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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
Wednesday, August 25, 2010, Vol. 13, No. 167
Headlines
H O N G K O N G
MOTOROLA AIRCOMMUNICATIONS: Final Meeting Set for September 28
NATION BRIGHT: Commences Wind-Up Proceedings
POLDEN COMPANY: Creditors' Proofs of Debt Due September 20
OPTO TECH: Commences Wind-Up Proceedings
QUIXOTE (HK): Commences Wind-Up Proceedings
SPEED JET: Commences Wind-Up Proceedings
SPRINT ENTERPRISES: Commences Wind-Up Proceedings
SUZUKI GOLDLY: Leung Mei Fan Steps Down as Liquidator
TEAMGAIN INVESTMENT: Members' Final Meeting Set for September 20
VASTERN INTERNATIONAL: Commences Wind-Up Proceedings
VIBE INTERIORS: Creditors' Proofs of Debt Due September 20
I N D I A
AMBE AGRO: CRISIL Assigns 'BB+' Rating to INR58 Mil. Cash Credit
ASSAB SRIPAD: CRISIL Lifts Ratings on Various Bank Debts to 'BB-'
AUTOTEC SYSTEMS: CRISIL Reaffirms 'BB+' Rating on INR1.1MM LT Loan
C. DINESH: ICRA Assigns 'LBB+' Rating to INR35cr Bank Limits
CAROL INFRASTRUCTURE: CRISIL Rates INR122.5MM Term Loan at 'BB-'
OPG POWER: ICRA Reaffirms 'LBB' Rating on INR950cr Term Loans
RTSTAR DIAMONDS: ICRA Assigns 'LBB' Rating to INR17.5cr Bank Loan
RUBY BUS: ICRA Assigns 'LBB' Rating to INR2.14 crore Term Loan
SAMRAT FORGINGS: CRISIL Reaffirms 'BB' Rating on INR7.5MM Loan
SHANKAR AND CO: CRISIL Assigns 'BB+' Ratings to Various Bank Debts
SHREE RAM: CRISIL Reaffirms 'BB' Rating on INR65 Mil. Cash Credit
SONALI AUTO: CRISIL Assigns 'BB-' Rating to INR150MM Cash Credit
UMANG BOARDS: ICRA Assigns 'LB+' Rating to INR4.6cr LT Loan
VENKY HI-TECH: ICRA Rates INR5 crore Term Loan at 'LBB-'
J A P A N
ARM ELECTRONICS: Files for Bankruptcy Protection
JAPAN AIRLINES: Sees JPY19BB Drop in Revenue as Discount Fares End
JLOC 41: S&P Downgrades Ratings Various Classes of Notes to 'D'
LEHMAN BROTHERS: Wins U.S. Nod for Momo-O as Japanese Counsel
K O R E A
DAEWOO ELECTRONICS: Creditors to Sell Firm to Entekhab Industrial
M A L A Y S I A
AXIS INCORPORATION: Bank Releases Firm From All Liabilities
EON BANK: Moody's Reviews 'D' Bank Financial Strength Rating
OILCORP BHD: High Court of Shah Alam Grants Ex-parte Injunction
LCL CORPORATION: Unit Receives Demand Notice From PGD Marketing
TRANSMILE GROUP: Reports MYR6.28 Million Net Loss for 2nd Quarter
N E W Z E A L A N D
ALLIED FARMERS: Chairman Resigns After Unit's Receivership
BOTRY-ZEN LTD: Assets Sold to Zenith Technology
CEDENCO FOODS: New Zealand's OIO Approves Sale to CDC Foods
DORCHESTER PACIFIC: Raises $10.3 Million Through Entitlement Offer
P H I L I P P I N E S
COLLEGE ASSURANCE: Can Set Aside PHP270MM From MRT Sale Proceeds
S I N G A P O R E
AIMS AMP: Property Purchase Won't Affect Moody's 'Ba2' Rating
AVAGO TECHNOLOGIES: S&P Raises Corporate Credit Rating to 'BB+'
X X X X X X X X
* Upcoming Meetings, Conferences and Seminars
- - - - -
================
H O N G K O N G
================
MOTOROLA AIRCOMMUNICATIONS: Final Meeting Set for September 28
--------------------------------------------------------------
Members of Motorola Aircommunications Limited will hold their
final general meeting on September 28, 2010, at 11:00 a.m., at
21/F, Edinburgh Tower, The Landmark, 15 Queen's Road Central, in
Hong Kong.
At the meeting, Isabelle Angeline Young, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
NATION BRIGHT: Commences Wind-Up Proceedings
--------------------------------------------
Members of Nation Bright International Limited, on August 13,
2010, passed a resolution to voluntarily wind-up the company's
operations.
The company's liquidator is:
Chak Chun Keung Thomas
Room 603, Alliance Building
130-136 Connaught Road
Central, Hong Kong
POLDEN COMPANY: Creditors' Proofs of Debt Due September 20
----------------------------------------------------------
Creditors of Polden Company Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by September 20, 2010, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on August 9, 2010.
The company's liquidator is:
Wong Man Hung Windy
Room 1708 Dominion Centre
43-59 Queen's Road East
Wanchai, Hong Kong
OPTO TECH: Commences Wind-Up Proceedings
----------------------------------------
Members of Opto Tech (H.K.) Co. Limited, on August 12, 2010,
passed a resolution to voluntarily wind-up the company's
operations.
The company's liquidators are:
Ho Man Kit
Kong Sau Wai
Unit 511, 5th Floor
Tower 1, Silvercord
No. 30 Canton Road
Tsimshatsui, Kowloon
Hong Kong
QUIXOTE (HK): Commences Wind-Up Proceedings
-------------------------------------------
Members of Quixote (Hong Kong) Limited, on August 6, 2010, passed
a resolution to voluntarily wind-up the company's operations.
The company's liquidator is:
Philip Brendan Gilligan
7th Floor, Alexandra House
18 Chater Road
Central, Hong Kong
SPEED JET: Commences Wind-Up Proceedings
----------------------------------------
Members of Speed Jet Limited, on August 13, 2010, passed a
resolution to voluntarily wind-up the company's operations.
The company's liquidator is:
Mr. Chak Chun Keung Thomas
Room 603, Alliance Building
130-136 Connaught Road
Central, Hong Kong
SPRINT ENTERPRISES: Commences Wind-Up Proceedings
-------------------------------------------------
Members of Sprint Enterprises Limited, on August 12, 2010, passed
a resolution to voluntarily wind-up the company's operations.
The company's liquidator is:
Ng Kwok Cheung Bernard
Flat B, 16/F, Empire Land Commercial Centre
81-85 Lockhart Road
Wanchai, Hong Kong
SUZUKI GOLDLY: Leung Mei Fan Steps Down as Liquidator
-----------------------------------------------------
Leung Mei Fan stepped down as liquidator of Suzuki Goldly Sky
Limited on August 10, 2010.
TEAMGAIN INVESTMENT: Members' Final Meeting Set for September 20
----------------------------------------------------------------
Members of Teamgain Investment Limited will hold their final
general meeting on September 20, 2010, at 10:00 a.m., at 4th
Floor, East Ocean Centre, 98 Granville Road, Tsimshatsui East,
Kowloon, in Hong Kong.
At the meeting, Chan Hon Chung Johnny Pollux, the company's
liquidator, will give a report on the company's wind-up
proceedings and property disposal.
VASTERN INTERNATIONAL: Commences Wind-Up Proceedings
----------------------------------------------------
Members of Vastern International Limited, on August 13, 2010,
passed a resolution to voluntarily wind-up the company's
operations.
The company's liquidator is:
Chak Chun Keung Thomas
Room 603, Alliance Building
130-136 Connaught Road
Central, Hong Kong
VIBE INTERIORS: Creditors' Proofs of Debt Due September 20
----------------------------------------------------------
Creditors of Vibe Interiors Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by September 20, 2010, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on August 10, 2010.
The company's liquidator is:
Seto Sau Kuen Christine
Room 1509 C C Wu Building
302-8 Hennessy Road
Wanchai, Hong Kong
=========
I N D I A
=========
AMBE AGRO: CRISIL Assigns 'BB+' Rating to INR58 Mil. Cash Credit
----------------------------------------------------------------
CRISIL has assigned its 'BB+/Stable/P4+' ratings to the bank
facilities of Ambe Agro Industries Ltd, which is part of the Ambe
group.
Facilities Ratings
---------- -------
INR58.00 Million Cash Credit (Stocks) BB+/Stable (Assigned)
INR15.00 Million Cash Credit (Book Debts) BB+/Stable (Assigned)
INR30.00 Million Bank Guarantee P4+ (Assigned)
The ratings reflect the Ambe group's exposure to risks related to
fragmented nature of wheat flour industry, high inventory, and
susceptibility of margins to volatility in raw material prices.
These rating weaknesses are partially offset by AAIL's above
average financial risk profile and the group's established market
position in the flour business, marked by low debtor risk.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of AAIL and Shree Ambe Food Products Pvt
Ltd. This is because the two companies, together referred to as
the Ambe group, have common promoters, are in the same line of
business, and extend need-based financial support to each other.
Outlook: Stable
CRISIL believes that the Ambe group will continue to benefit from
its established market position in the flour business and healthy
relationships with institutional customers, over the medium term.
The outlook may be revised to 'Positive' incase of any significant
improvement in the group's operating revenue and margin.
