/raid1/www/Hosts/bankrupt/TCRAP_Public/101011.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
Monday, October 11, 2010, Vol. 13, No. 200
Headlines
A U S T R A L I A
GRIFFIN COAL: Wins Court Okay of Bankruptcy Protection Extension
* AUSTRALIA: Bankruptcies Down 9.1% in June Quarter
C H I N A
CENTRAL CHINA: Moody's Assigns 'Ba3' Corporate Family Rating
CHINA TEL GROUP: Posts US$29 Million Net Loss in June 30 Quarter
YANLORD LAND: Moody's Retains 'Ba2' Corporate Family Rating
I N D I A
CHEMCO PLASTIC: CRISIL Reaffirms 'BB+' Rating on INR50.1MM LT Loan
GURU-G TEX: CRISIL Assigns 'BB-' Rating to INR100MM Cash Credit
KERALA NUT: CRISIL Reaffirms 'P4+' Ratings on Various Bank Debts
MAA BHAGWATI: CRISIL Reaffirms 'B' Rating on INR8.4 Mil. Term Loan
RAJ INTERNATIONAL: CRISIL Places 'BB-' Ratings on Various Loans
SALASAR TECHNO: CRISIL Puts 'BB+' Rating on INR300MM Cash Credit
SAMRUDDHA RESOURCES: CRISIL Reassigns 'B+' Rating on INR150MM Loan
SHREE TATYASAHEB: CRISIL Reaffirms 'BB+' Rating on Term Loans
SHRINIVASA CATTLE: CRISIL Reaffirms 'BB-' Rating on INR150MM Debt
SURYA WIRES: CRISIL Reaffirms 'BB-' Rating on INR105MM Cash Credit
UGAM IMPEX: CRISIL Assigns 'BB-' Ratings on Various Bank Debts
VARIEGATE PROJECTS: Fitch Cuts National Long-Term Rating to 'BB+'
I N D O N E S I A
CENTRAL PROTEINAPRIMA: Fitch Withdraws 'C' Issuer Default Rating
J A P A N
GODO KAISHA: S&P Retains CreditWatch Negative on 'BB' Rating
JAPAN AIRLINES: Presses Pilots and Crews to Voluntarily Retire
JCREF CMBS: Fitch Takes Rating Actions on Various Classes of Notes
JLOC 39: S&P Puts Various Note Ratings on CreditWatch Negative
JLOC 41: S&P Puts Various Note Ratings on CreditWatch Negative
JLOC XXXI: S&P Puts Ratings on Various Classes of Certificates
* Japan's Corporate Bankruptcies Fall 4.6% in September
* Kawasaki Kisen Plans to Buy Ships to Rescue Japanese Ship Owners
N E W Z E A L A N D
A2 CORPORATION: Acquires Idea Sphere's 50% Stake in US Venture
EDENZ: Placed Into Receivership
NATIONAL FINANCE: Former Accountant Pleads Guilty to Theft
OPEY: Placed Into Receivership
YELLOW PAGES: Kordamentha Values Assets "NZ$650 to NZ$800 Million"
P A K I S T A N
PAKISTAN MOBILE: Moody's Confirms 'B2' Corporate Family Rating
- - - - -
=================
A U S T R A L I A
=================
GRIFFIN COAL: Wins Court Okay of Bankruptcy Protection Extension
----------------------------------------------------------------
Lindsay Fortado at Bloomberg News reports that Griffin Coal Mining
Co. won an extension for its bankruptcy protection because it
expects to get final bids by Nov. 5, a judge said.
Bloomberg relates that Australia Federal Court Judge Walter
McKerracher said Griffin Coal's request to extend bankruptcy
protection to Feb. 25 was granted, and a scheduled meeting of
creditors was put off to allow the completion of the sale.
"Most (if not all) mining equipment used by Griffin Coal is
leased," Mr. McKerracher wrote in explaining his reasons for the
judgment, according to Bloomberg. The owners of the leased
property could repossess the equipment if the protection wasn't
extended, which "would have a substantial impact on the
operations," Mr. McKerracher wrote, according to Bloomberg.
Bloomberg notes Griffin Coal hired UBS AG and Macquarie Capital
Advisers, a unit of Macquarie Group Ltd., to advise on the sale
process. They said the final bids, with executable transaction
documents, will be received by Nov. 5, according to the judgment
obtained by Bloomberg News.
"It will be at this stage that it will become appropriate for the
final successful bid to be put to the companies' creditors,"
Mr. McKerracher wrote.
About Griffin Coal
Based in Australia, The Griffin Coal Mining Company Pty Ltd --
http://www.griffincoal.com.au/-- is engaged in coal mining and
processing. Griffin Coal operates major mines in the Collie area,
approximately 220 kilometers south east of Perth. The Company is
producing more than three million tons of coal per year. Griffin
Coal has operations at Ewington Mine, Muja Mine and Buckingham
Mine.
* * *
As reported by the Troubled Company Reporter-Asia Pacific on
January 4, 2010, Griffin Coal Mining Co. appointed Kordamentha as
Administrator. The coal supplier defaulted on an interest payment
in December 2009 to bondholders owed US$475 million and also
missed a payment to Australia's tax authority.
* AUSTRALIA: Bankruptcies Down 9.1% in June Quarter
---------------------------------------------------
Elisabeth Behrmann at Bloomberg News reports that Australian
bankruptcies have fallen to the lowest level in three years,
coinciding with an increase in the minimum debt required to be
declared bankrupt.
The Australian Financial Review, citing Holman Webb Senior
Associate Krystiana Conomos, said bankruptcies are down 9.1%
during the June quarter, according to Bloomberg.
Bloomberg relates the newspaper said reforms increasing minimum
debt required for a creditor to start bankruptcy proceeding to
AU$5,000 from AU$2,000 took effect on Aug. 11, 2010.
=========
C H I N A
=========
CENTRAL CHINA: Moody's Assigns 'Ba3' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has assigned a first-time Ba3 corporate
family rating to Central China Real Estate Ltd.
At the same time, Moody's has assigned a provisional (P)B1 rating
to its proposed US$ senior unsecured bond issue.
The outlook for the ratings is stable.
The proceeds from the proposed bonds will be used to fund new land
acquisitions and general corporate purposes.
The provisional rating status of the bond rating will be removed
after Central China has completed the US$ bond issuance.
Ratings Rationale
"Central China's Ba3 corporate family rating reflects its leading
market position and very long operating track record of 18 years
in Henan province, China," says Kaven Tsang, a Moody's Assistant
Vice President and Analyst.
"Moody's notes that property markets in Henan have been relatively
stable with demand for housing growing. The lower volatility in
prices and growth in prices -- compared with other markets in
China -- mean a lower level of regulatory risk exposure, which
supports the rating," adds Tsang, also Moody's lead analyst for
Central China.
"Further, Central China's Ba3 rating reflects the higher
predictability of its performance relative to its property peers,"
says Tsang.
"Central China has demonstrated some operating stability, given
its strategy of focusing on projects within a geography where it
has established its brand, and its discipline in land
acquisitions," says Tsang.
The Ba3 rating also considers Capitaland's involvement in Central
China, with a 27% ownership holding and its two seats on the
board; a situation which would help strengthen corporate
governance and risk control.
On the other hand its geographical concentration in a province
with a developing economy exposes it to constraints in bank credit
availability which, in turn, could slow sales. Such a weakness
constrains its rating.
In addition, while Central China has over 20 projects under
development that can partly spread its sales risk, its size in
terms of revenue and capital base remain small relative to its
peers, and this constrains its ratings and weakly positions it in
the Ba3 rating level.
Central China's bond rating is notched down to B1 due to the
subordination risk arising from its moderate level of subsidiary
debt. Secured and subsidiary debt (including trust financing) to
total assets was 26% as of 30 June 2010. Moody's expects this
ratio will stay around 20% in the coming 2-3 years.
The stable outlook reflects Moody's expectation that Central China
will have adequate liquidity to fund its projects and debt
repayments, and will remain focused in Henan and its vicinity. At
the same time, it will preserve a disciplined approach to land
acquisition.
Upward rating pressure will be limited in the near term. However,
the possibility of an upgrade could emerge over the medium term if
Central China (1) consistently achieves its planned sales; (2)
demonstrates a track record of good financial discipline with
respect to management of liquidity and debt; (3) demonstrates a
successful property sales track record beyond Henan; and (4)
broadens its banking relationships.
With respect to its credit metrics, Moody's sees EBITDA/interest
coverage consistently above 4-5x and adjusted leverage below 40-
45% as indications of potential for a rating upgrade.
The rating could be under pressure for a downgrade if Central
China (1) experiences significant sales volatility, and which
deviates from past performance, (2) suffers a material decline in
its profit margin, (3) accelerates expansion that impairs its
liquidity position, and/or increases its debt leverage position
materially; and/or (4) undergoes a material reduction in
Capitaland's ownership or board representation.
