/raid1/www/Hosts/bankrupt/TCRAP_Public/130521.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Tuesday, May 21, 2013, Vol. 16, No. 99
Headlines
A U S T R A L I A
ENERGYAUSTRALIA: Faces Continued Difficult Trading Conditions
LEETON SOLDIERS: Hopeful of Getting More Aid to Pay Creditors
SALISBURY GROUP: In Administration Following Closure of AFS
SP EXPORTS: Creditors Vote to Liquidate as Firm Miss Payments
* S&P Revises Outlook on 8 New Zealand Banks
C H I N A
DAQO NEW: Incurs $115.6-Mil. Net Loss in 2012
I N D I A
AMRIT HUMIFRESH: CRISIL Rates INR198MM Term Loan at 'B+'
BISLANIA AGRO: CRISIL Assigns 'B' Ratings to INR61.6MM Loans
CHAUDHARY NURSING: CRISIL Puts 'D' Ratings on INR74.8MM Loans
FABRIZIO INDUSTRIES: CRISIL Cuts Ratings on INR163.5MM Loans to D
MAHESHWARA COTTON: CRISIL Assigns 'B+' Ratings to INR65MM Loans
MILAN INFRA: CRISIL Rates INR80MM Term Loan at 'CRISIL B+'
MYSORE PAPER: CRISIL Lowers Ratings on INR1.01BB Loans to 'D'
R. K. PHARMA: CRISIL Assigns 'B' Rating to INR65MM Cash Credit
R.L. CONSTRUCTION: CRISIL Raises Rating on INR45MM Loan to 'B-'
SIMBHAOLI SUGARS: CRISIL Ups Ratings on INR7.02BB Loans to 'B-'
SRIPATHY ASSOCEATES: CRISIL Ups Ratings on INR70MM Loan to 'B'
STERILE EXTRUSIONS: CRISIL Places 'B+' Ratings on INR58.9MM Loans
I N D O N E S I A
VALE INDONESIA: S&P Affirms 'BB+' CCR; Outlook Stable
J A P A N
DTC EIGHT: S&P Affirms 'BB+' Rating on Class E Notes
ELPIDA MEMORY: Creditor Appeals on Reorganization Plan Tossed
SHARP CORP: S&P Affirms 'B+' CCR; Outlook Negative
TAIYO TMK 1: S&P Lowers Rating on Class B Specified Loan to BB-
N E W Z E A L A N D
MAINZEAL CONSTRUCTION: High Court Favors BNZ in Hoist Case
S O U T H K O R E A
SSANGYONG ENGINEERING: Latest Rescue Plan Delayed
X X X X X X X X
* BOND PRICING: For the Week May 13 to May 17, 2013
- - - - -
=================
A U S T R A L I A
=================
ENERGYAUSTRALIA: Faces Continued Difficult Trading Conditions
-------------------------------------------------------------
The Sydney Morning Herald reports that China Light and Power has
warned that its EnergyAustralia unit is facing continued
"difficult" trading conditions, with little respite expected
anytime soon.
"Market conditions in Australia remain difficult," the Hong Kong
company told shareholders in a quarterly trading update on Monday,
SMH reports.
"Suppressed wholesale prices, declining energy demand, regulatory
uncertainty and intense retail competition are continuing to exert
considerable pressure on the financial performance of the
business."
SMH relates that along with Origin Energy and AGL, EnergyAustralia
is one of the three largest integrated power utilities in
Australia, operating a suite of power stations along with holding
around a quarter of the electricity market.
With ongoing trading difficulties, the focus remains on cutting
costs and boosting operating efficiencies as it continues to seek
to work through the implications of "lower wholesale prices and
reduced electricity demand," the report notes.
Also weighing on performance is the continued union negotiations
at Yallourn for a new enterprise bargaining agreement.
"Industrial action may continue and management is working to
mitigate the financial impact on the company," the company told
shareholders.
China Light said no decision has been made whether to bid for NSW
government generation assets which are being sold, the report
adds.
LEETON SOLDIERS: Hopeful of Getting More Aid to Pay Creditors
-------------------------------------------------------------
The Irrigator reports that while a deed of company arrangement for
the Leeton Soldiers Club was two weeks unanimously accepted by
creditors, more work still needs to be done to ensure the success
of the club, according to the creditors committee.
According to the report, creditors will receive 50 cents in the
dollar for the money owed, with committee representative Mark Del
Gigante hoping a greater amount will be returned.
"It was very generous of the creditors to accept that offer," the
report quotes Mr. Del Gigante as saying. "No one wanted to see
the club close down . . . the creditors are very much on the same
page as the club board and want it to move ahead successfully.
"Hopefully through donations creditors might be able to see even
more of that money returned.
"At this stage, though, the creditors are more than happy with the
option presented and were happy to support the club."
The Irrigator notes that control of the Soldiers Club was formally
handed back to the board on May 12, but donations are still needed
to reach the goal of AUD500,000 in order for the creditors' debt
to be paid under the deed arrangement.
Mr. Del Gigante was pleased the creditors' support had paid off.
SALISBURY GROUP: In Administration Following Closure of AFS
-----------------------------------------------------------
Money Management reports that the Salisbury Group, a planning
business with 50 planners, has gone into administration following
the recent closure of Australian Financial Services.
AFS provided TSG with accounting, compliance, secretarial
services, regional management and professional indemnity (PI)
insurance, but withdrew these services prior to AFS entering
voluntary administration in late April, according to Money
Management.
The report relates that company records accessed via the
Australian Securities and Investments Commission indicate that TSG
is under administration; however Australian Financial Services
Licence (AFSL) records state that TSG still holds a current AFSL.
The report discloses that AFS PI insurance expired on April 30 and
its AFSL was cancelled a few days later. Prior to this, AFS had
written to TSG advisers informing them that AFS would not be able
to provide PI cover beyond April 30, the report notes.
The report relays that AFS urged past and present TSG advisers to
seek their own PI insurance cover or to take up a separate PI
insurance arrangement through AFS' existing insurer.
SP EXPORTS: Creditors Vote to Liquidate as Firm Miss Payments
-------------------------------------------------------------
NewsMail reports that the final nail has been hammered into the
coffin of embattled tomato-growing giant SP Exports, with
creditors voting to have the company liquidated after it missed
four month-end payments totaling AUD120,000.
Creditors last year voted to have the company enter into a Deed of
Company Arrangement after it went into voluntary administration on
February 17, the report recalls.
At the time the company's managing director Andrew Philip said the
operation would instead focus on marketing fruit rather than
growing it and that Agquip would take over the farming operation,
relates NewsMail.
"The main thing now is to take the company through the deed of
company arrangement and work on getting money back to the
creditors," Mr. Philip told the NewsMail in April last year.
But that plan ended last week when 25 creditors met and
unanimously agreed the company should be liquidated after it
missed four monthly payments of AUD30,000.
According to the report, liquidator John Shanahan from FTI
Consulting said former employees of the company, who were owed
about AUD660,000, would be paid under the Australian Government's
General Employee Entitlements and Redundancy Scheme (GEERS).
"The GEERS scheme provides the employees all their entitlements
with the exception of superannuation," the report quotes
Mr. Shanahan as saying.
But other creditors, both secure and unsecured, will not be so
lucky with the company having almost no assets left.
"The only assets will be any debtors and the results of recoveries
we may make including assets and preference recoveries," Mr.
Shanahan, as cited by the report, said. "There is no property."
More than AUD12.1 million has been claimed by unsecured creditors
during the administration of SP Exports, all of which is still
outstanding, the report discloses. About AUD18 million was owed
to secured creditors with the amount now almost halved to AUD9.7
million still outstanding.
SP Exports Pty Ltd -- http://www.spexports.com.au/-- is
Australia's premier field grown tomato producer.
