/raid1/www/Hosts/bankrupt/TCRAP_Public/130417.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, April 17, 2013, Vol. 16, No. 75
Headlines
A U S T R A L I A
LEHMAN BROTHERS: Aussie Unit Seeks Court Nod for Settlement Vote
LIBERTY 2013-2: S&P Assigns BB Rating to Class E Notes
REBAR PREFAB: Hall Chadwick Appointed as Administrators
* Liquidators See Rising Finance Fraud Across Australia and NZ
C H I N A
AGFEED INDUSTRIES: Delays U.S. Filing of 2012 Report
CHINA SOUTH: Contract Sales and Notes Issue are Credit Positive
FUTURE LAND: Fitch Assigns 'B+' Rating to CNY Senior Unsec. Notes
KAISA GROUP: Moody's Says New Notes Issuance No Impact on B1 CFR
KAISA GROUP: S&P Rates Chinese Renminbi-Denominated Notes 'B+'
LAI FUNG: Fitch Assigns 'BB-' Long-Term Issuer Default Rating
LAI FUNG: Proposed Senior Notes Issuance Gets Moody's B1 Rating
LAI FUNG: S&P Rates Chinese-Renminbi-Denominated Notes 'B+'
LDK SOLAR: Still Seeking OK for LDK Anhui Purchase Agreement
I N D I A
AMBAL MODERN: CRISIL Rates INR85MM Cash Credit at 'B+'
DENZONG ALBREW: CRISIL Assigns 'D' Ratings to INR180MM Loans
MAHENDRAKUMAR BABULAL: CRISIL Cuts Rating on INR100MM Loan to 'D'
PURVA ALLOYS: CRISIL Assigns 'D' Ratings to INR120MM Loans
SESHAASAI E-FORMS: CRISIL Ups Rating on INR80MM Loans to 'B'
SHRI KRISHNA: CRISIL Rates INR51MM Term Loan at 'B'
SSD OIL: CRISIL Lowers Ratings on INR432MM Loans to 'D'
TEXCEL INT'L: CRISIL Cuts Ratings on INR132MM Loans to 'D'
TULSI DAL: CRISIL Upgrades Rating on INR75MM Loan to 'B-'
VTC ENGINEERING: CRISIL Cuts Ratings on INR95MM Loans to 'B'
J A P A N
ASAHI MUTUAL: Fitch Affirms 'BB' IFS Rating; Outlook Stable
DTC ONE: S&P Affirms BB Rating on Class E Notes
N E W Z E A L A N D
MAINZEAL PROPERTY: Minter Ellison's Role Under Fire
S O U T H K O R E A
MAGNACHIP SEMICONDUCTOR: S&P Raises CCR to 'BB-'; Outlook Stable
* SOUTH KOREA: Insurers' Loan Delinquency Ratio Rises in February
X X X X X X X X
* Upcoming Meetings, Conferences and Seminars
- - - - -
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A U S T R A L I A
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LEHMAN BROTHERS: Aussie Unit Seeks Court Nod for Settlement Vote
----------------------------------------------------------------
Bloomberg News reports that Lehman Brothers Holding Inc.'s
Australian unit sought federal court approval for a creditors'
vote on a proposed claims settlement that will see them getting
less than half of what they are owed, a litigation funder said.
Bloomberg News relates that IMF (Australia) Ltd. said in a
statement creditors will be paid between 39.9 Australian cents and
49.2 cents for each dollar of debt in the local currency.
U.S. insurers agreed to pay $45 million to fund the settlement,
and IMF will drop a class action lawsuit against the firm as part
of the agreement, outlined in an April 12 filing, according to the
statement obtained by Bloomberg News.
Lehman Brothers Australia appointed a voluntary administrator
under the country's bankruptcy laws on Sept. 26, 2008, after
Lehman Brothers Holdings, then the fourth-largest investment bank
in the world, filed for bankruptcy, Bloomberg News discloses. The
securities firm had $613 billion in debt, making it the biggest
bankruptcy in U.S. history.
Bloomberg News notes that the Australian unit has assets of
between AUD297 million ($312 million) and AUD303 million and
creditors are owed between AUD596 million and AUD654 million,
according to the IMF statement. IMF's clients are owed
AUD143.5 million, it said.
PPB Advisory, liquidators of the Lehman unit, plan to ask for
approval of the meeting of creditors to vote on the proposed
settlement at a May 7 hearing, IMF, as cited by Bloomberg News,
said.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was
the fourth largest investment bank in the United States. For
more than 150 years, Lehman Brothers has been a leader in the
global financial markets by serving the financial needs of
corporations, governmental units, institutional clients and
individuals worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the
largest in U.S. history. Several other affiliates followed
thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset
LLC sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at
Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's
investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant
to the provisions of the Securities Investor Protection Act (Case
No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as
trustee for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
Lehman made its first payment of $22.5 billion to creditors in
April 2012 and a second payment of $10.2 billion on Oct. 1. A
third distribution is set for around March 30, 2013. The
brokerage is yet to make a first distribution to non-customers.
Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers
Bankruptcy News. The newsletter tracks the Chapter 11 proceeding
undertaken by Lehman Brothers Holdings, Inc., and other
insolvency and bankruptcy proceedings undertaken by its
affiliates.
LIBERTY 2013-2: S&P Assigns BB Rating to Class E Notes
------------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to eight
of the nine classes of residential mortgage-backed securities
(RMBS) issued by Liberty Funding Pty. Ltd. in respect of Liberty
Series 2013-2 Trust. Liberty Series 2013-2 Trust is a
securitization of nonconforming and prime residential mortgages
originated by Liberty Financial Ltd.
The ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed
portfolio, which means no further loans will be assigned to
the trust after the closing date.
-- S&P's view that the credit support is sufficient to
withstand the stresses it applies. This credit support
comprises mortgage insurance for 19.4% of the portfolio,
which covers 100% of the face value of those loans, their
accrued interest, and reasonable costs of enforcement, and
note subordination for the class A1, class A2, class A3,
class B, class C, class D, class E, and class F notes.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including an amortizing
liquidity facility equal to 4.0% of the invested amount of
class A1, class A2, class A3, class B, class C, class D,
class E, and class F notes and the stated amount of class G
notes, subject to a floor of A$600,000, and principal
draws, are sufficient under S&P's stress assumptions to
ensure timely payment of interest.
-- The provision of a reserve account established and
maintained through the trapping of excess spread on each
payment date. The reserve account may be utilized to meet
current loan losses or as liquidity support.
-- The benefit of a fixed-to-floating interest-rate swap to be
provided by Commonwealth Bank of Australia, to hedge the
mismatch between receipts from any fixed-rate mortgage
loans and the variable-rate RMBS.
A copy of Standard & Poor's complete report for Liberty Series
2013-2 can be found on Global Credit Portal, Standard & Poor's
Web-based credit analysis system, at:
http://www.globalcreditportal.com
The issuer has not informed Standard & Poor's (Australia) Pty
Limited whether the issuer is publically disclosing all relevant
information about the structured finance instruments the subject
of this press release or whether relevant information remains non-
public.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities.
