MYR86.2 billion as at September 30, 2009. CIMB Bank Berhad., headquartered in Kuala Lumpur, had assets of MYR186.7 billion as at September 30, 2009. Malayan Banking Berhad, headquartered in Kuala Lumpur, had assets of MYR317.0 billion as at September 30, 2009. Public Bank Berhad, headquartered in Kuala Lumpur, had assets of MYR209.0 billion as at September 30, 2009. POLY TOWER: Obtains 90-Day Restraining Order -------------------------------------------- Poly Tower Ventures Berhad disclosed that on February 17, 2010, the Court has granted a restraining order pursuant to Section 176 (10) of the Companies Act, 1965 in favor of Poly Tower Ventures Berhad, Kinsplastics Sdn Bhd, Poly Carriers Industries (M) Sdn Bhd, Poly Asia Plastics Industries Sdn Bhd and Bestari Palms Sdn Bhd (PTV Group) whereby all proceedings in any action or proceeding against PTV Group including any intended and future proceedings are restrained and stayed for a period of ninety (90) days from the date of the Order. Poly Tower, on February 8, said it failed to submit its Quarterly Results for the period ended November 30, 2009 to Bursa Malaysia Securities. Based in Malaysia, Poly Tower Ventures Berhad (KUL:POLYTWR) -- http://www.polytowerventures.com/-- is an investment holding Company. The Company's segments include investment holding and property investment, manufacturing, and trading. The Company is engaged in manufacturing, marketing and exportation of plastic bags, films, related products, trading of plastic packaging, recycling of materials used by plastic industry, and property investment. The Company's subsidiaries include Poly Carriers Industries (Malaysia) Sdn. Bhd, Poly Packaging Products Pty. Ltd., Kinsplastic Sdn. Bhd., Kinsplastic Vietnam Co. Ltd, and Bestari Palms Sdn. Bhd. Poly Tower Ventures Berhad has been considered as an Affected Listed Issuer under Practice Note No. 17/2005 of the Bursa Malaysia Securities Berhad as the Company defaulted in its principal and interest payments pursuant to Practice Note No.1/2001 and is unable to provide a solvency declaration. RANHILL BERHAD: Ingersoll-Rand Files Wind Up Petition Against Unit ------------------------------------------------------------------ Ranhill Berhad furnished Bursa Malaysia Securities Berhad with details of the winding-up petition served against Ranhill Engineers and Constructors Sdn Bhd, a wholly owned subsidiary of the Company. Ranhill Berhad said a winding up petition was filed by Ingersoll-Rand Malaysia Co. Sdn Bhd against Ranhill Engineers in the Kuala Lumpur High Court. The petition against REC was presented to Court on January 28, 2010, and served on REC on February 17, 2010, for a claim MYR34,245.00 as at July 22, 2009, without any judgment or order from the Court. The claim against REC is due to a claim of the work done and completed by Ingersoll and also due to the expiry of twenty-one (21) days of the Statutory Notice Pursuant to Section 218 of the Companies Act, 1965. REC and Ingersoll are now in the midst of negotiations to settle the matter amicably. The petition has been slated for hearing on March 25, 2010. About Ranhill Berhad Ranhill Berhad is a Malaysia-based company. The company is engaged in the business of investment holding, provision of management services to its subsidiaries, and provision of engineering, procurement and construction services. It is engaged in the provision of engineering and construction services, as well as asset management and ownership, with focus on power, utilities and other infrastructure and resource assets. It has also undertaken oil and gas exploration, development and production activities. Ranhill Berhad is organized into four business segments: EPC & EPCM/PMC, power generation, transmission and distribution, water and others. In January 2008, the company acquired a dormant company, Ranhill Global Systems Sdn Bhd, making it a wholly owned subsidiary of the company. On June 20, 2008, the company disposed its entire equity interest in Bumi Parahyangan Ranhill Energi Citarum Pte Ltd and BPE became a 72.72% subsidiary of the Company through West Java Energy Pte Ltd (WJE). * * * As reported by the Troubled Company Reporter-Asia Pacific on March 26, 2009, Fitch Ratings affirmed Ranhill Berhad's Long-term foreign currency Issuer Default rating at 'B'. The Outlook is Stable. At the same time, the agency has affirmed the 'B-' (B minus) senior unsecured rating on the US$220 million notes due 2011 issued by Ranhill (L) Limited and guaranteed by Ranhill and its subsidiaries. On December 7, 2009, Standard & Poor's Ratings Services revised the outlook on Ranhill Bhd. to stable from negative and affirmed the 'B' long-term corporate credit rating on the company. At the same time, Standard & Poor's affirmed the 'B-' issue rating on the US$220 million five-year senior unsecured notes due in October 2011, issued by Ranhill (L) Ltd.