TCRAP_Public/110519.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, May 19, 2011, Vol. 14, No. 98

                            Headlines



A U S T R A L I A

FINCORP CORP: Former Finance Director Not Guilty of Breach
INTERFERT: Goes Into Administration on Failed Financing
PAPERLINX LIMITED: Expects Up to $30 Million Annual Loss for 2011
PETTAVEL: Closes Restaurants, Axes 29 Jobs


C H I N A

CHINA TEL GROUP: Tay Lee Owns 16.4% of Series A Shares
CHINA TEL GROUP: George Alvarez Owns 50% of Series B Shares


H O N G  K O N G

CHINA CHASE: Court Enters Wind-Up Order
FEALTY COMPANY: Creditors' Proofs of Debt Due June 3
GREAT PACIFIC: Court Enters Wind-Up Order
GREAT PACIFIC TEXTILE: Court Enters Wind-Up Order
H.K. ZHONG: Court Enters Wind-Up Order

HING WAH: Court Enters Wind-Up Order
INCORPORATED OWNERS: Creditors' Proofs of Debt Due June 3
INTERSMART INTERNATIONAL: Court Enters Wind-Up Order
MINIGRAND LIMITED: Court Enters Wind-Up Order
NATIONBUILD PACIFIC: Court Enters Wind-Up Order

NEW COLOR: Court Enters Wind-Up Order
PALMSOURCE HK: Seng and Lo Step Down as Liquidators
PCI EXPRESS: Members' Final Meeting Set for June 13
RIGEL NAVIGATION: Wong and Ngan Step Down as Liquidators
SILVERY TARGET: Seng and Lo Step Down as Liquidators

WILLWAY INTERNATIONAL: Commences Wind-Up Proceedings
WORLD CARNIVAL: First Meetings Slated for May 27
YEE KING: Yeung Kwong Tat Appointed as Liquidator


I N D I A

AIR INDIA: Meets Cabin Crew's Demands
AIR INDIA: Seeks Approval to Issue INR5,500cr Bonds to Banks
AKSHATA MERCANTILE: CARE Assigns 'CARE BB+' Rating to INR45cr Loan
CEE DEE VACUUM: ICRA Assigns 'LBB' Rating to INR18cr Bank Loan
COMPULEARN TECH: CARE Assigns 'CARE BB+' Rating to INR9cr Loan

ESHWAR TRUST: ICRA Assigns 'LB' Rating to INR10.22cr Term Loan
GAYATRI BIO-ORGANICS: CARE Rates INR49.25cr LT Loan at 'CARE B+'
INDIA LAND: CARE Reaffirms 'CARE BB-' Rating on INR37.63cr Loan
SAIKRUPA SAKHAR: CARE Rates INR208.46cr LT Loans at 'CARE BB+'
SANGHVI INTERNATIONAL: ICRA Rates INR3.5cr Bank Loans at 'LBB-'

UNI SOURCCE: ICRA Assigns 'LBB-' Rating to INR1.9cr Term Loan


I N D O N E S I A

MERPATI AIRLINES: Restructuring to Continue Despite Crash
PT SULFINDO: S&P Lowers CCR to 'CCC'; Outlook is Developing


J A P A N

CSC SERIES: Fitch Downgrades Ratings on Eight Classes of Bonds
JLOC VII: S&P Lowers Rating on Class D Notes to 'D'


K O R E A

KOREA EXCHANGE: FSC Delays Lone Star Sale Plan Approval


P H I L I P P I N E S

PHILIPPINE AIRLINES: Union Seeks ILO Intervention


V I E T N A M

VIETNAM SHIPBUILDING: Creditors Demand $60 Million Payment




                            - - - - -


=================
A U S T R A L I A
=================


FINCORP CORP: Former Finance Director Not Guilty of Breach
----------------------------------------------------------
The Australian Securities and Investments Commission said that the
former finance director of Fincorp Investments Limited was on
May 17, 2011, found not guilty of breaching his duties as a
company director.

Jacob Quigley faced Sydney District Court in relation to one
alleged offence against s.184(2)(a) of the Corporations Act.

The charge related to an allegation that Mr. Quigley dishonestly
used his position as a company director to sign a cheque for
AU$1,980,000 with the intention of gaining an advantage for
himself and others.

Mr. Quigley's co-director Eric Krecichwost, who was chairman and
chief executive of Fincorp, was found guilty earlier this year of
three offences against s.184(2)(a) of the Corporations Act,
including one for acting dishonestly in relation to the same  
AU$1,980,000 cheque.

Mr. Krecichwost is currently serving a prison sentence of a
maximum three and a half years.

Both trials were prosecuted by the Commonwealth Director of Public
Prosecutions.

                          About Fincorp

Fincorp Group -- http://www.fincorp.com.au/-- is a boutique
funds management and property development business that
focuses on mortgage-backed and property products.  It is based
in Grosvenor Place, Sydney, with around 40 employees across New
South Wales, Victoria, and Queensland.

Two companies with the Fincorp Group (Fincorp Financial Services
Limited and Fincorp Managed Investments Limited) hold Australian
Financial Services Licenses and act as Responsible Entities
under the Corporations Act 2001.  Fincorp and its Funds are
regulated by the Australian Securities and Investment
Commission.

                          *     *     *

On March 27, 2007, the Troubled Company Reporter-Asia Pacific
reported that Fincorp Group went into administration with
AU$290 million in debt, of which AU$200 million were owed to
investors and AU$90 million to external financiers.

David Winterbottom was appointed as administrator together with
Mark Korda and Lachlan McIntosh, partners at corporate recovery
firm KordaMentha.

Fincorp Group was reportedly struggling under heavy inter-
company debt loads and negative cash flow, the TCR-AP cited a
report from The Australian, published on March 26, 2007.


INTERFERT: Goes Into Administration on Failed Financing
-------------------------------------------------------
Matt Chambers at The Australian reports that Interfert has gone
into administration after Switzerland's Western Gulf Advisory
failed to deliver on financing.

WGA, which has been accused of taking millions of dollars from
Australian companies in upfront fees for loans, is understood to
have committed to provide loans to the Interfert and Megafert
fertiliser companies owned by South Australian businessmen Peter
Evans and John Simper, according to The Australian.  But the
funding was not delivered on, leading the companies to appoint
KordaMentha as administrators, The Australian relates.

Late last year, The Australian recalls, Interfert and Megafert had
agreed on funding arrangements with WGA for new banking
facilities.  The report relates that funds were to be advanced in
January, in time for the 2011 fertilizer season.

The Australian says that the failure of the finance to come
through for Megafert and Interfert was the last straw.  The
Australian relates that the companies owe creditors, including the
tax office, AU$25 million.

The Australian discloses that the tax office, which is reportedly
chasing AU$4.9 million, has also taken action to wind up Megafert.

Interfert and Megafert have about 150 unsecured creditors, many of
them farmers who have paid for fertilizer, The Australian notes.

The Australian adds that despite recent high fertilizer prices and
a strong Australian dollar, the companies were carrying losses
from the global financial crisis and were unable to refinance a
loan facility with the National Australia Bank.

Interfert is one of Australia's biggest fertilizer importers and
sellers.


PAPERLINX LIMITED: Expects Up to $30 Million Annual Loss for 2011
-----------------------------------------------------------------
PaperlinX Limited said it expects to report a full year statutory
loss after tax for the 2011 financial year in the range of
AU$23 million to AU$30 million, (inclusive of an estimated non
cash valuation loss for a foreign currency option of some AU$14
million after tax).  This compares to a statutory loss after tax
of AU$225 million for 2010.