The potential for a downgrade could be triggered by a decline in
balance sheet cash, or Moody's expectation that Central China's
credit metrics would likely deteriorate -- EBITDA/interest falling
below 2.5-3x and adjusted leverage above 55% -- on a sustained
basis.
Central China Real Estate Limited is a leading property developer
in the Henan Province, China. Founded in 1992, it has been listed
on the Hong Kong Stock Exchange since June 2008.
Regulatory Disclosures
Information sources used to prepare the credit rating are these:
parties involved in the ratings, public information, confidential
and proprietary Moody's Investors Service's information.
Moody's Investors Service considers the quality of information
available on the issuer or obligation satisfactory for the
purposes of assigning a credit rating.
MOODY'S adopts all necessary measures so that the information it
uses in assigning a credit rating is of sufficient quality and
from sources MOODY'S considers to be reliable including, when
appropriate, independent third-party sources. However, MOODY'S is
not an auditor and cannot in every instance independently verify
or validate information received in the rating process.
CHINA TEL GROUP: Posts US$29 Million Net Loss in June 30 Quarter
----------------------------------------------------------------
China Tel Group, Inc., filed its quarterly report on Form 10-Q,
reporting a net loss of US$29.0 million on US$236,584 of revenue
for the three months ended June 30, 2010, compared with a net loss
of US$10.4 million on US$199,238 of revenue for the comparable
period in 2009.
The Company has incurred cumulative losses since inception
(April 4, 2008) of US$201.6 million. In addition, the Company has
negative working capital of US$25.6 million as of June 30, 2010,
and a stockholder's deficit of US$17.3 million.
Historically, the Company has financed its operations through the
sale of equity and convertible debt, as well as borrowings from
related parties. As of June 30, 2010, the Company had cash of
US$138,495 and current liabilities of approximately US$26.2
million. The Company expects to continue to incur net losses for
the foreseeable future.
The Company's balance sheet at June 30, 2010, showed US$8.9
million in total assets, US$26.2 million in total liabilities, and
a stockholders' deficit of US$17.3 million.
Mendoza Berger & Company, LLP, in Irvine, Calif., expressed
substantial doubt about the Company's ability to continue as a
going concern, following the Company's 2009 results. The
independent auditors noted that the Company has incurred a net
loss of US$56.0 million for 2009, cumulative losses of
US$165.4 million since inception, a negative working capital of
US$68.8 million and a stockholders' deficit of US$63.2 million,
and that the Company's viability is dependent upon its ability to
obtain future financing and the success of its future operations.
A full-text copy of the Form 10-Q is available for free at:
http://researcharchives.com/t/s?6c23
About China Tel
Based in San Diego, California, and Shenzhen, China, China Tel
Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/-- is
a US-based provider of high speed wireless broadband and
telecommunications infrastructure engineering and construction
services. Through its controlled subsidiaries, the Company
provides fixed telephony, conventional long distance, high-speed
wireless broadband and telecommunications infrastructure
engineering and construction services. ChinaTel is presently
building, operating and deploying networks in Asia and South
America: a 3.5GHz wireless broadband system in 29 cities across
the People's Republic of China with and for CECT-Chinacomm
Communications Co., Ltd., a PRC company that holds a license to
build the high speed wireless broadband system; and a 2.5GHz
wireless broadband system in cities across Peru with and for
Perusat, S.A., a Peruvian company that holds a license to build
high speed wireless broadband systems.
YANLORD LAND: Moody's Retains 'Ba2' Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service sees no immediate rating impact on the
Ba2 corporate family and senior unsecured debt ratings, or their
stable outlook, of Yanlord Land Group Limited following the
company's announcement that it has acquired a development site of
179,944 square meters.
"The acquisition of the land -- located in Tangzhen New District,
Pudong, Shanghai -- for RMB2.89 billion will be fully funded by
cash-on-hand and will not result in any material change in the
company's credit profile," says Peter Choy, a Moody's Vice
President & Senior Credit Officer, adding, "Yanlord had about
RMB6.8 billion in cash as of June 30, 2010".
"The new site is also only about 13 km from Lujiazui, where
Yanlord has already established a brand name for itself," says
Choy.
Projected post-acquisition credit metrics -- EBITDA/interest of
around 4.0x -- 5.5x and debt leverage of about 40% in the next 2
years -- remain within the Ba2 rating range
Moody's last rating action with regard to Yanlord was taken on 4
May 2010 when Moody's affirmed its Ba2 corporate family rating
with a stable outlook and removed the provisional status of its
US$300 million senior unsecured bonds.
Yanlord Land Group Limited is one of the major property developers
in China, targeting mid to high-end large-scale residential
developments in the Yangtze River Delta. It has a land bank with
a gross floor area of around 4.5 million sqm. It was established
in 1993 and was listed on the Singapore Stock Exchange in 2006.
=========
I N D I A
=========
CHEMCO PLASTIC: CRISIL Reaffirms 'BB+' Rating on INR50.1MM LT Loan
------------------------------------------------------------------
CRISIL's ratings on the bank facilities of Chemco Plastic
Industries Pvt Ltd continue to reflect Chemco Plastic's modest
scale of operations in the plastic industry, limited pricing
power, and vulnerability to volatility in raw material prices,
though partly mitigated by efficient raw material procurement
policy. These weaknesses are partially offset by Chemco Plastic's
established presence in the plastic industry and established
customer relationships.
Facilities Ratings
---------- -------
INR52.5 Million Cash Credit BB+/Stable (Reaffirmed)
INR50.1 Million Long-Term Loan BB+/Stable (Reaffirmed)
INR1.4 Million Proposed Long-Term
Bank Loan Facility BB+/Stable (Reaffirmed)
INR10.0 Million Letter of Credit P4+ (Reaffirmed)
INR6.0 Million Bank Guarantee P4+ (Reaffirmed)
Outlook: Stable
CRISIL believes that Chemco Plastics will continue to benefit from
its established customer relationships and promoter's longstanding
industry experience. The outlook may be revised to 'Positive' if
Chemco Plastic's revenues, profitability, and debt protection
metrics improve significantly. Conversely, the outlook may be
revised to 'Negative' if the company's cash accruals or debt
protection metrics decline sharply either on account of large,
debt-funded capital expenditure or deterioration in profitability.
Update
Chemco Plastic's scale of operations continues to be modest, with
operating income of around INR450 million during 2009-10 (refers
to financial year, April 1 to March 31). The company's financial
risk profile is constrained because of increase in gearing, driven
by the recent large debt-funded capital expenditure (capex).
Chemco Plastic has recently expanded its manufacturing capacity
from to around 20,000 tonnes per annum (tpa) from 7000 tpa by
setting up a plant in Baroda (Gujarat) for a cost of INR350
million. The project was funded through a term loan of INR250
million and the balance through promoter's contribution (equity
shares, preference shares, and unsecured loan) and internal
accruals. The new facilities commenced commercial production in
March 2010. Furthermore, Chemco Plastic's management has informed
CRISIL that the company has signed an agreement with one of its
clients, Hindustan Coca-Cola Beverages Pvt Ltd, for offtake from
the new plant. The expanded capacity is expected to increase the
company's revenues over the medium term. Chemco Plastic has
moderate liquidity. Its bank limit utilization has been above
85 per cent on an average during the 12 months ended July 2010.
The estimated net cash accrual for 2009-10 is INR650 million. The
company has term debt obligations of around INR220 million in
2010-11 and no major capex plan for the medium term.
Chemco Plastic reported, on provisional basis, a profit after tax
(PAT) of INR42.2 million on an operating income of INR453.0
million for 2009-10 (refers to financial year, April 1 to
March 31); it reported a PAT of INR15.9 million on an operating
income of INR421.5 million for 2008-09.
About Chemco Plastic
Chemco Plastic, promoted by Mr. Ramawatar Saraogi in 1996, is a
closely held company. It manufactures pet bottles, pet jars, and
pet preforms for industries such as personal care, health care,
confectionaries, agro-chemicals and lubricants. The company's
clientele includes Bisleri Ltd, Pepsi Co, Parle Products Pvt Ltd,
Hindustan Coca-Cola Beverages Pvt Ltd, and Iceberg Foods Ltd.
Chemco Plastic also exports pet preforms to manufacturers in the
Middle East and Africa. The company has manufacturing capacity of
20,000 metric tones per annum. Mr. Ramawatar Saraogi is the
chairman and managing director of Chemo Plastic.
GURU-G TEX: CRISIL Assigns 'BB-' Rating to INR100MM Cash Credit
---------------------------------------------------------------
CRISIL has assigned its 'BB-/Stable' rating to the bank facilities
of Guru-G Tex Print Pvt Ltd, which is part of the Bodra group.
