/raid1/www/Hosts/bankrupt/TCRAP_Public/130401.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, April 1, 2013, Vol. 16, No. 63
Headlines
A U S T R A L I A
ACLASS CRANE: Clifton Hall Appointed as Administrators
HARRISON GROUP: Appoints Deloitte as Receivers
HAYSON BLOODSTOCK: Owner Loses Luxury Car as ATO Tax Row Goes On
NUFARM LTD: Weak First-Half Results No Impact on Ba2 CFR
C H I N A
CHINA NATURAL: Seeks Dismissal of Involuntary Bankruptcy in U.S.
CITIC PACIFIC: Moody's Rates Proposed EMTN Drawdown 'Ba1'
EVERGRANDE REAL: Weak 2012 Results No Impact on B1 CFR
FRANSHION PROPERTIES: Moody's Outlook on Ba1 Rating is Stable
HIDILI INDUSTRY: Production Delays Cue Moody's to Review B2 CFR
KWG PROPERTY: Moody's Keeps CFR at Ba3 Following Results Release
POWERLONG REAL: Moody's Changes Outlook to Positive; Keeps B3 CFR
SUNAC CHINA: Moody's Rates Proposed Senior Notes (P)B1
* Moody's Reports on Impact of Property Tightening Measures
H O N G K O N G
ASIA RICH: Members' Final Meeting Set for April 2
ASK PACIFIC: Members' Final Meeting Set for April 2
EASTERN PREFERENCE: Members' Final Meeting Set for April 2
FY GLASS: Members' Final Meeting Set for April 2
GOOD MARK: Members' Final Meeting Set for April 2
GOODVIEW GLASS: Members' Final Meeting Set for April 2
GRASSION LIMITED: Members' Final Meeting Set for April 2
HK COLD: Members' Final Meeting Set for April 2
KELLIX LIMITED: Members' Final General Meeting Set for April 8
NEW TERRITORIES: Members' Final Meeting Set for April 2
RATONAL INDUSTRIAL: Court to Hear Wind-Up Petition on April 3
RUI HONG: Members' Final Meeting Set for April 2
SOFT-TREK MEDIA: Creditors To Get 0.4725% Recovery on Claims
SS&T SHIPPING: Court to Hear Wind-Up Petition on April 3
VOYAGE MEDIA: Court to Hear Wind-Up Petition on April 24
YING KIT: Court to Hear Wind-Up Petition on April 24
I N D I A
BINUS TRADING: CRISIL Assigns 'B' Ratings on INR130MM Loans
HEALTHY LIFE: CRISIL Assigns 'B' Ratings to INR86.5MM Loans
KKR FOOD: CRISIL Cuts Ratings on INR109.9MM Loans to 'D'
KUMAR AUTOWHEELS: CRISIL Assigns 'B+' Ratings to INR155MM Loans
MAHADEVA CARS: CRISIL Rates INR50MM Cash Credit at 'B+'
RAYALA CORP: CRISIL Cuts Ratings on INR600MM Loans to 'B+'
SHIV SHAKTI: CRISIL Rates INR350MM Cash Credit at 'B'
SUN PAPER: CRISIL Upgrades Ratings on INR328MM Loans to 'B-'
SURYAAMBA SPINNING: CRISIL Ups Rating on INR288.2MM Loans to 'B-'
TECHOPS INFRA: CRISIL Assigns 'B-' Ratings to INR55MM Loans
I N D O N E S I A
MNC SKYVISION: Moody's Says Refinancing Plan is Credit Positive
J A P A N
SHARP CORP: To Consider Seeking Buyout Fund Investment
P A P U A N E W G U I N E A
* Moody's Sets New Country Ceilings for Papua New Guinea
P H I L I P P I N E S
* PHILIPPINES: Fitch Upgrades Issuer Default Rating From 'BB+'
S I N G A P O R E
SINGAPORE ORCHIDS: Court to Hear Wind-Up Petition April 5
X X X X X X X X
* Moody's Issues Stable Outlook for Asian Power Utilities
- - - - -
=================
A U S T R A L I A
=================
ACLASS CRANE: Clifton Hall Appointed as Administrators
------------------------------------------------------
Timothy Clifton -- tclifton@cliftonhall.net.au -- and Mark Hall
-- mhall@cliftonhall.net.au -- of Clifton Hall were appointed
Joint and Several Administrators of Aclass Crane Trucks Pty Ltd on
March 27, 2013.
The first meeting of creditors will be held on April 10, 2013, in
the office of Clifton Hall, Level 4, 12 Gilles Street, in
Adelaide, South Australia at 11:30 a.m.
Creditors will receive separate notification of the meeting.
HARRISON GROUP: Appoints Deloitte as Receivers
----------------------------------------------
Cara Waters at SmartCompany reports that the Harrison Group, which
is made up of 14 pharmacies and six medical centres, has entered
into receivership.
Deloitte partners David Lombe -- dlombe@deloitte.com.au -- and
Jason Tracy -- jtracy@deloitte.com.au -- were on March 25, 2013,
appointed as receivers and managers of the group, which includes
Harrison's Health and Beauty Pharmacies.
Advertisements were place in newspapers on March 28 offering the
business for sale as a group or separately.
In the meantime, SmartCompany says, Mr. Lombe said all the
pharmacies and medical centres would continue to trade normally.
"Our first task will be to undertake an urgent assessment of the
company's financial position and prepare the business for sale,"
SmartCompany quotes Mr. Lombe as saying. "There will be no impact
on company operations, employees, customers and clients in the
short term."
Deloitte declined to provide any details of the businesses'
turnover or the major creditors involved. A first meeting of
creditors will be held on April 8, 2013.
The Harrison Group has pharmacies in New South Wales, Queensland,
South Australia and Northern Territory, a number of medical
centres and a head office in Sydney.
HAYSON BLOODSTOCK: Owner Loses Luxury Car as ATO Tax Row Goes On
----------------------------------------------------------------
The Sydney Morning Herald reports that the financial woes of
Hayson Bloodstock owner Eddie Hayson continue with the
repossession of his luxury car on March 25.
SMH relates that Mr. Hayson's black Porsche Cayenne, worth an
estimated AUD180,000 new, was seen being loaded onto a tow truck
at the back of Mr. Hayson's brothel, Stiletto, in Camperdown.
Last month, SMH recalls, Mr. Hayson's company Hayson Bloodstock,
which once owned a string of racehorses, was being pursued in the
Supreme Court over debts to various entities including the
Australian Taxation Office.
In August last year, bookmaker Tom Waterhouse had receivers
appointed to Hayson Bloodstock over AUD3.36 million gambling debt,
the report relates. Mr. Waterhouse also has caveats over Mr.
Hayson's brothel and his Dural property, to protect his claim, the
report relays.
Other creditors listed on corporate documents include the Bank of
Western Australia and Network Consumer Finance, which is the
finance arm of the retailer Harvey Norman, the report discloses.
According to the report, Mr. Hayson has also run up millions of
dollars in gambling debts to other betting agencies, including
Sportsbet. He is also being pursued by the owners of Sydney
escort business Boardroom Escorts over a AUD2.3 million debt
incurred when Mr. Hayson tried to sell shares in Stiletto.
SMH relates that Mr. Hayson was previously bankrupted over unpaid
gambling debts to bookmaker Con Kafataris. The bankruptcy was
annulled when Mr. Hayson repaid his debt.
At one time Mr. Hayson's racing stable had more than 50 horses,
including Wanted, Pathetic, Sign Nothing, Throw Off, Backstabber,
Busty, Tampered With and Regreagan which Mr. Hayson co-owned with
ex-footballers Matthew and Andrew Johns.
Hayson Bloodstock's battle with the Tax Office will be back in
court on April 9, SMH adds.
NUFARM LTD: Weak First-Half Results No Impact on Ba2 CFR
--------------------------------------------------------
Moody's Investors Service says that Nufarm's results for the
first-half ending January 31, 2013 are credit negative, but the
ratings are not immediately affected. Moody's has a Ba2 corporate
family rating assigned to Nufarm Limited and Ba3 senior unsecured
rating assigned to Nufarm Australia Limited.
Nufarm reported weaker-than-expected operating conditions in
Australia, and which are likely to persist, if not worsen, in the
second half of the 2013 fiscal year. At the same time, Moody's
acknowledges that operating conditions in other regions,
especially in South America, have offset the weak performance in
Australia, but there is uncertainty around the ability of
international operations to continue to offset the weak conditions
in Australia throughout 2013.
Moody's had previously indicated its expectation for Nufarm to
maintain Adjusted Debt/EBITDA of 2.6-3.0x over the medium term,
and with the weak performance expected in 2013, this ratio will
likely be at the upper end of this range. The rating could be
pressured if the ratio exceeds 3.5x on a consistent basis.
For the six months ending 31 January 2013, Nufarm reported EBITDA
of AUD82.8 was 21.5% higher than the previous corresponding
period, but operating cashflow -- which tends to be seasonally
weaker in the first half due to seasonality -- has deteriorated,
declining to s deficit of AUD148 million compared to a deficit of
AUD71 million same time last year. This was mainly due to the
inventory buildup in Australia (reflecting the weak conditions)
and one-off payment of AUD46.7 million representing settlement of
class action.
Moody's is closely monitoring the company's working capital
management, as well as and the ability of the overseas operations
to continue to offset the weak operating conditions in Australia
in 2013.
Negative rating pressure will emerge if there is marked
deterioration in the company's liquidity and/or if core operations
demonstrate ongoing weakness, leading to Debt/EBITDA falling below
3.5x and EBITDA/Interest below 3.0x on a consistent basis.
=========
C H I N A
=========
CHINA NATURAL: Seeks Dismissal of Involuntary Bankruptcy in U.S.