KordaMentha administrators Ginette Muller and John Shanahan were
appointed as administrators on Feb. 17, 2012. SP Exports owes
unsecured creditors about AUD12.5 million and secured creditors
about AUD18 million. Employees are owed in excess of AUD500,000
in wages.
* S&P Revises Outlook on 8 New Zealand Banks
--------------------------------------------
Standard & Poor's Ratings Services said that it had revised its
outlooks on eight New Zealand banks to negative from stable. The
financial institutions affected are: Co-operative Bank (The),
Heartland Bank Ltd., TSB Bank Ltd., Credit Union Baywide, Credit
Union South, First Credit Union, New Zealand Association of Credit
Unions, and Police and Families Credit Union. S&P has also
affirmed its long- and short-term counterparty credit ratings on
these banks.
As a result of the revised outlooks on Heartland Bank Ltd. and New
Zealand Association of Credit Unions, the outlook on their
respective insurance subsidiaries MARAC Insurance Ltd. and Credit
Union Insurance Ltd. have also been revised to negative from
stable. The ratings on MARAC Insurance Ltd. ('BB+') and Credit
Union Insurance Ltd. ('BB') have been affirmed under the revised
insurance criteria effective May 7, 2013.
At the same time, S&P has affirmed the ratings on ANZ Bank New
Zealand Ltd., ASB Bank Ltd., Bank of New Zealand, Westpac New
Zealand Ltd., Bank of India (New Zealand) Ltd., Rabobank New
Zealand Ltd., and Kiwibank Ltd. The outlooks on these banks
remain unchanged.
S&P may lower the ratings on the eight New Zealand banks that are
on negative outlook by one-to-two-notches within the next two
years if economic vulnerabilities worsen, in S&P's view. S&P
considers that this risk is heightened by New Zealand's material
dependence on external borrowings and persistent current account
deficits, in the backdrop of an uncertain short-to-medium term
outlook for the global economic recovery. Furthermore, S&P notes
recent strong growth in house prices (particularly in Auckland).
"Consequently, we consider that there is an increasing risk that a
sharp correction in property prices could occur if there is a
weakening in the country's macroeconomic factors. For example,
should there be a further widening in current account deficit, or
a weakening in terms of trade, this could heighten the risk of a
sharp depreciation in currency, which may affect confidence in the
housing market, particularly if accompanied by a significant rise
in unemployment. If these were to occur, banks' credit losses
could rise materially, given that there was a build-up in housing
prices and domestic credit over the period preceding the global
financial crisis. We consider that such a scenario would have a
high impact on the banking sector and financial strength of the
balance sheets of New Zealand banks. We note that the Reserve
Bank of New Zealand's planned initiatives to manage banking
systemic risks could mitigate some of these vulnerabilities," S&P
said.
S&P could revise the outlooks back to stable if it considers that
the uncertainties around the structural imbalances have abated.
For the banks that benefit from group support, S&P is of the view
that the ratings of these institutions would remain equalized with
that of the parent. However, if economic vulnerabilities worsen,
the stand-alone credit factor assessments could be negatively
impacted.
RATING LIST
To From
MAJOR BANKS
ANZ Bank New Zealand Ltd.
AA-/Stable/A-1+ AA-/Stable/A-1+
ASB Bank Ltd.
AA-/Stable/A-1+ AA-/Stable/A-1+
Bank of New Zealand
AA-/Stable/A-1+ AA-/Stable/A-1+
Westpac New Zealand Ltd.
AA-/Stable/A-1+ AA-/Stable/A-1+
OTHER BANKS
Bank of India (New Zealand) Ltd.*
BBB-/Negative/A-3 BBB-/Negative/A-3
Co-operative Bank (The)
BBB-/Negative/A-3 BBB-/Stable/A-3
Heartland Bank Ltd.
BBB-/Negative/A-3 BBB-/Stable/A-3
Kiwibank Ltd.*
A+/Stable/A-1 A+/Stable /A-1
Rabobank New Zealand Ltd.*
AA-/Stable/A-1+ AA-/Stable/A-1+
TSB Bank Ltd.
BBB+/Negative/A-2 BBB+/Stable/A-2
NONBANK MUTUALS
Credit Union Baywide
BB/Negative/B BB/Stable/B
Credit Union South
BB-/Negative/B BB-/Stable/B
First Credit Union
BB/Negative/B BB/Stable/B
New Zealand Association of Credit Unions
BB+/Negative/B BB+/Stable/B
Police and Families Credit Union
BB+/Negative/B BB+/Stable/B
INSURANCE SUBSIDIARIES
MARAC Insurance Ltd.
BB+/Negative/- BB+/Stable/-
Credit Union Insurance Ltd.
BB/Negative/- BB/Stable/-
*Bank is guaranteed by parent. The issuer credit rating is one
notch lower than the standalone credit profile (SACP) to account
for credit factors not captured in the SACP.
=========
C H I N A
=========
DAQO NEW: Incurs $115.6-Mil. Net Loss in 2012
---------------------------------------------
Daqo New Energy Corp. filed on April 23, 2013, its annual report
on Form 20-F, reporting a net loss of $115.6 million on
$86.9 million of revenues for the year ended Dec. 31, 2012,
compared with net income of $34.9 million on $232.2 million of
revenues for the year ended Dec. 31, 2011.
According to the regulatory filing, the decrease in total revenues
was primarily attributable to the precipitous fall of the sales
price of the Company's polysilicon throughout 2012.
The Company's balance sheet at Dec. 31, 2012, showed
$816.3 million in total assets, $475.4 million in total
liabilities, and stockholders' equity of $340.9 million.
According to the regulatory filing, the following factors raise
substantial doubt about the Company's ability to continue as a
going concern for the foreseeable future.
* The solar industry is being negatively impacted by a number of
factors including excess capacity, reduction of government
incentives in key solar markets, higher import tariffs and the
European debt crisis. These factors have contributed to declining
average selling prices for the Company's products. The average
selling price of polysilicon has fallen from nearly $60 per
kilogram in 2010 to almost $23 per kilogram in 2012.
* For the year ended Dec. 31, 2012, the Company incurred an
operating loss of $88,517,894.
* During the year Dec. 31, 2012, the Company experienced
negative cash flow from operations of $10,307,234, primarily as a
result of the net loss incurred by the Company.
* As of Dec. 31, 2012, the Company's current liabilities exceed
its current assets by $163,799,978. While the Company had cash
and cash equivalents of $6,679,024, it had short-term bank
borrowings of $51,273,360 all due within one year and the current
portion of long-term debt amounting of $69,006,400, which is
restricted to purchase fixed assets and not expected to be
renewed.
A copy of the Form 20-F is available at http://is.gd/0sgUc4
Daqo New Energy Corp. (NYSE: DQ) is a polysilicon manufacturer
based in China. Daqo New Energy primarily manufactures and sells
high-quality polysilicon to photovoltaic product manufacturers.
It also manufactures and sells photovoltaic wafers.
=========
I N D I A
=========
AMRIT HUMIFRESH: CRISIL Rates INR198MM Term Loan at 'B+'
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Amrit Humifresh Preservation Private Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 198 CRISIL B+/Stable
The rating reflects AHPPL's small scale of operations in the
highly fragmented cold storage industry, its weak financial
profile marked by high gearing and risks related with on-going
debt funded capital expenditure. These rating weaknesses are
partially offset by the promoter's extensive experience in the
cold storage industry.
Outlook: Stable
CRISIL believes that AHPPL will continue to benefit from promoters
extensive experience in the industry. The outlook may be revised
to 'Positive' in case of timely implementation and stabilization
of ongoing capex leading to substantial improvement in scale of
operations and cash accruals. Conversely, the outlook may be
revised to 'Negative' if the company's financial risk profile
deteriorates due to pressure on its profitability or delays in
stabilization of project.