Underlying earnings after tax for the 2011 financial year are
expected to be a loss after tax in the range of AU$7 million to
AU$14 million, after adjusting for the impact of the foreign
currency option and discontinued operations.  This compares to an
underlying loss after tax of AU$28 million for 2010.  Possible
implications for impairment valuations at June 30, 2011, will be
considered.

The Troubled Company Reporter-Asia Pacific previously reported
that PaperlinX had also posted a total loss after tax for the year
ended June 30, 2009, of AU$798.2 million, including AU$727.9
million in significant items.  The reported after tax loss of
AU$798.2 million for the 2009 fiscal year was significantly
impacted by impairment charges, loss on sale of Australian Paper
and related restructuring costs totaling AU$727.9 million after
tax.  Results were additionally impacted by the weak operating
environment, foreign exchange losses primarily in the first half,
one-off restructuring costs and increased finance costs and
charges.

"Volumes are significantly below last year and below our
expectations in Europe and the United Kingdom," PaperlinX said in
a statement.  

"Despite these market conditions the Company is maintaining market
share in Europe, the United Kingdom and North America and has
implemented some price increases in these markets."

PaperlinX said the already depressed Australian print market is
being further impacted by the high Australian dollar and this
coupled with the Company's strategy of not pursuing riskier, lower
margin business is impacting results in Australia.

PaperlinX also said that the maturity date of the Company's
largest borrowing facility (in Europe) has been extended from
May 2012 to September 2013.

                          About PaperlinX

Australia-based PaperlinX Limited (ASX:PPX) --
http://www.paperlinx.com.au/-- is a fine paper merchant and
manufacturer of communication and packaging paper.  PaperlinX
employs over 9,600 people in 28 countries.


PETTAVEL: Closes Restaurants, Axes 29 Jobs
------------------------------------------
Geelong Advertiser reports that Pettavel restaurant is now closed
and its 29 staff out of work after receivers met with employees.

Receivers and managers PricewaterhouseCoopers told staff the
restaurant business was shut, effective immediately, because it
was no longer viable to keep it open, according to Geelong
Advertiser.  However, the report relates, PwC partners Kate
Warwick and Ian England said the winery arm of the business would
continue to operate.

Geelong Advertiser notes that last month Pettavel went into
administration with an estimated AU$16.5 million debt after
directors Michael and Sandra Fitzpatrick had tried for months to
sell the property and business.  Geelong Advertiser relates that
the administration was triggered after the Australian Tax Office
started legal action to recoup a AU$535,000 tax debt.

Documents lodged with the corporate regulator revealed an AU$11
million debt to lender Rabobank Limited and AU$5.5 million owed to
unsecured creditors, including suppliers across the state, Geelong
Advertiser says.

Geelong Advertiser discloses that suppliers heard at a recent
creditors' meeting that it was unlikely they would receive much of
a return due to the amount owing to the bank.

Pettavel operates a restaurant and winery in Geelong.


=========
C H I N A
=========


CHINA TEL GROUP: Tay Lee Owns 16.4% of Series A Shares
------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, Tay Yong Lee disclosed that he is the beneficial owner
of 76,867,119 A Shares, representing 16.4% of China Tel Group,
Inc.'s A Shares, and 66,909,088 B Shares, representing
approximately 50% of the Company's B Shares.  Trussnet Capital
Partners (HK) Ltd. is the beneficial owner of 58,867,119 A Shares,
representing 12.6% of the Company's A Shares, as reflected in the
Company's Form 10-K for the period ended Dec. 31, 2010, filed with
the United States Securities and Exchange Commission on April 15,
2011.  A full-text copy of the regulatory filing is available for
free at http://is.gd/fqQTvX

                          About China Tel

Based in San Diego, California, and Shenzhen, China, China Tel
Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/--
provides high speed wireless broadband and telecommunications
infrastructure engineering and construction services.  Through its
controlled subsidiaries, the Company provides fixed telephony,
conventional long distance, high-speed wireless broadband and
telecommunications infrastructure engineering and construction
services.  ChinaTel is presently building, operating and deploying
networks in Asia and South America: a 3.5GHz wireless broadband
system in 29 cities across the People's Republic of China with and
for CECT-Chinacomm Communications Co., Ltd., a PRC company that
holds a license to build the high speed wireless broadband system;
and a 2.5GHz wireless broadband system in cities across Peru with
and for Perusat, S.A., a Peruvian company that holds a license to
build high speed wireless broadband systems.

The Company reported a net loss of $66,623,130 on $955,311 of
revenue for the year ended Dec. 31, 2010, compared with a net loss
of $56,065,029 on $657,876 of revenue during the prior year.

The Company's balance sheet at Dec. 31, 2010 showed $3,888,292 in
total assets, $28,11,423 in total current liabilities, all
current, $35,483 in mandatory redeemable Series B common stock,
and a $24,260,614 total stockholders' deficit.

As reported by the TCR on April 21, 2011, Mendoza Berger &
Company, LLP, in Irvine, California, expressed substantial doubt
about the Company's ability to continue as a going concern,
following the 2010 financial results.  The independent auditors
noted that the Company has incurred a net loss of $56,041,182 for
the year ended Dec. 31, 2009, cumulative losses of $165,361,145
since inception, a negative working capital of $68,760,057, and a
stockholders' deficit of $63,213,793.


CHINA TEL GROUP: George Alvarez Owns 50% of Series B Shares
-----------------------------------------------------------
In a Schedule 13D filing with the U.S. Securities and Exchange
Commission, George Alvarez disclosed that he beneficially owns
47,700 A Shares and 66,956,789 B shares of China Tel Group, Inc.,
representing less than 1% of the Series A common shares and
approximately 50% of the Series B common shares.  A full-text copy
of the filing is available for free at http://is.gd/DRomu5

                          About China Tel

Based in San Diego, California, and Shenzhen, China, China Tel
Group, Inc. (OTC BB: CHTL) -- http://www.ChinaTelGroup.com/--
provides high speed wireless broadband and telecommunications
infrastructure engineering and construction services.  Through its
controlled subsidiaries, the Company provides fixed telephony,
conventional long distance, high-speed wireless broadband and
telecommunications infrastructure engineering and construction
services.  ChinaTel is presently building, operating and deploying
networks in Asia and South America: a 3.5GHz wireless broadband
system in 29 cities across the People's Republic of China with and
for CECT-Chinacomm Communications Co., Ltd., a PRC company that
holds a license to build the high speed wireless broadband system;
and a 2.5GHz wireless broadband system in cities across Peru with
and for Perusat, S.A., a Peruvian company that holds a license to
build high speed wireless broadband systems.

The Company reported a net loss of $66,623,130 on $955,311 of
revenue for the year ended Dec. 31, 2010, compared with a net loss
of $56,065,029 on $657,876 of revenue during the prior year.

The Company's balance sheet at Dec. 31, 2010 showed $3,888,292 in
total assets, $28,11,423 in total current liabilities, all
current, $35,483 in mandatory redeemable Series B common stock,
and a $24,260,614 total stockholders' deficit.

As reported by the TCR on April 21, 2011, Mendoza Berger &
Company, LLP, in Irvine, California, expressed substantial doubt
about the Company's ability to continue as a going concern,
following the 2010 financial results.  The independent auditors
noted that the Company has incurred a net loss of $56,041,182 for
the year ended Dec. 31, 2009, cumulative losses of $165,361,145
since inception, a negative working capital of $68,760,057, and a
stockholders' deficit of $63,213,793.


================
H O N G  K O N G
================


CHINA CHASE: Court Enters Wind-Up Order
---------------------------------------
The High Court of Hong Kong entered an order on Feb. 28, 2011, to
wind up the operations of China Chase Fashion Company Limited.


