/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/120307.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Wednesday, March 7, 2012, Vol. 15, No. 48 Headlines A U S T R A L I A SMART SERIES: Fitch Puts Rating on AUD11.81-Mil. Notes at 'BB' H O N G K O N G BEKKERT COMPANY: Placed Under Voluntary Wind-Up Proceedings CHARTERMATE TECHNOLOGIES: Final Meetings Set for April 10 CHIPNUTS TECHNOLOGY: Annual Meetings Set for April 3 EVERWISE DEVELOPMENT: Commences Wind-Up Proceedings GLOBAL MODA: Creditors' Proofs of Debt Due April 5 INVESTMENTS LIMITED: Creditors' Proofs of Debt Due April 2 LIBERTY PACIFIC: Creditors' Proofs of Debt Due April 2 OMNIA PRODUCT: Members' Final General Meeting Set for April 10 SUN HOLY: Sole Member' Final Meeting Set for April 3 YOBE TOYS: Creditors' Meeting Set for March 16 I N D I A AGGARSAIN FIBRES: CARE Reaffirms 'BB+' Rating on INR11.9cr Loan AIR INDIA: Unpaid Pilots to Fly on "Cash-and-Carry" from April 1 A-ONE INDUSTRIES: Fitch Migrates Nat'l Long-Term Rating to 'BB' B.N.T. CONNECTIONS: Fitch Affirms Nat'l Long-Term Rating at 'B-' B.N.T. INNOVATIONS: Fitch Affirms Nat'l Long-Term Rating at 'B-' D. RAJA COTTON: CARE Rates INR30.25cr Long-Term Loan at 'CARE B' GUJARAT BOROSIL: Fitch Cuts Nat'l LT Rating to B+, Outlook Neg. JUBILEE HILLS: Inadequate Info Cues Fitch to Withdraw Ratings KINGFISHER AIRLINES: TPG, Blackstone, Cerberus Eye Airline Stake KUTTY FLUSH: Fitch Withdraws 'Low-B' Rating on Bank Loans MERCHANT PLC: Fitch Affirms Nat'l Long-Term Rating at 'BB+' MOSER BAER: Liquidity Constraints Cue CARE to Assign 'B' Ratings MOSER BAER INDIA: CARE Assigns 'CARE B' Rating to INR1,150cr Loan MOSER BAER SOLAR: CARE Assigns 'B' Rating to INR998.49cr Loan PADAM SHREE: CARE Assigns 'CARE BB-' Rating to INR7cr LT Loan PRADIP OVERSEAS: CARE Cuts Rating on INR322.29cr Loan to 'CARE C' RAJA INDUSTRIES: CARE Places 'CARE B+' Rating on INR45cr Loan RIBA TEXTILES: Timely Debt Payment Cues Fitch to Upgrade Rating SINGH CASUALS: CARE Assigns 'CARE BB-' Rating to INR0.12cr Loan SURAJ CONSTRUCTION: Inadequate Info Cues Fitch to Withdraw Rating SWARNALATHA AGRITECH: CARE Rates INR9cr Loan at 'CARE B' TA INFRA: CARE Reaffirms 'CARE D' Long-Term Bank Loan Rating TOYOTA CONSTRUCTION: CARE Reaffirms BB Rating to INR10.1cr Loans VARAM BIO-ENERGY: Strain Liquidity Cues CARE Junk Ratings J A P A N AIJ INVESTMENT: Japan to Require Asset Manager External Audits AIJ INVESTMENT: Execs Likely to Face Charges Over Falsified Docs N E W Z E A L A N D FIVE STAR: Judge to Decide on Guilty Plea Reversal Bid This Month OTAGO RUGBY: Liquidation Put on Hold as Possible Lifeline Emerges P H I L I P P I N E S BANCO FILIPINO: BSP Seeks to Overturn CA Decision to Reopen Bank S I N G A P O R E FIRST SHIP: Fitch Downgrades Issuer Default Rating to 'B' JURONG MACHINERY: Creditors' Proofs of Debt Due April 2 KOMARS ENTERPRISE: Court to Hear Wind-Up Petition on March 16 LINCOLN BUSINESS: Court to Hear Wind-Up Petition on March 23 SIN LEONG: Court Enters Wind-Up Order THIRD WIND: Court Enters Wind-Up Order S R I L A N K A EDIRISINGHE TRUSTE: Fitch Affirms Nat'l Long-Term Rating 'BB-' X X X X X X X X * Upcoming Meetings, Conferences and Seminars - - - - - ================= A U S T R A L I A ================= SMART SERIES: Fitch Puts Rating on AUD11.81-Mil. Notes at 'BB' -------------------------------------------------------------- Fitch Ratings has assigned SMART Series 2012-1US Trust's notes expected ratings. The transaction is an asset-backed securitization backed by Australian automotive lease receivables originated by Macquarie Leasing Pty Limited. -- USD100m Class A-1 notes: 'F1+(exp)sf' -- USD145m Class A-2 (a & b) notes: 'AAA(exp)sf'; Outlook Stable -- USD165m Class A-3 (a & b) notes: 'AAA(exp)sf'; Outlook Stable -- USD90m Class A-4 (a & b) notes: 'AAA(exp)sf'; Outlook Stable -- AUD10.5m Class B notes: 'AA(exp)sf'; Outlook Stable -- AUD14.44m Class C notes: 'A(exp)sf'; Outlook Stable -- AUD13.13m Class D notes: 'BBB(exp)sf'; Outlook Stable -- AUD11.81m Class E notes: 'BB(exp)sf'; Outlook Stable -- AUD7.88m seller notes: not rated The final ratings are contingent on receipt of final documents conforming to information already received. The notes will be issued by Perpetual Trustee Company Limited as trustee for SMART Series 2012-1US Trust. The latter is a legally distinct trust established pursuant to a master trust and security trust deed. "SMART Series 2012-1US Trust marks Macquarie Leasing's fifth transaction to be issued in the US market," said Ben Newey, Director in Fitch's Structured Finance team. "Lease receivables originated by Macquarie Leasing have continued to perform well with the 30+days arrears, tracking well below 1%. This can be attributed to the portfolio's diversification across various industries." The expected ratings of the Class A notes are based on the quality of the collateral; the 11% credit enhancement provided by the subordinate Class B, C, D, and E notes, the unrated seller notes and excess spread. It also reflects the liquidity reserve account sized at 1% of the aggregate invested amount of the notes at closing; the interest rate swap arrangement the trustee has entered into with Macquarie Bank Ltd ('A+'/RWN/'F1'); and Macquarie Leasing Pty Ltd's lease underwriting and servicing capabilities. The expected ratings on the other classes of notes are based on all the strengths supporting the Class A notes, excluding their credit enhancement levels, but including the credit enhancement provided by each class of notes' respective subordinate notes. At the cut-off date, Macquarie Leasing's representative collateral portfolio consisted of 24,897 leases totalling AUD867.5m with an average size of AUD34,844. The pool comprises passenger and light commercial vehicle lease receivables from Australian residents across the country, consisting of amortizing principal and interest leases with varying balloon amounts payable at maturity. The weighted average balloon payment for the portfolio is 29.7% of leases' current balance. The majority of leases consist of novated contracts (64%), where the lease is novated to the employer in salary packaging arrangements. Historical gross loss rates by quarterly vintage on passenger vehicle and truck leases range between 0.6% and 1.5%, and between 0.5% and 5%, respectively. ================ H O N G K O N G ================ BEKKERT COMPANY: Placed Under Voluntary Wind-Up Proceedings ----------------------------------------------------------- At an extraordinary general meeting held on Feb. 20, 2012, creditors of Bekkert Company Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Gabardi Vittorio Luigi Rooms 1801-1805, Hua Qin International Building 340 Queen's Road Central, Hong Kong CHARTERMATE TECHNOLOGIES: Final Meetings Set for April 10 --------------------------------------------------------- Members and creditors of Chartermate Technologies (Hong Kong) Limited will hold their final meetings on April 10, 2012, at 10:00 a.m., and 10:30 a.m., respectively at Unit A, 5/F, CKK Commercial Centre, 289 Hennessy Road, Wanchai, in Hong Kong. At the meeting, Chiu Fan Wa, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. CHIPNUTS TECHNOLOGY: Annual Meetings Set for April 3 ---------------------------------------------------- Members and creditors of Chipnuts Technology (HK) Limited will hold their annual meetings on April 3, 2012, at 3:00 p.m., and 3:30 p.m., respectively at Room 1601-1602, 16th Floor, One Hysan Avenue, Causeway Bay, in Hong Kong. At the meeting, Jackson Ip, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. EVERWISE DEVELOPMENT: Commences Wind-Up Proceedings --------------------------------------------------- Members of Everwise Development Limited, on March 2, 2012, passed a resolution to voluntarily wind up the company's operations. The company's liquidator is: Lee King Yue 72-76/F, Two International Finance Centre 8 Finance Street Central, Hong Kong GLOBAL MODA: Creditors' Proofs of Debt Due April 5 -------------------------------------------------- Creditors of Global Moda Sourcing Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by April 5, 2012, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Feb. 21, 2012. The company's liquidator is: Tong Lap Hong Unit 501, 5/F Mirror Tower, 61 Mody Road Tsimshatsui East Kowloon, Hong Kong INVESTMENTS LIMITED: Creditors' Proofs of Debt Due April 2 ---------------------------------------------------------- Creditors of Investments Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by April 2, 2012, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Feb. 21, 2012. The company's liquidator is: Padraig Liam Walsh 19th Floor, Cheung Kong Center 2 Queen's Road Central, Hong Kong LIBERTY PACIFIC: Creditors' Proofs of Debt Due April 2 ------------------------------------------------------ Creditors of Liberty Pacific Direct Investments Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by April 2, 2012, to be included in the company's dividend distribution. The company commenced wind-up proceedings on Feb. 21, 2012. The company's liquidator is: Padraig Liam Walsh 19th Floor, Cheung Kong Center 2 Queen's Road Central, Hong Kong OMNIA PRODUCT: Members' Final General Meeting Set for April 10 -------------------------------------------------------------- Members