/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/100624.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, June 24, 2010, Vol. 13, No. 123 Headlines A U S T R A L I A DALBY BIO-REFINERY: Ernst and Young Appointed as Receivers FORGECAST PTY: Exec Faces Legal Action Over Unpaid Entitlements SONRAY CAPITAL: Calls in Administrator Ferrier Hodgson H O N G K O N G OKI SEMICONDUCTOR: Placed Under Voluntary Wind-Up Proceedings ORIENTAL MACHINERY: Commences Wind-Up Proceedings ORIENTAL SUN: Members' Final Meeting Set for July 19 PAPYRUS TRADE: Members' Final General Meeting Set for July 23 PFL PACIFIC: Placed Under Voluntary Wind-Up Proceedings P.I.C. ASSOCIATION: Placed Under Voluntary Wind-Up Proceedings REGENT SUMMIT: Wardell and Ip Appointed as Liquidators SINOBOND INVESTMENT: Placed Under Voluntary Wind-Up Proceedings I N D I A ASACO PRIVATE: ICRA Cuts Rating on INR155MM Fund Based Limits ASVINI FISHERIES: ICRA Assigns 'LBB-' Rating on INR150MM LT Loans ARSH DAIRYMAX: CARE Places 'CARE BB' Rating on INR23.75cr LT Loans BHAVNA PROPERTY: ICRA Assigns 'LBB+' Rating on INR70MM Bank Limits JAIPURIA INFRASTRUCTURE: ICRA Rates INR520MM LT Loan at 'LB-' KADALKANNY FROZEN: ICRA Withdraws 'LBB' Rating MAHAVIR SHIP: ICRA Assigns 'LBB-' Rating on INR98 Million LT Loans MOHAN SPINTEX: ICRA Reffirms 'LBB+' Rating on INR342.4MM LT Loans NATIONAL STEEL: CARE Assigns 'CARE BB+' Rating on LT Bank Debts NSIL EXPORTS: CARE Assigns 'CARE BB+' Rating on LT Bank Facilities OSNAR CHEMICAL: ICRA Assigns 'LBB' Rating on Various Bank Debts PRINCE GEM: ICRA Reaffirms 'LBB+' Rating on INR32.5MM Term Loans SWADESHI AAHAR: ICRA Assigns 'LBB' Rating on Various Bank Debts I N D O N E S I A BERAU COAL: Moody's Assigns 'B2' Corporate Family Rating BERAU COAL: S&P Assigns 'B+' Long-Term Corporate Credit Rating J A P A N JAPAN AIRLINES: Seeks 3,300 More Early Retirement Applicants JLOC 36: S&P Puts Note Ratings on CreditWatch Negative JVC KENWOOD: Regulator Recommends JPY1.5BB Fine for JVC & Victor M A L A Y S I A LCL CORP: CIMB Islamic Bank Serves Writ of Summons Over Debt LCL CORP: Court Enters Wind Up Order Against LCL Wood Industries N E W Z E A L A N D AIR NEW ZEALAND: Seeks Legal Costs From Former Flight Attendant AORANGI SECURITIES: Serious Fraud Office Begins Probe BRIDGECORP LTD: Receivers Lose Control of Momi Resort in Fiji BRIDGECORP LTD: Two Directors Face New Charges Under Crimes Act DORCHESTER PACIFIC: Provides More Info Ahead of Vote on New Plan SOUTH CANTERBURY: S&P Downgrades Long-Term Rating to 'B-' T A I W A N AMERICAN INT'L: Deadline for Unit Sale to China Strategic Moved - - - - - ================= A U S T R A L I A ================= DALBY BIO-REFINERY: Ernst and Young Appointed as Receivers ---------------------------------------------------------- The Dalby Bio-Refinery has been placed into voluntary administration with creditors calling in Ernst and Young as receivers to review the business, ABC News reports. ABC News relates receiver Adam Nikitins said the bio-refinery owes more than AU$80 million to creditors. "The current strategy is to certainly continue operations at the plant -- there are no planned redundancies," he said. Ernst and Young said it is preparing the business for a possible sale later this year. Dalby Bio-Refinery -- http://www.dbrl.com.au/-- operates Queensland's first grain-to-ethanol production facility. The company was established in 2002 to take advantage of the federal government's clean fuels policy. FORGECAST PTY: Exec Faces Legal Action Over Unpaid Entitlements --------------------------------------------------------------- James Thomson at SmartCompany reports that the Australian Workers Union and the Australian Manufacturing Workers Union are set to launch legal action against the director of Forgecast Pty Ltd. under never-before-used provisions of the Fair Work Act. SmartCompany relates that the unions have engaged law firm Slater & Gordon to launch a claim against Ian Beynon, the sole director of Forgecast and another company called Ideal Pty Ltd, following the collapse of Victorian company Forgecast Australia in November 2009. According to the report, the legal claim covers 57 former employees of the company, who say they are owed more than AU$2 million in entitlements under the company's enterprise agreement. As some of the employees had worked with the company for more than 35 years, the largest claims are worth up to AU$98,000. The report, citing Slater and Gordon industrial relations lawyer Marcus Clayton, says the claim is believed to be the first under the provisions in the Fair Work Act that allow workers to sue company directors personally. "The union's case is that Mr. Beynon was involved in Forgecast's contraventions of the AWU and AMWU agreements, and the Fair Work Act provides that a person involved in such a contravention is equally as liable as a company," SmartCompany quoted Mr. Clayton as saying. "If successful, this legal action will set a precedent for future litigation where workers have been left without their entitlements after a company has gone broke." Headquartered in Melbourne, Australia, Forgecast Pty Ltd -- http://www.forgecast.com.au/-- manufactures door hardware, automotive components, leisure goods, plumbing fittings, industrial valves and fittings, munitions and aerospace components. The company has a manufacturing operation in Tijuana, Mexico. Forgecast Pty Ltd went into liquidation in November 2009. The company was placed in administration in mid-November 2009 before being placed in liquidation on November 26 by a secured creditor. Receivers Stephen Dixon and Laurie Fitzgerald from accounting firm BDO Kendalls said the receivers will continue to work with the AMWU "to ensure the best possible outcome for all involved". SONRAY CAPITAL: Calls in Administrator Ferrier Hodgson ------------------------------------------------------ Sonray Capital Markets Group has appointed Ferrier Hodgson partners George Georges and John Lindholm as Voluntary Administrators. Companies affected included Sonray Capital Markets Pty Ltd, Sonray Capital Markets (Qld) Pty Ltd, Sonray Capital Markets Nominees Pty Ltd, and Sonray Advisory Pty Ltd. Administrator Ferrier Hodgson said the companies will cease trading immediately and the approximately 3,000 client accounts have been suspended while the administrators carry out an investigation into the circumstances of the collapse. The administrators will also meet with the Australian Securities and Investments Commission. Mr. Georges said a creditors meeting will be held next week. "We understand the concerns of investors at this difficult time and ask for their patience while we carry out the investigation," Mr. Georges said. "Our job will be to provide creditors with clarity about what happened to Sonray and we will do all we can to keep creditors informed about any developments." About Sonray Capital Based in Melbourne, Australia, Sonray Capital Markets -- http://www.sonray.com.au/-- specializes in online and advisory services in global equities, global futures, global Contracts For Difference (CFDs) and Margin Foreign Exchange. The company has operated since 2003 and employs about 70 people in offices in Melbourne and on the Gold Coast. ================ H O N G K O N G ================ OKI SEMICONDUCTOR: Placed Under Voluntary Wind-Up Proceedings ------------------------------------------------------------- At an extraordinary general meeting held on June 8, 2010, sole shareholder of OKI Semiconductor Hong Kong Limited resolved to voluntarily wind up the company's operations. The company's liquidators are: Seng Sze Ka Mee Natalia Susan Y H Lo Three Pacific Place, Level 28 1 Queen's Road East Hong Kong ORIENTAL MACHINERY: Commences Wind-Up Proceedings ------------------------------------------------- Members of Oriental Machinery (Chaina) Limited, on June 10, 2010, passed a resolution to voluntarily wind-up the company's operations. The company's liquidators are: Lui Wan Ho To Chi Man 17th Floor, Kam Sang Building 255 Des Voeux Road Central, Sheng Wan Hong Kong ORIENTAL SUN: Members' Final Meeting Set for July 19 ---------------------------------------------------- Members of Oriental Sun International Limited will hold their final meeting on July 19, 2010, at 10:00 a.m., at Unit 1110, Lippo Sun Plaza, 28 Canton Road, Tsimshatsui, Kowloon, in Hong Kong. At the meeting, Wong Pong Kwok Ivan, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. PAPYRUS TRADE: Members' Final General Meeting Set for July 23 ------------------------------------------------------------- Members of Papyrus Trade Services Limited will hold their final general meeting on July 23, 2010, at 3:30 p.m., at 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. PFL PACIFIC: Placed Under Voluntary Wind-Up Proceedings ------------------------------------------------------- At an extraordinary general meeting held on June 7, 2010, creditors of PFL Pacific Container Lines Limited resolved to voluntarily wind up the company's