/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/101223.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, December 23, 2010, Vol. 13, No. 253 Headlines A U S T R A L I A A2 CORP: Inks NZ$3.91-Mil. Capital Placement With Two Investors CHALLENGE DAIRY COOP: 47 Farmers to Receive Money Owed STORM FINANCIAL: ASIC Launches Legal Action Vs. 3 Australian Banks H O N G K O N G ABERDEEN INT'L: Philip Brendan Gilligan Steps Down as Liquidator BOOKMAKERS (HK): Commences Wind-Up Proceedings CHAFEIST LIMITED: Commences Wind-Up Proceedings CITY TELECOM: Fitch Upgrades Issuer Default Rating to 'BB' CLAREN INTERNATIONAL: Commences Wind-Up Proceedings FIBRES IMPORT: Commences Wind-Up Proceedings GAINVIEW HOLDINGS: Commences Wind-Up Proceedings HEDRAGON LIMITED: Commences Wind-Up Proceedings HENTELL LIMITED: Cowley and Mitchell Appointed as Liquidator MORGAN STANLEY: S&P Downgrades Ratings on 3 Note Classes to 'D' NIHON MINI: Members' Final Meeting Set for January 19 REDHAWK ELECTRONICS: Lee Kwok On Alexander Appointed as Liquidator TECHNO MOTORCYCLE: Members' Final General Meeting Set for Jan. 14 UCB PHARMA: Members' Final Meeting Set for January 18 I N D I A AADI INDUSTRIES: CRISIL Downgrades Rating on INR40.5MM Loan to 'D' ABS MERCANTILES: ICRA Upgrades Rating on INR14.5cr Bank Facilities AMMARUN FOUNDRIES: CRISIL Reaffirms 'B' Rating on INR41.8MM Loan ASSRM & CO: CRISIL Rates INR50.00 Million Cash Credit at 'BB' DHAVAL AGRI: ICRA Assigns 'LBB+' Rating to INR1cr Term Loan BELLISS INDIA: CRISIL Assigns 'B' Rating to INR25MM Cash Credit DIAMONDSTAR: CRISIL Assigns 'P4' Ratings to Various Bank Debts G. NAGESWARAN: CRISIL Assigns 'BB-' Rating to INR49MM Cash Credit GUPTA DYEING: CRISIL Assigns 'B-' Rating to INR43MM Term Loan JRD INDUSTRIES: CRISIL Assigns 'P4+' Rating to INR125 Million LOC RAJ PACKAGING: CRISIL Assigns 'BB+' Rating to INR49 Million Loan SHRADHA AGENCIES: CRISIL Upgrades Rating on INR150MM Loan to 'BB-' STEEL EXCHANGE: ICRA Reaffirms Rating on INR87.02cr Loan to 'LBB+' VIJETA PROJECTS: ICRA Assigns 'LBB+' Rating to INR37.5cr Bank Debt K O R E A KUMHO ASIANA: Creditors to Start Korea Express Sale Process M A L A Y S I A AXIS INC: Taps New Adviser for Proposed Restructuring Scheme JPK HOLDINGS: Taps TA Securities as News Principal Adviser KENMARK INDUSTRIAL: Liquidators File Wind Up Petition Against Unit LCL CORP: Won't Appeal Delisting Notice TRACOMA HOLDINGS: Appoints Mohamed Niza Abu Bakar as CEO N E W Z E A L A N D LOMBARD FINANCE: Distributions on Hold Until IRD Claim is Resolved SOUTH CANTERBURY: Owed NZ$103-MM by Southbury Corp, Receiver Says SOUTHERN CROSS: S&P Affirms 'BB/B' Ratings with Stable Outlook ST LAURENCE: Investors to Get First Repayment Next Month - - - - - ================= A U S T R A L I A ================= A2 CORP: Inks NZ$3.91-Mil. Capital Placement With Two Investors --------------------------------------------------------------- A2 Corporation Limited has entered into agreements with two cornerstone shareholders, AMP Capital Investors (New Zealand) Limited and Freedom Foods Group Limited (previously Freedom Nutritional Products Limited), to raise NZ$3.914 million. This capital will be used to support the establishment of A2 Corporation's own milk processing facility in Australia. AMP Capital Investors has agreed to provide NZ$3 million to A2 Corporation by subscribing for 30 million ordinary shares at NZ$0.10 per share. Freedom Foods Group has chosen to exercise its capital raising right, allowing it to participate in the capital raising alongside AMP Capital Investors on the same terms. Under the capital raising right, Freedom Foods Group will subscribe for enough shares to maintain their current shareholding percentage, which is approximately 9.14 million shares. A2 Corporation is delighted with the support from these two cornerstone shareholders. 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. CHALLENGE DAIRY COOP: 47 Farmers to Receive Money Owed ------------------------------------------------------ ABC News reports that 47 farmers caught up in the collapse of the Challenge Dairy Co-operative will receive some of the money they are owed before Christmas. As reported in the Troubled Company Reporter-Asia Pacific on Dec. 7, 2010, Farm Weekly said that Challenge Dairy Co-operative has been preparing to follow Challenge Australian Dairy (CAD) into voluntary administration. In a separate TCR-AP reports on Dec. 2, 2010, citing Margaret River Mail, the collapse of Challenge Australian Dairy was made official when it announced it was going into receivership. Margaret River Mail related that third generation dairy farmer Miles Mottershead is owed almost AU$300,000 in milk supplied to Challenge and said it could be anywhere between six months to years before the repayments came. ABC News discloses that the Co-operative's chairman Imre Menshelley said that the AU$1 million would be distributed this week between the 47 farmers who supplied Challenge and more payments are expected next year. Challenge Dairy Co-operative is a totally Western Australian farmer-owned entity and is situated at the historic Capel Dairy site. Dairy farmer members supply fresh milk, produced daily from their own farms which are based in the beautiful south west of Western Australia. Joint venture partners Challenge Australia Dairy manufactures the highest quality cheese, butter, cream and dairy ingredients under the Capel brand for both the Australian domestic market as well as expanding export markets. STORM FINANCIAL: ASIC Launches Legal Action Vs. 3 Australian Banks ------------------------------------------------------------------ The Australian Securities and Investments Commission has launched a legal action against three Australian banks involved in the collapse of Storm Financial Ltd. ASIC on Thursday confirmed it has lodged with relevant courts legal proceedings that it announced on November 26, 2010. These proceedings arise out of its investigation into the collapse of Storm Financial. "Since announcing its decision to commence compensation proceedings, ASIC has continued confidential commercial discussions with some key parties, however, these have not resulted in an acceptable commercial resolution on compensation," ASIC said in a statement. ASIC Chairman Tony D'Aloisio said, "ASIC is bringing these actions to seek compensation for investors who have suffered losses. ASIC has maintained that a commercial resolution is the preferred approach. Unfortunately discussions did not result in a satisfactory outcome and it has been necessary for ASIC to bring these proceedings." The legal proceedings are: * compensation proceedings in the Federal Court of Australia in ASIC's name and on behalf of two former Storm investors against Bank of Queensland Limited, the owner and franchisee of the BoQ's North Ward branch (Senrac Pty Limited) and Macquarie Bank Limited (MBL) in relation to alleged breach of contract, contravention of the statutory prohibitions against unconscionable conduct and liability as linked credit providers of Storm under section 73 of the Trade Practices Act 1974; and * proceedings in the Federal Court of Australia against Storm, Commonwealth Bank of Australia, BoQ and MBL based on the operation by Storm of an alleged unregistered managed investment scheme in which the banks were involved. In addition, as foreshadowed, ASIC has filed civil penalty proceedings in the Federal Court of Australia against Emmanuel and Julie Cassimatis as directors of Storm in relation to alleged contraventions of section 180 (duties of directors) of the Corporations Act. ASIC's investigations into the collapse of Storm continue. About Storm Financial Storm Financial Limited -- http://www.stormfinancial.com.au/-- operates in the Australian wealth management industry. The company manages over one trillion dollars in investment fund assets for over nine million investors, distributed through investment administration providers and financial adviser. The funds are invested through different investment products and structures, including superannuation, nonsuperannuation managed funds and life insurance products. Non-superannuation managed funds, which form the majority of Storm's products, total approximately 26.5% of total investment fund assets in Australia, as of June 30, 2007. * * * As reported in the Troubled Company Reporter-Asia Pacific on Jan. 14, 2009, Storm Financial Ltd. appointed Worrells Solvency & Forensic Accountants as voluntary administrators after the Commonwealth Bank of Australia demanded debt repayment of around AU$20 million. Storm later closed its business and fired all of its 115 staff. The closure, the company's administrators said, was due to the significant reduction in Storm's income resulting in trading losses being incurred "at a rate which the company could no longer absorb." The TCR-AP reported on Jan. 22, 2009, that the CBA, Storm's largest creditor, lodged a AU$27.09 million debt claim at a first meeting of the company's creditors on Jan. 20, 2010. The group's remaining creditors are owed AU$51 