/raid1/www/Hosts/bankrupt/TCRAP_Public/130904.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, September 4, 2013, Vol. 16, No. 175
Headlines
A U S T R A L I A
FORTESCUE METALS: Fitch Affirms Issuer Default Rating at 'BB+'
FRATERNITY CLUB: Back From Brink of Receivership
GIPPSLAND SECURED: Looks Set to Go Into Receivership After Ruling
MONDELLO FARMS: Thomas Foods Buys Potato Processor
RETAIL ADVENTURES: Jan Cameron Wins Back Control of Business
VIKING GROUP: Fifth Person Charged Over Group's Collapse
WILLIAMS CORPORATION: Creditors Opt to Wind Up Family Company
C H I N A
CHINESEINVESTORS.COM INC: Incurs $1.1MM Net Loss in Fiscal 2013
COUNTRY GARDEN: S&P Affirms LT Corporate Credit Rating at 'BB'
FOSUN INT'L: 1st Half 2013 Results No Impact on Moody's Ratings
GREENTOWN CHINA: Improving Finances Cue Moody's to Up CFR to B1
KEYUAN PETROCHEM: Amends 2012 Form 10-K to Revise Disclosures
SUNTECH POWER: Reaches Restructuring Deal With Creditors
I N D I A
AROMA INDIA: CRISIL Assigns 'B-' Rating to INR100MM Bank Loan
DUHEE ALLOY: CRISIL Assigns 'BB+' Ratings to INR115MM Loans
ESHWARNATH CONSTRUCTIONS: CRISIL Rates INR35MM Loans at 'B'
HINDUSTAN LABS: CRISIL Cuts Rating on INR150MM Loan to 'BB+'
JAGAT PROJECTS: CRISIL Rates INR150MM Overdraft Facility at 'B+'
K & T AGRO: CRISIL Assigns 'B+' Ratings to INR65MM Loans
LUNI POWER: CRISIL Rates INR150MM Term Loan at 'BB-'
MG HOUSING: CRISIL Assigns 'B+' Ratings to INR400MM Loans
MIRACLE CABLES: CRISIL Assigns 'B+' Ratings to INR134.4MM Loans
M.M.G. HOLDINGS: CRISIL Rates INR178.2MM LT Loan at 'B+'
M.R.S. LEATHER: CRISIL Assigns 'BB-' Ratings to INR60MM Loans
NICE POULTRY: CRISIL Assigns 'D' Ratings to INR110MM Loans
PANCHDEEP COTTON: CRISIL Rates INR90MM Cash Credit at 'B+'
PARAMOUNT AIRWAYS: Court Orders SFIO to Probe Grounded Carrier
PRAKASH FERROUS: CRISIL Assigns 'B+' Ratings to INR1.05BB Loans
RALSON PETROCHEMICALS: CRISIL Rates INR200MM Term Loan at 'B+'
SALEM AUTOMECH: CRISIL Puts 'B+' Ratings on INR81.6MM Loans
SONEX TV: CRISIL Rates INR85MM Cash Credit at 'B'
SRINIVASA GAYITHRI: CRISIL Cuts Rating on INR527.5MM Loan to 'D'
SUMITRA DS: CRISIL Assigns 'D' Ratings to INR97MM Loans
TARA UTTAM: CRISIL Assigns 'B' Ratings to INR73.6MM Loans
I N D O N E S I A
LIPPO KARAWACI: S&P Withdraws Scale Rating on US$273MM Sr. Notes
* Major Indonesian Banks Resilient vs. Market Turmoil, Fitch Says
J A P A N
TOKYO ELECTRIC: Should Consider Bankruptcy, Niigata Gov Says
N E W Z E A L A N D
PIKE RIVER: NZ Government to Pay For Mine Re-entry Plan
* Moody's Outlook for New Zealand Banking Sector Remains Stable
P A K I S T A N
PAKISTAN MOBILE: Moody's Says 1H2013 Results Strong for B2 CFR
P H I L I P P I N E S
MANILA ELECTRIC: S&P Rates Proposed Sr. Unsecured Notes at 'BB'
X X X X X X X X
* Plunging Currencies Crimp Asian Companies, WSJ Reports
* Upcoming Meetings, Conferences and Seminars
- - - - -
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A U S T R A L I A
=================
FORTESCUE METALS: Fitch Affirms Issuer Default Rating at 'BB+'
--------------------------------------------------------------
Fitch Ratings has revised Australian based Fortescue Metals Group
Limited's Outlook to Stable from Negative and affirmed its Long-
Term Issuer Default Rating (IDR) and senior unsecured rating at
'BB+'. At the same time, Fitch has affirmed Fortescue's senior
unsecured and senior secured debt, issued through FMG Resources
(August 2006) Pty Ltd, at 'BB+' and 'BBB-' respectively.
The Outlook revision reflects the expectation that debt will
decrease and, should iron ore prices remain above USD110/t through
to FY14 and the AUD remains at sub parity, the decrease could be
accelerated. Fortescue expects to achieve 150m metric tonnes per
annum (mtpa) run rate from March 2014. With a permanent reduction
in costs, and having passed the inflection point of capex
intensity (capex is expected to decrease to USD1.94bn in FY14 from
USD6.24bn), free cash generation is expected to be strong,
consequently driving debt reduction.
Key Rating Drivers
Deleveraging quickly: "Under our base case assumption of
USD110/dry metric tonnes (dmt), 62% Fe and AUD/USD 0.94 in FY14,
we expect Fortescue's FFO adjusted net leverage to be less than
2.50x, down from 3.34x in FY13. Aside from operational
improvements including stronger production volume, a reduction in
costs, lower capex, prepayments as at August 2013 totalling USD1bn
(including USD500m for port access from Formosa) and any asset
sales, are also expected to enhance the strong free cash
generation in FY14 and FY15," Fitch says.
Fortescue is considering the sale of a minority interest in The
Pilbara Infrastructure Pty Ltd (TPI) to reduce gearing (net
debt/net debt+equity) from 71% at FY13 to Fortescue's targeted
levels of between 30 and 40% by end FY15. While Fortescue is still
considering the sale of TPI, to date it has not received offers
that meet its expectations of value and terms. Fitch's base case
does not factor in this potential sale. Should a transaction
occur, we would need to review the terms to assess the likely
impact on the company's overall credit profile.
Step change reduction in costs: During FY13, C1 costs peaked at
USD50/wet metric tonnes (wmt) in the December 2012 quarter, but
these have reduced to USD44/wmt for FY13. The key drivers include
cost reduction measures that were put in place in October 2012,
lower strip ratios on account of the new mine plan, and the
commissioning of the low cost Firetail mine (strip ratio of 1:4
compared to Chichsterster of 3.5:1). The reduction in costs is
considered permanent, with the expectation that they will trend
lower, and will be helped with the depreciation of the AUD/USD.
Operating efficiencies insulate against lower iron ore price:
Falling cash costs and rising production will be key drivers to
profit margin. Fitch expects the profit margin to remain stable as
the business benefits from increased scale.
Low costs support rating: The ratings reflect Fortescue's cost
advantages due to its close proximity to key Asian markets.
Substantial rail and infrastructure assets assist in its cost
advantage.
Lack of business diversification: Fortescue has limited business
diversification compared with its international peers, current
selling one product (being iron ore) into the Chinese market.
Rating Sensitivities
Positive: Future developments that could lead to positive rating
actions include:
-- Funds from operations (FFO) adjusted gross leverage falling
below 2.0x and FFO gross interest cover moving above 5.0x.
Prior to such action, elements of the capital structure
would need to be more reflective of a 'BBB' category.
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- FFO adjusted gross leverage exceeding 3.00x and FFO gross
interest cover being below 4.0x from FY14.
FRATERNITY CLUB: Back From Brink of Receivership
------------------------------------------------
Jodie Duffy of Illawarra Mercury, reports that on the verge of
ruin since 2008, Fairy Meadow's Fraternity Club has clawed its way
out of receivership thanks to a lifeline offered by the
Commonwealth Bank.
More than 500 members were told the good news at a formal dinner
on Saturday night at the club's 60th birthday celebrations,
according to Illawarra Mercury.
The report relates that the board announced details of a
refinancing loan from the Commonwealth.
Crippled by two high-interest loans with a fixed interest rate of
8.5 per cent, the club has received a Commonwealth Bank offer to
consolidate the multimillion-dollar debt at a more manageable
interest rate of 6.02 per cent, the report notes.
The report says that the man behind the negotiations, club
president Mick Cuda, said the heart and soul of the club had been
salvaged.
"There have been hardships for sure . . . . But our members have
been patient with us. The difference with this community is that
it has always had the strength to provide assistance whenever it's
required," the report quoted Mr. Cuda as saying.
The Fraternity Club, which was built brick by brick by a handful
of immigrants in 1952, has played a vital role in the lives and
memories of the Italian migrant community who gathered at
Saturday's dinner to share fond memories of their "home away from
home".
In the history of the club, the report notes that nobody could
recall a happier moment than when members were told that the
facility was to be handed back to them by the receivers.
That alone will mean a huge financial saving for the club, which
had been forced to pay $1.25 million to the receiver over five
years - an average of $250,000 a year, the report discloses.
The report recalls that the club's troubles began in 2005 after
some poor business decisions and faction fighting within the then
board.
By the time Mr. Cuda took over as president in 2008, the debt had
blown out to $13 million, the report relays.
Mr. Cuda first job was to build back confidence in the new board
and attract more members to the club, the report notes.
Mr. Cuda's five-year strategy paid off and earlier this year, he
began to renegotiate the debt, which now stands at $7.5 million,
the report discloses.
Under the latest deal, the report says that the Fraternity's two
major lenders have agreed to reduce the loan to $6.75 million.
That agreement made the club's prospects more attractive to the
Commonwealth Bank, which made the refinancing offer, the report
notes.
While the deal still needs to be rubber-stamped by the board and
then approved by the NSW Office of Liquor, Gaming and Racing, Mr.
Cuda said it was just a formality and the club should be handed
back to members within a few months, the report adds.
"From a cash flow perspective, we will be well ahead," he said.
"The interest rate is very favorable and having the one lender
will be much cleaner, much more transparent. It's been a long
journey but we did it. We've managed to rebuild confidence in the
club," the report quoted Mr. Cuda as saying.
There are plans to move forward with the development of a new
foyer, with construction expected to begin by the end of the year,
the report adds.
GIPPSLAND SECURED: Looks Set to Go Into Receivership After Ruling
-----------------------------------------------------------------
Weekly Times Now reports that troubled financial company Gippsland
Secured Investment looks set to go into receivership after a court
ruling.
Justice Kathleen Farrell in Sydney's Federal Court of Australia
ruled in favor of GSI's trustee, the Trust Company Ltd, which
sought to have the company wound up, according to Weekly Times
Now.
The report relates that the Bairnsdale-based company, which had
its assets frozen in July after an external review, is now likely
to be put into the hands of a receiver.
It could mean about 5000 mainly Gippsland-based investors may not
see a 100 per cent return on their investment, Weekly Times Now
notes.
Weekly Times Now says that the decision is a blow to a group of
Gippsland business people trying to put together a $7 million
bailout for GSI.
The group, which included former Woolworths chairman and ANZ
director John Dahlsen, and Patties Pies directors Harry and
Richard Rijs, had sought a two-week adjournment to further develop
a plan, Weekly Times Now relays.
