/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/131226.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, December 26, 2013, Vol. 16, No. 254 Headlines A U S T R A L I A AIR AUSTRALIA: ASIC Disqualifies Michael James For Three Years BRINDABELLA AIRLINES: Retrenches 128 Staff After Collapse NUFARM LTD: S&P Lowers Rating on US$325 Million Notes to 'B+' WALTON CONSTRUCTION: ASIC Challenges Liquidators on Independence I N D I A ARIHANT SHIP: CRISIL Assigns 'B' Rating to INR80MM Loan ASHTAVINAYAK CINE: CRISIL Suspends 'D' Ratings on INR315MM Loans BLISS ANAND: CRISIL Suspends 'B+' Ratings on INR106MM Loans BRITEX COTTON: CRISIL Upgrades Rating on INR200MM Loan to 'B+' COGENT ENGINEERS: CRISIL Suspends 'B+' Ratings on INR38MM Loans COMPUTER ENGINEERS: CRISIL Suspends 'B+' Rating on INR50MM Loan GAYATRI SEA: CRISIL Reaffirms 'B+' Rating on INR150MM Loan JIWAN POLYCOT: CRISIL Cuts Ratings on INR57.5MM Loans to 'B' RATHORE FREIGHT: CRISIL Reaffirms 'D' Ratings on INR99MM Loans SATYAM ISPAT: CRISIL Raises Ratings on INR440MM Loans to 'C' SHAMLI SUGAR: CRISIL Suspends 'B-' Ratings on INR74.8MM Loans SUMESH ENGINEERS: CRISIL Reaffirms 'B' Rating on INR30MM Loan TATA STEEL: S&P Raises CCR of UK Unit to 'BB-'; Outlook Negative UNITED INDIA: CRISIL Reaffirms 'D' Ratings on INR382MM Loans J A P A N CORSAIR (JERSEY): S&P Raises Rating on JPY3BB Loan to BB- M O N G O L I A MONGOLIAN MINING: S&P Keeps 'B-' CCR on CreditWatch Negative N E W Z E A L A N D AORANGI SECURITIES: Bid to Exclude Jenks as Investor Junked S I N G A P O R E AEGIS LTD: S&P Lowers CCR to 'B+'; Outlook Stable S R I L A N K A * SRI LANKA TELECOM: S&P Affirms Foreign Currency CCR at 'B+' T H A I L A N D * THAILAND: Slowdown Sees Rise in Personal, Business Bankruptcies - - - - - ================= A U S T R A L I A ================= AIR AUSTRALIA: ASIC Disqualifies Michael James For Three Years -------------------------------------------------------------- The Australian Securities and Investment Commission has disqualified Michael David James, of Brisbane, Queensland, from managing corporations for three years for his involvement in the failure of seven companies in the Air Australia Group. The seven companies in the Air Australia Group were: Strategic Airlines Pty Ltd Strategic Aviation Group Pty Ltd Air Australia Airways Pty Ltd Ozjet Airlines Pty Ltd Strategic Engineering Australia Pty Ltd Strategic Global Pty Ltd Strategic Aviation Pty Ltd. Liquidators were appointed to those companies in March 2012. ASIC found that Mr. James allowed the companies to trade in circumstances where there were a number of insolvency indicators present and failed to comply with his director's duty to act with care and diligence. The Air Australia Group of Companies was wound up with an estimated deficiency of approximately AUD97.1 million, including approximately AUD36 million owing to Air Australia ticketholders. ASIC Commissioner Greg Tanzer said, "ASIC's power to disqualify directors of failed companies is an important preventative measure that we use to safeguard and secure the public interest in transparency and accountability of companies." About Air Australia The Air Australia fleet consists of five Airbus A330-200 and A320-200 aircraft, with headquarters in Hendra, Queensland. Regular flight paths included Bali, Phuket and Honolulu as well as Australian domestic destinations such as Melbourne, Brisbane, Perth, Port Hedland and Derby. On Feb. 17, 2012, Mark Korda and John Park of KordaMentha were appointed by the Director of the Strategic Aviation Group as voluntary administrators for the firm. The group consists of seven companies including Air Australia, Strategic Engineering Australia, and Strategic Aviation Charter. ANZ was the airline's the biggest creditor, owed more than AUD20 million, Australian Associated Press discloses. BRINDABELLA AIRLINES: Retrenches 128 Staff After Collapse --------------------------------------------------------- The Australian Associated Press reports that nearly all staff at Brindabella Airlines have been told they're out of a job just two days before Christmas. AAP relates that the 140 workers at the Canberra-based airline were told on Dec. 23 that 128 of them had lost their jobs. According to the news agency, staff were told the airline could no longer be sold after it lost most of its licenses and the majority of its planes were returned to their owners. All but a dozen staff at the cash-strapped airline will be retrenched, as the receivers KordaMentha try to sell the company's remaining assets, mainly four J-41 jetliners, AAP relays. According to the AAP, KordaMentha spokesman Michael Smith said the receivers did not want to dangle false hope in front of the workers once it became clear there wasn't anything left to sell. "It's a terrible time of year for this to happen," Mr. Smith told AAP on Dec. 23. "But the receivers thought it was better to be upfront with the workers as soon as the worst had been realised, to give them every possible chance to use the holiday period to look for work." Brindabella, formed in 1994, operated up to 250 sectors a week, with services from Canberra, Sydney and Brisbane to regional destinations including Newcastle, Cobar, Coffs Harbour, Moree, Mudgee, Narrabri, Newcastle, Orange and Tamworth. It has 140 employees and operates five US-built Metroliners and seven British-built Jetstreams. Recently Brindabella have experienced significant maintenance and regulatory issues which have impacted aircraft availability and services. David Winterbottom and Sebastian Hams of KordaMentha were appointed Receivers and Managers of the Canberra-based regional airline Brindabella on Dec. 15, 2013. The group consists of five companies including Brindabella Airlines Pty Ltd, Aeropelican Air Services Pty Ltd, M/V Purchasing Company Pty Ltd, Business Air Holdings Pty Ltd and Trand Holdings Pty Ltd. This follows the Group's decision to ground all aircraft not already grounded by the recent CASA directive and to cease all passenger flights. NUFARM LTD: S&P Lowers Rating on US$325 Million Notes to 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services said that it had assigned its 'BBB-' long-term issue rating to Nufarm Ltd.'s senior secured A$530 million bank facility, which has replaced the company's A$406 million facility. At the same time, S&P lowered the senior unsecured issue rating on Nufarm Australia Ltd.'s US$325 million notes to 'B+' from 'BB-', following the refinancing of its senior secured syndicated bank facilities. The downgrade on the senior unsecured issue reflects its structural subordination and an increase in the senior secured facility size to A$530 million from A$406 million. Security offered for the new senior secured facility will be Australian, New Zealand, and U.S. tangible assets, except for assets already pledged to the securitized receivables program's special-purpose vehicle, Nufarm Finance BV, but including the subordinated loan provided by Nufarm Holdings SAS to Nufarm Finance BV. Standard & Poor's simulated default scenario assumes a payment default in 2018 due to material worsening in Nufarm's operating results arising from a significant and prolonged weakening in global demand from the agribusiness sector. Under this scenario, there is adequate enterprise value to provide a very high recovery for the senior secured credit facilities (assuming a fully drawn