/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/110221.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, February 21, 2011, Vol. 14, No. 36 Headlines A U S T R A L I A ANGUS & ROBERTSON: REDgroup Retail Places Firm Into Administration ARAB BANK: Moody's Reviews 'D+' Bank Financial Strength Rating BURRUP FERTILISER: Shareholder Seeks to Remove Receivers CONNECTEAST GROUP: First Half 2010 Net Loss Narrows to AU$2.7-Mil. INDIGO PROPERTIES: Calls in Administrators as Takeover Bid Fails REDGROUP RETAIL: Names Ferrier Hodgson as Administrator H O N G K O N G 3CM MEDIA: Creditors' Proofs of Debt Due March 11 ALL UNITY: Ying and Chan Step Down as Liquidators CHUN PO: Keung and Wai Appointed as Joint and Several Liquidators CHOK YICK: Wan and Fung Appointed as Liquidators COSNATA LIMITED: Lai Chi Kin Appointed as Liquidator DOUBLE COMPONENTS: Members' Final Meeting Set for March 31 DRAGON KING: Members' Final Meeting Set for March 18 DZAN DESIGN: Members' Final Meeting Set for March 21 EUSTON ENTERPRISES: Seng and Lo Step Down as Liquidators EXCESSWAY INVESTMENT: Creditors' Proofs of Debt Due March 22 FARGO PROPERTIES: Seng and Lo Appointed as Liquidators FEDERAL INT'L: Members' Final General Meeting Set for March 18 G4S INTERNATIONAL: Wong and Wong Tak Step Down as Liquidators GLORIOUS PROPERTY: Moody's Downgrades Corp. Family Rating to 'B2' GOLDMINGTON DEVELOPMENT: Wong Sun Keung Appointed as Liquidator GOSPEL PREACHING: Suen Siu Ying Appointed as Liquidator I N D I A ALAKNANDA SPONGE: CRISIL Reaffirms 'B+' Rating on Cash Credit BALAJI COTTON: CRISIL Rates INR56MM Cash Credit Facility at 'B' BALAJI EXPORT: CRISIL Assigns 'P4+' Rating to INR280MM LOC BLUE PRECISION: CRISIL Assigns 'D' Rating to INR22.3MM Term Loan DHARIYA CONSTRUCTION: CRISIL Assigns 'B' Rating to Cash Credit MAXIM INFRASTRUCTURE: CRISIL Rates INR1.59 Billion Loan at 'B+' PLANET RETAIL: CRISIL Assigns 'BB-' Rating to INR110MM Term Loan PRATISHTHA COMMERCIAL: CRISIL Reaffirms 'BB' Rating on Cash Credit PUNJAB NATIONAL: Fitch Affirms Individual Rating at 'C/D' SHREE SANYEEJI: CRISIL Cuts Rating on INR140MM Cash Credit to 'D' SHREE SANYEEJI STEEL: CRISIL Reaffirms 'D' Rating on Term Loan SHREE SHIV SAI: CRISIL Cuts Rating on INR88 Million Term Loan SYRMA TECHNOLOGY: Fitch Assigns 'BB+' National Long-Term Rating TREADSTONE: CRISIL Reaffirms 'B' Rating on INR121MM Term Loan VENKATESWARA WIRES: ICRA Reaffirms 'LBB+' Rating on Bank Limits J A P A N CAFES 2: S&P Raises Ratings on Various Classes of Notes JLOC XXVIII: Moody's Downgrades Ratings on Two Classes of Certs. N E W Z E A L A N D A2 CORP: Posts NZ895,517 Maiden Profit in First Half Ended Dec. 31 HANOVER FINANCE: Judge Reserves Decision in Hotchin Assets Freeze MACPHERSON MARINE: Ex-Director Faces Three Year for NZ$1.6MM Fraud - - - - - ================= A U S T R A L I A ================= ANGUS & ROBERTSON: REDgroup Retail Places Firm Into Administration ------------------------------------------------------------------ ABC News reports that Angus & Robertson and the Whitcoulls group of news agencies in New Zealand have been placed into administration by owners, REDgroup Retail. The report relates that the board had serious concerns about the solvency of the company and was forced to call in administrators Ferrier Hodgson. A combination of the high Australian dollar, cheap books online, high wages and rents, as well as the retail downturn led to the company's decline, according to ABC News reports. ABC News notes that the administrators said it will be business as usual while the business's financial status is assessed ahead of the first creditors meeting, which is expected to be held in March. The report relates that REDgroup's board is believed to be confident that the company can be restructured. The first Angus & Robertson bookshop opened in Sydney in 1886. ARAB BANK: Moody's Reviews 'D+' Bank Financial Strength Rating -------------------------------------------------------------- Moody's Investors Service has downgraded the long-term and short- term debt and deposit ratings of Arab Bank Australia Limited to Baa1/P-2 from A3/P-1 and its subordinate rating to (P)Baa2 from (P)Baa1. Concurrently, Moody's has placed these ratings and the bank financial strength rating of D+ on review for possible downgrade. Ratings Rationale The rating changes are a direct result of the rating actions taken on Arab Bank Australia's parent, Arab Bank plc on Feb. 14, 2011, which were prompted by Moody's decision on Feb. 8, 2011, to lower the sovereign local currency rating of Jordan. Arab Bank plc's BFSR and local currency deposit ratings were downgraded to C/Baa1/P-2 from C+/A3/P-2 and were also placed on review for possible downgrade. "The downgrade of Arab Bank Australia to Baa1 reflects Moody's view that whilst the potential for support from its parent Arab Bank plc remains very high, the ability of the parent to provide that support has weakened", said Daniel Yu, an Analyst with Moody's Sydney office. "The potential for parental support remains an important, positive rating factor for Arab Bank Australia", explained Yu. "It lifts the bank's Baa1 deposit and debt ratings two-notches over its baseline credit assessment of Baa3, which measures its credit strength on a stand-alone basis". Moody's incorporates the potential for support into its ratings using its joint default analysis framework. The potential for parental support of a foreign subsidiary uses the parent's BCA as the reference rating, as opposed to the parent's deposit and senior debt ratings. This is because the deposit and senior debt ratings may incorporate the potential for systemic support for the parent in its home market -- which its home market regulator is unlikely to extend to a foreign subsidiary. The review of Arab Bank plc's ratings will focus on its financial position and the potential impact on the bank's finances from the recent rise in political tensions in Jordan following the turmoil in the region. The review of Arab Bank Australia's BFSR will focus on whether weakness at its parent has any potential to impact the financial flexibility and business operations of the Australian subsidiary. The bank continues to hold ample capital for its risk profile, demonstrated by a Tier one ratio of 9.52% as at 30 September 2010. There is no impact on the Aaa rating of debt securities the bank issued under the Australian government's guarantee scheme. The last rating action on Arab Bank Australia was on 4 May 2007, when its BFSR and deposit ratings were upgraded to D+/A3/P-1 from D/Baa1/P-2. Arab Bank Australia is headquartered in Sydney, Australia. It reported assets of AUD1.21billion (approximately US$1.09billion) at FY2009, period ending Dec. 31, 2009. BURRUP FERTILISER: Shareholder Seeks to Remove Receivers -------------------------------------------------------- Nick Evans at PerthNow reports that Radhika Oswal launched action in the Victorian Supreme Court seeking to have the Burrup Fertilisers Pty Ltd's receivers removed. The report, citing a statement, relates that Mrs. Oswal is taking action as a shareholder because she believes the "events of default that ANZ has alleged and relied upon to appoint the receivers did not occur." Mrs. Oswal, who owns around 35% of Burrup Fertilisers, said the vast majority of her shareholding is unencumbered, according to PerthNow. As reported in the Troubled Company Reporter-Asia Pacific on Dec. 20, 2010, The Australian said Burrup Fertilisers Pty Ltd has been placed into receivership with debts of about AU$800 million. ANZ Bank appointed PPB Advisory as receivers to Burrup Fertilisers. ANZ has also appointed the same receivers, PPB Advisory, over shares held by members of the Oswal Group in related company, Burrup Holdings. The bank is alleging "evidence of financial irregularities" as well as the usual default triggers relating to debt facilities established between 2002 and 2007. ANZ appointed PPB Advisory as Burrup Fertiliser's receivers two months ago, claiming irregularities in the company's books. The bank is owed as much as $900 million by Burrup. PerthNow notes that Mrs. Oswal said all amounts owed to ANZ were paid on time. The report relates Mrs. Oswal said she has been in contact with PPB Advisory since their appointment and "has concerns about the conduct of the receivership and the direction it taking. The newly launched legal action is seeking orders from the court declaring that the appointment of PPB Advisory over Burrup Fertilisers is invalid, the report notes. PerthNow discloses that a spokesman for the ANZ Bank said the company is disappointed at the legal action. "We have strong legal rights under the security we hold and we will be vigorously defending the action. We continue to expect to make a full recovery of our exposure to Burrup/Oswal. The action is disappointing and poorly conceived in view of all the circumstances associated with the Burrup matter including financial irregularities," he added. PerthNow adds that the receivers have finished their initial investigation in Burrup's financial affairs, and submitted a report last week to the Australian Securities and Investments Commission (ASIC) containing complaints about the way