/raid1/www/Hosts/bankrupt/TCRAP_Public/121002.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
Tuesday, October 2, 2012, Vol. 15, No. 196
Headlines
A U S T R A L I A
BILL EXPRESS: Pitcher Partners to Defend Liquidator's Writ
COMPASS HOTEL: Former CEO Appears in Sydney Court
FORTESCUE METALS: S&P Affirms 'BB-' CCR; Outlook Negative
LOYVIC PTY: S&P Gives 'BB+' Rating on A$1.06BB Sr. Secured Debt
TORRENS TRUST: Fitch Affirms Rating on Two Trust Classes at Low-B
C H I N A
BRIGHT FOOD: Moody's Rating Reflects 'ba1' BCA; Outlook Stable
CHINA FISHERY: S&P Lowers Corporate Credit Rating to 'B+'
CHINA GREEN: Issues 150.3 Million Common Shares for $1.5 Million
H O N G K O N G
CASTING LIMITED: Members' Final Meeting Set for Oct. 29
CHEMTURA (HK): Members' Final Meeting Set for Oct. 22
CHINA TAX: Members' Final General Meeting Set for Oct. 19
CITI-FAME (HK): Members' Final Meeting Set for Oct. 12
GAME LUX: Creditors' Meeting Set for Oct. 6
GENDA DEVELOPMENT: Creditors' Meeting Set for Oct. 11
GENDA MICROELECTRONICS: Creditors' Meeting Set for Oct. 11
HYPERFACTORY (HK): Final Meetings Set for Oct. 22
LUCKY DRAGON: Chan Yui Hang Appointed as Liquidator
MEGA REGENT: Members' Final Meeting Set for Oct. 22
OCEAN FREIGHT: Creditors' Proofs of Debt Due Oct. 19
PECONIC INDUSTRIAL: Final Meetings Set for Oct. 24
TAPPA HOLDINGS: Members' Final Meeting Set for Oct. 22
THADDEUS CAPITAL: Members' Final General Meeting Set for Oct. 24
VANSHINE CHINA: Members' Final Meeting Set for Oct. 22
I N D I A
BALAJI IMPORTS: CARE Rates INR17cr LT Loan at 'CARE B+'
GEO BIOTECHNOLOGIES: CARE Puts 'BB-' Rating on INR12cr LT Loan
IMI ABRASIVES: CARE Assigns 'CARE BB-' Rating to INR4cr Loan
JAIN TRADING: CARE Rates INR10cr LT Loan at 'CARE BB-'
KINGFISHER AIRLINES: Management to Meet With Striking Workers
SHRACHI DEVELOPERS: CARE Rates INR9cr LT Loan at 'CARE BB+'
SHREE RADHE: Delays in Loan Payment Cues CARE Junk Ratings
SHREE GANESH: CARE Assigns 'CARE BB-' Rating to INR12.70cr Loan
SUZUKI SUITINGS: CARE Puts 'CARE B' Rating to INR9cr LT Loan
I N D O N E S I A
CHANDRA ASRI: Moody's Says Bond Buyback Plan Credit Positive
J A P A N
HUMMINGBIRD SECURITISATION: S&P Keeps CCC Rating on Series 2 Loan
NOMURA HOLDINGS: Fitch Affirms 'B' Support Rating Floor
* JAPAN: Moody's Says RLGs Face More Fiscal Pressures
N E W Z E A L A N D
NORTH ISLAND MUSSEL: Sanford & Sealord Sale Saves 220 Jobs
P H I L I P P I N E S
RURAL BANK OF TAGAYTAY: Placed Under PDIC Receivership
S I N G A P O R E
EW TOA: Creditors' Proofs of Debt Due Oct. 29
EWO ENTERTAINMENT: Creditors' Proofs of Debt Due Oct. 29
GOLDLINK ITALIA: Creditors Get 0.08992% Recovery on Claims
IJIMASIA PTE: Creditors Get 100% Recovery on Claims
JTIC INVESTMENTS: Creditors Get 100% Recovery on Claims
T H A I L A N D
BANK OF AYUDHYA: Fitch Assigns 'BB+' Support Rating Floor
V I E T N A M
* VIETNAM: Moody's Lowers Deposit Ratings on Eight Banks
* VIETNAM: Moody's Lowers Government Bond Ratings to 'B2'
X X X X X X X X
* BOND PRICING: For the Week Sept. 24 to Sept. 28, 2012
- - - - -
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A U S T R A L I A
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BILL EXPRESS: Pitcher Partners to Defend Liquidator's Writ
----------------------------------------------------------
SmartCompany reports that accounting firm Pitcher Partners said
it will "vigorously defend" a writ issued by the liquidator of
failed payments company Bill Express, which claims the company
signed off on financial statements despite them containing
inaccuracies.
SmartCompany relates that Pitcher Partners has said in a
statement it will defend itself against the accusation made by
PPB over the collapse, while PPB said the financial statements in
question were used by bankers and suppliers to back up the
business.
"Pitcher Partners is mystified at the appearance of the writ,
which was issued within days of the expiry of a six-year period
provided for in the statute of limitations."
"The writ was issued in September 2011 but not served on Pitcher
Partners until Sept. 27, 2012, shortly prior to its expiry."
According to the report, Pitcher Partners also said the
Australian Securities and Investment Commission and Australian
Competition and Consumer Commission have "conducted extensive
investigations" with no mention of any wrongdoing.
PPB said in its legal claim, the 2005 Bill Express financial
report should have reported the company sustained a loss of at
least $41 million, and also reportedly says the kiosks the
company provided to newsagents weren't stated properly in the
report as well, SmartCompany relays.
As a result, PPB suggests the auditors breached their directors'
duties and did not use reasonable skill and care, adds
SmartCompany.
About Bill Express
Bill Express Ltd. -- http://www.billexpressltd.com/-- was
engaged in the management and development of an electronic
distribution system for pre-paid products and services across in
excess of 14,000 locations around Australia, automated ordering,
delivery and inventory control for pre-paid services including
mobile, landline and Internet services. It also processed
payments for bills and services, including bills that are
presented for payment to its outlets across Australia. The
company had an in-store media, which is a network that promotes
Bill Express Limited's and other products at the point of sale
and in-store aisles. OnQ Group Limited is the parent company of
Bill Express Limited.
* * *
As reported in the Troubled Company Reporter-Asia Pacific on
July 10, 2008, Bill Express went into administration with
AUD180 million in debts after a subsidiary of Saudi-based Al
Othman Group withdrew its proposal for the recapitalization and
restructuring of the company. The proposal was to include a
substantial capital injection and new bank guarantees combined
with a restructuring of the existing liabilities of the company.
In addition, the Board and management of the company were to be
substantially restructured.
COMPASS HOTEL: Former CEO Appears in Sydney Court
-------------------------------------------------
The former chief executive officer of Compass Hotel Group Ltd, a
West Australian hotel chain, has appeared in the Downing Centre
Local Court in Sydney following an ASIC investigation.
Bryan Raymond Northcote, who lives in Sydney, was charged on
Sept. 25, 2012, with three counts relating to breaching
directors' duties and submitting false and misleading documents
to ASIC.
ASIC's investigation focused on Mr. Northcote's activities while
he was CEO and executive director of Compass Hotel Group Ltd.
CHGL floated on the Australian Securities Exchange on Jan. 3,
2008 and operated a West Australian hotel chain consisting of
12 hotels and taverns. CHGL went into receivership in March 2011.
It is alleged that between Oct. 9, 2007, and April 22, 2008,
Mr. Northcote dishonestly withheld information from the CHGL
board and used his position to gain a financial advantage. It is
alleged that a company owned and controlled by Mr. Northcote,
Yard House Australia and New Zealand Pty Ltd entered into a
conjunctional agreement with a hotel broker whereby it would
receive 50% of all sales commissions paid by CHGL and vendors to
the hotel broker for hotels purchased by CHGL. YANZ subsequently
received $1.566 million in commissions.
It is also alleged Mr. Northcote submitted documents to ASIC,
which were misleading in that it was falsely claimed that
Mr. Northcote had resigned from YANZ on 1 October 2007.
Mr. Northcote was not required to enter a plea and the matter
will return to Court on Dec. 4, 2012.
A breach of directors' duties carries a penalty of five years
imprisonment and or a fine of $220,000. Submitting false or
misleading documents to ASIC carries a penalty of five years
imprisonment and or a fine of $22,000.
The Commonwealth Director of Public Prosecutions is prosecuting
the matter.
As reported in the Troubled Company Reporter-Asia Pacific on
March 24, 2011, SmartCompany said Compass Hotel Group has been
placed in receivership. Quentin Olde, Ian Francis, and Michael
Ryan of insolvency firm Taylor Woodings were appointed as
receivers to the sharemarket-listed group on March 22, 2011,
after secured lender St George Bank, a subsidiary of Westpac,
lost patience with the debt-laden group. Compass Hotel's latest
financial statements, released in February, show the company had
liabilities of more than AUD100 million. It is believed the bulk
of the debts is owed to St George.
About Compass Hotel
Compass Hotel Group (ASX:CXH) -- http://www.compasshotel.com.au/
-- is engaged in the provision of operating hotel and tavern
businesses in Western Australia and managing investment
properties in Western Australia. The Company has four segments:
food, retail, beverage and other. The Company's property
portfolio includes Kalamunda Hotel, Carine Glades Tavern,
Princess Rd Tavern, Peninsula Tavern, Brighton Hotel, Peel
Alehouse, Belmont Tavern, Herdsman Lake Tavern, Albion Hotel,
Gosnells Hotel, Greenwood Hotel and Lakers Tavern. Its
subsidiaries include Kalamunda Hotel (WA) Pty Ltd, Carine Glades
Tavern (WA) Pty Ltd, Princess Road Tavern (WA) Pty Ltd, Brighton
Hotel (WA) Pty Ltd, Belmont Tavern (WA) Pty Ltd and Peninsula
Tavern (WA) Pty Ltd.
FORTESCUE METALS: S&P Affirms 'BB-' CCR; Outlook Negative
---------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on Australia-based mining company Fortescue Metals
Group Ltd. The rating outlook is negative. "We have also lowered
the issue rating on Fortescue's senior unsecured debt to 'B+'
from 'BB-', and the recovery rating to '5' from '4'. At the same
time, we have removed all ratings from CreditWatch with negative
implications, where they were placed on Sept. 12, 2012. The
downgrade on the senior unsecured debt reflects the prior ranking
of the senior secured debt in our recovery analysis," S&P said.
"With the recent refinancing of its bank debt, Fortescue has
removed the financial covenants that had been expected to come
under pressure, particularly if iron ore prices had remained low.
The restructure comprises the raising of US$4.5 billion senior
secured debt, the repayment of US$3.55 billion senior unsecured
bank debt, and the prepayment of Leucadia notes for US$715
million. It extends the company's near-term debt maturity from
December 2013 to November 2015, and provides additional
liquidity," S&P said.
"The 'BB-' rating incorporates our expectation that Fortescue's
earnings will improve materially in year ending June 30, 2014,
from an expected low level in fiscal 2013," Standard & Poor's
credit analyst May Zhong said. "The better forecast performance
in fiscal 2014 is based on the assumption that Fortescue
successfully ramps up its 95 million tons per annum (mtpa)
production run rate, and benchmark iron ore prices (62% Fe CFR
China) remain at about US$110 per ton in fiscal 2014 (between
July 2013 to June 2014). In addition, we also expect the company
to de-lever in 2014 with cash from operations or asset sales."