--a fully owned special purpose vehicle of the company; the notes are fully guaranteed by Ranhill Bhd. SBB CAPITAL: Moody's Cuts US$200MM Shares to Ba3 ------------------------------------------------ Moody's Investors Service has downgraded the ratings on the hybrid Tier 1 capital securities of four Malaysian banks, in line with Moody's revised Guidelines for Rating Bank Hybrids and Subordinated Debt, published in November 2009. The affected banks are AmBank (M) Berhad and its subsidiary AMBB (L) Capital Ltd, CIMB Bank Berhad and its subsidiary SBB Capital Corporation, Malayan Banking Berhad and Public Bank Berhad. This concludes Moody's reviews for possible downgrade that began on November 18, 2009. Prior to the global financial crisis, Moody's had incorporated into its ratings an assumption that the support provided by national governments and central banks to a troubled bank would, to some extent, benefit subordinated debt holders as well as senior creditors. But, in many cases, systemic support for these instruments has not been forthcoming. Moody's revised methodology largely removes our previous assumptions of systemic support, resulting in the rating actions. In addition, the revised methodology generally widens the notching on a hybrid's rating that is based on the instrument's features. Summary Rating Action The characteristics of Moody's-rated Malaysian banks' hybrid Tier 1 capital securities enable them to be broadly classified into two categories, namely non-cumulative and cumulative. Non-cumulative securities with relatively weak coupon skip triggers are generally notched 3 notches from the bank's Adjusted BCA. On the other hand, cumulative securities with relatively weak coupon skip triggers are generally notched 2 notches below the bank's Adjusted BCA. The rating of the US$200 million Fixed-to-Floating Rate Step-up Non-cumulative Non-voting Guaranteed Preference Shares issued by AMBB (L) Capital Ltd, AMBB's subsidiary was lowered from Ba2 to B2, which is 3 notches below the Adjusted BCA of Ba2. The outlooks of these hybrid Tier 1 capital securities and AMBB's other ratings are stable. The rating of the US$200 million Non-Cumulative Guaranteed Preference Shares issued by SBB Capital Corp., CIMBB's subsidiary was lowered from Baa3 to Ba3, which is 3 notches below the Adjusted BCA of Baa3. The rating outlook of these securities is positive and in line with the positive outlook of CIMBB's BFSR; the outlook for the bank's other ratings are stable. The rating of the S$600 million Capital Securities with Step-up in 2018 issued by MBB was lowered from A3 to Baa2, which is 2 notches below the Adjusted BCA of A3. The outlooks for the bank's Tier 1 capital securities' rating and other ratings are stable. The rating of the US$200 million Innovative Tier 1 Capital Securities Callable with Step-up in 2016 issued by PBB was lowered from A3 to Baa2, which is 2 notches below the Adjusted BCA of A3. The outlooks for the bank's Tier 1 capital securities' rating and other ratings are stable. Rating Action in Detail The starting point in Moody's revised approach to rating hybrid securities is the Adjusted Baseline Credit Assessment. The Adjusted BCA reflects the bank's stand-alone credit strength, including parental and/or cooperative support, if applicable. The Adjusted BCA excludes systemic support. The Adjusted BCA is Ba2 for AMBB and is the same as the BCA, given that parental and/or cooperative support does not apply. The Adjusted BCA is Baa3 for CIMBB and is the same as the BCA, given that parental and/or cooperative support does not apply. The Adjusted BCA is A3 for MBB and is the same as the BCA, given that parental and/or cooperative support does not apply. The Adjusted BCA is A3 for PBB and is the same as the BCA, given that parental and/or cooperative support does not apply. The main features of the hybrid instruments issued by these banks and a discussion of the way Moody's rates them follow. The hybrid Tier 1 capital securities of AMBBC and SBBC have similar structures. Each of their hybrid Tier 1 capital securities consists of perpetual preference shares issued by them (with a subordinated guarantee by their parents), the proceeds of which are on-lent to their parents for working capital. Conditions for non-payment of interest include prevention by the regulator; the risk of breaching regulatory capital requirements as a result of the payment; or insufficient distributable reserves to make the payment. Deferred interest is non-cumulative. The preference shares only rank in priority to common equity. Moody's generally rates these securities 3 notches below the banks' Adjusted BCAs. MBB's hybrid Tier 1 capital securities have a maturity of 60 years. Interest may be deferred if no dividend has been declared or paid on ordinary shares during the 6 months prior to the securities' interest payment dates. However, interest will not be paid if it results in a breach of the minimum capital adequacy ratio. Any deferred interest is cumulative, but subject to a deferral limit. The deferred interest shall be settled with cash raised via the issuance of ordinary shares not exceeding 2% of weighted average shares (including treasury shares) or in the form of non-innovative Tier 1 capital instruments if market condition or share price performance is not supportive of the issuance of ordinary shares. The securities only rank in priority to common equity. Moody's generally rates these securities 2 notches below the banks' Adjusted BCAs. PBB's hybrid Tier 1 capital securities have a maturity of 30 years. Interest deferral may not be paid if common dividends are not declared or paid during the 12 months prior to the securities' interest