AHPPL is an integrated cold chain providing cold storage
facilities for various fruits, vegetables, dry fruits and spices.
It was set up by Mr. B.K. Gupta in the year 2000 and became
operational in 2003. Mr. Deepak Agarwal, son of the promoter looks
into the day-to-day operations of the company.
AHPPL reported a profit after tax (PAT) of INR0.8 million on net
sales of INR15.3 million for 2011-12 (refers to financial year,
April 1 to March 31), as against a PAT of INR0.6 million on net
sales of INR11.3 million for 2010-11.
BISLANIA AGRO: CRISIL Assigns 'B' Ratings to INR61.6MM Loans
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank loan facilities of Bislania Agro Products Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 28.6 CRISIL B/Stable
Bank Guarantee 1.0 CRISIL A4
Cash Credit 33.0 CRISIL B/Stable
The ratings reflect BAPPL's small scale of operations in the
fragmented rice milling industry, and susceptibility to raw
material prices, the vagaries of the monsoon, and to adverse
regulatory changes; the ratings also factor in BAPPL's weak
financial risk profile marked by small networth, high gearing and
weak debt-protection metrics. These rating weaknesses are
partially offset by the benefits that BAPPL derives from its
promoters' extensive experience in the rice industry and the
stable demand for rice.
Outlook: Stable
CRISIL believes that BAPPL will continue to benefit over the
medium term from its established relationship with its customers,
the assured rice offtake by the government, and the stable demand
for rice in the country. The outlook may be revised to 'Positive'
in case the company registers substantial improvement in its cash
accruals through improvement in its scale of operations or
operating efficiency, or demonstrates better working capital
management leading to significant improvement in its financial
risk profile, particularly in its liquidity. Conversely, the
outlook may be revised to 'Negative' in case BAPPL generates
lower-than-expected accruals, registers deterioration in its
working capital management, or undertakes any large, debt-funded
capital expenditure programme, leading to deterioration in its
financial risk profile, particularly in its liquidity.
BAPPL, incorporated in 2005, mills non-basmati parboiled rice. It
commenced commercial operations in July 2010. Its manufacturing
facility is at Siliguri (West Bengal). BAPPL's day-to-day
operations are looked after by its director Mr. Babulal Agarwal.
The company markets its products under the brand names, Big Boss
and Rice India.
CHAUDHARY NURSING: CRISIL Puts 'D' Ratings on INR74.8MM Loans
-------------------------------------------------------------
CRISIL has revoked the suspension of its ratings on the bank
facilities of Chaudhary Nursing Home Pvt Ltd and has assigned its
'CRISIL D/CRISIL D' ratings to the aforementioned facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL D (Assigned;
Suspension Revoked)
Overdraft Facility 47.5 CRISIL D (Assigned;
Suspension Revoked)
Term Loan 22.3 CRISIL D (Assigned;
Suspension Revoked)
The ratings were previously 'Suspended' by CRISIL vide the Rating
Rationale dated March 30, 2013, since CNHPL had not provided
necessary information required for reviewing the ratings. CNHPL
has now shared the requisite information, thereby enabling CRISIL
to assign ratings to the bank facilities. The ratings reflect
delay by CNHPL in servicing its term loan; the delay has been
caused by the company's weak liquidity.
CNHPL has large working capital requirements; it is also exposed
to geographical concentration in revenue profile and to intense
competition in the local health care industry. However, CNHPL
benefits from its promoters' extensive experience in the health
care industry.
CNHPL, incorporated in 1988, operates a 150-bed multi-specialty
hospital named Vinayak Hospital in Noida (Uttar Pradesh). The
hospital provides services such as general surgery, laboratory
testing, radiology and imaging, physiotherapy, and rehabilitation,
and treatments in obstetrics and gynaecology, orthopaedics, and
dermatology.
CNHPL is estimated to report a profit after tax (PAT) of INR8.1
million on net income of INR60.7 million for 2011-12 (refers to
financial year, April 1 to March 31) against a PAT of INR7.5
million on net sales of INR60 million for 2010-11.
FABRIZIO INDUSTRIES: CRISIL Cuts Ratings on INR163.5MM Loans to D
-----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Fabrizio Industries Pvt Ltd to 'CRISIL D' from 'CRISIL
B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 27.5 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Term Loan 136.0 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The rating downgrade reflects instances of delay by FIPL in
servicing its debt; the delays have been caused by FIPL's weak
liquidity resulting from inadequate cash accruals.
FIPL also has a below-average financial risk profile marked by its
small net worth, high debt levels resulted in high gearing and
weak debt protection metrics. However, FIPL continues to benefit
from favorable demand prospects and exclusive technology tie-up
with GEFIT SpA, Italy.
Incorporated in 2009 in Mapusa (Goa), FIPL is promoted by Mr.
Desai, one of the largest liquor wholesale distributors in the Goa
region. The company manufactures security closures for spirit
bottles.
MAHESHWARA COTTON: CRISIL Assigns 'B+' Ratings to INR65MM Loans
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of Maheshwara Cotton Industries.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
SME Credit 2.5 CRISIL B+/Stable
Cash Credit 50.0 CRISIL B+/Stable
Long-Term Loan 12.5 CRISIL B+/Stable
The rating reflects MCI's small scale of operations in the
fragmented cotton ginning industry and it's below average
financial risk profile marked by a weak capital structure and
modest debt protection metrics. These rating weaknesses are
partially offset by the extensive industry experience of its
promoters in the cotton ginning industry.
Outlook: Stable
CRISIL believes that MCI will continue to benefit over the medium
term from its partners' extensive industry experience. The outlook
may be revised to 'Positive' if the firm's revenues and
profitability increase substantially leading to an improvement in
its financial risk profile or in case of significant infusion of
capital resulting in an improvement in its capital structure.
Conversely, the outlook may be revised to 'Negative' if the firm
undertakes a larger-than-expected debt-funded capital expenditure,
or if its revenues and profitability decline substantially or if
the partners withdraw capital from the firm leading to
deterioration in its financial risk profile.
Set up in 2009 as a partnership entity, MCI is engaged in cotton
ginning in Adilabad district of Andhra Pradesh. The firm is
promoted by Mr. Dindigala Malliah and his family.
For 2011-12 (refers to financial year April 1 to March 31), MCI
reported a profit after tax (PAT) of INR1.4 million on net sales
of INR185 million as against a PAT of INR0.2 million on net sales
of INR97.7 million during 2010-11.
MILAN INFRA: CRISIL Rates INR80MM Term Loan at 'CRISIL B+'
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Milan Infrastructures & Developers Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 80 CRISIL B+/Stable
The rating reflects MIDPL's exposure to project funding risk, and
to the risks and cyclicality inherent in the Indian real estate
industry. These rating weaknesses are partially offset by the
extensive experience of the company's promoters in the real estate
industry.
Outlook: Stable
CRISIL believes that MIDPL will continue to benefit over the
medium term from the extensive industry experience of its
promoters. The outlook may be revised to 'Positive' if there is a
significant improvement in the company's credit risk profile,
backed by timely funding support from promoters and bank, and
timely completion and high saleability of its ongoing project,
leading to healthy and sustainable cash accruals. Conversely, the
outlook may be revised to 'Negative' if there are delays in
receiving funding for the projects, leading to pressure on MIDPL's
revenues or construction schedule, or time and cost overruns in
its ongoing projects, or significant pressure on its liquidity.
MIDPL, set up in 2006, is engaged in development of various
residential and commercial projects, mainly in and around
Ghaziabad (Uttar Pradesh). The company is promoted by Mr. Navin
Tyagi and Mr. Amit Mahajan, based in Uttar Pradesh. At present,
MIDPL is undertaking a residential-cum-commercial project at
Rajnagar extension, Ghaziabad. It is also developing a residential
project on contract basis for Azpa Society, Ghaziabad.