of Omnia Product Limited will hold their final general meeting on April 10, 2012, at 10:00 a.m., at C/Balmes, 65 2a Planta, 08007 Barcelona, in Spain. At the meeting, Ivan Cabeza Mora, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. SUN HOLY: Sole Member' Final Meeting Set for April 3 ---------------------------------------------------- Sole Member of Sun Holy Enterprises Limited will hold their final meeting on April 3, 2012, at 11:00 a.m., at 19A Entertainment Building, at 30 Queen's Road Central, in Hong Kong. At the meeting, Tang Tin Sek, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. YOBE TOYS: Creditors' Meeting Set for March 16 ---------------------------------------------- Creditors of Yobe Toys Limited will hold their meeting on March 16, 2012, at 3:00 p.m., for the purposes provided for in Sections 228A(8), 242, 243, 244 and 255A of the Companies Ordinance. The meeting will be held at Room 2301, 23/F, Ginza Square, at 565-567 Nathan Road, Yaumatei, Kowloon, in Hong Kong. ========= I N D I A ========= AGGARSAIN FIBRES: CARE Reaffirms 'BB+' Rating on INR11.9cr Loan --------------------------------------------------------------- CARE reaffirms the rating assigned to the bank facilities of Aggarsain Fibres Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 11.90 CARE BB+ Reaffirmed Rating Rationale The rating continues to remain constrained by the modest scale of operations of Aggarsain Fibres Ltd. and weak financial risk profile marked by low profit margins, weak solvency position, stressed debt coverage indicators and liquidity position. The rating also continues to be constrained by vulnerability to fluctuation in raw material prices and working-capital intensive nature of operations in the fragmented and highly competitive cotton yarn manufacturing industry. However, the rating continues to derive strength from wide experience of the promoters of AFL in the agro business and location advantage on account of proximity to the cotton growing region. Increase in level of operations in light of competitive nature of the industry, ability of AFL to manage volatility associated with cotton prices and improvement in the financial risk profile are the key rating sensitivities. About Aggarsain Fibres Punjab based Aggarsain Fibres Ltd. was incorporated in 2004 by Mr. Vijay Garg. The operations are mainly looked after by the current Managing Director, Mr Pradeep Kumar Goyal. The company commenced its operations in May 2007 by setting up a unit at Samana (Punjab) with the initial installed capacity of 12,000 spindles for manufacturing cotton yarn which has increased to 20,000 spindles as on March 31, 2011. The company produces cotton yarn in range of 20-32 counts. AFL can produce 4,000 metric tonnes per annum (MTPA) of cotton yarn with these capacities. During FY11 (refers to the period April 1 to March 31), AFL reported net profit of INR0.22 crore (FY10: INR1.88 crore) on a total operating income of INR44.37 crore (FY10: INR26.50 crore). AIR INDIA: Unpaid Pilots to Fly on "Cash-and-Carry" from April 1 ---------------------------------------------------------------- The Economic Times reports that pilots of Air India-domestic have decided to put the airline on "cash-and-carry" starting April 1. The report relates that after a meeting of the airline's union on Sunday, it has been left to individual pilots to tell the management that they will fly as of next month only if their dues -- five months' performance-linked incentive (PLI) and three months' salary -- are paid fully or at least substantially. While many agitated members wanted some immediate action, the union, Indian Commercial Pilots' Association (ICPA), decided against giving a strike call as such protests have only led to promises from the government in the past, which were never kept, The Economic Times relays. About Air India Air India Ltd -- 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. Air India had debt of INR42,570 crore and accumulated losses of INR22,000 crore as of March 31, 2011, according to livemint.com. A-ONE INDUSTRIES: Fitch Migrates Nat'l Long-Term Rating to 'BB' --------------------------------------------------------------- Fitch Ratings has migrated India-based A-One Industries's 'Fitch BB(ind)' National Long-Term rating with a Stable Outlook to the non-monitored category. This rating will now appear as 'Fitch BB(ind)nm' on the agency's Web site. The ratings have been migrated to the non-monitored category due to lack of adequate information, and Fitch will no longer provide ratings or analytical coverage of A-One. The ratings will remain in the non-monitored category for a period of six months and be withdrawn at the end of that period. However, in the event the issuer starts furnishing information during this six-month period, the ratings could be reinstated and will be communicated through a Rating Action Commentary. Fitch has also migrated A-One's following bank loan ratings to the non-monitored category: -- Fund-based working capital limits of INR12.5m: migrated to 'Fitch BB(ind)nm'/'Fitch A4+(ind)nm' from 'Fitch BB(ind)'/'Fitch A4+(ind)' -- Non-fund-based working capital limits of INR40m: migrated to 'Fitch A4+(ind)nm' from 'Fitch A4+(ind)' B.N.T. CONNECTIONS: Fitch Affirms Nat'l Long-Term Rating at 'B-' ---------------------------------------------------------------- Fitch Ratings has affirmed India-based B.N.T. Connections Impex Ltd's National Long-Term Rating at 'Fitch B-(ind)'. The Outlook is Stable. While affirming the ratings, Fitch has considered the consolidated credit profile of BCIL and B.N.T Innovation Pvt Ltd (BIPL, 'Fitch B-(ind)'/Stable), a B.N.T group company. The entities have guaranteed each others' bank loans. The ratings continue to reflect the weak and volatile operating performance of the combined entity. On a consolidated basis, EBITDA margin have ranged from 11.5% to 0.7% over FY08-FY11 (financial year ending March), with low interest coverage and significantly high financial leverage (total debt/EBITDA) of 0.19x and 56.2x in FY11 (FY10: 0.42x, 25.1x), respectively. However, the consolidated turnover increased to INR621.4m in FY11 from INR538.5m in FY10, as there was an increase in the number of orders executed during the year. The ratings are supported by over a two-decade-long experience of BCIL's management in the domestic textile industry. Moreover, the rental income of INR32.5m every year from its real estate property in Chennai -- leased to a multinational company -- provides comfort when there are operational deficits. A negative rating guideline would be any delay/default in debt repayments. A positive rating guideline would be interest coverage of above 1.25x. These guidelines are on a consolidated basis. Incorporated in 1986, BCIL has a manufacturing capacity of 1.2 million garments per year, and exports readymade woven garments to Europe. In FY11, on a standalone basis, it reported revenues of INR384.8m (FY10: INR287.2m), negative EBITDA of INR4.9m (FY10: negative INR4.8m) and a net profit of INR0.5m (FY10: a net loss INR15.2m). During 9MFY12 (un-audited), the company reported revenue of INR270m with an EBITDA of INR27m. Fitch has also affirmed BCIL's bank loan ratings as follows: -- INR155m fund-based working capital limits (enhanced from INR65m): affirmed at 'Fitch B-(ind)'/'Fitch A4(ind)' -- INR17.4m non-fund based working capital limits (enhanced from INR5m): affirmed at 'Fitch A4(ind)' B.N.T. INNOVATIONS: Fitch Affirms Nat'l Long-Term Rating at 'B-' ---------------------------------------------------------------- Fitch Ratings has affirmed India-based B.N.T. Innovations Private Limited's National Long-Term Rating at 'Fitch B-(ind)'. The Outlook is Stable. While affirming the ratings, Fitch has considered the consolidated credit profile of BIPL and B.N.T Connections Impex Ltd (BCIL, 'Fitch B-(ind)'/Stable), a B.N.T. group company. The entities have guaranteed each others' bank loans. The ratings continue to reflect the weak and volatile operating performance of the combined entity. On a consolidated basis, EBITDA margin have ranged from 11.5% to 0.7% over FY08-FY11 (financial year ending March), with low interest coverage and significantly high financial leverage (total debt/EBITDA) of 0.19x and 56.2x in FY11 (FY10: 0.42x, 25.1x), respectively. However, the consolidated turnover increased to INR621.4m in FY11 from INR538.5m in FY10, as there was an increase in the number of orders executed during the year. The ratings are supported by over a two-decade-long experience of BIPL's management in the domestic textile industry. Also, there are no term loans, and no major capex is expected in the near- term. A negative rating guideline would be any delay/default in debt repayments. A positive rating guideline would be interest coverage of above1.25x. These guidelines are on a consolidated basis. Incorporated in 1989, BIPL has a manufacturing capacity of 1.5 million garments per year, and exports readymade knitted garments to Europe. In FY11, on a standalone basis, it reported revenues of INR236.7m (FY10: INR251.2m), an EBITDA of INR9.4m (FY10: INR12.2m) and a net loss of INR8.8m (FY10: a net profit INR5.5m). For 9MFY12 (un-audited), the company reported revenue of INR240m with an EBITDA of INR27m. For