They wanted to split the company into two managed investment
schemes and allow it to trade out of trouble, the report relates.
The plan included the contribution of AU$7 million in new cash and
equity, the report adds.
MONDELLO FARMS: Thomas Foods Buys Potato Processor
--------------------------------------------------
Sarah Scopelianos at Weekly Times reports that Australia's largest
family-owned meat processing company, Thomas Foods International,
has snapped up potato processor Mondello Farms.
Receivers for Mondello Farms announced on August 30 the business
was sold as an ongoing concern, with settlement expected to occur
immediately, the report relates.
Thomas Foods International would not disclose the amount it paid
for its new venture, says Weekly Times.
According to the report, receiver Sam Davies said the company had
been sold with "significant ongoing employment for the majority of
the company's workforce".
He said receivers would assist the redundant workers to collect
their entitlements, the report relays.
"Whilst there were a number of redundancies following the sale of
business, maintaining a high level of continuity of employment in
the horticulture and food processing industries, was pleasing from
a state economy perspective," Weekly Times quotes Mr. Davies as
saying.
Mondello Farms is a large scale wholesaler of processed potatoes
and employs about 140 staff in its South Australian and Victorian
operations. Mondello Farms' operations are comprised of potatoes
grown on owned and leased land in South Australia and Victoria,
potatoes sourced from third party growers, and a substantial
processing packaging facility.
news.com.au reported in March that Mondello Farms was placed in
receivership. McGrathNicol was appointed as receivers following
Heard Phillips being appointed administrators of the company,
according to news.com.au.
RETAIL ADVENTURES: Jan Cameron Wins Back Control of Business
------------------------------------------------------------
Patrick Stafford at SmartCompany reports that Retail Adventures
founder Jan Cameron has won back control of her business nearly a
year after the company collapsed into administration, with
creditors voting in favor of a new deed of company arrangement.
SmartCompany says the move finalises a significant period of the
company's history, during which it has faced significant
opposition. Earlier this month, SmartCompany recalls,
administrators Deloitte argued creditors should reject the deal,
and have even claimed the company could have traded while
insolvent.
SmartCompany adds Retail Adventures also faces the prospect of
litigation, with IMF Australia having confirmed an investigation
of this option within the past year. The vote is still open to
legal contest.
According to the report, creditors voted on September 2 to approve
the deal, which will see them receive between five and six cents
for every dollar owed by the company. With around AUD114 million
owed by the company, that means a AUD5.5 million return to
creditors, SmartCompany discloses.
The purchase comes after Deloitte said earlier this month
creditors should vote against Ms. Cameron's plan, in favor of a
liquidation plan which would see creditors receive between 22c and
48c in the dollar, the report relates.
Deloitte also warned the new deed of company arrangement would
reduce the company's risk of being targeted by legal action, adds
SmartCompany.
About Retail Adventures
Retail Adventures Pty Ltd is an Australia-based discount variety
retailer and operates nationally under brand names Chickenfeed,
Go-Lo, Crazy Clark's, and Sam's Warehouse. The company operates
around 270 stores across the four brands.
Deloitte Restructuring Services Partners Vaughan Strawbridge,
David Lombe and John Greig have been appointed Joint Voluntary
Administrators of Retail Adventures Pty Limited, effective
Oct. 26, 2012.
Mr. Strawbridge said a license agreement is in place between
Retail Adventures Pty Ltd and DSG Holdings Australia Pty Ltd for
them to manage the 238 Crazy Clark's and Sam's Warehouse stores.
About 20 Chickenfeed stores in Tasmania have been closed and
staff paid entitlements.
VIKING GROUP: Fifth Person Charged Over Group's Collapse
--------------------------------------------------------
Mark Buttler at Herald Sun reports that a fifth person has been
charged after a major police investigation into the collapse of
the Viking group of companies.
A Point Cook man, 52, was arrested by detectives from the fraud
and extortion squad and charged with handling stolen goods and
possessing an unregistered gun, says Herald Sun.
He was bailed and will appear in the Melbourne Magistrates' Court
on October 31, the report relates.
Herald Sun says the investigation began after Viking collapsed.
Previously charged were a 24-year-old man from Sanctuary Lakes, a
Glen Waverley man and woman aged 51 and another 52-year-old Point
Cook man, the report adds.
Melbourne-based Viking Group was a transport and logistics company
with operations in Queensland, New South Wales, Tasmania and
Western Australia.
SmartCompany said McGrathNicol was acting as receiver over
certain assets within Viking Group after being appointed by an
unnamed secured creditor in 2011.
WILLIAMS CORPORATION: Creditors Opt to Wind Up Family Company
-------------------------------------------------------------
Marissa Calligeros at brisbanetimes.com.au reports that the family
company of late Gold Coast theme park developer Keith Williams has
collapsed into the hands of liquidators after his cyclone-battered
Port Hinchinbrook resort in north Queensland failed to sell.
Creditors, including Mr. Williams' son Ben Williams, voted to wind
up Williams Corporation at a meeting in Brisbane on
August 28, the report relates.
According to brisbanetimes.com.au, liquidator FTI Consulting now
has control of the company's assets, including the Port
Hinchinbrook resort community, which comprises tourist
accommodation and private dwellings for more than 250 residents.
The resort, located between Cairns and Townsville, was battered in
2011 when huge swells caused by Cyclone Yasi plucked multimillion-
dollar boats from the water and smashed them against the marina,
says brisbanetimes.com.au.
The report says the resort has struggled to rebound from the
disaster, with the marina, restaurant, bar and much of its
accommodation still closed.
Mr. Williams died in October 2011 after handing the reins of the
company to his son.
brisbanetimes.com.au notes that the development was put on the
market, but the sale has been hampered by a deed signed by
Mr. Williams in the late 1990s that binds the resort's owner to
the maintenance of the sewerage system, roads and the marina.
A consortium of buyers, led by Townsville businessman Anthony
Dotta, withdrew its offer to buy Port Hinchinbrook this month,
according to the report.
brisbanetimes.com.au relates that liquidator Joanne Dunn --
joanne.dunn@fticonsulting.com -- said FTI was negotiating with the
state government over the deeds and licences which applied to the
resort community. "We're in discussions with them about how to
move forward on those," the report quotes Ms. Dunn as saying.
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C H I N A
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CHINESEINVESTORS.COM INC: Incurs $1.1MM Net Loss in Fiscal 2013
---------------------------------------------------------------
Chineseinvestors.com, Inc., filed with the U.S. Securities and
Exchange Commission on Aug. 29, 2013, its annual report on Form
10-K for the fiscal year ended May 31, 2013.
The Company reported a net loss of $1.1 million on $1.6 million of
total revenue in fiscal 2013, compared with a net loss of
$2.2 million on $897,105 of total revenue in fiscal 2012.
The Company's balance sheet at May 31, 2013, showed $1.0 million
in total assets, $824,753 in total liabilities, and stockholders'
equity of $175,822.
B.F. Borgers CPA PC, in Denver, stated that the Company's
significant operating losses raise substantial doubt about its
ability to continue as a going concern.
A copy of the Form 10-K is available at http://is.gd/fWLPd7
Aurora, Colo.-based Chineseinvestors.com, Inc. (OTC BB: CIIX) was
incorporated on Jan. 6, 1997, in the State of Indiana under the
corporate name "MAS Acquisition LII Corp." On June 12, 2000, the
Company acquired 8,200,000 shares of common stock, representing
100% of the outstanding shares of Chineseinvestors.com, Inc.,
which was incorporated in the State of California on June 15,
1999. After giving effect to the acquisition,
Chineseinvestors.com, Inc., became a wholly owned subsidiary and
the Company changed its name to Chineseinvestors.com, Inc.
Chineseinvestors.com, Inc. was established as an 'in language'
(Chinese) financial information web portal, offering various
levels of information relative to the U.S. Equity and Financial
Markets, as well as certain other specific financial markets
(including China A Shares, FOREX, etc.). Over the years, various
informational components have been added and the general content
improved as the Company continues to derive the majority of its
income from various subscription services it offers to its
customers.
The Company established a representative office business presence
in leased office space in Shanghai, China in late 2000 from which
the Company could fulfill most of its support types of service and
also has a leased office presence in Arcadia, California with its
corporate offices located in Aurora, Colorado.
COUNTRY GARDEN: S&P Affirms LT Corporate Credit Rating at 'BB'
--------------------------------------------------------------
Standard & Poor's Ratings Services revised the rating outlook on
China-based real estate developer Country Garden Holdings Co. Ltd.
to positive from stable.
S&P noted, "At the same time, we affirmed our 'BB' long-term
corporate credit rating on Country Garden and the 'BB-' issue
rating on the company's outstanding senior unsecured notes.
Because of the outlook revision, we raised our long-term Greater
China regional scale ratings on the company to 'cnBBB' from
'cnBBB-', and that on the notes to 'cnBBB-' from 'cnBB+'.
"We revised the outlook to reflect our view that Country Garden's
competitive position has strengthened because of the company's
strong execution, materially expanded scale, and improving
geographic diversification. We also expect the company to manage
cash flow and leverage with discipline while pursuing rapid
growth. We assess Country Garden's business risk profile as
"fair" and its financial risk profile as 'significant'", said S&P.
"We expect Country Garden's focus on fast asset-churn, mass market
owner-occupier products, and strong project and sales execution to
support robust property sales over the next two years," said
Standard & Poor's credit analyst Frank Lu. "We believe the
company's business model and execution are resilient to market
cycles, as reflected in steady sales growth over the past four
years. In our view, China's real estate market is likely to be
stable over the next 12 months."
S&P pointed out, in our view, Country Garden's larger scale and
increasing geographic and project diversity could enhance its
performance stability by tempering the effects of uneven regional
market conditions. "We believe the company has established its
market position outside of its home market in Guangdong province,"
Mr. Lu said.
S&P said "We expect Country Garden's capital structure to remain
largely stable over the next two years with strong property sales
tempering a material increase in debt for expansion.
"The positive outlook reflects our expectation that Country Garden
will maintain strong execution of its fast-churn model, generate
robust property sales, and improve geographic diversity over the
next 12 months. We also expect the company to maintain its
financial risk profile and have largely stable margins over the
period.
"We may raise the rating if Country Garden sustains strong
execution and property sales on a much larger scale base while
maintaining consistent and disciplined financial management, such
that the ratio of debt to EBITDA
remains below 3.5x.
"We may revise the outlook to stable if: (1) Country Garden's
execution on sales and expansion is weaker than we expect, such
that contract sales in 2013 are materially less than our base-case
estimate of about RMB70 billion, or EBITDA margin is materially
lower than 25%; or (2) the company's debt-funded expansion is more
aggressive than we anticipate," added S&P.
FOSUN INT'L: 1st Half 2013 Results No Impact on Moody's Ratings
---------------------------------------------------------------
Moody's Investors Service says that Fosun International's 1H 2013
results have no immediate impact on its Ba3 corporate family
rating and B1 senior unsecured bond rating, and their stable
outlook.
"Despite a challenging macroeconomic environment, Fosun reported a
5% year-on-year increase in its core operating income to RMB4.5
billion in 1H 2013 due to the substantial rise in investment
returns and the solid performance of the group's pharmaceuticals
and mining businesses," says Alan Gao, a Moody's Vice President
and Senior Analyst.