Facilities Ratings
---------- -------
INR100.0 Million Cash Credit Facility BB-/Stable (Assigned)
INR99.9 Million Proposed LT Bank Loan BB-/Stable (Assigned)
Facility
The rating reflects the Bodra group's large working capital
requirements, and exposure to risks related to geographical and
customer concentration in revenues from jewellery division. These
rating weaknesses are partially offset by the group's moderate
financial risk profile, marked by adequate net worth and
conservative capital structure.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of GTPPL, and its group companies Ugam
Impex Ltd, and Raj International Ltd. This is because the three
entities, collectively referred to as the Bodra group, have common
promoters and management, are in similar lines of business, and
have fungible funds. Moreover, UIL owns 17.6 per cent stake in
GTPPL.
Outlook: Stable
CRISIL believes that the Bodra group will, over the medium term,
continue to benefit from healthy growth in sales in its jewellery
manufacturing and textile trading divisions, and improvement in
its operating margin. The outlook may be revised to 'Positive' if
the Bodra group reports better-than-expected growth in sales and
operating margin, resulting in an improvement in debt protection
metrics. Conversely, the outlook may be revised to 'Negative' if
the group reports less-than-expected growth in sales or its
working capital requirements increase substantially, thus exerting
pressure on the company's liquidity.
About the Group
RIL (formerly, Raj Synthetics) was set up as a partnership firm by
Mr. Jagdish Bodra, Mr. Rajesh Bodra and Mr. Ashok Jalani in 1992.
It was reconstituted as a private limited company in 1996. RIL
has various business divisions comprising textile trading, diamond
trading, gold jewellery manufacturing, and wind power generation.
With the changing business profile of the company it was renamed
to RIL in 2007 and its corporate status was changed to closely
held public limited company.
UIL too has various business divisions comprising yarn and fabrics
trading, trading and exports of diamonds and wind power
generation. Mr. Ramesh Bodra and Mrs. Kailash Bodra have 19.6 per
cent and 8.17 per cent shareholding in UIL, respectively. UIL was
incorporated in 1996 and was a private limited company until 2009.
It was converted into public limited company in 2009-10 (refers to
financial year, April 1 to March 31).
GTPPL trades in yarn and fabrics. The company is promoted by the
Bodra family with Mr. Ramesh Bodra (8.84 per cent shareholding)
and Mrs. Kailash Bodra (17.1 per cent shareholding) being the
common promoters amongst RIL, UIL and GTPPL. UIL also owns 17.69
per cent stake in GTPPL.
GTPPL reported a profit after tax (PAT) of INR4 million on net
sales of INR467 million for 2009-10 (refers to financial year,
April 1 to March 31), it first year of operations.
KERALA NUT: CRISIL Reaffirms 'P4+' Ratings on Various Bank Debts
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of Kerala Nut Food Company
continue to reflect KNFC's volatile operating margins, small net
worth, and small scale of operations, its exposure to intense
market competition because of fragmentation in the cashew
industry, and the risks the firm faces because of its partnership
structure. The impact of these weaknesses is mitigated by KNFC's
established track record in the cashew industry, and its above-
average financial risk profile marked by moderate gearing and
comfortable debt protection indicators.
Facilities Ratings
---------- -------
INR120 Million Export Packing Credit/ P4+ (Reaffirmed)
Packing Credit in Foreign Currency Limit
INR40 Million Foreign Bills Discounting P4+ (Reaffirmed)
Limit
INR10 Million Standby Line of Credit Limit P4+ (Reaffirmed)
Update
KNFC's sales declined in 2009-10 (refers to financial year,
April 1 to March 31) because of a depressed demand scenario for
cashew kernel in export markets. Because of the depressed demand
scenario and the appreciation of the value of the rupee against
the US dollar, KNFC's operating margin has declined from previous
robust levels of 12%. Nevertheless, KNFC's financial risk profile
remained above average, with gearing of 1.2 times as on March 31st
2010 and interest coverage ratio of 2.0 times for 2009-10. CRISIL
believes that KNFC will report healthy revenue growth in the
medium term, backed by favorable prices of cashew nuts and a
healthy order book. For the five months ended August 31, 2010,
KNFC has provisionally reported sales of INR250 million and orders
of USD4.8 million to be delivered by December 2010.
KNFC provisionally reported a profit after tax (PAT) of INR6.5
million on a turnover of INR652.8 million for 2009-10; it reported
a PAT of INR51.6 million on a turnover of INR738.2 million for
2008-09.
About Kerala Nut
KNFC, part of the K Parameswaran Pillai group, is a Kollam-based
partnership firm is in the business of processing raw cashew nuts
and exporting cashew kernels; it has a total processing capacity
of around 36 tonnes per day.
MAA BHAGWATI: CRISIL Reaffirms 'B' Rating on INR8.4 Mil. Term Loan
------------------------------------------------------------------
CRISIL's rating on the bank facilities of Maa Bhagwati Rice Mill
continue to reflect MBRM's weak financial risk profile, and the
company's exposure to risks relating to the working-capital-
intensive nature, and small scale of its operations in the rice
industry, to unfavorable changes in regulations governing the rice
industry, and to vagaries in the monsoons. These weaknesses are,
however, partially offset by the healthy growth prospects of the
rice industry.
Facilities Ratings
---------- -------
INR95.0 Million Cash Credit B/Stable (Reaffirmed)
INR8.4 Million Term Loan B/Stable (Reaffirmed)
INR10.6 Million Letter of Credit P4 (Reaffirmed)
Outlook: Stable
CRISIL believes that MBRM will maintain a stable business risk
profile over the medium term on the back of established
relationships with suppliers and clients. However, the firm's
financial risk profile may remain constrained by high gearing and
weak debt protection measures. The outlook may be revised to
'Positive' if MBRM reports high growth in turnover, while
maintaining stable profitability, and if the promoters infuse
funds into the firm, improving its financial risk profile.
Conversely, the outlook may be revised to 'Negative' if the firm
undertakes large, debt-funded capital expenditure, or its revenue
declines owing to a slowdown in rice exports.
Update
MBRM's topline increased marginally more than CRISIL's
expectations?to an estimated INR416 million in 2009-10 (refers to
financial year, April 1 to March 31) from INR256.1 million in
2008-09. The firm's sorting capacity increased to 10 tonnes per
hour (tph) from 8 tph in November 2009 due to installation of a
new machine. MBRM's financial profile remains in line with
CRISIL's expectations, with gearing and net worth estimated at 8.3
times and INR15 million, respectively, as on March 31, 2010.
CRISIL expects MBRM's financial profile to remain constrained in
the near term.
MBRM's profit after tax (PAT) was estimated at INR0.9 million on
net sales of INR416 million for 2009-10, as against a PAT of
INR0.1 million on net sales of INR256.1 million for 2008-09.
About Maa Bhagwati
Set up in 2006 as a partnership firm by Mr. Pawan Kumar Goyal and
Mr. Joginder Pal, MBRM undertakes milling and processing of
basmati rice. It produces parboiled rice. The firm sells via
intermediaries to rice exporters. The firm's manufacturing unit is
at Cheeka (Haryana).
RAJ INTERNATIONAL: CRISIL Places 'BB-' Ratings on Various Loans
---------------------------------------------------------------
CRISIL has assigned its 'BB-/Stable/P4+' ratings to the bank
facilities of Raj International Ltd, which is part of the Bodra
group.
Facilities Ratings
---------- -------
INR180.0 Million Cash Credit Facility BB-/Stable (Assigned)
INR101.9 Million Term Loan BB-/Stable (Assigned)
INR18.0 Million Proposed Long Term BB-/Stable (Assigned)
Bank Loan Facility
INR50.0 Million Letter of Credit P4+ (Assigned)
INR400.0 Million Foreign Bill P4+ (Assigned)
Discounting
The rating reflects the Bodra group's large working capital
requirements, and exposure to risks related to geographical and
customer concentration in revenues from jewellery division. These
rating weaknesses are partially offset by the group's moderate
financial risk profile, marked by adequate net worth and
conservative capital structure.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of RIL, and its group companies Guru-G Tex
Print Pvt Ltd, and Ugam Impex Ltd. This is because the three
entities collectively referred to as the Bodra group have common
promoters and management, are in similar lines of business, and
have fungible funds as reflected in inter-group sales to derive
benefits of economies of scale. Moreover, UIL owns 17.6 per cent
stake in GTPPL.
Outlook: Stable
CRISIL believes that the Bodra group will, over the medium term,
continue to benefit from healthy growth in sales in its jewellery
manufacturing and textile trading divisions and improvement in its
operating margin. The outlook may be revised to 'Positive' if the
Bodra group reports better-than-expected growth in sales and
operating margin, resulting in an improvement in debt protection
metrics. Conversely, the outlook may be revised to 'Negative' if
the group reports less-than-expected growth in sales or its
working capital requirements increase substantially, thus exerting
pressure on the company's liquidity.