----------------------------------------------------------------
China Natural Gas, Inc., has asked the United States Bankruptcy
Court for the Southern District of New York to dismiss the
involuntary bankruptcy petition filed on Feb. 8, 2013, by Abax
Lotus Ltd., Abax Nai Xin A Ltd. and Lake Street Fund LP.
The Debtor claimed that it has not been served with valid summons.
According to the Debtor, the Petitioning Creditors purported to
serve the summons and a copy of the involuntary petition to the
Debtor by first class mail, postage pre-paid, addressed to: China
Natural Gas, Inc., Attn: Taylor Zhang, 90 Park Avenue, 16th Floor,
New York, NY 10016" and to "The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, DE
19801."
The Debtor said that Mr. Zhang isn't an officer or managing or
general agent of the Debtor, nor is he or the Debtor located at 90
Park Avenue in New York. The Debtor is a corporation organized
and existing under the laws of the State of Delaware with its
principal place of business in Xi'an, Republic of China.
The Debtor added that The Corporation Trust isn't authorized to
accept service on the Debtor's behalf, as it isn't a registered
agent of the Debtor. The Corporation Trust Company was the former
registered agent for a company also named China Natural Gas, Inc.,
that was formed in December 2005, but that company merged into the
Debtor in that same month and is currently an inactive Delaware
corporation. The Debtor's registered agent is National Corporate
Research, Ltd., located in Dover, Delaware.
About China Natural
China Natural Gas, through its wholly owned subsidiaries and
variable interest entity (VIE), Xi'an Xilan Natural Gas Co., Ltd.
(XXNGC) and subsidiaries of its VIE, which are located in Hong
Kong, Shaanxi Province, Henan Province and Hubei Province in the
People's Republic of China (PRC), engages in sales and
distribution of natural gas and gasoline to commercial, industrial
and residential customers through fueling stations and pipelines,
construction of pipeline networks, installation of natural gas
fittings and parts for end-users, and conversions of gasoline-
fueled vehicles to hybrid (natural gas/gasoline) powered vehicles
at automobile conversion sites.
CITIC PACIFIC: Moody's Rates Proposed EMTN Drawdown 'Ba1'
---------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to CITIC Pacific's
proposed USD notes to be drawn under its USD4.5 billion Euro
Medium Term Notes (EMTN) Program.
The rating outlook is negative.
Ratings Rationale:
"The notes issuance has no immediate rating impact, as the funds
are expected to be used to refinance loans maturing in 2013," says
Alan Gao, a Moody's Vice President.
"CITIC Pacific's Ba1 rating factors in the expected strong support
from its parent, CITIC Group (Baa2 stable) with a three-notch
rating uplift from its standalone credit fundamentals," says Kai
Hu, a Moody's Vice President and local market analyst for CITIC
Pacific.
Moody's expects CITIC Pacific's financial profile will remain weak
until at least 2015, when most of the six production lines of its
Sino Iron Ore project are expected to start operation.
Before that, the company will need to take on more debt in the
next one to two years, as the cash flow generated by its first and
second lines, the latter of which is due to be commissioned in
mid-2013, is insufficient to cover the additional capex for lines
three to six of the project," adds Hu.
Moody's expects CITIC Pacific's debt level will continue to rise,
assuming that there are no asset disposals or equity injections.
Its adjusted funds from operations (FFO)/debt is likely to remain
below 5% in the next two years.
CITIC Pacific's liquidity profile remains adequate, mainly
supported by its HKD32 billion cash-on-hand and HKD15 billion in
unused committed credit facilities as of end-2012.
The proceeds from the EMTN program, which will be used repay
maturing debt, will improve CITIC Pacific's debt maturity profile.
The negative outlook reflects Moody's concerns regarding the
uncertainties surrounding the Sino Iron Ore project.
Nonetheless, the outlook could revert to stable if (1) the Sino
Iron Ore project progresses according to schedule, passing
important milestones such as commissioning the second line in mid-
2013, and commissioning lines three to six in stages, beginning
mid-2014; (2) the remaining capex for the iron project is kept to
under USD2 billion; and (3) the company maintains adequate
liquidity for refinancing and project development.
However, the ratings may be downgraded if (1) the project misses
its key milestones and encounters major cost over-runs; and (2)
the company's liquidity profile deteriorates.
Moody's will consider the following credit metrics for a
downgrade: (1) adjusted debt/capitalization staying at above 60%;
and (2) adjusted FFO/debt failing to trend above 5% by end-2014.
In addition, a downgrade in CITIC Group's rating or an erosion of
its support for CITIC Pacific may also trigger a downgrade of
CITIC Pacific.
CITIC Pacific Limited's ratings were assigned by evaluating
factors that Moody's considers relevant to the credit profile of
the issuer, such as the company's (i) business risk and
competitive position compared with others within the industry;
(ii) capital structure and financial risk; (iii) projected
performance over the near to intermediate term; and (iv)
management's track record and tolerance for risk. Moody's compared
these attributes against other issuers both within and outside
CITIC Pacific Limited's core industry and believes CITIC Pacific
Limited's ratings are comparable to those of other issuers with
similar credit risk.
Other Factors used in this rating are described in Analytical
Considerations in Assessing Conglomerates published in September
2007.
CITIC Pacific Ltd, listed in Hong Kong, is a conglomerate that is
57.5%-owned by the CITIC Group. It was one of the first Chinese
companies to list and invest in overseas markets. It is engaged in
a range of businesses, including special steel manufacturing, iron
ore mining, property development and investment, power generation,
aviation, infrastructure, communications, and distribution. As of
end-2012, it had total consolidated assets of HKD247 billion.
The CITIC Group, headquartered in Beijing, is a conglomerate
investment company wholly owned by the State Council of the
Chinese government. As of end-2011, it had total consolidated
assets of RMB3.3 trillion.
EVERGRANDE REAL: Weak 2012 Results No Impact on B1 CFR
------------------------------------------------------
Moody's Investors Service says that Evergrande Real Estate Group
Limited's 2012 results were weaker than expected. But there is no
immediate impact on its B1 corporate family rating and B2 senior
unsecured ratings.
The ratings outlook remains stable.
"Evergrande's lower-than-expected EBITDA margin could limit the
company's financial flexibility for weathering stress from any
future market downturn," says Franco Leung, a Moody's Assistant
Vice President and Analyst.
Evergrande's adjusted EBITDA margin decreased to 19% in FY2012
from 25% in FY2011, partly due to lower selling prices, and higher
staff and selling expenses as % of revenue. These outcomes reflect
its fast turnover model and its limited flexibility for adjusting
costs in a down market in early 2012.
At the same time, Evergrande's revenue of RMB65.3 billion,
representing 5% y-o-y growth, was lower than Moody's expectations.
Thus, its adjusted EBITDA / interest coverage deteriorated from
3.9x in FY2011 to 2.1x in 2012.
"On the other hand, Evergrande was able to slow its pace of debt
increase which, in turn, kept its financial risk to a level
consistent with its current rating level," adds Leung, also the
Lead Analyst for Evergrande, adding "Its slower growth could help
it avoid a further deterioration of its credit metrics".
Though Evergrande's total funding requirement was RMB66.9 billion
-- sum of RMB28.4 billion in land payments and RMB38.5 billion in
construction costs -- in FY2012, it increased gross debt only by
RMB8.6 billion. Accordingly, debt leverage -- in terms of adjusted
debt/capitalization -- was at around 63%. If the effect of the
HKD4.35 billion equity placement in Jan 2013 is included, such
debt leverage ratio would decline by about 2%.
Moody's notes that Evergrande has shown progress in slowing its
land acquisitions, and will continue to do so in 2013. In
addition, Moody's expects Evergrande's EBITDA margin to slightly
improve in 2013 as staff and selling expenses as % of revenue will
decline modestly.
With such a modest growth scenario, Moody's expects an interest
coverage ratio of 2.0--2.5x and adjusted debt/capitalization of
60-65%, which will continue to position the company at the B1
corporate family rating.
Evergrande's B1 rating will be supported by its strong sales
execution. Moody's expects sales momentum will continue in 2013
when market conditions are expected to be stable. In 2012, it
executed contracted sales of RMB92.3 billion, 15% above 2011 and
its 2012 target.
Evergrande's current liquidity is still adequate. Cash-on-hand of
RMB25.2 billion as of Dec 2012, RMB3.5 billion in proceeds from
its share placement, and operating cash flow are sufficient to
cover its RMB19 billion in maturing debt and RMB16.4 billion in
committed land payments.
Evergrande's B1 corporate family rating continues to reflect its
large-scale developments, efficient business model of fast
turnover, low-cost land bank, and competitively priced products in
the mass market.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.
Evergrande Real Estate Group Limited is one of the major
residential developers in China, with a standardized operating
model. Founded in 1996 in Guangzhou, the company has rapidly
expanded its business across the country over the past few years.
As of December 2012, it had a land bank of 140 million square
meters in gross floor area across 122 cities in China.
FRANSHION PROPERTIES: Moody's Outlook on Ba1 Rating is Stable
-------------------------------------------------------------
Moody's Investors Service revised the outlook on Franshion
Properties (China) Limited's Baa3 corporate family rating and Ba1
senior unsecured ratings to stable from negative.
Moody's has also affirmed Franshion's Baa3 corporate family rating
and the Ba1 senior unsecured ratings to the bonds issued by
Franshion Development Limited and Franshion Investment Limited.
Ratings Rationale:
"The outlook revision reflects Franshion's satisfactory financial
results and contract sales in 2012, and which will enable the
company to sustain its improved financial profile and adequate
liquidity in the next 12-18 months," says Kaven Tsang, a Moody's
Vice President & Senior Analyst.