"While debt increased moderately, Moody's expects adjusted
debt/capitalization to stay at 50-55% and adjusted debt/EBITDA of
6.0-6.5x by end-2013; credit metrics which remain consistent with
its rating level," says Gao.
Investment income, which includes both dividend income and capital
gains from disposals of various assets from the group's large
investment portfolio, almost tripled in 1H 2013 to RMB2.9 billion
from RMB1.1 billion a year ago because of the monetization of key
investments, such as Focus Media Holdings Ltd and China Minsheng
Bank (unrated).
Investment income contributed 66% of the group's core operating
income, up from 34% a year ago, reflecting the group's
transformation from an industrial conglomerate into an investment
company.
Operating profit from Fosun's industrial operations dropped by 18%
year-on-year to RMB1.5 billion in 1H 2013, primarily pressured by
lower booked revenue at Forte Land.
Forte Land only recognized RMB3.6 billion in property sales
revenue despite RMB6.1 billion in contract sales, which resulted
in an approximately 60% year-on-year drop in net profit, after
excluding the impact of a one-off tax reversal for land
appreciation.
Moreover, Nanjing Iron & Steel Co Ltd, which includes the majority
of the group's steel business, reported RMB14.5 billion in revenue
and RMB471 million in operating profit, down 19% and 7%
respectively from a year ago, and in line with the overall
sector's weakness.
On the other hand, the underperformance of the steel and property
divisions was partially offset by the strong growth of the
pharmaceuticals division. Fosun Pharma, the flagship
pharmaceuticals subsidiary 41% owned by Fosun, reported 29% year-
on-year growth in revenue to RMB4.5 billion.
Moody's expects Fosun's industrial operating profit to improve in
2H 2013 in light of the accelerated pace of revenue booked at
Forte Land and the strong growth of the pharmaceuticals business.
Gross debt increased by approximately RMB8 billion to RMB65
billion as of end-June 2013, mainly due to the issuance of US$400
million in senior unsecured bonds and of medium term notes in the
domestic market. Approximately 59% of the company's gross debt was
long term as of end-June 2013, up from 52% as of end-2012. Its
capital structure is also improving.
Total assets under its fund management grew by 16% to RMB19.4
billion, and likely will grow further to around RMB25 billion as
of end-2013 following the company's successful launch of its new
property investment funds in China. Moody's expects Fosun to
increasingly rely on third-party funds for its private equity and
property investments, thereby reducing its own balance-sheet risk.
Liquidity is also manageable. Its total group cash balance
remained largely unchanged at RMB22 billion as of end-June 2013,
covering 85% of the company's bank borrowings due in one year. It
also maintains continued access to domestic bank and capital
markets.
Rating Approach and Methodology - Moody's considers Fosun as a
conglomerate for the purpose of analysis because of its ties with
some of its core subsidiaries, given the number of intra-group
guarantees and cross-default provisions. The rating therefore
takes into consideration the performance of its operating
entities, as well as Fosun's consolidated credit metrics.
Moody's does not apply a sole industry methodology in assessing
Fosun, because of its diverse business interests. Moody's
evaluates the credit profile of each of its segments, by using the
relevant methodology for pharmaceutical, steel, mining, home
building, and investment-holding companies. Moody's also analyzes
the results from these methodologies, according to the rating
framework for conglomerates.
Fosun International Ltd, which was founded in 1992, focuses on the
following core businesses: (1) steel, (2) property, (3)
pharmaceuticals and healthcare, (4) mining. Apart from the core
businesses, Fosun has a growing presence in other business areas
such as insurance and asset management. Fosun's investment
portfolio has significant Chinese and overseas investments in
listed companies, equity interests in operating businesses and
investment partnerships that are not publicly listed.
Fosun International Ltd became the holding company of the group in
2005. Headquartered in Shanghai, it was listed on the Hong Kong
Stock Exchange in 2007. The group is 58% indirectly owned by its
Chairman, Guangchang Guo. He and the three other founders
indirectly own a combined share of 79.08% in the holding company.
GREENTOWN CHINA: Improving Finances Cue Moody's to Up CFR to B1
---------------------------------------------------------------
Moody's Investors Service has upgraded Greentown China Holdings
Limited's corporate family rating to B1 from B2 and its senior
unsecured rating to B2 from B3. The ratings outlook is positive.
Ratings Rationale:
"The rating upgrade reflects the consideration that Greentown is
improving its financial profile, given the fact that it has
maintained the sales momentum achieved in 2012," says Jiming Zou,
a Moody's Assistant Vice President and Analyst.
Greentown's contract sales grew to RMB33.9 billion in the first
seven months of 2013 and accounted for 61.6% of its full-year
target. Such an improvement makes available funding for
construction and reduces the use of additional debt.
As a result, Greentown's credit metrics show marked improvements
over 2010 and 2011 when the company experienced financial
difficulties.
Adjusted EBITDA/interest expense was 3.8x at end-June 2013, much
better than 1.0x at end-2010 and 1.7x at end-2011.
Similarly, debt/total capitalization was 53.5% at end-June 2013,
much better than 73% at end-2010 and 77% at end-2011.
Moody's expects Greentown to continue achieving strong contract
sales in the next 12-18 months and its credit metrics --
debt/capitalization of 59% and EBITDA/interest of around 3.5x --
will position it strongly among its B1 peers.
"The upgrade also considers the fact that the disciplined approach
to financial management introduced by Wharf (Holdings) Limited is
establishing itself," adds Zou, who is also the lead analyst for
Greentown.
Since Wharf became a major shareholder in 2012, Greentown has
become bound by a net gearing ceiling, which will prevent it from
aggressively expanding. At end-June 2013, net gearing (net
debt/equity) was 49.5%, and well below the ceiling of 100%.
"Reducing short-term debt partly reduces Greentown's liquidity
risk," says Zou
During 1H 2013, the issuance of long-term offshore notes helped
halve short-term debt to RMB7.7 billion. The $1.1 billion in long-
term notes also reduced interest costs by repaying some expensive
domestic financing.
But capital commitments for land payments remain material over the
next 12 months. Moody's will monitor Greentown's ability to secure
capital from its joint venture partners to reduce funding
requirements on land payments.
Greentown's B1 rating reflects (i) its large and diversified land
bank; (ii) its long operating history and strong brand name; and
(iii) the benefits from the investment from Wharf.
The ratings outlook is positive, reflecting Moody's expectation
that Greentown will continue to improve sales execution, debt
leverage and liquidity in the next 18 months.
Upgrade pressure could emerge if Greentown (i) establishes a track
record of acceptable credit metrics - adjusted debt/capitalization
below 50%-55% and EBITDA/interest above 3.5-4.0x; (ii) continues
to show good sales execution and meets presales targets; and (iii)
maintains an adequate liquidity position due to prudent financial
and land investment management.
The outlook could return to stable, if Greentown (i) cannot
achieve ongoing improvements in liquidity; (ii) shows a weakening
in sales or embarks on further land acquisitions which cause a
deterioration in its financial profile - debt/capitalization above
55%-60% and EBITDA/interest below 3.0x.
The principal methodology used in this rating was the Global
Homebuilding Industry Methodology published in March 2009.
Greentown China Holdings Limited is one of China's major property
developers, with a primary focus in Hangzhou city and Zhejiang
Province. At end-June 2013, the company had 99 projects, including
those under construction and available for construction, with a
total GFA 41.39 million sqm. Of this total, 21.96 million sqm were
attributable to the company.
KEYUAN PETROCHEM: Amends 2012 Form 10-K to Revise Disclosures
-------------------------------------------------------------
Keyuan Petrochemicals, Inc., filed with the U.S. Securities and
Exchange Commission on Aug. 29, 2013, filing Amendment No. 1 to
its annual report on Form 10-K pursuant to a SEC comment letter
dated July 3, 2013, to amend certain disclosures in the Form 10-K
filed with the SEC on June 6, 2013. Pursuant to the SEC comments,
changes and revisions have been made to the following items: Item
1. Business; Item 1A. Risk Factors; Item 3. Legal Proceedings;
Item 7. Management's Discussion and Analysis of Financial
Conditions and Results of Operations; Item 10. Directors,
Executive Officers and Corporate Governance; Item 11. Executive
Compensation; and Item 13. Certain Relationships and Related
Transactions and Director Independence. The Revised Items are
filed in this Amended Report in their entirety.
In addition, pursuant to Rule 12b-15 under the Securities Exchange
Act of 1934, as a result of this Amended Report, the
certifications pursuant to Section 302 and Section 906 of the
Sarbanes-Oxley Act of 2002, filed and furnished, respectively, as
exhibits to the Original Report have been re-executed and re-filed
as of the date of this Amended Report.
A copy of the Form 10-Q/A is available at http://is.gd/0EQYB0
As reported in the TCR on June 12, 2013, the Company had a net
loss of $5.9 million on $750.6 million of sales in fiscal year
ended Dec. 31, 2012, compared to a net loss of $7.1 million on
$626.7 million of sales in 2011, according to its Form 10-K filed
before the U.S. Securities and Exchange Commission on June 5,
2013.
GHP Horwath, P.C., in Denver, Colorado, expressed substantial
doubt about Keyuan Petrochemicals' ability to continue as a going
concern, citing the Company's net losses and cash flows used in
operations, and working capital deficiency at Dec. 31, 2012.
The Company's balance sheet at Dec. 31, 2012, showed
$666.9 million in total assets, $584.6 million in total current
liabilities, $16.5 million of Series B convertible preferred
stock, and stockholders' equity of $65.8 million.
A copy of the Original Report is available at http://is.gd/8Hk0NY
Located in Ningbo, Zhejiang Province, China, Keyuan
Petrochemicals, Inc., formerly Silver Pearl Enterprises, Inc.,
through its PRC operating subsidiaries, is engaged in the
manufacture and sale of petrochemical products in the PRC.
SUNTECH POWER: Reaches Restructuring Deal With Creditors
--------------------------------------------------------
Suntech Power Holdings Co., Ltd. on Aug. 30, 2013, announced that
following productive discussions with its key stakeholders earlier
last week in China, an understanding has been reached with its
Creditor Working Group led by Clearwater Capital Partners and
Spinnaker Capital Limited for restructuring the Company.
The Company intends to immediately commence preparations for
implementing a recapitalization plan that contemplates a scheme of
arrangement as part of a holistic restructuring of the Suntech
Group. The principal components of the restructuring scheme would
include: (i) identifying the key assets to be retained by the
Company to allow it to continue its operations at a rationalized
scale; (ii) the exchange of outstanding debt into the Company's
equity; (iii) the setting of maximum debt levels for the Company's
operating subsidiaries; and (iv) the introduction of a new
strategic investor that will provide the necessary funding through
the purchase of newly issued equity to complete the restructuring
process. This will permit the Company to substantially improve its
balance sheet and to be well positioned to continue as a major
worldwide supplier in the solar industry.
The Company anticipates entering into a restructuring framework
agreement in the next week or so to document the understanding
that will allow the Company adequate time to execute the
restructuring so long as it progresses the recapitalization plan
and complies with the other terms in the restructuring framework
agreement.
Mr. Zhou Weiping, Suntech's President said, "Important steps
forward are being taken towards a new Suntech. During this
restructuring period, Suntech has continued to maintain its
production and warranty obligations. The restructuring will allow
us to cut our costs and optimize our margins and production.