MIDPL reported a net profit of INR0.20 million on net sales of
INR21.10 million for 2011-12 (refers to financial year, April 1 to
March 31); it had no net sales in 2010-11.
MYSORE PAPER: CRISIL Lowers Ratings on INR1.01BB Loans to 'D'
-------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of The
Mysore Paper Mills Ltd to 'CRISIL D/CRISIL D' from 'CRISIL
C/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 450 CRISIL D (Downgraded from
'CRISIL C')
Letter of Credit 550 CRISIL D (Downgraded from
'CRISIL A4')
Bank Guarantee 10 CRISIL D (Downgraded from
'CRISIL A4')
The rating downgrade reflects MPML's continuously overdrawn cash
credit account for more than 30 consecutive days. The account has
been overdrawn because of the company's weak liquidity stemming
from large operating losses.
MPML also has a weak financial risk profile, marked by a negative
net worth and inadequate debt protection metrics. Furthermore, it
has a poor operating efficiency and is exposed to risks related to
the highly competitive and commoditised paper industry. However,
the company benefits from the financial support it receives from
the Government of Karnataka (GoK).
MPML was founded in May 1936 by the then maharaja of Mysore. In
November 1977, GoK acquired a controlling interest in the company.
As on March 31, 2013, GoK owned 64.7 per cent of MPML's equity
shares; the remainder was held by financial institutions and the
general public.
MPML is an ISO-14001-certified company, producing news print,
writing and printing paper, and sugar at its plant at Bhadravati
in the Shimoga district of Karnataka.
MPML reported a net loss of INR769 million on net sales of INR3.6
billion for 2011-12 (refers to financial year, April 1 to
March 31), as against a net loss of INR848 million on net sales of
INR3.3 billion for 2010-11.
R. K. PHARMA: CRISIL Assigns 'B' Rating to INR65MM Cash Credit
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of R. K. Pharmaceutical.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 65 CRISIL B/Stable
Letter of Credit 65 CRISIL A4
The ratings reflect small scale of RKP's operations marked by
geographical concentration in its revenue profile and RKP's weak
financial risk profile. These rating strengths are partially
offset by extensive industry experience of RKP's promoter.
Outlook: Stable
CRISIL believes that RKP will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' in case of improvement in
capital structure and higher than expected increase in revenues &
profitability, leading to improvement of debt protection measures.
Conversely, the outlook may be revised to 'Negative' in case the
firm's profitability or revenues decline, resulting in lower-than-
expected cash accruals leading to deterioration of its financial
risk profile.
RKP established in 2006 by Mr. Rakesh Sharma, is engaged in
trading of Aluminium foils (Alufoil) used for packaging in
pharmaceutical industry. The firm is based out of Jalandhar
(Punjab).
RKP is estimated to report net profit of INR5.4 million on net
sales of INR400 million for 2012-13 (refers to financial year,
April 1 to March 31), as against a net profit of INR2.4 million on
net sales of INR351 million for 2011-12
R.L. CONSTRUCTION: CRISIL Raises Rating on INR45MM Loan to 'B-'
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities of
R.L. Construction to 'CRISIL B-/Stable' from 'CRISIL C', and has
reaffirmed its rating on the firm's short-term bank facilities at
'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 70 CRISIL A4 (Reaffirmed)
Cash Credit 45 CRISIL B-/Stable (Upgraded
from 'CRISIL C')
The rating upgrade reflects improvement in RLC's liquidity. The
improvement in liquidity is on account of the fact that the firm
has serviced its entire long-term debt. CRISIL believes that RLC
will sustain the improvement in its liquidity on the back of
increased accruals and the absence of term debt obligations going
ahead.
The ratings continue to reflect RLC's weak, though improved,
liquidity, because of the firm's large working capital
requirements; the ratings also factor in RLC's geographical and
product concentration. These rating weaknesses are partially
offset by the benefits that RLC derives from its promoters'
experience in the civil construction industry.
Outlook: Stable
CRISIL believes that RLC's liquidity will remain weak over the
medium term because of the firm's large working capital
requirements, especially on account of the need of keeping deposit
towards bank guarantee margin and security margin. The outlook
will be revised to 'Positive' if RLC's liquidity improves,
supported by better cash accruals or support from its promoters in
the form of equity or unsecured loans. Conversely, the outlook may
be revised to 'Negative' if RLC faces delays in collection of
receivables, leading to deterioration in its liquidity.
RLC, based in Silchar (Assam), was set up as a partnership firm by
three friends, Mr. Gouranga Paul, Mr. Mukul Paul, and Mr. Nirmal
Banik, in 1999. RLC undertakes earthwork, construction of side
drains, site development, strengthening of bridges, and
construction of minor bridges for North Eastern Indian Railways.
RLC reported a profit after tax (PAT) of INR12 million on net
sales of INR167 million for 2011-12 (refers to financial year,
April 1 to March 31), against a PAT of INR15 million on net sales
of INR268 million for 2010-11.
SIMBHAOLI SUGARS: CRISIL Ups Ratings on INR7.02BB Loans to 'B-'
---------------------------------------------------------------
CRISIL has upgraded its rating on the bank facilities of Simbhaoli
Sugars Ltd to 'CRISIL B-/Stable/CRISIL A4' from 'CRISIL D/ CRISIL
D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3,337.50 CRISIL B-/Stable (upgraded
from 'CRISIL D')
Term Loan 2,220.60 CRISIL B-/Stable (upgraded
from 'CRISIL D')
Letter of Credit & 912.50 CRISIL A4 (upgraded from
Bank Guarantee 'CRISIL D')
Working Capital 500.0 CRISIL B-/Stable (upgraded
Term Loan (WCTL) from 'CRISIL D')
Proposed Long Term 965.60 CRISIL B-/Stable (upgraded
Bank Loan facility from 'CRISIL D')
The rating upgrade reflects the improvement in the liquidity
profile of SSL, after infusion of capital of INR865 million by
promoters as part of Corporate Debt Restructuring scheme, along
with receipt of insurance claim of INR550 million. Moreover, the
divestment in its power division will help SSL raise around INR780
million to support its working capital requirements and debt
obligation. Its business risk profile is also expected to improve
with the abolition of levy quota and sugar release mechanism and
is expected to further improve the liquidity situation by
improvement in operating margin in sugar division. CRISIL,
however, believes that SSL's liquidity will remain weak over the
medium term, marked by high bank limit utilisation, low financial
flexibility, and large debt obligations.
CRISIL's ratings on the bank facilities of SSL reflect its weak
financial risk profile, marked by a highly leveraged capital
structure and weak debt protection metrics, vulnerability to high
degree of regulatory risk, and cyclicality in the sugar industry.
These rating weaknesses are mitigated by healthy growth in the
company's revenues and its established market position.
Outlook: Stable
CRISIL's believes that SSL's liquidity will remain constrained by
its large debt servicing obligations, over the medium term. The
outlook may be revised to 'Negative' in case of further decline in
its operating margin, affecting the company's ability to service
its debt. Conversely, the outlook may be revised to 'Positive' if
significant improvement in profitability leads to larger-than-
expected cash accruals, or if infusion of external funds further
improves the liquidity profile.
SSL (formerly, The Simbhaoli Sugar Mills Ltd) is a 75-year-old
company. SSL was established as a partnership firm in 1933 in
Simbhaoli (Uttar Pradesh [UP]). It was reconstituted in 1936 as a
private limited company and then to a public limited company in
1989. In 1992, it acquired a distillery and converted its
Simbhaoli sugar plant into a sugar complex. SSL now has an
integrated sugar unit and operates under the sugar-alcohol-power
business model. SSL is among the top 10 integrated sugar companies
in India.
SSL has three sugar plants, one each in Simbhaoli and Brijnathpur
in western UP and in Chilwaria in eastern UP; the company has a
combined crushing capacity of 20,100 tonnes of sugarcane per day.