facility). Therefore, S&P has assigned a recovery rating of '1' to the senior secured bank facility, indicating that lenders should expect high recovery of principal (90%-100%) in the event of default. S&P also assigned a recovery rating of '6' to the senior unsecured notes, indicating lenders should expect negligible recovery (0%-10%). At the same time, S&P has affirmed the 'BBB-' issue rating on the securitized receivables program and the recovery rating of '1', indicating that lenders should expect high recovery of principal (90%-100%) in the event of default. Subsequently, S&P has withdrawn the rating on the securitized receivables program at the request of the issuer. S&P has also affirmed the 'B+' issue rating and recovery rating of '6' on Nufarm's subordinated NSS hybrid notes, indicating lenders should expect negligible recovery (0%-10%). The outlook on the 'BB' issuer credit rating on Nufarm is negative, reflecting S&P's view that the company may face challenges in restoring its metrics to those comfortably in line with its expectations for the 'BB' rating. If the company is unable to restore its adjusted debt to EBITDA to about 3.5x and generate meaningful positive free operating cash flow metrics, or its liquidity deteriorates during the next 12 months, S&P may lower the rating to 'BB-'. S&P may revise the outlook to stable if Nufarm were to restore its metrics and demonstrate its commitment to sustaining its metrics in line with its expectations for the rating. A stable outlook would assume that Nufarm's appetite for acquisitions remained modest and focused predominantly on small bolt-on opportunities. A significant improvement in working capital management to mitigate its exposure to the volatile agribusiness sector would be evidenced by adjusted debt to EBITDA of about 3.5x, and a return to generating meaningful positive free operating cash flow. WALTON CONSTRUCTION: ASIC Challenges Liquidators on Independence ---------------------------------------------------------------- The Australian Securities and Investment Commission has applied to the Federal Court of Australia seeking the removal and replacement of the liquidators of Walton Construction Pty Ltd and Walton Construction (Qld) Pty Ltd on the grounds of a perceived lack of independence. ASIC is also seeking a declaration from the court that the liquidators' declarations of independence, relevant relationships and indemnities made to the companies' creditors were inadequate. If the court decides not to remove the liquidators, ASIC will seek orders that the liquidators: * provide new declarations of independence, relevant relationships and indemnities, and * convene meetings of creditors so that they can consider whether to replace the liquidators, having been fully informed of the relevant matters. In carrying out their functions and duties, the liquidators will be required to investigate prior transactions involving entities connected with the adviser which referred the companies to them. ASIC believes that those transactions and the referral relationship were not sufficiently disclosed to creditors at the appropriate time and that there is a perceived lack of independence that makes it inappropriate for the liquidators to hold office as liquidators of the companies. ASIC Commissioner, John Price said: 'Independence is vital to a fair and efficient market, particularly given the referral model widely used in the insolvency profession. The law sets a high standard for insolvency practitioners to act in the interest of creditors. 'Creditors must have absolute confidence in a liquidator's independence knowing that they are free of any conflict, both actual and perceived.' Glenn Franklin -- gfranklin@lawlerdd.com.au -- Stirling Horne -- shorne@lawlerdd.com.au -- and Jason Stone -- jstone@lawlerdd.com.au -- were appointed as voluntary administrators of the companies on Oct. 3, 2013. They were subsequently appointed as liquidators on Nov. 8, 2013. The matter will be heard by the Federal Court on Feb. 19, 2014. Walton Construction was a Melbourne-based builder. The company was founded in 1993 by Craig Walton and had offices in Melbourne, Sydney and Brisbane. ========= I N D I A ========= ARIHANT SHIP: CRISIL Assigns 'B' Rating to INR80MM Loan ------------------------------------------------------- CRISIL has revoked the suspension of its ratings on the bank facilities of Arihant Ship Breakers, and assigned its 'CRISIL B/Stable/CRISIL A4' ratings to these facilities. CRISIL had suspended its rating on Nov. 1, 2013, as Arihant had not provided the necessary information required for reviewing the rating. Arihant has now shared the requisite information, thereby enabling CRISIL to assign a rating to the bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 20 CRISIL A4 (Assigned; Suspension Revoked) Cash Credit 80 CRISIL B/Stable (Assigned; Suspension Revoked) The ratings reflect Arihant's susceptibility to risks related to project execution, large working capital requirements, and modest scale of operations in the cyclical and fragmented ship-breaking industry. These rating weaknesses are partially offset by the extensive industry experience of Arihant's proprietor in the ship breaking industry. Outlook: Stable CRISIL expects Arihant to maintain its business risk profile over the medium term backed by the established track record of the proprietor in the ship breaking industry. The outlook maybe revised to 'Positive' if Arihant is able to execute the current project from the Goa government in time and also able to achieve timely realisation of dues from the project. Conversely, the outlook may be revised to 'Negative' if execution of the project is delayed leading to impact on the revenues, margins and liquidity of the concern. Arihant was set up in 1983 as a partnership firm by Mr. Sanjeev Jain and his wife, Mrs. Nita Jain. The firm was subsequently reconstituted as a proprietorship concern under Mrs. Nita Jain. Arihant used to operate from Alang (Gujarat) but later on shifted base to Mumbai (Maharashtra). Along with the ship-breaking business, Arihant is also engaged in ship broking business. In March 2011, Arihant was awarded a tender by the Government of Goa to demolish MV River Princess (dead weight of 20,000 tonnes), which has been stranded at the Candolim Beach in North Goa since June 2000. As per the company, the total consideration for this project will be INR 990 million including the proceeds from scrap sales and the amount to be received from the Goa government. Arihant reported a profit after tax(PAT) of INR1.4 million on net sales of INR32.6 million for 2012-13 (refers to financial year, April 1 to March 31), as against a PAT of INR3.6 million on net sales of INR384.5 million for 2011-12. ASHTAVINAYAK CINE: CRISIL Suspends 'D' Ratings on INR315MM Loans ---------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Shree Ashtavinayak Cine Vision Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 20 CRISIL D Suspended Cash Credit 255 CRISIL D Suspended Proposed Long-Term Bank Loan Facility 40 CRISIL D Suspended The suspension of ratings is on account of non-cooperation by SACVL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SACVL is yet to provide adequate information to enable CRISIL to assess SACVL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' SACVL, incorporated in 2001, is a film production house