/raid1/www/Hosts/bankrupt/TCRAP_Public/110421.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, April 21, 2011, Vol. 14, No. 79
Headlines
A U S T R A L I A
ANDREW HARRIS: Mudgee Winery Placed into Liquidation
ANZ NATIONAL BANK: Fitch Affirms Individual Rating at 'B'
COLORADO GROUP: CEO Works on Plans to Take Colorado Back on Track
COLOURPLUS PRINTING: Loss of Major Client Spurs Liquidation
DOLLARFORCE GROUP: 2nd Defendant Appears in Court over Collapse
MINC FINANCIAL: In Administration; Certain Assets Sold
REDGROUP RETAIL: Administrators and Franchisees Declare Truce
* Fitch Affirms 9 Illawarra CMBS Tranches; Revises 6 LS Ratings
B A N G L A D E S H
BANGLADESH: Moody's Says Tax Reform Measures Support Ba3 Rating
C H I N A
ASPIRE INT'L: Had US$1.57-Mil. Loss in 1st 9 Months of 2010
CHINA AGRITECH: Receives Notice of Delisting from Nasdaq
H O N G K O N G
HANG FUNG: Lai and Ho Appointed as Liquidators
HERO HOUSING: Creditors' Proofs of Debt Due May 15
JADESAILS INVESTMENTS: Members' Final Meeting Set for May 16
LUCKY COSMOS: Final Meetings Set for May 16
LUCKY GROUP: Final Meetings Set for May 16
MAHA NIRVANA: Placed Under Voluntary Wind-Up Proceedings
MARPHIL COMPANY: Creditors' Proofs of Debt Due May 3
MERIDIEN HOTELS: Members' Final Meeting Set for May 16
OHNISHI DENKI: Creditors' Proofs of Debt Due May 12
PRIME VIEW: Creditors' Proofs of Debt Due May 13
QUINWAY COMPANY: Members' Final Meeting Set for May 16
RIGHT CONNECTION: Commences Wind-Up Proceedings
SILVER TECH: Creditors' First Meeting Set for April 26
STAR EAST: Members' and Creditors' Final Meetings Set for May 16
STAR EAST ON-LINE: Final Meetings Set for May 16
I N D I A
AMBUJA PIPES: CRISIL Downgrades Rating on INR36MM Loan to 'B-'
CLASSIC MICROTECH: CRISIL Places 'B-' Rating on INR9.9MM Term Loan
GREENLEAF TOBACCO: CRISIL Raises Rating on Packing Credit to 'BB'
G.S. ALLOY: CRISIL Downgrades Rating on INR50MM Cash Credit to 'C'
K J INFRASTRUCTURE: CRISIL Puts 'C' Rating to INR250MM Cash Credit
KABRA PLASTICS: CRISIL Cuts Rating on INR90MM Cash Credit to 'BB-'
KARLE INT'L: CRISIL Cuts Rating on Various Bank Loans to 'D'
KASHMIRI LAL: CRISIL Rates INR181.8 Million Cash Credit at 'BB-'
N.K BHOJANI: CRISIL Reaffirms 'B+' Rating on INR115MM Cash Credit
PASCHIM HYDRO: CRISIL Downgrades Rating on INR207.4MM Loan to 'B+'
SIDHI VINAYAK: CRISIL Reaffirms 'BB+' Rating on INR90MM Term Loan
SKYLARK MANSIONS: CRISIL Rates INR200 Million LT Loan at 'B+'
VEDANTA RESOURCES: Moody's Continues Review of Ratings
J A P A N
CSC SERIES: S&P Puts 'CCC' Ratings on Four Classes of Bonds
GK L-JAC4: S&P Gives Six Classes of Notes 'B-' Ratings under Watch
JLOC 36: Fitch Downgrades Class C & D Notes; Affirms Other Notes
K O R E A
* SOUTH KOREA: Urges Banking Groups to Help Troubled Builders
M A L A Y S I A
GULA PERAK: Infra Purnama Serves Wind-Up Petition
HO HUP CONSTRUCTION: Disposes Shares in 8 Subsidiaries
TRACOMA HOLDINGS: Has Until May 4 to Submit Debt Revamp Scheme
- - - - -
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A U S T R A L I A
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ANDREW HARRIS: Mudgee Winery Placed into Liquidation
----------------------------------------------------
ABC News reports that The Andrew Harris Winery has gone into
liquidation, and 274,000 litres of its red wine went under the
hammer in an auction Wednesday. The Andrew Harris Winery was
placed in the hands of liquidators Nicholls and Co on March 10,
2011.
The management of Andrew Harris Wines declined to comment on the
reasons for the winery being wound up, ABC News notes.
But Scott Burns, from Burns and Co Auctions, who'll handle the
sale, acknowledges the general oversupply in Australian wines,
according to ABC News.
"There is a big glut of red wine about," ABC News quotes Mr. Burns
as saying.
Andrew Harris is one of the best known winemakers in the Mudgee
region. The winery produced its first vintage in 1994.
ANZ NATIONAL BANK: Fitch Affirms Individual Rating at 'B'
--------------------------------------------------------
Fitch Ratings has affirmed the Local and Foreign Currency Long-
Term and Short-Term Issuer Default Ratings of ASB Bank Limited,
Bank of New Zealand and Westpac New Zealand Limited at 'AA' and
'F1+' respectively. The Outlook on the Long-Term IDRs is Stable.
At the same time, the agency affirmed ANZ National Bank Limited's
(ANZNB) Long-Term and Short-Term IDRs at 'AA-' and 'F1+'
respectively. The Outlook is Positive. All other ratings of the
four major New Zealand banks were also affirmed. The rating
action has no impact on BNZ's covered bond rating of 'AAA'.
The rating actions follow the affirmation of the Australian
parents' ratings on April 14, 2011. The Long-Term and Short-Term
IDRs, as well as the Support Rating of all four banks, reflect a
very strong support from their respective parent. All four banks
are supervised by the Reserve Bank of New Zealand and, as
subsidiaries, are also subject to a degree of oversight by the
Australian Prudential Regulation Authority. Fitch believes that
there is an extremely high probability that the Australian parent
banks would be willing and able to provide support should it be
required. Fitch also considers there to be a moderate probability
that the RBNZ would provide direct support to its four largest
domestic banks, if required.
The operating environment in New Zealand has been challenging
since mid-2008: unemployment peaked at 7% in December 2009;
current property prices are still around 5% below their peak; and
discretionary spending remains weak. At the same time,
earthquakes in the Canterbury region in September 2010 and
February 2011 have constrained economic growth, but rebuilding
activity should provide some stimulus later in 2011. Furthermore,
historically high commodity prices are benefitting important
export trades, such as dairy products. Fitch expects the economy
to continue to recover, albeit at a slow pace. The rebuilding of
the earthquake-affected areas and the Rugby World Cup which will
take place later in 2011, will likely contribute positively to the
country's economic growth.
"Despite this challenging operating environment, New Zealand's
four major banks have performed well compared to their
international peers," says Andrea Jaehne, Director in Fitch's
Financial Institutions team. "Asset quality, capitalisation and
profitability remain strong. However, a dependence on wholesale
funding, particularly from offshore markets, remains a risk," she
adds.
Improvements are taking place, with the RBNZ requiring that banks
fund at least 65% of their loan books with customer deposits and
long-term wholesale funding instruments such as longer-dated term
debt and covered bonds. This funding ratio requirement will
increase to 70% in July 2011 and 75% in 2012. Regulatory capital
ratios of New Zealand banks compare well with international peers
particularly when the relatively strict requirements of the RBNZ,
such as higher deductions for items like dividend payments, are
taken into account.
All four major banks are owned by the major Australian banks and
accounted for around 80% of the New Zealand banking system at end-
2010.
ANZ National Bank Limited (ANZNB):
Long-Term IDR affirmed at 'AA-'; Outlook Positive;
Short-Term IDR affirmed at 'F1+';
Local Currency Long-Term IDR affirmed at 'AA-'; Outlook
Positive;
Local Currency Short-Term IDR affirmed at 'F1+';
Individual Rating affirmed at 'B';
Support rating affirmed at '1';
Senior unsecured rating for Short-Term notes affirmed at 'F1+';
Senior unsecured rating for Long-Term notes affirmed at 'AA-';
and
Senior unsecured rating guaranteed by the New Zealand
government affirmed at 'AA+'.
ASB Bank Limited (ASB):
Long-Term IDR affirmed at 'AA'; Outlook Stable;
Short-Term IDR affirmed at 'F1+';
Local Currency Long-Term IDR affirmed at 'AA'; Outlook Stable
Local Currency Short-Term IDR affirmed at 'F1+';
Individual Rating affirmed at 'B';
Support rating affirmed at '1'; and
Senior unsecured rating affirmed at 'AA'.
Bank of New Zealand (BNZ):
Long-Term IDR affirmed at 'AA'; Outlook Stable;
Short-Term IDR affirmed at 'F1+';
Local Currency Long-Term IDR affirmed at 'AA'; Outlook Stable
Local Currency Short-Term IDR affirmed at 'F1+';
Individual Rating affirmed at 'B';
Support rating affirmed at '1'; and
Senior unsecured rating affirmed at 'AA'.
Westpac New Zealand Limited (WNZL):
Long-Term IDR affirmed at 'AA'; Outlook Stable;
Short-Term IDR affirmed at 'F1+';
Local Currency Long-Term IDR affirmed at 'AA'; Outlook Stable
Local Currency Short-Term IDR affirmed at 'F1+';
Individual Rating affirmed at 'B';
Support rating affirmed at '1'; and
Senior unsecured rating affirmed at 'AA'.
COLORADO GROUP: CEO Works on Plans to Take Colorado Back on Track
-----------------------------------------------------------------
Blair Speedy at The Australian reports that Colorado Group Chief
Executive Kevin Roberts is already looking beyond the receivership
process to an aggressive strategy that could more than double the
size of its Jag and Diana Ferrari chains over five years.
The Australian relates that Mr. Roberts said the Affinity Equity-
backed group's problems are mostly confined to its balance sheet.
Unlike its Jag and Diana Ferrari fashion chains, or footwear
divisions, Mathers and Williams, Mr. Roberts said that the
business which shared a name with the parent company was losing
money.
"With the exception of Colorado, the businesses are profitable,
but it reached the point where the businesses could no longer
service the debt," The Australian quotes Mr. Roberts as saying.
The Australian notes that the Colorado chain could quickly be made
profitable by closing loss-making stores from its 120-strong
portfolio, with receivers Ferrier Hodgson set to identify likely
targets over the next month.
Meanwhile, The Australian says, Mr. Roberts is working on plans to
take the Colorado chain back to the roots it abandoned in 2004,
when it sought to broaden its appeal among female shoppers by
repositioning itself as a provider of "generic casual wear".