SSL offers a broad range of sugar products, such as white crystal
refined sugar, pharmaceutical grade sugar, superfine sugar, sugar
cubes, icing sugar, table sugar, candy sugar, and sugar sachets.
SSL has hived off its power and alcohol division by forming two
100 per cent subsidiaries -- Simbhaoli Power Limited and Simbhaoli
Spirits Limited.
SSL reported net profit of INR154.6 million on net sales of
INR11.99 billion for 18-month period from October 1, 2010 to
March 31, 2012, as against net loss of INR 747 million on net
sales of INR12.62 billion for 12 months period from October 1,
2009 to September 30, 2010.
SRIPATHY ASSOCEATES: CRISIL Ups Ratings on INR70MM Loan to 'B'
--------------------------------------------------------------
CRISIL has upgraded its ratings on the bank loan facilities of
Sripathy Assoceates to 'CRISIL B/Stable/CRISIL A4' from 'CRISIL
D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70.00 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Bank Guarantee 140.00 CRISIL A4 (Upgraded from
'CRISIL D')
The rating upgrade reflects timely servicing of debt by Sripathy
over the past six months. The rating upgrade also reflects
CRISIL's belief that the firm will generate adequate cash accruals
to service its debt over the medium term. CRISIL, however, also
believes that Sripathy's liquidity, in spite of marginal
improvement, will remain weak, marked by high bank limit
utilisation because of moderate working capital requirements and
limited bank working capital lines.
The ratings reflect Sripathy's moderate working capital
requirements, and the susceptibility of the firm's operating
margin to volatility in raw material prices; the ratings also
factor in Sripathy's small scale of operations in the construction
industry. These rating weaknesses are partially offset by the
benefits that Sripathy derives from its partners' extensive
experience in the construction industry.
Outlook: Stable
CRISIL believes that Sripathy will continue to benefit over the
medium term from its partners' extensive industry experience. The
outlook may be revised to 'Positive' if the firm's liquidity
improves in a sustained manner, supported by improvement in its
working capital cycle or generation of higher-than-expected cash
accruals. Conversely, the outlook may be revised to 'Negative' if
Sripathy registers deterioration in its financial risk profile,
because of large debt-funded capital expenditure or capital
withdrawal from the firm by its partners.
Sripathy was set up as a partnership firm in 1989 at Erode (Tamil
Nadu). The firm undertakes civil contracts, involving the
construction of colleges, buildings, and roads, primarily for
government departments.
For 2011-12 (refers to financial year, April 1 to March 31),
Sripathy booked a profit after tax (PAT) of INR48.7 million on an
operating income of INR1.02 billion, against a PAT of INR42.4
million on an operating income of INR826.5 million for 2010-11.
STERILE EXTRUSIONS: CRISIL Places 'B+' Ratings on INR58.9MM Loans
-----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Sterile Extrusions Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 21.00 CRISIL B+/Stable
Term Loan 37.90 CRISIL B+/Stable
The rating reflects SEPL's nascent stage of operations and
vulnerability to volatility in aluminium prices and intense
competition in the aluminium extrusion industry. These rating
weaknesses are partially offset by the promoter's extensive
entrepreneurial experience.
Outlook: Stable
CRISIL believes that SEPL will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if SEPL's revenues and
profitability increase substantially due to stabilization of its
manufacturing facilities leading to healthier cash accruals.
Conversely, the outlook may be revised to 'Negative' if SEPL
undertakes larger-than-expected debt-funded expansions, or if its
revenues and profitability decline substantially, weakening its
financial risk profile.
SEPL commenced commercial operations in June 2012, and
manufactures aluminium sections and profiles. The product
portfolio consists of various aluminium profiles, which are used
as panels, channels, and verticals with their end usage in
residences, construction, and other industries.
=================
I N D O N E S I A
=================
VALE INDONESIA: S&P Affirms 'BB+' CCR; Outlook Stable
-----------------------------------------------------
Standard and Poor's Ratings Services affirmed its 'BB+' corporate
credit and 'A-' issue ratings on PT Vale Indonesia Tbk (PTVI) The
outlook is stable.
S&P's 'BB+' ratings on PTVI reflect its 'bb' stand-alone credit
profile (SACP) and one notch of support from its parent company
Vale S.A. (Vale; A-/Stable/--). PTVI's SACP reflects its "fair"
business risk profile and "intermediate" financial risk profile.
The issuer rating incorporates one notch of support from Vale,
which fully and unconditionally guarantees PTVI's $300 million
bank loan. "We believe PTVI is strategically important to Vale,
which controls 58.7% of the company, and complements Vale's mining
assets portfolio," said Standard & Poor's credit analyst Rafaela
Vitoria. PTVI enjoys a "must take" sales contract with
shareholders and Vale appoints key management positions, which
evidences this support. In S&P's view, country risks in Indonesia
constrain the corporate credit rating, given the possible negative
impact on nickel producers in the country due to uncertainties
regarding Indonesia's mining laws.
=========
J A P A N
=========
DTC EIGHT: S&P Affirms 'BB+' Rating on Class E Notes
----------------------------------------------------
Standard & Poor's Ratings Services said that it has affirmed its
ratings on all classes issued by DTC Seven Funding Ltd. (DTC7) and
DTC Eight Funding Ltd. (DTC8).
S&P's affirmations of the ratings on the class A to D notes of
DTC7, and the class A to E notes of DTC8, reflect the following:
-- The performance of the apartment properties, in S&P's view,
will remain within its assumptions, although it is likely
to deteriorate slightly as the properties age.
-- Both transactions employ a unique principal payment rule,
whereby available cash is used to repay outstanding
subordinate notes--except for the most subordinated class-
if the subordination level of senior classes equals its
predefined target level. Therefore, no senior class'
subordination level increases over its predefined target
level.
At the same time, S&P affirmed its ratings on DTC7's and DTC8's
class N notes, which redeem mainly through the transaction's
excess spread, considering its prepayment and default scenario
going forward.
Regarding DTC8, 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 DTC8 reflect this view, in addition to
the aforementioned factors relating to S&P's credit analysis of
both transactions.
The assets underlying both 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 AFFIRMED
DTC Seven Funding Ltd.
JPY27.792 billion pass-through notes due February 2038*
Class Rating Initial issue amount
A AAA (sf) JPY21.78 bil.
B AA (sf) JPY1.20 bil.
C A (sf) JPY1.06 bil.
D BBB (sf) JPY0.89 bil.
N** BBB (sf) JPY2.35 bil.
*Nonrated class E notes (initial issue amount: about JPY0.512
bil.) were also issued under this transaction.
**Deferrable
DTC Eight Funding Ltd.
JPY44.232 billion pass-through notes due November 2038*
Class Rating Initial issue amount
A AA (sf) JPY35.00 bil.
B AA (sf) JPY1.78 bil.
C A (sf) JPY1.62 bil.
D BBB (sf) JPY1.21 bil.
E BB+ (sf) JPY0.24 bil.
N** BBB (sf) JPY3.90 bil.
*Nonrated class F notes (initial issue amount: about
JPY0.482 bil.) were also issued under this transaction.
**Deferrable
ELPIDA MEMORY: Creditor Appeals on Reorganization Plan Tossed
-------------------------------------------------------------
Micron Technology, Inc. on May 15 disclosed the Tokyo High Court's
issuance of an order dismissing creditor appeals of the Tokyo
District Court's approval of Elpida Memory, Inc.'s reorganization
plan. Elpida's reorganization plan calls for Micron to sponsor
the reorganization under which Elpida will join the Micron group
of companies.
On February 28, the Tokyo District Court approved the
reorganization plan following an Elpida creditor vote in which the
creditors voted overwhelmingly to approve the plan.
On March 29, certain unsecured creditors of Elpida filed appeals
of the District Court's approval order with the Tokyo High Court.