Although there is expected to be substantial dilution for our
existing shareholders, we believe that these measures will put us
in a better and stronger position to serve our current and future
customers in China, Japan, the EU, USA and around the world."
As noted in prior announcements, the Board of Directors has
recently been reconstituted to a smaller, more geographically
focused Board with the skillsets necessary for the development and
execution of a restructuring plan. Recent new director
appointments are: Mr. Michael Nacson, the new Chairman, who has
been based in Southeast Asia for more than 30 years and has
extensive restructuring experience, including projects in Hong
Kong, China and North America, with a focus on the manufacturing,
technology and electronics sectors; and Mr. Kurt Metzger who has
lived in Asia for 18 years and has significant experience relating
to risk management/debt restructuring, particularly in the
sustainable energy sector. Mr. Nacson and Mr. Metzger were
nominated by the Creditor Working Group. The Company and the
Creditor Working Group will also be working together to identify a
full-time executive to assist in the restructuring process and to
work with the current management team to rebuild the Company to
its former prominent position in the solar industry.
Suntech's Chairman, Mr. Michael Nacson said, "We are pleased that
we have been able to make progress on discussions with key
stakeholders involved that puts us on a good footing to move
forward with a clear business plan."
About Suntech Power
Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP)
produces solar products for residential, commercial, industrial,
and utility applications. With regional headquarters in China,
Switzerland, and the United States, and gigawatt-scale
manufacturing worldwide, Suntech has delivered more than
25,000,000 photovoltaic panels to over a thousand customers in
more than 80 countries.
As reported by the TCR on March 20, 2013, Suntech Power Holdings
Co., Ltd., has received from the trustee of its 3 percent
Convertible Notes a notice of default and acceleration relating to
Suntech's non-payment of the principal amount of
US$541 million that was due to holders of the Notes on March 15,
2013. That event of default has also triggered cross-defaults
under Suntech's other outstanding debt, including its loans from
International Finance Corporation and Chinese domestic lenders.
Wuxi Suntech, the biggest subsidiary of Suntech Power, filed for
bankruptcy protection in China in March, five days after its
troubled parent company defaulted on a $541 million convertible
bond, Reuters reported.
=========
I N D I A
=========
AROMA INDIA: CRISIL Assigns 'B-' Rating to INR100MM Bank Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long term
bank facility of Aroma India Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long-Term 100 CRISIL B-/Stable
Bank Loan Facility
The rating reflects AIPL's weak financial risk profile marked by
weak capital structure and debt protection metrics expected in the
initial stages of operations, and exposure to risks related to
implementation of its on-going project. These rating weaknesses
are partially offset by the extensive experience of AIPL's
promoters in the Indian-made foreign liquor (IMFL) business.
Outlook: Stable
CRISIL believes that AIPL will benefit over the medium term from
the extensive experience of its promoters in the IMFL business.
The outlook may be revised to 'Positive' if AIPL is able to
successfully set up its IMFL bottling unit without any time or
cost overrun and scales up operations, and generates stable cash
accruals, resulting in better-than-expected financial risk
profile. Conversely, the outlook may be revised to 'Negative' in
case of any significant time or cost overrun in the project,
leading to inadequate cash flows and weaker-than-expected
financial risk profile.
AIPL was set up in 1996 by Mr. Shanti Kumar Jain and his son Mr.
Amit Kumar Jain in Guwahati (Assam). The company has been
manufacturing citronella grass oil and citronella seedling (used
in perfumes and essential oils) on a small scale. It is setting up
an IMFL bottling plant for Pernod Ricard India Pvt Ltd in Amingaon
(Assam) which is expected to commence operations by January 2014.
DUHEE ALLOY: CRISIL Assigns 'BB+' Ratings to INR115MM Loans
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL BB+/Stable/CRISIL A4+' ratings to
the bank facilities of Duhee Alloy Steel Processors.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 31.1 CRISIL BB+/Stable
Proposed Long-Term 8.9 CRISIL BB+/Stable
Bank Loan Facility
Cash Credit 75.0 CRISIL BB+/Stable
Bank Guarantee 5.0 CRISIL A4+
The ratings reflect the benefits that DASP derives from its
promoters' extensive experience in the forging industry and
moderate financial risk profile backed by comfortable debt
protection metrics. These rating strengths are partially offset by
the company's small scale of operations and large working capital
requirements.
Outlook: Stable
CRISIL believes that DASP will maintain its business risk profile
over the medium term, backed by its promoters' extensive industry
experience. The outlook may be revised to 'Positive' if the firm
improves its capital structure either by equity infusion or
higher-than-expected cash accruals, backed by improvement in its
scale of operations or profitability along with improvement in its
working capital management. Conversely, the outlook may be revised
to 'Negative', if DASP generates less-than-expected accruals or if
its financial risk profile deteriorates, on account of large debt-
funded capital expenditure. Pressure on liquidity due to a further
stretch in working capital requirements may also result in a
'Negative' outlook.
DASP, established in 2001, is a 50:50 partnership between Mr.
Mayurkant Shashikant Patel and Mr. Taruben Nanalal Makwana. The
firm is engaged in forging various components such as bearing
races, rings, gear blanks, flange blanks and bushes used in the
automotive, general engineering, engineering, and oil and energy
industries. The manufacturing facility is located at Rajkot
(Gujarat).
ESHWARNATH CONSTRUCTIONS: CRISIL Rates INR35MM Loans at 'B'
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank facilities of Eshwarnath Constructions.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 50 CRISIL A4
Cash Credit 35 CRISIL B/Stable
The ratings reflect ECS's small scale of operations in a
fragmented industry, and large working capital requirements. These
rating weaknesses are partially offset by the extensive experience
of ECS's promoter in the civil construction industry.
Outlook: Stable
CRISIL believes that ECS will continue to benefit over the medium
term from its promoter's extensive experience in the civil
construction industry. The outlook may be revised to 'Positive' if
the firm scales up its operations significantly, while it improves
its profitability, leading to better-than-expected cash accruals
and improvement in its liquidity. Conversely, the outlook may be
revised to 'Negative' in case ECS registers lower-than-expected
revenues or profitability or deterioration in its working capital
management, resulting in weakening of its liquidity, or if the
firm undertakes a large, debt-funded capital expenditure
programme, resulting in weakening of its overall financial risk
profile.
ECS, set up in 1997, executes civil construction work for Southern
Railways and other private players in Tamil Nadu. The day-to-day
operations of the firm are managed by Mr. M Athmanathan.
HINDUSTAN LABS: CRISIL Cuts Rating on INR150MM Loan to 'BB+'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Hindustan Laboratories to 'CRISIL BB+/Stable/CRISIL A4+' from
'CRISIL BBB-/Stable/CRISIL A3'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL BB+/Stable (Downgraded
from 'CRISIL BBB-/Stable')
Bank Guarantee 200 CRISIL A4+ (Downgraded from
'CRISL A3')
The rating downgrade reflects CRISIL's belief that Hindustan Labs'
operating performance will remain under pressure over the medium
term because of the firm's exposure to intense competition in the
institutional sales segment, along with increasing raw material
costs. Moreover, Hindustan Labs' financial risk profile will be
constrained by the firm's large working capital requirements over
the medium term. As on March 31, 2013, Hindustan Labs' debtors
increased to an estimated at 133 days, thereby increasing the
firm's working capital requirements. The firm's total debt was
estimated at INR251 million, as on
March 31, 2013, as compared to INR170 million as on March 31,
2012. Furthermore, the promoter has withdrawn INR115 million from
the firm, between 2010-11 and 2012-13, thus weakening its capital
structure and debt protection metrics; the firm's gearing declined
to 1.2 times as on March 31, 2013, from 0.79 times as on March 31,
2012.
The ratings continue to reflect the extensive experience of
Hindustan Labs' promoter in the institutional pharmaceutical sales
business and the firm's moderate scale of operations. These rating
strengths are partially offset by Hindustan Labs' high dependence
on tender-based sales exposing it to the risk of volatility in
cash flows, and below-average financial risk profile marked by an
average gearing and weak debt protection metrics.
Outlook: Stable
CRISIL believes that Hindustan Labs will continue to benefit over
the medium term from its promoters' extensive experience in the
institutional pharmaceutical sales business. The outlook may be
revised to 'Positive' if the firm registers substantial and
sustained growth in its revenues, and improves its working capital
management, operating margin, and capital structure. Conversely,
the outlook may be revised to 'Negative' in case Hindustan Lab
registers significant decline in its revenues, large reduction in
its net worth, or weakening in its debt protection metrics.
Hindustan Labs, a sole proprietorship firm, was established in
1976 by the late Mr. Vasantrai Doshi. It is currently being
managed by its founder's son, Mr. Rajesh Doshi. Hindustan Labs is
primarily involved in the tender-based supply of formulations to
government institutions. Hindustan Labs derives a major portion of
its revenues from its tender-based sales, and the rest from
contract manufacturing of formulations. Hindustan Labs
manufactures nutrition supplements, cough and cold, anti-malarial,
anti-invective, and anti-tuberculosis formulations in tablet,
capsule, powder, and liquid oral dosage forms. The firm's
manufacturing facility is at Palghar in Thane district
(Maharashtra). On May 13, 2013, HL Formulations Ltd was formed and
Letter of Incorporation from Registrar of Companies was obtained.
The promoter plans to merge Hindustan Labs into HLFL during 2013-
14 and dissolve the proprietorship.
Hindustan Labs reported a profit after tax (PAT) of INR64 million
on net sales of INR848 million for 2012-13, against a PAT of INR97
million on net sales of INR941 million for 2011-12.
JAGAT PROJECTS: CRISIL Rates INR150MM Overdraft Facility at 'B+'
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Jagat Projects Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 150 CRISIL B+/Stable
The rating reflects JPL's weak financial flexibility, on account
of fungibility of cash flows with group entities, and working-
capital-intensive nature of operations. These rating weaknesses
are partially offset by the experience of JPL's promoters in the
rice industry and moderate financial risk profile marked by low
gearing.
Outlook: Stable
CRISIL believes that JPL will benefit from its promoters'
extensive experience in the rice industry. The outlook may be
revised to 'Positive' in case JPL registers continued revenue
growth with improved operating margin, and decline in investment
in non-core activities, leading to improvement in its liquidity.
Conversely, the outlook may be revised to Negative in case of
large incremental working requirements or unfavorable changes in
government regulations regarding import/export of rice negatively
impacting the company's business risk profile.
JPL, incorporated in 2008, is promoted by Mr. Satish Pawa and Mr.
Sant lal Agarwal and their family members. JPL trades in
basmati/non-basmati rice and paddy in the domestic market. The
company is based in New Delhi
K & T AGRO: CRISIL Assigns 'B+' Ratings to INR65MM Loans
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facilities of K & T Agro Mills (P) Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 CRISIL B+/Stable
Proposed Cash 40 CRISIL B+/Stable
Credit Limit
The rating reflects K&T's below-average financial risk profile,
marked by high gearing, and its limited size of operations in the
intensely competitive rice milling industry. The ratings also
factor in the susceptibility of the company's operating margin to
changes in government regulations and to volatility in raw
material prices. These rating weaknesses are partially offset by
the extensive industry experience of K&T's promoters.