According to The Australian, Mr. Roberts said there were also
opportunities for substantial cost savings by centralising
functions such as material sourcing and rental negotiations, which
were currently executed by each brand.
Mr. Roberts, however, conceded he may not have the opportunity to
execute his plans as the receivers are attempting to sell the
company either as a complete group or as five brands.
About Colorado Group
Colorado Group -- http://www.coloradogroup.com.au/-- is a leading
footwear and apparel retailer and wholesaler with more than 430
stores in Australia and New Zealand operating under the divisions
of Colorado, Mathers, Williams, diana ferrari, Jag, and Pairs.
The group employs approximately 3,800 people.
As reported in the Troubled Company Reporter-Asia Pacific on
March 31, 2011, Colorado Group Limited was placed in receivership
on March 30, 2011, following the board's appointment of Deloitte
as voluntary administrators. Colorado Group incorporates five
well-known brands -- JAG, Diana Ferrari, Colorado, Mathers,
Williams -- with 434 stores across Australia and New Zealand.
Ferrier Hodgson partners James Stewart, Brendan Richards and Will
Colwell were appointed receivers and managers over the group. The
appointment was made by the syndicate of secured creditors owed
AU$400 million.
The TCR-AP, citing ABC News, reported on April 11, 2011, that the
receivers and managers of Colorado Group have put the company up
for sale. Mr. Stewart said the company is looking to receive
expressions of interest from around the region by April 19, 2011,
and will then take several months to conclude the sale process.
COLOURPLUS PRINTING: Loss of Major Client Spurs Liquidation
-----------------------------------------------------------
ProPrint reports that Colourplus Printing, with more than
AU$400,000 in debt after "50% of its work disappeared" as major
client Toll Group moved its print to Stream Solutions, has called
in the liquidators.
ProPrint relates that the company appointed accountant Gregory J
Shilton & Co on Feb. 25, 2011. The creditors' report on March 8,
2011, showed that AU$438,486 was owed to unsecured creditors,
including KW Doggett and Spicers Paper, ProPrint discloses.
More than 15 SME printers and trade houses were owed money, with
the likes of Ability Press, CMYKhub and Four Trade Only, each owed
more than AU$10,000, according to ProPrint.
Colourplus operated digital and offset kit, which was sold at
auction to compensate secured creditors.
ProPrint relates that liquidator Gregory Shilton confirmed that
the loss of work from a number of different Toll subsidiaries was
the "straw that broke the camel's back".
DOLLARFORCE GROUP: 2nd Defendant Appears in Court over Collapse
---------------------------------------------------------------
James Stephen Lewis has appeared before the Melbourne Magistrates'
Court in connection with an investigation conducted by the
Australian Securities and Investigation Commission into the
collapse of the Dollarforce group of companies.
Mr. Lewis, an accountant and former director of Altitude Property
Limited (in liquidation), was on April 18, 2011, charged on
summons with four offences. The charges relate to alleged false
statements in a prospectus issued by APL and Mr. Lewis' role as an
officer of My Building No 1 Pty Ltd (MB 1) in the falsification of
the general ledger of MB 1.
Mr. Lewis is charged with:
-- one count of engaging in conduct as an officer of MB 1 that
resulted in the falsification of the general ledger of MB 1
by removing debts totalling more than $5.6 million;
-- one count of making, or authorising the making, of false or
misleading statements in a prospectus issued by APL; and
-- two counts of omitting, or authorizing the omission of,
Material information in a prospectus issued by APL.
Mr. Lewis was ordered to re-appear before the Melbourne
Magistrates' Court on Aug. 26, 2011.
On March 30, 2011, Clestus Weerappah, the director of Dollarforce
Financial Services Pty Ltd, was arrested and charged with a total
of 57 offences as a result of ASIC's investigation.
The Commonwealth Director of Public Prosecutions is prosecuting
the matter.
Background
Simon Wallace-Smith of Deloitte Touche Tohmatsu is a liquidator of
a number of companies within the Dollarforce Group, following his
appointment by the Federal Court of Australia (Victoria) on
March 12, 2009, as a result of proceedings brought by ASIC in
2008.
Mr. Wallace-Smith also received funding from ASIC from the
Assetless Administration fund in order to carry out investigations
into some of the companies. He is appointed to:
Bennett Street Developments Pty Ltd
Altitude Property No1 Pty Ltd
My Building No 1 Pty Ltd
Altitude Property Limited
Lewmac Investments Pty Ltd
Ivory Property Group Pty Ltd
Retail Treasury Pty Ltd, and
Elite Wealth Builders Pty Ltd.
The AA Fund was established by the Australian Government and is
administered by ASIC. It provides funding for liquidators to
prepare an appropriate report into the failure of companies with
few or no assets, so ASIC can determine whether to commence
enforcement action.
The collapse of the Dollarforce group of companies involved a
deficit in the group of more than AU$24 million.
Greg Andrews of GS Andrews and Associates is the liquidator of
Dollarforce Financial Services Pty Ltd. Mr. Murray Godfrey of RMG
partners and Michael Royal of BIR Solvency Solutions are the
liquidators of Alamanda Property Investments No 2 Pty Ltd.
MINC FINANCIAL: In Administration; Certain Assets Sold
------------------------------------------------------
SmartCompany reports that MINC Financial Services has been sold
after collapsing into the hands of voluntary administrators with
debts believed to be as high as AU$8 million.
MINC and its subsidiaries, including broking arm Asanda, were
placed in the hands of Atle Crowe-Maxwell and Ken Whittingham from
accounting and insolvency firm PKF on April 15, 2011, according to
SmartCompany. But the operations were sold to MDS Financial Group
for an undisclosed amount, SmartCompany says.
SmartCompany relates that MDS will acquire MINC's current national
client lists, the private client business and advisors in
Townsville, Bunbury, Gold Coast and Melbourne. The acquisition
does not include MINC's debts, liabilities and infrastructure.
Atle Crowe-Maxwell from PKF told SmartCompany that the
administrators were under severe time pressure to get a deal done
before MINC's clients started moving on to other firms,
drastically lowering the value of the business.
SmartCompany says the administrators will now remain in place to
investigate the reasons for the company's collapse and try to sell
the remaining assets of the business to increase returns to
creditors.
The first creditors meeting will be held on May 2, 2011,
SmartCompany adds.
Based in New South Wales, Australian, MINC Financial Services --
http://www.mincfinancialservices.com.au/-- is a full service
financial advisory and stockbroking firm which offers personal
financial advice and solutions tailored to your financial goals.
The company has offices in Sydney, Perth and Brisbane.
REDGROUP RETAIL: Administrators and Franchisees Declare Truce
-------------------------------------------------------------
The administrators of REDgroup Retail, Ferrier Hodgson, and the
Angus & Robertson franchisees, who have been engaged in litigation
about whether their franchise agreements have been terminated,
have agreed to put aside their differences and to work together in
a process to seek a successful outcome for REDgroup companies,
which are currently in voluntary administration.
Ferrier Hodgson said that the franchisees have withdrawn the
termination notices and Angus & Robertson has agreed to
discontinue the proceedings in the Supreme Court of NSW, and to
preserve the franchise agreements to allow discussions between
stakeholders to continue in good faith.
Voluntary Administrator, Mr. Steve Sherman, said: "This is a good
outcome and is important for the preservation of the value of the
Group's business as a going concern."
Angus & Robertson Bowral franchisee, Ms. Marie Fitzpatrick, said:
"The franchisees welcome the opportunity to engage in a process
which will hopefully achieve a successful outcome for them and,
more importantly, their customers."
As reported in the Troubled Company Reporter-Asia Pacific on
April 6, 2011, SmartCompany said around half of Angus & Roberton's
franchised stores have terminated their franchise agreements and
plan to operate as independent bookstores following RedGroup
Retail's collapsed. 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. 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.
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
* Fitch Affirms 9 Illawarra CMBS Tranches; Revises 6 LS Ratings
---------------------------------------------------------------
Fitch Ratings has affirmed 9 classes of notes issued from two
Illawarra series of Australian CMBS. The transactions are backed
by pools of Australian Small and Medium Enterprises (SME)
commercial mortgages originated by IMB Ltd.
Illawarra Series 2004-1 CMBS Trust (Illawarra 2004-1 CMBS):
AUD1.1m Class B (ISIN AU300ILWB020) affirmed at 'AAAsf' ;
Outlook Stable; Loss Severity Rating revised to 'LS3' from
'LS2';
AUD9.9m Class C affirmed at 'AAAsf' ; Outlook Stable; Loss
Severity Rating revised to 'LS1' from 'LS2';
AUD7.6m Class D affirmed at 'AAsf' ; Outlook Stable; Loss
Severity Rating revised to 'LS2' from 'LS3' and
AUD4.7m Class E affirmed at 'Asf' ; Outlook Stable; Loss
Severity Rating revised to 'LS2' from 'LS3'.
Class A notes were paid in full in January 2011.
Illawarra Series 2007-1 CMBS Trust (Illawarra 2007-1 CMBS):
AUD88.0m Class A (ISIN AU3FN0002747) affirmed at 'AAAsf';
Outlook Stable; Loss Severity Rating 'LS1';
AUD12.3m Class B (ISIN AU3FN0002754) affirmed at 'AAAsf' ;
Outlook Stable; Loss Severity Rating 'LS2';
AUD10.3m Class C (ISIN AU3FN0002838) affirmed at 'AAsf' ;
Outlook Stable; Loss Severity Rating revised to 'LS2' from
'LS3';
AUD8.0m Class D (ISIN AU3FN0002853) affirmed at 'Asf' ; Outlook
Stable; Loss Severity Rating revised to 'LS2' from 'LS3'; and
AUD4.3m Class E (ISIN AUSFN0002788) affirmed at 'BB+sf' ;
Outlook Stable; Loss Severity Rating 'LS3'.
"The underlying mortgage loans in both Illawarra 2004-1 CMBS and
Illawarra 2007-1 CMBS have continued to pay down, resulting in
increasing credit enhancement levels for rated notes in both
transactions," noted James Zanesi, Associate Director in Fitch's
Structured Finance team. "As the transactions pay down,
concentration might lead to volatility in performance," added Mr.
Zanesi.
The affirmations and Stable Outlooks on all notes for both
transactions reflect the pay down of the most senior notes,
resulting in the building of additional credit support for the
junior notes and the stable delinquency performance of each
transaction. As at March 2011, the unrated Class F notes provide
credit enhancement of 13.06% for Illawarra 2004-1 CMBS and 3.31%
for Illawarra 2007-1 CMBS.
Both transactions have shown a stable and positive performance.