million, plus a provision for dividends of AU$10 million. In March 2009, the Australian Securities and Investments Commission won its bid to liquidate Storm Financial after the Federal Court ruled that the Company be wound up. Federal court Justice John Logan appointed Ivor Worrell and Raj Khatri of Worrells Solvency and Forensic Accountants as liquidators for the Company. ================ H O N G K O N G ================ ABERDEEN INT'L: Philip Brendan Gilligan Steps Down as Liquidator ---------------------------------------------------------------- Philip Brendan Gilligan stepped down as liquidator of Aberdeen International Investment Management Limited on December 13, 2010. BOOKMAKERS (HK): Commences Wind-Up Proceedings ---------------------------------------------- Members of Bookmakers (Hong Kong) Limited, on December 10, 2010, passed a resolution to voluntarily wind up the company's operations. The company's liquidator is: Yeung Mui Kwan David 14/F, San Toi Building 137-139 Connaught Road Central, Hong Kong CHAFEIST LIMITED: Commences Wind-Up Proceedings ----------------------------------------------- Members of Chafeist Limited, on December 10, 2010, passed a resolution to voluntarily wind up the company's operations. The company's liquidators are: Andrew C. C. Ma Felix K. L. Lee 19th Floor, Seaview Commercial Building 21-24 Connaught Road West Hong Kong CITY TELECOM: Fitch Upgrades Issuer Default Rating to 'BB' ---------------------------------------------------------- Fitch Ratings has upgraded City Telecom's Long-term foreign currency and local currency Issuer Default Rating to 'BB' from 'BB-'. The Outlook is Stable. Fitch also has affirmed the company's foreign currency senior unsecured at 'BB', and simultaneously withdrawn this rating following the full repayment of its senior unsecured notes in 2010. "The upgrades reflect the company's continued improvement in its credit metrics, as well as its strong position as the second- largest broadband service provider in Hong Kong. Although an increase in marketing expenses caused a slight decline in the company's EBITDA margin to 29.9% during the fiscal year to end- August 2010 from 32.0% a year earlier, City Telecom acquired a record-high 135,000 subscriber net additions in FY10," says Alvin Lim, Associate Director in Fitch's Asia Pacific Telecom Media and Technology ratings team. This increased its broadband market share to 23% at FYE10, versus 15% at FYE08, thanks to its effective pricing strategy and competitive Fibre-to-the Home network quality. In addition, backed by its strong cash generation, the company has maintained a net cash position for two consecutive fiscal years. Notwithstanding the highly saturated Hong Kong telecom market, Fitch believes that City Telecom has solid growth potential based on its extensive FTTH network. While the overall broadband household penetration rate is high at 85%, there still is room for further growth, in terms of consumers switching from copper to FTTH, as the penetration rate of FTTH is still quite low at 35%, and demand from subscribers for faster data transmission speed is expected to constantly increase. "City Telecom should be able to strengthen its market position by absorbing subscribers migrating to its FTTH networks from slower DSL-based network services. This is well-illustrated by the fact that the company was able to capture 93% of total net additions in Hong Kong's broadband segment during FY10," said Mr. Lim. Although the company witnessed a sharp decline in blended ARPU to HKD135 in FY10 (FY09: HKD183) due to its aggressive pricing strategy, Fitch forecasts a reversal to positive ARPU growth in FY11. This is as City Telecom ended its HKD99 per month broadband promotion at end-August 2010, and is now focusing on selling a "triple play" service of 100Mbps broadband, voice, and IP-TV for HKD199 a month. This demonstrates the company's strength as the price-setter in the market, based on its network quality and even as the industry's non-incumbent player. Fitch also notes that there has been a material improvement in City Telecom's credit metrics as it has been able to reduce its adjusted gross debt level to HKD124.2m at FYE10 (FYE07: HKD953.8m) thanks to its strong cash generating ability and management's conservative financial policies. In addition, the agency expects the company's total capex level to gradually decrease from FY12 as it is expected to complete its FTTH network coverage. Although a significant increase in dividends is suppressing potential Free Cash Flow generation, Fitch expects City Telecom to maintain its net cash position and be able to generate positive FCF from FY12 based on a lower capex commitment. The Stable Outlook on City Telecom reflects Fitch's expectation that the company will be able to sustain its improved business and financial profile, and gain additional market share over the medium-term, underpinned by its network technology leadership. Fitch will consider a further positive rating action if the company is able to increase its market share above 35% and maintain its operating EBITDAR margin over 30%, with the absolute amount of EBITDAR reaching over US$100m, as well as FFO adjusted net leverage below 1.0x on a sustained basis. A negative rating action may be taken if there is a material deterioration in City Telecom's competitiveness which results in a substantial loss in its market share, coupled with erosion in profitability with its operating EBITDAR margin falling below 25%, and FFO adjusted net leverage rising above 1.5x on a sustained basis. CLAREN INTERNATIONAL: Commences Wind-Up Proceedings --------------------------------------------------- Members of Claren International Limited, on December 10, 2010, passed a resolution to voluntarily wind up the company's operations. The company's liquidators are: Andrew C. C. Ma Felix K. L. Lee 19th Floor, Seaview Commerical Building 21-24 Connaught Road West Hong Kong FIBRES IMPORT: Commences Wind-Up Proceedings -------------------------------------------- Members of Fibres Import and Export Company Limited, on December 10, 2010, passed a resolution to voluntarily wind up the company's operations. The company's liquidators are: Andrew C. C. Ma Felix K. L. Lee 19th Floor, Seaview Commerical Building 21-24 Connaught Road West Hong Kong GAINVIEW HOLDINGS: Commences Wind-Up Proceedings ------------------------------------------------ Members of Gainview Holdings Limited, on December 10, 2010, passed a resolution to voluntarily wind up the company's operations. The company's liquidator is: Mr. Leung Che Wing Unit B, 17/F Capital commercial Building 446-448 Shanghai Street Mongkok, Kowloon Hong Kong HEDRAGON LIMITED: Commences Wind-Up Proceedings ----------------------------------------------- Members of Hedragon Limited, on December 9, 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 HENTELL LIMITED: Cowley and Mitchell Appointed as Liquidator ------------------------------------------------------------ Patrick Cowley and Paul Edward Mitchell, on December 14, 2010, were appointed as liquidators of Hentell Limited. The liquidators may be reached at: Patrick Cowley Paul Edward Mitchell 8th Floor, Prince's Building 10 Chater Road Central, Hong Kong MORGAN STANLEY: S&P Downgrades Ratings on 3 Note Classes to 'D' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes of notes issued by Morgan Stanley Managed ACES SPC to 'D (sf)' from 'CCC- (sf)'. The downgrades follow a realized interest loss to the investor in each of the series of notes on the most recent interest payment date. The portfolio in the transaction suffered several credit events, which have resulted in an aggregate loss that exceeded the available subordination and reduced the principal amount of the notes. Consequently, there was an interest payment shortfall on the most recent interest payment date. Rating Lowered Morgan Stanley Managed ACES SPC Rating To Rating From --------- ----------- Series 2006-12 Class IIA D (sf) CCC- (sf) Series 2006-12 Class IIIA D (sf) CCC- (sf) Series 2006-7 Class IIA D (sf) CCC- (sf) NIHON MINI: Members' Final Meeting Set for January 19 ----------------------------------------------------- Members of Nihon Mini Motor (HK) Co Limited will hold their final meeting on January 19, 2011, at 9:00 a.m., at 12 Science Park East Avenue, 6/F, Hong Kong Science Park, Shatin, New Territories, in Hong Kong. At the meeting, Christopher John Hasson and Yip Chee Lan, the company's liquidators, will give a report on the company's wind-up proceedings and property disposal. REDHAWK ELECTRONICS: Lee Kwok On Alexander Appointed as Liquidator ------------------------------------------------------------------ Lee Kwok On Alexander on December 10, 2010, was appointed as liquidator of Redhawk Electronics Limited. The liquidator may be reached at: Lee Kwok On Alexander Rooms 1901-2, Park-In Commercial Centre 56 Dundas Street Kowloon TECHNO MOTORCYCLE: Members' Final General Meeting Set for Jan. 14 ------------------------------------------------------------------ Members of Techno