/raid1/www/Hosts/bankrupt/TCRAP_Public/130225.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
Monday, February 25, 2013, Vol. 16, No. 39
Headlines
A U S T R A L I A
BILLABONG INT'L: Half-Year Loss Cues Debt Covenant Breach
FORTESCUE METALS: Half Year Results No Impact on Moody's Ba3 CFR
MIDWEST VANADIUM: S&P Lowers Corporate Credit Rating to 'CCC'
NORSEMAN GOLD: Creditors Approve Restructuring Plan
* Moody's Revises Outlook on Australian Utilities to Negative
C H I N A
CHINA BAK: Incurs $25.2-Mil. Net Loss in Fiscal 2013 Q1
CHINA GINSENG: Incurs $257,000 Net Loss in Fiscal 2013 Q2
GLORIOUS PROPERTY: Moody's Rates New USD-denominated Notes 'Caa1'
KAISA GROUP: Moody's B1 Sr. Debt Rating Remains Unchanged
LAI FUNG: Moody's Affirms B1 Rating on Senior Unsecured Debt
* Moody's Notes Recovering Chinese Economy
H O N G K O N G
3L ELECTRONIC: Commences Wind-Up Proceedings
BLU SPA: Creditors' Meeting Set for Feb. 26
BOYER ALLAN: Creditors' Proofs of Debt Due March 15
COMFORT RICH: Final Meetings Set for March 22
FIZZY LIMITED: Members' Final Meeting Set for March 22
FLIUTSHIRE PROPERTIES: Creditors' Proofs of Debt Due March 15
GOODMAN FANLING: Cowley and Mitchell Step Down as Liquidators
HAINAN WENCHANG: Ma Kam Man Jasper Steps Down as Liquidator
HOGARY ESTATE: Creditors' Proofs of Debt Due March 15
HOI KA: Creditors' Proofs of Debt Due March 15
MF GLOBAL: Creditors' Proofs of Debt Due March 1
OPENQPON LIMITED: Placed Under Voluntary Wind-Up Proceedings
ORBI (HK): Creditors' Proofs of Debt Due March 18
PACIFIC ESPLANADE: Members' Final Meeting Set for March 19
I N D I A
CONGLOME TECHNOCONSTRUCTIONS: ICRA Rates INR10cr Term Loan at 'D'
IENERGIZER LTD: S&P Assigns 'B' CCR; Rates $140MM Loan 'B'
KAMALA BOARD: ICRA Assigns 'B+' Rating to INR8.0cr Loans
MITTAL CONSTRUCTION: ICRA Assigns 'BB' Rating to INR20cr Loans
PRIME COMFORT: ICRA Assigns 'B-' Ratings to INR31cr Loans
SANGHVI BOTHRA: ICRA Reaffirms 'BB' Rating on INR5cr LT Loan
SHANDERS PROPERTIES: ICRA Rates INR35cr Loans at '[ICRA]BB-'
SOHAM MANNAPITLU: ICRA Places 'B+(SO)' on INR54.4cr Loans
SOHAM RENEWABLE: ICRA Assigns 'B' Rating to INR38.7cr LT Loan
STATUS CLOTHING: ICRA Assigns 'B+' Ratings to INR14.5cr Loans
VITARAG EXPORT: ICRA Reaffirms 'B+' Rating on INR12cr Loans
WHITEGOLD CERAMICS: ICRA Junks Ratings Due to Loan Payment Delays
I N D O N E S I A
* Fitch Reports Indonesian Corporates Challenges for 2013
J A P A N
RENESAS ELECTRONICS: Investors Approve Rehabilitation Plan
SHARP CORP: Mulls Cutting Off Tieup Talks With Hon Hai
SONY CORP: Fitch Says PS4 Launch Unlikely to Help Restore Profit
K O R E A
SSANGYONG ENG'G: Creditors Plan to Dismiss Chairman on Crisis
WOONGJIN HOLDINGS: Wins Court Approval of Self-Rescue Plan
* Moody's Outlook on Korean Insurance Sector Remains Stable
M A L A Y S I A
AMBANK (M): Fitch Affirms 'BB-' Tier 1 Securities Rating
N E W Z E A L A N D
MAINZEAL PROPERTY: Likely To Be In Liquidation, Receivers Say
S I N G A P O R E
ALTUS TECHNOLOGIES: Creditors to Get 100% Recovery on Claims
ARTECH ENGINEERING: Creditors' Proofs of Debt Due March 25
LEHMAN BROTHERS: Creditors' Proofs of Debt Due March 5
LEHMAN BROTHERS FINANCE: Creditors' Proofs of Debt Due March 5
LEHMAN BROTHERS INVESTMENTS: Creditors' Proofs of Debt Due Mar. 5
LUXURY RESERVATIONS: Creditors' Proofs of Debt Due March 21
WARAKU INTERNATIONAL: Court to Hear Wind-Up Petition March 1
S R I L A N K A
ETI FINANCE: Fitch Lowers National Long-Term Rating to 'CC'
X X X X X X X X
* Moody's Reports Manageable Corporate Refunding Needs for Asia
- - - - -
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A U S T R A L I A
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BILLABONG INT'L: Half-Year Loss Cues Debt Covenant Breach
---------------------------------------------------------
The Sydney Morning Herald reports that Billabong International's
path to redemption got tougher on Friday after the surfwear group
downgraded earnings guidance and said a AUD537 million loss for
the half-year put it in breach of debt covenants.
The breach led its banks to seek a secured charge over most of the
business, the report says.
SMH notes that Chief executive Launa Inman also declined to back
her multi-year transformation plan's target -- AUD239 million in
earnings before interest, tax, depreciation and amortisation
(EBITDA) by 2016.
According to SMH, the company confirmed that due diligence by its
two suitors -- which have made AUD1.10-a-share indicative offers
for the company, valuing it at AUD527 million -- is expected to
conclude next month.
One team is led by Billabong executive Paul Naude and Sycamore
Partners, the other by US retailer VF Corp and private equity
group Altamont, the report relays.
A AUD567 million write-down of Billabong's brands, goodwill and
its investment in a joint venture, Nixon, was the main reason for
the half-year loss, according to SMH. Underlying group EBITDA was
up 13% in constant-currency terms to AUD57 million for the six
months to December 31. The report notes that this was largely
driven by cost cutting and store closures, and the company remains
on track to close 160 stores by June this year.
Global sales revenue dropped 8% to just under AUD700 million for
the December half, the report discloses.
SMH states that the company reported it was in breach of its debt
covenants thanks to the AUD567 million of write-downs for the
half-year. The situation has since been remedied, but at a price.
The report relates that Billabong said it had agreed to move "as
soon as practicable" to a secured banking arrangement with its
financiers "whereby the company will grant security over the
majority of its assets".
Billabong's new chief financial officer, Peter Myers, said talks
with the banks had been "extremely constructive," SMH adds.
Based in Australia, Billabong International Limited (ASX:BBG) --
http://www.billabongbiz.com/-- is engaged in the wholesaling and
retailing of surf, skate, snow and sports apparel, accessories and
hardware, and the licensing of its trademarks to specified regions
of the world.
FORTESCUE METALS: Half Year Results No Impact on Moody's Ba3 CFR
----------------------------------------------------------------
Moody's Investors Service reports that Fortescue Metals Group
Ltd's results for the half-year ended December 2012 were broadly
within its expectations and hold no rating implications. Fortescue
Metals Group's Corporate Family Rating is Ba3 with a senior
secured rating of Ba1 and a senior unsecured rating of B1, outlook
negative.
"Despite record iron ore shipments, lower iron ore prices during
the period together with higher cash costs resulted in a decrease
in earnings, with EBITDA declining around 30% to US$1.1bn compared
to the same period last year" says Matthew Moore, a Moody's AVP --
Analyst. "The decrease in earnings has resulted in weakened credit
metrics, but within our rating expectation", added Moore. For
example, Debt to EBITDA increased to over 5x versus Moody's
tolerance level for the Ba3 rating at 4.5x. "This was in line with
our expectations that credit metrics will be weaker than the
tolerance level for the rating in the near term given the drastic
fall in iron ore prices during the latter half of 2012 and is
reflected by the negative outlook on the rating", added Moore.
The company's average realized selling price was about 25% lower
than the price realized during the same period last year. This
decrease in price more than offset the record 35.7mt in shipments.
The company expects to reach 115mtpa run rate in April 2013, which
is one month later than Moody's original expectations, however the
company maintained its full year guidance of 82-84mt.
"We expect the company to generate stronger earnings and cash flow
during the second half of the financial year as it benefits from
higher production, reduced costs and expected stronger iron ore
prices", added Moore.
During the half, the company also approved the resumption of the
40mtpa Kings project, which is expected to achieve run rate
production of 155mtpa by December 2013. Moody's expects the
company will continue to monitor market conditions as it
progresses with the additional capital expenditures associated
with the Kings expansion.
The company also announced that it is progressing with potential
asset sales, including the potential sale of a minority stake in
its rail and port infrastructure. The potential asset sale could
provide support for the rating and/or outlook as Fortescue's
stated objective is apply proceeds to debt reduction.
While Fortescue did not declare a dividend for the half, the
company stated that the board will consider a full year dividend
following the full year results. Also, the company announced that
the Board had decided to adopt a profit pay-out ratio approach to
dividends and expected the payout ratio to move towards 30-40% of
profits over time, having regard for the capital expansion
requirements and the overall stated objective of the reduced
gearing.
The current rating expects that any dividend payments will be made
at levels that allow the company to maintain adequate credit
metrics for the rating, namely Debt/EBITDA below 4.5x and
FFO/Interest maintained above 2.0x.
The negative outlook reflects the ongoing uncertainty around iron
ore fundamentals and prices and the need for the company to
execute on its expansion plans to improve its financial profile
and credit metrics to levels in line with Moody's expectations.
The rating outlook could be stabilized if Fortescue completes its
expansion program and iron ore prices remain at or above levels
allowing the company to improve its currently weak financial
profile for the rating. This would include improving Debt/EBITDA
to below 4.5x and FFO/Interest maintained above 2.0x on a
consistent basis.
The rating could be downgraded if Fortescue experiences any major
delays or further cost overruns with its expansion activities
causing liquidity concerns or delaying expected strengthening in
the company's credit metrics. Ratings could also be downgraded if
iron ore prices drop materially from current levels and are
expected to be sustained at lower levels.
Specifically the ratings could be downgraded if Debt/EBITDA
remains greater than 4.5x or FFO/Interest falls below 2.0x on a
consistent basis.
MIDWEST VANADIUM: S&P Lowers Corporate Credit Rating to 'CCC'
-------------------------------------------------------------
Standard & Poor's Ratings Services said that lowered its corporate
credit rating and issue level ratings on Australian mining company
Midwest Vanadium Pty Ltd. to 'CCC' from 'CCC+', and placed the
ratings on CreditWatch with negative implications.
"The downgrade and CreditWatch negative reflect our concerns
regarding MVPL's tight liquidity and lower-than-expected cash flow
generation. Furthermore, the company's parent, Atlantic Ltd.,
announced that MVPL was in technical default under the indenture
governing its senior secured notes due February 2018," Standard &
Poor's credit analyst Marie Shmaruk said. "Although we currently
expect that the company will come to some agreement in its
negotiations with its noteholders concerning the technical
default, we believe the company will need to complete its
production ramp-up in ferrovanadium and arrange additional
financing to realize sufficient liquidity to meet its next
interest payment."
The company paid its February coupon partially from funds in its
interest reserve account, leaving it with less than the
US$14.3 million required by the indenture. The company has 45
business days to negotiate with noteholders to replenish the
reserve or seek revision of the requirement.
Ms. Shmaruk added: "Although MVPL produced its first ferrovanadium
in early 2012, the production ramp-up has been slow and it has
faced operating problems. These delays, coupled with lower-than
originally anticipated pricing, have caused the company to have
weak liquidity."
The company has revised its ramp-up schedule and should begin to
generate positive cash from operations by mid-2013. Nevertheless,
S&P believes MVPL's cash flow generation will be insufficient to
fund its US$19.3 million interest payment in August 2013. As a
result, S&P believes that the company will require further
external funding to meet its future obligations.
In resolving this CreditWatch, S&P will assess the outcome of
negotiations with and actions of the noteholders regarding the
technical default, as well as funding alternatives. S&P will also
consider MVPL's internal cash flow generation, as well as any
changes to the company's capital structure.
NORSEMAN GOLD: Creditors Approve Restructuring Plan
---------------------------------------------------
Proactiveinvestors.com reports that Norseman Gold plc's creditors
have given the green light to its restructuring plan.