and also undertakes distribution and exhibition of films. It is managed by Mr. Dhilin Mehta, who acquired the company from its original promoter, Mr. Amit Behl. SACVL has produced 13 films so far, and distributed 32 films. The company raised funds through initial public offering in December 2006 by issuing 3,728,000 equity shares at INR160 per share. The proceeds of INR596.4 million were utilised to fund film production. In December 2009, the company raised INR3.25 billion through a global depository receipt issue. The majority of the proceeds were given as advances to SACVFZE for film production. BLISS ANAND: CRISIL Suspends 'B+' Ratings on INR106MM Loans ----------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Bliss Anand Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 25 CRISIL A4 Suspended Cash Credit 50 CRISIL B+/Stable Suspended Proposed Bank Guarantee 55 CRISIL A4 Suspended Proposed Bill Discounting Facility 20 CRISIL A4 Suspended Proposed Cash Credit Limit 10 CRISIL B+/Stable Suspended Proposed Export Packing Credit 40 CRISIL A4 Suspended Proposed Term Loan 46 CRISIL B+/Stable Suspended The suspension of ratings is on account of non-cooperation by BAPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, BAPL is yet to provide adequate information to enable CRISIL to assess BAPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' Incorporated in 1975, BAPL manufactures level gauges and control and safety relief valves used in the oil and gas sector. Based in Manesar (Haryana), the company has three manufacturing facilities; one each in Manesar, Bawal (Haryana), and Jaber Ali (Dubai). The company is promoted by Mr. Prem Anand. Over the years, Mr. Prem Anand's sons, Mr. Vikas Anand, Mr. Gaurav Anand, and Mr. Kunal Anand, have also joined the business and look after various departments. BRITEX COTTON: CRISIL Upgrades Rating on INR200MM Loan to 'B+' -------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Britex Cotton International Ltd to 'CRISIL B+/Stable' from 'CRISIL B/Stable', and reaffirmed its rating on the company's short-term facilities at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 200 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Letter of Credit 300 CRISIL A4 (Reaffirmed) The rating upgrade reflects the substantial improvement in BCIL's revenues. The company registered operating revenues of INR3.11 billion in 2012-13 (refers to financial year, April 1 to March 31) as against INR1.67 billion in 2011-12. The increase was driven by higher demand for raw cotton by cotton mills on account of robust demand for cotton yarn by Chinese fabric and ready-made garment manufacturers. BCIL has achieved sales growth while maintaining a moderate operating profit margin of around 2.3 per cent in 2012-13, as against 1.67 per cent in 2011-12. The rating upgrade also factors in BCIL's improved liquidity as a result of unsecured loans extended to its group companies in the past being brought back into the company to fund its incremental working capital requirements. The funds brought back are expected to remain in the business over medium term, further supplemented by support extended by its group entities. The improvement in liquidity is also reflected in the improvement in BCIL's gross current assets to 150 days as on March 31, 2013, from 230 days as on March 31, 2012. The ratings, however, continue to reflect BCIL's modest scale of operations, and its limited pricing flexibility in an industry that is vulnerable to volatility in commodity prices and to any regulatory changes. The ratings also factor in the company's below-average financial risk profile, marked by a high total outside liabilities to tangible net worth ratio of 6.22 times as on March 31, 2013, and a low interest coverage ratio of 1.47 times in 2012-13. These rating weaknesses are partially offset by the extensive experience of BCIL's promoters in the cotton and yarn trading industry, the company's established clientele, and its tie-ups with suppliers. For arriving at the ratings, CRISIL has treated unsecured loans of INR60 million as on March 31, 2013, extended to BCIL by its promoters as neither debt nor equity, as these loans will be retained in the business and interest charged on them is lower than the bank rate. Outlook: Stable CRISIL believes that BCIL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if BCIL reports more-than- expected growth in its revenues and margins, leading to improvement in its cash accruals and debt protection metrics. Conversely, the outlook may be revised to 'Negative' if the company's debt protection metrics deteriorate, caused most likely by lower-than-expected growth in revenues and margins, or a significant stretch in its working capital cycle. Significant outflow of funds to its group companies may also result in a 'Negative' outlook. BCIL was incorporated in 1996, promoted by Mr. Badresh Mehta, a first-generation entrepreneur from Mumbai. The company trades in yarn, fabrics, and cotton, and operates mainly in the Indian market. COGENT ENGINEERS: CRISIL Suspends 'B+' Ratings on INR38MM Loans --------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Cogent Engineers Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 30 CRISIL A4 Suspended Bill Discounting 5 CRISIL A4 Suspended Cash Credit 34.3 CRISIL B+/Stable Suspended Overdraft Facility 3.7 CRISIL B+/Stable Suspended The suspension of ratings is on account of non-cooperation by Cogent with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, Cogent is yet to provide adequate information to enable CRISIL to assess Cogent's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' Cogent, set up in 1984, manufactures and erects water tube boilers. The company also undertakes projects for upgrading boilers, boiler re-tubing, steam piping, and spent wash firing. It also sells boiler spare parts. Cogent has in-house engineers to design the boilers. Based on customer requirements, it designs boilers with pressure, temperature, and tonnage specifications. The company primarily supplies to independent power plants, and process industries such as sugar, paper, chemicals, and distilleries. It has a diversified customer base with exports to South East Asia (including countries such as Thailand, Philippines, Vietnam, Indonesia, and Turkey) and some parts of the European Union. Cogent derives about 35 per cent of its total revenues from exports. COMPUTER ENGINEERS: CRISIL Suspends 'B+' Rating on INR50MM Loan --------------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Computer Engineers. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B+/Stable Suspended The suspension of ratings is on account of non-cooperation by CE with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, CE is yet to provide adequate information to enable CRISIL to assess CE's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' CE was established in 1990 as a proprietorship firm by Mr. Chetan Mehta. The firm undertakes civil construction contracts for the BMC (Brihan Mumbai Corporation) and MHADA (Maharashtra Housing and Area Development Authority) in and around Mumbai (Maharashtra). CE gets majority of the contracts from the School Infra Cell department of the BMC. The firm undertakes building repair and construction work; of its total sales, around 70 per cent comes from building repair work, and the remaining from building construction work. CE is registered as an AA grade contractor for the BMC. GAYATRI SEA: CRISIL Reaffirms 'B+' Rating on INR150MM Loan ---------------------------------------------------------- CRISIL's ratings on the bank facilities of Gayatri Sea Foods and Feeds Private Limited continue to reflect its modest scale of operations in the intensely competitive seafood trading business, working capital intensive nature of its operations and geographical concentration of its revenues. These rating weaknesses are partially offset by the extensive experience of GSFFPL's promoters in seafood business. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10 CRISIL A4 (Reaffirmed) Letter of Credit 150 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that GSFFPL will continue to benefit from its promoters' extensive experience in the seafood trading business. The outlook may be revised to 'Positive' in case of a substantial and sustained improvement in the company's scale of operation and profitability leading to higher-than-expected cash accruals with consequent improvement in its liquidity. Conversely, the outlook may be revised to 'Negative' in case GSFFPL faces a decline in revenues and profitability or lengthening of its working capital cycle leading to pressure on liquidity and financial risk profile. GSFFPL is an Andhra Pradesh based company incorporated in 2005. The company trades in shrimp feed in the domestic market. Currently, Mr. S.R. Satyanarayana Murthy and Mr. G Govardhan Rao are the directors of the company. GSFFPL reported a profit after tax (PAT) and net sales of INR3.5 million and INR533.9 million, respectively, for 2012-13 (refers to financial year, April 1 to March 31); the company reported a PAT of INR5.6 million on net sales of INR634.4 million for 2011-12. JIWAN POLYCOT: CRISIL Cuts Ratings on INR57.5MM Loans to 'B' ------------------------------------------------------------- CRISIL has downgraded its ratings on the long-term bank loan facilities of Jiwan Polycot to 'CRISIL B/Stable' from 'CRISIL B+/Stable' while reaffirming its ratings on JP's short-term bank loan facilities at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 5.0 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Cash Credit 52.5 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Letter of Credit 10.0 CRISIL A4 (Reaffirmed) The rating downgrade reflects weakening in JP's liquidity because of large incremental working capital requirements, commensurate with estimated year-on-year revenue growth of more than 20 per cent in 2013-14 (refers to financial year, April 1 to March 31) and reduction in capital. Three promoters exited the firm with total capital withdrawals of around INR35 million in 2012-13. Large incremental working capital requirements and significant capital withdrawals led to extensive utilisation of the firm's fund-based limits with instances of the limits being overdrawn; the utilisation of the limits is expected to remain high over the medium term, with expected low cash accruals. The ratings reflect JP's stretched liquidity because of working- capital-intensive operations, small scale of operations in a highly fragmented industry, and susceptibility to changing demand patterns for partially oriented yarn (POY) and to sharp volatility in raw material prices. These rating weaknesses are partially offset by the extensive experience of JP's promoters in the POY industry and the firm's established relationship with customers. Outlook: Stable CRISIL believes that JP's liquidity will remain constrained by large working capital requirements over the medium term. The outlook may be revised to 'Positive' if the firm scales up its operations significantly while improving its profitability, leading to larger-than-expected cash accruals, and consequently, improvement in liquidity. Conversely, the outlook may be revised to 'Negative' if the firm's financial risk profile, especially liquidity, deteriorates, mostly because of lower-than-expected cash accruals and larger-than-expected working capital requirements, or if the firm undertakes any large debt-funded capital expenditure programme. JP was established by members of the Goyal and Bansal families in 2005 to manufacture polyester POY. The firm set up its POY manufacturing unit in Haridwar (Uttarakhand) with capacity of 5 tonnes per day (tpd), which commenced commercial operations in September 2006. In 2008-09, the promoters set up fully drawn yarn (FDY) capacity of around 3 tpd. The firm sells its polyester yarn to socks and fabric weaving units in and around Delhi through its exclusive distributors. JP reported a profit after tax of INR6.4 million on net sales of INR240.9 million for 2012-13, against a PAT of INR18.5 million on net sales of INR271.7 million for 2011-12. RATHORE FREIGHT: CRISIL Reaffirms 'D' Ratings on INR99MM Loans -------------------------------------------------------------- CRISIL's rating on the long-term bank loan facilities of Rathore Freight Carriers (RFC) continue to reflect instances of delay by RFC in servicing its debt; the delays have been cause by RFC's weak liquidity marked by stretched receivables. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 52.5 CRISIL D (Reaffirmed) Rupee Term Loan 36.0 CRISIL D (Reaffirmed) Proposed Long-Term Bank Loan Facility 10.5 CRISIL D (Reaffirmed) RFC also has a weak financial risk profile, marked by high gearing and below-average debt protection metrics, and a modest scale of operations in the transportation industry. These rating weaknesses are partially offset by the extensive experience of RFC's partners in the transportation industry and its established clientele. RFC was set up as a partnership firm in 1986 by the late Mr. Girdharisingh Rathore. The firm operates in the transportation industry; it has also diversified into the liquefied petroleum gas (LPG) transportation business. The operations of the firm are managed by Mr. Hanwant Singh Rathore. For 2012-13 (refers to financial year, April 1 to March 31), RFC reported profit of INR2.8 million on net sales of INR331.5 million as against profit of INR3.2 million on net sales of INR352.5 million for 2011-12. SATYAM ISPAT: CRISIL Raises Ratings on INR440MM Loans to 'C' ------------------------------------------------------------ CRISIL has upgraded its ratings on the bank facilities of Satyam Ispat (North East) Limited to 'CRISIL C/CRISIL A4' from 'CRISIL D/CRISIL D'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 283 CRISIL C (Upgraded from 'CRISIL D') Letter of Credit 95 CRISIL A4 (Upgraded from 'CRISIL D') Working Capital Term Loan 123 CRISIL C (Upgraded from 'CRISIL D') Proposed Long-Term 34 CRISIL C (Upgraded from Bank Loan Facility 'CRISIL D') Bank Guarantee 5 CRISIL A4 (Upgraded from 'CRISIL D') The upgrade reflects closure of one of its term loans leading to reduced debt obligations and timely servicing of interest over the past few months. However, rating remains constrained by the commencement of repayment of its working capital demand loan from January 2014, which will again exert pressure on its liquidity. The company's ability to service the increased obligations on time, given its large working capital requirement and low net cash accruals remains a key rating sensitivity factor. SINEL also has large working capital requirements, along with limited pricing flexibility because of intense competition in the steel