BCIL's rating rationale, please refer to the rating action commentary entitled, "B.N.T. Connections Affirmed at 'Fitch B- (ind)'/Stable", dated 02 March 2012. Fitch has also affirmed BIPL's bank facilities as follows: -- INR120m fund-based working capital limits (enhanced from INR70m): affirmed at 'Fitch B-(ind)'/'Fitch A4(ind)' -- INR11m non-fund based working capital limits (reduced from INR60m): affirmed 'Fitch A4(ind)' D. RAJA COTTON: CARE Rates INR30.25cr Long-Term Loan at 'CARE B' ---------------------------------------------------------------- CARE assigns 'CARE B' rating to the bank facilities of D. Raja Cotton Private Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 30.25 CARE B Assigned Rating Rationale The rating is constrained by D. Raja Cotton Pvt. Ltd's very short track record of operations and its highly leveraged capital structure due to its predominantly debt-funded project. The rating is further constrained on account of susceptibility of its margins to the cotton price fluctuations and presence in the highly fragmented cotton yarn industry. The rating is supported by the vast experience of the promoters, integrated group operations through the presence of associate entity M/s. Raja Industries in the cotton ginning activity and DRCPL's proximity to the cotton-growing region. DRCPL's ability to ensure timely stabilization of its recently completed greenfield project along with optimum utilization of its capacity in a highly competitive and cyclical cotton yarn industry would be the key rating sensitivities. Incorporated in 2005, DRCPL is a closely-held private limited company promoted by Mr. Dilip Patel. DRCPL has undertaken a project for setting up a cotton yarn manufacturing unit at Kadi (Gujarat). The spinning mill would have 12,000 spindles with capacity to manufacture 2,441 metric tonne per annum (MTPA) of cotton yarn with an average yarn count of 40. The trial run of the recently completed greenfield project started in January 2012.During FY11 (refers to the period April 1 to March 31), DRCPL had earned a total income of INR8.13 crore by way of trading of ginned cotton. GUJARAT BOROSIL: Fitch Cuts Nat'l LT Rating to B+, Outlook Neg. --------------------------------------------------------------- Fitch Ratings has downgraded India-based glass manufacturer Gujarat Borosil Ltd's National Long-Term rating to 'Fitch B+(ind)' from 'Fitch BB(ind)'. The Outlook is Negative. The downgrade reflects Fitch's view that GBL's liquidity will come under pressure from interest and loan repayments commencing in October 2012. This follows a decline in revenues over FY11 (year end March) and FY10 as well as operating losses during the same period. The company is expected to make interest payment of INR85m (on the inter-corporate deposit availed from group company Borosil Glass Works Ltd.) as well as INR32.3 million external commercial borrowing repayment in FY13. The ratings are also constrained by a slowdown in demand for its low iron solar glass in the export markets such as Spain, Italy, Portugal and other European countries. The ratings further reflect volatility in raw material prices, mainly of soda ash and quartz. During 2010-2011, GBL shut down its sheet glass production on expiry of the furnace's life and due to intense competition from float glass manufacturers. The company has since moved its focus to low iron solar glass used in solar power projects. The domestic market for solar power is still in its nascent stage but has received support from government initiatives by way of the Jawaharlal Nehru Solar Mission which promotes new solar power plants across the country. This should help offset the slowdown in export demand from Europe. The ratings are underpinned by the support that GBL continues to get from its group company; Borosil Glass Works Limited, a manufacturer of laboratory glassware and microwavable kitchenware in India. For FY11, GBL's revenues declined to INR819.4m from INR826m in FY10 and INR930.7m in FY09. Operating margins turned to a negative 9.45%, compared with 3.1% in FY10 and 14.6% in FY09. The decline was largely due to quality issues of low iron solar glass, which led to rejection claims, and slowdown in Europe, a major market for solar glass. Increased utilization of its manufacturing plant, along with stabilization in sales and margins, leading to an improved liquidity position could be positive for the ratings. Conversely, significant deterioration in revenue from any sharper-than-expected decline in end-market demand affecting margins may put downward pressure on the ratings. GBL manufactures low iron solar glass for application in the photovoltaic cell manufacturing industry worldwide. It has a plant located at Bharuch, Gujarat. The agency has also downgraded GBL's bank facilities, as follows: -- INR322.5m external commercial borrowings: downgraded to 'Fitch B+(ind)' from 'Fitch BB(ind)' -- INR30m cash credit limits: downgraded to 'Fitch B+(ind)' from 'Fitch BB(ind)' -- INR40m non-fund based limits: downgraded to 'Fitch A4(ind)' from 'Fitch A4+(ind)' JUBILEE HILLS: Inadequate Info Cues Fitch to Withdraw Ratings ------------------------------------------------------------ Fitch Ratings has withdrawn India-based Jubilee Hills Landmark Projects Limited's 'Fitch B-(ind)nm' National Long-Term rating. The 'Fitch B-(ind)nm' rating on JHLPL's INR4.7 billion term loans has also been withdrawn. The ratings have been withdrawn due to lack of adequate information, and Fitch will no longer provide ratings or analytical coverage of JHLPL. KINGFISHER AIRLINES: TPG, Blackstone, Cerberus Eye Airline Stake ---------------------------------------------------------------- Business Standard reports that private equity majors TPG, Blackstone and Cerberus are eyeing stake in Kingfisher Airlines and have started initial discussions with promoter Vijay Mallya. According to the report, sources said Blackstone was likely to rope in a British airline for acquiring the Kingfisher stake. The percentage of stake dilution in Kingfisher is not known, the report notes. About Kingfisher Airlines Headquartered in Mumbai, India, Kingfisher Airlines -- http://www.flykingfisher.com/-- formerly known as Deccan Aviation Ltd., serves about 35 domestic destinations with a fleet of more than 40 aircraft, including Airbus jets and ATR 72 turboprops. It maintains bases in major cities such as Delhi and Mumbai. Kingfisher Airlines is a unit of UB Holdings, best known for its United Breweries unit, and the carrier shares the Kingfisher brand with a popular Indian beer. UB Holdings also owns a stake in another domestic carrier, Air Deccan, whose operations it combined with Kingfisher Airlines in mid-2008. Kingfisher Airlines began flying in 2005. * * * Kingfisher Airlines lost money six years in a row, accumulating net debt of INR77.2 billion (US$1.74 billion) as of March 2010, according to data compiled by Bloomberg. Kingfisher lost INR4.44 billion (US$90.1 million) in the fiscal third quarter that ended in December, 74.8 per cent more than a loss of 2.54 billion rupees a year previously, The Economic Times discloses. The company has lost INR11.8 billion (US$240 million) in the first nine months of the current fiscal year that ends in March, a 35 per cent rise from a year earlier. KUTTY FLUSH: Fitch Withdraws 'Low-B' Rating on Bank Loans --------------------------------------------------------- Fitch Ratings has withdrawn India-based Kutty Flush Doors and Furniture Co Pvt Ltd's 'Fitch B-(ind)nm' National Long-Term rating. The ratings have been withdrawn due to lack of adequate information, and Fitch will no longer provide ratings or analytical coverage of Kutty. Fitch has also withdrawn Kutty's bank loans ratings as follows: -- INR26m long-term loans: 'Fitch B-(ind)nm'; rating withdrawn -- INR40m fund-based working capital limits: 'Fitch B- (ind)nm'/'Fitch A4(ind)nm'; ratings withdrawn -- INR34m non-fund based working capital limits: 'Fitch A4(ind)nm'; rating withdrawn MERCHANT PLC: Fitch Affirms Nat'l Long-Term Rating at 'BB+' ----------------------------------------------------------- Fitch Ratings Lanka has affirmed Sri Lanka's People's Merchant PLC's National Long-Term rating at 'BB+(lka)'. The Outlook is Stable. The rating reflects implied support that Fitch expects would be forthcoming from its main shareholder, state-owned People's Bank (PB; 'AA(lka)'/Stable), if required, and its weak standalone financial profile. PB has a 36% effective shareholding in PMP, directly and via PB's subsidiary People's Leasing PLC ('A+(lka)'/Stable). Fitch's view of support is also based on PMP's association with, and consequent reputational risk to, PB's franchise given the common brand identity and PB's representation on PMP's board. PMP's profitability, measured by return on assets (ROA), was 0.44% excluding non-recurring items, as at end-9MFY12 (end December 2011) which, although an improvement from a negative 0.43% at FYE11, remains weaker than that of similarly rated peers. PMP's equity to assets increased to 32.5% at end-9MFY12 from 12.7% at FYE11, following a rights issue of LKR450m in November 2011. Fitch expects capitalization to remain healthy, provided it is not diluted by aggressive growth. Net (unprovided for) three-month non-performing advances (NPAs) to equity improved to 35.5% as of end-9MFY12 from 81.8% in FY11 and net six-month NPAs improved to 28.3% from 63.3% on account of equity increase and a reduction in absolute NPA levels. Fitch notes large maturity mismatches between interest rate- sensitive assets and liabilities point to a refinancing requirement in Q4FY12. Management indicates that options for funding this gap through further credit lines from banks are being explored. However, Fitch expects adequate liquidity support from PB would be forthcoming should it be required. Management has also indicated that measures are being taken to diversify the funding base. PMP's asset quality remains weak when compared with rated peers with three-month gross NPAs at 20.6% and six-month gross NPAs at 17.6% as at end-9MFY12 (versus Fitch rated peer averages of 19.3% and 4.8% respectively at end September 2011). Fitch expects asset quality to remain weak, despite reduced NPAs on account of greater recovery efforts. This is because of high NPAs in term loans (62% of over three-month NPAs) that are relatively more difficult to recover. Any changes in Fitch's assessment of PB's ability and willingness to support PMP may trigger a rating action. Substantial and sustained improvements in PMP's standalone financial profile in terms of asset quality, solvency, and profitability while maintaining healthy capitalisation, may lead to positive rating action. Conversely, a further deterioration in the company's profitability and/or deterioration in its asset quality and solvency may result in a negative rating action. MOSER BAER: Liquidity Constraints Cue CARE to Assign 'B' Ratings ---------------------------------------------------------------- CARE revises the ratings assigned to the bank facilities of Moser Baer Photo Voltaic Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 350.48 CARE B (SO) Revised from CARE BB+ (SO) Short-term Bank Facilities 510.00 CARE A4 (SO) Revised from CARE A4+ (SO) Long Term/Short Term 50.00 CARE B(SO)/CARE Bank Facilities A4(SO) Rating Rationale The ratings factor in the unconditional and irrevocable corporate guarantee provided by Moser Baer India Ltd. rated 'CARE B/CARE A4'(revised from 'CARE BB+/CARE A4+'), for the above bank facilities of MBPV. The revision in MBIL's ratings takes into account liquidity constraints faced by the company because of its high receivables, substantial exposure to its loss making subsidiaries and weak financial profile marked by continuing losses and adverse capital structure of MBIL at a consolidated level. Furthermore, the ratings also factor in the pricing pressure in the optical media, risk of volatility in the raw material prices and technology risk. However, the ratings continue to derive strength from the experienced promoters and management team, MBIL's dominant position in the optical storage media, broad product range and wide geographical presence. Going forward, improving liquidity, profitability, prudent management of capital structure and cash flows in the light of upcoming redemption of FCCBs and the extent of support to the subsidiary companies would remain the key rating sensitivities. About Moser Baer Moser Baer Photo Voltaic Ltd. is a wholly-owned subsidiary of MBSL (Moser Baer Solar Ltd.) and a step-down subsidiary of MBIL. MBPV is primarily engaged in design, manufacture and export of photo voltaic (PV) cells, modules and systems. It has 80MW PV cell and 100 MW module manufacturing capacities based on crystalline silicon technology. MBPV commenced its commercial shipment of PV cells and modules in June 2007 and November 2007 respectively. MBPV has also commenced providing turnkey solutions and EPC services for large grid-connect solar farms. The commercial shipments started in FY08 only. On account of stretched liquidity, MBPV has approached lenders for restructuring of the debt. MOSER BAER INDIA: CARE Assigns 'CARE B' Rating to INR1,150cr Loan ----------------------------------------------------------------- CARE revises the ratings assigned to the bank facilities of Moser Baer India Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 1,150.71 CARE B Revised from CARE BB+ Short-term Bank Facilities 423.25 CARE A4 Revised from CARE A4+ Long/Short-term Bank 807.07 CARE B/CARE E Facilities revised from CARE BB+/CARE A+ The revision in MBIL's ratings takes into account liquidity constraints faced by the company because of its high receivables, substantial exposure to its loss making subsidiaries and weak financial profile marked by continuing losses and adverse capital structure of MBIL at a consolidated level. Furthermore, the ratings also factor in the pricing pressure in the optical media, risk of volatility in the raw material prices and technology risk. However, the ratings continue to derive strength from the experienced promoters and management team, MBIL's dominant position in the optical storage media, broad product range and wide geographical presence. Going forward, improving liquidity, profitability, prudent management of capital structure and cash flows in the light of upcoming redemption of FCCBs and the extent of support to the subsidiary companies would remain the key rating sensitivities. About Moser Baer India Moser Baer India Ltd., promoted by Mr Deepak Puri in 1983, is one of the world's largest manufacturers of optical storage media. It is engaged in the manufacture and sale of optical storage media with a broad product range comprising Compact Discs (CDs), Digital Versatile Discs (DVDs), High Definition Digital Versatile Discs (HD-DVD), Blu-Ray Disc (BDR - next-generation of storage formats) etc. Key developments MBIL's liquidity position is stretched mainly on account of its high receivables and substantial exposure to its loss making subsidiaries. Extended credit period was allowed to customers in order to penetrate into the overseas markets. One of its subsidiaries, MBPV has approached the lenders to restructure the debt. As a result, MBIL is facing liquidity pressure and has also approached lenders for restructuring of the debt. MOSER BAER SOLAR: CARE Assigns 'B' Rating to INR998.49cr Loan ------------------------------------------------------------- CARE revises the ratings assigned to the bank facilities of Moser Baer Solar Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 998.49 CARE B (SO) Revised from CARE BB+ (SO) Short-term Bank Facilities 243.00 CARE A4 (SO) Revised from CARE A4+ (SO) Rating Rationale The ratings factor in the unconditional and irrevocable corporate guarantee provided by Moser Baer India Ltd. rated 'CARE B/CARE A4' (revised from CARE BB+/CARE A4+), for the above bank facilities of MBSL. The revision in MBIL's ratings takes into account liquidity constraints faced by the company because of its high receivables, substantial exposure to its loss making subsidiaries and weak financial profile marked by continuing losses and adverse capital structure of MBIL at a consolidated level. Furthermore, the ratings also factor in the pricing pressure in the optical media, risk of volatility in the raw material prices and technology risk. However, the ratings continue to derive strength from the experienced promoters and management team, MBIL's dominant position in the optical storage media, broad product range and wide geographical presence. Going forward, improving liquidity, profitability, prudent management of capital structure and cash flows in the light of upcoming redemption of FCCBs and the extent of support to the subsidiary companies would remain the key rating sensitivities. About Moser Baer Solar Moser Baer Solar Ltd., formerly PV Technologies India Limited is a step down subsidiary of MBIL. The company is primarily engaged in the manufacture, design and export of thin film and EPC systems, thick film photo voltaic modules etc. MBSL has installed capacity of 50 MW thin film-based on amorphous silicon technology and 90 MW high efficiency silicon cell and module line. Various PE players have invested in MBSL. The company also has collaboration with Applied Materials Inc. and Gebr. Schmid, Germany, one of the leading players in PV industry involved in supplying technology solutions/support to the PV cell and module manufacturers. The commercial production for thin film commenced in July 2009 and for high efficiency silicon cells, it started in July 2011. PADAM SHREE: CARE Assigns 'CARE BB-' Rating to INR7cr LT Loan ------------------------------------------------------------- CARE assigns 'CARE BB-' rating to the bank facilities of Padam Shree Tex Fab Pvt Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 7.00 CARE BB- Assigned Rating Rationale The rating is primarily constrained on account of weak financial risk profile of Padam Shree Tex Fab Pvt. Ltd. (PSPL) marked by highly leveraged capital structure, thin profitability and weak debt coverage indicators. The rating is further constrained by its presence in the highly fragmented textile processing industry along-with its limited presence in textile value chain. The rating, however, favorably takes into account rich experience of the promoters in the textile industry. The company's ability to improve profit margins and capital structure would be the key rating sensitivity. About Padam Shree Padam Shree Tex Fab Pvt