"We applaud the Tokyo High Court's ruling," said Micron CEO
Mark Durcan. "This is an important milestone on the way to Micron
and Elpida joining to become the world's second largest memory
provider with the strongest product portfolio in the industry."
The closing of the transaction remains subject to the satisfaction
or waiver of certain conditions -- including recognition of
Elpida's reorganization plan by the United States Bankruptcy Court
for the District of Delaware.
About Elpida Memory Inc.
Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is
a Japan-based company principally engaged in the development,
design, manufacture and sale of semiconductor products, with a
focus on dynamic random access memory (DRAM) silicon chips. The
main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM,
Mobile RAM and XDR DRAM, among others. The Company distributes
its products to both domestic and overseas markets, including the
United States, Europe, Singapore, Taiwan, Hong Kong and others.
The company has eight subsidiaries and two associated companies.
After semiconductor prices plunged, Japan's largest maker of DRAM
chips filed for bankruptcy in February with liabilities of 448
billion yen ($5.6 billion) after losing money for five quarters.
Elpida Memory and its subsidiary, Akita Elpida Memory, Inc.,
filed for corporate reorganization proceedings in Tokyo District
Court on Feb. 27, 2012. The Tokyo District Court immediately
rendered a temporary restraining order to restrain creditors from
demanding repayment of debt or exercising their rights with
respect to the company's assets absent prior court order.
Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo
Court as Supervisor and Examiner in the case.
Elpida Memory Inc. sought the U.S. bankruptcy court's recognition
of its reorganization proceedings currently pending in Tokyo
District Court, Eight Civil Division. Yuko Sakamoto, as foreign
representative, filed a Chapter 15 petition (Bankr. D. Del. Case
No. 12-10947) for Elpida on March 19, 2012.
Micron Technology, Inc. on Feb. 28 announced the Tokyo District
Court's issuance of an order approving Elpida Memory Inc.'s plan
of reorganization. Elpida's plan of reorganization calls for
Micron to sponsor Elpida's reorganization under which Elpida will
become a wholly owned subsidiary of Micron. The Tokyo District
Court's approval follows an Elpida creditor vote, concluded on
Feb. 26, in which the creditors voted to approve the
reorganization plan.
SHARP CORP: S&P Affirms 'B+' CCR; Outlook Negative
--------------------------------------------------
Standard & Poor's Ratings Services said that it has affirmed its
'B+' long-term corporate credit rating, 'B' debt rating, and its
'B' short-term rating on Sharp Corp. and all ratings of its
overseas subsidiaries -- Sharp Electronics Corp. and Sharp
International Finance (U.K.) PLC--and removed the ratings from
CreditWatch with negative implications. The outlook on S&P's
long-term corporate rating on Sharp is negative. S&P had placed
the ratings on Sharp and its overseas subsidiaries on CreditWatch
with negative implications on July 27, 2012, and has lowered the
ratings multiple times as Sharp's operating performance worsened.
S&P affirmed the ratings and removed them from CreditWatch with
negative implications because it sees increased likelihood that
Sharp's liquidity will stabilize. S&P also believes that the
company's operating performance has bottomed out and will
gradually improve. The company has announced that it has received
continued support from its main lenders--Mizuho Corporate Bank
Ltd. and Bank of Tokyo-Mitsubishi UFJ Ltd.--on the extension of
the term of their JPY360 billion existing syndicated loan
agreement due June 30, 2013, with the extended term maturing March
2016. The company has also received the banks' consent on an
additional JPY150 billion borrowing facility, which would be used
to redeem JPY200 billion in convertible bonds that mature
Sept. 30, 2013. S&P believes the banks' support will provide some
stability to Sharp's liquidity. As such, combined with S&P's view
that Sharp's operating performance will recover, S&P continues to
assess the company's liquidity as "less than adequate."
Sharp's business risk profile remains "fair." In S&P's view,
technological strengths in flat-panel TVs, liquid crystal display
(LCD) panels, and electronic devices will continue to support
Sharp's credit quality. Sharp's operating performance is
gradually recovering, with the company posting operating profits
after having climbed into the black in the third quarter of fiscal
2012 (Oct. 1, 2012, to Dec. 31 2012). It also reported operating
profits for fiscal 2012 (ended March 31, 2013) that exceeded its
guidance. S&P believes Sharp's operating performance will
continue to recover at a gradual pace thanks to the company's
efforts to cut fixed costs, for example, by reducing its
workforce. S&P's ratings also incorporate an assumption of
benefits that Sharp's LCD business will derive from its alliances
with Taiwan-based electronics maker Hon Hai Precision Industry Co.
Ltd. and with Korea-based electronics maker Samsung Electronics
Co. Ltd.; and an assumption that strong demand for mid-to-small
LCD panels for use in smartphones will help boost utilization
rates at its key plants. Nevertheless, the competition to secure
orders and sale of LCDs remains severe, and the business remains
highly susceptible to the highly cyclical LCD industry. Sharp's
heavy dependence on the LCD business is a constraint on its
business risk profile, in S&P's opinion.
Sharp has recently reshuffled its top management but S&P continues
to view its management and governance as "fair." For now, S&P do
not think it will change this assessment based solely on the
management reshuffle. Sharp has led the growth of the LCD market
with its advanced technology but it then made massive investments
in the field, after which its operating performance tumbled.
Therefore, S&P believes the company has an aggressive risk
appetite.
Sharp's financial risk profile remains "highly leveraged," in
S&P's opinion. In fiscal 2012, the company wrote down additional
losses, including from its LCD panel business and loss provisions
from litigation. As a result, it posted net losses of
JPY545.3 billion, which were far higher than the company's
guidance in November 2012, and exceeded our assumptions. The
company's net assets decreased to JPY134.8 billion because of the
heavy losses it posted for two straight years, and its capital
structure worsened materially. S&P estimates that the adjusted
ratio of Sharp's debt to capital deteriorated from 68% at the end
of fiscal 2011 (ended March 31, 2012) to around 90% at the end of
fiscal 2012. Sharp states in its medium-term business plan that
it will aim to improve its financial health, and therefore, S&P
believes that it may seek to recapitalize. However, at this
point, S&P do not assume in its base-case scenario that the
company will raise capital. In S&P's base-case scenario, it
assumes that Sharp will increase its operating profit and EBITDA
in fiscal 2013 (ending March 31, 2014) and secure annual free cash
flow in excess of JPY30 billion. As a result, its adjusted ratio
of debt to EBITDA is likely to improve but is likely to remain
high at around mid-7x at the end of fiscal 2013 (S&P estimates
this ratio was above 30x at the end of fiscal 2012). Also, if the
company does not raise capital, the ratio of debt to capital may
worsen to mid-90% because S&P expects the company to remain in the
red on a net basis in fiscal 2013. To calculate the above ratios,
S&P uses its estimates for lease and pension obligations and other
off-balance-sheet items because the company has yet to disclose
such figures.
Sharp's liquidity remains "less than adequate" because its
upcoming liquidity needs will likely exceed sources in the next 12
months, in S&P's view. As of March 31, 2013, Sharp had
JPY674.9 billion in short-term loans, JPY235.4 billion in bonds
due to mature within a year (including JPY200 billion in
convertible bonds maturing Sept. 30, 2013). As of now, the
company remains highly dependent on short-term debt. Of its
short-term bank loans, the term of the JPY360 billion syndicated
loan will be extended to March 2016, and S&P has included this in
its calculation of liquidity sources. S&P's calculation of
liquidity sources also includes an additional JPY150 billion
borrowing facility, which would be used to finance the redemption
of JPY200 billion in convertible bonds that mature in September
2013. These measures will reduce Sharp's dependence on short-term
bank loans and help stabilize its financing. S&P believes that
the company will generate over JPY30 billion in free cash flow
over the next year, which it would use to repay its debt, because
its operating performance has gradually recovered since the third
quarter of fiscal 2012 and S&P expects Sharp to limit its capital
investments and continue to suspend dividend payments. In
addition, JPY50 billion of its JPY360 billion syndicated loan is
unused; the company has cash and equivalents totaling nearly
JPY200 billion as of March 31, 2013; and the two main lenders are
likely to keep their strong supportive stance. Accordingly,
Sharp's liquidity is unlikely to deteriorate substantially over
the next 12 months, in S&P's opinion.
