/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/060831.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, August 31, 2006, Vol. 9, No. 173 Headlines A U S T R A L I A & N E W Z E A L A N D 3C CHEMICAL LABORATORIES: To Declare First and Final Dividend 3D RECYCLING: Court to Hear CIR's Liquidation Bid on Sept. 28 A.H.B. PTY: Members Resolve to Wind-Up Firm A H LANDSEER: To Declare Dividend on September 13 ANELA PTY: Appoints Official Receivers and Managers BISACAR PTY: Members to Receive Wind-Up Report BRADSNAX FOODS: Creditors Appoint Official Liquidators BREMEN RURAL: Creditors' Proofs of Claim Due on Sept. 19 BRITISH-ISRAEL-WORLD: To Declare First and Final Dividend C.P.H. INVESTMENTS: Shareholders Pass Resolution to Close Firm CARALIS HOLDINGS: Liquidator Caralis to Present Wind-Up Report CARPE OMNES: Appoints Suncorp Metway Limited as Controller EAST RIDING: Creditors' Proofs of Debt Due on September 22 EUROPEAN MARINE: Undergoes Liquidation Proceedings EVANS & TATE: Completes Griffith Winery Sale to TWG Australia EVANS & TATE: Completes Mildura Winery Sale to Roberts Estate FABRIC DYE: Members and Creditors to Convene on September 22 FIRST STAR: Members Agree to Shut Down Business GAMEON GROUP: Names Shephard and Dunphy as Liquidators HUSEN PTY: Members and Creditors to Receive Wind-Up Report ION LIMITED: Sells Castalloy Business to Harley-Davidson J & J POLI: Supreme Court Orders Wind-Up JENPEET PTY: Members Scheduled to Meet on September 22 JMA FOOD: Enters Wind-Up Proceedings K & K INVESTMENT: Members' Final Meeting Set on September 20 KP ENGINEERING: Creditors to Receive 25 Cents in the Dollar LIB MANAGEMENT: Placed Under Members' Voluntary Liquidation METAL STORM: AU$27.5 Million Renounceable Rights Issue Closed MONARO SERVICES: Court to Hear CIR's Liquidation Bid on Sept. 4 MOTORING WOMENS: Faces Liquidation Proceedings NATIONAL INDUSTRIES: Members to Receive Wind-Up Report NDL FRAGRANCES: Names Hugh Martin as Liquidator OLIVE TREE: Creditors' Proofs of Claim Due on September 29 OLIVE TREE PAINTERS: Creditors' Proofs of Claim Due on Sept. 29 ONE.TEL LIMITED: Compiler of Expert's Report Can't Testify ONE.TEL LIMITED: Liquidator to Sell Mobile Phone Spectrum PICS PATTERNS: Members Decide to Close Business PIONEER STEEL: Members' Final Meeting Scheduled on September 22 PRESTIGE CAR: Shuts Down Business SAPHIRE MOON: Names Joseph Sleiman as Liquidator SANSON AUTO: Liquidation Bid Hearing Fixed on September 4 SPUD JOINERY: Court Appoints Joint Liquidators TUI'S HELPING: Faces Liquidation Proceedings TUUSON ENTERPRISES: Creditors' Proofs of Claim Due on Sept. 19 WHF INVESTMENTS: Liquidator Fischer to Present Wind-Up Report WWWICKED PTY: Enters Wind-Up Proceedings XPRESSIONS FASHION: Court Sets Date to Hear Liquidation Bid C H I N A & H O N G K O N G ASUN ENTERPRISE: Members to Receive Liquidators' Wind-Up Report BALLY TOTAL: Enters Confidentiality Pact with Pardus Capital BARCLAYS CORPORATION: Joint Liquidators Step Aside BINA INVESTMENT: Creditors' Proofs of Claim Due on September 18 BIOPHARM GLOBAL: Members to Hear Wind-Up Report BIS GARMENT: Creditors' First Meeting Fixed on August 30 CERADYNE INC: Wants Nasdaq Listing Qualifications Panel Hearing E. SUN BANK: S&P Affirms Financial Strength Rating at C+ EUROPOINT WATCH: Members and Creditors Hold Meetings FILA MARKETING: Joint Liquidators Ceases to Act for Company FIS CHINA: Members' Final Meeting Slated for Sept. 20 GUANGDONG KELON: Expects to Book Losses in First Three Quarters KONG WING TRADING: Liquidator Ceases to Act for Company LEAD SUPPLY: Members Resolve to Wind-Up Operations MBF INTERNATIONAL: Liquidator Steps Aside MILLION GRAND: Final Members Meeting Set on September 20 NATURE'S FARM: Liquidator Presents Wind-Up Report PARTY PRODUCTS: Creditors Must Prove Debts by September 14 SCREEN MARKETING: Liquidators Muk and Middleton Step Aside SERASIA LIMITED: Sole Shareholder Opts for Voluntary Wind-Up TCL MULTIMEDIA: European Operations Widen First Half Losses VISION CARD: Liquidator Ceases to Act for Company YUE CHEONG: Company's Books Under Liquidator's Custody I N D I A CADMUS COMMS: Inks Asian Joint Venture Pact with Periscope Inc. SILICON GRAPHICS: Gets Final OK to Keep Existing Bank Accounts SILICON GRAPHICS: Winston & Strawn Hired as Committee's Counsel SILICON GRAPHICS: Gets Final Nod to Use Existing Business Forms SILICON GRAPHICS: Court OKs Hiring of Morgan Lewis as IP Counsel SILICON GRAPHICS: Gets Court Approval to Continue Refund Program I N D O N E S I A GOODYEAR TIRE: Delaware Court Denies Dismissal Motion GOODYEAR TIRE: Asbestos Claims Drop to 124,400 in 2Q GOODYEAR TIRE: Reports US$2 Million Net Income in Second Quarter GREAT RIVER: Bank Mandiri Says No To Taking Over Management NORTEL NETWORKS: Second Quarter Revenues Up 5% to US$2.74 Bil. NORTEL NETWORKS: Reaches US$438M Settlement in US, Canada Suits NORTEL NETWORKS: Unit Inks New US$1.6M Court Records System Pact NORTEL NETWORKS: Deploys New IP Telephony Network for DEDIC J A P A N AMERICAN AXLE: Earns US$20.4 Million in 2006 Second Quarter COREL CORP: Buying InterVideo Inc. for US$196 Million in Cash HITACHI ZOSEN: R&I Affirms BB- Rating with Negative Outlook LEAR CORP: Incurs US$6.4 Million Net Loss in Second Quarter 2006 K O R E A ARAMARK SERVICES: Moody's Reviews Ratings for Possible Downgrade ARAMARK CORP: S&P Lowers Corp. Credit Rating to BB+ from BBB- ARAMARK CORPORATION: Board Declares Quarterly Cash Dividend ARAMARK CORP: Inks $8.3-Bil. Merger Accord with Investment Group DONG-AH CONSTRUCTION: Prime-Led Group Named Preferred Bidder M A L A Y S I A EKRAN BERHAD: Books MYR92-Million Net Loss in Fourth Quarter KRAMAT TIN: High Court Approves Scheme of Arrangement HO WAH GENTING: Second Quarter Pre-tax Loss Drops to MYR2 Mil. INTAN UTILITIES: Provides Default Updates LITYAN HOLDINGS: Creditors Grant Restructuring Deal Extension MBF HOLDINGS: Hearing of Amfinance's Case Adjourned to Jan. 2007 SETEGAP BERHAD: Appeals SC's Rejection of Rehab Proposals TANCO HOLDINGS: Net Loss Widens to MYR11.5 Mil in Second Quarter TECHVENTURE BERHAD: Still In Talks with Lenders for Debt Revamp WEMBLEY INDUSTRIES: June 30 Balance Sheet Reveals Insolvency P H I L I P P I N E S CHC HELICOPTER: Invests US$30 Million in New Helicopter Facility CHC HELICOPTER: Earns CDN$10.8 Million in Quarter Ended April 30 EQUITABLE PCI: Sy Family Proposes to Buy EBCII-Owned Shares LIBERTY TELECOMS: Postpones ASM; Date to be Determined METROPOLITAN BANK: Partners with 35 Mid-East Remittance Houses SECURITY BANK: Appoints J. Jereza as 1st VP of N. Metro Manila S I N G A P O R E CHEMTURA CORP: Earns US$420,000 in Second Quarter of 2006 CHEMTURA CORP: Faces Albermarle's Decabromodiphenyl Patent Suits HIBEX SINGAPORE: Wind-Up Petition Hearing Slated for Sept. 11 ISOFT GROUP: Inks Revised Credit Agreement with Banks NETWORK EQUIPMENT: Posts US$3.7M Loss in 2007 1st Fiscal Quarter POH LIAN SHIPPING: Faces Liquidation Proceedings SEA CONTAINERS: Restructuring Spurs S&P to Keep Junk Rating SILVERN INVESTMENT: Creditors' Proofs of Debt Due on Sept. 25 SPECTRUM BRANDS: Fitch Junks Rating on US$2.3 Billion Debt SPECTRUM BRANDS: Third Quarter Earnings Down to US$2.5 Million TIANJIN ZHONG: Creditors Should Prove Debts by September 25 T H A I L A N D BANK OF AYUDHYA: Finance Ministry Approves GE Deal SIAM COMMERCIAL: President Tenders Resignation THAI DURABLE: SET Suspends Securities Trading - - - - - - - - ============================================ A U S T R A L I A & N E W Z E A L A N D ============================================ 3C CHEMICAL LABORATORIES: To Declare First and Final Dividend ------------------------------------------------------------- 3C Chemical Laboratories Pty Limited will declare its first and final dividend to creditors on September 25, 2006, to the exclusion of those who were not able to prove their claims by August 22, 2006. The liquidator can be reached at: Robert Moodie c/o Rodgers Reidy Chartered Accountants Level 8, 333 George Street Sydney, New South Wales 2000 Australia 3D RECYCLING: Court to Hear CIR's Liquidation Bid on Sept. 28 ------------------------------------------------------------- A petition to liquidate 3D Recycling Ltd will be heard before the High Court of Auckland on September 28, 2006, at 10:00 a.m. The Commissioner of Inland Revenue filed the petition with the Court on July 3, 2006. The Plaintiff's Solicitor can be reached at: P.L. Windsor-Knaap Inland Revenue Department 1 Bryce Street, Hamilton New Zealand Telephone: (07) 959 0432 Direct Inquiries to: S. MacLean Telephone: (06) 968 4029 A.H.B. PTY: Members Resolve to Wind-Up Firm ------------------------------------------- At a general meeting held on June 30, 2006, the members of A.H.B. Pty Ltd resolved to wind up the company's operations and appoint James Patrick Downey as liquidator. Mr. Downey can be reached at: James Patrick Downey Chartered Accountant Cole Downey & Co Chartered Accountants Level 1, 22 William Street Melbourne, Victoria 3000 Australia A H LANDSEER: To Declare Dividend on September 13 ------------------------------------------------- Liquidator G. R. Ashby will declare the first and final dividend for the creditors of A H Landseer Pty Ltd on September 13, 2006. Creditors are required to submit their proofs of debt by September 12, 2006, for them to share in the dividend distribution. The Liquidator can be reached at: G. R. Ashby Ground Floor, 200 East Terrace Adelaide, South Australia 5000 Australia ANELA PTY: Appoints Official Receivers and Managers --------------------------------------------------- First Capital Securities Limited appointed Ginette Muller and John Park on August 9, 2006, as joint and several receivers and managers of Anela Pty Ltd. Ms. Muller and Mr. Park can be reached at: Ginette Muller John Park KordaMentha (Queensland) 22 Market Street Brisbane, Queensland 4000 Australia Telephone:(07) 3225 4900 Facsimile:(07) 3225 4999 BISACAR PTY: Members to Receive Wind-Up Report ---------------------------------------------- Members of Bisacar Pty Limited will hold a final meeting on September 22, 2006, at 10:00 a.m., to receive Liquidator Stephanie Wilkinson's final account on the company's wind-up proceedings and property disposal exercises. As reported by the Troubled Company Reporter - Asia Pacific on March 16, 2006, the company commenced a wind-up of its operations on February 3, 2006. The Liquidator can be reached at: Stephanie J. Wilkinson c/o L. W. Gray 5/120 Katoomba Street Katoomba 2780 Australia BRADSNAX FOODS: Creditors Appoint Official Liquidators ------------------------------------------------------ The members of Bradsnax Foods Pty Ltd convened on August 14, 2006, and agreed to voluntarily wind up the company's operations. At the creditors' meeting held later that day, Philip Newman and Clyde Peter White were appointed as joint and several liquidators. Mr. Newman and Mr. White can be reached at: Philip Newman Clyde Peter White HLB Mann Judd Chartered Accountants Level 1, 160 Queen Street Melbourne 3000 Australia BREMEN RURAL: Creditors' Proofs of Claim Due on Sept. 19 -------------------------------------------------------- Liquidator Raymond Gordon Burgess require the creditors of Bremen Rural Ltd to submit their proofs of claim by September 19, 2006, or be excluded from sharing in any distribution the company will make. The Liquidator can be reached at: Raymond Burgess P.O. Box 82-100, Auckland New Zealand Telephone: (09) 576 7806 Facsimile: (09) 576 7263 BRITISH-ISRAEL-WORLD: To Declare First and Final Dividend --------------------------------------------------------- British-Israel-World Federation New South Wales Branch Limited will declare its first and final dividend on October 1, 2006. Failure to prove debts by August 22, 2006, will exclude the creditor from sharing in the company's dividend distribution. The liquidator can be reached at: Geoffrey McDonald Level 29, 31 Market Street Sydney, New South Wales 2000 Australia Telephone:(02) 9263 2600 Facsimile:(02) 9263 2800 C.P.H. INVESTMENTS: Shareholders Pass Resolution to Close Firm -------------------------------------------------------------- Shareholders of C.P.H. Investments Pty Ltd passed a resolution to close the company's business during their meeting held on August 10, 2006. In this regard, Anthony Desmond Hoffman was appointed as liquidator. The Liquidator can be reached at: Anthony Desmond Hoffman Hoffman Kelly Lajoie Pty Ltd Level 1, 15 Harries Road Coorparoo, Queensland Australia CARALIS HOLDINGS: Liquidator Caralis to Present Wind-Up Report -------------------------------------------------------------- Members and creditors of Caralis Holdings Pty Limited will hold a final meeting on September 18, 2006, at 9:00 a.m., to receive Liquidator James Caralis' report on the company's wind-up proceedings and property disposal exercises. The Liquidator can be reached at: James Caralis Level 8, 15 Blue Street North Sydney, New South Wales 2060 Australia CARPE OMNES: Appoints Suncorp Metway Limited as Controller ---------------------------------------------------------- On August 7, 2006, Suncorp Metway Limited was appointed as controller of all the assets and undertakings of Carpe Omnes Diem Pty Ltd. The Controller can be reached at: Suncorp Metway Limited Suncorp Metway Plaza Level 6, Corner Albert & Turbot Streets Brisbane, Queensland 4001 Australia EAST RIDING: Creditors' Proofs of Debt Due on September 22 ---------------------------------------------------------- East Riding Investments Pty Ltd notifies parties-in-interest of its intention to declare dividend to creditors. Creditors are required to submit their proofs of claim by September 22, 2006, for them to share in the dividend distribution. The Troubled Company Reporter - Asia Pacific reported on August 24, 2006, that the company commenced a wind-up of its operations on July 23, 2006. The liquidator can be reached at: BDH & Co Suite 3, Level 1 3 Carlingford Road Epping, New South Wales 2121 Australia EUROPEAN MARINE: Undergoes Liquidation Proceedings -------------------------------------------------- At a general meeting of the members of European Marine Pty Ltd held on August 9, 2006, it was resolved that a voluntary wind-up of the company's operations is appropriate and necessary. Subsequently, Russell Graeme Peake was appointed as liquidator. The Liquidator can be reached at: Russell Peake Jenkins Peake & Co Chartered Accountants Lexen Building, 200 Malop Street PO Box 1570, Geelong 3220 Australia Telephone:(03) 5223 1000 Facsimile:(03) 5221 4938 EVANS & TATE: Completes Griffith Winery Sale to TWG Australia ------------------------------------------------------------- As reported in the Troubled Company Reporter - Asia Pacific on July 18, 2006, Evans & Tate Limited had decided to sell its winery in Griffith, NSW, for AU$8 million, to the Terlato Wine Group. According to the TCR-AP report, Evans & Tate had disclosed that "binding agreements for the asset sale and for wine storage have been entered into with TWG Australia Pty Limited" and that "settlement was scheduled to be completed by August 11, 2006, after final conditions precedent have been satisfied." In an update, Evans & Tate reveals that on August 25, 2006, it has completed the sale of its Griffith winery in the New South Wales Riverina to TWG Australia, which is the Australian subsidiary of California-based The Wine Group LLC, for AU$8 million. The Griffith Winery Sale, the TCR-AP had noted, brings the amount that Evans & Tate will get from asset realization to more than AU$30 million. According to Evans & Tate Chief Executive Officer Martin Johnson, the transaction demonstrated that the company can execute its turnaround strategy and bring it to a stable trading position with a renewed emphasis on premium wines and luxury brands. About Evans & Tate Headquartered in Wembley, Western Australia, Evans & Tate Limited -- http://www.etw.com.au/-- is an Australian wine company listed on the Australian Stock Exchange. The primary businesses of the Evans & Tate Wine Group are the production, marketing and distribution of a number of branded, exclusive labeled and unbranded wines; contract winemaking; wine trading; viticultural services; and wine tourism through its Visitor Centers. In June 2005, rumors began brewing that the wine maker was carrying total liabilities of AU$127.5 million, of which AU$102.5 million was interest-bearing debt. A few days later, Evans & Tate admitted that it had been coordinating with insolvency firm KordaMentha on the recommendation of its major creditor, ANZ Banking Group Limited. It had appointed KordaMentha's 333 Performance Management "to improve its forecasting, planning and business efficiencies." Evans & Tate also admitted that it was cash flow negative and had sought an AU$8.5-million capital injection from ANZ Bank. The firm further said that it would cut the value of its wine inventories by AU$8 million to AU$10 million, offload stock at a discount, and cut the carrying value of certain wineries. In July 2005, Evans & Tate has secured an additional AU$10 million in short- term working capital from ANZ. In the first half of 2006, Evans & Tate has taken steps to sell its Griffith and Mildura Wineries to reduce debts, which are estimated to be more than AU$160 million, and meet restructuring costs. The TCR-AP reported on July 18, 2006, that Evans & Tate has already written down the value of its inventory by AU$39 million over the past year and reported a AU$44-million first-half loss. EVANS & TATE: Completes Mildura Winery Sale to Roberts Estate ------------------------------------------------------------- The Troubled Company Reporter - Asia Pacific reported on March 15, 2006, that Evans & Tate Limited has entered into negotiations to sell its Mildura Winery to British beverage group Neqtar Ltd, through its Australian subsidiary SDS Beverages Food and Wine Pty Ltd. Through the Mildura Winery Sale, Evans & Tate will get AU$22 million, plus the granting of options over 5.9% of the pre-listing capital of Neqtar. Yet, in a subsequent TCR-AP report on August 2, 2006, Evans & Tate clarified that the purchaser will be Roberts Estate Wines Pty Ltd., a wholly owned subsidiary of Neqtar. Accordingly, in a statement posted at its Web site, Evans & Tate discloses that on August 29, 2006, the sale of its Mildura Winery to Roberts Estate was completed for a total consideration of AU$22 million. Evans & Tate also noted that nearly all of its Mildura staff have been offered positions by Roberts Estate. "In Mildura, we will continue to have access to their valuable skills, as Roberts Estate is contracted to continue making some of our most important export products, such as the newly re-launched Barramundi brand," Evans & Tate Chief Executive Officer Martin Johnson said. About Neqtar Based in Hertfordshire, Neqtar UK -- http://www.neqtarbeverages.com/-- through HwCg Ltd., is a leading supplier to the British multiple retail and independent trade. It supplies over 2.5 million cases of wine, which represents 3% of the United Kingdom off trade. HwCg was founded in 1999, after the merger of Hedley Wright and Castle Growers, both well established wine distributors in the U.K. Neqtar UK represents 29 suppliers from around the world, with particular strength in France, Chile and Italy. Neqtar UK intends to be a major player in Australian wines through its 2005 acquisition of Roberts Estate and its new UK distribution partner Evans and Tate Ltd. About Evans & Tate Headquartered in Wembley, Western Australia, Evans & Tate Limited -- http://www.etw.com.au/-- is an Australian wine company listed on the Australian Stock Exchange. The primary businesses of the Evans & Tate Wine Group are the production, marketing and distribution of a number of branded, exclusive labeled and unbranded wines; contract winemaking; wine trading; viticultural services; and wine tourism through its Visitor Centers. In June 2005, rumors began brewing that the wine maker was carrying total liabilities of AU$127.5 million, of which AU$102.5 million was interest-bearing debt. A few days later, Evans & Tate admitted that it had been coordinating with insolvency firm KordaMentha on the recommendation of its major creditor, ANZ Banking Group Limited. It had appointed KordaMentha's 333 Performance Management "to improve its forecasting, planning and business efficiencies." Evans & Tate also admitted that it was cash flow negative and had sought