Norseman appointed a voluntary administrator to its main operating
subsidiary CNGC in October after cash and production problems
while its shares were suspended, the report recalls.
Proactiveinvestors.com says that on February 21, major shareholder
Tulla Resources and Norseman put forward proposals for CNGC to
enter a deed of company arrangement (DOCA) and a creditors' trust
to be set up.
The report relates that the creditors of CNGC on February 22
approved the execution of the proposed deed, with secured
creditors now required to reach an agreement as to the
circumstances of the existing securities and any fresh security
that may be granted by directors.
If the DOCA is completed "satisfactorily", CNGC will be returned
with no change in ownership or control, the report notes.
According to the report, the company hopes to resume trading its
shares on AIM and in Australia "without delay" after completing
any outstanding regulatory requirements.
If it is not completed within 15 business days of approval, CNGC
will be wound up, Norseman said.
The company said a further announcement will be made following the
meeting of secured creditors planned for March 8, the report adds.
About Norseman Gold
Norseman Gold plc -- http://www.norsemangoldplc.com/-- is
engaged in gold mining operation. The Company operates in two
operating mines, which include the Harlequin high-grade
underground gold mine; and the North Royal Open Pit mine.
Proactiveinvestors.com said Norseman Gold Plc appointed an
administrator to its main operating subsidiary CNGC after
production problems at the Norseman mine left it short of
cash. Norseman's directors said they propose to submit a deed of
company arrangement for consideration of creditors that will
provide for the continuation of the business of CNGC and control
to be returned to them. Ron Dean-Willcocks of Dean-Willcocks
Shepard who had been appointed administrator to CNGC said he
intends to continue to run the Norseman Mine as a going concern,
Proactiveinvestors.co.uk added.
* Moody's Revises Outlook on Australian Utilities to Negative
-------------------------------------------------------------
Moody's Investors Service has changed its outlook on the
Australian regulated utilities sector to negative.
The negative outlook reflects the increased uncertainty in the
regulatory environment following the introduction of new rules in
November 2012 that govern the revenue-setting process for the
utility networks sector.
"The new rules challenge the sector's credit profile by reducing
the predictability of regulated revenues. In our view, the
increased emphasis on regulator discretion under the new rules
will likely reduce revenue predictability in the future,
particularly because there isn't a track record on how these
powers will be exercised," says Spencer Ng, a Moody's Assistant
Vice President and Analyst.
"At the same time, we believe the increase in regulator power to
define the return-setting framework could result in lower
regulated returns for the networks" adds Ng.
Ng was speaking at the release of a new Moody's report titled,
"Increased Uncertainty in Regulatory Environment Challenges
Sector's Credit Profile," and which details Moody's expectation
for the fundamental business conditions in the sector over the
next 12-18 months.
According to the report, Moody's believes the final impact on the
credit profiles of issuers as a result of the rule change will
depend on their plans to preserve their credit profiles in order
to offset their increased business risk, emanating from the
reduced revenue predictability.
"We believe most rated utilities would have the financial capacity
to manage a moderate tightening of returns. However, negative
pressure from the new rules would be more pronounced for networks
that currently have limited headroom within their existing rating.
Further details on the practical application of the rules will
become available in November when the guideline paper on return
setting is published," says Ng.
"Finally, although the new rules will have a negative credit
impact on the regulatory environment, we still view the Australian
framework as having supporting features, albeit weakened by the
rule changes," says Ng, adding "This is because other credit
supportive elements of the previous regulatory regime, such as the
building block approach, are unchanged," adds Ng.
Moody's believes that the refinancing tasks for the utilities are
manageable, given their solid investment grade rating profiles and
the progress they have already made to refinance debt maturing in
2013.
=========
C H I N A
=========
CHINA BAK: Incurs $25.2-Mil. Net Loss in Fiscal 2013 Q1
-------------------------------------------------------
China BAK Battery, Inc., reported a net loss of $25.2 million on
$63.7 million of revenues for the three months ended Dec. 31,
2012, compared with a net loss of $1.8 million on $71.8 million of
revenues for the prior fiscal period.
The company reported an operating loss totaling $15.1 million for
the three months ended Dec. 31, 2012, as compared to operating
income of $2.3 million for the same period in 2011.
The Company's balance sheet at Dec. 31, 2012, showed
$441.2 million in total assets, $393.6 million in total
liabilities, and stockholders' equity of $47.6 million.
A copy of the Form 10-Q is available at http://is.gd/jj2USO
About China BAK
Shenzhen, PRC-based China BAK Battery, Inc., is a global
manufacturer of lithium-based battery cells.
* * *
As reported in the TCR on Jan. 14, 2013, PKF, in Hong Kong, China,
expressed substantial doubt about China BAK'a ability to continue
as a going concern. The independent auditors noted that the
Company has a working capital deficiency and accumulated deficit
from net losses incurred for the year ended Sept. 30, 2012, and
prior periods.
CHINA GINSENG: Incurs $257,000 Net Loss in Fiscal 2013 Q2
---------------------------------------------------------
China Ginseng Holdings, Inc., reported a net loss of $256,860 on
$1.7 million of revenues for the three months ended Dec. 31, 2012,
compared with a net loss of $421,943 on $1.4 million of revenues
for the prior fiscal period.
For the six months ended Dec. 31, 2012, the Company reported a net
loss of $1.7 million on $2.2 million of revenues, compared with a
net loss of $834,202 on $2.2 million of revenues for the six
months ended Dec. 31, 2011.
The Company's balance sheet at Dec. 31, 2012, showed $7.6 million
in total assets, $6.6 million in total liabilities, and
stockholders' equity of $937,830 million.
A copy of the Form 10-Q is available at http://is.gd/hJV5qf
About China Ginseng Holdings
China Ginseng Holdings, Inc., headquartered in Changchun City,
China, was incorporated on June 24, 2004, in the State of Nevada.
Since its inception in 2004, the Company has been engaged in the
business of farming, processing, distribution and marketing of
fresh ginseng, dry ginseng, ginseng seeds, and seedlings.
Starting August 2010, it has gradually shifted the focus of its
business from direct sales of ginseng to canned ginseng juice
production and wine production.
* * *
As reported in the TCR on Oct. 9, 2012, Meyler & Company, LLC, in
Middletown, N.J., expressed substantial doubt about China
Ginseng's ability to continue as a going concern. The independent
auditors noted that the Company had an accumulated deficit of
$5.8 million at June 30, 2012, had a negative working capital of
$547,480, and there are existing uncertain conditions the Company
faces relative to its ability to obtain working capital and
operate successfully.
GLORIOUS PROPERTY: Moody's Rates New USD-denominated Notes 'Caa1'
-----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Glorious
Property Holdings Limited's proposed issuance of USD-denominated
senior unsecured notes. At the same time, Moody's has affirmed
Glorious' B3 corporate family rating and its Caa1 senior unsecured
debt rating.
The ratings outlook is negative.
The net proceeds from this issuance will primarily be used to
refinance existing debt and for general corporate purposes.
Ratings Rationale:
"The proposed issuance of USD notes will improve Glorious'
liquidity and debt maturity profile," says Franco Leung, a Moody's
Assistant Vice President and Analyst.
Glorious' liquidity position has improved in the past year, driven
primarily by its proactive management of its debt maturity
profile.
While total debt remained at around RMB15.8 billion at end-2012,
its short-term debt dropped to RMB6.1 billion from about RMB10
billion at end-June 2012. At the same time, cash coverage of its
short-term debt improved to about 54% from 35%.
The proposed USD notes are expected to further improve its cash
coverage of its short-term debt.
"But the current ratings and outlook continue to reflect Moody's
concerns over Glorious' weak sales performance and financial
profile," says Leung, who is also the lead analyst for Glorious.
The company reported contract sales of RMB10.9 billion for FY2012,
down 18% year-on-year. This figure is also 16% below its full-year
sales target of RMB13 billion.
It also reported a 12.5% year-on-year decrease in book revenue to
around RMB8.4 billion in FY2012. Its gross profit margin dropped
significantly to 23% from about 40% due to higher proportion of
delivered properties in the second- and third-tier cities in
FY2012. These trends resulted in low EBITDA and interest coverage
in FY2012.
Moody's expects Glorious' credit metrics to remain weak. Adjusted
EBITDA/ interest ratio will likely remain below 2x for 2013,
positioning the company at the B3 rating level.
On the other hand, the B3 rating reflects Glorious high-quality
land bank which is located in the major districts of first-tier
cities, such as Shanghai and Beijing.
"Looking ahead, better execution capability, as reflected in
growth in sales and improvements in profit margins, or further
improvements in its debt maturity and liquidity profiles, could
return the outlook to stable," says Leung.
The ratings could be downgraded if (1) Glorious fails to arrange
new funding for its maturing debt; or (2) its sales performance
deteriorates, or profit margins decline on a sustained basis.
An upgrade is unlikely in the near term unless Glorious
demonstrates an ability to significantly improve its sales
execution, as well as its liquidity and debt maturity profiles.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.
Glorious Property Holdings Limited is a medium-sized residential
property developer based in Shanghai. It has now expanded to
eastern and northern China. It had a land bank of around 16.2
million sqm (GFA) in Shanghai, Beijing, Tianjin, and several
second-tier cities in the Yangtze River Delta and Northeast China
at end-December 2012. Glorious was listed on the Stock Exchange of
Hong Kong in 2009. Its chairman, the major shareholder, owns
68.4%, and also has a shipbuilding company listed in Hong Kong.
KAISA GROUP: Moody's B1 Sr. Debt Rating Remains Unchanged
---------------------------------------------------------
Moody's Investors Service says that Kaisa Group Holdings Ltd's
2012 full-year results are generally within Moody's expectations,
and support its B1 corporate family and senior unsecured ratings
with a stable outlook.
"Kaisa's 2012 results reflect its good sales execution and
proactive approach to financial management," says Franco Leung, a
Moody's Assistant Vice President and Analyst.
Kaisa reported on 21 February 2013 a 10.3% year-on-year increase
in revenue to RMB12.0 billion in 2012, while its gross profit
margin rose to 32.5% from 29.8% in 2011.
At the same time, Kaisa reported contract sales of RMB17.3 billion
for 2012, exceeding its sales target of RMB16.5 billion for the
year. This growth represented a 13% increase in dollar sales and
an 18% rise in gross floor area on a year-on-year basis.
"Over the next 12 months, we expect Kaisa will maintain a
reasonable profit margin, while it grows its sales, with
forecasted adjusted EBITDA margin of around 25-30%," adds Leung,
also the Lead Analyst for Kaisa.
Moody's expects that the momentum in Kaisa's sales growth will
continue on the back of a stabilizing residential market on the
Mainland. Its profit margin will improve slightly as more housing
units in first-tier cities become available for sale in 2013.
Moody's notes that Kaisa has been proactive in managing its
capital structure and debt maturity profile. Its issuance of
USD500 million in notes in January has reduced the amount of debt
falling due in 2014 as the proceeds were primarily used for
prepaying such debt. This issuance has therefore successfully
reduced its refinancing risk. A further reduction in refinancing
risk would be positive for its ratings.
Moody's expects that Kaisa's debt leverage -- as measured by
adjusted debt to total capitalization -- will measure around 50%-
55% over the next 12-18 months, while interest coverage will
remain around 2.5x-3x. Such debt and interest coverage levels will
remain comparable to those of its B1 rated peers.
Kaisa was active in land acquisitions in 2012 and bought 21
parcels of land for over RMB4.5 billion. Its current land bank of
around 23.9 million square meters is sufficient to meet its
development needs for at least the next 5 years.
Kaisa's liquidity is adequate. Its cash on hand of RMB5.35 billion
at end-2012 and its operating cash flows will be sufficient to
cover its short-term debt of RMB3.15 billion and committed land
payments for the next 12 months.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.
Kaisa Group Holdings Ltd is a Shenzhen-based property developer
established in 1999 and listed on the Hong Kong Stock Exchange in
December 2009. As of December 2012, the company was 62.4% owned by
the founder and his family members.
As of December 2012, Kaisa had a land bank of around 23.9 million
square meters in gross floor area located in the Pearl River and
Yangtze River deltas, Bohai Rim, and central and western China.
LAI FUNG: Moody's Affirms B1 Rating on Senior Unsecured Debt
------------------------------------------------------------
Moody's Investors Service has affirmed Lai Fung Holding Limited's
B1 corporate family and senior unsecured debt ratings. The outlook
on both ratings remains stable.
Ratings Rationale:
"The affirmation reflects Lai Fung's adequate liquidity, its
stable rental income, and CapitaLand's 20% equity interest," says
Lina Choi, a Moody's Vice President and Senior Analyst.