The outlook is negative, reflecting the slow recovery of Sharp's
operating performance, and S&P's expectations that the company
will require time to turn around its undercapitalized status and
reduce its extremely heavy dependence on debt. Also, although
Sharp has managed to secure the means to meet its liquidity needs
for now, its key lenders' support likely hinges on the company
achieving the profit target of its medium-term business plan. S&P
sees this target as a high hurdle, as it relies on revenue growth.
Accordingly, the supportive stances of key banks will remain a key
factor in S&P's analysis. S&P may downgrade Sharp if its
operating performance shows signs of deteriorating--for example,
if its operating profit declines quarter on quarter for two to
three straight quarters--or if S&P sees a higher likelihood that
its capital will shrink further owing to massive net losses
without any capital injection in fiscal 2013. A weakening in key
lender banks' supportive stance would also pressure Sharp's
liquidity and may lead to a downgrade. S&P believes that steady
operating profits in Sharp's main businesses, reducing debt by
securing free cash flow, and a turnaround of its undercapitalized
status would be needed for S&P to revise the outlook to stable.
S&P's senior unsecured debt rating on Sharp is one notch below the
issuer rating on the company. S&P now believes the company's
ratio of priority liabilities to total debt will not exceed 30% on
a sustained basis (as of March 31, 2013, it was below 30%), but if
the company's efforts to sell assets or raise capital change S&P's
base-case scenario, it will need to reassess the ratio. If S&P
believes the ratio will exceed 30% on a sustained basis, it may
lower the issue rating by an additional notch, thus increasing the
difference with the corporate credit rating on Sharp to two
notches.
TAIYO TMK 1: S&P Lowers Rating on Class B Specified Loan to BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it has lowered its
ratings on the series 1 unsecured specified bond issued by, and
the class A and B specified loans extended to, Taiyo Tokutei
Mokuteki Kaisha (Taiyo TMK; "special-purpose company"; see list
below). At the same time, S&P removed the ratings from
CreditWatch with negative implications, where they were placed on
Feb. 15, 2013.
S&P lowered its ratings on the above specified bond and specified
loans primarily because: (1) it revised downward its estimates for
the cash flows generated from the pachinko parlor businesses; (2)
it believes that Taiyo TMK is now less likely than before to
secure refinancing on the scheduled principal repayment date; and
(3) it lowered its assumptions for the likely recovery amounts
from the real estate assets relating to this transaction.
The specified bond and the class A and B specified loans are
backed by (1) real estate assets consisting of 33 pachinko parlors
and their adjoining parking lots; and (2) cash flows generated
from the pachinko parlor businesses. The Taiyo Group--which
consists of Taiyo Group Co. Ltd. and its affiliates--operates the
parlors. Performance measures at the pachinko parlors relating to
this transaction have generally weakened amid tough business
conditions across the industry.
The pachinko industry is experiencing a protracted decline in the
total amount of ball-lending fees, because of such factors as the
emergence of new types of leisure activities and the penetration
of machines with low ball-lending fees. Although signs of a
recovery in pachinko parlors' earnings emerged in the second half
of 2011 as pachinko slot machines regained popularity, earnings
began to decline again from the second half of 2012. S&P partly
attributes this recent decline to the inability of pachinko
parlors to use their former advertising methods and launch
promotional events as they did in the past, owing to the tighter
advertising regulations that took effect in August 2011.
Under the transaction agreement, Taiyo TMK is set to secure
refinancing on the scheduled principal repayment date in October
2013. However, based on S&P's interviews of the transaction-
related parties, it believes Taiyo TMK is now less likely than
before to secure refinancing on that date. S&P again lowered its
assumptions for the likely amounts to be recovered from
liquidating the transaction's underlying real estate assets--
should Taiyo TMK fail to secure refinancing--after considering the
assets' types and locations.
"Our ratings on the specified bond and specified loans reflect to
a degree our negative outlook for the cash flows generated from
the pachinko parlor businesses. We also base the ratings on our
assumption that, if Taiyo TMK is unable to secure refinancing, the
transaction-related parties will, in November 2013 or after, begin
working to liquidate the real estate assets as stipulated under
the transaction agreement. Nevertheless, we may lower our ratings
again if: (1) profitability at the parlors continues to
deteriorate, reflecting the Taiyo Group's failure to boost
earnings through its various operating strategies; or (2) the
liquidation of the real estate assets does not move forward, or
Taiyo TMK does not make progress in securing refinancing. On the
other hand, we would regard the following as positive factors for
the transaction's credit quality: (1) improvements in the expected
future cash flows of the pachinko parlor businesses; and (2)
increases in the likely recovery amounts from the transaction's
underlying real estate assets," S&P said.
STANDARD & POOR'S 17G-7 DISCLOSURE REPORT
SEC Rule 17g-7 requires an NRSRO, for any report accompanying a
credit rating relating to an asset-backed security as defined in
the Rule, to include a description of the representations,
warranties and enforcement mechanisms available to investors and a
description of how they differ from the representations,
warranties and enforcement mechanisms in issuances of similar
securities. The Rule applies to in-scope securities initially
rated (including preliminary ratings) on or after Sept. 26, 2011.
If applicable, the Standard & Poor's 17g-7 Disclosure Report
included in this credit rating report is available at:
http://standardandpoorsdisclosure-17g7.com
RATINGS LOWERED, OFF CREDITWATCH NEGATIVE
Taiyo Tokutei Mokuteki Kaisha Specified Bond and Specified Loans
To From Initial issue amount
Interest rate
Series 1 specified bond
BBB (sf) A (sf)/Watch Neg JPY0.1 bil.
Floating rate
Class A specified loan
BBB (sf) A (sf)/Watch Neg JPY15.0 bil.
Floating rate
Class B specified loan
BB- (sf) BBB- (sf)/Watch Neg JPY14.9 bil.
Floating rate
E BB+ (sf) JPY0.24 bil.
====================
N E W Z E A L A N D
====================
MAINZEAL CONSTRUCTION: High Court Favors BNZ in Hoist Case
----------------------------------------------------------
Stuff.co.nz reports that the High Court has ruled the Bank of
New Zealand has priority over the owners of a leaky Auckland
apartment building in a spat over two hoists formerly owned by the
collapsed Mainzeal Construction.
Mainzeal went under while two-thirds of the way through
NZ$15 million of remedial work to make the 97-apartment Hobson
Gardens complex watertight.
Stuff.co.nz says the apartment owners claimed they then had the
right to seize the hoists worth NZ$350,000 each under the
construction contract once the receivers shut down work on the
site.
According to the report, the owners said the hoists -- external
elevators used by construction workers to reach the building's
exterior and upper floors -- were key to resuming the recladding
work with another contractor.
Stuff.co.nz notes that Mainzeal's receiver, PwC, asked the court
in Auckland to clarify ownership of the two hoists which they
wanted to sell to repay first-ranking secured creditor, the BNZ,
which is owed NZ$11.2 million.
In a reserved decision, the report relates, Justice David Collins
found the BNZ's security interest had priority over any security
interest held by Hobson Gardens and the receiver was entitled to
take possession of them.
Stuff.co.nz recalls that Mainzeal signed a general security
agreement in 2006 that gave the bank a security interest in all of
the construction firm's "present and after acquired property" and
"all personal property in which Mainzeal had rights".