an AU$8.5-million capital injection from ANZ Bank. The firm further said that it would cut the value of its wine inventories by AU$8 million to AU$10 million, offload stock at a discount, and cut the carrying value of certain wineries. In July 2005, Evans & Tate has secured an additional AU$10 million in short- term working capital from ANZ. In the first half of 2006, Evans & Tate has taken steps to sell its Griffith and Mildura Wineries to reduce debts, which are estimated to be more than AU$160 million, and meet restructuring costs. The TCR-AP reported on July 18, 2006, that Evans & Tate has already written down the value of its inventory by AU$39 million over the past year and reported a AU$44-million first-half loss. FABRIC DYE: Members and Creditors to Convene on September 22 ------------------------------------------------------------ A final meeting of the members and creditors of Fabric Dye Services Pty Limited will be held on September 22, 2006, at 9:30 a.m. During the meeting, the members and creditors will be asked to: -- receive Liquidator Geoffrey Mcdonald's report on the accounts of the company's wind-up that will end on September 22, 2006; -- authorize the Liquidator to destroy all books and records of the company on completion of all duties; and -- discuss any other business. The Liquidator can be reached at: Geoffrey Mcdonald c/o Hall Chadwick Level 29, 31 Market Street Sydney, New South Wales 2000 Australia FIRST STAR: Members Agree to Shut Down Business ----------------------------------------------- Members of First Star Marine Pty Ltd convened on August 9, 2006, and agreed to shut down the company's business operations. Creditors appointed Gary Anderson as liquidator at a separate meeting held later that day. The Liquidator can be reached at: Gary Anderson PO Box 1661 West Perth, Western Australia 6872 Australia Telephone:(08) 9486 7822 Facsimile:(08) 9226 4250 e-mail: garya@iinet.net.au GAMEON GROUP: Names Shephard and Dunphy as Liquidators ------------------------------------------------------ Members of The Gameon Group Ltd appointed on August 14, 2006, Iain Bruce Shephard and Christine Margaret Dunphy as joint and several liquidators of the company. The Joint Liquidators can be reached at: Chris Dunphy Shephard Dunphy Limited, Level Two Zephyr House, 82 Willis Street Wellington, New Zealand Telephone: (04) 473 6747 Facsimile: (04) 473 6748 HUSEN PTY: Members and Creditors to Receive Wind-Up Report ---------------------------------------------------------- Members and creditors of Husen Pty Ltd will hold a final meeting on September 21, 2006, at 9:30 a.m., to receive Liquidator B. P. Cotter's report on the company's wind-up and property disposal exercises. According to the Troubled Company Reporter - Asia Pacific, the company commenced a wind-up of its operations on July 22, 2005. The Liquidator can be reached at: B. P. Cotter Level 24, 264 George Street Sydney, New South Wales 2000 Australia ION LIMITED: Sells Castalloy Business to Harley-Davidson -------------------------------------------------------- The Troubled Company Reporter - Asia Pacific reported on August 8, 2006, that a report to creditors dated April 15, 2005, disclosed that administrators have been appointed to ION Limited and each of its 22 Australian subsidiaries, including Castalloy Limited. In an update, an agreement has been executed for the sale of ION's Castalloy business to a subsidiary of U.S. domiciled Harley-Davidson Inc., New Castalloy Pty Ltd, which will see the continued manufacture of motorcycle wheels at North Plympton in Adelaide, South Australia. This follows a successful turnaround of the business and has been made possible with the support of the South Australian Government, which has agreed to acquire the North Plympton site and lease it to the purchaser. Prior to the appointment of Administrators Colin Nicol and Peter Anderson of the independent restructuring and corporate advisory firm, McGrath Nicol + Partners, in December 2004, the Castalloy business was incurring losses of up to AU$20 million per annum. After 20 months of intensive operational restructuring and performance turnaround implemented by the Deed Administrators, the business is now in a position to be transferred to a new owner. The successful business turnaround and sale was critically dependant on the support of key stakeholders including management, employees, Harley Davidson, the Australian Workers Union, the State Government, suppliers and the Environment Protection Agency. The Harley-Davidson subsidiary is purchasing the majority of Castalloy's plant, equipment, intellectual property and inventory, and will be offering ongoing employment to approximately 320 employees. All employee entitlements for these employees will transfer to the purchaser in accordance with the new Australian Workplace Agreement implemented in June 2006. Any employees not transferring to New Castalloy will receive their full entitlements from the Administrators. The Deed Administrators will also be transferring the ten year EPA Licence, obtained in August 2005, to the Harley-Davidson subsidiary. The EPA has confirmed that Castalloy has complied with the licence conditions as at June 30, 2006. The sale is due to settle in late September 2006. About ION ION Limited -- http://www.ionlimited.com/-- is a manufacturer of automotive components and also has an energy services business. It employs around 3,000 people at sites in Australia, New Zealand, and the United States of America and has annual revenues of approximately AU$700 million. ION manufactures wheels and alloy components, transmission assemblies, cylinder heads, oil pans and other automotive products. Its energy services business distributes oil and gas to retail and commercial outlets, undertakes aviation refuelling and manages terminal operations. On December 7, 2004, ION Limited was placed in voluntary administration. Trading in its shares has been suspended and Colin Nicol and Peter Anderson of the independent restructuring and corporate advisory firm, McGrath Nicol + Partners, have been appointed as joint and several administrators to the group. The TCR-AP stated on August 8, 2006, that the company has been placed in administration by its board of directors primarily as a result of cost overruns and delays associated with three major capital projects, which have absorbed cash. McGrath Nicol Partner Colin Nicol said that they will work towards selling ION's businesses -- where possible as going concerns -- recapitalizing parts of the group. The Administrators expected the existence of sufficient assets within the group to ensure that employee entitlements were secure. A report to creditors dated April 15, 2005, disclosed that administrators have been appointed to ION and each of its 22 Australian subsidiaries: 1) Castalloy Limited, 2) Castalloy Manufacturing Pty Ltd, 3) Castalloy Wheels Pty Ltd, 4) Core Cast Limited, 5) ION Automotive Group Limited, 6) ION Automotive Systems Pty Ltd, 7) ION Light Metal Castings Pty Ltd, 8) ION Transmissions Pty Ltd, 9) XCTA Pty Ltd (formerly Cootes Transport Pty Ltd), 10) XCTS Pty Ltd (formerly Cootes Tanker Service Pty Ltd), 11) XIRC Pty Ltd (formerly I.R. Cootes Pty Ltd), 12) XLC Pty Ltd (formerly Liquip Corp Pty Limited), 13) XLO Pty Ltd (formerly Liquip Overseas Pty Ltd), 14) XLS Pty Ltd (formerly Liquip Sales Pty Ltd), 15) XLSE Pty Ltd (formerly Liquip Service Pty Ltd), 16) XLSV Pty Ltd (formerly Liquip Sales (Vict.) Pty Ltd), 17) XST Pty Ltd (formerly Stevenson Transport Pty Ltd), 18) ION Finance Ltd, 19) ION Holdings Pty Ltd, 20) ION Investments Pty Ltd, 21) Thomson & Scougall Industries Pty Ltd, and 22) XCHO Pty Ltd (formerly Cootes Holdings Pty Ltd) On May 30, 2005, the Administrators informed creditors that ION and 17 of its subsidiaries executed deeds of company arrangement on May 27, 2005: 1) ION Automotive Group Limited, 2) ION Light Metal Castings Pty Ltd, 3) Core Cast Limited, 4) Castalloy Limited, 5) Castalloy Wheels Pty Ltd, 6) Castalloy Manufacturing Pty Ltd, 7) ION Automotive Systems Pty Ltd, 8) ION Transmissions Pty Ltd, 9) XCTA Pty Ltd, 10) XCTS Pty Ltd, 11) XIRC Pty Ltd, 12) XST Pty Ltd, 13) XLSV Pty Ltd, 14) XLS Pty Ltd, 15) XLSE Pty Ltd, 16) XLC Pty Ltd, and 17) XLO Pty Ltd J & J POLI: Supreme Court Orders Wind-Up ---------------------------------------- Valerie/notice The Supreme Court of New South Wales ordered on August 17, 2006, the wind-up of J & J Poli Pty Ltd's operations. The Court also directed the appointment of Steven Nicols as liquidator. The Liquidator can be reached at: Steven Nicols Level 2, 350 Kent Street Sydney, New South Wales 2000 Australia JENPEET PTY: Members Scheduled to Meet on September 22 ------------------------------------------------------ Members of Jenpeet Pty Ltd will convene on September 22, 2006, at 9:00 a.m. to hear Liquidator Richard Mansell's report on the company's wind-up and property disposal exercises. The Troubled Company Reporter - Asia Pacific reported on June 7, 2006, that the company commenced a wind-up of its operations on April 13, 2006. The Liquidator can be reached at: Richard G. Mansell R. G. Mansell & Associates Level 3, 118 Queen Street Melbourne Australia JMA FOOD: Enters Wind-Up Proceedings ------------------------------------ At a general meeting held on August 14, 2006, the members of JMA Food & Beverage Pty Limited resolved to wind up the company's operations and appoint Daniel Civil as liquidator. The Liquidator can be reached at: Daniel Civil Jirsch Sutherland Chartered Accountants Level 2, 84 Pitt Street Sydney, New South Wales 2000 Australia Telephone:(02) 9233 2111 Facsimile:(02) 9233 2144 K & K INVESTMENT: Members' Final Meeting Set on September 20 ------------------------------------------------------------ The members of K & K Investment Company Pty Limited will hold a final meeting on September 20, 2006, at 11:00 a.m. During the meeting, Liquidator Ole Michael Madsen will present accounts of the company's wind-up and property disposal activities. As reported by the Troubled Company Reporter - Asia Pacific on July 27, 2006, the company commenced a wind-up of its operations on June 26, 2006. The Liquidator can be reached at: Ole Michael Madsen PO Box 328 Belconnen, Australian Capital Territory 2616 Australia KP ENGINEERING: Creditors to Receive 25 Cents in the Dollar ----------------------------------------------------------- KP Engineering (WA) Pty Ltd will declare dividend for its creditors with claims in excess of AU$1,000. The amount to be declared is 25 cents in the dollar. Creditors who failed to submit their proofs of debt by August 22, 2006, will be excluded from sharing in the dividend distribution. The joint and several deed administrator can be reached at: Martin Jones Engineering (WA) Pty Ltd Ferrier Hodgson Chartered Accountants Level 26, 108 St George's Terrace Perth, Western Australia 6000 Australia LIB MANAGEMENT: Placed Under Members' Voluntary Liquidation ----------------------------------------------------------- At a general meeting held on August 14, 2006, the members of LIB Management Pty Ltd resolved to voluntarily wind up the company's operations and appoint Michael Owen as liquidator. The Liquidator can be reached at: Michael Owen Chartered Accountant BDO Kendalls, Level 18 300 Queen Street Brisbane, Queensland 4000 Australia METAL STORM: AU$27.5 Million Renounceable Rights Issue Closed ------------------------------------------------------------- Metal Storm Limited's Renounceable Rights Issue of Unsecured Convertible Notes and attaching New Options closed on August 24, 2006. The company has received acceptances for 28,688,166 of the 203,703,704 Convertible Notes and 14,344,083 of the 101,851,852 New Options that were offered. The issue was fully underwritten by Patersons Securities Limited and sub-underwritten to the extent of AU$26.125 million by Harmony Investment Fund Limited. The Company confirms that a shortfall notice has been issued under the underwriting agreement. Subject to the terms of this agreement, the shortfall of 175,015,538 Convertible Notes and 87,507,769 New Options will be taken up by the underwriter and sub-underwriter. When completed, the total funds raised under this issue will be approximately AU$27.5 million before issue costs. As detailed in the Prospectus lodged on July 28, 2006, shareholders who have accepted the offer will be issued with securities with these key features: Convertible Notes -- Convertible Notes bear interest at the rate of 10% per annum on the face value of A$0.135 per Convertible note over the term. Interest is payable quarterly in arrears, but the Company may elect to defer payment of some or all of the interest for the first year; -- at the Maturity Date (expected to be Aug. 31, 2009), the Company must repay the face value of A$0.135 to the Note Holder, unless the Note Holder has elected to convert their Convertible Note into ordinary shares; -- it is an event of default under the Trust Deed for the Convertible Notes if, amongst other things, Metal Storm does not meet certain performance and cash milestones; -- until conversion or redemption, the Convertible Notes rank ahead of ordinary shares in the event of the Company being wound up; -- Note Holders may elect to convert some or all of their Convertible Notes into ordinary shares at a conversion price which is the lesser of: 1. A$0.135 cents per share; 2. 90% of the volume weighted average price of ordinary shares during the 30 business days immediately preceding the conversion date, rounded to the nearest cent; and -- Note Holders can elect to convert some or all of their Convertible Notes into ordinary shares at the beginning of each quarter, at the Maturity Date and at certain other times. New Options -- Subject to the terms and conditions of the New Options, each New Option entitles the holder to subscribe for one ordinary share of Metal Storm upon exercise and payment of the Exercise Price of AU$0.15; -- the New Options expire three years from the date of issue, expected to be August 31, 2009, and can be exercised by the holder at any time before then. The net funds raised, together with existing cash reserves and confirmed revenues from current operations, are expected to be sufficient to cover the estimated cost of existing and planned operations and interest payable on the Convertible Notes through to the August 2009, without assuming additional income from other sources or from the exercise of options. The Board are grateful to the shareholders, Patersons and Harmony for their support in the capital raise. The Company is more committed than ever to see the development of its technology to commercial outcomes. The Convertible Notes and the New Options are to be allotted on August 31, 2006, and holding statements for those securities are to be dispatched on September 1, 2006. Metal Storm will then have three securities independently traded on the ASX under these codes: Ordinary Shares MST (existing) Convertible Notes MSTG Options MSTO About Patersons Securities Patersons Securities is Australia's largest independently owned specialist stockbroker, with ten offices around the country. Established over 100 years ago, Patersons now has more than 140 private client advisers, institutional sales, research and full corporate finance capability. Over the last two years the Patersons corporate finance team has raised over AU$1.5 billion for clients, ranking it in the Top 10 brokers in capital raisings by value. About Harmony Capital Pte Harmony Capital Partners is a Singapore-based fund management company which manages a US$500 million capacity Fund. The primary strategy of Harmony is to invest in special situations in Asia including Australia and New Zealand. The principals of Harmony, Suresh Withana and John Nicholls, are very familiar with the investment environment in Australia, particularly in the turnaround space with experience in a number of industry sectors. Harmony has a number of large investors in its fund including a cornerstone investor with a significant capital base providing it with the capability to execute investments ranging from US$5 million to US$50 million in size. * * * Metal Storm Limited -- http://www.metalstorm.com/-- is headquartered in Brisbane, Australia, and incorporated in Australia, with an office in Arlington, Virginia. Metal Storm works with government agencies and departments, as well as industries, to develop a variety of systems utilizing the Metal Storm non-mechanical, electronically fired stacked ammunition system. Metal Storm reflected a loss of AU$10,914,600 in its Annual Financial Report for the year ended December 31, 2005, which was attributable to members of its parent company. The Directors noted that they are actively seeking funding to continue the Company's operations. After auditing the Company's 2005 Annual Report, Winna Irschitz, a partner at Ernst & Young, raised significant uncertainty regarding the Company's and its consolidated entity's ability to continue as going concerns. As stated in the 2005 Annual Report, Metal Storm's continuing viability, and ability to continue as a going concern and to meet debts and commitments as and when they fall due is dependent on its ability to secure additional equity funding in the near future and to continue the development and progress the commercialization of its electronically initiated "stacked projectile" weapons systems. MONARO SERVICES: Court to Hear CIR's Liquidation Bid on Sept. 4 --------------------------------------------------------------- A petition to liquidate Monaro Services Ltd will be heard before the High Court of Palmerston North on September 4, 2006, at 10:00 a.m. The Commissioner of Inland Revenue filed the petition with the Court on July 25, 2006. The Solicitor for the Petitioner can be reached at: Kerri Ann Doherty Technical and Legal Support Group Wellington Service Centre 1st Floor, New Zealand Post House 7-27 Waterloo Quay (P.O. Box 1462) Wellington, New Zealand Telephone: (04) 890 1045 Facsimile: (04) 890 0009 MOTORING WOMENS: Faces Liquidation Proceedings ---------------------------------------------- The members of Motoring Womens Holdings Pty Ltd held a general meeting on August 11, 2006, and decided to liquidate the company's business. Accordingly, Leigh Dudman was appointed as liquidator. The Liquidator can be reached at: Leigh Dudman B. K. Taylor & Co 8/608 St Kilda Road Melbourne, Victoria 3004 Australia NATIONAL INDUSTRIES: Members to Receive Wind-Up Report ------------------------------------------------------ Members of National Industries (NSW) Pty Ltd will hold a final meeting on September 22, 2006, to receive Liquidator Kenneth John Rennie's report on the company's wind-up proceedings and property disposal exercises. The Liquidator can be reached at: Kenneth John Rennie Ernst & Young Level 37, 680 George Street Sydney, New South Wales 2000 Australia Telephone:(02) 9248 4304 NDL FRAGRANCES: Names Hugh Martin as Liquidator ----------------------------------------------- At a general meeting held on August 11, 2006, the members appointed Hugh Martin to oversee the company's wind-up proceedings. The Liquidator can be reached at: Hugh Martin Bernardi Martin Level 1, 195 Victoria Square Adelaide, Australia OLIVE TREE: Creditors' Proofs of Claim Due on September 29 ---------------------------------------------------------- Shareholders of Olive Tree Productions (2002) SP Ltd appointed on August 18, 2006, Peter Reginald Jollands and Rory Iain Grieve as joint and several liquidators for the Company. The Joint Liquidators will be receiving proofs of claims from the company's creditors until September 29, 2006. The Joint and Several Liquidator can be reached at: Rory Grieve Jollands Callander Accountants and Insolvency Practitioners Level Four, 3-13 Shortland Street Auckland, New Zealand P.O. Box 106-141, Auckland City Web site: www.jollandscallander.co.nz Telephone: (09) 379 0463 Facsimile: (09) 379 0465 e-mail: rory@jollandscallander.co.nz OLIVE TREE PAINTERS: Creditors' Proofs of Claim Due on Sept. 29 --------------------------------------------------------------- Shareholders of Olive Tree Painters & Decorators Ltd appointed on August 18, 2006, Peter Reginald Jollands and Rory Iain Grieve as joint and several liquidators for the Company. The Joint Liquidators will be receiving proofs of claims from the company's creditors until September 29, 2006. The