/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/130425.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, April 25, 2013, Vol. 16, No. 81 Headlines A U S T R A L I A AFS GROUP: BDO Appointed as Administrator BANKSIA SECURITIES: Receivers Sell Loan Portfolio for NZ$238MM BILLABONG INT'L: Extends Exclusive Talks With Sycamore Partners C H I N A BODISEN BIOTECH: Accumulated Losses Prompt Going Concern Doubt CHINA PEDIATRIC: Clement C. W. Chan Raises Going Concern Doubt CHINA SHEN: Gets NYSE MKT Listing Non-Compliance Notice CITIC PACIFIC: Project Delays No Immediate Impact on Ba1 CFR LDK SOLAR: Subsidiary to Sell LDK Hefei for RMB120 Million H O N G K O N G ACL SEMICONDUCTORS: Albert Wong & Co. Raises Going Concern Doubt I N D I A BERIA COMMERCIAL: ICRA Downgrades Rating on INR15cr Loan to 'D' BHAVANA ISPAT: ICRA Downgrades Ratings on INR15cr Loans to 'D' DECO EQUIPMENTS: ICRA Assigns 'D' Ratings to INR12cr Loans JAI MATA: ICRA Assigns 'D' Ratings to INR6cr Loans J D INDUSTRIES: ICRA Assigns 'B+' Ratings to INR6.93cr Loans KINGFISHER AIRLINES: Banks to File Case in Debt Recovery Tribunal KINGFISHER AIRLINES: Lessons Emerge for Lessors Amid Dispute KK STEEL: ICRA Lowers Rating on INR9cr Loans to 'D' MAA TARINI: ICRA Cuts Rating on INR9.54cr Loans to 'D' SANJAY KRAFT: ICRA Reaffirms 'B+' Rating on INR8cr Limits SIDDHI EDIBLES: ICRA Downgrades Ratings on INR20.75cr Loans to D SIMHAPURI ENERGY: ICRA Reaffirms 'D' Rating on INR2,206.8cr Loan SUPREME WOOD: ICRA Lowers Ratings on INR48cr Loans to 'D' UTTAM RESOURCES: ICRA Cuts Rating on INR15cr Loan to 'D' * Moody's Says Policy Changes Can Boost India's Infrastructure I N D O N E S I A BAKRIE TELECOM: Fitch Downgrades Issuer Default Ratings to 'CC' BANK OCBC: Fitch Affirms 'bb' Viability Rating J A P A N CORSAIR 2: S&P Lowers Rating on JPY3BB Loan to B N E W Z E A L A N D MAINZEAL PROPERTY: Hobson Gardens Disputes Hoists Ownership PEGASUS TOWN: Unsecured Creditors Left High and Dry After Sale S O U T H K O R E A LEO MOTORS: John Scrudato CPA Raises Going Concern Doubt RNL BIO: Investors Set to Lose KRW200 Billion on Delisting T H A I L A N D UNITED OVERSEAS: Fitch Affirms 'bb+' Viability Rating - - - - - ================= A U S T R A L I A ================= AFS GROUP: BDO Appointed as Administrator ----------------------------------------- Rachel Burdett-Baker -- rachel.burdett-baker@bdo.com.au -- and Luke Targett -- luke.targett@bdo.com.au -- of BDO, on April 23, 2013, were appointed administrator of the following companies of the AFS Group: -- AFS Group Limited (ACN 055 796 211) -- Australian Financial Services Limited (ACN 116 900 362) -- MDA Private Pty Ltd (ACN 151 974 006) -- Strategy Portfolio Limited (ACN 094 486 003) "We understand that in recent times, the Group has actively been working with advisers with respect to a transfer to alternate licensees, however this process was unable to be finalized due to the withdrawal of existing financial accommodation," BDO said in a statement. "The effect of our appointment is to place a moratorium on the payment of unsecured creditors' accounts in relation to trading and other debts incurred up to the date of our appointment, until creditors make a decision about the Group's future. "We have commenced an assessment of the financial position of the Group to assess its future viability. We will continue to work with management and major stakeholders and regulators during the Voluntary Administration process." BANKSIA SECURITIES: Receivers Sell Loan Portfolio for NZ$238MM -------------------------------------------------------------- Receivers and Managers of Banksia Securities Limited, McGrathNicol, and The Trust Company as trustee announced the sale of BSL's performing loan portfolio with a face value of AUD238.8 million to Deutsche Bank. "We are very pleased with the outcome of the sale which will allow us to declare a further significant distribution to BSL debenture holders. The sale was a competitive process with significant interest from a broad range of suitable parties, leading to a strong outcome for debenture holders," Receiver Tony McGrath said. Mr. McGrath noted that the sale transaction was supported by BSL's Committee of Debenture Holders and approved by The Trust Company. David Grbin, Group Executive General Manager, Corporate Client Services at The Trust Company, said the trustee had approved the sale as it represented a great outcome for debenture holders. "In our role as trustee we will continue to closely monitor the process and approve any further loans sales. Our ongoing priority remains the best interests of debenture holders." Repayments by June 30, 2013 There will be two further repayments made to BSL debenture holders by June 30, 2013, including: -- 10 cents in the dollar to be paid on or around 17 May 2013 (funded from interest receipts and discharges); and -- 35 cents in the dollar to be paid by 30 June 2013 funded from the Deutsche Bank sale proceeds. The Receivers expect to have made total repayments of 65 cents in the dollar to BSL debenture holders by June 30, 2013 (inclusive of the first interim repayment of 20 cents paid in December 2012). Revised Distribution Guidance McGrathNicol also announced updated distribution guidance to BSL debenture holders. Mr. McGrath stated "as the performing loan sale represents over 50% of BSL's remaining assets, securing the Deutsche Bank sale allows us to forecast repayments to BSL debenture holders with greater certainty". "Whilst ultimate returns may vary due to a number of factors, our revised best estimate is an overall return of 80 to 85 cents in the dollar" Mr. McGrath said. Cherry Fund Limited Update The Receivers continue to progress the sale process for certain Cherry Fund performing loans. "In the meantime, we are pleased to advise that a higher than forecast initial repayment of 20 cents in the dollar to Cherry Fund debenture holders will be paid on or around May 17, 2013" Mr. McGrath said. The Receivers noted that a separate update to Cherry Fund debenture holders would be released shortly. Future Strategy and Public Examinations Mr. McGrath noted that separate to the loan book sale process, a tailored approach to each remaining loan was being formulated and that the Receivers are considering whether a sale of a portion of remaining loans is appropriate. Separately, Mr. McGrath noted that the Receivers' investigations as to the failure of Banksia were continuing and that a number of individuals had been served with summons for the public examinations. The Receivers' public examinations will be held in the Supreme Court of Victoria from July 23, 2013. About Banksia Securities Banksia Securities Limited is a subsidiary of The Banksia Financial Group Ltd. TBFG is a privately owned, independent group of companies operating in the finance sector, largely operating as a National Financier and Mortgage Fund Manager. The Trust Company (Nominees) Limited on Oct. 25, 2012, appointed Tony McGrath, Joseph Hayes, Matthew Caddy and Robert Kirman of McGrathNicol as receivers and managers of Banksia Securities Limited. The Trustee is the secured creditor of BSL. The Trustee made the appointment of Receivers and Managers following a request of BSL's Board. McGrathNicol said BSL owes approximately $660 million to investors and advanced these funds to borrowers primarily to finance real property purchases. BSL holds first ranking real property mortgages to secure its advances. Control of the business and the assets of BSL rests with the Receivers and Managers who will be working in close consultation with the Trustee to ensure the interests of debenture holders are being protected. Interest payments and redemptions have been frozen as of Oct. 25, 2012. BILLABONG INT'L: Extends Exclusive Talks With Sycamore Partners --------------------------------------------------------------- Myriam Robin at SmartCompany reports that embattled Billabong International has extended its exclusive talks with private equity suitor Sycamore Partners. SmartCompany relates that Billabong said the exclusivity period, first announced on April 10, would be extended a further 10 business days, to May 8. According to SmartCompany, LeadingCompany said the extension was requested by Sycamore and granted by Billabong's board as the suitors needed more time to assess the quality of earnings report. SmartCompany relates that Ben Le Brun, an analyst at optionsXpress, says the extension is unlikely to result in a large fall in the share price, as a lot of bad news has already been "factored in". "It's already trading at a significant discount to the 60c a share bid," the report quotes Mr. Le Brun as saying. "In terms of the quality of earnings report, Sycamore would be looking at the future projects. Obviously they want to know the earnings are repeatable, controllable and bankable. And that's where Billabong has had issues before." In October, the report recalls, private equity firms TPG and Bain Capital both walked away from offers to buy Billabong