/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/120614.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, June 14, 2012, Vol. 15, No. 118 Headlines A U S T R A L I A INTEGRITY PLUS: Operators Plead Guilty to ASIC Charges PERMO-DRIVE TECHNOLOGIES: Assets Up for Sale Following Collapse TRIO CAPITAL: Investors Demand Release of GCSL Documents C H I N A GREENTOWN CHINA: Moody's Reviews 'Caa1' CFR for Upgrade GREENTOWN CHINA: S&P Puts 'CCC+' Corp. Credit Rating on Watch Pos SHANGHAI ZENDAI: Moody's Upgrades CFR to 'B3'; Outlook Stable H O N G K O N G HK ASSOCIATION: Creditors' Proofs of Debt Due June 28 HUNGKAY INT'L: Placed Under Voluntary Wind-Up Proceedings JUPITER NETWORKS: Creditors' Proofs of Debt Due June 30 LEXUS AUTOMATION: Members' Final Meeting Set for July 9 LINK GARMENT: Cheung Yuk Cheung Steps Down as Liquidator MUSIC IN: Placed Under Voluntary Wind-Up Proceedings OPTO SENSORS: Creditors' Proofs of Debt Due July 8 SULZER PUMPS: Wong Man Chung Francis Steps Down as Liquidator TMAX SOURCING: Creditors' Proofs of Debt Due July 13 VICTORY DYEING: Wong and Arab Step Down as Liquidators YARN HOUSE: Creditors' Meeting Set for June 15 I N D I A EKDANT BUILDTECH: CARE Assigns 'CARE BB-' Rating to INR10cr Loan GAYATRI SUGARS: Delays in Loan Payment Cues CARE Junk Ratings JAIPUR INTEGRATED: CARE Reaffirms 'BB' Rating on INR25cr Loan LATHIYA BROTHERS: ICRA Reaffirms 'BB' Rating on INR6.5cr Loan PERFECT ENG'G: Delays in Loan Payment Cues ICRA Junk Ratings PRAKASH CHEMICALS: CARE Rates INR6cr LT Loan at 'CARE BB+' PRAKASH CHEMICALS AGENCIES: CARE Rates INR7.02cr Loan at 'BB+' RADHA BIHARI: ICRA Assigns '[ICRA]B' Rating to INR8cr LT Loan RITESH TRADEFIN: CARE Rates INR9.1cr Loan at 'CARE B+' SAKAL AUTO: CARE Assigns 'CARE BB' Rating to INR4cr LT Loan SHAMBHU MAHADEV: CARE Places 'CARE BB-' Rating on INR29.13cr Loan SPY AGRO: CARE Assigns 'CARE C' Rating to INR217.44cr Loan UMANG BOARDS: CARE Assigns 'B+' Rating to INR25.52cr Loan J A P A N DREAM STAGE: Closes Doors After Former Parent Bankruptcy N E W Z E A L A N D ARIES HOLDINGS: NZ$8.8-Mil. Mansion Up for Mortgagee Sale NZ DAIRIES: Receivers Get Seven Offers from Interested Buyers S I N G A P O R E KXD DIGITAL: Court Enters Wind-Up Order LEHMAN BROTHERS: Creditors' Proofs of Debt Due June 22 MOUNT ELIZABETH: Creditors' Proofs of Debt Due July 7 ORION-TWO DEVELOPMENT: Creditors' Proofs of Debt Due July 10 PARADIGM SHIPPING: Court to Hear Wind-Up Petition on June 29 T A I W A N * TAIWAN: Moody's Expects Bank Profitability to Remain Low - - - - - ================= A U S T R A L I A ================= INTEGRITY PLUS: Operators Plead Guilty to ASIC Charges ------------------------------------------------------ The Australian Securities and Investments Commission said that Brian Wood of Davistown and Jimmy Truong of St John's Park have pleaded guilty in the Downing Centre Local Court in Sydney to operating a Ponzi scheme called the Integrity Plus Fund. Facing the Court on June 5, 2012, Mr. Wood pleaded guilty to a total of 10 charges, including six counts of making false statements to investors and four counts of fraudulently misappropriating investors' funds. Mr. Truong pleaded guilty to four charges of making false statements to investors. Both men falsely stated to investors that their investments would earn returns of 4% per month and that the capital amounts of their investments were guaranteed. A third man, Con Koutsoukos of Wiley Park, has not entered a plea to three charges of making false statements to investors. Mr. Wood and Mr. Truong will next appear in the District Court at Sydney for sentencing on June 15, 2012. Mr. Koutsoukos's matter has been adjourned and he will next appear at the Downing Centre Local Court on July 3, 2012. Between December 2004 and December 2007, the Integrity Plus scheme raised in excess of $30 million from about 270 investors. In December 2007, ASIC obtained injunctions from the Supreme Court of NSW against Mr. Wood, Mr. Truong and Mr. Koutsoukos and others preventing the operation of Integrity Plus and securing funds for investors. In June 2008, a liquidator was appointed to the Integrity Plus Fund. According to The Age, liquidator Barry Taylor of HLB Mann Judd, said the Integrity scheme was administered by PJCB International, which was incorporated in the British West Indies. The Age relates that Mr. Taylor said some investors in the Integrity scheme attended seminars by a company called Future Trading Corporation, which described itself as an "innovative supplier of financial education material." Most of the 270 investors were from Sydney and the southern highlands, and were encouraged to set up self-managed superannuation funds, which then invested in Integrity, the report notes. Messrs. Wood and Truong were two of the "beneficial owners" of PJCB International, The Age adds. PERMO-DRIVE TECHNOLOGIES: Assets Up for Sale Following Collapse --------------------------------------------------------------- Cara Waters at SmartCompany reports that Permo-Drive Technologies Ltd was listed for sale this week by administrators PKF Chartered Accountants. SmartCompany notes that Permo-Drive has developed an intellectual property that hydraulically captures kinetic energy in heavy vehicles to reduce operating costs. The technology converts energy from braking into kinetic energy that saves on fuel, but it was never commercialised and Permo-Drive has never made a profit, the report says. The business collapsed on June 1 and administrator Atle Crowe- Maxwell told SmartCompany that Permo-Drive had simply run out of money. "They ran out of money from continuing to try and commercialise the technology in a market where it is difficult to try and raise capital. Things like this go well in times when people have got a little bit of capital to tie up in something that is not core business for them, but at the moment people are not in the mind to put additional money in that," the report quotes Mr. Crowe- Maxwell as saying. SmartCompany notes that PKF advertised the sale of the business in newspapers on Tuesday, called for expressions of interest, and prepared an information memorandum. According to the report, Mr. Crowe-Mawell said Permo-Drive did not employ any staff currently and had not traded for a while. The report says PKF is offering the group's entities, businesses and intellectual property in its entirety for sale or alternatively the group's intellectual property individually. Mr. Crowe-Maxwell, as cited by SmartCompany, said so far he has received "three or four" phone calls requesting copies of the information memorandum and offers for the business must be made by June 22. Permo-Drive Technologies Ltd -- http://www.permo-drive.com/-- is a research and development company. It was established in 2000 and has its head office and engineering centre in Lismore, northern New South Wales, Australia. Permo-Drive is a public company with over 1,900 shareholders and is currently not listed on any exchange. TRIO CAPITAL: Investors Demand Release of GCSL Documents -------------------------------------------------------- smh.com.au reports that investors who lost their savings in the Trio Capital fraud have called for the release of documents, which they hope will expose