Motorcycle Company Limited will hold their final general meeting on January 14, 2011, at 10:00 a.m., at the Registered Office at Unit 901, 9th Floor, Omega Plaza, 32 Dundas Street, Kowloon, in Hong Kong. At the meeting, Lau Chung Sun, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. UCB PHARMA: Members' Final Meeting Set for January 18 ----------------------------------------------------- Members of UCB Pharma Limited will hold their final general meeting on January 18, 2011, at 10:00 a.m., at Level 18, Three Pacific Place, 1 Queen's Road East, in Hong Kong. At the meeting, Ying Hing Chiu and Chan Mi Har, the company's liquidators, will give a report on the company's wind-up proceedings and property disposal. ========= I N D I A ========= AADI INDUSTRIES: CRISIL Downgrades Rating on INR40.5MM Loan to 'D' ------------------------------------------------------------------ CRISIL has downgraded its ratings on the bank facilities of Aadi Industries Ltd (Aadi Industries) to 'D/P5' from ''BB-/Stable/P4+'. The downgrade reflects delays by Aadi Industries in servicing its term debt; the delays have been caused by poor liquidity. Robust growth in sales has substantially increased the working capital requirements for the company. However, the increase in bank facilities was not adequate to fund the incremental working capital requirements. The weakening in the company's liquidity has resulted in delays in servicing its term debt. Facilities Ratings ---------- ------- INR60 Million Cash Credit D (Downgraded from 'BB-/Stable') INR40.5 Million Long-Term Loan D (Downgraded from 'BB-/Stable') INR50 Million Letter of Credit P5 (Downgraded from P4+) INR10 Million Bank Guarantee P5 (Downgraded from P4+) Aadi Industries has an average financial risk profile, marked by average debt protection metrics, and exposure to risks related to limited track record in the plastic products industry. These weaknesses are, however, partially offset by Aadi Industries' established relationships with dealers across a wide multi-state network About Aadi Industries Aadi Industries, promoted by Mr. Rushabh Shah, manufactures tarpaulin and plastic bags. Its plant at Silvassa (Union Territory of Dadra and Nagar Haveli), which commenced operations in April 2009, has an installed capacity of 950 tonnes per month. Aadi Industries reported profit after tax (PAT) of INR17.9 million on net sales of INR717.6 million for 2009-10, against a PAT of INR1.7 million on net sales of INR97.2 million for 2008-09. ABS MERCANTILES: ICRA Upgrades Rating on INR14.5cr Bank Facilities ------------------------------------------------------------------ ICRA has upgraded the long term rating from 'LBB-' to 'LBB' assigned to the INR14.5 crore fund-based facilities of ABS Mercantiles Pvt. Ltd. ICRA has also assigned the short term rating of "A4" to the INR1.0 crore non-fund based limits of the company. The long term rating has been assigned a stable outlook. The upgrade in ratings take into account the improvement in company's operating performance during 2009-10 with a strong growth in revenues as well as operating profits, improvement in financial profile and correction in company's inventory with the stabilization of auto dealership business. The ratings are also supported by the promoters' experience and established network in the pharmaceutical industry and exclusive marketing contracts with key suppliers. The ratings, however, continue to be constrained by the company's weak competitive position on account of the commoditized nature of its businesses, relatively small scale of operations resulting in low bargaining power with the suppliers & customers and the pharma division's high single client concentration. About ABS Mercantile ABS Mercantile Private Limited, established in 1997 is engaged in the activity of marketing and representing Pharmaceuticals companies as their selling agent. Initially the company had started with only a single principal (Aurobindo Pharma Limited) but over the years it has been able to associate with many big bulk and API manufacturers. To ensure the timely supply and availability, AMPL has set up warehouses in Baddi (Himachal Pradesh), Roorkee(Uttarakhand) and Gurgaon (Haryana) to cater to the need of the pharmaceutical industries based in those locations. The company has diversified its business by opening an auto dealership (Tata and Fiat Auto) in Gurgaon during 2009. The company, thus, is currently present in two segments viz. Pharma trading and Auto dealership. Recent Results The company reported a net profit of INR 1.1 crore on an operating income of INR 107.2 crore during 2009-10. AMMARUN FOUNDRIES: CRISIL Reaffirms 'B' Rating on INR41.8MM Loan ---------------------------------------------------------------- CRISIL ratings on Ammarun Foundries's bank facilities continue to reflect AF's weak financial risk profile, low capacity utilization, and exposure to intense competition because of fragmentation in the iron castings industry. These rating weaknesses are partially offset by AF's established track record in the castings industry. Facilities Ratings ---------- ------- INR95.0 Million Cash Credit B/Stable (Reaffirmed) INR41.8 Million Term Loan B/Stable (Reaffirmed) INR15.0 Million Post-Shipment Credit P4 (Reaffirmed) INR30.0 Million Inland Letter of Credit P4 (Reaffirmed) Outlook: Stable CRISIL believes that the AF will continue to benefit from its promoters' track record in the castings industry. The outlook may be revised to 'Positive' if AF's financial risk profile improves, most likely because of fresh equity infusion, and increase in capacity utilization and profitability. Conversely, the outlook may be revised to 'Negative' if AF's debt servicing ability weakens because of sharp decline in cash accruals, deterioration in liquidity, or larger-than-expected debt-funded capital expenditure (capex). Update AF's performance in 2009-10 (refers to financial year, April 1 to March 31) was marginally below CRISIL's expectations, driven by power shortage from Tamil Nadu Electricity Board leading to decline in AF's production. However, AF's performance in 2010-11 is expected to be as per CRISIL's expectations. The firm has generated revenues of INR463.5 million in the eight months ended November 30, 2010, and has an order book of INR80 million as on date, backed by improvement in demand from its customers. The firm undertook a capex programme of INR50 million (funded by term loan of INR5.5 million, equity of INR22 million, and internal accruals); the capex is expected to generate additional revenues of INR100 million annually over the medium term. Despite the capex, the firm's capital structure remains as per CRISIL expectation; gearing and liquidity remain adequate for the rating category. AF reported a net loss of INR14.0 million on net sales of INR482.0 million for 2009-10, against a PAT of INR6.4 million on net sales of INR501.0 million for 2008-09. About Ammarun Foundries Set up in 1991 as a partnership firm by Mr. N Visvanathan and his family members, AF manufactures grey and ductile iron castings. The foundry is based in Coimbatore (Tamil Nadu) and caters to customers from various industries such as automotive, motor and pump, tractor, valve, textile, and general engineering. The firm has production capacity of 2000 tonnes per month. ASSRM & CO: CRISIL Rates INR50.00 Million Cash Credit at 'BB' ------------------------------------------------------------- CRISIL has assigned its 'BB/Stable' rating to the cash credit facility of ASSRM &Co, which is a part of the Annai group. Facilities Ratings ---------- ------- INR50.00 Million Cash Credit BB/Stable (Assigned) The rating reflects the Annai group's below-average financial risk profile marked by a small net worth and exposure to risks related to intense competition in the agricultural (agro) commodities trading business, volatility in foreign exchange (forex) rates and agro-commodity prices, and adverse regulatory changes. These rating weaknesses are partially offset by the Annai group's established market position, and strong relationships with suppliers and customers, in the agro-commodities trading business. For arriving at its rating, CRISIL has combined the business and financial risk profiles of Sri Annai Agencies, ASSRM & Co., Annai Stores, SA & Sons, Annai & Co, Thangamani Enterprises, Annai Corp, Annai Pulses, Annai Dhall Products, Annai Agro Commodities, and VSS & Sons. This is because these entities, collectively referred to as the Annai group, are under a common management and have fungible cash flows. Outlook: Stable CRISIL believes that the Annai group will continue to benefit from its promoters' extensive experience in the agro-commodities trading business. The outlook may be revised to 'Positive' if the Annai group's net worth increases significantly, led by sustained increase in profitability and revenues, or infusion of capital by partners. The outlook may be revised to 'Negative' if the group's financial risk profile deteriorates significantly because of decline in margins, caused in turn