FEALTY COMPANY: Creditors' Proofs of Debt Due June 3
----------------------------------------------------
Creditors of Fealty Company Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by June 3, 2011, to be included in the company's dividend
distribution.

The company's liquidators are:

         Cheung Lai Kuen
         Pui Chiu Wing
         Suites 1303-1306
         13/F, Asian House
         1 Hennessy Road
         Wanchai, Hong Kong


GREAT PACIFIC: Court Enters Wind-Up Order
-----------------------------------------
The High Court of Hong Kong entered an order on Feb. 21, 2011, to
wind up the operations of Great Pacific (Far East) Limited.

The company's liquidator is Pui Chiu Wing of Neil Collins
Corporate Services Limited.


GREAT PACIFIC TEXTILE: Court Enters Wind-Up Order
-------------------------------------------------
The High Court of Hong Kong entered an order on Jan. 27, 2011, to
wind up the operations of Great Pacific Textile Limited.

The company's liquidator is Pui Chiu Wing of Neil Collins
Corporate Services Limited.


H.K. ZHONG: Court Enters Wind-Up Order
--------------------------------------
The High Court of Hong Kong entered an order on March 2, 2011, to
wind up the operations of H.K. Zhong Xin Jia Hua Property
Investment Limited.


HING WAH: Court Enters Wind-Up Order
------------------------------------
The High Court of Hong Kong entered an order on May 4, 2011, to
wind up the operations of Hing Wah Engineering Development Co.
Limited.


INCORPORATED OWNERS: Creditors' Proofs of Debt Due June 3
---------------------------------------------------------
Creditors of The Incorporated Owners of Kin Yu Mansion, which is
in members' voluntary liquidation, are required to file their
proofs of debt by June 3, 2011, to be included in the company's
dividend distribution.

The company's liquidator is:

         Mat Ng
         c/o John Lees Associates
         20/F Henley Building
         5 Queen's Road
         Central, Hong Kong


INTERSMART INTERNATIONAL: Court Enters Wind-Up Order
----------------------------------------------------
The High Court of Hong Kong entered an order on Feb. 21, 2011, to
wind up the operations of Intersmart International Limited.

The company's liquidator is Pui Chiu Wing of Neil Collins
Corporate Services Limited.


MINIGRAND LIMITED: Court Enters Wind-Up Order
---------------------------------------------
The High Court of Hong Kong entered an order on Feb. 21, 2011, to
wind up the operations of Minigrand Limited.

The company's liquidator is Pui Chiu Wing of Neil Collins
Corporate Services Limited.


NATIONBUILD PACIFIC: Court Enters Wind-Up Order
-----------------------------------------------
The High Court of Hong Kong entered an order on March 24, 2011, to
wind up the operations of Nationbuild Pacific Limited.

The company's liquidator is Pui Chiu Wing of Neil Collins
Corporate Services Limited.


NEW COLOR: Court Enters Wind-Up Order
-------------------------------------
The High Court of Hong Kong entered an order on Feb. 14, 2011, to
wind up the operations of New Color International Limited.


PALMSOURCE HK: Seng and Lo Step Down as Liquidators
---------------------------------------------------
Natalia K M Seng and Susan Y H Lo stepped down as liquidators of
Palmsource Hong Kong Limited on May 13, 2011.


PCI EXPRESS: Members' Final Meeting Set for June 13
---------------------------------------------------
Members of PCI Express Padala (HK) Limited will hold their final
general meeting on June 13, 2011, at 10:00 a.m., at 2/F., BDO
Building, 3851 Sen. Gil Puyat Avenue Corner Paseo De Roxas Avenue,
Makati City, in Philippines.

At the meeting, Tjon Yose Manuel Sie Fo, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.


RIGEL NAVIGATION: Wong and Ngan Step Down as Liquidators
--------------------------------------------------------
Wong Wai Pui Ricky and Ngan Lin Chun Esther stepped down as
liquidators of Rigel Navigation Corporation Limited on May 3,
2011.


SILVERY TARGET: Seng and Lo Step Down as Liquidators
----------------------------------------------------
Natalia K M Seng and Susan Y H Lo stepped down as liquidators of
Silvery Target Limited on May 13, 2011.


WILLWAY INTERNATIONAL: Commences Wind-Up Proceedings
----------------------------------------------------
Members of Willway International Limited, on May 5, 2011, passed a
resolution to voluntarily wind up the company's operations.

The company's liquidator is:

         Lam Ying Sui
         10/F, Allied Kajima Building
         138 Gloucester Road
         Wanchai, Hong Kong


WORLD CARNIVAL: First Meetings Slated for May 27
------------------------------------------------
Contributories and creditors of World Carnival Limited will hold
their separate meeting on May 27, 2011, at 3:00 p.m., and
3:30 p.m., respectively, at the offices of FTI Consulting, 14th
Floor, The Hong Kong Club Building, Central, in Hong Kong.

At the meeting, Bruno Arboit, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.


YEE KING: Yeung Kwong Tat Appointed as Liquidator
-------------------------------------------------
Yeung Kwong Tat on May 4, 2011, was appointed as liquidator of Yee
King Elderly Centre Limited.

The liquidator may be reached at:

         Yeung Kwong Tat
         Room 1003, Island Centre
         470 Reclamation Street
         Mongkok, Hong Kong


=========
I N D I A
=========


AIR INDIA: Meets Cabin Crew's Demands
-------------------------------------
The Hindu reports that All India Cabin Crew Association (AICCA)
said Tuesday that Air India management has met various long-
standing demands of the cabin crew, especially those related to
timely promotion.

"The association met Executive Director for Operations & Customer
Services, and resolved various long-standing issues of the cabin
crew of both the carriers (AI and erstwhile Indian Airlines)," The
Hindu cites AICCA General Secretary Sanjay Lazar as saying in a
release.  The move will help 1,600 cabin crew members, he said.

According to the report, Mr. Lazar said AI Chairman and Managing
Director, Arvind Jadhav, has accepted the proposals following
which an order to this effect was issued by the Executive
Director.

Early May, The Hindu says, the AI management had agreed to some of
the demands of the pilots of the erstwhile Indian Airlines, who
went on a 10-day strike from April 27.  The strike, relates The
Hindu, caused an average daily loss of INR26 crore to the national
carrier that is sitting on a debt pile of nearly INR18,000 crore.

The Hindu relates that Mr. Lazar said the AICCA's demands were
part of the 2008 merger agreement.  Following this, the court
cases filed in this regard would be withdrawn, Mr. Lazar said.

                         About Air India

Air India -- http://www.airindia.com/-- transports passengers
throughout India and to more than 40 destinations throughout the
world.  Affiliate Air India Express operates as a low-fare
carrier, mainly between India and destinations in the Middle East,
and Air India Cargo provides freight transportation.  The
government of India has merged Air India with another state-
controlled carrier, Indian Airlines, which has focused on domestic
routes.  The combined airline, part of a new holding company
called National Aviation Company of India, uses the Air India
brand.  The new Air India and its affiliates have a fleet of more
than 110 aircraft altogether.

                           *     *     *

The Troubled Company Reporter-Asia Pacific, citing the Hindustan
Times, reported on June 19, 2009, that Air India has been bleeding
cash due to excess capacity, lower yield, a drop in passenger
numbers, an increase in fuel prices and the effects of the global
slowdown.  The carrier incurred net losses of INR2,226.16 crore in
2007-08 and INR5,548 crore in 2008-09.  Air India is estimated to
have lost INR54 billion in the fiscal year ended March 31, 2010,
according to The Wall Street Journal.