Joint and Several Liquidator can be reached at: Rory Grieve Jollands Callander Accountants and Insolvency Practitioners Level Four, 3-13 Shortland Street Auckland, New Zealand P.O. Box 106-141, Auckland City Web site: www.jollandscallander.co.nz Telephone: (09) 379 0463 Facsimile: (09) 379 0465 e-mail: rory@jollandscallander.co.nz ONE.TEL LIMITED: Compiler of Expert's Report Can't Testify ---------------------------------------------------------- As reported in the Troubled Company Reporter - Asia Pacific on February 8, 2006, the Australian Securities and Investments Commission has initiated actions against One.Tel Limited's founder, Jodee Rich, and finance director, Mark Silbermann, for allegedly allowing the Company to trade while it was insolvent and for providing misleading financial information to the Company's Board of Directors. In an update, Vanda Carson of The Australian relates that PricewaterhouseCoopers partner Ian Hocking was named on a list of 10 witnesses that the ASIC hopes to call in the final stages of its AU$92-million damages claim against Mr. Rich and Mr. Silbermann. Paul Carter, another PwC partner, who spent a year compiling an expert report on One.Tel's AU$2-billion collapse that has been the center of the ASIC's case, will not be called after suffering a heart attack, The Australian notes. The report relates that Mr. Carter faces surgery and a long recovery that will prevent him from returning to the stand to contradict evidence given by Mr. Rich and Mr. Silbermann over the past two months. The Australian recounts that Mr. Hocking and Mr. Carter were hired by the ASIC to help prepare its case, in which it seeks to ban Mr. Rich and Mr. Silbermann from holding directorships and have them pay AU$92 million -- the value allegedly lost by the telco by continuing to trade after February 2001, when ASIC alleged it became insolvent. Lawyers for the defendants argued that the evidence does not warrant the extension of the case by up to three weeks, Ms. Carson says. According to the report, Mr. Carter spent more than a year writing an "independent expert's report" on One.Tel for the ASIC, noting that the 90-page financial report has been described by Judge Robert Austin as "a central plank in ASIC's case against the defendants." However, large parts of it were excluded from evidence on legal grounds earlier in the hearing, The Australian says. The Australian recounts that One.Tel collapsed in 2001, leaving shareholders with no chance of recovering their investment. Directors Lachlan Murdoch and James Packer claim they were "profoundly misled" by executives about the true state of the company's finances, the paper notes. * * * One.Tel Limited is an Australian based telecommunications company, belonging to One.Tel Group. One.Tel Ltd. was established in 1995 soon after the deregulation of the Australian telecommunications industry, most of which are currently under external administration by court appointed liquidators. One.tel is currently in liquidation. Ferrier Hodgson was appointed as voluntary administrator on May 29, 2001. The administrator's report stated that the company was insolvent as of March 2001. Accordingly, the administrator terminated approximately 3,000 employees in June that same year. Steve Sherman and Peter Walker of Ferrier Hodgson were then named liquidators on July 24, 2001. The Liquidators can be reached at: Steve Sherman Peter Walker Joint Liquidators Ferrier Hodgson Level 17 2 Market Street Sydney, NSW Australia 2000 ONE.TEL LIMITED: Liquidator to Sell Mobile Phone Spectrum --------------------------------------------------------- More than five years after One.Tel Limited collapsed, an advertising campaign to promote the sale of its mothballed mobile phone spectrum has been launched for the second time, The Australian relates. The paper further relates that liquidator Steve Sherman of insolvency specialist Ferrier Hodgson wants to offload the spectrum with a resale value estimated to be just 15% of the AU$532 million purchase price paid in 1998 and 2000. According to The Australian, the spectrum is capable of transmitting third generation in five of the nation's state capitals and the licenses are valid until 2013 and 2015. It is in the 1.8GHz band and covers a population of more than 11 million. The Australian recounts that while the licenses have unofficially been on the market since One.Tel's collapse, a formal advertising campaign was launched two years ago to ignite interest in an otherwise flat market. However, the campaign was withdrawn after the major telecommunications carriers who had expressed interest failed to match the undisclosed asking price, The Australian says, noting that analysts have predicted that the licenses would sell for as low as AU$50-AU$80 million. The paper says that the funds will go to creditors. Moreover, The Australian notes, Mr. Sherman prefers to sell the licenses "in one line" and in a single transaction. Tenders closed on August 28, 2006, and if a buyer is found, assignment of licenses will occur around September 18, 2006, The Australian says. According to the paper, news of the sale comes as a special purpose liquidator, appointed to resume his investigation of the role played by the Packer and Murdoch families in the company's dying days, has been awarded AU$250,000 to fund his work in the coming months. S. Sherman has Conflict of Interest The Australian relates that Paul Weston, of Horwath Chartered Accountants, had originally asked the NSW Supreme Court to force Mr. Sherman to hand over AU$750,000 to fund examinations of more than 30 key executives, including former One.Tel directors James Packer and Lachlan Murdoch. A recent committee of inspection meeting of creditors was told that Mr. Weston had already spent AU$146,000 on legal fees, the paper reveals. The Australian explains that Mr. Weston's role is to investigate the circumstances surrounding the controversial 11th-hour withdrawal of a AU$132 million renounceable rights issue underwritten by Mr. Packer's Publishing and Broadcasting Ltd., and News Limited, publisher of The Australian. Mr. Weston must launch any legal action by May 29, 2007, when a six-year statute of limitations expires, The Australian notes. According to the paper, Mr. Weston was appointed to investigate after a group of creditors with connections to One.Tel founder Jodee Rich convinced the court that Mr. Sherman had a potential conflict of interest in looking into the pivotal move. It claimed that this conflict arose because Mr. Sherman was present at a meeting on May 17, 2001, when it was decided to cancel the issue, The Australian relates. Mr. Sherman and his partner, Peter Walker, might possibly be made parties in future lawsuits, the paper says. Previous Asset Sales According to The Australian, previous sales of former One.Tel assets have been bargains. The paper recounts that Telstra purchased the junior telco's customer base in 2001 for a couple of million dollars. The company's British arm, which had 600,000 customers, returned just AU$60 million to creditors, after which, it was on-sold for AU$400 million. * * * One.Tel Limited is an Australian based telecommunications company, belonging to One.Tel Group. One.Tel Ltd. was established in 1995 soon after the deregulation of the Australian telecommunications industry, most of which are currently under external administration by court appointed liquidators. One.tel is currently in liquidation due to financial problems. Ferrier Hodgson was appointed as voluntary administrator on May 29, 2001. The administrator's report stated that the company was insolvent as of March 2001. Accordingly, the administrator terminated approximately 3,000 employees in June that same year. Steve Sherman and Peter Walker of Ferrier Hodgson were then named liquidators on July 24, 2001. The Liquidators can be reached at: Steve Sherman Peter Walker Joint Liquidators Ferrier Hodgson Level 17 2 Market Street Sydney, NSW Australia 2000 PICS PATTERNS: Members Decide to Close Business ----------------------------------------------- On August 9, 2006, the members of Pics Patterns Pty Ltd decided to close the company's business and appoint Matthew L. Joiner and Gerald T. Collins as joint and several liquidators. The Joint and Several Liquidators can be reached at: Matthew L. Joiner Gerald T. Collins c/o JCJ Partners Pty Ltd Chartered Accountants GPO Box 272 Brisbane, Queensland 4001 Australia PIONEER STEEL: Members' Final Meeting Scheduled on September 22 --------------------------------------------------------------- The members of Pioneer Steel Pty Ltd will meet on September 22, 2006, at 10:00 a.m., to receive Liquidator Rennie's report on the company's wind-up and property disposal exercises. The Liquidator can be reached at: Kenneth John Rennie Ernst & Young Level 37, 680 George Street Sydney, New South Wales 2000 Australia Telephone:(02) 9248 4304 PRESTIGE CAR: Shuts Down Business --------------------------------- At a general meeting held on August 17, 2006, the members of Prestige Car Exchange Pty Limited decided to shut down the company's business and appoint Roderick Mackay Sutherland as liquidator. The Liquidator can be reached at: Roderick Mackay Sutherland Jirsch Sutherland Chartered Accountants Level 2, 84 Pitt Street Sydney, New South Wales 2000 Australia Telephone:(02) 9233 2111 Facsimile:(02) 9233 2144 SAPHIRE MOON: Names Joseph Sleiman as Liquidator ------------------------------------------------ On August 4, 2006, a general meeting was held for the members of Saphire Moon Pty Ltd and resolved to: -- voluntarily wind up the company's operations; and -- appoint Joseph Sleiman as liquidator. The Liquidator can be reached at: Joseph Sleiman Chartered Practising Accountant Sleiman & Co Level 8, 65 York Street Sydney, Australia SANSON AUTO: Liquidation Bid Hearing Fixed on September 4 --------------------------------------------------------- The High Court of Palmerston North will hear a liquidation petition against Sanson Auto Court Ltd on September 4, 2006, at 10:00 a.m. The Commissioner of Inland Revenue filed the petition before the Court on July 25, 2006. The Solicitor for the Petitioner can be reached at: Kerri Ann Doherty Technical and Legal Support Group Wellington Service Centre 1st Floor, New Zealand Post House 7-27 Waterloo Quay (P.O. Box 1462) Wellington, New Zealand Telephone: (04) 890 1045 Facsimile: (04) 890 0009 SPUD JOINERY: Court Appoints Joint Liquidators ---------------------------------------------- Henry David Levin and Barry Jordan were appointed by the High Court of Auckland on August 17, 2006, as joint and several liquidators for Spud Joinery Specialists Ltd. The Joint Liquidators will be receiving proofs of claims from the company's creditors until September 14, 2006. According to the Troubled Company Reporter - Asia Pacific, the Commission of Inland revenue filed a liquidation petition against the company on May 22, 2006. The Court heard the petition on August 17, 2006. The Joint Liquidators can be reached at: Henry David Levin McCallum Petterson, Level 11 Forsyth Barr Tower 55-65 Shortland Street, Auckland New Zealand P.O. Box 6916, Wellesley Street, Auckland Telephone: (09) 336 0000 Facsimile: (09) 336 0010 TUI'S HELPING: Faces Liquidation Proceedings -------------------------------------------- A petition to liquidate Tui's Helping Hands Ltd will be heard before the High Court of Auckland on September 7, 2006, at 10:45 a.m. The Commissioner of Inland Revenue filed the petition with the Court on June 21, 2006. The Plaintiff's Solicitor can be reached at: Geraldine Ann Ryan Auckland South Service Centre 17 Putney Way (P.O. Box 76-198) Manukau City, New Zealand Telephone: (09) 984 2002 TUUSON ENTERPRISES: Creditors' Proofs of Claim Due on Sept. 19 -------------------------------------------------------------- Liquidator Raymond Burgess will be receiving proofs of claim from the creditors of Tuuson Enterprises Ltd until September 19, 2006. Failure to submit claims will exclude a creditor from sharing in any distribution the company will make. The Liquidator can be reached at: Raymond Burgess P.O. Box 82-100, Auckland New Zealand Telephone: (09) 576 7806 Facsimile: (09) 576 7263 WHF INVESTMENTS: Liquidator Fischer to Present Wind-Up Report ------------------------------------------------------------- A final meeting will be held for the members of WHF Investments Pty Limited on September 22, 2006, at 10:00 a.m. At the meeting, Liquidator Fischer will report on the company's wind-up proceedings and property disposal exercises. The Liquidator can be reached at: Walter Henry Fischer Level 6, 151 Macquarie Street Sydney, New South Wales 2000 Australia WWWICKED PTY: Enters Wind-Up Proceedings ---------------------------------------- Members of WWWICKED Pty Ltd convened on August 11, 2006, and resolved to voluntarily wind up the company's operations. Accordingly, Anthony Grieves was appointed as liquidator. The Liquidator can be reached at: Anthony Grieves WalterTurnbull 44 Sydney Avenue Barton, Australian Capital Territory 2600 Australia Telephone:(02) 6247 6200 Facsimile:(02) 6257 6655 XPRESSIONS FASHION: Court Sets Date to Hear Liquidation Bid ----------------------------------------------------------- The High Court of Napier will hear a liquidation petition filed against Xpressions Fashion Clothing Ltd on September 7, 2006, at 10:00 a.m. Zara Elizabeth Warren filed the petition with the Court on August 10, 2006. The Plaintiff's Solicitor can be reached at: B.S. King Langley Twigg, Barristers & Solicitors 66 West Quay, Napier New Zealand ================================ C H I N A & H O N G K O N G ================================ ASUN ENTERPRISE: Members to Receive Liquidators' Wind-Up Report --------------------------------------------------------------- Members of Asun Enterprise Ltd will hear Joint Liquidators Ng Tze Kin and Tsui Yip Kin's report on the company's wind-up and property disposal exercises. The report will be presented at a members' meeting on September 21, 2006, at 3:00 p.m. at 3/F., Malaysia Building, 50 Gloucester Road, Wanchai in Hong Kong. BALLY TOTAL: Enters Confidentiality Pact with Pardus Capital ------------------------------------------------------------ Bally Total Fitness Holding Corp. has entered into a confidentiality agreement with its largest shareholder, Pardus Capital Management, the Associated Press reports. Pardus Capital told AP that it would receive confidential information about Bally Total. AP notes that Pardus Capital said in a filing with the US Securities and Exchange Commission late last week that Bally Total will give it certain private information to be used in the evaluation and negotiation of a possible strategic transaction with Pardus Capital. AP underscores that under the agreement, Pardus Capital can: -- nominate individuals to Bally's board of directors; -- bring business before a stockholders meeting; and -- conduct a proxy solicitation in support of director nominees. Pardus Capital agreed not to buy or sell Bally Total securities for a "period ending three business days", after Oct. 16, AP states. About Bally Total Bally Total Fitness Holding Corporation -- http://www.Ballyfitness.com -- is a commercial operator of fitness centers, with over 400 facilities located in 29 states, Mexico, Canada, Korea, the Caribbean, and China under the Bally Total Fitness, Bally Sports Clubs and Sports Clubs of Canada brands. * * * As reported in the Troubled Company Reporter on March 17, 2006, Standard & Poor's Ratings Services held its ratings on Bally Total Fitness Holding Corp., including the 'CCC' corporate credit rating, on CreditWatch with developing implications, where they were placed on Dec. 2, 2005. BARCLAYS CORPORATION: Joint Liquidators Step Aside -------------------------------------------------- Jacky Chung Wing Muk and Edward Simon Middleton ceased to act as joint and several liquidators for Barclays Corporation NZ Ltd on August 11, 2006. The former Joint Liquidators can be reached at: Jacky Chung Wing Muk KPMG, 8th Floor Prince's Bldg, 10 Chater Road Central, Hong Kong BINA INVESTMENT: Creditors' Proofs of Claim Due on September 18 --------------------------------------------------------------- Liquidator Philip Brendan Gilligan requires creditors of Bina Investment Ltd to file their proofs of claim by September 18, 2006. Failure to prove claims will exclude a creditor from sharing in any distribution the company will make. On August 14, 2006, the Troubled Company Reporter - Asia Pacific reported that the company commenced a wind-up of its operations on July 26, 2006. The Liquidator can be reached at: Philip Gilligan 7th Floor, Alexandra House 18 Chater Road, Central Hong Kong BIOPHARM GLOBAL: Members to Hear Wind-Up Report ----------------------------------------------- Members of Biopharm Global (BPG) Ltd will hear Liquidator Lau Hak Lap's report on the company's wind-up and property disposal activities. The report will be presented at a members' meeting on September 18, 2006, at 11:00 a.m. at Mr. Lau's office. The Liquidator can be reached at: Lau Hak Lap Unit 1001-4, 10/F China Merchants Steam Navigation Building 152-155 Connaught Road Central Hong Kong BIS GARMENT: Creditors' First Meeting Fixed on August 30 -------------------------------------------------------- Creditors of BIS Garment convened for their first meeting on August 30, 2006, at Room 201, Duke of Windsor Social Service Building, No.15, Hennessy Road, Wanchai in Hong Kong. During the meeting, creditors will discuss various matters provided under different sections of the Companies Ordinance of Hong Kong. CERADYNE INC: Wants Nasdaq Listing Qualifications Panel Hearing --------------------------------------------------------------- Ceradyne, Inc., requested a hearing before the Nasdaq Listing Qualifications Panel in response to its receipt of a Nadaq Staff Determination letter on Aug. 17, 2006, indicating that the Company is not in compliance with the filing requirements for continued listing as set forth in Marketplace Rule 4310(c)(14). The letter was issued in accordance with Nasdaq procedures due to the delayed filing of the Company's Form 10-Q for the quarter ended June 30, 2006. Pending a decision by the Panel, the Company's common stock will remain listed on The Nasdaq Stock Market. The Company disclosed that a special committee of independent directors was formed, on Aug. 4, 2006, to conduct an internal investigation of the Company's historical stock option grants and related accounting treatment. The special committee is being assisted by independent legal counsel and forensic accountants. The special committee's investigation is ongoing and, accordingly, the Company was unable to file its Form 10-Q for the quarter ended June 30, 2006, by the required filing deadline. The Company is focused on resolving the issues as quickly as possible and plans to file its Form 10-Q following completion of the independent investigation by the special committee. Ceradyne, Inc. (Nasdaq: CRDN) -- http://www.ceradyne.com/-- develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, automotive/dieseland consumer applications. The company operates a technical ceramic plant in Tianjin, China. * * * As reported in the Troubled Company Reporter on July 24, 2006, Ceradyne's US$50 million revolving credit facility due 2009 carries Standard & Poor's BB- rating. The Company's credit rating is also rated BB- by Standard & Poor's. E. SUN BANK: S&P Affirms Financial Strength Rating at C+ -------------------------------------------------------- Standard & Poor's Ratings Services affirmed on August 29, 2006, its 'BBB' long-term and 'A-2' short-term counterparty credit ratings on E.Sun Bank. The 'C+' bank fundamental strength rating on the bank was also affirmed. The outlook is stable. The affirmation follows an announcement that E.Sun Bank, a wholly owned subsidiary of E.Sun Financial Holding Co. Ltd., plans to merge with E.Sun Bills Finance Corp., another wholly owned subsidiary of E.Sun FHC, by Dec. 25, 2006, through a share swap transaction. According to the plan, designed to enhance capital efficiency, E.Sun Bank will be the surviving entity and retain the risk exposure of E.Sun BFC. Based on pro forma financials as of the end of June 2006, E. Sun Bank's ratio of adjusted common equity to assets would increase to 5.4% from 5% currently. Nevertheless, the bank's capitalization