"However, we expect Fortescue's credit metrics to be weak for the
rating in fiscal 2013. That's because we expect lower earnings
and cash flows arising from a steep decline in iron ore prices
since late July 2012. This deterioration coincided with higher
debt to fund Fortescue's peak capital expenditure for its
expansion to a production run rate of 115 mtpa. As such, we
expect Fortescue's funds from operations (FFO) to debt will drop
to less than 10% and adjusted debt to EBITDA higher than 5x in
the year ending June 30, 2013," S&P said.
"In response to lower iron ore prices, Fortescue has slowed down
its expansion plans to 115 mtpa, from a commitment of 155 mtpa
previously. It's also actively considering selling assets and has
cut operating costs, to preserve cash. We believe these measures
will alleviate short-term liquidity pressure," S&P said.
Ms. Zhong added: "The negative outlook reflects our concerns that
Fortescue's fiscal 2013 credit metrics will likely be sub-par for
the 'BB-' rating. We also consider that the company's credit
metrics are vulnerable to volatility in iron ore prices or any
execution risk of its current expansion project in the next 12
months. We believe iron ore prices need to average at least US$90
per ton for the next 12 months for Fortescue to maintain adequate
liquidity."
The rating could be lowered if:
-- S&P considered that Fortescue's credit metrics are unlikely
To recover in fiscal 2014. For example, if its adjusted FFO-
to-debt remains less than 20% and adjusted debt to EBITDA
stays higher than 4x. This scenario could arise from either
a prolonged period of weak iron ore prices, or any delays or
cost overruns of its 115 mtpa expansion project.
-- The company needs to raise more debt to fund its current
expansion.
"The rating could also come under downward pressure if
Fortescue's growth strategy were to expand beyond its current
commitment of a 115 mtpa expansion through debt funding," S&P
said.
S&P would consider revising the outlook to stable if:
-- Fortescue develops a track record of shipping at a run rate
of about 100 mtpa (all other things being equal);
-- It restores a healthy buffer in the liquidity position; and
-- Its key credit metrics improve, for example its adjusted
FFO-to-debt is sustained at more than 20% and its adjusted
debt to EBITDA remains less than 4x.
LOYVIC PTY: S&P Gives 'BB+' Rating on A$1.06BB Sr. Secured Debt
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Loyvic Pty Ltd.'s AUD1.06 billion senior secured debt. "We also
affirmed the issuer credit rating of 'BB+' on IPM Australia Ltd.,
in line with the rating on Loyvic. At the same time, the rating
on IPM has been removed from CreditWatch with positive
implications, where it was placed on June 27, 2012. The outlook
on the ratings is stable," S&P said.
"The 'BB+' ratings reflect our view of likely strong owner
support for the project, which enables a three-notch uplift to
the project's credit profile of 'b+'," Standard & Poor's credit
analyst Richard Creed said. "The project's lower credit profile
reflects our view that the project's financing structure is very
demanding on debt repayment until 2017, making it vulnerable to
continued weak wholesale power prices. In addition, the project
has an exposure to a carbon price, and limited ability to
withstand moderate operating disruption of the plant. We believe
that refinance risk in the absence of parental support continues
to be a risk."
"Loyvic and IPM Australia are respectively the financing and
trading arms of the Loy Yang B joint venture (LYB) that owns and
operates the 1,000 megawatt brown coal-fired power plant in the
Australian State of Victoria. LYB's owners ultimately comprise
Mitsui & Co. (A+/Stable/A-1; 30% share) and GDF SUEZ S.A. (GDFS;
A/Stable/A-1; 70% share)," S&P said.
"We believe the owners are likely to support the project if
required because we consider LYB to be an important part of the
group's Australian energy portfolio. We note that GDFS has a
track record of supporting its Australian assets, including
repaying AUD652 million of loans by the Hazelwood power station
in Victoria. We consider LYB to be a superior asset, compared to
the Hazelwood station, because of the former's greater economic
value to its owners given its relatively young age, sound
operating performance, relatively favorable cost-competitive
position in the dispatch merit order, and lower carbon intensity.
This view is notwithstanding the market dynamic of moving toward
lower carbon-intensity generation," S&P said.
Mr. Creed added: "The stable ratings outlook reflects continued
parental support, the favorable offtake contract with the state
of Victoria (the state hedge) for 77% until 2014 and 56% of
output until 2016, operating performance of the plant, and the
plant's mine mouth operations."
"Downward pressure may emerge if wholesale power prices fall,
reducing cash flow and increasing vulnerability of the plant,
particularly once the state hedge begins to run off in 2014 as
the plant transitions to being wholly merchant. In addition, the
ratings could be lowered if we believe there is a lessening in
parental support, for example demonstrated by any delay in
remedying any prospective or actual breach of project covenants,"
S&P said.
The ratings could be raised if power prices rise materially above
present market levels, improving the project's project cash flow
and if this used to repay debt.
TORRENS TRUST: Fitch Affirms Rating on Two Trust Classes at Low-B
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Fitch Ratings has affirmed 4 classes from 2 Torrens series -
Series 2004-1 TORRENS Trust and Series 2004-2(W) TORRENS Trust.
The transactions are securitisations of Australian conforming
residential mortgages originated by Bendigo and Adelaide Bank
Limited ('A-'/Stable/'F2'). The rating actions are as listed
below:
Series 2004-1 TORRENS Trust:
-- AUD74.3m Class A-2 (ISIN AU300PTT4026) affirmed at 'AAAsf';
Outlook Stable
-- AUD23.2m Class B (ISIN AU300PTT4034) affirmed at 'BBsf';
Outlook Stable
Series 2004-2(W) TORRENS Trust:
-- AUD95.7m Class A-2 (ISIN AU300PTT5023) affirmed at 'AAAsf';
Outlook Stable
-- AUD20m Class B (ISIN AU300PTT5031) affirmed at 'BBsf';
Outlook Stable
The affirmations reflect Fitch's view that the available credit
enhancement available on the class A notes are able to support
the Class A notes at their current rating levels.
"Although 30+ and 90+ days arrears tend to be much higher than
Fitch's Dinkum indices, claims remain low," said James Zanesi,
Director in Fitch's Structured Finance team.
As of Aug. 31, 2012, the 30+ day delinquencies of the collateral
pools were 2.61% for Series 2004-1 TORRENS Trust and 4.45% for
Series 2004-2(W) TORRENS Trust. Series 2004-2(W) TORRENS
experiences a higher level of delinquencies compared to other
Torrens deals due to the pool composition of 93.7% low-doc loans.
As at Aug. 31, 2012, repayment rates have been strong in the 20%-
35% range. Since closing, all senior notes have paid down
steadily, and credit enhancement levels for Class A notes have
increased strongly. The increases in credit enhancement levels
mean that the ratings of the senior notes are independent of the
ratings of the lenders' mortgage insurance providers.
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C H I N A
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BRIGHT FOOD: Moody's Rating Reflects 'ba1' BCA; Outlook Stable
--------------------------------------------------------------
Moody's Investors Service has assigned a first-time Baa3 issuer
rating to Bright Food (Group) Co., Ltd.
The rating outlook is stable.
Ratings Rationale
Bright Food's Baa3 rating reflects its baseline credit assessment
(BCA) of ba1, and incorporates a one-notch uplift based on
Moody's expectation of strong support by the Shanghai Municipal
Government in the event of financial distress.
Bright Food's BCA reflects (1) its low demand risk and stable
profit margins from its food and agriculture business; (2) its
strong growth underpinned by a favorable industry outlook and its
successful expansion strategy; and (3) its diversified and ample
funding channels.
On the other hand, these credit strengths are counterbalanced by
the group's (1) integration risk because of recent acquisitions
and previous business restructuring; (2) near-term earnings
pressure as a result of sugar price volatility; and (3) weak
operating cash flow and high leverage.
The BCA also factors in structural subordination risk given
Bright Food's holding company status with a majority of debt
booked at the subsidiary level.
The group attained a 16% compounded annual growth rate in its
total revenue between 2008 and 2011, and a stable annual EBITDA
margin of over 8%.
"Bright Food's core food and agriculture business enjoys leading
market positions across various products in Shanghai and East
China, and this competitiveness is further enhanced by the
group's extensive wholesale food distribution network in China,
as well as its continuous expansion into new product lines," says
Alan Gao, a Moody's Vice President and Senior Analyst.
The group will continue to enjoy good organic revenue growth in
the next two years as a result of favorable industry dynamics;
China's food industry has witnessed fast and stable growth,
underpinned by a steady rise in per capita income, and
consumption levels that are low when compared to those of the
mature markets.
Moreover, Moody's expects that the group will continue to
strengthen its market position in its core food business through
active acquisitions, which will increase its sales growth and
diversify its business portfolio further.
"On the other hand, Bright Food's rating is constrained by the
challenges it faces to integrate its various business units as a
result of past business reorganizations and recent acquisitions,"
says Gao.
In May 2012, Bright Food announced that it would acquire a 60%
interest in Weetabix Limited, a leading UK cereal maker. The
acquisition has received regulatory approval and is expected to
be completed by the end of 2012.
Whilst the acquisition could help the group to further diversify
its food product offerings as well as improve its overall EBIT
margin, the group's financial risk will increase due to
Weetabix's high leverage.
The integration of Weetabix's operations with that of Bright
Food's will pose new challenges for its management.
And the recent decline in the sugar price is also expected to
have a negative impact on its food segment EBIT.
However, Moody's expects that the overall negative impact on the
group's consolidated EBIT will be less than 10%, because of its
highly diversified business.
The group is also highly leveraged due to the high debt level in
its property business as well as the debt-funded growth strategy
of its core food and wholesale operations; its adjusted
debt/capitalization was 49% as of December 31, 2011, and is
likely to remain at this level for the next two years.
However, this factor is partially mitigated by the group's good
liquidity and the large amount of liquid financial assets on its
balance sheet.
As of June 30, 2012, Bright Food had a cash balance of RMB15
billion, and available-for-sales investments of RMB8 billion.
These liquid funds sufficiently cover its RMB21 billion short-
term debt, which includes bills payable.
In assigning the one-notch uplift, Moody's has taken into
consideration (1) Bright Food's ultimate 100%-government
ownership; (2) the direct supervision by the State-owned Assets
Supervision and Administration Commission of the Shanghai
Municipal Government; (3) the group's key role in supplying sugar
and other essential staples to the Shanghai consumer market; and
(4) its history of receiving annual government grants and
subsidies.
Bright Food's stable outlook reflects Moody's expectation that
the group will uphold its leadership position in its core food
business in the Shanghai and East China markets and that it will
also maintain adequate liquidity.
Upward rating pressure is limited in the near term as the group
is still in the process of integrating its recent acquisitions,
and particularly that of Weetabix.
However, positive rating pressure could emerge over time if the
group (1) demonstrates success in fully integrating Weetabix; (2)
generates sustained and positive free cash flow; and (3) achieves
meaningful deleveraging by equity raising.
Moody's would consider the following as signs of upward rating
pressure: (1) adjusted debt/ capitalization consistently below
40%; (2) FFO/debt consistently over 15% and (3) EBITDA/interest
above 5.0x - 5.5x.
Downward rating pressure could arise if (1) the group fails to
fend off competition, such that its market share significantly
erodes, adversely affecting its profitability and cash flow
generation; (2) it encounters material food safety problems which
could weaken consumer confidence in its products and thereby
affect its market share; (3) it undertakes aggressive
acquisitions that weaken its balance sheet; (4) government
support weakens significantly.