A unique feature of Lai Fung among its B1-rated Chinese property
peers is stable income from investment properties of HKD573
million per annum.
Although Lai Fung's contract sales performance in the last 12-18
months has been moderate, this stream of stable rental income from
Hong Kong Plaza in Shanghai, and Mayflower Plaza in Guangzhou, has
helped resolve most of its interest obligations.
Lai Fung's current cash balance of over HKD2.6 billion should be
sufficient to cover its short-term debt of HKD1.3-HKD1.6 billion.
"Lai Fung is also able to leverage on CapitaLand's operating
expertise. Although the company has a long operating history in
investment properties, its relatively small scale could benefit
substantially from CapitaLand's more established scale and brand
name," adds Choi, who is also the Lead Analyst for Lai Fung.
Lai Fung's current revenue portfolio comprises 70% property sales
and 30% rental income.
In view of the management's revised business strategy of building
a more sizeable investment property portfolio, CapitaLand's
management and operating expertise should serve as a check-and-
balance mechanism.
However, the B1 rating is constrained by Lai Fung's (1) lack of a
track record in executing sales; (2) plan to expand its property
portfolio; and (3) reliance on sales contributions from a few
locations in Shanghai and Guangzhou..
"Developing and maintaining an investment property-oriented
business model requires persistently higher capital investments.
On the other hand, owing to its build-and-keep strategy, Lai
Fung's cash flow return cycle will be lengthened.
Hence, Lai Fung will partially rely on the proceeds of its
contract sales to fund potential IP land and construction costs in
the next 2-3 years," says Choi.
Lai Fung has a relatively high ASP of RMB20,000 to RMB30,000, and
a concentration of its primary operations in Shanghai and
Guangzhou, which are tier-1 cities that are subjected to austerity
measures.
These factors present challenges for Lai Fung to achieve its more
ambitious growth plan. Hence, its moderate sales performance in
the previous years.
"Moody's expects Lai Fung to achieve limited growth in contract
sales in the next 12-24 months. After omitting the funding
required to replenish its land bank and further expansion of its
IP portfolio, Lai Fung's FCCR, which was 3.0x as of July 2012,
could come under pressure," says Choi.
The stable outlook reflects Moody's expectation that Lai Fung will
continue to manage its expansions and land acquisitions in a
prudent manner.
Moody's also expects the company to maintain a stable cash balance
and to have uninterrupted access to bank financing.
Upward rating pressure is limited in the near to medium term, but
considerations for an upgrade could emerge if Lai Fung (1)
achieves stable sales growth from a more diversified portfolio
over the next two to three years; (2) demonstrates strong
financial discipline and diligently monitors its business and
financial risks; and (3) demonstrates a material increase in
recurring rental income, such that net rental income/consolidated
interest stays above 1x-1.5x on a sustained basis.
On the other hand, downgrade pressure may emerge if Lai Fung (1)
does not meet its property sales targets or records a reduction in
rental income from its investment properties, thereby materially
affecting its operating cash flow and balance sheet liquidity; or
(2) engages in aggressive land acquisitions or debt-funded
investments or acquisitions.
Moody's will consider the following as triggers for a downgrade:
(1) adjusted debt/capitalization in excess of 50%; (2)
EBITDA/interest of less than 1.5x-2.0x; or (3) net rental
income/consolidated interest of less than 0.5x; (4) a reduction in
CapitaLand's equity interest and/or commitment in Lai Fung.
The principal methodology used in rating Lai Fung Holdings was the
Global Homebuilding Industry Methodology, published in March 2009.
Lai Fung Holdings Ltd, a member of the Lai Sun Group, focuses on
mid-market property development and investments in Guangzhou,
Shanghai and Zhongshan. It is 49.39%-owned by eSun Holdings
Limited (unrated), a Lai Sun Group company, and is controlled by
the Lam family, which has interests in property, garment, and the
entertainment businesses through a number of listed companies in
Hong Kong. CapitaLand Group, a property company under Temasek
Holdings (Private) Limited (Aaa stable), also has a 20% interest
in Lai Fung.
The company has a development land bank with an attributable gross
floor area of around 0.9 million square meters. It also has a
portfolio of investment properties with an attributable gross
floor area of approximately 218,000 square meters.
* Moody's Notes Recovering Chinese Economy
------------------------------------------
Moody's Investors Service says that China's economy is recovering
and a hard landing is becoming more and more an unlikely and
distant possibility.
In addition, while Moody's considers the rebound in growth as
positive, it can also -- to the extent that it depends on an ample
availability of financial credit and if it is left unchecked --
exert credit pressures over time, perhaps offsetting the initial
advantages for the economy.
At the same time, the Mainland's new leadership looks committed to
financial-sector, fiscal and structural reforms, and the orderly
transition to the country's fifth generation of political leaders
has reduced uncertainty for investors.
Moody's conclusion of the presence of a recovery is supported by
forward-looking indicators, such as the purchasing managers'
index, which point towards ongoing near-term economic expansion.
In addition, early signs of a rebalancing in the economy represent
another positive, as consumption contributed slightly more than
investment to overall GDP growth in 2012. Stabilization in the
global economy has boosted China's export performance and supports
the country's growth rebound.
Recent data releases also point to a rebound in economic activity
and suggest real GDP growth should climb to the upper half of the
7.5% to 8.5% range Moody's forecasts for 2013, up from 7.8% in
2012. The favorable growth outlook is supported by policy easing
and credit extension, particularly by the non-banking sectors, and
should continue in 2014.
Moody's conclusions were contained in its latest sovereign report
on China (Aa3 positive), titled "Improved Economic Outlook for
2013 Is Underpinned by Policy Easing."
According to the report, China's economy enters 2013 on a
relatively stronger footing than 2012, as reflected in Moody's
revised growth forecast of 8.0%, up from real GDP growth of 7.8%
in 2012, with upside risks.
The authorities' pursuit of a policy of calibrated stimulus
measures has helped the rebound in aggregate demand in China, and
which was also reflected in the stronger retail sales and
industrial output apparent in the fourth quarter.
Recent developments suggest that fiscal policy has also become
more expansionary and is supporting growth, and will also ease
budgetary pressures at the local government level. Moody's
estimates that China's general government budget deficit was
slightly higher at around 1.5% of GDP in 2012, compared with 1.1%
in 2011. Moody's expects that fiscal policy will continue to
provide more support to growth this year and next, and that the
budget deficit will widen modestly and prudently.
However, while the development of the non-bank financial system,
including the banks' off-balance-sheet wealth management products,
is needed to help the financial system diversify, growth from this
sector was extraordinarily rapid in 2012.
Accordingly, if non-bank credit growth is left unchecked, or
regulators and financial institutions are unable to adequately
manage the associated risks, or moral hazard is allowed to emerge
when investors face losses, negative consequences could become
apparent for macroeconomic stability and the soundness of the
banking system, which remains the key mechanism for financial
intermediation.
Given the evolving environment, Moody's believes that China's new
political leadership faces a new challenge in modulating the rapid
rise in aggregate financing to ensure long-term macro-economic and
financial system stability. To that end, the authorities appear --
as recently indicated by the recent long-term income distribution
strategy outlined by the State Council -- committed to furthering
financial-sector, fiscal, and structural reforms. But the pace at
which such reforms can be achieved will be crucial for determining
whether a rebalancing of the economy away from its heavy reliance
on investment, and increasingly on leverage, is successful.
================
H O N G K O N G
================
3L ELECTRONIC: Commences Wind-Up Proceedings
--------------------------------------------
Members of 3L Electronic (HK) Limited, on Feb. 8, 2013, passed a
resolution to voluntarily wind-up the company's operations.
The company's liquidator is:
Liu Ting Pang
6/F, No. 27, Wanning St
Wunshan District, Taipei City 116
Taiwan
BLU SPA: Creditors' Meeting Set for Feb. 26
-------------------------------------------
Creditors of Blu Spa (Hong Kong) Limited will hold their meeting
on Feb. 26, 2013, 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 the Auditorium, Duke of Windsor Social
Service Building, 15 Hennessy Road, Wanchai, in Hong Kong.
BOYER ALLAN: Creditors' Proofs of Debt Due March 15
---------------------------------------------------
Creditors of Boyer Allan Investment Management (Hong Kong)
Limited, which is in members' voluntary liquidation, are required
to file their proofs of debt by March 15, 2013, to be included in
the company's dividend distribution.
The company's liquidator is:
Philip Brendan Gilligan
7th Floor, Alexandra House
18 Chater Road
Central, Hong Kong
COMFORT RICH: Final Meetings Set for March 22
---------------------------------------------
Members and creditors of Comfort Rich Enterprises Limited will
hold their final meetings on March 22, 2013, at 10:00 a.m., at
Rooms 2604-6, 26/F, CC Wu Building, 302-308 Hennessy Road,
Wanchai, in Hong Kong.
At the meeting, Lau Yip Leung, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
FIZZY LIMITED: Members' Final Meeting Set for March 22
------------------------------------------------------
Members of Fizzy Limited will hold their final general meeting on
March 22, 2013, at 11:15 a.m., at Level 28, Three Pacific Place,
at 1 Queen's Road East, in Hong Kong.
At the meeting, Natalia K M Seng, the company's liquidator, will
give a report on the company's wind-up proceedings and property
disposal.
FLIUTSHIRE PROPERTIES: Creditors' Proofs of Debt Due March 15
-------------------------------------------------------------
Creditors of Fliutshire Properties Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by March 15, 2013, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Feb. 5, 2013.
The company's liquidator is:
Yuen Ting Wah
Flat 4A, 1 B Babington Path
Ping On Mansion, Hong Kong
GOODMAN FANLING: Cowley and Mitchell Step Down as Liquidators
-------------------------------------------------------------
Patrick Cowley and Paul Edward Mitchell stepped down as
liquidators of Goodman Fanling Investments No. 1 Limited on
Feb. 5, 2013.
HAINAN WENCHANG: Ma Kam Man Jasper Steps Down as Liquidator
-----------------------------------------------------------
Ma Kam Man Jasper stepped down as liquidator of Hainan Wenchang
Shi Changsa Overseas Chinese School Education Fund Limited on
Feb. 15, 2013.
HOGARY ESTATE: Creditors' Proofs of Debt Due March 15
-----------------------------------------------------
Creditors of Hogary Estate Limited, which is in members' voluntary
liquidation, are required to file their proofs of debt by March
15, 2013, to be included in the company's dividend distribution.
The company commenced wind-up proceedings on Feb. 5, 2013.
The company's liquidator is:
Ma Kam Man Jasper
Room 1502, 15/F
101 King's Road
North Point, Hong Kong
HOI KA: Creditors' Proofs of Debt Due March 15
----------------------------------------------
Creditors of Hoi Ka Company Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by March 15, 2013, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Feb. 5, 2013.
The company's liquidator is:
Yuen Ting Wah
Flat 4A, 1 B Babington Path
Ping On Mansion, Hong Kong
MF GLOBAL: Creditors' Proofs of Debt Due March 1
------------------------------------------------
Creditors of MF Global Holdings HK Limited, which is in members'
voluntary liquidation, are required to file their proofs of debt
by March 1, 2013, to be included in the company's dividend
distribution.
The company's liquidators are:
Patrick Cowley
Fergal Thomas Power
Lui Yee Man
8th Floor, Prince's Building
10 Chater Road
Central, Hong Kong
OPENQPON LIMITED: Placed Under Voluntary Wind-Up Proceedings
------------------------------------------------------------
At an extraordinary general meeting held on Feb. 1, 2013,
creditors of Openqpon Limited resolved to voluntarily wind up the
company's operations.
The company's liquidators are:
Cheung Hok Hin Alan
Suen Fuk Yuen Bernie
Suite 2302, 23/F
Seaview Commercial Building
21 Connaught Road
West, Sheung Wan, Hong Kong
ORBI (HK): Creditors' Proofs of Debt Due March 18
-------------------------------------------------
Creditors of Orbi (HK) Limited, which is in members' voluntary
liquidation, are required to file their proofs of debt by
March 18, 2013, to be included in the company's dividend
distribution.
The company commenced wind-up proceedings on Jan. 16, 2013.
The company's liquidator is:
Chareyre Jean-Paul Bernard
119 Lam Tsuen San Tsuen
1/F, Tai Po
New Territories
PACIFIC ESPLANADE: Members' Final Meeting Set for March 19
----------------------------------------------------------
Members of Pacific Esplanade Properties Limited will hold their
final meeting on March 19, 2013, at 2:00 p.m., at 20th Floor, Tung
Wai Commercial Building 109-111 Gloucester Road, Wanchai, in Hong
Kong.