the associates of the criminal mastermind Jack Flader. Mr. Flader was the architect of Australia's largest superannuation fraud in which $176 million was siphoned out of Trio into the Cayman Islands, smh.com.au notes. The report relates that in the wake of admissions from corporate regulators last week that they had given up the hunt for Jack Flader -- who operates out of Bangkok and Hong Kong -- an action group, "The Victims of Financial Fraud", has vowed to pursue documents which it believes may help to recover victims' losses. "The Victims of Financial Fraud" (VOFF) condemns the failure of ASIC to pursue the kingpin of the Trio Capital fraud, Jack Flader and bring him to justice," the group, as cited by smh.com.au, said a statement. "ASIC has previously claimed that Flader was the 'ultimate controller' of the offshore funds in Trio Capital. This claim is despite Jack Flader coming to the attention of the ATO, APRA and ASIC more than a decade ago, yet all failed to prevent him being able to set up managed investment schemes in Australia." According to the report, VOFF called on the regulators to release all documents relating to "Global Consultants and Services Ltd" (GCSL), the Hong Kong-based custodian of the Trio funds. Mr. Flader was GCSL chief executive but its other officers remain a secret, the report says. In 2010, smh.com.au recalls, lawyers for Mr. Flader sought to block the release of nearly 6,000 GCSL documents in the NSW Supreme Court. The court, however, ordered the documents be released to the Trio liquidator PPB on the basis of a confidentiality agreement with ASIC, according to smh.com.au. The report says ASIC argued that the documents should remain confidential to itself and PPB due to a memorandum of understanding the agency had with regulators in Hong Kong. ========= C H I N A ========= GREENTOWN CHINA: Moody's Reviews 'Caa1' CFR for Upgrade ------------------------------------------------------- Moody's Investors Service has placed Greentown China Holdings Limited's Caa1 corporate family rating and Caa2 senior unsecured rating under review for upgrade. The rating review follows the announcement by Greentown on June 8, 2012 that it has entered into a share subscription agreement and an investment agreement with Wharf (Holdings) Limited, a Hong Kong-based conglomerate. Ratings Rationale "Greentown's near-term liquidity position will improve if Wharf completes its share and convertible securities subscriptions," says Zou Jiming, a Moody's analyst. Greentown will receive a total of approximately HKD5.1 billion upon fulfillment of certain conditions according to the agreements. The company intends to apply the net proceeds for general corporate purposes, repayment of loan, and/or general working capital. "The involvement of Wharf will also improve Greentown's investment and financial management. Wharf will appoint two directors to Greentown's board. Furthermore, Wharf requires the establishment of an investment committee to review land acquisitions in relation to the Greentown's gearing ratio," says Mr. Zou. Moody's will close the review once (a) Wharf has completed the subscription of shares and convertible securities; and (b) Greentown has provided its refinancing plan for its short-term debt in 2012 as well as its debt deleverage plan for the next 2 years. The principal methodology used in rating Greentown was the Global Homebuilding Industry Methodology published in March 2009. Wharf (Holdings) Limited is a company listed on Hong Kong Stock Exchange. The principal business activities of the Wharf Group are ownership of properties for development and letting, investment holding, container terminals as well as communications, media and entertainment. Greentown China Holdings Limited is one of China's major property developers, with a primary focus in Hangzhou city and Zhejiang Province. As of December 31, 2011, it had a land bank with a total attributable gross floor area of 41 million square meters (square meters). GREENTOWN CHINA: S&P Puts 'CCC+' Corp. Credit Rating on Watch Pos ----------------------------------------------------------------- Standard & Poor's Ratings Services had placed the following ratings on China-based property developer Greentown China Holdings Ltd. on CreditWatch with positive implications: The 'CCC+' long-term corporate credit rating on Greentown; The 'CCC' issue rating on the company's outstanding senior unsecured notes; The 'cnCCC+' long-term Greater China credit scale rating on Greentown; and The long-term 'cnCCC' Greater China credit scale rating on the company's notes. "We placed the ratings on CreditWatch with positive implications to reflect our view that Greentown's liquidity pressure is likely to ease following the proposed sale of equity and convertible securities to Hong Kong-based Wharf (Holdings) Ltd. (not rated)," said Standard & Poor's credit analyst Frank Lu. "The CreditWatch placement also reflects our uncertainty about whether Wharf's cash injection will prompt a change in Greentown's aggressive financial management and its high financial leverage." "We expect Greentown to use the projected transaction proceeds of about Hong Kong dollar 5.09 billion to meet debt repayments and for working capital. The proceeds represent about 32% of the company's maturities in 2012. Together with property sales in the first five months of 2012, Greentown's liquidity position will have reversed its deterioration," S&P said. "The bulk of the share and securities sale will require approval from shareholders and regulators. Both Greentown and Wharf expect the transaction to be completed within 180 days after the transaction was announced last Friday," S&P said. "We aim to resolve the CreditWatch status within the next three months after we review the progress of Greentown's share and securities sale plan and its liquidity," said Mr. Lu. "We may revise the outlook to stable or raise the rating by at least one notch if we believe Greentown's liquidity will improve, such that its sources of liquidity will be more than uses over the next six to 12 months. This could happen if Greentown completes the share and securities sale and it achieves at least Chinese renminbi 28.3 billion in property sales in 2012 (our base-case expectation)," S&P said. SHANGHAI ZENDAI: Moody's Upgrades CFR to 'B3'; Outlook Stable ------------------------------------------------------------- Moody's Investors Service has upgraded Shanghai Zendai Property Limited's corporate family rating to B3 from Caa1 after the company repaid its USD-denominated notes on June 6, 2012. Moody's has withdrawn the company's Caa2 senior unsecured bond rating, given the full redemption of the notes. The rating outlook is stable. Ratings Rationale "The rating upgrade reflects Zendai's improved liquidity position after the company fully repaid the US$139 million in senior unsecured notes on June 6. The sale of its interest in the Shanghai Bund project has raised cash for the settlement," says Jiming Zou, a Moody's analyst. Zendai is expected to maintain an adequate cash balance -- relative to its short-term debt -- over the next 12 months. The proceeds of around RMB2.9 billion from the sale of the Bund project exceeded the amount needed its