/raid1/www/Hosts/bankrupt/TCRAP_Public/110406.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
Wednesday, April 6, 2011, Vol. 14, No. 68
Headlines
A U S T R A L I A
REDGROUP RETAIL: Angus & Roberton Franchisees to Terminate Deal
C H I N A
FRANSHION PROPERTIES: Moody's Assigns First-Time Baa3 Rating
UNIVERSAL SOLAR: Paritz & Company Raises Going Concern Doubt
H O N G K O N G
ACEGLORY DEVELOPMENT: Lau Ngai Ma Emma Appointed as Liquidator
ALESCO HK: Seng and Lo Step Down as Liquidators
ASIA RISK: Commences Wind-Up Proceedings
BAOSHINN CORPORATION: Accumulated Losses Cue Going Concern Doubt
BRIDGMAN FIRE: Creditors' Meeting Set for April 8
BREAKINGVIEWS ASIA: Members' Final Meeting Set for May 3
BROAD VIDEO: Poon Wai Hung Richard Steps Down as Liquidator
CHINA MEDIA: Placed Under Voluntary Wind-Up Proceedings
COMPUTER DIAGNOSTIC: Creditors' Proofs of Debt Due May 1
FAMOUS EXCEL: Creditors' Meeting Set for April 16
GOLDEN PROFIT: Creditors' Proofs of Debt Due April 26
I N D I A
AJANTA LEATHER: CRISIL Cuts Rating on INR49.7MM Term Loan to 'D'
AKM ENTERPRISES: CRISIL Reaffirms 'BB+' Rating on Term Loan
ALLIANZ CONVERGENCE: CRISIL Cuts Rating on Cash Credit to 'BB-'
AMRITVARSHA FINANCE: CRISIL Upgrades Rating on INR11.9MM Term Loan
BANMORE FOAM: CRISIL Cuts Rating on INR45MM Cash Credit to 'B-'
BEST MILK PRODUCTS: Fitch Rates INR76.8MM LT Loans at 'B(ind)'
BRIGHT ENTERPRISES: CRISIL Reaffirms 'BB' Rating on Term Loan
CHADDAMI LAL: CRISIL Reaffirms 'BB-' Rating on INR80MM Term Loan
DALAS BIOTECH: CRISIL Assigns 'BB+' Rating to INR92.1MM Term Loan
GANESHILAL NARAYANDAS: CRISIL Rates INR104MM Term Loan at 'BB-'
JAYA PROJECTS: CRISIL Rates INR100.00 Million Cash Credit at 'D'
MANNOHAR LAL: CRISIL Assigns 'BB' Ratings on Various Bank Loans
M MOHITE: CRISIL Cuts Rating on INR400MM Cash Credit to 'D'
NATIONAL STEEL: CRISIL Assigns 'B' Rating to INR80MM Cash Credit
REGAL TRADING: CRISIL Reaffirms 'BB-' Rating on Cash Credit
ROHAN BUILDERS: CRISIL Assigns 'BB+' Rating to Cash Credit
J A P A N
TOKYO ELECTRIC: S&P Sees Stand-Alone Credit Profile to be 'bb+'
UDMAC-J1: S&P Lowers Ratings on Classes D and E Certificates
N E W Z E A L A N D
SOUTH CANTERBURY: Receivers Have Good Feel for Recovery
SOUTH CANTERBURY: Hubbard Retires from Dairy Holdings' Board
WESTERN PACIFIC: Appoints Grant Thornton as Liquidator
S I N G A P O R E
ARIBA SINGAPORE: Creditors' Proofs of Debt Due May 3
LCR DEVONSHIRE: Creditors' Proofs of Debt Due May 3
NEXSOL (SINGAPORE): Creditors' Proofs of Debt Due May 3
PACIFIC BEAUTY: Creditors' Proofs of Debt Due April 30
PARAKOU SHIPPING: Creditors' Meeting Set for April 14
PLATINUM CAPITAL: Creditors' Proofs of Debt Due May 2
OMD HOLDINGS: Court to Hear Wind-Up Petition on April 15
ORHIS PTE: Court Enters Wind-Up Order
YOONG CHANG: Creditors' Proofs of Debt Due April 15
S R I L A N K A
CEYLEASE FINANCIAL: Fitch Affirms National LT Rating at 'BB+(lka)'
X X X X X X X X
* Upcoming Meetings, Conferences and Seminars
- - - - -
=================
A U S T R A L I A
=================
REDGROUP RETAIL: Angus & Roberton Franchisees to Terminate Deal
---------------------------------------------------------------
SmartCompany reports that around half of Angus & Roberton's
franchised stores have terminated their franchise agreements and
plan to operate as independent bookstores, six weeks after A&R's
owner, RedGroup Retail, collapsed.
According to SmartCompany, Marie Fitzpatrick, the former Angus &
Robertson franchisee in the New South Wales town of Bowral, said
the collapse of REDgroup Retail had had a terrible effect on the
business of franchisees.
"Franchisees have experienced serious falls in sales after the
collapse," Ms. Fitzpatrick told SmartCompany.
SmartCompany relates that the group sent a letter from its lawyer
on Tuesday advising Ferrier Hodgson, the receivers of the private
equity-owned REDgroup Retail, of its decision.
Ms. Fitzpatrick said it was "seriously difficult" to be an A&R
franchisee after the collapse. She argues that the group has a
right to terminate its agreement because the franchisees no longer
receive the benefits of the brand, according to SmartCompany.
Ms. Fitzpatrick told SmartCompany that the action to not accept
gift cards had seriously damaged A&R's brand, and therefore,
damaged the reputations of the stores.
The franchises to terminate their agreement are:
1. Albany
2. Armidale
3. Tamworth
4. Batemans Bay
5. Bowral
6. Kiama
7. Burnie
8. Busselton
9. Darwin
10. Edwardstown
11. Forster
12 Glenelg
13. Mt. Barker
14. West Lakes
15. Victor Harbour
16. Murray Bridge
17. Goulburn
18. Nowra
19. Orange
20. Rockingham
21. Southport
22. Taree
23. Ulladulla
24. Unley
25. North Adelaide
Steve Sherman, administrator of REDgroup Retail, has told
SmartCompany the administrators "strongly refute the purported
terminations and intend to hold each of the franchisees fully
accountable under the terms of the franchise agreements."
"The Angus and Robertson brand continues to operate and the
administrators remain optimistic that a long term solution can be
determined for the benefit of all stakeholders," SmartCompany
quotes Mr. Sherman as saying.
About REDgroup Retail
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.
* * *
REDgroup Retail Pty. Ltd. on Feb. 17, 2011, named Ferrier Hodgson
as voluntary administrators. 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 News.
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
=========
C H I N A
=========
FRANSHION PROPERTIES: Moody's Assigns First-Time Baa3 Rating
------------------------------------------------------------
Moody's Investors Service has assigned a first-time Baa3 corporate
family rating to Franshion Properties (China) Limited.
Moody's has also assigned a provisional (P)Ba1 rating to
Franshion's proposed USD senior unsecured bond issue.
The outlook for both ratings is stable.
The proceeds from the proposed bonds will be used for working
capital, refinancing of outstanding indebtedness, capital
expenditures and other general corporate purposes.
The provisional status of the bond rating will be removed upon
completion of the bond issue.
Ratings Rationale
"Franshion's Baa3 corporate family rating reflects the company's
credit strength, which is based on its portfolio of quality
investment properties, including prime office buildings and hotels
in Shanghai and Beijing. Rental income provides the company with
stable cash flow and a strong cushion to offset any volatility in
cash flow, in contrast to its rated Chinese property peers," says
Kaven Tsang, a Moody's AVP/Analyst.
"Franshion's projected financial metrics, with adjusted
debt/capitalization around 40-45% and EBITDA interest coverage 5-
6x, are comparable to those of its mid- to high Ba-rated property
peers," says Tsang, also Moody's lead analyst for Franshion.
"Its adjusted recurring EBITDA, comprising net rental income and
50% of hotel EBITDA, can fully cover its projected gross interest
expenses, giving the company the strongest coverage position of
all the rated Chinese developers."
"This favorably positions it against peers whose income is derived
mainly from the cyclical and volatile development business," he
adds.
The rating is further supported by the company's solid track
record in the development of landmark, integrated projects and in
the acquisition of strategically important projects through its
collaboration with government-related entities.
The Baa3 rating also takes into account Franshion's diversified
and solid access to both on- and offshore funding, which is
supported by its status as a quasi-state-owned enterprise and as a
62.87%-owned subsidiary of Sinochem Hong Kong (Group) Company
Limited (Baa1/stable).
However, Franshion's rapid growth plan will entail execution risk,
as the company will have to achieve unprecedented sales targets in
an uncertain operating and regulatory environment. Rapidly
expanding residential development projects and a lack of
geographic diversity will raise the company's exposure to
performance volatility. Revenue growth in the next two to three
years will also rely on a small number of projects, compared with
other rated property peers.
Franshion's bond rating is notched down to Ba1, reflecting
structural and legal subordination. The ratio of secured and
subsidiary debt to total assets stood at 28.9% as of end-2010.
After the bond issue, the ratio should remain at 15-20% for the
next year or two.
The stable outlook reflects Moody's expectation that Franshion
will maintain 1) its focus on its commercial and integrated
developments in first- and major second-tier cities in China and
2) a stable credit profile, with adjusted recurring EBITDA to
cover projected interest expenses in full.