the business was run. Headquartered in Karratha in Western Australia, Burrup Fertilisers Pty Ltd -- http://www.bfpl.com.au/-- is Australia's largest ammonium producer. The company has a production capacity of 850- tonnes of liquid ammonia a year. CONNECTEAST GROUP: First Half 2010 Net Loss Narrows to AU$2.7-Mil. ------------------------------------------------------------------ The Sydney Morning Herald reports that ConnectEast Group has reduced its first-half net loss and says traffic volumes at the group's EastLink toll road in Melbourne are continuing to improve. SMH discloses that the group reduced its net loss for the six months to Dec. 31, 2010, to AU$2.7 million, from AU$43.3 million for the same period a year earlier. Revenue for the half year rose 14.4% to AU$108.4 million. According to SMH, ConnectEast said it cut operating costs by 9%, while traffic volumes rose by 10.4% for the half year. The group boosted operating cash flow to AU$26.9 million for the half year, rising from AU$0.4 million in the prior corresponding period, SMH discloses. ConnectEast Group (ASX:CEU) -- http://www.connecteast.com.au/-- is the owner and operator of Melbourne's EastLink Tollway. In October 2004, the ConnectEast Group was awarded the concession to finance, design, build, maintain and operate the EastLink Tollway, which comprises approximately 39 kilometers of tolled freeway- standard road connecting Melbourne's eastern and south-eastern suburbs. The tollway opened toll-free for public use on June 29, 2008, and tolling commenced on July 27, 2008. The concession expires on November 30, 2043. Peninsula Link construction is underway and preliminary works have begun at this untolled freeway project at EastLink's southern end. ConnectEast Group comprises the ConnectEast Investment Trust (CEIT) and ConnectEast Holding Trust (CEHT). On March 31, 2009 ConnectEast Holding 2 Pty Limited (CEH2), a company within the ConnectEast Group, acquired ConnectEast Management Limited (CEML) from Macquarie Capital Group Limited. CEML is the responsible entity of CEIT and CEHT. * * * ConnectEast Group posted three consecutive annual net loss of AU$9.33 million, AU$531.58 million and AU$5.6 million for the years ended June 30, 2008 through 2010. INDIGO PROPERTIES: Calls in Administrators as Takeover Bid Fails ---------------------------------------------------------------- Indigo Properties Australia Limited said the takeover bid by DK Northern Investments Pty Ltd was accepted by 87.3% of shareholders, falling short of the 90% minimum acceptance condition. The takeover is therefore not proceeding. The company has advised its shareholders that if the offer will not proceed, IPA will face the real prospect of moving into administration or liquidation. The company has appointed Terrence John Rose and Terry Grant van der Velde of SV Partners, Insolvency Accountants and Business Solutions, joint and several administrators of the company. Based in Australia, Indigo Properties Australia Limited (ASX: IPA), formerly Indigo Pacific Capital Limited, is engaged in investment activities, which include loans and property development. Loans include charges held by the Company over borrowing entities and registered mortgages over certain development properties. Property development includes equity investments in property development entities. As of June 30, 2010, Indigo Properties' projects under negotiation included development of 100 hectares of industrial land on the north side of Brisbane; development of up to 100 residencies in Ashgrove, Brisbane; development of approximately 1,500 residential lots in the Scenic Rim area west of Brisbane, and acquisition and development of a staged residential project west of Brisbane. The Company's 50% owned subsidiaries include Elevation Developer Pty. Ltd and Indigo (Warrill View) Partnership. REDGROUP RETAIL: Names Ferrier Hodgson as Administrator ------------------------------------------------------- Robert Fenner at Bloomberg News reports that REDgroup Retail Pty. Ltd., owner of the Borders bookstore chain in Australia, named Ferrier Hodgson as voluntary administrators, indicating a move toward bankruptcy. An "urgent assessment" of the business will be conducted before a meeting of creditors in March, Ferrier Hodgson said in an e-mailed statement obtained by Bloomberg. The appointment comes less than a day after Borders Group Inc. filed for bankruptcy in the U.S. and began taking bids for 200 stores, according to Bloomberg. The REDgroup companies in Administration include: * REDgroup Retail Pty Ltd * Spine Holdco Pty Ltd * A&R Australia Holdings Pty Ltd * REDgroup Retail Administrative Services Pty Ltd * Whitcoulls Group Holdings Pty Ltd * Spine Newco Pty Ltd * Angus & Robertson Pty Ltd * Angus & Robertson Bookworld * Calendar Club Pty Ltd * WGL Retail Holdings Ltd * Whitcoulls Group Ltd * Calendar Club New Zealand Ltd * Borders New Zealand Ltd * REDgroup Online Ltd Ferrier Hodgson partner Steve Sherman said as far as possible it would be business as usual while the Administrators conduct an urgent assessment of the business's financial status and prepare for the first meeting of creditors. During this period he called for regular Angus & Robertson, Borders and Whitcoulls customers to continue supporting their local outlets. Mr. Sherman said the administrators will be working closely with David Cowling of Clayton Utz. The first meeting of creditors is likely to take place in the first week of March. REDgroup Retail Pty, with 260 stores and brands including Angus & Robertson and Whitcoulls, is the largest book retailer in Australia and New Zealand. It acquired Borders stores in Australia, New Zealand and Singapore in 2008. ================ H O N G K O N G ================ 3CM MEDIA: Creditors' Proofs of Debt Due March 11 ------------------------------------------------- 3CM Media Limited, which is in members' voluntary liquidation, requires its creditors to file their proofs of debt by March 11, 2011, to be included in the company's dividend distribution. The company's liquidators are: Wong Teck Meng 602 The Chinese Bank Building 61-65 Des Voeux Road Central, Hong Kong ALL UNITY: Ying and Chan Step Down as Liquidators ------------------------------------------------- Ying Hing Chiu and Chan Mi Har stepped down as liquidators of All Unity Limited on February 4, 2011. CHUN PO: Keung and Wai Appointed as Joint and Several Liquidators ----------------------------------------------------------------- Stephen Liu Yiu Keung and David Yen Ching Wai on January 28, 2011, were appointed as liquidators of Chun Po Investment Company Limited. The liquidators may be reached at: Stephen Liu Yiu Keung David Yen Ching Wai 62/F., One Island East 18 Westlands Road Island East, Hong Kong CHOK YICK: Wan and Fung Appointed as Liquidators ------------------------------------------------ Dr. Wan Ho Yuen Terence and Mr. Fung Henry on February 2, 2011, were appointed as liquidators of Chok Yick Interior Design & Engineering Company Limited. The liquidators may be reached at: Dr. Wan Ho Yuen Terence Mr. Fung Henry Rooms 1001-1003, 10/F Manulife Povident Funds Place 345 Nathan Road Kowloon, Hong Kong COSNATA LIMITED: Lai Chi Kin Appointed as Liquidator ---------------------------------------------------- Lai Chi Kin on February 2, 2011, was appointed as liquidator of Cosnata Limited. The liquidator may be reached at: Lai Chi Kin Suite 1306, 13/F ING Tower, 308 Des Voeux Road Central, Hong Kong DOUBLE COMPONENTS: Members' Final Meeting Set for March 31 ---------------------------------------------------------- Members of Double Components Company Limited will hold their final meeting on March 31, 2011, at 2:30 p.m., at Room 1101, 11/F., Tai Yau Building, 181 Johnston Road, Wanchai, in Hong Kong. At the meeting, Chin Tak Tei, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. DRAGON KING: Members' Final Meeting Set for March 18 ---------------------------------------------------- Members of Dragon King Development Limited will hold their final meeting on March 18, 2011, at 10:00 a.m., at Room 2702-03, C C Wu Building, 302-8 Hennessy Road, Wanchai, in Hong Kong. At the meeting, Sun Fung Allan Ho, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. DZAN DESIGN: Members' Final Meeting Set for March 21 ---------------------------------------------------- Members of Dzan Design Limited will hold their final meeting on March 21, 2011, at 5:00 p.m., at Room 502, 5th Floor, Prosperous Building, 48-52 Des Voeux Road Central, in Hong Kong. At the meeting, Law Yui Lun, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. EUSTON ENTERPRISES: Seng and Lo Step Down as Liquidators -------------------------------------------------------- Natalia K M Seng and Susan Y H Lo stepped down as liquidators of Euston Enterprises Limited on February 12, 2011. EXCESSWAY INVESTMENT: Creditors' Proofs of Debt Due March 22 ------------------------------------------------------------ Excessway Investment Limited, which is in members' voluntary liquidation, requires its creditors to file their proofs of debt by March 22, 2011, to be included in the company's dividend distribution. The company's liquidators are: Stephen Liu Yiu