Ltd, incorporated in the year 2008 as a private limited company, was promoted by Mr. Narayandas Gogad, Mr. Naresh Kumar Gogad and Mr. Ramesh Kumar Gogad who have over a decade long experience in the textile industry. PSPL is engaged in dyeing and processing of synthetic fabric at its unit in Balotra, Rajasthan with a total installed capacity of nearly 400 lakh meters per annum. PSPL had opened its branch at Surat (Gujarat) in June 2010 where only embroidery work is done on job work basis. As per audited results for FY11 (refers to period April 1 to March 31), PSPL reported a net profit of INR0.18 crore on a total operating income of INR63.83 crore as against a PAT of INR0.05 crore on a total operating income of INR36.88 crore in FY10. PRADIP OVERSEAS: CARE Cuts Rating on INR322.29cr Loan to 'CARE C' ----------------------------------------------------------------- CARE revises the ratings assigned to bank facilities of Pradip Overseas Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 322.29 CARE C Revised from 'CARE BB+' Short-term Bank Facilities 324.50 CARE A4 Revised from 'CARE A4+' Long-term / Short-term 323.25 CARE C/CARE A4 Facilities Revised from 'CARE BB+'/'CARE A4+' Rating Rationale The revision in the ratings of Pradip Overseas Ltd. takes into account substantial deterioration in its financial risk profile during Q3FY12 (Unaudited) during which it reported net loss of INR57 crore as against a net profit of INR4 crore during Q3FY11 (Unaudited). The deterioration in POL's financial risk profile is mainly on account of significant increase in interest cost and unfavorable scenario in textile industry. The net loss incurred during Q3FY12 has resulted in stressed liquidity position for the company which has led to cash flow mismatches. About Pradip Overseas Pradip Overseas Ltd, (earlier known as Chetan Textile Ltd.) was originally formed as a partnership firm in 2005 and converted into a public limited company in August, 2006. It is promoted by Mr Chetan Karia and Mr. Pradip Karia who have more than 20 years of experience in the textile business. The company is primarily into processing of home textile products. Its products include cotton and polyesterblended bed sheets, duvet covers, fitted sheets, pillow covers and curtains. Currently it operates two textile units with a combined installed capacity to process 140 million meter per annum (MMPA) of home linen. POL's manufacturing facilities are located at Changodar near Ahmedabad in Gujarat. During FY11 (audited), POL reported a total operating income of INR2177 crore (FY10: INR1614 crore) and a PAT of INR67 crore (FY10: INR57 crore). RAJA INDUSTRIES: CARE Places 'CARE B+' Rating on INR45cr Loan ------------------------------------------------------------- CARE assigns 'CARE B+' rating to the bank facilities of M/S. Raja Industries. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 45.00 CARE B+ Assigned Rating Rationale The rating assigned by CARE is based on the capital deployed by the partners and the financial strength of the firm at present. The rating may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners in addition to the financial performance and other relevant factors. The rating is constrained on account of M/s. Raja Industries' thin profitability, high leverage and its working-capital intensive operations. RJI's constitution as a partnership firm, susceptibility of its margins to cotton price fluctuations, its presence in a highly fragmented cotton ginning industry and regulatory risk governing cotton industry further constrains the rating. The rating is supported by the vast experience of the promoters, RJI's integrated operations and its proximity to the cotton- growing region. Improvement in its profitability, capital structure and efficient working-capital management in light of fluctuations in the cotton price and seasonality associated with its availability are the key rating sensitivities. About M/S. Raja Industries RJI was constituted as a partnership firm in 1994 by Mr. Dilip Patel and Mr. Arvind Patel, the key partners, to undertake the business of cotton ginning and pressing and manufacturing of cotton wash oil at its sole manufacturing facility located in Kadi (Gujarat). The firm has 142 machines to process raw cotton which enables it to produce 1100 bales of cotton per day (1 bale - 170 kgs) along with cotton seed crushing and edible oil refining capacity of 110 tonne per day and 70 tonne per day respectively. RJI sells its refined oil under brand name 'Meghdhara' in retail as well as bulk segment. RIBA TEXTILES: Timely Debt Payment Cues Fitch to Upgrade Rating --------------------------------------------------------------- Fitch Ratings has upgraded India-based Riba Textiles Limited's National Long-Term rating to 'Fitch B(ind)' from 'Fitch D(ind)'. The Outlook is Stable. The upgrade reflects regular and timely payments of debt obligations by RTL for more than six months till February 2012 and its utilization of the working capital credit facility under the sanctioned limits during the same period; although the levels remain high at 99%. The upgrade also reflects RTL's 18% yoy revenue growth to INR473m in 9MFY12 (financial year ending March) and its stable operating EBITDA margin (around 10% since FY09 till Q3FY12) due to an increase in production capacity utilization in FY12. Riba has gained from favorable currency movements in Q212 and Q312; however, its earnings have remained susceptible to volatile forex rates. Therefore, the company has started hedging its forex exposure to the extent of 70%. The ratings, however, continue to be constrained by the tight liquidity position of the company due to its long net cash conversion cycle of 150-190 days over FY08-FY11 on account of a high inventory processing period of 125-160 days during the same time. The ratings are also constrained by the commoditized nature of RTL's key raw material (cotton yarn) and company's inability to pass along on the full cost of price increases to the end customers, which exposes it inventory losses. However, the issue of labour unrest, which lead to a loss of production and operational efficiency in the past, seems to be addressed at present. The ratings benefit from RTL's diversified sales base in terms of customers and geography as it sells across the globe; thus mitigating seasonal cyclicality in product demand. Also, its largest customer contributed only 6% to its total sales of INR540m in FY11. Negative rating action may result from low capacity utilization or inventory losses resulting in a decline in profitability and/or an increase in working capital requirements, leading to net financial leverage (adjusted debt/operating EBITDA) exceeding 5x on a sustained basis. Conversely, an improvement in liquidity along with revenue growth while maintaining the profitability on a sustained basis may lead to positive rating action. RTL is a niche manufacturer of terry towels and bath robes for export. For 9MFY12, it reported an EBITDA of INR72m (FY11: INR53m) and a profit after tax of INR23m (FY11: INR3m). Net financial leverage at Q312 was 3.6x. Fitch has also upgraded RTL's bank loan ratings as follows: -- INR31m long-term debt: upgraded to 'Fitch B(ind)' from 'Fitch D(ind)' -- INR180m fund-based working capital limits: upgraded to 'Fitch B(ind)'/'Fitch A4(ind)' from 'Fitch D(ind)' -- INR30m non-fund based working capital limits: upgraded to 'Fitch B(ind)'/'Fitch A4(ind)' from 'Fitch D(ind)' SINGH CASUALS: CARE Assigns 'CARE BB-' Rating to INR0.12cr Loan --------------------------------------------------------------- CARE assigns 'CARE BB-' rating to the bank facilities of Singh Casuals Pvt Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank 0.12 CARE BB- Assigned Facilities-Term loan Long term Bank Facilities- 5.50 CARE BB- Assigned Fund Based CC limit Rating Rationale The rating is constrained by small scale of operations of Singh Casuals Private Ltd., its moderate financial risk profile marked by low profitability margins, modest capital structure and elongated operating cycle, modest financial profile of the parent to which it supplies majority of its products and competition from other players in the domestic apparel industry. The rating is however underpinned by experience of promoter in the apparel industry. The ability of the company to improve its scale of operations and financial risk profile are the key rating sensitivities. Singh Casuals Pvt Ltd was incorporated in the year 1997. In the year 2003, Chermas Exquisite Limited (CEL; rated 'CARE BB-/A4') acquired it and SCPL became its wholly owned subsidiary. SCPL is into manufacturing of readymade garments for the domestic market and its major products are sold to the retail outlets of CEL. The company achieved a PAT (after def. Tax) of INR0.57 crore on the total income of INR15.85 crore during FY11 (refers to a period from April 1 to March 31). SURAJ CONSTRUCTION: Inadequate Info Cues Fitch to Withdraw Rating ----------------------------------------------------------------- Fitch Ratings has withdrawn India-based Suraj Constructions's 'Fitch D(ind)nm' National Long-Term rating. The 'Fitch D(ind)nm' rating on Suraj's INR136.2 million secured cash credit limit has also been withdrawn. The ratings have been withdrawn due to lack of adequate information, and Fitch will no longer provide ratings or analytical coverage of Suraj. SWARNALATHA AGRITECH: CARE Rates INR9cr Loan at 'CARE B' -------------------------------------------------------- CARE assigns 'care b' rating to the bank facilities of Swarnalatha Agritech Pvt. Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 9.00 'CARE B' Assigned Rating Rationale The rating factors in the absence of prior experience of promoters in manufacturing of crude rice bran oil, nascent stage of operations, operations in a fragmented market, scarcity of raw material (rice bran), low capacity utilization, high financial leverage, working capital intensive nature of business and instance of delay in debt servicing in the past. The rating derives strength from the experienced team of management and strong demand for crude rice bran oil from local refineries and de-oiled bran to aquaculture industry. The ability of the company to source sufficient quantities of raw material (rice bran) from brokers/mill owners for improving its capacity utilization, sell its entire produce of crude bran oil and de-oiled cake to refineries and aquaculture industry and sustain profitability margins given operations in a competitive and fragmented industry are the key rating sensitivities. About Swarnalatha Agritech Incorporated in February 2010, Swarnalatha Agritech Private Limited (SAPL) has set up a 300 TPD solvent extraction plant for extracting crude bran oil from rice bran in Krishna District, approximately, 35 Kms from Vijayawada city. The plant, which became operational from Feb 17, 2011, has been set up at a project cost of INR9.28 crore funded through term loan of INR5 crore and the remaining through a mix of equity and unsecured loans brought in by the promoters. The company is promoted by Shri Jogi Venkateswara Rao, an experienced businessman, along with his family members. For the period between February 17, 2011 and March 31, 2011, the company's sales amounted to INR2.31 cr. During the financial year, the company had earned a profit of INR0.03 crore. SAPL has achieved total operating income of INR26.20 cr and earned a profit of INR0.01 cr during H1FY12. TA INFRA: CARE Reaffirms 'CARE D' Long-Term Bank Loan Rating ------------------------------------------------------------ CARE reaffirms rating assigned to the bank facilities of TA Infra Projects Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 133.75 CARE D Reaffirmed (reduced from 134.25) Long-term/Short-term Bank 7.75 CARE D Reaffirmed Facilities (enhanced from 6.75) Short-term Bank Facilities 8.25 CARE D Reaffirmed (reduced from 19.00) Rating Rationale The ratings continue to take into account the strain on the liquidity position of TA Infra Projects Ltd. and consequent delays in servicing of debt obligations. TA Infra Projects Ltd was incorporated in January 1997 as Taher Ali Industries & Projects Private Ltd by Mr. Taher Ali to take over business of his proprietorship firm Taher Ali Engineers & contractors (TAEC). TAEC was started in 1980 by Mr. Ali to enter into the business of execution of irrigation, water supply and sewerage projects on turnkey basis. Later in Nov 2010, the company was converted into public limited company as TA Infra Projects Limited. TAIPL is into execution of irrigation, water supply, sewerage and telecom infrastructure projects on turnkey basis along with manufacturing of Mild Steel Pipes (MS Pipes) and Pre-stressed Concrete Pipes (PSC Pipes). It has an all India tie up with Ericsson, Sweden to manufacture and install Telecom towers (patented product of Ericsson). Mr. Ali is the chairman of the company and takes care of day-to- day operations of the company along with Mr. M Rehman, Managing Director and Mr. A Rehman, Executive Director. TOYOTA CONSTRUCTION: CARE Reaffirms BB Rating to INR10.1cr Loans ---------------------------------------------------------------- CARE reaffirms the ratings assigned to the bank facilities of Toyota Construction Pvt Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 6.68 CARE BB Reaffirmed Long-term/Short-term 3.50 CARE BB/CARE A4 Facilities Reaffirmed Rating Rationale The ratings continue to remain constrained by the modest scale of operations with the limited geographical presence of Toyota Construction Private Ltd (TCPL), moderate order book position resulting in the limited revenue visibility and high degree of competition in the construction industry. However, the ratings continue to factor the benefits derived from the promoters' rich experience in the construction business, TCPL's long-standing association with the private sector clients and its moderate level of leverage and coverage indicators. Increase in the scale of operations through the timely execution of new contracts and diversification into new segments and geographies along with improvement in the profitability while maintaining its leverage position is the key rating sensitivity. About Toyota Construction Started in 1970 as Raj Construction, a proprietorship concern, Toyota Construction Pvt Ltd. was promoted by Mr Janardan Singh, father of the current managing director, Mr Rajesh Singh. In 1989, it changed its name to Toyota Construction and in 2004 it got converted into a private limited company. TCPL executes civil construction contracts with major focus on the commercial and housing projects. The company has experience in the construction of roads, school building, factory building and effluent treatment plant. As per audited results of FY11 (refers to the period April, 1 to March 31), TCPL had reported a total operating income of INR31.00 crore and a PAT of INR1.01 crore. VARAM BIO-ENERGY: Strain Liquidity Cues CARE Junk Ratings --------------------------------------------------------- CARE reaffirms rating assigned to the bank facilities of Varam Bio-Energy Pvt Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 31.01 CARE D Reaffirmed (enhanced from 25.91) Rating Rationale The rating continues to take into account the strain on the liquidity position of Varam Bio-Energy Pvt Ltd and consequent delays in servicing of debt obligations. Varam Bio-Energy Pvt Ltd was incorporated in January 2002 by Mr. Kameswara Raju, Mr. P Hari Krishna, Mr. P Mohan Kumar, Mr. Prashant Mupparapu and their associates. It owns and operates a 10MW bio-mass power plant located in Rajegaon Village, Bhandara near Nagpur. The plant started its commercial operations in February 2009. The promoters hold 74% stake in the company while PTC India Financial services Ltd is a 26% equity partner. During FY11 (refers to the period April 1 to March 31), VBEPL has reported a Net loss of INR5.62cr (INR9.19 cr for FY10) on a total income of INR17.41 cr (INR8.08 cr for FY10). ========= J A P A N ========= AIJ INVESTMENT: Japan to Require Asset Manager External Audits -------------------------------------------------------------- Bloomberg News reports that the ruling Democratic Party of Japan is seeking to amend laws to require external audits for privately owned asset management firms in a bid to avoid a recurrence of the AIJ Investment Advisors Co. case. Tsutomu Okubo, a lawmaker who leads the panel, told Bloomberg in an interview that the DPJ has launched a working team under its financial committee to discuss changes to rules governing investment managers for pension money. Mr. Okubo expects a bill to amend the Financial Instruments and Exchange Law will win Cabinet approval as early as this month and then be sent to the Diet, Bloomberg relates. According to Bloomberg, Japan's financial regulator is investigating asset managers following the Feb. 24 suspension of AIJ, which has failed to account for the more than JPY210 billion (US$2.6 billion) it oversaw for clients, including pension funds. The case has raised concern over the safety of retirement assets at a time when more than a fifth of the nation's population is over 65, says Bloomberg. "The social impact from the AIJ issue is huge, and we want to avoid a second or third case like this," Bloomberg quotes Mr. Okubo, a DPJ legislator and a former Morgan Stanley executive, as saying. "We need a swift remedy to prevent a repeat of this." Bloomberg relates Mr. Okubo said the subcommittee on pension funds and AIJ issues will be made up of 10 politicians from Prime Minister Yoshihiko Noda's DPJ, including former Government Revitalization Minister Renho and ex-labor minister Akira Nagatsuma. The FSA said a total of 265 asset managers nationwide will be required to submit status reports to the FSA by March 14, Bloomberg discloses. The reports must contain details of a firm's operations, contracts and their amounts, and any past complaints from customers, the report adds. Tokyo-based asset-management firm AIJ Investment Advisors Co., led by Kazuhiko Asakawa, was established in April 1989, and had 120 clients including pension plans with JPY183.2 billion in assets as of the end of 2010. It has 12 employees. AIJ INVESTMENT: Execs Likely to Face Charges Over Falsified Docs ---------------------------------------------------------------- The Yomiuri Shimbun, citing informed sources, reports that the Securities and Exchange Surveillance Commission is considering filing criminal charges against executives of AIJ Investment Advisors Co. on suspicion