Outlook: Stable
CRISIL believes that K&T will continue to benefit over the medium
term from the extensive industry experience of its promoters. The
outlook may be revised to 'Positive' if K&T's revenues and
profitability increase substantially, resulting in higher-than-
expected accruals and hence to an improvement in its financial
risk profile. Conversely, the outlook may be revised to 'Negative'
if K&T undertakes aggressive debt-funded expansions, or its
working capital management deteriorates further, leading to
weakening of its liquidity.
Set up in 1994, Ernakulam (Kerala)-based K&T is engaged in the
milling and processing of paddy into rice, rice bran, broken rice,
and husk.
K&T reported a profit after tax (PAT) of INR1.2 million on net
sales of INR151 million for 2011-12 (refers to financial year,
April 1 to March 31), as against a PAT of INR0.3 million on a net
sales of INR154 million for 2010-11.
LUNI POWER: CRISIL Rates INR150MM Term Loan at 'BB-'
----------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable' rating to the long-
term bank facility of Luni Power Company Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 150 CRISIL BB-/Stable
The rating reflects LPCL's exposure to risks related to project
implementation. The company is also susceptible to hydrological
risks and to single site concentration. These rating weaknesses
are partially offset by the extensive experience of LPCL's
promoters in the hydro-electric power generation and
infrastructure sectors, and by the company's healthy revenue
visibility.
Outlook: Stable
CRISIL believes that LPCL will benefit over the medium term from
its power purchase agreement with Himachal Pradesh State
Electricity Board, leading to steady revenue visibility. The
outlook may be revised to 'Positive' if LPCL commences operations
at its power plant without cost and time overruns, and operates
the unit at a high plant load factor (PLF), thereby ensuring that
cash accruals are comfortable. Conversely, the outlook may be
revised to 'Negative' if low PLF or substantial defaults by power
purchasers weaken LPCL's debt servicing ability.
LPCL, incorporated in 2001, is setting up a small hydro-power
plant under a 40-year concession contract with the Government of
Himachal Pradesh on build-own-operate-and-transfer basis. The unit
will generate electricity by utilising water from the Luni Khad
tributary of River Beas.
MG HOUSING: CRISIL Assigns 'B+' Ratings to INR400MM Loans
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of MG Housing Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 300 CRISIL B+/Stable
Proposed Long-Term 100 CRISIL B+/Stable
Bank Loan Facility
Bank Guarantee 100 CRISIL A4
Proposed Bank Guarantee 100 CRISIL A4
The ratings reflect MGPL's susceptibility to large funding risks
accentuated by the high reliance on customer advances coupled with
large term debt repayments within the implementation stage of the
project. The ratings also reflect company's geographical
concentration, and susceptibility to cyclicality in the real
estate industry. These rating weaknesses are partially offset by
the positive initial response from customers (in the form of
significant bookings) to MGPL's Faridabad project and promoter's
industry experience and expected continual funding support from
them.
Outlook: Stable
CRISIL believes that MGPL will continue to benefit from the
extensive experience of its promoters in the real estate industry
and their funding support over the medium term. The outlook may be
revised to 'Positive' in case of timely project completion along
with better-than-expected customer bookings resulting in an
improvement in the company's liquidity. Conversely, the outlook
may be revised to 'Negative' in case of time or cost overrun in
relation to the project or in the event of lower-than-expected
ramp up in customer bookings leading to lower-than-expected cash
inflows or large debt funding of its proposed project pressurizing
the company's liquidity.
MGPL was established in October 2012 by Mr Ajay Mangal and Mr.
Dinesh Chand Gupta by reconstituting Mangalmay Constructions Pvt.
Ltd. The company is engaged in development of residential township
(Mulberry County), in Faridabad (Haryana). Mulberry County is the
maiden project of MGPL.
MIRACLE CABLES: CRISIL Assigns 'B+' Ratings to INR134.4MM Loans
---------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facilities of Miracle Cables (India) Pvt Ltd, and assigned its
'CRISIL B+/Stable/CRISIL A4' rating to these facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.5 CRISIL A4 (Assigned;
Suspension Revoked)
Letter of Credit 2.5 CRISIL A4 (Assigned;
Suspension Revoked)
Cash Credit 120.0 CRISIL B+/Stable (Assigned;
Suspension Revoked)
Term Loan 14.4 CRISIL B+/Stable (Assigned;
Suspension Revoked)
CRISIL had suspended its rating on February 8, 2013, as MCPL had
not provided the necessary information required for reviewing the
rating. MCPL has now shared the requisite information, thereby
enabling CRISIL to assign a rating to the bank facilities.
The ratings reflect MCPL's modest scale of operations, customer
concentration in its revenue profile and working-capital-intensive
nature of operations. The ratings also factor in the company's
below-average financial risk profile, marked by its modest net
worth, high gearing, and subdued debt protection metrics. These
rating weaknesses are partially offset by the extensive experience
of MCPL's partners in the cables industry.
Outlook: Stable
CRISIL believes that MCPL will continue to benefit over the medium
term from the extensive experience of its promoters in the
industry. The outlook may be revised to 'Positive' in case MCPL
achieves significant and sustained improvement in its revenues,
while maintaining its margins and improving its capital structure.
Conversely, the outlook may be revised to 'Negative' in case MCPL
registers significant decline in its revenues or margins, or if
there is elongation in the working capital cycle of the company,
or if it undertakes any larger-than-expected, debt-funded capital
expenditure (capex) programme, thereby resulting in the weakening
of its financial risk profile.
MCPL, incorporated in 2002, By Mr. M Yesudhason, is engaged in
manufacturing of various types of cables such as uninyvin cables,
power cables and wiring harness. Mr. Yesudhason started the
business under his proprietary concern 'Miracle Cables' in 1996.
The business is now mostly booked under MCPL. The company's
manufacturing facilities are located at Bhandup (Mumbai), Mahape
(Thane, Maharashtra) and Ambernath (Thane, Maharashtra).
MCPL reported (on a provisional basis) a profit after tax (PAT) of
INR3.3 million on net sales of INR366.8 million for 2012-13
(refers to financial year, April 1 to March 31); it had reported a
PAT of INR6.7 million on net sales of INR333.8 million for 2011-
12.
M.M.G. HOLDINGS: CRISIL Rates INR178.2MM LT Loan at 'B+'
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of M.M.G. Holdings Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 178.2 CRISIL B+/Stable
The rating reflects MMG's exposure to risks associated with the
implementation and commercialisation of its commercial complex
project, and below-average financial risk profile marked by a high
gearing and weak debt protection metrics. These rating weaknesses
are partially offset by the benefits that MMG derives from the
prime location of its warehouse, and the company's stable cash
flows by way of lease rentals, supported by the healthy credit
risk profile of its tenant.
Outlook: Stable
CRISIL believes that MMG will complete its on-going commercial
complex project without any significant time or cost overrun. The
outlook may be revised to 'Positive' if the company generates
more-than-expected cash accruals, most likely because of earlier-
than-expected completion of its project or healthy occupancy after
inauguration of the commercial complex. Conversely, the outlook
may be revised to 'Negative' if MMG faces a time or cost overrun
in its project or if it undertakes a larger-than-expected, debt-
funded capex programme, resulting in weakening of its financial
risk profile.
MMG, incorporated in 2004, is involved in the business of leasing
warehouse spaces at Chennai (Tamil Nadu). The company is currently
building a commercial complex at Mount Road in Chennai. MMG is
part of Chennai-based Gupta group of companies.
M.R.S. LEATHER: CRISIL Assigns 'BB-' Ratings to INR60MM Loans
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL BB-/Stable' ratings to the bank
facilities of M.R.S. Leather Exports Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Standby Line of Credit 5 CRISIL BB-/Stable
Cash Credit 10 CRISIL BB-/Stable
Export Packing Credit 45 CRISIL BB-/Stable
The ratings reflect the benefits that MRS derives from its
promoters' extensive experience in the leather processing industry
and its above-average financial risk profile marked by healthy
capital structure albeit constrained by low net worth. These
rating strengths are partially offset by MRS' modest scale of
operations in the intensely competitive leather processing
industry, large working capital requirements, and susceptibility
of its operating margin to fluctuation in forex rates.
Outlook: Stable
CRISIL believes that MRS will continue to benefit from the
extensive industry experience of its promoters over the medium
term. The outlook may be revised to 'Positive' if there is a
substantial increase in revenues and profitability on a sustained
basis, leading to higher than expected accruals. Conversely, the
outlook may be revised to 'Negative' if MRS undertakes a large
debt-funded capital expenditure programme, or in case of a decline
in revenues and profitability leading to a weakening in the
capital structure.
Set up in partnership firm in the year 1989 as MRS Leather
Traders, MRS is engaged in the processing of EI tanned goat skin
to finished leather; the partnership firm was converted into a
private limited company during 2001.
MRS posted, on a provisional basis, profit after tax of INR6
million on a net sales of INR375 million during 2012-13 (refers to
financial year, April 1 to March 31) as against PAT of INR4
million on a net sales of INR348 million during 2011-12.
NICE POULTRY: CRISIL Assigns 'D' Ratings to INR110MM Loans
----------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facilities of Nice Poultry Feeds Mill Pvt Ltd. The rating reflects
instances of delays by NPFPL in servicing its debt, because of
stretched liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 20 CRISIL D
Cash Credit 30 CRISIL D
Proposed Cash 60 CRISIL D
Credit Limit
NPFPL also has a weak financial risk profile, marked by high
gearing and below average debt protection metrics. Moreover, the
rating factors in the company's moderate working capital
requirements, along with its small scale and short track record of
operations. These rating weaknesses are partially offset by the
extensive experience of NPFPL's promoters in the poultry feeds
industry.
NPFPL was incorporated in 2011. The company manufactures poultry
feed at its facility in Ghaziabad. NPFPL is promoted by Mr. Rais
Ahmad, Mr. Naeem Ahmad and Ms. Shama Praveen.
NPFPL reported a profit after tax (PAT) of INR2.4 million on net
sales of INR343.6 million for 2012-13 (refers to financial year,
April 1 to March 31), and a PAT of INR2.5 million on net sales of
INR101.2 million for 2011-12.
PANCHDEEP COTTON: CRISIL Rates INR90MM Cash Credit at 'B+'
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Panchdeep Cotton Industries Pvt Ltd (part of the
Panchdeep Group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 90 CRISIL B+/Stable
The rating reflects the Panchdeep group's weak financial risk
profile marked by high gearing and weak debt protection metrics,
its exposure to intense competition in the fragmented cotton
ginning industry, and vulnerability to changes in government
policies. These rating weaknesses are partially offset by the
benefits that the Panchdeep group derives from its promoters'
extensive industry experience.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of PCIPL and its group entity, Panchdeep
Cotton Industries (PCI), together referred to as the Panchdeep
group. This is because both the entities are in the same line of
business and are owned and managed by the Patel family.
Furthermore, both the entities have common raw material
procurement; also, there are occasional fungible cash flows and
operational linkages between both the entities.
Outlook: Stable
CRISIL believes that the Panchdeep group will continue to benefit
over the medium term from its promoters' extensive industry
experience. The outlook may be revised to 'Positive' if the group
generates higher-than-expected cash accruals or benefits from
significant equity infusion by its promoters, leading to
improvement in its financial risk profile. Conversely, the outlook
may be revised to 'Negative' if there is a significant decline in
the group's cash accruals or deterioration in its working capital
management or the group undertakes a large, debt-funded, capital
expenditure programme, further weakening its financial risk
profile.