industry. The company, however, benefits from the semi- integrated nature of its operations. SINEL, incorporated in 2005, is part of Satyam Group of Industries. SINEL commenced commercial operations in April 2007. It manufactures thermo-mechanically treated (TMT) bars, which it sells under its Satyam Super TMT brand. The company has a semi- integrated steel plant, with capacity to manufacture TMT and mild steel billets. SINEL reported a provisional profit after tax (PAT) of INR9 million on net sales of INR1267 million for 2012-13 (refers to financial year, April 1 to March 31), against a PAT of INR13 million on net sales of INR2138 million for 2011-12. SHAMLI SUGAR: CRISIL Suspends 'B-' Ratings on INR74.8MM Loans ------------------------------------------------------------- CRISIL has suspended its rating on the bank facilities of Shamli Sugar Works Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 65 CRISIL B-/Stable Suspended Term Loan 9.8 CRISIL B-/Stable Suspended The suspension of ratings is on account of non-cooperation by SSWPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SSWPL is yet to provide adequate information to enable CRISIL to assess SSWPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria 'Information Availability Risk in Credit Ratings' SSWPL, set up in 1995 by Mr. Ankit Singhal, manufactures MS ingots used in the rolling mills. It uses sponge, pig, and scrap iron as raw materials to produce steel billets and ingots. It has manufacturing capacity of 22,500 tonnes per annum of steel ingots at its plant in Muzaffarnagar (Uttar Pradesh). The average capacity utilisation of the plant over the past three years has been around 57 per cent. The company has two blast furnaces; the second one was installed in 2009-10 (refers to financial year, April 1 to March 31). SUMESH ENGINEERS: CRISIL Reaffirms 'B' Rating on INR30MM Loan ------------------------------------------------------------- CRISIL's ratings on the bank facilities of Sumesh Engineers Pvt Ltd continue to reflect SEPL's working-capital-intensive, and small scale of, operations in the highly fragmented electrical industry, and high customer concentration in its revenue profile. These rating weaknesses are partially offset by SEPL's moderate financial risk profile, marked by healthy debt protection metrics, and the extensive experience of its promoter in the electrical industry, leading to established customer and supplier relationships. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 30 CRISIL A4 (Reaffirmed) Cash Credit 30 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes that SEPL will continue to benefit over the medium term from its promoter's extensive industry experience and established customer and supplier relationships. The outlook may be revised to 'Positive' if SEPL's scale of operations improves substantially, while it maintains its profitability, leading to higher-than-expected cash accruals, or if it improves its working capital management. Conversely, the outlook may be revised to 'Negative' if the company's liquidity weakens further, most likely due to larger-than-expected working capital requirements or substantial debt-funded capital expenditure (capex). Update SEPL's net sales of INR147.5 million in 2012-13 (refers to financial year, April 1 to March 31), were marginally lower than CRISIL's expectations. In current year also, the firm has achieved revenues of about INR95 million till November 2013. The company's revenues were mainly derived from the Gujarat Electricity Board (GEB) and its subsidiaries. SEPL had an operating profitability margin of about 7.5 per cent for 2012-13, which was higher than 6.95 per cent recorded in 2011-12 because of better realisations on its order book. SEPL's working capital requirement was better than expectations, with receivables of about 50 days as on March 31, 2013, much lower than 112 days a year earlier, as its major customer was GEB, to which the company extends lower credit period of about 30 to 60 days. The company's inventory was also negligible because of the low stock of finished goods maintained. SEPL's financial risk profile was also moderate, with low gearing of about 1.3 times as on March 31, 2013, though it had a small net worth of about INR20 million as on this date. The company's debt protection metrics were moderate, with interest coverage ratio of about 2.55 times and net cash accruals to total debt ratio of about 0.24 times, in 2012-13. SEPL does not have any significant debt-funded capex plans, and is hence likely to maintain its moderate financial risk profile over the medium term. SEPL's liquidity is marked by no term debt obligations and low bank limit utilisation. SEPL, on a provisional basis, reported a profit after tax (PAT) of INR3.9 million on net sales of INR147.4 million for 2012-13, as against a PAT of INR3.6 million on net sales of INR139.1 million for 2011-12. SEPL was established by Vadodara (Gujarat)-based Mr. Suresh Vyas in 1992. It manufactures distribution transformers in the range of 5 kilovolt amperes to 5 megavolt amperes. TATA STEEL: S&P Raises CCR of UK Unit to 'BB-'; Outlook Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it had raised its long-term corporate credit rating on Tata Steel UK Holdings Ltd. (TSUKH) to 'BB-' from 'B+'. The outlook is negative. S&P also affirmed its 'B' short-term corporate credit rating on the U.K- based company. At the same time, S&P raised the issue rating on TSUKH's GBP3.53 billion bank loan to 'BB' from 'BB-'. S&P removed all the ratings from CreditWatch, where they were placed with positive implications on Nov. 26, 2013. The recovery rating is '2'. "We upgraded TSUKH to 'BB-' from 'B+' because we view the company as a "highly strategic" subsidiary of Tata Steel Ltd. under our revised group rating methodology," said Standard & Poor's credit analyst Mehul Sukkawala. "We expect TSUKH to continue to receive strong support from its parent. We have therefore raised the rating on TSUKH to one notch below the 'bb' group credit profile of Tata Steel. We assess TSUKH's stand-alone credit profile (SACP) as 'b'." S&P believes Tata Steel (BB/Negative/--) is fully committed to supporting TSUKH because it considers the company to be a strategic investment. The companies share a common name. Tata Steel also intends to maintain good banking relationships with the common lenders of TSUKH. Tata Steel continues to provide significant financial support to the subsidiary. Nevertheless, S&P notes that the investment has significantly underperformed as compared with initial expectations and TSUKH has a significantly weaker competitive position than the group. TSUKH's "weak" business risk profile reflects S&P's view of the company's "weak" competitive position and "moderately high" risk in the steel industry. "TSUKH's weak operating efficiency and competitive advantage stem from the company's lack of raw material integration and its exposure to volatility in prices, given the high proportion of spot contracts," said Mr. Sukkawala. "Higher cost of production in U.K. plants and low capacity utilization in Europe underpin TSUKH's below-average profitability compared with industry peers." Nevertheless, TSUKH has a good market position as the second- largest steel producer in continental Europe; it is the largest in the U.K. It also has a good product mix, with a large proportion of value-added