Illawarra 2004-1 CMBS has experienced no defaults since closing,
and as at Feb 2011, just one loan is in arrears of 30-59 days,
totalling AUD 313,582.07, equivalent to 1.17% of the current
outstanding pool balance. Since closing, Illawarra 2007-1 CMBS
has experienced two defaults generating a loss of AUD 261,288
which was fully covered by excess spread and the credit
enhancement provided by the unrated Class F notes. Currently just
one loan is in arrears for 30-59days totalling AUD507,321.81,
equivalent to 0.40% of the pool balance. Arrears have been
historically low and below 1%. Excess spread in Illawarra 2007-1
CMBS has been overall stable and has been able to repay mortgage
shortfalls when required, reducing the temporary charge-off on the
unrated Class F notes.
As the mortgage portfolio reduces in size, the risk of principal
losses resulting from the concentrated default of large loans
becomes the primary driver for Fitch's analysis.
===================
B A N G L A D E S H
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BANGLADESH: Moody's Says Tax Reform Measures Support Ba3 Rating
---------------------------------------------------------------
Moody's Investor Service says tax reforms and infrastructure
enhancement efforts are supporting Bangladesh's Ba3 rating. The
rating outlook is stable.
An updated analysis of the rating is provided in Moody's 2011
annual sovereign report.
Rationale for the rating:
1. Bangladesh's economy is treading the path to a higher growth
potential, but is also facing modest near-term risks. With
declining poverty, improved food security, favorable
demographics, and recent efforts to enhance infrastructure,
conditions for higher growth are visible. However, a recent
deceleration of remittance inflows, and a rising trade
imbalance are resulting in modest near-term pressures in the
external balance of payments.
2. The policy framework is reasonably effective, but deeper
reforms will sustain higher growth targets. Ongoing tax and
budgetary reforms and reasonably effective monetary management
can absorb the modest sized near-term balance of payments
pressures. However, amidst Bangladesh's rising energy
intensity and pent up demand for capital goods, land reforms
and improvements in governance are important. These could
attract greater foreign direct investment which would be useful
in countering the possible materialization of sustained
external pressures.
3. Despite the recent external headwinds, Bangladesh's overall
external financing position is comfortable and its government
debt service, manageable. Meanwhile, government debt burden
and its affordability are gradually improving. These credit
features benefit from access to official and low cost external
finance. The government's very low revenue base remains a key
drawback, but tax reforms are being undertaken.
4. Economic and banking event risks are low, and polarized
politics do not threaten the policy framework. Macro-financial
stability, low external indebtedness, and improving banking
fundamentals are key support factors. Excessive government
interventions in the stock market or in state enterprises may
raise contingent fiscal pressures somewhat. But, these are
expected to remain within the liquid resources of the broader
public sector.
Rationale for the outlook:
The rating outlook is stable. Given the prospects for steadily
rising growth in a very low-income economy, the outlook balances
an expected moderation in the external balance of payments from a
rather comfortable position, against improving tax collection from
very low levels.
What could change the rating -- Up:
Bangladesh's rating could move up if sustained increases in
economic growth were to be supported by infrastructure
improvements, enhanced regional integration and a broadening of
the tax revenue base. These developments could support
improvements in government debt affordability and overall fiscal
flexibility; and also encourage greater foreign investment which
could fortify the reasonably healthy external payments position.
What could change the rating -- Down:
The rating would face downward pressure if a major shock to
confidence, perhaps emanating from political or fiscal setbacks,
or a deterioration of the balance of payments resulted in a
substantial reversal of gains in the external payment position or
adversely altered the improving trends in government and external
debt trajectories.
Previous rating Action & Methodology:
Moody's last rating action on Bangladesh was on April 12, 2010, at
which time the local and foreign currency issuer ratings were
assigned a Ba3, with a stable outlook.
The principal methodology used in this rating was Moody's
Sovereign Bond Methodology published in September 2008.
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C H I N A
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ASPIRE INT'L: Had US$1.57-Mil. Loss in 1st 9 Months of 2010
-----------------------------------------------------------
Aspire International, Inc., last week filed with the U.S.
Securities and Exchange Commission quarterly reports on Form 10-Q
for the quarters ended March 31, 2010, June 30, 2010, and
September 30, 2010.
According to the latest Form 10-Q, the Company had a net loss of
$1,570,406 on $0 of sales for the nine months ended September 30,
2010, compared with a net loss of $1,297,048 on $71,169 of sales
for the same period during the prior year.
The Company's balance sheet at September 30, 2010, showed
$1,134,145 in total assets, $9,039,945 in liabilities, all
current, and a $7,905,800 stockholders' deficit.
A full-text copy of the quarterly report on Form 10-Q for the
first quarter of 2010 is available for free at http://is.gd/MvYMtu
A full-text copy of the Form 10-Q for the second quarter of 2010
is available for free at http://is.gd/jqom0Y
A full-text copy of the Form 10-Q for the third quarter of 2010 is
available for free at http://is.gd/0I0P03
About Aspire International
Markham, Ontario-based Aspire International, Inc., has acquired
MYGOS.NET, an online business-to-consumer shopping mall,
headquartered in Shenzhen, in the Guangdong province of China.
Mygos operates as a platform to allow users to start their own
businesses online and currently hosts over 80,000 active stores.
DNTW Chartered Accountants, LLP, in Markham, Canada, in its audit
report for the Company's financial statements for the year ended
Dec. 31, 2009, expressed substantial doubt about Aspire
International's ability to continue as a going concern. The
independent auditors noted of the Company's significant cumulative
operating losses. The Company reported a net loss of $1.7 million
on $71,169 of sales for 2009, compared with a net loss of $1.9
million on $170,415 of sales for 2008.
CHINA AGRITECH: Receives Notice of Delisting from Nasdaq
--------------------------------------------------------
China Agritech, Inc., announced on April 18, 2011, that it has
received a letter dated April 12, 2011, from The NASDAQ Stock
Market LLC advising that the Nasdaq Staff intends to delist the
Company's common stock based on public interest concerns and the
Company's failure to file its 2010 Form 10-K on time. Nasdaq
stated that its determination was based on Nasdaq's broad
discretionary authority pursuant to Listing Rule 5101 to deny
continued listing and the failure of the Company to comply with
Listing Rule 5250(c)(1) related to the filing of periodic
financial reports.
The Company has filed an appeal of the determination by requesting
an oral hearing before a Nasdaq listing qualifications panel.
There can be no assurance that the appeal will be successful. The
trading suspension, which commenced on March 14, 2011, remains in
effect pending a decision by the panel.
In response to allegations made in a short seller's report and a
report by its former auditors, Ernst & Young Hua Ming, regarding
issues that surfaced during the audit process, the Company has
formed a Special Committee of the independent members of its board
of directors to conduct an investigation. The Special Committee
engaged the law firm of TroyGould PC to advise it in connection
with its investigation, and TroyGould retained BDO China Li Xin Da
Hua Certified Public Accountants Co., Ltd. to assist in the
investigation with respect to various accounting issues, including
specific financial transactions and customer relationships. In
addition, the Company has recently appointed Simon & Edward, LLP
to serve as its independent registered public accounting firm,
effective April 6, 2011. The internal investigation is currently
in process, but it is uncertain when the Company will be able to
file its 2010 Form 10-K.
About China Agritech
China Agritech, Inc. -- http://www.chinaagritechinc.com-- is
engaged in the development, manufacture and distribution of liquid
and granular organic compound fertilizers and related products in
China. The Company has developed proprietary formulas that
provide a continuous supply of high-quality agricultural products
while maintaining soil fertility. The Company sells its products
to farmers located in 28 provinces of China.
================
H O N G K O N G
================
HANG FUNG: Lai and Ho Appointed as Liquidators
----------------------------------------------
Lai Kar Yan (Derek) and Ho Kwok Leung on March 29, 2011, were
appointed as liquidators of Hang Fung Jewellery (International)
Company Limited.
The liquidators may be reached at:
Lai Kar Yan (Derek)
Ho Kwok Leung
35th Floor, One Pacific Place
88 Queensway, Hong Kong
HERO HOUSING: Creditors' Proofs of Debt Due May 15
--------------------------------------------------
Creditors of Hero Housing Limited, which is in members' voluntary
liquidation, are required to file their proofs of debt by May 15,
2011, to be included in the company's dividend distribution.
The company commenced wind-up proceedings on April 2, 2011.
The company's liquidator is:
Sung Mi Yin
Suite No. A, 11th Floor
Ritz Plaza, 122 Austin Road
Tsimshatsui, Kowloon
Hong Kong
JADESAILS INVESTMENTS: Members' Final Meeting Set for May 16
------------------------------------------------------------
Members of Jadesails Investments Limited will hold their final
meeting on May 16, 2011, at 10:00 a.m., at 9/F, Tung Ning
Building, 249-253 Des Voeux Road Central, in Hong Kong.
At the meeting, Chan Shu Kin and Chow Chi Tong, the company's
liquidators, will give a report on the company's wind-up
proceedings and property disposal.
LUCKY COSMOS: Final Meetings Set for May 16
-------------------------------------------
Members and creditors of Lucky Cosmos Limited will hold their
final meetings on May 16, 2011, at 10:00 a.m., at 62/F, One
Island East, 18 Westlands Road, Island East, in Hong Kong.
At the meeting, Stephen Liu Yiu Keung and David Yen Ching Wai, the
company's liquidators, will give a report on the company's wind-up
proceedings and property disposal.
LUCKY GROUP: Final Meetings Set for May 16
------------------------------------------
Members and creditors of Lucky Group Investments Limited will hold
their final meetings on May 16, 2011, at 2:00 p.m., at 62/F, One
Island East, 18 Westlands Road, Island East, in Hong Kong.
At the meeting, Stephen Liu Yiu Keung and David Yen Ching Wai, the
company's liquidators, will give a report on the company's wind-up
proceedings and property disposal.
MAHA NIRVANA: Placed Under Voluntary Wind-Up Proceedings
--------------------------------------------------------
At an extraordinary general meeting held on April 4, 2011,
creditors of Maha Nirvana Buddhist Society (Hong Kong) Limited
resolved to voluntarily wind up the company's operations.
The company's liquidator is:
Cheung Hing Chik
Room 2907, West Tower
Shun Tak Centre
168-200 Connaught Road
Central, Hong Kong
MARPHIL COMPANY: Creditors' Proofs of Debt Due May 3
----------------------------------------------------
Creditors of Marphil Company Limited, 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 commenced wind-up proceedings on April 6, 2011.
The company's liquidator is:
Cheung Ko Man Lai
Room A, 6/F
47 Conduit Road
Hong Kong
MERIDIEN HOTELS: Members' Final Meeting Set for May 16
------------------------------------------------------
Members of Meridien Hotels (Hong Kong) Limited will hold their
final meeting on May 16, 2011, at 10:00 a.m., at 8th Floor,
Gloucester Tower, The Landmark, 15 Queen's Road Central, in Hong
Kong.