Keung David Yen Ching Wai 62/F, One Island East 18 Westlands Road Island East, Hong Kong FARGO PROPERTIES: Seng and Lo Appointed as Liquidators ------------------------------------------------------ Natalia K M Seng and Susan Y H Lo on Feb. 11, 2011, were appointed as liquidators of Fargo Properties Limited. The liquidators may be reached at: Natalia K M Seng Susan Y H Lo Level 28, Three Pacific Place 1 Queen's Road East Hong Kong FEDERAL INT'L: Members' Final General Meeting Set for March 18 -------------------------------------------------------------- Members of Federal International Mining Group Co., Limited will hold their final general meeting on March 18, 2011, at 10:00 a.m., at Room 1410, 14/F., Harbour Centre, 25 Harbour Road, Wanchai, in Hong Kong. At the meeting, Poon Wai Hung Richard and Yao Yi, the company's liquidators, will give a report on the company's wind-up proceedings and property disposal. G4S INTERNATIONAL: Wong and Wong Tak Step Down as Liquidators ------------------------------------------------------------- Wong Poh Weng and Wong Tak Man stepped down as liquidators of G4S International (Hong Kong) Limited on Feb. 18, 2011. GLORIOUS PROPERTY: Moody's Downgrades Corp. Family Rating to 'B2' ----------------------------------------------------------------- Moody's Investors Service has downgraded Glorious Property Holdings Limited's corporate family rating to B2 from B1. Moody's has also downgraded Glorious's senior unsecured bond rating to B3 from B2. The outlook for both ratings is stable. Ratings Rationale "These downgrades reflect Moody's view that Glorious liquidity risk has increased, as its current business plan entails substantial funding needs -- including the repayment of a large amount of maturing trust loans and unpaid land premium -- in the next 24 months," says Kaven Tsang, a Moody's AVP/Analyst. "Although Glorious' 2010 contracted sales came to RMB12.7 billion, Moody's estimates the company's current cash holdings at about RMB5 billion to RMB6 billion and operating cash flow at about RMB 4-5 billion per annum, which will not be sufficient to cover its funding needs in the next two years," Mr. Tsang continues. "Moody's expects Glorious credit metrics will remain weak over the next 12-24 months, with EBITDA interest coverage between 2-2.5x and adjusted debt/total capitalization around 55%," says Tsang, adding that "the company's low interest coverage will constrain its ability to raise debt." Moody's recognizes, however, that Glorious has a high-quality and low-cost land bank, particularly those in first-tier cities, as well as a high profit margin. These could offer Glorious some flexibility on pricing products in a down market. Moody's notes that Glorious has banking facilities from banks in China. However, in Moody's view, they are not committed facilities due to the nature of banking practices in China. The stable outlook reflects Moody's expectation that Glorious will be able to raise further debt to cover its funding gap and will rationalize the pricing for its products. The rating could be pressured for downgrade if Glorious's credit profile deteriorates further, due to (1) weaker than expected sales performance; (2) aggressive development or land acquisitions; or (3) weakened access to funding. The credit metrics that Moody's would consider for a rating downgrade include adjusted debt/capitalization rising beyond 55- 60% or EBITDA/interest falling under 1.5-2x. Glorious's ratings are unlikely to see any pressure for an upgrade over the near term. Over the medium term, however, the ratings could be upgraded if the company can (1) establish a track record of disciplined land acquisitions; (2) strengthen its liquidity by terming out its short-term trust loans; and (3) maintain EBITDA interest coverage above 3x. The last rating action on Glorious was on 11 November 2010, when Moody's assigned a definitive B2 rating to its bonds. Glorious Property Holdings Limited is a medium-sized residential property developer out of Shanghai, which has now expanded to eastern and northern China. It has a land bank of around 19.1 million sqm (gross floor area) in Shanghai, Beijing, Tianjin, and several second-tier cities in China. Glorious was listed on the Stock Exchange of Hong Kong in 2009. Its chairman, the major shareholder, owns 65.86%, and has a ship building company listed in Hong Kong. GOLDMINGTON DEVELOPMENT: Wong Sun Keung Appointed as Liquidator --------------------------------------------------------------- Wong Sun Keung on Feb. 14, 2011, was appointed as liquidator of Goldmington Development Limited. The liquidator may be reached at: Wong Sun Keung 20/F., Far East Consortium Building 121 Des Voeux Road Central, Hong Kong GOSPEL PREACHING: Suen Siu Ying Appointed as Liquidator ------------------------------------------------------- Suen Siu Ying on Feb. 18, 2011, was appointed as liquidator of Gospel Preaching Group of Oversea Chinese Christians Limited. The liquidator may be reached at: Suen Siu Ying Suite 1801, 18/F Wing On Central Building No. 26 Des Voeux Road Central, Hong Kong ========= I N D I A ========= ALAKNANDA SPONGE: CRISIL Reaffirms 'B+' Rating on Cash Credit ------------------------------------------------------------- CRISIL rating on the long-term bank facilities of Alaknanda Sponge Iron Pvt Ltd continues to reflect its exposure to risks related to cyclicality in the steel industry, and its limited track record of operations. These weaknesses are partially offset by the benefits Alakananda derives from being a franchisee of Kamdhenu Ispat Ltd. Facilities Ratings ---------- -------- INR125 Million Cash Credit B+/Stable (Reaffirmed) INR64.3 Million Long Term Loan B+/Stable (Reaffirmed) INR10.7 Million Proposed LT B+/Stable (Reaffirmed) Bank Loan Facility Outlook: Stable CRISIL believes that Alaknanda will continue to maintain its credit risk profile backed by its relationship with KIL. The outlook may be revised to 'Positive' in case of significant improvement in the company's revenues and profitability. Conversely, the outlook may be revised to 'Negative' if the company undertakes a large, debt-funded capital expenditure programme, or if its revenue and profitability decline steeply, leading to deterioration in its financial risk profile. Update Alaknanda's topline has improved at INR923 million in 2010 (refers to financial year, April 1 to March 31). The company commenced full-scale operations in 2009-10, utilizing 40% of its capacity during the year. The company continues to be a franchisee of KIL. The turnover of the company, over the nine months ended December 2010, was INR850 million. Alaknanda's liquidity is likely to remain stretched, marked by its low cash accruals and high bank limit utilization, of around 88%, over the ten months ended January 2011. The company's accruals are expected to be barely sufficient to service its debt obligation of INR20 million in 2010-11. Alaknanda reported a profit after tax (PAT) of INR5.7million on net sales of INR927 million for 2009-10, against a net loss of INR4.9 million on net sales of INR130 million for 2008-09. About Alaknanda Sponge Incorporated in 2006 by Mr. Anand Saraogi, Alaknanda manufactures thermo-mechanically-treated bars for the construction sector. The company commenced operations in January 2009. It markets bars under the Kamdhenu brand, as a franchise of KIL, which is based in Gurgaon (Haryana). BALAJI COTTON: CRISIL Rates INR56MM Cash Credit Facility at 'B' --------------------------------------------------------------- CRISIL has assigned its 'B/Stable' rating to the cash credit facility of Balaji Cotton Industries. Facilities Ratings ---------- -------- INR56.0 Million Cash Credit Facility B/Stable (Assigned) The rating reflects BCI's weak financial risk profile, marked by high gearing, weak debt protection metrics and small net worth, and the adverse impact government policy has on its business and profitability. These weaknesses are partially offset by the experience of BCI's promoters in the cotton industry. Outlook: Stable CRISIL believes that BCI will benefit over the medium term from its established customer relationships and its promoters' industry experience. The outlook may be revised to 'Positive' in case of equity infusion, leading to improvement in its capital structure, or if the firm increases its scale of operations. Conversely, the outlook may be revised to 'Negative' in case of further deterioration in its working capital management. About Balaji Cotton Established in 2004, BCI is a partnership concern between Mr. Narbherambhai Jivanai, Ms. Jyotsnaben Jivani, Mr. Vijaykumar Jivani, Mr. Mahendrakumar Jivani, and Mr. Nagjibhai Rajapar. BCI is into cotton ginning and pressing, and has a capacity of 210 bales per day at its facility in Tankara (Gujarat). BCI reported a book profit of 0.6 million on net sales of INR174.1 million for 2009-10 (refers to financial year, April 1 to March 31), against a book profit of INR0.5 million on net sales of INR101.4 million for 2008-09. BALAJI EXPORT: CRISIL Assigns 'P4+' Rating to INR280MM LOC ---------------------------------------------------------- CRISIL has assigned its 'P4+' rating to the bank