products. S&P's assessment of TSUKH's financial risk profile as "highly leveraged" is based on its expectation that the company's financial ratios will remain weak over the next 12-18 months. S&P estimates the ratio of debt to EBITDA to exceed 7x and EBITDA interest coverage to be less than 1.5x over the period. S&P also expects TSUKH's free cash flows to remain negative for the next two years. The negative outlook on TSUKH reflects S&P's rating outlook on Tata Steel. S&P would lower the rating on TSUKH if: (1) it lowers the rating on Tata Steel; or (2) Tata Steel shows signs of reducing support to TSUKH--although S&P believes this is unlikely. S&P may revise the outlook to stable if it revises the outlook on Tata Steel to stable. Tata Steel UK Limited is the 100% subsidiary of Tata Steel Ltd, and is the holding company for its European steel operations, which principally consists of the Corus group. UNITED INDIA: CRISIL Reaffirms 'D' Ratings on INR382MM Loans ------------------------------------------------------------ CRISIL's rating on the bank facilities of United India Shoe Corporation Private Limited (part of the Florind group) continue to reflect instances of delay by the Florind group in servicing its debt; the delays have been caused by the group's weak liquidity, arising from its working-capital-intensive operations. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Export Packing Credit 340 CRISIL D (Reaffirmed) Foreign Bill Discounting 42 CRISIL D (Reaffirmed) The Florind group also has a weak financial risk profile, marked by high gearing and weak debt protection metrics. Furthermore, the group has customer concentration in its revenue profile and is exposed to risks related to fluctuations in foreign exchange rates. The Florind group, however, benefits from its integrated operations, its long-standing relationships with its customers, and the extensive industry experience of its promoters. For arriving at the ratings, CRISIL has combined the business and financial risk profiles of UNISCO, Florind Shoes Pvt Ltd (FSPL), and Eastern Chrome Tanning Corporation Pvt Ltd (ECTC). This is because all these companies, collectively referred to as the Florind group, have a common management, are in similar lines of business, and have fungible cash flows among them. The Florind group was set up in 1978 by Mr. K Ameenur Rahman under the K Ameenur Rahman (KAR) group of companies, with FSPL as the group's flagship company. FSPL (set up in 1978) and UNISCO (2001) manufacture shoes. ECTC, set up in 2001, specialises in processing finished leather from cow hides. The KAR group comprises nine companies, all engaged in activities ranging from leather processing to manufacturing finished leather products; however, the entities other than the Florind group, are managed independently. ========= J A P A N ========= CORSAIR (JERSEY): S&P Raises Rating on JPY3BB Loan to BB- --------------------------------------------------------- Standard & Poor's Ratings Services said that it has raised its rating on one Japanese synthetic collateralized debt obligation (CDO) transaction, and removed the rating from CreditWatch with positive implications. The upgrade reflects the tranche's synthetic rated overcollateralization (SROC) level as well as S&P's sensitivity analyses in line with its criteria. S&P also reviewed the counterparty risk because the creditworthiness of the tranche relies on a swap counterparty and collateral assets. S&P has raised its rating to the level at which the tranche's SROC level exceeds 100% and meets our minimum cushion requirement as of the review date. STANDARD & POOR'S 17G-7 DISCLOSURE REPORT SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Rule applies to in-scope securities initially rated (including preliminary ratings) on or after Sept. 26, 2011. If applicable, the Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at: http://standardandpoorsdisclosure-17g7.com RATING RAISED, REMOVED FROM CREDITWATCH POSITIVE Corsair (Jersey) No. 2 Ltd. Fixed rate credit-linked loan series 58 To From Amount BB- (sf) B+ (sf)/Watch Pos JPY3.0 bil. =============== M O N G O L I A =============== MONGOLIAN MINING: S&P Keeps 'B-' CCR on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services said that it had kept its 'B-' long-term corporate credit rating on Mongolian Mining Corp. (MMC) and its 'B-' issue rating on the company's outstanding senior unsecured notes on CreditWatch with negative implications. S&P had first placed all the ratings on CreditWatch with negative implications on Aug. 30, 2013. "We kept MMC on CreditWatch with negative implications because the company continues to face heightened liquidity and refinancing risks in 2014, pending the completion of its initiatives to bolster its liquidity," said Standard & Poor's credit analyst Xavier Jean. MMC intends to sell certain assets, refinance its amortizing bank loans, and settle its promissory notes to stem the erosion in its liquidity buffer. S&P has better clarity on the terms, conditions, and likely timing of MMC's asset sales compared with three months ago. But the company is yet to receive the asset sales proceeds and refinance its amortizing bank loans throughout 2014 and promissory notes due in March and December 2014. S&P do not expect the rating on MMC to be higher than 'B-' following the resolution of the CreditWatch, and even if the company's liquidity situation improves markedly over the next 12 months. That's because S&P expects MMC's financial risk profile to remain "highly leveraged" in 2014 and 2015, with S&P's forecast of a ratio of debt to EBITDA of about 10x and EBITDA interest coverage of close to 1.5x. The CreditWatch resolution will depend on the final execution of MMC's following liquidity management initiatives: (1) the receipt of proceeds from asset sales; (2) the refinancing of its amortizing bank loans with a slower debt amortization profile than at present; and (3) the settlement of the amortizing promissory notes. "We will likely lower the rating if MMC does not receive the proceeds from its asset sales by the end of 2013," said Mr. Jean. While these proceeds will support MMC's short-term liquidity, S&P believes substantial downward rating pressure will remain until the company refinances its bank loans and addresses the settlement of its promissory notes, given its debt servicing requirements in March 2014. S&P believes downward rating pressure on MMC could reduce if the company: (1) receives the proceeds from the asset sales before the end of 2013; and (2) addresses the amortization of its bank loans and the settlement of its promissory notes before the end of February 2014. ==================== N E W Z E A L A N D ==================== AORANGI SECURITIES: Bid to Exclude Jenks as Investor Junked ----------------------------------------------------------- BusinessDesk reports that the statutory managers for the late Allan Hubbard's Aorangi Securities have lost a bid to exclude an American widow who had some $5.8 million invested with the Timaru businessman. In the High Court in Christchurch, Justice Robert Dobson on Dec. 23 struck down a bid by Grant Thornton's Richard Simpson, Trevor Thornton and Graeme McGlinn to have Susan Jenks and her deceased husband declared not investors in Aorangi Securities, one of the Hubbard investment vehicles under their statutory management, according to BusinessDesk. The