The TCR-AP, citing livemint.com, reported on July 27, 2010, that
Air India unveiled a turnaround plan that envisages the airline
reaching operational break-even and wiping out the INR14,000 crore
of accumulated losses and INR18,000 crore of debt on its balance
sheet by 2014-15.  The plan includes raising the company's fleet
strength to as many as 275 planes from 148 in five years.  Air
India Chairman and Managing Director Arvind Jadhav said the new
100-page turnaround plan for 2010-14, which ruled out any job cuts
or wage reductions, was approved by the board and would be adopted
after incorporating suggestions by representatives of the
airline's 33,500 employees.


AIR INDIA: Seeks Approval to Issue INR5,500cr Bonds to Banks
------------------------------------------------------------
The Economic Times reports that Air India has sent a proposal to
the civil aviation ministry for permission to raise INR5,500 crore
by issuing bonds to a consortium of banks, to help restructure its
long-term debts.

"We have sent a proposal to the ministry a week back to seek their
approval on the issue," a senior Air India official, who did not
want to be named, told IANS.

The Economic Times relates the official said the proposal seeks to
raise about INR5,500 crore through the 15-year bonds which would
be issued to the consortium of banks.

                         Debt for Equity Swap

Meanwhile, DNA reports that the civil aviation ministry and the
Air India management are wooing state-owned banks to convert part
of their loans into equity in the airline, according to three
people close to the development.

DNA discloses that the total debt on Air India's books stands at
over INR40,000 crore, of which around INR20,000 crore is for
working capital and the remaining for aircraft purchase.

According to DNA, the working capital loan was raised from a
consortium of 22 banks and Air India has been negotiating to
restructure this loan.  With the government reluctant to infuse
more equity in the bleeding airline, DNA states, Air India
management is now left with no option but to persuade banks to
convert at least some of it into equity and the remaining into
long-term debt, which would help reduce the interest burden.

Banks are also being asked to restructure the aircraft acquisition
loan of INR20,000 crore under a sovereign guarantee, which could
save another INR780 crore of interest payment a year, DNA reports.

                           About Air India

Air India -- http://www.airindia.com/-- transports passengers
throughout India and to more than 40 destinations throughout the
world.  Affiliate Air India Express operates as a low-fare
carrier, mainly between India and destinations in the Middle East,
and Air India Cargo provides freight transportation.  The
government of India has merged Air India with another state-
controlled carrier, Indian Airlines, which has focused on domestic
routes.  The combined airline, part of a new holding company
called National Aviation Company of India, uses the Air India
brand.  The new Air India and its affiliates have a fleet of more
than 110 aircraft altogether.

                           *     *     *

The Troubled Company Reporter-Asia Pacific, citing the Hindustan
Times, reported on June 19, 2009, that Air India has been bleeding
cash due to excess capacity, lower yield, a drop in passenger
numbers, an increase in fuel prices and the effects of the global
slowdown.  The carrier incurred net losses of INR2,226.16 crore in
2007-08 and INR5,548 crore in 2008-09.  Air India is estimated to
have lost INR54 billion in the fiscal year ended March 31, 2010,
according to The Wall Street Journal.

The TCR-AP, citing livemint.com, reported on July 27, 2010, that
Air India unveiled a turnaround plan that envisages the airline
reaching operational break-even and wiping out the INR14,000 crore
of accumulated losses and INR18,000 crore of debt on its balance
sheet by 2014-15.  The plan includes raising the company's fleet
strength to as many as 275 planes from 148 in five years.  Air
India Chairman and Managing Director Arvind Jadhav said the new
100-page turnaround plan for 2010-14, which ruled out any job cuts
or wage reductions, was approved by the board and would be adopted
after incorporating suggestions by representatives of the
airline's 33,500 employees.


AKSHATA MERCANTILE: CARE Assigns 'CARE BB+' Rating to INR45cr Loan
------------------------------------------------------------------
CARE assigns 'CARE BB+' and 'PR4' ratings to the bank facilities
of Akshata Mercantile Pvt Ltd.

                                Amount
   Facilities                  (INR cr)     Ratings
   ----------                  --------     -------
   Long-term Bank Facilities      45.00     'CARE BB+' Assigned
   Short-term Bank Facilities    290.00     'PR4' Assigned

Rating Rationale

The ratings are constrained by AMPL's low profitability margins
caused by trading nature of business, higher dependence of the
company on working capital related bank borrowings, relatively low
cash accruals & networth, elongation in working capital cycle and
the inherent cyclicality in the steel industry.  The ratings
derive strength from the promoter's experience in the domestic
steel industry and AMPL's large scale of operations.

AMPL's ability to achieve the envisaged sales and profitability
and manage the working capital requirement efficiently are the key
rating sensitivities.

Incorporated in August 2001, Akshata Mercantile Private Ltd., is
engaged in the business of trading of Hot Rolled (HR) and Cold
Rolled (CR) sheets/coils, mild steel (MS) sheets/plates and
galvanized plain as well as corrugated sheets. AMPL is part of the
Topworth group, which has presence in metal, mining and power
sectors.  The group is led by Mr. Abhay Lodha (Chairman), who has
more than a decade of experience in steel trading and
manufacturing. Company's sales mix consists of high seas sales and
domestic sales.


CEE DEE VACUUM: ICRA Assigns 'LBB' Rating to INR18cr Bank Loan
--------------------------------------------------------------
ICRA has assigned 'LBB' rating to the INR 18.00 crore fund based
and INR 20.00 crore non- fund based bank facilities of CEE DEE
Vacuum Equipment Private Limited. The outlook on the long term
rating is stable. ICRA has also assigned short term rating of 'A4'
to the INR 20.00 crore non- fund based bank lines of CDVEPL. The
non- fund based limits are rated on both the scales and as such
the total utilization should not exceed INR 20.00 crore at any
point of time.

The ratings are constrained by the high working capital intensity
of operations leading to consistently high working capital
requirement; increase in share of revenue from public sector
clients exposing the company to delayed receipts coupled with high
client concentration among public sector clients with top 3
clients contributing to -90% of the revenue in FY2010 and 9 months
FY2011.  The ratings are further constrained by the steep decline
in the share of revenue from exports to 5.66% for 9 months FY2011
from 31.93% in FY2010 on account of space constraints faced by the
company; delayed functioning of the new facility at MIDC Chakan on
account of land acquisition risk and funding risk leading to lower
than expected growth in earnings in the future. The ratings,
however, derive comfort from the reputed client base comprising of
private sector as well as public sector clients; long track record
and technical expertise of the promoters in the industry and
moderate gearing of 1.00 times as on March 31, 2010. Going
forward, the company's ability to scale up its operations and
manage its capital structure and liquidity position under
reasonable levels given the working capital intensive nature of
operations remains important from a credit perspective.

                         About CEE DEE Vacuum

CDVEPL is a private limited company based out of Pune and is
engaged in manufacturing and selling range of transformer oil
filtration machines, vacuum pressure impregnation plants, oil
dehydration plants etc. Incorporated in 1989, it is promoted by
Mr. Suhas Dhamale, Mr. Nitin Dhamale and Mr. S.G. Dhamale. CDVEPL
markets these products primarily to power generation companies,
railways, electricity distribution companies, transformer
manufacturers etc and has executed contracts for reputed clients
like BHEL, PGCIL, ABB, Siemens etc.

For the financial year ending March 2010, CDVEPL reported an
operating income of INR23.64 crore and a net profit of INR1.25
crore as compared to revenues of INR18.53 crore and profit of
INR0.94 crore in the previous year.


COMPULEARN TECH: CARE Assigns 'CARE BB+' Rating to INR9cr Loan
--------------------------------------------------------------
CARE assigns 'CARE BB+' and 'PR4+' ratings to the bank facilities
of Compulearn Tech India Ltd.