facilities of Balaji Export Co. Facilities Ratings ---------- -------- INR120 Million Bill Purchase- P4+ (Assigned) Discounting Facility INR280 Million Letter of Credit P4+ (Assigned) The rating reflects BEC's average financial risk profile, marked by moderate net worth and debt protection metrics, and its exposure to risks related to customer and geographical concentration in its revenue profile. These weaknesses are partially offset by the extensive experience of BEC's promoters in the gold jewellery industry. BEC was established in 1996 by Mr. Viren J Shah and Mr. Laxmi Narayan Somani. Mr. Viren Shah is the son of Mr. Jitendra Shah, who has over thirty years' experience in the jewellery industry. The firm manufactures hand-made exquisite and plain gold jewellery, catering to the wholesale segment. Its manufacturing facility is in the special economic zone in Noida (Uttar Pradesh); it generates all its revenues from exports. BEC reported a profit after tax (PAT) of INR25.7 million on net sales of INR2.95 billion for 2009-10 (refers to financial year, April 1 to March 31), as against a PAT of INR27.5 million on net sales of INR3.32 billion for 2008-09. BLUE PRECISION: CRISIL Assigns 'D' Rating to INR22.3MM Term Loan ---------------------------------------------------------------- CRISIL has assigned its 'D/P5' rating to the long-term bank facilities of Blue Precision Ltd (BPL, part of the Blue group). The rating reflects instances of delay in servicing its debt; the delays have been caused by weak liquidity. Facilities Ratings ---------- -------- INR52.5 Million Cash Credit Limit D (Assigned) INR22.3 Million Term Loan D (Assigned) INR20.0 Million Letter of Credit/ P5 (Assigned) Buyer's Credit The Blue group also has a weak financial risk profile, marked by high gearing and weak debt protection metrics, large working requirements, and is susceptible to volatility in prices of aluminum, and revenue concentration risks. These weaknesses are partially offset by the extensive experience of the Blue group's promoters in the metal industry. For arriving at its ratings, CRISIL has combined the business and financial risk profiles of BPL, Blue Engineering Pvt Ltd, and BPL's subsidiary, Blue Prime Aluminium Ltd. This is because the companies, together referred to as the Blue group, are under the same management and in the same line of business. Also, the companies have considerable operational, financial, and business linkages. About the Group Incorporated in 1995 by Mr. Pritam Mantri and his family, BPL manufactures aluminium alloy ingots used in die-casting in the automobile industry. BPL's manufacturing facility in Faridabad (Haryana) has an installed capacity of 6000 tonnes per annum. Incorporated in 1980 by the Mantri family, BEPL imports aluminium scraps and sells its goods to BPL. Incorporated in 2009 by Mr. Pritam Mantri and his family members, BPAL is implementing a project for manufacturing aluminium extrusions and ingots. The plant in Kosi (Uttar Pradesh) is expected to have an annual capacity of 250 tonnes per month. BPL reported a profit after tax (PAT) of INR9.8 million on net sales of INR262.8 million for 2009-10 (refers to financial year, April 1 to March 31), as against loss of INR41 million on net sales of INR406 million for 2008-09. DHARIYA CONSTRUCTION: CRISIL Assigns 'B' Rating to Cash Credit -------------------------------------------------------------- CRISIL has assigned its 'B/Negative/P4' ratings to Dhariya Construction Pvt Ltd's bank facilities. Facilities Ratings ---------- -------- INR70.0 Million Cash Credit B/Negative (Assigned) INR29.9 Million Bank Guarantee P4 (Assigned) The ratings reflect DCPL's small scale of operations, its exposure to risk related to single site and customer concentration in its revenue profile, and the project's susceptibility to protests by the local community. The ratings also reflect DCPL's weak financial risk profile, marked by small net worth and weak liquidity, driven by significant delays in receivables. These rating weaknesses are partially offset by the experience of DCPL's promoters in the civil construction business. Outlook: Negative CRISIL believes that DCPL will remain exposed to liquidity pressures over the medium term because of delays in receivables. Also, the company will remain critically dependent on the timely resolution of protests encircling the Kumbhe Hydro Electric project. The ratings may be downgraded if the receivables remain stretched or the protest continues, leading to further strain on liquidity. Conversely, the outlook may be revised to 'Stable' if DCPL's liquidity improves, backed by better-than-expected receivables collection, or in case of better-than-expected cash accruals, on account of resolution of the protest or if the company undertakes new projects. About Dhariya Construction Set up in 2003 by Mr. Mukund Dhariya, DCPL undertakes civil work contracts involving construction of dams, roads, and tunnels. Its current order book primarily comprises construction of dams, roads, and tunnels for Kumbhe Hydro Electric project, based in Raigarh (Maharashtra). In March 2005, the company won the bid for the construction of Kumbhe dam and since then has been awarded several other assignments related to the project. However, there has not been much progress on the project over the past 27 months due to protest by local community against construction of dam. DCPL reported a profit after tax (PAT) of INR2.6 million on net sales of INR105 million for 2009-10 (refers to financial year, April 1 to March 31), against a PAT of INR2.1 million on net sales of INR112 million for 2008-09. MAXIM INFRASTRUCTURE: CRISIL Rates INR1.59 Billion Loan at 'B+' --------------------------------------------------------------- CRISIL has assigned its 'B+/Stable' ratings to the long-term loan facilities of Maxim Infrastructure and Real Estate Pvt Ltd. Facilities Ratings ---------- -------- INR1592.40 Million Long-Term Loan B+/Stable (Assigned) The ratings reflect Maxim Infra's exposure to risks related to cyclicality in the hospitality industry, an economic slowdown, and project implementation. These weaknesses are partially offset by the healthy prospects for the tourism industry in North-East India, and Maxim Infra's tie-up with Marriot International Inc (Marriot). Outlook: Stable CRISIL believes that Maxim Infra will remain exposed to project implementation risks over the medium term. The outlook may be revised to 'Positive' if the project is completed without any time or cost overruns, and the company generates stable accruals from operations. Conversely, the outlook may be 'Negative' in case of any delays in project implementation or if the company is unable to generate stable accruals from operations, adversely impacting its ability to service its debt. About Maxim Infrastructure Maxim Infra was incorporated in December 2007 by Mr. Narayan Prasad Jhunjhunwala, his children, Mr. Pankaj Jhunjhunwala, Mr. Prithu Jhunjhunwala, and Mrs. Jyoti Agarwal, and son-in-law, Mr. Vikash Agarwal. The company has been established to develop two five-star hotels in North-East India at a total project cost of INR2388.6 million, to be funded in debt-to-equity ratio of 2:1. The operations of the hotel will be managed by Marriot. PLANET RETAIL: CRISIL Assigns 'BB-' Rating to INR110MM Term Loan ---------------------------------------------------------------- CRISIL has assigned its 'BB-/Stable/P4+' ratings to the bank facilities of Planet Retail Holdings Pvt Ltd. Facilities Ratings ---------- -------- INR150.00 Million Cash Credit BB-/Stable (Assigned) INR110.0 Million Long Term Loan BB-/Stable (Assigned) INR100.0 Million Letter of Credit P4+ (Assigned) The ratings reflect PRH's weak financial risk profile, marked by thin profitability margins and weak debt protection metrics coupled with its exposure to risks arising from long gestation period involved in establishing a strong brand loyalty for its products in the domestic market. These weaknesses are partially offset by the extensive experience and established standing of PRH's promoters in the retail industry. Outlook: Stable CRISIL believes that PRH will benefit over the medium term from its promoters' industry experience, and its presence in strategic locations in National Capital Region (NCR) and Mumbai coupled with extensive experience of its promoters in the retail industry. The outlook may be revised to 'Positive' if the company is able to generate more-than-expected operating revenues and earnings, leading to significant improvement in its accruals and debt protection metrics. Conversely, the outlook may be revised to 'Negative' if the company's financial risk profile deteriorates due to significantly lower-than-expected revenues and earnings, or a larger-than-expected debt-funded capital expenditure programme resulting in deterioration of its financial risk profile. About Planet Retail PRH is part of the Mumbai-based Tainwala group of companies. Mr. Rakesh Tainwala is the chairman of the group. The company retails high-end premium apparel brands such as Guess, Next, Accessorize, Nautica and Debenhams. Currently, the company has around 40 stores operational mainly in the National