by volatility in forex rates or commodity prices, or because of withdrawal of sizeable capital by the group's promoter-partners. About the Group The Chennai-based Annai group, promoted by Mr. V S Sundaralingam and family, trades in agro-commodities such as sugar, pulses, and wheat. Sri Annai Agencies and ASSRM & Co import pulses, such as black mappae and moong dal, and sells these to the other group entities. The other group entities procure food materials from various agents and sell to retailers and institutions in and around Chennai. The group has two associate companies, Annai Flour Pvt Ltd and Annai Fried Grams Pvt Ltd, which process and sell wheat and gram, respectively. The Annai group was set up in the late 1960s. The Annai group reported, on provisional basis, a profit after tax (PAT) of INR12.50 million on net sales of INR3.90 billion for 2009-10 (refers to financial year, April 1 to March 31); it reported a PAT of INR6.70 million on net sales of INR2.96 billion for 2008-09. DHAVAL AGRI: ICRA Assigns 'LBB+' Rating to INR1cr Term Loan ----------------------------------------------------------- ICRA has assigned an 'LBB+' rating to the INR1.0 crore term loan and INR 8.0 crore cash credit facilities of Dhaval Agri Exports. The long term rating has been assigned stable outlook. ICRA has also assigned an 'A4+' rating to the INR16.50 crore short term fund based facilities and INR2.50 crore non fund based facilities of DAE. The combined utilization of short term fund based facilities and non fund based facilities should not exceed INR16.50 crore. The assigned rating derives comfort from the long standing experience of promoters in the commodity trading and processing industry combined with the location advantages for the company arising out of proximity to raw material supplies with the company being located in leading sesame producing Saurashtra region of Gujarat. Further the assigned rating takes into account the company's position as one of the leading processor of Sesame seed in India and diversified geographic mix of revenues. The ratings are however constrained by its moderate scale of operations in a highly competitive and fragmented industry with business being concentrated on a single commodity. The company has highly leveraged capital structure with liquidity profile being further constrained by low profitability indicators. Further the profitability of operations is highly vulnerable to regulatory framework with regards to export incentives and agro climatic conditions in the country. DAE was established in 1999 as a partnership concern by first generation entrepreneur Mr. Suresh Chandarana in Rajkot, Gujarat. It is engaged in processing and selling sesame seeds in domestic as well as export markets. The company has a processing capacity of 36000MT of Natural sesame seeds and 18000MT of hulled sesame seeds per annum Recent Result In FY10, DAE has reported a net profit of INR1.80 crore on an operating income of INR193.8 crore as against PAT of INR 1.5 crore in FY09 on an operating income of INR 158.4 crore. BELLISS INDIA: CRISIL Assigns 'B' Rating to INR25MM Cash Credit --------------------------------------------------------------- CRISIL has assigned its 'B/Stable/P4' ratings to the bank facilities of Belliss India Ltd. The ratings reflect BIL's weak financial risk profile, marked by small net worth, high gearing, and weak capital structure, and its small scale of operations. These weaknesses are partially offset by the established presence of BIL's promoters in the steam turbine manufacturing business. Facilities Ratings ---------- ------- INR25.0 Million Cash Credit B/Stable (Assigned) INR32.5 Million Proposed LT B/Stable (Assigned) Bank Loan Facility INR22.5 Million Letter of Credit P4 (Assigned) Outlook: Stable CRISIL believes that BIL will benefit over the medium term from its established track record in the steam turbine manufacturing business and wide customer base. The outlook may be revised to 'Positive' if the company achieves strong revenue growth and improves its profitability, thereby improving its capital structure and debt protection metrics. Conversely, the outlook may be revised to 'Negative' if the company undertakes a large, debt-funded capital expenditure programme, leading to deterioration in its debt protection metrics and capital structure. About Belliss India BIL, established in 1960 as Belliss and Marcom Ltd, manufactures steam turbines, which find use in sugar and rice mills, and various industries, such as paper, textile, and steel. The company manufactures turbines with capacities ranging from 20 kilowatts to 10 megawatts, used in mill driving, power generation and co-generation. Around 50 per cent of the company's revenues are generated from sugar and rice mills across the country. BIL reported a profit after tax (PAT) of INR18 million on net sales of INR212 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR3 million on net sales of INR182 million for 2008-09. DIAMONDSTAR: CRISIL Assigns 'P4' Ratings to Various Bank Debts -------------------------------------------------------------- CRISIL has assigned its 'P4' rating to Diamondstar's bank facilities. The rating reflects Diamondstar's large working capital requirements, and modest scale of operations in diamond export industry. These rating weaknesses are partially offset by the long standing experience of Diamondstar's promoters' in the diamond business. Facilities Ratings ---------- ------- INR92.3 Million Post Shipment Credit P4 (Assigned) INR61.1 Million Packing Credit P4 (Assigned) INR166.6 Million Proposed ST Bank P4 (Assigned) Loan Facility Diamondstar is a partnership firm, set up in 1967 by Mr. Chottalal P Shah and his friends. The firm procures and exports cut and polished diamonds. The firm is currently managed by the second generation of the Shah family, Mr. Rupesh C Shah and Mr. Nilesh C Shah. Diamondstar predominantly deals in large diamonds (up to 9 carats) and in marquise, pear, and round cuts. Diamondstar reported a profit after tax (PAT) of INR5.9 million on net sales of INR400.7 million for 2008-09 (refers to financial year, April 1 to March 31), against a PAT of INR6.3 million on net sales of INR390.4 million for 2007-08. G. NAGESWARAN: CRISIL Assigns 'BB-' Rating to INR49MM Cash Credit ----------------------------------------------------------------- CRISIL has assigned its 'BB-/Stable/P4+' ratings to the bank facilities of G. Nageswaran. Facilities Ratings ---------- ------- INR49.00 Million Cash Credit BB-/Stable (Assigned) INR1.00 Million Bank Guarantee P4+ (Assigned) The ratings reflect GN's average financial risk profile marked by weak capital structure and moderate debt-protection metrics, working-capital-intensive operations, and customer concentration in its revenue profile. These weaknesses are partially offset by the extensive experience of GN's promoters in the civil construction business. Outlook: Stable CRISIL believes that GN will continue to benefit from the longstanding industry experience of its promoters. The outlook may be revised to 'Positive' if GN diversifies its revenue profile, leading to significant increase in its scale of operations, while maintaining its operating margin, or if it improves its capital structure significantly. Conversely, the outlook may be revised to 'Negative' if the firm's profitability declines, or if it contracts more-than-expected debt to fund its capital expenditure, leading to deterioration in its capital structure. About G. Nageswaran Set up in 1985 as a proprietorship firm, GN is engaged in civil construction activities, mainly in Tamil Nadu. GN is primarily constructs roads and storm-water drains. The construction work is undertaken for the Government of Tamil Nadu and National Highways Authority of India.GN has an order book of INR378 million, to be executed over the next 12-15 months. GN reported a profit after tax (PAT) of INR22 million on net sales of INR382 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR18 million on net sales of INR445 million for 2008-09. GUPTA DYEING: CRISIL Assigns 'B-' Rating to INR43MM Term Loan ------------------------------------------------------------- CRISIL has assigned its 'B-/Stable/P4' ratings to the bank facilities of Gupta Dyeing and Printing Mills Pvt Ltd. The ratings reflect GDPMPL's weak financial risk profile marked by a high gearing and weak debt protection indicators, and exposure to risks related to the commodity nature of the company's products. The above weaknesses are partly negated by the promoters' long experience in the textile industry. Facilities Ratings ---------- ------- INR87.5 Million Cash Credit Limit B-/Stable (Assigned) INR43.0 Million Term Loan B-/Stable (Assigned) INR100.0 Million Proposed LT Bank B-/Stable (Assigned) Loan Facility INR40.0 Million Letter of Credit P4 (Assigned) INR5.0 Million Bank Guarantee P4 (Assigned) Outlook: Stable CRISIL believes that Gupta Dyeing and Printing Mills Pvt Ltd (GDPMPL) will continue to benefit over the medium term from its promoters' industry experience. The