Conversely, the outlook may be revised to 'Negative' if the
group's operating margin declines, or it undertakes large, debt-
funded capital expenditure programme.
About the Group
The Ambe group is managed by two families -- the Guptas and the
Agrawals. Both the families have stake in AAIL and SAFPPL.
AAIL was incorporated in 1997 by Mr. Bimal Kant Gupta. The company
manufactures flour products from wheat. It has capacity of 108900
tonnes per annum (TPA).
SAFPPL was incorporated in 2006 by Mr. Nneeraj Agarwal. It also
manufactures flour products from wheat. It has capacity of 45000
TPA.
The Ambe group posted a provisional profit after tax (PAT) of
INR7.74 million on net sales of INR1169 million for 2009-10
(refers to financial year, April 1 to March 31), against a
reported PAT of INR6.11 million on net sales of INR978.2 million
for 2008-09.
ASSAB SRIPAD: CRISIL Lifts Ratings on Various Bank Debts to 'BB-'
-----------------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of Assab
Sripad Steels Ltd to 'BB-/Stable' from 'B+/Stable'.
Facilities Ratings
---------- -------
INR110.7 Million Long-Term Loan BB-/Stable (Upgraded from
'B+/Stable')
INR77.5 Million Cash Credit Limit BB-/Stable (Upgraded from
'B+/Stable')
INR11.8 Million Proposed LT Bank BB-/Stable (Assigned)
Loan Facility
The rating upgrade reflects increase in Assab Sripad's cash
accruals, driven by higher profitability, in 2009-10 (refers to
April 1 to March 31). Assab Sripad's cash accruals are expected
to remain stable over the medium term, backed by steady demand for
its products and fixed-rate contract for its supplies.
The rating reflects Assab Sripad's moderate financial risk
profile, marked by small net worth and, moderate gearing and debt
protection measures. The rating also factors in its
susceptibility to volatility in raw material prices and foreign
exchange rates. These rating weaknesses are partially offset by
the benefits that Assab Sripad derives from the support provided
by its ultimate holding company, Voestalpine AG (Voestalpine).
Outlook: Stable
CRISIL believes that Assab Sripad will continue to receive
operational and financial support from Voestalpine. The outlook
may be revised to 'Positive' if Assab Sripad continues to improve
its profitability, scales up its operations, and strengthens its
capital structure through equity infusion. Conversely, weak cash
flows because of slowdown in end-user segments, decline in
margins, or larger-than-expected debt-funded capital expenditure
may result in a revision in the outlook to 'Negative'.
About Assab Sripad
Assab Sripad was established in 1994 as a joint venture between
Assab International AB, Sweden (Assab-Sweden; a 100 per cent
subsidiary of Bohler-Uddeholm AG, Austria) and Sripad Steels Pvt
Ltd. Assab Sripad trades in tool steel, and provides heat-
treatment services. Assab-Sweden owns 70 per cent of Assab Sripad.
With the acquisition of Bohler-Uddeholm AG by Austria-based
Voestalpine in 2007, Assab Sripad became a subsidiary of
Voestalpine. Assab Sripad has branch offices and service centres
in Chennai, Mumbai, Delhi, and Hyderabad; its heat-treatment
service units are in Mumbai and Chennai; it has a warehouse in
Delhi.
Assab Sripad reported, on a provisional basis, a profit after tax
(PAT) of INR29.3 million on net sales of INR400.8 million for
2009-10 (refers to financial year, April 1 to March 31); it
reported a net loss of INR26.9 million on net sales of INR378.9
million for 2008-09.
AUTOTEC SYSTEMS: CRISIL Reaffirms 'BB+' Rating on INR1.1MM LT Loan
------------------------------------------------------------------
CRISIL's ratings on the bank facilities of AutoTEC Systems Pvt Ltd
continue to reflect Autotec's limited revenue diversity and
susceptibility of its margins to volatility in raw material prices
and foreign exchange rates.
Facilities Ratings
---------- -------
INR1.10 Million Long-Term Loan BB+/Stable (Reaffirmed)
INR17.50 Million Cash Credit BB+/Stable (Reaffirmed)
INR10.00 Million Letter of Credit P4+ (Reaffirmed)
INR45.00 Million Bank Guarantee P4+ (Reaffirmed)
The ratings also factor in the company's large working capital
requirements and small scale of operations. These weaknesses are
partially offset by Autotec's established presence in the defence
hardware industry, and its moderate financial risk profile, marked
by low gearing and healthy debt protection measures.
Outlook: Stable
CRISIL believes that Autotec will maintain a stable credit risk
profile over the medium term, on the back of its established
presence in the defence hardware industry and comfortable order
book. The outlook may be revised to 'Positive' if the company
scales up its operations and diversifies its revenue base, while
maintaining a healthy financial risk profile. On the other hand,
the outlook may be revised to 'Negative' if Autotec undertakes a
large, debt-funded capital expenditure (capex) programme, or if
its revenues and margins decline because of unfavourable changes
in government regulations or in its relationships with customers
and suppliers.
Update
Autotec reported an 89 per cent year-on-year growth in revenues
for 2009-10 (refer to financial year, April 1 to March 31) on
account of high-value orders executed during the year; the growth
was in line with CRISIL's expectations. However, Autotec's
operating margin at 5.7 per cent was lower than CRISIL's
expectations, primarily due to increase in material costs. Its
gearing was comfortable at 0.88 times as on March 31, 2010, and is
expected to improve marginally considering that the company has no
significant debt-funded capex over the medium term, but also
taking into account the proposed increase in cash credit limits.
Furthermore, the company's operations remain working capital
intensive as evident from its high utilisation of bank lines.
Autotec posted a provisional profit after tax of INR4.9 million on
net sales of INR126 million for 2009-10, against a net loss of
INR0.04 million on net sales of INR67 million for 2008-09.
About Autotec
Autotec, established in 2000, is the flagship company of the Rass
group that provides hardware, software, and related support
services to the defence sector. The Bengaluru-based company
manufactures, assembles, and trades in defence hardware. During
2009-10, the company had a tie-up with Hyderabad-based HBL Power
Systems Limited wherein HBL acquired a 2 per cent stake in the
company.
C. DINESH: ICRA Assigns 'LBB+' Rating to INR35cr Bank Limits
------------------------------------------------------------
ICRA has assigned an 'LBB+' and 'A4+' rating to the INR35 crores
fund-based bank limits of C. Dinesh & Company Private Limited.
The outlook on long term rating is stable. The fund based limits
are rated on both long term and short term scales though the total
utilization should not exceed INR35 crores at any point of usage.
The ratings factor in CDPL's modest scale of operations and a weak
financial profile characterized by low profitability and cash
accruals and a leveraged capital structure. The rating also takes
into account the intense competitive pressures in the fragmented
cut and polished diamonds (CPDs) industry which, coupled with the
slowdown in the diamond industry till sometime back, has affected
both the demand and realization for cut and polished diamonds.
The rating favorably factors in the promoters experience in the
industry, the sustained growth in operating income over the last
five fiscals despite the challenging operating environment and the
fact that a substantial part of the debt comprises of loans from
promoters which is subordinate to the bank loans.
Incorporated in 2007, C.Dinesh & Company Private Limited is a
private limited company. CDPL was engaged in the same activity in
the form of a partnership firm since 1976. CDPL is engaged in the
import of rough diamonds and trading and export of Cut and
Polished Diamonds (CPDs). CDPL has its registered office at Opera
House, Mumbai and manufacturing facility of cutting and polishing
diamonds at Surat.
CDPL has reported a net profit of INR2.64 crores on an operating
income of INR117.99 crores for unaudited FY 10.
CAROL INFRASTRUCTURE: CRISIL Rates INR122.5MM Term Loan at 'BB-'
----------------------------------------------------------------
CRISIL has assigned its 'BB-/Stable' rating to Carol
Infrastructure Pvt Ltd's term loan facility.
Facilities Ratings
---------- -------
INR122.50 Million Term Loan BB-/Stable (Assigned)
The rating reflects CIPL's exposure to risks related to
uncertainty regarding timely receipt of customer advances and
funding mix of proposed Phase III of River Heights project, and
susceptibility to cyclicality in the Indian real estate industry.
These rating weaknesses are partially offset by CIPL's healthy
track record of sale of units in Phase I and II of its River
Heights project.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of CIPL and its two subsidiaries, Voyage
Real Estate Pvt Ltd and Platina Estate Developers Pvt Ltd;
together referred to as Carol group. This is because CIPL holds 99
per cent stake in the subsidiaries, which hold land bank for CIPL.
Outlook: Stable
CRISIL believes that Carol group will continue to benefit from
healthy bookings in its River Heights project. However, the
completion of Phase II of the group's River Heights project will
depend on timely receipt of customer advances for the remaining
residential units in the project. The outlook may be revised to
'Positive' if the company completes Phase II of the project on
time and reports more-than-expected profitability. Conversely, the
outlook may be revised to 'Negative' if the company faces delays
in completion of the project, or its liquidity deteriorates
significantly on account of lack of proper funding for Phase III
of the project.
About Carol Infrastructure
CIPL was incorporated in September 2005 to undertake real estate
development activities. The company commenced operations in 2006-
07 (refers to financial year, April 1 to March 31), with the
construction of a group housing project, River Heights, located on
Meerut Road on National Highway 58 in Ghaziabad (Uttar Pradesh);
it remains the company's only project so far.