operations. The Chairman is Kwok Tze Tai. P.I.C. ASSOCIATION: Placed Under Voluntary Wind-Up Proceedings -------------------------------------------------------------- At an extraordinary general meeting held on June 10, 2010, creditors of P.I.C. Association Limited resolved to voluntarily wind up the company's operations. The company's liquidators are: Leung Chung Yin Wong Ming Lai Rm 306, 3/F., Dah Sing Life Building 99-105 Des Voeux Road Central, HK REGENT SUMMIT: Wardell and Ip Appointed as Liquidators ------------------------------------------------------ James Wardell and Mr. Jackson Ip on June 10, 2010, were appointed as liquidators of Regent Summit Holdings Limited. The liquidators may be reached at: James Wardell Mr. Jackson Ip Room 1601-1602, 16/F One Hysan Avenue Causeway Bay, Hong Kong SINOBOND INVESTMENT: Placed Under Voluntary Wind-Up Proceedings --------------------------------------------------------------- At an extraordinary general meeting held on June 11, 2010, members of Sinobond Investment Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Mr. Lee King Yue 72-76/F., Two International Finance Centre 8 Finance Street Central, Hong Kong ========= I N D I A ========= ASACO PRIVATE: ICRA Cuts Rating on INR155MM Fund Based Limits ------------------------------------------------------------- ICRA has downgraded the long term rating to the INR155 million fund based limits of Asaco Private Limited from LBB- to LB+. ICRA has retained the A4 rating assigned to the INR175 million short term non fund based limits of APL. The rating downgrade factors in the past delays in debt servicing following delays in payments by key customers which has resulted in a stretched liquidity position for APL. The rating also takes into account small size of operations of the company, which results in limited bargaining power vis-a-vis suppliers and customers and lower economies of scale which in turn have resulted in lower net margins in the past. The rating is also constrained by the weak financial profile of the company in the past indicated by high gearing levels, moderate debt coverage indicators and negative cash flows (adjusted for working capital). However the rating derives some comfort from APL's long and established position with reputed defence organizations, promoters experience in running this business and good relationships with the clients. About Asaco Private Asaco Private Limited was founded in 1969 by Mr. K. Mohandas (presently MD) to supply parts to the Indian Metal Forming and Cable Industries. Later on with their technical collaboration with European Companies the company is now manufacturing Cable Extrusion Lines & Optical Fibre Cable Equipment, Tension Levelling Lines and allied equipment, Diamond dies and tools for wire & cable industry. The company is a closely held by promoters and his family members having manufacturing facilities located in Hyderabad where manufacturing of engineering machineries takes place. In FY 2009, the company earned a Profit after Tax (PAT) of INR7.95 million on an operating income of INR300.86 million as compared to a PAT of INR4.76 million on an operating income of INR291.61 million in FY 2008. ASVINI FISHERIES: ICRA Assigns 'LBB-' Rating on INR150MM LT Loans ----------------------------------------------------------------- ICRA has assigned 'LBB-' rating to the INR150.0 million long term Non fund based facility of Asvini Fisheries Private Limited. The outlook on the long term rating is stable. ICRA has also assigned A4 rating to the INR155.0 million short term fund based facility and INR7.5 million short term non fund based facility of AFPL. The ratings reflect moderate scale of operations of the company with marginal product differentiation, highly fragmented nature of the industry, low entry barriers in the business, intense competition in the export market from other competing countries, threat from cheaper varieties of shrimps & seafood and vulnerability to the outbreak of any disease. Further, the rating also factors in the high client concentration risk, clustered geographical base, susceptibility of margins to volatility in foreign currency exchange rates, and weak financial profile characterized by net loss in FY09 coupled with low coverage indicators. Nevertheless, the ratings also takes into account the significant experience of promoters in the sea food export business and comfortable gearing position as on March 31, 2009. About Asvini Fisheries Asvini Fisheries Private Limited was incorporated in 1986 and the company is closely held by the promoters and their family. AFPL primarily deals in processing and exports of shrimps. The company has state of art facility at Bhimavaram (AndhraPradesh) and Tuticorin (TamilNadu) with processing facilities of 32 MT per day and 24 MT per day, respectively. AFPL has total storage capacity of 770 MT. The company manufactures different varieties of shrimps like Head On, Head Less, Peeled & De-veined, Tail On, Tail Off, Butterfly and Pulled Vein. AFPL has also started processing shrimps with different flavors like ginger, garlic & lemon and these products will be marketed in the next fiscal. The company has recorded a net loss of INR21.2 million on an operating Income of INR627.8 million for the period ended March 31, 2009. ARSH DAIRYMAX: CARE Places 'CARE BB' Rating on INR23.75cr LT Loans ------------------------------------------------------------------ CARE Assigns 'CARE BB-' and 'PR4' ratings to the bank facilities of Arsh Dairymax Pvt. Ltd. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 23.75 'CARE BB-' Short-term Bank Facilities 1.00 'PR4' Rating Rationale The ratings are constrained by Arsh Dairymax Pvt. Ltd.'s short track record of operations, small procurement base, weak financial risk profile characterized by stressed liquidity position, high overall gearing and low equity base. The ratings are further constrained by its weak competitive position as compared to other established players mainly dairy cooperatives. The ratings, however, factor in promoters' experience in dairy industry, though at a small scale, and its eligibility for various incentives from central and state government. The ability of the company to improve its operating performance including scale of operations and its procurement base along with improvement in its financial risk profile are key rating sensitivities. Incorporated in 2008, ADPL was promoted by Shri Anil Kumar Goel, Shri Om Prakash Gupta, Shri Rajesh Bansal and Shri Anil Bansal to set up a milk processing plant of 5,00,000 litres per day at Sikar, Rajasthan. The rationale for setting up the unit was to take advantage of various incentives from central and state government, growing demand for dairy products and deficit milk processing capacity in the state of Rajasthan. ADPL's plant was commissioned in Aug.2009 at a cost of INR22.68 with term loan of INR12.46 crore and equity of INR10.22 crore. ADPL is engaged in manufacturing of dairy products like ghee, butter, milk powder and processed milk. Milk is purchased from local private chilling centres and finished products are sold to institutional buyers and retail dairy parlors. The commencement of operations of ADPL (in Aug. 2009) coincided with the peak season and hence it got job work from Rajasthan Cooperative Dairy Federation (RCDF) with the later having deficit processing capacity during peak season. BHAVNA PROPERTY: ICRA Assigns 'LBB+' Rating on INR70MM Bank Limits ------------------------------------------------------------------ ICRA has assigned an 'LBB+' rating to the INR70.0 million fund based bank limits and INR30.0 million non-fund based limits of Bhavna Property Developers Limited. The rating is constrained by BPDL's small scale of operations, low operating profit margins and high geographic, client and project concentration risks in the company's order book. The rating however, favorably factors in BPDL's experienced management team and established relationships with its key clients in Gujarat government departments for whom BDPL has executed numerous repeat orders. Incorporated in 1995, Bhavna Property Developers Limited executes civil construction contracts largely for the departments of Government of Gujarat. The promoter-directors, Mr. Karsanbhai Prajapati and his brothers have over three decades of experience in the civil construction industry in Gujarat. BDPL obtained AA- class registration with the Government of Gujarat Roads & Buildings (R&B) department in 1997, and over the years has executed a number of projects for various Gujarat government departments, particularly the R&B department and Gujarat State Police Housing Corporation Limited. JAIPURIA INFRASTRUCTURE: ICRA Rates INR520MM LT Loan at 'LB-' ------------------------------------------------------------- ICRA has assigned an 'LB-'rating to the INR520 million, long-term loan facilities of Jaipuria Infrastructure Developers Private Limited. ICRA's rating factors in the poor mall occupancy levels; poor