About Raj International
RIL (formerly, Raj Synthetics) was set up as a partnership firm by
Mr. Jagdish Bodra, Mr. Rajesh Bodra and Mr. Ashok Jalani in 1992.
It was reconstituted as a private limited company in 1996. RIL
has various business divisions comprising textile trading, diamond
trading, gold jewellery manufacturing, and wind power generation.
With the changing business profile of the company it was renamed
to RIL in 2007 and its corporate status was changed to closely
held public limited company.
UIL too has various business divisions comprising yarn and fabrics
trading, trading and exports of diamonds and wind power
generation. Mr. Ramesh Bodra and Mrs. Kailash Bodra have 19.6 per
cent and 8.17 per cent shareholding in UIL, respectively. UIL was
incorporated in 1996 and was a private limited company until 2009.
It was converted into public limited company in 2009-10 (refers to
financial year, April 1 to March 31).
GTPPL trades in yarn and fabrics. The company is promoted by the
Bodra family with Mr. Ramesh Bodra (8.84 per cent shareholding)
and Mrs. Kailash Bodra (17.1 per cent shareholding) being the
common promoters amongst RIL, UIL and GTPPL. UIL also owns 17.69
per cent stake in GTPPL.
RIL reported a provisional profit after tax (PAT) of INR84 million
on provisional net sales of INR6.3 billion for 2009-10 (refers to
financial year, April 1 to March 31), against a PAT of INR19
million on net sales of INR2.1 billion for 2008-09.
SALASAR TECHNO: CRISIL Puts 'BB+' Rating on INR300MM Cash Credit
----------------------------------------------------------------
CRISIL has assigned its 'BB+/Stable/P4+' ratings to Salasar Techno
Engineering Pvt Ltd's bank facilities.
Facilities Ratings
---------- -------
INR300.00 Million Cash Credit BB+/Stable (Assigned)
INR75.00 Million Bank Guarantee P4+ (Assigned)
The ratings reflect STEPL's large working capital requirements,
average scale of operations with limited track record, end-user-
industry concentration in its revenue profile, and its
susceptibility to volatility in raw material prices. These rating
weaknesses are partially offset by STEPL's moderate financial risk
profile, marked by a moderate net worth and low gearing, and
healthy revenue growth.
Outlook: Stable
CRISIL believes that, over the medium term, STEPL's scale of
operations will continue to be average, while its financial risk
profile will remain constrained, as its working capital
requirements are likely to remain large. The outlook may be
revised to 'Positive' if STEPL increases its scale of operations
and improves its profitability, while maintaining its capital
structure. An improvement in STEPL's liquidity, led by
improvement in the company's working capital cycle, could also
trigger a 'Positive' outlook. Conversely, the outlook may be
revised to 'Negative' if there is a decline in STEPL's orders,
leading to a lower topline and reduction in cash accruals, or in
case of a further stretch in the company's receivables, resulting
in deterioration in its financial risk profile or liquidity.
About Salasar Techno
STEPL was incorporated in 2001. The company, set up by Mr. Alok
Kumar and Mr. Gyanendra Kumar Aggarwal, undertakes projects
involving engineering, designing, and fabrication of steel
structures for the telecommunication and power sectors. Its
manufacturing unit at Jindal Nagar in Noida (Uttar Pradesh) has a
capacity of 15,000 tonnes per annum (tpa). The company set up a
new facility at Khera in Ghaziabad (Uttar Pradesh) in 2009-10
(refers to financial year, April 1 to March 31), with a capacity
of 20,000 tpa. STEPL has also diversified into turnkey erection
and commissioning of structures for power substations and
transmission lines.
STEPL is estimated to report a profit after tax (PAT) of INR22.1
million on net sales of INR1070.5 million for 2009-10, against a
PAT of INR18.3 million on net sales of INR957.8 million for
2008-09.
SAMRUDDHA RESOURCES: CRISIL Reassigns 'B+' Rating on INR150MM Loan
------------------------------------------------------------------
CRISIL has upgraded its rating on the short-term bank facility of
Samruddha Resources Ltd to 'P4' from 'P5', and assigned its
'B+/Stable' rating to the company's long-term facilities (these
facilities were earlier short-term facilities, and were rated
'P5').
Facilities Ratings
---------- -------
INR300 Million Cash Credit Facility B+/Stable (Reassigned)
INR150 Million Working Capital Term B+/Stable (Reassigned)
Loan
INR320 Million Proposed Long-Term B+/Stable (Reassigned)
Bank Loan Facility
INR55 Million Bank Guarantee Facility P4 (Upgraded from 'P5')
The rating upgrade reflects improvement in SRL's liquidity
following the commencement of operations at its mines since
October 2009, and the improvement in demand from its export
market, China. The company had faced liquidity pressures in
2008-09 (refers to financial year, April 1 to March 31) because of
a decline in demand for iron-ore from its customers in China and
the consequent large accumulation of inventory, and later because
the company could not immediately commence operations at its
mines. As a result, SRL could not service its debt obligations
from November 2008 till January 2010. The company's liquidity has
improved since then, and its packing credit account was converted
to a cash credit account and a working capital term loan in
March 2010. The company has been timely in servicing its debt
obligations for the past seven months. The upgrade also reflects
CRISIL's belief that SRL will maintain its liquidity over the
medium term, supported by improved cash accruals because of a
shift in its business to mining from its earlier trading
activities, and its moderate capital expenditure (capex).
The ratings reflect SRL's limited track record in timely debt
servicing, exposure to geographical and customer concentration
risks, and susceptibility of its margins to fluctuations in iron
ore prices and in the Indian rupee-US dollar exchange rate. These
rating weaknesses are partially offset by SRL's moderate financial
risk profile, marked by moderate net worth, gearing, and debt
protection metrics, efficient logistics operations and quality
control, and its established relationships with international
customers.
Outlook: Stable
CRISIL believes that SRL will maintain a stable credit risk
profile over the medium term with the commencement of its mining
operations and the expected increase in its sales, backed by
improvement in demand for iron ore and steady orders from its
customers. The outlook may be revised to 'Positive' in case of
significant improvement in iron ore prices or increase in SRL's
scale of operations, leading to an improvement in its business
risk profile, and if the company continues to exhibit a track
record of timely debt servicing. Conversely, the outlook may be
revised to 'Negative' in case there is a decline in iron ore
prices, or SRL undertakes a major debt-funded capex programme.
About Samruddha Resources
Incorporated in 1997, the Mumbai-based SRL, formerly Samruddha
Overseas Ltd, is currently engaged in mining and trading in iron
ore. The company was previously engaged in trading in and export
of iron ore, cotton yarn, coal, and grey fabrics. The trading in
cotton yarn and grey fabrics business is now carried through
Samruddha International Ltd and its subsidiary Sunline Exports
Ltd, respectively. SRL's mines are located in the Sindhdurg
district of Maharashtra.
For 2009-10, SRL reported a net profit of INR134 million on net
sales of INR1.51 billion, against a PAT of INR14 million on net
sales of INR1.52 billion for the previous year.
SHREE TATYASAHEB: CRISIL Reaffirms 'BB+' Rating on Term Loans
-------------------------------------------------------------
CRISIL's ratings on Shree Tatyasaheb Kore Warana Sahakari Sakhar
Karkhana Ltd's bank facilities continue to reflect Warana Sugar's
weak financial risk profile, marked by low net worth, high
gearing, and weak debt protection measures, working-capital-
intensive operations, and susceptibility to adverse regulatory
changes in the sugar industry. These rating weaknesses are
partially offset by Warana Sugar's average operating efficiency.
Facilities Ratings
---------- -------
INR300 Million Term Loans BB+/Stable (Reaffirmed)
INR2300 Million Cash Credit BB+/Stable (Reaffirmed)
INR20 Million Bank Guarantee P4+ (Reaffirmed)
Outlook: Stable
CRISIL believes that Warana Sugar will maintain its business risk
profile and strengthen its financial risk profile over the medium
term, backed by repayment of term loans and stable profitability.
The outlook may be revised to 'Positive' if Warana Sugar reports a
sustained improvement in revenues and reduces its debt levels.
Conversely, the outlook may be revised to 'Negative' if the
society's business suffers because of shortage in sugarcane
production (caused by drought), or if the society undertakes any
additional debt-funded capital expenditure programme, thereby
adversely affecting its capital structure.