The Standard & Poor's 17g-7 Disclosure Report included in this
credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com/1461.pdf
REGULATORY DISCLOSURES
Please refer to the initial rating report for any additional
regulatory disclosures that may apply to a transaction.
RATINGS ASSIGNED
Class Rating Amount (mil. A$)
A1 AAA (sf) 100.0
A2 AAA (sf) 175.0
A3 AAA (sf) 150.0
B AA (sf) 34.0
C A (sf) 18.0
D BBB (sf) 9.5
E BB (sf) 6.0
F B (sf) 3.0
G N.R. 4.5
N.R.--Not rated.
REBAR PREFAB: Hall Chadwick Appointed as Administrators
-------------------------------------------------------
SmartCompany reports that Melbourne-based steel company Rebar
Prefab was placed in administration on April 8.
Richard Albarran -- ralbarran@hallchadwick.com.au-- David Ross
-- dross@hallchadwick.com.au -- and Shannon Thomson --
sthomson@hallchadwick.com.au -- of Hall Chadwick were appointed to
the company on that date. On April 9, the company was placed in
receivership.
Mr. Thomson told SmartCompany the business has continued to trade
in a limited capacity.
Although Mr. Thomson could not comment on the specific reasons
Rebar Prefab was placed in administration and receivership, he
noted in general the steel manufacturing industry has been under
pressure, SmartCompany relays.
The business is now up for sale. According to the report, the
company turns over between AUD40 and AUD50 million every year,
with the administrators saying the company has a "blue chip
customer base", along with specialist plant and equipment.
Rebar Prefab manufactures steel-based concrete reinforcing
materials.
* Liquidators See Rising Finance Fraud Across Australia and NZ
--------------------------------------------------------------
The Sydney Morning Herald reports that discovery of fraud in the
financial statements produced by staff within companies is
increasing, according to liquidators examining recent corporate
collapses.
SMH relates that PPB Advisory partner Peter Morris --
pmorris@ppbadvisory.com -- said he was seeing more financial
statement fraud including staff fudging financial reports,
excluding information, faking revenue or asset value, or
understating expenses.
According to the report, Mr. Morris expects to be able to reveal
in coming months that financial statement fraud has been found in
several recent collapses.
"Through the restructuring process we are finding that there are
issues of financial statement fraud that is going on and have been
going on for a number of years. [The fraud has] a mask of
profitability that tricks people into thinking the organisation is
performing better than it really is," the report quotes
Mr. Morris as saying. "It is usually people working in finance
who are responsible for the fraud. From a chief financial officer
to a staff member who was given instructions such as 'we are
expecting to meet these performance hurdles'."
KPMG Forensic's recent survey of fraud, bribery and corruption in
Australia and New Zealand found an increase in collusive behavior,
which also made it harder to detect fraud because several people
were covering it up, SMH reports.
SMH relates that KPMG partner David Luijerink --
dluijerink@kpmg.com.au -- said staff in the financial department
"know how the accounts work and know where the weaknesses are
[and] know how to exploit it."
Financial statement fraud was often committed by someone in a
position of trust who produced work that was too complex to be
double-checked by anyone else, Mr. Luijerink, as cited SMH, said.
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C H I N A
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AGFEED INDUSTRIES: Delays U.S. Filing of 2012 Report
----------------------------------------------------
AgFeed Industries, Inc., was unable to file its annual report for
the year ended Dec. 31, 2012, within the prescribed time period
required by the U.S. Securities and Exchange Commission without
unreasonable effort or expense. As previously disclosed, on
Jan. 31, 2012, the Company announced that its special committee of
the board of directors had completed its investigation into
certain accounting issues in the Company's animal nutrition and
legacy farm hog operations in China. Also, as previously
disclosed, the Company is in the process of restating its
unaudited financial statements for the quarters ended March 31 and
June 30, 2011, its audited financial statements for the years
ended Dec. 31, 2010, 2009, 2008 and 2007 and its unaudited
financial statements for all quarters within those years. The
Company intends to file the 2012 Form 10-K as soon as practicable,
but at this time the Company is unable to predict when it will be
in a position to file the 2012 Form 10-K.
Because the Company has not completed the closing procedures
related to its financial statements as of and for the year ended
Dec. 31, 2012, the Company is unable to provide a reasonable
estimate of its results of operations for the year ended Dec. 31,
2012. Accordingly, the Company cannot predict whether significant
changes will be reflected in its results of operations for the
year ended Dec. 31, 2012, compared to the year ended Dec. 31,
2011. As previously disclosed, the Company's unaudited financial
statements for the quarters ended March 31 and June 30, 2011, as
well as the Company's audited financial statements for the years
ended Dec. 31, 2010, 2009, 2008 and 2007 and its unaudited
quarterly data for all quarters in those fiscal years, should no
longer be relied upon.
About Agfeed Industries
NASDAQ Global Market Listed AgFeed Industries is an international
agribusiness with operations in the U.S. and China. AgFeed has
two business lines: animal nutrition in premix, concentrates and
complete feeds and hog production. In the U.S., AgFeed's hog
production unit, M2P2, is a market leader in setting new standards
for production efficiency and productivity. AgFeed believes the
transfer of these processes, procedures and techniques will allow
its new Western-style Chinese hog production units to set new
standards for production in China. China is the world's largest
pork market consuming 50% of global production and over 62% of
total protein consumed in China is pork. Hog production in China
currently enjoys income tax free status.
CHINA SOUTH: Contract Sales and Notes Issue are Credit Positive
---------------------------------------------------------------
Moody's Investors Services says that China South City's
announcement of HKD8.2 billion in contract sales for FY2012/13,
and its issuance of HKD975 million in convertible notes to PAG are
credit positive.
"CSC's contract sales, which exceeded its target of HKD8 billion,
indicated the company's successful implementation of its sales
strategy for its trade and logistics centers. The sales also
exceeded last year's level by 15% thanks to the contribution from
new projects," said Jiming Zou, a Moody's Analyst.
CSC's projects in Xian, Nanchang and Zhengzhou have attracted end-
users and investors. Although some of these commercial projects
are still under construction, its proactive sales strategy --
coupled with an easing credit environment and the absence of
purchase restrictions for commercial properties -- supported
contract sales in the last fiscal year.
About half of CSC's HKD8.2 billion in contract sales were recorded
in FY2012/13's last quarter of January-March 2013, according to
the company. Its sales concentration is more pronounced than many
other rated property developers because of its reliance on a few
large-scale commercial projects in their early stages of
development.
The volatile nature of its contract sales also restricts the
timing of cash inflow.
Accordingly, Moody's expects external financing will be necessary
to meet large capital spending plans, as outlined in its
development schedule, and despite some flexibility in its
construction program.
"CSC's issuance of HKD975 million in convertible notes to PAG in
April improves cash liquidity and facilitates the development of
its projects. It also reflects CSC's ability to raise funds for
project development in the market," continues Zou.
The convertible notes issued by ASEAN City (BVI) Limited, a wholly
owned subsidiary of CSC, are unconditionally and irrevocably
guaranteed by CSC.
The notes will mature in April 2018 with a put option for notes
holders in April 2016.
Apart from its development purposes, CSC will be able to improve
its debt maturity profile and reduce interest costs through this
issuance.