                                Amount
   Facilities                  (INR cr)     Ratings
   ----------                  --------     -------
   Long-term Bank Facilities      9.00      'CARE BB+' 'Assigned'
   Short-term Bank Facilities     1.00      'PR4+' 'Assigned'

Rating Rationale

The rating takes into account CTIL's limited track record of
operations under the new management, high collection period
resulting into consistent negative operating cash flows,
declining profitability ratios, small scale of operations
increasing vulnerability to industry cycles, un-hedged foreign
exchange exposure and relatively low entry barriers leading to
intense competitive pressure. The rating also factors in the long
experience of the promoters, low gearing levels, equity infusion
by the promoters over the years and moderate order book. The
ability of the company to recover contract proceeds on time, to
increase its scale of operations, while increasing the client base
are the key rating sensitivities.

Comp-u-Learn Tech India Limited, headquartered in Hyderabad, is a
listed company promoted by a group of technocrats in the year
1997. CTIL was acquired by Mr. P.V.V Satyanarayana, Chairman,
Mr. KS Rao, Managing Director and their associates during February
2008.  The company is engaged in providing software development
solution. The company bought 55% stake in Spry Resources India Pvt
Ltd, involved in providing IT Software solutions, for INR4.65
crores during FY10.  CTIL also bought 60% stake in ACE BPO Pvt
Ltd, engaged in providing medical transcription solutions for
INR3.60 crore during FY10 for diversifying its revenue stream.


ESHWAR TRUST: ICRA Assigns 'LB' Rating to INR10.22cr Term Loan
--------------------------------------------------------------
ICRA has assigned 'LB-' rating to the INR10.22 crore term loan
facilities of Eshwar Trust.

The rating considers the limited track record of the promoters in
the business, the small scale of operations which is likely to
restrict financial flexibility, and the high competition which is
expected to exert pressure to attract and retain experienced
faculty.  The financial profile is also characterized by stretched
capital structure and coverage indicators owing to the aggressive
debt-funded capital expenditure incurred to establish the
institution. The rating considers the favorable demand for
education driven by factors like increasing population and
disposable income, the favorable location of the college which is
likely to drive revenue growth and the satisfactory occupancy
levels.

Eshwar Trust was registered in August 2007 with three trustees.
The trust is promoted by Mr. M Ramasamy.  The trust manages Sri
Eshwar College of Engineering at Kondampatti post, Vadasithur
(near Coimbatore, Tamil Nadu), which commenced operations on
September 1, 2008. The college currently offers engineering
courses in five specializations, namely, mechanical, electronics
and communication, electrical and electronics, computer science
and information technology. The college, which has 758 students
and 46 teachers, is affiliated to Anna University, Coimbatore.

Recent Results

The trust reported net profit of INR0.5 crore on operating income
of INR2.4 crore in 2009-10. May 201


GAYATRI BIO-ORGANICS: CARE Rates INR49.25cr LT Loan at 'CARE B+'
----------------------------------------------------------------
CARE Assigns 'CARE B+' rating to the bank facilities of
Gayatri Bio-Organics Ltd.

                                Amount
   Facilities                  (INR cr)    Ratings
   ----------                  --------    -------
   Long-term Bank Facilities     49.25     'CARE B+' Assigned

Rating Rationale

The rating is constrained by the company's weak financial profile
characterized by high financial leverage, risk of decline in
realizations resulting from substitutes and cheap imports,
increasing trend in raw material prices and fragmented nature of
the industry entailing aggressive competition from other players.
The rating also takes in to account the registration with Board
for Industrial & Financial Reconstruction (BIFR) as a sick unit
from the year 2000 till July 2010.  The rating is underpinned by
the experience of promoters and management team, recently
completed capacity expansions and acquisitions, long term selling
arrangements with customers and stable industry outlook. Ability
of the company to source raw material at economical prices,
achieve stabilization of operations in the enhanced capacity and
integration of newly acquired sick unit (Devi Corn Products Ltd.)
and pass on increase in raw material prices to its customers are
the key rating sensitivities.

Gayatri Bio-Organics Ltd, a listed company, was originally
incorporated as Starchem Industries Ltd. in December 1991 by
Mr. T. Sandeep Kumar Reddy (Present Chairman) in Hyderabad. The
name of the company changed to Gayatri Starchkem Ltd. in October
1997 and then to its present name in February 2008. GBL is part of
Hyderabad based Gayatri Group, which is in the business of
Infrastructure and civil constructions, sugar and hospitality.
Gayatri Projects Limited, the flagship company of the group is
rated CARE A-/PR2+ (Bank Loans Rating), PR1 (Commercial Paper).
GBL was registered as sick industrial company with Board for
Industrial & Financial Reconstruction (BIFR) in 2000. BIFR vide
its order dated July 5, 2010, declared that that GBL ceases to be
a Sick Industrial Company as the company's networth has turned
positive and the company's revival is sustainable. The company had
an installed capacity of 8,550 TPA for sorbitol and 45,000 TPA for
maize crushing as on March 31, 2010.


INDIA LAND: CARE Reaffirms 'CARE BB-' Rating on INR37.63cr Loan
---------------------------------------------------------------
CARE reaffirms a 'CARE BB-' rating to the bank facilities of
India Land Kgisl Tech Park Pvt Ltd.

                                Amount
   Facilities                  (INR cr)     Ratings
   ----------                  --------     -------
   Long-term Bank Facilities     37.63     'CARE BB-' Reaffirmed

Rating Rationale

The rating continues to be constrained by the restructuring and
refinancing of bank loans during FY10 and FY11 respectively due to
substantial delay in the execution of the project.  The rating is
also constrained by the low occupancy level achieved of Phase I
till date and funding risk for Phase II which has been postponed
by more than three years. Besides, imposition of minimum
alternate tax (MAT) on Special Economic Zone (SEZ) units is a
rating constrain.

The rating, however, derives strength from the lower acquisition
cost of land, financial support by the promoters demonstrated in
the past, infusion of the entire expected equity and completion of
Phase I of the project.  The ability of IKTPPL to lease out the
remaining space in Phase I, execute Phase II as planned
and achieve the envisaged lease rentals and occupancy levels
remain the key rating sensitivities.

IKTPPL, promoted for the development of IT Infrastructure projects
in India, is a joint venture between India Land Ventures Ltd., a
company registered in Mauritius and M/s. Coimbatore Hi-Tech
Infrastructure Private Limited.  IKTPPL is developing an IT SEZ on
11.74 acres of land in Saravanampatti Village, Coimbatore.
The total area proposed to be developed is about 2.07 msf in two
Phases, which were to be fully operational by end of FY10.
However, only Phase I became fully operational in September 2010
and only 24% of the leasable area from Phase I was leased out as
on February 28, 2011.

The total estimated project cost for Phase I and Phase II was
around INR323 crore, which was proposed to be funded through a
bank loan of INR214 crore and equity of INR109 crore.  The company
had availed bank loan of INR123 crore during FY10 for construction
of Phase I.  Consequent to the low occupancy level and
insufficient cash accruals, IKTPPL has got four out of five bank
loan refinanced during March 2011.  As on Dec. 31, 2010, the
promoters had infused funds amounting to INR116.12 crore.


SAIKRUPA SAKHAR: CARE Rates INR208.46cr LT Loans at 'CARE BB+'
--------------------------------------------------------------
CARE assigns 'CARE BB+' rating to the bank facilities of
Saikrupa Sakhar Karkhana Ltd.