retail area off-take; substantial inventory and debtor build- up on account of ongoing sluggishness in the real estate market. The company has been successful in offloading more than 96% of the residential area but its project surplus margins have been inadequate as compared to its high financial costs. Moreover, the ongoing sluggishness in the real estate market has affected the sales and lease progress of the mall and poor occupancy has in turn led to non-payment of lease rentals by the remaining tenants. All of these factors have resulted in inadequate cash generation from operations and, therefore, the company had to resort to debt restructuring for its term loans. The company now makes its interest payments after a delay of a few weeks. On the positive side, the project construction is completed, thereby lowering execution risks. Jaipuria Infrastructure Developers Pvt Limited operates as a real estate company under the Jaipuria Group. The company was promoted by the SK Jaipuria Group (of Jaipuria family) in 2004 to develop, construct and sell a residential apartment-cum-commercial space project (spread over 13.5 acres) under the name of "Sunrise Greens" located at Indirapuram, Ghaziabad and also develop and operate (as well as sell) a mall under the name of "Sunrise Plaza" adjacent to its residential project in Indirapuram, Ghaziabad. The construction of both the projects is completed and the mall of the company has commenced operations. KADALKANNY FROZEN: ICRA Withdraws 'LBB' Rating ---------------------------------------------- ICRA has withdrawn the 'LBB' rating of Kadalkanny Frozen Foods and reaffirmed the A4 rating to the INR135.0 million short term fund based facilities and INR90.0 million short term non fund based limits of Kadalkanny Frozen Foods. The reaffirmed rating continues to factor in the high geographic concentration risk, risks arising from exposure to volatility in raw material prices and foreign exchange rate and the weak financial profile of the company characterized by low profit margins/ accruals and high gearing. The partnership nature of the business and the regular withdrawal of profits by the promoters further restrict the financial flexibility of the company. The partners have withdrawn significant capital from the company in the recent past which has deteriorated the equity base leading to high gearing levels (Total Debt/ Tangible Net Worth of 2.9 times as on March 31, 2009). The rating also takes into account the intense competition in the sea foods exports industry which coupled with marginal product differentiation, greatly restricts KFF's pricing flexibility. The rating, however, recognizes the industry experience of the promoters of KFF and its established position in the sea foods business. About Kadalkanny Frozen KFF is closely held by the promoters of the Tuticorin-based Diamond Sea Food group, which was founded in 1976 by Mr. Devanesam and is presently managed by his five sons. The DSF group is primarily engaged in the processing and export of sea foods (mainly shrimp, cuttlefish and squid) through three other group entities besides KFF ? Diamond Sea Food Exports, Theva & Co. and Edhayam Frozen Foods Private Limited. The group has a limited presence in other segments of the sea foods value chain (feed sales, hatching and aquaculture) through Theva Erudhayam Aqua Farms, King Ice Plant and Edhayam & Co. The group has recently also set up a shopping mall-cum-hotel venture in Tuticorin under DSF Grand Plazas Private Limited. KFF exports shrimps (under the brands Kanni, Arokia and Sun) to Japan and has a shrimp processing facility at Tuticorin with an installed capacity of around 330 tonnes per month. MAHAVIR SHIP: ICRA Assigns 'LBB-' Rating on INR98 Million LT Loans ------------------------------------------------------------------ ICRA has assigned LBB- rating to the INR 98.0 million long-term, fund-based credit facilities of M/s. Mahavir Ship Breakers. The outlook for the long term rating is stable. ICRA has also assigned A4 rating to the INR 120.0 million short-term, non- fund based credit facilities of MSB. The assigned ratings are constrained by MSB's modest scale of operations, weak financial profile with low profitability, negative net worth due to significant losses in FY09 and price risks inherent in the business given the substantial lead time between purchase of ship and sale of scrap. The firm also remains exposed to various environmental and regulatory risks due to the nature of business and any delay in obtaining the requisite approvals can result in high working capital requirement for the firm. Moreover, the profit margins of firm remain vulnerable to fluctuations in foreign exchange rates. However, the assigned ratings derive comfort from MSB's established presence in the ship breaking business, long standing experience of the promoters, its diversified client base and a favorable outlook for ship breaking industry in the near term. About Mahavir Ship M/s. Mahavir Ship Breakers is a partnership firm promoted by Mr. Mukesh Jain to venture into ship breaking business in 1983. The Jain family has been in steel business since last two generations. MSB is one of the oldest ship breaking firms at Alang and has been allotted Plot no. 18 by the Gujarat Maritime Board (GMB) for this purpose. The firm is dealing only in Ship Breaking activity and does not have any associate concern. The firm has reported an operating income of INR158.9 million and a net loss after tax of INR94.4 million for the financial year ending March 2009. Moreover, according to provisional financials, the company is expected to report an operating income of INR152.6 million and a net profit after tax of INR4.4 million for the nine months ending December 31, 2009. MOHAN SPINTEX: ICRA Reffirms 'LBB+' Rating on INR342.4MM LT Loans ----------------------------------------------------------------- ICRA has reaffirmed an 'LBB+' rating to the INR342.4 million long term loans and INR153.0 million fund based limits of Mohan Spintex India Limited. The long term rating has been assigned a stable outlook. ICRA has also reaffirmed an A4+ rating to the INR17.0 million non fund based limits of MSIL. The ratings draw comfort from the favorable location of MSIL's spinning plant in a major cotton growing belt of Andhra Pradesh, relatively low capital cost of plant, involvement of promoters in day to day operations of the company and support rendered by the promoters in the form of equity infusion and interest free unsecured loan. The assigned ratings are however constrained by MSIL's small scale of operation, its stretched capital structure and weak coverage indicators. ICRA also notes that company is undertaking fairly large size debt funded capacity expansion in the near future which is likely to further deteriorate its already stretched capital structure. Incorporated in 2005, MSIL is 100% cotton spinning mill located in Krishna District, near Vijayawada, Andhra Pradesh, an area which is the major cotton producing belt of the state. Mr. V. Mohan Rao, the company's Chairman is a first generation businessman trading in cigars and fertilizers for over 50 years. The promoters set up their spinning mill aided by the subsidy available under Technology Upgradation Fund Scheme (TUFS) and other benefits like subsidized power that state of Andhra Pradesh offered. Starting with an installed capacity of 7,200 spindles in October 2006, MSIL has increased it to the planned 30,000 spindles in April 2008 and it is further expanding its capacity to 71,760 spindles by FY12. Recent Results As per provisional FY10 results, MSIL has reported a net profit of INR51.0 million on an operating income of INR516.3 million. NATIONAL STEEL: CARE Assigns 'CARE BB+' Rating on LT Bank Debts --------------------------------------------------------------- CARE has assigned the 'CARE BB+' rating to the long-term bank loans/facilities and 'PR 4' rating to the short-term bank loans/facilities of National Steel and Agro Industries Limited. Facilities with 'Double B' rating are considered to offer inadequate safety for timely servicing of debt obligations and carry high credit risk. This rating is applicable for facilities having tenure of more than one year. Facilities with 'PR 4' 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 tenure up to one year. 