Mainzeal couldn't dispose of any of the secured property without
the BNZ's consent, except in limited circumstances, the report
notes.
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
====================
SSANGYONG ENGINEERING: Latest Rescue Plan Delayed
-------------------------------------------------
Cho Mu-hyun at The Korea Times reports that the rescue plan for
Ssangyong Engineering & Construction's has been delayed as some
creditor banks have failed to send a letter of agreement.
Korea Times says Woori Bank, the main creditor of the company, was
to receive letters from 40 creditors approving the plan but not
all have responded. Industry officials expect the letters to be
sent May 21 at the earliest.
The report relates that Woori has asked other creditor banks to
agree to an injection of new funds worth KRW445 billion and a
debt-equity swap of KRW107 billion to save the cash-strapped
builder.
According to the report, an official of the bank said the deadline
was delayed due to ongoing discussions over STX Group, a
shipbuilding conglomerate saddled with heavy debts.
Korea Times relates that Woori said it will hold an emergency
meeting if creditors fail to agree on its latest rescue plan.
Ssangyong E&C filed for debt-rescheduling program on Feb. 26,
2013, after it has suffered from capital erosion due to massive
losses for the second straight year in 2012 amid the lackluster
housing market, Yonhap reported.
Based in Seoul, Korea, Ssangyong Engineering & Construction Co.,
Ltd. -- http://www.ssyenc.com/eng/-- is involved in the areas of
construction and engineering.
===============
X X X X X X X X
===============
* BOND PRICING: For the Week May 13 to May 17, 2013
---------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
AUSTRALIA
---------
MIDWEST VANADIUM 11.50 2/15/2018 USD 65.75
MIDWEST VANADIUM 11.50 2/15/2018 USD 64.22
NEW S WALES TREA 0.50 9/14/2022 AUD 71.16
NEW S WALES TREA 0.50 10/7/2022 AUD 70.96
NEW S WALES TREA 0.50 10/28/2022 AUD 70.77
NEW S WALES TREA 0.50 11/18/2022 AUD 70.58
NEW S WALES TREA 0.50 12/16/2022 AUD 71.23
NEW S WALES TREA 0.50 2/2/2023 AUD 70.81
NEW S WALES TREA 0.50 3/30/2023 AUD 70.31
TREAS CORP VICT 0.50 8/25/2022 AUD 72.60
TREAS CORP VICT 0.50 3/3/2023 AUD 71.77
TREAS CORP VICT 0.50 11/12/2030 AUD 51.02
CHINA
-----
CHINA GOVT BOND 4.86 8/10/2014 CNY 102.30
CHINA GOVT BOND 1.64 12/15/2033 CNY 69.57
INDIA
-----
CORE PROJECTS 7.00 5/7/2015 USD 50.50
COROMANDEL INTL 9.00 7/23/2016 INR 16.14
DR REDDY'S LABOR 9.25 3/24/2014 INR 5.02
GRAMEEN FIN SERV 14.05 6/7/2016 INR 55.18
JCT LTD 2.50 4/8/2011 USD 20.00
MASCON GLOBAL LT 2.00 12/28/2012 USD 10.00
PRAKASH IND LTD 5.63 10/17/2014 USD 68.41
PRAKASH IND LTD 5.25 4/30/2015 USD 63.48
PUNJAB INFRA DB 0.40 10/15/2024 INR 33.49
PUNJAB INFRA DB 0.40 10/15/2025 INR 30.56
PUNJAB INFRA DB 0.40 10/15/2026 INR 27.93
PUNJAB INFRA DB 0.40 10/15/2027 INR 25.54
PUNJAB INFRA DB 0.40 10/15/2028 INR 23.40
PUNJAB INFRA DB 0.40 10/15/2029 INR 21.47
PUNJAB INFRA DB 0.40 10/15/2030 INR 19.73
PUNJAB INFRA DB 0.40 10/15/2031 INR 18.17
PUNJAB INFRA DB 0.40 10/15/2032 INR 16.75
PUNJAB INFRA DB 0.40 10/15/2033 INR 15.47
PYRAMID SAIMIRA 1.75 7/4/2012 USD 1.00
REI AGRO 5.50 11/13/2014 USD 70.03
REI AGRO 5.50 11/13/2014 USD 70.03
SHIV-VANI OIL 5.00 8/17/2015 USD 34.64
SUZLON ENERGY LT 7.50 10/11/2012 USD 65.13
SUZLON ENERGY LT 5.00 4/13/2016 USD 50.93
JAPAN
-----
AVANSTRATE INC 1.94 11/5/2013 JPY 59.60
EBARA CORP 1.30 9/30/2013 JPY 100.41
ELPIDA MEMORY 2.03 3/22/2012 JPY 9.00
ELPIDA MEMORY 2.10 11/29/2012 JPY 9.00
ELPIDA MEMORY 2.29 12/7/2012 JPY 9.00
ELPIDA MEMORY 0.50 10/26/2015 JPY 9.50
JAPAN ATOMIC PWR 1.28 9/25/2020 JPY 69.58
JPN EXP HLD/DEBT 0.50 9/17/2038 JPY 69.59
JPN EXP HLD/DEBT 0.50 3/18/2039 JPY 69.54
KADOKAWA HLDGS 1.00 12/18/2014 JPY 126.55
MALAYSIA
--------
AMAN SUKUK 4.25 3/8/2028 MYR 4.14
PHILIPPINES
-----------
BAYAN TELECOMMUN 13.50 7/15/2006 USD 22.75
BAYAN TELECOMMUN 13.50 7/15/2006 USD 22.75
SINGAPORE
---------
BAKRIE TELECOM 11.50 5/7/2015 USD 38.33
BAKRIE TELECOM 11.50 5/7/2015 USD 40.00
BLD INVESTMENT 8.63 3/23/2015 USD 69.00
BLUE OCEAN 11.00 6/28/2012 USD 38.00
BLUE OCEAN 11.00 6/28/2012 USD 38.00
CAPITAMALLS ASIA 2.15 1/21/2014 SGD 99.92
CAPITAMALLS ASIA 3.80 1/12/2022 SGD 102.13
DAVOMAS INTL FIN 11.00 12/8/2014 USD 14.63
DAVOMAS INTL FIN 11.00 12/8/2014 USD 14.63
F&N TREASURY PTE 2.48 3/28/2016 SGD 100.62
F&N TREASURY PTE 3.15 3/28/2018 SGD 101.85
INDO INFRASTRUCT 2.00 7/30/2049 USD 1.88
SOUTH KOREA
-----------
CHEJU REGION DEV 3.00 12/29/2034 KRW 69.42
EXP-IMP BK KOREA 0.50 9/28/2016 BRL 74.81
EXP-IMP BK KOREA 0.50 10/27/2016 BRL 74.59
EXP-IMP BK KOREA 0.50 11/28/2016 BRL 74.22
EXP-IMP BK KOREA 0.50 12/22/2016 BRL 69.68
EXP-IMP BK KOREA 0.50 10/23/2017 TRY 73.06
EXP-IMP BK KOREA 0.50 11/21/2017 BRL 67.98
EXP-IMP BK KOREA 0.50 12/22/2017 TRY 73.01
EXP-IMP BK KOREA 0.50 12/22/2017 BRL 67.44
SRI LANKA
---------
SRI LANKA GOVT 6.20 8/1/2020 LKR 74.66
SRI LANKA GOVT 7.00 10/1/2023 LKR 67.38
SRI LANKA GOVT 5.35 3/1/2026 LKR 56.82
SRI LANKA GOVT 8.00 1/1/2032 LKR 69.67
THAILAND
--------
G STEEL 3.00 10/4/2015 USD 8.25
MDX PUBLIC CO 4.75 9/17/2003 USD 16.25
*********
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.
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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
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*********
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.
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