repayment of USD139 million in notes in June and RMB950 million in trust loans in April. "Another factor supporting the upgrade was the removal of execution and funding risk with regard to the Bund project, given its sale," says Zou. Furthermore, Zendai's B3 rating reflects steady income from its investment properties and its diversified portfolio of residential and commercial projects in 11 cities throughout China. Zendai's credit metrics will improve as a result of the disposal of the Bund project and the repayment of the notes and trust loans. Moody's expects its Debt/Book capital ratio to fall below 40% and EBITDA/Interest to rise well above 2.5x. Although Zendai is named as a defendant in a litigation launched by Fosun (Ba2, review for downgrade) with regard to its disposal of the Bund project to SOHO China (unrated), Moody's expects the impact on Zendai will be limited and this assessment is reflected in the B3 rating. At the same time, Zendai's rating is constrained by the company's small business scale and slow progress in contract sales. Moody's notes that the operating environment is lackluster, and is characterized by continued restrictions on purchases and the tight availability of bank credit to developers across the country. In the cases of Zendai itself, property sales have also lagged expectations. Looking ahead, Moody's expects management to refocus on existing projects. In particular, it needs to complete and deliver a significant number of properties this year, and after its book sales fell 31% in 2011. The stable outlook reflects Moody's expectation that Zendai will meet the funding needs of its development projects with its available cash and existing bank credit facilities. The rating could be upgraded, if Zendai can (1) improve its business scale through resuming growth in both contract and book sales; and (2) show a track record in sound project execution and prudent financial management. In terms of credit metrics, a rating upgrade would require EBITDA/interest above 3x and Debt/Book Capital below 50%. The rating could be downgraded, if Zendai (1) fails to achieve its contract and book sales with business strength weakening; (2) makes acquisitions funded by debt that lead to a deterioration of its credit profile; or (3) faces heightened liquidity risk. EBITDA/Interest below 2.0x or its cash balance falling materially below its short-term debt levels would result in a downgrade. The principal methodology used in rating Shanghai Zendai Property Ltd was the Global Homebuilding Industry Methodology published in March 2009. Shanghai Zendai Property Ltd is a mainland China property developer that develops, invests in, and manages residential and commercial properties in China. The group has projects under development in 11 cities in three regions, including northern China, Shanghai and adjacent areas, and Hainan Province. ================ H O N G K O N G ================ HK ASSOCIATION: Creditors' Proofs of Debt Due June 28 ----------------------------------------------------- Creditors of Hong Kong Association of Secretaries and Administrative Professionals Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by June 28, 2012, to be included in the company's dividend distribution. The company's liquidator is: Li Pik Hung Suites 1501-2, 15/F Chinachem Johnston Plaza 178-186 Johnston Road Wan Chai, Hong Kong HUNGKAY INT'L: Placed Under Voluntary Wind-Up Proceedings --------------------------------------------------------- At an extraordinary general meeting held on June 1, 2012, creditors of Hungkay International Limited resolved to voluntarily wind up the company's operations. The company's liquidators are: Chiu Wai Hon Unit 201, 2/F Malaysia Building 50 Gloucester Road Wanchai, Hong Kong JUPITER NETWORKS: Creditors' Proofs of Debt Due June 30 ------------------------------------------------------- Creditors of Jupiter Networks Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by June 30, 2012, to be included in the company's dividend distribution. The company commenced wind-up proceedings on May 31, 2012. The company's liquidator is: Cheung Chun Kwok Suite 1703, 17th Floor Office Tower, Convention Plaza 1 Harbour Road Wan Chai, Hong Kong LEXUS AUTOMATION: Members' Final Meeting Set for July 9 ------------------------------------------------------- Members of Lexus Automation Limited will hold their final general meeting on July 9, 2012, at 3:00 p.m., at Suite 2105, 21/F, Wing On Centre, 111 Connaught Road, Central, in Hong Kong. At the meeting, Mok Yu Cheung, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. LINK GARMENT: Cheung Yuk Cheung Steps Down as Liquidator -------------------------------------------------------- Cheung Yuk Cheung stepped down as liquidator of Link Garment Company Limited on May 30, 2012. MUSIC IN: Placed Under Voluntary Wind-Up Proceedings ---------------------------------------------------- At an extraordinary general meeting held on May 26, 2012, creditors of Music In You Foundation Limited resolved to voluntarily wind up the company's operations. The company's liquidator is: Wong Maria Susana Room B1, 18/F Chung Hing Commercial Building 62-63 Connaught Road, Central Central, Hong Kong OPTO SENSORS: Creditors' Proofs of Debt Due July 8 -------------------------------------------------- Creditors of Opto Sensors Hong Kong Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by July 8, 2012, to be included in the company's dividend distribution. The company commenced wind-up proceedings on May 31, 2012. The company's liquidator is: Lau Hoi Ping Carol Room 1708 Dominion Centre 43-59 Queen's Road East Wanchai, Hong Kong SULZER PUMPS: Wong Man Chung Francis Steps Down as Liquidator ------------------------------------------------------------- Wong Man Chung Francis stepped down as liquidator of Sulzer Pumps (China) Limited on June 1, 2012. TMAX SOURCING: Creditors' Proofs of Debt Due July 13 ---------------------------------------------------- Creditors of Tmax Sourcing Limited, which is in members' voluntary liquidation, are required to file their proofs of debt by July 13, 2012, to be included in the company's dividend distribution. The company commenced wind-up proceedings on May 22, 2012. The company's liquidators are: Stephen Briscoe Wong Teck Meng 602 The Chinese Bank Building 61-65 Des Voeux Road Central, Hong Kong VICTORY DYEING: Wong and Arab Step Down as Liquidators ------------------------------------------------------ Wong Tak Man Stephen and Osman Mohammed Arab stepped down as liquidators of Victory Dyeing Factory Limited on May 29, 2012. YARN HOUSE: Creditors' Meeting Set for June 15 ---------------------------------------------- Creditors of Yarn House Company Limited will hold their meeting on June 15, 2012, at 10:00 a.m., for the purposes provided for in Sections 228A(8), 242, 243, 244, 255A of the Companies Ordinance. The meeting will be held at Unit No. 1015, 10/F, Star House, at No. 3 Salisbury Road, Tsim Sha Tsui, Kowloon, in Hong Kong. ========= I N D I A ========= EKDANT BUILDTECH: CARE Assigns 'CARE BB-' Rating to INR10cr Loan ---------------------------------------------------------------- CARE assigns 'CARE BB-' and 'CARE A4' ratings to the bank facilities of Ekdant Buildtech Pvt. Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 10.0 'CARE BB-' Assigned Short-term Bank Facilities 1.0 'CARE A4' Assigned Rating Rationale The ratings of Ekdant Buildtech Pvt. Ltd. are primarily constrained by its short track record of operations, geographical concentration, risk associated with delay in project execution and receipt of payments, volatile input prices in the absence of price escalation clause, high working capital intensity of operations and sluggish growth witnessed in construction industry amidst high competition. The aforesaid constraints are partially offset by the group support & rich experience of the promoter in execution of construction contracts and healthy order book providing revenue visibility in the medium term. Ability of the company to execute orders within stipulated time period along with maintaining a healthy order book and achieving envisaged revenue and profit margin would be the key rating sensitivities. Ekdant Buildtech Pvt. Ltd., belonging to the 'Ekdant Group' of Noida, was incorporated in March 2011 in order to take over the complete business of 'Ekdant Construction', an existing partnership firm (belonging to the same promoters) constituted in September 2010 and engaged in civil construction works (primarily real estate projects) in the National Capital Region (NCR). Ekdant group, founded by Shri Girish Rauthan in 1996, is a well- known Delhi based civil construction group performing all kinds of civil works for residential complexes, commercial buildings, multiplex & shopping malls, institutional projects etc. Shri B.K.Singhal (Director), having more than two decades of experience in the real estate industry and Shri Ram Singh (Director), having more than four decades of experience look after the day to day affairs of the company. During FY11 (refers to the period from April 1, 2010 to March 31, 2011), EBPL reported a total operating income of INR7.0 crore and a PAT of INR0.2 crore. As per provisional results for FY12, EBPL has reported a total operating income of INR45.2 crore. GAYATRI SUGARS: Delays in Loan Payment Cues CARE Junk Ratings ------------------------------------------------------------- CARE assigns 'CARE D' rating to the bank facilities of Gayatri Sugars Limited. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 121.07 CARE D Assigned Rating Rationale The rating takes into account the ongoing delays in debt servicing on account of tight liquidity position of the company. Gayatri Sugars Limited was established in 1995 by Mrs. Indira Subbirami Reddy, Mr. Sandeep Reddy and Mrs. Sarita Reddy. The company is engaged in the business of manufacturing white crystal sugar, rectified spirit/extra neutral alcohol and power generation. GSL is part of Hyderabad's Gayatri Group. The company has an installed capacity of 65,00 Tonnes per day (TPD) for sugarcane crushing, 50 Kilo Litres per day (KLPD) for distillery and 25.25 MW for the cogen power plant for FY11 (refers to the period April 2010 to March 2011). For FY11, GSL registered net sales of INR109 cr with loss of INR10 cr. For the nine months ended December 2011, GSL registered total income of INR126.92 cr with loss of INR22.32 cr. JAIPUR INTEGRATED: CARE Reaffirms 'BB' Rating on INR25cr Loan ------------------------------------------------------------- ICRA has reaffirmed the rating of '[ICRA]BB' assigned to the INR25.00 crore bank facilities of Jaipur Integrated Texcraft Park Private Limited. The outlook on long term rating is stable. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Term Loan 25.00 [ICRA]BB (Stable)(Reaffirmed) The rating reaffirmation takes into account significant physical progress achieved by the project since last rating exercise. However, ICRA notes continued delays in project execution vis a vis its original completion schedule; as a result, the debt repayments are expected to commence before completion of the projection. Notwithstanding the delays, the rating takes comfort from liquidity support available with company by way of six month debt servicing reserve account (DSRA) and planned common debt servicing fund (CDSF) established by collecting additional 10% of member's monthly dues towards the SPV. Also, ICRA notes that the SPV has taken initiative of collecting dues from unit holders in advance from April 2012 onwards and one tranche has been successfully collected. The rating also takes into account low funding risk as allocated equity amounts have been infused by unit holders, term loan has been fully disbursed, and 76% of the revised grant from government has been received. Further, government approval has been received for incremental grant amounting to 6% of revised project cost on account of cost escalation, and SPV has also secured grant of INR4 crore from European Union's Switch Asia Project. The rating is also supported by IL&FS' project management capability, flexibility in structure offered as per the contract terms by allowing replacement of non performing members, and established operations of the unit holders. Though, the rating continues to remain constrained on account of untested ability of unit holders to pay combined annual dues of the order of INR8 crore in timely manner. Going forward, ability of the SPV to handover the units without incurring any incremental time and cost over runs; timely commencement of operations by various members; and timely collection of dues from these unit holders will remain key rating sensitivities. Jaipur Integrated Texcraft Park Private Limited is a special purpose vehicle promoted by existing hand block printers and garment manufacturers having operations in and around Jaipur, Rajasthan with the specific objective of implementing an Integrated Textile Park. The implementation includes development, operations and maintenance of the project. The project has been sanctioned under the Scheme for Integrated Textile Park, and the Government of India grant for 40% of the project cost (excluding pre-operative expenses) has been approved. LATHIYA BROTHERS: ICRA Reaffirms 'BB' Rating on INR6.5cr Loan ------------------------------------------------------------- ICRA has re-affirmed the long term rating of '[ICRA]BB-' and the short term rating of '[ICRA]A4' to the INR6.50 crore fund based limits of Lathiya Brothers and Company. The outlook on the long term rating is stable. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Fund based limits 6.50 [ICRA]BB-(Stable)/ [ICRA]A4 reaffirmed The ratings reflect the company's strained liquidity position arising from consistently high receivables resulting in almost full utilization of working capital limits. The scale of operations remains small and are characterised by inherent thin profitability owing to presence in CPD business. ICRA also notes the susceptibility of business operations to adverse foreign exchange movements. The firm's sales have declined in FY 2012, given the persistent increase in rough diamond prices coupled with labor issues at the firm's manufacturing facility which has hampered production activities. The ratings however favorably factor in the long standing experience of the partners in the cut and polished diamonds business and the firm's conservative capital structure over the years. Promoted by Mr. Valjibhai K. Lathiya and his brothers, Lathiya Brothers & Co. (LBC) commenced business as a partnership firm in 1989. LBC is engaged in export of cut and polished diamonds. The firm has a processing unit in Surat and a sales office in Mumbai. Recent results: LBC recorded a net profit of Rs.0.12 crore on an operating income of INR18.55 crore as per the provisional figures for the year ending March 31, 2012 and a net profit of Rs.0.11 crore on an operating income of INR20.36 crore for the year ending March 31, 2011. PERFECT ENG'G: Delays in Loan Payment Cues ICRA Junk Ratings ------------------------------------------------------------ ICRA has assigned an '[ICRA]D' rating to the INR17.50 crore fund- based bank facilities and the INR6.00 crore non-fund based facilities of Perfect Engineering Associates Private Limited. ICRA has also assigned an '[ICRA]D' rating to the INR1.50 crore short-term non-fund-based bank facilities of PEAPL2. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Term Loan 11.50 [ICRA]D assigned Long-term non-fund 6.00 [ICRA]D assigned based Limits Short-term non-fund 1.50 [ICRA]D assigned based Limits The assigned rating is constrained by PEAPL's recent delays in servicing of debt obligations due to delay in collection from its customers; high sales concentration risks, with about 80% of the revenues coming from Municipal Corporation Of Greater Mumbai during last 5 years; weak coverage indicators and low cash accruals and its small scale of operations. The rating however, takes into account the long experience of the management in municipal water works business; healthy order book of about INR38.00 crore, which gives visibility to revenues in the medium term and established relations with government departments along with highest certification for water mechanical works from Municipal Corporation Of Greater Mumbai. Incorporated in 1972, Perfect Engineering Associates Pvt. Ltd. is based out of Mumbai, Maharashtra and is involved in repair and construction of water pipe lines and construction of water reservoirs for various municipal corporations. Recent Results: In 2010-11, PEAPL reported a profit after tax (PAT) of Rs.0.23 crore on an operating income of INR15.84 crore as compared to a PAT of INR0.65 crore on an operating income of INR16.78 crore in 2009-10. As per the provisional results for 2011-12, PEAPL has recorded an operating income of INR23.76 crore. PRAKASH CHEMICALS: CARE Rates INR6cr LT Loan at 'CARE BB+' ---------------------------------------------------------- CARE assigns 'CARE BB+' and 'CARE A4+' ratings to the bank facilities of Prakash Chemicals Pvt. Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 6.00 CARE BB+ Assigned Short-term Bank Facilities 9.50 CARE A4+ Assigned Rating Rationale The ratings are constrained by the modest scale of operations of Prakash Chemicals Pvt. Ltd. risks inherent in trading operations, its thin profitability and low capitalisation. The ratings are further constrained by the high working capital intensity of its operations and its presence in a highly competitive and fragmented chemical industry. The ratings, however, factor in the benefits derived from the established track record of the promoters in the chemical trading business, its established sourcing arrangements and reputed clientele. The ability of PCPL to increase its scale of operations, improve its profitability and efficiently manage its working capital would be the key rating sensitivities. PCPL was initially constituted as a partnership firm and was subsequently converted into a private limited company in 1994. PCPL was established by Mr. Prakash Shah, Mr. Dilip Shah and Mr. Manish Shah who have experience of more than three decades in the business of chemical trading. Currently, PCPL is being managed by Mr. Chirag Shah, MD, who has around two decades of experience in trading of chemicals. PCPL is involved into the trading of various chemicals viz titanium dioxide, pigments, oleo chemicals, emulsions, polymers, additives, colour chemicals etc used in pharmaceuticals, cosmetic & plastics industry. PCPL has various other group companies which are also involved in the chemical trading business including Prakash Chemicals Agencies Pvt. Ltd. (PCAPL; rated CARE BB+/CARE A4+). During FY11 (refers to the period April 01, 2010 to March 31, 2011), PCPL reported total operating income of INR43.61 crore and PAT of INR0.79 crore as compared to a total operating income of INR31.58 crore and PAT of INR0.68 crore FY10. PRAKASH CHEMICALS AGENCIES: CARE Rates INR7.02cr Loan at 'BB+' -------------------------------------------------------------- CARE assigns 'CARE BB+' and 'CARE A4+' ratings to the bank facilities of Prakash Chemicals Agencies Pvt. Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 7.02 CARE BB+ Assigned Short-term Bank Facilities 3.75 CARE A4+ Assigned Rating Rationale The ratings are constrained by the modest scale of operations of Prakash Chemicals Agencies Pvt. Ltd., risks inherent in trading operations, its thin profitability and low capitalisation. The ratings are further constrained by the company's presence in a highly competitive and fragmented chemical industry. The ratings, however, factor in the benefits derived from the vast experience of the promoters in chemical trading business and its established relationship with reputed customers and suppliers. The ability of PCAPL to increase its scale of operations, improve its profitability and efficiently manage its working capital would be the key rating sensitivities. PCAPL, a private limited company, was initially established by Mr. Dilip Shah, Mr. Prakash Shah and Mr. Manish Shah as a partnership firm, which was subsequently converted into private limited company in the year 2002. PCAPL is in the business of trading a wide variety of basic chemicals like caustic soda lye which is used in the dye & pharmaceutical industry, liquid chlorine tonner which is used in synthetic rubber, hydrochloric acid which is used in the food processing industry, poly aluminium chloride-G-18 which used in the metal industry, citric acid monohydrate, acetic acid & citric acid anhydrous which are used for pH maintenance (food additives). PCAPL is an ISO 9001:2000 certified company. During FY11 (refers to the period April 01, 2010 to March 31, 2011), around 19% of the total chemicals were procured from the foreign market compared to around 25% during FY10. All the imports by the company are from China. However, its sales are mostly in the domestic market with around 1% of the total sales in FY11 being exports. PCAPL has various other group companies which are also involved in the chemical trading business including Prakash Chemicals Pvt. Ltd. (PCPL; rated CARE BB+/CARE A4+). During FY11, PCAPL reported total operating income of INR62.07 crore and PAT of INR0.67 crore as compared to a total operating income of INR47.34 crore and PAT of INR0.78 crore in FY10. RADHA BIHARI: ICRA Assigns '[ICRA]B' Rating to INR8cr LT Loan ------------------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]B' assigned to the INR8 crore bank limits of Radha Bihari Shiksha Samiti. Amount Facilities (INR Cr) Ratings ---------- --------- ------- Long-term Fund Based 