CIPL is part of the Garg group, based in Ghaziabad. The Garg group
has a legacy of more than five decades and has varied business
interests, including in the education, steel, real estate, and
publishing sectors.
River Heights is a INR1.25 billion project divided into two
phases: Phase I (expected to cost around INR1 billion) and Phase
II (around INR250 million). Phase I of the project was funded
through a term loan of INR244 million, and through
equity/unsecured loans from promoters and customer advances. The
construction of Phase I is around 85 per cent complete, with
around INR900 million already spent. CIPL has already re-paid the
term loan contracted to fund Phase I. Phase II of the project is
being funded through a term loan of INR122.5 million, and through
internal accruals from Phase I, equity/unsecured loans, and
customer advances. Construction on Phase II is more than 55 per
cent complete, and the company has spent INR130 million on Phase
II, which is targeted for completion by September 2010.
Till date, the promoters have infused around INR293 million in the
project (Phases I and II combined): INR200 million as unsecured
loans and INR93 million in the form of equity.
The company has sold more than 725 units (Phases I and II
combined) in River Heights till May 2010, and around 40-50 units
are yet to be sold.
Carol group reported a profit after tax (PAT) of INR28.8 million
on net sales of INR280.9 million for 2008-09 against a PAT of
INR16.9 million on net sales of INR259.2 million for 2007-08.
OPG POWER: ICRA Reaffirms 'LBB' Rating on INR950cr Term Loans
-------------------------------------------------------------
ICRA has reaffirmed the long term rating of 'LBB' assigned to the
the Term Loans of OPG Power Gujarat Private Limited aggregating to
INR950.00 crore. ICRA has assigned a stable outlook on the
rating.
The rating continues to take into account the high project
execution risks associated with the project as the power plant is
still under construction and the Commercial Operation Date (COD)
has been delayed by about 15 months to October 2012 due to delay
in receipt of Environmental Clearance. Equity contribution of
about INR80crore is yet to be infused that is planned to be
brought in from captive consumers, closer to the commissioning of
the plant. Further, the company is yet to assign a contractor for
Balance of Plant (BOP) scope of work and enter into Power Purchase
Agreements (PPAs), though the company has an MoU for sale of power
upto 115 MW. Also, the revision in scope of project from initially
planned 270 MW to 300 MW would lead to proportionate increase in
project cost and the company would have to ensure suitable funding
lines for the same.
The ratings however favorably factor in the receipt of the
requisite approvals and clearances, the substantial portion of
equity brought in by the promoters through Alternate Investment
Market (AIM) listing of OPG Ventures Plc, existing tie-up for the
term loan requirement and in-place contract for BTG equipment with
BHEL on fixed-price basis. The company has been recommended for F
Grade coal upto 10.3 lakh tonnes per annum from South Eastern
Coalfields Ltd. and has applied for Letter of Agreement (LOA) from
the same. ICRA notes that the successful commissioning of the
project without any cost overruns and ability to achieve designed
plant operating parameters, subsequent to project commissioning,
would remain critical for profitability and debt coverage metrics
of the company.
About OPG Power
OPG Power Gujarat Pvt. Ltd. was incorporated in April 2007 as a
Special Purpose Vehicle (SPV) promoted by OPG Energy Pvt. Ltd. The
company had initially planned to setup a 270 MW (2 x 135 MW) coal
based plant but has revised its plant capacity to 300 MW (2 x 150
MW). The plant is based in Kutch, Gujarat and the COD of the plant
has been delayed to October 2012. The total cost of the project
was initially estimated at INR1282 crore, to be financed by INR950
crore term loans and INR332 crore equity. The revision in project
capacity is however expected to proportionately increase the
project cost as well.
RTSTAR DIAMONDS: ICRA Assigns 'LBB' Rating to INR17.5cr Bank Loan
-----------------------------------------------------------------
ICRA has assigned "LBB"/A4 ratings to the INR17.5 crore proposed
bank facilities of RTStar Diamonds. The long term rating carries
stable outlook. ICRA has an outstanding rating of LBB/A4 on the
INR2 crore fund based bank limits of RTSD. The long term rating
carries stable outlook.
The rating favorably factors in the long experience of RTSD's
promoters' in the CPD industry and its robust revenue growth in
the last three years owing to strong sales focus and favorable
demand conditions for the CPD industry. ICRA also takes into
account RTSD's favorable capital structure as of FY10, though the
same could weaken in the near term owing to likelihood of increase
in working capital requirements on account of proposed contracts
with Russian miners for rough supply. Nevertheless, the proposed
contracts, if concluded successfully, are likely to have a
favorable impact on the firm's operational and business profile in
the near future. The rating is constrained by low operating
margins resulting from intense competition in the CPD industry,
exposure of revenues and profitability to adverse fluctuations in
exchange rates and stretched liquidity profile as reflected from
almost full utilization of working capital limits in the last one
year.
RTStar Diamonds, a partnership firm, was established in 1978 for
manufacturing and trading (catering to export market) of cut and
polished diamonds (CPDs) ranging up to 1 carat. The firm is a
part of the RTStar group which was founded in 1978 by Mr. Nitin
Ratilal Shah, son of Late Shri Ratilal Tribhovandas Shah (founder
promoter of the RTStar Group). Mr. Nitin Shah has a wide
experience of over three decades in the diamond industry. The
other major companies in the RTStar group include ? RTStar
Solitaires (rated LBB+ (stable) / A4+ by ICRA), RTStar Jewelry
Private Limited (rated LB / A4 by ICRA), Hiraco Jewellery (India)
Private Limited, etc.
Recent results:
For the financial year ended March 2010, the company reported a
Net Profit of INR0.9 crore on an operating income of INR166.3
crore.
RUBY BUS: ICRA Assigns 'LBB' Rating to INR2.14 crore Term Loan
--------------------------------------------------------------
ICRA has assigned 'LBB' rating to the INR2.14 crore term loans and
the INR40 crore fund based facility of Ruby Bus Private Limited.
The outlook on the long term rating is stable. ICRA has also
assigned 'A4' rating to the INR5 crore non-fund based limits of
RBPL.
The rating is constrained by RBPL's highly leveraged capital
structure resulting from high working capital intensity of its
operations, its low profitability and low cash accruals,
overdependence on key customers leading to client concentration
risks as well as the fragmented and highly competitive nature
of the bus body building industry which is expected to continue
exerting pressure on the company's margins. In addition to these,
the rating also factors in the high susceptibility of RBPL's
business to the slowdown in the user industry (commercial
vehicles) as witnessed from the relatively large losses
incurred in FY09. The rating, though, favorably factors in the
vast experience of RBPL's promoters in the bus body building
business, its reputed client profile, flexibility of operations on
account of contract manufacturing, improved economic scenario
coupled with strong order book and proposed introduction
of bus code in the near term which is likely to benefit organized
players like RBPL.
The rating also takes into account RBPL's plans to foray into
manufacturing of kits wherein the entire bus model will be made
without chassis, improved business terms with the OEMs and other
plans with some of the leading OEMs (Eicher and ALL) to use the
existing spare capacity to manufacture commercial vehicles like
tippers.
About Ruby Bus
Ruby Bus Private Limited was incorporated in the year 1947 and has
been a part of the Indian bus body building industry for over five
decades. The company which is engaged in the business of building
bus bodies was promoted by late Mr. Shantilal Kapashi, grandfather
of the current Managing Director Mr. Pankaj Kapashi.
Headquartered in Mumbai, the company has manufacturing facilities
set up at Naroda, Ahmedabad, where it employs about 900 people and
has the capacity and infrastructure to produce 3000 bus bodies per
annum. Over the years, the company, through Tata Exports Ltd. and
Ashok Leyland Ltd., has registered exports of more than 15,000
vehicles to various countries like Sri Lanka, Afghanistan, Ghana,
among many others.
Recent Results
For the year ended March 31, 2010, the company reported an
operating income of INR56.5 crore and profit before tax of Rs 0.2
crore.
SAMRAT FORGINGS: CRISIL Reaffirms 'BB' Rating on INR7.5MM Loan
--------------------------------------------------------------
CRISIL's ratings on the bank facilities of Samrat Forgings Ltd
continue to reflect SFL's small scale of operations, constrained
financial risk profile marked by a small net worth, and average
operating efficiency. The impact of these weaknesses is mitigated
by the benefits SFL derives from its established position in the
forged automotive components market.
Facilities Ratings
---------- -------
INR100.0 Million Cash Credit BB/Stable (Reaffirmed)
INR7.5 Million Term Loan BB/Stable (Reaffirmed)
INR20.0 Million Letter of Credit P4+ (Reaffirmed)
Outlook: Stable
CRISIL believes that SFL will maintain its business risk profile
over the medium term, supported by its good clientele comprising
leading original equipment manufacturers (OEMs) in the automotive
industry. The outlook may be revised to 'Positive' if SFL
completes and stabilizes operations at its upcoming machining and
finishing facility on time, leading to an increase in its cash
accruals, or generates more-than-expected operating income, driven
by diversification in its customer base. Conversely, the outlook
may be revised to 'Negative' if SFL's debt protection metrics
deteriorate because of lower-than-expected increase in cash
accruals, or larger-than-expected debt-funded capital expenditure.