Franshion reported HKD17.2 billion in revenues for 2012 (RMB13.9
billion, a 161% increase year-on-year).
Of this, its rental and hotel income remained stable at HKD3.1
billion (RMB2.5 billion).
At the same time, the company's EBITDA/interest improved to 3.3x
for the full year of 2012 from 2.5x for the last twelve month
period ended June 2012 and adjusted recurring EBITDA/interest to
0.74x from 0.67x. Adjusted recurring EBITDA includes net rental
income and 50% of the hotel segment's EBITDA.
"Moody's expects Franshion's projected EBITDA/interest will
improve further to around 4x and adjusted recurring
EBITDA/interest will stabilize at around 0.75x in the next two
years supported by its growing development portfolio and stable
rental income," says Tsang, who is also Moody's lead analyst for
Franshion.
"In addition, its adjusted debt/capitalization will stay at around
45%-50%," adds Tsang.
The anticipated improvement in financial metrics is in line with
Franshion's Baa3 corporate family rating.
Franshion had HKD13.5 billion (RMB10.9 billion) in cash-on-hand as
of December 2012, which represents 16% of its total assets.
Together with its estimated operating cash flow of between RMB9
billion and RMB10 billion, the company will be able to cover its
short-term debt of HKD9.0 billion (RMB7.3 billion) and committed
land payments of HKD12.3 billion (RMB10.0 billion).
Franshion's Baa3 corporate family rating continues to reflect its
credit strength as a result of stable rental income generated from
its quality portfolio of investment properties, including prime
office buildings and hotels in Shanghai and Beijing. This rental
income provides the company with a buffer against business
volatility.
The rating also takes into consideration the company's solid track
record in the development of landmark, integrated projects and in
the acquisition of strategically important projects through its
collaboration with government-related entities.
In addition, the rating reflects Franshion's diversified and solid
access to both on- and off-shore funding, and which is supported
to an extent by its background as a state-owned enterprise and its
position as a subsidiary of Sinochem Hong Kong (Group) Company
Limited (Baa1 stable), which is in turn 100%-owned by Sinochem
Corporation (unrated).
On the other hand, the company has elevated implementation risk as
a result of its planned expansion in the property development
business. Its lack of geographic and cash flow diversity will also
increase its exposure to performance volatility.
Franshion's senior unsecured rating is notched down to Ba1,
reflecting structural and legal subordination. The ratio of
secured and subsidiary debt to total assets stood at 22% as of 31
December 2012.
Moody's expects this ratio to remain at around 20% in the next one
to two years.
The rating could be downgraded if Franshion: (1) fails to
implement its business plan, or China's property market
experiences a significant downturn, such that cash flow is weaker
than anticipated; (2) pursues aggressive debt-funded land
acquisitions; or (3) significantly increases its investments in
residential properties with debt funding.
Moody's will regard the following financial metrics as signals for
downward rating pressure: (1) adjusted debt/capitalization above
45%-50%; (2) EBITDA/interest falling below 3x-4x; or (3) adjusted
recurring EBITDA/interest falling below 0.6x-0.75x on a sustained
basis.
The rating could be upgraded if Franshion: (1) successfully
carries out its sales plan and achieves its targets; (2) improves
its geographic diversity and business scale; and (3) strengthens
its financial ratios with EBITDA/interest above 6x-7x and adjusted
recurring EBITDA/interest at 1.0x-1.5x.
The principal methodology used in these ratings were Global
Homebuilding Industry Methodology published in March 2009.
Listed on the Stock Exchange of Hong Kong in 2007, Franshion
Properties (China) Limited is a 62.87%-owned subsidiary of
Sinochem Hong Kong (Group) Company Limited, and which in turn is
98%-owned by Sinochem Group, a state-owned enterprise under the
State-Owned Assets Supervision and Administration Commission.
Franshion develops commercial and integrated properties in first-
tier and major second-tier cities in China. As of December, 2012,
the company had a total land bank of approximately 5.8 million
square meters of attributable gross floor area.
HIDILI INDUSTRY: Production Delays Cue Moody's to Review B2 CFR
---------------------------------------------------------------
Moody's Investors Service has placed Hidili Industry International
Development Limited's B2 corporate family rating and B3 senior
unsecured debt ratings under review for downgrade.
This review follows Hidili's 2012 results announcement on
March 27, 2013.
Ratings Rationale:
"The review is driven by the operational hold-ups to Hidili's coal
mining activities in China following a series of mining accidents
at other companies in Southwest China," says Alan Gao, a Moody's
Vice President and Senior Analyst.
"Hidili's weak 2012 results also demand a reassessment of its
business in view of the challenging operating conditions for the
mining industry in Southwest China," adds Gao, also the lead
analyst for Hidili.
Although none of the accidents occurred in the company's areas,
the government's tightening of safety regulatory measures
disrupted Hidili's production, compromised its cash flow
generation capability, and further weakened its already stretched
credit profile.
Hidili reported a 33% year-on-year drop in revenue to RMB1.9
billion in 2012 from RMB2.9 billion in 2011, and a 59% year-on-
year drop in EBITDA to RMB579 million from RMB1.4 billion. Whilst
the 13.1% year-on-drop in coal ASP was to blame, production volume
loss was also the more important contributor to the weakness in
the 2012 results.
Hidili's raw coal production dropped by 15% to 3.5 million tons in
2012 from 4.1 million tons in 2011, mainly due to production
losses in Sichuan and Yunnan, where a series of accidents at other
mines prompted the local governments to halt production for the
whole region. The purpose was to carry out mandatory inspections.
As a result, Hidili's total coal production in Yunnan and Sichuan
dropped by 32% year-on-year to 1.96 million tons in 2012 from 2.87
million tons in 2011.
According to the company's announcement on 25 March, 6 out of 10
coal mines in Guizhou have passed government inspection and
resumed operation. And management expects some of its Yunnan and
Sichuan coal mines to resume production by the end of March.
However, the company's vulnerability to production disruptions
highlights the high level of regulatory and safety risk which can
weaken its cash flow generation capability.
"The review is also driven by the tight liquidity position of
Hidili," says Gao.
Moody's expects that Hidili had utilized most of its RMB1.8
billion cash balance at end-2012 to repay RMB1.8 billion in
convertible bonds in January 2013. Hence its current liquidity
situation is tight and it is highly reliant on short-term bank
financing. Liquidity could be further compromised by its weakened
level of cash flow generation capability.
Consequently, the company's credit metrics in the next 6 -12
months -- without meaningful deleveraging -- are no longer
consistent with its current credit ratings.
In its review, Moody's will focus on (1) Hidili's progress in
improving its liquidity by seeking alternative financing, which
may include long-term debt issuance or asset disposals; and (2)
the company's ability to keep increasing production without
operational disruptions.
The principal methodology used in this rating was Global Mining
Industry Methodology published in May 2009.
Hidili is a vertically-integrated coal mining enterprise in
southwestern China that supplies coking coal products to the
domestic steel industry. Hidili was listed on the Hong Kong Stock
Exchange in September 2007.
KWG PROPERTY: Moody's Keeps CFR at Ba3 Following Results Release
----------------------------------------------------------------
Moody's Investors Service says that KWG Property Holding Limited's
2012 results were weaker than expected, but have no immediate
impact on its corporate family rating of Ba3 and stable outlook.
"KWG's slight decline in revenue and lower profit margins --
compared with 2011 -- were generally within our expectations,"
says Franco Leung, a Moody's Assistant Vice President and Analyst.
KWG's gross margin dropped to 36.5% in 2012 from 44.2% in 2011 due
to a change in product mix with an increase in land and
construction costs for products delivered in 2012. But Moody's
expects profit margins to pick up in 2013 because the company has
gradually increased the selling prices of its properties.
"We expect KWG's revenue to improve this year, which could in turn
improve its financial metrics over the next 12 - 18 months", adds
Leung, also the Lead Analyst for KWG.
KWG's contract sales reached RMB12.2 billion in 2012, slightly
above its full-year target of RMB12 billion. Given the stabilizing
nature of the Chinese property market in 2013, Moody's expects
that KWG's contract sales in 2013 will exceed 2012.
KWG's reported a rise in debt to RMB16.2 billion at end-2012 from
RMB13.8 billion at end-2011, as the company needed to fund its
property development projects.
As a result, adjusted debt/capitalization rose to around 60% at
end-2012. Meanwhile, adjusted EBITDA/interest dropped below 2x.
Such credit metrics position KWG at the weaker end of the Ba
rating range.
Moody's expects that KWG's adjusted debt/capitalization will trend
down to around 55-60% over the next 12-18 months, while adjusted
EBITDA/interest will trend towards 2.5x-3.0x in the next1-2 years.
KWG has adequate liquidity. Its cash on hand of RMB6.4 billion --
together with its bond issuance of USD300 million at January 2013
-- can fully cover its short-term maturing debt of RMB3.1 billion
and committed land payment of around RMB1.8 billion.
The principal methodology used in this rating was Global
Homebuilding Industry Methodology published in March 2009.
KWG is a Chinese property developer founded in 1995. Currently, it
has a total attributable land bank of around 9.7 million sqm in
gross floor area in Guangzhou, Chengdu, Suzhou, Beijing, Shanghai,
Tianjin and Hainan. KWG mainly develops mid-to high-end
residential properties, office buildings, shopping malls and
hotels.
POWERLONG REAL: Moody's Changes Outlook to Positive; Keeps B3 CFR
-----------------------------------------------------------------
Moody's Investors Services changed to positive the rating outlook
of Powerlong Real Estate Holdings Limited. At the same time,
Moody's has confirmed Powerlong's B3 corporate family and Caa1
senior unsecured rating.
This action concludes the rating review which was initiated on 15
January 2013.