Because of the issuance and its strong contract sales, Moody's
expects CSC's liquidity to remain adequate for the next 12 months.
This is important for CSC because of the volatile nature of its
cash sales, and its large capital needs for developing trade and
logistics centers with certain levels of execution risk.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.
Moody's maintains a B2, LT Corporate Family Rating (Foreign) and
B3 Senior Unsecured (Foreign) rating on China South.
China South City, listed on the Hong Kong Stock Exchange, is a
developer and operator of large-scale integrated logistics and
trade centers in China. The company operates one center in
Shenzhen and is developing new trade centers in Nanning, Nanchang,
Xian, Harbin, Zhengzhou and Hefei.
FUTURE LAND: Fitch Assigns 'B+' Rating to CNY Senior Unsec. Notes
-----------------------------------------------------------------
Fitch Ratings has assigned China-based Future Land Development
Holdings Limited's proposed CNY senior unsecured notes an expected
rating of 'B+(EXP)'. The proceeds will be used to refinance
existing trust loans, acquire land parcels, and for general
corporate use.
The notes are rated at the same level as Future Land's senior
unsecured rating as they represent direct, unconditional,
unsecured and unsubordinated obligations of the company. The final
rating of the proposed notes is contingent upon the receipt of
documents conforming to information already received.
Key Rating Drivers
Significant structural subordination: Access to cash flow is
significantly restricted given that around 80% of contracted sales
in 2012 were contributed by 54%-owned Jiangsu Future Land (JFL),
and that 62.5% of its total land bank at end-2012 was owned by
JFL. The presence of the significant minority interest in JFL also
structurally restricts Future Land's access to the cash flow of
JFL.
Limited geographical diversification: Around 87% of its 12.6
million square metre land bank was in in Yangtze River Delta (YRD)
at end-2012, exposing the company to uncertainties of local
policies and the local economy.
Fast sales turnover: Future Land's business profile is supported
by its rapid sales turnover; contracted sales/total debt was 1.7x
at end-2012. The company standardises its products and targets the
mass markets of first-time buyers and homeowners looking to
upgrade.
Strong market position: Its strong market position in YRD helps
the company build relationships with local governments, which
serve to facilitate its development activity in the region. This
should help maintain its moderate EBITDA margin of 20.5% over the
next two to three years.
Sound leverage: Net debt/adjusted inventory of the holding company
excluding JFL is likely to increase to 35% at end-2013, after the
proposed bond issue and subsequent inventory increase, from an
estimated 17% at end-2012. Fitch expects leverage to remain
healthy as the proposed bonds should speed up repayment of its
trust loans, which in turn will decrease its funding cost.
Rating Sensitivities
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
- A significant decrease in contracted sales of the company's
business, excluding JFL, in 2013 from the CNY3bn achieved in
2012
- A significant decrease in the contracted sales/ total debt
ratio to below 1.0x at the holding company level on a sustained
basis
- Proportionately consolidated net debt/ adjusted inventory
rising above 40% on a sustained basis
Positive: No positive rating action is expected over the next 12
months. However, positive rating action may be considered upon
- A substantial increase in the scale of the company's business,
excluding JFL, with annual contracted sales exceeding CNY10bn
- Unrestricted access to JFL's cash flows
KAISA GROUP: Moody's Says New Notes Issuance No Impact on B1 CFR
----------------------------------------------------------------
Moody's Investors Service says Kaisa Group Holdings Ltd.'s B1
corporate family and senior unsecured ratings will be unaffected
by its proposed issuance of RMB notes.
The company plans to use the net proceeds from the issuance for
the partial prepayment of its $ 13.5% bond due in 2015.
"The proposed issuance of RMB notes will slightly lengthen Kaisa's
debt maturity profile and likely set a new benchmark for its RMB
debt in terms of cost of issuance," says Franco Leung, a Moody's
Assistant Vice President and Analyst.
Kaisa has been proactive in managing its capital structure and
debt maturity profile. The proposed bonds follow the issuance of
$550 million in notes in March 2013 and $500 million in notes in
January 2013, both of which aimed to reduce the amount of debt
falling due in 2014 and 2015. The RMB notes will effectively move
Kaisa's bond obligations further to 2016.
Moreover, the RMB notes will modestly reduce the overall cost of
debt, as Kaisa will use the net proceeds to repay debt with higher
interest rates.
"At the same time, Kaisa's efforts to raise debt will not have a
substantial impact on its key credit metrics, because the company
continues to expand its operations," says Leung, also Moody's Lead
Analyst for Kaisa.
Moody's expects that Kaisa's adjusted debt/capitalization will be
around 50%-55% over the next 12-18 months, while its interest
coverage will remain below 3x. These levels will still be
appropriate for its B1 corporate family rating.
For the first three months of 2013, the company's contract sales
jumped 78% year-on-year to RMB4.8 billion, largely because the
average selling price rose to RMB9,450 per square meter from
around RMB6,100 a year ago.
"The momentum in Kaisa's sales growth will continue for the rest
of the year, on the back of the stabilizing residential market in
China. Its profit margin will also improve slightly, as more
housing units in first-tier cities become available for sale in
2013," Leung adds.
Kaisa's B1 corporate family rating continues to reflect its track
record in developing property projects in major Chinese cities,
such as Shenzhen. The rating also takes into account Kaisa's
ability to purchase land at a low cost for redevelopment projects
in Guangdong province, which is its home base. In addition, its
presence in cities beyond its home turf is increasing.
On the other hand, the rating is constrained by the company's
rapid expansion, which has increased its execution risk and debt
in the past few years.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.
Kaisa Group Holdings Ltd, a Shenzhen-based property developer, was
established in 1999 and listed on the Hong Kong Stock Exchange in
December 2009. As of end-2012, the company was 62.4% owned by the
founder and his family members. 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 as of end-2012.
KAISA GROUP: S&P Rates Chinese Renminbi-Denominated Notes 'B+'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
issue rating and 'cnBB' long-term Greater China regional scale
rating to a proposed issue of Chinese renminbi-denominated senior
unsecured notes by Kaisa Group Holdings Ltd. (B+/Stable/--;
cnBB/--). The China-based property developer intends to use the
net proceeds to partially refinance the senior notes it issued in
2010.
S&P do not notch down the issue rating from the issuer rating on
Kaisa because the company has improved its debt structure by
reducing structural subordination risk on its offshore debt. S&P
expects the company to maintain its priority debt at less than 15%
of total assets over the next 12 months. The ratio was below this
threshold for speculative-grade companies in 2011 and 2012.
The rating on Kaisa reflects the company's high leverage and lack
of consistent financial management. The company's large and low-
cost land bank and its established market position in Shenzhen and
Guangdong temper these weaknesses. S&P views Kaisa's business
risk profile as "weak" and its financial risk profile as
"aggressive."
The stable outlook reflects S&P's expectation that Kaisa can
maintain its good sales execution and sufficient liquidity, and
continue to control its debt-funded expansion over the next 12
months. S&P also expects Kaisa's cash flow adequacy to improve.
LAI FUNG: Fitch Assigns 'BB-' Long-Term Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has published Chinese investment property company
Lai Fung Holdings Limited's (Lai Fung) Foreign Currency Long-Term
Issuer Default Rating (IDR) of 'BB-' with Stable Outlook and a
foreign currency senior unsecured rating of 'BB-'.