is unlikely to change significantly because of ongoing expansion. The transaction is subject to regulatory approval. The ratings on E.Sun Bank continue to reflect the bank's good asset quality, prudent risk controls, and adequate capitalization. Counterbalancing factors include potential risks as a result of the bank's ambitious growth strategy. The stable outlook reflects the expectation that E.Sun Bank's prudent risk controls will help the bank to maintain its current financial profile and creditworthiness. * * * Based in Taiwan, E Sun Commercial Bank -- http://www.esunbank.com.tw/-- engages in commercial banking, savings banking, offshore banking, trust investments and international financial services. EUROPOINT WATCH: Members and Creditors Hold Meetings ---------------------------------------------------- Members and creditors of Europoint Watch and Jewellery Ltd held separate meetings on August 28, 2006, at 9:45 a.m. and 10:00 a.m. respectively to discuss matters relating to the company's wind-up. The meetings were held at Room 503, 5th Floor of the Boy's & Girl's Club Assoc. of Hong Kong, No. 3 Lockhart Road, Wanchai, Hong Kong. FILA MARKETING: Joint Liquidators Ceases to Act for Company ----------------------------------------------------------- Chung Miu Yin, Diana and Yeung Betty Yuen ceased to act as joint and several liquidators of Fila Marketing (P.R.C) on August 7, 2006. According to the Troubled Company Reporter - Asia Pacific, the Liquidators had presented if final wind-up report on June 5, 2006. The Joint Liquidators can be reached at: Yeung Betty Yuen Level 28, Three Pacific Place 1 Queen's Road East Hong Kong FIS CHINA: Members' Final Meeting Slated for Sept. 20 ----------------------------------------------------- Members of FIS China Ltd will convene for their final meetings at the office of Liquidator David John Lawrence on September 20, 2006, at 3:00 p.m. During the meeting, Mr. Lawrence will present a report regarding the Company's wind-up and the manner its properties were disposed of. According to the Troubled Company Reporter - Asia Pacific, the company commenced a members' voluntary wind-up of its operations on March 29, 2006. The Liquidator can be reached at: David J. Lawrence 7th Floor, Alexandra House 18 Chater Road Central Hong Kong GUANGDONG KELON: Expects to Book Losses in First Three Quarters --------------------------------------------------------------- Guangdong Kelon Electrical Holdings warned it will incur losses for the first three quarters of this year due to increased material cost, production halts at some plants and a drop in orders, The South China Morning Post reports. "In view of the continuous surging raw material prices and some subsidiaries which have ceased production, it is expected that loss will be incurred from January 1 to September 30, 2006" said chairman Tang Yeguo. "As a result of the former chairman being suspected of economic crimes, the confidence of the distributors in our company was significantly affected, causing a huge loss of potential orders from September 2005 to September 2006 as well as a significant drop in sales of air conditioners and freezers," Mr. Tang told The Post. Trading in Kelon's Hong Kong-listed shares has been suspended since June 16, 2005 while its Shenzhen-listed shares may also be suspended under listing rules if it reports a net loss fro this year, which would be the firm's third straight annual loss, the Post says. For the first half this year, Kelon said net loss shrank to CNY29.2-million from CNY448-million in the same period a year ago while sales fell 21.3% to CNY3.59-billion. As of June 30, Kelon's liabilities exceeded its assets by CNY3.27-billion and it had CNY1.45-billion of overdue short-term loans. The company said it was negotiating its debts with creditors. Although H.K.-listed firms are not required to have independent auditors review their earnings, Kelon's auditor BDO McCable Lo stated that it was unable to determine if hundreds of millions of yuan of assets and liabilities in Kelon's first-half balance sheet were accurately stated, the South China Post said. In addition, Kelon's reported first-half earnings also failed to win endorsement from the majority of its three supervisors. One endorsed the results, another was not contactable and another, Bai Yunfeng, abstained from voting on the results, the paper relates. * * * Headquartered in Wanchai, Hong Kong, Guangdong Kelon Elecrical Holdings Company Limited -- http://www.kelon.com/-- is one of the largest cooling domestic appliance manufacturers in China, mainly engaging in the development and manufacture, as well as domestic and overseas sales of refrigerators and air- conditioners. Before the latest scandal involving it's former Chairman, the refrigerator maker was saddled with 2004 net losses, after seeing a CNY197.3 million net profit in 2003 and a similar substantial profit in 2002. With the outbreak of the scandal, it suspended trading of some of its shares and had its assets frozen. The Company was taken over China's Hisense Group in a CNY900-million acquisition agreement in September 2005. The Troubled Company Reporter - Asia Pacific reported on July 3, 2006, that Guangdong Kelon is facing possible de-listing of its shares from China's stock exchanges for failing to submit its first quarter financial report ending March 31, 2006 on an appointed date. On August 16, 2006, TCR-AP reported that Guangdong Kelon's net loss widened to CNY3.7 billion, or CNY3.73 a share, from CNY226.29 million or CNY23 a share in 2004 under Hong Kong accounting standards. KONG WING TRADING: Liquidator Ceases to Act for Company ------------------------------------------------------- Ha Man Kit, Marcus ceased to act as liquidator for Kong Wing Trading & Transportation Ltd on August 7, 2006. Mr. Marcus can be reached at: Ha Man Kit, Marcus Room 2302, 23/F 99 Hennessy Road Wanchai, Hong Kong LEAD SUPPLY: Members Resolve to Wind-Up Operations -------------------------------------------------- Members of Lead Supply Industrial Ltd resolved on August 12, 2006, to voluntary wind-up its operations and appoint Chiu Chi Kin as liquidator to oversee its liquidation. The Liquidator can be reached at: Chiu Chi Kin Block E, 3rd Floor Wang Cheong Bldg 251 Reclamation Street Kowloon, Hong Kong MBF INTERNATIONAL: Liquidator Steps Aside ----------------------------------------- Ha Man Kit, Marcus ceased to act as Liquidator for MBF International Finance Ltd on August 7, 2006. The former Liquidator can be reached at: Ha Man Kit, Marcus Room 2302, 23/F 99 Hennessy Road Wanchai, Hong Kong MILLION GRAND: Final Members Meeting Set on September 20 -------------------------------------------------------- Members of Million Grand Industrial Ltd will convene for their final meeting at 905 Silvercord Tower 2, 30 Canton Road, Tsimshatsui, Kowloon in Hong Kong on September 20, 2006, at 10:00 a.m. At the meeting, Joint Liquidators James T. Fulton and Cordelia Tang will present a report regarding the Company's wind-up and the manner its properties were disposed of. NATURE'S FARM: Liquidator Presents Wind-Up Report ------------------------------------------------- Joint and Several Liquidator Yeo Boon Ann presented a report regarding the company's wind-up and property disposal activities on August 25, 2006. PARTY PRODUCTS: Creditors Must Prove Debts by September 14 ---------------------------------------------------------- Creditors of Party Products Manufacturing Ltd are required to submit their proofs of claim to Company Chairman Ho Ka Ping by September 14, 2006. Failure to prove debts will exclude a creditor from sharing in any distribution the Company will make. SCREEN MARKETING: Liquidators Muk and Middleton Step Aside ---------------------------------------------------------- Jacky Chung Wing Muk and Edward Simon Middleton ceased to act as joint and several liquidators of Screen Marketing Ltd on August 11, 2006. The former Joint Liquidators can be reached at: Jacky Chung Wing Muk KPMG, 8th Floor Prince's Bldg, 10 Chater Road Central, Hong Kong SERASIA LIMITED: Sole Shareholder Opts for Voluntary Wind-Up ------------------------------------------------------------ The sole shareholder of Serasia Limited resolved on August 9, 2006, to voluntary wind-up the company's operations and named Lai Kar Yan, Derek and Darach E. Haughey as joint and several liquidators. The Joint Liquidators require the company's creditors to file their proofs of claim by September 18, 2006, for them to share in any distribution the company will make. The Joint Liquidators can be reached at: Lai Kar Yan, Derek 35/F., One Pacific Place 88 Queensway, Hong Kong TCL MULTIMEDIA: European Operations Widen First Half Losses ----------------------------------------------------------- The CNY763 million losses of TCL Multimedia Technology Holdings Limited's European operations have caused losses of the TCL Corp. group to widen to CNY737.56 million, AFX News reports. TCL Corp's loss per share was CNY0.285 against CNY0.268 a year earlier. According to the Company's report, slower-than-expected business integration of acquisitions from Alcatel and Thomson were also partly responsible for the weak performance of its European businesses. TCL Corp's core revenue was down 3.44% year-on-year at CNY23.58 billion in the first half. Its sales in China totaled CNY10.31 billion, or 43.74% of the total, while overseas sales were CNY13.26 billion. Color television sales dropped 3.68% year-on-year to CNY13.66 billion, with sales of CNY6.41 billion in North America and Europe. Computer sales totaled CNY1.25 billion for the first half, up 21.34% year-on-year. Appliance sales totaled CNY2.48 billion, down 1.94%. On July 12, 2006, the Troubled Company Reporter - Asia Pacific reported that TCL Multimedia Technolgy issued a profit warning in anticipation that the group may record substantial losses for the six months ended June 30, 2006. In a statement to the Hong Kong Stock Exchange, the Company said the Group may record huge first-half losses as a result of its lackluster operations in Europe. * * * Headquartered in New Territories, Hong Kong, TCL Multimedia Technology Holdings Limited -- http://www.tclcom.com/-- is formerly known as TCL International Holdings Limited. The Group's principal activities are designing, manufacturing and selling electronic products like colored TV, DVD players, VCD players, home cinema hi-fi systems, mobile handsets, internet related information technology products, refrigerators and washing machines. Its other activity includes trading electronic parts and components used in the production of color television sets. The Troubled Company Reporter - Asia Pacific reported on January 9, 2006, that China's TCL Multimedia Technology Holdings Ltd. expects its money-losing North American and European operations to break even this year, a half year behind previous targets, citing TCL Multimedia Chairman Li Dongsheng. The North American and European operations, which operate under the RCA and Thomson brands, respectively, posted losses of about HK$30 million in 2005. VISION CARD: Liquidator Ceases to Act for Company ------------------------------------------------- Ha Man Kit, Marcus ceased to act as liquidator for Vision Card International Ltd on August 7, 2006. The former Liquidator can be reached at: Ha Man Kit, Marcus Room 2302, 23/F 99 Hennessy Road Wanchai, Hong Kong YUE CHEONG: Company's Books Under Liquidator's Custody ------------------------------------------------------ At a final members meeting of Yue Cheong Hardware Co Ltd held on August 7, 2006, a resolution was passed to put the Company's books and accounts under Liquidator Fan King Kit's custody. It was also resolved that Mr. Fan may destroy the books of the Company only after the expiry of three months after the Company's dissolution. ========= I N D I A ========= CADMUS COMMS: Inks Asian Joint Venture Pact with Periscope Inc. --------------------------------------------------------------- Cadmus Communications Corporation entered into a joint venture agreement with Periscope, Inc., a Minneapolis-based graphic services and creative agency. The new PeriscopeCadmus(TM) entity will integrate Cadmus Specialty Packaging's global packaging network with Periscope's design and pre-press capabilities to provide an end-to-end worldwide print management solution. The joint venture agreement between Cadmus and Periscope was signed on June 29, 2006. Cadmus simultaneously disclosed that PeriscopeCadmus(TM) has been selected as one of only four global print managers to serve a large United States-based retail chain. This initial business development success will provide the joint venture with an excellent opportunity to win a significant portion of an estimated US$200 million annual packaging buy. PeriscopeCadmus(TM) has already begun operations at its new, expanded pre-press and print management operation in Hong Kong. John Riley, Vice President of Operations for Cadmus Specialty Packaging, has relocated to Hong Kong to assume the position of Director, Global Operations and lead the team that will manage PeriscopeCadmus(TM) print operations in the eastern hemisphere. Gilbert Lee has signed on as Director, Sales & Prepress and in that role will share responsibility with Riley for leadership of the business in Asia. PeriscopeCadmus(TM) is currently adding 15 associates to existing Hong Kong staff in anticipation of rapid sales growth in Asia. Additional support offices are planned in the next few months in Shanghai, India, and Thailand to provide even closer regional support for anticipated business in those regions. Alan Parnell, Vice President of Global Packaging Solutions for Cadmus, said, "this is a tremendous opportunity to apply our global brand management expertise on a much larger scale. It expands the scope of our business in terms of services offered as well as enhancing our global reach. Our print and packaging network has grown to include facilities in China, Thailand, India and Turkey. The establishment in Hong Kong of a pre-press and print management hub, together with our existing U.S. and Central American capabilities, positions us to provide our customers with unparalleled global brand management solutions for packaging." "This agreement and the related business development success represents an opportunity to aggressively accelerate our growth in Asia and sustain strong momentum in our Specialty Packaging business," Paul Suijk, Senior Vice President and Chief Financial Officer of Cadmus, commented. "With this joint venture, we can not only build on the success we have had in the Caribbean Rim, but we now can extend our production management capabilities literally around the world. We expect the joint venture and our Asian operation to move quickly from the current 'start up' phase and adding significant revenue and profitability as early as the fall of this year." About Periscope Periscope, Inc. -- http://www.periscope.com/-- is a marketing agency providing clients with a full range of integrated services, including advertising, media planning and buying, interactive, public relations, design and graphic services. With offices in Minneapolis and Hong Kong, Periscope has 200 employees and US$200 million in capitalized billings. The agency's clients include Arctic Cat, Buca di Beppo, Cox Communications, Humana, Papa Murphy's Take 'N' Bake Pizza and Target. About Cadmus Based in Richmond, Virginia, Cadmus Communications Corporation -- http://www.cadmus.com/-- provides end-to-end, integrated graphic communications services to professional publishers, not- for-profit societies and corporations. Cadmus is the world's largest provider of content management and production services to scientific, technical and medical journal publishers, the fifth largest periodicals printer in North America, and a leading provider of specialty packaging and promotional printing services. The company also has operations in India. * * * Cadmus Communications' 8-3/8% Senior Subordinated Notes due 2014 carry Moody's Investors Service's B2 rating and Standard & Poor's single-B rating. SILICON GRAPHICS: Gets Final OK to Keep Existing Bank Accounts -------------------------------------------------------------- The Hon. Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York approved the request of Silicon Graphics, Inc., and its debtor-affiliates to designate, maintain and continue to use, with the same account numbers, all of the bank accounts in existence on the Chapter 11 filing on a final basis. Furthermore, the Debtors are allowed to open new bank accounts or close any existing bank accounts, as they may deem necessary. The Debtors maintained 27 Bank Accounts with several financial institutions. A full-text copy of a list of the Debtors' Bank Accounts is available for free at http://researcharchives.com/t/s?eab About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high- performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. Silicon Graphics has operations in India, Australia, China, Japan, New Zealand and sales offices in Hong Kong, Korea, Malaysia, Indonesia, the Philippines, Singapore, Thailand, and Vietnam. The Debtor and 13 of its affiliates filed for Chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Debtor affiliates filing separate chapter 11 petitions: * Silicon Graphics Federal, Inc. * Cray Research, LLC * Silicon Graphics Real Estate, Inc. * Silicon Graphics World Trade Corporation * Silicon Studio, Inc. * Cray Research America Latina Ltd. * Cray Research Eastern Europe Ltd. * Cray Research India Ltd. * Cray Research International, Inc. * Cray Financial Corporation * Cray Asia/Pacific, Inc. * ParaGraph International, Inc. * WTI-Development, Inc. Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of US$369,416,815 and total debts of US$664,268,602. SILICON GRAPHICS: Winston & Strawn Hired as Committee's Counsel --------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York authorized the Official Committee of Unsecured Creditors in Silicon Graphics, Inc., and its debtor-affiliates' Chapter 11 cases, to retain Winston & Strawn LLP as its counsel, nunc pro tunc to May 18, 2006. As reported in the Troubled Company Reporter on June 30, 2006, Winston & Strawn will: a. provide legal advice to the Committee with respect to its duties and powers in the Chapter 11 cases; b. consult with the Committee and the Debtors concerning the administration of the bankruptcy proceedings; c. assist the Committee in: -- in its investigation of the acts, conduct, assets, liabilities, postpetition financing, and financial condition of the Debtors, operation of the Debtors' businesses, and the desirability of continuing or selling businesses and assets, and other matters related to the bankruptcy case or to the formulation of a plan; -- in the evaluation of claims against the estates, including analysis of and possible objections to the validity, priority, amount, subordination, or avoidance of claims and transfers of property on account of the claims; -- in participating in the formulation of a plan, including the Committee's communications with unsecured creditors concerning the plan and collecting of, and filing with the Court, acceptances or rejections of the plan; and -- with any effort to request the appointment of a trustee or examiner; d. advise and represent the Committee in connection with administrative and substantive matters arising in the Chapter 11 cases, including the obtaining of credit, the sale of assets, and the rejection or assumption of executory contracts and unexpired leases; e. appear before the Court, any other federal court, state court or appellate courts; and f. perform other legal services as may be required and which are in the interest of the unsecured creditors. Winston & Strawn will be paid on its current hourly rates and will be reimbursed for necessary expenses. The firm's customary hourly rates, subject to periodic adjustment, were: Partners US$360 to US$765 Associates US$225 to US$470 Legal Assistants US$105 to US$230 David Neier, a partner at Winston & Strawn, assured the Court that his firm has no connection with, and holds no interest adverse to, the Debtors, their creditors, or any other party-in- interest. Winston & Strawn is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code. About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high- performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. Silicon Graphics has operations in India, Australia, China, Japan, New Zealand and sales offices in Hong Kong, Korea, Malaysia, Indonesia, the Philippines, Singapore, Thailand, and Vietnam. The Debtor and 13 of its affiliates filed for Chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Debtor affiliates filing separate chapter 11 petitions: * Silicon Graphics Federal, Inc. * Cray Research, LLC * Silicon Graphics Real Estate, Inc. * Silicon Graphics World Trade Corporation * Silicon Studio, Inc. * Cray Research America Latina Ltd. * Cray Research Eastern Europe Ltd. * Cray Research India Ltd. * Cray Research International, Inc. * Cray Financial Corporation * Cray Asia/Pacific, Inc. * ParaGraph International, Inc. * WTI-Development, Inc. Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of US$369,416,815 and total debts of US$664,268,602. SILICON GRAPHICS: Gets Final Nod to Use Existing Business Forms --------------------------------------------------------------- The Hon. Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York allowed Silicon Graphics, Inc., and its debtor-affiliates to continue using existing checks and business forms, including purchase orders, multi-copy checks, letterheads, and promotional materials, without reference to the Debtors' status as debtors-in-possession, on a final basis. Pursuant to the operating guidelines established by the Office of the United States Trustee for debtors-in-possession, the Debtors are required to obtain checks that bear the designation "debtor in possession" and reference the bankruptcy case number and the type of account on those checks. As reported in the Troubled Company Reporter on May 22, 2006, the Debtors also obtained the Court's permission to use their existing check stock. As soon as practicable, the Debtors will imprint the legend "Debtor-In-Possession" and the Debtors' chapter 11 case number on those checks. About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high- performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. Silicon Graphics has operations in India, Australia, China, Japan, New Zealand and sales offices in Hong Kong, Korea, Malaysia, Indonesia, the Philippines, Singapore, Thailand, and Vietnam. The Debtor and 13 of its affiliates filed for Chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Debtor affiliates filing separate chapter 11 petitions: * Silicon Graphics Federal, Inc. * Cray Research, LLC * Silicon Graphics Real Estate, Inc. * Silicon Graphics World Trade Corporation * Silicon Studio, Inc. * Cray Research America Latina Ltd. * Cray Research Eastern Europe Ltd. * Cray Research India Ltd. * Cray Research International, Inc. * Cray Financial Corporation * Cray Asia/Pacific, Inc. * ParaGraph International, Inc. * WTI-Development, Inc. Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of US$369,416,815 and total debts of US$664,268,602. SILICON GRAPHICS: Court OKs Hiring of Morgan Lewis as IP Counsel ---------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York allowed Silicon Graphics, Inc., and its debtor- affiliates to employ Morgan, Lewis & Bockius LLP as their special intellectual property counsel, nunc pro tunc to their bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Morgan Lewis will be responsible for: -- counseling the Debtors with respect to patent, trademark, licensing, open source, and other issues relating to transactional and non-transactional matters; and -- the litigation of intellectual property disputes, including matters that may come before the Court in connection with the Debtors' Chapter 11 case concerning intellectual property. Morgan Lewis' customary hourly rates are: Professionals Rates Per Hour ------------- -------------- Counsel US$330 to US$530 Douglas J. Crisman US$450 Partners US$430 to US$750 Andrew Gray US$530 James Bollinger US$750 Associates US$210 to US$500 Tim Heaton US$500 Paraprofessionals US$130 to US$200 Jeremy Sullivan US$175 Mr. Crisman assures the Court that his firm does not have any connection with or interest adverse to the Debtors or any party- in-interest. About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high- performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. Silicon Graphics has operations in India, Australia, China, Japan, New Zealand and sales offices in Hong Kong, Korea, Malaysia, Indonesia, the Philippines, Singapore, Thailand, and Vietnam. The Debtor and 13 of its affiliates filed for Chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Debtor affiliates filing separate chapter 11 petitions: * Silicon Graphics Federal, Inc. * Cray Research, LLC * Silicon Graphics Real Estate, Inc. * Silicon Graphics World Trade Corporation * Silicon Studio, Inc. * Cray Research America Latina Ltd. * Cray Research Eastern Europe Ltd. * Cray Research India Ltd. * Cray Research International, Inc. * Cray Financial Corporation * Cray Asia/Pacific, Inc. * ParaGraph International, Inc. * WTI-Development, Inc. Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of US$369,416,815 and total debts of US$664,268,602. SILICON GRAPHICS: Gets Court Approval to Continue Refund Program ---------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York authorized Silicon Graphics, Inc., and its debtor- affiliates to: -- continue their Refund Program, including the ordinary course practice of issuing Credit Memos to customers; and -- perform and honor their prepetition obligations under the Refund Program, including the issuance of approximately US$100,000 in Credit Memos relating to refund credit requests received prepetition. In addition, Judge Lifland permits the Debtors to issue approximately US$100,000 in Credit Memos applicable to future purchases of their products and services in respect of refund requests received prepetition. As reported in the Troubled Company Reporter on July 24, 2006, the Debtors want to continue their customer refund program and issue Credit Memos to customers to ensure customer satisfaction, effectively compete with their market, develop and sustain customer loyalty, improve profitability, and generate goodwill for the Debtors and their products. Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York, told the U.S. Bankruptcy Court for the Southern District of New York that Credit Memos avoid the need to issue cash refunds to customers, which are less likely to yield future benefits to the Debtors, as customers are not obligated to use their cash refund to make additional purchases from the Debtors. On the other hand, Credit Memos incentivize customers to continue their business relationship with the Debtors as opposed to purchasing similar products and services from a competitor. About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high- performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. Silicon Graphics has operations in India, Australia, China, Japan, New Zealand and sales offices in Hong Kong, Korea, Malaysia, Indonesia, the Philippines, Singapore, Thailand, and Vietnam. The Debtor and 13 of its affiliates filed for Chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Debtor affiliates filing separate chapter 11 petitions: * Silicon Graphics Federal, Inc. * Cray Research, LLC * Silicon Graphics Real Estate, Inc. * Silicon Graphics World Trade Corporation * Silicon Studio, Inc. * Cray Research America Latina Ltd. * Cray Research Eastern Europe Ltd. * Cray Research India Ltd. * Cray Research International, Inc. * Cray Financial Corporation * Cray Asia/Pacific, Inc. * ParaGraph International, Inc. * WTI-Development, Inc. Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of US$369,416,815 and total debts of US$664,268,602. ================= I N D O N E S I A ================= GOODYEAR TIRE: Delaware Court Denies Dismissal Motion ----------------------------------------------------- The Superior Court of Delaware, New Castle County, denied the dismissal motion filed by The Goodyear Tire & Rubber Co. in an asbestos-related action filed by multiple plaintiffs. Judge Susan C. Del Pesco handed down the decision of the case on March 13, 2006. The Goodyear Tire & Rubber Co. is an Ohio corporation with its principle place of business in Ohio. The Company had filed a motion to dismiss this action based on interests of justice. The Court ruled that the provision relied on is a codification of the due process protection of the U.S. Constitution, which is implicated when a State seeks to exercise jurisdiction over a nonresident. The provision does not supply a basis for dismissing the plaintiff's claim. The Court denied the Company's motion to dismiss based on interests of justice. Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world, including Indonesia, Australia, China, India, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, and Thailand. Goodyear employs more than 80,000 people worldwide. The company's Asia-Pacific headquarters is in Shanghai, China. * * * Fitch affirmed The Goodyear Tire & Rubber Company's Issuer Default Rating at 'B'; US$1.5 billion first lien credit facility at 'BB/RR1'; US$1.2 billion second lien term loan at 'BB/RR1'; US$300 million third lien term loan at 'B/RR4'; US$650 million third lien senior secured notes at 'B/RR4'; and Senior Unsecured Debt at 'CCC+/RR6'. Moody's Investors Service assigned a B3 rating to Goodyear Tire & Rubber Company's US$400 million ten-year senior unsecured notes. Standard & Poor's Ratings Services assigned its 'B-' rating to Goodyear Tire & Rubber Co.'s US$400 million senior notes due 2015 and affirmed its 'B+' corporate credit rating. GOODYEAR TIRE: Asbestos Claims Drop to 124,400 in 2Q ---------------------------------------------------- The Goodyear Tire & Rubber Co. recorded about 124,400 pending asbestos-related claims against it at June 30, 2006, compared with 125,700 claims at March 31, 2006. The claims related to alleged asbestos-related diseases resulting from exposure to asbestos in products made by the company or in asbestos-containing materials in the company's facilities. The plaintiffs sought unspecified actual and punitive damages and other relief. In the 2006-2nd quarter, about 700 new claims were filed against the company and about 2,000 were settled or dismissed. The amount expended on asbestos defense and claim resolution by the company and its insurance carriers during the 2006-2nd quarter was US$6 million and US$10 million in the first six months of 2006. In the six months ended June 30, 2006, the company noted 1,600 new claim filings and 2,700 claims settled or dismissed. To date, the company has disposed of about 40,800 claims by defending and obtaining the dismissal or by entering into a settlement. The sum of the company's accrued asbestos-related liability and gross payments, including legal costs, totaled about US$242 million through June 30, 2006 and US$233 million through December 31, 2005. The company had recorded liabilities for both asserted and unasserted claims, inclusive of defense costs, totaling US$103 million at June 30, 2006 and US$104 million at December 31, 2005. The portion of the liability associated with unasserted asbestos claims was US$37 million at June 30, 2006, and US$31 million at December 31, 2005. The company's liability with respect to asserted claims and related defense costs was US$66 million at June 30, 2006, and US$73 million at December 31, 2005. As of June 30, 2006 and December 31, 2005, the company had recorded a receivable related to asbestos claims of US$53 million. The company expects that about 52% of asbestos claim related losses would be recoverable up to the company's accessible policy limits through the period covered by the estimated liability. Of this amount, US$9 million was included in current assets as part of accounts and notes receivable at June 30, 2006, and December 31, 2005. The company said that at June 30, 2006, it had at least US$176 million in aggregate limits of excess level policies potentially applicable to indemnity payments for asbestos products claims. A portion of the availability of the excess level policies is included in the US$53 million insurance receivable recorded at June 30, 2006. The company also had about US$20 million in aggregate limits for products claims, as well as coverage for premise claims on a per occurrence basis and defense costs available with the company's primary insurance carriers through coverage-in-place agreements at June 30, 2006. Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world, including Indonesia, Australia, China, India, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, and Thailand. Goodyear employs more than 80,000 people worldwide. The company's Asia Pacific headquarters is in Shanghai, China. * * * Fitch affirmed The Goodyear Tire & Rubber Company's Issuer Default Rating at 'B'; US$1.5 billion first lien credit facility at 'BB/RR1'; US$1.2 billion second lien term loan at 'BB/RR1'; US$300 million third lien term loan at 'B/RR4'; US$650 million third lien senior secured notes at 'B/RR4'; and Senior Unsecured Debt at 'CCC+/RR6'. Moody's Investors Service assigned a B3 rating to Goodyear Tire & Rubber Company's US$400 million ten-year senior unsecured notes. Standard & Poor's Ratings Services assigned its 'B-' rating to Goodyear Tire & Rubber Co.'s US$400 million senior notes due 2015 and affirmed its 'B+' corporate credit rating. GOODYEAR TIRE: Reports US$2 Million Net Income in Second Quarter ---------------------------------------------------------------- The Goodyear Tire & Rubber Company filed its financial results for the second quarter ended June 30, 2006, with the United States Securities and Exchange Commission on Aug. 4, 2006. For the three months ended June 30, 2006, the Company earned US$2 million of net income on US$5.14 billion of net revenues, compared to US$69 million of net income on US$5 billion of net revenues in 2005. At June 30, 2006, the Company had US$1.56 billion in cash and cash equivalents as well as US$1.68 billion of unused availability under the company's various credit arrangements, compared to US$2.16 billion and US$1.68 billion at Dec. 31, 2005, respectively. Cash and cash equivalents decreased primarily due to payments of debt maturities and funding of seasonal working capital. Cash and cash equivalents do not include restricted cash. Restricted cash primarily consists of Goodyear contributions made related to the settlement of the Entran II litigation and proceeds received pursuant to insurance settlements. In addition, the Company will, from time to time, maintain balances on deposit at various financial institutions as collateral for borrowings incurred by various subsidiaries, as well as cash deposited in support of trade agreements and performance bonds. As of June 30, 2006, cash balances totaling US$224 million were subject to restrictions, compared to US$241 million at Dec. 31, 2005. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?f3b Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world, including Indonesia, Australia, China, India, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, and Thailand. Goodyear employs more than 80,000 people worldwide. The company's Asia Pacific headquarters is in Shanghai, China. * * * Fitch affirmed The Goodyear Tire & Rubber Company's Issuer Default Rating at 'B'; US$1.5 billion first lien credit facility at 'BB/RR1'; US$1.2 billion second lien term loan at 'BB/RR1'; US$300 million third lien term loan at 'B/RR4'; US$650 million third lien senior secured notes at 'B/RR4'; and Senior Unsecured Debt at 'CCC+/RR6'. Moody's Investors Service assigned a B3 rating to Goodyear Tire & Rubber Company's US$400 million ten-year senior unsecured notes. Standard & Poor's Ratings Services assigned its 'B-' rating to Goodyear Tire & Rubber Co.'s US$400 million senior notes due 2015 and affirmed its 'B+' corporate credit rating. GREAT RIVER: Bank Mandiri Says No To Taking Over Management ----------------------------------------------------------- PT Bank Mandiri (Persero) Tbk has refused to take over the management of its troubled debtor, apparel maker PT Great River International Tbk, the Jakarta Post reports. Bank Mandiri Vice President Wayan Agus Mertayasa has said that the matter of managing Great River, which owes the bank IDR310 billion (US$34 million), should be the domain of its shareholders, and not its creditors. Any decision on the company's fate should be determined through a shareholders meeting, and be settled in court, he said. The Post further cites Mr. Wayan as saying that Mandiri has no plans to provide more loans to save Great River, until its previous loans have been settled. Great River's five acting directors -- Kristanto Setyadi, D. Swantopo, Hasanuddin Rachman, Doddy Soepardi and Albert Mario Setyawan -- told the Jakarta Stock Exchange last week that they would step down, handing over the company to Mandiri, PT Nikko Securities as its bond underwriter, and Bank Mega as the trustee. The five resigned after the Jakarta-based firm -- once Southeast Asia's largest apparel manufacturer -- continued to be dogged by problems paying for its raw material purchases, salaries, and other obligations. Great River's shares were suspended from the JSX in January 2005 after the company failed to pay IDR11 billion in interest on its loans and bonds. Its main shareholder, Sunjoto Tanudjaja, the son of tycoon Sukanta Tanudjaja, has been named a suspect in a scam regarding the loans and is a fugitive from justice. The company has failed to submit financial reports since 2004, making it more difficult for the debtor to settle its outstanding loans. Mandiri had disbursed IDR260 billion in loans to the company and bought IDR50 billion of its bonds, in return for collateral worth 1.4 times more, but mostly in the form of fast depreciating buildings and machinery. Mandiri is under pressure to lower its still-high level of bad loans, the report says. About Bank Mandiri Headquartered in Jakarta, Indonesia, PT Bank Mandiri (Persero) Tbk's -- http://www.bankmandiri.co.id/-- services include: Internet banking, consumer banking, commercial banking and corporate banking. The bank's subsidiaries consist of: Bank Mandiri (Europe) Limited, which is the bank's representative in Europe; PT Bank Syariah Mandiri, which is a bank within the syariah banking system; PT Usaha Gedung Bank Dagang Negara, which is a property management company; PT Mandiri Sekuritas, which is an investment management company, and PT Bumi Daya Plaza, which is a property management company. The bank is supported by 10 regional offices, 54 hub offices, 98 community offices, 334 spoke offices, 423 cash offices, four international offices and one representative office. The bank has overseas operations in the Cayman Islands, China, Hong Kong, London, and Singapore. * * * A Troubled Company Reporter - Asia Pacific report on May 22, 2006, reported that Moody's Investors Service has upgraded Bank Mandiri's long-term deposit rating to B2 from B3, with a stable outlookBank Mandiri's short-term deposit rating of Not-Prime, and bank financial strength rating of E+ are unaffected. A subsequent TCR-AP report on May 29, 2006, stated that Moody's upgraded these ratings of Bank Mandiri Persero (P.T.),Cayman Islands under the revised foreign currency ceilings: -- Subordinated debt rating: to Ba3 from B1 with stable outlook; and -- Senior debt rating: to Ba3 from B1 with stable outlook. Another TCR-AP report on May 24, 2006, said that Fitch Ratings affirmed Bank Mandiri's * Long-term Foreign and Local Currency Issuer Default Ratings at 'BB-'; * Short-term rating at 'B'; * Individual rating at 'D'; and * Support rating at '4'. The outlook for the ratings is stable. About Great River PT Great River International Tbk -- http://www.greatriver.co.id/ -- is a fashion apparel producer, exporter and retailer of international brands. Great River produces ladies'/men's undergarments and men's shirts/trousers, as well as children's wear in Indonesia. The company distributes brands of men's wear and other apparel through its subsidiary in Malaysia, Apparel World (M) Sdn. Bhd., and an associated distributor in Singapore, Inter Fashion Marketing Pte. Ltd. Great River operates three production facilities located in West Java, Cibinong, Cikarang and Purwakarta, which, together, house a combined total of more than 6,600 sewing machines. These production facilities are capable of producing over 34 million pieces garments