outlook may be changed to 'Positive' if infusion of fresh equity by promoters strengthens the company's financial risk profile. Conversely, the outlook may be revised to 'Negative' if increase in working capital requirements results in increase in GDPMPL's debt, further weakening GDPMPL's liquidity. About Gupta Dyeing Incorporated in 1986 in Surat (Gujarat) by Mr. Nandkishore Gupta, GDPMPL manufactures polyester draw twisted and draw winder yarn. The company is being managed by the founder's grandson, Mr. Jatin Gupta. Currently, GDPMPL has capacities to manufacture 8 tonnes of draw twisted yarn and 2 tonnes of draw winded yarn per day. The company is also installing a new capacity to manufacture 10 tonnes of shaggy polyester yarn per day. GDPMP reported a profit after tax (PAT) of INR6.0 million on net sales of INR607.1 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR1.5 million on net sales of INR356.8 million for 2008-09. JRD INDUSTRIES: CRISIL Assigns 'P4+' Rating to INR125 Million LOC ----------------------------------------------------------------- CRISIL has assigned its 'P4+'rating to the bank facility of JRD Industries. Facilities Ratings ---------- ------- INR125 Million Letter of Credit P4+(Assigned) The ratings reflect the MJR group's below-average financial risk profile, marked by small net worth, low profitability, weak debt protection metrics and moderate gearing, and its vulnerability to the cyclical and fragmented end-user (shipping and steel) industries. These weaknesses are partially offset by the group's diversified business risk profile. Analytical Approach For arriving at its ratings, CRISIL has combined the business and financial risk profiles of JRD, M J R Steels Pvt Ltd, and M J Scrap Pvt Ltd, together referred to as the MJR group. This is because the companies have common management, and fungible cash flows. Furthermore, JRD and MJR have provided corporate guarantees for each other's bank facilities. Also, MJSPL has guaranteed the bank facilities of MJR and JRD. Moreover, the promoters operate the three companies as a group. About JRD Industries The MJR group, based in Kolkata, trades in steel intermediaries and scrap, and also dismantle ships at Alang (Gujarat) and Kolkata (West Bengal). The group registered a turnover of around INR1680 million in 2009-10 (refers to financial year, April 1 to March 31), of which 75 per cent was from the trading business. MJR has traded in steel products since 2003-04. Until 2001, the company was in the ship-breaking business. However, due to downturn in ship breaking in 2002, the company began trading in steel products. MJR procures steel products from Kolkata, Durgapur (West Bengal), Jamshedpur (Jharkhand), Ramgarh (Jharkhand) and Rourkela (Orissa), and sells the same in West Bengal, Mandi Govindgarh (Punjab) and Jaipur (Rajasthan). JRD has been in the ship-breaking business sine 1991, but withdrew from the business from 2002 to 2008 when it had no operations due to downturn in the industry. Over the years, the group has dismantled over 100 ships with aggregate weight of 0.5 million tonnes. The day-to-day operations of the group are looked after by its promoter, Mr. Sanjiv Agarwal. The MJR group reported a profit after tax (PAT) of INR9.7 million on net sales of INR1680 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR5.5 million on net sales of INR1835 million for 2008-09. RAJ PACKAGING: CRISIL Assigns 'BB+' Rating to INR49 Million Loan ---------------------------------------------------------------- CRISIL has assigned its 'BB+/Stable/P4+' ratings to the bank facilities of Raj Packaging Industries Ltd. The ratings reflect RPIL's weak financial profile, marked by small net worth, moderate gearing and debt protection measures, and exposure to risks relating to intense competition in the packaging industry and small scale of operations. These rating weaknesses are partially offset by the benefits that RPIL derives from its established market position and sound operating efficiencies. Facilities Ratings ---------- ------- INR40.0 Million Cash Credit Limit BB+/Stable (Assigned) INR49.0Million Term Loan BB+/Stable (Assigned) INR10.0 Million Letter of Credit P4+ (Assigned) INR1.0 Million Bank Guarantee P4+ (Assigned) Outlook: Stable CRISIL believes that RPIL will continue to benefit over the medium term from its relationships with its key customers. The outlook may be revised to 'Positive' if RPIL's financial risk profile improves substantially, supported by capital infusion and growth in operating income and operating margin. Conversely, the outlook may be revised to 'Negative' if the company's financial risk profile deteriorates because of large, debt-funded capital expenditure. About Raj Packaging Incorporated in 1988 as a private limited company, RPIL is promoted by Mr. Prem Kankaria and Mr. U C Bhandari. The company manufactures multilayered, co-extruded plastic films, and flexible packing materials. It supplies its products mainly to various film converters and edible oil manufacturers such as The Paper Products Ltd (rated 'AA-/Stable/P1+' by CRISIL) and Ruchi Soya Industries Limited. RPPL reported a profit after tax (PAT) of INR9.1 million on net sales of INR188.6 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR7.9 million on net sales of INR195.8 million for 2008-09. SHRADHA AGENCIES: CRISIL Upgrades Rating on INR150MM Loan to 'BB-' ------------------------------------------------------------------ CRISIL has upgraded its rating on the cash credit facility of Shradha Agencies Pvt Ltd to 'BB-/Stable' from 'B+/Stable'. The upgrade reflects the improvement in SAPL's business performance in 2009-10 (refers to financial year, April 1 to March 31) marked by a 32.5 per cent growth in revenues, and improved business risk profile on the back of expansion into newer territories. Facilities Ratings ---------- ------- INR150.00 Million Cash Credit BB-/Stable (Upgraded from 'B+/Stable') The rating, however, continues to reflect SAPL's below-average financial risk profile marked by high gearing and weak debt protection metrics, and its large, debt-funded working capital requirements. These weaknesses are partially offset by SAPL's sound business risk profile with a strong distribution network, extensive experience of its promoters in the trading business, and relatively low-risk business model supported by minimal inventory and debtor risk. Outlook: Stable CRISIL believes that SAPL will continue to benefit from its wide market reach and low-risk business model. The outlook may be revised to 'Positive' if the company's profitability improves considerably from current levels, or if equity infusions enhance its net worth, thereby reducing the gearing levels and improving its debt protection metrics. Conversely, the outlook may be revised to 'Negative' if SAPL increases its reliance on debt to fund its incremental working capital requirements, thereby constraining its liquidity. About Shradha Agencies SAPL was originally set up in 1974 as a proprietorship firm, which began operations by trading in cigarettes; the firm was reconstituted as a private limited company in 1995. The company, which operates from West Bengal, is a stockist for many fast- moving consumer goods (FMCG) brands including Procter and Gamble, Nokia, Heinz, and Reynolds, catering to various districts of West Bengal. SAPL is currently managed by Mr. Rajeev Arora and his son Mr. Ankit Arora. For 2009-10, SAPL reported a profit after tax (PAT) of INR3.53 million on net sales of INR1.59 billion, as against a PAT of INR2.89 million on net sales of INR1.20 billion for the preceding year. STEEL EXCHANGE: ICRA Reaffirms Rating on INR87.02cr Loan to 'LBB+' ------------------------------------------------------------------ ICRA has reaffirmed the 'LBB+' rating to the INR87.02 crore term loan and INR140.00 crore (enhanced from INR100.00 crore) long term fund based bank facilities of Steel Exchange India Limited. The outlook on the rating is Stable. ICRA has also reaffirmed the 'A4+' rating to the INR2.00 crore fund based bank facilities and INR111.0 crore (enhanced from INR 86.00 crore) non fund based bank facilities of SEIL. The retained ratings factor in the inherent cyclicality and the increasing competition in the highly fragmented steel rolled products industry, the exposure of the company to highly volatile raw material prices which has affected its operating margins during FY10 and the weak financial profile of the company characterized by high gearing, low operating profitability and low coverage indicators. However, the ratings favorably factor in the positive demand outlook for the Indian steel industry, demonstrated ability of the promoters to bring in funds by way of equity and unsecured loans and the anticipated cost savings from the backward integration of manufacturing operations, which is expected to improve margins post stabilization of operations. Though the capital expenditure towards backward integration and capacity expansion is likely to benefit the company in the long term, in ICRA's opinion