payment dates. The interest payments are also cumulative, but subject to a deferral limit. The deferred interest shall be settled with cash raised via the issuance of ordinary shares, subject to market condition or share price performance. Moreover, a breach of the minimum capital adequacy ratio may result in the full redemption of the securities via cash from the sale of ordinary shares, the settlement of which would depend on market condition or the share's price performance. The securities only rank in priority to common equity. Moody's generally rates these securities 2 notches below the banks' Adjusted BCAs. The last rating actions for MBB and PBB were on November 18 when its hybrid Tier 1 capital securities were put on review for possible downgrade. The last rating action for CIMBB was on December 3, 2009 when the outlook for its Bank Financial Strength Rating was revised from Stable to Positive. The last rating action for AMBB was on February 22, 2010 when its BFSR was revised from D- to D and Baa2/P-3 deposit ratings were confirmed with stable outlooks. AmBank (M) Berhad, headquartered in Kuala Lumpur, had assets of MYR86.2 billion as at September 30, 2009. CIMB Bank Berhad., headquartered in Kuala Lumpur, had assets of MYR186.7 billion as at September 30, 2009. Malayan Banking Berhad, headquartered in Kuala Lumpur, had assets of MYR317.0 billion as at September 30, 2009. Public Bank Berhad, headquartered in Kuala Lumpur, had assets of MYR209.0 billion as at September 30, 2009. WWE HOLDINGS: Dec. 31 Balance Sheet Upside Down by MYR6.47 Mil. --------------------------------------------------------------- WWE Holdings Bhd balance sheet at December 31, 2009, showed total assets of MYR227.81 million and total liabilities of MYR234.28 million, resulting in a shareholders' deficit of MYR6.47 million. The Company's balance sheet at Dec. 31, 2009, also showed strained liquidity with MYR203.79 million in total current assets available to pay MYR205.67 million in total current liabilities. In the first quarter ended Dec. 31, 2009, WWE Holdings reported net income of MYR298,000, compared with a net income of MYR1.52 million in the same quarter of 2008. For the current quarter, the group registered revenue of MYR3.95 million as compared to revenue of MYR4.57 million in the preceding year quarter. The revenue for the current year quarter is derived solely from the Operation and Maintenance (O&M) works on the Jelutong Sewage Treatment Plant (JSTP) which commenced since May 11, 2008. About WWE Holdings WWE Holdings Bhd is engaged in investment holding and is a contractor for the provision of engineering services related to design, fabrication, installation and commissioning of water, wastewater treatment, environmental facilities and construction activities. The company's subsidiaries include WWE Construction Sdn. Bhd., a contractor for the provision of engineering services related to design, fabrication, installation and commissioning of water, wastewater treatment, environmental facilities and construction activities; WWE Industries Sdn. Bhd., which provides installation of mechanical and electrical works connected with water, wastewater treatment and environmental engineering, and Quality Water Technology Sdn. Bhd., which undertakes research and development activities to develop new technologies related to water and wastewater. On March 23, 2006, WWE acquired the remaining 30% equity interest in Quality Water. * * * As reported by the Troubled Company Reporter-Asia Pacific on March 7, 2008, the company was classified as an Affected Listed Issuer under PN 17 of Bursa Malaysia Securities Berhad's Listing Requirements because the company's auditors were unable to ascertain the recoverability of the amounts and the outcome of the legal suit brought against the company. Thus, the auditors are unable to form an opinion on the financial statements of the Group for the financial year ended September 30, 2007. WWE HOLDINGS: Disclosed Revision to 40-Mil. Shares Placement ------------------------------------------------------------ WWE Holdings Berhad on February 23 signed a supplemental letter with the vendors, Peribadi Johan and Newco, in relation to a Restructuring Agreement dated October 20, 2009, to vary the terms of the Proposed Placement. The Proposed Placement will involve a private placement of up to 40,000,000 new Newco Shares at an issue price of MYR0.50 per Newco Share. The Revised Placement is expected to raise gross proceeds of MYR20,000,000. The proceeds raised from the Revised Placement will be utilized for defraying of expenses incidental to the Proposed Restructuring Scheme, which amounts to MYR2,000,000 and for working capital, which amounts to MYR18,000,000. All the other terms of the announcement dated October 20, 2009, remain unchanged. HwangDBS Investment Bank Berhad and Hong Leong Investment Bank Berhad (formerly known as HLG Credit Berhad and HLG Credit Sdn Bhd), being the Joint Advisers to WWE, on October 20, 2009, entered into: (i) a restructuring agreement with Char Hon Wah, Char Hon Loong, Char Seow Peng, Capaian Bitara Sdn Bhd, Amat Megah Holdings Sdn Bhd and Able Realty Sdn Bhd, the shareholders of Malpakat Construction Sdn Bhd, Peribadi Johan Sdn Bhd and Malpakat Resources Sdn Bhd, a special purpose