of falsifying pension asset management results for years. The investigation by the commission, the Financial Services Agency's independent watchdog, has been conducted mainly by its Securities Business Inspection Division, the report says. After the probe is completed, the Investigation Division will start examining whether criminal charges should be laid against AIJ President Kazuhiko Asakawa and other executives, according to sources cited by The Yomiuri Shimbun. According to the report, sources said the planned investigations reflect the far-reaching impact of AIJ's alleged falsification of business documents to cover up huge losses of assets entrusted to the company by corporate pension funds. The Yomiuri Shimbun relates that sources said AIJ has submitted false business statements to the Finance Ministry's Kanto Regional Finance Bureau since 2002, when the firm started investing in financial derivatives and similar instruments through funds based in the Cayman Islands, a tax haven. In addition to filing business statements that concealed losses, AIJ issued phony investment result reports to clients and attracted new customers through explanations that bore little semblance to its actual asset management results, sources told The Yomiuri Shimbun. The sources, as cited by The Yomiuri Shimbun, said the president and a handful of other AIJ executives were behind the falsification of the business results. The Investigation Division will search AIJ and related locations with the police after the inspection division completes its probe, the sources told The Yomiuri Shimbun. As reported in the Troubled Company Reporter-Asia Pacific on Feb. 27, 2012, Bloomberg News said the Financial Services Agency on Feb. 24 ordered AIJ Investment Advisors Co. to halt its business after finding the asset manager's clients funds of about JPY183.2 billion (US$2.3 billion) may be "adversely affected" and started a probe into the 263 asset managers operating in Japan. Tokyo-based asset-management firm AIJ Investment Advisors Co., led by Kazuhiko Asakawa, was established in April 1989, and had 120 clients including pension plans with JPY183.2 billion in assets as of the end of 2010. It has 12 employees. ==================== N E W Z E A L A N D ==================== FIVE STAR: Judge to Decide on Guilty Plea Reversal Bid This Month ----------------------------------------------------------------- The New Zealand Herald reports that Neill Williams, a man alleged to be a prime mover in the failed Five Star Group, will need to wait until later this month to discover if a second bid to reverse his guilty plea has been successful. Mr. Williams originally pleaded guilty in October 2010 to Securities Act charges for allegedly misleading Five Star investors, according to the Herald. But in the Auckland District Court Monday Mr. Williams' lawyer, Andrew Speed, argued his client only did so because he was too ill to endure a trial and believed a guilty plea could result in home detention instead of prison, the Herald relates. The Herald says Mr. Speed also argued his client had a strong defence to the Crown charges as he applied to vacate Mr. Williams' original guilty plea. The bid is the second the accused has made -- his first application was declined by Judge Roderick Joyce QC in March last year, the report notes. According to the report, Mr. Speed argued there was fresh evidence to support Williams' case since the initial bid. But Crown lawyer Ian Brookie said there was "nothing truly new about the application" and claimed it relied on the same line of defence Mr. Williams had used all along, the Herald relays. Mr. Brookie, as cited by the Herald, said the defence's position on Mr. Williams' poor health was "overstated" because the accused was working in 2010 and made weekend trips to his holiday home in Russell. Judge David Harvey reserved his decision on the application until later this month, the Herald notes. As reported in the Troubled Company Reporter-Asia Pacific on Aug. 27, 2010, the Serious Fraud Office laid over 100 charges under the Crimes Act against Nicholas Kirk, Marcus MacDonald, Anthony Bowden and Neill Williams who are associated with the collapsed Five Star Finance Group. The offences each carry a maximum penalty of seven years imprisonment. Messrs. Kirk, McDonald and Bowden are former directors of Five Star Finance Ltd, while Mr. Williams was heavily involved in its management. The Companies Office also laid criminal charges in Auckland District Court against Messrs. MacDonald, Bowden, Kirk and Williams. The case was referred to it by the Securities Commission. About Five Star Established in 1992, Five Star Finance Limited focused on financing real estate loans following a restructuring exercise that created Five Star Consumer Finance in New Zealand and Five Star Consumer Finance Pty in Australia. Five Star Debenture Nominee Limited acted as debenture holder on behalf of unsecured depositors and appeared to lend all of the money it raised to Five Star Finance. Five Star Finance Limited went into receivership on September 5, 2007. Five Star Debenture Nominee Limited went into liquidation on November 5, 2007. At the start of the liquidation in June 2009, the shortfall of assets to liabilities was NZ$51.7 million, according to The Dominion Post. The Post says joint liquidator Paul Sargison, of Gerry Rea & Associates, said the firm's directors attributed the group's failure to the economic crisis but his own appraisal is that Five Star has been insolvent since no later than March 31, 2005. OTAGO RUGBY: Liquidation Put on Hold as Possible Lifeline Emerges ----------------------------------------------------------------- Sport24 reports that the Otago Rugby Football Union put off immediate liquidation Friday, March 2, and revealed the existence of a possible lifeline. Faced with debts of NZ$2.35 million, the Otago Union said earlier in the week it would fold on March 2, but at the last minute announced that the move had been delayed for a week, according to Sport24. "We considered the state of play and where we've got to in unravelling the true position of the union, and we've decided to extend the deadline for seven days," the report quotes ORFU president Wayne Graham as saying. Otago's precarious financial position does not affect the Otago Highlanders Super 15 team, which is a separate legal entity and not liable for ORFU debts, the report notes. Sport24 notes that a number of wealthy possible benefactors have been in talks with ORFU in recent days about a potential recovery package, but New Zealand Rugby Union chief executive Steve Tew declined to go into details. According to the report, Mr. Tew said Otago's financial future remained bleak but agreed on the need for more time. "The key parties have been talking since Monday and have identified some options that warrant further examination," Sport24 quotes Mr. Tew as saying. "It makes sense for the union to delay proceedings to allow these parties more time to undertake proper analysis." Based in Dunedin, the Otago Rugby Football Union -- http://www.orfu.co.nz/-- is the official governing body of rugby union for the Otago Region of New Zealand. ===================== P H I L I P P I N E S ===================== BANCO FILIPINO: BSP Seeks to Overturn CA Decision to Reopen Bank ---------------------------------------------------------------- Manila Standard Today reports that the Bangko Sentral ng Pilipinas has asked the Court of Appeals to reconsider its decision ordering the reopening of Banco Filipino, insisting that the padlocked savings bank is insolvent and has PHP23 billion in liabilities. According to the report, the central bank's legal counsel said the appellate court's Special 14th Division erred when it ruled that Banco Filipino Savings and Mortgage Bank was not insolvent. Manila Standard relates that John Balismono of the Villaraza Cruz Marcelo & Angangco law firm said the appellate court is risking dissipating PHP25 billion in public funds for a bank that has admitted losing PHP12 billion. "It was quite a surprise how the Court . . . can say that Banco Filipino is not insolvent," the report quotes Mr. Balismono as saying. "The blatant error and grave injustice wrought by the assailed decision is thus undeniable." The central bank and the Monetary Board, its policy-making body, are seeking to overturn the Court of Appeals' Jan. 27 decision ordering the central bank to reopen Banco Filipino and provide it with a PHP25-billion loan, the report notes. Meanwhile, Manila Standard Today reports that former Securities and Exchange Commission chairman Perfecto Yasay on Wednesday said Banco Filipino will next week file contempt charges against central bank and Monetary Board officials for their failure to comply with the Court of Appeals' decision. As reported in the Troubled Company Reporter-Asia Pacific on Feb. 3, 2012, the Philippine Daily Inquirer said the Court of Appeals in January ordered the Bangko Sentral ng Pilipinas to reopen Banco Filipino Savings and Mortgage Bank and to extend to it within 30 days state financial assistance worth more than PHP25 billion. According to the Inquirer, the appellate court's former Special 14th Division ruled that respondents BSP, Monetary Board and the Philippine Deposit