                              Amount
   Facilities                (INR cr)     Ratings
   ----------                --------     -------
   Rupee Term Loans          208.46       'CARE BB+' Assigned

Rating Rationale

The ratings are constrained by the small size of operations, weak
financial profile characterized by low profitability, high
gearing, high inventory holding days and higher working capital
utilization.  Further, the rating also takes into account the
seasonal and cyclical nature of business and stringent regulatory
norms.  However, the rating derives strength from the experienced
promoters, the long track record and being an integrated sugar
company with the commissioning of the new project.  Ability of the
company to stabilize the new integrated project, to achieve growth
in sales and profitability and to improve capital structure are
the key rating sensitivities.

SSKL a closely-held public limited company was incorporated in the
year 1998 and commenced operations from the year 2000. The company
has an existing sugar plant at Devdaithan (Maharashtra) with
production capacity of 2,250 TCD. In order to diversify and be an
integrated sugar player, SSKL set up a Greenfield project at
Hiradgaon, Shrigonda, Ahmednagar district of Maharashtra at a
total project cost of Rs 357.54 crore comprising of debt of Rs
248.54 crore and equity contribution of INR109.00 crore.
The new facility comprises sugar plant, cogen power plant and
ethanol plant with installed capacities of 7,500 TCD, 35 MW and 60
KLPD respectively. The new facility has commenced operations from
January 2011.

During FY10, SSKL reported PBILDT of INR4.87 crore on a total
operating income of INR65.23 crore. The tangible net worth as on
March 31, 2010 stood at INR41.41 crore.

As per the unaudited H1FY11 results, the company generated a total
income of INR13.75 crore with PBILDT and PAT margins of 12.51% and
2.04%, respectively.


SANGHVI INTERNATIONAL: ICRA Rates INR3.5cr Bank Loans at 'LBB-'
---------------------------------------------------------------
ICRA has assigned an 'LBB-' rating to the INR 3.50 Crore fund-
based bank facilities and an 'A4' rating to INR7.00 Crore non-fund
based bank facilities of Sanghvi International.  The outlook on
the long-term rating is "Stable".

The assigned ratings take into account the long experience of the
proprietor in the steel trading business; the firm's established
relationship and dealership with leading steel producers and its
good customer base.  The ratings are, however, constrained by SI's
thin operating and net profitability due to limited value addition
involved in the steel trading business and the high competitive
intensity; exposure of margins to price fluctuations, given the
business requirement of holding a wide variety of inventory; and
cyclicality inherent in the steel industry, which is likely to
make SI's cash flows volatile.

                    About Sanghvi International

Established in 1996 as a proprietorship firm, Sanghvi
International is engaged in trading of iron & steel, mainly cold
rolled coils, sheets and hot rolled coils. The Firm has its
administrative office in Carnac Bunder, Mumbai (Maharashtra) and
warehousing facility at Taloja MIDC Mumbai. Recent results: In FY
10, SI made a net profit of INR 1.22 crores on the back of net
sales of INR 61.32 crores. As per nine month provisional results
for FY11, SI recorded a net profit of INR 1.45 crores on the back
of net sales of INR 61.37 crores.


UNI SOURCCE: ICRA Assigns 'LBB-' Rating to INR1.9cr Term Loan
-------------------------------------------------------------
ICRA has assigned 'LBB-' rating to the INR1.90 crore proposed term
loan facilities and INR6.00 crore long term fund based bank
facilities of Uni Sourcce Treend India.  The outlook on the long
term rating is stable. ICRA has also assigned 'A4' rating to the
INR4.00 crore non-fund based bank facility of the firm.

The assigned ratings reflect the firm's limited scale of
operations restricting economies of scale and financial
flexibility, capital structure is characterized by high gearing,
debt funded capital expansion plan as envisaged by the firm which
would stretch the gearing. The ratings also take into account
operational risk consequent to closure of dyeing units in Tirupur,
shortage of labor and high customer concentration in an intensely
competitive market. The ratings also consider the steady growth in
operating income and experience of the promoters.

                         About Uni Source

Uni Sourcce Treend India is primarily engaged in the production of
hosiery garments. Incorporated in 2005, the firm operates three
manufacturing facilities in and around Tirupur, Tamil Nadu.
Currently, the firm has 435 stitching machines (includes 223
singer machines, 142 over lock machines and 70 flat lock machines)
across three units. The promoter and his friends hold 100.0%
ownership of USTI.

Recent Results

During the year ended March 31, 2010, USTI reported net profit of
INR2.8 crore on an operating income of INR38.5 crore. For the nine
months period ended December 2010, the firm reported net sales
(unaudited) of INR42.1 crore.


=================
I N D O N E S I A
=================


MERPATI AIRLINES: Restructuring to Continue Despite Crash
---------------------------------------------------------
Jakarta Globe reports that State Enterprises Minister Mustafa
Abubakar said the financial restructuring of ailing state-owned
PT Merpati Nusantara Airlines will carry on despite a recent crash
that led to questions about the safety of its fleet.

Jakarta Globe says Merpati was under the care of the state-asset
management company Perusahaan Pengelola Aset, which has injected
hundreds of billions of rupiah to bring it back to profitability.
But after the crash of a Merpati MA-60 that killed 25 people on
May 7, pressure is building to let the airline go under.

According to Jakarta Globe, House of Representatives lawmakers on
Commission XI, which oversees budgetary and financial affairs,
last week threatened to pull government funding from the airline.

Mr. Mustafa, however, rejected the lawmakers' threats saying
Merpati's restructuring will carry on as scheduled, Jakarta Globe
relates.

Under the PPA's oversight, says Jakarta Globe, Merpati managed to
post a IDR5.46 billion profit in 2009 after losing IDR186.54
billion in 2008.  However, its profits shrank to just IDR243
million last year amid rising costs.

Jakarta Globe adds that Pandu Djajanto, the deputy for
restructuring and privatization at the State Enterprises Ministry,
said the carrier's main problems were its IDR1.1 trillion debt,
aging fleet, low market penetration and poor brand image.

According to the report, Merpati has received IDR525 billion from
PPA since 2005 to help cover its expenses.  However, Mr. Pandu
said the airline still needed IDR510 billion to overhaul its fleet
and help plug an estimated IDR92.9 billion deficit in its cash
flow this year.

Jakarta Globe says PPA president director Boyke Mukijat, who is
also in charge of Merpati's restructuring, said the crash in Papua
not only cost the airline a tangible asset but struck its image a
heavy blow.  "There is also the problem of a low level of
confidence among customers in Merpati," Mukijat said.

Headquartered in Jakarta, Indonesia, PT Merpati Nusantara
Indonesia -- http://www.merpati.co.id/-- is a state-owned
carrier that services predominantly international routes.  The
carrier is facing the threat of being declared bankrupt with
IDR1.6 trillion in accumulated losses.

                          *     *     *

According to press reports, Merpati has suffered from high fuel
prices and hurt by the weaker rupiah.  The bombings in Bali in
October 2005 hit the airline pretty hard in its revenue flow.
The airline is also struggling to cope with new competition
within Indonesia, both from domestic airlines and from other
airlines coming into Indonesia internationally.

The Troubled Company Reporter-Asia Pacific reported on July 24,
2004, that the Indonesian Government invited applications from
financial and legal advisers to help devise a privatization
scheme for the carrier.  The Government proposed a strategic
sale of the state's 51% stake in Merpati to help fund the
carrier's operations.  The state was also considering a IDR220
billion debt-for-equity swap.

According to a TCR-AP report in January 2006, the Government had
promised to inject up to IDR400 billion into the Company.
However, since it is also cash-strapped, the Government said it
would disburse the amount in installments, and initially meted
out IDR75 billion for the Company to continue its business.