per annum. NORTEL NETWORKS: Second Quarter Revenues Up 5% to US$2.74 Bil. -------------------------------------------------------------- Nortel Networks Corp. disclosed that it and its principal operating subsidiary Nortel Networks Limited or NNL have reported their unaudited financial results for the second quarter of 2006 prepared in accordance with accounting principles generally accepted in the United States. Second Quarter 2006 Results Revenues were US$2.74 billion for the second quarter of 2006 compared to US$2.62 billion for the second quarter of 2005 and US$2.38 billion for the first quarter of 2006. The company reported net earnings in the second quarter of 2006 of US$366 million, or US$0.08 per common share on a diluted basis, compared to a net loss of US$33 million, or (US$0.01) per common share on a diluted basis, in the second quarter of 2005 and a net loss of US$167 million, or (US$0.04) per common share on a diluted basis, in the first quarter of 2006. Net earnings in the second quarter of 2006 included a shareholder litigation recovery of US$510 million reflecting a mark-to-market adjustment of the share portion of the global class action settlement, special charges of US$45 million for restructuring and a loss of US$10 million on the sale of assets. Net loss in the second quarter of 2005 included special charges of US$92 million related to restructuring activities and US$11 million of costs related to the sale of businesses and assets. Net loss in the first quarter of 2006 included a benefit of US$35 million in gains on the sale of businesses and assets and a shareholder litigation expense of US$19 million reflecting a mark-to-market adjustment. "Our second quarter performance underscores both the challenges and good progress we are making with Nortel's transformation. On the plus side we saw strong order growth of 22% and increased sales momentum but gross margin was up only modestly and not at the 40% target we have set for ourselves," said Mike Zafirovski, president and chief executive officer, Nortel. "We remain intensely focused on delivering improved financial performance and there's solid traction on significant business transformation initiatives including the go-to-market supporting our Enterprise business, the development of our Services business, our strategic alliance with Microsoft, and across the board cost management programs. Together, these efforts are enabling us to deliver greater customer value and substantially enhance Nortel's competitiveness." Breakdown of Second Quarter 2006 Revenues Mobility and Converged Core Networks revenues were US$1.59 billion, an increase of 7% compared with the year-ago quarter and an increase of 12% sequentially. Enterprise Solutions and Packet Networks revenues were US$1.07 billion, a decrease of 1% compared with the year-ago quarter and an increase of 23% sequentially. Deferred revenues decreased sequentially by US$14 million and backlog increased by approximately US$194 million. Gross margin Gross margin was 39% of revenue in the second quarter of 2006, primarily impacted by geographic and product mix, and competitive pricing pressures. This compares to gross margin of 43 percent for the second quarter of 2005 and 38 percent for the first quarter of 2006. Compared to the second quarter of 2005, gross margin was impacted primarily by pricing pressures and unfavourable product mix, which was partially offset by higher sales volumes. Selling, General and Administrative SG&A expenses were US$596 million in the second quarter of 2006, reflecting incremental costs related to our acquisition of PEC and the LG-Nortel joint venture and unfavorable foreign exchange impacts, offset by cost containment initiatives. This compares to SG&A expenses of US$588 million for the second quarter of 2005, and US$595 million for the first quarter of 2006. Research and Development R&D expenses were US$489 million in the second quarter of 2006, reflecting increased investment in targeted product areas, the consolidation of the LG-Nortel joint venture and unfavorable foreign exchange impacts, offset by the favorable impact of the savings associated with its 2004 restructuring program. This compares to US$488 million for the second quarter of 2005 and US$478 million for the first quarter of 2006. Special Charges Special charges in the second quarter of 2006 of US$45 million included US$43 million for the restructuring program announced June 27, 2006. Other income (expense) - net Other income (expense) - net was net income of US$51 million for the second quarter of 2006, which primarily related to investment income of US$29 million and foreign exchange gains of US$16 million. Cash Cash balance at the end of the second quarter of 2006 was US$1.90 billion, down from US$2.70 billion at the end of the first quarter of 2006. This decrease in cash was primarily driven by an outflow of US$580 million (US$575 million plus accrued interest of US$5 million) deposited into escrow on June 1, 2006, under the global class action settlement (pending satisfactory completion of all conditions) and US$150 million for the repayment at maturity of the outstanding aggregate principal amount of the 7.40% Notes due June 15, 2006, and a cash outflow from operations of US$108 million, partially offset by cash proceeds of US$70 million related to the Flextronics transfer. On July 5, 2006, Nortel announced the closing of the offering of US$2 billion aggregate principal amount of senior notes and that it has used US$1.3 billion of the proceeds to prepay the US$1.3 billion one-year credit facility that it entered into in February 2006. First Half 2006 Results For the first half of 2006, revenues were US$5.13 billion compared to US$5.01 billion for the same period in 2005. The company reported net earnings for the first half of 2006 of US$199 million, or US$0.05 per common share on a diluted basis, compared to a net loss of US$137 million, or (US$0.03) per common share on a diluted basis, for the same period in 2005. Net earnings in the first half of 2006 included a shareholder litigation recovery of US$491 million reflecting a mark-to- market adjustment of the share portion of the global class action settlement, special charges of US$50 million related to restructuring activities and a benefit of US$25 million related to the sale of businesses and assets. The first half 2005 results included special charges of US$106 million related to restructuring activities and US$33 million of costs related to the sale of businesses and assets. Outlook Commenting on the company's financial expectations, Peter Currie, executive vice president and chief financial officer, Nortel, said, "For the full year 2006, we continue to expect strong revenue momentum for the rest of 2006, resulting in high single digit growth for the full year 2006 compared to 2005, gross margin to be around 40% as a percentage of revenue and operating expenses to be flat to up slightly from 2005, with foreign exchange and growth related expenses offsetting productivity and efficiencies. For the third quarter of 2006, we expect revenue growth in excess of 10 percent compared to the third quarter of 2005 and gross margin and operating expenses to be in-line with our full year guidance." Recent Business Highlights New Strategic Relationships Nortel and Microsoft announced a strategic alliance to accelerate the transformation of business communications towards a shared vision for unified communications. The agreement engages the companies at the technology, marketing and business levels and includes joint product development, solutions and systems integration, and go-to-market initiatives. Liberty Global, the world's leading international cable operator, has signed a 3-year global purchase agreement with Nortel for cable VoIP and optical solutions and services. With this agreement, Nortel is now an approved vendor across Liberty Global's cable subsidiaries that serve 15 million customers in 18 countries around the world. Nortel Government Solutions has teamed up with NextiraOne Federal to work together to propose joint solutions for the U.S. Army Infrastructure Modernization program or IMOD. NextiraOne Federal, an authorized Nortel reseller, was awarded one of 10 Indefinite Delivery/Indefinite Quantity contracts to provide converged voice and data solutions for bases worldwide under the U.S. Army IMOD program. In addition, Fortress Technologies and Nortel Government Solutions have formed a strategic relationship to provide government agencies worldwide with a joint solution for secure wireless voice, video and data networking. Revenue Momentum Nortel's enterprise customer momentum has resulted in new customers such as: -- Hong Kong Exchanges and Clearing Ltd., one of Asia's largest international stock exchanges, -- China's University of Petroleum to improve communications and ensure easy online access to advanced learning resources for 40,000 students, -- Israel's Migdal Insurance and Financial Holdings Ltd., -- Macquarie University in Australia for a network security solution from Nortel, and -- Langham Hotel Hong Kong for IP phone systems. The Bahamas Telecommunications company Ltd., the primary telecom operator in the Bahamas will deploy network enhancements to extend the availability of next-generation, voice, data and multimedia services with Nortel GSM/GPRS wireless technology. The GSM/GPRS solution from Nortel will enable BTC to achieve operational efficiencies through reduced network complexity and operating expenses as well as the availability to introduce new services quickly. Nortel's Global Services will provide full lifecycle services for the Rolls-Royce telephone network under a seven-year management services agreement. Rolls-Royce will transform its entire telephone network into a single, advance network providing VoIP services based on Nortel solutions including the Nortel Communication Server 1000 and Nortel CallPilot for unified voice, fax and e-mail accessible from any location, and Nortel mobility services. Nortel Global Services will also provide network design, integration, management and maintenance services to Suddenlink Communications, one of the 10 largest cable operators in the United States. Suddenlink will provide VoIP-based telephony services based on Nortel PacketCable- qualified Communications Server 2000-Compact as the exclusive softswitch on their Suddenlink backbone. Recent momentum in Nortel's Government Solutions business includes selection by the U.S. Department of Homeland Security for program management, acquisition and administrative services to the U.S. Citizenship and immigration Service, and a contract for systems engineering and software development for ground systems with the U.S. National Oceanic and Atmospheric Administration. Russia's alternative telecommunications service provider Pride has launched 'triple play' voice, video and multimedia services with a newly deployed Metro Ethernet network from Nortel. The solution is based on Nortel's Metro Ethernet portfolio andenables Pride to make available services such as IPTV with video on demand; VoIP; and high-speed Internet access. Leading Next-Generation Solutions Nortel has been selected to supply Verizon Wireless with one of the industry's most advanced CDMA 1xEV-DO Revision A technology beginning in the third quarter of 2006. This upgrade will provide data speeds significantly faster than current capabilities and meet customer demand for more high-bandwidth, real-time wireless services such as VoIP, video telephony and advanced multimedia applications. KTF, one of South Korea's leading cellular providers, has launched a next-generation ultra high speed 3.5G wireless network in Seoul and cities across South Korea using wireless broadband technology from LG-Nortel. The network supports advanced handset capabilities including high-definition video, video chatting, messaging and remote monitoring. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries including Indonesia, Australia, China, Hong Kong, India, Philippines, Singapore, Taiwan and Thailand. * * * Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. Additionally, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed USUS$2billion senior note issue; downgraded the USUS$200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed USUS$2 billion notes. The outlook is stable. NORTEL NETWORKS: Reaches US$438M Settlement in US, Canada Suits --------------------------------------------------------------- A proposed settlement has been reached in these class actions filed in the United States and Canada: -- In Re Nortel Networks Corp. Securities Litigation, Consolidated Civil Action No.: 2001-CV-1855 (RMB) in the U.S. District Court for the Southern District of New York (U.S. Action); -- Frohlinger v. Nortel Networks Corporation et al., Court File No.: 02-CL-4605 in the Ontario Superior Court of Justice (Ontario National Action); -- Association de Protection des Epargnants et Investisseurs du Quebec v. Corp. Nortel Networks, No.: 500-06-000126-017 in the Superior Court of Quebec (Quebec Action); and -- Jeffery et al. v. Nortel Networks Corp. et al., Court File No.: S015159 in the Supreme Court of British Columbia (B.C. Action). The Ontario National Action, the Quebec Action and the B.C. Action are collectively referred to as the "Canadian Nortel I Actions." The U.S. Action and the Canadian Nortel I Actions are collectively referred to as the "Nortel I Actions." Terms of Proposed Settlement The settlement will provide total proceeds consisting of approximately US$438,667,428 in cash, plus 314,333,875 shares of Nortel common stock for the benefit of members of the classes. In addition, Nortel will adopt certain corporate governance enhancements. The settlement resolves lawsuits over whether Nortel misled investors about its historic and future earnings during the class period. The settlement is contingent on approval by the courts in the Nortel I Actions and in certain related actions against Nortel in the U.S. and Canada (the Nortel II Actions) for which there is a separate notice. The settlement is further subject to certain regulatory approvals. The settlement constitutes a full and final resolution of claims and causes of action raised by members of the classes in the Nortel I Actions and encompassed in the settlement. Notice of Certification of Classes The U.S. Action was certified in 2004 to proceed as a class action on behalf of persons and entities, wherever located, who bought Nortel common stock or call options on Nortel common stock or who wrote (sold) put options on Nortel common stock during the period Oct. 24, 2000, through Feb. 15, 2001, inclusive, and suffered damages thereby, including, but not limited to, those persons or entities who traded in Nortel Securities on the New York Stock Exchange and/or the Toronto Stock Exchange (U.S. Global Class). The Canadian Nortel I Actions have now been certified for settlement purposes on behalf of Canadian class members. The Ontario Court, the Quebec Court and the B.C. Court have certified these classes for settlement purposes: -- Ontario National Class: All persons or entities, except members of the Quebec Class or British Columbia Class, who, while residing in Canada at the time, purchased Nortel common stock or call options on Nortel common stock, or wrote (sold) put options on Nortel common stock, during the period between Oct. 24, 2000, through Feb. 15, 2001, inclusive; -- Quebec Class: All "natural" persons, who, while residing in Quebec at the time, purchased Nortel common stock or call options on Nortel common stock, or wrote (sold) put options on Nortel common stock, during the period between Oct. 24, 2000, through Feb. 15, 2001, inclusive; and -- British Columbia Class: All persons or entities, who, while residing in British Columbia at the time, purchased Nortel common stock or call options on Nortel common stock, or wrote (sold) put options on Nortel common stock, during the period between Oct. 24, 2000, through Feb. 15, 2001, inclusive. As described in detail in the Long-Form Notice, certain persons and entities are excluded from the above classes. Deadline for filing proof of claim is Nov. 20, 2006. Requests for exclusion and objections are due Sept. 19, 2006. Requests for exclusion and objections must be mailed to: Nortel I Securities Litigation Exclusions c/o The Garden City Group, Inc. Claims Administrator P.O. Box 9000 #6445, Merrick, NY 11566-9000 On the Net: http://www.nortelsecuritieslitigation.com/ Notice of Settlement Fairness/Approval Hearings Dates for the Settlement Fairness/Approval Hearings have been scheduled with the respective courts as: -- in the U.S. Action: at 1:00 p.m. on Oct. 26, 2006, at the U.S. District Court for the Southern District of New York, Daniel Patrick Moynihan U.S. Courthouse, Courtroom 12A, 500 Pearl Street, New York, N.Y.; -- in the Ontario National Action: at 10:00 a.m. on Nov. 6, 2006, at the Ontario Superior Court of Justice, 361 University Avenue, Toronto, Ontario; -- in the Quebec Action: at 9:30 a.m. on Nov. 16, 2006, at the Superior Court of Quebec, District of Montreal, 1 Notre-Dame East, Montreal, Quebec; and -- in the British Columbia Action: at 10:00 a.m. on November 27, 2006, at the Supreme Court of British Columbia, 800 Smithe Street, Vancouver, British Columbia. U.S. Action: Lead Plaintiff's Counsel ------------------------ George A. Bauer III Milberg Weiss Bershad & Schulman LLP One Pennsylvania Plaza, New York, New York 10119-0165 Murray Gold Koskie Minsky LLP 20 Queen Street West Suite 900, Toronto Ontario M5H 3R3 Ontario National Action Ontario National Class Counsel ------------------------------ Joel P. Rochon, Rochon Genova LLP 121 Richmond Street West, Suite 900, Toronto, Ontario M5H 2K1 Quebec Action Quebec Class Counsel -------------------- Daniel Belleau, Belleau Lapointe, S.A., 306 Place D'Youville, B-10, Montreal, Quebec H2Y 2B6 British Columbia Action British Columbia Class Counsel ------------------------------ David Klein, Klein Lyons, 1100-1333 West Broadway, Vancouver, British Columbia V6H 4C1 About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries including Indonesia, Australia, China, Hong Kong, India, Philippines, Singapore, Taiwan and Thailand. * * * Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. Additionally, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed USUS$2billion senior note issue; downgraded the USUS$200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed USUS$2 billion notes. The outlook is stable. NORTEL NETWORKS: Unit Inks New US$1.6M Court Records System Pact ---------------------------------------------------------------- Nortel Government Solutions will continue development and operational support of a sophisticated records system for the Fairfax County, Virginia Circuit Court under a five-year agreement valued at US$1.6 million. First implemented in 1996, the Fairfax County Courts Automated Recording System provides more than 1,400 users each day with automated access to more than 31 million recorded images and corresponding indexes dating back to 1742. CARS was initially designed for the Land Records department, but later enhanced with the help of Nortel Government Solutions to include the Judgments, Public Services and Probate Departments. The system is now used by banks, title examiners, law offices, mortgage companies and county agencies. Nortel Government Solutions developed and implemented the integrated scanning, point-of-sale, verification, storage and retrieval capabilities that enable CARS to capture images and index data. The system has been maintained and enhanced by Nortel Government Solutions for the past 10 years. "CARS has been a big success for Fairfax County," Chuck Saffell, chief executive officer, Nortel Government Solutions, said. "This new agreement is a testament to our performance in maintaining and enhancing the system for the past 10 years, and a vote of confidence in our ability to evolve and improve it with new technology over the next five years." About Nortel Government Solutions Headquartered in Fairfax, Virginia, Nortel Government Solutions -- http://www.nortelgov.com-- is a U.S. company wholly-owned by Nortel(x). It offers a one-stop shop for solutions designed to improve workforce productivity, reduce operating costs, and streamline inter-agency communications. Nortel Government Solutions is a network-centric integrator. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries including Indonesia, Australia, China, Hong Kong, India, Philippines, Singapore, Taiwan and Thailand. * * * Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. Additionally, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed USUS$2billion senior note issue; downgraded the USUS$200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed USUS$2 billion notes. The outlook is stable. NORTEL NETWORKS: Deploys New IP Telephony Network for DEDIC ----------------------------------------------------------- Nortel Networks Corporation deployed its new IP telephony network to create a state of the art contact center to support business expansion of DEDIC. The new network, being deployed by the company's channel partner Wittel, makes it possible for DEDIC to cost-effectively expand its contact center outsourcing services to customers through the addition of 1,000 new agent positions. DEDIC is investing US$2 million on the first project phase. The company's IP technology makes it possible for DEDIC to respond quickly to customer service requests through a range of multimedia services beyond telephony such as e-mail and web- based chat. Incoming calls to the center are also immediately routed to the most appropriate agent. The new IP telephony network includes anywhere, anytime mobility for agents and gives DEDIC the flexibility to expand quickly to meet increasing demand without major costs for additional network upgrades. "Nortel's contact center solutions provides DEDIC with one of the most innovative and competitive cost-effective product on the market. These technologies are essential to ensuring DEDIC maintains its competitive edge as one of the largest calls centers in Brazil," noted Juan Chico, president, Nortel Brazil. "Instead of deploying several contact centers we decided to create a central site with intelligent routing to reduce operational costs" Miguel Cui, president of DEDIC, said. "Among all suppliers we contacted, Nortel was the one that best understood our needs both in terms of proposed solution and our cost limitations. Nortel and its partner Wittel also ensured the network will be deployed quickly without interrupting daily business activities." Carlos Louro, president of Wittel, said, "For a contact center to maintain competitive advantage today, it's essential that access to information happens in real time. The Nortel solution we are deploying allows DEDIC to maintain the advantage of services being centralized through one management center," DEDIC's new network includes the company's Communication Server 1000 and its Contact Center 6.0 for skill-based routing. The deployment also includes the company's ERS 470 to ensure network capacity easily meets increased demand. About DEDIC DEDIC is one of the largest Brazilian contact center companies, and ranks among the top five in the segment. It is owned by Portugal Telecom Group and was created in 2002 to strengthen the Group's contact center business. About Wittel Wittel is a company that provides corporate communications and technology solutions, and is specialized in the Contact Center and Trading Floors fields with a strong presence in the financial, wireline and wireless telecommunications, and third- party contact center service provider segments. Wittel provides services ranging from design, deployment and maintenance for the solutions it offers. About Nortel Networks Corporation Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries including Indonesia, Australia, China, Hong Kong, India, Philippines, Singapore, Taiwan and Thailand. * * * Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. Additionally, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed USUS$2billion senior note issue; downgraded the USUS$200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed USUS$2 billion notes. The outlook is stable. ========= J A P A N ========= AMERICAN AXLE: Earns US$20.4 Million in 2006 Second Quarter ----------------------------------------------------------- American Axle & Manufacturing Holdings Inc. reported US$20.4 million of earnings for the second quarter of 2006. This compares to earnings of US$18.9 million in the second quarter of 2005. AAM's second quarter earnings in 2006 reflect the impact of a one-time non-cash charge of US$2.4 million to write off unamortized debt issuance costs related to the cash conversion of approximately US$128.4 million of AAM's Senior Convertible Notes due 2024. An additional US$21.6 million of these Notes remain outstanding as of June 30, 2006. AAM's second quarter earnings in 2006 also reflect the impact of an unfavorable tax adjustment of US$2.6 million related to the settlement of prior year foreign jurisdiction tax liabilities. AAM's earnings in the second quarter of 2005 included a charge of US$8.9 million related to voluntary lump-sum separation payments accepted by 162 hourly associates. Net sales in the second quarter of 2006 were US$874.6 million as compared to US$867.7 million in the second quarter of 2005. Non- GM sales in the quarter were US$204.5 million and now represent 23% of AAM's total sales. On a year-to- date basis through the second quarter of 2006, AAM's non-GM sales have increased US$53.9 million or 15% over the prior year. "In the second quarter of 2006, AAM benefited from strong demand for GM's full-size utility vehicles and the increase in our content appearing on these outstanding new vehicles. We look forward to supporting the launch of GM's new full-size pick-ups later this year," said American Axle & Manufacturing Co-Founder, Chairman of the Board & CEO, Richard E. Dauch. "AAM is also looking forward to the launch of production at our new regional manufacturing facilities in Changshu, China and Olawa, Poland. With the addition of these new low-cost manufacturing facilities, as well as the continuing development of our products supporting passenger car and crossover vehicle applications, AAM is well positioned for profitable growth and diversification in 2007 and beyond." AAM sales in the quarter reflect an estimated 5% increase in customer production volumes for the major full-size truck and SUV programs it currently supports for GM and The Chrysler Group as compared to the second quarter of 2005. AAM estimates that customer production volumes for its mid-sized pick- up truck and SUV programs were down approximately 23% in the quarter on a year-over-year basis. AAM's content per vehicle increased by approximately 3% to US$1,216 in the second quarter of 2006 as compared to US$1,185 in the second quarter of 2005. This increase is due primarily to the impact of new AAM content appearing on GM's full-size utility vehicles, as well as production mix shifts favoring AAM's axles and driveline systems for the Dodge Ram heavy-duty series pick-ups and the four-wheel-drive HUMMER H3 in the mid- size SUV segment. Gross margin in the second quarter of 2006 was 10.3% as compared to 9.8% in the second quarter of 2005. Operating income was US$40.5 million or 4.6% of sales in the quarter as compared to US$36.4 million or 4.2% of sales in the second quarter of 2005. Net sales in the first half of 2006 were US$1.7 billion, approximately the same as the first half of 2005. Gross margin was 9.0% in the first half of 2006 as compared to 9.4% for the first half of 2005. Operating income for the first half of 2006 was US$55.5 million or 3.2% of sales as compared to US$62.1 million or 3.7% of sales for the first half of 2005. AAM's gross margin and operating margin performance in the first half of 2006 reflects the impact of higher non-cash expenses related to depreciation, amortization, pension and postretirement benefits and stock-based compensation. Higher fringe benefit costs, including supplemental unemployment benefits paid to certain of AAM's hourly associates, also pressured margins in the first half of 2006. Recent Developments On June 8, 2006, AAM received financing commitments for a US$200 million senior unsecured term loan. Proceeds from this financing, which closed on June 28, 2006, will be used for general corporate purposes and to finance payments made upon the cash conversion of American Axle & Manufacturing Holdings, Inc. Senior Convertible Notes due 2024. AAM also disclosed on June 8, 2006 that it expects its full year 2006 earnings to be in the range of US$1.00 - US$1.10 per share to reflect the anticipated impact of the term loan financing. On May 31, 2006, AAM reported that it had purchased a manufacturing building in Olawa, Poland. In addition, AAM purchased approximately 75 acres of land in an industrial park adjacent to the building for future development. AAM has designed a new 170,000 square-foot, state-of-the-art manufacturing plant for that site, to accommodate future manufacturing requirements. Operations will begin in late 2006. About American Axle American Axle & Manufacturing -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States, AAM also has offices or facilities in Brazil, China, United Kingdom, Germany, India, Mexico, Poland, Scotland, South Korea and Japan. * * * As reported in the Troubled Company Reporter on Aug. 17, 2006, Standard & Poor's Ratings Services assigned its 'BB' rating to the new US$50 million senior unsecured term loan of American Axle & Manufacturing Inc. (BB/Negative/--). The corporate credit ratings on American Axle and parent company, American Axle & Manufacturing Holdings Inc., are 'BB'. The rating outlook is negative. The company has about US$717 million of lease-adjusted debt and US$425 million of underfunded employee benefit liabilities. COREL CORP: Buying InterVideo Inc. for US$196 Million in Cash ------------------------------------------------------------- Corel Corp. and InterVideo, Inc., entered into a definitive agreement for Corel to acquire InterVideo in an all-cash transaction at a price of US$13 per share or US$196 million. In 2005, InterVideo acquired a majority interest in Ulead, a developer of video imaging and DVD authoring software for desktop, server, mobile and Internet platforms. By acquiring InterVideo, Corel is delivering on its strategy to accelerate revenue and earnings growth by acquiring complementary companies and technologies that will benefit from Corel's global sales, marketing, and distribution capabilities. With a robust product line, strategic partnerships with leading OEM manufacturers, and an established presence in Asia Pacific and Europe, InterVideo will provide Corel with added critical mass to efficiently serve the growing consumer demand for digital media software. This acquisition is especially strategic for Corel given InterVideo's strength in Asian markets, including China, Taiwan and Japan regions that Corel has targeted for expansion. InterVideo's development centers across China and Taiwan provide Corel with a solid base from which to broaden its footprint in these key regions. The companies share a common vision around delivering high quality, full-featured software to consumers through leading OEMs and Internet distribution channels. The companies also believe they will be able to realize meaningful efficiencies by eliminating redundant operational expenses and public company costs. "We are pleased to announce Corel's latest acquisition as a public company as we continue to execute our strategy to grow both organically and through the acquisition of complementary businesses that leverage our capabilities and scale in the packaged software market," said David Dobson, CEO of Corel. "With outstanding products, talented employees and deep relationships with eight of the world's top ten PC manufacturers, InterVideo represents a significant opportunity for Corel to deliver enhanced value to our shareholders. This acquisition will also benefit customers and partners as we expand our ability to provide flexible, bundled solutions that meet the needs of today's digital media consumers." The acquisition will be financed through a combination of Corel's cash reserves, debt financing, and InterVideo's cash and cash equivalents, which stood at approximately US$105 million as of June 30, 2006. The acquisition is subject to InterVideo shareholder approval, regulatory approvals, and other customary closing conditions. The transaction is expected to close in the fourth quarter of 2006 and to be accretive in the second quarter after closing. Directors and executive officers of InterVideo, including Steve Ro, Chinn Chin and Honda Shing, have entered into voting agreements pursuant to which they have agreed to vote their shares of InterVideo in favor of the merger. About InterVideo, Inc. Based in Fremont, California, InterVideo, Inc. (NASDAQ:IVII) -- http://www.intervideo.com/-- provides integrated digital and high-definition multimedia and audio/video content solutions in the PC, CE and wireless industries. The company's broad suite of integrated multimedia software products are designed to enhance the consumer's entertainment experience, whether the content is delivered to a home system, HDTV set, wireless system, mobile or personal multimedia device. InterVideo also has major offices in Taiwan, Japan, Mainland China and around the globe. About Corel Corp Headquartered in Ottawa, Ontario, Corel Corp. (NASDAQ:CREL) (TSX:CRE) -- http://www.corel.com/-- is a packaged software company with an estimated installed base of over 40 million users. The Company provides productivity, graphics and digital imaging software. Its products are sold in over 75 countries, including Japan, Australia, Hong Kong, Korea, Mainland China and Taiwan, through a scalable distribution platform comprised of original equipment manufacturers, Corel's international websites, and a global network of resellers and retailers. The Company's product portfolio features CorelDRAW(R) Graphics Suite, Corel(R) WordPerfect(R) Office, WinZip(R), Corel(R) Paint Shop(R) Pro, and Corel Painter(TM). Corel Corp. opened an office in Tokyo, Japan in May 2002. Corel's Japan office was established following the company's 2001 acquisition of Micrografx. The office is designed to further strengthen relationships with customers and partners in the Asia-Pacific market. * * * As reported in the Troubled Company Reporter on April 7, 2006, Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit and senior secured debt ratings to Corel Corp. At the same time, Standard & Poor's assigned its 'B' bank loan rating, with a recovery rating of '3', to the company's US$165 million first-lien senior secured bank facility. The outlook is positive. As reported in the Troubled Company Reporter on April 11, 2006, Moody's Investors Service assigned first time corporate family rating of B3 to Corel Corp. and B3 ratings to Corel's proposed senior secured term loan facility and senior secured revolving credit facility. Moody's also assigned a SGL-2 liquidity rating, reflecting good liquidity. Combined proceeds of US$90 million from the term loan and those of Corel's IPO will be used to repay Corel's existing debt. The rating outlook is stable. HITACHI ZOSEN: R&I Affirms BB- Rating with Negative Outlook ----------------------------------------------------------- Rating and Investment Inc. has affirmed the BB- issuer rating of Hitachi Zosen Corporation with a negative outlook. Hitachi Zosen is a major heavy machinery manufacturer. A large amount of extraordinary loss led to bottom line profits for the March 2006 term going into the red, and the ordinary profits for the year ending March 2008 -- projected in the midterm management plan -- have been revised downwards because the environment surrounding the company's core businesses of environmental systems and steel structures has considerably worsened on the back of shrinking public sector demand and other factors. At the beginning of March R&I therefore downgraded the Issuer Rating from BB to BB-, and placed the company for the Rating Monitor with a view towards downgrading. The results for the first quarter of fiscal 2007, announced on August 8, 2006, showed that sales losses were greatly improved, falling to JPY600 million loss compared to the JPY3.8 billion loss recorded in the same period of the previous fiscal year. The main reason for this was the major gains made by machinery and process machinery products such as auto factory presses, gas-to-liquid machinery, and marine engines. Moreover, the consolidated equity capital, which had sunk to JPY24.1 billion by the end of March 2006, had recovered to a level of JPY40 billion at the end of June 2006 due to the partial progress of converting share warrants (convertible bonds) to stock. Since this has helped to stall any further deterioration in Hitachi Zosen's financial base, R&I has removed it from Rating Monitor status and held the Issuer Rating at BB-. However, the company's future prospects hold little room for optimism. As public sector demand continues to shrink, and since the company will be prohibited from receiving tenders as punishment for its role in a scandal involving the orchestrated bidding for a human waste treatment facility construction project, the business environment surrounding its flagship environmental systems becomes even more severe. Though debts have decreased, the weakening of the company's ability to create cash flow will become an increasing burden. Attention must be given to the fact that non-operating income is worsening due to falling dividend income. Improving the interest coverage ratio, which dipped below one in March 2006, is also an urgent matter. Hitachi Zosen's financial durability against the latent risks carried by its engineering business is still weak. The Rating Outlook is negative because it is difficult to assess whether or not profitability will fully recover, and because the progress of financial restructuring efforts such as convertible bond switches and the disposal of non-core assets are susceptible to the impact of market factors. Headquartered in Osaka, Japan, Hitachi Zosen Corporation -- http://www.hitachizosen.co.jp/-- is principally involved in the manufacture of heavy machinery and engineering. Its other businesses include electronics, information systems and technology development. LEAR CORP: Incurs US$6.4 Million Net Loss in Second Quarter 2006 ---------------------------------------------------------------- Lear Corporation posted record net sales of US$4.8 billion and pretax income of US$31.5 million, which included costs related to restructuring actions, impairments, and other special items of US$24 million, for the second quarter of 2006. The results for the second quarter of 2006 compare to year-earlier net sales of US$4.4 billion and a pretax loss of US$50.4 million, including costs related to restructuring actions and other special items of US$79.5 million. Net loss for the second quarter of 2006 was US$6.4 million. This compares with a net loss of US$44.4 million, for the second quarter of 2005. Net sales were up from the prior year, primarily reflecting the addition of new business globally, offset in part by lower production on several Lear platforms in North America and Europe. Operating performance improved from the year earlier results primarily due to the increase in net sales as well as benefits from cost and operating efficiencies in the Company's core businesses. These improvements were offset in part by higher raw material costs. "The Lear team remains focused on improving quality and ensuring flawless launch execution while we aggressively implement cost improvement and operating efficiency initiatives," said Bob Rossiter, Lear Chairman and Chief Executive Officer. "Although there are many challenges facing our industry, we are taking aggressive actions to address these issues and further improve our operating results. We will continue to be product- line focused; competitive on a global basis; and dedicated to working collaboratively with our customers." Free cash flow was positive US$800,000 for the second quarter of 2006. Net cash provided by operating activities was US$74.8 million. Quality and customer satisfaction measures remain at high levels, and the Company continued to win recognition from customers around the world. Second quarter awards include "Supplier of the Year" from General Motors and Special Recognition for Customer Service from Ford Motor Company. Recognition was also received from Toyota, Mazda and Volkswagen for excellence in quality and