Moody's would consider the following as triggers for downward
rating pressure: (1) adjusted debt/ capitalization consistently
above 60%; (2) FFO/debt consistently below 10%; and (3)
EBITDA/interest below 3.5x - 4.0x.
Bright Food (Group) Co., Ltd.'s ratings were assigned by
evaluating factors that Moody's considers relevant to the credit
profile of the issuer, such as the company's (i) business risk
and competitive position compared with others within the
industry; (ii) capital structure and financial risk; (iii)
projected performance over the near to intermediate term; and
(iv) management's track record and tolerance for risk. Moody's
compared these attributes against other issuers both within and
outside Bright Food (Group) Co., Ltd.'s core industry and
believes Bright Food (Group) Co., Ltd.'s ratings are comparable
to those of other issuers with similar credit risk.
Other Factors used in this rating are described in Analytical
Considerations in Assessing Conglomerates published in September
2007.
Incorporated in China and headquartered in Shanghai, Bright Food
(Group) Co., Ltd. is one of the largest food conglomerates in
China with various business segments and a strong focus on food
manufacture & supply. The group has four major business segments
including: food and agriculture; food wholesale and retail; real
estate development; and logistics.
Bright Food's food and agriculture segment is the core business
unit generating more than 50% of the group revenue and EBIT, and
comprises a highly diversified product portfolio, for example,
sugar, dairy, staple agriculture products, processed meat
products, snack foods, and liquor & wine. Bright Food is 50.4%
owned by the State-owned Assets Supervision and Administration
Commission of the Shanghai Municipal Government.
CHINA FISHERY: S&P Lowers Corporate Credit Rating to 'B+'
---------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit rating on China Fishery Group Ltd. to 'B+' from
'BB-'. The outlook is stable. "At the same time, we lowered our
issue rating on the company's US$300 million senior unsecured
notes due 2019 to 'B+' from 'BB-'. We affirmed the 'cnBB' long-
term Greater China regional scale ratings on China Fishery and
its outstanding senior unsecured notes," S&P said.
"We downgraded China Fishery to reflect our view that regulatory
risk for the company has increased and could undermine the
company's already weak business risk profile," said Standard &
Poor's credit analyst Lillian Chiou. "The Pacific Andes group's
weaker credit profile than China Fishery's also constrains the
rating on the subsidiary."
"Russia's Federal Antimonopoly Service (FAS) has inquired about
the operations of China Fishery and its parent group, Pacific
Andes, in Russian waters. Despite China Fishery's increased
diversity, it continues to rely heavily on its Russian
operations, which generated nearly two-thirds of the company's
revenue, EBITDA, and operating cash flow for the first nine
months of the fiscal year ending Sept. 30, 2012. China Fishery
and its parent group confirmed that they believe their fish
supply agreements are in full compliance with all relevant laws
and regulations of the Russian Federation. However, in our view,
the regulatory risk remains high in Russia," S&P said.
"In our view, a negative impact of the FAS inquiry into China
Fishery's North Pacific Ocean operations will also hit the
Pacific Andes group. The financial risk profile of Pacific Andes
International Holdings Ltd. (PAIH) would deteriorate further if
revenue from the fishery and fish supply division materially
declines," S&P said.
"In our opinion, China Fishery is also exposed to high
uncertainty and regulatory risk for its Peru operations. The
Peruvian government's decision on China Fishery's permitted total
allowable catch could also affect the company's revenues," S&P
said.
"The stable outlook reflects our expectation that China Fishery's
performance will remain largely stable over the next six to 12
months despite the difficult operating conditions," said Ms.
Chiou. "We expect the company's debt-to-EBITDA ratio to increase
to above 3.0x at the end of fiscal 2012 from 2.1x in fiscal 2011.
We anticipate that the ratio of funds from operations (FFO) to
debt will decrease to 26.8% from 37.9%."
S&P could lower the rating if:
"The outcome from the FAS inquiry is worse than we expect,
such that China Fishery loses material fish supply in Russian
waters," S&P said.
The financial performance of China Fishery's direct and
indirect parent companies, Pacific Andes Resources Development
Ltd. (not rated) and PAIH, weaken materially. This could
happen if the total debt-to-EBITDA ratio of the ultimate
parent, PAIH, exceeds 6.0x.
"The heightening regulatory risk of China Fishery's business
limits the rating upside in the next few years. Beyond that, we
could raise the rating if China Fishery further diversifies its
geographic coverage and improves its product mix while
maintaining a robust financial performance," S&P said.
CHINA GREEN: Issues 150.3 Million Common Shares for $1.5 Million
----------------------------------------------------------------
In connection with a security purchase agreement between China
Green Creative, Inc., and 236 investors, on Sept. 19, 2012, the
Company closed an offering of $1,503,500 in which the Company
issued a total of 150,350,000 shares of the Company's common
stock, par value $0.001 per share at a purchase price of $0.01
per share.
The Investors except Han Sing Investment Incorporated are
individuals and regional independent third-party distributors of
the Company. None of these individual distributors held any
shares of the Company prior to the Closing Date or was issued
more than 5% of the shares of the Company in the Reg. S offering.
Han Sing is a Cayman company wholly owned by Mr. Xinghua Chen.
Mr. Chen is a director of the Company and is actively involved in
the Company's daily operation and management. Prior to the Reg.
S. Offering, Han Sing held approximately 245,417 shares of the
Company's Common Stock, representing 4.9% of the shares of issued
and outstand Common Stock before the Closing Date. Han Sing
purchased 88,700,000 shares of the Company's Common Stock in the
Reg. S Offering, resulting in its holding of approximately 57.1%
of the Company's Common Stock. Through his ownership of Han
Sing, Mr. Xinghua Chen became a controlling shareholder of the
Company. The Company's Board of Directors has determined that the
issuance to Han Sing will be disclosed as a related party
transaction.
A copy of the Securities Purchase Agreement is available at:
http://is.gd/3f04rn
About China Green
China Green Creative, Inc., located in Shenzhen, Guangdong
Province, People's Republic of China, is principally engaged in
the distribution of consumer goods and electronic products in the
PRC.
After auditing the 2011 results, Madsen & Associates CPA's, Inc.,
in Salt Lake City, Utah, expressed substantial doubt about China
Green Creative's ability to continue as a going concern. The
independent auditor noted that the Company does not have the
necessary working capital to service its debt and for its planned
activity.
The Company reported a net loss of $344,901 on $1.93 million of
revenues for 2011, compared with a net loss of $3.35 million on
$2.78 million of revenues for 2010.
The Company's balance sheet at June 30, 2012, showed
$5.43 million in total assets, $7.43 million in total
liabilities, and a $2 million total stockholders' deficit.
================
H O N G K O N G
================
CASTING LIMITED: Members' Final Meeting Set for Oct. 29
-------------------------------------------------------
Members of Casting Limited will hold their final meeting on
Oct. 29, 2012, at 10:00 a.m., at Unit F, 7/F, CNT Tower, 338
Hennessy Road, Wanchai, in Hong Kong.
At the meeting, Wong John Wing Kit, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
CHEMTURA (HK): Members' Final Meeting Set for Oct. 22
-----------------------------------------------------
Members of Chemtura (HK) Holding Co. Limited will hold their
final meeting on Oct. 22, 2012, at 2:30 p.m., at 5th Floor, Ho
Lee Commercial Building, at 38-44 D'Aguilar Street, Central, in
Hong Kong.
At the meeting, Lau Wu Kwai King Lauren and Yuen Tsz Chun Frank,
the company's liquidators, will give a report on the company's
wind-up proceedings and property disposal.
CHINA TAX: Members' Final General Meeting Set for Oct. 19
---------------------------------------------------------
Members of China Tax Society Limited will hold their final
general meeting on Oct. 19, 2012, at 4:00 p.m., at Suite 1201,
Tower 2, The Gateway, 25 Canton Road, Tsimshatsui, Kowloon, in
Hong Kong.
At the meeting, Wong Wa Sun Thomas, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
CITI-FAME (HK): Members' Final Meeting Set for Oct. 12
------------------------------------------------------
Members of Citi-Fame (Hong Kong) Limited will hold their final
meeting on Oct. 12, 2012, at Room 2103-4, 21/F, Wing On Centre,
at 111 Connaught Road Central, in Hong Kong.
At the meeting, Lai Chi Kin, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
GAME LUX: Creditors' Meeting Set for Oct. 6
-------------------------------------------
Creditors of Game Lux Limited will hold their meeting on Oct. 6,
2012, at 10:30 a.m., for the purposes provided for in Sections
241, 242, 243, 244, 251, 255A and 283 of the Companies Ordinance.
The meeting will be held at Unit A, 14/F, JCG Building, 16
Mongkok Road, Mongkok, Kowloon, in Hong Kong.
GENDA DEVELOPMENT: Creditors' Meeting Set for Oct. 11
-----------------------------------------------------
Creditors of Genda Development Limited will hold their meeting on
Oct. 11, 2012, at 10:30 a.m., for the purposes provided for in
Sections 241, 242, 243, 244 and 255A of the Companies Ordinance.
The meeting will be held at Room 704, 3 Lockhart Road, Wanchai,
in Hong Kong.
GENDA MICROELECTRONICS: Creditors' Meeting Set for Oct. 11
----------------------------------------------------------
Creditors of Genda Microelectronics Limited will hold their
meeting on Oct. 11, 2012, at 11:00 a.m., for the purposes
provided for in Sections 241, 242, 243, 244 and 255A of the
Companies Ordinance.
The meeting will be held at Room 704, 3 Lockhart Road, Wanchai,
in Hong Kong.
HYPERFACTORY (HK): Final Meetings Set for Oct. 22
-------------------------------------------------
Members and creditors of The Hyperfactory (HK) Limited will hold
their final meetings on Oct. 22, 2012, at 11:00 a.m., and 11:30
a.m., respectively at Unit 803, 8/F, Shanghai Industrial
Investment Building, 48-62 Hennessy Road, Wanchai, in Hong Kong.
At the meeting, Chan Kam Man, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
LUCKY DRAGON: Chan Yui Hang Appointed as Liquidator
---------------------------------------------------
Chan Yui Hang on Sept. 14, 2012, was appointed as liquidator of
Lucky Dragon Boat (Belvedere) Restaurant Limited.
The liquidator may be reached at:
Chan Yui Hang
Room 512, 5/F
New Mandarin Plaza Tower B
14 Science Museum Road
Tsimshatsui East, Kowloon
Hong Kong
MEGA REGENT: Members' Final Meeting Set for Oct. 22
---------------------------------------------------
Members of Mega Regent Investment Limited will hold their final
general meeting on Oct. 22, 2012, at 10:00 a.m., at 4/F, Antonia
House, 12 Broom Road, Happy Valley, in Hong Kong.
At the meeting, Anna Louise Patria, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
OCEAN FREIGHT: Creditors' Proofs of Debt Due Oct. 19
----------------------------------------------------
Creditors of Ocean Freight Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by Oct. 19, 2012, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Sept. 12, 2012.
The company's liquidators are:
Thomas Andrew Corkhill
Iain Ferguson Bruce
8th Floor, Gloucester Tower
The Landmark
15 Queen's Road
Central, Hong Kong
PECONIC INDUSTRIAL: Final Meetings Set for Oct. 24
--------------------------------------------------
Members and creditors of Peconic Industrial Development Limited
will hold their final meetings on Oct. 24, 2012, at 3:00 p.m.,
and 3:30 p.m., respectively at Rooms 903-908, 9/F, Kai Tak
Commercial Building, at 317-319 Des Voeux Road, Central, in Hong
Kong.