vehicle which shall assume the listing status of WWE ("Restructuring Agreement"); and (ii) a conditional share sale agreement with Peribadi Johan for the proposed disposal of the entire paid-up share capital of WWE to Peribadi Johan. The restructuring exercise set out in the Restructuring Agreement comprises of (i) Proposed Share Split; (ii) Proposed Share Exchange; (iii) Proposed Malpakat Acquisition; (iv) Proposed Placement; (v) Proposed Offer for Sale; (vi) Proposed Transfer; (vii) Proposed Exemption; and (viii) Proposed Disposal. A full-text copy of the Requisite Announcement is available at no charge at http://ResearchArchives.com/t/s?5493 About WWE Holdings WWE Holdings Bhd is engaged in investment holding and is a contractor for the provision of engineering services related to design, fabrication, installation and commissioning of water, wastewater treatment, environmental facilities and construction activities. The company's subsidiaries include WWE Construction Sdn. Bhd., a contractor for the provision of engineering services related to design, fabrication, installation and commissioning of water, wastewater treatment, environmental facilities and construction activities; WWE Industries Sdn. Bhd., which provides installation of mechanical and electrical works connected with water, wastewater treatment and environmental engineering, and Quality Water Technology Sdn. Bhd., which undertakes research and development activities to develop new technologies related to water and wastewater. On March 23, 2006, WWE acquired the remaining 30% equity interest in Quality Water. * * * As reported by the Troubled Company Reporter-Asia Pacific on March 7, 2008, the company was classified as an Affected Listed Issuer under PN 17 of Bursa Malaysia Securities Berhad's Listing Requirements because the company's auditors were unable to ascertain the recoverability of the amounts and the outcome of the legal suit brought against the company. Thus, the auditors are unable to form an opinion on the financial statements of the Group for the financial year ended September 30, 2007. ==================== N E W Z E A L A N D ==================== GENEVA FINANCE: S&P Downgrades Long-Term Rating to 'CC' ------------------------------------------------------- Standard & Poor's Ratings Services said that it had lowered its long-term rating on Geneva Finance Ltd. to 'CC' from 'CCC'. The rating is also placed on CreditWatch with negative implications. At the same time, the insurer financial strength rating on Geneva's captive insurer, Quest Insurance Group Ltd., was lowered to 'CC' from 'CCC', and placed on CreditWatch with negative implications. "The downgrade follows Geneva's announcement that it has negotiated an extension of its funding facility from BOS International (Australia) Ltd. (A+/Negative), which S&P believes will result in a partial deferment of principal debenture repayments on March 31, 2010, under existing terms and conditions," said Standard & Poor's credit analyst Derryl D'silva. Under the revised agreement, the company has proposed that debenture and subordinated note investors defer approximately 50% of their currently scheduled principal repayments, which Standard & Poor's would view as a selective default. Geneva will, however, continue to pay interest each month at the individual investor contracted interest rate. This revised arrangement is subject to approval from Geneva's debenture and subordinate note holders, which is expected to take place in the last week of March 2010. The company has expressed the view that its proposed course of action is the best way for the company to achieve an orderly repayment of its banking facility, due in April 2011, and is in the best long-term interests of debenture and subordinated note holders. While this may or may not prove to be the case, it is likely nonetheless to cause a selective default on existing obligations in the short term. The CreditWatch placement reflects S&P's view that the next key milestone requiring a review by Standard & Poor's of its ratings on Geneva and Quest is likely to be after debenture and subordinate note holders have considered the revised arrangement, in the last week of March 2010. "Standard & Poor's view is that investors are likely to approve the plan, which would result in Geneva having completed a distressed exchange offer that would result in a payment default, and S&P would subsequently lower the rating to 'SD' on the day the approval comes through", said Mr. D'silva. If and when the approval is successfully completed, it is likely that the rating on Geneva will be raised to the 'CC' rating category from 'SD' but with a negative outlook. At the same time, the 'CC' rating on Quest is likely to be affirmed with a negative outlook. On the other hand, should investors reject the plan, Standard & Poor's view is that the 'CC' rating on Geneva and Quest would be affirmed and remain on CreditWatch negative. This would be based on S&P's view that management may have to gradually wind down the operations of Geneva and Quest. If this were to eventuate such that it resulted in a payment default by Geneva, S&P would lower the rating on Geneva to 'D', and could lower the rating on Quest to 'R'. ********* 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 ***