Warana Sugar, a part of the Warana group of societies, was
incorporated in 1955 under the Maharashtra Co-operative Societies
Act, 1960. The sugar factory started operations with capacity of
1000 tonnes crushed per day (tcd) in 1959-60 (refers to financial
year, April 1 to March 31); over the years, the capacity has
increased to 7500 tcd. The society has also taken on lease three
sugar mills, with capacity of 2500 tcd each, in the Kohlapur
region. It will shortly commission a sugar refinery plant with a
capacity of processing 500 tpd, which will produce low-sulphur
content, export-quality sugar. Warana Sugar also has a distillery
with capacity of 135 kilolitres per day, and a 20-tonne-per-day
paper mill. Sugar remained the largest contributor to the
society's overall revenues, at 85 per cent, in 2009-10 (refers to
financial year, April 1 to March 31).
Warana Sugar reported, on provisional basis, a profit after tax
(PAT) of INR117.50 million on net sales of INR5.76 billion for
2009-10; it reported a PAT of INR41.90 million on net sales of
INR4.45 billion for 2008-09.
SHRINIVASA CATTLE: CRISIL Reaffirms 'BB-' Rating on INR150MM Debt
-----------------------------------------------------------------
CRISIL's rating on the bank facilities of Shrinivasa Cattle Feeds
Pvt Ltd continues to reflect SCFPL's large working capital
requirements, small scale of operations, exposure to intense
competition in the edible oil and de-oiled cakes (DOCs) industry,
average financial risk profile marked by below-average net worth,
and average gearing and debt protection metrics, and
susceptibility to volatility in raw material prices and to adverse
regulatory changes. The impact of these weaknesses is mitigated
by SCFPL's increased access to raw materials and its promoters'
industry experience.
Facilities Ratings
---------- -------
INR150.00 Million Cash Credit BB-/Stable (Reaffirmed)
Update
SCFPL generated an operating income of INR1233 million in 2009-10
(refers to financial year, April 1 to March 31), which was lower
than CRISIL's expectation and almost at the 2008-09 level. This
was mainly because of relatively lower yield of soybean crop
during the October-to-December 2009. The company's operating
margin continues to be low (lower than CRISIL's expectation)
because of adverse prices of soybean. SCFPL's working capital
requirements, though large, decreased in 2009-10 because of low
inventory stocking and debtor levels. This has lowered the
company's gearing to 1.27 times as on March 31, 2010, from 1.95
times as on March 31, 2009. Despite the absence of any large
capital expenditure (capex) plan for the near term, SCFPL's
financial risk profile is expected to remain constrained because
of its large working capital requirements and low profitability.
SCFPL's profit after tax (PAT) and net sales are estimated to be
INR6.5 million and INR1233 million for 2009-10; it reported a PAT
of INR7.7 million on net sales of INR1252 million for 2008-09.
Outlook: Stable
CRISIL believes that SCFPL will maintain its financial risk
profile, supported by the absence of any capex plan for the near
term. The company's scale of operations is expected to remain
small. The outlook may be revised to 'Positive' if there is a
substantial increase in SCFPL's scale of operations, or
improvement in its financial risk profile, most likely by way of
increase in net worth through fresh equity infusion. Conversely,
the outlook may be revised to 'Negative' if the company undertakes
a larger-than-expected debt-funded capex programme.
About Shrinivasa Cattle
SCFPL was established in 1991 by Mr. Shriram Medewar and
Mr. Deelip Chakkarwar. The company is into solvent extraction of
soybean oil, manufacture of soy DOCs, solvent extraction of
mustard and sunflower cakes, and trading in DOCs. SCFPL's
production facility in Nanded (Maharashtra) has seed-crushing
capacity of 150 tonnes per day (tpd) and a refining capacity of 50
tpd. Currently, Mr. Shriram Medewar's son, Mr. Sunil Medewar, and
Mr. Deelip Chakkarwar's son, Mr. Rohan Chakkarwar, manage the
company.
SURYA WIRES: CRISIL Reaffirms 'BB-' Rating on INR105MM Cash Credit
------------------------------------------------------------------
CRISIL's ratings on the bank facilities of Surya Wires Pvt Ltd
continue to reflect Surya Wires' weak financial risk profile,
marked by a low net worth, and limited scale of operations in the
wires industry. These weaknesses are partially offset by Surya
Wires' average business risk profile, supported by steady
relationships with customers and comfortable order book.
Facilities Ratings
---------- -------
INR105 Million Cash Credit Limits BB-/Stable (Reaffirmed)
INR30 Million Letter of Credit P4+ (Reaffirmed)
INR23 Million Bank Guarantee P4+ (Reaffirmed)
Outlook: Stable
CRISIL believes that Surya Wires' financial risk profile will
remain strained over the medium term, with weak debt protection
measures, due to low profitability. The outlook may be revised to
'Positive' if there is significant improvement in the company's
profitability, and further infusion of equity, resulting in an
increased net worth. Conversely, any large debt-funded capital
expenditure or decline in profitability may result in a 'Negative'
outlook.
About Surya Wires
Surya Wires was incorporated as a closely-held company by Mr. S K
Jain in 1989. The company manufactures galvanised iron and stay
wires at its facility at Raipur (Chattisgarh).
Surya Wires, on a provisional basis, reported a profit after tax
(PAT) of INR2.7 million on net sales of INR588.2 million for 2009-
10 (refers to financial year, April 1 to March 31); it reported a
PAT of INR2.3 million on net sales of INR639.8 million for
2008-09.
UGAM IMPEX: CRISIL Assigns 'BB-' Ratings on Various Bank Debts
--------------------------------------------------------------
CRISIL has assigned its 'BB-/Stable' rating to the bank facilities
of Ugam Impex Ltd, which is part of the Bodra group.
Facilities Ratings
---------- -------
INR150.0 Million Cash Credit Facility BB-/Stable (Assigned)
INR57.0 Million Term Loan BB-/Stable (Assigned)
INR523.0 Million Proposed Long Term BB-/Stable (Assigned)
Bank Loan Facility
The rating reflects the Bodra group's large working capital
requirements, and exposure to risks related to geographical and
customer concentration in revenues from jewellery division. These
rating weaknesses are partially offset by the group's moderate
financial risk profile, marked by adequate net worth and
conservative capital structure.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of UIL, and its group companies Guru-G Tex
Print Pvt Ltd, and Raj International Ltd. This is because the
three entities collectively referred to as the Bodra group have
common promoters and management, are in similar lines of business,
and have fungible funds. Moreover, UIL owns 17.6 per cent stake
in GTPPL.
Outlook: Stable
CRISIL believes that the Bodra group will, over the medium term,
continue to benefit from healthy growth in sales in its jewellery
manufacturing and textile trading divisions and improvement in its
operating margin. The outlook may be revised to 'Positive' if the
Bodra group reports better-than-expected growth in sales and
operating margin, resulting in an improvement in debt protection
metrics. Conversely, the outlook may be revised to 'Negative' if
the group reports less-than-expected growth in sales or its
working capital requirements increase substantially, thus exerting
pressure on the company's liquidity.
About the Group
RIL (formerly, Raj Synthetics) was set up as a partnership firm by
Mr. Jagdish Bodra, Mr. Rajesh Bodra and Mr. Ashok Jalani in 1992.
It was reconstituted as a private limited company in 1996. RIL
has various business divisions comprising textile trading, diamond
trading, gold jewellery manufacturing, and wind power generation.
With the changing business profile of the company it was renamed
to RIL in 2007 and its corporate status was changed to closely
held public limited company.
UIL too has various business divisions comprising yarn and fabrics
trading, trading and exports of diamonds and wind power
generation. Mr. Ramesh Bodra and Mrs. Kailash Bodra have 19.6 per
cent and 8.17 per cent shareholding in UIL, respectively. UIL was
incorporated in 1996 and was a private limited company until 2009.
It was converted into public limited company in 2009-10 (refers to
financial year, April 1 to March 31).
GTPPL trades in yarn and fabrics. The company is promoted by the
Bodra family with Mr. Ramesh Bodra (8.84 per cent shareholding)
and Mrs. Kailash Bodra (17.1 per cent shareholding) being the
common promoters amongst RIL, UIL and GTPPL. UIL also owns 17.69
per cent stake in GTPPL.
UIL reported a provisional profit after tax (PAT) of INR18 million
on net sales of INR2.9 billion for 2009-10 (refers to financial
year, April 1 to March 31), against a PAT of INR2 million on net
sales of INR1.1 billion for 2008-09.