At the meeting, Leung Shu Yin William, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
TAPPA HOLDINGS: Members' Final Meeting Set for Oct. 22
------------------------------------------------------
Members of Tappa Holdings Limited will hold their final meeting
on Oct. 22, 2012, at 10:00 a.m., at 8th Floor, Gloucester Tower,
The Landmark, at 15 Queen's Road Central, in Hong Kong.
At the meeting, Iain Ferguson Bruce, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
THADDEUS CAPITAL: Members' Final General Meeting Set for Oct. 24
----------------------------------------------------------------
Members of Thaddeus Capital Management (HK) Limited will hold
their final general meeting on Oct. 24, 2012, at 10:00 a.m., at
Level 28, Three Pacific Place, 1 Queen's Road East, in Hong Kong.
At the meeting, Ho Siu Pik, the company's liquidator, will give a
report on the company's wind-up proceedings and property
disposal.
VANSHINE CHINA: Members' Final Meeting Set for Oct. 22
------------------------------------------------------
Members of Vanshine China Investments Limited will hold their
final general meeting on Oct. 22, 2012, at 10:00 a.m., at Rooms
1009-1012, 10th Floor, K. Wan Centre, at 191 Java Road, North
Point, in Hong Kong.
At the meeting, Fan Sai Yee, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
=========
I N D I A
=========
BALAJI IMPORTS: CARE Rates INR17cr LT Loan at 'CARE B+'
-------------------------------------------------------
CARE assigns 'CARE B+' and 'CARE A4' ratings to the bank
facilities of Balaji Imports Pvt Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 17 CARE B+ Assigned
Short-term Bank Facilities 3 CARE A4 Assigned
Rating Rationale
The ratings assigned to the company are constrained by the weak
financial risk profile characterized by the low profitability,
leveraged capital structure and weak debt coverage indicators.
The ratings also take into account the high working capital
utilizations, supplier concentration risk and foreign exchange
fluctuation risk on account of the absence of hedging by the
company. The ratings, however, draw comfort from the experienced
promoters, the long track record of operations of Balaji Imports
Private Limited and a pan-India base of distributors.
Going forward, the company's ability to improve its
profitability, capital structure and effective management of
working capital shall be the key rating sensitivities.
Balaji Imports Private Limited was established in FY1996 by
Mr. Vinod Mittal. The company is engaged in the trading of vinyl
flooring and hardware and sanitary goods. It imports Poly Vinyl
Chloride (PVC) flooring from a South Korean entity and hardware
and sanitary goods from China and sells its imported goods
through its distributors. The products of the company (PVC
flooring, hardware and sanitary goods) are used in residential
and commercial sectors. PVC flooring finds application in various
public transport vehicles, hospitals, theatres, etc.
The company has created its own brand, 'Matrix' for its hardware
and sanitary goods. It has sales and distribution offices in
Mumbai, Kolkata and Chennai and an overseas office in China to
take care of its procurements. The company is ISO 9001:2008
certified for its quality management systems.
During FY12 (refers to the period April 1 to March 31), the total
income of Balaji stood at INR75.5 crore with a net profit of
INR0.94 crore as against the total income of INR61.7 crore and
net profit of INR0.95 crore during FY11.
GEO BIOTECHNOLOGIES: CARE Puts 'BB-' Rating on INR12cr LT Loan
--------------------------------------------------------------
CARE assigns 'CARE BB-' rating to the bank facilities of Geo
Biotechnologies India Pvt Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 12 CARE BB- Assigned
Rating Rationale
The rating assigned to the bank facilities of Geo Biotechnologies
India Private Limited is constrained by small scale of its
operations with low capitalization and cash accruals, modest
profitability margins, highly leveraged capital structure and
stretched working capital cycle. The rating is further
constrained by GBIPL's concentrated revenue profile and
competition from large and established domestic players. The
rating, however, derives strength from the vast experience of
promoters in hybrid seed business, increasing scale of operations
with improvement in the profitability during last three years,
professional scientific advisory committee coupled with inhouse
R&D facility and technology collaborations with reputed
institutes.
The ability of the company to scale up its operations along with
improvement in its overall financial risk profile is the key
rating sensitivity.
GBIPL, incorporated on January 1, 2009, is engaged in R&D,
production and sales of hybrid seeds in field crops like
sunflower, corn, rice, Bt Cotton and hybrid vegetable seeds. It
is promoted by Mr. K S Narayanaswamy, with an experience of 26
years in the same line of business. GBIPL has its corporate
office located at Bangalore and its processing plant located at
Hyderabad. GBIPL has research farms located at both Hyderabad and
Bangalore. The seed production activities are conducted across
multiple locations in Karnataka and Andhra Pradesh, through
contract farming arrangements. GBIPL has marketing presence
across 13 states through a distribution network of over 500 C&F
agents.
During FY11 (refers to the period April 1 to March 31), GBIPL
reported a total operating income of INR25.56 crore and a PAT of
INR0.31 crore. As per FY12-UA, SOSPL reported a total operating
income of INR30.74 crore and a PAT of INR0.82 crore
IMI ABRASIVES: CARE Assigns 'CARE BB-' Rating to INR4cr Loan
------------------------------------------------------------
CARE assigns 'CARE BB-' and 'CARE A4' ratings to the bank
facilities of IMI Abrasives Pvt. Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term bank facilities 4.00 'CARE BB-' Assigned
Short term bank facilities 2.00 'CARE BB-'/
'CARE A4' Assigned
Rating Rationale
The ratings assigned to the bank facilities of IMI Abrasives Pvt.
Ltd. are constrained by small scale of operations with low
profitability margins, lack of backward integration vis-a-vis
volatility in raw materials prices, presence in highly
competitive, fragmented & cyclical steel industry and working
capital intensive nature of business. The aforesaid constraints
are partially offset by experience of the promoters with long
track record of operations, strategic location of the plant and
comfortable capital structure.
Ability of the company to increase the scale of operations and
improve profitability levels & margin nd ability to manage
working capital effectively are the key rating sensitivities.
IMI Abrasives Pvt. Ltd., incorporated in May 24, 1991, was
promoted by Shri Shiv Kumar Mundhra and Shri Raj Kumar Mundhra
(brother of Shri Shiv Kumar Mundhra) of Raipur, Chhattisgarh and
is engaged in the manufacturing of steel shots & grits which is
used in the process of metal surface cleaning, metal surface
finishing & improving the surface tension of metal and it finds
application in construction, automobile, steel industry etc. The
manufacturing unit of the company is located at Raipur,
Chhattisgarh having an installed capacity of 7000 MTPA. In Feb,
2010 the company also started manufacturing Ferro alloys at its
existing plant at Raipur having an installed capacity of 2500
MTPA.
As per the audited results of FY11 (refers to the period from
April 1 to March 31), IMIAPL reported a PBILDT and a PAT of
INR2.3 crore (INR1.7 crore in FY10) and INR0.8 crore (INR0.6
crore in FY10) respectively on a total income of INR38.8 crore
(INR22.8 crore in FY10).
As per provisional results for FY12, it has achieved a PBILDT of
INR2.7 crore and PAT of INR 1.0 crore on a total income of
INR42.8 crore.
JAIN TRADING: CARE Rates INR10cr LT Loan at 'CARE BB-'
------------------------------------------------------
CARE assigns 'CARE BB-' rating to the bank facilities of Jain
Trading Agency.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term bank facilities 10.0 'CARE BB-' Assigned
The rating assigned by CARE is based on the capital deployed by
the proprietor and the financial strength of the entity at
present. The rating may undergo change in case of withdrawal of
the capital or the unsecured loans brought in by the proprietor
in addition to the financial performance and other relevant
factors.
Rating Rationale
The rating assigned to the bank facility of Jain Trading Agency
is primarily constrained by its modest scale of operations
coupled with low profitability margins and its constitution as a
proprietorship concern. The rating is further constrained by
JTA's exposure to price volatility of agricultural commodities,
industry's sensitivity to the vagaries of nature, working capital
intensive nature of business and its presence in the highly
competitive and fragmented agro commodities industry. The rating,
however, is strengthened from the long track record of operation
of the entity, its experienced proprietor and established
procurement arrangement with suppliers.
Ability of JTA to enhance the business level along with
improvement in profitability margins and effective working
capital management would remain the key rating sensitivities.
JTA is a proprietary firm set up in 1969 by Shree Chand Surana
belonging to Shillong, Meghalaya and is engaged in wholesale and
retail trading of various agro commodities such as rice, wheat,
sugar, mustard oil, refines oil, salt, flour, etc in Shillong,
Guwahati, and north eastern areas of India.
During FY11 (refers to the period from April 1, 2010 to March 31,
2011), JTA reported a total operating income of INR 66.1 crore
(FY10: INR70.1 crore) and a PAT of INR 0.2 crore (FY10: INR 0.3
crore). Further, as per provisional results for FY12, the firm
has achieved a total operating income of INR 85.0 crore.
KINGFISHER AIRLINES: Management to Meet With Striking Workers
-------------------------------------------------------------
The Economic Times reports that facing its worst employee unrest
that has forced a shut down all of its flights and operations
since Sunday night, cash strapped carrier Kingfisher Airlines'
management has now decided to meet its striking engineers and
pilots to see if the deadlock can be resolved.
According to the report, Kingfisher, which operates around 80
flights per day with nine aircraft (as per schedule given to the
regulator), was forced to cancel all its flights across its
network after its engineers refused to certify aircraft for
flying beginning Sunday evening. The engineers are protesting
non-payment of salaries that are overdue for the past six months
now, the report says.
Sources said the pilots too started reporting sick since morning
making this first ever-cohesive action by Kingfisher employees to
draw attention of the management to their plight, according to
the report.
The employees till now only got assurances from Kingfisher
chairman and promoter Vijay Mallya about salary dispersal, but
the salaries have not been actually credited in their bank
accounts.
Flights Cancelled
Meanwhile, The Economic Times reports that Kingfisher Airlines
Ltd said it was cancelling several flights on Monday due to
employee unrest.
The airline was cancelling flights on Monday because it feared a
number of its employees were unlikely to report for work due to
threats from other workers, said Kingfisher, which is owned by
billionaire Vijay Mallya.
"A section of employees of Kingfisher Airlines has not been
reporting for work over the last fortnight and over the past two
days, they have been threatening and even manhandling the other
employees who are reporting for work," Kingfisher spokesman
Prakash Mirpuri said in a statement.
Kingfisher is saddled with $1.4 billion debt and has grounded
most of its fleet. Banks have refused to lend it more money
unless it can infuse fresh funds into the airline.
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 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.
As reported in the Troubled Company Reporter-Asia Pacific on
Sept. 5, 2012, The Times of India said Kingfisher Airlines has
now been given a reality check by its auditors in the company's
annual report 2011-12. The company had current liabilities,
including borrowings and trade payables of INR8,436 crore,
against current assets of INR1,618.8 crore at the end of
March 2012. According to TOI, the Vijay Mallya-promoted company
has defaulted in repayment of loans to banks and financial
institutions, for which several lenders have had to take a hit by
setting aside more funds, with overdues estimated at nearly
INR800 crore at the end of March 2012.