Update
SFL reported, on a provisional basis, an operating income of
around INR400 million for 2009-10 (refers to financial year,
April 1 to March 31), lesser than CRISIL's estimate of over INR450
million. The less-than-expected operating income in 2009-10 has
been primarily because of suspension of manufacturing activity in
the company's main hammer line (five-tonne capacity) during the
first quarter of 2009-10. The company's operating profitability
is now estimated to be 11 per cent for 2009-10, slightly higher
than earlier estimate of 10 per cent. SFL's liquidity remains
weak, marked by bank limit utilization of 99 per cent on an
average for the 12 months ended May 2010. The company's expected
cash accruals of around INR23.0 million in 2010-11 will be
adequate to meet its maturing debt obligations of INR13.0 million
during the year. SFL reported a profit after tax (PAT) of INR7.0
million on net sales of INR443.0 million for 2008-09, against a
PAT of INR15.0 million on net sales of INR366.0 million for 2007-
08.
About Samrat Forgings
SFL was incorporated in 1981, with Mr. J C Chowdhary as its
managing director. The company's manufacturing facility at Punjab
undertakes forging operations for companies such as Punjab
Tractors Ltd, Bharat Earth Movers Ltd, and Balaji Precisions
Components Ltd. SFL does closed-die-forging for components such as
spindles, crank shafts, connecting rods, bull gears, and crown
wheels. SFL's forged products are used in tractors. The company's
manufacturing facility has a forging capacity of 7500 tonnes per
annum (tpa), and a machining and finishing capacity of 1800 tpa.
SHANKAR AND CO: CRISIL Assigns 'BB+' Ratings to Various Bank Debts
------------------------------------------------------------------
CRISIL has assigned its 'BB+/Stable/P4+' ratings to Shankar and
Company's bank facilities.
Facilities Ratings
---------- -------
INR2.5 Million Overdraft Facility BB+/Stable (Assigned)
INR7.5 Million Proposed Long-Term BB+/Stable (Assigned)
Bank Loan Facility
INR10.0 Million Bank Guarantee P4+ (Assigned)
INR40.0 Million Proposed Short-Term P4+ (Assigned)
Bank Loan Facility
The ratings reflect the promoter's extensive experience in the
civil construction industry. These rating strengths are partially
offset by Shankar and Company's modest scale of operations.
Outlook: Stable
CRISIL believes that Shankar and Company will continue to benefit
from its promoters' experience and established track record in the
civil construction industry. The outlook may be revised to
'Positive' if the company successfully executes large projects,
substantially increasing its revenues and net cash accruals, while
maintaining its debt protection indicators. Conversely, the
outlook may be revised to 'Negative' if the company's debt
protection indicators or gearing deteriorates significantly.
About Shankar and Company
Shankar and Company undertakes civil construction activities in
and around Bangalore. The firm generally undertakes private
contracts and is mainly involved in construction of apartments,
commercial complexes, factory buildings, hospitals, corporate
offices, and palatial bungalows; it also executes turnkey projects
and government projects, however, on a limited scale.
Shankar and Company reported a profit after tax (PAT) of INR8.1
million on net sales of INR102.3 million for 2009-10 (provisional
figures)(refers to financial year, April 1 to March 31), against a
PAT of INR8.6 million on net sales of INR145.3 million for 2008-
09.
SHREE RAM: CRISIL Reaffirms 'BB' Rating on INR65 Mil. Cash Credit
-----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Shree Ram Shipping
Industries Pvt Ltd continues to reflect SRSIPL's small scale of
operations in the cyclical and fragmented shipping industry, and
susceptibility to volatility in foreign exchange rates and adverse
regulatory changes. The rating weaknesses are mitigated by the
benefits SRSIPL derives from the industry experience of its
promoters and the healthy growth prospects for the ship-breaking
industry.
Facilities Ratings
---------- -------
INR65.0 Million Cash Credit Facility BB/Stable (Reaffirmed)
INR535.0 Million Letter of Credit P4+ (Reaffirmed)
Outlook: Stable
CRISIL believes that SRSIPL will continue to benefit from the
experience of its promoters and healthy revenue visibility,
supported by ships-in-hand to be dismantled during the current
financial year. The outlook maybe revised to 'Positive' if
SRSIPL's profitability improves and scale of operations increase,
backed by healthy growth prospects for the ship-breaking industry.
Conversely, the outlook maybe revised to 'Negative' in case
SRSIPL's liquidity comes under pressure because of less-than-
expected cash accruals or adverse foreign exchange rates.
Update
SRSIPL's topline for 2009-10 (refers to financial year, April 1 to
March 31) at INR331.0 million, was less than CRISIL's
expectations; this was primarily because of ship-breaking activity
being stopped during the year for inspections as the company was
in the process of acquiring a plot of land to increase the plot
size to 60 metres from 30 metres and also on account of decline in
average sales realisation. SRSIPL reported a negative operating
profit of about 1 per cent for 2009-10. However its profit before
tax (PBT) was INR21 million (or 5.6 per cent); as the company
generated around INR38.0 million from foreign exchange
transactions.
For the first quarter of 2010-11, SRSIPL booked sales of about
INR138.5 million. SRSIPL had inventory of about 12000 tonnes as on
July 31, 2010, which is expected to be dismantled in 2010-11.
CRISIL expects SRSIPL's sales to be about INR550.0 million in
2010-11.
SRSIPL continues to procure ships backed by letter of credits and
had an estimated gearing of 1 time as on March 31, 2010; the
gearing is expected to remain comfortable at less than 1 time, as
the company has not planned any capital expenditure for the medium
term. SRSIPL maintains fixed deposits in order to accumulate funds
required to repay its letter of credit obligations; it had fixed
deposits of INR38.0 million as on March 31, 2010, which is
expected to have increased to about INR138.0 million by August 31,
2010.
SRSIPL reported, on a provisional basis, a PBT of INR21.0 million
on net sales of INR331.0 million for 2009-10; it reported a PBT of
INR9.0 million on net sales of INR882.0 million for 2008-09.
About Shree Ram
SRSIPL, part of the Shree Ram group, is into ship-breaking
activities. The company acquired an additional plot of 30 meters
in 2010, increasing the total plot size to 60 meters in Alang
(Gujarat). The company has a capacity to break ships ranging from
800 tonnes to 50,000 tonnes. SRSIPL imports ships, breaks them
into steel plates, and sells the same across India through a
network of brokers.
SRSIPL had given loans and advances aggregating INR125.0 million
as on March 31, 2010 to one of its group companies Shree Ram
Vessel Scrap Pvt Ltd (SRVSPL), at an interest of 12 per cent. Of
this about INR70 million has been repaid and INR55 million is
outstanding as on August 2010.
SONALI AUTO: CRISIL Assigns 'BB-' Rating to INR150MM Cash Credit
----------------------------------------------------------------
CRISIL has reaffirmed its rating of 'BB-/Stable' to the bank
facilities of Sonali Auto Pvt Ltd.
Facilities Ratings
---------- -------
INR150.00 Million Cash Credit BB-/Stable (Reaffirmed)
The rating reflects SAPL's weak financial risk profile, marked by
low net worth and high gearing, and exposure to risks relating to
trading operations. These weaknesses are, however, partially
offset by SAPL's strong regional presence as an automobile
dealership for Mahindra and Mahindra in Patna and the adjoining
districts.
Outlook: Stable
CRISIL believes that SAPL will maintain a favorable business risk
profile over the medium term, supported by a strong regional
presence. The outlook may be revised to 'Positive' if the
company's operating margins and debt protection measures improve
substantially; or to 'Negative' if the company undertakes large
debt to fund capital expenditure.
Update
SAPL's estimated performance for 2009-10 (refers to financial
year, April 1 to March 31) was in line with CRISIL's expectation.
Company's liquidity is likely to remain weak on account of high
limit utilization of around 94% for the period April 2009 ? March
2010. The company is estimated to report a profit after tax (PAT)
of INR5.3 million on operating income of INR2209 million for 2009-
10 (refers to financial year, April 1 to March 31), as against a
PAT of INR2.8 million on net sales of INR1801 million for 2008-09.
About Sonali Auto
Set up in 2007, SAPL is a dealer to M&M's entire range of utility
vehicles. It also sells spares, accessories, and services of
vehicles in Bihar. The promoters have experience of more than two
decades in the automobile dealership business.
UMANG BOARDS: ICRA Assigns 'LB+' Rating to INR4.6cr LT Loan
-----------------------------------------------------------
ICRA has assigned 'LB+' rating to INR4.60 crore long term fund
based bank limits and INR18.56 crore term loans of Umang Boards
Private Limited. ICRA has also assigned 'A4' rating to INR6.84
crore short term non fund based bank limits of UBPL.
The rating assigned takes into consideration UBPL's moderate scale
of operations, its stretched liquidity profile as reflected by
negative cash flow from operations and high working capital
intensity on account of high debtors' days and high inventory days
and vulnerability of its profitability to adverse movement in
foreign exchange rates. While assigning rating, ICRA has also
taken into consideration the fact that the company has recently
completed its project of capacity expansion which had been
delayed by around 1 year and which led to loan restructuring in
the past. Thus the ability of the company to achieve targeted
sales and profits with increased manufacturing capacity will be
the key rating sensitivity factors. However ICRA derives comfort
from promoter's long track of record of operations in the
industry, its reputed client base and significant growth potential
owing to increasing demand for the products manufactured by the
company.