Ratings Rationale:
"The change to a positive outlook reflects Powerlong's improving
contract sales, higher rental income, and a slowdown in its
business expansion," says Jiming Zou, a Moody's analyst.
The company's contract sales grew by 18.9% year over year in 2012,
thanks to a larger number of projects available for sale and a
stronger contribution from residential units.
Powerlong recorded a relatively balanced contract sales
contribution from about 20 commercial and residential complexes in
2012 after strengthening sales execution and reaping the gains
from its earlier investments.
A slowdown in the economy and a tightening in credit availability
in lower tier cities, coupled with the effect of product mix,
resulted in only 4.4% growth in the contract sales of its
commercial product, but stronger residential sales (33% growth and
accounting for 57% of the total) upheld the group's performance.
Powerlong accelerated product delivery and raised its book
revenues by 11% to about RMB5.9 billion in 2012.
More positive was the growth in recurring income, including rental
income and property management service fees, by 78.9% to RMB508
million. Such an increase reflected Powerlong's diversifying
portfolio of up to 13 commercial complexes in operation, and
higher occupancy rates thanks to improving operating quality.
Should the company open another three commercial complexes, as
planned in 2013, its rental income and management fees could
further improve.
At the same time, the company has slowed its business expansion
with little land acquisition premium outstanding. As indicated by
Powerlong, it is switching its business focus, from expanding its
operating scale to improving the quality and economic benefits it
reaps.
"Nevertheless, Powerlong's weak credit metrics and tight liquidity
position it in the B3 level," says Zou, also the lead analyst for
Powerlong.
Powerlong's high debt leverage, relative to its earnings ability,
has resulted in low interest coverage. Its EBITDA/Interest
coverage declined to about 1.6x in 2012 from 2.2x in 2011. Such a
level keeps the company at the low B level.
Moody's notes that Powerlong's business plan is to increase its
investment property portfolio. This plan could demand more funding
which will further raise its already high financial risk level.
Powerlong has a tight liquidity profile. At end-2012, its cash
balance of RMB2 billion was low in comparison to its short-term
debt of RMB3.3 billion. Although the issuance of USD250 million in
January has replenished Powerlong's cash balance, Moody's expects
a level of high construction spending in 2013 will result in a
limited liquidity cushion.
The ratings could be upgraded if Powerlong can: (1) improve its
liquidity position through rationalizing its debt-funding
arrangements; (2) slow the growth of its investment portfolio to
reduce financial risk; (3) improve coverage of its interest
expenses by recurring income to above 0.5x.
The ratings outlook could return to stable if the company's weak
liquidity position persists and EBITDA/interest remains below
1.5x.
The principal methodology used in this rating was Global
Homebuilding Industry methodology published in March 2009.
Powerlong Real Estate Holdings Limited is a Chinese developer
focused on building large-scale integrated residential and
commercial properties in second- and third-tier cities in China.
As of December 30, 2012, it had a development land bank of around
7.8 million sqm in gross floor area (GFA) in nine provinces, and
had 13 completed investment properties. The company listed on the
Hong Kong Exchange in October 2009. At end-2012, the Hoi family,
who are the founders, had an aggregate stake of 67.7% in the
company.
SUNAC CHINA: Moody's Rates Proposed Senior Notes (P)B1
------------------------------------------------------
Moody's Investors Service assigned a first-time Ba3 corporate
family rating to Sunac China Holdings Limited.
Moody's has also assigned a provisional (P)B1 to Sunac's proposed
US dollar senior unsecured notes.
The ratings outlook is stable.
The company plans to use the proceeds from the proposed issuance
for debt refinancing and general corporate purposes.
Moody's will remove the provisional status of the notes after
Sunac completes the issuance on satisfactory terms and conditions.
Ratings Rationale:
"The Ba3 corporate family rating reflects Sunac's strong sales
execution in particular regions of the Chinese property market,
which is now subject to regulatory measures," says Franco Leung, a
Moody's Assistant Vice President and Analyst.
Sunac has a clear strategy of operating in locations where it has
good knowledge of property demand and has developed good working
relationships with local governments.
It prefers to grow its market shares in cities -- where it already
has a presence -- in the Yangtze River Delta, Bohai Rim and the
Western Region. As a result, it has 44 projects in eight cities
with strong branding in Tianjin, Beijing and Chongqing. To ensure
the good marketability of its products, it emphasizes good
location, good quality and product affordability.
Such a strategy has benefitted Sunac, leading to strong sales even
under the tightened regulatory measures apparent in 2011 and 2012.
Its contracted sales increased by 86% to RMB35.6 billion in 2012
and by 130% to RMB19.2 billion in 2011.
"The rating also considers the good quality of its land bank and
its partnerships with established industry players such as
Greentown", says Leung, also the Lead Analyst for Sunac.
A good portion of Sunac's land bank is situated in economically
strong first- and second-tier cities. Some of the projects are
located in city centers. This ensures good demand for its
products.
Joint venture arrangements allow Sunac to leverage on its
partners' expertise in areas such as product design and
construction. While the joint venture structures may lower Sunac's
control over the projects' cash flows, they will reduce risk
exposure, capital commitment and resource requirements.
On the other hand, its rating is constrained by its short listing
history. In addition, its strong appetite for expanding its land
bank and the financial risk from rapid debt-funded growth is
another negative driver. The company's debt-funded growth strategy
has resulted in a highly debt-leveraged balance sheet, with
adjusted debt/capitalization rising to about 61% in 2012 from 57%
in 2011.
Sunac has an adequate liquidity profile, driven primarily by the
cash receipts from property sales. Its cash-on-hand of around
RMB12.3 billion at end-2012, together with equity raised in
January this year and future presales proceeds, will cover its
short-term obligations, such as land payments and some debt
payments.
Sunac has a track record of maintaining a cash balance covering
its short-term debt since 2009. But its short-term debt has now
reached RMB11.8 billion, which is 54% of total debt.
Such a high level of short-term debt -- even though covered --
raises the level of refinancing risk. The proposed notes will
partially reduce the amount needing refinancing. Also, Sunac's
strong sales track record could be helpful in obtaining domestic
banks' agreement to grant refinancing or credit extensions.
However, if the company does not correct its weak capital
structure, its ratings could be under pressure.
Sunac's bond rating is rated (P)B1, one notch below the Ba3
corporate family rating, reflecting legal and structural
subordination risk. Its fast growth has resulted in persistently
high levels of onshore debt and which, in turn, kept its secured
and subsidiary debt-to-total assets ratio well above 15% at end-
2012.
The stable outlook reflects Moody's expectation that Sunac will
maintain strong sales execution, stay regionally focused, preserve
its adequate liquidity position, and improve its debt maturity
profile over time.
Upgrade pressure could emerge in the medium term if the company:
(1) demonstrates stable sales growth and substantially achieves
its presales target; (2) adopts a prudent strategy on land
acquisitions; (3) improves its credit metrics -- EBITDA/interest
coverage above 3.0x-3.5x and adjusted debt/capitalization below
50%-55%, on a sustained basis; and (4) improves its debt maturity
profile, such that debt maturing in 12 months does not exceed 35%
of total debt.
On the other hand, downgrade pressure could arise if Sunac: (1)
fails to achieve its sales plan; (2) shows increased liquidity
risk due to the aggressive acquisition of land; or (3) increases
its debt leverage, such that Debt/Total capitalization is higher
than 60%, or EBITDA/interest is under 2.0x for a sustained period.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.
Sunac China Holdings Limited, listed on the Hong Kong Stock
Exchange in October 2010, is an integrated residential and
commercial property developer. It has engaged in project
developments in eight cities: Beijing, Tianjin, Chongqing, Wuxi,
Yixing, Suzhou, Hangzhou and Shanghai. The company has a diverse
range of property types, such as high-rise and mid-rise
residences, detached villas, townhouses, retail properties,
offices and car parks.
* Moody's Reports on Impact of Property Tightening Measures
-----------------------------------------------------------
Moody's Investors Service reports that the impact of the latest
round of property tightening measures by the Chinese government
should be manageable.
"While the tighter rules are expected to constrain the sales
growth of developers in general, the measures were introduced
mainly to clamp down on speculative demand and will therefore have
a negative effect on developers with high-end projects in first-
and second-tier cities," says Franco Leung, a Moody's Assistant
Vice President and Analyst.
Nonetheless, Moody's believes that developers who continue to
focus on mass-market housing will be less affected.
Leung was speaking at the release of the latest edition of Moody's
China Property Focus newsletter, which notes that the larger
number of cities across China exhibiting property price increases
in recent months is part of the reason why the government
introduced on March 1, additional tightening measures to curb
property prices.
"In February, 62 of China's 70 major cities exhibited property
price increases; the highest number since December 2011," says
Leung, one of the authors of the newsletter.
In addition, for the first time since December 2011, property
prices in four cities -- Beijing, Nanjing, Guangzhou and Shenzhen
-- registered year-on-year growth of more than 5%, and the number
of cities experiencing price declines significantly reduced to
eight in February from 26 in December last year.
China's property market recorded a very strong 87% year-on-year
growth in nationwide contract sales in January and February,
totaling RMB630 billion versus RMB337 billion in the first two
months of 2011.
"We do not expect the government to introduce stricter measures in
the next 6-12 months, unless there is a higher-than-expected
increase in overall property prices," says Leung.
The newsletter also says that Moody's is maintaining a stable
outlook on the property sector for the next 6-12 months, as the
tightening measures will reduce the risk of large price hikes and
contribute to the stable development of China's property market.
Overall, property developers actively raised funds from offshore
bond markets in the Chinese New Year month of February and also
into March, albeit at a lower total amount than compared with the
figure raised in January 2013.