after examining the company's books, prompting speculation that Billabong's future was less certain than previously supposed. "There are obviously some gremlins in the numbers," Mr. Le Brun, as cited by SmartCompany, said. "What this means is that there's no certainty the talks will result in Billabong being bought out," SmartCompany quotes Mr. Le Bun as saying. SMH reported last month that the company's path to redemption got tougher after the surfwear group downgraded earnings guidance and said a AUD537 million loss for the half-year put it in breach of debt covenants. The breach led its banks to seek a secured charge over most of the business, SMH related. DealBook said Billabong has fallen on difficult times because of changing consumer tastes and the financial crisis. It has closed stores and sold assets as part of an effort to restructure the company. Based in Australia, Billabong International Limited (ASX:BBG) -- http://www.billabongbiz.com/-- is engaged in the wholesaling and retailing of surf, skate, snow and sports apparel, accessories and hardware, and the licensing of its trademarks to specified regions of the world. ========= C H I N A ========= BODISEN BIOTECH: Accumulated Losses Prompt Going Concern Doubt -------------------------------------------------------------- Bodisen Biotech, Inc., filed on April 16, 2012, its annual report on Form 10-K for the year ended Dec. 31, 2012. Clement C. W. Chan & Co., expressed substantial doubt about Bodisen Biotech's ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss of $16.4 million for the year ended Dec. 31, 2012, and has accumulated losses of $30.7 million at Dec. 31, 2012. The Company reported a net loss of $16.4 million on $8.1 million of revenue in 2012, compared with a net loss of $2.3 million on $7.7 million of revenue in 2011. The Company recorded a loss of $9.1 million for the write down of property and equipment in 2012. Also, included in non-operating income (expense) is a write down on investment in marketable security of approximately $2.8 million of a long-term equity investment that was deemed to be other than temporary. There was no such write down in 2011. The Company's balance sheet at Dec. 31, 2012, showed $22.7 million in total assets, $2.8 million in total current liabilities, and stockholders' equity of $19.9 million. A copy of the Form 10-K is available at http://is.gd/sIXUE9 Based in Xi'an, Shaanxi, China, Bodisen Biotech, Inc., is engaged in developing, manufacturing and selling organic fertilizers, liquid fertilizers, pesticides and insecticides in the People's Republic of China, and has developed a product line of over 60 items. CHINA PEDIATRIC: Clement C. W. Chan Raises Going Concern Doubt -------------------------------------------------------------- China Pediatric Pharmaceuticals, Inc. filed on April 16, 2012, its annual report on Form 10-K for the year ended Dec. 31, 2012 Clement C. W. Chan & Co., in Hong Kong, expressed substantial doubt about China Pediatric's ability to continue as a going concern, citing the Company's net loss of $9,152,318 for the year ended Dec. 31, 2012, and accumulated deficit of $6,534,904 at Dec. 31, 2012. The Company reported a net loss of $9.2 million on $14.2 million of sales in 2012, compared with a net loss of $7.0 million on $27.4 million of sales in 2011. The Company's balance sheet at Dec. 31, 2012, showed $12.1 million in total assets, $500,048 in total current liabilities, and stockholders' equity of $11.6 million. A copy of the Form 10-K is available at http://is.gd/6RP68T Located in Xi'an City, P.R.C., China Pediatric Pharmaceuticals, Inc., engaged in the business of manufacturing and marketing of over-the-counter and prescription pharmaceutical products for the Chinese marketplace as treatment for a variety of diseases and conditions. CHINA SHEN: Gets NYSE MKT Listing Non-Compliance Notice ------------------------------------------------------- China Shen Zhou Mining & Resources, Inc. on April 22 disclosed that on April 17, 2013, China Shen Zhou Mining & Resources, Inc. received a letter from the NYSE MKT LLC advising that the Company was no longer in compliance with Sections 134 and 1101 of the Exchange's Company Guide due to the Company's inability to timely file its annual report on Form 10-K for the fiscal year ended December 31, 2012. In addition, the Company is also in material violation of its listing agreement with the Exchange for not timely filing the Form 10-K, and as such the Exchange is authorized (pursuant to Section 1003(d) of the Company Guide) to suspend, and unless prompt corrective action is taken, remove the Company's securities from the Exchange. The Company is afforded the opportunity to submit a plan of compliance to the Exchange by May 1, 2013 that demonstrates the Company's ability to regain compliance with Sections 134 and 1101 of the Company Guide by July 16, 2013. If the Company does not submit a plan of compliance, if the plan is not accepted by the Exchange, or if the Company does not make progress consistent with the plan if it is accepted, the Company will be subject to delisting procedures as set forth in the Company Guide. The Company has indicated its intention to submit a plan to the Exchange on or before May 1, 2013 and believes it can provide the Exchange with a satisfactory plan to show that it will be able to return to compliance with Sections 134 and 1101 of the Company Guide. About China Shen Zhou Mining & Resources, Inc. Headquartered in Beijing, China, China Shen Zhou Mining & Resources, Inc., through its subsidiaries, -- http://www.chinaszmg.com/-- is engaged in the exploration, development, mining, and processing of fluorite and nonferrous metals such as zinc, lead, and copper in China. The Company has the following principal areas of interest in China: (a) fluorite extraction and processing in the Sumochaganaobao region of Inner Mongolia; (b) fluorite extraction and processing in Jingde County, Anhui Province; (c) zinc/copper/lead processing in Wulatehouqi of Inner Mongolia; and (d) zinc/copper exploration, mining, and processing in Xinjiang. CITIC PACIFIC: Project Delays No Immediate Impact on Ba1 CFR ------------------------------------------------------------ Moody's Investors Service says that delays related to CITIC Pacific's Sino Iron project are credit negative, but will not have any immediate impact on its Ba1 corporate family and senior unsecured bond ratings. The ratings outlook remains negative. According to an update the company provided on its iron ore project on 19 April 2013, it said that it is likely to postpone the load commissioning of its second production line by three months because its grinding mill failed its voltage test. CITIC Pacific also said that the first shipment of iron ore concentrate from its first production line will be delayed to the second half of May 2013, from late March or early April. "Such delays indicate that CITIC Pacific continues to encounter challenges both in ramping up its completed lines and in constructing new lines. The process toward final completion of the project will probably not be as smooth as the company previously expected, despite the experience it has gained from the completion of the first line," says Alan Gao, a Moody's Vice President. "Nevertheless, the current delays are not material and we have already factored their possibility in the negative rating outlook," adds Gao, also Moody's International Lead Analyst for CITIC Pacific. Moody's will continue to monitor the progress of the iron ore project. Downgrade pressure will emerge if there are more severe delays or other material negative developments. 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 China's State Council. As of end-2011, it had total consolidated assets of RMB3.3 trillion. LDK SOLAR: Subsidiary to Sell LDK Hefei for RMB120 Million ----------------------------------------------------------- LDK Solar Co., Ltd.'s wholly owned subsidiary, Anhui LDK New Energy Co., Ltd., signed an agreement to sell and transfer all its equity interest in its wholly owned subsidiary, LDK Solar High- Tech (Hefei) Co., Ltd., located in Hefei City of Anhui Province in China, to an affiliate of the Hefei City government, Hefei High Tech Industrial Development Social Service Corporation, for approximately RMB120 million. Based on the Company's book value, LDK Solar expects to realize a net loss in the range of US$80 million to US$90 million for this transaction. Previously, LDK Solar announced a purchase agreement in January 2013 with Shanghai Qianjiang Group, with its consummation subject to relevant governmental approvals. Shanghai Qianjiang Group failed to secure such government approvals by the expiration date of March 30, 2013. "We appreciate the assistance and collaboration from Hefei Municipal Government," stated Xingxue Tong, president and CEO of LDK Solar. "We will do our best to assure a smooth closing of this transaction." Signs New Module Supply Contract LDK Solar has signed a module supply contract with EA Solar Nakornsawan Co., Ltd, a leading developer of photovoltaic (PV) projects in Thailand. Under the terms of the agreement, LDK Solar will provide 63 megawatts (MW) of PV modules with weekly shipments of approximately 6.3 MW expected to commence in August 2013. "We are pleased to expand our customer base into Thailand through this new module sales agreement," stated Xingxue Tong, president and CEO of LDK Solar. "We believe this contract demonstrates the continued demand for our solar modules." 