At the meeting, Francis Young, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
=========
I N D I A
=========
CONGLOME TECHNOCONSTRUCTIONS: ICRA Rates INR10cr Term Loan at 'D'
-----------------------------------------------------------------
ICRA has revised the long term rating to the INR10 crore term loan
of Conglome Technoconstructions Private Limited from '[ICRA]BBB-'
to '[ICRA]D'. The outlook on the long-term rating is 'Stable'.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Term Loan 10.00 [ICRA]D (Revised)
The rating revision takes into account delays in servicing of debt
obligations by the company. The time as well as cost overruns in
CTPL's ongoing residential project 'Sathya Nagar' and delay in
launching of Phase II of the project has resulted in weakening of
CTPL's liquidity position. Going forward, the timely service of
debt and progress on its on-going projects would be the key rating
sensitivities.
Incorporated in 2007, CTPL is a private limited company with
Greenberry Limited and Shriram Land Development India Pvt Ltd
holding 74% and 26% respectively. The company has entered into a
Joint Development Agreement (JDA) with Sapphire Space Infracon
Private Limited and SLDPL to develop and market a residential
township in the name of 'Sathya Nagar' consisting of low cost
residential units at Boisar area of Thane District. As per the
terms of the JDA, the parties have agreed to contribute the land
in return for a pre-agreed profit share out of the project and
have vested all the rights for development, marketing and
conveyance with CTPL. Spread over 33 acre of land, the project
comprising of row houses and apartments, is to be developed in two
phases 0.4 msf in Phase I and 0.6 msf in Phase II. As on
Nov. 30, 2011, the company had sold almost 98% in Phase I.
Besides, the company has plans to develop one project in Bangalore
and one in Hyderabad, which are currently at preliminary stage.
IENERGIZER LTD: S&P Assigns 'B' CCR; Rates $140MM Loan 'B'
----------------------------------------------------------
Standard & Poor's Ratings Services said that it had assigned its
'B' long-term corporate credit rating to India-based business
process outsourcing (BPO) company iEnergizer Ltd. The outlook is
stable. S&P also assigned its 'B' long-term issue rating to the
company's proposed $140 million secured bank loan.
"The rating on iEnergizer reflects the company's weak market
position as a very small player in the competitive and fragmented
BPO industry in India," said Standard & Poor's credit analyst
Katsuyuki Nakai. "The rating also reflects iEnergizer's complex
group structure, aggressive financial policy, and highly leveraged
balance sheet in an asset-light industry. The company's firm
client relationships and steady free cash flows moderate these
weaknesses."
S&P assess iEnergizer's business risk profile to be "weak" mainly
due to the company's small size in the BPO industry. The company
could faces stronger competition from domestic and international
BPO service providers. In S&P's opinion, iEnergizer has low
client and geographical diversity. The company's earnings
prospects are steady due to its firm client relationships in non-
voice segments and the recurring nature of BPO revenues. The
company's relatively good margins due to its high seat utilization
and value-added non-voice services also support its business risk
profile.
S&P assess iEnergizer's financial risk profile to be "highly
leveraged." The company's ratio of adjusted debt to capital was
higher than peers', at 81.8% as of March 31, 2012. This is mainly
due to its acquisition of U.S.-based Aptara Inc. in early 2012.
S&P views the complex structure of the wider iEnergizer group and
the company's aggressive financial policy as rating weaknesses.
In S&P's view, iEnergizer's large acquisition of Aptara through
short-term bridge loans from a group company and other business
associates indicates its aggressive financial policies. S&P
believes the promoter has a strong influence on key strategic and
financial decisions.
"The stable outlook reflects our expectation that iEnergizer will
sustain a steady operating performance in the next one to two
years," said Mr. Nakai. We expect the company's revenue to grow
at about 10% each in fiscals 2013 and 2014, and EBITDA margin to
remain about 25% in the period. This is despite moderate wage
inflation. We also anticipate that the company will maintain
financial discipline with capital spending of $3 million-
$4 million and no dividend payment.
S&P may raise the rating if iEnergizer improves its market
position by increasing its scale of operations and demonstrates
more conservative financial policies, such that the ratio of FFO
to debt remains above 25% and the debt-to-capital ratio stays
below 60%.
S&P may lower the rating if the company's financial policies
become more aggressive, as indicated by further debt-funded
acquisitions, large dividend payouts, or higher leverage. A
deterioration in the ratio of adjusted debt to capital from the
current level of about 80% could trigger a downgrade.
KAMALA BOARD: ICRA Assigns 'B+' Rating to INR8.0cr Loans
--------------------------------------------------------
ICRA has assigned an '[ICRA]B+' rating to the INR6.85 crore cash
credit facility and INR1.15 crore term loans of Kamala Board Box
Pvt. Ltd.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Cash Credit 6.85 [ICRA]B+ Assigned
Term Loans 1.15 [ICRA]B+ Assigned
The rating takes into consideration KBBPL's weak financial profile
with nominal profits, adverse capital structure and weak debt
coverage indicators, high working capital intensity of operations
on the back of limited credit availed from suppliers;
notwithstanding some moderation during the last two years leading
to a stretched liquidity position, high utilization of the bank
facilities limiting the company's financial flexibility and the
company's limited bargaining power against strong clients due to
its small size of current operations. ICRA also notes KBBPL's
exposure to client concentration risk, as the top two clients
contributed around 50% of the sales during the past few years and
the risks of adverse movements in the paper prices although
mitigated to a large extent on account of KBBPL's ability to pass
on such increase to clients. The rating however takes into account
the long track record of the promoters in the manufacturing of
corrugated fibre and offset printed duplex board cartons, the
company's established client base present across diverse
industries, product acceptability as demonstrated by repeat orders
from existing clients, and a steady improvement in the Return on
Capital Employed (RoCE) and net profitability during the last two
years.
KBBPL, promoted by the Kolkata based Das family was established in
1984 as a proprietorship concern and was converted into a private
limited company in February 2006. The company is engaged in the
manufacturing of corrugated fibre and offset printed duplex board
cartons through two units based in West Bengal. The current
production capacity of the company is around 14,400 metric tonnes
per annum.
Recent Results
KBBPL reported a net profit of INR0.36 crore during FY12 on an OI
of INR20.92 crore as against a net profit of INR0.20 crore and an
OI of INR19.31crore during FY11.
MITTAL CONSTRUCTION: ICRA Assigns 'BB' Rating to INR20cr Loans
--------------------------------------------------------------
ICRA has assigned a rating of '[ICRA]BB' to the INR20.0 crore fund
based and non fund based facilities of Mittal Construction Unit.
The outlook on the long term rating is 'stable'.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Fund Based Limits 11.0 [ICRA]BB(stable) assigned
Non Fund based limits 9.0 [ICRA]BB(stable) assigned
The rating favorably factors in MCU's long track record in the
construction industry, its diversified client base and presence
across sectors thereby mitigating client and sectoral
concentration risks. Further, the rating takes into account the
healthy growth in MCU's revenues backed by strong inflow of orders
in FY 2012 coupled with adequate speed of execution; and its
moderate debt coverage indicators. The rating is however
constrained by the intensely competitive nature of the industry
given the low to medium value added nature of orders executed by
the firm as is also evident in MCU's declining profitability over
the last few years. This apart the rating takes into account the
increasing working capital intensity marked by rising receivable
collection period which is expected to lead to additional funding
requirements going forward. The rating also factors in the
moderate order book position which provides limited revenue
visibility. As on Sep 30th 2012, MCU had an order book of INR94.7
crore which is expected to be executed over the next 9 to 12
months.
As MCU does not have any debt funded capital expenditure plans,
ICRA expects MCU's debt coverage indicators to be moderate over
the medium term. Going forward, MCU's ability to improve its order
book position, execute the same as planned in order to maintain
revenue growth and profitability amid the competitive environment
will be key rating sensitivity factors. The rating will also
remain sensitive to any withdrawal of partner's capital or
unsecured loans and increase in interest rates.
Established in 1996, Mittal Construction Unit is a partnership
firm based in Muzzafarnagar, Uttar Pradesh managed by first
generation entrepreneur Mr. R K Mittal. The firm started as a
contractor for civil construction projects in state government
sponsored projects. Over the years, the firm gained capability to
bid for work tendered by central government entities. Being
present in Uttar Pradesh and having a track record of executed
work in public sector, the firm forayed into private sector
wherein it executed factory buildings and offices for primarily
for sugar mills and some other industries. At present, the firm
executes projects across civil, industrial, sewage treatment and
road segments with most projects in Uttar Pradesh, Uttarakhand and
National Capital Region. MCU is a registered contractor with
various public entities. It is a class I contractor for Public
Works Department, National Building Construction Corporation, UP
Avas Evam Vikas Parishad etc.
Recent results
In FY 2012, MCU reported an operating income of INR99.4 crore with
an OPBDIT of INR5.5 crore and PAT of INR2.8 crore translating to
an operating margin of 5.6% and net margin of 2.8%. As on Mar 31st
2012, the firm had a total debt of INR14.8 crore on a networth of
INR10.8 crore translating to a gearing of 1.36 times. As per the
unaudited results provide by the firm, for the six months ended
Sep 30, 2012 the firm reported an operating income of INR56.8
crore with an OPBDIT of INR2.3 crore and PAT of INR0.7 crore
translating to an operating margin of 4.1% and net margin of 1.3%.
As on Sep 30th 2012, the firm had a total debt of INR12.8 crore on
a networth of INR11.6 crore translating to a gearing of 1.10
times.
PRIME COMFORT: ICRA Assigns 'B-' Ratings to INR31cr Loans
---------------------------------------------------------
ICRA has assigned a long-term rating of '[ICRA]B-' to the INR17.0
Crore fund based limits and INR14.0 crore term loans of Prime
Comfort Products Private Limited. ICRA has also assigned a short
term rating of '[ICRA]A4' to the INR5.0 crore (sublimit of fund
based facilities) non fund based limits of Prime.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
In Crore Fund Based 17.00 [ICRA]B- assigned
Limits
Term Loans 14.00 [ICRA]B- assigned
Non Fund Based 5.00 [ICRA]A4 assigned
The ratings are constrained by intensely competitive nature of the
PU foam industry which coupled with Prime's modest scale of
operations and limited pricing flexibility results in low
profitability margins for the company. The ratings are also
constrained by vulnerability of Prime's profitability margins to
volatility in prices of raw materials as company maintains large
inventory, on account of the lead time of two months involved in
the import of raw materials. Further the company also remains
susceptible to foreign exchange fluctuation risk on import
payables; the foreign exchange and raw material price risks are
further amplified by the lack of adoption of any hedging mechanism
by the company to cover against these risks. However the ratings
derive comfort from long and established track record of promoters
in the foaming industry, favorable demand outlook for foam
products in India and Prime's moderate return and debt coverage
indicators.
Going forward, Prime's ability to scale up in a profitable manner,
to manage its working capital intensity and to maintain a healthy
financial risk profile in the context of the modest scale of
operations would remain key rating drivers.
Prime, an ISO 9001:2008 certified company incorporated in 2009,
was promoted by Mr. Praduman Patel and his family members. Prior
to the incorporation of the company, Mr. Patel was associated with
Sheela Foam Private Limited for three decades. Prime is engaged in
manufacturing of Polyether PU Foam and Polyester PU Foam, such as
long foam for mattress, pillows, and cushions and roll foam for
lamination of apparels. The company's PU foam manufacturing
facility in Greater Noida, Uttar Pradesh has a manufacturing
capacity of 10,000 MT per annum and has been operational since
October 2010.
Recent results
Prime reported a profit after tax (PAT) of INR0.31 crore on an
operating income of INR71.44 crore in FY 2011-12 as compared to
PAT of INR0.13 crore on an operating income of INR16.91 crore in
FY 2010-11.
SANGHVI BOTHRA: ICRA Reaffirms 'BB' Rating on INR5cr LT Loan
------------------------------------------------------------
ICRA has reaffirmed the '[ICRA]BB' rating to the INR5.00 crore
fund-based bank limits of Sanghvi Bothra Engineering Company
Private Limite. The outlook on the long-term rating is 'stable'.