The rating could be downgraded if Franshion 1) fails to implement
its business plan -- or China's property market experiences a
significant downturn, such that cash flow is weaker than
anticipated; 2) accelerates its development plans or makes any
aggressive land acquisitions without a corresponding increase in
cash inflow; or 3) significantly increases its investments in
residential properties, materially altering its risk exposure and
credit profile.
Moody's would regard the following financial metrics as signals
for downward rating pressure: 1) adjusted debt/capitalization
consistently above 45-50%; 2) EBITDA interest coverage less than
4-5x; or 3) adjusted recurring EBITDA to interest coverage ratio
less than 1x.
Upward rating pressure is limited in the near term in view of the
company large, upcoming land premium payment and fast sales growth
targets. However, positive rating pressure could emerge over time
if Franshion can 1) achieve its planned sales growth targets with
stable profit margins; 2) generate sales from a balanced portfolio
without concentration risk; and 3) strengthen its recurring income
such that adjusted recurring EBITDA exceeds 2-2.5x of its gross
interest expenses.
Moody's would also regard the following as signals for upward
rating pressure: 1) adjusted debt/capitalization consistently
below 35% and/or 2) EBITDA interest coverage higher than 8x.
The principal methodology used in this rating was Global
Homebuilding Industry published in March 2009.
Listed on the Stock Exchange of Hong Kong in 2007, Franshion
Properties (China) Limited is a 62.87%-owned subsidiary of
Sinochem Hong Kong (Group) Company Limited, which in turn is 98%-
owned by Sinochem Group, a state-owned enterprise under SASAC.
Franshion develops commercial and integrated properties in first-
and major second-tier cities in China. As at Dec. 31, 2010,
Franshion has a land bank of approximately 2.3 million sq.m. of
GFA.
UNIVERSAL SOLAR: Paritz & Company Raises Going Concern Doubt
------------------------------------------------------------
Universal Solar Technology, Inc., filed on March 30, 2011, its
annual report on Form 10-K for the fiscal year ended Dec. 31,
2010.
Paritz & Company, P.A., in Hackensack, New Jersey, expressed
substantial doubt about Universal Solar Technology's ability to
continue as a going concern. The independent auditors noted that
the Company's current liabilities exceeded its current assets by
$1,484,406 and the Company has incurred net loss of $1,519,274
since inception.
The Company reported a net loss of $593,808 on $2.4 million of
sales for 2010, compared with a net loss of $389,435 on $691,713
of sales for 2009.
At Dec. 31, 2010, the Company's balance sheet showed $9.3 million
in total assets, $10.1 million in total liabilities, and a
stockholders' deficit of $844,093.
A complete text of the Form 10-K is available for free at:
http://is.gd/Zn6K9d
Headquartered in Zhuhai City, Guangdong Province, in the People's
Republic of China, Universal Solar Technology, Inc., was
incorporated in the State of Nevada on July 24, 2007. It operates
through its wholly owned subsidiary, Kuong U Science & Technology
(Group) Ltd., a company incorporated in Macau, the People's
Republic of China on May 10, 2007, and its subsidiary, Nanyang
Universal Solar Technology Co., Ltd., a wholly foreign owned
enterprise registered on Sept. 8, 2008 under the wholly foreign-
owned enterprises laws of the PRC.
The Company primarily manufactures, markets and sells silicon
wafers to manufacturers of solar cells. In addition, the Company
manufactures photovoltaic modules with solar cells purchased from
third parties.
================
H O N G K O N G
================
ACEGLORY DEVELOPMENT: Lau Ngai Ma Emma Appointed as Liquidator
--------------------------------------------------------------
Lau Ngai Ma Emma on Feb. 24, 2011, was appointed as liquidator of
Aceglory Development Limited.
The liquidator may be reached at:
Lau Ngai Ma Emma
5/F., Block F, Juniper Mansion
Tai Koo Shing
Hong Kong
ALESCO HK: Seng and Lo Step Down as Liquidators
-----------------------------------------------
Natalia K M Seng and Susan Y H Lo stepped down as liquidators of
Alesco HK Limited on April 1, 2011.
ASIA RISK: Commences Wind-Up Proceedings
----------------------------------------
The sole member of Asia Risk (HK) Limited, on March 18, 2011,
passed a resolution to voluntarily wind up the company's
operations.
The company's liquidators are:
Ng Kit Ying Zelinda
Liou Kun Chiu Eddie
31/F., The Center
99 Queen's Road
Central, Hong Kong
BAOSHINN CORPORATION: Accumulated Losses Cue Going Concern Doubt
----------------------------------------------------------------
Baoshinn Corporation filed on March 30, 2011, its annual report on
Form 10-K for the fiscal year ended Dec. 31, 2010.
Dominic K.F. Chan & Co, in Hong Kong, expressed substantial doubt
about Baoshinn Corporation and its subsidiaries' ability to
continue as a going concern. The independent auditors noted that
the Group has accumulated losses.
The Company reported net income of $25,754 on $30.6 million of
revenues for 2010, compared with net income of $5,159 on
$24.3 million of revenues for 2009.
At Dec. 31, 2010, the Company's balance sheet showed $4.3 million
in total assets, $3.5 million in total liabilities, and
stockholders' equity of $829,433.
A complete text of the Form 10-K is available for free at:
http://is.gd/p1WsN8
Based in Kowloon, Hong Kong, Baoshinn Corporation, through its
Hong Kong subsidiary, is a ticket consolidator of major
international airlines. The Company provides travel services such
as ticketing, hotel and accommodation arrangements, tour packages,
incentive tours and group sightseeing.
BRIDGMAN FIRE: Creditors' Meeting Set for April 8
-------------------------------------------------
Creditors of Bridgman Fire Doors (HK) Limited will hold their
meeting on April 8, 2011, at 4:00 p.m., for the purposes provided
for in Sections 241, 242, 243, 244, 251, 255A, and 283 of the
Companies Ordinance.
The meeting will be held at 29/F, Caroline Centre, Lee Gardens
Two, 28 Yun Ping Road, in Hong Kong.
BREAKINGVIEWS ASIA: Members' Final Meeting Set for May 3
--------------------------------------------------------
Members of Breakingviews Asia Limited will hold their final
meeting on May 3, 2011.
At the meeting, Chan Yee Por Simon, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
BROAD VIDEO: Poon Wai Hung Richard Steps Down as Liquidator
-----------------------------------------------------------
Poon Wai Hung Richard stepped down as liquidator of Broad Video
Technology Co. (H.K.) Limited on March 22, 2011.
CHINA MEDIA: Placed Under Voluntary Wind-Up Proceedings
-------------------------------------------------------
At an extraordinary general meeting held on March 22, 2011,
creditors of China Media Business Association Limited resolved to
voluntarily wind up the company's operations.
The company's liquidator is:
Law Yui Lun
Room 502, 5/F
Prosperous Building
48-52 Des Voeux Road
Central, Hong Kong
COMPUTER DIAGNOSTIC: Creditors' Proofs of Debt Due May 1
--------------------------------------------------------
Creditors of Computer Diagnostic Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by May 1, 2011, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on March 24, 2011.
The company's liquidators are:
Yu Yu Kin
Cheng Mo Kit
Office B, 26/F
United Centre
95 Queensway, Hong Kong
FAMOUS EXCEL: Creditors' Meeting Set for April 16
-------------------------------------------------
Creditors of Famous Excel Limited will hold their meeting on
April 16, 2011, at 8:30 a.m., for the purposes provided for in
Sections 241, 242, 243, 244, 251, and 255A of the Companies
Ordinance.
The meeting will be held at Room 702, Hing Yat House, Kwai Hing
Estate, New Territories, in Hong Kong.
GOLDEN PROFIT: Creditors' Proofs of Debt Due April 26
-----------------------------------------------------
Creditors of Golden Profit Limited, which is in members' voluntary
liquidation, are required to file their proofs of debt by
April 26, 2011, to be included in the company's dividend
distribution.
The company's liquidators are:
Yuen Sik Ming Patrick
6/F., Greenwich Centre
260 King's Road
North Point, Hong Kong
=========
I N D I A
=========
AJANTA LEATHER: CRISIL Cuts Rating on INR49.7MM Term Loan to 'D'
----------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Ajanta
Leather Fashions Pvt Ltd to 'D/P5' from 'B-/Stable/P4'.
Facilities Ratings
---------- -------
INR49.7 Million Working Capital D (Downgraded from
Term Loan 'B-Stable')
INR27.8 Million Proposed LT Bank D (Downgraded from
Loan Facility 'B-/Stable')
INR107.5 Million Packing Credit P5 (Downgraded from
and Post Shipment Credit 'P4')
INR2.5 Million Foreign Letter P5 (Downgraded from
of Credit 'P4')
The downgrade reflects delays by ALF in servicing its term debt,
because of weak liquidity. ALF is expected to continue to report
cash losses in the current year because of high operational
expenses and decline in revenues. ALF's cash loss increased to
INR16.2 million over the eight months ended Nov. 30, 2010, against
INR7 million during 2009-10 (refers to financial year, April 1 to
March 31).
ALF also has a weak financial risk profile marked by a small net
worth and a high gearing. The company, however, benefits from its
promoters' industry experience.
About Ajanta Leather
ALF was set up in 1976 by the late Mr. R D Chandani and his
brother. Currently, Mr. Manish Chandani, son of Mr. R D Chandani,
and Mr. Talat Ahmed look after the company. ALF bulk manufactures
leather bags, wallets, and other similar products, mainly for
women. ALF currently has an installed capacity of 0.5 million
leather bags at its unit in Kolkata (West Bengal).