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. ================ H O N G K O N G ================ ACL SEMICONDUCTORS: Albert Wong & Co. Raises Going Concern Doubt ---------------------------------------------------------------- ACL Semiconductors Inc., filed on April 16, 2012, its annual report on Form 10-K for the year ended Dec. 31, 2012. Albert Wong & Co., LLP, in Hong Kong, expressed substantial doubt about ACL Semiconductors' ability to continue as a going concern, citing the Company's accumulated deficit of $3.5 million as of Dec. 31, 2012. The Company reported a net loss of $4.9 million on $161.4 million of sales in 2012, compared with a net loss of $1.7 million on $368.9 million of sales in 2011. The Company's balance sheet at Dec. 31, 2012, showed $35.7 million in total assets, $37.0 million in total liabilities, and a stockholders' deficit equity of $1.3 million. A copy of the Form 10-K is available at http://is.gd/0ivNzk Based in Kowloon, Hong Kong, ACL Semiconductors Inc. was incorporated under the laws of the State of Delaware on Sept. 17, 2002. The Company has been primarily engaged in the business of distribution of memory products mainly under the "Samsung" brand name. ========= I N D I A ========= BERIA COMMERCIAL: ICRA Downgrades Rating on INR15cr Loan to 'D' --------------------------------------------------------------- ICRA has revised downwards the short term rating assigned to the INR15.00 crore letter of credit facility of Beria Commercial Impex Private Limited from '[ICRA]A4' to '[ICRA]D'. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Non Fund Based Limits- 15.00 [ICRA]D downgraded Letter of Credit The rating actions factor in the stretched liquidity position, leading to repeated devolvement of letter of credit by the company. Incorporated in 1991, BCIPL is engaged in the business of timber trading. The company procures sawn timber and timber logs primarily from the domestic market and also imports timber logs from countries like Malaysia and Myanmar. The company sells both sawn timber and timber logs to saw mills, plywood and veneer manufacturers, traders and retailers primarily in the Kolkata market. The company has a warehouse at Howrah, West Bengal. BHAVANA ISPAT: ICRA Downgrades Ratings on INR15cr Loans to 'D' ------------------------------------------------------------- ICRA has downgraded the long term rating assigned to the INR10.00 crore fund-based bank facilities of Bhavana Ispat Private Limited from '[ICRA]B-' to '[ICRA]D'. ICRA has also downgraded the short- term rating assigned to the INR5.00 crore non-fund based facility of BIPL from '[ICRA]A4' to '[ICRA]D'. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Fund Based Limits- 10.00 [ICRA]D downgraded Cash Credit Non Fund Based Limits- 5.00 [ICRA]D downgraded Letter of Credit The revision in ratings takes into account the delays by the company in servicing its debt obligations in a timely manner. Established in 2000, Bhavana Ispat Private Limited is engaged in cutting, slitting, recoiling, de-coiling, pickling and de-rusting of Cold Rolled (CR), Hot Rolled (HR) and Galvanized Plain (GP) coils/sheets catering to steel dealers, automobile industries and fabrication industries. The company has its steel processing facility located in Taloja MIDC, Navi Mumbai and has two warehouses. The operations of the company are mainly based out of Mumbai and sales operations are limited to Maharashtra. DECO EQUIPMENTS: ICRA Assigns 'D' Ratings to INR12cr Loans ---------------------------------------------------------- ICRA has assigned a long term rating of '[ICRA]D' to the INR8.0 crore term loan facilities and the INR4.0 crore long-term fund based facilities of Deco Equipments Private Limited. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Term Loan 8.0 [ICRA]D /assigned Long-term Fund 4.0 [ICRA]D / assigned Based Limits The assigned rating reflects the incidences of delays in debt servicing in the recent past by the Company due to strained liquidity conditions. This is largely attributable to the substantial capital expenditure commitments of the Company and the de-growth in the M&HCV- segment adversely affecting the cash flows of DEPL. The Company's financial profile is characterized by healthy operating profitability on the back of significant contribution of high-margin job work revenues but strained net margins owing to substantial depreciation and interest costs; weak capital structure marked by high gearing and modest coverage indicators and high working capital intensity owing to substantial consumables inventory held by the Company. Further, DEPL's small scale of operations and significant customer and industry concentration renders the Company's revenues vulnerable to any order volatility from customers as well as the inherent cyclicality of the M&HCV segment. In addition, DEPL's partly debt funded capital expenditure plans are likely to stretch the Company's debt coverage metrics going forward. ICRAhowever, takes note of the promoters' longstanding experience in the automotive components manufacturing business and the Company's well established relationships with renowned customers in the domestic market. Incorporated in 1989, Deco Equipments Private Limited is engaged in the manufacturing of brake heads and the associated components such as pinion cage, hub, spider, anchor and roller, camshaft and spindles to be used in commercial vehicles and construction equipment. DEPL is engaged both in own manufacturing (around 42.7% of total revenues) as well as job-work for its customers (around 57.3% of total revenues). The Company's manufacturing units are located in Mysore and DEPL presently employs around 150 workers. The company's forging operations are supported by machining, heat treatment and grinding facilities. Recent results During 2011-12, DEPL reported a net profit of INR0.9 crore on operating income of INR15.2 crore as against a net profit of INR0.5 crore on operating income of INR13.3 crore in 2010-11. JAI MATA: ICRA Assigns 'D' Ratings to INR6cr Loans -------------------------------------------------- ICRA has assigned an '[ICRA]D' rating to the INR4.00 crore term loan and INR2.00 crore cash credit facilities of Jai Mata Di Plastics Private Limited. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Fund Based Limit- 4.00 [ICRA]D assigned Term Loan Fund Based Limit- 2.00 [ICRA]D assigned Cash Credit The assigned rating takes into account the irregularity in debt servicing by the company due to its stretched liquidity position. The liquidity tightness has been a result of nominal profits and cash accruals in 2011-12, coupled with stretched receivables position along with a high build-up of inventory levels. The rating also takes into account JMDP's weak financial risk profile as reflected by the operating losses suffered since commencement of operations and below average debt coverage indicators, the susceptibility of profitability to adverse movement in polymer prices, weak bargaining power against stronger raw material suppliers and customers and a high customer concentration risk, with the top five customers contributing around 89% of total sales in 2011-12. The rating also takes into consideration the fragmented nature of the industry characterized by a large number of small players, which in turn leads to intense competition putting pressure on margins and JMDP's small scale of current operations, which deprives it from the benefits of economies of scale. ICRA notes that the company's plant was commissioned in October 2010, and hence it lacks a sufficiently long track record of conducting its business across business cycles. The rating, however, favorably factors in the favorable demand outlook for packaging material business, primarily driven by the expected growth in the cement sector and the improvement in the capacity utilization of the company post stabilization of manufacturing facility. JMDP, incorporated in 2007, is engaged in the manufacturing of polypropylene (PP) woven sacks and fabrics. The company started its commercial production in October 2010. The manufacturing facility of the company is located at Kalunga, in the district of Rourkela, Odisha and has an installed capacity of 2,616 metric tonne per annum (MTPA). Recent Results The company has reported a net profit of INR0.17 crore on an operating income of INR10.66 crore in 2011-12 as compared to a net loss of INR0.20 crore on an operating income of INR2.35 crore in 2010-11. J D INDUSTRIES: ICRA Assigns 'B+' Ratings to INR6.93cr Loans ------------------------------------------------------------ ICRA has assigned an '[ICRA]B+' rating to the INR6.93 crore fund based bank facilities of J D Industries. ICRA has also assigned a short term rating of '[ICRA]A4' to the INR2.00 crore non fund based facilities of JDI. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Fund Based Limits- 1.43 [ICRA]B+ assigned Term Loan Fund Based Limit- 5.50 [ICRA]B+ assigned Cash Credit Non-Fund Based Limit- 2.00 [ICRA]A4 assigned Bank Guarantee (Performance) The assigned ratings take into account JDI's weak financial risk profile characterized by low profitability, leveraged capital structure, depressed level of coverage indicators, low entry barrier and intense competition in a highly fragmented rice milling industry which restricts pricing flexibility. The ratings also factor in the risks inherent in an agro based business like rice milling, including the vulnerability towards the changes in Government policies and raw material supply risks as the level of harvest and quality of paddy are highly dependent on agro climatic conditions. The ratings also reflect the risk associated with the legal status of JDI as a proprietorship firm, including the risk of withdrawal of capital by the proprietor. The ratings, however, derive comfort from the proprietor's experience in the rice milling business and JDI's proximity to raw material sources, leading to low landed cost of input material. JDI, incorporated in 2007, is engaged in the milling of non- basmati rice with an installed capacity of 72,000 metric tonne per annum (MTPA). The firm is also engaged in milling of paddy on job- work for Food Corporation of India (FCI). The manufacturing facility of the firm is located at Tilda in the district of Raipur, Chhattisgarh. Recent Results The firm posted a net profit of INR0.22 crore on an operating income of INR23.11 crore during 2011-12, as compared to a net profit of INR0.18 crore on an operating income of INR15.19 crore during 2010-11. KINGFISHER AIRLINES: Banks to File Case in Debt Recovery Tribunal ----------------------------------------------------------------- The Economic Times reports that lenders to the troubled Kingfisher Airlines will file the case in the debt recovery tribunal (DRT) and serve the SARFAESI notice this week, according to sources close to the development. ET relates that following this, bankers will start the process of actually stripping down the airline's assets and selling them to recover their dues. According to the report, the consortium will now start the process of selling the physical assets of the company which includes the office spaces in Mumbai and a villa in Goa. Banks have already started selling the pledged shares of United Spirits as well as Kingfisher Airlines, the report says. ET relates that sources said the banks will also now start invoking the corporate guarantee of UB Holdings as well as the personal guarantee of Vijay Mallya. The value of both these guarantees totals to INR3,000 crore, the report says. Kingfisher owes the consortium of banks over INR7,500 crore and the value of the collateral totals to around INR6,500 crore. Last week, ET recalls, SBI chairman Pratip Chaudhuri said that the lenders weren't interested in any revival plan that the airline had to offer. "We have given them enough time. We will not spare any recourse in out recovery efforts," the report quotes Mr. Chaudhuri as saying. About Kingfisher Airlines Headquartered in Mumbai, India, Kingfisher Airlines -- http://www.flykingfisher.com/-- formerly known as Deccan Aviation Ltd., served about 35 domestic destinations with a fleet of more than 40 aircraft, including Airbus jets and ATR 72 turboprops. It maintained bases in major cities such as Delhi and Mumbai. Kingfisher Airlines, which has been unprofitable since it was created in 2005, accumulated losses of $1.9 billion between May 2005 and June 30, 2012, The Wall Street Journal reported citing Sydney-based consultant CAPA-Centre for Aviation. The airline also owes about $2.5 billion to lenders, suppliers, leasing companies and investors, the Journal added. According to The Times of India, the company began showing signs of weakness in November 2011 when it ran out of money to operate most of its flights and started reducing its flights to cut cost. The airline also failed to pay salaries to its employees for a long time following which the employees went on an indefinite strike. Its flying license was finally suspended in October 2012, TOI reported. KINGFISHER AIRLINES: Lessons Emerge for Lessors Amid Dispute ------------------------------------------------------------ An ongoing dispute among major aircraft leasing companies, local Indian authorities, and Kingfisher Airlines, which has been grounded since late last year, provides some critical insights into risk factors for lessors seeking to safeguard interests in emerging markets, according to Fitch. While plans to relaunch the airline are still being considered by Indian regulators, Kingfisher has not operated since December, when it lost authority to fly in the midst of a liquidity crisis. Most of the largest global aircraft lessors, including ILFC, AerCap, BOC Aviation, Aviation Capital Group, and AWAS, had leased equipment to the carrier, whose fleet of approximately 60 new- generation aircraft was primarily leased. Since Kingfisher's grounding, major lessors have taken a number of different approaches to asset recovery, with varying results. "Above all, we see the Kingfisher experience as important in underscoring the risks associated with leasing to start-up airlines that lack a proven operating track record and often fail to become profitable after launch. In India and many other emerging economies, where rapid demand growth has spurred market entry by unproven carriers, lessors face the need to reflect higher risk through pricing or potentially stricter concentration limits," Fitch says. Kingfisher had been operating in a fast-growing, but still young, Indian air transport industry only since 2005, and it had never turned a profit prior to its grounding in 2012. In addition to credit risk, lessors clearly face substantial legal risk in India and other countries, where quick recovery of assets and enforcement of creditor rights is less certain than in developed markets. Lessors have had difficulty in some cases recovering aircraft from Kingfisher as a result of India's failure to cooperate fully in deregistering the aircraft. India ratified parts of the Cape Town Treaty, an international agreement setting out common standards for treatment of secured aircraft claims, in 2008. However, many of the Kingfisher leases predated that ratification. Even with Cape Town in place, local laws and precedent remain critical for lessors and other aircraft creditors to consider. The experience of lessors in the Kingfisher situation shows that moves to take assets from lessees at the first sign of trouble often pay off. This is clear in light of media reports suggesting that Kingfisher-leased aircraft and engines have, in some cases, been stolen or damaged. This points to the need for lessors to remain focused on maintenance reserves, security deposits, and solid insurance policies -- especially in cases where local laws and regulatory protection of creditor rights may come up short. Exposure to Kingfisher among Fitch-rated lessors is small relative to their total leased aircraft portfolios. The outcome of the dispute is therefore not a ratings issue for these firms. More broadly, aircraft lessors tend to lease to airlines that have weaker credit profiles than their own, which places a natural limitation on the lessors' ratings. KK STEEL: ICRA Lowers Rating on INR9cr Loans to 'D' --------------------------------------------------- ICRA has downgraded the long term rating assigned to the INR8.75 crore fund-based bank facilities and to the INR0.25 crore unallocated limits of K.K. Steel from '[ICRA]B' to '[ICRA]D'. ICRA has also downgraded the short-term rating assigned to the INR0.25 crore unallocated limits of KK from '[ICRA]A4' to '[ICRA]D'. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Fund Based Limits- 8.75 [ICRA]D downgraded Cash Credit Untied/Unallocated 0.25 [ICRA]D downgraded Limits The revision in ratings takes into account the default by the firm in meeting its debt obligations. K.K. Steel, a proprietorship concern, was incorporated in the year 1996. The firm is engaged in the business of trading flat steel products namely Galvanised Plain, Hot rolled, Cold Rolled (GP/ HR/CR) sheets, coils and plates. The operations of the firm are based out of Mumbai and sales operations are limited to Maharashtra and Goa. MAA TARINI: ICRA Cuts Rating on INR9.54cr Loans to 'D' ------------------------------------------------------ ICRA has revised downwards the long term rating assigned to the INR3.54 crore term loan and INR6.00 crore cash credit facilities of Maa Tarini Industries Limited from '[ICRA]B-' to '[ICRA]D'. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Fund Based Limit- 3.54 [ICRA]D downgraded Term Loan Fund Based Limit- 6.00 [ICRA]D downgraded Cash Credit The rating action factors in the recent delays by MTIL in meeting its debt service obligations in a timely manner. MTIL was incorporated in August, 2000 and started commercial production in August, 2001. It has sponge iron and ingot manufacturing facilities of 48,000 tons per annum (TPA) and 21,000 TPA respectively in the Sundargarh district of Odisha. MTIL is currently engaged in the production of sponge iron. SANJAY KRAFT: ICRA Reaffirms 'B+' Rating on INR8cr Limits --------------------------------------------------------- ICRA has re-affirmed the long term rating of '[ICRA]B+' for INR8.00 crore fund based limits of Sanjay Kraft Paper Private Limited. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Fund based limits 8.00 [ICRA]B+ reaffirmed The rating reaffirmation continues to be constrained by the high product concentration risk as the company solely manufactures kraft paper; modest scale of operations and high competitive intensity in the fragmented kraft paper industry resulting in thin profitability and high working capital intensity as reflected in NWC/OI of 37% for FY2012 & high utilisation of cash credit facilities. The rating is also constrained by the adverse power supply situation in the state of Andhra Pradesh which constrained the production in the current year. With SKPPL looking to undertake capex in the medium term (-INR60.00 crore planned capex funded by INR48.00 crore planned term loan) the capital structure of the company is likely to deteriorate in the medium term. The rating reaffirmation however takes into account the established and diverse customer base of SKPPL on the back of the management's experience in paper distribution through group concern - Vaishnavi Impex; steady increase in operating income over the last 3 years and easy access to raw material - recycled waste paper. Sanjay Kraft Paper Private Limited was incorporated as a Private Limited company on April 19, 2006. SKPPL is involved in the manufacturing of kraft paper using recycled waste paper/fibre as raw material. The company has a manufacturing facility located in the west Godavari district and has a capacity of 50 TPD. SKPPL is currently managed by Mr. Nageswar Rao who has experience of over a decade in the paper industry. SIDDHI EDIBLES: ICRA Downgrades Ratings on INR20.75cr Loans to D ---------------------------------------------------------------- ICRA has revised downwards the long term rating assigned to the INR4.25 crore cash credit facility of Siddhi Edibles Private Limited from '[ICRA]BB-' to '[ICRA]D'. ICRA has also revised downwards the short term rating assigned to the INR16.50 crore non fund based bank facilities of SEPL from '[ICRA]A4' to '[ICRA]D'. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Fund Based Limits 4.25 [ICRA]D downgraded (Cash Credit) Non-Fund Based Limits 16.50 [ICRA]D downgraded (Letter of Credit) The rating actions factor in the constant over utilisation of working capital limits and continuing devolvement of letter of credit by SEPL owing to its stretched liquidity position. SEPL was incorporated in July 2003 and has been promoted by the Bhura family based in Kolkata. The company has been engaged in trading of agro-commodities like yellow peas, black matpe, yellow maize, gwar seeds, soya bean and chana. Since 2007-08, the company started trading in mobile phones, walkie talkie sets, telecom equipments and other related electronic and hardware fittings, which are used for fabrication of telecommunication towers. Since 2008-09, the company has also started trading in electronic equipments like Digital Trunking System, LCD Monitors, CPU Cabinet and other computer related accessories. SIMHAPURI ENERGY: ICRA Reaffirms 'D' Rating on INR2,206.8cr Loan ---------------------------------------------------------------- ICRA has reaffirmed the '[ICRA]D' rating assigned to the INR2206.8 crore term loan programme of Simhapuri Energy Private Limited. The rating reaffirmation factors in the continued delays in servicing of the debt pertaining to Phase 1 of the 570 MW imported coal based power plant at Nellore, Andhra Pradesh. Phase 1 commenced commercial operations in end-Q1 2012-13 (against scheduled commissioning of February 2011), after a substantial cost and time overrun, with debt repayments commencing in May 2012. Both the cost overrun and the debt repayments have had to be supported by periodic equity infusions from the parent, Madhucon Projects Limited (MPL, rated at [ICRA]D). Owing to the Madhucon Group's liquidity pressures, funding support to Simhapuri Energy has been untimely in the past. Phase 2 is expected to be commissioned in Q1 2013-14 (against scheduled commissioning of October 2012) although debt repayments would only commence in September 2014. Simhapuri Energy, promoted by the Hyderabad based Madhucon Group, is setting up a coastal coal based thermal power plant with an ultimate capacity of 1920 MW, to be developed in four phases near Krishnapatnam, in Nellore District, Andhra Pradesh. The Madhucon Group largely undertakes EPC works across various sectors with Madhucon Projects Limited as its flagship; the Group also has several investments in BOT projects. Simhapuri Energy has commissioned Phase 1 (270 MW) and is currently in the final stages of implementing Phase 2 of the project (300 MW). For both phases, Simhapuri Energy has a power tolling arrangement in place with PTC India Limited (PTC) for a major portion of the capacity (350 MW of 570 MW) with the balance capacity to be sold on merchant basis. SUPREME WOOD: ICRA Lowers Ratings on INR48cr Loans to 'D' --------------------------------------------------------- ICRA has revised downwards the long term rating assigned to the INR6.00 crore cash credit facility of Supreme Wood Products Private Limited from '[ICRA]BB+' to '[ICRA]D'. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Fund Based Limits- 6.00 [ICRA]D downgraded Cash Credit Non-Fund Based Limits- 42.00 [ICRA]D downgraded Letter of Credit ICRA has also revised downwards the short term rating assigned to the INR42.00 crore non fund based bank facilities of SWPPL from '[ICRA]A4+' to '[ICRA]D'. The rating actions factor in the stretched liquidity position, leading to continuous over utilisation of working capital limits and repeated devolvement of letter of credit by the company. SWPPL, incorporated in 1990 by Mr. Suresh Kumar Beria and Mr. Manoj Kumar Beria is currently engaged in trading of timber and manufacturing of veneer and plywood with installed capacity of 25,000 cbm and 15,000 cbm respectively. The manufacturing facility of the company is located at Howrah, West Bengal. UTTAM RESOURCES: ICRA Cuts Rating on INR15cr Loan to 'D' -------------------------------------------------------- ICRA has revised downwards the short term rating assigned to the INR15.00 crore letter of credit facility of Uttam Resources Private Limited from '[ICRA]A4' to '[ICRA]D'. Amount Facilities (INR Cr) Ratings ---------- -------- ------- Non Fund Based Limits- 15.00 [ICRA]D downgraded Letter of Credit The rating actions factor in the stretched liquidity position, leading to repeated devolvement of letter of credit by the company. Incorporated in 1993, URPL is engaged in the business of timber trading. The company procures sawn timber from the domestic market and imports timber logs from countries like Malaysia and Myanmar. The company sells both sawn timber and timber logs to saw mills, plywood and veneer manufacturers, traders and retailers primarily in the Kolkata market. * Moody's Says Policy Changes Can Boost India's Infrastructure -------------------------------------------------------------- Moody's Investors Service says India's recent reforms do not address all the regulatory, financial and pricing constraints on infrastructure investment, but they could still attract private investment because the policy changes coincide with a conducive financing environment characterized by low global interest rates and falling domestic interest rates. Moody's detailed its conclusions in a newly released report titled, "Indian Infrastructure: Increased Private Investment Would Benefit Sovereign Credit Profile". The report says that given the Indian government's weak fiscal position, the country's vast infrastructure needs cannot be bridged without private investment. Infrastructure shortages are a constraint on India's Baa3 sovereign rating because the country's infrastructure is weaker than in comparable emerging markets. This has hurt potential growth, as well as the competitiveness of its export and import- competing sectors, thus contributing to its trade and current account deficits. Moreover, poor infrastructure discourages foreign direct investment inflows, which could finance these deficits and stimulate growth. Infrastructure