ICRA has also reaffirmed the '[ICRA]A4' rating to the INR15.00
crore (enhanced from INR9.25 crore) short-term non-fund based bank
limits of SBECPL.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Long term fund 5.00 [ICRA]BB(stable)reaffirmed
based limits
Short term non-fund 15.00 [ICRA]A4 reaffirmed
Based
The reaffirmation in ratings take into account the improved
financial risk profile in 2011-12 characterized by improved
profitability, lower working capital intensity and reduced gearing
levels; significant (of over four decades) and reputation of the
promoters in trading of nickel and stainless steel products; and
their established relationships with international and domestic
suppliers of these products. The ratings are, however, constrained
by the relatively small scale of current operations of SBECPL;
thin profitability indicators on account of intense competition
and limited value addition in the trading business; and
significant exposure to forex related risks on account of
dependence on imports. The ratings are also constrained by
company's exposure to cyclicality associated with the metal
industry which is likely to make cash flows volatile.
Incorporated in 1996, SBECPL is primarily in the business of
trading of nickel and stainless steel products. The company is
also engaged in trading boiler quality plates. The group has a
long presence of over four decades in trading business; with other
companies in the group engaged in trading stainless steel and
boiler quality plates; manufacturing stainless steel tubes and
pipes and real estate development. About 75% of the requirements
of traded products are met through imports. The customer base of
the company includes traders as well as manufacturers of various
products within India.
Recent Results
As per the audited results of 2011-12, SBECPL reported a profit
after tax (PAT) of INR0.72 crore on an operating income of
INR51.48 crore as compared to a PAT of INR0.76 crore on an
operating income of INR45.86 crore in 2010-11. As per the
provisional results for the period between April 2012 to December
2012, SBECPL reported an operating income of INR34.64 crore and a
PAT of 0.21 crore.
SHANDERS PROPERTIES: ICRA Rates INR35cr Loans at '[ICRA]BB-'
------------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]BB-' to the INR35
crore Non Convertible Debentures (NCD) of Shanders Properties
Private Limited. The outlook on the long-term rating is 'Stable'.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Non Convertible Debentures 35.00 [ICRA]BB- (Stable)
The rating takes into account SPPL's INR35 crore debt raising
(NCD) programme, at relatively high cost of capital for land
aggregation, which would result in weakening of SPPL's credit risk
profile. Further, the NCD redemption is dependent on the sales
from SPPL's plotted development project over 10 acre of land,
which has implementation risk associated with pending required
approvals and has high market risk given the project is not yet
launched and may face significant competition from lower priced
projects within its catchment area. Moreover, the possibility of
cash flow mismatch can't be ruled out given the NCD's bullet
repayment towards principal as well as redemption premium at the
end of 36 months and fungible project cash flows towards other
projects of the company.
Nevertheless, the rating continues to derive comfort from the
satisfactory initial market response for SPPL's ongoing
residential project 'Shanders Dwellington', an affordable
apartment project, as indicated by healthy bookings witnessed in
the six months of its launch. In addition, the project is expected
to benefit from the project's good location in proximity to
Electronic City and its good accessibility to major parts of the
city through elevated expressway, NICE road and upcoming
peripheral ring road. However, the rating continues to be
constrained by SPPL's high execution risk given the initial stage
of the project development, large size of the total development
plan of SPPL and significant dependence on its in-house execution
team.
Further, the project is a part of SPPL's significant development
plan of 3.62 msf and will have operational as well as financial
linkages with the entire project. This along with pending debt
tie-up for the project and significant dependence on customer
advances for project funding increases the financial risk of SPPL.
The rating further takes into account SPPL's sensitivity to
external factors such as variability in raw material prices,
increase in competition in affordable housing segment, prevailing
high interest rates and weakening of economic conditions. Going
forward, the company's ability to maintain its sales volumes with
better realisation and healthy collection efficiency in
competitive and sluggish market environment would be the key
sensitivity factors.
Incorporated in 2010, SPPL was promoted as an SPV by Mossrock
India Infrastructure (Cyprus) Finance Company and Brixstone Realty
Private Limited by contributing equity of INR95.5 crore in 89:11
ratio. The company has acquired total 60 acre of land completed
its land by buying 40 acre of land and entering into Joint
Development Agreement (JDA) for -20 acre of land. The entire land
parcels are in Anekal area in proximity to Electronic City Phase
II and near SDW project. The company plans to develop 3.62 msf of
saleable area (SBA) over this 60 acre of land, wherein SPPL's
share will be 3.11 msf of SBA. The total project cost for the
entire development envisaged by the company is INR546.3 crore.
Shanders Group through its group company, BRPL, will be the
Project Development Manager.
SOHAM MANNAPITLU: ICRA Places 'B+(SO)' on INR54.4cr Loans
---------------------------------------------------------
ICRA has reassigned a credit rating of '[ICRA]B+' to the
INR54.40Cr Soham Mannapitlu Power Private Limited from '[ICRA]B'.
The letters SO in parenthesis suffixed to a rating symbol stands
for Structured Obligation. An SO rating is specific to the rated
issue, its terms, and its structure. SO rating does not represent
ICRA's opinion on the general credit quality of the issuers
concerned.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Long term Fund based 54.40 [ICRA]B+(SO) [ICRA]B
limits (Term Loan)
ICRA has factored in the comfort drawn from the pledge of 30% of
SMPPL's shares held by the parent Ambuthirtha Power Private
Limited in favor of the lender and also from the Non-Disposal
Undertaking-Power of Attorney (NDU-POA) on balance 70% of SMPPL's
shares held by APPL to the lender. The pledge agreement and NDU
POA covers the principal and interest payment obligations on the
rated debt.
About Soham Mannapitlu
Soham Mannapitlu Power Private Limited is an IPP promoted by the
Soham Group. The company operates a 15 MW run of the river hydel
power plant on River Puchamugaru, in the Dakshina Kannada District
of Karnataka. Soham Group was promoted in the year 1961 and is
currently headed by Mr. Sadananda Shetty who is the former
Chairman & Managing Director of Vijaya Bank. With the 22 MW MGHE
TRS Scheme having been commissioned by one of its Subsidiaries
(Ambuthirtha Power (P) Ltd.), followed by the 15 MW SHP another
subsidiary (Mannapitlu Power Private Limited) and 10 other
projects on hand, the main focus of the group is the Renewable
Energy Space in India. Earlier, SMPPL was 100% held by Soham
Renewable Energy India Pvt. Ltd (SREIPL). However in Oct 2011 the
entire stake of SMPPL has been bought by Ambuthirtha Power private
Limited (APPL) for INR20.78 crore, pursuant to which SMPPL has
become 100% subsidiary of SPPL.
About Ambuthirtha Power
Ambuthirtha Power Private Limited is an IPP promoted by the Soham
Group. The company operates a 22 MW small containment run of the
river hydel power plant located near Jog Falls in the Shimoga
district of Karnataka. Soham Group was promoted in the year 1961
and is currently headed by Mr Sadananda Shetty who is the former
Chairman & Managing Director of Vijaya Bank. With the 22 MW MGHE
TRS Scheme having been commissioned by one of its subsidiaries
(APPL) followed by the 15 MW SHP through another subsidiary
(SMPPL) and 3 other projects on hand, the main focus of the group
is renewable energy in India. Initially the group had 54% stake in
APPL through its flagship company Soham Renewable Energy India Pvt
Ltd. However, in June 2011, SREIPL had acquired the balance
shareholding in APPL from the other shareholders including Praxair
India Private Limited and India Clean Energy Limited. Besides,
APPL has also bought the entire stake of SMPPL and
Sahasralingeshwara Power Private Limited (both earlier 100%
subsidiaries of SREIPL) for consideration of INR20.78 Cr and
INR2.87 Cr respectively. The purchase was funded out of cash
balances of APPL amounting to INR10.38 Cr, loans and advances of
INR6.06 Cr and advances given to APPL by Praxair of INR7 Cr. Thus
currently APPL has two 100% subsidiaries.
SOHAM RENEWABLE: ICRA Assigns 'B' Rating to INR38.7cr LT Loan
-------------------------------------------------------------
ICRA has assigned a long- term rating of '[ICRA]B' to the INR38.70
Cr term loan facilities of Soham Renewable Energy India Private
Limited.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Long term Fund based 38.70 [ICRA]B (Assigned
limits (Term Loan)
SREIPL is currently undertaking a hydropower project under the
Mahadevpura Mini Hydel Scheme. The rating incorporates the
execution risks, including risks of cost and time overruns
inherent with under construction hydro power projects as well as
hydrology risks as the project is not covered under any deemed
generation clause in case of loss of generation due to shortage of
water. Given that revenues of the company are linked to actual
unit sales, this exposes the project to variable cash flows
arising out of hydrological risks. The rating is also tempered by
the leveraged project funding with debt to equity mix of ~2.3:1
and corresponding financial risk involved in executing the
project. The rating also reflects the high capital cost of this
project, and consequently the company's ability to tie up
customers at remunerative tariff is critical for the project
viability. ICRA also notes that SREIPL is the holding company of
the Soham group of companies, which has significant expansion
plans in relation to current size of operations.
However the rating is strengthened by the general supply-demand
gap in the power sector which is likely to ensure healthy takeoff
notwithstanding the fact that PPAs are not tied up at the moment,
location of the plant in Karnataka state where there are
relatively more supportive regulations for open access and banking
for hydro power projects, as well as access to the financial and
managerial strengths and technical knowhow of Soham Group (which
already has 37 MW of operational assets-including 22 MW of power
sold via open access-and 29 MW of assets under various stages of
development). The project is also eligible for INR2.2 Cr of
capital subsidies which is expected to improve the viability of
MMHS to some extent. ICRA notes that project is already in the
advanced stage of commissioning, and is expected to be operational
by July 2013.
The Soham Group is engaged in a number of diverse activities such
as Renewable Energy Generation, Business Investments and
Infrastructure Development. Its flagship company, SREIPL was
created in December 2007 and its primary objective is power
generation. The company is presently headed by Mr Sadananda
Shetty, who is the former Chairman and Managing Director of Vijaya
Bank. SREIPL is currently undertaking the construction of a mini
hydel project (MMHS) located 2 km from the village of Mahadevpura,
Mandya District, Karnataka. The project is a gated diversion weir
being built across the river Cauvery with a capacity of 6 MW of
power generation per annum. The expected project cost is estimated
to be INR55.28 Cr, with the civil works being undertaken by Sierra
Constructions Pvt Ltd, Electro Mechanical Works provided by B
Fouress Private Limited and Transmission Line Works provided by
Vijaya Electricals. The project is in advanced stages of
development and is expected to be commissioned by July 2013.
STATUS CLOTHING: ICRA Assigns 'B+' Ratings to INR14.5cr Loans
-------------------------------------------------------------
ICRA has assigned an '[ICRA]B+' rating to the INR14.50 crore long-
term fund based facilities of Status Clothing Company Limited.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Long-term, fund-based 6.51 [ICRA]B+ assigned
facilities - Term Loan
Long-term, fund-based 7.57 [ICRA]B+ assigned
facilities - Cash Credit
Long-term - Unallocated 0.42 [ICRA]B+ assigned
The assigned rating favorably factors in the long standing
experience of promoters in the textile industry and its
diversified customer profile. The rating is however constrained by
the small scale of weaving operations in a highly fragmented and
cost competitive industry which restricts pricing power. The
rating is further constrained by the weak financial profile with
low net margins, leveraged capital structure and weak debt
protection metrics. Any debt funded capital expenditure in future
is likely to put further strain on the company's capital
expenditure and profitability in the near term.
Status Clothing Company Limited, set up in 1996 as a partnership
firm, is engaged in manufacture and trading of gray fabric i.e.
fabric for shirting and suiting. In July, 2011, the firm was
converted into a private limited company and the name was changed
to its current name. The company sells gray fabric mainly to
exporters / local traders and is also an outsourcing house for
other branded finished fabric players. SCCL has a manufacturing
unit in Tarapur, Maharashtra consisting of 55 Sulzer looms and 13
Dornier Rapier looms. The company sells its fabrics in the local
market, mainly in and around Mumbai. SCCL has a limited client
base with Siyarams and Kamadgiri Textiles being among the
prominent few.
Recent results
SCCL reported profit after tax (PAT) of INR0.23 crore on operating
income of INR25.49 crore for FY 2011-12.
VITARAG EXPORT: ICRA Reaffirms 'B+' Rating on INR12cr Loans
-----------------------------------------------------------
The rating of '[ICRA]B+' has been reaffirmed for the INR10.00
crore (enhanced from INR7.50 crore) cash credit facility and the
INR2.00 crore term loan of Vitarag Export Industries. The rating
of '[ICRA]A4' has been reaffirmed for the INR0.25 crore Bank
Guarantee facility of VEI.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Cash Credit Facility 10.00 [ICRA]B+ reaffirmed
Term Loan 2.00 [ICRA]B+ reaffirmed
Bank Guarantee facility 0.25 [ICRA]A4 reaffirmed
The reaffirmation of ratings takes into account the modest scale
of operations of VEI; low capacity utilization of groundnut
processing plant; limited value addition and fragmented nature of
the industry as well as lack of diversification in the product
profile. The ratings also take into account the vulnerability of
profitability to fluctuations in raw material prices as well as
sales concentration risk arising from major portion of sales
derived from top four customers; weak financial profile as
reflected by low profitability, adverse capital structure and weak
debt coverage indicators. ICRA also notes the risk of an adverse
impact on the capital structure due to any substantial capital
withdrawals from partner's capital account.