Insurance Corp. committed grave abuse of discretion and violated BF's right to due process when they implemented MB Resolution 372-A on March 17, 2011 which placed the bank under receivership and barred it from continuing its business operations in the country due to "unsound banking practices." About Banco Filipino Banco Filipino Savings & Mortgage Bank -- http://www.bancofilipino.com/-- was organized in 1964, offers full domestic banking services, which are five main types, namely: cash services; commercial services; loans; money market services; and trust services. It started operations on July 9, 1964. Bangko Sentral ng Pilipinas closed Banco Filipino after the bank's liabilities overwhelmed its assets by PHP8.4 billion, and then filed charges against the bank's directors and officials. BSP also placed the bank under the receivership of the state-run Philippine Deposit Insurance Corp. to provide immediate relief to the bank's 177,652 depositors. ================= S I N G A P O R E ================= FIRST SHIP: Fitch Downgrades Issuer Default Rating to 'B' --------------------------------------------------------- Fitch Ratings has downgraded Singapore-based First Ship Lease Trust's Long-Term Foreign Currency Issuer Default Rating (IDR) to 'B' from 'B+'. The Outlook is Negative. The downgrade reflects FSLT's heightened liquidity risk following the default of one of its lessees, Berlian Laju Tanker (BLT, rated 'C') that contributed to 12.8% of FSLT's 2011 revenues. Despite BLT's default, Fitch expects FSLT to meet its contractual debt servicing commitments for the next 12 months. However, the agency expects the company's financial metrics to weaken. The Negative Outlook reflects the risk that the portfolio would see more defaults due to the deterioration in financial profile of certain other lessees and Fitch's Negative Outlook for the global shipping industry. If the portfolio's default rate increases further, projected operating cash flows and the USD32.3m cash outstanding as of 31 December 2011 would not be sufficient to fund the USD44m annual principal repayment and operating expenses. Excluding the USD32.3m cash, FSLT's financial flexibility is low as all its vessel purchases have been funded through secured bank debt. The issuer does not possess sufficient unencumbered assets to raise additional debt during times of tight liquidity. The Outlook may be revised to Stable if FSLT generates positive free cash flow, on a sustained basis, after paying its unit distribution and USD44m annual principal repayment. The rating may be further downgraded if FSLT's cash balance falls below USD20m. JURONG MACHINERY: Creditors' Proofs of Debt Due April 2 ------------------------------------------------------- Creditors of Jurong Machinery And Automation Pte Ltd, which is in voluntary liquidation, are required to file their proofs of debt by April 2, 2012, to be included in the company's dividend distribution. The company's liquidators are: Leow Quek Shiong Gary Loh Weng Fatt c/o BDO LLP 21 Merchant Road #05-01 Royal Merukh S.E.A. Building Singapore 058267 KOMARS ENTERPRISE: Court to Hear Wind-Up Petition on March 16 ------------------------------------------------------------- A petition to wind up the operations of Komars Enterprise Pte Ltd will be heard before the High Court of Singapore on March 16, 2012, at 10:00 a.m. Jack Investment Pte Ltd filed the petition against the company on Feb. 20, 2012. The Petitioner's solicitors are: Bee See & Tay 10 Anson Road #24-11 International Plaza Singapore 079903 LINCOLN BUSINESS: Court to Hear Wind-Up Petition on March 23 ------------------------------------------------------------ A petition to wind up the operations of Lincoln Business School Pte Ltd will be heard before the High Court of Singapore on March 23, 2012, at 10:00 a.m. Worldwide Academic Education (S) Pte Ltd filed the petition against the company on Feb. 24, 2012. The Petitioner's solicitor is: TSMP Law Corporation 6 Battery Road, Level 41 Singapore 049909 SIN LEONG: Court Enters Wind-Up Order ------------------------------------- The High Court of Singapore entered an order on Feb. 17, 2012, to wind up the operations of Sin Leong Sieng Hardware & Machinery Pte. Ltd. Hoe Seng Huat Pte Ltd filed the petition against the company. The company's liquidator is: The Official Receiver Insolvency & Public Trustee's Office The URA Centre (East Wing) 45 Maxwell Road, #06-11 Singapore 069118 THIRD WIND: Court Enters Wind-Up Order -------------------------------------- The High Court of Singapore entered an order on Feb. 24, 2012, to wind up the operations of Third Wind Rubber Pte. Ltd. Thung Yai Rubber Co. Ltd. filed the petition against the company. The company's liquidator is: The Official Receiver Insolvency & Public Trustee's Office The URA Centre (East Wing) 45 Maxwell Road, #06-11 Singapore 069118 ================ S R I L A N K A ================ EDIRISINGHE TRUSTE: Fitch Affirms Nat'l Long-Term Rating 'BB-' -------------------------------------------------------------- Fitch Ratings Lanka has affirmed Edirisinghe Trust Investment Ltd's National Long-Term rating at 'BB-(lka)' with a Stable Outlook. The rating reflects ETI's weak core-equity position and its significant exposure to real estate (1.02x capital base), which has weighed down on its profitability. The rating also reflects ETI's established franchise and its large exposure to pawn- broking leading to strong asset quality. Core equity/assets (excluding fair-value gains on investment properties), although improving to 7.1% at end-December 2011 (9MFY12; FYE11: 5.1%), remains below that of rating peers. ETI's shareholders expect to inject LKR1bn of capital in 2012, which could increase this ratio to over 10%. An increase in its core capitalization, while maintaining asset quality and profitability and reducing its real estate exposure could result in an upgrade of ETI's rating. ETI's real estate exposure although decreasing still remains significant, and accounted for 13% of assets at end-9MFY12 (FYE11: 22%). These assets are debt-funded and due to their slow-to-yield nature have continued to drag down profitability. The company has indicated that it will not undertake any further real-estate investments in the medium term. Despite higher net interest margins (NIMs: 13.9% in 9MFY12, 12.9% in FY11), pre-tax return on assets improved only marginally to 3.0% in 9MFY12 (FY11: 2.8%) due to an LKR68m loss on property disposal. Total gross advances accounted for only 58% of ETI's assets compared with 78% for Fitch-rated registered finance companies (RFCs), indicating the company's lower proportion of high-yielding assets. Fitch expects ETI's profitability to improve as it winds down its real estate portfolio and increases its lending book. The company's substantial pawn-broking portfolio (73% of advances at end-9MFY12) benefits its regulatory capital adequacy ratios (CARs) due to the low risk weight on gold-backed lending. As such, CARs were above the minimum 5% (Tier 1) and 10% (total) in 9MFY12, as stipulated by the regulator. The low credit risk on its pawning book has also enabled ETI to consistently maintain lower non-performing loan (NPL) ratios compared with the sector. Although potential volatility in gold prices exposes the company to market risks, Fitch notes that gold prices have been on an upward trend and that the company maintains a more conservative loan-to-value ratio compared with peers. Gross three-month NPLs accounted for only 3.0% of advances at end-9MFY12 (FYE11: 3.1%) compared with 5.8% for other Fitch-rated RFCs. This enabled ETI to hold a comfortable equity buffer to meet potential loan losses, with un-provided-for-NPLs accounting for just 4.1% (Fitch-rated RFCs: 19.3%). However, Fitch notes that ETI's net NPL/equity position could weaken as its vehicle finance portfolio (22% of advances and with an NPL ratio of 7.8%) grows, given the current levels of capital. ETI is a mid-sized RFC, and has been a closely held family-owned company since its establishment in 1967. The Edirisinghe family, which also has interests in manufacturing and retailing of gold jewellery, pawning and film production, owns 99.2% of ETI. This holding would be diluted once the company lists its shares on the Colombo Stock Exchange. =============== X X X X X X X X =============== * Upcoming Meetings, Conferences and Seminars --------------------------------------------- April 3-5, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Grand Hyatt Atlanta, Atlanta, Ga. Contact: http://www.turnaround.org/ Apr. 19-22, 2012 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ July 14-17, 2012 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 2-4, 2012 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Md. Contact: 1-703-739-0800; http://www.abiworld.org/ November 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 29 - Dec. 2, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800; http://www.abiworld.org/ April 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ October 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Ivy B. Magdadaro, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2012. 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 Peter Chapman at 240/629-3300. *** End of Transmission ***