At the meeting, Iain Ferguson Bruce, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
OHNISHI DENKI: Creditors' Proofs of Debt Due May 12
---------------------------------------------------
Creditors of Ohnishi Denki (HK) Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by May 12, 2011, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on April 11, 2011.
The company's liquidator is:
Wong Chi Kin
Rooms 2017-8
Park-In Commercial Centre
56 Dundas Street
Mongkok, Kowloon
PRIME VIEW: Creditors' Proofs of Debt Due May 13
------------------------------------------------
Creditors of Prime View Industrial Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by May 13, 2011, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on April 14, 2011.
The company's liquidator is:
Lau Wai Yung Alice
Room 2402, 24/F
101 King's Road
Fortress Hill
Hong Kong
QUINWAY COMPANY: Members' Final Meeting Set for May 16
------------------------------------------------------
Members of Quinway Company Limited will hold their final meeting
on May 16, 2011, at 10:00 a.m., at 9/F, Tung Ning Building, 249-
253 Des Voeux Road Central, in Hong Kong.
At the meeting, Chan Shu Kin and Chow Chi Tong, the company's
liquidators, will give a report on the company's wind-up
proceedings and property disposal.
RIGHT CONNECTION: Commences Wind-Up Proceedings
-----------------------------------------------
Members of The Right Connection Limited, on April 8, 2011, passed
a resolution to voluntarily wind up the company's operations.
The company's liquidators are:
Cosimo Borrelli
Yuen Lai Yee
Level 17, Tower 1
Admiralty Centre
18 Harcourt Road
Hong Kong
SILVER TECH: Creditors' First Meeting Set for April 26
------------------------------------------------------
Members of Silver Tech (China) Limited will hold their first
meeting on April 26, 2011, at 3:00 p.m., at Room 2301, 23/F.,
Ginza Square, 565-567 Nathan Road, Kowloon, in Hong Kong.
STAR EAST: Members' and Creditors' Final Meetings Set for May 16
----------------------------------------------------------------
Members and creditors of Star East Culture Development Limited
will hold their final meetings on May 16, 2011, at 10:30 a.m., at
62/F, One Island East, 18 Westlands Road, Island East, in Hong
Kong.
At the meeting, Stephen Liu Yiu Keung and David Yen Ching Wai, the
company's liquidators, will give a report on the company's wind-up
proceedings and property disposal.
STAR EAST ON-LINE: Final Meetings Set for May 16
------------------------------------------------
Members and creditors of Star East On-line Limited will hold their
final meetings on May 16, 2011, at 11:00 a.m., at 62/F, One
Island East, 18 Westlands Road, Island East, in Hong Kong.
At the meeting, Stephen Liu Yiu Keung and David Yen Ching Wai, the
company's liquidators, will give a report on the company's wind-up
proceedings and property disposal.
=========
I N D I A
=========
AMBUJA PIPES: CRISIL Downgrades Rating on INR36MM Loan to 'B-'
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Ambuja Pipes Pvt Ltd to 'B-/Stable' from 'B+/Stable', while
reaffirming the rating on the short-term facilities at 'P4'.
Facilities Ratings
---------- -------
INR120.7 Million Cash Credit B-/Stable (Downgraded from
'B+/Stable')
INR36.0 Million Long-Term Loan B-/Stable (Downgraded from
'B+/Stable')
INR50.0 Million Letter of Credit P4 (Reaffirmed)
The downgrade reflects deterioration in APPL's liquidity because
of increasing working capital requirements, driven by increase in
inventory and longer debtor collection period over the past six
months. The downgrade also factors in CRISIL's belief that APPL's
liquidity will remain weak over the medium term because of large
incremental working capital requirements with increase in its
scale of operations.
The ratings reflect APPL's weak financial risk profile marked by
high gearing and weak debt protection measures, and small scale of
operations in the electric resistance welded (ERW) black and
galvanised pipes industry. These rating weaknesses are partially
offset by APPL's established relationships with customers and
suppliers, and sound track record in the ERW pipes segment.
Outlook: Stable
CRISIL believes that APPL will maintain its stable business risk
profile over the medium term, supported by its track record in the
ERW pipes market in Rajasthan. However, the company's financial
risk profile is expected to remain weak because of high gearing
and weak debt protection metrics. The outlook may be revised to
'Positive' if APPL's financial risk profile improves
significantly, with significant decline in gearing coupled with
increase in cash accruals. Conversely, the outlook may be revised
to 'Negative' if APPL's receivables cycle stretches further or if
the company undertakes a large, debt-funded capital expenditure or
acquisition programme, thereby weakening its capital structure.
About Ambuja Pipes
Incorporated in 1999, APPL manufactures ERW black and galvanised
pipes. The company's plant in Jaipur (Rajasthan) has production
capacity of 21,000 tonnes per annum, for pipes of diameters
ranging from 0.5 to 10 inches. The company's products are used in
the commercial, industrial, agricultural, and residential sectors.
APPL reported a profit after tax (PAT) of INR7.73 million on net
sales of INR623.79 million for 2009-10 (refers to financial year,
April 1 to March 31), against a PAT of INR13.07 million on net
sales of INR 567.98 million for 2008-09.
CLASSIC MICROTECH: CRISIL Places 'B-' Rating on INR9.9MM Term Loan
------------------------------------------------------------------
CRISIL has assigned its 'B-/Stable/P4' ratings to the bank
facilities of Classic Microtech Pvt Ltd.
Facilities Ratings
---------- -------
INR40.00 Million Cash Credit B-/Stable (Assigned)
INR9.90 Million Term Loan B-/Stable (Assigned)
INR50.00 Million Letter of Credit P4 (Assigned)
The ratings reflect CMPL's weak financial risk profile marked by
weak capital structure and debt protection metrics, large working
capital requirements, and small scale of operations. These rating
weaknesses are partially offset by the extensive experience of
CMPL's promoters in the tile industry in Gujarat.
Outlook: Stable
CRISIL believes that CMPL's financial risk profile, particularly
liquidity, will remain weak, as its working capital requirements
are expected to remain large over the medium term. The outlook
may be revised to 'Positive' if CMPL's revenue growth and cash
accruals are more than expected. Conversely, the outlook may be
revised to 'Negative' if there is further deterioration in
company's financial risk profile on account of lesser-than-
expected cash accruals leading to further weakening in liquidity
or larger-than-expected debt-funded capital expenditure (capex)
leading to weakening in capital structure.
About Classic Microtech
Incorporated in 2007, CMPL manufactures zirconium silicate and
zirconium flour, which are used in the ceramic and vitrified tile
industry for whitening and glazing tiles. Currently, CMPL has
4,200-tonne-per-annum capacity, which is being fully utilized, and
is enhancing its capacity by 2,400 tonnes, which is expected to be
operational by July 2011. The capacity enhancement involves a
capex of INR7.00 million, funded by debt of INR5.25 million.
The promoters also manufacture vitrified and wall tiles under the
group company Regent Granito India Ltd, and ceramic glaze under
the group company, Ricasil Ceramic Industries Pvt Ltd.
CMPL reported a profit after tax (PAT) of INR1.4 million on net
sales of INR155.1 million for 2009-10 (refers to financial year,
April 1 to March 31), against a PAT of INR1.5 million on net sales
of INR72.3 million for 2008-09.
GREENLEAF TOBACCO: CRISIL Raises Rating on Packing Credit to 'BB'
------------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Greenleaf Tobacco Threshers Ltd to 'BB/Stable' from 'BB-/Stable'.
Facilities Ratings
---------- -------
INR150 Million Export Packing Credit BB/Stable (Upgraded from
'BB-/Stable')
The upgrade reflects improvement in Greenleaf's business risk
profile, backed by the healthy demand for tobacco in the export
market and improvement in its revenue from processing and export
of tobacco. The company has been able to sustain the increase in
its scale of operations in 2009-10 (refers to financial year,
April 1 to March 31) and is expected to report moderate growth of
10 per cent in 2010-11. The upgrade also reflects CRISIL's belief
that Greenleaf will maintain its moderate financial risk profile,
backed by healthy cash accruals and absence of debt-funded capital
expenditure, over the medium term.
The rating reflects Greenleaf's large working capital requirements
and susceptibility to adverse regulatory changes and volatility in
foreign exchange rates. These rating weaknesses are partially
offset by Greenleaf's moderate financial risk profile, marked by
healthy gearing and comfortable debt protection metrics,
promoters' extensive experience in the tobacco industry, and
established customer relationships.
Outlook: Stable
CRISIL believes that Greenleaf will continue to benefit from its
established customer relationships, healthy demand for tobacco in
the export market, and the extensive experience of its promoters
in the tobacco industry, over the medium term. The outlook may be
revised to 'Positive' in case the company's financial risk profile
improves because of improved receivables or profitability.
Conversely, the outlook may be revised to 'Negative' if
Greenleaf's working capital requirements increase substantially,
or if the company's business is adversely affected by adverse
regulatory changes.
About Greenleaf Tobacco
Established as a private limited company in 1985 by Mr.
Shyamsundara Rao, Greenleaf was reconstituted as a closely held
public limited company in 1990. The company processes tobacco
leaves, mainly the flue-cured virgin and burley tobacco varieties.
The company has an in-house threshing capacity of 4000 kilograms
per hour (kg/hour), re-drying capacity of 3200 kg/hour, and
storage facilities spread over nine acres in Guntur (Andhra
Pradesh). Most of Greenleaf's customers are cigar and cigarette
manufacturers.
Greenleaf reported a profit after tax (PAT) of INR20.2 million on
net sales of INR492.4 million for 2009-10, as against a PAT of
INR5.3 million on net sales of INR151.7 million for 2008-09. For
2010-11, the company has reported on provisional basis revenues of
about INR541.0 million.
G.S. ALLOY: CRISIL Downgrades Rating on INR50MM Cash Credit to 'C'
------------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of G.S. Alloy Castings Ltd to 'C' from 'B+/Negative', while
reaffirming the rating on the short-term facility at 'P4'.
Facilities Ratings
---------- -------
INR50.0 Million Cash Credit Limit C (Downgraded from
B+/Negative)
INR5.0 Mil. Letter of Credit Limit P4 (Reaffirmed)
The downgrade is driven by instances of delays by GSAC in
servicing its term debt (not rated by CRISIL); the delays have
been caused by the company's weak liquidity. The downgrade also
factors in GSAC's high utilization of its bank lines, and its
stretched receivables.
GSAC has a weak financial risk profile, marked by stretched
liquidity and average gearing. It is also susceptible to customer
concentration, intense industry competition, and volatility in raw
material prices. These rating weaknesses are partially offset by
GSAC's established position in the castings industry, and its
promoters' extensive industry experience.