8.00 [ICRA]B (assigned) Limit The rating is constrained by weak occupancy at the society's colleges and declining enrolments over the past few years, led by a number of factors including intense competition in the engineering education space due to sudden mushrooming of colleges in Western Uttar Pradesh, the weak placement record of the colleges and the location disadvantage compared to other colleges affiliated to Mahamaya Technical University (MTU). The rating also takes into account the frail debt coverage indicators and operating cash flows of the society, which would necessitate external funding for meeting upcoming debt repayments, as well as the deficit made by the society in FY11 because of high interest burden and low profitability at a newly started college. The rating draws comfort from the satisfactory operating profitability of RBS despite weak occupancy, helped by support from a sizeable hostel and other fee, minimal capex planned in the medium term, the society's affiliation with MTU, whose centralised admission process provides sustainable flow of students, and the regular infusion by trustees in the corpus fund, which has maintained the capital structure at satisfactory levels. Going forward, the society's ability to improve its occupancy from current levels and the infusion by trustees in corpus fund to meet cash shortfalls will remain key rating sensitivities. RBS was established in 1995 under the Societies Registration Act, 1860. The society currently has three institutions under its wing, located in Akbarpur, Mathura. RBS set up a new engineering college, Murli Manohar Agarwal Institute of Technology in 2009, which is yet to complete its first four years. The Chairman of the society is the promoter of the Murli Manohar Agarwal group, which has several business interests including beverages, offshore logistics and real estate. The current Chairman of the society is Mr. Mukesh Agarwal, who has directorships in other group companies as well. RITESH TRADEFIN: CARE Rates INR9.1cr Loan at 'CARE B+' ------------------------------------------------------ CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank facilities of Ritesh Tradefin Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term bank facilities 9.1 CARE B+ Assigned Short-term bank facilities 1.6 CARE A4 Assigned Rating Rationale The ratings of Ritesh Tradefin Ltd. are constrained by the small scale of its operations, low capacity utilization, lack of backward integration for key raw materials, susceptibility to volatile commodity prices and its presence in the highly competitive and cyclical iron & steel industry. The ratings, however, draw support from the satisfactory track record & reasonable experience of the promoter and favorable location of the plant. RTL's ability to increase the scale of operations and improve its profitability while managing raw material price volatility in a competitive environment would be the key rating sensitivities. RTL was incorporated in January 1993 as a private limited company by two brothers, Shri Shankar Lal Agarwal and Shri Naresh Kr. Agarwal. It initially commenced operations as an investment company dealing in securities. Subsequently, in 1999, it shifted to manufacturing of sponge iron (with initial installed capacity - 15,000 MTPA) and was converted into public limited company. RTL is currently engaged in manufacturing of sponge iron (having installed capacity - 30,000 MTPA) and structural steel (having installed capacity - 36,000 MTPA) with plant being located at Durgapur, West Bengal. Apart from manufacturing, it is also involved in trading of iron and steel related materials. During FY11 (refers to the period April 1 to March 31), RTL had reported a total operating income of INR43.4 crore and net loss of INR 0.4 crore. Further, as per provisional results for FY12, the company has achieved a total operating income of INR62.2 crore. SAKAL AUTO: CARE Assigns 'CARE BB' Rating to INR4cr LT Loan ----------------------------------------------------------- CARE assigns 'CARE BB' and 'CARE A4' ratings to the bank facilities of Sakal Auto. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 4 CARE BB Assigned Short-term Bank Facilities 2 CARE A4 Assigned The ratings assigned by CARE are based on the capital deployed by the partners and the financial strength of the firm at present. The ratings may undergo change in case of withdrawal of the capital or unsecured loans brought in by the partners in addition to the financial performance and other relevant factors. Rating Rationale The ratings of Sakal Auto are mainly constrained on account of thin profitability, weak debt coverage indicators and high working capital intensity of its operations. The ratings are further constrained due to its limited geographical presence in a highly competitive two- wheeler dealership industry and low bargaining power against original equipment manufacturers (OEMs). The above constraints far offset the benefits derived from the partners' vast experience in auto dealership business, benefits derived from being the sole dealer for two-wheelers of Bajaj Auto Limited in Sabarkantha district of Gujarat with established sub- dealership network and stable outlook for two-wheeler industry. Increase in scale of operation with widening market presence, improvement in overall financial risk profile with better working capital management and diversification in to other segments of the auto industry are the key rating sensitivities. Himatnagar, Gujarat based SKA was established as a partnership firm in 2006 by seven partners with Mr. Raman Prajapati and Mr. Vijay kumar Shah being the key partners holding 50% stake in the firm. SKA is an authorized dealer of Bajaj Auto Limited and deals in two-wheelers segment only. SKA caters to Sabarkantha district of Gujarat state through its single showroom and 16 sub- dealers. SKA achieved a total operating income of INR45.00 crore till December 31, 2011. SHAMBHU MAHADEV: CARE Places 'CARE BB-' Rating on INR29.13cr Loan ----------------------------------------------------------------- CARE assigns 'CARE BB-' and 'CAREA4' ratings to the bank facilities of Shambhu Mahadev Sugar & Allied Industries Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 29.13 CARE BB- Assigned Short-term Bank Facilities 13.00 CARE A4 Assigned Rating Rationale The ratings are constrained by Shambhu Mahadev Sugar & Allied Industries Ltd.'s (SMSAI) relatively small size of operations and weak financial risk profile indicated by high gearing levels and low debt coverage indicators. Further, the ratings also take in to account the cyclical and regulated nature of the sugar industry. The ratings, however, derive strength from SMSAI's experienced promoters and forward integration initiatives through setting up of distillery. The ability of the company to improve its operating performance thereby improving its debt protection metrics is the key rating sensitivity. Shambhu Mahadev Sugar & Allied Industries Limited was incorporated by the chairman Mr Diliprao Shankarrao Apet on March 3, 2000. SMSAI has set up a sugar factory with an installed capacity of 2,000 TCD at Havargaon, Kallam district, Osmanabad, Maharashtra. Trial runs for the plant were completed during FY02 (refers to the period April 01 to march 31) while the commercial operation commenced during FY03 (Sugar Season 2003-04). To mitigate the seasonal and cyclical nature of the sugar industry, SMSAI started setting up a distillery with an installed capacity of 30 KLPD in Q2FY12 with a project cost of INR24.67 crore. As on February 29, 2012, the erection of the plant is complete. The trial session of the distillery will start from the end of Q1FY13. For the year ended March 31, 2010, SMSAI's total sales was INR86.38 crore with a PBILDT of INR10.60 crore (PBILDT margin 7.80%) and a PAT of INR0.03 crore (PAT margin 0.04%) compared to total sales of INR45.93 crore with a PBILDT of INR7.82 crore (PBILDT margin 19.71%) and a PAT of INR0.36 crore (PAT margin 0.78%). During 10MFY12, the company has achieved sales of INR84.90 crore. SPY AGRO: CARE Assigns 'CARE C' Rating to INR217.44cr Loan ---------------------------------------------------------- CARE assigns 'CARE C' and 'CARE A4' ratings to the bank facilities of Spy Agro Industries Limited. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 217.44 CARE C Assigned Short-term Bank Facilities 2.00 CARE A4 Assigned Rating Rationale The ratings are constrained by the tight liquidity position of the company, volatility in prices and availability of raw materials, high customer concentration risk, declining PBILDT margins, ongoing debt-funded capacity expansion, weak capital structure and challenges of operating in the highly regulated industry. The ratings also take into account the experience and satisfactory track record of the promoters in the business, and reputed clientele. The ability of the company to improve its liquidity profile and complete the ongoing capacity expansion without time and cost overrun are the key rating sensitivities. SPY Agro Industries Limited, incorporated in May 2005, is a part of the Nandi Group of Industries based out of Nandyal in Andhra Pradesh. The group since 1978 has built a diversified presence of businesses such as cement, dairy, PVC pipes, construction, TMT bars etc. SPYAIL commenced its commercial operations in FY09 (refers to period April 1 to March 31). The company has a grain- and-molasses-based distillery plant at Nandyal (Andhra Pradesh) with an installed capacity of 145 kilo liters per day. Extra Neutral Alcohol (ENA) is the main raw material in the manufacture of Indian Made Foreign Liquor. For FY11, SPY registered net sales of INR169 cr with profit of INR2 cr. For the nine months ended December 2011, SPY registered total income of INR125 cr with profit of INR9 cr. UMANG BOARDS: CARE Assigns 'B+' Rating to INR25.52cr Loan --------------------------------------------------------- CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank facilities of Umang Boards Pvt Ltd. Facilities (INR crore) Ratings ----------- ----------- ------- Long-term Bank Facilities 25.52 CARE B+ Assigned Short-term Bank Facilities 7.10 CARE A4 Assigned Rating Rationale The ratings are constrained by the small scale of operations of Umang Boards Private Limited, net losses incurred during the past two years ended FY11 (refers to period April 1 to March 31) and the high working capital intensity of its operations. The ratings are further constrained by its susceptibility to volatile input prices and foreign exchange fluctuation risk on imports apart from delay in project implementation. The ratings, however, favorably take into account the vast experience of the promoters in the insulation paper board industry, long track record of its operations and favorable demand outlook. Timely stabilization of operations of the recently commissioned facility along with achieving the envisaged level of sales, improvement in profitability and better working capital management are the key rating sensitivities. Jaipur (Rajasthan) based UBPL, incorporated in 1999 is promoted by the Dhanuka family. Mr S.K. Dhanuka, Chairman, has an industrial experience for more than three decades. UBPL is engaged in the manufacturing of electrical insulation transformer boards, laminated boards etc at its ISO 9001:2008, 14001:2003 and 18001:2007 certified facility. The company increased its installed capacity from 660 metric tonnes per annum (MTPA) as on March 31, 2010 to 4,660 MTPA as on March 31, 2011. During FY11 (refers to the period April 1 to March 31), UBPL's total operating income was INR9.46 crore (FY10: INR6.84 crore) with a net loss of INR1.27 crore (FY10: net loss of INR0.03 crore). As per provisional figures for FY12, the company has reported a total income of INR11.81 crore. ========= J A P A N ========= DREAM STAGE: Closes Doors After Former Parent Bankruptcy -------------------------------------------------------- Sherdog.com reports that Japan-based promotion firm Dream Stage Entertainment, has ceased day-to-day operations, sources close to the situation said. The news comes after former parent company Fighting and Entertainment Group (FEG) declared bankruptcy in Tokyo District Court, the report relates. The report notes that the magnitude and frequency of Dream events had declined, as had the general interest in Mixed Martial Arts among the Japanese fan base. Sherdog.com says rumors of the company's impending demise had circulated for the better part of two years due to waning ratings and reported financial difficulties, and only increased with Dream's conspicuous absence in the first half of 2012. Real Entertainment, the company which operated Dream, last month told Sherdog that they were still in the process of planning Dream 18, which had been tentatively set for July at Saitama Super Arena. However, recent news broke that several of Real's top employees had resigned from the organization. A source close to One Fighting Championship, a Singapore-based upstart which last fall formed an alliance with Dream, told Sherdog that the promotion will likely sign much of Dream's remaining talent. Dream, a successor to Pride Fighting Championships, is Japan's last remaining major promotion. ==================== N E W Z E A L A N D ==================== ARIES HOLDINGS: NZ$8.8-Mil. Mansion Up for Mortgagee Sale --------------------------------------------------------- Amelia Wade at nzherald.co.nz reports that an NZ$8.8 million mansion in one of Auckland's richest suburbs is up for mortgagee sale after the companies that owned it went into liquidation. The report relates that former property developer Paul Alexander lived in the house, which was bought in 2006 by companies owned by a friend. According to the report, the luxury home was bought for NZ$7.2 million -- the fourth highest house sale in 2006 -- in a corporate trust arrangement. It is worth NZ$8.8 million according to a QV evaluation in August last year, the report relays. nzherald.co.nz notes that the house was in the name of two companies, St Stephens Investments and Parnell Property Investments, which were then owned by a third company, Aries Holdings. All three businesses were owned by Mr. Alexander's friend and business partner, Stephen Osborn, but Mr. Alexander and his wife Julie lived in the mansion, the report discloses. Early last year, the three companies resolved to wind themselves up and appointed liquidators, says