report relates that the statutory managers claimed the Jenks' investment was with Southbury Group, and were resisting their claim to be recognised as a creditor of Aorangi, as it would cut the proportionate entitlement of other creditors. They claimed the exclusion was confirmed by Allan Hubbard's juggling of the Jenks' investment between the entities leading up to their appointment, the report says. BusinessDesk notes that while the judge was satisfied the investment was in the Southbury unit at the time the managers were appointed, he said they erred in dismissing a letter from Hubbard to Susan Jenks in October 2010 affirming a personal guarantee to Aorangi and implying a constraint on moving her funds without obtaining her instructions. That meant Hubbard's shuffling of Jenks' assets amounted to breach of his fiduciary duties, though the statutory managers did not argue he had been deliberately untruthful, the judgment said, the report relays. "However well meaning, and irrespective of any misguided subjective justification Mr Hubbard had for taking Mrs Jenks' money out of ASL, his conduct in doing so breached the fiduciary obligations he owed her, to deal with her money only in her best interests," the report quotes Justice Dobson as saying. The judge said that given Hubbard's close identity with and authority to bind Aorangi, the fund wasn't able to deny that it continued to hold Jenks' funds, meaning the statutory managers are obliged to treat her as a depositor, BusinessDesk relays. Justice Dobson awarded costs to Jenks, turning down the managers' bid to have each party bear their own costs, the report notes. About Aorangi Securities Aorangi Securities Ltd was incorporated in 1974 and is solely controlled by the Hubbards. On June 20, 2010, Aorangi Securities and seven charitable trusts were placed into statutory management, and Allan and Jean Hubbard were also placed into statutory management as "associated persons" of those entities. The seven charitable trusts included in the statutory management are Te Tua, Otipua, Oxford, Regent, Morgan, Benmore and Wai-iti. Trevor Thornton and Richard Simpson of Grant Thornton were appointed as statutory managers. The Temple Bar Family Trust and Barns Charitable Trust were also put into statutory management in September 2010 on recommendation from the Securities Commission. Hubbard Churcher Trust Management and Forresters Nominees Company were also added to the list of businesses under management by Trevor Thorton, Richard Simpson and Graeme McGlinn, of Grant Thornton, on September 20, 2010. On June 20, 2011, the Serious Fraud Office laid 50 charges under Crimes Act against Allan Hubbard in relation to its investigation into the affairs of Aorangi Securities Ltd; Hubbard Management Funds; and ASL directors Allan and Margaret (Jean) Hubbard. The SFO dropped the fraud charges against Allan Hubbard following Mr. Hubbard's death on Sept. 2, 2011. Mrs. Hubbard was also removed from statutory management, effective on Nov. 13, 2011. Aorangi's statutory managers said 400 investors in the mortgage lender owed NZ$96 million were likely to face a substantial shortfall as many loans were in default. So far, statutory managers have paid just 12 cents in the dollar, The Timaru Herald reported. ================= S I N G A P O R E ================= AEGIS LTD: S&P Lowers CCR to 'B+'; Outlook Stable ------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on India-based business process outsourcing (BPO) company Aegis Ltd. to 'B+' from 'BB-'. The outlook is stable. S&P removed the rating from CreditWatch, where it was placed with negative implications on Nov. 26, 2013. S&P then withdrew the rating at the company's request. S&P lowered the rating on Aegis to primarily reflect its assessment of the group's credit profile under its revised group rating methodology and Aegis' strategic role within the group. S&P believes the Ruia family is the majority shareholder of Essar Global Fund, which owns and controls the Essar Group entities and has influence over their strategies. The group companies include Essar Energy PLC, Essar Steel Ltd., and Aegis. S&P consolidated these entities as if they were a single entity and arrived at its 'b' assessment for the group credit profile of Essar Group. S&P's stand-alone credit profile of Aegis was 'bb-'. However, S&P's rating on Aegis was negatively affected by the company being a part of the Essar Group. Based on S&P's criteria, it viewed Aegis as a "nonstrategic" and an "insulated" member of the group, and capped the rating at 'B+', one notch above its group credit profile of Essar Group. S&P viewed the group's financial profile as "highly leveraged," given that key group companies, such as Essar Energy and Essar Steel, have sizable debt. S&P evaluated the group's consolidated cash flow adequacy and leverage as weaker than that of Aegis on a stand-alone basis. In addition, S&P assessed Essar Group's business risk profile as "weak," considering the market presence and profitability of key group members in its mainstay infrastructure business. S&P's assessment of Aegis as a "nonstrategic" member of the group indicated that the group could sell Aegis in the near to medium term. Aegis' business is not integral to the group and it does not share the group's name. S&P also assessed Aegis to be an "insulated" member of the group mainly because its financial performance and funding prospects are highly independent. S&P therefore rated the company one notch above the group credit profile on Essar Group. However, S&P still believes that the Essar Group and the Ruia family retain a certain level of control over Aegis' management policy, backed by the group's almost 100% ownership in the company. Aegis' stand-alone credit profile was underpinned by its "weak" business risk profile and "significant" financial risk profile, as defined in S&P's criteria. S&P's business risk profile assessment reflected the company's high reliance on its inbound voice business, its relatively low margins, and high attrition rate in the competitive BPO industry. The company's moderate size and recurring revenues from a good client base mitigated those weaknesses. In addition, Aegis' financial risk profile reflected the steady cash flow from its BPO business and our expectations of a ratio of funds from operations to debt of 25%-30% and a ratio of debt to EBITDA of 2x-3x over the next two years. At the time of the withdrawal, the stable outlook on Aegis reflected S&P's expectation that the company would steadily improve its EBITDA margin and maintain a stable financial performance over the next 12 months. At the same time, S&P expected Aegis to remain "insulated" from its parent group over the medium term. S&P could have lowered the rating if it believed the group credit profile had deteriorated. S&P could also have downgraded Aegis if the company had lost the required characteristics of an "insulated subsidiary," such as rising influence from the group members. S&P could have upgraded Aegis if it believed it was no longer part of Essar Group, or if its view of the group credit profile strengthened. RATINGS SCORE SNAPSHOT Corporate Credit Rating: B+/Stable/-- Business risk: Fair -- Industry risk: Intermediate risk -- Country risk: Intermediate risk -- Competitive position: Weak Financial risk: Significant -- Cash flow/leverage: Significant Anchor: 