About of G.S. Alloy
Incorporated in 1987 and promoted by Mr. Prasada Rao, GSAC
manufactures alloy and steel castings that are used in the heavy
engineering industry. Its manufacturing unit at Vijayawada
(Andhra Pradesh) has a capacity to produce 18,000 tonnes of
castings per annum. It derives about 80 per cent of its revenues
from supply of castings to Bharat Heavy Electricals Ltd (rated
'AAA/Stable/P1+' by CRISIL) and Larsen & Toubro Ltd
('AAA/FAAA/Stable/P1+').
GSAC reported a profit after tax (PAT) of INR11.4 million on net
sales of INR639.9 million for 2009-10 (refers to financial year,
April 1 to March 31), as against a net loss of INR1.0 million on
net sales of INR583.0 million for 2008-09.
K J INFRASTRUCTURE: CRISIL Puts 'C' Rating to INR250MM Cash Credit
------------------------------------------------------------------
CRISIL has assigned its 'C/P4' ratings to the bank facilities of K
J Infrastructure Projects India Pvt Ltd.
Facilities Ratings
---------- -------
INR250.00 Million Cash Credit C (Assigned)
INR250.00 Million Bank Guarantee P4 (Assigned)
The ratings reflect instances of delay by KJIP in servicing its
equipments rated by CRISIL; the delays have been caused by the
company's weak liquidity. KJIP also has an average financial risk
profile, marked by a small net worth and a high gearing, a small
scale of operations in the infrastructure development industry,
and is susceptible to geographic concentration and to risks
associated with dependence on government projects. These rating
weaknesses are partially offset by KJIP's established presence in
the civil construction industry and comfortable order book.
About K J Infrastructure
Incorporated in 2008, KJIP belongs to the KJ Jadav group. The
company undertakes civil engineering activities, and is involved
in construction of dams, canals, roads, and thermal power plants,
and land development works for the government and private sector
players. KJIP renders its services to Maharashtra Industrial
Development Corporation, Central Railways, Maharashtra State
Electricity Board, and industrial players. Private players account
for about 1 per cent of KJIP's total revenues. The company's had
an order book of INR4647.7 million as on March 31, 2011.
KABRA PLASTICS: CRISIL Cuts Rating on INR90MM Cash Credit to 'BB-'
------------------------------------------------------------------
CRISIL has downgraded the rating on the long-term bank facility of
Kabra Plastics Ltd to 'BB-/Stable' from 'BB/Stable', while
reaffirming the rating on its short-term bank facility at 'P4+'.
Facilities Ratings
---------- -------
INR99.0 Million Cash Credit BB-/Stable (Downgraded from
'BB/Stable')
INR1.5 Million Bank Guarantee P4+ (Reaffirmed)
The downgrade reflects deterioration in KPL's business and
financial risk profiles, driven by decline in its operating
margin. Its operating margin has declined steadily, to around 4
per cent in 2010-11 (refers to financial year, April 1 to March
31) from 10.2 per cent in 2006-07, due to its inability to pass on
raw material price increases to its customers and the shifting of
its focus to lower-margin, working-capital-intensive trading
activities. Less-than-expected cash accruals have adversely
affected the debt protection metrics and liquidity of the company.
CRISIL believes that KPL's credit risk profile will remain weak
because of small cash accruals, on account of the increasing
contribution of its trading business to its revenues.
The ratings reflect KPL's weak financial risk profile, marked by
high gearing and weak debt protection measures, large working
capital requirements, and its limited pricing flexibility in the
fragmented and competitive packaging industry. These rating
weaknesses are partially offset by the extensive experience of
KPL's promoters in the packaging industry.
Outlook: Stable
CRISIL believes that KPL will maintain its business risk profile
over the medium term, backed by the increasing scale of its
operations. Its financial risk profile, marked by high gearing and
weak debt protection metrics, is, however, expected to remain
constrained because of small cash accruals with low operating
margins in the business. The outlook may be revised to 'Positive'
if KPL reports better-than-expected operating margin, leading to
better cash accruals and improvement in its working capital
management. Conversely, the outlook may be revised to 'Negative'
in case the financial risk profile of the company deteriorates on
account of a large, debt-funded capital expenditure programme, or
aggressive trading sales operations, resulting in a less-than-
expected operating margin, and leading to pressure on liquidity.
About Kabra Plastics
KPL was incorporated in 1995, promoted by Mr. Binod Kumar Kabra.
Mr. Kabra has been in the packaging industry since 19781 . KPL's
product profile comprises plain and metallised biaxially-oriented
polypropylene (BOPP) and polyvinyl chloride (PVC) films. Its
facility in Daman (Daman and Diu) has a total capacity to
manufacture 3000 tonnes per annum (tpa) of BOPP films and 1200 tpa
of PVC films, and a metallising capacity of 7200 tpa. The company
also trades in various types of films and this contributed to
around 47 per cent of its total sales for 2009-10.
For 2009-10, KPL reported a profit after tax (PAT) of INR5.9
million on net sales of INR1151.1 million, against a PAT of INR8.8
million on net sales of INR478.9 million for 2008-09.
KARLE INT'L: CRISIL Cuts Rating on Various Bank Loans to 'D'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Karle
International Pvt Ltd to 'D/P5' from 'BB/Stable/P4+'. The
downgrade reflects instances of delay by the Karle group in
servicing its debt; the delays have been caused by the group's
weak liquidity.
Facilities Ratings
---------- -------
INR500 Million Working Capital D (Downgraded from
Demand Loan 'BB/Stable')
INR335 Million Rupee Term Loan D (Downgraded from
'BB/Stable')
INR35 Million Proposed Working D (Downgraded from
Capital Demand Loan 'BB/Stable')
INR180 Million Letter of credit P5 (Downgraded from 'P4+')
& Bank Guarantee
The Karle group has a weak financial risk profile, marked by weak
capital structure and below-average debt protection metrics. The
group is also exposed to risks related to customer concentration
in its revenue profile. The group, however, benefits from its
strong track record, backed by global clientele, integrated
operations, and efficient supply chain management.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of KIPL and LT Karle. This is because the
two entities are in the same line of business, and have
operational linkages, including fungible cash flows.
About Karle International
The Karle group was promoted in 1972 as a fabric-exporting unit by
the late Mr. L T Karle. The group has expanded into the
manufacture of readymade garments, with four manufacturing units
in Bengaluru; the group has capacity to manufacture around 440,000
pieces of garments per month.
The Karle group reported a profit after tax (PAT) of INR38.7
million on net sales of INR1.63 billion for 2009-10, against a PAT
of INR38.2 million on net sales of INR2.02 billion for 2008-09.
KASHMIRI LAL: CRISIL Rates INR181.8 Million Cash Credit at 'BB-'
----------------------------------------------------------------
CRISIL has assigned its 'BB-/Stable' rating to the bank facilities
of Kashmiri Lal Satpal.
Facilities Ratings
---------- -------
INR181.8 Million Cash Credit Limit BB-/Stable (Assigned)
The rating reflects the Kashmiri Lal group's weak financial risk
profile, small net worth size, on account of its low operating
margin, and its susceptibility to raw material price risks. These
weaknesses are partially offset by the extensive experience of the
Kashmiri Lal group's promoters in the rice business, and its
established presence in the domestic market.
For arriving at its rating, CRISIL has consolidated the business
and financial risk profiles of KLS, M/s K S International, and M/s
Bajrang Bali Rice Mills, together referred to as the Kashmiri Lal
group. This is because the entities are under common management,
are in the same line of business, and there exist inter-company
transactions.
Outlook: Stable
CRISIL believes that the Kashmiri Lal group will benefit over the
medium term from its promoters' industry experience. Its financial
risk profile is, however, expected to remain weak, owing to large
working capital requirements. The outlook may be revised to
'Positive' in case of substantial improvement in the operating
margin and scale of operations. Conversely, the outlook may be
revised to 'Negative 'if the group's operating margin declines
further, thereby impacting its overall profitability.
About the Group
KLS was set up by Mr. Satpal Gupta (karta) in 1959 as a Hindu
undivided family (HUF). KLS is into milling and processing of
basmati rice in the domestic and export markets. The HUF is the
flagship entity of the Kashmiri Lal group. The rice milling and
processing plant in Taraori (Haryana) has a capacity of 8 tonnes
per hour (tph). The entity enhanced its capacity to 8 tph in
October 2010 from 5 tph. 70 to 80 per cent of the HUF's capacity
is utilised from October to March (the paddy harvest season) while
the utilisation level declines to 50 to 60 per cent from April to
September.
Parboiled rice contributes 80 to 90 per cent to KLS's revenues.
The domestic market accounted for 95 per cent of the KLS's total
sales in 2009-10 (refers to financial year, April 1 to March 31),
while exports to countries such as Saudi Arabia, Dubai, and Iran
accounted for the remainder. With a view to better utilise the
enhanced capacities, the management has increased its focus on the
overseas market, with a share of 45 to 50 per cent of gross sales
during the nine months of 2010-11.
Bajrang, set up in 1992, is engaged in milling and selling of
basmati rice in domestic market. The rice milling and processing
plant in Taraori (Haryana) has a capacity of 1.5 tph.
KSI, set up in 1996, is also engaged in milling and selling of
basmati rice in domestic market. The rice milling and processing
plant in Taraori (Haryana) has a capacity of 2.5 tph.
The Kashmiri Lal group reported a profit after tax (PAT) of
INR1.26 million on net sales of INR753.4 million for 2009-10
(refers to financial year, April 1 to March 31), against a PAT of
INR1.01 million on net sales of INR589.8 million for 2008-09.
N.K BHOJANI: CRISIL Reaffirms 'B+' Rating on INR115MM Cash Credit
----------------------------------------------------------------
CRISIL's ratings on the bank facilities of N K Bhojani Pvt Ltd
reflect the company's average operating margin because of its
marginal market share and exposure to cyclicality in the
fragmented steel industry. These rating weaknesses are partially
offset by NKB's above-average financial risk profile, marked by
comfortable gearing, adequate debt protection metrics, and
comfortable cash accruals.
Facilities Ratings
---------- -------
INR115.0 Million Cash Credit B+/Stable (Reaffirmed)
INR70.0 Million Proposed LT Loan B+/Stable (Reaffirmed)
INR20.0 Mil. Stand by Line of Credit P4 (Reaffirmed)
INR10.0 Million Letter of Credit P4 (Reaffirmed)
INR15.0 Million Bank Guarantee P4 (Reaffirmed)
Outlook: Stable
CRISIL believes that NKB will continue to maintain its above-
average financial risk profile over the medium term. However, the
business risk profile will remain constrained due to lack of
integration. The outlook may be revised to 'Positive' if NKB is
able to diversify its revenue profile while sustaining its
profitability. Conversely, the outlook may be revised to
'Negative' if the company's capacity utilization is less than
expected, which may adversely affect its operating margin, or if
the company undertakes a large debt-funded capital expenditure
programme, thereby adversely affecting its capital structure.