Umang Boards Private Limited was incorporated by Mr. Anup Dhanuka
and his family members in 1999. The promoters are in the business
of selling electrical components since 1978. Initially company
started trading in precompressed insulating boards and later on it
set up its unit for manufacturing pre-compressed boards formed the
company Umang Boards Private Limited in FY03. The Company's
product profile includes electrical grade insulation Pre-
Compressed Press Boards made from imported unbleached softwood
pulp. These boards are used as insulation material transformers.
Recent Results
UBPL reported an Operating Income of INR6.58 crore and Profit
after Tax of INR1.80 crore in FY2010.
VENKY HI-TECH: ICRA Rates INR5 crore Term Loan at 'LBB-'
--------------------------------------------------------
ICRA has assigned an 'LBB-' rating to the INR5 crore term loan and
INR15 crore cash credit facility of Venky Hi-Tech Ispat Limited.
The outlook on the assigned long term rating is stable. ICRA has
also assigned an A4 rating to the INR1.5 crore letter of credit
facility of VHTIL.
The ratings take into account the cyclicality inherent in the
steel business, which makes margins and cash flows volatile to
fluctuations in prices, low capacity utilization in VHTIL'S TMT
plant, the company's weak financial risk profile characterized by
depressed profit margins, low business returns and moderate debt
coverage indicators. ICRA notes that during the past five years,
the net profit for VHTIL has primarily been driven by steel
trading and commodity trading income. ICRA also notes that the
company's aggressive growth plans in the near term as against the
present scale of operations could adversely impact its business
risk profile. The ratings also take into consideration the
positive demand outlook of long products, diversified customer
base, with the top five cumulatively contributing around 30% of
sales in FY10 and a moderate capital structure backed by regular
equity infusion over
the past four years.
VHTIL's TMT manufacturing is still in the stabilization phase, the
company therefore has to offer discount to its customers to
establish its produce in the market. This has resulted in weak
profitability for the company, with steel trading activities
driving its profitability. An increase in the working capital
loans during FY10 on the back of higher requirements following the
commissioning of the TMT plant resulted in increase in gearing
levels, however the same still remain at moderate levels.
About Venky Hi-Tech
VHTIL was incorporated in December 2003 and currently has a 36000
mtpa ingot and 84,000 mtpa TMT manufacturing facility at Durgapur,
West Bengal. VHTIL plans to set up a new 61,000 mtpa continuous
casting billet plant, 55,000 mtpa ferro manganese and 5,000 mtpa
silico manganese plant at a total cost of INR51.42 crores, at a
project gearing of 2.83 times.
Recent Results
The company reported a net profit of INR 0.39 crores in FY10 on
an OI of INR 121.0 crores, as compared to a net profit of INR0.02
crores on an OI of INR76.5 crores during FY09.
=========
J A P A N
=========
ARM ELECTRONICS: Files for Bankruptcy Protection
------------------------------------------------
Tak Kumakura at Bloomberg News reports that Arm Electronics Co.
filed for bankruptcy protection with the Tokyo District Court
disclosing liabilities of JPY6.2 billion (US$73 million).
Arm Electronics Co., Ltd., is a Japan-based company primarily
engaged in the manufacture and sale of printed circuit boards
(PCBs). The Company designs, manufactures and assembles various
types of PCBs. The products of the Company include single-side
PCBs, double-side PCBs, multilayer PCBs, interstitial via hole
(IVH) circuit boards, blind via hole (BVH) circuit boards, chip on
board PCBs, flexible PCBs and others.
JAPAN AIRLINES: Sees JPY19BB Drop in Revenue as Discount Fares End
------------------------------------------------------------------
Japan Airlines Corp. anticipates a drop of JPY19.2 billion in
revenues in the current fiscal year due to the discontinuation of
a discount fare program for shareholders, Kyodo News reports
citing sources familiar with the matter.
According to Kyodo, sources said JAL fears that it will lose a
large number of customers to rival All Nippon Airways Co. which
maintains a shareholder benefit program.
Kyodo News says JAL in June this year stopped distributing
discount tickets that can make domestic flight fares 50% off to
shareholders due to the transport ministry's opposition to the
benefit program.
In fiscal 2009 ended in March, a total of 2.15 million JAL
passengers used the discount tickets, including 1.77 million on
routes competing with ANA. Sources told Kyodo JAL estimates that
1.35 million of its discount ticket users will fly ANA in fiscal
2010.
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, 2010, 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 estimated
debts at $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 41: S&P Downgrades Ratings Various Classes of Notes to 'D'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered to 'D (sf)' from 'CCC-
(sf)' its ratings on the class C-3 and D-3 floating-rate notes
issued under the JLOC 41 LLC transaction. At the same time,
Standard & Poor's affirmed its ratings on the class A, B, C-2, D-
1, and D-2 notes issued under the same transaction. The class C-1
notes were fully redeemed on the principal and interest payment
date in August 2010.
The transaction's three underlying loans defaulted in 2009. S&P
lowered to 'D (sf)' S&P's ratings on classes C-3 and D-3 because,
with regard to one of the loans (the loan originally represented
about 36.4% of the total initial issuance amount of the notes), a
principal loss was incurred at the loan level as the subordinate
note holders exercised their options to purchase the loan
receivables (the stake of the senior note holders) in August 2010.
Accordingly, the principal of the class C-3 and D-3 notes has been
written down on the principal and interest payment date in August
2010.
All 13 properties backing another of the three underlying loans
(the loan originally represented about 41.3% of the total initial
issuance amount of the notes) were sold in late July 2010.
Although the final collection amount still has yet to be
determined, S&P believes that the likelihood of losses being
incurred at the loan level has increased. The class C-1 notes
have been fully redeemed using the proceeds from the sales of the
properties.
Meanwhile, collections from the properties backing the remaining
underlying loan (the loan originally represented about 22.2% of
the total initial issuance amount of the notes) will proceed in
accordance with the property liquidation report provided by the
servicer in July 2010. S&P intend to continue to monitor
information on the progress of collections that S&P receive from
the servicer.
The notes issued under this transaction were originally secured by
three loans extended to three obligors. The loans were initially
backed by 31 real estate trust certificates or real estate
properties. The transaction was arranged by Morgan Stanley Japan
Securities Co. Ltd., and ORIX 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 2015 for the class A floating-rate
notes, and the full payment of interest and ultimate repayment of
principal by the legal final maturity date for the class B to D-3
floating-rate notes.
Ratings Lowered
JLOC 41 LLC
JPY23.36 billion floating-rate notes due February 2015
Class To From Initial Issue Amount Coupon Type
----- -- ---- -------------------- -----------
C-3 D (sf) CCC- (sf) JPY0.99 bil. Floating rate
D-3 D (sf) CCC- (sf) JPY0.87 bil. Floating rate
Ratings Affirmed
Class Rating Initial Issue Amount Coupon Type
----- ------ -------------------- -----------
A AA (sf) JPY15.40 bil. Floating rate
B BBB+ (sf) JPY2.70 bil. Floating rate
C-2 B- (sf) JPY0.86 bil. Floating rate
D-1 CCC- (sf) JPY0.78 bil. Floating rate
D-2 CCC (sf) JPY0.69 bil. Floating rate
LEHMAN BROTHERS: Wins U.S. Nod for Momo-O as Japanese Counsel
-------------------------------------------------------------
Lehman Brothers Holdings Inc. and its affiliated debtors received
authority from the U.S. Bankruptcy Court for the Southern District
of New York to employ Momo-o Matsuo & Namba as special counsel
effective February 1, 2010.
The Debtors tapped the firm to provide them legal assistance in
connection with the civil rehabilitation proceedings of Lehman
Brothers Holdings Japan Inc., Lehman Brothers Commercial
Mortgage, Inc., and Sunrise Finance Inc. at the Tokyo District
Court.
Prior to the proposed employment, MMN worked as "ordinary course"
professional for the Debtors, providing them advice in connection
with the civil rehabilitation cases of the Japan-based Lehman
units. The firm's fees and expenses, however, exceeded the
$1 million compensation cap for ordinary course professionals,
prompting the Debtors to retain the firm as a professional
pursuant to Sections 327 and 328 of the Bankruptcy Code.
MMN will be paid for its services on an hourly basis and will be
reimbursed for its expenses. The firm's hourly rates are:
Professionals Hourly Rates
------------- ------------
Partners JPY35,000 - JPY60,000
Senior Associates JPY30,000 - JPY35,000
Associates JPY20,000 - JPY30,000
In a declaration, Junya Naito, Esq., a partner at MMN, assures
the Court that the firm does not represent or hold interest
adverse to the Debtors and their estates.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more
than 150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy September 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
listed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in
U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
On September 19, 2008, the Honorable Gerard E. Lynch, Judge of the
U.S. District Court for the Southern District of New York, entered
an order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI
The Bankruptcy Court has approved Barclays Bank Plc's purchase
of Lehman Brothers' North American investment banking and
capital markets operations and supporting infrastructure for
US$1.75 billion. Nomura Holdings Inc., the largest brokerage
house in Japan, purchased LBHI's operations in Europe for US$2
plus the retention of most of employees. Nomura also bought
Lehman's operations in the Asia Pacific for US$225 million.