SHRACHI DEVELOPERS: CARE Rates INR9cr LT Loan at 'CARE BB+'
-----------------------------------------------------------
CARE assigns 'CARE BB+' rating to bank facilities of Shrachi
Developers Pvt. Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 9 CARE BB+ Assigned
Rating Rationale
The above rating is constrained by significant exposure of
Shrachi Developers Pvt. Ltd. in group companies which are
implementing large size projects, geographical concentration risk
along with risks inherent to the real estate sector and high
interest rate scenario. The above constraints more than offset
the benefits derived from the experience of the promoters, strong
brand image and efficient marketing channels of the Shrachi
group, satisfactory advancement of the project with major project
approvals already in place, 100% bookings achieved and majority
of advance money already received. Completion of the ongoing
projects without any cost and time over runs along with prudent
cash flow management, more so pertaining to timely receipt of
advances made to its group companies would remain the key rating
sensitivities.
Shrachi Developers Pvt. Ltd., incorporated in September 1994, was
promoted by the Shrachi group of Kolkata for undertaking real
estate projects. Since inception, SDPL has successfully developed
a number of residential projects in and around Kolkata and is the
oldest company of the real estate arm of the Shrachi Group.
Promoted by Mr. S. K. Todi, the Kolkata-based Shrachi group has
major presence in the real estate, healthcare, agro industries
and engineering services.
Currently, there are two ongoing residential projects ("Shrachi
Lakewoods" & "Shrachi Dakhin" being undertaken by SDPL, both
scheduled to be completed in FY13 (refers to March 1 to
April 31). While SL is a complex with 125 residential units in
Narkeldanga, Kolkata; SD is a residential complex with 46
residential units and 2 bungalows in Nayabad, Kolkata. The
estimated cost of SL is INR37.0 crore (including cost of land)
which is being financed at a debt-equity ratio of 0.21:1
(considering advance booking money as part of equity), while that
of SD is INR19.5 crore (including cost of land) which is being
financed at a debt-equity ratio of 0.86:1 (considering advance
booking money as part of equity). Financial closure of both the
projects has been fully achieved.
Till June 30, 2012, SDPL has incurred INR45 crore in the
summation for both its ongoing project (INR36.2 crore for SL and
INR8.8 crore for SD) and entire booking for both the projects has
been achieved.
SHREE RADHE: Delays in Loan Payment Cues CARE Junk Ratings
----------------------------------------------------------
CARE assigns 'CARE D' rating to the bank facilities of Shree
Radhe Krishna Smelters Pvt. Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 12.0 'CARE D' Assigned
Short-term Bank Facilities 3.0 'CARE D' Assigned
Rating Rationale
The aforesaid ratings take into account the outstanding delays in
debt servicing by Shree Radhe Krishna Smelters Private Limited.
SRKSPL was incorporated in 2004 by Shri Dhiraj Thard of Kolkata.
The company is currently engaged in trading of various types of
iron and steel related items (like TMT bars, pig iron, steel
angles/channels/flats/G.I. wires etc.). SRKSPL earned PBILDT of
INR2.3 crore (INR1.5 crore in FY11) and PAT (after defd. tax) of
INR0.8 crore (INR0.4 crore in FY11) on net sales of INR188.3
crore in FY12 (INR170.8 crore in FY11).
SHREE GANESH: CARE Assigns 'CARE BB-' Rating to INR12.70cr Loan
---------------------------------------------------------------
CARE assigns 'CARE BB-' and 'CARE A4' ratings to the bank
facilities of Shree Ganesh Edibles Pvt Ltd.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term Bank Facilities 12.70 CARE BB- Assigned
Short-term Bank Facilities 2.00 CARE A4 Assigned
Rating Rationale
The ratings assigned to the bank facilities of Shree Ganesh
Edibles Pvt. Ltd. are primarily constrained by its small scale of
operations with very low and declining profitability margins,
leveraged capital structure and its presence in a highly
fragmented and competitive industry. The ratings are further
constrained due to its exposure to volatility in raw material
prices and stabilization risk associated with the commencement of
its new unit.
The above constraints are partially offset by the strengths
derived from experienced and resourceful promoters of SGEPL,
steady demand and consumption pattern providing favorable outlook
to edible oil industry.
Going forward, the company's ability to increase its scale of
operations along with the improvement in the profitability
margins and solvency position are the key sensitivities.
Incorporated in 2006, SGEPL was promoted by Mr. Varinder Kumar,
Mr. Surinder Kumar, Mr. Hans Raj Garg and Mr. Puneet Kumar Garg.
Mr. Varinder Kumar and Mr. Surinder Kumar have around two decades
of experience in food processing industry and have multiple
business interests.
The company is engaged in the processing of crude rice bran oil
(edible oil) and spent earth oil (non edible rice bran oil) and
sale of its byproducts including fatty acids, wax and gums. Spent
earth oil is used in the manufacturing of poultry feed. SGEPL has
its manufacturing facility set up at Khanna, Punjab. The company
sells its products through brokers and agents spread across
India.
SGEPL has recently set up another unit for manufacturing oleo
chemicals (fatty acids). The overall installed capacity of the
manufacturing units is 50 tonnes per day (TPD) for rice bran oil,
150 TPD for spent earth oil and 100 TPD for oleo chemicals.
For FY11 (refers to the period April 1 to March 31), SGEPL
achieved total operating income of INR38.33 crore with a PAT of
INR0.19 crore.
SUZUKI SUITINGS: CARE Puts 'CARE B' Rating to INR9cr LT Loan
------------------------------------------------------------
CARE assigns 'CARE B' and 'CARE A4' ratings to the bank
facilities of Suzuki Suitings Private Limited.
Facilities (INR crore) Ratings
----------- ----------- -------
Long-term/ Short-term 9.00 CARE B/ CARE A4 Assigned
Bank Facilities
Short-term Bank 1.50 CARE A4 Assigned
Facilities
Rating Rationale
The ratings assigned to the bank facilities of Suzuki Suitings
Private Limited are constrained mainly on account of its small
scale of operations, presence in the highly competitive and
fragmented synthetic fabric industry with limited presence in the
textile value chain resulting in thin profitability margins. The
ratings are further constrained on account of its leveraged
capital structure and stressed liquidity position coupled with
the susceptibility of profit margins to the volatile raw material
prices.
The ratings, however, favorably take into account the rich
experience of the promoters in the fabrics manufacturing industry
and its presence in the textile hub of Ahmedabad (Gujarat).
Increase in the scale of operations and improvement in the
overall financial risk profile with effective management of the
working capital in light of volatile raw material prices and
intense industry competition remains the key rating sensitivity.
SSPL, based in Ahmedabad (Gujarat), was incorporated in 1987 by
Mr. Biharilal Parsrampuria and Mr Bharatlal Poddarat. The company
is engaged in the manufacturing of synthetics and cotton fabrics
at its manufacturing facility located in Chhatral (Gandhinagar),
with an installed capacity of 26 looms as on March 31, 2011. SSPL
sells its products through the network of its 40 agents mainly
spread in the western and northern India under the brand name
"Aristo".
During FY11 (refers to the period April 1 to March 31), SSPL
reported total operating income of INR32.71 crore and PAT of
INR0.10 crore as against total operating income of INR29.08 crore
and net loss of INR0.19 crore in FY10. As per the provisional
result for FY12, SSPL reported total operating income of INR35.48
crore and PAT of INR0.12 crore.
=================
I N D O N E S I A
=================
CHANDRA ASRI: Moody's Says Bond Buyback Plan Credit Positive
------------------------------------------------------------
Moody's Investors Service says Chandra Asri Petrochemical Tbk's
(B2 negative) buyback of its outstanding USD184.9 million senior
secured guaranteed notes, if successful, will be credit positive.
The tender offer for the notes will close on October 3. In
conjunction with the offer, Chandra Asri Petrochemical solicited
the consent for certain amendments to the terms of the bonds,
including the ability to incur additional secured debt, the
release of security, and the ability to redeem notes that remain
outstanding after the tender offer.
"The redemption of the notes and the consent solicitation, if
successful, will significantly lower the company's interest
expense, which will increase the headroom under the maintenance
covenants in its USD150 million bank loan," says Vikas Halan, a
Moody's Vice President and Senior Analyst.
"As a result, the company will have more financial flexibility to
take on additional debt to fund its working capital needs and
execute its strategic expansion," he adds.
Given the weak operating environment and low naphtha-ethylene
spreads, CAP has no headroom under its debt incurrence test to
assume further debt that is required to supplement the expected
weak cash flow over the next year. For the 12 months ended June,
the company generated EBITDA of only USD22 million, which is just
about 1% of its revenue.
CAP plans to fund the buyback with new bank loans and has entered
into binding commitments with two Thai banks for term-loan
facilities of up to USD220 million, with a term of 7 years
(subject to the execution of final documentation and meeting of
all conditions).
The interest rates on these new facilities are likely to be
significantly lower than the current rate of 15.5% for the notes
(12.875% coupon plus 20%, withholding tax thereon). CAP cannot
draw down on these facilities unless the consent solicitation is
successful.
The company is also seeking solicitation to amend certain terms
in its existing UD$150 million term-loan facility, amongst others
to reduce interest costs and to relax the financial covenants,
which will result in lower finance costs and increase financial
flexibility of CAP.
Under the USD150 million term-loan facility, the company is
required to maintain the ratio of its reported operating cash
flows to finance costs at above 2x, at the end of every quarter,
on a rolling 12-month basis. As at June 30, this ratio was at
2.4x.
The full retirement of the currently outstanding notes will also
increase CAP's financial flexibility as it will no longer be
subject to debt incurrence tests, as required by the bond
indenture. The consent solicitation is also seeking agreement to
allow the company to incur new facilities to fund the bond
buyback as well as other working capital and capital expenditure
needs.
"We view CAP's initiative to strengthen its capital structure as
timely. In the current challenging operating environment,
characterized by high naphtha prices and low naphtha-ethylene
spreads, finance cost savings and increased financial flexibility
will help the company better address its near-term working
capital and other funding needs," says Halan, who is also the
Lead Analyst for CAP.
CAP's B2 rating reflects its leading position in the Indonesian
petrochemicals market, resulting from its competitive and
vertically integrated operations. The rating also reflects the
company's high leverage, small global presence, asset
concentration, and the inherent cyclical nature of the
petrochemical industry, all of which have led to volatile
earnings and cash flow.
The negative outlook reflects a protracted decline in the
company's profit margins following a decline in its naphtha-
ethylene spread, which has weakened its credit metrics as a
result. Such pressure on its profit margins and weak credit
metrics is likely to affect the company for the next 12 months.
The negative outlook also takes into account the declining
headroom under the maintenance covenants in the company's USD150
million bank loan, which will somewhat improve following a
successful completion of the proposed transaction.
A rating upgrade in the near term is unlikely given the negative
outlook. The outlook could return to stable if the company
improves its profit margins and generates positive operating cash
flows such that its debt/ EBITDA is maintained below 3.0x-3.5x
and the headroom under the bank loan covenants improves.
The company's rating could be downgraded, if (1) its credit
metrics fail to improve because of delays in recovering its
margins; or (2) its negative operating cash flow and tight
headroom under its bank loan covenants continue for an extended
period.
The principal methodology used in rating PT Chandra Asri
Petrochemical Tbk was the Global Chemical Industry Methodology
published in December 2009.
CAP, listed on the Jakarta Stock Exchange, operates an integrated
petrochemical complex, including the only naphtha cracker in
Indonesia with a cracking capacity of 1.7 million tons per annum
(tpa).
The complex has a production capacity of 600,000 tpa for
ethylene, 320,000 tpa for propylene, 280,000 tpa for py-gas,
220,000 tpa for crude C4, two polyethylene plants with a combined
production capacity of 336,000 tpa, and 480,000 tpa for
polypropylene. Through its wholly owned subsidiary, Styrindo Mono
Indonesia, CAP also has an annual styrene monomer production
capacity of 340,000 tpa.