About N K Bhojani
Incorporated in 1996, NKB manufactures sponge iron with an
installed capacity of 36,000 tonnes per annum (tpa); its crusher
machines have a combined capacity to crush 208,000 tpa of iron
ore. NKB also undertakes iron ore mining works, and has a
dealership contract with Larsen & Toubro Ltd for spares sales and
service. NKB also had a MS ingot manufacturing plant with an
installed capacity of 48000 MTPA; the ingot unit was sold for a
consideration of INR75 million in November 2010,
NKB reported a profit after tax (PAT) of INR19.2 million on net
sales of INR925 million for 2009-10 (refers to financial year,
April 1 to March 31), as against a PAT of INR24.3 million on net
sales of INR1047 million for 2008-09.
PASCHIM HYDRO: CRISIL Downgrades Rating on INR207.4MM Loan to 'B+'
------------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Paschim Hydro Energy Pvt Ltd to 'B+/Stable' from 'BB-/Stable'.
Facilities Ratings
---------- -------
INR207.40 Million Long-Term Loan B+/Stable (Downgraded from
'BB-/Stable')
INR80.10 Million Proposed LT Loan B+/Stable (Downgraded from
'BB-/Stable')
The downgrade reflects deterioration in Paschim's liquidity
because of a decline in the plant load factor (PLF), leading to
lower cash accruals, and the support that the company extended to
its group entity. Paschim's PLF in 2010-11 (refers to financial
year, April 1 to March 31) is expected to decline to 31 per cent
from 35 per cent in 2009-10, because of low rainfall in Hassan
district (Karnataka). Furthermore, the company garners 85 to 90
per cent of its cash flows between July and December, resulting in
cash flow mismatches in the lean period between January and
June. In 2009-10, Pachim also diverted its cash flows of INR15
million as on March 31, 2010 to its group company, Nagarjuna Hydro
Energy Pvt Ltd, for commissioning the Kadamane Mini Hydel Scheme.
However, the loans and advances are expected to come back to
Paschim by June 15, 2011, to meet the installment due in June
2011.
The rating also reflects Paschim's average financial risk profile,
marked by a moderate gearing and average debt protection metrics,
and susceptibility to risks related to hydrology. These rating
weaknesses are partially offset by Paschim's stable revenues from
sale of power to Bangalore Electricity Supply Company Ltd.
Outlook: Stable
CRISIL believes that Paschim's liquidity will remain moderate over
the medium term on account of a lower-than-expected PLF in the
upcoming summer months. However, CRISIL expects the loans and
advances extended to the group company to come back to Paschim
before the end of June 2011. The outlook may be revised to
'Positive' if the company operates at a higher PLF, enabling
better cash flows. Conversely, the outlook may be revised to
'Negative' if Paschim's liquidity deteriorates because of subdued
cash accruals or further diversion of funds to its group entities,
or if the company undertakes any large debt-funded capital
expenditure (capex) programmes.
About Paschim Hydro
Paschim was set up in 2002 as a special purpose vehicle (SPV) by
the promoters of MVK Energy Pvt Ltd (MVK), Mr. M Srinivas and Mr.
K Vijay Kumar. Paschim has set up Kadamane Mini Hydel Scheme
(KMHS-1), a 9-megawatt (MW) hydro-power project across the
Kadamane stream, near Kemp Hole, in Karnataka. The stream is a
tributary of the River Nethravathy. The project was allotted by
the Government of Karnataka on a build-own-operate-and-transfer
basis in 2004. The ownership of the unit is with Paschim for 30
years. Paschim signed a power purchase agreement with Karnataka
Power Transmission Corporation Ltd in November 2004 for 30 years
from the commercial operation date. The promoters also own another
SPV named Nagarjuna Hydro Energy Pvt Ltd, which is setting up a
2x7.5-MW hydropower plant called Kadamane Mini Hydel Scheme in
Karnataka.
Paschim reported a profit after tax (PAT) of INR5.20 million on
net sales of INR81.15 million for 2009-10, against a PAT of
INR12.9 million on net sales of INR74.5 million for 2008-09.
SIDHI VINAYAK: CRISIL Reaffirms 'BB+' Rating on INR90MM Term Loan
-----------------------------------------------------------------
CRISIL's rating on the bank facilities of Sidhi Vinayak Metcom Ltd
continues to reflect SVML's marginal market share and
susceptibility to cyclicality in the steel industry, and the lack
of integration in operations. These rating weaknesses are
partially offset by SVML's moderate business risk profile,
supported by its proximity to raw material sources and end-user
industry.
Facilities Ratings
---------- -------
INR85.0 Million Cash Credit BB+/Stable (Reaffirmed)
INR90.0 Million Term Loan BB+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SVML will maintain its financial risk profile
over the medium term, supported by its moderate gearing and debt
protection metrics. The outlook may be revised to 'Positive' if
there is a significant increase in SVML's revenues and
profitability or greater integration in its operations.
Conversely, the outlook may be revised to 'Negative' if SVML's
capacity utilization declines, leading to weak operating margin,
or if the company undertakes a large, debt-funded capital
expenditure programme, leading to deterioration in its capital
structure.
Update
SVML's plan to add its third sponge-iron kiln and waste-heat
recovery unit (capacity of 100 million tonnes per annum [mtpa]) in
2010-11 (refers to financial year, April 1 to March 31) got
delayed because of downturn in the steel industry; the unit is
expected to commence operations by end of 2012-13. The project
cost is expected to be around INR500 million (70 per cent debt
funded). The company's liquidity is adequate, as reflected in its
bank limit utilization of around 72 per cent on an average between
January 2010 and February 2011. The company's working capital
limits have been enhanced to INR85.0 million in July 2010 from
INR47.5 million. Also, its net cash accruals are estimated to be
sufficient to service its maturing term debt obligations over the
medium term period.
SVML's profit after tax (PAT) and net sales are estimated to be
INR6.0 million and INR505.0 million respectively for 2010-11; the
company reported a PAT of INR4.2 million on net sales of INR500.0
million for the previous year.
About Sidhi Vinayak
SVML was set up by Mr. Manoj Kumar Agrawal, Mr. Vijay Kumar
Mittal, Mr. Shivjee Singh, and Mr. Shankar Lal Agarwal in
Jamshedpur (Jharkhand) in 2004. The company produces sponge iron;
it has two sponge iron kilns, with a combined capacity of 60,000
tonnes per annum (tpa). The company has plans to set up another
sponge iron kiln with capacity of 30,000 tpa and a waste heat
recovery power plant of 8 megawatt for a total cost of INR500
million, expected to be funded in a debt-equity ratio of 7:3.
SKYLARK MANSIONS: CRISIL Rates INR200 Million LT Loan at 'B+'
-------------------------------------------------------------
CRISIL has assigned its 'B+/Stable' rating to the bank loan
facility of Skylark Mansions Pvt Ltd.
Facilities Ratings
---------- -------
INR200.00 Million Proposed LT Loan B+/Stable (Assigned)
The rating reflects SMPL's susceptibility to risks related to the
completion and saleability of its ongoing real estate projects in
Bengaluru (Karnataka), and cyclicality in the Indian real estate
industry. This rating weakness is partially offset by the
extensive industry experience of SMPL's promoters and its healthy
project completion capabilities.
Outlook: Stable
CRISIL believes that SMPL will continue to benefit over the medium
term from its promoters' extensive experience in the residential
real estate construction segment. The outlook may be revised to
'Positive' if SMPL generates larger-than-expected cash flows
resulting from earlier-than-scheduled completion of its ongoing
projects, or if it benefits from higher-than-expected sales
realizations from its ongoing projects. Conversely, the outlook
may be revised to 'Negative' in case of delays in the projects or
receipt of booking advances from customers, or a significant fall
in sales realizations, or if the company takes up a large debt-
funded project.
About Skylark Mansions
Set up in 1992, the Bengaluru-based SMPL is in the real estate
construction business. SMPL is implementing two projects (Skylark-
Arcadia phase I and Skylark-Zenith) in Bengaluru. SMPL commenced
the Skylark-Arcadia phase I, a luxury villas project in August
2009, and the project is scheduled to be completed by December
2011. The Skylark arcadia project includes saleable area of 177553
square feet (sft). As at March 31, 2011, the company has completed
52 per cent of the construction. SMPL also commenced Skylark
Zenith, a residential-cum-commercial project during January 2010
and the project is scheduled for completion by April 2012. The
residential project includes a saleable area of 110000 sft and the
commercial projects involve commercial space of 110000 sft. The
company has completed around 35 per cent of construction of
Skylark Zenith project.
SMPL reported a profit after tax (PAT) of INR4 million on net
sales of INR49 million for 2009-10 (refers to financial year,
April 1 to March 31) as against a PAT of INR1 million on net sales
of INR24 million for 2008-09.
VEDANTA RESOURCES: Moody's Continues Review of Ratings
------------------------------------------------------
Moody's Investors Service has continued to place on review for
possible downgrade the Ba1 corporate family rating and Ba2 senior
unsecured rating of Vedanta Resources plc.
The rating view was initiated on Aug. 17, 2010, after Vedanta had
announced the proposed acquisition of a controlling stake (of up
to 60%) in Cairn India Ltd. (CIL) for $9.6 billion or less. On
Dec. 21, 2010, Moody's announced the continuation of its review of
Vedanta.
On April 7, 2011, the seller, Cairn Energy Plc and Vedanta agreed
to extend the completion date deadline from April 15 to May 20,
2011. This was as a result of further delays in the regulatory
approval process. The Government of India's (GoI) final decision
is still awaited and the outcome is in the hands of a special
ministerial panel. Moody's notes that Vedanta reports its results
for the year to March 31, 2011 on May 5, while Cairn Energy will
issue an interim management statement, and usually holds its AGM
for shareholders, in late May.
As described in our December note, the $6 billion of debt
financing to be guaranteed by Vedanta Resources Plc for the
transaction is in place, Additionally, Sesa Goa's open offer for
CIL shares is now underway following clearance from the Securities
and Exchange Board of India (SEBI). Vedanta is using its listed
subsidiary, Sesa Goa Ltd. (55.7%-owned), as a funding vehicle to
acquire a 20% stake in Cairn India, by drawing on its cash on hand
and raising short-term funds.