For 2009-10, ALF reported a net loss of INR9.9 million on net
sales of INR233 million, against a profit after tax (PAT) of
INR0.15 million on revenues of INR174 million for 2008-09.
AKM ENTERPRISES: CRISIL Reaffirms 'BB+' Rating on Term Loan
-----------------------------------------------------------
CRISIL's rating on the term loan facility of AKM Enterprises Pvt
Ltd continues to reflect AKM's limited experience in mall
management, and exposure to risks related to pre-construction
activities and to delays in the completion of its ongoing projects
at Ludhiana and Jalandhar (both in Punjab).
Facilities Ratings
---------- -------
INR1200 Million Term Loan BB+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the benefits that
AKM derives from the fixed rental model for mall operations, which
ensures revenue visibility post completion of the projects, the
healthy liquidity of the Malhotra Book Depot (MBD) group, of which
AKM is a part, and the timely infusion of funds by group entities
to support the maturing debt obligations and construction costs.
Outlook: Stable
CRISIL believes that with the launch of the mall at Ludhiana, AKM
will generate stable cash inflows; this, along with timely
financial support from group entities, is expected to ensure
timely servicing of debt by AKM. Also, the company's ongoing
projects are expected to be completed as per the revised schedule.
The outlook may be revised to 'Positive' if AKM completes its
projects on schedule, and generates cash flows in a timely manner.
Conversely, the outlook may be revised to 'Negative' in case of
further delays in completion of projects, or delays in infusing
funds by the promoters to meet its debt obligations.
About AKM Enterprises
AKM is part of MBD group. AKM, is currently executing two
projects--one in Ludhiana, comprising a 88-room, five-star hotel,
and a shopping mall, and the other in Jalandhar, comprising a
shopping mall--with a total investment outlay of INR1.99 billion.
The mall at Ludhiana was launched during the year; however,
operations of the mall are not yet stabilised. The ongoing hotel
and mall projects at Ludhiana and Jalandhar, respectively, are
expected to be completed by mid 2011-12. The MBD group is one of
India's leading publishing houses. The group has diversified into
various industries, including paper manufacturing, hospitality,
real estate, and mall development and management; it also runs a
web-based online interactive academy. The MBD group has
successfully established itself in the hospitality industry
through its maiden venture, The Radisson MBD Hotel, in Noida
(Uttar Pradesh). For this property, the MBD group has entered into
a franchise agreement with Radisson Hotels & Resorts, a group
company of Carlson Hotels Worldwide.
ALLIANZ CONVERGENCE: CRISIL Cuts Rating on Cash Credit to 'BB-'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Allianz Convergence Pvt Ltd to 'BB-/Stable' from 'BB/Stable',
while reaffirming the rating on the short-term facility at 'P4+'.
Facilities Ratings
---------- -------
INR75 Million Cash Credit BB-/Stable (Downgraded from
'BB/Stable')
INR5 Million Bank Guarantee P4+ (Reaffirmed)
The downgrade has been driven by continued pressure on ACPL's
liquidity, as indicated by full utilization of its bank limits
over the 12 months ended January 2011. The downgrade also
reflects deterioration in the company's business risk profile,
driven by a change in its business model--from distribution of
mobile phones and mobile phone accessories to trading in iron and
steel products. Trading in iron and steel products, which
currently accounts for around 60 per cent of the company's sales,
is a more competitive and fragmented revenue segment as compared
to the mobile distribution.
The ratings reflect ACPL's weak financial risk profile, marked by
small net worth, high total outside liability to tangible net
worth (TOLTNW) ratio, and weak debt protection metrics, and its
large working capital requirements. These rating weaknesses are
partially offset by ACPL's established market position in the
mobile phone distribution segment in West Bengal and track record
of good debtor management.
Outlook: Stable
CRISIL believes that ACPL will maintain its business risk profile
over the medium term, supported by promoters' industry experience
and established relationships with principals. The outlook may be
revised to 'Positive' if ACPL's cash accruals increase, most
likely through significant increase in scale of operations and
improvement in profitability. Conversely, the outlook may be
revised to 'Negative' if ACPL's financial risk profile
deteriorates further, most likely driven by deteriorating capital
structure and debt protection metrics.
About Allianz Convergence
Set up in 2005 by Mr. Ashok Jaiswal, ACPL is in the business of
distribution of mobile phones, mobile phone accessories, cordless
phones, laptops, digital photo frames, and security devices. For
mobile phones, ACPL is a distributor of LG Electronics Ltd,
Motorola, Panasonic Sales and Services Pvt Ltd, Alcatel Lucent,
and Ningbo Bird Company. For laptops, ACPL is the distributor of
Flybook China. ACPL has five sales offices in West Bengal and
Orissa. Since 2010 company has also started trading in iron and
steel products. Such trading currently accounts for just over half
of the company's total sales.
ACPL reported a profit after tax (PAT) of INR1.0 million on net
sales of INR389 million for 2009-10 (refers to financial year,
April 1 to March 31), against a PAT of INR0.7 million on net sales
of INR229 million for 2008-09.
AMRITVARSHA FINANCE: CRISIL Upgrades Rating on INR11.9MM Term Loan
------------------------------------------------------------------
CRISIL has upgraded its long-term ratings on the bank facilities
of Amritvarsha Finance and Leasing Ltd to 'BB+/Stable' from
'BB/Stable', while reaffirming the short-term rating at 'P4+'.
Facilities Ratings
---------- -------
INR11.9 Million Term Loan BB+/Stable (Upgraded from
'BB/Stable')
INR10.0 Million Standby BB+/Stable (Upgraded from
Line of Credit 'BB/Stable')
INR10.0 Million Letter of Credit P4+ (Reaffirmed)
INR20.0 Million Bank Guarantee P4+ (Reaffirmed)
The upgrade reflects the improvement in Amritvarsha's business
risk profile, with sustenance of sales and profitability. In
addition, the upgrade also factors in the improvement in
Amritvarsha's capital structure, as a result of equity infusion by
promoteINR The rating upgrade also factors in CRISIL's belief
that Amritvarsha will benefit over the medium term from the
increased demand in the steel structures segment. Moreover, in
the absence of any capital expenditure (capex) plan, Amritvarsha
is expected to maintain its financial risk profile over the near
term.
The ratings continue to reflect Amritvarsha's average financial
risk profile, and exposure to intense competition in the steel
structures segment. These rating weaknesses are, however,
partially offset by the benefits that Amritvarsha derives from its
promoters' established track record.
Outlook: Stable
CRISIL believes that Amritvarsha will maintain its business risk
profile, supported by increased demand in the steel structures
segment and sustained profitability, over the medium term. The
company is also expected to maintain its financial risk profile,
with moderate gearing and debt protection measures. The outlook
may be revised to 'Positive' if the company consistently improves
its scale of operations, while maintaining its financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
Amritvarsha's financial risk profile weakens because of large
working capital requirements, or if the company undertakes a
large, debt-funded capex programme, resulting in the deterioration
of its debt protection metrics.
About Amritvarsha Finance
Amritvarsha, incorporated in 1995, was initially involved in
finance and leasing activities. In 2002, the company commenced
manufacturing activities. Amritvarsha manufactures mild steel
ingots, channels, shapes, girders, and sections at its plant at
Gautam Budh Nagar (Uttar Pradesh). It has capacity to manufacture
20,088 tonnes per annum (tpa) of ingots, and a rolling capacity of
44,000 tpa.
Amritvarsha reported a profit after tax (PAT) of INR1 million on
net sales of INR597.3 million for 2009-10 (refers to financial
year, April 1 to March 31), against a PAT of INR6.9 million on net
sales of INR683.1 million in 2008-09.
BANMORE FOAM: CRISIL Cuts Rating on INR45MM Cash Credit to 'B-'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Banmore Foam Pvt Ltd to 'B-/Negative' from 'BB-/Stable', while
reaffirming its rating on the short-term bank facilities at 'P4'.
Facilities Ratings
---------- -------
INR45.0 Million Cash Credit Limit B-/Negative (Downgraded
from 'BB-/Stable')
INR25.0 Million Letter of Credit P4 (Reaffirmed)
The downgrade reflects CRISIL's belief that BFPL's liquidity will
remain weak over the near to medium term. The weak liquidity is a
result of losses incurred because of a fire in the factory in
August 2010; these losses have been funded through ad-hoc limits
sanctioned by the banker. The repayment of the ad-hoc limits of
INR21.7 million is due on March 31, 2011 and the company's
internal cash accruals are expected to be insufficient to meet
these repayments. Hence, the company has currently applied for
rescheduling the repayment of this debt.
The ratings also reflect BFPL's weak financial risk profile,
marked by small net worth, high gearing, and weak debt protection
metrics, small scale of operations, and susceptibility to intense
competition in the foam industry and fluctuations in raw material
prices. These rating weaknesses are partially offset by BFPL's
established brand name, promoters' extensive experience in the
polyurethane foam manufacturing and marketing business, and strong
customer relationships.
Outlook: Negative
CRISIL believes that BFPL's credit risk profile will continue to
be constrained over the near term because of its weak liquidity
following the losses incurred because of the fire at its factory.
The rating may be downgraded in case of a delay in receipt of the
insurance claim, resulting in a delay in meeting its debt
repayments. Conversely, the outlook may be revised to 'Stable' if
BFPL's debt repayment in restructured within the due date, thus
improving its liquidity and if the company is able to achieve
better-than-expected business growth, and/or its capital structure
improves, most likely because of equity infusion.