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 ---------- ----------- ------- Outstanding term loan 105.72 CARE BB+ as on Dec.31, 2009 Sanctioned Fund based 130.00 CARE BB+ working capital limits Sanctioned non fund based 725.00 PR4 working capital limits Rating Rationale The ratings are constrained by fluctuations in raw material prices which can potentially affect the profitability on account of lack of backward integration, high overall gearing, working capital intensive operations, location disadvantage and inherent risk associated with cyclical nature of the steel industry. Further, sharp movement in the raw material prices and foreign exchange fluctuation had resulted in to cash loss during FY09. Nevertheless, ratings consider NSAIL's established presence as part of the Ruchi group and established position in the Central India with good brand name. Ratings also consider improvement in the financial risk profile during 9MFY10. Improvement in the financial risk profile, ability to pass on raw material prices and managing working capital are key rating sensitivities. About National Steel NAIL belongs to Ruchi Group and engaged in the manufacturing of cold rolled sheets, galvanized sheets and color coated sheets. During FY09, NSAIL reported operating income of INR2123 crore and net loss of INR89 crore against operating income of INR2156 crore and net profit of INR28 crore during FY08. During 9M Y10, NSAIL reported operating income of INR1589 crore and PAT of INR8 crore. NSIL EXPORTS: CARE Assigns 'CARE BB+' Rating on LT Bank Facilities ------------------------------------------------------------------ CARE has assigned the 'CARE BB+' rating to the long-term bank loans/facilities and 'PR 4' rating to the short-term bank loans/facilities of NSIL Exports Limited. Facilities with 'Double B' rating are considered to offer inadequate safety for timely servicing of debt obligations and carry high credit risk. This rating is applicable for facilities having tenure of more than one year. Facilities with 'PR 4' 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 tenure up to one year. 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 ---------- ----------- ------- Sanctioned Fund based 30.00 CARE BB+ working capital limits Sanctioned non fund based 64.65 PR4 working capital limits Rating Rationale The ratings are constrained by low profit margins & inherent risk associated with the trading activity, presence of group companies in the similar line of business, customer concentration risk and working capital intensive operations. Nevertheless, ratings continue to consider long standing track record of Ruchi group in the trading activity and flexibility in the product mix. Managing working capital and inherent risk associated with trading activity are key rating sensitivities. NEL belongs to Ruchi Group and engaged in the trading of steel and agro products. During FY09, NEL reported operating income of INR255.77 crore and PAT of INR3.83 crore against operating income of INR308.73 crore and PAT of INR5.07 crore. OSNAR CHEMICAL: ICRA Assigns 'LBB' Rating on Various Bank Debts --------------------------------------------------------------- ICRA has assigned an 'LBB' rating to the Term Loans, Fund Based facilities and Non-Fund Based facilities of Osnar Chemical Private Limited aggregating to INR5.0 million, INR40.0 million and INR12.5 million, respectively. The rating carries a stable outlook. ICRA has also assigned an 'A4' rating to the Non-Fund Based limits of OCPL aggregating to INR40.0 million. The ratings are constrained by the modest size of operations of the company, exposure of profitability to adverse movement of polymer prices since the contracts with customers are "fixed- price" in nature, absence of any hedging policy for imports of raw materials (polymer) and exposure to delays in the road projects due to reasons that may be beyond the scope of the company. The financial profile of the company is also moderately high with gearing at 1.40 times as on March 31, 2010, moderate debt coverage indicators and high working capital intensity in the business due to high debtor days. The ratings are however supported by the long track record of the company of about four decades in supply of modified bituminous products, reputed and well-diversified customer profile, strong market position in the business segment, healthy order book at INR 260 million (1.3 times the revenues of FY 2010) and healthy demand outlook on account of government impetus on road construction activities. Osnar Chemical Private Limited was incorporated in the year 1972 with its headquarters in Mumbai. The company was promoted by Osnar Paints & Chemicals Pvt. Ltd. with the objective of venturing into the manufacturing sector. OCPL was initially involved in waterproofing activities but has shifted its focus towards the road sector since 1994. CPL is at present largely involved in manufacturing of numerous bituminous products such as modified bitumen, industrial bitumen, bitumen solutions, glass grid, paving mats, emulsions etc. that are mainly used for road construction. The company installed its Polymer Modified Bitumen (PMB) plant in 1994 with technical know-how from Central Road Research Institute (CRRI). The company sells PMB products under the brand name "Polybit." In FY 2010, the company reported Profit After Tax (PAT) of INR7.3 million on an operating income of INR196.0 million (unaudited). PRINCE GEM: ICRA Reaffirms 'LBB+' Rating on INR32.5MM Term Loans ---------------------------------------------------------------- ICRA has reaffirmed the 'LBB+' rating outstanding against the INR32.5 million term loans and the INR450.0 million fund based limits of Prince Gem and Jewelry Private Limited. The outlook on the rating is stable. ICRA has also reaffirmed the A4+ rating outstanding against the INR200.0 million non-fund based limits of Prince Gem and Jewelry. The rating reaffirmations recognise the significant experience of Prince Gem and Jewelry's promoters in the jewellery business and the Company's brand presence in the Chennai market. Prince Gem and Jewelry's financial profile is characterized by modest margins and accruals, and relatively high gearing (driven by high working capital requirements). Furthermore, the Company envisages expansion of its retail network over the short term, which is expected to significantly weaken the capital structure driven by the associated debt-funded capital expenditure and working capital requirements. The ratings also factor in the intense competitive pressures in the highly fragmented jewellery retail industry and the inherent susceptibility to gold price fluctuations, restricting pricing flexibility of players in this business. The Company proposes to open a new showroom in Ernakulum to widen its geographic base. However, ICRA is of the view that the ability of the company to successfully establish its presence would remain critical for improving the credit metrics of the company which are expected to be stressed by the initial investment and promotional expenditure. About Prince Gem Promoted by Mr. Princeson Jose as a proprietary concern in 1983 and incorporated as a private limited company in 2006, Prince Gem and Jewelry is engaged in the manufacture and retail sale of jewellery in the domestic market. Gold jewellery contributes to the bulk of the Company's revenues (over 75% in 2008-09), with diamond, platinum and silver jewellery accounting for the rest. Prince Gem and Jewelry has five showrooms with a combined retail space of 20,250 sq. ft. across prime locations in Chennai (Tamil Nadu), Bangalore and Thiruvananthapuram. The Company also proposes to open a new showroom at Ernakulam (Kerala) in 2010-11, subsequent to which the total retail space of the Company is expected to increase to around 32,650 sq. ft. Prince Gem and Jewelry reported a profit after tax INR59.7 million on an operating income of INR2.8 billion in 2008-09, as against a PAT of INR 45.9 million on an operating income of INR 1.7 billion in 2007-08. Recent results (Unaudited) The company clocked an operating income of INR2.4 billion for the nine months ended December 31, 2009. During the same period, the Company reported a Profit Before Tax (PBT) of INR76.1 million. SWADESHI AAHAR: ICRA Assigns 'LBB' Rating on Various Bank Debts --------------------------------------------------------------- ICRA has assigned an 'LBB' rating to INR68.00 million fund based limits and INR16.00 million term loan of Swadeshi Aahar Private Limited. The assigned rating carries a stable outlook. The rating takes into account the company's long track record in the flour milling business, its experienced management, well established distribution network and its diversified customer profile. The rating is however constrained by the highly competitive and fragmented nature of the flour milling industry, the low profitability of the company and high working capital intensive nature of the business. Swadeshi Aahar Pvt Ltd. is a private limited company engaged in the production and sale of food products ? atta, maida, suji, bran & refraction. It was incorporated in 2002 in Varanasi as a joint venture between Mr. Pawan Kumar Tulsyan and Mr Bhola Ram Agrawal. The original promoter later divested their stake in favor of Mr Vijay Gupta, promoter of Simran Foods Ltd, which is also in the flour milling business, in 2008. The company has its production unit based out of Varanasi, Uttar Pradesh. ================= I N D O N E S I A ================= BERAU COAL: Moody's Assigns 'B2' Corporate Family Rating -------------------------------------------------------- Moody's