PT SULFINDO: S&P Lowers CCR to 'CCC'; Outlook is Developing
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on PT Sulfindo Adiusaha to 'CCC' from 'B-'. The
outlook is developing. "We also removed the rating from
CreditWatch, where it had been placed with negative implications
on Feb. 11, 2011. At the same time, we withdrew our 'B-/Watch
Negative' issue rating on the company's proposed US$250 million
bond because the issue was cancelled," S&P stated.

"We lowered the rating on Sulfindo because we believe that the
company's liquidity will remain under pressure over the next six
to nine months, even though the company received US$47.5 million
in committed bank facilities at the end of April 2011," said
Standard & Poor's credit analyst Xavier Jean. "The committed
facilities will only alleviate Sulfindo's liquidity pressures
until the end of 2011, in our opinion. Nevertheless, further
external funding will be critical for the company to meet its
substantial committed capital expenditure and debt maturities in
the fourth quarter of 2011 and in 2012."

"We expect Sulfindo to remain highly committed to its US$150
million capital expenditure plan over the rest of 2011 and 2012
despite increasing debt repayment requirements. This is because
the plan would strengthen the company's cost competitiveness over
the medium term and reduce its reliance on electricity supplier PT
Perusahaan Listrik Negara (Persero) (BB/Stable/--)," S&P noted.

S&P continued, "We believe Sulfindo has weak sources of liquidity
to cover its needs in the next nine months. We expect the
company's liquidity sources of about US$135 million to be barely
sufficient to cover our estimate of its liquidity needs of US$125
million over the next nine months. Liquidity sources over the
period include our estimate of funds from operations of US$35
million to US$40 million, surplus cash balance of about US$45
million, and the newly obtained committed facilities of US$47.5
million. Sources also include Sulfindo's short-term investments of
US$11 million, mostly comprising bonds of Indonesian companies; we
apply a haircut of 50% to these bonds to reflect their lack of
marketability. Liquidity needs over the next nine months include
about US$65 million of committed capital expenditure, about US$30
million in principal repayments, and our estimate of working
capital requirements of US$20 million to US$30 million."

The outlook is developing; the rating hinges on Sulfindo's ability
to obtain sufficient funding for its committed capital expenditure
and debt maturities. The company might be able to use bank loans
to meet a part of its short-term needs. "Nevertheless, we believe
liquidity needs will remain high throughout 2012 because of
US$45.3 million in principal repayments on the 2005 restructured
bond and the second tranche of its committed capital expenditure
of about US$85 million," S&P said

"We may raise the rating if Sulfindo is able to obtain a level of
financing that we believe is sufficient to cover its liquidity
needs. We could lower the rating if the company faces a covenant
breach; or alters or restructures any debt instrument, which we
would consider tantamount to a default," S&P added.


=========
J A P A N
=========


CSC SERIES: Fitch Downgrades Ratings on Eight Classes of Bonds
--------------------------------------------------------------
Fitch Ratings has downgraded CSC Series 1 GK's bonds due November
2012 and removed them from Rating Watch Negative (RWN). The
transaction is a Japanese multi-borrower type CMBS securitisation.

The rating actions are:

   -- JPY1.74bn* Class A-2 bonds downgraded to 'BBsf' from
      'AAAsf'; off RWN; Outlook Stable

   -- JPY0.37bn* Class A-3 bonds downgraded to 'BBsf' from
      'AAAsf'; off RWN; Outlook Stable

   -- JPY1.7bn* Class B-2 bonds downgraded to 'CCCsf' from 'Asf';
      off RWN; assigned a Recovery Rating of 'RR2'

   -- JPY1.5bn* Class B-3 bonds downgraded to 'CCCsf' from 'Asf';
      off RWN; assigned a Recovery Rating of 'RR2'

   -- JPY3.2bn* Class C-2 bonds downgraded to 'CCCsf' from 'BBB-
      sf'; off RWN; assigned a Recovery Rating of 'RR2'

   -- JPY3.2bn* Class D-2 bonds downgraded to 'CCsf' from 'B-sf';
      off RWN; assigned a Recovery Rating of 'RR4'

   -- JPY0.9bn* Class E-2 bonds downgraded to 'CCsf' from 'CCCsf';
      off RWN; Recovery Rating revised to 'RR6' from 'RR5'

   -- JPY0.6bn* Class E-3 bonds downgraded to 'CCsf' from 'CCCsf';
      off RWN; Recovery Rating revised to 'RR6' from 'RR5'

   -- JPY1.47bn* Class F-3 bonds downgraded to 'CCsf' from
      'CCCsf'; off RWN; Recovery Rating of 'RR6'

   -- JPY0.44bn* Class G-3 bonds affirmed at 'Dsf'; Recovery
      Rating of 'RR6'.

   * as of May 13, 2011

The downgrades follow interest deferrals on all classes of bonds
at the payment date in May 2011. This deferral was caused by the
payment of a large special servicing fee following the repayment
of underlying loan principal. The special servicing fee relating
to the disposal of the collateral properties is being deducted
from the fund that pays the interest on the bonds, rather than
from the account of received principal proceeds of the underlying
loans. As a result, the deduction has led to an interest
shortfall. Fitch has yet to receive updated information clarifying
the payment waterfall from the transaction parities. The deferral
was also caused by a lack of loan interest collection from a
defaulted loan backed by a retail property in Miyagi. This was due
to the earthquake in March which damaged the said property but
repair work is underway.

The downgrade of Class A-2 to C-2 bonds reflects reduced
likelihood of ultimate payment of the bond interest by legal final
maturity. The fund that pays the interest on the bonds may see a
shortfall, although Fitch believes that full repayment of the
principal on these bonds is still likely. Fitch notes that
interest deferral on class B-2 to C-2 bonds may not be resolved by
legal final maturity, depending on the work-out activity of
defaulted loans.

The downgrade of Class D-2 to F-3 bonds reflects Fitch's belief
that principal loss for these classes will probably be realized.
The remaining three underlying loans are all in default and the
servicer is undertaking work-out activity. Fitch has revised
downward the property valuation for a number of properties, taking
into account the property sales activity by the servicer to date
and recent cash flow performance of the property.

At closing in December 2006, the bonds were backed by loans
extended to six borrowers, and secured by 72 commercial real
estate properties in Japan. Two loans have been fully repaid. One
defaulted loan has been partially recovered and was written down
on principal. The other remaining loans extended to three
borrowers are currently in default and under special servicing,
and are secured by a total of 40 remaining properties.


JLOC VII: S&P Lowers Rating on Class D Notes to 'D'
---------------------------------------------------
Standard & Poor's Ratings Services lowered to 'D (sf)' from 'CC
(sf)' its rating on the class D floating-rate structured notes
that were issued under the JLOC VII Ltd. transaction. Classes A to
C have already been fully redeemed. "We withdrew the rating on the
interest-only (IO) class X on April 23, 2010, following the
updates to our criteria for rating IO securities," S&P noted.

The rating action on class D reflects the fact that class D has
incurred an actual loss following the impairment of the principal
of the transaction's remaining underlying loan. "On Feb. 2, 2011,
we lowered to 'CC (sf)' from 'CCC (sf)' our rating on class D
because we had been informed at the end of January 2011 that the
principal of the loan had been impaired and class D had thereby
incurred an effective loss," S&P stated.

JLOC VII Ltd. is a multiborrower commercial mortgage-backed
securities (CMBS) transaction. The notes were initially secured by
nine nonrecourse loans extended to seven borrowers. The
nonrecourse loans were ultimately backed by 27 real estate
properties. The transaction was arranged by Morgan Stanley Japan
Securities Co. Ltd., and the servicer for the transaction is
Premier Asset Management Co.