The ratings, however, favorably factor in VEI's experienced
management, reputed client base developed by the firm during last
two years of operations, favourable location of VEI which helps
the firm in procuring high quality raw material as well as robust
demand outlook for edible oil in the domestic market.
Vitarag Export Industries was established in February 2009 as a
partnership firm. The firm is involved in the business of
groundnut seed crushing with a total installed capacity to crush
13,200 MT of ground nut seeds per annum. The firm also has a
solvent extraction plant to extract oil from oiled cakes with
installed capacity to process 3000 MT of oil cakes per annum. The
manufacturing facility of the firm is located at Dhoraji in
Junagadh district of Gujarat.
Recent Results
During FY2012, the firm reported operating income of INR36.60
crore and profit after tax of INR0.09 crore as against operating
income of INR24.43 crore and profit after tax of INR0.06 crore for
FY 2011. Further, the firm has reported operating income of
INR22.51 crore and profit after tax of INR0.14 crore for first
nine months of FY 2013 (as per provisional unaudited numbers).
WHITEGOLD CERAMICS: ICRA Junks Ratings Due to Loan Payment Delays
-----------------------------------------------------------------
ICRA has assigned a long term rating of '[ICRA]D' to the INR3.65
crore term loans and INR2.00 crore cash credit facility of
Whitegold Ceramics Private Limited. ICRA has also assigned short
term rating of '[ICRA]D' to the INR0.40 crore short term bank
guarantee facility of WCPL.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Term Loan 3.65 [ICRA]D assigned
Cash Credit 2.00 [ICRA]D assigned
Bank Guarantee 0.40 [ICRA]D assigned
The assigned ratings reflect the delays in debt servicing by the
company owing to its tight liquidity position arising out of sub-
optimal utilization of the company's plant due to technical
difficulties and consequently stressed financial profile
characterized by net losses in past year, adverse capital
structure, poor debt coverage metrics and high working capital
intensity of operations. The ratings are also constrained by the
competitive business environment in which the company operates
limiting improvement in realizations and vulnerability of its
profitability to cyclicality inherent in real estate industry and
to adverse fluctuations in raw material & fuel prices.
The ratings, however, factor in the promoters' extensive
experience in the ceramic industry and favorable location of the
company with its proximity to raw material sources.
Whitegold Ceramics Pvt. Limited is a wall tiles manufacturer with
its plant situated at Morbi, Gujarat. The company was established
in September 2010, while the company commenced its operations in
May 2011. WCPL is promoted and managed by Mr. Jay Bhatt and Mr.
Niraj Patel. The plant has an installed capacity of 30,660 MTPA to
manufacture wall tiles. WCPL currently manufactures wall tiles of
sizes 10" X 13" and 12" X 18" with the current set of machineries
at its production facilities.
Recent Results
During 6M FY2013, the company reported a net profit of INR0.23
crore on an operating income of INR5.86 crore as against net loss
of INR0.51 crore on an operating income of INR6.03 crore in FY
2012.
=================
I N D O N E S I A
=================
* Fitch Reports Indonesian Corporates Challenges for 2013
---------------------------------------------------------
Fitch Ratings says that its internationally rated portfolio of
Indonesian corporates will be able to absorb the challenges of
potentially higher labor costs, a weaker rupiah and political
uncertainties during 2013. Matt Jamieson, Fitch's Head of APAC
Research, put a number of key questions in this regard to the
agency's team of analysts covering Indonesian corporates - Erlin
Salim, Shahim Zubair and Nitin Soni. In short Fitch believes most
of its internationally rated Indonesian corporates will benefit
from rising consumer spending power during 2013. While margins may
fall on the back of higher labor costs, absolute cash flow
generation and leverage ratios are unlikely to deteriorate.
-- In 2012 Indonesia's GDP growth slowed slightly to 6.2% from
6.5% in 2011. What caused this, and what are the implications for
Indonesian corporates in 2013?
Anaemic global growth restraining the value of the country's
exports is the main reason, particularly with respect to both
volumes and prices for the country's two main exports - palm oil
and coal. Nevertheless, Indonesia continues to be a consumption-
driven economy with private consumption accounting for around two-
thirds of GDP. Macro indicators such as consumer confidence, which
stood above 100 points at end-January 2013, remain supportive
despite inflationary pressures. The long-term outlook for non-
exporting corporates is therefore closely linked to the ongoing
rise of consumer spending power, and this trend is positive due to
a young demographic structure and a rising middle-class. However,
key risks include higher labour costs, particularly if there is no
productivity improvement, a weaker rupiah and, to some extent,
political uncertainties surrounding the 2014 general election.
-- Jakarta made a bold decision to increase minimum wages by a
substantial 44% in November 2012 with the President of Indonesia
declaring that the country's era of "cheap labour" is over. To
what extent will Fitch's rated corporates be affected,
particularly if this move is followed by the rest of Indonesia's
districts and provinces?
While nominal labor costs are likely to rise, as reflected in our
lower margin assumptions, we expect that the average Indonesian
corporate's labor cost will still remain cheap relative to other
emerging markets in Asia. For the remaining provinces and
districts of Indonesia the minimum wage increase will be
determined based on province-specific factors, including 'local'
inflation. As such, it is most likely that in areas where there
are high labor-intensive operations, the actual increase will not
be as high as Jakarta's 44%
The flip side is that the resultant rise in disposable income
should benefit those corporates exposed to Indonesia's large and
expanding consumer sector. Also labor availability for domestic
industries could possibly benefit from a wage increase given that
Indonesia provides cheap labor to its neighbors, including workers
for Malaysian palm oil estates. Hence there would be less reason
for Indonesian workers to seek jobs overseas if the pay gap is
narrower.
In the case of exporters, Indonesia's miners are among the lowest-
cost producers in the world, and should be able to manage the wage
cost increase without significantly affecting their
competitiveness globally. The palm oil sector is slightly more
exposed, with labor costs representing a higher proportion of
total costs compared with the mining sector.
-- In January 2013 Indonesia's currency fell closer to the 10,000
level against the US dollar than it has in the past three and a
half years. Could this result in inflationary pressures and dampen
the consumption-driven growth model?
Inflation remains a risk for the medium- to long-term; however,
on-going consumption growth is likely to offset this risk in the
short term. Exporters, including Fitch's rated crude palm oil
(CPO) producers, will benefit from a weaker rupiah and this will
help offset the negative impact from higher labour costs. Other
industrials rated by Fitch in Indonesia have either a defensive,
consumer-focused business model with some flexibility to pass on
costs (i.e. FMCG-based such as Berlina), or a solid market share
(e.g. Aneka Gas and Japfa) to cope with the volatile environment.
-- Indonesia's 2013 Budget Law, passed in October 2012, allows
for an increase in both electricity tariffs and the retail price
of the lower-grade government-subsidised fuel without approval
from the House of Representatives. Does Fitch expect an increase
in these prices, and hence a reduction in government subsidies to
energy and power companies?
Fitch says, "We do not expect any significant increase in
subsidised retail fuel prices in 2013. The government's previous
attempts to raise the retail price of subsidised fuels in April
2012 were stymied by popular resistance, and with general
elections due in 2014 a meaningful increase is unlikely to be
proposed in 2013. Accordingly a reduction in subsidies to the
state petroleum retailer, PT Pertamina (Persero) (BBB-/Stable)
remains unlikely. Fitch expects subsidies to the state electricity
company, PT Perusahaan Listrik Negara (Persero) (BBB-/Stable) to
reduce gradually over time. However, the main reason is more
likely to be the commissioning of new low-cost coal-fired
generation capacity over the next five to 10 years as opposed to
any meaningful tariff increases."
-- Within the telecom sector, where seven operators are still
competing aggressively for market share, is there any possibility
of consolidation occurring in 2013?
The struggling CDMA operators, including PT Bakrie Telecom Tbk
(BTEL, CCC/Stable) and PT Smartfren Telecom Tbk (CC(idn)), may
well participate in consolidation as they face tight liquidity and
weak profitability. PT Telekomunikasi Indonesia Tbk's (BBB-
/Stable) CDMA unit, Flexi, could acquire one of the smaller CDMA
operators. Notably BTEL is facing liquidity risks in 2013 as its
EBITDA will be insufficient to cover its obligations. It could
suffer further loss of competiveness, as its forecast
capex/revenue of 20% for 2013 is much lower than the top-four
industry average of 27%.
"We expect the bottom three telcos to struggle as the top four
will continue to hold a market share of over 90%. The smaller
telcos will also face tough challenges in capturing data market
share, as they lack a profitable voice business to support initial
losses in data. In contrast the dominant top four operators will
generate adequate cash from operations to support continued high
capex. Fitch expects their 2013 revenue to rise by mid-single
digits, and operating EBITDAR margins to remain healthy in the
45%-50% range."
-- Finally what's the credit outlook for Fitch's portfolio of
Indonesian corporates in 2013?
Predominately stable given that among Fitch's portfolio of 18
Indonesian corporates with international ratings, 17 have a Stable
Outlook and one a Positive Outlook. Aggregate revenue growth for
the portfolio is forecast to improve to 16% in 2013 from 12% in
2012, but the median EBITDA margin is forecast to fall to 36% from
40%, and the median funds from operations adjusted net leverage
ratio is forecast to rise slightly to 3.1x from 3.0x.
=========
J A P A N
=========
RENESAS ELECTRONICS: Investors Approve Rehabilitation Plan
----------------------------------------------------------
The Japan Times Online reports that shareholders of Renesas
Electronics Corp. approved Friday a JPY150 billion investment plan
from a government-backed fund and eight companies to accelerate
restructuring steps.
The report says Renesas, which commands 40% of the global market
for automobile microcontrollers, aims to improve its financial
standing and enhance its competitive edge with the investment from
Innovation Network Corp. of Japan and eight key clients, including
Toyota Motor Corp. INCJ will be the top shareholder by acquiring
more than two-thirds of Renesas shares by the end of September.
About Renesas Electronics
Based in Tokyo, Japan, Renesas Electronics Corp. --
http://am.renesas.com/-- manufactures semiconductor systems for
mobile phones and automotive applications.
For the fiscal year that ended March 31, 2012, the chip maker
reported a net loss of JPY62.60 billion and revenue of
JPY883.11 billion. In the previous fiscal year when the company
was created, it reported a net loss of JPY115.02 billion, The
Wall Street Journal reported.
Renesas Electronics on Feb. 8 widened its annual loss forecast to
JPY176 billion ($1.9 billion).
SHARP CORP: Mulls Cutting Off Tieup Talks With Hon Hai
------------------------------------------------------
The Japan Times Online reports that Sharp Corp. plans to terminate
stalled capital tieup talks with Taiwanese business partner Hon
Hai Precision Industry Co. and will prioritize alliance
negotiations with another firm, sources revealed.
According to the report, sources said Sharp has concluded that the
possibility is low of reaching an accord in the near future with
Hon Hai, also known as Foxconn, as it is taking time to complete
the necessary procedures with Taiwanese authorities.
The deadline for forming the capital alliance between the two
companies is March 26, the report discloses.
The company will thus switch its focus to discussions with another
company that has approached it over a potential capital deal, the
sources said, without identifying the other firm, The Japan Times
relates.
However, Sharp will maintain its business alliance with Hon Hai,
including the joint operation of a liquid crystal display plant in
Sakai, Osaka Prefecture, the sources, as cited by The Japan Times,
added.
Last March, the report recalls, Sharp concluded a capital and
business tieup with Hon Hai under which the Taiwanese company was
to purchase a 9.9% stake in Sharp at a price of JPY550 per share
by this March 26. But Sharp's stock price has since plummeted as
its business performance deteriorated, prompting the two companies
to launch talks on revising the terms of the accord. However,
these negotiations have stalled amid various differences of
opinion, notably the share price to be paid by Hon Hai, the report
states.
About Sharp Corp.
Based in Osaka, Japan, Sharp Corporation (TYO:6753) --
http://sharp-world.com/-- manufactures and sells electronic
telecommunication devices, electronic machines and components.