Capital Region (NCR) that includes Delhi, and Gurgaon, Mumbai, and other major cities of the country. PRH reported a net loss of INR283.8 million on net sales of INR701.3 million for 2009-10 (refers to financial year, April 1 to March 31), against a net loss of INR24.1 million on net sales of INR1381 million for 2008-09. PRATISHTHA COMMERCIAL: CRISIL Reaffirms 'BB' Rating on Cash Credit ------------------------------------------------------------------ CRISIL has reaffirmed its rating of 'BB/Positive' on the bank facilities of Pratishtha Commercial Pvt Ltd. The outlook was revised to 'Positive' from 'Stable' on September 23, 2010. Facilities Ratings ---------- -------- INR220.0 Million Cash Credit BB/Positive (Reaffirmed) (Enhanced from INR140.0 Million) CRISIL's rating on the bank loan facility of PCPL continues to reflect PCPL's weak financial risk profile, marked by low interest coverage ratio, large working capital requirements, and high bank limit utilization. These rating weaknesses are partially offset by PCPL's established relationships with its customers and healthy revenue growth. Outlook: Positive CRISIL believes that PCPL will maintain its healthy growth in revenues over the medium term, supported by its strong relationships with its customers. The rating may be upgraded if the company significantly improves its operating margin, leading to better debt protection metrics. Conversely, the outlook may be revised to 'Stable' if PCPL reports pressure on liquidity, decline in profitability margins, or fall in business volumes because of competitive pressures. About Pratishtha Commercial Incorporated in 1997, PCPL trades in commodities such as soya de- oiled cake (DOC) and maize. It is one of the largest soya DOC traders in East India. The company procures soya DOC from leading solvent extractors such as Ruchi Soya Industries Ltd and Sanwaria Agro Oils Ltd, and sells these products to leading cattle feed manufacturers such as Godrej Agrovert Ltd, Shalimar Pellets Feeds Ltd, and Japfa Comfeed India Ltd. The company's promoters, Mr. Manoj Poddar and Mr. Suresh Poddar, manage its daily operations. PCPL reported a profit after tax (PAT) of INR3 million on net sales of INR2.24 billion for 2009-10 (refers to financial year, April 1 to March 31), as against a PAT of INR2 million on net sales of INR1.35 billion for 2008-09. PUNJAB NATIONAL: Fitch Affirms Individual Rating at 'C/D' --------------------------------------------------------- Fitch Ratings has affirmed Punjab National Bank's Long-Term Foreign-Currency Issuer Default Rating at 'BBB-' and National LT rating at 'AAA(ind)'. The Outlook is Stable. The agency has also affirmed PNB's Individual rating at 'C/D', Short-Term FC IDR at 'F3', Support rating at '2' and Support Rating Floor at 'BBB-'. Additional rating actions are included at the end of the release. The ratings reflect PNB's stable asset quality, strong funding profile and superior earnings mix. In addition, the bank's extensive pan-India franchise (over 5,000 branches) -- which is the second-largest (only after State Bank of India) -- provides stability to its funding profile, while capital buffer is adequately supported by steady internal capital generation and high loan loss coverage. In Fitch's opinion, PNB's high government ownership (57.8%), coupled with its extensive franchise, would also translate into a high probability of regulatory support in the event of crisis, as reflected in its Support rating. The rating on its lower Tier 2 subordinated bonds is consistent with the approach taken for other similar performing securities based on Fitch's criteria. In supportive economic conditions, PNB's loan growth (CAGR for FY06-FY10: +25%) appears to have been well-managed, helping to improve asset quality and underpin earnings. Infrastructure loans have been the key driver of growth in recent years, additionally supported by the growing share of retail and micro-SME (MSME) in line with its net interest margin-focused strategy. Helped by some restructuring, quality of the infrastructure portfolio has been stable, while retail and MSME specific NPL ratios have fared better than most large peer banks. The bank's gross NPL ratio did increase in the nine months ended 31 December 2010 (9MFYE11: 2%; FYE10: 1.7%) in line with the banking system, although it was favorably accompanied by high specific loan loss coverage of 77% (including technical write-offs). While Fitch expects near-term pressures to continue with the phasing down of PNB's restructured loans portfolio (6.3% of gross loans at 9MFYE11; highest among peers), the agency draws comfort from the relative superior performance of the RL portfolio (slippage ratio of around 9% vs. 11%-15% experienced by peer banks). A high share of low-cost current-savings account deposit (FYE10: 40.8%) solidly underpins PNB's funding profile, providing flexibility to balance funding costs in a rising interest rate environment. Fitch is of the view that while higher funding costs might put some pressure on PNB's NIM (9MFYE11; 4%; FYE10: 3.6%), the management expects to comfortably achieve at least 3.5% NIM, backed by a higher yielding asset mix and greater flexibility to reprice assets under the new base rate regime - under which repricing of assets has typically preceded any rise in deposit costs. The agency expects the bank's return on asset (ROA for FYE10: 1.44%; FYE09: 1.39%) to largely remain stable as near-term cost challenges -- pension provisions and branch expansion plans - - would be partly cushioned by full provision for gratuity liability (by FYE11) and stable loan loss provisioning. PNB's capitalization is viewed to be adequate. Tier 1 capital adequacy ratio has been consistent at around 9% for the last five years, and is backed by strong internal capital generation and timely issuances of Tier 1 and Tier 2 capitals. Capital quality is viewed to be strong as hybrids are a relatively small percentage of Tier 1 capital. PNB's LT FC IDR is at its Support Floor Rating, and could see an upgrade in the event of an upgrade of the sovereign LT FC IDR. The bank's Individual rating could, however, come under pressure if its asset quality experiences sharp deterioration, impacting both earnings and capital buffer. PNB: - INR10bn lower Tier 2 subordinated bonds: affirmed at 'AAA(ind)'; and - INR150bn certificate of deposits programme: affirmed at 'F1+(ind)'. SHREE SANYEEJI: CRISIL Cuts Rating on INR140MM Cash Credit to 'D' ----------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Shree Sanyeeji Ispat Ltd (Sanyeeji Ispat, part of Sanyeeji group) to 'D/P5' from 'BB/Stable/P4+'. Facilities Ratings ---------- -------- INR140 Million Cash Credit D (Downgraded from 'BB/Stable') INR20 Million Letter of Credit P5 (Downgraded from 'P4+') & Bank Guarantee The downgrade reflects instances of delay by the Sanyeeji group in servicing its debt; the delays have been caused by the group's weak liquidity. The Sanyeeji group has a weak financial risk profile, marked by weak liquidity and debt protection metrics. The group is also exposed to the cyclicality in the steel business and implementation risks related to its ongoing capacity expansion plan. These weaknesses are mitigated by the increasing integration in the group's operations, leading to a moderate position in the north-eastern states. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of Sanyeeji Ispat, Shiv Sai Steel Industries, and Shree Sanyeeji Steel & Power Ltd, together referred to as the Sanyeeji group. This is because the billets produced by Shiv Sai are used by Sanyeeji Ispat for making thermo mechanically-treated (TMT) bars, and Sanyeeji Ispat has guaranteed the loans of Sanyeeji Steel. About the Group Sanyeeji Ispat, Shiv Sai, and Sanyeeji Steel are part of the Sanyeeji group, based in Guwahati (Assam), founded by Mr. Jai Prakash Jaiswal. In 1991, Mr. Jaiswal established Sanyeeji Ispat, a 3000-tonne per annum (tpa) scrap-based rolling mill, in Guwahati. A second ingot-based rolling mill with a capacity of 18,000 tpa was established in 1996, which was converted into a thermo-mechanically-treated (TMT) bar-cum-coil rolling mill in 1998. In 2000, a third rolling mill, with a 72,000-tpa capacity, was set up for TMT rods. As a backward integration initiative, a billet manufacturing unit with a capacity of 70,000 tpa was set up in 2006, under the name Shiv Sai, a partnership firm. A third integrated steel project was started under the name of Sanyeeji Steel in 2007 in Bankura (West Bengal). This unit currently has three induction furnaces with concast mills for producing billets (present installed capacity of 148,500 tpa). The group has a combined capacity to manufacture 72,000 tpa of TMT rods, and 218,000 tpa of billets. Sanyeeji Steel is in the process of setting up a pipe and TMT bar manufacturing unit, which will lead to forward integration for the billets produced by the company. For 2009-10 (refers to financial year, April 1 to March 31), the Sanyeeji group posted profit after tax (PAT) of INR144 million on net sales of INR2.85 billion against PAT of INR129 million on net sales of INR2.19 billion for the previous year. SHREE SANYEEJI STEEL: CRISIL Reaffirms 'D' Rating on Term Loan -------------------------------------------------------------- CRISIL's ratings on the various bank facilities of Shree Sanyeeji Steel & Power Ltd (Sanyeeji Steel, part of the Sanyeeji group) continue to reflect instances of delays in servicing its term debt obligations; the delays have been caused by the company's weak liquidity. Facilities Ratings ---------- -------- INR167 Million Cash Credit D (Reaffirmed) INR382.5 Million Term Loan D (Reaffirmed) INR33 Million Bank Guarantee P5 (Reaffirmed) INR75 Million Letter of Credit P5 (Reaffirmed) The Sanyeeji group has a weak financial risk profile, marked by weak liquidity and debt protection metrics. The group is also exposed to the cyclicality in the steel business and implementation risks related to its ongoing capacity expansion plan. These weaknesses are mitigated by the increasing integration in the group's operations, leading to a moderate position in the north-eastern states. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of Shree Sanyeeji Ispat Ltd (Sanyeeji Ispat), Shree Shiv Sai Steel Industries (Shiv Sai), and Sanyeeji Steel, together referred to as the Sanyeeji group. This is because the billets produced by Shiv Sai are used by Sanyeeji Ispat for making thermo mechanically-treated (TMT) bars, and Sanyeeji Ispat has guaranteed the loans of Sanyeeji Steel. About the Group Sanyeeji Ispat, Shiv Sai, and Sanyeeji Steel are part of the Sanyeeji group, based in Guwahati (Assam), founded by Mr. Jai Prakash Jaiswal. In 1991, Mr. Jaiswal established Sanyeeji Ispat, a 3000-tonne per annum (tpa) scrap-based rolling mill, in Guwahati. A second ingot-based rolling mill with a capacity of 18,000 tpa was established in 1996, which was converted into a thermo-mechanically-treated (TMT) bar-cum-coil rolling mill in 1998. In 2000, a third rolling mill, with a 72,000-tpa capacity, was set up for TMT rods. As a backward integration initiative, a billet manufacturing unit with a capacity of 70,000 tpa was set up in 2006, under the name Shiv Sai, a partnership firm. A third integrated steel project was started under the name of Sanyeeji Steel in 2007 in Bankura (West Bengal). This unit currently has three induction furnaces with concast mills for producing billets (present installed capacity of 148,500 tpa). The group has a combined capacity to manufacture 72,000 tpa of TMT rods, and 218,000 tpa of billets. Sanyeeji Steel is in the process of setting up a pipe and TMT bar manufacturing unit, which will lead to forward integration for the billets produced by the company. For 2009-10 (refers to financial year, April 1 to March 31), the Sanyeeji group posted profit after tax (PAT) of INR144 million on net sales of INR2.85 billion against PAT of INR129 million on net sales of INR2.19 billion for the previous year. SHREE SHIV SAI: CRISIL Cuts Rating on INR88 Million Term Loan ------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Shree Shiv Sai Steel Industries (Shiv Sai, part of Sanyeeji group) to 'D/P5' from 'BB/Stable/P4+'. Facilities Ratings ---------- -------- INR80 Million Cash Credit D (Downgraded from 'BB/Stable') INR88 Million Term Loan D (Downgraded from 'BB/Stable') Rs .20 Million Letter of P5 (Downgraded from 'P4+') Credit The downgrade reflects instances of delay by the Sanyeeji group in servicing its debt; the delays have been caused by the group's weak liquidity. The Sanyeeji group has a weak financial risk profile, marked by weak liquidity and debt protection metrics. The group is also exposed to the cyclicality in the steel business and implementation risks related to its ongoing capacity expansion plan. These weaknesses are mitigated by the increasing integration in the group's operations, leading to a moderate position in the north-eastern states. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of Shree Sanyeeji Ispat Ltd (Sanyeeji Ispat), Shiv Sai, and Shree Sanyeeji Steel & Power Ltd (Sanyeeji Steel), together referred to as the Sanyeeji group. This is because the billets produced by Shiv Sai are used by Sanyeeji Ispat for making thermo mechanically-treated (TMT) bars, and Sanyeeji Ispat has guaranteed the loans of Sanyeeji Steel. About the Group Sanyeeji Ispat, Shiv Sai, and Sanyeeji Steel are part of the Sanyeeji group, based in Guwahati (Assam), founded by Mr. Jai Prakash Jaiswal. In 1991, Mr. Jaiswal established Sanyeeji Ispat, a 3000-tonne per annum (tpa) scrap-based rolling mill, in Guwahati. A second ingot-based rolling mill with a capacity of 18,000 tpa was established in 1996, which was converted into a TMT bar-cum-coil rolling mill in 1998. In 2000, a third rolling mill, with a 72,000-tpa capacity, was set up for TMT rods. As a backward integration initiative, a billet manufacturing unit with a capacity of 70,000 tpa was set up in 2006, under the name Shiv Sai, a partnership firm. A third integrated steel project was started under the name of Sanyeeji Steel in 2007 in Bankura (West Bengal). This unit currently has three induction furnaces with concast mills for producing billets (present installed capacity of 148,500 tpa). The group has a combined capacity to manufacture 72,000 tpa of TMT rods, and 218,000 tpa of billets. Sanyeeji Steel is in the process of setting up a pipe and TMT bar manufacturing unit, which will lead to forward integration for the billets produced by the company. For 2009-10 (refers to financial year, April 1 to March 31), the Sanyeeji group posted profit after tax (PAT) of INR144 million on net sales of INR2.85 billion against PAT of INR129 million on net sales of INR2.19 billion for the previous year. SYRMA TECHNOLOGY: Fitch Assigns 'BB+' National Long-Term Rating --------------------------------------------------------------- Fitch Ratings has assigned India's Syrma Technology Private Limited a National Long-Term rating of 'BB+(ind)'. The Outlook is Stable. The agency has also assigned 'BB+(ind)/F4(ind)' ratings to Syrma's INR270 million fund-based working capital limits and INR249.1 million non-fund based working capital limits, as well as a rating of 'BB+(ind)' to its INR20 million term loans. The ratings reflect the company's steady revenue growth in the electronics manufacturing segment, with fairly diversified revenue streams from verticals such as mobile tower antennas, electronic manufacturing services, telecom modems, RFID tags, magnetics and coils and memory devices. The ratings draw strength from Syrma's established relationships with its customers as well as from the promoters' established track record in the domestic electronics manufacturing industry. The ratings are also supported by the company's healthy unexecuted order book position of INR384 million at end-January 2011. Syrma's ratings are constrained by the small scale of its operations as well as by the possible underutilization and obsolescence of production capacities and technology. Intense competition from large industry peers and pressure from customers would restrict the company's EBITDA margins, and therefore constrain the ratings. Syrma proposes to increase its capacity during FY12-FY13 by installing two more surface mounting technology lines. Fitch expects borrowings for the capex to weaken Syrma's credit metrics; its leverage was high in FY10 with a net adjusted debt/EBITDA of 4.8x. The agency could downgrade Syrma's ratings, if interest coverage falls below 1.1x and/or if there is a sustained deterioration in net adjusted debt/EBIDTAR to above 6x. On the other hand, the ratings could be upgraded, if there is a sustained improvement in net adjusted debt/EBIDTAR to below 3.0x with interest coverage of beyond 1.5x. Established in 2005, Syrma is located at MEPZ Special Economic Zone in Chennai, and provides electronics manufacturing services. In FY10, the company reported revenues of INR1487.7 million (FY09: INR1061.2m), EBIDTA of INR53.8 million (FY09: INR65.1 million), and interest cover of 1.7x. As per Syrma's H1FY11 figures (provisional, unaudited), its revenues were INR845.6 million, EBIDTA was INR32.7 million and interest coverage was 1.9x. TREADSTONE: CRISIL Reaffirms 'B' Rating on INR121MM Term Loan ------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Treadstone Ltd to 'B/Negative' from 'B+/Stable', while reaffirming its rating on the short-term facilities at 'P4'. Facilities Ratings ---------- -------- INR121 Million Proposed Long Term B/Negative (Downgraded Bank Loan Facility from B+/Stable) INR30 Million Foreign Bill Purchase P4 (Reaffirmed) INR30 Million Packing Credit P4 (Reaffirmed) INR5 Million Letter of Credit P4 (Reaffirmed) INR4 Million Bank Guarantee P4 (Reaffirmed) The rating downgrade is driven by the expected shortfall in Treadstone's cash flows as against its term debt obligations due to the company's reliance on the cash flows from equestrian business to repay the term debt obligations of real estate business, which is facing offtake risk. The rating downgrade also factors in the delay in repayment of debt by Treadstone Hospitality Pvt Ltd, a group company of Treadstone, for which Treadstone has extended a corporate guarantee. Though, the guarantee has not been invoked by the bank yet, invocation of the bank guarantee will further deteriorate