Nevertheless, Moody's would not be surprised if the acquisition of
a majority interest in CIL failed to occur. The royalty issue
between CIL and ONGC (74%-owned by GoI) had been a point of
contention for some time prior to Vedanta's approach to CIL. In
essence, ONGC pays the royalty on all the fields' outputs whereas
its production share is only 30%. While there is a contract in
place to underpin the arrangement, a change in control of CIL
represents an opportunity for such contracts to be closely
scrutinized. However, Vedanta's track record of negotiation
suggests that it is unlikely to budge from its position and will
walk away if it perceives a material change in value.
The operational performance of both Vedanta and CIL have been
buoyed by the continuation of strong commodity prices into Q1
2011. Crude oil was trading around $75/barrel in August 2010 and
is now some $110/barrel. Moody's estimates the current EBITDA run
rate for Vedanta to be around $900 million per quarter and that
for CIL over $500 million per quarter.
However, the CIL deal sees the complex structure of Vedanta
persist, with the CIL ownership interests to be split between Sesa
Goa (holding up to 20%) and an offshore SPV holding between 31-
40%. Substantial minority shareholders in both listed and un-
listed subsidiaries continue to populate the Vedanta Group
structure, from the UK Plc to the Indian operating companies, and
in order to protect ownership levels, debt is invariably the first
choice for new funds.
Vedanta's strategy remains opportunistic and difficult to predict,
but its track record in the execution of acquisitions and organic
growth has been good. Its recent purchase of a small, part-built
steelworks in Karnataka, India, for $50 million is partly in
response to the growing pressures on the export of iron ore but
Moody's expects Vedanta's investment in steel to grow over time.
The acquisition of CIL represents a challenge for Vedanta as the
risk and time profiles of the oil and gas, exploration and
production sector are different from those of its hard minerals
business. However, the execution risk is somewhat mitigated by
the retention of existing management and the onshore location of
the producing wells. Nevertheless, CIL is a larger company by
market capitalization ($14.7 billion) than Vedanta ($10.1 billion)
and the relative size of the transaction elevates the risks for
Vedanta.
Moody's notes the proposed addition of debt at the Parent company
level to fund the CIL purchase and the implications this has for
subordination within the Group. The balance between priority debt
at operating subsidiaries and the Parent may well be better after
the transaction, but this serves to highlight the thinly
capitalized Parent. Furthermore, the Parent's sources of cash are
unpredictable. The senior unsecured rating of Vedanta Resources
Plc is currently set at one notch below the corporate family
rating (CFR) and this is not expected to change.
The review will conclude once the outcome of the CIL acquisition
is known. Moody's expectations are for Vedanta's CFR to be
lowered by one notch if Vedanta succeeds, based on the existing
terms, and for the CFR to remain at its current level if the deal
falls through. However, in both circumstances Vedanta's credit
profile at these rating levels would be challenged.
The principal methodology used in rating Vedanta is Rating
Methodology on Global Mining Industry published in May 2009, and
available on www.moodys.com in the Rating Methodologies sub-
directory under the Research & Ratings tab. Other methodologies
and factors that may have been considered in the process of rating
this issuer can also be found in the Rating Methodologies sub-
directory on Moody's website.
Headquartered in London, UK, Vedanta Resources plc is a metals and
mining company focusing on integrated zinc, aluminum, copper, iron
ore mining and commercial power generation. Its operations are
predominantly located in India. It is listed on the London Stock
Exchange and is 59.67% owned by Volcan Investments Ltd.
=========
J A P A N
=========
CSC SERIES: S&P Puts 'CCC' Ratings on Four Classes of Bonds
-----------------------------------------------------------
Standard & Poor's Ratings Services kept the ratings on the class
A-2 to F-3 bonds issued under the CSC, Series 1 GK transaction on
CreditWatch with negative implications. "We lowered to 'D (sf)'
our ratings on the interest-only class X bonds and the class G-3
bonds, which were issued under the same transaction, on
Feb. 1, 2011, and Feb. 17, 2011," S&P related.
"Since Jan. 7, 2011, we have kept the ratings on classes A-2 to
F-3 on CreditWatch negative because we wanted to ascertain the
possible impact of the allocation between principal and interest,
which caused the missed interest payment on class X, as well as
the impact of step-up coupons after the expected maturity date,"
S&P noted.
S&P continued, "We have learned that the massive earthquake that
struck northeastern Japan on March 11, 2011, caused damage to the
property (a retail facility in Miyagi Prefecture) backing one of
the transaction's remaining loans (the loan originally represented
about 8% of the total initial issuance amount of the bonds), which
has defaulted. In addition, given the extent of the damage, it
has become clear that we need to revise downward our assumption
with respect to the likely collection amount from the property in
question. Indeed, although some of the tenants of the facility
have resumed operations, a portion of the premises remains
unusable. We believe that restoring the facility to its former
condition may require a certain amount of time and expenditure."
"Nevertheless, it is our view that even if we lower our assumption
with regard to the likely collection amount from the damaged
property, there should be no impact on the ratings of classes
other than class C and more subordinate classes. This is because:
(1) We had already assumed that the principal of the related loan
would be largely impaired; and (2) the transaction's credit
enhancement levels are improving as principal payments are made on
the transaction's other remaining loans. We kept the ratings on
classes A-2 to F-3 on CreditWatch with negative implications as we
want to continue to ascertain the possible impact of the
allocation between principal and interest, the impact of step-up
coupons after the expected maturity date, as well as the full
extent of the damage to the property," S&P stated.
Thirteen of the remaining collateral properties relating to this
transaction are located in Iwate, Miyagi, and Fukushima
prefectures--the three prefectures that were most affected by the
earthquake and tsunami. "We have learned through a report that we
received from the servicer that the properties in these
prefectures, other than the retail facility, suffered relatively
little damage. Even so, we need to consider the potential
negative effects of the earthquake and tsunami with respect to
sales activities for the properties relating to this transaction.
The ratings on the tranches of this transaction may come under
downward pressure if sales activities are largely affected,"
according to S&P.
CSC, Series 1 GK is a multiborrower commercial mortgage-backed
securities (CMBS) transaction. The bonds were initially secured
by 11 nonrecourse loans, which were actually treated as six loans,
extended to six obligors. The loans were originally backed by 72
real estate trust certificates and real estate properties. The
transaction was arranged by Credit Suisse Securities, and ORIX
Asset Management & Loan Services Corp. is the servicer for the
transaction.
The ratings address the full and timely payment of interest and
the ultimate repayment of principal by the transaction's legal
final maturity date in November 2012 for the class A-2 and A-3
bonds, and the full payment of interest and ultimate repayment of
principal by the legal maturity date for the class B-2 to G-3
bonds.
Ratings Kept on CreditWatch Negative
Class Rating Initial issue amount
A-2 AAA (sf)/Watch Neg JPY18.1 bil.
A-3 AAA (sf)/Watch Neg JPY3.9 bil.
B-2 A- (sf)/Watch Neg JPY1.7 bil.
B-3 A- (sf)/Watch Neg JPY1.5 bil.
C-2 B- (sf)/Watch Neg JPY3.2 bil.
D-2 CCC (sf)/Watch Neg JPY3.2 bil.
E-2 CCC (sf)/Watch Neg JPY0.9 bil.
E-3 CCC (sf)/Watch Neg JPY0.6 bil.
F-3 CCC (sf)/Watch Neg JPy1.9 bil.
GK L-JAC4: S&P Gives Six Classes of Notes 'B-' Ratings under Watch
------------------------------------------------------------------
Standard & Poor's Ratings Services placed on CreditWatch with
negative implications its ratings on the class A-2 to G-3 bonds,
which were issued under the G.K. L-JAC4 Funding (L-JAC4)
transaction on May 31, 2007.
Of the five underlying loans (effectively three loans) that
initially backed the bonds when they were issued in May 2007, a
single loan remains (the loan, which is due to mature in May 2013,
originally represented about 34% of the total initial issuance
amount of the bonds).
The transaction's remaining loan is backed by a metropolitan
resort hotel in Urayasu City, Chiba Prefecture. "We placed
classes A-2 to G-3 on CreditWatch negative because we need to
ascertain the full impact on the property of the devastating
earthquake that struck northeastern Japan on March 11, 2011," S&P
stated.
The hotel, which had been temporarily closed because facilities
located nearby suspended operations following the Japanese
earthquake, has already partially reopened. Under the
transaction, a liquidity reserve is established at the loan level
to provide support to the transaction if cash flows deteriorate,
causing delays in rent payments. In addition, at the transaction
level, an advance will be provided in accordance with the
transaction agreement. As such, the transaction is structured to
ensure timely payments of interest on the bonds, provided delays
in rent payments do not become protracted.
"Nevertheless, it is our view that we need to ascertain the effect
of the temporary closure of the hotel with respect to future rent
payments and future cash flows because: (1) Some of the hotel
rooms need to be repaired, and (2) achieving stable cash flow may
require a certain amount of time in light of a number of factors,
primarily overall electric power supply capacity and demand for
hotel rooms," S&P related.
"Meanwhile, in analyzing the transaction, we did not take into
account the advance because it does not satisfy our counterparty
criteria," S&P noted.
L-JAC4 is a multiborrower commercial mortgage-backed securities
(CMBS) transaction. The bonds were originally secured by five
nonrecourse loans extended to three sponsors. The loans were
initially backed by 34 properties. The transaction was arranged
by Lehman Brothers Japan Inc., and Premier Asset Management Co.
acts as the servicer for this transaction.
Standard & Poor's ratings address the full and timely payment of
interest and the ultimate repayment of principal by the
transaction's legal final maturity date in May 2015 for the class
A-2 to G-3 bonds.
Ratings Placed on CreditWatch Negative
G.K. L-JAC4 Funding
JPY78.7 billion floating-rate/fixed-rate bonds due May 2015
Class To From Initial issue amount
Coupon
A-2 A+ (sf)/Watch Neg A+ (sf) JPY25.0 bil. Floating
B-2 BB+ (sf)/Watch Neg BB+ (sf) JPY5.2 bil. Floating
C-2 B- (sf)/Watch Neg B- (sf) JPY4.8 bil. Floating
D-3A B- (sf)/Watch Neg B- (sf) JPY1.0 bil. Floating
D-3B B- (sf)/Watch Neg B- (sf) JPY2.3 bil. Fixed
E-3 B- (sf)/Watch Neg B- (sf) JPY1.2 bil. Fixed
F-3 B- (sf)/Watch Neg B- (sf) JPY1.1 bil. Fixed
G-3 B- (sf)/Watch Neg B- (sf) JPY0.4 bil. Fixed
Classes A-1, B-1, C-1, D-1, D-2, E-1, E-2, F-1, F-2, G-1, and G-2
have already been fully redeemed. "We withdrew our ratings on the
class X-1 and X-2 certificates on Oct. 29, 2010," S&P added.