Rating Lowered

JLOC VII Ltd.
JPY20.1 billion floating-rate structured notes due May 2011

   Class    To       From      Initial issue amount
   -----    --       ----      --------------------
   D        D (sf)   CC (sf)   JPY1.2 billion


=========
K O R E A
=========


KOREA EXCHANGE: FSC Delays Lone Star Sale Plan Approval
-------------------------------------------------------
The Chosun Ilbo reports that Lone Star's third attempt to sell
Korea Exchange Bank looks set to go the way of the other two and
fail.

According to the report, the Financial Services Commission said it
will decide whether to approve the sale of KEB to Hana Financial
Group only after a court case against Lone Star over stock
manipulation of KEB Credit Card has concluded.

Chosun Ilbo recalls that the FSC withheld approval of the sale of
KEB to Kookmin Bank and HSBC in 2006 and 2007, citing ongoing
legal disputes.  Lone Star is fighting allegations that it
acquired the bank at a knockdown price after the 1997 Asian
financial crisis.

In November last year, Hana Financial Group signed an agreement
with Lone Star to buy KEB for KRW4.69 trillion, and if the FSC
does not grant approval by May 24, either side can nullify the
agreement without penalty.

Lone Star, a U.S.-based private-equity fund, has had a number of
setbacks in trying to exit from its $1.3 billion investment in
KEB, which it bought in 2003, Dow Jones reported.

                     About Korea Exchange Bank

Korea Exchange Bank -- http://www.keb.co.kr/-- established in
1967, is one of seven national banks in South Korea with over
300 domestic branches and 28 overseas networks, including
Canada, the United States, Panama and Germany, constituting the
most extensive global banking network of any Korean bank.  KEB
Futures -- http://www.kebf.com/-- is a clearing member of KOFEX
and is a subsidiary of Korea Exchange Bank, the official F/X
settlement bank for Korean Futures Exchange.

                          *     *     *

Korea Exchange Bank continues to carry Moody's Investors Service
"C-" Bank Financial Strength Rating.


=====================
P H I L I P P I N E S
=====================


PHILIPPINE AIRLINES: Union Seeks ILO Intervention
-------------------------------------------------
GMA News Online reports that the Philippine Airlines Employees
Association on Wednesday filed a complaint against the Department
of Labor and Employment before the International Labor
Organization (ILO).

The group filed the complaint due to alleged violations of ILO
conventions on freedom of association, collective bargaining and
the right to hold strikes, GMA News says.

According to the report, PALEA national secretary Bong Palad said
the group is questioning DOLE's approval of Philippine Airlines'
move to outsource catering, call center reservations and ground
operations and the management's decision to not go into a
collective bargaining agreement (CBA).

"We believe that corruption has something to do with [the
decision]," Mr. Palad alleged in an interview with GMA News
Online.

In April, GMA News recalls, DOLE issued an order to postpone
protest actions and resolve the dispute through a settlement.
Meanwhile, the Palace also approved PAL's move to outsource its
non-core operations.

"The Philippines is party to international conventions that
protect the rights of workers to form unions, negotiate CBAs and
hold strikes. But with government connivance, PAL is trying to
bust PALEA through its outsourcing plan and is prolonging a 12-
year CBA moratorium by refusing to negotiate," GMA News quotes
PALEA chairman Gerry Rivera as saying.

GMA News notes that the group is also attending the hearings at
the National Labor Relations Commission (NLRC) to resolve its
dispute with PAL management.

Malaca¤ang had earlier denied a conspiracy between the government
and PAL management when it supported PAL's decision to outsource
non-core operations, GMA News adds.

As reported in the Troubled Company Reporter-Asia Pacific on
April 21, 2010, the Manila Bulletin said PAL is to spin off its
three non-core units as a last resort to avoid bankruptcy.
PAL will spin off its three non-core units: inflight catering
services; airport services, including ground handling, cargo
handling and ramp handling; and call center reservations, the
Manila Bulletin said.  The PAL Employees Union estimated that
2,000 to 4,000 employees assigned to those departments could be
retired.  PAL said competition from overseas carriers, slower
global economic growth, and higher oil prices had prompted the
airline to slash its non-core businesses.  The carrier had
approached several investors but failed to secure financial help,
and equity had dropped to a worrisome US$1.1 million as of
February 2010, according to the Manila Standard.

The TCR-AP, citing BusinessWorld Online, reported on July 28,
2010, that PAL announced a narrower loss for its fiscal year that
ended March 2010 to $14.3 million, from the previous year's $297.8
million, but warned of still weak demand for international
flights.

                    About Philippine Airlines

Philippine Airlines -- http://www.philippineairlines.com/-- is
the Philippines' national airline.  It was the first airline in
Asia and the oldest of those currently in operation.  With its
corporate headquarters in Makati City, Philippine Airlines flies
both domestic and international flights.  First taking off in
1941, the carrier has grown into a fleet of about 40 aircraft
(including five Boeing 747-400s) flying to more than 20 domestic
points and about 30 foreign destinations.


=============
V I E T N A M
=============


VIETNAM SHIPBUILDING: Creditors Demand $60 Million Payment
----------------------------------------------------------
James Hookway at The Wall Street Journal reports that Frustration
over Vietnamese state-run shipbuilder Vietnam Shipbuilding
Industry Group's failure to repay loans it defaulted on last year
is intensifying among creditors, potentially jeopardizing
Vietnam's plans to draw more investment to improve its
infrastructure and reduce the bottlenecks that threaten its
growth.

The Journal says the problems at Vinashin point to the risks of
investing in what, on the face of it, is one of the world's most
attractive emerging markets.  According to The Journal, Vietnam's
Communist-run government built up the firm to be a major player in
the global shipbuilding market to compete with heavyweight
manufacturers in China, South Korea and Japan.  The entire $750
million proceeds of the country's first-ever sovereign bond were
channeled to Vinashin in 2005.

In 2007, The Journal recalls, the government provided a letter of
support for the company to enable it to secure an additional $600
million syndicated loan to make the most of a rapid economic boom
in the country.

The Journal notes that but when Vinashin defaulted on that debt
last December in the aftermath of the global economic crash, the
government refused to step in to help pay off the debt, which, in
an indication of the boom in emerging markets, had been bought by
investors around the world.  Dozens of financial institutions
invested in the loan, including, among others, Standard Chartered
PLC, Credit Suisse AG, Depfa Bank PLC and hedge fund Elliott
Advisers Ltd, The Journal says.

According to The Journal, some of Vinashin's lenders now complain
that they have been deceived.  For many, the government's letter
of support was the only reason they felt sufficiently secure to
lend to the company.  This month, The Journal reports, a group
comprising just over half the lenders' group sent a letter to
Vietnam's government demanding payment on the first $60 million,
which was due in December.

"This was always a government-supported loan as far as the lenders
are concerned," one person familiar with the situation told The
Wall Street Journal. "Going forward, capital won't go to places
where it isn't treated fairly."

Vinashin, whose debts of more than US$4 billion pushed it to the
brink of bankruptcy, in December reportedly defaulted on the first
US$60 million installment of a US$600 million loan arranged by
Credit Suisse in 2007.

Vinashin got a US$600 million loan in 2007 from banks led by
Credit Suisse Group AG that paid interest of 1.5 percentage points
more than the London interbank offered rate, according to data
compiled by Bloomberg.  While it made a US$6.8 million interest
payment on Dec. 23, the company missed a Dec. 20 deadline to make
a US$60 million principal payment and asked lenders for a one-year
extension, Bloomberg relates.

Vietnam Shipbuilding Industry Group is a state-owned shipbuilding
company.


                             *********

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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