"The successful fund raisings reflect the recurring ability of the
developers to access the USD bond markets and is a positive sign
for the sector," says Leung.
The $8.12 billion of offshore bonds issued by the rated developers
between 1 January and 20 March 2013 was a significant amount, as
it was approximately 111% of the total offshore bonds issued in
all of 2012. The total debt issued so far in 2013 is also almost
double the $4.3 billion raised by developers in the final quarter
of 2012 and more than four times the $1.9 billion raised in the
first quarter of 2012.
Furthermore, the credit profiles of developers rated by Moody's
improved in February and March, as seen by the number of
developers with outlooks that were stable, positive or on review
for upgrade increasing to 82% as of 20 March, up from 75% as at
January 31.
In contrast, only 45% of the portfolio met these criteria last
May.
In addition, the number of companies with negative rating outlooks
fell to seven as of 20 March 2013, from eight as of January 31,
2013.
Moody's also took only a total of three rating actions between 1
January and 20 March 2013 -- two positive and one negative --
reflecting the stable outlook for the industry.
================
H O N G K O N G
================
ASIA RICH: Members' Final Meeting Set for April 2
-------------------------------------------------
Members of Asia Rich Holdings Limited will hold their final
general meeting on April 2, 2013, at 11:00 a.m., at Room 1205,
12/F, Manulife Provident Funds Place, No. 345 Nathan Road, in
Kowloon.
At the meeting, Ng Ching Na, the company's liquidator, will give a
report on the company's wind-up proceedings and property disposal.
ASK PACIFIC: Members' Final Meeting Set for April 2
---------------------------------------------------
Members of A.S.K Pacific Limited will hold their final general
meeting on April 2, 2013, at 3:00 p.m., at 10/F, Allied Kajima
Building, 138 Gloucester Road, Wanchai, in Hong Kong.
At the meeting, Lam Ying Sui, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
EASTERN PREFERENCE: Members' Final Meeting Set for April 2
----------------------------------------------------------
Members of Eastern Preference Investments Limited will hold their
final meeting on April 2, 2013, at 9:30 a.m., at 17/F, Kam Sang
Building, 255 Des Voeux Road Central, Sheung Wan, in Hong Kong.
At the meeting, Lui Wan Ho and To Chi Man, the company's
liquidators, will give a report on the company's wind-up
proceedings and property disposal.
FY GLASS: Members' Final Meeting Set for April 2
------------------------------------------------
Members of F.Y Glass South Pacific Limited will hold their final
general meeting on April 2, 2013, at 10:00 a.m., at 10/F, Allied
Kajima Building, 138 Gloucester Road, Wanchai, in Hong Kong.
At the meeting, Lam Ying Sui, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
GOOD MARK: Members' Final Meeting Set for April 2
-------------------------------------------------
Members of Good Mark Investments Limited will hold their final
meeting on April 2, 2013, at 10:00 a.m., at 17/F, Kam Sang
Building, 255 Des Voeux Road Central, Sheung Wan, in Hong Kong.
At the meeting, Lui Wan Ho and To Chi Man, the company's
liquidators, will give a report on the company's wind-up
proceedings and property disposal.
GOODVIEW GLASS: Members' Final Meeting Set for April 2
------------------------------------------------------
Members of Goodview Glass Limited will hold their final general
meeting on April 2, 2013, at 11:00 a.m., at 10/F, Allied Kajima
Building, 138 Gloucester Road, Wanchai, in Hong Kong.
At the meeting, Lam Ying Sui, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
GRASSION LIMITED: Members' Final Meeting Set for April 2
--------------------------------------------------------
Members of Grassion Limited will hold their final meeting on
April 2, 2013, at 10:00 a.m., at 8th Floor, Gloucester Tower, The
Landmark, 15 Queen's Road Central, in Hong Kong.
At the meeting, Iain Ferguson Bruce, the company's liquidator,
will give a report on the company's wind-up proceedings and
property disposal.
HK COLD: Members' Final Meeting Set for April 2
-----------------------------------------------
Members of Hong Kong Cold Storage Merchants Association Limited
will hold their final general meeting on April 2, 2013, at
4:00 p.m., at 10/F, Allied Kajima Building, 138 Gloucester Road,
Wanchai, in Hong Kong.
At the meeting, Lam Ying Sui, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
KELLIX LIMITED: Members' Final General Meeting Set for April 8
--------------------------------------------------------------
Members of Kellix Limited will hold their final general meeting on
April 8, 2013, at 10:00 a.m., at Room 402, 4/F, Kai Tak Commercial
Building, 317-319 Des Voeux Road Central, in
Hong Kong.
At the meeting, Ho Mei Ngan and Low Fung Ping, the company's
liquidators, will give a report on the company's wind-up
proceedings and property disposal.
NEW TERRITORIES: Members' Final Meeting Set for April 2
-------------------------------------------------------
Members of New Territories West District Residents Association
Limited will hold their final meeting on April 2, 2013, at
2:30 p.m., at Flat A, Room 9, 5/F, Delya Industrial Centre, 7 Shek
Pai Tau Road, Tuen Mun, in New Territories.
At the meeting, Lui King Wai, the company's liquidator, will give
a report on the company's wind-up proceedings and property
disposal.
RATONAL INDUSTRIAL: Court to Hear Wind-Up Petition on April 3
-------------------------------------------------------------
A petition to wind up the operations of Ratonal Industrial Limited
will be heard before the High Court of Hong Kong on
April 3, 2013, at 9:30 a.m.
Standard Chartered Bank (Hong Kong) Limited filed the petition
against the company on Feb. 21, 2013.
The Petitioner's solicitors are:
Tsang, Chan & Wong
16th Floor, Wing On House
No. 71 Des Voeux Road
Central, Hong Kong
RUI HONG: Members' Final Meeting Set for April 2
------------------------------------------------
Members of Rui Hong International Industries Limited will hold
their final meeting on April 2, 2013, at 10:30 a.m., at 17/F, Kam
Sang Building, 255 Des Voeux Road Central, Sheung Wan, in
Hong Kong.
At the meeting, Lui Wan Ho and To Chi Man, the company's
liquidators, will give a report on the company's wind-up
proceedings and property disposal.
SOFT-TREK MEDIA: Creditors To Get 0.4725% Recovery on Claims
------------------------------------------------------------
Soft-Trek Media Limited, which is in liquidation, will declare the
final ordinary dividend to its creditors on April 2, 2013.
The company will pay 0.4725% for ordinary claims.
The company's liquidator is:
Osman Mohammed Arab
29/F, Caroline Centre
Lee Gardens Two
28 Yun Ping Road
Hong Kong
SS&T SHIPPING: Court to Hear Wind-Up Petition on April 3
--------------------------------------------------------
A petition to wind up the operations of SS&T Shipping Company
Limited will be heard before the High Court of Hong Kong on
April 3, 2013, at 9:30 a.m.
Farenco Shipping Pte Limited filed the petition against the
company on Jan. 24, 2013.
The Petitioner's solicitors are:
Laracy & Co
2102, Tower Two
Lippo Centre
89 Queensway, Admiralty
Hong Kong
VOYAGE MEDIA: Court to Hear Wind-Up Petition on April 24
--------------------------------------------------------
A petition to wind up the operations of Voyage Media Group Company
Limited will be heard before the High Court of Hong Kong on April
24, 2013, at 9:30 a.m.
Nanhu International Travel Service (Hong Kong) Company Limited
filed the petition against the company on Feb. 21, 2013.
The Petitioner's solicitors are:
Tony Kan & Co
Suite 1808, World-Wide House
No. 19 Des Voeux Road
Central, Hong Kong
YING KIT: Court to Hear Wind-Up Petition on April 24
----------------------------------------------------
A petition to wind up the operations of Ying Kit Dispensary
Company Limited will be heard before the High Court of Hong Kong
on April 24, 2013, at 9:30 a.m.
Alain Roger Auguste Vandenbroucke filed the petition against the
company on Feb. 20, 2013.
=========
I N D I A
=========
BINUS TRADING: CRISIL Assigns 'B' Ratings on INR130MM Loans
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Binus Trading Co.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 129 CRISIL B/Stable
Proposed Long-Term 1 CRISIL B/Stable
Bank Loan Facility
The rating reflects BTC's modest scale of, and highly working-
capital-intensive, operations, and weak financial risk profile,
marked by high gearing and weak debt protection metrics. These
rating weaknesses are partially offset by the benefits that BTC
derives from the extensive experience of the promoter family in
the agro commodities trading industry.
Outlook: Stable
CRISIL believes that BTC will continue to benefit over the medium
term from its promoter family's extensive industry experience. The
outlook may be revised to 'Positive' in case of a significant
improvement in the firm's capital structure, most likely driven by
higher-than-expected cash accruals, or large equity infusion.
Conversely, the outlook may be revised to 'Negative' if BTC's
profitability and revenues decline, or its working capital
requirements are higher than expected.
Established in 2002, BTC is a partnership firm set-up by Mr.
Surinder Verma. The firm trades in rice and paddy. The other
partners in the business are Ms. Binus Verma and Ms. Sushma Rani.
BTC reported a book profit of INR1.5 million on net sales of
INR544.3 million for 2011-12 (refers to financial year, April 1 to
March 31), as against a book profit of INR0.6 million on net sales
of INR270.5 million for 2010-11.
HEALTHY LIFE: CRISIL Assigns 'B' Ratings to INR86.5MM Loans
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Healthy Life Pharma Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 30.0 CRISIL B/Stable (Assigned)
Proposed Long-Term 9.0 CRISIL B/Stable (Assigned)
Bank Loan Facility
Letter of Credit 3.5 CRISIL A4 (Assigned)
Bank Guarantee 50.0 CRISIL A4 (Assigned)
Cash Credit 47.5 CRISIL B/Stable (Assigned)
The rating reflects the company's modest scale of operations in a
highly competitive industry, weak financial risk profile marked by
modest networth and high gearing and working capital intensive
nature of operations. These rating weaknesses are partially offset
by the promoter's extensive experience in the pharmaceutical
industry.