VARIEGATE PROJECTS: Fitch Cuts National Long-Term Rating to 'BB+'
-----------------------------------------------------------------
Fitch Ratings has downgraded India's Variegate Projects Private
Limited's National Long-term rating to 'BB+(ind)' from 'BBB-
(ind)'. The Outlook remains Stable. Simultaneously, the agency
downgraded these ratings for Variegate's bank loans:
-- INR550 million fund-based working capital limits (enhanced
from INR200 million): downgraded to 'BB+(ind)'/'F4(ind) from
'BBB-(ind)'/'F3(ind)'
-- INR1100 million non-fund-based working capital limits
(enhanced from INR640 million): downgraded to 'BB+
(ind)'/'F4(ind) from 'BBB-(ind)'/'F3(ind)'
The downgrades reflect deterioration in gross adjusted debt/EBIDTA
levels to 3.26x, well above the earlier negative trigger of 3.0x,
due to a combination of a decline in EBITDA margins and an
increase in debt levels. The leverage was 1.06x in FY09. An
increase in raw material costs led to a decrease in EBIDTA margins
to 10.5% in FY10 from 11.7% in FY09. Additional working capital
requirements due to delays in the realization of dues from
Maharasthra State Electricity Board have been financed by debt.
The total receivables at end-March 2010 were INR803.40 million
(equivalent to 177 days of FY10 revenues), which is significantly
higher than the FY09 level of INR467.70 million of receivables at
end-March 2009 (equivalent to 120 days of FY09 revenues).
Interest coverage also decreased to 4.72x in FY10 from 6.36x in
FY09. Fitch believes that Variegate's liquidity will remain under
pressure until the company improves its ability to reduce the
receivables days.
The ratings continue to reflect Variegate's track record in
executing turnkey projects in the power transmission and
distribution segment, with a continued focus on projects relating
to rural electrification and high voltage distribution systems.
Further pressure on liquidity due to an increase in working
capital requirements could trigger a negative rating action. A
sustained improvement in the liquidity position, backed by a
sustained improvement in the receivables days and gross adjusted
debt/EBIDTA below 3x, would be considered as positive rating
triggers.
Variegate is a Hyderabad-based company engaged in the execution of
electrical infrastructure projects and was promoted by the
Managing Director, Mr. Siva Reddy, in 2002 as a partnership
concern. For FY10, Variegate reported revenues of INR1653.9
million and profit-after-tax of INR91.4 million.
=================
I N D O N E S I A
=================
CENTRAL PROTEINAPRIMA: Fitch Withdraws 'C' Issuer Default Rating
----------------------------------------------------------------
Fitch Ratings has withdrawn PT Central Proteinaprima's 'C' Long-
term foreign currency Issuer Default Ratings, as well as the 'C'
rating on its US$325 million senior unsecured notes due in 2012,
issued by Blue Ocean Resources Pte Ltd and guaranteed by CPP and
its subsidiaries.
The withdrawal follows CPP's failure to submit a restructuring
plan to noteholders within the agreed six-month standstill period
that ended in June 2010. However, Fitch understands that the
negotiations on a restructuring plan continue between the company
and the US$ noteholders.
The agency has withdrawn all ratings due to a lack of forward
looking information from the company. Fitch will no longer
provide ratings or analytical coverage on this issuer.
=========
J A P A N
=========
GODO KAISHA: S&P Retains CreditWatch Negative on 'BB' Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB (sf)' rating
on Godo Kaisha MF2 Alpha's JPY7.0 billion series 1 unsecured bonds
due April 2014 will remain on CreditWatch with negative
implications.
The bonds are ultimately backed by a nonrecourse loan maturing in
March 2012, which was initially secured by four office buildings.
One of properties has been sold, and the three remaining office
buildings are all located in Tokyo. As net cash flow levels have
been low compared with its initial assumptions, S&P considers the
recovery prospects from the underlying real estate properties are
being under stress. Accordingly, S&P lowered the rating on the
bonds and placed it on CreditWatch with negative implications.
S&P has maintained its rating on the bonds on CreditWatch with
negative implications because S&P has not yet finalized its
assessment of the recovery prospects from the underlying real
estate properties. S&P intends to review its rating on the bonds,
after finalizing its assessment of the recovery prospects of the
aforementioned three remaining office buildings.
In this transaction, S&P has assigned its ratings to the JPY7.0
billion unsecured bonds issued by Godo Kaisha MF2 Alpha. The
bonds are backed by a JPY7.0 billion ABL (class B ABL; mezzanine
loan) extended to Godo Kaisha MF2. The class B ABL that backs the
bonds is backed by a nonrecourse loan. The nonrecourse loan,
which was extended by Godo Kaisha MF2 to another company serving
as the borrower special-purpose company, was initially secured by
four properties. In addition to backing the class B ABL, the
nonrecourse loan also backs MF2 Senior Loan's senior ABLs, classes
A1 to A4, which have been rated by Standard & Poor's.
The transaction was arranged by Morgan Stanley Japan Securities,
and ORIX Asset Management & Loan Services Corp. acts as the
servicer for this transaction. The rating addresses the full
payment of interest and the ultimate repayment of principal by the
transaction's legal final maturity date in 2014 for the unsecured
bonds.
Rating Remains On Creditwatch Negative
Godo Kaisha MF2 Alpha
JPY7.0 billion unsecured bonds due April 2014
Rating Initial issue amount
------ --------------------
BB (sf)/Watch Neg. JPY7.0 bil.
JAPAN AIRLINES: Presses Pilots and Crews to Voluntarily Retire
--------------------------------------------------------------
Japan Airlines Corp. has kept about 320 pilots and some cabin
attendants off duty this month and is encouraging them through
interviews to voluntarily retire, Kyodo News reports citing
sources familiar with the situation.
Kyodo News relates that JAL has taken the unusual action due to
the possibility that it could fail to achieve its personnel
reduction target under a court-administered rehabilitation plan.
According to Kyodo News, sources said the carrier is apparently
prepared to dismiss some personnel if the target is not achieved
and has indicated to employees a set of criteria for such possible
dismissal while refraining from giving work to those who meet
them.
The JAL group plans to cut about 16,000 jobs within the current
fiscal year to March 2011 and has secured about half the figure
through early retirement programs and other measures, Kyodo News
reports.
Kyodo News adds JAL said it is making maximum efforts to avoid any
dismissals and is seeking employees' understanding on the matter.
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)
JCREF CMBS: Fitch Takes Rating Actions on Various Classes of Notes
------------------------------------------------------------------
Fitch Ratings has downgraded one class, affirmed four classes of
notes issued by JCREF CMBS 2007-1 GK due December 2015, and
simultaneously withdrawn the rating on the Class X TK Investment.
The transaction is a Japanese multi-borrower type CMBS
securitization. The rating actions are as listed below:
-- JPY34.8 billion* Class A notes affirmed at 'AA-sf'; Outlook
Negative;
-- JPY6.0 billion* Class B notes affirmed at 'BBBsf'; Outlook
Negative;
-- JPY5.2 billion* Class C notes affirmed at 'BBsf'; Outlook
Negative;
-- JPY4.6 billion* Class D notes downgraded to 'B-sf' from Bsf';
Outlook Negative; and
-- JPY2.6 billion* Class E notes affirmed at 'CCCsf'; Recovery
Rating revised to 'RR5' from 'RR4'.
* as of October 5, 2010
-- Class X TK Investment (dividend only), rating of 'AAAsf' with
a Stable Outlook has been withdrawn.
The ratings actions are the result of a performance review of the
underlying assets (loans or bonds) and collateral properties.
Since the previous rating action in October 2009, three out of the
nine underlying assets have reached their maturity dates. All
three assets are now in the early stages of their workout process.
The downgrade of the Class D notes reflects the deterioration in
property value assumptions adopted in Fitch's analysis. This
class did not benefit as much from the decline in note principal
as the senior classes. Principal redemptions to date have
occurred from scheduled amortization, some property dispositions
and application of excess funds, from fast pay or cash trap
structures prior to loan maturity, and from excess cash flow
collected from defaulted underlying assets.
Fitch reviewed the operating performance of the underlying
property portfolio, taking into account the current Japanese
commercial real estate market, trends and future prospects. Some
deterioration was observed in rent levels and occupancy trends at
some properties. Cash flow assumptions were revised downwards for
30 of the 52 remaining properties. The agency also reduced the
stressed-sale cap rates for some of the office properties located
in Tokyo and Osaka, and residential properties located in the
Kanto and Kansai metro areas, considering the recent positive
trends seen in the recovery of liquidity in these property types
and areas. As a result, Fitch has revised the values downwards
and adopted values for the underlying properties which, are on
average, 7.4% lower than those adopted in the previous review, and
on average 34.1% lower than its initial analysis in November 2007,
for this review. The decline in adopted values also reflects
Fitch's concern that the collateral properties are more likely to
be sold under stressed market conditions as the time to maturity
on the remaining underlying assets reduces.
Negative Outlooks on classes A through D are maintained due to the
general uncertainty related to the workout proceedings and
outcomes of loans already in default, and the likelihood of other
loans defaulting within the next six to 12 months.
The rating on the dividend-only Class X TK Investment, which
addresses the likelihood of receiving dividends while principal on
the related notes remain outstanding, has been withdrawn. For
additional information, please refer to the commentary, entitled
"Fitch Revises Practice for Rating IO and Pre-Payment Related
Structured Finance Securities", dated June 23, 2010.