International Operations Collapse
Lehman Brothers International (Europe), the principal UK trading
company in the Lehman group, was placed into administration,
together with Lehman Brothers Ltd, LB Holdings PLC and LB UK RE
Holdings Ltd. Tony Lomas, Steven Pearson, Dan Schwarzmann and
Mike Jervis, partners at PricewaterhouseCoopers LLP, have been
appointed as joint administrators to Lehman Brothers International
(Europe) on September 15, 2008. The joint administrators have
been appointed to wind down the business.
Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc.
filed for bankruptcy in the Tokyo District Court on September 16.
Lehman Brothers Japan Inc. reported about JPY3.4 trillion
(US$33 billion) in liabilities in its petition.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other insolvency
and bankruptcy proceedings undertaken by its affiliates.
(http://bankrupt.com/newsstand/or 215/945-7000)
=========
K O R E A
=========
DAEWOO ELECTRONICS: Creditors to Sell Firm to Entekhab Industrial
-----------------------------------------------------------------
Yonhap News Agency, citing financial sources, reports that
creditors of Daewoo Electronics Co. are seeking to seal an
agreement as early as next week to sell the electronics firm to
Entekhab Industrial Group.
Woori Bank and other creditors picked Iranian home appliance maker
Entekhab as the preferred bidder for their 97.5% stake in Daewoo
Electronics, which they acquired in a debt-equity swap in 1999
when the company was placed under a debt rescheduling program.
Headquartered in Chung-Gu, Seoul, Daewoo Electronics Corporation
-- http://www.dwe.co.kr/-- is the third largest Korean consumer
electronics company. It manufactures and sells a variety of
products including televisions, DVD players, refrigerators, air
conditioners, washing machines, microwaves, vacuum cleaners and
car audio systems in over 105 countries.
According to the Troubled Company Reporter-Asia Pacific, Daewoo
Electronics has been under a debt workout program since January
2000, months after its parent group -- the Daewoo Group --
collapsed under debts of nearly US$80 billion in 1999.
===============
M A L A Y S I A
===============
AXIS INCORPORATION: Bank Releases Firm From All Liabilities
-----------------------------------------------------------
The Bank of East Asia Limited has discharged and released Axis
Incorporation Berhad from all past, present and future liability
from BEA under the Corporate Guarantee provided by the Company and
also from all actions suits accounts claims and demands whatsoever
under or in respect of the Guarantee.
The Company and BEA entered into a Deed of Discharge and Release
on August 11, 2010.
About Axis Inc.
Based in Johor Bahru, Malaysia, Axis Incorporation Berhad
(KUL:AXIS) -- http://www.chongee.com.my-- is principally engaged
in the business of investment holding. The company, through its
subsidiaries, is engaged in fabric knitting and dyeing, and
manufacturer of garments. Its subsidiaries include Asiapin Sdn.
Bhd., Chongee Enterprise Sdn. Bhd. and GBC Marketing Pte. Ltd. In
June 2008, Axis Incorporation Berhad announced the disposal of the
entire equity interest in Ganad Corporation Bhd.
On May 23, 2009, Axis Incorporation Berhad was classified as an
affected issuer under the Amended Practice Note No. 17/2005 and
Paragraph 8.14C of the Listing Requirements of Bursa Malaysia
Securities Berhad as the Company was unable to provide a solvency
declaration to Bursa Securities.
EON BANK: Moody's Reviews 'D' Bank Financial Strength Rating
------------------------------------------------------------
Moody's Investors Service is continuing its review for possible
upgrade of EON Bank Berhad's Baa2/P-3 foreign currency long-
term/short-term deposit ratings and D Bank Financial Strength
Rating.
The rating review was initiated on April 7, 2010 following EON
Capital's Board's decision to call an extraordinary general
meeting to seek shareholder approval of Hong Leong Bank's (A3/P-
1/C-) proposed acquisition of its assets and liabilities. EBB is
the main asset of EON Capital.
"The extension of the review of EBB's ratings is due to the
protracted nature of the proposed deal," says John Tham, a Moody's
Vice President and Senior Credit Officer.
"The EGM for shareholders to vote on the proposed deal on
August 19, 2010 has been deferred to September 30, 2010 to avoid
further litigation after a minority shareholder contested the
validity of the EGM's notice period," says Tham.
"Contributing to the delay is an earlier lawsuit filed against
certain shareholders and directors of EON Capital by its largest
shareholder, Primus Pacific Limited. Separately, Moody's notes
that most regulatory approvals have been granted, and the closing
date set by HLB to receive all approvals, including shareholders'
approvals, and EON Capital's acceptance of the offer is
November 30, 2010," adds Tham.
In extending the ratings review, Moody's is not expressing a
judgment regarding the merits of the outstanding lawsuit. The
review for possible upgrade is underpinned by Moody's view that
the proposed acquisition, if successful, would be credit positive
for EBB as it would become part of a larger and more systemically
significant bank.
The merger of the two banks would move them from their current
positions to the fourth largest in the system. Currently, in
terms of asset size, EBB is the seventh largest and HLB is the
sixth largest of nine local banks in Malaysia.
Furthermore, EBB's moderate but improving credit profile would
likely benefit from HLB's comfortable funding and asset quality; a
situation which would collectively mitigate the risk of a
weakening of capital post-acquisition.
If the proposed deal is called off, EBB's ratings would likely be
confirmed with a stable outlook, all else being equal.
Moody's expects to conclude the ratings review once there is
greater clarity on the outcome of the proposed acquisition.
The last rating action on EBB was taken on April 7, 2010 when its
foreign currency long-term/short-term ratings of Baa2/P-3 and BFSR
of D were placed on review for possible upgrade.
EBB, headquartered in Kuala Lumpur, reported consolidated assets
of MYR46.6 billion as at December 31, 2009.
OILCORP BHD: High Court of Shah Alam Grants Ex-parte Injunction
---------------------------------------------------------------
Oilfab Sdn. Bhd., a subsidiary of Oilcorp Berhad, has been granted
an ex-parte injunction by the High Court of Shah Alam to restrain
Carigali-PTTEPI Operating Company Sdn. Bhd. and Bank Muamalat
Malaysia Berhad from making or proceeding with the call on the
Bank Guarantee No. BM001G812210.
The Company announced on August 13, 2010, that CPOC has served a
notice to BMMB of its intention to demand from BMMB the full
payment of Bank Guarantee sum of US$8.45 million. CPOC had
alleged that OFSB failed to perform its obligations under the
Contract known as JDA Block B-17 Development Project ?
Engineering, Procurement, Construction and Commissioning of Four
Wellhead Platforms and their Jackets. BMMB has in turn requested
OFSB to remit full payment of the amount to BMMB.
The High Court of Shah Alam has fixed the matter for case
management on September 6, 2010, and for hearing inter-partes of
OFSB's application for ad interim injunction on September 8, 2010.
About Oilcorp Berhad
Oilcorp Berhad is a Malaysia-based investment holding company.
The Company operates in five segments: oil and gas and
engineering, which includes engineering, procurement, construction
and contract-related services in oil and gas related industries;
property investment/resort, which includes property and resort
operations and related activities and services; investment
holding, which includes investment holding; fisheries, which
includes deep sea fishing operations and related activities, and
overseas special project (construction), which includes
engineering, procurement, construction and contract-related
sources in non oil and gas industries related industries. Its
wholly owned subsidiaries include Oil-Line Engineering &
Associates Sdn. Bhd., D'Tiara Corp Sdn. Bhd., Layar Visi Sdn. Bhd.
and D'Tiara Corp Limited.
Oilcorp Berhad has been classified as an Affected Listed Issuer
under Practice Note 17/2005 of Bursa Malaysia Securities Berhad
as the Company is unable to provide a solvency declaration to
Bursa Securities following a default in its interest payments
pursuant to Practice Note 1/2001.
LCL CORPORATION: Unit Receives Demand Notice From PGD Marketing
---------------------------------------------------------------
LCL Corporation Berhad disclosed in a regulatory filing that its
wholly-owned subsidiary, LCL Furniture Sdn Bhd, had on August 16,
2010, been served a Notice pursuant to Section 218(1)(e) and
(2)(a) of the Companies Act, 1965 by PGD Marketing Sdn Bhd in
respect of outstanding debt amounting to MYR44,777.04.
LCLF has 21 days from the date of the receipt of the Notice,
failing which will be deemed to be unable to pay and winding-up
proceedings will be taken against LCLF.
LCLF is currently under receivership and is not in a position to
defend 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.
TRANSMILE GROUP: Reports MYR6.28 Million Net Loss for 2nd Quarter
-----------------------------------------------------------------
Transmile Group Bhd incurred a net loss of MYR6.28 million for
three months ended June 30, 2010, compared with a net loss of
MYR449,000 in the second quarter of 2009. Total revenues were
MYR54.42 million for the 2010 second quarter from MYR38.53 million
for the 2009 second quarter.
The Company's balance sheet at June 30, 2010, showed MYR641.73
million in total assets, MYR616.06 million in total liabilities,
and stockholder's equity of MYR25.67 million.
A full-text copy of the Company's Quarterly Result is available
for free at http://ResearchArchives.com/t/s?69b9
About Transmile Group
Transmile Group Berhad is an investment holding company. The
Company is engaged in provision of air transportation and related
services. The Company's subsidiaries include Transmile Air
Services Sdn. Bhd., which is engaged in provision of air
transportation and related services and dealing in aircraft,
aircraft parts and equipment; Transmile Thailand Sdn. Bhd., which
is engaged in investment holdings; Transmile Management Sdn. Bhd.,
which is engaged in provision of management services; Viunique
Corporation Sdn. Bhd., which is engaged in leasing of aircraft,
and CEN Worldwide Sdn. Bhd., which is engaged in express
distribution and logistics management services.