deficiencies also heighten the supply bottlenecks that fuel inflation. Nonetheless, Moody's stable outlook on the sovereign rating assumes that infrastructure investments will increase over the next 12--18 months, as the country's medium term demand for infrastructure remains robust despite the recent slowdown in GDP growth. Domestic demand for infrastructure is fueled by a critical mass of Indian consumers with growing disposable incomes as well as corporations willing to pay for improved infrastructure in order to remain internationally competitive. Consequently, the private sector may be more interested in investing in Indian infrastructure, as demand for infrastructure and the lowering of regulatory and pricing barriers revives the prospects for profits. Moreover, financing for infrastructure investment may now be easier to obtain, as investors seek real investment assets, against the backdrop of lower interest rates and slower global growth. However, since policies will only selectively and slowly address current supply constraints, Moody's believes any investment will likely commence as a trickle rather than a surge. Nevertheless, according to the report, even incremental infrastructure improvements will alleviate pressures on the balance of payments and inflation, while enhancing growth and living standards. The report further notes that while pre-election politics pose risks, these risks are not exclusively negative. India's fragmented politics have often hindered the economic policy process, regardless of the electoral cycle. Now, as incumbent governments seek to revive sluggish growth ahead of state and national elections in 2013 and 2014, they may accelerate policy implementation in order to attract investment. ================= I N D O N E S I A ================= BAKRIE TELECOM: Fitch Downgrades Issuer Default Ratings to 'CC' --------------------------------------------------------------- Fitch Ratings has downgraded Indonesia-based PT Bakrie Telecom's Long-Term Foreign- and Local-Currency Issuer Default Ratings to 'CC' from 'CCC'. Also, the agency has downgraded the May 2015 USD380m bond fully guaranteed by BTEL to 'CC' from 'CCC'. The Recovery Rating of the bond is 'RR4'. The Stable Outlook has been removed. Key Rating Drivers Default is Probable: Fitch now believes that BTEL will most likely restructure its USD380m senior unsecured bond, given the company's poor liquidity and the low-likelihood of an operational turn- around. BTEL has failed to fund an interest reserve account under its bond documentation - which requires the company to maintain a minimum of one coupon payment at all times and to have at least two coupon payments (about USD43.7m) in the account at least 30 days before the coupon date (7 May 2013). The balance in the account was only USD8m at end-December 2012, rendering this an 'event of default' under the terms of the bond. While it is still possible that the company may be able to pay the coupon of USD21.9m due on May 7, 2013, non-payment is likely to result in a downgrade of BTEL's rating to 'C'. Fitch believes that holders of the senior unsecured USD380mn bond have limited options and may not accelerate the debt repayment at this juncture. The bond is already trading well below 50 cents on the dollar, and the likelihood is that the company will find it hard to repay the bond due in May 2015. Poor Liquidity: BTEL's 2013 cash balance and EBITDA generation will most likely fall short of its obligations. Fitch estimates that the cash deficit will be about USD50m-60m out of which a maximum of USD30m can be funded through debt. Under the terms of its USD bond, BTEL can raise a maximum of USD30m as fresh debt as it continues to be in breach of an incurrence covenant. Its consolidated debt/last 12 months EBITDA was 5.2x at end-December 2012, compared with the incurrence covenant of 4.75x. Turn-around unlikely: The agency feels that BTEL's data EBITDA generation is unlikely to fully offset the decline in voice and SMS over the next two years. BTEL is likely to lose its competiveness against larger GSM operators given its limited flexibility to expand its network infrastructure. Its 2013 capex guidance of USD25m or 10%-11% of its revenue is much lower than Indonesia's top three GSM operators, which will invest at least 25%-30% of their revenues to expand their data franchises. During 2010-12, BTEL's EBITDA declined by 28% to USD102m (2010: USD141m) due to a 10.7% reduction in subscribers to 11.6 million (2010: 13 million) on higher competition and operating costs. CDMA consolidation: Struggling CDMA operators - including BTEL and PT Smartfren Telecom Tbk (Smartfren, CC(idn)) - may participate in consolidation, as they face tight liquidity amid weak profitability. CDMA operators are struggling due to a lack of variety of CDMA handsets and a narrowing of the tariff spread between CDMA and GSM operators. PT Telekomunikasi Indonesia Tbk's (Telkom, BBB-/Stable) CDMA unit, Flexi, which had discussed a unsuccessful merger plan with BTEL in 2010, could acquire one of the smaller CDMA operators to strengthen its customer base. Rating Sensitivities Positive: BTEL has limited upside given its liquidity constraints. However, future developments that may, individually or collectively, lead to positive rating action include: - A significant improvement in business performance leading to improved liquidity, although Fitch regards this as unlikely - An M&A transaction with a larger operator/stronger investor which improves its financial and operating performance Negative: Future developments that may, individually or collectively, lead to negative rating action include: - A debt restructuring announcement, constituting in Fitch's opinion, a distressed debt in line with agency's criteria will lead to a downgrade of BTEL's rating to 'C'. - A non-payment of a coupon on the company's USD380m senior unsecured bond. BANK OCBC: Fitch Affirms 'bb' Viability Rating ---------------------------------------------- Fitch Ratings has affirmed the Long-Term Foreign Currency Issuer Default Ratings (IDR) and National ratings of three Indonesian foreign-owned banks and one of their subsidiaries - PT Bank CIMB Niaga Tbk (CIMB Niaga), PT Bank OCBC NISP Tbk's (OCBC NISP), PT Bank UOB Indonesia (UOBI) and PT CIMB Niaga Auto Finance (CNAF). Fitch has also upgraded OCBC NISP's Long-Term Local Currency IDR to 'A-' from 'BBB'. Rating Action Rationale The affirmation of the Long-Term Foreign Currency IDRs and National Long Term ratings reflects unchanged parental support and linkage for the three banks, and the VRs reflect their continued stable stand-alone credit profiles. The upgrade of OCBC NISP's Long-Term Local Currency IDR, which is constrained by a 3-notch maximum uplift from the Sovereign's Long-Term Local Currency IDR, reflects Fitch's reassessment of the bank's debt servicing capacity on local currency obligations, which is viewed to be of a lower risk relative to that of its foreign currency obligations, according to Fitch's criteria. Rating Drivers The Long-Term Local Currency IDRs and National Long-Term ratings reflect Fitch's view of a high propensity of timely support from each local bank's higher-rated foreign parent, if needed. The Long-Term Foreign Currency is constrained by Indonesia's Country Ceiling at 'BBB'. Fitch's view of support is reinforced by the growing strategic importance of these Indonesian subsidiaries to the parents' Asia franchise, increased financial and technical resources needed to develop their Indonesian banking franchises, parents' majority ownership/control, name sharing and a high level of integration with their parents. CIMB Niaga is owned by Malaysia-based CIMB Group, while OCBC NISP and UOBI are majority owned by Singapore-based Overseas-Chinese Banking Corp (OCBC, 'AA- '/Stable) and United Overseas Bank Limited (UOB; 'AA-'/Stable). CIMB Niaga's Viability Rating (VR) of 'bb' reflects the bank's moderate standalone financial position with satisfactory asset quality and improved profitability despite its weaker capital position and funding profile compared to its peers. OCBC NISP's VR of 'bb' takes into account its consistently strong asset quality and satisfactory capital position, despite its smaller franchise and its weaker profitability and funding profile compared with its larger peers. Rating Sensitivities- IDRs, National and Support Ratings Upside potential for the banks' IDRs and Support Rating may result from an upgrade of the Indonesian Country Ceiling. There is no rating upside for National Ratings as their National Ratings are already at the top of the scale. Downward rating pressure may arise from any developments leading to a weakening of perceived support from their parents, such as major changes to ownership or a significant weakening in their parents' financial ability, although Fitch believes this to be a remote prospect in the near- to medium-term. Deterioration in the banks' standalone financial profile is unlikely to impact