=========
J A P A N
=========
HUMMINGBIRD SECURITISATION: S&P Keeps CCC Rating on Series 2 Loan
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has kept its 'CCC
(sf)' rating on Hummingbird Securitisation Ltd.'s series 2 loan
(Hummingbird 2 loan) synthetic collateralized debt obligation
(CDO) transaction on CreditWatch with positive implications,
following Standard & Poor's monthly review of synthetic CDO
transactions. "We placed the rating on CreditWatch positive on
Aug. 6, 2012," S&P said.
"As part of our surveillance of rated synthetic CDO transactions,
we generally subject them to a review every month to determine
whether upgrades or downgrades are warranted. Typically, an
initial credit committee reviews synthetic CDO tranches at the
beginning of each month for potential CreditWatch placements and
removals. Then, later in the month, a second credit committee
reviews the tranches that are on CreditWatch for possible
upgrades or downgrades. 's action reflects the results of the
second credit committee's review in September," S&P said.
"We are currently reviewing the credit quality of a reference
entity in the transaction's portfolio and concluded that our
analysis needs to reflect the result of the review before we can
resolve the CreditWatch status. As a result, we kept the rating
on Hummingbird 2 loan on CreditWatch positive," S&P said.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and
a description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Reports
included in this credit rating report are available at:
http://standardandpoorsdisclosure-17g7.com
RATING KEPT ON CREDITWATCH POSITIVE
Hummingbird Securitisation Ltd.
Series 2 loan
Class Rating Loan amount
#2 Loan CCC (sf)/Watch Pos JPY3.0 billion
NOMURA HOLDINGS: Fitch Affirms 'B' Support Rating Floor
-------------------------------------------------------
Fitch Ratings has affirmed Nomura Holdings, Inc.'s and its 100%
subsidiary Nomura Securities Co., Ltd.'s Long-Term Foreign and
Local Currency Issuer Default Ratings (IDR) at 'BBB' and 'BBB+',
respectively. The Outlooks are Stable.
The Long-Term IDRs of NHI and NSC are driven by their Viability
Ratings (VR). The affirmation of the VRs takes into account the
group's leading franchise in the domestic market, adequate
capitalisation, funding stability, and modest market and
counterparty risk.
The VRs also factor in their weak profitability and vulnerability
to market conditions in terms of asset valuation as well as
business volume. The one-notch differential in the VRs between
NHI and NSC reflects the continued weak performance of the
former's global wholesale unit. The differential also reflects
Fitch's view that NSC is unlikely to extend full-scale support to
NHI, in case of need, to the extent that may jeopardise the
former's franchise or long-term viability.
In Fitch's view, NHI's plan to downsize underperforming overseas
businesses as a part of a USD1bn cost cutting exercise under the
new management by March 2014, in addition to previous reductions
worth USD1.2bn, should enhance the group's operating efficiency
in the medium term. The agency notes that one-off costs may hurt
NHI's income in the short term, either through liquidation of
assets or personnel cutbacks. However, Fitch expects such costs
to be temporary; this has been factored into their VRs,
underpinning the Stable Outlooks on IDRs.
Both NHI and NSC have a stable funding source independent of each
other, which is reflected in their Short-Term IDRs being
equalised at 'F2'.
NHI's Fitch core capital ratio stood at 13.1% at end-June 2012,
which was considerably higher than the average among global
systemically important financial institutions (about 7%). Given
the moderate level of Fitch stressed value at risk (6.3% of Fitch
core capital for the year ended March 2012), the potential impact
on capital from market risk would be immaterial.
Fitch may consider negative rating action if the global
reorganisation and refocus on Asia Pacific fail to address the
group's structurally weak operating performance. Evidence of a
failed new business strategy leading to a higher risk appetite or
continued pressures on performance may also result in negative
rating action. Positive rating action is unlikely in the medium-
term given current pressures on the group's overall performance
in a difficult operating environment.
The extent of state support remains uncertain under the current
legal framework for non-deposit-taking financial institutions,
resulting in the Support Rating of '5' for NHI and '4' for NSC.
The rating actions are:
NHI rating actions:
-- Long-Term Foreign Currency IDR affirmed at 'BBB'; Outlook
Stable
-- Long-Term Local Currency IDR affirmed at 'BBB'; Outlook
Stable
-- Short-Term Foreign Currency IDR affirmed at 'F2'
-- Short-Term Local Currency IDR affirmed at 'F2'
-- Viability Rating affirmed at 'bbb'
-- Support Rating affirmed at '5'
-- Support Rating Floor affirmed at 'No Floor'
-- Senior unsecured debt affirmed at 'BBB'
NSC rating actions:
-- Long-Term Foreign Currency IDR affirmed at 'BBB+'; Outlook
Stable
-- Long-Term Local Currency IDR affirmed at 'BBB+'; Outlook
Stable
-- Short-Term Foreign Currency IDR affirmed at 'F2'
-- Short-Term Local Currency IDR affirmed at 'F2'
-- Viability Rating affirmed at 'bbb+'
-- Support Rating affirmed at '4'
-- Support Rating Floor affirmed at 'B'
* JAPAN: Moody's Says RLGs Face More Fiscal Pressures
-----------------------------------------------------
Moody's Japan K.K. says that regional and local governments in
Japan will face additional fiscal challenges next year as the new
budget framework released on September 7 indicates that they will
achieve only minimal revenue growth.
The budget outline -- which establishes the rough level of
government subsidies, local allocation tax (LAT) revenues, and
borrowing for all RLGs in FY2013 (April 2013 -- March 2014) --
points to total revenues rising by a mere 1.4%, a level which is
not likely to be sufficient to cover rising costs.
Pressures related to spending on social security and social
services will necessitate sharp cutbacks in other areas for the
purposes of meeting the requirements for balanced budgets.
Moody's released its assessment on a new special comment,
entitled: "Japanese Prefectures and Designated Cities Face More
Fiscal Pressures in FY2013, but Central Government Continues
Supportive Stance".
The expected low growth in revenues stems from the impact that
the sluggish economy is having on many RLGs' own tax revenues, as
well as the termination of a tax deduction for families with
children.
In part, this situation will be offset by the support provided by
the central government through the LAT system. But, given the
central government's own weak revenue performance, it is
currently restricting the allocation of LAT among the RLGs and
is, in its place, allowing them to issue more of their own debt -
known as rinzai-sai.
The central government will support repayments of this debt
through future LAT transfers.
However, repayments for all rinzai-sai debt will pressure the
country's budget for many years. Ultimately, reforms, such as
further tax hikes or reductions in LAT provisions to the RLGs,
are required to ensure the long-term sustainability of the LAT
program.
The program is designed to reduce fiscal disparities among RLGs
and guarantee minimum services for all residents.
====================
N E W Z E A L A N D
====================
NORTH ISLAND MUSSEL: Sanford & Sealord Sale Saves 220 Jobs
----------------------------------------------------------
Claire Rogers at stuff.co.nz reports that the jobs of 220 workers
at North Island Mussel Processors Limited are safe after fishing
companies Sanford and Sealord bought the company from its
receivers.
stuff.co.nz says North Island Mussel Processors is taking one of
its former owners to court to recover money owed to it for
processing mussels.
According to the report, Sanford and Sealord have a half share
each in a new company, North Island Mussels, which will include
the two businesses' Coromandel mussel farming operations and
North Island Mussel Processors' (NIMP) Tauranga plant.
As reported in the Troubled Company Reporter-Asia Pacific on
Sept. 6, 2012, BusinessDesk said North Island Mussel Processors
is being placed in receivership after the owner of its one-third
shareholder, Greenshell Investments, failed to pay NZ$1.2 million
in processing fees and associated debt.
North Island Mussel is a toll processor for its shareholders, who
export Greenshell mussels.
=====================
P H I L I P P I N E S
=====================
RURAL BANK OF TAGAYTAY: Placed Under PDIC Receivership
------------------------------------------------------
Manila Standard Today reports that the Bangko Sentral's Monetary
Board placed the Rural Bank of Tagaytay City Inc. under the
receivership of the state-run Philippine Deposit Insurance Corp.
on Sept. 20.
The Standard relates that the PDIC assured depositors of RB
Tagaytay that all valid deposits would be paid up to the maximum
deposit insurance coverage of PHP500,000. The deposit insurer
said upon takeover, all bank records would be gathered, verified
and validated.
PDIC said depositors with valid savings accounts and balances of
PHP10,000 or below and had no outstanding obligations with RB
Tagaytay were not required to file deposit insurance claims, as
long as they had valid and latest address and contact details.
RB Tagaytay City, which is controlled by the Velazco family, had
PHP304.9 million in deposits owned by 3,105 depositors as of end-
June, according to the PDIC.
The bank, which is majority owned by V.S. Velazco Enterprise and
Roseller Velazco, is headed by Horacio Velazco as the president
and chief executive.
=================
S I N G A P O R E
=================
EW TOA: Creditors' Proofs of Debt Due Oct. 29
---------------------------------------------
Creditors of EW Toa Payoh Pte Ltd, which is in compulsory
liquidation, are required to file their proofs of debt by Oct.
29, 2012, to be included in the company's dividend distribution.
The company's liquidator is:
Chian Yeow Hang
c/o Abacus Advisory Services Pte Ltd
6001 Beach Road
#09-09 Golden Mile Tower
Singapore 199589
EWO ENTERTAINMENT: Creditors' Proofs of Debt Due Oct. 29
--------------------------------------------------------
Creditors of EWO Entertainment Concepts Pte Ltd, which is in
compulsory liquidation, are required to file their proofs of debt
by Oct. 29, 2012, to be included in the company's dividend
distribution.
The company's liquidator is:
Chian Yeow Hang
c/o Abacus Advisory Services Pte Ltd
6001 Beach Road
#09-09 Golden Mile Tower
Singapore 199589
GOLDLINK ITALIA: Creditors Get 0.08992% Recovery on Claims
----------------------------------------------------------
Goldlink Italia Marketing Pte Ltd declared the first and final
dividend on Sept. 19, 2012.
The company paid 0.08992% to the received claims.
The company's liquidator is:
The Official Receiver
The URA Centre (East Wing)
45 Maxwell Road #06-11
Singapore 069118
IJIMASIA PTE: Creditors Get 100% Recovery on Claims
---------------------------------------------------
Ijimasia Pte Ltd, which in liquidation will declare the first and
final dividend on Oct. 22, 2012.
The company will pay 100% for preferential and 16.4% for ordinary
claims.
The company's liquidator is:
Bob Yap Cheng Ghee
c/o KPMG Business Advisory Pte Ltd
16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
JTIC INVESTMENTS: Creditors Get 100% Recovery on Claims
-------------------------------------------------------
JTIC Investments Pte Ltd, f.k.a Jurong Hi-Tech (Far East) Pte
Ltd, which in creditors' voluntary liquidation declared the first
and final dividend on Sept. 27, 2012.
The company paid 100% for preferential and 2.3233% for ordinary
claims.
The company's liquidator is:
Lim Loo Khoon
c/o 6 Shenton Way
#32-00 DBS Building Tower Two
Singapore 068809
===============
T H A I L A N D
===============
BANK OF AYUDHYA: Fitch Assigns 'BB+' Support Rating Floor
---------------------------------------------------------
Fitch Ratings says that Bank of Ayudhya Public Company Limited's
ratings are not immediately affected by major shareholder GE
Capital International Holdings Corporation's divestment of a 7.6%
stake in the bank to institutional investors. This is because
the ratings are driven by the bank's Viability Rating which is
largely Fitch's assessment of the standalone credit fundamentals
without factoring in any extraordinary support from GECIH.