Standard & Poor's Ratings Services said earlier this month that it
had lowered to 'B' from 'B+' its senior unsecured debt rating on
Sharp Corp. At the same time, S&P kept the senior unsecured debt
rating and 'B+' long-term and 'B' short-term corporate credit
ratings on Sharp and its overseas subsidiaries-- Sharp Electronics
Corp. and Sharp International Finance (U.K.) PLC -- on CreditWatch
with negative implications. S&P lowered the senior unsecured debt
rating by one notch from the issuer rating because it believes
Sharp's priority liabilities have increased and will likely remain
high against the company's assets in the next six to 12 months.
Fitch Ratings also said continued support from main creditor banks
will be essential for a sustained recovery of Sharp Corporation's
('B-'/Rating Watch Negative) operating performance. The Japanese
electronics manufacturer's liquidity position remains vulnerable
despite a turnaround to post marginally positive EBIT margins in
the third quarter of financial year ending March 2013 (Q3FY13).
SONY CORP: Fitch Says PS4 Launch Unlikely to Help Restore Profit
----------------------------------------------------------------
Fitch Ratings says Sony Corporation's (Sony, BB-/Negative) next
generation console, PlayStation 4, is unlikely to deliver
sufficient cash flow to turn around the company's credit profile.
In the console market the PlayStation will continue to face tough
competition from Microsoft Corporation's (AA+/Stable) Xbox brand
as both companies attempt to provide a media hub for living room
internet entertainment and Nintendo's Wii products will continue
to appeal to a wide range of users. In the broader games market,
PC products will remain key competition for hard-core gamers,
while smartphones and tablets will continue to grow in appeal for
casual and mobile gamers.
In line with expectations, PlayStation 4 will feature a more
powerful processor and graphics chip. In addition, PlayStation 4
places greater emphasis on social networking features and remote
capability. However, the key to the product's success will be
price, timing, content and how it compares with the yet-to-be-
announced next generation Xbox. None of these details are
currently available. However, product developments are unlikely to
lead to a substantial long-term expansion in the console games
market which has become relatively mature. Operating profit from
Sony's Game segment declined to just JPY3bn for the first nine
months in the financial year to March 2013 from JPY29bn in FYE12
and from a peak of JPY113bn in FYE03.
The competitive nature of the market may also constrain
profitability; Sony lost money on each PlayStation 3 sold for 3.5
years after launch, until production costs were reduced. However,
software and subscription income generated related, compensating
income streams.
For its turnaround strategy, Sony will concentrate investment and
development in digital imaging, game and mobile. However, Fitch
believes that profitability of all three segments will be under
pressure in the next few quarters, and that meaningful recovery
will be slow.
For its Game segment, Sony drastically cut its FYE13 annual sales
volume target for PlayStation Portable and PlayStation Vita
successively to seven million units in February 2013, from
previous targets of 10 million in November 2012 and 12 million in
August 2012. It further announced a price cut in PlayStation Vita
in Japan. Its Mobile Products & Communications segment is making a
substantial loss and the Imaging Products & Solutions segment may
see further deterioration in profitability due to significant
competition from smartphones.
Excluding Sony Financial Holdings, Fitch continues to expect
operating EBIT margins to be negative or minimal and funds flow
from operations (FFO)-adjusted leverage to be above 4x for FYE13
and FYE14. Fitch may downgrade the rating if Sony's EBIT loss
sustains and FFO-adjusted leverage rises above 4.5x (both
excluding SFH). However, Fitch will consider revising the Outlook
to Stable if EBIT margins improve to over 1% and FFO-adjusted
leverage is sustained below 4x, both excluding SFH.
=========
K O R E A
=========
SSANGYONG ENG'G: Creditors Plan to Dismiss Chairman on Crisis
-------------------------------------------------------------
Yonhap News reports that creditors of Ssangyong Engineering &
Construction Co. plan to dismiss its chairman, holding him
responsible for the current crisis, industry sources said
Saturday.
According to Yonhap, sources said creditors, including officials
from the Korea Asset Management Corp., the state-run debt clearer,
sent an official document on discharging Kim Suk-joon, the
president of the troubled builder.
Ssangyong E&C could face bankruptcy later this month unless it
pays back maturing debts worth KRW60 billion (US$55 million), the
news agency relates.
Yonhap notes that the development came after the builder said its
capital has been wiped out due to massive losses for the second
year in a row amid Korea's protracted housing market slump.
The news agency says the Korea Exchange, the country's stock
market operator, suspended trading of Ssangyong E&C's shares
earlier this month, a process that could result in delisting
unless the builder emerges from capital erosion.
The company posted a net loss of KRW411.4 billion last year, after
reporting a net loss of KRW157 billion in 2011, the report
discloses.
Based in Seoul, Korea, Ssangyong Engineering & Construction Co.,
Ltd. -- http://www.ssyenc.com/eng/-- is involved in the areas of
construction and engineering.
WOONGJIN HOLDINGS: Wins Court Approval of Self-Rescue Plan
----------------------------------------------------------
Yonhap News reports that a Seoul court on Friday gave the green
light to a self-rescue plan proposed by Woongjin Holdings Co.,
clearing the way for the cash-strapped mid-sized group to make a
fresh start.
Under the approved plan, Woongjin Holdings, which owes about 1.57
trillion won (US$1.5 billion) to its creditor banks, said it will
pay off its debts with proceeds from its stake sale of several
subsidiaries.
Based in Korea, Woongjin Holdings Co., Ltd., engages in the
management of its subsidiaries. Its subsidiaries include
Woongjin Coway Co., Ltd., which engages in the rental and sale of
water purifiers, air cleaners, bidets, food waste treatment
equipment and others.
Bankruptcy Law360 said Woongjin Holdings Co. dropped plans to sell
a stake in water purification company Woongjin Coway to private
equity group MBK Partners for $1.1 billion after filing for
bankruptcy in September 2012. Woongjin reportedly backed out of a
deal to sell Coway because of liquidity problems that led the
company to file for receivership in Seoul Central District Court.
Woongjin owes KRW3.3 trillion to financial firms including Woori
Bank and Shinhan Bank, the Financial Supervisory Service said.
* Moody's Outlook on Korean Insurance Sector Remains Stable
-----------------------------------------------------------
Moody's Investors Service reports that the outlook for Korea's
life insurance industry is stable, backed by likely steady growth
in premiums and a more stringent regulatory framework.
"Korea's stable economic growth and inflation will support steady
demand for life insurance products. We expect total premiums to
grow 6.0%-6.5% in the next 12-18 months," says Stella Ng, a
Moody's Assistant Vice President and Analyst.
Ng was speaking on a just-released Moody's report titled, "Korea
Life Insurance Industry Outlook." The report details Moody's
expectations for the fundamental credit conditions in the sector
over the next 12-18 months.
According to the report, Korea's life insurance industry is one of
the most saturated markets globally, with an insurance penetration
rate of 7.0% in 2011.
Nonetheless, Moody's expects insurers to benefit from their focus
on specific sectors, such as retirement pension and medical
insurance products. These are sectors where demand is likely to be
strong, owing to Korea's aging population.
In addition, the introduction of a new risk-based capital (RBC)
regime in April 2012 by Korean regulators will strengthen the
asset quality and capitalization levels of insurers.
The regime requires life insurers to: (1) apply higher credit risk
charges on mortgage and retail loans; and (2) set a higher
confidence level -- to 99% from 95% -- to calibrate their
insurance risk.
These higher standards of risk measurements will result in a
decline in the RBC ratios of insurers, and pressure weaker
insurers to strengthen their capital positions.
Furthermore, declining property prices have had a limited impact
on the loan portfolios of insurers because the quality of their
lending is good, given that they have extended these credits based
on the insurance contracts of policyholders.
However, these strengths are partially offset by Korea's low
interest rates which could weigh on the investment earnings of
insurers.
"A prolonged environment of low interest rates could aggravate the
negative spread burden on products like annuity policies with
long-term guarantees, and old books of savings-type policies that
carry fixed yields," Ng says.
Low interest rates will also lead to a higher valuation of
insurers' liabilities and through that, higher reserving, which
will in turn hurt overall profitability.
Nevertheless, Moody's expects insurers to maintain solid earnings
from mortality/morbidity and expense experiences, which remain the
key drivers for the profitability of Korean life insurers.
On the other hand, the industry landscape remains competitive. The
aggregate market share of Korea's top three life insurers --
Samsung Life (unrated), Hanwha Life [previously known as Korea
Life] (unrated) and Kyobo Life (A2 stable) -- declined to 51.4% of
total premium income in FY2011 (April 2011-March 2012), from 56.7%
in FY2007.
The major factors behind the increasing competition are: 1) the
entry of a new active player, NongHyup Life Insurance, which is
the life insurance operation of the agricultural cooperative
National Agricultural Cooperative Federation and is now competing
within the insurance sector; (2) the increasing market presence of
non-life insurers in selected long-term businesses; and (3)
aggressive sales from smaller life insurers.
===============
M A L A Y S I A
===============
AMBANK (M): Fitch Affirms 'BB-' Tier 1 Securities Rating
--------------------------------------------------------
Fitch Ratings has affirmed Malaysia-based AmBank (M) Berhad's and
AmInvestment Bank Berhad's Long-Term Issuer Default Ratings (IDRs)
at 'BBB'. The Outlook is Stable. At the same time, the agency has
affirmed AmBank's Viability Rating (VR) at 'bbb'.
RATING ACTION RATIONALE
AmBank's Long-Term IDR is driven by its VR. The ratings reflect
the banking group's reasonable franchise, steady earnings
generation and asset quality. They also incorporate Fitch's
expectations that funding and capital will continue to gradually
improve and its loan portfolio will be further diversified over
the medium-term.
AmBank and AmInvestment are rated at the same level as they
operate under a universal banking model with close operational
links and a common franchise. Both entities are owned by AMMB
Holdings Berhad (AMMB), which in turn is 24%-owned by the
Australian and New Zealand Banking Group Limited (ANZ; AA-
/Stable).
RATING DRIVERS AND SENSITIVITIES - AMBANK's IDRS AND VR
A more stable credit profile and more comparable financial
indicators with higher-rated Malaysian banks, in areas such as
funding profile, loan diversity and core capital buffer, could
trigger a positive rating action. This in Fitch's view is more of
a longer-term prospect. Conversely, negative rating action may
also arise from aggressive expansion or event risks leading to an
elevated risk profile for AMMB.
The agency expects AMMB's asset quality and profitability to be
supported by ongoing expansion of profitable loan segments, stable
low-cost deposits and non-interest income. Its measured risk
appetite has allowed loan growth to remain below the industry's
which, together with a more diversified loan book, should help
support asset quality through credit cycles. The banking group has
been building its corporate lending franchise, mostly to
government-linked and multinational companies. Auto loans mix fell
to 30% at end-December 2012, from 35% at end-FY10 (sector's
average: 14%), and may decline further.
AMMB's gross loans/deposits ratio remains at 95%-100%, higher than
that of domestic banks. Low-cost deposit mix has risen to 19% at
end-December 2012 from 11% four years ago (sector's average: 26%),
and Fitch expects this to continue. Long-term wholesale
borrowings, which reduce asset/liability maturity mismatch, stood
at 11% of interest-bearing liabilities, and are mostly from the
domestic market. The gross loans/deposits ratio, including term
funding, would be around 90%.
At end-December 2012, AmBank's core Tier 1 capital adequacy ratio
(excluding hybrids) stood at 8.6% (domestic peer average of 9.5%),
which is satisfactory relative to its rating level. Fitch believes
the bank's core capitalisation may increase in tandem with the new
capital rules under Basel III, driven mainly by internal capital
generation. The banking group may, however, do so in a gradual
manner, given the extended implementation period of Basel III and
its shareholders' dividend expectation. Fitch assesses holding
company risks to be manageable, as AMMB is only modestly
leveraged, with a reported double leverage ratio of 1.13x at end-
December 2012.
AMMB's overall profitability indicators are likely to remain
steady in the near term. Margins have narrowed as domestic
competition and its expansion into low-yielding corporate loans
were not fully offset by benefits of low-cost deposit expansion.
However, this was compensated by non-interest income growth and
low credit costs amid steady domestic operating conditions. Fee
income may further benefit from the recent takeover of Kurnia
Insurans and MBF Cards.
RATING DRIVERS AND SENSITIVITIES - SUPPORT RATING AND SUPPORT
RATING FLOOR
As part of Malaysia's sixth-largest banking group, with indirect
state ownership via the Employees Provident Fund, the potential
for extraordinary state support for AmBank and AmInvestment, if
needed, is moderate. Fitch believes that extraordinary support
from ANZ cannot be relied on under extreme conditions given its
non-controlling stake in the banking group. Fitch, however,
recognises that ANZ continues to provide support through the board
and senior management representation, and in governance, risk
management, strategy, new business development and resources.