Transmile Group Berhad has been considered as an Amended Practice
No. 17 company based on the criteria set by the Bursa Malaysia
Securities Bhd.
According to a disclosure statement with the bourse, the PN17
criteria was triggered resulting from Transmile's latest unaudited
quarterly announcement for the full financial year ended Dec. 31,
2009, wherein the shareholders' equity of the Company on a
consolidated basis is less than 25% of the Company's issued and
paid-up capital (excluding treasury shares) and such shareholders'
equity is less than MYR40 million.
====================
N E W Z E A L A N D
====================
ALLIED FARMERS: Chairman Resigns After Unit's Receivership
----------------------------------------------------------
John Loughlin has resigned as chairman of Allied Farmers Ltd.
after its finance unit was placed in receivership, BusinessDesk
reports.
BusinessDesk relates the company said Mr. Loughlin's resignation
was accepted "with regret" and he had worked "extremely hard
throughout what has been a very difficult period for the company."
Mr. Loughlin had been on the board of Allied farmers since 2004
and also chaired Allied Nationwide. A replacement would be
announced shortly.
Allied Nationwide Finance was put in the hands of Andrew Grenfell
and Kerryn Downey of McGrathNicol after a breach of its trust
deed. The breach, which Allied disputes, forced the company to
withdraw its debenture prospectus and the receivership is "a
direct result" of that move, Allied Farmers managing director Rob
Alloway said in the statement.
As reported in the Troubled Company Reporter-Asia Pacific on
July 21, 2010, Allied Farmers gained a six-month extension of its
loan facility with Westpac, giving the finance company more time
to repay debt and restructure its business. Allied had NZ$21
million outstanding on the facility as at June 30 and had an
overdraft facility of NZ$2.5 million that was set to expire on
July 1. The latest agreement pushes out the due date to March 31
next year from September 24.
About Allied Farmers
Based in New Zealand, Allied Farmers Limited (NZE:ALF) --
http://www.alliedfarmers.co.nz/-- is engaged in livestock, real
estate, finance, wool brokering and manufacturing (meat and
timber). Rural Services comprises livestock, merchandise and real
estate operations. The Company's Rural Services activities are
carried out in Taranaki, Waikato, King Country and Manawatu. Its
Financial Services activities are carried out by Allied Nationwide
Finance Limited in Auckland, Wellington and Christchurch. Timber
processing comprises the Company's discontinued sawmilling
operations. On June 29, 2007, Allied Nationwide Finance Limited,
Nationwide Finance Limited and Allied Prime Finance Limited were
amalgamated, with Nationwide Finance Limited being the continuing
entity. Nationwide Finance Limited subsequently changed its name
to Allied Nationwide Finance Limited.
BOTRY-ZEN LTD: Assets Sold to Zenith Technology
-----------------------------------------------
The Daily Otago Times reports that Botry-Zen Ltd has been sold to
the owner of Zenith Technology Corporation Ltd., eight months
after being placed in receivership owing NZ$2.6 million. The
price paid for Botry Zen's assets and intellectual property was
not disclosed, the report says.
The Otago Times reports that neither unsecured creditors nor
shareholders would get any money back from Botry Zen's collapse.
According to the report, industry sources said the owner of 23-
year-old ZenTech -- low-profile Dunedin millionaire Tak Hung --
paid less than $1 million for the company.
Dr. Hung said Botry-Zen would be kept as a separate business
entity from Zen Tech and not merged into its operations.
Headquartered in Dunedin, New Zealand, Botry-Zen Limited --
http://www.botryzen.co.nz/-- is engaged in the research,
development and commercialization of biological control agents
for use in the agriculture and horticulture industry. The
company operates in New Zealand, and is engaged in the
production and marketing for sale of the BOTRY-Zen product.
BOTRY-Zen is a live spore preparation of a non-pathogenic
saprophytic fungus.
As reported in the Troubled Company Reporter-Asia Pacific on
December 28, 2009, Botry-Zen Ltd. requested its bankers, Bank
of New Zealand Limited, to appoint receivers. The move comes
after the company failed to raise a minimum of NZ$1.5 million
under the Share Purchase Plan offering and other funding
opportunities.
Secured creditors included Bank of New Zealand (NZ$1.2 million),
Melic Innovators (NZ$1.1 million), preferential creditors (staff)
were owed NZ$47,766 and trade creditors NZ$279, 280.
CEDENCO FOODS: New Zealand's OIO Approves Sale to CDC Foods
-----------------------------------------------------------
New Zealand's Overseas Investment Office (OIO) has approved the
sale of Cedenco Foods to Japan's CDC Foods Ltd. for an undisclosed
price, The New Zealand Herald reports.
The Troubled Company Reporter-Asia Pacific, citing NZPA, reported
on June 30, 2010, that Cedenco Foods in New Zealand has been sold
to Japanese food group Imanaka, subject to Overseas Investment
Office approval. Imanaka is the owner of CDC Foods. Receiver
Brendon Gibson of KordaMentha said the business was being sold as
a going concern, and Imanaka planned to continue operating Cedenco
Foods in Gisborne and Hawke's Bay.
The company's Australian affiliates Cedenco JV Australia Pty and
SS Farms Pty Ltd were sold last month to Kagome Co. for AU$91
million.
About Cedenco Foods
Cedenco Foods -- http://www.cedenco.co.nz/-- is a leading
New Zealand and Australian based food ingredient processing and
marketing company. It produces and exports vegetable and fruit
powders, aseptic paste, purees and dice, frozen purees, and UHT
vegetable purees individually Quick Frozen (IQF) products to
customers globally.
In November 2009, ANZ Banking Group placed Cedenco Foods Australia
in receivership. Craig Shepard and Mark Korda of KordaMentha were
appointed receivers and managers of Cedenco Australia and its
related trading entities. The move came after ANZ Banking Group
NZ subsidiary, ANZ National Bank, called in receivers into Cedenco
Foods in New Zealand.
DORCHESTER PACIFIC: Raises $10.3 Million Through Entitlement Offer
------------------------------------------------------------------
Dorchester Pacific Ltd. said it has successfully raised NZ$10.3
million through its entitlement offer. Subscriptions were
received from 944 Shareholders and Debenture Holders. The amount
raised included NZ$460,000 from Noteholders who elected to receive
Dorchester shares rather than a cash settlement for their Notes.
The capital raising, which is part of Dorchester's Capital
Reconstruction Plan, sought to raise between NZ$8 million and
NZ$10 million in new capital and closed over-subscribed on
August 20, 2010. The capital raising was underwritten by NZ$7
million by the company's major shareholders, The Business Bakery
and Hugh Green Investments.
Paul Byrnes, Executive Director Dorchester, said ?We are extremely
pleased at the level of subscriptions we have received with more
than 940 subscribers participating in the capital raising
entitlement offer. This reflects the ongoing support we have
received from investors and shareholders over what has been a
difficult two years for the company.
?Looking ahead, we see a number of opportunities in the market.
The capital we have raised will provide Dorchester with a strong
financial base from which we can grow the business and create good
returns for our shareholders.?
The new capital that has been raised will be used to help grow
Dorchester's consumer and motor vehicle lending book and will
support an increased marketing investment in the savings and
insurance business in order to grow revenue and profits and
provide shareholder value.
The new shares will be issued at $0.10 per share. For every new
share subscribed to under the capital raising, Dorchester will
also issue one Option to subscribe for a new share in 3 years at
$0.125 per share. The new shares issued under the capital raising
will rank equally in all respects to existing shares.
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.
=====================
P H I L I P P I N E S
=====================
COLLEGE ASSURANCE: Can Set Aside PHP270MM From MRT Sale Proceeds
----------------------------------------------------------------
The Daily Tribune reports that a Court of Appeals ruling in favor
of a petition filed by cash-strapped pre-need firm College
Assurance Plan to set aside $6 million or about P270 million
proceeds from the sale of the firm's holdings in Mass Rail Transit
(MRT) III bonds last year is expected to further dim prospects
among millions of policy holders of the firm of ever recovering
their investments.
The Tribune says plan holders have been opposing the use of the
proceeds of the MRT III bonds to pay for CAP's obligations to its
affiliate creditors Smart Share Investments Ltd. and Fil-Estate
Management Inc. (FEMI) as they insisted that the money should only
be used to pay the 700,000 plan holders.
According to the Tribune, the company had asked the appellate
court to put off the fate of the sum pending the resolution of its
petition questioning a lower court's decision disapproving payment
of its obligations to two other companies also owned by pre-need
firm's owners, the Sobrepe¤as.
Associate Justice Rosmari Carandang said in an eight-page
resolution that the setting aside of the $6 million is necessary
in order not to render its petition moot in case the appellate
court eventually decides to allow it to pay its obligations
amounting to some $10.68 million.
The report says the amount represents the unpaid balance of the
purchase price of bonds issued by the Metro Rail Transit Corp.,
which operates the MRT III.
According to the report, the CA also gave the Securities and
Exchange Commission and the group of unidentified plan holders
represented by the Syquia and Syquia Law Officers 10 days to file
their comments to CAP's petition.