The transaction has reduced GECIH's stake in BAY to 25%, which is
about the same level with the Ratanarak Group, another major
shareholder. According to BAY, there is no change in executive
management and board members as a result of this transaction.
GECIH has said it will continue to review strategic options for
its remaining interest in BAY. Any further divestment by GECIH
or the Ratanarak Group leading to the entry of a new major
shareholder may cause Fitch to review BAY's ratings.
GECIH's investment in BAY since 2007 has been positive for the
bank's standalone credit profile by way of capital injection and
operational support, which Fitch views as ordinary support under
BAY's five-year partnership with GECIH. Supported by GECIH's
experience in consumer finance, BAY has built up its retail
lending franchise via organic growth and several strategic
acquisitions (including GE Capital Auto Lease, AIG Retail Bank,
AIG Card, GE Money Thailand and HSBC's Thailand retail banking
business) over the past four years. The bank aims to increase
its retail exposure to about 50% of its total portfolio from the
current 48%.
Positive rating action may result from significant improvement in
BAY's deposit franchise that is comparable to its major domestic
peers, in terms of retail deposits as a share of total funding.
Maintaining its strong capital position and sustainable
profitability may also benefit the ratings. Any sharp increase in
liquidity risk, including heavier reliance on wholesale funding,
risk of significant deterioration in asset quality due to
aggressive asset growth, or material weakening of capital
position may lead to negative rating action.
BAY was established in 1945 and is Thailand's fifth-largest
commercial bank by consolidated assets with around 8% share each
in loans and deposits at end-June 2012. Its key subsidiaries are
involved in auto finance, credit cards, consumer finance,
securities and fund management. Given BAY's share of deposits
and loans, there is a moderate probability of government support,
in case of need.
BAY's current ratings:
-- Long-Term Issuer Default Rating: 'BBB'; Outlook Stable
-- Short-Term Issuer Default Rating: 'F3'
-- Viability Rating: 'bbb'
-- Support Rating: '3'
-- Support Rating Floor: 'BB+'
-- National Long-Term Rating: 'AA-(tha)'; Outlook Stable
-- National Short-Term Rating: 'F1+(tha)'
-- National Long-term unsubordinated unsecured debt: 'AA-(tha)'
-- National Long-term subordinated debt: 'A+(tha)'
-- National Short-term unsubordinated unsecured debenture
programme: 'F1+(tha)'
=============
V I E T N A M
=============
* VIETNAM: Moody's Lowers Deposit Ratings on Eight Banks
--------------------------------------------------------
Moody's Investors Service has downgraded the local and foreign
currency deposit ratings of all eight Moody's-rated Vietnamese
banks.
The rating downgrades primarily reflect the concurrent downgrade
of all eight banks' standalone credit assessments, as well as the
parallel downgrade of the Government of Vietnam, as described in
a separate announcement that Moody's has also released on
Sept. 28.
The bank financial strength ratings (BFSR) of all eight banks are
now placed at E, mapping to caa1 on the long-term scale. These
ratings were previously at E+, mapping to a range of b1 to b2
among individual banks on the long-term scale.
After incorporating the probability of support from the
government, Moody's assigns two notches of uplift to both
government-controlled banks -- Vietnam Bank for Industry and
Trade (Vietinbank) and the Bank for Investment & Development of
Vietnam (BIDV) -- resulting in their credit ratings being
downgraded to B2 from B1, except for their foreign currency
deposit ratings, which are downgraded to B3 from B2, given the
constraint imposed by the lowering of the foreign currency
deposit ceiling following the sovereign rating action.
For the six rated joint stock banks, Moody's has deemed the
probability and likely extent of government support to be lower
than that for the government-controlled banks, but nevertheless
sufficiently likely to warrant an uplift of one notch. Therefore,
for these joint stock banks, their new issuer and deposit
ratings, in both local and foreign currencies, are B3.
The action also concludes the review of the ratings of Asia
Commercial Bank initiated on August 24, 2012.
The related downgrade of the Government of Vietnam to B2 from B1
was taken into account when Moody's derived its opinion on the
willingness and capacity of the government to provide support to
the banks.
Moody's has assigned a stable outlook to all bank ratings.
A more detailed bank-by-bank breakdown of these actions is
available further below.
Ratings Rationale
The downgrade of the standalone credit assessments reflects the
increased probability that the eight banks will need
extraordinary support to avoid economic insolvency.
Moody's analysis arises from multiple interconnected credit
factors.
The operating environment for the banks has materially
deteriorated and is now characterized by very weak loan growth
and high interest rates. This is an environment in which Moody's
expects to see continued and possibly sharp deterioration in
asset quality, and pressure on bank profitability, thereby
undermining the banks' already weak loss-absorbing cushions.
The central bank of Vietnam recently acknowledged that the level
of non-performing loans already affecting the banks was higher
than that reported by the banks themselves, and comprises at
least 8.6% of total loans, according to the central bank's
account of March 2012.
However, Vietnam's lack of alignment with international
accounting and regulatory standards as well as the relative
opacity surrounding the true economic position of its banks
continues to mask the extent of the problems they face. In fact,
the lack of transparency is such that Moody's has determined that
it has prevented meaningful credit differentiation. As a result,
it has assigned the same standalone credit assessments to all
eight rated banks despite differences in their reported results.
"The measures contemplated by the Government of Vietnam to reform
the banking sector and improve disclosure will prove positive in
their effects, if fully implemented. However, for now, reforms
are slow, the next steps are unclear, and bank shares are
depressed, making new capital raisings unlikely. And with low
profits expected over the next few quarters, it is difficult to
see how the banks will be able to improve their capitalization
for the time being", says Jean-Francois Tremblay, Moody's
Singapore-based Associate Managing Director for South and South
East Asia.
"And we cannot ignore the risk that the banks may continue to
restrain their lending, with potential feedback loop implications
for the economy," adds Tremblay.
"A further consideration behind the decision to assign caa1
standalone credit assessments to all rated banks is the risk that
confidence in specific banks may be undermined in an environment
in which further sanctions may be applied to bank executives or
shareholders due to past malpractices. Although the situation has
returned to normal, the considerable fall in deposits at Asia
Commercial Bank and other Vietnamese credit institutions in
August shows that confidence is fragile," says Tremblay.
The strong efforts of the central bank to provide liquidity to
Asia Commercial Bank and the banking system more generally
support Moody's decision to assume a modest amount of government
support in its bank ratings for Vietnam.
The central bank has made strong statements of support for the
banking system, indicating that it would do everything necessary
to ensure a safe and sound banking sector. Moody's has assumed
greater support in the ratings of the two large rated government-
controlled banks (Vietinbank and BIDV) because of the presence of
government ownership in both and their relatively significant
market shares.
However, a tangible plan to recapitalize Vietnamese banks or
relieve them of their problem loans has not yet been developed
and Moody's support assumptions will evolve as the government's
intentions become clearer.
In determining that the outlook is stable, Moody's has taken into
account the view that the Vietnamese government has the fiscal
capacity to support the banking system, although at some cost to
its own credit profile, as reflected in the sovereign downgrade.
The standalone credit profile of any bank would be lowered -- to
the "ca" category -- if it became clear that it was only avoiding
default due to extraordinary systemic support. Deposit and debt
ratings for all or some banks could be lowered if there are signs
that support may not be forthcoming to the extent that is
required to restore economic solvency.
By contrast, a more rapid reform program that leads to a clearer
path towards recapitalization of the banks, greater transparency
and more effective risk management could have positive rating
implications for some or all banks.
RATING ACTIONS ON INDIVIDUAL BANKS
Asia Commercial Bank
The E+ bank financial strength rating (BFSR) was downgraded to E,
which maps to caa1 on the long-term scale. The local currency and
foreign currency long-term deposit ratings were downgraded to B3
from B2. The local currency and foreign currency long-term issuer
ratings were also downgraded to B3 from B2. The revised ratings
have stable outlooks. The short-term rating of Not Prime was
unaffected.
Headquartered in Ho Chi Minh City, the bank had total assets of
VND281,019 billion (USD13 billion) at December 2011.
Bank for Investment & Development of Vietnam
The E+ bank financial strength rating (BFSR) was downgraded to E,
which maps to caa1 on the long-term scale. The local currency
long-term deposit rating was downgraded to B2 from B1. The
foreign currency long-term deposit rating was downgraded to B3
from B2 and was constrained by the foreign currency deposit
ceiling. The local currency and foreign currency long-term issuer
ratings were downgraded to B2 from B1. The revised ratings have
stable outlooks. The short-term ratings of Not Prime was
unaffected.
Headquartered in Hanoi, the bank had total assets of VND399,311
billion (USD19 billion) at December 2011.
Military Commercial Joint Stock Bank
The E+ bank financial strength rating (BFSR) was downgraded to E,
which maps to caa1 on the long-term scale. The local currency and
foreign currency long-term deposit ratings were downgraded to B3
from B2. The local currency and foreign currency long-term issuer
ratings were also downgraded to B3 from B2. The revised ratings
have stable outlooks. The short-term rating of Not Prime was
unaffected.
Headquartered in Hanoi, the bank had total assets of VND138,698
billion (USD7 billion) at December 2011.
Saigon - Hanoi Commercial Joint Stock Bank
The E+ bank financial strength rating (BFSR) was downgraded to E,
which maps to caa1 on the long-term scale. The local currency and
foreign currency long-term deposit ratings were downgraded to B3
from B2. The local currency and foreign currency long-term issuer
ratings were also downgraded to B3 from B2. The revised ratings
have stable outlooks. The short-term rating of Not Prime was
unaffected.
Headquartered in Hanoi, the bank had total assets of VND70,990
billion (USD3 billion) at December 2011.
Saigon Thuong Tin Commercial Joint-Stock Bank
The E+ bank financial strength rating (BFSR) was downgraded to E,
which maps to caa1 on the long-term scale. The local currency and
foreign currency long-term deposit ratings were downgraded to B3
from B1 for the local currency rating and from B2 for the foreign
currency rating. The local currency and foreign currency long-
term issuer ratings were also downgraded to B3 from B1. The
revised ratings have stable outlooks. The short-term rating of
Not Prime was unaffected.
Headquartered in Ho Chi Minh City, the bank had total assets of
VND141,469 billion (USD7 billion) at December 2011.
Techcombank
The E+ bank financial strength rating (BFSR) was downgraded to E,
which maps to caa1 on the long-term scale. The local currency and
foreign currency long-term deposit ratings were downgraded to B3
from B1 for the local currency rating and from B2 for the foreign
currency rating. The local currency and foreign currency long-
term issuer ratings were also downgraded to B3 from B1. The
revised ratings have stable outlooks. The short-term rating of
Not Prime was unaffected.
Headquartered in Hanoi, the bank had total assets of VND179,668
billion (USD9 billion) at December 2011.
Vietnam Bank for Industry and Trade
The E+ bank financial strength rating (BFSR) was downgraded to E,
which maps to caa1 on the long-term scale. The local currency
long-term deposit rating was downgraded to B2 from B1. The
foreign currency long-term deposit was downgraded to B3 from B2
and was constrained by the country's foreign currency deposit
ceiling. The local currency and foreign currency long-term issuer
ratings were downgraded to B2 from B1. Accordingly, the rating on
the bank's outstanding senior unsecured foreign currency debt was
also downgraded to B2 from B1. The revised ratings have stable
outlooks. The short-term rating of Not Prime was unaffected.