Fitch has also assigned Lai Fung a Local Currency Long-Term IDR of
'BB-' with Stable Outlook and a local currency senior unsecured
rating of 'BB-'. In addition, the agency has assigned Lai Fung's
proposed senior unsecured CNY notes an expected 'BB-(EXP)' rating.
The final rating is contingent on the receipt of final documents
conforming to information already received.
Key Rating Drivers
Recurring earnings supports ratings: Lai Fung's stable rental
income generated from its prime location properties and a healthy
financial profile warrant a higher rating than 'B+' rated Chinese
homebuilders that generate double its EBITDA. Lai Fung's EBITDA
for investment properties/gross interest expenses of 1.5x and
total debt/adjusted property assets of 0.24x in financial years
ending July 31, 2012, indicated sufficient headroom to meet its
current debt obligations. Its ratings are however constrained by
its small scale relative to the expansion of investment properties
the company is undertaking.
Small scale, project concentration: Lai Fung's small scale means
that it has only one sizeable investment property, Shanghai Hong
Kong Plaza, which contributed 74% of its rental revenue of HKD474m
in 2012. This asset concentration had caused Lai Fung's rental
EBITDA interest coverage to weaken considerably below 1.0x between
2008 and 2010 when it undertook a major upgrading of Shanghai Hong
Kong Plaza. Outside of this period, Lai Fung's rental EBITDA
interest coverage was at least 1.5x between 2006 and 2012.
Debt funded expansion: Lai Fung's debt will increase to help fund
committed capex and to invest for future growth, thus weakening
its credit metrics until its new assets start contributing income
from 2015. Fitch expects that its current and future investments
in investment properties will be in excess of HKD2bn over the next
five years, resulting in accumulated negative free cash flow of
above HKD1.5bn. This means that Lai Fung's 2012 rental EBITDA of
HKD309m will grow slower than interest expenses increase before
2015.
Prime location properties: Lai Fung's investment properties in
Shanghai and Guangzhou will benefit from China's continued strong
economic growth. Its key asset, Shanghai Hong Kong Plaza, is
located in a prime location attracting high quality tenants.
Financially prudent track record: Lai Fung has maintained a low
loan-to-value ratio of below 30% and adequate liquidity even as
its property assets have grown 140% between 2006 and 2012. The
company's financial prudence was also demonstrated in 2009 and
2010 where property development sales outstripped development
expenditure, generating positive operating cash flow. Furthermore,
the company has access to diversified funding sources in both
onshore and offshore debts as well as equity funding.
Parent co-operation supports growth: Lai Fung can now allow its
largest shareholder Lai Sun Development Company Limited (LSD) to
participate in its Chinese projects where Lai Fung has control.
This follows the lifting of an anti-competition restriction on LSD
to participate in Chinese projects in 2012. Further, access to
group funding allows Lai Fung to compete for larger projects in
prime locations to enhance its portfolio.
Rating Sensitivities:
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
- EBITDA for investment properties/interest expenses falling
below 1.0x on a sustained basis
- total debt/property assets exceeding 0.4x on a sustained basis
- increase of development assets to above 25% (22% in 2012) of
total property assets
Positive: Positive rating action is not expected in the next 18-24
months due to Lai Fung's small operational scale and high capex
resulting in negative free cash flow. However, future developments
that may, individually or collectively, lead to positive rating
action include:
- EBITDA from investment properties rising above HKD600m and
EBITDA for investment properties/interest expenses exceeding
1.5x on a sustained basis
LAI FUNG: Proposed Senior Notes Issuance Gets Moody's B1 Rating
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Lai Fung Holding
Limited's proposed senior RMB notes. Lai Fung's B1 corporate
family and senior unsecured debt ratings are affirmed at the same
time.
The outlook on all the ratings is stable.
The proceeds from the notes will be used for general corporate
purposes.
Ratings Rationale:
"The proposed senior notes will provide funding for Lai Fung to
manage its existing projects and expansion" says Lina Choi, a
Moody's Vice President and Senior Analyst.
Lai Fung's current revenue portfolio comprises 70% property sales
and 30% rental income. It plans to expand its investment property
portfolio. The proposed RMB notes will provide the required medium
term capital for this new business initiative.
"While the additional debt will increase Lai Fung's financial
risk, we expect the company to maintain its record of prudent
financial management," adds Choi, who is also the lead analyst for
Lai Fung.
Although Lai Fung's debt leverage will increase, Moody's expects
the company to align its capital spending with available
liquidity; the latter of which is dependent on its ability to
achieve contract sales in the next two years.
Under a prudent financial management scenario, Moody's estimates
that the company's debt leverage as measured by debt/total
capitalization will increase to 30%-35% over the next 24 months,
from 20% in January 2013, and its interest coverage will
deteriorate to 2.0x -- 2.5x from 2.8x.
In addition, Moody's expects Lai Fung to maintain its strong cash
position, which would be an important buffer in times of market
stress. As of January 31, Lai Fung recorded a cash balance of over
HKD2.6 billion, an amount sufficient to cover its short-term debt
of HKD1.4 billion. In addition, Lai Fung was successful in
securing a syndicated loan for HKD3.55 billion in March 2013.
Lai Fung's B1 corporate family rating continues to reflect its
stable rental income, and CapitaLand Limited's (unrated) 20%
equity interest. CapitaLand's board representation is an important
governance factor in managing the business risks of a small scale
company like Lai Fung.
However, the B1 rating is constrained by Lai Fung's weak track
record in sales execution, small scale, and geographic
concentration in Shanghai and Guangzhou where regulatory measures
are strong.
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, but Moody's could consider
upgrading the company's ratings if it: (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.
Credit metrics that could trigger upgrade include EBITDA interest
coverage above 3x and net rental income/consolidated interest
above 1.0x-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 flows and balance sheet liquidity; or
(2) engages in aggressive land acquisitions or debt-funded
investments or acquisitions.
Credit metrics triggering a downgrade would include: (1) an
adjusted debt/capitalization ratio in excess of 50%; (2) an
EBITDA/interest ratio of less than 1.5x-2.0x; or (3) a net rental
income/consolidated interest ratio of less than 0.5x.
A reduction in CapitaLand's equity interest and/or commitment in
Lai Fung will also be negative for the ratings.
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) -- a Singapore government
investment fund -- also has a 20% interest in Lai Fung.
As of end-month, Lai Fung had a development land bank with an
attributable gross floor area of around 0.9 million square meters.
It also had a portfolio of investment properties with an
attributable gross floor area of approximately 218,000 square
meters.
LAI FUNG: S&P Rates Chinese-Renminbi-Denominated Notes 'B+'
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' long-term
issue rating and its 'cnBB' long-term Greater China regional scale
rating to a proposed issue of Chinese-renminbi-denominated senior
unsecured notes by Lai Fung Holdings Ltd. (B+/Stable/--; cnBB/--).
The ratings are subject to S&P's review of the final issuance
documentation. Lai Fung intends to use the proceeds from the
proposed issuance to refinance its existing debt and for general
corporate purposes.