Fitch assigned ratings to this transaction in November 2007. At
closing, the notes were secured by nine loans or Tokutei Mokuteki
Kaisha bonds collateralized by 56 properties. All underlying
assets remain to date, and the transaction is currently secured by
52 properties.
JLOC 39: S&P Puts Various Note Ratings on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
A to D trust certificates issued on Dec. 21, 2007, under the JLOC
39 Trust Certificate transaction on CreditWatch with negative
implications.
S&P intends to review its ratings on classes A to D trust
certificates, which have been placed on CreditWatch with negative
implications, after reviewing all the specified bonds and the loan
and assessing the potential recovery amount from the collateral
properties that S&P need to revise.
JLOC 39 is a multi-borrower CMBS transaction. The trust
certificates were initially secured by 14 specified bonds, and one
loan extended to 10 obligors. The specified bonds and the loan
were initially backed by 34 real estate properties and real estate
trust certificates. The transaction was arranged by Morgan
Stanley Japan Securities Co. Ltd., and ORIX Asset Management &
Loan Services Corp. acts as the servicer for this transaction.
Standard & Poor's ratings address the full and timely payment of
interest and the ultimate full repayment of principal by the legal
final maturity in April 2014 for the class A certificates, and the
full payment of interest and repayment of principal by the legal
final maturity for the class B to D certificates.
Ratings Placed On Creditwatch Negative
JLOC 39 Trust Certificate
JPY40.3 billion trust certificates issued on Dec. 21, 2007,
due April 2014
Class To From Initial Issue Amount Coupon Type
----- -- ---- -------------------- -----------
A AAA (sf)/Watch Neg AAA (sf) JPY28.8 bil. Floating rate
B A (sf)/Watch Neg A (sf) JPY5.4 bil. Floating rate
C BBB (sf)/Watch Neg BBB (sf) JPY3.9 bil. Floating rate
D B (sf)/Watch Neg B (sf) JPY2.2 bil. Floating rate
JLOC 41: S&P Puts Various Note Ratings on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch with
negative implications its ratings on the class A, B, C-2, and D-2
floating-rate notes issued under the JLOC 41 LLC transaction. At
the same time, Standard & Poor's affirmed its 'CCC- (sf)' ratings
on the class D-1 notes issued under the same transaction (also
listed below). The class C-1 notes were fully redeemed on the
principal and interest payment date in August 2010. The ratings
on the class C-3 and D-3 notes were lowered to 'D (sf)' on
Aug. 23, 2010.
The recovery prospect for one of the transaction's underlying
loans is under stress. S&P intends to review its rating on the
aforementioned four tranches on CreditWatch with negative
implications, after examining the recovery prospects of related
collateral properties.
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-2
floating-rate notes.
Ratings Placed On Watch Negative
JLOC 41 LLC
JPY23.36 billion floating-rate notes due February 2015
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-2 CCC (sf) JPY0.69 bil. Floating rate
Ratings Affirmed
Class Rating Initial Issue Amount Coupon Type
----- ------ -------------------- -----------
D-1 CCC- (sf) JPY0.78 bil. Floating rate
JLOC XXXI: S&P Puts Ratings on Various Classes of Certificates
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the trust
certificates, classes A to C, issued on Aug. 10, 2006, under the
JLOC XXXI Trust Certificates transaction on CreditWatch with
negative implications. At the same time, Standard & Poor's
affirmed its ratings on classes D and X issued under the same
transaction.
The trust certificates were initially secured by 22 nonrecourse
loans, of which 15 loans have been already repaid, with seven
loans (of which two have defaulted) remaining at this point.
S&P placed its ratings on classes A to C on CreditWatch with
negative implications because:
With regard to one of the two defaulted loans, originally
representing about 12.6% of the total initial issuance amount of
the trust certificates, S&P take the view that there appears to be
growing uncertainty over the recovery prospects for the properties
backing the loan, in light of the progress of the servicer's
recovery activities from the underlying properties.
With respect to one of the five loans that have not defaulted, and
for which S&P has not lowered its recovery assumption with respect
to the likely recovery amount from the properties backing that
loan (originally representing about 3.5% of the total initial
issuance amount of the trust certificates; maturity date: January
2013), S&P has concluded that downward revisions to its recovery
assumption will be inevitable.
S&P intends to review its ratings on classes A to C after
assessing progress made toward selling the properties, the cash
flow from the properties, and the recovery prospects for the
properties backing these loans.
JLOC XXXI is a multi-borrower CMBS transaction. The trust
certificates were initially secured by 22 nonrecourse loans, which
were originally backed by 62 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 for the class A trust certificates, the full
payment of interest and ultimate repayment of principal by the
legal final maturity date for the class B to D certificates, and
the timely payment of available interest for the interest-only
class X certificates.
Rating Placed on Creditwatch Negative
JLOC XXXI Trust Certificates
JPY24.3 billion trust certificates due February 2015
Class To From Initial Issue Amount
----- -- ---- --------------------
A AAA (sf)/Watch Neg AAA (sf) JPY21.6 bil.
B A- (sf)/Watch Neg A- (sf) JPY1.1 bil.
C BB (sf)/Watch Neg BB (sf) JPY0.9 bil.
Ratings Affirmed
Class Rating Initial Issue Amount
----- ------ --------------------
D CCC (sf) JPY0.7 bil.
X AAA (sf) JPY24.3 bil.
(initial notional principal)
* Japan's Corporate Bankruptcies Fall 4.6% in September
-------------------------------------------------------
RTTNews, citing Tokyo Shoko Research, reports that the number of
corporate bankruptcies in Japan fell 15.2% year-on-year to 6,555
cases between April and September. Japanese corporate
bankruptcies also fell 4.58% in September from a year earlier to
1,102 cases.
RTTNews relates the research firm said the fall in bankruptcies
was mainly due to the cheap lending program put in place by the
government to stimulate the economy.
According to RTTNews, the construction sector had the highest
number of bankruptcy cases, totaling 1,774, followed by other
services at 1,290. The manufacturing sector registered a total of
1,042 bankruptcy cases.
* Kawasaki Kisen Plans to Buy Ships to Rescue Japanese Ship Owners
------------------------------------------------------------------
Dave McCombs at Bloomberg News, citing Lloyd's List, reports that
Kawasaki Kisen Kaisha Ltd. plans to buy new vessels from Japan-
based ship owners to help owners that had agreed to lease ships
long-term to the shipping line.
Lloyd's List cited Kenichi Kuroya, president of K-Line, as saying
that the company is taking on the risk of owning the vessels to
help prevent the ship owners from facing bankruptcy or lawsuits
from shipbuilders seeking payment as funding becomes more
difficult for smaller companies, according to Bloomberg.
Bloomberg says the Lloyd's List didn't name any ship owners, say
how many vessels would be involved or give a timeframe for the
purchases.
====================
N E W Z E A L A N D
====================
A2 CORPORATION: Acquires Idea Sphere's 50% Stake in US Venture
--------------------------------------------------------------
A2 Corporation Ltd. and Idea Sphere Inc. have agreed for A2C to
fully acquire ISI's 50% interest in the U.S.-based joint venture
entity, A2 Milk Company LLC.
The consideration for the transaction will be in the form of an
issue of four million fully paid shares in A2C to ISI.
About A2 Corporation
New Zealand-based A2 Corporation Ltd. (NZAX: ATM) --
http://www.a2corporation.com/-- is engaged in the sale and
production of beta-casein A2 milk products. The company owns
and licenses intellectual property that enables the
identification of cattle for the production and subsequent
marketing of A2 Milk. a2 milk is naturally produced to contain
maximum amounts of a milk protein variant that is associated by
a number of studies with potential benefits in some individuals.
A2 Corporation Ltd receives royalty income from sales of A2 Milk
products and testing for A2 cattle, and shares in the profits or
losses of associates and subsidiaries formed for those purposes.
* * *
A2 Corporation Ltd. incurred three consecutive net losses of
NZ$6.3 million, NZ$5.08 million and NZ$448,800 for the years ended
March 31, 2008, 2007 and 2006, respectively. The Company reported
an audited Group post-tax loss of NZ$2,193,973 for the 12 months
ended June 30, 2010. This compared to a loss of NZ$3,528,057 for
the 15 months ended June 30, 2009.
EDENZ: Placed Into Receivership
-------------------------------
Opey and Edenz, which have related shareholding, were put into
receivership two weeks ago with debts owing to several creditors,
Radio New Zealand News reports.
According to the report, Pipfruit New Zealand said that the two
companies should not be blamed by the state of the pipfruit
industry. The report relates that Opey and Edenz account for 5%
of Hawke's Bay's pipfruit production, with another 4% going
through their packhouses.