Investors Service has assigned a provisional (P)B2 corporate family rating to PT Berau Coal. At the same time, Moody's has assigned a provisional (P)B2 senior secured bond rating to the proposed senior secured notes issued by Berau Capital Resources Pte Ltd, which is wholly owned by PT Berau Coal Energy. The outlook on both ratings is stable. BCE is a 90% shareholder of Berau. The bonds are guaranteed by BCE and its subsidiaries, which includes Berau. BCE intends to raise a USD bond offering and a bank loan facility, to partially refinance the bridge loans for the acquisition of Berau by Recapital Advisors. The provisional status of the ratings will be removed upon completion of the bond issuance and bank loan. If the debt financing plan fails to go ahead, the ratings will be under pressure in view of Berau's refinancing risk and weak liquidity profile. "Berau's B2 ratings reflect its status as one of the world's lowest-cost producers and exporters of coal, and the quality of its customer base, comprising large utilities with excellent payment records," says Laura Acres, a Moody's Vice President and Senior Credit Officer. "Its coal mines also have a long concession life and well established operations, with a track record of consistent production growth," adds Acres. "Among the key challenges Berau faces are its exposure to commodity cycles for both coal sales and fuel procurement, leading to earnings and cash flow volatility, although this can be partially mitigated by a policy of locking sales prices in up to one year in advance." "The rating also recognizes the company's lack of diversification, given its single concession and product, as well as the high level of concentration risk, given that its top ten customers account for approximately 83% of revenues," says Acres, also Moody's Lead Analyst for the company. Moody's is also concerned over the high level of acquisition debt across the extended group, which relies primarily on cash flows from Berau to service its debt. This is exacerbated by the near term liquidity risk due to US$580 million of vendor notes, incurred as part of the acquisition, which are due in December 2010. Moody's has therefore included such debt in computing the adjusted ratios for Berau, resulting in an expected, adjusted debt/EBITDA of 5.0x in FY2010, compared to 2.4x if only guaranteed debt is included. As such, the company's strong pre-acquisition credit metrics have been weakened considerably by the debt adjustment, such that its adjusted leverage will be more line with that of its B-rated coal mining peers. "We're also concerned about the risk appetite of the new shareholders, as well as the lack of clarity regarding long-term strategy for Berau, given Recapital's role as a financial investor," Acres adds. The stable outlook reflects the expectations that Berau will implement its business plan and maintain its competitiveness in the near to medium term. Upward rating pressure could emerge if Berau expands its production capacity, such that a sustainable improvement in the underlying business model (driven by improved operating performance from increased production) develops. Credit metrics that will support an upgrade include adjusted consolidated debt/EBITDA lower than 4.0x and adjusted consolidated EBIT/Interest expense higher than 2.5x. In particular, Moody's would also like to see some clarity with regard to the repayment of the US$580 million vendor notes that are due to expire in December 2010. Downward pressure on the rating could emerge if industry fundamentals deteriorate, leading to a decline in free cash flow that could constrain Berau's ability to fund scheduled debt payments at the holding company level. Indicators Moody's would consider include adjusted consolidated debt/EBITDA rising above 6.0x or adjusted consolidated EBIT/interest expense falling below 1.5x. Other negative rating trends include 1) a lack of resolution with regard to the maturity and payment of the vendor notes; 2) event risk as a result of any adverse decision regarding the off-setting of VAT payments; and 3) any change in laws and regulations, particularly on the mining concessions, that would affect the business. Moody's had previously rated Berau at B1 until 9th February, 2010, when the rating was withdrawn for business reasons. Berau is Indonesia's fifth-largest producer and exporter of thermal coal. It operates three active mines at a single site in East Kalimantan. It has estimated resources of approximately 1.4 billion tons, with probable and proven reserves estimated at 346 million tons. BERAU COAL: S&P Assigns 'B+' Long-Term Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it had assigned its 'B+' long-term corporate credit rating to Indonesia-based coal mining company PT Berau Coal Energy. The outlook is stable. At the same time, S&P assigned its 'B+' issue rating to the proposed senior secured notes to be issued by Berau Capital Resources Pte. Ltd., a wholly owned subsidiary of Berau Energy, and guaranteed by Berau Energy and PT Berau Coal. Berau Energy holds a 90% stake in Berau. The rating on the notes is subject to S&P's review of the final issuance documentation. "The ratings on Berau Energy reflect the company's highly leveraged financial risk profile, its exposure to Indonesia's evolving regulatory framework and coal price volatility, and mineral concentration risk," said Standard & Poor's credit analyst Manuel Guerena. "These weaknesses are tempered by the company's low cost profile, high contracted coal sales, established relationships with clients, and consistent production growth." In addition to the proposed notes, Berau Energy is in the process of procuring a bank loan. The company expects to raise funds from both the proposed notes issuance and the bank loan. Following this, S&P anticipate Berau Energy's adjusted debt-to-EBITDA ratio to be about 5.0x for the year ending Dec. 31, 2010. The rating on the proposed notes reflects the irrevocable and unconditional guarantee by Berau Energy and Berau. The proposed notes rank pari passu with other debt, which primarily comprises a proposed bank loan. Gross proceeds from the notes will be mainly used to refinance debt. In S&P's view, Berau Energy's liquidity is weak. As at March 31, 2010, the company had unrestricted cash and equivalents of US$214.8 million, and additional restricted cash of US$75.0 million. S&P expects the company to generate funds from operations of about US$100 million for the year ending Dec. 31, 2010, which is insufficient to cover the debt maturity of US$600 million at a downstream subsidiary and the intermediate parent. Berau Energy is dependent on the proposed bank loan and the proposed bond issuance to meet its immediate debt and extend its debt repayment schedule. The stable outlook reflects S&P's expectation that Berau Energy's cash flow will be supported by the favorable outlook for coal prices in the next 12-18 months, and the company's ongoing efforts to increase coal production and maintain its margins. S&P also expect the company to successfully refinance its near-term debt maturities. ========= J A P A N ========= JAPAN AIRLINES: Seeks 3,300 More Early Retirement Applicants ------------------------------------------------------------ Japan Airlines Corp. is seeking applications from around 3,300 more group employees to take early retirement during the current fiscal year through next March, Kyodo News reports citing sources familiar with the matter. According to the report, sources said JAL is expected to start soliciting the bulk of the additional early retirement applications in autumn or later. As of early this month, around 4,000 employees had applied for early retirement and the company has determined that the additional number is necessary to reach its payroll reduction target for the current business year, sources told Kyodo News. Kyodo News relates that the move is part of the company's program to eliminate about 16,000 jobs in fiscal 2010 amid efforts to turn itself around after filing for bankruptcy protection in January. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan-based company mainly engaged in the provision of air transport services. The Company is active in five business segments through its 203 subsidiaries and 83 associated companies. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. Japan Airlines Corporation, Japan Airlines International Co., Ltd. and JAL Capital Co., Ltd., on January 19, 2010, filed the petitions to commenced corporate reorganization proceedings with the Tokyo District Court. The Court appointed the Enterprise Turnaround Initiative Corporation of Japan and Eiji Katayama, Esq., as reorganization trustees. Japan Airlines Corp. filed for reorganization January 19 in the Tokyo District Court and filed a Chapter 15 petition in New York (Bankr. S.D.N.Y. Case No. 10-10198). The Company said debt is $28 billion. Bankruptcy Creditors' Service, Inc., publishes Japan Airlines Bankruptcy News. The newsletter tracks the Chapter 15 proceedings and the bankruptcy proceedings in Tokyo undertaken by Japan Airlines Corp. and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) JLOC 36: S&P Puts Note Ratings on CreditWatch Negative ------------------------------------------------------ In Standard & Poor's Ratings Services' media release published on June 21, 2010, the number of loans was misstated in one instance. A corrected version is: S&P placed its ratings on JLOC 36 LLC's floating-rate secured notes, classes C1 and C2, on CreditWatch with negative implications. At the same time, Standard & Poor's affirmed its ratings on the class A1 through B, D, and X secured notes issued under the same transaction. Of the 34 loans that initially backed the transaction, six loans (originally representing a combined 22.6% or so of the total initial issuance amount of the notes) have defaulted so far. With regard to two of the six defaulted loans (two loans originally representing a combined 2.9% or so of the total initial issuance amount of the notes), the related collateral properties have been sold, and the full amounts of the loans (rated portions) have been recovered. Meanwhile, the servicer is proceeding with the liquidation of the properties backing the remaining four defaulted loans (originally representing a combined 19.7% or so of the total initial issuance amount of the notes). There remain 25 loans including these four defaulted loans. S&P placed the ratings on classes C1 and C2 on CreditWatch with negative implications because: (1) S&P is of the opinion that there appears to be uncertainty over the recovery prospects of the properties backing the transaction's 14 remaining loans that are due to mature by the end of 2011 (14 loans originally representing a combined 61.1% or so of the total initial issuance amount of the notes); and (2) S&P believes that uncertainty is clouding the recovery prospects of the properties backing five of the transaction's seven remaining loans that are due to mature after 2011 (five loans originally representing a combined 9.5% or so of the total initial issuance amount of the notes) given the types and locations of the properties. S&P intends to review its ratings on the classes that S&P placed on CreditWatch with negative implications after assessing a number of factors, including the likely recovery amount from the properties backing the aforementioned 14 loans maturing by the end of 2011 and those backing the aforementioned five loans maturing after 2011. In addition, S&P will monitor the progress of collections from the four loans that have defaulted and whose collateral properties have yet to be sold. It is highly possible that the recovery amount from the sales of the collateral properties backing some of the four loans may be less than the loan amounts (rated portions), which would very likely affect payments on the most subordinate class D notes. JLOC 36 is a multi-borrower CMBS transaction. The notes were originally secured by 34 nonrecourse loans, which were originally backed by 99 real estate properties. The transaction was arranged by Morgan Stanley Japan Securities Co. Ltd., and Premier Asset Management & Loan Services Corp. is the transaction servicer. The ratings address the full and timely payment of interest and the ultimate repayment of principal by the transaction's legal final maturity date in February 2016 for the class A1 to A3 notes, the full payment of interest and ultimate repayment of principal by the legal final maturity date for the class B to D notes, and the timely payment of available interest for the class X notes. Ratings Placed On Creditwatch Negative JLOC 36 LLC Secured notes due February 2016 Class To From Initial Issue Amount ----- -- ---- -------------------- C1 A-/Watch Neg A- JPY3.6 bil. C2 A-/Watch Neg A- EUR24,250,000 Ratings Affirmed Class Rating Initial Issue Amount ----- ------ -------------------- A1 AAA JPY29.05 bil. A2 AAA EUR65,300,000 A3 AAA $8,000,000 B AA JPY6.8 bil. D CCC JPY4.3 bil. X (IO) AAA JPY59.1 bil. (initial notional principal) * Interest-only The issue date was May 2007. JVC KENWOOD: Regulator Recommends JPY1.5BB Fine for JVC & Victor ---------------------------------------------------------------- The Securities and Exchange Surveillance Commission on Monday recommended the Financial Services Agency impose about JPY1.5 billion in fines on Victor Co. of Japan and its parent, JVC Kenwood Holdings Inc., nikkei.com reports. The securities watchdog accused JVC of making false statements in securities reports, nikkei.com says. Nikkei.com reports that Victor Co. of Japan faces a fine of JPY707.6 million while JVC Kenwood may be fined JPY839.13 million. The total penalty would be the largest since a record fine of about JPY1.6 billion was imposed on industrial equipment maker IHI Corp. in 2008, the report notes. JVC Kenwood Holdings, Inc. (TYO:6632)-- http://www.jk- holdings.com/ -- is a Japan-based holding company. JVC Kenwood Holdings focuses on car and home electronics and wireless systems. The Company has 134 subsidiaries and 11 associated companies. JVC Kenwood sells TVs via Victor Co. of Japan Ltd. * * * JVC Kenwood Holdings, Inc., posted three consecutive net losses of JPY30.73 billion, JPY43.48 billion and JPY10.94 billion for the fiscal years ended March 31, 2009, 2008 and 2007, respectively. =============== M A L A Y S I A =============== LCL CORP: CIMB Islamic Bank Serves Writ of Summons Over Debt ------------------------------------------------------------ LCL Corporation Bhd disclosed that CIMB Islamic Bank Berhad had served a Writ of Summons against the company and Dato' Low Chin Meng. The Writ of Summons and Statement of Claim was served on LCL Corp. and Dato' Low Chin Meng on June 17, 2010. CIMB Islamic Bank is claiming for the sum of MYR54.44 million as at May 18, 2010, in respect of the Term Financing-i Facility of MYR64.35 million and in addition takzir at the rate of 1.00% per annum shall continue to be levied cumulatively on installments falling into arrears until November 30, 2011 (maturity date of facility) and upon maturity of the facility, late payment charges at the then prevailing Islamic Interbank Money Market rate on the outstanding Purchase Price at the maturity date of the facility until full settlement. The filing of the Writ of Summons is a result of the default in payment of the Banking Facilities granted to LCL. The litigation will not have any operational impact on LCL Group as LCL is an investment holding company and has no operations. LCL will seek necessary legal advice from its solicitors with regards to the claim. About LCL Corp Based in Malaysia, LCL Corporation Berhad (KUL:LCL) -- http://www.lclgroup.com.my/-- is an investment holding company engaged in the provision of management services to the subsidiaries. It operates in five segments: interior fit-out services, which provides interior fit-out works and services, including project management, design and consultancy, procurement, construction and installation; manufacturing of furniture, which is engaged in the manufacture of customized furniture and fixtures, generic furniture; supply and installation of materials and fittings, which is engaged in the supply and installation of ceiling materials, metal fittings and fixtures and stone materials; trading of furniture and building materials, including interior fit-out materials, and others, which comprises investment holding and/or property development activities of the Company and certain subsidiaries. LCL Corp Bhd. has been classified as an Affected Listed Issuer under Practice Note 17 of Bursa Malaysia Securities Berhad as the Company is unable to provide a solvency declaration to Bursa Securities following a default in its loan payments pursuant to Practice Note 1/2001. LCL CORP: Court Enters Wind Up Order Against LCL Wood Industries ---------------------------------------------------------------- The High Court of Malaya at Johor Bahru has entered an order to wind up LCL Wood Industries Sdn Bhd, a wholly owned subsidiary of LCL Corporation Berhad, under the provisions of the Companies Act, 1965. LCL Corp. said LCL Wood Industries was served a Notice of Demand pursuant to Section 218 of the Companies Act, 1965 on October 28, 2009, demanding the outstanding payment of MYR16,481.50 by Messrs. Ong Ban Chai & Co on behalf of Mirotone (Malaysia) Sdn Bhd. A copy of the Petition dated November 19, 2009, was served on the Company on March 1, 2010. About LCL Corp Based in Malaysia, LCL Corporation Berhad (KUL:LCL) -- http://www.lclgroup.com.my/-- is an investment holding company engaged in the provision of management services to the subsidiaries. It operates in five segments: interior fit-out services, which provides interior fit-out works and services, including project management, design and consultancy, procurement, construction and installation; manufacturing of furniture, which is engaged in the manufacture of customized furniture and fixtures, generic