The rating on Hong Kong-based property developer and investor Lai
Fung reflects the company's small scale, high geographic and
project concentration, and volatile cash flows from property
development. The company's stable and sizable recurring rental
income, which its well-located investment properties support,
tempers the above weaknesses. S&P views Lai Fung's business risk
profile as "weak" and its financial risk profile as "aggressive,"
as S&P's criteria define these terms.
The stable outlook reflects S&P's expectation that Lai Fung's
investment properties will continue to generate sizable cash flows
to cover most of the company's interest expenses. The outlook
also reflects S&P's view that Lai Fung's property sales will
improve over the next 12 months but remain volatile. The sales
improvement should stem from a stabilizing property market in
China and the company's higher volume of properties available for
sale. S&P also expect Lai Fung to maintain disciplined financial
management while pursing expansion.
LDK SOLAR: Still Seeking OK for LDK Anhui Purchase Agreement
------------------------------------------------------------
LDK Solar Co., Ltd., said it continues to work with the relevant
governmental agencies on the review and approval of the purchase
agreement for LDK Anhui. The purchase agreement was announced on
Jan. 2, 2013, with Shanghai Qianjiang Group. According to the
terms of the agreement, Qianjiang Group agreed to purchase all
shares of LDK Anhui, located in Hefei City, for approximately
RMB25 million and release the guarantee LDK Solar provided to LDK
Anhui and its subsidiaries within 12 months, as well as compensate
LDK Solar for any loss associated with such guarantee, prior to
its release. The planned closing date for this purchase agreement
was originally set for March 31, 2013, subject to relevant
governmental approvals.
"We have been working with relevant governmental agencies on this
purchase agreement with Shanghai Qianjiang Group for LDK Anhui,"
stated Xingxue Tong, President and CEO of LDK Solar. "We will
provide further updates when a final approval decision is made."
About LDK Solar
LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-
Tech Industrial Park, Xinyu City, Jiangxi Province, People's
Republic of China, is a vertically integrated manufacturer of
photovoltaic products, including high-quality and low-cost
polysilicon, solar wafers, cells, modules, systems, power
projects and solutions.
LDK Solar was incorporated in the Cayman Islands on May 1, 2006,
by LDK New Energy, a British Virgin Islands company wholly owned
by Xiaofeng Peng, LDK's founder, chairman and chief executive
officer, to acquire all of the equity interests in Jiangxi LDK
Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin
Industrial Limited.
KPMG in Hong Kong, China, said in a May 15, 2012, audit report,
there is substantial doubt on the ability of LDK Solar Co., Ltd.,
to continue as a going concern. According to KPMG, LDK Solar has
a net working capital deficit and is restricted to incur
additional debt as it has not met a financial covenant ratio
under a long-term debt agreement as of Dec. 31, 2011. These
conditions raise substantial doubt about the Group's ability to
continue as a going concern.
LDK Solar's balance sheet at Sept. 30, 2012, showed
US$5.76 billion in total assets, US$5.41 billion in total
liabilities, US$299.02 million in redeemable non-controlling
interests and US$45.91 million in total equity.
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AMBAL MODERN: CRISIL Rates INR85MM Cash Credit at 'B+'
------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Ambal Modern Rice Mill.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 85 CRISIL B+/Stable
The rating reflects AMRM's weak financial risk profile, marked by
high gearing and weak debt protection metrics, modest scale of
operations, and exposure to intense competition in the rice
milling industry. These rating weaknesses are partially offset by
the extensive experience of AMRM's promoter in the rice milling
business.
Outlook: Stable
CRISIL believes that AMRM will continue to benefit over the medium
term from its promoter's extensive industry experience. The
outlook may be revised to 'Positive' if the firm improves its
scale of operations and capital structure, leading to an
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' if AMRM undertakes aggressive debt-
funded expansions, or if its revenues and profitability decline
substantially, or if the promoter withdraws capital from the firm,
leading to weakening in its financial risk profile.
Set up in 1999 as a proprietorship firm, AMRM mills and processes
paddy into rice, rice bran, broken rice, and husk. The firm is
promoted by Mrs. M Wahida.
AMRM reported a profit after tax (PAT) of INR0.69 million on net
sales of INR349 million for 2011-12 (refers to financial year,
April 1 to March 31), against a PAT of INR0.69 million on net
sales of INR274 million for 2010-11.
DENZONG ALBREW: CRISIL Assigns 'D' Ratings to INR180MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facilities of Denzong Albrew Pvt Ltd. The rating reflects
instances of delay by DAPL in servicing its debt; the delays have
been caused by the company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL D
Term Loan 170 CRISIL D
DAPL is exposed to intense competition from established regional
and national players and constrained financial risk profile. These
rating weaknesses are partially offset by the DAPL's promoters'
extensive industry experience.
DAPL was incorporated in 2003 and setup its plant for
manufacturing beer in Sikkim in 2011. The manufacturing unit
produces both mild (lager) as well as strong beer. The company has
executed a memorandum of understanding with United Breweries Ltd
for tie-up arrangement to manufacture and bottle beer under its
brands. DAPL is promoted by Mr. Rishi Kumar Mittal and his
brother, Mr. Sanjay Mittal.
MAHENDRAKUMAR BABULAL: CRISIL Cuts Rating on INR100MM Loan to 'D'
-----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Mahendrakumar Babulal Jewels Pvt Ltd to 'CRISIL D' from 'CRISIL
BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
The rating downgrade reflects MBJPL's continuously overdrawn cash
credit limits, and its delays in payment of interest on its bank
facilities; the overdrawn limits and delays have been caused by
the company's weak liquidity.
MBJPL also has a modest financial risk profile, marked by a small
net worth and weak debt protection metrics, and is exposed to
risks related to intense competition and geographical
concentration in its revenue profile. However, the company
benefits from its promoters' extensive experience in the jewellery
business.
Incorporated in 2011 by Mr. Babulal Shah and his three sons, MBJPL
is in the jewellery business in Ahmedabad (Gujarat).
PURVA ALLOYS: CRISIL Assigns 'D' Ratings to INR120MM Loans
----------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
loan facilities of Purva Alloys Ltd. The rating reflects
instances of delay by PAL in meeting its debt obligations; the
delays have been caused by the company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL D
Term Loan 60 CRISIL D
PAL also has weak financial risk profile because of its low cash
accruals in the initial period of its operations. Moreover, the
company's business risk profile is constrained by the start-up
nature, and, small scale, of its operations in the intensely
competitive iron and steel industry and its exposure to risks
related to volatility in steel prices. However, PAL benefits from
its promoters' extensive industry experience.
PAL, incorporated in June 2011, is promoted by Mr. Mukesh Kumar
Agarawal, Smt Meenakshi Agarwal (his wife) and Mr. Asheesh Gupta
(his brother in law). The company is in the manufacturing of mild
steel angle (M S angle) and stainless steel flat (S S flat). The
manufacturing unit of the company is located in Unnao, Kanpur
(Uttar Pradesh). Company has commenced the commercial operations
from July 2012.