Outlook: Stable
CRISIL believes that HLPL will continue to benefit over the medium
term from the extensive experience of the promoters. The outlook
may be revised to 'Positive if the company generates significantly
better-than-expected revenue and margins while improving its
capital structure. Conversely, the outlook may be revised to
'Negative' if the company's financial risk profile deteriorates
because of substantially lower than expected profitability or
revenues or higher than expected debt-funded capital expenditure
programme or due to stretch in its working capital cycle.
Healthy Life Pharma Private Limited, incorporated in 1998 by Mr.
Manu T. Shah, is engaged in manufacturing of pharmaceuticals
formulations. The company also undertake share trading activity.
Its manufacturing facilities are located at Tarapur (Maharashtra).
The company's registered office is in Mumbai (Maharashtra).
HLPL recorded a profit after tax (PAT) of INR1.4 million on net
sales of INR509.5 million for 2011-12 (refers to financial year,
April 1 to March 31), against a PAT of INR2.9 million on net sales
of INR480.7 million for 2010-11.
KKR FOOD: CRISIL Cuts Ratings on INR109.9MM Loans to 'D'
--------------------------------------------------------
CRISIL has downgraded its long-term rating on the bank facilities
of K.K.R. Food Products (KFP; part of the KKR group) to 'CRISIL D'
from 'CRISIL C'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 1.5 CRISIL D (Downgraded from
'CRISIL C')
Overdraft Facility 105.0 CRISIL D (Downgraded from
'CRISIL C')
Proposed Long-Term 3.4 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL C')
The rating downgrade reflects instances of delay in debt repayment
by KFP; the delays have been caused by the group's weak liquidity
resulting from large working capital requirements.
The KKR group also has a weak financial risk profile, marked by a
high gearing and weak debt protection metrics, and is exposed to
risks related to adverse changes in government regulations and to
volatility in raw material prices. The KKR group, however,
benefits from its established track record in the rice milling
industry.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of KFP, with those of its group entities,
KKR Agro Mills Pvt Ltd, SN Rice Mills, KKR Mills, KKR Flour Mills,
Karthika Modern Rice Mill, and KKR Products and Marketing Pvt Ltd.
This is because all these entities, together referred to as the
KKR group, are under a common management and have strong
operational and financial linkages.
Set up in 1976 by Mr. K K Karnan, the KKR group commenced
operations with a small rice trading business in Okkal near Kochi
(Kerala). Over the years, the group has entered into rice milling,
and manufacturing of food products. The KKR group sells its
products under the Nirapara brand name. Set up in 2003, KFP trades
in spices and pickles.
KUMAR AUTOWHEELS: CRISIL Assigns 'B+' Ratings to INR155MM Loans
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Kumar Autowheels Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 75 CRISIL B+/Stable
Term Loan 80 CRISIL B+/Stable
The rating reflects KAPL's exposure to project implementation
risks, and its below-average financial risk profile, marked by a
modest net worth, high gearing, and weak debt protection metrics.
These rating weaknesses are partially offset by the benefits that
KAPL derives from its promoters' experience in managing
businesses, their established relationships with prospective
customers, and their funding support.
Outlook: Stable
CRISIL believes that KAPL will benefit over the medium term from
its promoters' extensive experience along with their funding
support. However, the company will remain susceptible over this
period to risks related to time or cost overruns while setting up
its showrooms, and thereafter to stabilisation of its revenues and
profitability. The outlook may be revised to 'Positive' in case of
more-than-anticipated increase in KAPL's scale of operations and
profitability; and higher-than-expected funding support from its
promoters, resulting in improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative' in case of
significant time and cost overruns in completion of the company's
project, substantial working capital requirements, or lower-than-
expected funding support from promoters, leading to pressure on
its liquidity.
Incorporated in 2009, KAPL is setting up a dealership for Mahindra
& Mahindra Ltd's passenger cars and small commercial vehicles in
Rudrapur (Uttarakhand). The company received the M&M dealership in
August 2012 for Rudrapur, Kashipur, Sitarganj, Jaspur, and
Khatima, in the Uddham Singh Nagar district of Uttarakhand. It is
currently in the process of setting up the showrooms and
workshops, and is expected to start commercial operations in April
2013.
MAHADEVA CARS: CRISIL Rates INR50MM Cash Credit at 'B+'
-------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Mahadeva Cars Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B+/Stable
The rating reflects MCPL's below-average financial risk profile
and exposure to intense competition in the automobile dealership
industry. These rating weaknesses are partially offset by the
benefits that MCPL derives from the extensive experience of its
promoters in the automotive (auto) dealership business.
Outlook: Stable
CRISIL believes that MCPL will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if MCPL's financial profile
improves backed by significant equity infusion by promoters, or
substantial improvement in debt protection metrics. Conversely,
the outlook may be revised to 'Negative' in case of slowdown in
its revenues and profitability, or if the company undertakes any
large debt-funded capital expenditure (capex) programme, thereby
weakening its capital structure and cash accruals.
Established in 2012, MCPL is a Renault India Pvt Ltd (RIPL) dealer
for passenger cars in the state of Chattisgarh. It operates three
showrooms and authorised service stations in Raipur, Bhilai and
Bilaspur districts of Chattisgarh. The company, promoted by Mr.
Sunil Madhyani and his father, Mr. Pratap Madhyani, started
operations in July 2012.
RAYALA CORP: CRISIL Cuts Ratings on INR600MM Loans to 'B+'
----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank loan
facilities of Rayala Corporation Pvt Ltd to 'CRISIL B+/Stable'
from 'CRISIL BB-/Stable'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 380 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Proposed Long-Term 220 CRISIL B+/Stable(Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
The downgrade reflects deterioration in the financial risk profile
of RCPL on the back of the larger than expected debt-funded
capital expenditure (capex) incurred by the company over the two
years ended March 31, 2013, resulting in deterioration in gearing
and debt protection metrics. The downgrade also reflects CRISIL's
belief that the RCPL's liquidity will remain constrained till the
hotel project stabilises and generates adequate cash accruals.
However, CRISIL believes that RCPL's promoters will provide
financial support on a need basis.
The rating reflects risks related to RCPL's exposure to risks
related to commercialisation of its hotel project, and its
constrained financial risk profile on the back of significant
debt-funded capex programme. These weaknesses are partially offset
by the benefits RCPL derives from the prime locations of its
properties and its stable cash flows from its lessee base.
Outlook: Stable
CRISIL believes that RCPL's financial risk profile will remain
constrained by significant debt-funded capex. The outlook may be
revised to 'Positive' if RCPL generates the expected level of
revenues from the project upon timely stabilisation of the hotel,
while improving in capital structure and cash accruals.
Conversely, the outlook may be revised to 'Negative' if the
company faces significant time and cost overruns in the ongoing
project, if its existing lease agreements get cancelled
unexpectedly, or if the company undertakes larger-than-expected,
debt-funded capex programme.
Set up in 1948 and promoted by Mr. Rajagopal Naidu, Rayala
Corporation, part of the Rayala group, leases out commercial
spaces in Chennai. The company has now recently diversified into
the hotel and hospitality segment as well.
The Rayala group is a diversified group and is into multiple
businesses, including manufacturing automobile parts, developing
real estate, food processing, and manufacturing household
appliances. The group is currently led by Mr. Ranjit Pratap, the
grandson of Mr. Rajagopal Naidu.
SHIV SHAKTI: CRISIL Rates INR350MM Cash Credit at 'B'
-----------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of Shiv Shakti Exporters Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 350 CRISIL B/Stable
The rating reflects SSEPL's modest scale of operations, and high
working-capital-intensity of operations, and weak financial risk
profile marked by a high gearing and weak debt protection metrics.
These rating weaknesses are partially offset by the benefits that
SSEPL derives from the largely assured off take of its products
from Food Corporation of India , and the extensive industry
experience of the company's promoter.
Outlook: Stable
CRISIL believes that SSEPL will continue to benefit over the
medium term from its promoter's extensive experience in the rice
industry. The outlook may be revised to 'Positive' if SSEPL
registers significant increase in its revenues and profitability,
leading to improvement in its financial risk profile, or if
significant infusion of equity capital into the company leads to
improvement in its capital structure. Conversely, the outlook may
be revised to 'Negative' if SSEPL's revenues and profitability
decline substantially, thereby leading to deterioration in its
financial risk profile.
SSEPL was set up in 1987 by Mr. Surinder Verma. It mills and
processes paddy into rice (meant for public distribution) and its
by-products such as rice bran, broken rice, and husk.
SUN PAPER: CRISIL Upgrades Ratings on INR328MM Loans to 'B-'
------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank loan
facilities of Sun Paper Mill Ltd to 'CRISIL B-/Stable' from
'CRISIL D', and has assigned its 'CRISIL A4' rating to the
company's short-term bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 42.50 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Long-Term Loan 285.50 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 150.00 CRISIL A4 (Assigned)
The rating upgrade reflects improvement in SPML's liquidity
resulting from significant equity infusion of INR80 million into
the company during 2012-13 (refers to financial year, April 1 to
March 31). Furthermore, customer advances from its group entity,
The Daily Thanthi, to which it sells its entire newsprint
production, has increased substantially to INR120 million as of
December 31, 2012, as against about INR61 million, as of March 31,
2012. Consequent to the liquidity improvement, SPML has been
currently servicing its term loans in a timely manner. Moreover,
SPML's capital expenditure (capex) programme for setting up of a
de-inking plant has been completed, and its cash accruals are
expected to improve over the medium term driven by improvement in
operating profitability. Though the company's cash accruals are
expected to be insufficient to meet its maturing term loan
repayment obligations over the medium term, CRISIL expects SPML to
continue to benefit from its promoters' funding support.