PCI is a partnership firm established in 1996 by the promoters
Mr.Zinabhai Patel and Mr. Pravinbhai Patel. The firm is engaged in
ginning and pressing of raw cotton (kapas) and also in crushing
activities to manufacture cotton seed oil.
PCIPL was incorporated in 2007 by Mr. Zinabhai Patel, Mr.
Pravinbhai Patel and Mr. Akashbhai Shah (non-active). The company
is also engaged in ginning and pressing of raw cotton (kapas) and
owns a cotton seed oil unit.
The Panchdeep group reported, on a consolidated basis, a net loss
of INR0.6 million on net sales of INR1.71 billion for 2011-12
(refers to financial year, April 1 to March 31), against a net
profit of INR17.4 million on net sales of INR1.47 billion for
2010-11. For 2012-13, the Panchdeep group reported, on a
provisional basis, an estimated total turnover of INR1.64 billion.
PARAMOUNT AIRWAYS: Court Orders SFIO to Probe Grounded Carrier
--------------------------------------------------------------
The Times of India reports that the Madras high court has ordered
the Ministry of Corporate Affairs (MCA) to direct the Serious
Fraud Investigation Office (SFIO) to enquire into the affairs of
the grounded carrier, Paramount Airways.
TOI relates that the order was in response to a preliminary report
submitted by the Official Liquidator of the Madras high court. The
judgment was pronounced by Justice V Ramasubramanian on August 19.
The court also directed the SFIO to file a report before it within
eight weeks, the report says.
According to TOI, the official liquidator's report had cited
multiple discrepancies in the finances of the company and pegged
the net amount owed to creditors at INR611 crore, of which
INR450 crore was lent primarily by banks against "unrealisable
securities." The banks, which lent to Paramount, include Indian
Bank, Central Bank of India, State Bank of India, Andhra Bank,
Bank of India and IDBI Bank, the report discloses.
TOI relates that M Thiyagarajan, founder of Paramount Airways,
said he would appeal against the order. He also accused
competition of conspiring against the airline.
The report further said, "the secured creditors, herein primarily
banks, have lent the company in provisional liquidation a sum
totalling more than INR450 crore by creating charge over
unrealisable securities. In this regard, whether or not due
diligence was applied in sanctioning credit to the said company
needs to be ascertained," TOI relays.
The official liquidator's report also said that upon preliminary
scrutiny of the balance sheet, it was found that fixed assets of
INR18.88 crore as reported on March 31, 2009 have been "watered
down to a zero fixed asset position" by March 31, 2011. The report
said that "it is pertinent to point out that the year 2009 is also
the year of commencement of winding up," TOI adds.
As reported in the Troubled Company Reporter-Asia Pacific on
April 24, 2013, the New Indian Express said declaring the
Paramount Airways Private Limited in the city commercially
insolvent, the Madras High Court has appointed its Official
Liquidator to provisionally take charge of the assets of the
airline company till a decision is reached. The Express said
Justice S Rajeswaran made the declaration as the airways company
was not in a position to pay its dues to various companies.
Paramount Airways operated scheduled services, mainly targeting
business travellers until it ceased operations in 2010. The
company was based in Chennai, India.
PRAKASH FERROUS: CRISIL Assigns 'B+' Ratings to INR1.05BB Loans
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Prakash Ferrous Industries Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 450 CRISIL B+/Stable
Cash Credit 600 CRISIL B+/Stable
Letter of Credit 90 CRISIL A4
Letter Of Guarantee 4 CRISIL A4
Bank Guarantee 6 CRISIL A4
The ratings reflect PFIPL's below-average financial risk profile,
marked by high gearing and weak debt protection metrics; its
start-up operations; and susceptibility to intense competition in
the secondary steel industry. These rating weaknesses are
partially offset by the extensive experience of PFIPL's promoters
in the steel products manufacturing segment.
Outlook: Stable
CRISIL believes that PFIPL will continue to benefit over the
medium term from its promoters' extensive experience in the steel
products manufacturing segment. The outlook may be revised to
'Positive' if the company improves its scale of operations, and
generates larger-than-expected cash accruals, thus enhancing its
liquidity. Conversely, the outlook may be revised to 'Negative' if
the company reports lesser-than-expected revenues and
profitability, resulting in deterioration of its financial risk
profile.
PFIPL was incorporated in 2007 as Prakash Ferrous Industries
(Bangalore) Pvt Ltd. The company was subsequently renamed as
PFIPL.
PFIPL was set up to manufacture thermo-mechanically treated (TMT)
bars with Tempcore technology at Srikalahasti in Chitoor (Andhra
Pradesh). PFIPL is a joint venture between the Chennai-based
Agarwal family and the Agra-based Garg family. Members of the
promoter families, namely, Mr. Kalpesh Agarwal, Mr. Jayesh
Agarwal, Mr. Shailesh Agarwal, Mr. Rajesh Kumar Garg, Mr. Rakesh
Kumar Garg, Pramod Kumar Garg and Mr. Mukesh Kumar Garg, manage
PFIPL's day-to-day operations.
RALSON PETROCHEMICALS: CRISIL Rates INR200MM Term Loan at 'B+'
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term
bank facility of Ralson Petrochemicals Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 200 CRISIL B+/Stable
The rating reflects RPL's exposure to risks related to
implementation of its ongoing Haldia dock based container freight
station project. The rating also factors in risks attached to
successful stabilisation of operations and hence, achievement of
revenues and cash accruals. These rating weaknesses are partially
offset by the benefits that RPL derives from its holding company's
strong industry experience and the locational advantage of being
at Haldia port.
Outlook: Stable
CRISIL believes that RPL will benefit over the medium term from
the extensive experience of its promoter in the shipping industry,
and low funding risk of the project on account of financial
closure. The outlook may be revised to 'Positive' if the company's
operations commence as per the revised schedule and smoothly
scale-up, and it generates better-than-expected revenue and
profitability leading to better-than-expected cash accruals, thus
enhancing its financial risk profile and ensuring timely servicing
of debt. Conversely, the outlook may be revised to 'Negative' in
case of delay in initiation and stabilisation of operations and
thus lower-than-expected revenue and profitability, or more-than-
expected debt-funded capex impacting RPL's financial risk profile,
particularly its liquidity.
RPL is promoted by TP Roy Choudhary and Company Pvt Ltd (TPRCPL),
and was incorporated to set up a container freight station (CFS)
at the Haldia dock in West Bengal.
SALEM AUTOMECH: CRISIL Puts 'B+' Ratings on INR81.6MM Loans
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Salem Automech (India) Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Cash Credit 50 CRISIL B+/Stable
Limit
Overdraft Facility 23.6 CRISIL B+/Stable
Long-Term Loan 8.0 CRISIL B+/Stable
Proposed Bank Guarantee 10 CRISIL A4
Proposed Letter 15 CRISIL A4
of Credit
Bank Guarantee 3.4 CRISIL A4
The ratings reflect SAIPL's modest scale of operations and
exposure to economic downturns, and below-average financial risk
profile marked by a moderate capital structure. These rating
weaknesses are partially offset by the extensive experience of
SAIPL's promoter in the steel fabrication and scrap trading
segments.
Outlook: Stable
CRISIL believes that SAIPL will continue to benefit over the
medium term from its promoter's extensive industry experience. The
outlook may be revised to 'Positive' if the company improves its
financial risk profile, supported by increase in its scale of
operations and improvement in its profitability leading to
improvement in its capital structure. Conversely, the outlook may
be revised to 'Negative' if SAIPL undertakes any larger-than-
expected debt-funded capital expenditure programme or registers
deterioration in its working capital management.
SAIPL, incorporated in 2003, is involved in the fabrication of
structural steel components. It also trades in ferrous and non-
ferrous scrap. The company is promoted by Mr. M V Sellamuthu.
SAIPL reported, on a provisional basis, a profit after tax (PAT)
of INR4.2 million on total revenues of INR97.9 million for 2012-13
(refers to financial year, April 1 to March 31), against a PAT of
INR4.0 million on total revenues of INR90.4 million for 2011-12.
SONEX TV: CRISIL Rates INR85MM Cash Credit at 'B'
-------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the
bank loan facilities of Sonex TV Appliances Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Letter of Credit 35 CRISIL A4
Bank Guarantee 30 CRISIL A4
Cash Credit 85 CRISIL B/Stable
The ratings reflect STAPL's below-average financial risk profile,
marked by its weak capital structure and interest coverage ratio;
and the company's modest scale of operations in the competitive
consumer electronics product industry. These ratings weaknesses
are partially offset by the extensive experience of STAPL's
promoters in the consumer electronics distributorship business in
West Bengal (WB).
Outlook: Stable
CRISIL believes that STAPL will maintain its business risk profile
over the medium term, backed by the experience of its promoters in
the consumer electronics distributorship business. The outlook may
be revised to 'Positive' in case of improvement in its scale of
operations and profitability along with improvement in its capital
structure, thus enhancing its financial risk profile. Conversely,
the outlook may be revised to 'Negative' in case of lengthening in
STAPL's working capital cycle, lower-than-expected profitability;
or if it undertakes any debt-funded capital expenditure (capex)
programme, thereby weakening its financial risk profile.
STAPL was established as a partnership firm in 1992 in Kolkata,
WB. In 2000, the firm was reconstituted as a private limited
company. STAPL distributes various consumer electronic products in
WB. The promoters, Mr. Ashok Poddar and Mr.Chandra Lal Chowdhury,
manage the company's day-to-day operations.
SRINIVASA GAYITHRI: CRISIL Cuts Rating on INR527.5MM Loan to 'D'
----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Srinivasa Gayithri Resource Recovery Ltd to 'CRISIL D' from
'CRISIL C.'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long-Term Loan 527.5 CRISIL D (Downgraded from
'CRISIL C')
The rating downgrade reflects instances of delay by SGRRL in
servicing its term debt; the delays have been caused by the
company's weak liquidity. The weak liquidity is on account of
inordinate delays faced by SGRRL in commissioning its 8 megawatt-
(MW) municipal solid waste (MSW) power project.
SGRRL is also exposed to project implementation risks and has
geographical concentration in its revenue profile. Moreover, it is
exposed to moderate counterparty risk. However, SGRRL benefits
from the experience of its management.
SGRRL, a public-private partnership project of Bruhat Bengaluru
Mahanagara Palike and Mr. Ramesh Bingi and other promoters, was
set up in 2003. The company is setting up an MSW processing
facility and an 8-MW MSW-based power plant at Mandur near
Bengaluru (Karnataka).
SUMITRA DS: CRISIL Assigns 'D' Ratings to INR97MM Loans
-------------------------------------------------------
CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank
facilities of Sumitra DS Motors Pvt Ltd. The ratings reflect
instances of delays by SDSM in servicing its debt; the delays have
been caused by the company's weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 5 CRISIL D
Bank Guarantee 12 CRISIL D
Cash Credit 80 CRISIL D
SDSM also has a weak financial risk profile, marked by high total
outside liabilities to total networth ratio (TOL/TNW) and weak
debt protection metrics. However, the company benefits from its
established relationship with its principal and its promoters'
extensive experience in the automobile industry.