SESHAASAI E-FORMS: CRISIL Ups Rating on INR80MM Loans to 'B'
------------------------------------------------------------
CRISIL has upgraded the rating on Seshaasai E-forms Pvt Ltd's bank
facilities to 'CRISIL B/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 28.5 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Rupee Term Loan 51.5 CRISIL B/Stable (Upgraded
from 'CRISIL D')
The upgrade is on account of the regularisation of the SEPL's term
loan payments. The company has improved its internal systems and
discipline to ensure timely repayment of debt, which is expected
to continue in the future. CRISIL believes that sustained
improvement in liquidity will be key for further strengthening of
SEPL's credit risk profile.
SEPL's ratings take into account the company's strong customer
profile and the promoters' extensive experience in the printing
business. The rating strengths are partially offset by the
company's average financial risk profile marked by modest net
worth; and high working capital intensity which is expected to
constrain the capital structure over the near-medium term.
Outlook: Stable
CRISIL believes that SEPL will maintain its credit risk profile
over the medium term, supported by its association with the
leading companies in financial services sector currently. The
outlook may be revised to 'Positive' if the company successfully
expands scale substantially, without significantly impacting
profitability and capital structure. Conversely, the outlook may
be revised to 'Negative' if the company's margins decline sharply,
or if it undertakes any large, debt-funded capital expenditure
(capex) that could lead to deterioration in the financial risk
profile.
SEPL, incorporated in 2001 by Mr. Gautam Jain and Mr. Pragnyat
Lalwani, is engaged in printing of security products like cheques
and account statements for banks, along with providing various
data processing and other software solutions for other companies
in financial services, telecom, business process outsourcing, and
various state governments.
SEPL posted a profit after tax (PAT) of around INR9.8 million on
operating income of INR495.3 million for 2011-12 (refers to
financial year, April 1 to March 31) against a PAT of INR8.2
million on operating income of INR485.9 million for 2010-11.
SHRI KRISHNA: CRISIL Rates INR51MM Term Loan at 'B'
---------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of Shri Krishna Cinetech (P) Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 51 CRISIL B/Stable
The rating reflects SKCPL's exposure to implementation risks and
off take risk related to its ongoing multiplex project. These
rating weaknesses are partially offset by the benefits that SKCPL
derives from the extensive experience of its promoters in
operating multiplexes and favorable location of the multiplex and
the established image of its brand, Shri Infratech, in Lucknow
(Uttar Pradesh).
Outlook: Stable
CRISIL believes that SKCPL will maintain a stable credit risk
profile, backed by promoters' extensive industry experience and
brand recall in the region. The outlook may be revised to
'Positive' in case of completion of the multiplex project as per
schedule within the budgeted cost and earlier than expected
stabilization, leading to larger-than-expected cash accruals.
Conversely, the outlook may be revised to 'Negative' in case of
time and cost overruns in its ongoing project, significant
pressure on SKCPL's liquidity, or delays in lease tie-ups, leading
to inadequate cash flow from operations to meet maturing term debt
obligations.
Incorporated in 2011, SKCPL, promoted by the Lucknow-based Arora
family, known as Shri Infratech group. It is setting up a two-
screen multiplex and food court in Lucknow. It is expected to be
operational by December 2013.
SSD OIL: CRISIL Lowers Ratings on INR432MM Loans to 'D'
-------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
SSD Oil Mills Company Ltd. to 'CRISIL D/CRISIL D' from 'CRISIL BB-
/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 22.00 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Cash Credit-Stock 295.00 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Letter of Credit 100.00 CRISIL D (Downgraded from
'CRISIL A4+')
Bank Guarantee 15.00 CRISIL D (Downgraded from
'CRISIL A4+')
The rating downgrade reflects instances of delay by SSD in
servicing its term debt obligation; the delays have been caused by
weak liquidity. SSD's weak liquidity has, in turn, been on account
of weak cash accruals and moderate working capital intensity in
business.
SSD has a weak financial risk profile, marked by high gearing and
weak debt protection metrics. It also remains exposed to risks
relating to intense industry competition and volatility in foreign
exchange rates. However, the company benefits from its promoters'
longstanding industry experience.
Set up in 1982, SSD manufactures edible refined oil and vanaspati
products under its brand, Supreme.
SSD reported a net loss of INR24.9 million on an operating income
of INR3.29 billion for 2011-12 (refers to financial year, April 1
to March 31), against a profit after tax of INR4.2 million on
operating income of INR3.49 billion for 2010-11.
TEXCEL INT'L: CRISIL Cuts Ratings on INR132MM Loans to 'D'
----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Texcel International Pvt Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
C/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 102 CRISIL D (Downgraded from
'CRISIL C')
Letter of Credit 30 CRISIL D (Downgraded from
'CRISIL A4')
The rating downgrade reflects instances of continuous delay by
TIPL in servicing its debt over the seven months through
February 2013; the delays are on account of the company's weak
liquidity.
The rating also reflects TIPL's weak financial risk profile,
marked by a small net worth, weak debt protection metrics, and
large working capital requirements. These rating weaknesses are
partially offset by TIPL's established regional position in the
fabrication and precision components segment.
Established in 2001, TIPL manufactures precision components
required by the automobile, engineering, and related industries.
TIPL's core competence is in offering material handling solutions
for the automobile industry, manufacturing auto components, and
fabrication of steel racks, pallets, heavy equipments, such as
pressure vessels, HSD tanks, cement mill equipment, and equipment
for the chemical and engineering industries. TIPL was set up by
the late Mr. R Rajalingam and is being currently managed by its
managing director, Mr. Kumar Narayanan.
For 2011-12 (refers to financial year, April 1 to March 31), TIPL
reported a net loss of INR34.6 million on net sales of INR241.1
million as against net loss of INR51.6 million on net sales of
INR219.3 million for 2010-11.
TULSI DAL: CRISIL Upgrades Rating on INR75MM Loan to 'B-'
---------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Tulsi Dal Mill to 'CRISIL B-/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 75 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects the improvement in its liquidity
profile, characterized by prepayment of INR1.4 million of its term
debt, which is equivalent of one year of debt servicing. This
improvement can be primarily attributed to the equity infusion
from the promoters of around INR12 million, and moderate net cash
accruals generated.
While TDM's liquidity is expected to be supported by need-based
funding support from promoters to meet company's debt obligations
and improving net cash accruals, company's liquidity is however
expected to be constrained over the medium term on account of
working capital intensive nature of operations.
The ratings reflect TDM's weak financial risk profile, marked by
modest net worth, high gearing, and weak debt protection metrics,
working capital intensive and small scale of operations in a
fragmented agricultural commodities industry. These rating
strengths are partially offset by promoters' extensive experience
in the agro-commodities trading business.
Outlook: Stable
CRISIL believes that TDM will continue to benefit from its
promoters' long-standing industry experience. The outlook may be
revised to 'Positive' in case of significant improvement in TDM's
operating margin, accompanied by efficient working capital
management, resulting in more-than-expected net cash accruals,
thereby improving company's financial risk profile and
particularly its liquidity. The outlook may be revised to
'Negative' in case of larger-than-expected, debt-funded capital
expenditure, or elongation of company's working capital cycle, or
decline in company's operating margins, leading to deterioration
in its financial risk profile.