the company could face off-take risks in the near term to an extent. About Steel Exchange SEIL was incorporated in 1999 as a subsidiary of Pyxis Technology Solutions Ltd. It was set up as a trading and logistics entity, to support steelexchangeindia.com, an online steel trading portal developed and launched by PTSL. Subsequently, the company ventured into steel trading and manufacturing operations. Currently the company has an installed capacity of 2,25,000 TPA for sponge iron, 3,30,000 TPA for billets/ingots, 2,70,000 TPA for TMT bars, 30,000 TPA for wires and 10 MW of power. Recent Results SEIL reported a Profit After Tax (PAT) of INR4.96 crore on an operating income of INR696.98 crore for the year ended March 31, 2010 as against a PAT of INR4.79 crore on an operating income of INR696.92 for the year ended March 31, 2009. SEIL has clocked net sales of INR 354.13 crores for the six months ended September 2010, representing healthy growth of 16% over the sales in the corresponding period of the previous fiscal. During the same period, the company has reported a PAT of INR13.68 crore against a PAT of INR6.61 crore in the corresponding period of the previous fiscal. VIJETA PROJECTS: ICRA Assigns 'LBB+' Rating to INR37.5cr Bank Debt ------------------------------------------------------------------ ICRA has assigned an 'LBB+' rating to INR37.50 crore1 fund based limits of Vijeta Projects and Infrastructures Limited. The outlook on the long-term rating is stable. ICRA has also assigned an 'A4+' rating to INR125.00 crore non-fund based limits of VIPL. The ratings take into account VIPL's experienced promoters; its long track record of operations; its presence in diverse segments; and a robust order book which provides visibility to revenues going forward. However, the ratings are constrained by the risks associated with high geographical concentration of VIPL's projects; delays witnessed in many of its projects which impacts the revenue generation and profitability; and the execution challenges faced on account of a sizeable order book. The ratings also take into consideration the high working capital intensity of the company due to delays in recovery of payments from the clients; and the fact that the revenue recognition policy of the company is not in accordance with the accepted accounting norms. About Vijeta Projects Promoted in 1990 by the Singh family, Vijeta Projects & Infrastructures Limited (VPIL) is a closely held public limited company engaged in executing infrastructure projects across sectors like irrigation, roadways, railway infrastructure, mining, etc. The company is primarily working for various government and semi government bodies (Central Public Works Department, Jharkhand State Mineral Development Corp., Department of Water Resources, National Buildings Construction Corporation etc) in the states of Bihar and Jharkhand. In addition to this, VPIL is also working for reputed private sector clients like Larsen & Toubro, Tata Power Ltd, Jindal Power Ltd, etc. Recent Results VIPL reported a profit after tax (PAT) of INR 7.8 crore in FY2009-10 on an operating income of INR145.1 crore. ========= K O R E A ========= KUMHO ASIANA: Creditors to Start Korea Express Sale Process ----------------------------------------------------------- Yonhap News reports that financial sources said creditors of Korea Express Co. Ltd. are seeking to begin the process to sell a major stake in the company in early 2011. Yonhap's sources said that the state-run Korea Development Bank will likely seal the decision to sell the stake in Korea Express this weekend and pick sale-managing brokerages in order to kick off the sale process early next year. According to Yonhap, sources said the stake to be put up for sale is expected to reach over 70%, which includes a 23.95% stake held by Daewoo Engineering & Construction Co., another 23.95% interest by Asiana Airlines Inc., and a 20% share owned by Korea Express itself. Yonhap states that the plan to sell the Korea Express stake came after KDB bought a majority stake in Daewoo Engineering from Kumho Asiana Group earlier this month as part of its efforts to rescue the financially troubled group, now under a creditors-led debt rescheduling program. Yonhap reports that several conglomerates, including steel giant POSCO, are reportedly interested in buying the stake, whose value analysts estimate reaches KRW2 trillion (US$1.7 billion) due to a managerial right that comes with the transaction. Samsung Group and retail giant Lotte Group are also known to be interested in joining the race to buy Korea Express, which Kumho Asiana acquired in 2008, Yonhap adds. Bloomberg News reported that Kumho Asiana said Jan. 5 that it plans to raise KRW1.3 trillion (US$1.1 billion) from asset sales to help repay debt stemming from the 2006 takeover of Daewoo Engineering. The group has already sold assets and lost control of units including Daewoo Engineering, Kumho Industrial Co. and Kumho Tire Co. to creditors. Korea Express Co., Ltd. provides land and marine transportation, and logistics services. The company also operates stevedoring, distribution, and warehousing businesses that serve domestic and international customer needs. The company is part of the Kumho Asiana Group. About Kumho Asiana Established in 1946, Kumho Asiana Group is a large South Korean conglomerate, with subsidiaries in the automotive, industry, leisure, logistic, chemical and airline fields. The group is headquartered at the Kumho Asiana Main Tower in Sinmunno 1-ga, Jongno-gu, Seoul, South Korea. =============== M A L A Y S I A =============== AXIS INC: Taps New Adviser for Proposed Restructuring Scheme ------------------------------------------------------------ Axis Incorporation Berhad has appointed MIDF Amanah Investment Bank Berhad as the new adviser for the company's Proposed Restructuring Scheme. MIDF Amanah replaces RHB Investment Bank Berhad. 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. JPK HOLDINGS: Taps TA Securities as News Principal Adviser ---------------------------------------------------------- JPK Holdings Berhad on December 20, 2010, mutually agreed with Public Investment Bank Berhad to revoke and terminate the earlier appointment of PIVB as JPK's Principle Scheme Advisor to the Company's Restructuring Exercise. JPK had on the same date appointed TA Securities Holdings Berhad as the Company's new Principle Scheme Advisor to JPK Group's Restructuring Exercise. About JPK Holdings JPK Holdings Berhad is a Malaysia-based investment holding company engaged in the provision of management services to its subsidiaries. The Company's subsidiaries include JPK (Malaysia) Sdn. Bhd., which is engaged in the manufacture of precision plastic injection moulded parts; JPK Industries Sdn. Bhd., which is engaged in property holding; JPK Co. Ltd., which is engaged in investment holding; JPK (Dongguan) Co. Ltd., which is engaged in the Manufacture of precision plastic injection moulded parts, and JPK (Hanoi) Co. Ltd., which is engaged in the manufacture, assemble, process and design precision plastic injection moulded parts. The Company's operating businesses are organized and managed into three geographical locations: Malaysia, The Socialist Republic of Vietnam and The People's Republic of China. * * * JPK Holdings Berhad has been considered as an Affected Listed Issuer under Practice Note No. 17 of the Bursa Malaysia Securities Berhad as the external auditors of the Company have expressed a disclaimer opinion on the Company's audited financial statements for the financial year ended March 31, 2009. KENMARK INDUSTRIAL: Liquidators File Wind Up Petition Against Unit ------------------------------------------------------------------ Kenmark Industrial Co. (M) Bhd disclosed that Mak Kum Choon and Yeoh Siew Ming, the Joint and Several Liquidators of the Company, have filed a petition to the Court for the winding up of Kenmark Paper Sdn Bhd pursuant to Section 217 (c) and (d) and Section 218 (e) and (i) of the Companies Act, 1965. The Company had regarded that Kenmark Paper is not financially solvent as a going concern. Kenmark Paper was placed under receivership on June 11, 2010, by EON Bank pursuant to the powers contained in a debenture dated November 18, 1991, created by Kenmark Paper in favor of EON Bank in respect of banking facilities up to a combined limit of MYR11 million. As at May 27, 2010, Kenmark Paper was indebted to EON Bank in amount of MYR7,668,375.41. The Company told the bourse that under the existing circumstances, it is just and equitable that Kenmark Paper should be wound up. In addition, it would be appropriate to apply to the Court to appoint Mak Kum Choon and Yeoh Siew Ming as Joint and Several Liquidators to deal with the assets of Kenmark Paper for these reasons: a) Kenmark Paper is a wholly owned subsidiary of the Company and the Petitioners are currently the Joint and Several Liquidators of the Company appointed by the court on October 14, 2010; b) The Company is a public listed company and the Joint Several Liquidators