Treadstone's liquidity. The ratings reflect Treadstone's modest financial risk profile, its exposure to risks of unrelated diversification into real estate development, and increasing competition in the equestrian products business. These rating weaknesses are partially offset by Treadstone's established customer relations in the equestrian business. Outlook: Negative CRISIL believes that Treadstone's liquidity will come under pressure over the medium term because of its large debt obligations. The rating may be downgraded if Treadstone is not able to sell its real estate projects or experiences a steep decline in revenues and profitability in the equestrian business, thereby constraining its debt repayment ability. The outlook may be revised to 'Stable' if Treadstone is able to complete and sell its real estate projects in a timely manner, thus generating larger cash accruals. About Treadstone Ltd Set up by Mr. K K Wadhwa in 1987, Treadstone manufactures riding shoes, breeches, and rugs (collectively referred to as equestrian products; 85% revenue contribution in 2009-10 [refers to financial year, April 1 to March 31]). The company is an export-oriented unit with manufacturing locations in Faridabad (Haryana), Kanpur and Noida (Uttar Pradesh), and New Delhi. The company markets its products under the brand 'Chetak'. In 2007-08, Treadstone entered the real estate development business and is developing properties, mainly shops, in New Delhi. THPL is constructing a restaurant in Gurgaon with project cost of INR129 million funded through term debt of INR55 million (Treadstone has extended a corporate guarantee for the same), and the rest through promoter's contribution. Treadstone reported a profit after tax (PAT) of INR20.9 million on net sales of INR312.8 million for 2009-10, as against a PAT of INR16.8 million on net sales of INR287.5 million for 2008-09. VENKATESWARA WIRES: ICRA Reaffirms 'LBB+' Rating on Bank Limits --------------------------------------------------------------- ICRA has reaffirmed 'LBB+' rating to the INR10.00 crore fund based limits, INR4.28 crore term loan and INR1.09 crore unallocated bank line of Venkateswara Wires Private Limited. ICRA has also reaffirmed 'A4+' ratings for the INR4.90 crore fund based and 13.50 crore non fund based bank facilities of Venakteswara. The outlook on the long term rating is positive. The ratings take into account strong competitive pressure in the core conductors and cables business which Venkateswara faces in the domestic market and the relatively small capacity of the company which has prevented it from executing large value orders having better profit margins. These factors have resulted in thin profitability in the past and this situation is unlikely to change materially in the medium term. The ratings are also constrained by high gearing levels (1.60 times as on FY10), modest coverage indicators (NCA/TD at 14% as on FY10) and high working capital intensity of the business (NWC/OI at 22% as on FY10) on account of delays in payments made by PSU clients. The ratings however derive comfort from the long experience of promoters in managing the business and established relationship with the client which has resulted in repeat orders in the past. The ratings also derive comfort from the fact that the sales orders have Price variation(PV) clauses which give protection to Venkateswara against the fluctuation of raw material prices. Moreover the recent approval form Power Grid Corporation of India Limited for its approved vendor list expected to give major boast to the scale of operation of the company and improve the overall brand visibility of the company as well. About Venkateswara Venkateswara is engaged in manufacturing of aluminium conductors & aerial bunched cables having its production facilities located in Jaipur. Aluminium conductors find application in transmission & distribution of power in rural & semi urban areas & interstate power transmission & distribution. They are also used in the reconductoring of existing lines, wherein lower voltage lines are replaced by higher voltage lines. The chief customers for the aluminum conductors are utilities like SEBs/state owned distribution companies/private sector discoms, which have in the recent past taken to reconductoring of existing lines in a big way as part of the distribution reform process. Venkateswara is mainly into distribution sector as the capacity installed does not support it to bid for the high value transmission sector. Venkateswara Wires Private Limited (Venkateswara) commenced operations in the year 1988 as a pure aluminium conductor manufacturer in the small scale sector at industrial area in Jaipur. Initially only Seven strand conductors were manufactured, however over the years product portfolio was diversified into ACSR conductors, AAAC conductors upto 61 strands as well as Aerial Bunched Cables used in power transmission lines. Apart from that the company also have two windmill of 600 KW one each in Maharashtra and Rajasthan the electricity of which is sold to MSEDCL and RSEB. The company is planning to set up one more wind mill of 600 KW in Rajasthan only. It is an ISO 9001- 2000 certified company having its customer profile comprising mainly of SEBs like RSEB, GEB, MSEB, TNEB WBSEB etc. The company also recently got approved from Power Grid Corporation of India Limited. Recent Results Venakteswara has posted a net profit of INR2.65 on an operating income of INR94.31 crore during 2009-10 as against profit after tax of INR2.52 crore on operating income of INR 89.58 crore during 2008-09. ========= J A P A N ========= CAFES 2: S&P Raises Ratings on Various Classes of Notes ------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the class C to E floating-rate trust certificates issued under the Cafes 2 transaction. At the same time, S&P withdrew its rating on class X, in accordance with its revised criteria for rating interest- only securities, which S&P published on April 15, 2010. The class A and B trust certificates, which had been issued under the same transaction, were fully redeemed on the trust distribution date in February 2011. Of the nine loans that originally backed the trust certificates, only three loans had remained. As two of the three loans were fully repaid on their respective maturity dates in January 2011, the proceeds were used to make principal payments to the trust certificates in sequential order (starting from the upper-level tranches). Accordingly, the class A and B trust certificates were fully redeemed on the abovementioned trust distribution date. The transaction's remaining loan, which is due to mature in July 2011, is backed by an office building in Chuo Ward, Tokyo. S&P reviewed its assessment of the likely collection amount from the property after considering the performance, the type and location of the property in question, as well as the situation regarding real estate deals involving similar asset types. Based on the results of its review, S&P found that the loan-to-value ratios of the class C to E trust certificates had improved, even though S&P had lowered its assumption with respect to the likely collection amount from the property. Accordingly, S&P raised its ratings on the class C to E trust certificates. Although S&P lowered its assumption concerning the property's likely collection amount, because the performance of the property with respect to net cash flow has, in fact, exceeded its initial assumption, S&P does not regard the performance of the property itself as a major risk factor. S&P has withdrawn its rating on class X in accordance with its updated criteria for rating IO securities. Cafes 2 is a multiborrower commercial mortgage-backed securities transaction originally backed by nine nonrecourse loans secured by 29 real estate properties. The transaction was arranged by Credit Agricole Securities Asia B.V., Tokyo Branch (formerly, Calyon Capital Markets Asia B.V., Tokyo Branch), and ORIX Asset Management & Loan Services Corp. acts as the servicer for this transaction. Standard & Poor's ratings reflect the full payment of interest and ultimate payment of principal by the transaction's legal final maturity date in August 2013 for the class C to E trust certificates. Ratings Raised Cafes 2 JPY16.4 billion floating-rate trust certificates due August 2013 Class To From Initial issue amount ----- -- ---- -------------------- C AAA (sf) A (sf) JPY1.45 bil. D BBB- (sf) B+ (sf) JPY0.96 bil. E BB (sf) B (sf) JPY0.16 bil. Rating Withdrawn Class Rating Initial notional principal ----- ------ -------------------------- X AAA (sf) JPY16.4 bil.