The report notes Pipfruit NZ Chief Executive Peter Beaven said
that while returns for some apple varieties are low because of a
high exchange rate and a static European export market, he
believes the industry is still in good shape.
Opey and Edenz are fruit businesses based in Hawke's Bay.
NATIONAL FINANCE: Former Accountant Pleads Guilty to Theft
----------------------------------------------------------
NZ Herald Online reports that John Gray, the former accountant for
National Finance 2000, has pleaded guilty to theft and false
accounting charges laid by the Serious Fraud Office.
According to NZ Herald Online, Mr. Gray on Friday admitted to one
charge of theft relating to misuse of funds and another of false
accounting the Auckland District Court. Mr. Gray will be
sentenced on November 26, NZ Herald Online notes.
NZ Herald Online relates Mr. Gray also pleaded guilty to a charge
of false accounting whereby he concealed the true recipient of
funds by creating a false document.
SFO's chief executive Adam Feeley said the outcome was satisfying
following what had been a comprehensive investigation, NZ Herald
Online adds.
About National Finance
National Finance 2000 is the first major finance company to
collapse in recent years and has re-ignited fears of a wider rout
in a sector weighed down by debt after several years of strong
economic growth.
National Finance's managing director, Allan Ludlow, shouldered
the blame for the company's collapse, but assured that he will
work closely with the receivers appointed by Covenant Trustee
Company -- John Waller and Colin McCloy of PricewaterhouseCoopers
-- to get the maximum amount of money back for investors.
The receivers estimate that around NZ$24 million is owed to
members of the public and that the likely recovery for secured
investors will be about 47 percent to 48 percent of their
investments. Subordinated investors and other unsecured creditors
are unlikely to recover anything from the receivership.
OPEY: Placed Into Receivership
------------------------------
Opey and Edenz, which have related shareholding, were put into
receivership two weeks ago with debts owing to several creditors,
Radio New Zealand News reports.
According to the report, Pipfruit New Zealand said that the two
companies should not be blamed by the state of the pipfruit
industry. The report relates that Opey and Edenz account for 5%
of Hawke's Bay's pipfruit production, with another 4% going
through their packhouses.
The report notes Pipfruit NZ Chief Executive Peter Beaven said
that while returns for some apple varieties are low because of a
high exchange rate and a static European export market, he
believes the industry is still in good shape.
Opey and Edenz are fruit businesses based in Hawke's Bay.
YELLOW PAGES: Kordamentha Values Assets "NZ$650 to NZ$800 Million"
------------------------------------------------------------------
Tim Hunter at BusinessDay.co.nz, citing sources, reports that
corporate finance specialist Korda Mentha told bankers for debt-
laden Yellow Pages publisher YPG how much the business was worth.
BusinessDay.co.nz relates that while the figure has not been
revealed, a report by news agency Debtwire said bankers were
expecting values ranging from NZ$650 to NZ$800 million.
BusinessDay.co.nz says the value is huge drop on the NZ$2.2
billion paid to Telecom by a private equity consortium in 2007 but
higher than the reported top bid of about NZ$400 million from
potential buyers last month.
According to BusinessDay.co.nz, the valuation will be used by
YPG's bankers to structure a deal to convert debt into an
ownership stake in YPG after the company failed to make enough
money to meet its interest payments.
BusinessDay.co.nz discloses that YPG's senior debt holders were
owed NZ$1.16 billion at June last year, the most recent figures
available publicly. Debtwire said senior debt holders were now
owed NZ$1.4 billion, the report adds.
A valuation of NZ$800 million would leave YPG's owners -- private
equity firm Unitas Capital and Canadian pension fund investor
Teachers Private Capital -- with a 100% loss on the NZ$785 million
they invested, BusinessDay.co.nz reports.
As reported in the Troubled Company Reporter-Asia Pacific on
Sept. 30, 2010, owners of the Yellow Pages Group have withdrawn
from a plan to sell the business because a satisfactory price is
unlikely to be achieved in the current economic environment.
The owners said the current economic climate did not suit large-
scale merger and acquisition activity, and "that as a result the
expectations of the stakeholders in regard to value are unlikely
to be met in the current market". The banking syndicate, led by
BNZ, would now continue with plans to restructure the company's
debt, and planned to stick with the business long-term.
===============
P A K I S T A N
===============
PAKISTAN MOBILE: Moody's Confirms 'B2' Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service has confirmed its B2 corporate family
and Caa1 senior unsecured ratings on Pakistan Mobile
Communications Limited, with a negative outlook.
This concludes the review for possible downgrade initiated on
August 17, 2010.
"The rating confirmation reflects Mobilink's improving and better-
than-expected operating performance, as reported in its first half
results announcement," says Laura Acres, a Moody's Senior Credit
Officer.
The confirmation also reflects Moody's expectation that the
proposed merger between VimpelCom Ltd (rated Ba2, on review for
possible downgrade) and Weather Investments S.p.A., the ultimate
parent of Mobilink, will not trigger the change of control clause
in Mobilink's bond indenture.
Weather is the parent of Orascom Telecom Holdings SAE ("Orascom
Telecom" - B2, under review, direction uncertain), which owns 100%
of Mobilink.
Mobilink's US dollar bonds have a change of control clause
relating to Orascom Telecom's ownership and majority control of
Mobilink. However, the structure of the proposed
VimpelCom/Weather merger should not trigger the change of control
clause at Mobilink as the merger will affect only those entities
at the Weather level and above.
"The B2 corporate family rating further recognizes Mobilink's
stand-alone credit profile, which is well supported by the
company's established brand, leading market position, and
extensive network coverage, as well as its moderate leverage and
strong margins," says Acres.
"These strengths are tempered by Mobilink's tight liquidity, given
its plans to increase capex in H2 2010 as well as the emerging
market risk inherent in its Pakistani operations," she adds.
The proposed merger between VimpelCom and Weather has prompted a
change in Orascom Telecom's rating review, to direction uncertain
from review for possible downgrade. This change indicates that
previous concerns about liquidity could be alleviated upon
completion of the transaction and associated refinancing
initiatives.
These concerns had previously led to downward pressure on
Mobilink's ratings, given its past reliance on cash injections to
comply with covenants. However, Moody's believes that the
improvement in Mobilink's operating performance may obviate the
need to rely on any support from Orascom Telecom for covenant
compliance purposes in the near to medium term.
Moody's also draws comfort from the ring fence arrangement in
Mobilink's loan and bond indentures, such that the linkage between
Orascom Telecom and Mobilink is reducing and Mobilink's rating is
now more reflective of its standalone credit fundamentals.
Mobilink's negative outlook incorporates the downside risk that
the merger between Weather and VimpelCom will not take place.
Moody's believes that, if the merger does not take place or if its
completion is delayed significantly, the existing liquidity
pressures on Orascom Telecom's ratings would resurface and result
in potential pressure on Mobilink, given Orascom Telecom's 100%
ownership.
The negative outlook also captures the uncertainty over Mobilink's
future business and financial strategies under the new ownership
if the merger proceeds.
Moody's will continue to monitor developments at both Orascom
Telecom and VimpelCom with a view to developing further insight
and understanding of Mobilink's strategic importance and
positioning in the greater VimpelCom-Weather group.
Positive rating pressure on Mobilink is unlikely in the near term
given the negative outlook; however, the outlook could revert to
stable should the merger be completed as planned on a timely
basis, thus removing the uncertainty about Orascom Telecom. In
addition, Moody's expects Mobilink to deliver on its financial
projections and create a sustainable cushion under its bank loan
covenants, particularly as these covenants step down.
Moody's would also like Mobilink to demonstrate an ability to
become self-funding, in the form of an improvement to free cash
flows as well as the ability to cover its capex and interest,
evidenced by (EBITDA-capex)/interest exceeding 1.5x. Moody's
would also like to see adjusted debt/EBITDA improve to below 3.0x
on a sustainable basis.
Further downward pressure on the ratings could emerge should
Mobilink: a) experience significant deterioration in market share
such that it loses its market leadership status; b) resume the
payment of dividends or management fees thereby reducing available
retained cash flow, such that retained cash flow/adjusted debt
falls below 10%; or c) is unable to access financing to fund
ongoing growth or repay/refinance lines as and when they fall due.
Moody's would also be concerned if Mobilink did not delever in
line with expectations such that adjusted debt/EBITDA increases
above 4.0-4.5x.
The last rating announcement for Mobilink was taken on 17th August
2010, when the ratings were placed under review for possible
downgrade following a similar action on Orascom Telecom.
Mobilink is the largest mobile operator in Pakistan, with more
than 32.2 million customers and a subscriber market share of 32.6%
as of June 2010 (according to PTA). Mobilink is indirectly and
wholly owned by Orascom Telecom, which is in turn 51.7% owned by
Weather.
*********
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 ***