About Banmore Foam
Incorporated in 1988 by Mr. Yogesh Mittal, BFPL manufactures PU
foam sheets, foam rolls, and other foam products used in the
furniture, leather, garment, automobile, footwear, and packaging
industries. BFPL sells its products under its own brands, such as
Cozymate (retail brand for mattresses, pillows, and cushions),
Lexus, Shagun, Oxford, and Banmore Foam (industrial brand for thin
foam sheets).
BFPL reported a profit after tax (PAT) of INR4.2 million on net
sales of INR215.8 million for 2009-10 (refers to financial year,
April 1 to March 31), as against a PAT of INR1.3 million on net
sales of INR200.2 million for 2008-09.
BEST MILK PRODUCTS: Fitch Rates INR76.8MM LT Loans at 'B(ind)'
--------------------------------------------------------------
Fitch Ratings has assigned India's Best Milk Products Private
Limited (BMP) a National Long-Term rating of 'B(ind)'. The
Outlook is Stable. The agency has also assigned ratings to BMP's
instruments, as follows:
-- INR76.8 million long-term loans: 'B(ind)'; and
-- INR80 million fund-based working capital limits:
'B(ind)'/'F4(ind)'.
The ratings reflect BMP's very limited operational track record
(operations started in October 2009) and the small size of its
operations. BMP reported revenues of INR298 million with
operating EBITDA margin of 6.6% in FY10. Its net leverage (total
adjusted net debt/operating EBITDA) stood at around 8.2x in FY10.
The ratings draw comfort from the two-decade-long experience of
BMP's promoters in the domestic dairy industry and its ability to
tap fairly large customer base in the first two years of its
operations mainly in North and West India. The ratings are
however constrained by the volatility in raw material prices,
seasonality in procurement of milk and high working capital
requirements.
A positive rating action may result from an increase in BMP's
profitability, resulting in a sustained improvement in its net
leverage. While a decline in the company's profitability and/or
any debt-led capex or increased working capital intensity,
deteriorating its financial leverage, would be negative for the
ratings.
Incorporated in May 2005, BMP is in the business of processing
milk and manufacturing milk products like skimmed milk powder,
butter, ghee among others. It has a milk processing unit in
Barnala, Punjab, and has registered brands like Punjab King, Shiv
Shakti.
BRIGHT ENTERPRISES: CRISIL Reaffirms 'BB' Rating on Term Loan
-------------------------------------------------------------
CRISIL's rating on the term loan facility of Bright Enterprises
Pvt Ltd continues to reflect the risk faced by the company, as its
Bengaluru project is at a very early stage of construction and may
face delays in completion; the rating also reflects BEPL's limited
track record in project execution. These weaknesses are partially
offset by the project's low financial risk, with financial closure
having been attained.
Facilities Ratings
---------- -------
INR5070.0 Million Term Loan Facility BB/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that BEPL will remain in project implementation
phase over the next three years. The outlook may be revised to
'Positive' if early completion of BEPL's mixed-use development
project in Bengaluru leads to cash flows sooner than expected.
Conversely, the outlook may be revised to 'Negative' if delays or
cost overruns in the project impact the company's debt-servicing
ability or if it takes on more-than-expected debt to fund capital
expenditure or undertakes other real estate development projects.
BEPL is part of the MBD group, headed by Mr. A K Malhotra. The
group is one of India's leading publishing houses. It has
diversified into various industries, including paper
manufacturing, hospitality, real estate, and mall development.
BEPL owns and manages the Radisson MBD Hotel in Noida (Uttar
Pradesh). BEPL has entered into a franchise agreement with
Radisson Hotels International, a group company of Carlson Hotels
worldwide.
BEPL plans to undertake a mixed-use development project in
Bengaluru. The project comprises a 288-room, 5-star hotel and a
super luxury mall. The project was earlier planned with a total
investment of around INR7.73 billion; however, the management has
revised the plan, and the total investment is now expected to be
INR4.61 billion. The project is expected to be completed in 37
months. Debt equity ratio of the project is 1.86 times.
BEPL reported a profit after tax (PAT) of INR96.7 million on net
sales of INR541.8 million for 2009-10 (refers to financial year,
April 1 to March 31), against a PAT of INR119.8 million on net
sales of INR622.3 million for 2008-09.
CHADDAMI LAL: CRISIL Reaffirms 'BB-' Rating on INR80MM Term Loan
----------------------------------------------------------------
CRISIL's rating on the bank facility of Chaddami Lal Jagdish Saran
Charitable Trust continues to reflect CLJSCT's exposure to risks
related to the initial phase of operations of its CL Gupta World
School, and the low expected profitability of the school during
the gestation/establishment period associated with the newly set
up educational institutions offering superior infrastructure.
These rating weaknesses are partially offset by the trust's
moderate capital structure and support from its promoters in the
form of interest free unsecured loans.
Facilities Ratings
---------- -------
INR80 Million Term Loan BB-/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that CLJSCT will benefit over the medium term from
its moderate capital structure and the support from its promoters
in the form of interest free unsecured loans. The outlook may be
revised to 'Positive' if the school generates more-than-expected
revenues and surplus in the first three years of operations,
leading to improvement in its liquidity. Conversely, the outlook
may be revised to 'Negative' in case of lower-than-expected
student enrolments, leading to liquidity constraints and
deterioration in its financial risk profile.
Update
As expected, CLGWS commenced operations in April 2010 and inducted
its first batch of students for academic year 2010-11, with 164
student enrolments. The response received by the school in
Moradabad (Uttar Pradesh) has been a tad lukewarm, driven by lower
affordability for costly high-end education in a tier II city such
as Moradabad. However, despite lower-than-expected enrolment of
students in the 2010-11, CLGWS is estimated to report revenues of
around INR19.5 million for 2010-11 (refers to financial year,
April 1 to March 31), because of higher-than-expected fee charged
per student.
Total cost of the school project has increased to INR185 million
in 2010-11 from INR150.4 million (as projected earlier). Cost
overrun of INR35 million has been on account of additional buses
and diesel generator sets purchased, and civil work undertaken for
beautification of school premises. The trust is funding the
aforementioned cost overrun of INR35 million at a debt-to-equity
mix of 1.2:1, by taking an additional term loan of INR19 million
and infusing interest free unsecured loans to the extent of INR16
million, incrementally. Additional term loan of INR19 million
taken to fund the cost overrun is expected to deteriorate the debt
service coverage ratio for the trust in the initial years, as
compared to earlier expectations.
CLJSCT was formed in 1995 with four members: Mr. Jagdish Saran
Gupta and his three sons, Mr. Anil Kumar Gupta, Mr. Ajay Kumar
Gupta, and Mr. Raghav Chand Gupta, in Moradabad. In January 2009,
the trust started construction of CLGWS in Moradabad on a piece of
land it had acquired in 2005 for INR49.1 million. The total cost
of the school project has been revised to INR185 million, funded
through debt of INR99 million and the rest through equity. The
school commenced operations in April 2010.
DALAS BIOTECH: CRISIL Assigns 'BB+' Rating to INR92.1MM Term Loan
-----------------------------------------------------------------
CRISIL has assigned its 'BB+/Stable' rating to the bank facilities
of Dalas Biotech Ltd.
Facilities Ratings
---------- -------
INR160.0 Million Cash Credit Facility BB+/Stable (Assigned)
INR92.1 Million Term Loan BB+/Stable (Assigned)
The rating reflects the expected weakening in DBL's capital
structure because of its large, debt-funded capital expenditure
(capex) programme, and revenue concentration in cephalosporin
products. These rating weaknesses are partially offset by DBL's
established customer profile.
Outlook: Stable
CRISIL believes that DBL will maintain its current business risk
profile over the medium term, backed by an established customer
profile and steady demand in the pharmaceutical industry. The
company's financial risk profile would, however, deteriorate over
the near term, driven by the large debt-funded capex for its new
manufacturing unit. The outlook may be revised to 'Positive' if
DBL is able to successfully set up its new unit without
significant time and cost overruns, and stabilizes its expanded
capacities in its existing unit, over the medium term.
Conversely, the outlook may be revised to 'Negative' if the
company contracts more-than-expected debt for funding the new
capex, or in case of a decline in its operating margin and cash
accruals, resulting in deterioration in its financial risk profile
About Dalas Biotech
DBL is based in Bhiwadi (Rajasthan), and manufactures active
pharmaceutical ingredients (bulk drugs). The company was
incorporated in 1989 as Aimil Medicaments (India) Pvt Ltd. It was
taken over by the existing promoters, Mr. Anil Rajani and Mr. Atul
Rajani, in 1998-99 (refers to financial year, April 1 to
March 31), and got its present name in August 1999. DBL has nine
products in its portfolio, including cefixime, enzymes,
simvastastin, axetil, proxetil, amoxicillin, ampicillin,
cloxacillin, and cefditoren.
DBL reported a profit after tax (PAT) of INR29 million on net
sales of INR774 million for 2009-10, as against a PAT of INR8
million on net sales of INR431 million for 2008-09.
GANESHILAL NARAYANDAS: CRISIL Rates INR104MM Term Loan at 'BB-'
---------------------------------------------------------------
CRISIL has assigned its 'BB-/Stable' rating to the rupee term loan
facility of Ganeshilal Narayandas Agrawal Charitable Society.