TDM, a partnership firm based in Nagpur (Maharashtra), was
established in 1987 by Mr. Mohandas Aswani, and Mr. Tulsi Aswani.
The firm is engaged in processing and trading of various pulses
such as toor dal, chana dal (split chickpeas) and also vatana.
VTC ENGINEERING: CRISIL Cuts Ratings on INR95MM Loans to 'B'
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term facilities of
VTC Engineering Pvt Ltd to 'CRISIL B/Stable' from 'CRISIL
B+/Stable' while reaffirming its rating on the short-term bank
facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70.0 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Cash Credit/Overdraft 25.0 CRISIL B/Stable (Downgraded
Facility from 'CRISIL B+/Stable')
Bank Guarantee 50.0 CRISIL A4(Reaffirmed)
The rating downgrade reflects deterioration in VTC's credit risk
profile with continued pressure on its profitability margins and
large working capital requirements estimated to have resulted in
deterioration in its financial risk profile. The operating profit
margin of the company is estimated to have declined to around
12.0% in 2012-13 (refers to financial year, April 1 to March 31)
from 16.8% in 2010-11 on account of increasing competitive
pressures. The operations of the company continue to remain
working capital intensive with its gross current asset estimated
to be high at around 180 days as on March 31, 2013.
The low profitability levels, on account of decline in
profitability margins, and large working capital requirements are
estimated to have resulted in an increase in the company's debt
levels. The net-worth of the company is also estimated to have
declined to around INR22 million as on March 31, 2013 from INR26
million as on March 31, 2011 as the company registered net loss in
2011-12. The increase in debt levels, coupled with decline in net-
worth, is estimated to result in an increase in the company's
gearing to around 4.0 times as on March 31, 2013 from 1.6 times as
on March 31, 2011.
The rating continues to reflect VTC's weak financial risk profile
marked by small networth, high gearing and weak debt protection
metrics, and its large working capital requirements. These rating
weaknesses are, however, partially offset by the extensive
experience of the promoters in the civil construction industry.
Outlook: Stable
CRISIL believes that VTC will continue to benefit over the medium
term from its promoters' extensive experience in the civil
construction industry. The outlook may be revised to 'Positive' if
the company registers a substantial and sustained improvement in
its revenues and profitability margins from the current levels or
if there is substantial increase in net worth backed by equity
infusion from its promoter. Conversely, the outlook may be revised
to 'Negative' if there is deterioration in its capital structure
on account of larger-than-expected working capital requirements.
Set up in 1987, VTC is based at Visakhapatnam (Andhra Pradesh).
The company provides turnkey solutions that include civil,
electrical and structural works. VTC is managed by Mr. V Nageshwar
Rao, along with his brothers.
VTC reported a net loss of INR19.4 million on net sales of INR142
million for 2011-12, against a profit after tax of INR5.2 million
on net sales of INR94.0 million for 2010-11.
=========
J A P A N
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ASAHI MUTUAL: Fitch Affirms 'BB' IFS Rating; Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed Japan-based Asahi Mutual Life Insurance
Company's Insurer Financial Strength (IFS) rating at 'BB'. The
Outlook is Stable.
Key Rating Drivers
The IFS rating reflects Asahi Life's weak capital adequacy
compared with its peers' as well as its overall resilient life
insurance underwriting. Its negative spread burden remains sizable
and continues to offset gains from a lower-than-projected
mortality rate. Fitch expects this burden to reduce due to
gradually declining average guaranteed yields over the medium
term.
Asahi Life's statutory solvency margin ratio (SMR) has been stable
(420.3% at end-December 2012 versus 426.6% at end-March 2012).
Nevertheless, in comparison with its peer average of around 700%,
Asahi Life's capital position remains weak. Measures taken to
strengthen asset and liability management should help to
moderately narrow the duration gap, which Fitch sees as one of the
primary risks for the company.
Its insurance underwriting has been stable owing to its effective
focus on the profitable third (health) sector. Annual premiums of
in-force policies of Asahi Life's third sector grew 1.6% during
end-March 2012 to end-December 2012, mainly owing to its
successful launch of nursery care insurance product.
Rating Sensitivities
Key rating triggers for an upgrade include a further strengthening
of capitalisation, particularly if the SMR remains well above
400%, or if Fitch's internal capitalisation measure improves
further on a sustained basis. Growth in the company's profitable
third sector, improvement in the surrender and lapse rates of its
death protection products, and improvement in the financial
leverage ratio would also be viewed positively by Fitch.
Key rating triggers for a downgrade include material erosion of
capitalisation, specifically, if the SMR declines to 300%, or if
Fitch's internal capitalisation measure deteriorates on a
sustained basis. Significant deterioration in its profitability
would also put the rating under pressure.
Asahi Life is one of nine traditional domestic life insurers in
Japan. It had a 3% market share by amount of policies in-force at
end-March 2012.
DTC ONE: S&P Affirms BB Rating on Class E Notes
------------------------------------------------
Standard & Poor's Ratings Services said that it has raised its
ratings on the class D and J pass-through notes issued by DTC Two
Funding Ltd. (DTC2), and the class D pass-through notes issued by
DTC Three Funding Ltd. (DTC3). At the same time, S&P affirmed its
ratings on the other classes of these two transactions, as well as
all classes of pass-through notes issued by DTC One SPC (DTC1).
"We today raised our ratings on three classes of notes,
considering that the transactions' credit enhancement levels have
increased, reflecting progress in the redemption of principal on
the senior classes. The transactions' performance to date is good
and only two of the transactions' underlying loans have defaulted
since the transactions' closings. Accordingly, we affirmed our
ratings on the other classes. In analyzing these transactions, we
examined data on current rent levels and vacancy rates for all
apartment properties backing these transactions, as well as
servicer reports," S&P said.
Regarding DTC3, an advancing agent has not yet been found to
replace Lehman Brothers Tokyo Branch, which had acted as the
advancing agent before it went bankrupt in late 2008. However,
S&P do not believe the current lack of an advancing agent
heightens the transaction's exposure to liquidity risk. In fact,
liquidity risk has decreased slowly, given that: (1) the
transaction is structured such that its liquidity reserve is
maintained at a certain level over the course of the transaction;
and (2) the outstanding amount of the notes has continued to
decrease. The actions on DTC3 reflect this view, in addition to
the aforementioned factors relating to S&P's credit analysis of
all three transactions.
The assets underlying the above three transactions are residential
apartment mortgage loans that were originated by New Century
Finance Co. Ltd. (name changed to Lehman Brothers Commercial
Mortgages on Dec. 1, 2007), a former affiliate of the now defunct
Lehman Brothers Tokyo Branch. New Century Finance extended the
mortgage loans to finance the construction costs and miscellaneous
expenses of new apartment buildings that Daito Trust Construction
Co. Ltd. built.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Reports
included in this credit rating report are available at:
http://standardandpoorsdisclosure-17g7.com
RATINGS RAISED
DTC Two Funding Ltd.
JPY18.9 billion pass-through notes due June 2035
Class To From Initial issue amount
D AA (sf) AA- (sf) JPY0.38 bil.
J AA (sf) AA- (sf) JPY8.69 bil.
DTC Three Funding Ltd.