their IDRs and National Rating unless the factors underpinning the parent support also weaken. Rating Sensitivities- VRs Rating upside on the VR may result from more comparable franchises relative to the major Indonesian banks, while maintaining healthy risk-adjusted profitability, high core capitalisation, predominantly deposit-funded balance sheets, and sound asset quality record. Rating downside may result from rapid loan growth adversely affecting asset quality and capital, and significantly weakened profitability, particularly if the economic environment were to deteriorate. Rating Sensitivities - Subsidiary's Ratings The ratings of CNAF reflect Fitch's expectation of continued strong support from its majority shareholder, CIMB Niaga, and its ultimate parent, CIMB Group. The ratings also take into account CNAF's strong linkage with CIMB Niaga as illustrated in the common brand name, operational alignment and funding support through without-recourse joint financing scheme. Any significant dilution in ownership by, or perceived weakening support from CIMB Niaga and CIMB Group would put pressure on CNAF's ratings. Rating Sensitivities - Debt Ratings The ratings of the companies' Rupiah-denominated senior bonds and bond programme are the same as their National Long-Term and Short- Term Ratings. This is because these debts constitute direct, unsubordinated and senior unsecured obligations of the concerned entities and rank equally with all their other unsecured and unsubordinated obligations. Any changes in the National Long-Term and Short-Term Ratings would affect these issue ratings. The subordinated debts are rated two notches below the banks' National Long-Term Rating, comprising one notch for loss severity and one notch for non-performance risk to reflect their subordination status and coupon and/or principal deferral risk. The list of rating actions is: CIMB Niaga Long-Term Foreign Currency IDR affirmed at 'BBB'; Outlook Stable National Long-Term rating affirmed at 'AAA(idn)'; Outlook Stable Viability Rating affirmed at 'bb' Support Rating affirmed at '2' Rupiah Senior Bond Programme 1 2012 affirmed at 'AAA(idn)' Rupiah Senior Bond Programme 1 tranche 1 2012 affirmed at 'AAA(idn)' Rupiah Subordinated bond affirmed at affirmed at 'AA(idn)' OCBC NISP Long-Term Foreign Currency IDRs affirmed at 'BBB'; Outlook Stable Long-Term Local Currency IDRs upgraded to 'A-'; Outlook Stable Short-Term Foreign Currency IDR affirmed at 'F3' National Long-Term rating affirmed at 'AAA(idn)'; Outlook Stable National Short-Term rating affirmed at 'F1+(idn)' Viability Rating affirmed at 'bb' Support Rating affirmed at '2' Rupiah Subordinated bond affirmed at 'AA(idn)' Rupiah Senior Bond Programme 1 2012 affirmed at 'AAA(idn)'/'F1+(idn)' Rupiah Senior Bond Programme 1 tranche 1 2013 affirmed at 'AAA(idn)'/'F1+(idn)' UOBI National Long-Term rating affirmed at 'AAA(idn)'; Outlook Stable CNAF National Long-Term rating affirmed at 'AA+(idn)'; Outlook Stable National Short-Term rating affirmed at 'F1+(idn)' Medium Term Notes affirmed at 'AA+(idn)' Rupiah Senior Bonds affirmed at 'AA+(idn)' /'F1+(idn)' ========= J A P A N ========= CORSAIR 2: S&P Lowers Rating on JPY3BB Loan to B ------------------------------------------------- Standard & Poor's Ratings Services said that it has lowered its rating on Corsair (Jersey) No. 2 Ltd.'s fixed rate credit-linked loan series 58 and removed the rating from CreditWatch with negative implications. S&P placed its rating on series 58 on CreditWatch negative on Jan. 18, 2013. S&P's downgrade of the transaction reflects its synthetic rated overcollateralization (SROC) level. S&P has lowered its rating to the level at which the SROC equals or exceeds 100 percent as of the April review. This transaction is a synthetic collateralized debt obligation (CDO) that is referenced to portfolios of global corporate names. 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 Report included in this credit rating report is available at: http://standardandpoorsdisclosure-17g7.com RATING LOWERED, REMOVED FROM CREDITWATCH NEGATIVE Corsair (Jersey) No. 2 Ltd. Fixed rate credit-linked loan series 58 To From Amount B (sf) B+ (sf)/Watch Neg JPY3.0 bil. ==================== N E W Z E A L A N D ==================== MAINZEAL PROPERTY: Hobson Gardens Disputes Hoists Ownership ----------------------------------------------------------- Stuff.co.nz reports that two hoists sitting on one of Mainzeal Property and Construction Ltd stalled Auckland construction sites are at the centre of a battle between receivers and an apartment complex's body corporate. According to Stuff.co.nz, the High Court at Auckland has heard that the hoists -- external elevators which are worth about NZ$350,000 each -- were put in place by Mainzeal to give workers access to the exterior and the higher storeys of the multi-level Hobson Gardens building in Auckland's CBD. Mainzeal was forced to carry out remedial recladding work on the 97-apartment complex after its initial construction was found to be leaky, Stuff.co.nz says. The report relates that the financial impact of leaky building remedial work is understood to be a major reason for Mainzeal Property & Construction slipping into receivership, and subsequent liquidation. It is believed the cost of the work on Hobson Gardens was about NZ$15 million, the report notes. According to the report, Hobson Gardens' body corporate is arguing that its construction contract with Mainzeal allows it to take ownership of the hoists. It argues the contractual arrangement outranks both general and specific security agreements held by secured creditor BNZ over the hoists, the report relates. Stuff.co.nz discloses that BNZ is owed NZ$11.2 million by Mainzeal, and is listed by receivers as the first-ranking secured creditor. However Hobson Gardens' lawyer Ross Dillon said the bank should have known the terms of the contract and had effectively consented to the transfer of ownership of the hoists when receivers shut down the construction project, Stuff.co.nz reports. Stuff.co.nz relates that the receivers' lawyer Matthew Kersey said his client had offered to lease the hoists to Hobson Gardens while the recladding was completed by another contractor, but the body corporate responded that it did not need to lease them because it now owned them. Mr. Kersey said the bank's "perfected" security agreements trumped Hobson Gardens' claim because, among other reasons, it was registered with the Companies Office, the report adds. 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. PEGASUS TOWN: Unsecured Creditors Left High and Dry After Sale --------------------------------------------------------------- NBR Online reports that the North Canterbury Pegasus Town property development and its sections sold for NZ$68.8 million, leaving unsecured creditors -- who were largely related parties -- out in the cold, according to the latest receiver's report. NBR Online notes that the Todd Property Group bought the development in December last year, saying it expected to complete the town by 2015, though it is unclear whether the sections sold were part of the deal. The price was not disclosed at the time. According to NBR Online, receivers David Ruscoe and Richard Simpson of Grant Thornton said in their latest report that the development's business and assets were sold for NZ$66.2 million and its sections for NZ$2.6 million. Secured creditors were paid NZ$1.8 million from the section sales, and received NZ$65.9 million as a settlement distribution. The sale and purchase agreement also included a NZ$117,000 transfer of cash assets. That leaves secured creditors New Zealand Property Finance Partners, a joint venture between Goldman Sachs and Brookfield Asset Management, owed NZ$89.5 million as at April 15, having previously been owed NZ$142.8 million by the development, according to NBR Online. That does not necessarily mean the venture is out of pocket, with the Goldman-Brookfield partnership buying the loans at a steep discount in 2011 from Bank of Scotland International as part of a larger NZ$1.3 billion portfolio in New Zealand. NBR Online says the receivers' report revealed that the other secured creditor, Wai Ora, was owed NZ$368,137, while unsecured creditors, who will not be paid, were owed almost NZ$12 million. Messrs. Ruscoe and Simpson's first report said some NZ$11.4 million of unsecured claims were from related parties, NBR Online discloses. Preferential creditors, including employees and IRD, were paid NZ$81,121 in the period, NBR Online relays. As reported in the Troubled Company Reporter-Asia Pacific on Aug. 21, 2012, Fairfax NZ News said Pegasus Town Ltd was placed in receivership. Simon Thorne has been appointed as receiver. Owner Bob Robertson said that difficulty refinancing a loan was behind the Pegasus trouble but there was no "contagion effect" for other projects, according to Fairfax NZ News. The receivership action was taken by New Zealand Property Finance Partners, an