Facilities Ratings
---------- -------
INR104 Million Rupee Term Loan BB-/Stable (Assigned)
The rating reflects GLAC's weak, albeit improving, financial risk
profile, marked by weak debt protection metrics, high gearing and
small net worth, and its exposure to intense competition and
adverse regulatory changes, both of which restrict revenue growth.
These weaknesses are partially offset by the healthy demand
prospects of the education sector and GLAC's promoters' industry
experience.
Outlook: Stable
CRISIL believes that GLAC will benefit over the medium term from
its promoters' experience in the education sector. Its financial
risk profile is, however, expected to remain weak marked by high
gearing and weak debt protection metrics. The outlook may be
revised to 'Positive' if GLAC further increases its scale of
operations while improving its financial risk profile. Conversely,
the outlook may be revised to 'Negative' in case GLAC's operating
margin declines significantly, or there is a significant drop in
the total number of students, leading to lower accruals, if the
society undertakes a large, debt-funded capital expenditure
programme, or in case the All India Council for Technical
Education (AICTE) withdraws approval for conduct of the courses
offered by the society.
Established in 2003 by Mr. Narayan Das Agarwal, GLAC operates GLNA
Institute of Technology (GLNA) in Mathura (Uttar Pradesh). GLNA
started functioning in 2008-09 (refers to financial year, April 1
to March 31) and offers bachelor courses in engineering. GLNA is
affiliated with Uttar Pradesh Technical University (UPTU) and the
courses are approved by AICTE. It has student strength of around
800.
GLAC reported surplus of INR1.4 million on net fees received of
INR47.8 million for 2009-10, against a surplus of INR7.2 million
on net fees received of INR17.0 million for 2008-09.
JAYA PROJECTS: CRISIL Rates INR100.00 Million Cash Credit at 'D'
----------------------------------------------------------------
CRISIL has assigned its 'D' rating to Jaya Projects Ltd's cash
credit facility.
Facilities Ratings
---------- -------
INR100.00 Million Cash Credit D (Assigned)
The ratings reflect delay by JPL in servicing its hire purchase
loans. Additionally, JPL's working capital limits have remained
overdrawn for more than three months at a stretch through
February 2011; the working capital limits are currently overdrawn.
The delays in debt servicing have been because of weak liquidity,
caused by stretched receivables and small scale of operations.
JPL has large working capital requirements. Its financial risk
profile is however moderate, despite the weak liquidity. JPL also
continues to benefit from its promoters' experience in the civil
construction industry.
Set up in 1988 as a partnership firm by Mr. Koneru Dhana Koteswara
Rao and his family members, JPL (formerly, Jaya Constructions),
got its current name in 2006. JPL undertakes construction of
dams, canals, irrigation projects, and laying and widening of
roads. JPL's projects are in Madhya Pradesh, Andhra Pradesh, Tamil
Nadu, West Bengal, Maharashtra, and Bihar.
JPL reported a profit after tax (PAT) of INR11 million on net
sales of INR366 million for 2009-10 (refers to financial year,
April 1 to March 31), against an actual PAT of INR9 million on net
sales of INR354 million for 2008-09.
MANNOHAR LAL: CRISIL Assigns 'BB' Ratings on Various Bank Loans
---------------------------------------------------------------
CRISIL has assigned its 'BB/Stable/P4+' ratings to the bank
facilities of Mannohar Lal Hira Lal Ltd.
Facilities Ratings
---------- -------
INR120.0 Million Cash Credit Limit BB/Stable (Assigned)
INR50.0 Million Working Capital BB/Stable (Assigned)
Demand Loan
INR25.0 Million Proposed LT Bank BB/Stable (Assigned)
Loan Facility
INR40.0 Million Letter of Credit P4+ (Assigned)
The ratings reflect MLHL's weak financial risk profile, marked by
small net worth, moderate gearing, weak debt protection metrics,
its modest scale of operations, with low profitability due to
intense competitive and high fragmentation in the steel wire
industry. These weaknesses are partially offset by the extensive
experience of MLHL's promoters in the industry and its diversified
end-user industry base.
Outlook: Stable
CRISIL believes that MLHL will benefit over the medium term from
the extensive experience of its promoters in the steel wire
industry; its financial risk profile is, however, expected to
remain weak over the corresponding period, on account of small net
cash accruals and the ongoing debt-funded capital expenditure.
The outlook may be revised to 'Positive' in case of more-than-
expected improvement in MLHL's revenue and profitability after the
capacity expansion or in case of an increase in net worth due to
equity infusion by promoters. Conversely, the outlook may be
revised to 'Negative' if the profitability of the company comes
under considerable pressure or its capital structure deteriorates,
most likely due to a large, debt-funded capacity expansion
programme.
About Mannohar Lal
MLHL manufactures various types of steel and galvanized iron
wires, and caters to the needs of various end-user industries such
as the cable manufacturing, automotive ancillary, infrastructure
and power industries. Mr. Hira Lal Goel and his son Mr. Man Mohan
Goel started the company in 1970. The company was reconstituted
as a public limited company in 2003-04 (refers to financial year,
April 1 to March 31). MLHL is presently managed by Mr. Manvendra
Goel (son of Mr. Man Mohan Goel). MLHL has a manufacturing
facility at Ghaziabad (Uttar Pradesh) with a capacity of 24,000
tonnes per annum (TPA). MLHL is in the process of increasing its
capacity to 32,000 TPA.
MLHL's associate concern, Pasondia Cables Pvt Ltd (PCPL), was
incorporated in 2000. It manufactures PVC cables and wires. PCPL
is managed by Mr. Raghvendra Goel (son of Mr. Manvendra Goel).
There is some sales-purchase transactions between MLHL and PCPL as
steel wires manufactured by MLHL are raw materials for PCPL. The
value of such transactions, however, is low as compared to the
total sales of MLHL.
MLHL reported a profit after tax (PAT) of INR15.0 million on net
sales of INR865.7 million for 2009-10, against a PAT of INR15.6
million on net sales of INR 880.0 million for 2008-09.
M MOHITE: CRISIL Cuts Rating on INR400MM Cash Credit to 'D'
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of R M
Mohite Textiles Ltd to 'D/P5' from 'BB-/Stable/P4+'. The
downgrade reflects significant delays by RMMTL in servicing its
term loan. The delays have been caused by RMMTL's weak liquidity.
Facilities Ratings
---------- -------
INR400 Million Cash Credit D (Downgraded from
BB-/Stable)
INR707.7 Million Long-Term Loan D (Downgraded from
BB-/Stable)
INR26 Million Proposed LT Bank Loan D (Downgraded from
Facility BB- /Stable)
INR20 Million Bank Guarantee P5 (Downgraded from P4+)
RMMTL has a modest financial risk profile marked by weak
liquidity, above average gearing, and modest debt protection
indicators. However, the company continues to benefit from its
established track record and its promoters' experience in the
textile industry.
Incorporated as a public limited company in 1990, RMMTL commenced
operations in May 1995. RMMTL manufactures ring-spun cotton yarn
and knitted and woven fabric. RMMTL holds a 50 per cent stake in
First Step Baby Wear Pvt Ltd, a bengaluru based baby-wear
manufacturing company. RMMTL has around 35,000 spindles with
capacity of manufacturing around 450 tonnes of yarn per month. It
also has weaving and knitting capacities of around 40,000 metres
per day and 7 tonnes per day respectively. The company has also
setup a 10-megawatt (MW) hydro power project at Radhanagari,
Kolhapur (Maharashtra); the plant started generating electricity
from the first week of March 2011. More than 90% of the power
generated will be captivly consumed and the balance will be sold
outside. RMMTL is presently in negotiations with Maharashtra State
Electricity Board for signing a power purchase agreement (PPA),
which is expected to be signed by the end of March 2011.
RMMTL reported a profit after tax (PAT) of INR40.4 million on net
sales of INR978.5 million for 2009-10 (refers to financial year,
April 1 to March 31), against a PAT of INR17.5 million on net
sales of INR991.0 million for 2008-09.
NATIONAL STEEL: CRISIL Assigns 'B' Rating to INR80MM Cash Credit
----------------------------------------------------------------
CRISIL has assigned its 'B/Stable/P4' ratings to the bank
facilities of National Steel Supplier.
Facilities Ratings
---------- -------
INR80.00 Million Cash Credit B/Stable (Assigned)
INR80.00 Million Proposed LT Bank B/Stable (Assigned)
Loan Facility
INR30.00 Million Bank Guarantee P4 (Assigned)
INR10.00 Million Proposed ST Bank P4 (Assigned)
Loan Facility
The ratings reflect NSS's below-average financial risk profile,
marked by below-average liquidity, small net worth, high ratio of
total outside liabilities to tangible net worth, and weak debt
protection metrics, because of large working capital requirements
and unrelated investments, small scale of operations, and
susceptibility to intense competition in the steel trading
industry and to volatility in steel prices. These rating
weaknesses are partially offset by NSS's promoters' extensive
industry experience, and established customer and supplier
relationships.
Outlook: Stable
CRISIL believes that NSS's financial risk profile will remain
below average over the medium term as the firm's working capital
requirements are likely to remain large and it is likely to
continue investing in unrelated businesses. The outlook may be
revised to 'Positive' if there is a significant improvement in
NSS's financial risk profile, particularly liquidity, driven by
more-than-expected cash accruals or reduced unrelated investments.
Conversely, the outlook may be revised to 'Negative' if the firm's
financial risk profile, particularly liquidity, deteriorates
because of larger-than-expected working capital requirements or
more-than-expected investments in real estate, land, or equity
shares.