furniture; supply and installation of materials and fittings, which is engaged in the supply and installation of ceiling materials, metal fittings and fixtures and stone materials; trading of furniture and building materials, including interior fit-out materials, and others, which comprises investment holding and/or property development activities of the Company and certain subsidiaries. LCL Corp Bhd. has been classified as an Affected Listed Issuer under Practice Note 17 of Bursa Malaysia Securities Berhad as the Company is unable to provide a solvency declaration to Bursa Securities following a default in its loan payments pursuant to Practice Note 1/2001. ==================== N E W Z E A L A N D ==================== AIR NEW ZEALAND: Seeks Legal Costs From Former Flight Attendant --------------------------------------------------------------- Air New Zealand is seeking legal costs from a former Chinese flight attendant who lost a personal grievance case against it, The New Zealand Herald reports. The NZ Herald relates that Crystal Zeng lost her job with Air New Zealand in 2007 and claimed in 2008 that Shanghai-based flight attendants were paid less than a quarter of the wage earned by their Kiwi counterparts and given only a third of their allowances. Ms. Zeng then made a personal grievance claim to the Employment Relations Authority, which ruled on May 31 that Air NZ had no case to answer, NZPA reports. According to NZPA, the airline submitted to the ERA that cabin staff were employed by Beijing Airline Service Corporation and not Air NZ. Air New Zealand wants Ms. Zeng to pay NZ$24,000 or 40 percent of its legal fees in relation to the case, the NZ Herald says. NZPA relates that Rob Towner, counsel for the airline, said Ms. Zeng's case to the ERA was "doomed to failure" because she raised her grievance nearly 18 months after her employment was terminated and that "her real objective was to return to work here." According to NZPA, former immigration minister Tuariki Delamere, who represented Ms. Zeng, said in reply to Air NZ's application for costs that awarding the airline costs would be "unreasonable" as it had a "lack of clean hands." Mr. Delamere, as cited by NZPA, said Air NZ broke immigration law by declaring to Immigration New Zealand on visa applications that it employed Ms. Zeng and 70 other Chinese cabin staff after the airline started direct flights from Shanghai in 2006. About Air New Zealand Based in Auckland, New Zealand, Air New Zealand Ltd. -- http://www.airnewzealand.com/--is the country's flag air carrier, with domestic and international passenger and freight operations, and an aviation engineering business. Air New Zealand flies to the United States, United Kingdom, Canada, Europe and other Asian cities. * * * Air New Zealand Ltd. continues to carry Moody's Investors Service "Ba1" Senior Unsecured Issuer rating with stable outlook. AORANGI SECURITIES: Serious Fraud Office Begins Probe ----------------------------------------------------- The Serious Fraud Office has visited the offices of Aorangi Securities in Timaru in response to concerns raised by the Registrar of Companies, an article posted at stuff.co.nz says. According to the report, the SFO said the aim of the visit was also to establish an immediate working relationship with the statutory managers appointed to manage Aorangi's affairs, and those of Allan Hubbard and his wife. "The SFO commenced this inquiry only after careful consideration of the information received from the Registrar of Companies," the report quoted SFO chief executive Adam Feeley as saying. The report relates that Mr. Feeley said the SFO's investigation was an immediate response to an earlier investigation by Companies Office staff appointed under the Corporations (Investigation & Management) Act and the Securities Act. As reported in the Troubled Company Reporter-Asia Pacific on June 23, 2010, Bloomberg News said that New Zealand appointed a statutory manager for Aorangi Securities Ltd. and seven trusts, which are associated with businessman Allan Hubbard, to protect investors and prevent fraud. Citing Commerce Minister Simon Power's e-mailed statement, Bloomberg News related that Mr. Hubbard and his wife are also subject to statutory management because they are so closely connected with the businesses. "The main objectives are to prevent fraud and reckless company management, to protect investors and to enable the orderly administration of a company's affairs," Bloomberg News quoted Mr. Power as saying. The seven charitable trusts included in the statutory management are Te Tua, Otipua, Oxford, Regent, Morgan, Benmore and Wai-iti. Trevor Thornton and Richard Simpson of Grant Thornton were appointed as statutory managers, and were expected to be in touch with investors soon, according to the New Zealand Herald. Aorangi Securities was incorporated in 1974 and is solely controlled by the Hubbards, who are both directors. BRIDGECORP LTD: Receivers Lose Control of Momi Resort in Fiji ------------------------------------------------------------- Receivers of Bridgecorp Ltd. are investigating what to do after the Fijian military regime seized the failed Momi Bay resort against its wishes, The New Zealand Herald reports. The company has a loan exposure of more than NZ$100 million on the Momi Resort development in Fiji. The report, citing a PricewaterhouseCoopers spokesman in Auckland, relates that the action left the receivers consulting lawyers and happened after the receivers tried to stop the action. Colin McCloy and John Fisk at PwC were in charge of the resort but now the military government has stepped in to stem huge superannuation losses, the report says. According to the NZ Herald, the Fiji Times reported on June 22, 2010, that the Momi Bay Development Decree became effective on June 18. That approved the move by the Fiji National Provident Fund to get full control and continue the development, the newspaper said. The NZ Herald notes that the fund has a $60.7 million exposure to Momi, the abandoned tropical resort where the vast 140ha first stage involved 22km of roading. PwC is now deciding what it can do to recover money from Fiji for the 14,360 Bridgecorp investors, the NZ Herald says. About Bridgecorp Ltd. Bridgecorp Ltd. is a New Zealand-based property development and finance company. Bridgecorp was placed into receivership on July 2, 2007, after failing to pay principal due to debenture holders. John Waller and Colin McCloy, partners at PricewaterhouseCoopers, were appointed as receivers. The company owes around 1,800 debenture holders, which liquidators estimate hold approximately NZ$500 million. Bridgecorp's nine Australian companies were also placed into voluntary administration, owing about 100 investors about AU$24 million (NZ$27 million). BRIDGECORP LTD: Two Directors Face New Charges Under Crimes Act --------------------------------------------------------------- The New Zealand Press Association reports that Bridgecorp Director Rod Petricevic and Chief Financial Officer Robert Roest were committed to trial on fresh charges, six laid under the Crimes Act and two under the Companies Act, when they appeared at a High Court callover in Auckland on Wednesday, June 23. NZPA says the Crimes Act charges allege false statements made to induce investment in the company, and the Companies Act charges allege false statements made to a trustee. The charges are in addition to 10 charges they each face under the Securities Act which had already been laid by the Securities Commission, the report relates. Three other Bridgecorp directors -- Gary Urwin, Bruce Davidson and Peter Steigrad -- face the 10 charges under the Securities Act but have not been charged under the Crimes Act or the Companies Act, prosecutor Brian Dickey told NZPA. NZPA notes that all of these charges are set to be heard by a judge alone at a 12-week trial set to start on July 4 next year, unless an application is made to hear them separately. The Troubled Company Reporter-Asia Pacific, citing the National Business Review, reported on May 20, 2010, that the Serious Fraud Office said Mr. Petricevic is facing charges relating to the fraudulent acquisition of a NZ$1.8 million luxury boat and another matter. The SFO said additional charges were also being brought against Mr. Petricevic and Mr. Roest. SFO director Adam Feeley said the charges related to two set of circumstances and are the final charges laid after an investigation. The first charge relates to an allegedly fraudulent acquisition of a luxury boat, the Medici, purchased using Bridgecorp funds totaling NZ$1.8 million and second one concerns allegedly dishonest payments totalling NZ$1.2 million of Bridgecorp funds authorized by Mr. Petricevic to a business entity called ABb. The SFO had also investigated a number of large commercial transactions involving Bridgecorp and other companies where there were common shareholders or other related interests. About Bridgecorp Ltd. Bridgecorp Ltd. is a New