Headquartered in Hanoi, the bank had total assets of VND459,842
billion (USD22 billion) at December 2011.
Vietnam International Bank
The E+ bank financial strength rating (BFSR) was downgraded to E,
which maps to caa1 on the long-term scale. The local currency and
foreign currency long-term deposit ratings were downgraded to B3
from B2. The local currency and foreign currency long-term issuer
ratings were also downgraded to B3 from B2. The revised ratings
have stable outlooks. The short-term rating of Not Prime was
unaffected.
Headquartered in Hanoi, the bank had total assets of VND96,950
billion (USD5 billion) at December 2011.
The principal methodology used in these ratings was Moody's
Consolidated Global Bank Rating Methodology published in June
2012.
* VIETNAM: Moody's Lowers Government Bond Ratings to 'B2'
---------------------------------------------------------
Moody's Investors Service has downgraded Vietnam's foreign- and
local-currency government bond ratings to B2 from B1.
The ratings outlook is stable.
The key drivers for the ratings action are:
1. A higher likelihood that contingent risks to the government's
balance sheet will be realized due to more pronounced weaknesses
in the banking system; and
2. An expectation of lower medium-term growth prospects for the
country's economy, stemming from the banking system's encumbered
capability to intermediate credit.
Vietnam's long-term foreign currency (FC) bond ceiling remains at
B1, while its long-term FC deposit ceiling was downgraded to B3
from B2. Its local currency bond and deposit ceilings were also
unchanged at Ba2.
Rationale for the Downgrade
The ratings downgrade was driven by the intensification of
banking system vulnerabilities because of the overhang from a
prolonged credit boom and the subsequent tightening in policy.
Over the 5-year period between 2007 and 2011, average domestic
credit growth of 33.7% far exceeded average annual nominal GDP
growth of 21.3% and average annual real GDP growth of 6.6%.
Quantitative and qualitative restrictions on loan growth since
early last year, while helping to alleviate overheating
pressures, have contributed to a deterioration in asset quality
in a system already characterized by relatively low levels of
capital adequacy and poor transparency.
Given the apparent lack of private sector solutions, Moody's
believes that there is an elevated risk that the costs of
recapitalizing the banking system will have to be borne, at least
in part, by the government. This is expected to have a material
impact on Vietnam's financial metrics.
Due to the degree of interconnectedness between banks within the
system and the need to preserve depositor confidence, the
government is likely to provide extraordinary support, although
political considerations will affect the size and timeliness of
such assistance.
The Vietnamese banks' impaired balance sheets have encumbered
their ability to provide credit in support of economic growth,
which has already been affected by slowing external demand: loan
growth has been virtually flat year-to-date through end-August
despite aggressive monetary easing by the central bank since
March 2012.
Given the looming costs related to recapitalization of the
banking system, the government may also be constrained in its
ability to formulate an effective fiscal policy response to a
more severe slowdown in global growth.
Moody's considers that the restoration of macroeconomic
stability, as represented by a fall in inflation, the relative
health of the balance of payments, and the accumulation of
foreign exchange reserves, has not adequately offset the
vulnerabilities posed by weaknesses in the banking system.
However, Moody's recognition of the gradual pace of privatization
and the increased dependence of the economy on foreign trade and
investment has led to a lower assessment of moratorium risks and
the maintenance of the FC bond ceiling at B1.
CREDIT TRIGGERS FOR A FUTURE RATING ACTION
The stable outlook means that upside and downside risks are
balanced. Factors that could lead to a positive rating action
include:
1. An effective implementation of a bank restructuring plan that
improves the banking system's credit profile and decreases
contingent risks to the government;
2. An improvement in transparency or governance that gives
greater confidence in fiscal and macroeconomic management; and
3. A longer track record of macroeconomic stability, which
preserves competitiveness and growth prospects.
The B2 rating captures a wide range of downside risks stemming
from a further deterioration in the financial system, and the
larger fiscal impact associated with such scenarios. Should a
materialization of risks prove greater than those in the
scenarios we currently envisage, then factors that could lead to
a negative rating action include:
1. The realization of contingent risks stemming from the banking
system and/or state-owned enterprise sector that sharply
increases the government's financing requirements and debt
burden;
2. A reemergence of a high degree of macroeconomic instability
that leads in turn to a marked deterioration in Vietnam's
external payments position.
In addition, Moody's has corrected the rating for the local
currency government bond due June 30, 2015 (ISIN: VNTD12150353)
originally assigned on September 11, 2012 to B1 from Ba1. The
bond was initially assigned an incorrect rating due to an
internal administrative error. The rating on this instrument is
being downgraded on Sept. 28 to B2.
The principal methodology used in these ratings were Sovereign
Bond Ratings published in September 2008.
===============
X X X X X X X X
===============
* BOND PRICING: For the Week Sept. 24 to Sept. 28, 2012
-------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
AUSTRALIA
---------
COM BK AUSTRALIA 1.50 04/19/22 AUD 72.99
EXPORT FIN & INS 0.50 06/15/20 NZD 74.96
MIDWEST VANADIUM 11.50 02/15/18 USD 60.88
MIDWEST VANADIUM 11.50 02/15/18 USD 60.75
NEW S WALES TREA 0.50 09/14/22 AUD 71.68
NEW S WALES TREA 0.50 10/07/22 AUD 71.49
NEW S WALES TREA 0.50 10/28/22 AUD 71.34
NEW S WALES TREA 0.50 11/18/22 AUD 71.84
NEW S WALES TREA 0.50 12/16/22 AUD 71.65
NEW S WALES TREA 0.50 02/02/23 AUD 71.31
NEW S WALES TREA 0.50 03/30/23 AUD 70.92
TREAS CORP VICT 0.50 08/25/22 AUD 71.94
TREAS CORP VICT 0.50 03/03/23 AUD 71.46
TREAS CORP VICT 0.50 11/12/30 AUD 53.85
CHINA
-----
CHINA GOVT BOND 4.86 08/10/14 CNY 103.38
CHINA GOVT BOND 1.64 12/15/33 CNY 69.00
INDIA
-----
AKSH OPTIFIBRE 1.00 02/05/13 USD 69.88
JCT LTD 2.50 04/08/11 USD 20.00
JSL STAINLESS LT 0.50 12/24/19 USD 67.47
MASCON GLOBAL LT 2.00 12/28/12 USD 10.00
PRAKASH IND LTD 5.63 10/17/14 USD 69.57
PRAKASH IND LTD 5.25 04/30/15 USD 67.57
PYRAMID SAIMIRA 1.75 07/04/12 USD 1.00
REI AGRO 5.50 11/13/14 USD 68.30
REI AGRO 5.50 11/13/14 USD 68.30
SHIV-VANI OIL 5.00 08/17/15 USD 51.48
SUZLON ENERGY LT 5.00 04/13/16 USD 45.69
JAPAN
-----
EBARA CORP 1.30 09/30/13 JPY 100.09
ELPIDA MEMORY 2.03 03/22/12 JPY 12.88
ELPIDA MEMORY 2.10 11/29/12 JPY 12.88
ELPIDA MEMORY 2.29 12/07/12 JPY 12.88
ELPIDA MEMORY 0.50 10/26/15 JPY 11.00
ELPIDA MEMORY 0.70 08/01/16 JPY 14.88
JPN EXP HLD/DEBT 0.50 09/17/38 JPY 63.58
JPN EXP HLD/DEBT 0.50 03/18/39 JPY 63.36
KADOKAWA HLDGS 1.00 12/18/14 JPY 107.38
SHARP CORP 1.42 03/19/14 JPY 56.11
SHARP CORP 0.85 09/16/14 JPY 52.25
SHARP CORP 1.14 09/16/16 JPY 45.45
SHARP CORP 2.07 03/19/19 JPY 41.70
SHARP CORP 1.60 09/13/19 JPY 41.24
SOFTBANK CORP 1.50 03/31/13 JPY 143.44
TOKYO ELEC POWER 2.35 09/29/28 JPY 72.40
TOKYO ELEC POWER 2.40 11/28/28 JPY 71.25
TOKYO ELEC POWER 2.21 02/27/29 JPY 70.46
TOKYO ELEC POWER 2.11 12/10/29 JPY 68.77
TOKYO ELEC POWER 1.96 07/29/30 JPY 66.30
TOKYO ELEC POWER 2.37 05/28/40 JPY 63.13
MALAYSIA
--------
DUTALAND BHD 7.00 04/11/13 MYR 0.96
PHILIPPINES
-----------
BAYAN TELECOMMUN 13.50 07/15/49 USD 22.38
BAYAN TELECOMMUN 13.50 07/15/49 USD 22.38
SINGAPORE
---------
BAKRIE TELECOM 11.50 05/07/15 USD 45.25
BAKRIE TELECOM 11.50 05/07/15 USD 48.00
BLD INVESTMENT 8.63 03/23/15 USD 60.10
BLUE OCEAN 11.00 06/28/12 USD 37.50
BLUE OCEAN 11.00 06/28/12 USD 37.50
CAPITAMALLS ASIA 2.15 01/21/14 SGD 99.64
CAPITAMALLS ASIA 3.80 01/12/22 SGD 100.56
DAVOMAS INTL FIN 11.00 12/08/14 USD 28.50
DAVOMAS INTL FIN 11.00 12/08/14 USD 28.50
ENERCOAL RESOURC 9.25 08/05/14 USD 74.13
F&N TREASURY PTE 2.48 03/28/16 SGD 100.31
KOREA
-----
CN 1ST ABS 8.00 02/27/15 KRW 33.30
CN 1ST ABS 8.30 11/27/15 KRW 34.63
EXP-IMP BK KOREA 0.50 08/10/16 BRL 72.76
EXP-IMP BK KOREA 0.50 09/28/16 BRL 72.51
EXP-IMP BK KOREA 0.50 10/27/16 BRL 72.02
EXP-IMP BK KOREA 0.50 11/28/16 BRL 71.48
EXP-IMP BK KOREA 0.50 12/22/16 BRL 71.00
EXP-IMP BK KOREA 0.50 10/23/17 TRY 72.71
EXP-IMP BK KOREA 0.50 11/21/17 BRL 65.69
EXP-IMP BK KOREA 0.50 12/22/17 BRL 65.38
EXP-IMP BK KOREA 0.50 12/22/17 TRY 71.99
GREAT KO 3RD ABS 10.00 12/29/14 KRW 30.79
GYEONGGI MUTUAL 8.50 08/29/14 KRW 86.98
HYUNDAI SWISS BK 8.50 10/02/13 KRW 94.27
HYUNDAI SWISS BK 8.50 07/15/14 KRW 88.47
HYUNDAI SWISS BK 8.30 01/13/15 KRW 83.15
KIBO GRE 1ST ABS 10.00 01/25/15 KRW 30.66
SCHNELL BIOPHARM 4.00 08/31/13 KRW 104.32
SINBO 4TH ABS 8.00 08/18/14 KRW 30.25
SINBO 7TH ABS 8.00 09/22/14 KRW 30.01
SINBO CO 3RD ABS 10.00 09/29/14 KRW 30.79
SRI LANKA
---------
SRI LANKA GOVT 6.20 08/01/20 LKR 64.17
SRI LANKA GOVT 7.00 10/01/23 LKR 61.10
THAILAND
--------
BANGKOK LAND 4.50 10/13/03 USD 4.88
VIETNAM
-------
VIETNAM GOVT 7.20 04/04/14 VND 37.11
VIETNAM GOVT 7.30 04/18/14 VND 36.32
*********
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 ***