About National Steel
Set up in 1982 by Mr. Anand Prakash, NSS is a proprietorship firm
that trades in steel products such as thermo-technically-treated
bars, angles, shapes, and sections, beams, billets, and rounds,
among others. NSS is also the consignment agent of Rashtriya
Ispat Nigam Ltd for Ghaziabad (Uttar Pradesh) and Dehradun
(Uttarakhand), wherein it undertakes transportation, grading,
sizing, and warehousing activities on behalf of RINL. NSS mainly
deals in products manufactured by RINL and sells them to traders
and end customers primarily in the National Capital Region and
Dehradun. In 2009-10 (refers to financial year, April 1 to
March 31), NSS traded 18,992 tonnes of steel products.
RSS reported a profit before tax (PBT) of INR10.3 million on net
sales of INR605.7 million for 2009-10, against a PBT of INR1.9
million on net sales of INR374.3 million for 2008-09.
REGAL TRADING: CRISIL Reaffirms 'BB-' Rating on Cash Credit
-----------------------------------------------------------
CRISIL's ratings on the bank facilities of Regal Trading Pvt Ltd
continue to reflect Regal's weak financial risk profile, marked by
small net worth and low profitability, large working capital
requirements, and its exposure to risks related to competition in
the timber industry. These weaknesses are partially offset by the
experience of Regal's promoters in the timber trading business.
Facilities Ratings
---------- -------
INR15 Million Cash Credit BB-/Stable (Reaffirmed)
INR90 Million Letter of Credit P4+ (Reaffirmed)
Outlook: Stable
CRISIL believes that Regal will continue to benefit from its
promoters' industry experience over the medium term. The outlook
may be revised to 'Positive' if increased profitability and
efficient working capital management lead to more-than-expected
cash flows from operations for Regal. Conversely, the outlook may
be revised to 'Negative' if the company's financial risk profile
deteriorates because of a large, debt-funded capital expenditure
(capex) or acquisitions.
Update
Regal registered moderate growth of 19 per cent year-on year in
2009-10 (refers to financial year, April 1 to March 31). However,
the company's profitability remained low, with a profit after tax
(PAT) margin of 0.2 per cent for 2009-10. Regal's total outside
liabilities to tangible net worth improved to 0.54 times as on
March 31, 2010 from 0.89 times as on March 31, 2009, due to better
working capital management. Its gross capital asset days, though
still high, improved to 190 days in 2009-10 from 297 days in 2008-
09. Its liquidity is expected to remain constrained over the near
term due to full utilization of its bank limits of INR15 million.
Regal does not have any term loans.
Regal did not undertake any capital expenditure over 2009-10. In
2010-11, the company set up a unit to manufacture mouldings on its
premises. The capital outlay for this was around INR3 million,
funded by internal accruals. In 2011-12, the company plans to
start manufacturing and exporting timber-based handicrafts to
Australia and New Zealand. These are high-margin products and
require minimal capital outlay, which is expected to be funded by
internal accruals.
For 2009-10, Regal reported a PAT of INR0.5 million on net sales
of INR251 million, as against a PAT of INR0.3 million on net sales
of INR211 million for 2008-09.
About Regal Trading
Incorporated in 1993 by Mr. N K Agarwal, Regal was acquired by its
current promoters, Mr. Radheshyam Poddar and his family, in 2001.
The Kolkata-based company trades in timber wood, which is used in
sleepers, mouldings, and door and window frames. The company
imports around 60 per cent of its timber requirement from African
countries such as Nigeria, the Ivory Coast, Ghana, Benin, and
Sudan; the remainder is procured from domestic traders. The
company also trades in finished timber products that are imported
from China (accounting for around 4 per cent of the company's
turnover). It caters to sawmill owners and traders in Delhi,
Punjab, Haryana, Rajasthan, Uttar Pradesh, Gujarat, and Karnataka.
ROHAN BUILDERS: CRISIL Assigns 'BB+' Rating to Cash Credit
----------------------------------------------------------
CRISIL's ratings on the bank facilities of Rohan Builders (India)
Pvt Ltd (RBIPL; part of the Rohan group) continue to reflect the
improvement in the Rohan group's financial risk profile,
particularly its liquidity, diversified business profile, and
strong order book, which provides good revenue visibility over the
medium term. These rating strengths are partially offset by the
group's susceptibility to a slowdown in the real estate business
and to intense competition in its industrial construction
business.
Facilities Ratings
---------- -------
INR200 Million Cash Credit Facility BB+/Stable
(Enhanced from INR130 Million)
INR113.4 Million Rupee Term Loans BB+/Stable (Reaffirmed)
(Reduced from INR350 Million)
INR2000 Million Bank Guarantee P4+
(Enhanced from INR600 Million)
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of RBIPL and its group entities,
collectively referred to herein as the Rohan group. This is
because the entities are under common management and have fungible
cash flows. The financials of the entities that the Rohan group
has formed as joint ventures with the Rajdeep group have also been
combined in proportion to the shareholding of the Rohan group.
Outlook: Stable
CRISIL believes that the Rohan group will maintain its healthy
business risk profile over the medium term, supported by sound
cash flows from industrial construction and real estate
businesses. The outlook may be revised to 'Positive' if the group
maintains adequate liquidity or generates more-than-expected
revenues without weakening its profitability. Conversely, the
outlook may be revised to 'Negative' if the group's financial risk
profile deteriorates significantly, most likely because of larger-
than-expected debt-funded investments or less-than-expected cash
accruals.
RBIPL, the flagship company of the Pune-based Rohan group, is
engaged in industrial construction. The group is also into real
estate development and infrastructure construction businesses.
RBIPL was promoted by Mr. Suhas Lunkad as a proprietary entity in
1992; with increasing scale of operations, it was reconstituted as
a private limited company in 1994.
RBIPL reported a profit after tax (PAT) of INR200.0 million on net
sales of INR3.4 billion for 2009-10; it reported a PAT of INR134.1
million on net sales of INR2.1 billion for the previous year. For
the nine months ended Dec. 31, 2010, RBIPL, on provisional basis,
reported a PAT of INR226.0 million on net sales of INR3.1 billion;
it reported a PAT of INR152 million on net sales of INR2.1 billion
for the corresponding period of the previous year.
The Rohan group, on provisional basis, reported a PAT of INR1.3
billion on net sales of INR8.3 billion for 2009-10; it reported a
PAT of INR0.34 billion on net sales of INR3.2 billion for the
previous year.
=========
J A P A N
=========
TOKYO ELECTRIC: S&P Sees Stand-Alone Credit Profile to be 'bb+'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term and
short-term ratings on Tokyo Electric Power Co. Inc. (TEPCO) to
'BBB+' and 'A-2', respectively, from 'A+' and 'A-1'. The ratings
remain on CreditWatch with negative implications.
"We assess the stand-alone credit profile of TEPCO to be 'bb+' at
this moment. However, the ratings on TEPCO reflect our opinion
that there is a "high" likelihood that the government of Japan
(foreign currency AA-/Stable/A-1+; local currency AA-/Stable/A-1+)
would provide timely and sufficient extraordinary support to the
company in the event of financial distress, such as that which it
faces now," S&P noted. In accordance with S&P's criteria for
government-related entities, its view of a "high" likelihood of
extraordinary government support is based on S&P's assessment of
the following characteristics of TEPCO:
* Its "very important" role in meeting the electricity demand
for approximately one-third of the Japanese economy,
including Metropolitan Tokyo.
* Its increasingly "strong" linkage to the Japanese
government, as it works closely with TEPCO to contain the
damage from the nuclear plant, as well as what S&P thinks is
a possibility of some form of government support in terms of
capital injections or compensation for damages to third
parties.
"Under normal operating and market conditions, we had not factored
in any extraordinary government support for TEPCO. However, we
believe that, as a result of the unprecedented events of March 11,
2011, and the importance of TEPCO to the economy at this point in
time, the Japanese government is likely to provide some form of
extraordinary support to the company," S&P noted.
"In our opinion, TEPCO's business and financial profile continues
to worsen since our last rating action on the company on March 18,
2011. TEPCO continues to face significant challenges in
containing radiation leakage from its Fukushima No. 1 nuclear
power plant, forcing the company to announce that it will be
decommissioning four of the plant's six reactors. We believe that
all six reactors will be decommissioned. We expect TEPCO's
operating performance to remain weak, and we believe it will take
a prolonged period of time for it to recover. Based on our
projections, we believe TEPCO will face significant deterioration
in its operating and free cash flows over the next couple of
years as a result of higher operating costs as it moves to oil and
liquefied natural gas (LNG) feedstock, higher financing costs,
material recovery costs for the decommissioned plants, and a
potentially enormous bill to compensate parties affected by the
radiation leakage," S&P related.
"In addition, we believe these factors will lead to a material
increase in TEPCO's balance sheet leverage over the near to medium
term, which will put further strain on its financial position and
flexibility. Although it is difficult to ascertain the precise
impact at this stage, we believe that TEPCO's forecast credit
metrics and free cash flows will be materially impacted by the
events and will continue to weaken, such that TEPCO's stand-alone
credit profile will not be commensurate with an investment-grade
rating without potential extraordinary government support," S&P
pointed out.
The ratings remain on CreditWatch with negative implications, with
a continued high risk of negative rating transition on the stand-
alone credit profile in the short term, particularly given that
TEPCO has not been able to contain the risks of the radiation
leakage.
"Given the level of uncertainty and event risks, we expect that
the CreditWatch placement will take more than 90 days to resolve
and will require continuous monitoring of the company's credit
profile.