are responsible to deal with its wholly owned subsidiary companies as per the Court Order dated October 14, 2010; c) It would be cost efficient to also appoint the Petitioners as the Joint and Several Liquidators of Kenmark Paper as the Joint and Several Liquidators would have to wind down the business of the Kenmark Paper once the assets are fully realized; d) The Receiver and Manager only protects the interest of the Debenture Holder while the Joint and Several Liquidators look after all the interest of the creditors and contributories; and e) The appointment of the Joint and Several Liquidators in Kenmark Paper will not prejudice the receivers and managers and/or debenture holders in any manner whatsoever. Based on the Kenmark Paper's audited financial statement for the year ended March 31, 2009, the Company holds 6,000,000 ordinary shares issued and fully paid-up of MYR1 each in Kenmark Paper. Kenmark Paper is currently dormant and the Company is unable to assess the expected losses, if any, arising from the winding-up proceedings. About Kenmark Industrial Kenmark Industrial Co. (M) Berhad is a Malaysia-based company. The Company is engaged in the manufacturing of computer workstations, cabinets, furniture; printing of packaging materials; the distribution of consumer products, and investment holding. The Company is also engaged in plastic injection for furniture parts, and assembly and distribution of liquid crystal display (LCD). It exports its products to the United States, Europe, Japan and Australia. * * * Kenmark Industrial Co. (M) Berhad has been classified a Practice Note 17 company based on the criteria set by the Bursa Malaysia Securities Bhd after it triggered Paragraph 2.1(f) of the Listing Requirements. The Company's major subsidiaries have defaulted on some of their banking facilities. The Company is also unable to provide a solvency declaration. The High Court on October 14, 2010, entered an order to wind up the operations of Kenmark Industrial Co (M) Berhad under the provisions of the Companies Act, 1965. The court appointed Mak Kum Choon and Yeoh Siew Ming both of Messrs. Deloitte Corporate Solutions Sdn Bhd as liquidators for Kenmark Industrial Co (M) Berhad. LCL CORP: Won't Appeal Delisting Notice --------------------------------------- LCL Corporation Berhad disclosed in a regulatory filing that it will not be appealing Bursa Malaysia Securities Berhad's decision to suspend trading of the company's securities as the Company does not have any Regularization Plan. The Company said on December 15 that it failed to submit its regularization plan to the Securities Commission and other relevant authorities for approval within the timeframe stipulated by Bursa Securities. The Company's securities will be de-listed on December 27, 2010, unless an appeal is submitted to Bursa Securities on or before December 22, 2010. About LCL Corp Based in Malaysia, LCL Corporation Berhad (KUL:LCL) -- http://www.lclgroup.com.my/-- is an investment holding company engaged in the provision of management services to the subsidiaries. It operates in five segments: interior fit-out services, which provides interior fit-out works and services, including project management, design and consultancy, procurement, construction and installation; manufacturing of furniture, which is engaged in the manufacture of customized furniture and fixtures, generic furniture; supply and installation of materials and fittings, which is engaged in the supply and installation of ceiling materials, metal fittings and fixtures and stone materials; trading of furniture and building materials, including interior fit-out materials, and others, which comprises investment holding and/or property development activities of the Company and certain subsidiaries. LCL Corp Bhd. has been classified as an Affected Listed Issuer under Practice Note 17 of Bursa Malaysia Securities Berhad as the Company is unable to provide a solvency declaration to Bursa Securities following a default in its loan payments pursuant to Practice Note 1/2001. Bursa Securities further decided to de-list the securities of the Company from the Official List of Bursa Securities pursuant to paragraph 8.04 of Bursa Securities Main Market Listing Requirements in the event: (a) the Company fails to sign and announce a definitive agreement with the white knight i.e. the Manhara Group of Companies on or before October 31, 2010; (b) the Company fails to submit the regularization plan to the SC for approval within the Extended Timeframe; (c) the Company fails to obtain the approval for the implementation of its regularization plan and does not appeal within the timeframe (or extended timeframe, as the case may be) prescribed to lodge an appeal; (d) the Company does not succeed in its appeal; or (e) the Company fails to implement its regularization plan within the timeframe or extended timeframes stipulated by the relevant authorities. Upon occurrence of any of the events set out, the securities of the Company will be removed from the Official List of Bursa Securities upon the expiry of seven market days from the date of the Company is notified by Bursa Securities or such other date as may be specified by Bursa Securities. TRACOMA HOLDINGS: Appoints Mohamed Niza Abu Bakar as CEO -------------------------------------------------------- Tracoma Holdings Berhad has appointed Mohamed Niza Abu Bakar as Chief Executive Officer of the company effective December 17, 2010. Mohamed Niza started his career with the Central Bank of Malaysia (Bank Negara Malaysia) as a Senior Executive with the Banking Supervision Department. He served the Central Bank for 5 years and was exposed to various fields in corporate finance and investment banking. Mohamed Niza then joined Tracoma Group in 2005 in the accounts and corporate finance division and subsequently heads the division in 2008. Mohamed Niza replaces Zulkiflee Mohamad, who resigned on Dec. 10, 2010. About Tracoma Holdings Tracoma Holdings Berhad is a Malaysia-based manufacturer and supplier of automotive parts and components. Some of its wholly owned subsidiary companies include Tracoma Sdn. Bhd., which is engaged in manufacturing of automotive components; Malaysian Die- Makers Sdn. Bhd., which is engaged in die making and servicing; Trends Mecha Sdn. Bhd., which is engaged in parts and car design, and Malaysian Farm Machinery Sdn. Bhd., which is engaged in assembling and distributing agricultural tractors. * * * Tracoma Holdings Berhad has been classified as an Affected Listed Issuer under Practice Note 17 of the Listing Requirements of Bursa Malaysia Securities Berhad. The company has triggered PN17's Paragraph 8.04 and Paragraph 2.1(a) as the consolidated shareholders' equity for the full financial year ended December 31, 2009, is less than 25% of the Company's issued and paid-up capital and such shareholders' equity is less than MYR12 million. ==================== N E W Z E A L A N D ==================== LOMBARD FINANCE: Distributions on Hold Until IRD Claim is Resolved ------------------------------------------------------------------ Guide2.co.nz reports that the receivers of Lombard Finance & Investments said no further distributions will be made to secured debenture investors until a claim by Inland Revenue is resolved. Lombard Finance went into receivership in 2008. IRD has been carrying out a goods and services tax audit of Lombard since the start of the receivership, according to Guide2.co.nz. As a result, the IRD has advised that it may have a preferential claim of up to NZ$4.5 million in the receivership, the report relates. Guide2.co.nz discloses that the claim relates to the GST component of one specific transaction that occurred prior to receivership. "We will be reviewing their claim to assess whether to accept it and whether the receivers consider it to be preferential or not," receiver PricewaterhouseCoopers said in a report obtained by Guide2.co.nz. Guide2.co.nz notes that two interim distributions totaling 9.5 cents on the dollar have been paid to secured debenture investors because IRD has waived any preferential claim. The IRD has now advised that as a result of the outcome of its audit, it is no longer in a position to agree to waive any preferential claim in respect of any further interim distributions, the report adds. About Lombard Finance Lombard Finance & Investments Limited is a wholly owned subsidiary of Lombard Group, a diversified company specializing in the financial services sector offering a number of lending options and providing investment opportunities for its shareholders and investors. Lombard Finance was placed into receivership on April 10, 2008, by its trustee, Perpetual Trust Limited. PricewaterhouseCoopers partners John Fisk and John Waller have been appointed receivers of the company. The receivership also applies to three other subsidiaries of Lombard Group, being Lombard Asset Finance Limited, Lombard Property Holdings Limited and Lombard Asset Finance No 2 Limited. The receivership does not impact on Lombard Group