nzherald.co.nz. Aries had secured creditors owed NZ$10.1 million, nzherald.co.nz discloses citing a liquidator's report last year. It said debt to the BNZ included property law claims of NZ$4.5 million "together with further amounts claimed by the BNZ relating to other cross guarantees which have been subject to dispute." The bank got possession in April and the property is being offered for mortgagee tender, the report notes. NZ DAIRIES: Receivers Get Seven Offers from Interested Buyers ------------------------------------------------------------- The Timaru Herald reports that New Zealand Dairies receivers, BDO, have received seven offers for the Studholme milk processing factory from a mix of overseas and New Zealand companies. A decision is expected within a fortnight, the report notes. The Herald understands those companies interested include New Zealand dairy giant Fonterra, Westland Milk Products and Synlait, who had been in talks with New Zealand Dairies prior to its collapse. Christchurch-based merchant banker Ocean Partners has also taken an interest in the company's assets, the Herald discloses. According to the report, BDO co-receiver Brian Mayo-Smith said they were going through the sale process, with indicative offers having closed last week. The Herald relates that Mr. Mayo-Smith said they had talked to all the interested parties by phone or in person. "The process is ongoing and we have also been talking to the farmers who supply the factory as they are a key part of the process," the report quotes Mr. Mayo-Smith as saying. The report adds that Mr. Mayo-Smith said they may also need to contact either the Overseas Investment Office or the Commerce Commission as well, depending on the buyer. About NZ Dairies New Zealand Dairies Limited engages in dairy processing, baby food production and distribution. NZ Dairies is owned by Russian firm Nutritek. The company is based in Studholme, New Zealand. VTB Capital Limited, secured creditor of New Zealand Dairies Limited, has appointed Colin Gower, Stephen Tubbs and Brian Mayo Smith of BDO Chartered Accountants as Receivers. The receivership includes New Zealand Dairies Limited and related Companies Studholme Corporation Limited and Dairy Exports New Zealand Limited. VTB Capital is owed about NZ$28 million, according to NBR Online. ================= S I N G A P O R E ================= KXD DIGITAL: Court Enters Wind-Up Order --------------------------------------- The High Court of Singapore entered an order on June 1, 2012, to wind up the operations of KXD Digital Entertainment Limited Pte Ltd. The company's liquidator is: Mr. Yit Chee Wah Steven FTI Consulting (Singapore) Pte Ltd 8 Shenton Way, #17-02A Singapore 068811 LEHMAN BROTHERS: Creditors' Proofs of Debt Due June 22 ------------------------------------------------------ Creditors of Lehman Brothers Investments Pte Ltd, which is in creditors' voluntary liquidation, are required to file their proofs of debt by June 22, 2012, to be included in the company's dividend distribution. The company's liquidators are: Chay Fook Yuen Bob Yap Cheng Ghee Tay Puay Cheng c/o KPMG Advisory Services Pte. Ltd. 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581 MOUNT ELIZABETH: Creditors' Proofs of Debt Due July 7 ----------------------------------------------------- Creditors of Mount Elizabeth Ophthalmic Investments Pte Ltd, which is in members' voluntary liquidation, are required to file their proofs of debt by July 7, 2012, to be included in the company's dividend distribution. The company's liquidators are: Low Sok Lee Mona Teo Chai Choo c/o Low, Yap & Associates 4 Shenton Way #04-01 SGX Centre 2 Singapore 068807 ORION-TWO DEVELOPMENT: Creditors' Proofs of Debt Due July 10 ------------------------------------------------------------ Creditors of Orion-Two Development Pte Ltd, which is in members' voluntary liquidation, are required to file their proofs of debt by July 10, 2012, to be included in the company's dividend distribution. The company's liquidators are: Lee Yin Chen Chai Yee Hoi 165 Bukit Merah Central #06-3663 Singapore 150165 PARADIGM SHIPPING: Court to Hear Wind-Up Petition on June 29 ------------------------------------------------------------ A petition to wind up the operations of Paradigm Shipping Pte Ltd will be heard before the High Court of Singapore on June 29, 2012, at 10:00 a.m. Chimbusco International Petroleum (Singapore) Pte Ltd filed the petition against the company on May 31, 2012. The Petitioner's solicitors are: Stamford Law Corporation 10 Collyer Quay, #27-00 Ocean Financial Centre Singapore 049315 =========== T A I W A N =========== * TAIWAN: Moody's Expects Bank Profitability to Remain Low ---------------------------------------------------------- Moody's Investors Service says the outlook for Taiwan's banking system is stable. Although asset quality may weaken somewhat due to challenging external conditions, low interest rates, sustained economic growth and resilient property markets should limit the extent of deterioration. "We expect the banks to either maintain or improve their capitalization to comply with more stringent regulatory requirements," says Sonny Hsu, a Moody's Vice President and Senior Analyst. "However, Taiwanese bank profitability, which is among the weakest in Asia Pacific, will remain low amid intense competition and abundant liquidity, and will continue to weigh negatively on bank ratings," he adds. Hsu was speaking at the release of a new Moody's report titled, "Banking System Outlook: Taiwan," which outlines Moody's expectation for the fundamental credit conditions of the system over the next 12 to 18 months. According to the report, Moody's central scenario assumes that Taiwan's economy will grow by around 3.2% in 2012, compared with 4.0% in 2011, providing an accommodating backdrop for the banks. At the same time, headline inflation will likely increase from the low level of 2.0% in 2011 due to rising gasoline and electricity prices. But, Moody's expects policy interest rates to remain little changed throughout 2012, given the weak external demand. "We expect only modest loan growth of mid-single digits in 2012, which is in line with the pace of growth in 2011. The demand for household loans, especially mortgages, is likely to be weak amid continued sluggish property market activities," Mr. Hsu says. Banks will aim to increase their SME and foreign lending to improve their net interest margins, while cutting back on their exposures to the troubled flat panel display and computer memory semiconductor sectors. In Moody's stress test analysis, rated Taiwanese banks for the most part retain adequate capitalization in a cyclical economic downturn. But, they may require capital injections in the event of a local financial crisis. "Although the rated banks for the most part have sufficient capital and impairment allowances to absorb credit losses in the stress scenarios, their weak profitability hinders the rebuilding of capital through earnings retention," Hsu says. Moody's rates 10 commercial banks in Taiwan, which together accounted for 60% of total assets of locally incorporated banks as of December 31, 2011. ********* 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 ***