UDMAC-J1: S&P Lowers Ratings on Classes D and E Certificates
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on classes
D and E and affirmed its ratings on classes B, C, F, G, and X
issued under the UDMAC-J1 Trust Certificates commercial mortgage-
backed securities (CMBS) transaction.
The class A trust certificates that were issued under the same
transaction were fully redeemed on the trust distribution date in
September 2010.
Of the seven loans that originally backed the trust certificates,
six loans (the six loans originally represented about 39.5% of the
total initial issuance amount of the trust certificates), which
have defaulted, have already been fully recovered. As the
proceeds were used to make principal payments in sequential order,
starting with class A, the highest-level tranche, the class A
trust certificates were fully redeemed on the trust distribution
date in September 2010. The remaining loan (the loan originally
represented about 60.5% of the total initial issuance amount of
the trust certificates), which was originally scheduled to be
redeemed in March 2010, has had its maturity date extended four
times. In the most recent extension, the maturity date was
extended to the end of June 2011 from the end of March 2011.
S&P lowered the ratings on classes D and E because:
* The transaction's remaining loan--a secured loan that was
extended to a Japanese real estate investment trust--has
already had its maturity date extended multiple times.
Although a loan refinancing plan involving a partial sale of
the three remaining related collateral properties (two
office buildings and one residential property, all located
in Tokyo) has been considered, it has not been realized at
this point. As such, it is S&P's view that there is
mounting uncertainty over the recovery prospects of the
properties in question.
* S&P expects the likely collection amount from the two office
buildings and the residential property backing the
transaction's remaining loan to decline, given the
performance of the three properties.
S&P affirmed the rating on class B because:
* Credit support for the class B trust certificates has
increased markedly, as six of the transaction's underlying
loans have been fully recovered. Even so, S&P believes the
transaction's remaining loan is exposed to increased risk
that collection from the loan will not be completed by the
transaction's legal final maturity date in June 2013, given
the shortened amount of time from the loan's maturity to the
transaction's final maturity date due to the extension of
the loan maturity, as well as the characteristics of the
loan.
"In addition, we maintained our ratings on classes C, F, and G
based on the revised underwriting values of the three
aforementioned properties," S&P related.
According to information received from the servicer, the large
earthquake and tsunami that hit northeastern Japan on March 11,
2011, have not caused major damages to the transaction's
collateral properties.
UDMAC-J1 Trust Certificates is a multiborrower CMBS transaction.
The trust certificates were originally secured by nonrecourse
loans extended to seven obligors (effectively seven loans). The
nonrecourse loans were initially backed by 40 real estate
properties. The transaction was arranged by UBS Securities Japan
Ltd., and Premier Asset Management Co. acts as the servicer
for this transaction.
The ratings address the full payment of interest and ultimate
repayment of principal by the transaction's legal final maturity
date in June 2013 for the class B to G certificates, and the
timely payment of available interest for the interest-only class X
certificates.
Ratings lowered
UDMAC-J1 Trust Certificates
JPY42.34 billion trust certificates due June 2013
Class To From Initial issue amount
D B+ (sf) BB- (sf) JPY4.5 bil.
E CCC (sf) B (sf) JPY1.5 bil.
Ratings affirmed
Class Rating Initial issue amount
B AA- (sf) JPY4.4 bil.
C BBB+ (sf) JPY4.4 bil.
F CCC (sf) JPY1.4 bil.
G CCC (sf) JPY0.34 bil.
X AAA (sf) JPY42.34 bil.*
====================
N E W Z E A L A N D
====================
SOUTH CANTERBURY: Receivers Have Good Feel for Recovery
-------------------------------------------------------
The New Zealand Press Association reports that the receivers of
South Canterbury Finance believe they have a good feel for the
amount that will be recovered from the assets of the company, but
are not willing to make the estimate public.
NZPA says Finance Minister Bill English said on Monday that the
Government's expected loss from the retail deposit guarantee
scheme -- put in place during the global financial crisis -- had
risen by NZ$331 million. The scheme is now expected to have a net
loss of around NZ$1.2 billion, rather than the NZ$900 million
estimated earlier, according to NZPA.
NZPA relates that most of the increase in the expected loss is due
to a cut in expected related party loan recoveries from the SCF
receivership.
The comments from Mr. English, says NZPA, were followed Tuesday by
a call from Labour finance spokesman David Cunliffe for Mr.
English to resign over what Mr. Cunliffe described as a scandal of
epic proportions.
According to NZPA, receiver Kerryn Downey of McGrathNicol, said
the receivers had been aware of the related party loans when
appointed to SCF at the end of last August, but had since learned
more about them and the chances of collecting them.
After concluding that collecting some of them would be a struggle,
it had been necessary to increase provisioning.
"I think we have got a good feel and a good handle now on what we
believe we will recover from the assets of South Canterbury," NZPA
quotes Mr. Downey as saying.
NZPA relates that Mr. Downey said the receivers were close to
offering SCF's consumer book for sale, and were well advanced on
other books within the loan book.
They were to look at indicative bids this week for SCF's
commercial plant and equipment finance business Face Finance,
while other sales processes for major investments were under way
and largely on schedule, NZPA reports.
NZPA notes that the sales processes would run for the next six
months, perhaps longer, depending on the complexity of deals put
together and time taken to settle.
Mr. Downey, according to NZPA, expected the taxpayers' final
position would not be known for a year or more.
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.
SOUTH CANTERBURY: Hubbard Retires from Dairy Holdings' Board
------------------------------------------------------------
The Timaru Herald reports that Allan Hubbard has retired from the
board of Dairy Holdings. Chairman Colin Armer said Monday Mr.
Hubbard had tendered his resignation as a director effective from
last Thursday, March 31.
The Timaru Herald relates that the receivers of South Canterbury
Finance are trying to sell its 33.6% share in Dairy Holdings,
which Mr. Hubbard transferred to the finance company in 2008 in a
bid to shore it up. At the time, The Timaru Herald notes, the
stake was said to be worth NZ$75.7 million.
According to the report, SCF receiver Kerryn Downey said
Mr. Hubbard's retirement would help in the sale of the failed
finance company's share in Dairy Holdings, The Timaru Herald
reports.
"Mr. Hubbard's involvement no longer made any sense because he was
not a shareholder any longer. He has been very active on the board
but, given the sales process in place and that he is in statutory
management, we appreciate his co-operation in resigning," The
Timaru Herald quotes Mr. Downey as saying.
The Timaru Herald notes that the SCF receivers are trying to sell
the Dairy Holdings stake jointly with four other investors, who
own a 28.9% stake, creating a 62.5% controlling stake in one of
New Zealand's largest dairy groups.
Dairy Holdings owns 58 dairy units on 14,201 hectares, milking
43,439 cows to produce about 15.1 million kilograms of milk solids
a year.
Mr. Hubbard and his wife, Jean, their companies Aorangi Securities
and Hubbard Management Funds, along with seven charitable trusts,
were placed in statutory management under accounting firm Grant
Thornton by the Government on June 20, 2010.
Mr. Downey, as cited by The Timaru Herald, said the sale of the
other key SCF assets -- Helicopters New Zealand, Face Finance and
Scales Corporation -- was progressing well.
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.
WESTERN PACIFIC: Appoints Grant Thornton as Liquidator
------------------------------------------------------
The National Business Review reports that David Ruscoe and Simon
Thorn, of Grant Thornton New Zealand, have been appointed
liquidators to Western Pacific Insurance, a small Queenstown-based
insurance company with around 150 claims relating to earthquakes
in Christchurch.
NBR relates that Mr. Ruscoe and Mr. Thorn were appointed
liquidators on Friday after directors of Western Pacific became
concerned about the solvency of their company.
According to NBR, Mr. Ruscoe said checks were being made that all
insurance policies were in place and valid and that all
reinsurance contracts were in order.
"We know people will be worried about their situation and so we're
urgently working through these issues," NBR quotes Mr. Ruscoe as
saying. Policy holders were being contacted through their
brokers.
"We're giving priority to claims relating to the Christchurch
earthquake. We understand there are 78 claims for the September
earthquake and 77 claims for the February one."
No further comment could be made until the liquidators had carried
out a review and looked at further options for the business,
Mr. Ruscoe said.
Western Pacific is a New Zealand-owned and operated insurance
company. It was established in April 2005 and is principally a
broker brand that offers a broad range of commercial, domestic and
specialty products as well as programmes for affinity groups,
underwriting agents and preferred brokers. It has about 7,000
policy holders in New Zealand.
=================
S I N G A P O R E
=================
ARIBA SINGAPORE: Creditors' Proofs of Debt Due May 3
----------------------------------------------------
Creditors of Ariba Singapore Pte Ltd, which is in members'
voluntary liquidation, are required to file their proofs of debt
by May 3, 2011, to be included in the company's dividend
distribution.
The company's liquidators are:
Bob Yap Cheng Ghee
Tay Puay Cheng
Wong Pheng Cheong Martin
c/o 16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
LCR DEVONSHIRE: Creditors' Proofs of Debt Due May 3
---------------------------------------------------
Creditors of LCR Devonshire Pte Ltd, which is in members'
voluntary liquidation, are required to file their proofs of debt
by May 3, 2011, to be included in the company's dividend
distribution.