Limited. SOUTH CANTERBURY: Owed NZ$103-MM by Southbury Corp, Receiver Says ----------------------------------------------------------------- The New Zealand Herald reports that South Canterbury Finance's parent company owes the entity more than NZ$103 million. The NZ Herald relates that McGrathNicol's Kerryn Downey and William Black on December 21 filed their first report on Southbury Corporation, the 100% owner of South Canterbury Finance, for which they are also the receivers. Southbury Corporation is wholly owned by Southbury Group, of which Allan Hubbard owns about 70%. Mr. Hubbard's assets have been under statutory management since June 20. According to the NZ Herald, Messrs. Downey and Black were appointed to both Southbury Corporation and Southbury Group on November 3 after South Canterbury Finance demanded repayment of money owed to it and the demand was not met. "At the date of our appointment, $103,908,343 was owed to South Canterbury Finance and remains outstanding. Interest continues to accrue on this amount," the pair stated, according to the NZ Herald. Southbury Corporation's major assets are an NZ$18.1 million loan to its parent company Southbury Group and its investment in South Canterbury Finance worth NZ$245.5 million. South Canterbury Finance is in the process of selling its major assets including stakes in Helicopters NZ, Scales Corporation and Dairy Holdings. "Until the sales process for South Canterbury Finance is complete, we are unable to confirm the likely recovery for Southbury Corporation's sole shareholder . . . Southbury Group." The receivers also said they were aware of a number of concerns raised by investors and other parties in relation to the activities of South Canterbury Finance Group before their appointment. "We are aware . . . that Southbury Corporation may have been a party to some of these transactions." The receivers said any potential breaches of legislation would be reported to the authorities, the NZ Herald adds. Kerryn Downey and William Black of McGrathNicol were appointed Receivers and Managers of Southbury Group Limited and Southbury Corporation Limited on November 3, 2010. About South Canterbury Based in New Zealand, South Canterbury Finance Limited (NZE:SCFHA) -- http://www.scf.co.nz/-- is engaged in the provision of financial services. The Company's principal activities are borrowing funds from public and institutional investors and on- lending those funds to the business, plant and equipment, property, rural and consumer sectors. It typically advances funds by means of hire purchase, floor plans, leasing of plant, vehicles and equipment, personal loans, business term loans and revolving credit facilities, mortgages against property, and other financial instruments, including consumer loan insurance. On August 31, 2010, Trustees Executors Limited, as trustee for South Canterbury Finance charging group, appointed Kerryn Downey and William Black of McGrathNicol as receivers of the charging group's secured assets. "As Trustee, we have had South Canterbury Finance under heightened surveillance since 2008. As part of that, SCF was granted a Trustee waiver in February 2010 to allow it time to recapitalize. Unfortunately, the Company's Directors have advised us that they have not been successful with respect to a recapitalization and requested us to appoint a receiver. At this point we, as Trustee, agree that it is the best interests of debenture, deposit and bond holders to do that," said Yogesh Mody, Southern Regional Manager for Trustees Executors Limited. The New Zealand government said it would repay South Canterbury's 35,000 depositors and stockholders NZ$1.6 billion under the crown retail deposit guarantee scheme. SOUTHERN CROSS: S&P Affirms 'BB/B' Ratings with Stable Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services said that it has affirmed the 'BB/B' ratings on New Zealand-based Southern Cross Building Society. The outlook remains stable. "The rating affirmation reflects S&P's view of the stabilizing effect that the proposed merger with MARAC Finance Ltd. and Canterbury Building Society would have on SCBS' credit standing once a larger and more diversified financial institution is created," Standard & Poor's credit analyst Peter Sikora said. "The merger will help ameliorate S&P's concerns around SCBS' current high level of single-name exposures and its concentrated business profile." The stable outlook reflects S&P's view that SCBS' high level of single-name exposures and its concentrated business profile will be ameliorated by the stabilizing effect that the proposed merger will have on SBCS' credit standing once the larger and more diversified financial institution is created. The ratings on SCBS will be withdrawn once the merger is completed, although S&P note that the creditors stand to benefit from the potentially better credit profile of the newly merged group. The new group has the potential to be rated 'BBB-', subject to several factors. These include: That ongoing merger plans continue to be effectively executed and integration risks and related costs are appropriately managed. The merged group is able to meet board and governance expectations that are supportive of a higher rating. The merged entity is able to retain the support of its depositors, debenture investors, and providers of wholesale funding, and maintain a funding and liquidity profile that is comparable with other 'BBB' category peers'. The financial profile of the merged group progresses as expected and leads to a progressive improvement in operating performance. No new credit concerns emerge that undermine the merged group's financial profile or S&P's assessment of its risk management capability. The expectation that the recent stabilization and improvement in asset quality across merger partners will continue. The financial impact of the Christchurch earthquake does not detract from S&P's assessment of the merged group's credit profile. There will be no material divergence of strategy from current expectations such that it compromises S&P's view of the benefits from the merger, or any strategic shift that increases the merged group's overall risk profile. If the merger transaction with MARAC and CBS does not proceed as planned: Downward pressure on the current ratings could arise on the back of management being unsuccessful in re-weighting the loan portfolio toward residential lending, such that the credit quality of the overall portfolio deteriorates. That said, the planned merger has already progressed well down its path of regulatory and statutory impositions and the unsuccessful consummation of the merger appears to be unlikely. S&P does not expect to raise the ratings on SCBS in the short term. Before S&P could consider an upgrade, a large capital injection would be needed to moderate SCBS' susceptibility to unexpected losses stemming credit, market, and operational risks. ST LAURENCE: Investors to Get First Repayment Next Month -------------------------------------------------------- BusinessDesk reports that investors in St Laurence Ltd will get the first 9 cents-in-the-dollar repayment next month after receivers sold its interest in National Property Trust and recovered some loans. BusinessDesk relates that receivers Barry Jordan and David Vance of Deloitte still kept their forecast recovery at between 15% and 22% of investors' principal according to their second report as at Oct. 28 and published on the firm's website. That's on top of the 10 cents repaid under St Laurence's abandoned moratorium, BusinessDesk notes. BusinessDesk says the receivers don't expect to recover enough to make any interest payments, or repay note holders and unsecured creditors. According to BusinessDesk, Messrs. Jordan and Vance said they recovered NZ$18.8 million from the sale of the National Property Trust units, the bulk of which will come through by the end of March. The receivers are looking at "many options" to either sell shares or the management contract for Irongate Property Ltd, but none have been finalized, BusinessDesk adds. About St Laurence Ltd Headquartered in Wellington, New Zealand, St Laurence Limited -- http://www.stlaurence.co.nz/st_laurence.php-- is a property- based funds management and finance company with over NZ$1.2 billion in assets under management. Since 1995 it has been developing and promoting investments, lending to property borrowers, and managing its property assets and investments for its investors. * * * St. Laurence Limited has been placed into receivership, owing 9,000 investors NZ$245 million. The company's trustee, Perpetual Trust, on April 29, 2010, appointed Barry Jordan and David Vance of Deloitte as receivers of St. Laurence and some of its subsidiaries. The receivership does not include the companies which are the managers of The National Property Trust, Irongate Property Limited and its proportionate ownership schemes and syndicates. ********* 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, Ivy B. Magdadaro, 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 ***