SDSM, incorporated in 2005 and promoted by Mr. Jagjit Singh and
his brothers, is an authorised automobile dealer for Maruti Suzuki
India Ltd (rated 'CRISIL AAA/Stable/CRISIL A1+'). The company
operates two showrooms, one in Shahjahanpur (Uttar Pradesh) and
one in Lakhimpur (Assam).
TARA UTTAM: CRISIL Assigns 'B' Ratings to INR73.6MM Loans
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facilities of Tara Uttam Seeds Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70.0 CRISIL B/Stable
Term Loan 3.6 CRISIL B/Stable
The rating reflects the initial stage of TUS' business operations,
along with its high working capital requirements, and average
financial risk profile marked by low net worth. These weaknesses
are partially offset by the experience of TUS' promoter in the
agriculture industry.
Outlook: Stable
CRISIL believes that TUS will maintain its credit risk profile,
backed by the experience of its promoters in the agriculture
sector. The outlook may be revised to 'Positive' in case of an
increase in the company's scale of operations with sustainability
in its operating margin and effective working capital management.
The outlook may be revised to 'Negative' with deterioration in
TUS' working capital management and operating margin or in case of
any debt-funded capex.
TUS is a Ludhiana (Punjab) based company involved in the
production and sale of hybrid seeds. The company was set up by Mr.
Kulwant Singh, along with his family members in 2012. The company
produces hybrid seeds of paddy and wheat. It sells the seeds under
its own brand called Tara Seeds.
=================
I N D O N E S I A
=================
LIPPO KARAWACI: S&P Withdraws Scale Rating on US$273MM Sr. Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services said that it had withdrawn its
'axBB+' ASEAN regional scale rating on the US$273.3 million senior
notes due Nov. 14, 2020, that Indonesia-based property developer
PT Lippo Karawaci Tbk. (BB-/Stable/--; axBB+/--) guarantees. The
issuer of the notes is Theta Capital Pte. Ltd., a special purpose
vehicle that Lippo Karawaci owns.
S&P notes, "We erroneously assigned the ASEAN regional scale
rating to the notes on Jan. 7, 2013."
S&P said, "We only assign ASEAN scale issue ratings to debt
denominated in a currency issued by an ASEAN country. The 'BB-'
issue rating on the notes and the ratings on Lippo Karawaci are
unaffected."
* Major Indonesian Banks Resilient vs. Market Turmoil, Fitch Says
-----------------------------------------------------------------
Indonesia's major banks are robust against the rupiah currency
slide because of their low unhedged foreign-currency exposure,
strong loss-absorption cushions and in some cases foreign
ownership, says Fitch Ratings. The slowdown in the economy will
weigh on these (rated) banks' operating environment, but is
unlikely to damage their credit profiles to any great extent.
A key reason for the credit resilience is that most major banks
now have very low net open positions on their foreign-currency
loans. There has been a run-up in foreign-currency lending since
2011, but unhedged foreign-currency exposure averages just 2% of
banks' capital - and is well below Bank Indonesia's (BI) maximum
allowable limit of 20%. The low amount of unhedged foreign-
currency exposure limits the potential risk of capital impairment
from the sharp depreciation of the rupiah - which has fallen by
11% against the US dollar this year, more than for many other
Asian currencies.
Indonesian commercial banks also have formidable loss-absorption
cushions. Capital adequacy ratios are around 18% with Tier-1
equity averaging 16%, against a gross NPL ratio of just 2%.
Notably, the NPLs tend to be well provisioned, which leaves the
banks with a substantial capital buffer against potential FX-
related losses.
In addition, a large proportion of the Indonesian banking system
is under foreign ownership of several regional and global banks.
This raises the likelihood of equity support from relatively
strong parent institutions in higher-rated jurisdictions in the
event of unexpected losses or sustained FX market pressure.
Indonesia's growth has begun slowing since the beginning of this
year due to a substantial drop in the prices of its key commodity
exports. The growth strains will worsen for two additional
reasons. First, the sharp fuel price hike in June - for
safeguarding the fiscal position - has raised inflation and will
quell household purchasing power. Second, monetary tightening - to
anchor inflation expectations and defend the falling rupiah - will
also rein in loan demand. Consequently, GDP growth could ease
toward a 5%-5.5% year-on-year rate.
Earnings and asset quality are bound to come under modest pressure
as Indonesia faces the slowest pace of economic expansion since
the global financial crisis of 2008. A higher cost of funds and
lower loan demand should hold back profit growth. More loans could
turn sour from decelerating activity, lower commodity prices, a
weaker rupiah and higher interest rates. The resulting increase in
loan-loss provisioning could weigh further on profitability.
Nonetheless, the credit profiles of the major banks are
sufficiently resilient to withstand a worsening operating
environment. This is supported by Fitch's stress tests which
indicate that the major banks' Viability Ratings already reflect a
range of vulnerability and resilience consistent with the current
financial and economic turmoil. The stress tests also found that
capital positions would be likely to remain intact at most major
banks.
In the instance of capital shortfalls, local banks owned by
foreign financial institutions, in particular, are likely to
benefit from parent support if stresses in the operating
environment became more persistent, or more intense, than
anticipated.
All of Fitch's commentary on the Indian rupee and Indonesian
currency slides are available on www.fitchratings.com
Currency Slide Will Add to Indian Banks' Woes
Policy Management is Key in India and Indonesia
Rupee Impact will be Highest for Indian Downstream National Oil
Companies
Hedging Insulates Indian Industrials from Rupee Fall; Risk in
Higher Debt
No Rating Impact on Indonesian Energy Companies from Rupiah
Depreciation
Rupiah Fall Exposes Indonesian Cos with FX Mismatch
Indonesian Telcos Can Ride Currency Storm
Fitch: Rupee Fall to Mainly Hit Chemical, Fertiliser, Paper Cos
=========
J A P A N
=========
TOKYO ELECTRIC: Should Consider Bankruptcy, Niigata Gov Says
------------------------------------------------------------
Jiji Press reports that Niigata Gov. Hirohiko Izumida said
bankruptcy should be considered an option for Tokyo Electric Power
Co. if it keeps failing to do the things it must do.
TEPCO has put money first and failed to take sufficient safety
measures, Mr. Izumida told a news conference in Tokyo, criticizing
the operator of the Fukushima No. 1 nuclear power plant, which was
crippled by the March 2011 earthquake and tsunami, Jiji Press
relates. On TEPCO's delays in announcing radioactive water leaks
into the sea from the plant, Mr. Izumida said he has strong
concerns about the company's ability to properly operate a nuclear
plant.
According to Jiji Press, Mr. Izumida again emphasized his
opposition to TEPCO's plan to apply for regulatory approval to
restart the Nos. 6 and 7 reactors at its Kashiwazaki-Kariwa
nuclear plant in his prefecture.
The government should bring all facts fully to light over the
crisis at the Fukushima plant before restarting the two reactors,
Mr. Izumida, as cited by Jiji Press, said.
About Tokyo Electric
Tokyo Electric Power Company is the largest electric power
company in Japan and the largest privately owned electric
utility in the world. TEPCO supplies electricity to meet the
increasingly diversified and sophisticated demands of its over
28.09 million customers in the metropolitan Tokyo, which is the
political, economic, and cultural center of Japan, and eight
surrounding prefectures.
Bloomberg News said the utility is battling radiation leaks at
the Fukushima Dai-Ichi power plant north of Tokyo after a
March 11 earthquake and tsunami knocked out its cooling systems,
causing the biggest atomic accident in 25 years. More than
50,000 households were forced to evacuate and Bank of America
Corp.'s Merrill Lynch estimates TEPCO may face compensation
claims of as much as JPY11 trillion (US$135 billion).
As reported in the Troubled Company Reporter-Asia Pacific on
May 11, 2012, Bloomberg News said Japan's government took control
of TEPCO and agreed to provide JPY1 trillion (US$12.5 billion) as
part of the nation's largest bailout since the rescue of the
banking industry in the 1990s.
Bloomberg related that the government will obtain more than 50%
of the voting rights in the utility under a 10-year plan approved
on May 8 by Trade and Industry Minister Yukio Edano. The
government stake may rise to two-thirds if TEPCO fails to meet
goals that include cost cuts and compensation payments, said
Bloomberg.
Under the plan, Bloomberg disclosed, the utility aims for an
unconsolidated profit of JPY106.7 billion in the year ending
March 2014, based on an electricity rate increase and the restart
of the Kashiwazaki Kariwa nuclear station. Bloomberg says
nationalization of TEPCO paves the way for the government to
restructure the electricity industry monopolized by regional
utilities and possibly break up power generation and transmission
networks to allow more competition.
====================
N E W Z E A L A N D
====================
PIKE RIVER: NZ Government to Pay For Mine Re-entry Plan
-------------------------------------------------------
Tracy Withers at Bloomberg News reports that New Zealand's
government will pay for a plan to re-enter the Pike River coal
mine, where an explosion almost three years ago killed 29 workers
in the nation's worst mining accident in 96 years.
The proposal is for a staged exploration of the main tunnel at the
site near Greymouth on the west coast of the South Island, Energy
Minister Simon Bridges said September 2 in a statement. Teams will
progress as far as a rockfall in the shaft that blocks the way to
the mine workings where the men were operating at the time of the
explosion.
"This is a highly complex and technical operation and it will be
carefully managed in stages, with a risk assessment undertaken at
each stage," Bloomberg quotes Mr. Bridges as saying. "Our criteria
are that any re-entry into the tunnel up to the rock fall is safe,
technically feasible and financially credible."
Bloomberg relates that Mr. Bridges said the government will pay
the estimated NZ$7.2 million ($6 million) cost of the plan, which
was approved by the board of Solid Energy New Zealand Ltd., the
government-owned miner that bought the site after Pike River Coal
Co. went into receivership.
About Pike River
Pike River Coal Limited (NZE:PRC) -- http://www.pike.co.nz/-- is
a New Zealand-based coal mining company. The Company, along with
its subsidiaries, is primarily engaged in the exploration,
evaluation, development and production of coal. It operates a
coal mine that lies under the Paparoa Ranges.
Pike River Coal Ltd was placed into receivership in December 2010
after 29 miners died in a series of explosions on Nov. 19, 2010.
New Zealand Oil & Gas, the company's largest shareholder,
appointed accountants PricewaterhouseCoopers as receivers. The
company owed NZ$80 million to secured creditors BNZ and NZ Oil &
Gas. Pike River Coal also owed another estimated NZ$10 million
to NZ$15 million to contractors, including some of the men who
lost their lives in the disaster.
Bloomberg notes that Pike River Coal was found guilty in April
this year of nine breaches of health and safety laws including
those relating to ventilation and methane management. A
New Zealand court awarded victims compensation of about NZ$110,000
each in July, adding that as the company was in receivership it
may be unable to make that payment, Bloomberg adds.
* Moody's Outlook for New Zealand Banking Sector Remains Stable
---------------------------------------------------------------
Moody's Investors Service has maintained its stable outlook on New
Zealand's banking system.
"The stable outlook over the next 12 to 18 months reflects our
expectation of continued improvements in New Zealand's economy,
supported by post-earthquake reconstruction in Christchurch and
accommodative interest rates," says Daniel Yu, a Moody's Assistant
Vice President and Analyst.