The ratings reflect SPML's below-average financial risk profile,
marked by weak debt protection metrics, its small scale of
operations, and susceptibility of its operating margin to
volatility in raw material prices. These rating weaknesses are
partially offset by funding support from its promoters, and strong
operational support from its group entity, The Daily Thanthi.
Outlook: Stable
CRISIL believes that SMPL will continue to benefit over the medium
term from the funding support from its promoters. The outlook may
be revised to 'Positive' in case of significant improvement in the
company's liquidity, resulting from substantially better-than-
expected cash accruals, along with efficient working capital
management and significant funding support from promoters.
Conversely, the outlook may be revised to 'Negative' if SPML's
liquidity weakens, most likely because of lower-than-anticipated
cash accruals or larger-than-expected working capital requirements
or debt-funded capex.
Incorporated in 1961, SPML has a newsprint manufacturing unit in
Cheranmahadevi (Tamil Nadu). The company was promoted by Dr.
Sivanthi Adityan as a backward-integration initiative to supply
newsprint-grade paper to the group's flagship company, The Daily
Thanthi. SPML supplies all its manufactured newsprint to The Daily
Thanthi, meeting about 25 per cent of the latter's newsprint
requirement.
For 2011-12, SPML reported a net loss of INR61 million on an
operating income of INR767 million, against a net loss of INR52.8
million on an operating income of INR782 million for 2010-11.
SURYAAMBA SPINNING: CRISIL Ups Rating on INR288.2MM Loans to 'B-'
-----------------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of
Suryaamba Spinning Mills Ltd to 'CRISIL B-/Stable/CRISIL A4' from
'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 130.0 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Cash Credit 20.0 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Long-Term Loan 138.2 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Bank Guarantee 2.5 CRISIL A4 (Upgraded from
'CRISIL D')
Letter of Credit 10.0 CRISIL A4 (Upgraded from
'CRISIL D')
The upgrade in ratings reflects timely repayment of debt
obligations by the company on the back of reschedulement of
repayment structure and an improvement in liquidity due to
enhancement in fund-based bank lines by INR30 million and infusion
of fresh funds by promoters. An increase in the company's cash
accruals will ensure that the liquidity is sustained over the
medium term.
The ratings on the bank facilities of Suryaamba reflect a weak
financial risk profile marked by small net worth, high gearing and
weak debt protection indicators and the company's limited ability
to pass on the increase in raw material prices. These rating
weaknesses are partially offset by the benefits that the company
derives from the experience of its promoters in the yarn
manufacturing business.
Outlook: Stable
CRISIL believes that Suryaamba's overall credit risk profile will
remain constrained by its weak liquidity emanating from its
working capital intensity of operations. The outlook may be
revised to 'Positive' if the company's accruals improve
significantly or if the promoters infuse sizeable long-term funds
to substantially alleviate the pressure on its liquidity.
Conversely, the outlook may be revised to 'Negative' if
Suryaamba's working capital cycle stretches further or if the
company undertakes any large debt-funded capital expenditure
programme, further weakening its financial risk profile.
Suryaamba was formed by the demerger of Suryalata Spinning Mills
Ltd's (Suryalata's) unit in Nayakund (Maharashtra) from Suryalata
in June 2007. Suryaamba manufactures polyester yarn and
polyester/viscose blended yarn in the 20s to 45s count range. The
company's manufacturing unit at Nayakund has 31,104 spindles.
Suryaamba reported a net loss of INR60.5 million on net sales of
INR996.8 million for 2011-12 (refers to financial year, April 1 to
March 31), against a profit after tax (PAT) of INR45.9 million on
net sales of INR1200.6 million for 2010-11.
TECHOPS INFRA: CRISIL Assigns 'B-' Ratings to INR55MM Loans
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-term
bank facilities of Techops Infrastructure Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long-Term 5 CRISIL B-/Stable
Bank Loan Facility
Term Loan 50 CRISIL B-/Stable
The rating reflects TIPL's exposure to risks associated with the
company's ongoing residential project and exposure to inherent
cyclicality in the Indian real estate industry. The rating also
factors in TIPL's weak financial risk profile marked by low
networth, high gearing and subdued debt protection metrics. These
rating weaknesses are partially offset by the extensive experience
of TIPL's promoters in the real estate business.
Outlook: Stable
CRISIL believes that TIPL will continue to benefit over the medium
term from the extensive experience of its promoters in the real
estate business. The outlook may be revised to 'Positive' if the
company generates higher-than-expected cash flows from operations
resulting from accelerated execution of its project and improved
inflow of advances. Conversely, the outlook may be revised to
'Negative' if TIPL reports significantly lower-than-expected cash
flow from operations, either because of subdued response to its
project or lower-than-envisaged flow of advances, impacting its
debt servicing ability.
Techops Infrastructure Private Limited (TIPL) was incorporated in
2007 by Mr.Rajendra Nakade, Mr. Vilas Harde, Mr. Jeevan Ghime, Mr.
Narendra Dakhale and Mr. Anil Kale. The company is engaged in real
estate development in Nagpur, Maharashtra. The company is
currently executing a residential project 'Techops Gardens' which
comprises of 140 bungalows and three buildings comprising of 350
flats.
TIPL reported a profit after tax (PAT) of INR1.1 million on net
sales of INR 32.5 million for 2011-12 (refers to financial year,
April 1 to March 31), as against a PAT of INR1.2 million on net
sales of INR73.3 million for 2010-11.
=================
I N D O N E S I A
=================
MNC SKYVISION: Moody's Says Refinancing Plan is Credit Positive
---------------------------------------------------------------
Moody's Investors Service says MNC SkyVision's potential
refinancing of its USD165 million 12.75% notes due November 16,
2015 is credit positive.
Moody's Long Term Rating on MNC SkyVision is B2.
SkyVision recently lodged with the Indonesia Stock Exchange its
intention to hold an extraordinary general meeting to seek
approval from its shareholders regarding a refinancing plan.
The notes are callable in full, prior to November 16, 2013, after
which the redemption price will increase to the range of 103% to
106%.
"Refinancing prior to November 2013 could result in lower interest
costs and an extended debt maturity profile, thereby enhancing
cash flows and liquidity, which is both credit positive," said
Annalisa Di Chiara, a Moody's Vice President and Senior Analyst.
The company is considering both rupiah- and US dollar-bond
issuances, as well as bank loans.
While a detailed refinancing plan, driven by market conditions,
will only be determined after the extraordinary general meeting on
April 29, 2013, Moody's favorably views SkyVision's proactive plan
to refinance this sizeable debt maturity.
According to the company's cash flow trajectory, this looming
maturity will start weighing more heavily on its liquidity profile
by end-2014.
SkyVision's senior secured bonds have weighed heavily on cash
flows as interest expenses have comprised around 25%of EBITDA.
Furthermore, after taking into consideration the depreciation of
the rupiah versus the dollar in 2012, the company's interest
expense climbed 10% in 2012, year-over-year, which also
contributed to the 34 percent drop in its net profits to IDR43
billion in 2012 from IDR65 billion in the previous year.
Given the company's growth trajectory, with management targeting
subscriber growth of 35% in 2013, capex is expected to be in the
vicinity of IDR850 trillion.
Together with the company's debt servicing obligations, this capex
program will continue to limit free cash flow generation.
Given this negative free cash flow, the company is currently
relying on its IPO proceeds from July 2012 to help fund its
growth.
"As a result, a refinancing plan with a long-dated maturity
profile while providing some cash-flow benefits is positive for
the ratings," says Di Chiara who is also lead analyst for
SkyVision.
"We believe an upgrade is possible over the near-term if margins
trend towards 45% and an adequate cash cushion is retained to
support its negative free cash flow," adds Di Chiara.
The company's unaudited FY2012 performance and outlook for 2013
bodes well for achieving these targets.
=========
J A P A N
=========
SHARP CORP: To Consider Seeking Buyout Fund Investment
------------------------------------------------------
Mariko Yasu & Emi Urabe at Bloomberg News report that Sharp Corp.
is considering seeking investments from private equity funds to
replenish dwindling cash, two people familiar with the matter
said.
The company is also considering selling shares to the public, the
people said, asking not to be identified as the discussions are
private, Bloomberg News relates. Details of the funding will
possibly be included in Sharp's mid-term plan, which may be
released in early May, the people, as cited by Bloomberg News,
said.
According to Bloomberg, Sharp's cash pile tumbled to
JPY164 billion ($1.7 billion) as of Dec. 31, the lowest level
based on records stretching back to 1992, amid slumping earnings.
The Osaka-based company, bracing for JPY200 billion of convertible
bonds maturing this year, has agreed to sell stakes to Qualcomm
Inc. and Samsung Electronics Co. A deadline for an investment
from Foxconn Technology Group expired March 27, 2013, without a
deal, Bloomberg News says.
"Sharp is looking at various measures to raise funds," spokeswoman
Miyuki Nakayama told Bloomberg News, declining to elaborate.
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).
=============================
P A P U A N E W G U I N E A
=============================
* Moody's Sets New Country Ceilings for Papua New Guinea
--------------------------------------------------------
Moody's Investors Service adjusted the local currency (LC) bond
and deposit ceilings for Papua New Guinea. The Government of Papua
New Guinea's B1 foreign currency (FC) and LC sovereign issuer
ratings are unaffected by these changes.