The appellate court also directed them to show cause why the order
to set aside $6 million issued should be lifted. On the other
hand, it gave CAP five days to reply to SEC and the plan holders'
comment to lift the order.
About College Assurance Plans
College Assurance Plans Philippines, Incorporated
-- http://www.cap.com.ph/-- began in 1980 with the birth of its
parent firm -- College Assurance Plan. CAP has since expanded
its business to the areas of Pre-need Pension, Distance
Learning, Health Maintenance, Life Insurance, Information
Technology, Financing, Communications and General Insurance.
As of end-2003, CAP's trust fund deficiency amounted to
PHP17.2 billion. According to the Securities and Exchange
Commission, the Company's trust fund assets, which were managed
by trustee banks, had not grown sufficiently to match its total
actuarial reserve liabilities, or its net liability to plan
holders worth PHP25.6 billion. CAP recorded a PHP2.8 billion
loss in 2003, up from PHP403.3 million in 2002.
As reported in the Troubled Company Reporter-Asia Pacific, CAP
blamed its financial difficulties on the SEC's imposition of the
Pre-need Uniform Chart of Accounts in 2002, claiming that it
resulted in CAP's "bloated yet theoretical" trust fund deficiency.
The SEC suspended the Company's license in 2004 due to its alleged
trust fund deficiency from the application of the PNUCA. CAP
filed a rehabilitation petition with the Makati Regional Trial
Court in 2005.
=================
S I N G A P O R E
=================
AIMS AMP: Property Purchase Won't Affect Moody's 'Ba2' Rating
-------------------------------------------------------------
Moody's Investors Service sees no immediate impact on its Ba2
corporate family rating on AIMS AMP Capital Industrial REIT
following its announcement that it had offered to acquire an
industrial property in Singapore for SGD161 million. The rating
outlook remains stable. At the same time, the company's
accompanying funding plan is supportive of its credit profile
given the resulting extension of its maturity profile.
The property has 90,506 sqm of net lettable area and is located at
27 Penjuru Lane, in Singapore's Jurong Industrial Estate. The
seller of the property is an indirectly and wholly owned
subsidiary of AMP Capital, which is one of the sponsors of
AIMSAMPIReit.
"The acquisition, which represents approximately 25% of
AIMSAMPIReit's current properties by value, will be funded by debt
and equity," says Kaven Tsang, a Moody's Assistant Vice President.
"Although the REIT's leverage will weaken to 35% from 28% (as of
June 30, 2010) because of the acquisition, it remains appropriate
for its current Ba2 rating, which incorporates some financial
flexibility."
"The 7.7% net property income yield from 27 Penjuru Lane will be
yield-accretive, and the property's cash flows should be stable at
least for the next two years, given its 100% occupancy from its
master lease agreement with C&P Holdings Pte Ltd, which will
expire in December 2012," says Tsang.
The REIT manager intends to actively engage with the sub-tenants
to secure a high occupancy rate for the property beyond December
2012. Moody's notes that AIMSAMPIReit's high lease maturities in
FY 2013 constrain the ratings and will need to be actively
managed.
In the meantime, on August 20, 2010, AIMSAMPIReit accepted a
letter of commitment for a new debt facility of SGD280 million in
three tranches from Standard Chartered Bank, United Overseas Bank
Limited, and the Commonwealth Bank of Australia. It intends to
draw down SGD272 million of the new facility and raise SGD79.6
million via a fully underwritten rights issue, to fund the Penjuru
Lane acquisition, refinance its existing SGD175 million loan
facility due in December 2012, and cover any related costs as well
as working capital.
Moody's views positively that the refinancing of the existing
SGD175 million facility will lengthen AIMSAMPIReit's debt maturity
profile and enhance its financial flexibility, as its loan payment
maturities will be staggered over the next three to five years.
Moreover, the financing terms of the new SGD280 million loan
facility are more advantageous, with interest margins at 2.05%-
2.35%, compared to 3.50% for the existing facility.
Moody's last rating action with regard to AIMSAMPIReit was taken
on December 28, 2009 when its rating was upgraded to Ba2 from
Caa1, with a stable outlook.
Headquartered in Singapore, AIMSAMPIReit is a real estate
investment trust that owns and invests in industrial properties.
The company reported investment property assets of approximately
SGD636 million as of June 30, 2010.
AVAGO TECHNOLOGIES: S&P Raises Corporate Credit Rating to 'BB+'
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it raised its
corporate credit rating on Singapore-based Avago Technologies
Finance Pte. Ltd. to 'BB+' from 'BB'. The outlook is stable.
At the same time, S&P raised its subordinated debt rating to 'BB+'
from 'B+' and revised its recovery rating to '3', indicating its
expectation for meaningful (50% to 70%) recovery for lenders in
the event of a payment default, from '6'. The senior secured debt
rating was raised to 'BBB' from 'BBB-' and the recovery rating
remains '1', indicating S&P's expectation for very high (90% to
100%) recovery for lenders in the event of payment default.
"The rating on Avago Technologies Finance Pte. Ltd. reflects S&P's
expectations that the company will sustain credit measures
commensurate with an 'intermediate' financial profile while it
pursues growth objectives," said Standard & Poor's credit analyst
Lucy Patricola. S&P expects full-year 2010 EBITDA of more than
$500 million, which will result in strong credit measures assuming
no change in the current capital structure. Still, in S&P's view,
the company is likely to pursue growth strategies to bolster
organic expansion or possibly diversify its portfolio, and S&P
expects a somewhat more leveraged capital structure over time.
S&P see capacity for debt to EBITDA of about 2x at the current
rating. Low leverage also allows for fluctuation in earnings
through a semiconductor cycle.
In line with the broader semiconductor industry, operating trends
for the first half of 2010 were strong, with revenues up 40%. S&P
believes Avago's future growth rates will moderate somewhat, up
about 35% for the fiscal year. Avago's EBITDA margin, which
remained stable during the recent downturn, is likely to remain at
current levels. Since fiscal year-end Oct. 31, 2009, the company
has reduced debt from a combination of IPO proceeds and cash flow
from operations. Debt to EBITDA was under 1x as of April, 2010,
compared with 2.6x one year earlier.
The stable outlook reflects S&P's expectation that Avago's credit
measures will remain consistent with an 'intermediate' financial
profile over time, including cyclicality and the potential for
debt-financed acquisitions. The company's still-moderate scale,
substantial competition within its markets of largely non-
proprietary products, and recent established position as a
publicly held enterprise all limit consideration for an upgrade
over the next year.
Given some accommodation for weaker earnings and higher leverage,
a lower rating would likely be the result of a sharp departure
from current expectations, such as an escalation of the
competitive environment and sustained aggressive pricing, which
would likely lower margins and EBITDA generation, or a shift in
financial policies that resulted in large debt-financed
acquisitions or material share repurchases.
===============
X X X X X X X X
===============
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Sept. 14, 2010
AMERICAN BANKRUPTCY INSTITUTE
ABI/NYIC Golf and Tennis Fundraiser
Maplewood Golf Club, Maplewood, N.J.
Contact: 1-703-739-0800; http://www.abiworld.org/
Sept. 20, 2010 (tentative)
AMERICAN BANKRUPTCY INSTITUTE
Complex Financial Restructuring Program
Fordham Law School, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
Sept. 23-25, 2010
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Four Seasons Las Vegas, Las Vegas, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 1, 2010 (tentative)
AMERICAN BANKRUPTCY INSTITUTE
ABI/UMKC Midwestern Bankruptcy Institute
Kansas City Marriott Downtown, Kansas City, Kan.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 6-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Oct. 11, 2010
AMERICAN BANKRUPTCY INSTITUTE
Chicago Consumer Bankruptcy Conference
Standard Club, Chicago, Ill.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 15, 2010
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Hilton New Orleans Riverside, New Orleans, La.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 29, 2010 (tentative)
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
The Savoy, London, England
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. __, 2010
AMERICAN BANKRUPTCY INSTITUTE
Delaware Views from the Bench and Bankruptcy Bar
Hotel du Pont, Wilmington, Del.
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 11, 2010
AMERICAN BANKRUPTCY INSTITUTE
Detroit Consumer Bankruptcy Conference
Hyatt Regency Dearborn, Dearborn, Mich.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 9-11, 2010
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Camelback Inn, a JW Marriott Resort & Spa,
Scottsdale, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 2-4, 2010
AMERICAN BANKRUPTCY INSTITUTE
22nd Annual Winter Leadership Conference
Camelback Inn, Scottsdale, Arizona
Contact: 1-703-739-0800; http://www.abiworld.org/
Jan. 20-21, 2011
AMERICAN BANKRUPTCY INSTITUTE
Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, Colo.
Contact: 1-703-739-0800; http://www.abiworld.org/
January 26-28, 2011
TURNAROUND MANAGEMENT ASSOCIATION
TMA Distressed Investing Conference
Aria Las Vegas
Contact: http://www.turnaround.org/
Mar. 31-Apr. 3, 2011
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Mich.
Contact: http://www.abiworld.org/
July 21-24, 2011
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 4-6, 2011 (tentative)
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 14, 2011
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Tampa Convention Center, Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
Apr. 19-22, 2012
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2012
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 2-4, 2012
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
Nov. 29 - Dec. 2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
*********
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 ***