Yu was speaking on Moody's report titled, "Banking System Outlook:
New Zealand."
According to the report, the stable outlook is based on Moody's
expectation that GDP will grow by an average of 2.2% this year and
2.6% next year. In addition, Moody's believes that whilst rising
house prices and high household indebtedness reflect some domestic
imbalances, they will not pose significant risks to the stable
outlook in the coming 12-18 months.
Moody's report points out that tighter regulatory requirements
have prompted banks to reduce their dependence on wholesale
funding markets, which, at 32% of total funding, is a key sector
weakness.
"However, further improvements to bank funding profiles are likely
to be limited, given our economic growth assumptions which expect
loan demand to strengthen over the time of this outlook," says Yu.
Moody's also expects the banks to face margin pressure as they
attempt to grow their share of loans through price competition,
and as borrowers choose lower-margin fixed-rate mortgages in
response to an expected increase in the official cash rate.
Nonetheless, bottom line profits should be supported by a mid- to
high-single digit percentage point growth in loans over the
horizon of Moody's outlook. Under this circumstance, Moody's
expects net earnings retention will outstrip loan growth to help
banks maintain their robust capitalization and remain well
positioned to meet higher capital requirements (capital
conservation buffer) from January 1, 2014.
Moody's says high house prices and high household indebtedness are
two key economic risks. Whilst the impact on banks will be
mitigated by their strong capital buffers and recent macro-
prudential measures, the risk of an asset bubble triggered by a
lending boom remains a key credit concern.
In addition, Moody's continues to incorporate systemic support in
the senior debt and deposit ratings of the largest banks, despite
the recent implementation of the Reserve Bank of New Zealand's
Open Bank Resolution pre-positioning requirements policy that
provides the government with a framework to impose selective
losses on bank liabilities.
While the Open Bank Resolution is now part of the regulator's
resolution options, the importance of banks in funding New
Zealand's net external liabilities, the dominant position of the
largest four banks -- ANZ Bank New Zealand, ASB Bank, Bank of New
Zealand and Westpac New Zealand -- and the complexity of their
resolution reduce the probability that creditor bail-ins would be
used as a primary tool for bank resolution.
Furthermore, parental support is strong. The four major banks
continue to enjoy strong support from their Australian parents,
while Kiwibank is supported by a guarantee from the government-
owned New Zealand Post.
The stable system outlook is consistent with the stable outlooks
for the banks' average a3 standalone bank financial strength
ratings and their Aa3 long-term issuer ratings.
The outlook also reflects Moody's stable outlook on the New
Zealand government's Aaa rating.
Moody's rates five of New Zealand's 11 locally incorporated banks.
The five rated banks represent 88% of total system loans. The
banks are ANZ National Bank Ltd; Bank of New Zealand; Westpac New
Zealand Ltd; ABS Bank Ltd; and Kiwibank.
===============
P A K I S T A N
===============
PAKISTAN MOBILE: Moody's Says 1H2013 Results Strong for B2 CFR
--------------------------------------------------------------
Moody's Investors Service says that Pakistan Mobile Communications
Limited's 1H2013 results were strong for the rating level,
although the company's B2 corporate family rating remains
constrained by a two-notch differential with the Caa1 sovereign
rating.
"Mobilink's revenue grew by 3.7% year-on-year, supported by a 3%
increase in subscribers. Its reported EBITDA margin before
management fees in 1H2013 stayed at 46%," says Yoshio Takahashi, a
Moody's Assistant Vice President and Analyst.
"The company also generated positive free cash flow of $195
million, part of which was used to reduce debt to $415 million,
from $508 million as of December 2012," says Takahashi.
Based on these results, Moody's estimates that Mobilink's adjusted
debt/EBITDA for the 12-month period ended June 2013 improved to
around 1.5-1.6x from 1.7x as of December 2012, a level which is
strong for its rating level.
Absent the 3G auctions, Moody's expects its adjusted debt/EBITDA
to stay below 2.0x in 2013, supported by strengthened EBITDA
generation.
Moody's also believes that Mobilink's cash-on-hand, stable
operating cash flows, and access to undrawn, committed bank lines
will be sufficient to cover debt falling due in the coming 12
months, including $112 million in senior unsecured bonds maturing
on November 13, 2013 (Caa1/negative).
As of June 2013, the company held about $132 million in cash and
cash equivalents, excluding restricted cash. It should generate
cash flows from operations of about $380-$400 million in the
coming 12 months, given its leading market position in the growing
mobile market in Pakistan.
In addition, based on the company's earnings release for 1H2013,
it had $245 million in undrawn committed lines, and $198 million
in available vendor financing.
Consequently, the company's total cash sources of approximately
$955-$975 million should cover its short-term debt of about $292
million -- including the $112 million in bonds due in November --
and about $250 million in estimated capital expenditure --
including $219 million in committed capital obligations -- in the
absence of the 3G auctions.
Although the schedule remains uncertain, auctions for 3G licenses
could take place in 4Q2013 or 1Q2014. Moody's estimates that if
the firm is successful in its bid for a license, it would incur
additional cash costs of $350 million-$500 million in 2013/14,
including the capex needed to roll out the 3G network.
However, should the auctions proceed, Mobilink should be able to
secure the necessary funding through its solid relationships with
the banks, given its position as a leading telco in the local
market.
Although its leverage -- as measured by adjusted debt/EBITDA -- is
likely to increase, it will remain below 2.5x, which is still
strong for its rating level.
Moody's believes that if Mobilink's financial metrics or headroom
under its bank covenants were to come under pressure due to a
possible increase in debt owing to the 3G auctions, the company
would receive financial support from its parents, Orascom Telecom
Holdings SAE (unrated) or its ultimate shareholder, VimpelCom
Limited (Ba3 stable).
Moody's understands that Mobilink was in full compliance with its
financial covenants as of June 2013.
Mobilink's B2 corporate family rating remains constrained by a
two-notch differential with the Caa1 sovereign rating, despite the
company's stronger fundamental credit strength, as demonstrated by
its leading market position, strong financial metrics and solid
relationships with its parent companies and banks.
The principal methodology used in this rating was the Global
Telecommunications Industry Methodology published in December
2010.
Mobilink is the largest mobile operator in Pakistan by number of
subscribers. According to the Pakistan Telecommunication
Authority, Mobilink had about 37 million customers equating to a
subscriber market share of about 30% as of June 2013. The company
estimates that its market share is around 36% based on an active
subscriber base.
=====================
P H I L I P P I N E S
=====================
MANILA ELECTRIC: S&P Rates Proposed Sr. Unsecured Notes at 'BB'
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to a
proposed issue of U.S. dollar senior unsecured notes by
Philippines-based power utility Manila Electric Co. (Meralco;
BB/Stable/--; axBBB-).
S&P said, "The rating on the proposed notes is subject to our
review of the final issuance documentation. Meralco plans to use
the proceeds from the proposed notes to fund capital expenditure.
"The rating on Meralco reflects the company's dominant position in
power distribution, improving cash flows supported by our forecast
of robust sales, and a stable regulatory framework in the
Philippines. Meralco's improving regulatory track record will
enable the company to fully recover all pass-through charges
(including generation, transmission, taxes, system loss,
and universal charge). It also reduces potential volatility in
the company's earnings profile and underpins a stable industry
risk assessment.
"We believe Meralco's re-entry into power generation could weaken
its financial risk profile if it pursues an aggressive strategy
coupled with high dividend payouts. We anticipate that the
projects will increase Meralco's debt-funded capital expenditure
because we expect the company to hold a large share in each of the
generation projects. These generation-related projects will also
expose Meralco to execution risks, noted S&P.
According to S&P, the stable outlook on the long-term corporate
credit rating on Meralco incorporates our expectation that the
regulatory regime will remain steady and that the company's sales
will stay strong over the next 18-24 months. S&P said, "We also
expect that Meralco will expand its power generation business at a
balanced pace and will prudently fund the expansion, such that it
does not hurt the forecast improvement in the company's financial
performance. Furthermore, we believe that Meralco will manage
dividend payout within its policy levels of 50% of consolidated
core net income of the year."
S&P said it may lower the rating if:
1) regulatory changes adversely affect Meralco;
2) power demand weakens significantly;
3) Meralco's expansion in power generation is more aggressive
or results in higher debt than we anticipated; or
4) the company is aggressive in dividend payments to
shareholders.
The debt-to-EBITDA ratio deteriorating to 3x-3.5x on a sustained
basis (after adjusting for obligations from power purchase
agreements) could be a downgrade trigger.
Prospects for an upgrade appear limited over the next 12-24
months, given Meralco's significant planned capital spending and
the execution risks associated with expansion into the generation
business. An improvement in Meralco's cash flows and a
significant change in the business risk profile could positively
affect the rating. This assumes that the company maintains
financial discipline while investing in its power generation
projects, including more conservative dividend payout to preserve
cash, if required.
===============
X X X X X X X X
===============
* Plunging Currencies Crimp Asian Companies, WSJ Reports
--------------------------------------------------------
Sean McLain at The Wall Street Journal reports that companies in
exposed parts of Asia are facing a debt-repayment crunch as
plunging local currencies make it more costly to repay foreign
loans, a situation that is exacerbating stresses on the region's
economies.
The Journal says Asian companies took out sizable foreign loans in
recent years as the U.S. Federal Reserve kept interest rates low
and printed money. For companies in nations like India and
Indonesia, rates on U.S.-denominated debt were more attractive
than local borrowing costs, the Journal relates.
But the current exodus of capital from emerging markets, amid
expectations the Fed will end its period of extraordinary monetary
stimulus later this year, has changed that equation, according to
the report.
The Journal notes that foreign funds are pulling out of Asian
bonds and other assets amid expectations U.S. rates will rise
further. That is pushing currencies in Asia sharply lower and
raising the cost of repaying U.S.-denominated borrowings.
The report says the situation in India is notable. Indian
companies have a combined $100 billion of unhedged foreign debt,
according to data from Indian ratings firm Crisil, an affiliate of
Standard & Poor's. A nearly 18.5% fall in the rupee since May has
increased the cost of repaying those debts in local currency
terms, the Journal relates.
"The depreciation of the rupee is causing a lot of pain among some
big Indian corporates," the report quotes D.K. Joshi, an economist
at Crisil, as saying. "Those who have not hedged their foreign
debt will struggle to repay it."
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Oct. 3-5, 2013
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Wardman Park, Washington, D.C.
Contact: http://www.turnaround.org/
Nov. 1, 2013
AMERICAN BANKRUPTCY INSTITUTE
NCBJ/ABI Educational Program
Atlanta Marriott Marquis, Atlanta, Ga.
Contact: 1-703-739-0800; http://www.abiworld.org/
Dec. 2, 2013
BEARD GROUP, INC.
19th Annual Distressed Investing Conference
The Helmsley Park Lane Hotel, New York, N.Y.
Contact: 240-629-3300 or http://bankrupt.com/
Dec. 5-7, 2013
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Terranea Resort, Rancho Palos Verdes, Calif.
Contact: 1-703-739-0800; http://www.abiworld.org/
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
some position in the issuers' public debt and equity securities
about which we report.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR-AP. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com
Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel
Elaine T. Fernandez, Julie Anne L. Toledo, Frauline S. Abangan,
and Peter A. Chapman, Editors.
Copyright 2013. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
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 ***