The change in ceilings mean that the highest rating that can be
assigned to a domestic issuer in Papua New Guinea, or to a
structured finance security backed by local currency receivables,
is now as follows:
1) The long-term LC bond ceiling was lowered to Ba1 from A1; and
2) The long-term LC deposit ceiling was lowered to Ba1 from A3.
Papua New Guinea's long-term FC bond and deposit ceilings remain
unchanged at Ba2 and B2, respectively.
Ratings Rationale:
Moody's decision to adjust the LC country ceilings for Papua New
Guinea is based on the rating agency's judgment of risks inherent
in the country's operating environment.
In particular, the lower LC ceilings reflect: 1) low economic
strength that balances robust economic performance in recent years
against poor diversification and low GDP per capita as compared to
similarly-rated peers; 2) very low institutional strength that
reflects relatively poor outcomes in third-party assessments of
the quality of governance and despite an improving track record in
fiscal and monetary management; and 3) a low susceptibility to
event risk that incorporates the country's relative immunity from
external financial shocks along with the inherent volatility of
its political culture.
Methodology
Moody's country ceilings capture externalities and event risks
that arise as a consequence of locating a business in a particular
country and that ultimately constrain domestic issuers' ability to
service their debt obligations. As such, the ceiling encapsulates
elements of the economic, financial, political, and legal risks in
a country, including political instability, the risk of government
intervention, the risk of systemic economic disruption, severe
financial instability risks, currency redenomination, and natural
disasters among other factors, that need to be incorporated into
the ratings of even the strongest domestic issuers. The ceiling
caps the credit rating of all issuers and transactions with
material exposure to those risks -- in other words, it affects all
domestic issuers and transactions other than those whose assets
and revenues are predominantly sourced from or located outside of
the country, or which benefit from an external credit support.
The methodologies used in this rating were Sovereign Bond Ratings
published in September 2008, and Local-Currency Country Risk
Ceiling for Bonds and Other Local Currency Obligations published
in March 2013.
=====================
P H I L I P P I N E S
=====================
* PHILIPPINES: Fitch Upgrades Issuer Default Rating From 'BB+'
--------------------------------------------------------------
Fitch Ratings upgraded the Philippines' Long-Term Foreign-Currency
Issuer Default Rating (IDR) to 'BBB-' from 'BB+'. The Long-Term
Local-Currency IDR has been upgraded to 'BBB' from 'BBB-'. The
Outlooks on both ratings are Stable. The agency has also upgraded
the Country Ceiling to 'BBB' from 'BBB-' and the Short-Term
Foreign-Currency IDR to 'F3' from 'B'.
Key Rating Drivers
The upgrade of Philippines' sovereign ratings reflects the
following factors:
- The Philippines' sovereign external balance sheet is considered
strong relative to 'A' range peers, let alone 'BB' and 'BBB'
category medians. A persistent current account surplus (CAS),
underpinned by remittance inflows, has led to the emergence of a
net external creditor position worth 12% of GDP by end-2012, up
from 6% at end-2010. Remittance inflows were worth 8% of GDP in
2012 and proved resilient even through the shock of the global
financial crisis. Fitch expects a rising import bill stemming from
strong domestic demand to lead to a narrower CAS and to stabilise
the net external creditor position at a strong level through to
2014.
- The Philippine economy has been resilient, expanding 6.6% in
2012 amid a weak global economic backdrop. Strong domestic demand
drove this outturn. Fitch expects GDP growth of 5.5% in 2013. The
Philippines has experienced stronger and less volatile growth than
its 'BBB' peers over the past five years.
- Improvements in fiscal management begun under President Arroyo
have made general government debt dynamics more resilient to
shocks. Strong economic growth and moderate budget deficits have
brought the general government (GG) debt/GDP ratio in line with
the 'BBB' median. The sovereign has taken advantage of generally
favorable funding conditions to lengthen the average maturity of
GG debt to 10.7 years by end-2012 from 6.6 years at end-2008. The
foreign currency share of GG debt has fallen to 47% from 53% over
the same period.
- Favorable macroeconomic outturns have been supported in Fitch's
view by a strong policy-making framework. Bangko Sentral ng
Pilipinas' (BSP) inflation management track record and proactive
use of macro-prudential measures to limit the potential emergence
of macroeconomic and financial imbalances is supportive of the
credit profile. Inflation has been in line with 'BBB' peers on
average over the past five years.
- Governance standards, as measured in international indices such
as the World Bank's framework, remain weaker than 'BBB' range
norms but are not inconsistent with a 'BBB-' rating as a number of
sovereigns in this rating category fare worse than the
Philippines. Governance reform has been a centrepiece of the
Aquino administration's policy efforts. Entrenching these reforms
by 2016 is a policy priority of the government.
- The Philippines' average income is low (USD2,600 versus 'BBB'
range median of USD10,300 in 2012), although this measure does not
account directly for the significant support to living standards
from remittance inflows. The country's level of human development
(as measured in the United Nations Development Programme's index)
is less of an outlier against 'BBB' range peers.
- The Philippines had a low fiscal revenue take of 18.3% of GDP in
2012, compared with a 'BBB' range median of 32.3%. This limits the
fiscal scope to achieve the government's ambition of raising
public investment. The recent introduction of a "sin tax", against
stiff political opposition, will likely lead to some increment in
revenues and underlines the administration's commitment to
strengthening the revenue base.
Rating Sensitivities
The main factors that could lead to a positive rating action,
individually or collectively, are:
- Sustained strong GDP growth that narrows income and development
differentials with 'BBB' range peers. An uplift in the investment
rate that enhances growth prospects without the emergence of
macroeconomic imbalances.
- Broadening of the fiscal revenue base, as well as further
improvements in the structure of the Philippine sovereign debt
stock.
The main factors that could lead to a negative rating action,
individually or collectively, are:
- A reversal of reform measures and deterioration in governance
standards.
- Sustained fiscal slippage, leading to a higher fiscal debt
burden.
- Deterioration in monetary policy management that allows the
economy to overheat.
- Instability in the banking sector, leading to a crystallisation
of contingent liabilities on the sovereign balance sheet.
Key Assumptions
The ratings and Outlooks are sensitive to a number of assumptions.
The agency assumes the Aquino administration will persist with its
fiscal, governance and social reform agenda.
Fitch estimates trend GDP growth for the Philippines in a range of
5%-5.5%.
The ratings incorporate an assumption that the Philippines is not
hit by a severe economic or financial shock sufficient to cause a
significant contraction in GDP and trigger stress in the financial
system. Fitch assumes that there is no materialisation of severe
risks to global financial stability that could impact emerging
market economies, such as a breakup of the euro zone or a severe
economic crisis in China.
=================
S I N G A P O R E
=================
SINGAPORE ORCHIDS: Court to Hear Wind-Up Petition April 5
---------------------------------------------------------
The High Court of Singapore will hear a voluntary petition to
wind up the operations of Singapore Orchids Private Limited on
April 5, 2013, at 10:00 a.m.
The Petitioner's solicitors are:
TSMP Law Corporation
6 Battery Road, Level 41
Singapore 049909
===============
X X X X X X X X
===============
* Moody's Issues Stable Outlook for Asian Power Utilities
---------------------------------------------------------
Moody's Investors Service says that the outlook for power
utilities in Asia (ex-Japan) will remain stable, except for India,
for the next 12-18 months, primarily driven by government and
regulatory policy continuity as well as easing fuel prices.
The outlook for India's power sector is negative.
"The policy pillars of governments and regulators across the
region will ensure that the major power utilities will maintain
their dominant or monopolistic positions, while independent power
producers will benefit from reliable purchase contracts," says Mic
Kang, a Moody's Vice President and Senior Analyst.
"Also, stable to declining trends for fuel prices are taking
pressure off weak tariff systems -- wherein the ability to pass
through higher costs to consumers is generally limited --
particularly for the major utilities in China, Indonesia, Korea,
Malaysia and Thailand," adds Kang.
Kang was speaking on the release of a special report entitled,
"Asian Power Utilities (ex-Japan): Broad Stable Outlook; India an
Outlier", which was authored by Kang, Ivan Chung, a Vice
President, and Ray Tay, an Assistant Vice President.
The report discusses the sector both regionally and for the power
utilities sectors in each of the nine countries covered by Moody's
separately. It highlights Moody's view that fundamental business
conditions will remain stable over the next 12 to 18 months,
expect for India.
"Moody's sees the Indian power sector as an outlier because of
continued inefficiencies across the value chain, spanning
feedstock supply and power generation to transmission,
distribution and retail," says Ray Tay.
Fuel shortages remain a challenge for the Indian sector,
particularly for private-sector utilities. In addition, the weak
financial health of state electricity boards, in their roles as
off-takers, means repercussions across the value chain when they
run into difficulties making payments.
Meanwhile, the financial metrics of individual issuers will
generally remain similar to their 2012 levels and consistent with
their current ratings over the outlook period.
Increased operational cash flows from newly commissioned power
plants, easier fuel prices, and ad-hoc tariff increases or
subsidies for state-owned power utilities will help offset the
rise in capital expenditure expected over the outlook period.
"However, lower financial cushions in some cases mean that some
utilities will have less room to maneuver if broad sector
conditions deteriorate," says Ivan Chung.
On a relative and issuer-specific basis, China Guangdong Nuclear
Power Holdings (A3 stable), Korea Electric Power Corp. (A1 stable)
and Tata Power Company's (B1 stable) demonstrate lower financial
headroom for absorbing the adverse effects of higher-than-expected
capital expenditure and execution risk, or any rise in fuel
prices.
The nine individual power utilities sectors covered by the report
are China, Hong Kong, India, Indonesia, Korea, Malaysia, the
Philippines, Singapore and Thailand.
*********
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, Julie Anne L. Toledo, 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
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Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
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thereof are US$25 each. For subscription information, contact
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*** End of Transmission ***