'bb-' Modifiers -- Diversification: No impact -- Capital structure: Neutral (no impact) -- Liquidity: Adequate (no impact) -- Financial policy: Neutral (no impact) -- Management and Governance: Fair (no impact) -- Comparable Rating Analysis: Neutral (no impact) Stand-alone credit profile: bb- Group credit profile: b Entity status within group: Nonstrategic ================ S R I L A N K A ================ * SRI LANKA TELECOM: S&P Affirms Foreign Currency CCR at 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services carried out several rating actions on five companies: PT Telekomunikasi Selular (Telkomsel); PT Astra International Tbk.; Pakistan Mobile Communications Ltd.; Sri Lanka Telecom PLC; and Philippine Long Distance Telephone Co. (PLDT). S&P raised the long-term local currency and ASEAN regional scale ratings on Telkomsel. S&P affirmed the long-term local currency ratings on Astra, Pakistan Mobile, and Sri Lanka Telecom. S&P also affirmed the long-term ASEAN regional scale ratings on Astra and PLDT. S&P removed all these ratings from CreditWatch, where they were placed with positive implications on Nov. 26, 2013, as a result of its new criteria. At the same time, S&P affirmed the foreign currency ratings on all the five companies. S&P also assigned its 'BBB' long-term local currency rating to PLDT. The rating outlooks on all the companies are stable. RATINGS LIST To From PT Telekomunikasi Selular Corporate credit rating Local currency BBB/Stable/-- BBB-/Watch Pos/-- Foreign currency BBB-/Stable/-- BBB-/Stable/-- ASEAN regional scale axA/-- axA-/Watch Pos/-- PT Astra International Tbk. Corporate credit rating Local currency BBB-/Stable/-- BBB-/Watch Pos/-- Foreign currency BBB-/Stable/-- BBB-/Stable/-- ASEAN regional scale axA-/-- axA-/Watch Pos/-- Philippine Long Distance Telephone Co. Corporate credit rating Local currency BBB/Stable/-- (new rating) Foreign currency BBB/Stable/-- BBB/Stable/-- ASEAN regional scale axA/-- axA/Watch Pos/-- Sri Lanka Telecom PLC Corporate credit rating Local currency B+/Stable/-- B+/Watch Pos/-- Foreign currency B+/Stable/-- B+/Stable/-- Pakistan Mobile Communications Ltd. Corporate credit rating Local currency B-/Stable/-- B-/Watch Pos/-- Foreign currency B-/Stable/-- B-/Stable/-- Based on S&P's criteria for ratings above the sovereign, it applies a stress test simulating a hypothetical sovereign foreign currency default scenario for ratings to be above the sovereign foreign currency rating. S&P also applies a test with incremental stress for ratings to be above the sovereign local currency rating. All the five companies pass these stress tests. The foreign currency rating is then capped by S&P's transfer and convertibility (T&C) assessment for the country in which the company operates. Although local currency ratings are not directly capped by the T&C assessment, S&P considers the incremental stress associated with a T&C event while evaluating if a local currency rating should exceed the T&C assessment. S&P specifically considers: (1) the impact of T&C controls on factors other than debt-service, such as the company's ability to import the required raw materials and capital equipment; and (2) the impact of T&C controls on debt acceleration clauses on the company's foreign currency debt and cross default clauses on its local currency debt. Therefore, for the local currency rating to exceed the T&C assessment, a company should have the ability to repay all its foreign currency debt (in the local currency equivalent amount), all the local currency debt accelerated due to cross default with foreign currency debt, and other regular debt maturities using cash and bank balances (after applying S&P's standard criteria assumptions) and funds from operations expected to be generated under sovereign stress over two to three months. T&C stress refers to an event in which the sovereign is under severe stress and restricts a non-sovereign entity's access to foreign exchange to meet debt-service obligations. Under the hypothetical T&C stress test, S&P assumes that T&C restrictions by the sovereign result in companies defaulting on all their foreign currency debt obligations within a few months of the T&C event. Such a default could trigger acceleration of the companies' local currency obligations that have cross default clauses with foreign currency debt. Of the five companies, S&P expects only Telkomsel to clear its hypothetical T&C stress because the company has a very low level of debt and a net cash position. S&P will continue to rate Astra and PLDT one notch above sovereign rating, i.e., the same as the T&C assessment for Indonesia and Philippines, respectively. The ratings on Sri Lanka Telecom and Pakistan Mobile will remain in line with the sovereign rating because S&P's T&C assessment for Sri Lanka and Pakistan is the same as the sovereign rating. Based on S&P's new corporate ratings methodology, the stand-alone credit profiles of all the five companies are two to three notches above the final rating: Telkomsel at 'a-'; Astra at 'bbb+'; PLDT at 'a- '; Sri Lanka Telecom at 'bb+'; and Pakistan Mobile at 'bb-'. S&P has restricted the local currency rating on Telkomsel to two notches above the sovereign foreign currency rating on Indonesia, which is one notch above its T&C assessment for the country. S&P believes the company benefits from the agreement between its shareholders, Indonesia government-owned PT Telekomunikasi Indonesia Tbk. (Telkom Indonesia), which owns 65%, and Singapore Telecommunications Ltd., which owns the balance stake. The agreement limits Telkom Indonesia's influence on Telkomsel's business and financial strategies. However, S&P believes government intervention in case of significant T&C stress could be negative considering Telkom Indonesia's majority ownership of Telkomsel. =============== T H A I L A N D =============== * THAILAND: Slowdown Sees Rise in Personal, Business Bankruptcies ----------------------------------------------------------------- The Nation reports that bankruptcy cases, both personal and commercial, have shown signs of rising due to the economic slowdown this year. However, the cases will take time after the economy saw slight growth or dropped about one or two years, the report relates. According to the Nation, Att Attanont, deputy director-general of the Legal Execution Department, said bankruptcies increase when people or businesses face a drop in their income to the point that they can no longer pay back creditors. When a bankruptcy case enters the court process, it will take at least one year before the case will end and the Legal Execution Department has to open bidding to sell the debtor's assets and pay the proceeds to its creditors, the report notes. As of October, the department had 264,232 cases with assets for sale valued at up to THB3.47 trillion, The Nation discloses. In the last fiscal year ended September, the department succeeded in settling 25,717 cases by mediating between debtors and creditors and selling assets for THB33.14 billion out of an estimated value of THB33.23 billion, according to the report. For this fiscal year, the department targets to clear at least 150,000 cases. In the first two months, it succeeded in clearing 5,026 cases with an estimated value of THB6.97 billion. It disposed of assets for THB7.07 billion, the report adds. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***