* The issue date of this transaction was Oct. 20, 2006. JLOC XXVIII: Moody's Downgrades Ratings on Two Classes of Certs. ---------------------------------------------------------------- Moody's Japan K.K has downgraded the ratings on the Class B and C Senior Trust Certificates issued by JLOC XXVIII Trust. Details are: -- Class B, Downgraded to Aa2 (sf); previously on Dec 3, 2010 Aaa (sf) Placed Under Review for Possible Downgrade -- Class C, Downgraded to Ba3 (sf); previously on Dec 3, 2010 Baa3 (sf) Placed Under Review for Possible Downgrade * Deal Name: JLOC XXVIII Senior Trust * Class: Class A through D Senior Trust Certificates * Issue Amount (initial): JPY 88.9 billion * Dividend: Floating * Issue Date (initial): October 20, 2005 * Final Maturity Date: October, 2012 * Underlying Asset (initial): Two senior specified bonds backed by commercial real estates * Entrustor: Morgan Stanley Japan Limited (as of issue date) * Trustee: Mitsubishi UFJ Trust and Banking Corporation * Arranger: Morgan Stanley Japan Limited (as of issue date) The JLOC XXVIII Senior Trust, issued in October 2005, is a liquidating CMBS transaction. The Entrustor entrusted the two senior specified bonds to the Asset Trustee (originally backed by 567 properties) and received the Class A through D Senior Trust Certificates in return, which were then sold to investors. The Senior Trust Certificates are rated by Moody's. In this transaction, principal payments resulting from the sale of the underlying properties of each bond will be used to make sequential payments on the most senior class. In the event of a breach of the transaction's fast-pay trigger, dividend payments will cease, and principal payments will be made from the proceeds of property sales as well as cash flow from the underlying properties. The losses will be allocated in reverse sequential order, starting with the most subordinate class of the trust certificates. The specified bond issued by Nakano Holding TMK was redeemed in full in July 2006. The specified bond issued by Harajuku Holding TMK was originally backed by 329 properties or property trust certificates. As of end-January, 212 properties had been sold. The Class A Senior Trust Certificates were redeemed in full by sequential payment. Ten properties (based on Moody's current value) comprise 53% of the portfolio, while residential properties outside Tokyo comprise 43%. Rating Rationale Given that approximately 20 months are left before final maturity for so many -- 117 -- of the properties, Moody's has decided to re-assess -- and add further stress to -- its recovery assumptions for the property disposal prices before the final maturity. Thus, the current rating action reflects these factors: (1) The new estimate for disposal prices is approximately 36% lower than Moody's initial value. (2) The credit support for the Class B Senior Trust Certificates has thus decreased. (3) In addition, losses on the remaining bond are highly likely and could negatively affect the Class C Senior Trust Certificates. Moody's will continue to monitor the properties' operating status and the progress of the asset advisor's activities. Moody's did not receive or take into account any third party due diligence reports on the underlying assets or financial instruments related to the monitoring of this transaction in the past six months. ==================== N E W Z E A L A N D ==================== A2 CORP: Posts NZ895,517 Maiden Profit in First Half Ended Dec. 31 ------------------------------------------------------------------ A2 Corporation Limited has reported a maiden unaudited Group Profit after Tax of NZ$893,517 for the six months ended 31 December 2010 -- a NZ$1.6 million turnaround from the comparable period a year ago. Consolidated trading revenue, including subsidiaries, for the period was NZ$19.309 million. The latest financial result reflects the benefits from the acquisition of the 50% of the Australian business a2C did not already own and implementation of a new agenda for growth. The Chairman, Cliff Cook, stated: "a2C has undergone a transformation over the last two years from a developer of intellectual property to a producer of premium priced fast moving consumer goods and ingredients (FMCG) with a global focus. The financial results reflect this change." In Australia, sales of a2 Milk(TM) fresh milk and dairy products have continued to grow rapidly through supermarket chains and independent grocery stores in the last six months. At the end of December 2010, a2 Milk(TM) fresh milk had achieved an estimated 3.7% share of fresh milk sales by value in the grocery channel. A2 said that to meet the growing demand for a2 Milk(TM) fresh milk, the Company is constructing a AU$7.5 million processing facility in Sydney, to be commissioned in the fourth quarter of 2011. Funding for the project has been achieved through an asset finance facility and a share placement to cornerstone shareholders, AMP Capital Investors (New Zealand) Limited and Freedom Foods Group Limited, that raised NZ$3.9 million equity in December 2010. Looking forward, the Managing Director, Geoffrey Babidge said: "Our immediate aims are to continue to expand in Australia and New Zealand, to enter new dairy beverage markets with partners and to supply powder and infant formula sourced locally, initially into Asia. Positive earnings from Australian sales will assist us to fund growth in new markets." "The full acquisition of the joint venture in Australia together with the interests of the joint venture in the USA during the period is consistent with a2C's new hands-on approach to creating a consistent business framework in a number of specific markets." The unaudited Group Profit comprised: * An operational profit after tax of NZ$945,921 compared to a prior year operational loss for the period of NZ$566,476; * Foreign exchange profits (unrealized) of NZ$153,124; * Non cash expense relating to share based incentive schemes for the MD & Executive Directors of NZ$142,934; * Final costs associated with the full acquisition of A2 Dairy Products Australia Pty Limited of NZ$62,594. 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. HANOVER FINANCE: Judge Reserves Decision in Hotchin Assets Freeze ----------------------------------------------------------------- The National Business Review reports that a High Court judge has reserved her decision on whether Hanover Finance co-founder Mark Hotchin's assets, which are worth millions, should remain frozen. NBR notes that more than 16,000 investors lost more than NZ$500 million through the failed finance company and the Securities Commission was, in December 2010, granted a court order which froze Mr. Hotchin's assets in case any of them took action to reclaim their investments. According to NBR, Mr. Hotchin also wanted to take a NZ$200,000 Mercedes Benz car and a NZ$90,000 Porsche Cayenne car to Australia, but Justice Helen Winkelmann rejected that application in December. Mr. Hotchin also sought an order giving him and his legal team access to an accountant's report but that too was rejected, Justice Winkelmann finding nothing unfair in the Securities Commission's application, NBR reports. NBR reports that a two-day hearing in the High Court at Auckland, the details of which the media were banned from reporting, ended Feb. 16 and Justice Winkelmann reserved her decision. Hanover Finance's investors in December 2008 voted in favor of the company's Debt Restructure Proposals, including a plan to fully repay NZ$552.6 million principal it owes over five years. However, Hanover Finance said in November 2009 it is no longer likely to fully repay investors under a debt restructuring plan due to a deterioration in the commercial property development market, a TCR-AP report on Nov. 12, 2009, said. In December 2009, investors agreed to swap their Hanover interests for shares in Allied Farmers Ltd. About Hanover Finance Limited Hanover Finance Limited -- http://www.hanover.co.nz/-- is New Zealand's third-largest privately-owned finance company with total assets of NZ$796 million at December 31, 2007. The company was established in 1984 to provide finance to the rural sector and began lending to property developers and investors in 1995. The loan portfolio has been gradually downsized since 2006 as a result of a more cautious approach to lending in the face of retail funding constraints. MACPHERSON MARINE: Ex-Director Faces Three Year for NZ$1.6MM Fraud ------------------------------------------------------------------ Radio New Zealand reports that Peter Edward Hynes, the former managing director of MacPherson Marine, has been sentenced to three years' jail term for swindling NZ$1.6 million from the marine retail firm he was in charge of. According to Radio New Zealand, Mr. Hynes had earlier pleaded guilty to 40 charges of credit fraud, laid by the Serious Fraud Office. Radio New Zealand recalls that the business was put in liquidation in mid-2006, soon after Mr. Hynes' offending was discovered. Last year, the report notes, the Serious Fraud Office began investigating his fake credit loan applications and the theft of customers' money. But it was only in July last year that he was located in Queensland and extradited to face the charges. Radio New Zealand relates that SFO chief executive Adam Feeley said although the case involved relatively modest financial losses, jobs were lost and some victims were forced to sell their homes. MacPherson Marine Ltd was a New Zealand-based boat dealer. ********* 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 U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Psyche A. Castillon, Julie Anne G. Lopez, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2011. 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 ***