investment consortium owned by Australia's Brookfield group and investment banker Goldman Sachs. The consortium bought a loan over Pegasus Town from the Bank of Scotland last year, Fairfax NZ News related. Pegasus agreed to buy back the loan from Brookfield and Goldman Sachs, but could not get the finance, Fairfax NZ News disclosed. Pegasus Town has been designed for 7,000 residents in 2,500 homes. ==================== S O U T H K O R E A ==================== LEO MOTORS: John Scrudato CPA Raises Going Concern Doubt -------------------------------------------------------- Leo Motors, Inc., filed with the U.S. Securities and Exchange Commission on April 16, 2012, its annual report on Form 10-K for the year ended Dec. 31, 2012 John Scrudato CPA, in Califon, New Jersey, expressed substantial doubt about Leo Motors' ability to continue as a going concern, citing the Company's significant losses since inception of $16.2 million and working capital deficit of $632,161. The Company reported a net loss of $1.9 million on $25,605 of revenues in 2012, compared with a net loss of $5.4 million on $920,587 of revenues in 2011. In 2011 the Company determined its investment in Leo B&T Inc. an investment account was impaired and recorded an expense of $4.5 million. During the 2012 year the Company had a net non operating income largely from the result of the forgiveness of debt for $1.3 million. The Company's balance sheet at Dec. 31, 2012, showed $1.4 million in total assets, $1.7 million in total liabilities, and a stockholders' deficit of $269,422. A copy of the Form 10-K is available at http://is.gd/GEDClg Headquartered in Hanam City, Gyeonggi-do, Republic of Korea, Leo Motors, Inc., a Nevada corporation, is currently engaged in the research and development of multiple products, prototypes and conceptualizations based on proprietary, patented and patent pending electric power generation, drive train and storage technologies. RNL BIO: Investors Set to Lose KRW200 Billion on Delisting ---------------------------------------------------------- Yonhap News reports that local retail investors are expected to lose up to KRW200 billion (US$178.3 million) from the scheduled delisting of RNL Bio Co., a stem cell researcher, sources said Wednesday. The news agency says the outlook came as RNL Bio is set to be delisted from the main bourse after posting a net loss of KRW56.1 billion last year and receiving a disclaimer of opinion from auditors on their financial statements earlier this month. Based in Seoul, South Korea, RNL Bio Co., Ltd. engages in the research and development of stem cell therapies and natural material screening techniques. =============== T H A I L A N D =============== UNITED OVERSEAS: Fitch Affirms 'bb+' Viability Rating ----------------------------------------------------- Fitch Ratings has affirmed the National Long-Term ratings of three foreign-owned Thai banks -- United Overseas Bank (Thai) Public Company Limited (UOBT) and Industrial and Commercial Bank of China (Thai) Public Company Limited' (ICBCT) at 'AAA(tha)' and CIMB Thai Bank Public Company Limited (CIMBT) at 'AA-(tha)'. The Outlook is Stable. At the same time, Fitch has also affirmed UOBT's and CIMBT's Long-Term Foreign-Currency IDR at 'A-' and 'BBB', respectively. Rating Action Rationale The three banks' National ratings, as well as the IDRs and Support Ratings of UOBT and CIMBT are based on Fitch's view that there is a high probability of support, if required, from their respective parents, United Overseas Bank Limited (UOB, 'AA-'/Stable), CIMB Bank Berhad (CIMB) and Industrial and Commercial Bank of China (ICBC; 'A'/Stable). This view is based on their parent banks' near-full ownership, name sharing, and their strategic importance to their parents. The Stable Outlooks for UOBT and ICBCT are consistent with that of their parents, while the Stable Outlook of CIMBT reflects Fitch's expectation that the parent bank's ability and propensity to provide extraordinary support to CIMBT is unlikely to change over the next one to two years. UOBT's Viability Rating (VR) of 'bb+' reflects its modest lending and deposits franchise, relatively weak funding profile, and persistently low profitability which is weaker than similarly rated peers, while the bank's capital position remains one of the strongest among Thai peers. The VR also takes into consideration UOBT's sound risk management culture and effective system, supported by UOB. CIMBT's VR of 'bb-' is based on its still modest franchise, low profitability and moderate liquidity. Despite improvements, CIMBT's overall credit profile remains generally in line with similarly rated peers. The VR also reflects ordinary support from CIMB. CIMBT's short-term senior unsecured debentures program is consistent with the National rating of the bank's Short-Term National Rating of 'F1+(tha)', as the debentures represent unsecured and unsubordinated obligations of the bank. CIMBT's Thai baht-denominated subordinated Upper Tier 2 debts are currently rated two notches below CIMBT's National Long-term Rating, based on its subordination and coupon deferral feature. Its subordinated unsecured debts (Lower Tier 2) are rated one notch below. The notching for these debts instruments reflects their subordination in the capital structure and are in line with Fitch's rating approach for such instruments. Rating Drivers and Sensitivities - IDRs, Support Rating, and National Ratings A material change in the parent banks' ability and willingness to support its Thai subsidiaries would have an impact on the subsidiaries' ratings. A reduction in the stake in the subsidiaries by the parent banks could result in a negative rating action. Since UOB Thai's LT FC IDR is constrained by Thailand's country ceiling, an upgrade of country ceiling would be positive to UOB Thai's LT FC IDR, while a downgrade of the country ceiling would be negative to UOBT's LT FC IDR. A material improvement in CIMB's credit profile may result in an upgrade of CIMBT's IDRs and National Ratings, conversely a significant deterioration may result in downgrades. A downgrade of ICBC's IDRs will negatively affect ICBCT's National ratings. An upgrade of Thailand's Long-Term Local Currency IDR, without any upgrade in the ratings of the parent ICBC, may result in a downgrade of ICBCT's National ratings. Rating Drivers and Sensitivities - Viability Rating and debts ratings UOBT's sustainable improvement in profitability without a material deterioration in asset quality or capital position would be positive to its VR, while deterioration in capital position may be negative to UOB Thai's VR. Significant and sustainable improvement in CIMBT's overall financial strength compared with peers could positively affect the VR, while a significant deterioration in key financial measures particularly for asset quality, liquidity and capital could negatively impact the VR. CIMBT's senior unsecured and subordinated debt ratings will be affected by changes to the bank's National Ratings. The performances of all three banks should continue to gradually improve over the medium-term due to the banks' growth momentum and supportive economic outlook. However, CIMBT's net profit in 2013 may be affected by reduced shared contributions from the management of legacy non-performing loans (NPLs). While, asset quality pressure could heighten in the medium-term for CIMBT and ICBCT due to their aggressive loan growth over the past two years, the risks could be mitigated by their strengthening loan loss coverage ratios of about 85%-90%. Moreover, expected capital support, if needed, from the parents should provide an additional buffer against the risks. UOB has a 99.7% stake in UOBT. UOBT is the 9th-largest bank in Thailand with 2.1% market share in assets. CIMB has a 93.7% stake in CIMBT. CIMBT is the 11th-largest bank in Thailand with 1.7% market share in assets. ICBCT is 97.7%-owned by ICBC. It has a market share of assets at 0.9%. The list of ratings actions is as follows: UOBT: - Long-Term Foreign Currency IDR affirmed at 'A-'; Outlook Stable - Short-Term Foreign Currency IDR affirmed at 'F2' - Viability Rating affirmed at 'bb+' - Support Rating affirmed at '1' - National Long-Term Rating affirmed at 'AAA(tha)'; Outlook Stable - National Short-term Rating affirmed at 'F1+(tha)' CIMBT: - Long-Term Foreign Currency IDR affirmed at 'BBB'; Outlook Stable - Short-Term Foreign Currency IDR affirmed at 'F3' - Viability Rating affirmed at 'bb-' - Support Rating affirmed at '2' - National Long-term rating affirmed at 'AA-(tha)'; Outlook Stable - National Short-term rating affirmed at 'F1+(tha)' - National Short-term debts affirmed at 'F1+(tha)' - Upper tier 2 debt affirmed at 'A(tha)' - Lower tier 2 debt affirmed at 'A+(tha)' ICBCT: - National Long-term rating affirmed at 'AAA(tha)'; Outlook Stable - National Short-term rating affirmed at 'F1+(tha)' ********* 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 without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***