The Support Rating may be upgraded should Fitch view the AMMB
group to be strategically more important to ANZ. This could occur
if ANZ's stake in AMMB increases, resulting in more tangible forms
of parental support, greater financial and operational integration
and, possibly, name-sharing. Present regulations on foreign
ownership on Malaysia's commercial banks are restrictive and
unlikely to be liberalised in the near term.
RATING DRIVERS AND SENSITIVITIES - DEPOSIT AND HYBRID SECURITIES
The deposits are rated one notch above the Long-Term IDR to
reflect Malaysia's depositor preference regime, where depositors
would rank above senior unsecured creditors in a liquidation
scenario. The 'BB-' hybrid rating is four notches below the VR on
account of the instrument's deeply subordinated status and coupon
deferral mechanism. Changes to the IDR and VR would accordingly
affect these issue ratings of AmBank.
RATING DRIVERS AND SENSITIVITIES - AMINVESTMENT'S IDR
Fitch expects AmInvestment's risk profile and ratings to continue
to move in line with those of AmBank due to the high level of
operational integration. AmInvestment is a core operating division
of AMMB group that focuses on investment banking and stock-
brokerage and operates as a separate legal entity for regulatory
reasons.
The full list of rating actions is as follows:
AmBank
- Long-Term IDR affirmed at 'BBB'; Outlook Stable
- Short-Term IDR affirmed at 'F3'
- Viability Rating affirmed at 'bbb'
- Support Rating affirmed at '3'
- Support Rating Floor affirmed at 'BB+'
- Long-term deposit rating affirmed at 'BBB+'
- Rating on USD-denominated hybrid Tier 1 securities affirmed
at 'BB-'
AmInvestment
- Long-Term IDR affirmed at 'BBB'; Outlook Stable
- Short-Term IDR affirmed at 'F3'
- Support Rating affirmed at '3'
- Support Rating Floor affirmed at 'BB+'
- Long-term deposit rating affirmed at 'BBB+'
====================
N E W Z E A L A N D
====================
MAINZEAL PROPERTY: Likely To Be In Liquidation, Receivers Say
-------------------------------------------------------------
Catherine Harris at stuff.co.nz reports that Mainzeal Property's
receiver PricewaterhouseCoopers said the collapsed construction
company could be put into liquidation.
stuff.co.nz notes that a liquidator has wider powers than a
receiver to ensure all creditors, not just preferred creditors,
get a fair share of remaining assets.
Subcontractors, who are owed millions in retention payments by
Mainzeal, are among the unsecured creditors, the report says.
According to the report, receiver Colin McCloy said it was likely
the company would be wound up.
"There's every chance it will. The company's clearly insolvent. It
doesn't have a future. So I think liquidation's inevitable,"
stuff.co.nz Mr. McCloy as saying.
The report relates that Mr. McCloy said any payment to
subcontractors "would probably come via liquidation".
stuff.co.nz meanwhile reports that the chairman of Richina
Pacific, Mainzeal's ultimate owner, has communicated with its
residual small shareholders via its website.
stuff.co.nz relates that John Walker, who is based in the United
States, said Richina had guaranteed certain obligations to
Mainzeal Property and Construction and provided funding to support
it. Now Richina Pacific (RPL) was assessing its exposure to
Mainzeal as a result of the receivership, the report relays.
According to stuff.co.nz, Mr. Walker said Mainzeal Property had
been wholly owned by RPL until 2009, when shareholders approved it
becoming a separate legal entity and become shareholders in
Mainzeal's parent, Mainzeal Group, instead.
About Mainzeal Property
Mainzeal Property and Construction Ltd is a New Zealand-based
property and construction company. The company forms part of the
Mainzeal Group, which is owned by Richina Inc, a privately held
New Zealand-based company with a strong China focus.
Colin McCloy and David Bridgman, partners from
PricewaterhouseCoopers, on Feb. 6, 2013, were appointed receivers
to Mainzeal Property and Construction Limited and associated
entities as a result of a request made by its director to BNZ.
Mainzeal's director, Richard Yan advised that following a series
of events that had adversely affected the Company's financial
position coupled with a general decline in major commercial
construction activity, and in the absence of further shareholder
support, the Company could no longer continue trading.
The receivers are currently in talks with some parties interested
in buying the business and assets of Mainzeal, either as a whole
or by segment.
=================
S I N G A P O R E
=================
ALTUS TECHNOLOGIES: Creditors to Get 100% Recovery on Claims
------------------------------------------------------------
Altus Technologies Pte Ltd will declare the first and final
dividend on Feb. 25, 2013.
The company will pay 100% to the received claims.
The company's liquidator is:
Tay Swee Sze
c/o 78 South Bridge Road #04-01
TKH Building
Singapore 058708
ARTECH ENGINEERING: Creditors' Proofs of Debt Due March 25
----------------------------------------------------------
Creditors of Artech Engineering Pte Ltd, which is in creditors'
voluntary liquidation, are required to file their proofs of debt
by March 25, 2013, to be included in the company's dividend
distribution.
The company's liquidator is:
Yiong Kok Kong
c/o 21 Merchant Road
#05-01 Royal Merukh S.E.A. Building
Singapore 058267
LEHMAN BROTHERS: Creditors' Proofs of Debt Due March 5
------------------------------------------------------
Creditors of Lehman Brothers Commodities Pte Ltd, which is in
creditors' voluntary liquidation, are required to file their
proofs of debt by March 5, 2013, to be included in the company's
dividend distribution.
The company's liquidator is:
Chay Fook Yuen
Bob Yap Cheng Ghee
Tay Puay Cheng
c/o KPMG Advisory Services Pte Ltd
16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
LEHMAN BROTHERS FINANCE: Creditors' Proofs of Debt Due March 5
--------------------------------------------------------------
Creditors of Lehman Brothers Finance Asia Pte Ltd, which is in
creditors' voluntary liquidation, are required to file their
proofs of debt by March 5, 2013, to be included in the company's
dividend distribution.
The company's liquidator is:
Chay Fook Yuen
Bob Yap Cheng Ghee
Tay Puay Cheng
c/o KPMG Advisory Services Pte Ltd
16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
LEHMAN BROTHERS INVESTMENTS: Creditors' Proofs of Debt Due Mar. 5
-----------------------------------------------------------------
Creditors of Lehman Brothers Investments Pte Ltd, which is in
creditors' voluntary liquidation, are required to file their
proofs of debt by March 5, 2013, to be included in the company's
dividend distribution.
The company's liquidator is:
Chay Fook Yuen
Bob Yap Cheng Ghee
Tay Puay Cheng
c/o KPMG Advisory Services Pte Ltd
16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
LUXURY RESERVATIONS: Creditors' Proofs of Debt Due March 21
-----------------------------------------------------------
Creditors of Luxury Reservations Asia Pte Limited, which is in
creditors' voluntary liquidation, are required to file their
proofs of debt by March 21, 2013, to be included in the company's
dividend distribution.
The company's liquidators are:
Khor Boon Hong
Victor Goh
C/o Baker Tilly TFW LLP
15 Beach Road
#03-10 Beach Centre
Singapore 189677
WARAKU INTERNATIONAL: Court to Hear Wind-Up Petition March 1
------------------------------------------------------------
A petition to wind up the operations of Waraku International Pte
Ltd will be heard before the High Court of Singapore on March 1,
2013, at 10:00 a.m.
Malayan Banking Berhad filed the petition against the company on
Feb. 8, 2013.
The Petitioner's solicitors are:
Khattarwong LLP
No. 80 Raffles Place
#25-01 UOB Plaza 1
Singapore 048624
================
S R I L A N K A
================
ETI FINANCE: Fitch Lowers National Long-Term Rating to 'CC'
-----------------------------------------------------------
Fitch Ratings Lanka has downgraded ETI Finance Limited's National
Long-Term rating to 'CC(lka)' from 'BB-(lka)'.
Rating Action Rationale
The downgrade follows the restructuring of ETI's operations and
the subsequent restatement of its financial accounts for the year
ended March 2012 which showed capital adequacy ratios (CAR) and
liquid assets below their respective minimum regulatory
thresholds.
Rating Drivers and Sensitivities
The regulator is currently overseeing the restructuring of ETI's
operations, which includes the possible sale of group investments
and other non-earning assets to improve regulatory liquidity, CAR,
and profitability. Pursuant to the regulatory direction and as
part of the restructuring process, ETI's majority shareholders
have transferred the ownership of Swarnamahal Financial Services
PLC, to ETI. The regulator expects ETI to comply with all
regulatory directions by mid-2014.
ETI expects to bring in external shareholder funds in the near
term in order to improve its financial position. However, Fitch
notes that if this does not transpire, and in the absence of
further shareholder injections, ETI will have to rely on the
expedient disposal of its investments in group companies and other
non-earning assets to improve the company's credit profile. ETI's
inability to improve its financial position in the near-term may
result in a further downgrade.
===============
X X X X X X X X
===============
* Moody's Reports Manageable Corporate Refunding Needs for Asia
---------------------------------------------------------------
Moody's Investors Service says that the refunding needs of Asian
non-financial corporates (excluding Japan) for domestic and cross-
border bonds due through 2016 are manageable, given strong
issuance of USD498 billion during 2009-2012, or an annual average
of USD124 billion.
In total, rated non-financial corporate debt issuers in Asia have
USD314 billion of domestic and cross-border bonds due through
2016. During this period, annual maturities will peak at USD92
billion in 2014, up from USD78 billion in 2013, and then decline
to USD63 billion by 2016.
"These maturity amounts are manageable, given the strong issuance
levels in recent years, and because the maturities are dominated
by investment grade and domestic bonds," says Ping Luo, a Moody's
Vice President and Senior Analyst.
Luo was speaking on the release of a new Moody's report titled,
"Asian Corporates' Refunding Needs Remain Manageable Through
2016", and of which she was the lead author.
In fact, the Asian bond market proved particularly strong in 2012
with investment-grade issuance reaching a record high of USD162
billion, up 52% from USD107 billion in 2011. Greater issuance by
Chinese companies was largely responsible for the jump.
"The markets should be able to absorb these maturities as long as
no significant market disruptions occur," says Luo, adding, "We
are less concerned about the refinancing of domestic bonds than
cross-border ones as Asian companies in general have better access
to domestic capital markets, which are relatively stable."
According to the report, domestic bonds dominate with some 66% of
the maturities due through 2016 being domestic bonds.
Additionally, the report states that around 88% of the debt
maturing through 2016 comes from investment-grade issuers, which
have good access to various funding sources.
Looking at the breakdown of debt by country, the majority comes
from Korea and China, with issuers in both countries accounting
for roughly 77% of the total refinancing needs in Asia. Moody's
notes that China has been increasingly active in bond issuance,
becoming the largest issuer country in Asia in 2012.
A total of 10 companies account for 47% of the expected total
refunding needs of the next four years.
Of this 10, five are Korean companies, breaking down into four
government-related issuers, all rated A1 with stable outlooks, and
finally POSCO at Baa1 with a negative outlook.
The other five are China National Petroleum Corporation (Aa3
positive), which has the largest amount of outstanding bonds at
nearly USD38 billion, both domestic and cross-border, China
Petrochemical Corporation (Aa3 stable), Hutchison Whampoa (A3
negative), China Three Gorges Corporation (A1 stable), and China
Metallurgical Group Corporation (Baa3 review for downgrade).
All 10 issuers continue to demonstrate strong access to onshore or
offshore funding.
"Furthermore, high-yield cross-border bonds due in 2013 are just
USD2.2 billion, an amount which is small when considered in the
context of the region's annual high-yield cross-border issuance
average of USD12 billion for 2009-2012," says Luo.
"And the maturity amounts also represent just 3% of the region's
total refinancing needs for 2013, while a variety of funding
sources are increasingly available to high-yield issuers,
particularly those in China, where onshore fundraising options are
becoming more diverse and accessible," adds Luo.
This special comment is Moody's third annual report analyzing the
refunding needs of rated non-financial corporates in the Asia
Pacific (excluding Japan) corporate bond market. The study covers
bond maturities over a four-year period and includes the
maturities of over 3,000 non-financial corporate bonds issued by
237 companies. The data was sourced as of December 31, 2012.
*********
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., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Psyche A. Castillon, Frauline S. Abangan, and
Peter A. Chapman, Editors.
Copyright 2013. 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$775 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 215-945-7000 or Nina Novak at 202-241-8200.
*** End of Transmission ***