Zealand-based property development and finance company. Bridgecorp was placed into receivership on July 2, 2007, after failing to pay principal due to debenture holders. John Waller and Colin McCloy, partners at PricewaterhouseCoopers, were appointed as receivers. The company owes around 1,800 debenture holders, which liquidators estimate hold approximately NZ$500 million. Bridgecorp's nine Australian companies were also placed into voluntary administration, owing about 100 investors about AU$24 million (NZ$27 million). DORCHESTER PACIFIC: Provides More Info Ahead of Vote on New Plan ---------------------------------------------------------------- The National Business Review reports that Dorchester Finance is providing supplementary information to investors ahead of a vote on a capital reconstruction plan at the request of the Securities Commission. According to NBR, the supplementary information included: -- a brief description of the capital reconstruction plan; -- a comparison of net present value of recoveries under the plan and under a receivership; -- information on future fund raising plans; and -- a summary of risks and comments on the whether Dorchester will be regarded as a non-bank deposit taker by the Reserve Bank of New Zealand. Meanwhile, NZPA reports that Dorchester Finance has started a series of presentations around New Zealand ahead of a vote on a plan to end a moratorium. The plan has already been mailed to investors and the company faced investors at the first presentation in Auckland on Monday, June 21, 2010, NZPA relates. NZPA says presentations followed in Christchurch and Dunedin on June 22, Wellington on June 23, Palmerston North and New Plymouth on June 25 and Tauranga on June 26. Chairman-designate Grant Baker and Executive Director Paul Byrnes are fronting the presentations. Dorchester Finance debenture holders at a meeting in Auckland on June 21 called for the rejection of the company's capital repayment plan, saying it is time to "pack it in" and call in receivers, BusinessDay.co.nz reports. In December 2008, Dorchester's investors voted in favor of a deferred repayment plan. They are now being asked to consider swapping outstanding debenture stock for new securities under the company's proposed the capital reconstruction plan. About Dorchester Pacific Headquartered in Auckland, New Zealand, Dorchester Pacific Limited (NZE:DPC)-- http://www.dorchester.co.nz--is a financial solutions provider, offering complementary products and services across finance, insurance, savings and investments. The Finance division provides investment opportunities through secured debenture stock and subordinated unsecured notes, and financing solutions for the property, business, equipment, motor vehicle and personal finance sectors. Its insurance and savings division provides a range of savings, life insurance, reverse annuity mortgages, home equity release loans and other financial products and services. The Investment Service division includes equity investment advisers and sharebrokers, MoneyOnline and NZ Investor Magazine, which provide professional, independent investment advice, sharebroking and financial planning services. Dorchester Pacific holds a 25% shareholding in St. Laurence Limited, the holding company for a property-based investment and finance group of companies, which manages assets for over 16,000 investors. * * * Dorchester Pacific reported three consecutive net losses of NZ$19.1 million, NZ$25.4 million and NZ$18.1 million for the years ended March 31, 2008, 2009 and 2010, respectively. The accounts to March 31, 2010, have been prepared on a going concern basis. Although an unqualified opinion is expressed, auditors Staples Rodway note fundamental uncertainties with respect to realization of property loans and positions and the validity of the going concern basis should the Capital Reconstruction Plan not be approved by investors. Dorchester has been operating under a deferred repayment plan since late 2008. SOUTH CANTERBURY: S&P Downgrades Long-Term Rating to 'B-' --------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating on New Zealand finance company South Canterbury Finance Ltd. to 'B-' from 'B+'. At the same time, the rating was removed from CreditWatch Developing, where it was initially placed on May 28, 2010, and placed on CreditWatch Negative. The short-term rating is lowered to 'C' from 'B' and is also placed on CreditWatch Negative. "The downgrade reflects S&P's view that news surrounding SCF's key shareholder will likely erode debenture investor confidence, which is critical to SCF's ability to manage its liquidity and its significant debenture reinvestment requirement. S&P is also now concerned that the company's recapitalization efforts could be compromised or delayed," Standard & Poor's credit analyst Derryl D'silva said. In S&P's view, SCF's recent momentum of improvement in its management of forward maturities and new debenture inflows will materially weaken because of this announcement. Additionally, SCF's cash balance has not increased as rapidly as factored into the previous rating, and there is now greater uncertainty around the support from SCF's key shareholder, Mr. Hubbard. SCF's steady new debenture inflows and its recent success in building balance-sheet liquidity -- through managing forward maturities for the July-to-October period -- support the 'B-' rating. "SCF's experience of managing forward maturities for the months leading into October 2010 has improved from previous months but will likely be more difficult to maintain from now on. SCF's ability to raise new debentures could also be at risk. Supporting the rating, however, is the New Zealand Treasury's announcement that eligible SCF depositors remain covered under its guarantee," added Mr. D'silva. The CreditWatch Negative listing by Standard & Poor's will be reviewed over the next few weeks after some additional clarity is gained around debenture investor reaction to recent shareholder news. The rating could be lowered to the 'CCC' category if general debenture investor support were to materially weaken. Specifically if: The momentum of improvement in SCF's management of forward maturities for coming months was not maintained. SCF's ability to raise new debentures weakened materially from recent experience. The rating could also be lowered if: * The likelihood of success in recapitalization efforts was materially delayed or compromised. * Further new credit concerns emerged. Even if SCF were able to address these negative rating pressures, the rating -- after the CreditWatch is resolved -- would likely remain at 'B-' with a negative outlook until SCF restored stability to its financial profile and its underlying business prospects became more evident. Equally important to the rating is evidence that SCF is able to build up its cash balance to comfortably cover monthly debenture maturities and meet ongoing working capital needs. =========== T A I W A N =========== AMERICAN INT'L: Deadline for Unit Sale to China Strategic Moved --------------------------------------------------------------- American International Group Inc. and China Strategic Holdings Ltd. have agreed to extend the deadline for the Hong Kong-based company's purchase of AIG's Nan Shan Life Insurance Co. to mid- October, as the deal is still pending regulatory approval in Taiwan, Dow Jones Newswires reports. China Strategic said in a statement on Monday that the deadline for the Taiwan unit sale had been extended until October 12. AIG agreed to sell Nan Shan to Primus Holdings Ltd., a Hong Kong-based investment company, and China Strategic Holdings Ltd. for US$2.15 billion in October 2009, as part of AIG's efforts to repay bailout funds from the U.S. government. The deal has been hindered by political concerns in Taiwan that China Strategic is backed by mainland Chinese money and has no experience running a life insurer. About AIG Inc. Based in New York, American International Group, Inc., is an international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies provide life insurance and retirement services around the world. AIG common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. In September 2008, AIG experienced a liquidity crunch when its credit ratings were downgraded below "AA" levels by Standard & Poor's, Moody's Investors Service and Fitch Ratings. In September 2008, the Federal Reserve Bank created an $85 billion credit facility to enable AIG to meet increased collateral obligations consequent to the ratings downgrade, in exchange for the issuance of a stock warrant to the Fed for 79.9% of the equity of AIG. The credit facility was eventually increased to as much as $182.5 billion. AIG has sold a number of its subsidiaries and other assets to pay down loans received from the U.S. government, and continues to seek buyers of its assets. ********* 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 T. Fernandez, 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 ***