JLOC 36: Fitch Downgrades Class C & D Notes; Affirms Other Notes
----------------------------------------------------------------
Fitch Ratings has downgraded JLOC 36 LLC class C and D notes due
February 2016 and affirmed the others. The transaction is a
Japanese multi-borrower type CMBS securitisation. The rating
actions are:
JPY14,461m* Class A1 affirmed at 'AAAsf'; Outlook Stable
EUR33m* Class A2 affirmed at 'AAAsf'; Outlook Stable
USD4m* Class A3 affirmed at 'AAAsf'; Outlook Stable
JPY4,803m* Class B affirmed at 'AA-sf'; Outlook revised to
Stable from Negative
JPY2,543m* Class C1 downgraded to 'BBB-sf" from 'BBB+sf';
Outlook Negative
EUR17m* Class C2 downgraded to 'BBB-sf' from 'BBB+sf'; Outlook
Negative
JPY3,037m* Class D downgraded to 'Csf' from 'CCsf'; Recovery
Rating revised to 'RR4' from 'RR3'
*as of April 15, 2011
Fitch has also withdrawn the rating of 'AAAsf'/Outlook Stable on
class X notes (interest-only), following the agency's revised
practice for rating interest-only debt.
The downgrade of the class C notes reflects Fitch's downward
revision of the value of many properties remaining within the
portfolio. For the purpose of rating analysis, Fitch has applied
greater stress to the property value given that the underlying
loans are approaching maturity or in default. At the same time,
Fitch has downwardly revised expected cash flow from certain
properties.
The downgrade of the class D notes reflects Fitch's view that
principal loss on the notes is inevitable. Following the
determination of principal loss from two defaulted loans whose
collateral properties have already been sold, the class D note
principal will be written down.
The class A and B notes have been affirmed as four properties
backing defaulted loans were sold since the last rating action in
April 2010, the proceeds of which have been and will be applied to
repay the notes on a sequential basis. This repayment has offset
the negative impact from the revision of property valuation.
The transaction is now backed by 23 non-recourse loans secured by
a total of 63 commercial properties in Japan and the sale proceeds
of one sold property. At closing the transaction was backed by 34
loans secured by 99 properties. According to information provided
by the servicer, there has been no significant damage to any of
the collateral properties to date from the recent earthquake.
=========
K O R E A
=========
* SOUTH KOREA: Urges Banking Groups to Help Troubled Builders
-------------------------------------------------------------
Yonhap News reports that South Korea's top financial regulator
prodded banking group chiefs Monday to provide financial support
to liquidity-squeezed builders reeling from a prolonged property
market slump.
According to the news agency, the call came as a bunch of
builders, including Sambu Construction Co., applied for court
receivership after failing to repay loans borrowed to finance
their construction projects. Yonhap says major local banks have
been blamed for aggravating builders' troubles by refusing to roll
over maturing loans or forcing them to repay their loans.
"As seen in the case of Sambu Construction, the financial sector's
response to builders' project financing (PF) loan issues has been
passive," Yonhap quotes Financial Services Commission (FSC)
Chairman Kim Seok-dong as saying at a breakfast meeting with
chairmen of five local financial groups. "And that is feared to
trigger difficulties on builders' business management."
Yonhap notes that KB Financial Group Inc. Chairman Euh Yoon-dae,
KDB Financial Group Inc. Chairman Kang Man-soo and three other
heads from Woori Finance Holdings Co., Hana Financial Group Inc.
and Shinhan Financial Group Co. attended the meeting.
In a bid to dissolve soured PF loans to builders and help banks
issue further support, the Financial Supervisory Service (FSS),
the FSC's executive body, will consider setting up a bad debt
clearing house, an FSS official told Yonhap.
"The five leading banking groups will mainly chip in money to the
bad bank, if established," Joo Jae-seong, a vice FSS governor,
said after attending the meeting, according to Yonhap.
The debt clearing body is likely to be set up by the second
quarter in order to pick up distressed loans off local banks'
balance sheets, another FSS official told Yonhap.
The plan came as commercial banks, mutual savings banks and other
financial institutions suffered a massive increase on their
defaulted construction PF loans.
As of the end of 2010, the local financial sector had a total of
KRW9.7 trillion (US$8.9 billion) in soured PF loans, nearly
tripling from KRW3.4 trillion a year earlier, Yonhap discloses.
===============
M A L A Y S I A
===============
GULA PERAK: Infra Purnama Serves Wind-Up Petition
-------------------------------------------------
Gula Perak Berhad has received a winding up petition from Infra
Purnama Sdn Bhd. The Petition was presented to the Shah Alam High
Court on March 15, 2011, and was served on April 15, 2011.
Infra Purnama asserts a MYR4,004,459.70 claim plus interest of 5%
per annum from GPB for renovation and general construction works
rendered.
The winding up proceeding will have a major impact on the
financial and operational aspects of the Company.
The Company is seeking to negotiate and settle the matter out of
court and is seeking legal advice.
The matter is fixed for hearing on May 18, 2011.
About Gula Perak
Gula Perak Berhad is a Malaysia-based company. The Company is
engaged in construction works, trading in construction materials
and property development. The principal activities of the
subsidiary companies consist of hotel operations and management,
service apartment operations and management and property
development. The Company operates in two segments: Hotel
operations, under which the Company owns and operates the Dynasty
Hotel, Kuala Lumpur and Empress Hotel, Sepang, Selangor; and
Construction and property development, under which the Company is
engaged in construction and development of industrial properties.
Its subsidiaries include Dynawell Corporation (M) Sdn. Bhd., KSB
Requirements & Rest Sdn. Bhd., Gula Perak Land Sdn. Bhd. and Dyna
Enterprise International Ltd.
Gula Perak Berhad has been listed as an Amended Practice Note 17
company as the Company was not able to provide a solvency
declaration to Bursa Malaysia.
HO HUP CONSTRUCTION: Disposes Shares in 8 Subsidiaries
------------------------------------------------------
Ho Hup Construction Company Berhad on April 13, 2011, entered into
an Agreement with Gerhana Prestij Sdn. Bhd. to dispose of the
shares held in the subsidiaries and associate companies of Ho Hup,
at a total consideration of MYR8.00:
No. of Par Value % of
Company shares per Share Holding
------- ----- -------- --------
Mekarani Heights Sdn. Bhd. 2 MYR1.00 100
Intermax Resources Sdn. Bhd. 2 MYR1.00 100
Ho Hup Geotechnics Sdn. Bhd. 2 MYR1.00 100
Hupcon Antarabangsa Sdn. Bhd. 2 MYR1.00 100
Timeless Element Sdn. Bhd. 2 MYR1.00 100
Semenyih Brickmakers Sdn. 5,000,000 MYR1.00 49
Bhd.
Ho Hup Corporation (Mauritius) 50,000 USD0.50 100
Ltd.
Ho Hup Corporation (South 100 Rand 1.00 100
Africa) Pty. Ltd.
Following the Disposals, all these companies will cease to be the
subsidiaries and associated companies of Ho Hup.
The Disposals are part of the proposed restructuring exercise and
application to the High Court of Malaya at Kuala Lumpur, wherein
Ho Hup had subsequently on Oct. 20, 2010, been granted an order
pursuant to Sections 176(1) and 176(10) of the Companies Act,
1965.
The Disposals are conditional upon these being obtained within
ninety days from the date of the Agreement:
(a) The approval of the Board of Directors of Ho Hup to
dispose of the shares in its subsidiaries and associated
companies pursuant to the terms and conditions of the
Agreement;
(b) Ho Hup obtaining the sanction of the High Court of Malaya
at Kuala Lumpur pursuant to the Orders to dispose of the
shares in its subsidiaries and associated companies; and
(c) Ho Hup waiving all intercompany advances, loans and debts
that are owing by its subsidiaries and associated companies
to Ho Hup and/or its remaining subsidiaries.
The Disposals will neither have any effect on the share capital
and substantial shareholding of Ho Hup nor have any material
effect on earnings, net assets or gearing of Ho Hup group for the
current financial year. None of the Directors and/or major
shareholders of the Company or persons connected to them have any
interest, direct or indirect in the Disposals.
The Board of Directors of the Company, having taken into
consideration all aspects of the Disposals, is of the opinion that
the Disposals are in the best interest of Ho Hup group.
Ho Hup Construction Company Berhad is engaged in foundation
engineering, civil engineering, building contracting works and
hire of plant and machinery. The Company operates in four
segments: construction, which is engaged in foundation and civil
engineering, building contracting works and engineering,
procurement, construction and commissioning of pipeline system;
property development, which includes the development of
residential and commercial properties; manufacturing, which
includes manufacturing and distribution of ready-mixed concrete;
and other business segment, which represents hire of plant and
machinery. The Company's subsidiaries include H2Energy
Corporation Sdn Bhd, Tru-Mix Concrete Sdn Bhd, Bukit Jalil
Development Sdn Bhd and Ho Hup Equipment Rental Sdn Bhd.
* * *
Ernst & Young expressed a disclaimer opinion in the Company's 2007
audited financial statements. As a result, the Company became an
affected listed issuer pursuant to paragraph 2.1 of the PN17/2005.
The auditors cited factors that indicate the existence of material
uncertainties, which may cast significant doubt on the ability of
the group and the company to continue as a going concern.
TRACOMA HOLDINGS: Has Until May 4 to Submit Debt Revamp Scheme
--------------------------------------------------------------
The Corporate Debt Restructuring Committee has granted Tracoma
Holding Bhd an extension of time to complete the Company's
proposed debt restructuring scheme with its creditors until
June 1, 2011, subject to Tracoma having appointed a Principal
Advisor by April 20, 2011. Tracoma has to submit the proposed
debt restructuring scheme to CDRC by May 4, 2011.
About Tracoma Holdings
Tracoma Holdings Berhad is a Malaysia-based manufacturer and
supplier of automotive parts and components. Some of its wholly
owned subsidiary companies include Tracoma Sdn. Bhd., which is
engaged in manufacturing of automotive components; Malaysian Die-
Makers Sdn. Bhd., which is engaged in die making and servicing;
Trends Mecha Sdn. Bhd., which is engaged in parts and car design,
and Malaysian Farm Machinery Sdn. Bhd., which is engaged in
assembling and distributing agricultural tractors.
* * *
Tracoma Holdings Berhad has been classified as an Affected Listed
Issuer under Practice Note 17 of the Listing Requirements of Bursa
Malaysia Securities Berhad.
The company has triggered PN17's Paragraph 8.04 and Paragraph
2.1(a) as the consolidated shareholders' equity for the full
financial year ended December 31, 2009, is less than 25% of the
Company's issued and paid-up capital and such shareholders' equity
is less than MYR12 million.
*********
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.
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