The company's liquidator is:
Leow Quek Shiong
Leong Hon Mun Peter
C/O Bdo Llp
19 Keppel Road
#02-01 Jit Poh Building
Singapore 089058
NEXSOL (SINGAPORE): Creditors' Proofs of Debt Due May 3
-------------------------------------------------------
Creditors of Nexsol (Singapore) Pte Ltd, which is in members'
voluntary liquidation, are required to file their proofs of debt
by May 3, 2011, to be included in the company's dividend
distribution.
The company's liquidators are:
Leow Quek Shiong
Leong Hon Mun Peter
C/O Bdo Llp
19 Keppel Road
#02-01 Jit Poh Building
Singapore 089058
PACIFIC BEAUTY: Creditors' Proofs of Debt Due April 30
------------------------------------------------------
Creditors of Pacific Beauty Care Pte Ltd, which is in members'
voluntary liquidation, are required to file their proofs of debt
by April 30, 2011, to be included in the company's dividend
distribution.
The company's liquidator is:
Aaron Loh Cheng Lee
Ernst & Young Solutions LLP
c/o One Raffles Quay North Tower 18th Floor
Singapore 048583
PARAKOU SHIPPING: Creditors' Meeting Set for April 14
-----------------------------------------------------
Parakou Shipping Private Limited, which is in provisional
liquidation, will hold a meeting for its creditors on April 14,
2011, at 10:30 a.m., at 331 North Bridge Road, #04-04/05 Odeon
Towers, in Singapore 188720.
Agenda of the meeting include:
a. to lay before the creditors a full statement of the affairs
of the Company, showing the assets and liabilities of the
Company;
b. to confirm the appointment of Messrs. Kon Yin Tong and Aw
Eng Hai of Foo Kon Tan Grant Thornton LLP, 47 Hill Street,
#05-01 Singapore Chinese Chamber of Commerce & Industry
Building, Singapore 179365 as joint and several Liquidators
of the Company;
c. to authorize the appointed Liquidators to open bank accounts
with a bank for the orderly winding up of the Company and
the authorized signatories of such bank accounts be
appointed by the Liquidators;
d. to consider and if thought fit, appoint a Committee of
Inspection for the purpose of winding up the Company; and
d. to discuss other business.
PLATINUM CAPITAL: Creditors' Proofs of Debt Due May 2
-----------------------------------------------------
Creditors of Platinum Capital Management (Asia) Pte Ltd, which is
in members' voluntary liquidation, are required to file their
proofs of debt by May 2, 2011, to be included in the company's
dividend distribution.
The company's liquidators are:
Kelvin Thio
Terence Ng
c/o Ardent Business Advisory Pte Ltd
146 Robinson Road #12-01
Singapore 068909
OMD HOLDINGS: Court to Hear Wind-Up Petition on April 15
---------------------------------------------------------
A petition to wind up the operations of OMD Holdings Pte Ltd will
be heard before the High Court of Singapore on April 15, 2011, at
10:00 a.m.
The Comptroller of Income Tax filed the petition against the
company on March 24, 2011.
The Petitioner's solicitors are:
Infinitus Law Corporation
77 Robinson Road, #16-00
Robinson 77
Singapore 068896
ORHIS PTE: Court Enters Wind-Up Order
-------------------------------------
The High Court of Singapore entered an order on March 18, 2011, to
wind up the operations of Orhis Pte. Ltd.
Malayan Banking Berhad filed the petition against the company.
The company's liquidators are:
Messrs Andrew Grimmett
Lim Loo Khoon
Deloitte & Touche LLP
care of 6 Shenton Way
#32-00 DBS Building Tower 2
Singapore 068809
YOONG CHANG: Creditors' Proofs of Debt Due April 15
---------------------------------------------------
Creditors of Yoong Chang Construction Pte Ltd, which is in
members' voluntary liquidation, are required to file their proofs
of debt by April 15, 2011, to be included in the company's
dividend distribution.
The company's liquidator is:
The Official Receiver
The URA Centre (East Wing)
45 Maxwell Road #06-11
Singapore 069118
================
S R I L A N K A
================
CEYLEASE FINANCIAL: Fitch Affirms National LT Rating at 'BB+(lka)'
------------------------------------------------------------------
Fitch Ratings Lanka has revised Ceylease Financial Services Ltd's
Outlook to Stable from Negative. Its National Long-Term rating
has been affirmed at 'BB+(lka)'.
The Outlook revision reflects CFS's improving financial profile,
underpinned by better credit controls and more stringent recovery
efforts. Its Long-Term rating benefits from the fact that Bank of
Ceylon (BOC, 'AA(lka)'/Positive, 55% shareholding of CFS) intends
to retain CFS within its wider group through merger with its
several other group companies. A majority of CFS's board consists
of senior BOC officials, including a Director (Chairman of CFS)
and Chief Financial Officer. BOC also appoints CFS's Managing
Director. BOC also continues to be a key creditor to CFS (20% of
borrowings at end-December 2010 (FYE10)), and subscribed to its
rights issue that brought in LKR100 million of fresh equity in
late-2009.
On Aug. 26, 2010, Merchant Bank of Sri Lanka (a 72%-owned
subsidiary of BOC) announced that it intends to merge with CFS and
Merchant Credit of Sri Lanka (MCSL, 'BBB(lka)'/Stable, 88%
effective ownership by BOC), subject to regulatory clearances and
statutory approvals. CFS's rating could be downgraded should
BOC's willingness to support CFS wanes, which may include a
considerable dilution in its shareholding or the withdrawal of
board-level controls and input. Conversely, the rating could be
upgraded if there is an increase in CFS's strategic importance to
BOC, or an improvement in the latter's perceived ability to
support CFS, or a significant improvement of CFS's stand-alone
financial profile; however, the latter is less likely over the
medium-term.
In 2010, CFS reported a reduction in non-performing advances (NPA)
in absolute terms. However, its loan book contracted at a faster
pace, partly due to the management's cautious approach to lending
and greater focus on recoveries, and partly due to CFS's still
limited marketing reach. Driven by the strong recovery of
impaired assets, profits turned around with return on assets of
1.05% in 2010 (2009: -6.53%) while a decrease in funding cost, in
line with market interest rates, also benefited its profitability.
Fitch expects the favourable trend in recoveries to continue in
2011 given its strengthened credit management and generally
improved macro economic conditions. Loans may begin to grow in
2011 as the company has deployed a team of field-sales staffs to
develop new businesses. Nonetheless, the growth is subject to
greater credit control as all disbursements now require approval
by the Managing Director, or the board credit committee.
While CFS acquired a real-estate stock in early-2007 to develop
and resell, progress in this respect has been slow, largely due to
suppressed real estate prices during the last few years. At
FYE10, the carrying value of real-estate stock and loans amounted
to 4.6% of assets and 34% of equity. In late-2010, CFS acquired
an equity trading portfolio to capitalise on the bull-run in
equity markets during 2009-2010. However, at end-December 2010,
its share portfolio, which accounted for 34% of its equity,
accumulated a marked-to-market loss of LKR3.3 million. Fitch
notes that an increase in CFS's real-estate stocks or its share
trading book could weaken recurring profitability, thereby
constraining its ability to service its creditors. The company
will not expand its real-estate stock or share trading portfolio
over the near term.
CFS continues to have good access to local wholesale funding,
mainly through commercial banks, due to its association with BOC.
While maturity mismatches between assets and liabilities exist
similar to most local non-bank financial institutions, the
potential for liquidity risk is mitigated by the availability of
substantial unutilised credit lines from BOC.
CFS is a small Specialised Leasing Company (SLC), which was
founded in 1996 by BOC and the Phoenix Group -- a local
conglomerate with interests in manufacturing apparels and plastic
products. In 2009, the Phoenix Group divested its stake to 27.5%,
in favour of Prime Lands Pvt Ltd, a local real-estate development
agency, which now owns 17.5% of CFS. CFS's total assets amounted
to LKR1.5 billion at FYE10. The company operates via two outlets.
===============
X X X X X X X X
===============
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
April 27-29, 2011
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott, Chicago, IL
Contact: http://www.turnaround.org/
May 5, 2011
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts - New York City
Association of the Bar of the City of New York,
New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
May 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Hilton New York, New York, N.Y.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Canadian-American Cross-Border Insolvency Symposium
Fairmont Royal York, Toronto, Ont.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 9-12, 2011
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Mich.
Contact: http://www.abiworld.org/
July 21-24, 2011
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 27-30, 2011
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Sanctuary at Kiawah Island, Kiawah Island, S.C.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 4-6, 2011
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 14, 2011
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Tampa Convention Center, Tampa, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. __, 2011
AMERICAN BANKRUPTCY INSTITUTE
International Insolvency Symposium
Dublin, Ireland
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 25-27, 2011
TURNAROUND MANAGEMENT ASSOCIATION
Hilton San Diego Bayfront, San Diego, CA
Contact: http://www.turnaround.org/
Dec. 1-3, 2011
AMERICAN BANKRUPTCY INSTITUTE
23rd Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 3-5, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Grand Hyatt Atlanta, Atlanta, Ga.
Contact: http://www.turnaround.org/
Apr. 19-22, 2012
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 14-17, 2012
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 2-4, 2012
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay, Cambridge, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
November 1-3, 2012
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Westin Copley Place, Boston, Mass.
Contact: http://www.turnaround.org/
Nov. 29 - Dec. 2, 2012
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
JW Marriott Starr Pass Resort & Spa, Tucson, Ariz.
Contact: 1-703-739-0800; http://www.abiworld.org/
April 10-12, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
JW Marriott Chicago, Chicago, Ill.
Contact: http://www.turnaround.org/
October 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Valerie 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 ***