JPY17.312 billion pass-through notes due February 2036
Class To From Initial issue amount
D AA- (sf) A+ (sf) JPY0.69 bil.
RATINGS AFFIRMED
DTC One SPC
JPY6.09 billion pass-through notes due November 2034
Class Rating Initial issue amount
A-1 AAA (sf) JPY0.5 bil.
A-2 AAA (sf) JPY4.4 bil.
A-3 AAA (sf) JPY0.2 bil.
B AAA (sf) JPY0.32 bil.
C AAA (sf) JPY0.18 bil.
D AA (sf) JPY0.32 bil.
E BB (sf) JPY0.35 bil.
X* AAA (sf)
*Interest-only class
DTC Two Funding Ltd.
Class Rating Initial issue amount
A AAA (sf) JPY7.56 bil.
B AAA (sf) JPY0.47 bil.
C AAA (sf) JPY0.28 bil.
E BB+ (sf) JPY0.85 bil.
X* AAA (sf)
*Interest-only class
DTC Three Funding Ltd.
Class Rating Initial issue amount
A-1 AA (sf) JPY8.22 bil.
A-2 AA (sf) JPY5.61 bil.
B AA (sf) JPY0.87 bil.
C AA (sf) JPY0.54 bil.
E BB (sf) JPY0.776 bil.
X* AAA (sf)
*Interest-only class
====================
N E W Z E A L A N D
====================
MAINZEAL PROPERTY: Minter Ellison's Role Under Fire
---------------------------------------------------
NBR Online reports that law firm Minter Ellison's role in advising
Mainzeal Property liquidator BDO has come under fire because the
firm is also acting against the construction firm in a separate
case.
National Business Review's April 12 print edition revealed
Minter Ellison is acting for Botany Downs' owners in a leaky
building claim against Mainzeal.
NBR Online says the case has been stayed as a result of the
liquidation and a Minter Ellison partner denies any conflict,
saying the owners are not in competition with the liquidators.
However, an insolvency expert from rival firm Kensington Swan has
described the situation as "extraordinary".
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.
On Feb. 28, 2013, BDO's Andrew Bethell and Brian Mayo-Smith were
appointed liquidators to those three companies in receivership and
nine others in the group that were not in receivership.
The companies now under the control of the liquidators are
Mainzeal Group, Mainzeal Property and Construction, Mainzeal
Living, 200 Vic, Building Futures Group Holding, Building Futures
Group, Mainzeal Residential, Mainzeal Construction, Mainzeal,
Mainzeal Construction SI, MPC NZ and RGRE.
====================
S O U T H K O R E A
====================
MAGNACHIP SEMICONDUCTOR: S&P Raises CCR to 'BB-'; Outlook Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it has raised its
long-term corporate credit and debt ratings on Korea-based
nonmemory chipmaker MagnaChip Semiconductor Corp. (MagnaChip) to
'BB-' from 'B+'. The outlook on the long-term corporate credit
rating is stable.
The actions include raising S&P's debt rating on the company's
US$203.7 million senior unsecured bonds due April 2018. The bonds
are co-issued by MagnaChip Semiconductor S.A. and MagnaChip
Semiconductor Finance Co., and guaranteed by MagnaChip.
"The upgrade reflects our expectation that MagnaChip will improve
its operating performance over the next 12 months, mainly due to
steady growth in demand for smartphones and tablet PCs and good
relationships with key customers," said JunHong Park, a credit
analyst at Standard & Poor's. "We also expect the company to
sustain prudent financial policies over the next one to two years,
resulting in stable financial metrics and steady free operating
cash flow," he added.
S&P assess the company's business risk profile as "weak,"
reflecting volatility in the semiconductor industry and potential
variability in its operating performance. However, the company's
improving business diversification, mainly from growth in its
power solutions division, should offset the potential variability
to some extent, in our opinion.
S&P views MagnaChip's financial risk profile as "significant"
reflecting the company's moderate debt and the relatively small
size of its business. S&P has changed the company's financial
risk score to "significant" from "aggressive," mainly reflecting
improved sustainability of its financial metrics. In S&P's base-
case scenario, it anticipates that MagnaChip will be able to
maintain its ratio of debt to EBITDA at around 2x through the
business cycle while generating positive free operating cash flow.
S&P also expects the company to effectively control its capital
investments at around $60 million over the next one to two years.
The stable outlook reflects S&P's expectation that the company
will maintain its stable financial risk profile over the next one
to two years based on gradually improving operating performance
and prudent financial policies.
S&P may lower the ratings if the company's profitability erodes
significantly likely due to a severe industry downturn or rapid
decline in its market position, and, as a result, its debt-to-
EBITDA ratio worsens to around 3.5x. Significantly more
aggressive financial policies could also undermine the company's
credit quality.
On the other hand, S&P may raise the ratings if the company
significantly improves its competitive position, especially in its
power and display solutions businesses, and, as a result, further
enhances its operating performances, while sustaining prudent
financial policies.
* SOUTH KOREA: Insurers' Loan Delinquency Ratio Rises in February
-----------------------------------------------------------------
Yonhap News Agency reports that the Financial Supervisory Service
said the delinquency ratio of loans extended by South Korean
insurers rose in February from the previous month as the amount of
overdue loans rose amid the economic slowdown.
FSS said the average overdue debt ratio of local life and non-life
insurers came in at 0.81% as of the end of February, up 0.02
percentage point from the previous month, according to Yonhap
News.
Yonhap News notes that the delinquency ratio is calculated based
on principal repayments that are at least one month overdue. The
ratio inched up 0.01 percentage point from a year earlier.
According to the report, the corresponding rate for loans extended
to households reached 0.57% as of end-February, up 0.02 percentage
point from January. The average delinquency ratio for corporate
lending also gained 0.01 percentage point on-month to 1.31%.
The delinquency rate for property-linked loans stood at 6.93% as
of the end of February, up 0.08 percentage point from January as
the local property market is in a deep slump, FSS added.
The FSS said there is a slim chance that insurers' loans will turn
sour, as the most of its loans were extended to households which
have collateral. But the regulator added that it will strengthen
its monitoring of local insurance companies as the delinquency
ratio has been on the rise, Yonhap News adds.
===============
X X X X X X X X
===============
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Apr. 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
Gaylord National Resort & Convention Center,
National Harbor, Md.
Contact: 1-703-739-0800; http://www.abiworld.org/
June 13-16, 2013
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, Mich.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 11-13, 2013
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Hyatt Regency Newport, Newport, R.I.
Contact: 1-703-739-0800; http://www.abiworld.org/
July 18-21, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Amelia Island, Amelia Island, Fla.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 8-10, 2013
AMERICAN BANKRUPTCY INSTITUTE
Mid-Atlantic Bankruptcy Workshop
Hotel Hershey, Hershey, Pa.
Contact: 1-703-739-0800; http://www.abiworld.org/
Aug. 22-24, 2013
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nev.
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
Nov. 1, 2013
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Atlanta Marriott Marquis, Atlanta, Ga.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 2, 2013
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Dec. 5-7, 2013
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Terranea Resort, Rancho Palos Verdes, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., 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
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
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Information contained herein is obtained from sources believed
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thereof are US$25 each. For subscription information, contact
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*** End of Transmission ***