customer service. Lear continues to be ranked as the highest quality major seat supplier in the 2006 J. D. Power Seat Quality Report. Lear also made progress on important strategic initiatives, including the signing of a definitive agreement to contribute substantially all of its European Interiors business to International Automotive Components Group, LLC in return for a 34% equity interest, subject to adjustment, and the Company continued to aggressively expand its business in Asia and with Asian automakers globally. During the quarter, Lear was awarded several new programs in China, and in India, Lear won its first business with Tata Motors. In addition, Lear opened a new TACLE joint venture facility in Sunderland, United Kingdom with its Japanese partner Tachi-S, to support future vehicle programs with Nissan in Europe. This is Lear's third TACLE joint venture facility, including a plant under construction in Mt. Juliet, Tennessee to serve Nissan in North America and a facility in China to serve Asia. Lear's plant in Montgomery, Alabama is ramping up to full production to supply seats for the all-new Hyundai Santa Fe sport utility vehicle and another new location in San Antonio, Texas will be supplying interior trim for the 2007 Toyota Tundra. Full-Year 2006 Outlook For the full year of 2006, Lear expects record worldwide net sales of approximately US$18 billion, reflecting primarily the addition of new business globally, partially offset by unfavorable platform mix. Net sales guidance is up about US$300 million from the prior guidance reflecting primarily the forecast for a stronger Euro. Lear anticipates 2006 income before interest, other expense, income taxes, impairments, restructuring costs and other special items (core operating earnings) to be in the range of US$400 to US$440 million, unchanged from the prior guidance. This compares with US$325 million a year ago. Restructuring costs for 2006 are estimated to be in the range of US$120 to US$150 million. Interest expense is estimated to be in the range of US$220 to US$230 million in 2006, compared with US$183 million last year. Pretax income before impairments, restructuring costs and other special items is estimated to be in the range of US$120 to US$160 million. This compares with US$97 million last year. Cash taxes are estimated to be within a range of US$80 to US$100 million, compared with US$113 million last year. Free cash flow is expected to be in the range of positive US$50 to US$100 million, compared with negative US$419 million a year ago. This reflects improved earnings, lower capital spending, reduced tooling and engineering costs and improved net working capital, offset in part by higher cash costs for restructuring. Net cash provided by operating activities for 2005 was US$561 million. Capital spending in 2006 is estimated at approximately US$400 million, down from last year's peak level due primarily to lower launch activity. Depreciation and amortization are expected to be in the range of US$410 to US$420 million, compared with US$393 million last year. Industry production assumptions underlying Lear's financial outlook include 15.7 million units in North America, which is down slightly from a year ago, and 19 million units in Europe, roughly flat with a year ago. About Lear Corp Headquartered in Southfield, Michigan, Lear Corporation (NYSE: LEA) -- http://www.lear.com/-- supplies automotive interior systems and components. Lear provides complete seat systems, electronic products and electrical distribution systems and other interior products. Lear has operating facilities in Latin America, Europe and Asia Pacific. In the Asia Pacific, Lears operates in China, India, Philippines, Singapore, Thailand and Japan. * * * As reported in the Troubled Company Reporter on April 21, 2006, Standard & Poor's affirmed the 'B+' rating on the US$1 billion first-lien term loan. Standard & Poor's corporate credit rating on Lear Corp. is B+/Negative/B-2. The speculative-grade rating reflects the company's depressed operating performance caused by severe industry pressures. ========= K O R E A ========= ARAMARK SERVICES: Moody's Reviews Ratings for Possible Downgrade ---------------------------------------------------------------- Moody's Investors Service confirmed the Baa3 rating on the 7.1% senior notes due 2006 of Aramark Services, Inc., a wholly owned subsidiary of Aramark Corp. All other senior note issues of Aramark Services remain on review for possible downgrade. The rating action follows Aramark's announcement that it has signed a definitive merger agreement under which the company's Chairman and Chief Executive Officer and a group of investment funds will acquire the company in a transaction valued at approximately US$8.3 billion, including the assumption or repayment of approximately US$2 billion of debt. The merger agreement was approved by the board of directors based on the unanimous recommendation of a special committee consisting of independent directors. Moody's placed all the credit ratings of Aramark on review for possible downgrade on May 1, 2006, following the announcement that it received a proposal from the company's CEO and a group of investors to acquire all of the outstanding shares of common stock. The transaction is expected to be completed by late 2006 or early 2007, subject to receipt of stockholder and regulatory approvals. The investor group has obtained equity and debt financing commitments for the transactions contemplated by the merger agreement. There is no financing condition to the proposed transaction. Based upon the expected terms of the proposed transaction, Moody's expects a substantial increase in debt levels and weakening of credit metrics. Moody's believes that a corporate family rating in the single B rating category is possible upon conclusion of the review. The rating review will focus on Aramark's post-acquisition capital structure including the company's plans regarding the treatment of the existing senior unsecured notes, liquidity position and operating strategy. Aramark has not announced the components of its post-acquisition capital structure. The confirmation of the Baa3 rating on the senior notes due 2006 reflects Moody's expectation that such notes will either mature before the transaction closes or will be repaid as a condition to any new financing. Aramark's other issues of senior notes (maturing in 2007-2012) remain on review for possible downgrade because of uncertainty as to whether such notes will be refinanced in connection with the acquisition or will remain in the post-acquisition capital structure. Moody's expects to confirm the ratings of any senior notes that will be refinanced in connection with the acquisition and to downgrade by multiple notches any senior notes that remain in the post- acquisition capital structure. Moody's confirmed this rating: -- US$125 million senior unsecured notes due 2006: Baa3; These ratings remain on review for possible downgrade: -- US$300 million senior unsecured notes due 2007: Baa3; -- US$31 million senior unsecured notes due 2007: Baa3; -- US$300 million senior unsecured notes due 2008: Baa3; -- US$250 million senior unsecured notes due 2012: Baa3; -- Senior unsecured shelf registration: (P) Baa3; and -- Senior subordinated shelf registration: (P) Ba1. Aramark Corp., a managed services company headquartered in Philadelphia, Pennsylvania, provides or manages a variety of services, including food and support services, and uniform rental and sales. The company's revenues were approximately US$11.3 billion for the 12-month period ended March 31, 2006. ARAMARK CORP: S&P Lowers Corp. Credit Rating to BB+ from BBB- ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Philadelphia-based ARAMARK Corp. and its subsidiary, ARAMARK Services Inc., including its corporate credit rating to 'BB+' from 'BBB-'. All ratings remain on CreditWatch with negative implications where they were placed on May 1, 2006, following an announcement that ARAMARK's board of directors had received a proposal from a group of investors led by its Chairman and CEO, Joseph Neubauer, to acquire all of the outstanding shares of the company, for US$32 per share in cash. This proposal included commitments from certain investment banking firms stating that they were confident about raising the approximately US$6.25 billion of debt financing necessary to complete the transaction. The downgrade reflects our assessment that ARAMARK no longer possesses an investment-grade financial policy following today's announcement that it has signed a definitive merger agreement under which a group of investors including Joseph Neubauer will acquire ARAMARK for US$33.80 per share, plus the assumption or repayment of approximately US$2.0 billion of debt in a transaction valued at approximately US$8.3 billion. The CreditWatch listing reflects our expectation that leverage for ARAMARK will increase substantially after effecting the acquisition. While financing details have yet to be disclosed, a significant amount of the transaction is likely to be financed with debt, and the corporate credit rating is likely to fall to the 'B' rating category. The transaction, which is expected to be completed by late 2006 or early 2007, is subject to receipt of stockholder and regulatory approvals, as well as satisfaction of other customary closing conditions. To resolve the CreditWatch listing, Standard & Poor's will: -- continue to monitor developments, -- meet with management to discuss financial policies and operating strategies, and -- evaluate the ultimate financing and terms of this going-private transaction, including the implications to ARAMARK's existing senior unsecured debt rating. About ARAMARK Corporation Headquartered in Philadelphia, Pennsylvania, ARAMARK Corporation (NYSE:RMK) -- http://www.aramark.com/-- is a leader in professional services, providing award-winning food services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world. In FORTUNE magazine's 2006 list of "America's Most Admired Companies," ARAMARK was ranked number one in its industry, consistently ranking since 1998 as one of the top three most admired companies in its industry as evaluated by peers and industry analysts. The company was also ranked first in its industry in the 2006 FORTUNE 500 survey. ARAMARK has approximately 240,000 employees serving clients in 20 countries, including Japan and Korea. ARAMARK CORPORATION: Board Declares Quarterly Cash Dividend ----------------------------------------------------------- The Board of Directors of ARAMARK Corporation declared a quarterly cash dividend of US$0.07 per share on its Class A and Class B common stock. The dividend will be payable on Sept. 8, 2006, to ARAMARK shareholders of record at the close of business on August 18, 2006. About ARAMARK Corporation Headquartered in Philadelphia, Pennsylvania, ARAMARK Corporation (NYSE:RMK) -- http://www.aramark.com/-- is a leader in professional services, providing award-winning food services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world. In FORTUNE magazine's 2006 list of "America's Most Admired Companies," ARAMARK was ranked number one in its industry, consistently ranking since 1998 as one of the top three most admired companies in its industry as evaluated by peers and industry analysts. The company was also ranked first in its industry in the 2006 FORTUNE 500 survey. ARAMARK has approximately 240,000 employees serving clients in 20 countries, including Japan and Korea. * * * Standard & Poor's Ratings Services lowered on Aug. 8, 2006, its ratings on Philadelphia-based ARAMARK Corp. and its subsidiary, ARAMARK Services Inc., including its corporate credit rating to 'BB+' from 'BBB-'. Fitch has downgraded on Aug. 8, 2006, the Issuer Default Rating and senior unsecured debt ratings for both ARAMARK Corporation and its wholly owned subsidiary, ARAMARK Services, Inc., to 'BB- ' from 'BBB'. The ratings remain on Rating Watch Negative. ARAMARK CORP: Inks $8.3-Bil. Merger Accord with Investment Group ---------------------------------------------------------------- ARAMARK Corporation has signed a definitive merger agreement under which Joseph Neubauer and investment funds managed by GS Capital Partners, CCMP Capital Advisors and J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC will acquire ARAMARK in a transaction valued at approximately US$8.3 billion, including the assumption or repayment of approximately US$2.0 billion of debt. Under the terms of the agreement, ARAMARK stockholders will receive US$33.80 in cash for each share of ARAMARK common stock they hold. The Board of Directors of ARAMARK, on the unanimous recommendation of a special committee comprised entirely of independent directors, has approved the agreement and will recommend that ARAMARK's stockholders approve the merger. The transaction is expected to be completed by late 2006 or early 2007, subject to receipt of stockholder approval and regulatory approvals, as well as satisfaction of other customary closing conditions. In addition to the vote required under Delaware law, the transaction will be subject to an additional affirmative approval of stockholders in which each share owned by Joseph Neubauer will have only one vote, rather than the ten votes to which they are entitled. As a result, Mr. Neubauer's voting power will be less than 5% of the total possible vote. Joseph Neubauer, ARAMARK Chairman and Chief Executive Officer, said, "We are proud to partner with this distinguished group of private equity firms, all of which have outstanding reputations and proven records of success. They are committed to working with us in building long-term solutions that deliver the most value for our clients and customers. They understand our business, share our mindset, and will be strong partners moving forward." Commenting further on the transaction, Mr. Neubauer said, "Our success is driven by the ongoing efforts of our 240,000 employees around the world. I want to thank them for their efforts and assure them we will remain focused on sustaining profitable growth by delivering outstanding environments, experiences and outcomes for our clients." The transaction will be financed through a combination of equity contributed by Joseph Neubauer and investment funds managed by GS Capital Partners, CCMP Capital Advisors and J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus LLC, and debt financing provided by JP Morgan Chase Bank, N.A., J.P. Morgan Securities, Inc., and Goldman Sachs Credit Partners L.P. There is no financing condition to the obligations of the group of investors led by Joseph Neubauer to consummate the transaction. Credit Suisse Securities (USA) LLC is acting as financial advisor to the special committee and Shearman & Sterling LLP is acting as legal advisor to the special committee. Credit Suisse has delivered a fairness opinion to the special committee. Goldman, Sachs & Co. and J.P. Morgan Securities Inc. are acting as financial advisors to the private equity investors. Simpson Thacher & Bartlett LLP, Sullivan & Cromwell LLP and Wachtell, Lipton, Rosen & Katz are acting as legal advisors to the private equity investors and Joseph Neubauer. About GS Capital Partners Founded in 1869, Goldman Sachs is one of the oldest and largest investment banking firms. Goldman Sachs is also a global leader in private corporate equity and mezzanine investing. Established in 1992, the GS Capital Partners Funds are part of the firm's Principal Investment Area in the Merchant Banking Division. Goldman Sachs' Principal Investment Area has formed 12 investment vehicles aggregatingUS$35 billion of capital to date. Significant investments include: VoiceStream Wireless, Allied World Assurance, Burger King, SunGard, YES Network, Western Wireless, Nalco Company, Kabel Deutschland and Coffeyville Resources. WithUS$8.5 billion in committed capital, GS Capital Partners V is the current primary investment vehicle for Goldman Sachs to make privately negotiated equity investments. About CCMP Capital CCMP Capital Advisors, LLC, formed in August 2006 by the formerbuyout/growth equity investment team of JPMorgan Partners, is a leading private equity investor. Through active management and its powerful value creation model, CCMP Capital's investment team has established a reputation as a world-class investment partner. CCMP Capital and its London affiliate manage approximatelyUS$8 billion in direct private equity investments. CCMP Capital's proprietary global network includes its affiliate in Asia, CCMP Capital Asia Ltd., a leading private equity firm with approximatelyUS$2 billion under management, operating from offices in Hong Kong, Melbourne, Seoul, Shanghai and Tokyo. CCMP Capital is an investment adviser registered with the Securities and Exchange Commission. About J.P. Morgan Partners J.P. Morgan Partners, LLC, is a leading private equity firm with approximatelyUS$10 billion in capital under management as of December 31, 2005. Since its inception in 1984, JPMP has invested overUS$15 billion worldwide in consumer, media, energy, industrial, financial services, healthcare and technology companies. JPMP is an experienced investor in companies with worldwide operations. Selected investments include: AMC Entertainment, Cabela's, The International Cornerstone Group, Pinnacle Foods, PQ Corporation, Brand Services and SafetyKleen Europe. JPMP is a private equity division of JPMorgan Chase & Co. (NYSE: JPM), one of the largest financial institutions in the United States, and is a registered investment adviser with the Securities and Exchange Commission. About Thomas H. Lee Partners Thomas H. Lee Partners, L.P., is one of the oldest and most successful private equity investment firms in the United States. Since its founding in 1974, THL Partners has invested approximatelyUS$12 billion of equity capital in more than 100 businesses with an aggregate purchase price of more thanUS$90 billion, completed over 200 add-on acquisitions for portfolio companies, and generated superior returns for its investors and partners. THL Partners identifies and acquires substantial ownership positions in large growth-oriented companies through acquisitions, recapitalizations and direct investments. The firm currently manages approximatelyUS$20 billion of committed capital. Notable transactions sponsored by the firm include Dunkin Brands, Michael Foods, Warner Music Group, General Nutrition Companies, Houghton Mifflin Company, Fisher Scientific International, Experian Information Solutions, TransWestern Holdings, Cott Corporation and Snapple Beverage. About Warburg Pincus LLC Warburg Pincus LLC has been a leading private equity investor since 1971. The firm currently has more thanUS$10 billion of assets under management and invests in a range of industries including consumer and retail, industrial, business services, healthcare, financial services, energy, real estate, technology, media and telecommunications. Warburg Pincus is an experienced partner to management teams seeking to build durable companies with sustainable value. The firm has an active portfolio of more than 100 companies. Significant current and past investments include: Neiman Marcus, Knoll (NYSE: KNL), TransDigm (NYSE: TDG), Mattel (NYSE: MAT), Mellon Financial (NYSE: MEL), Neustar (NYSE: NSR), BEA Systems (NASDAQ: BEAS) and Coventry Health Care (NYSE: CVH). Since inception, Warburg Pincus has sponsored 11 private equity funds, which have invested approximatelyUS$23 billion in more than 540 companies in 30 countries. About ARAMARK Corporation Headquartered in Philadelphia, Pennsylvania, ARAMARK Corporation (NYSE:RMK) -- http://www.aramark.com/-- is a leader in professional services, providing award-winning food services, facilities management, and uniform and career apparel to health care institutions, universities and school districts, stadiums and arenas, and businesses around the world. In FORTUNE magazine's 2006 list of "America's Most Admired Companies," ARAMARK was ranked number one in its industry, consistently ranking since 1998 as one of the top three most admired companies in its industry as evaluated by peers and industry analysts. The company was also ranked first in its industry in the 2006 FORTUNE 500 survey. ARAMARK has approximately 240,000 employees serving clients in 20 countries, including Japan and Korea. * * * Standard & Poor's Ratings Services lowered on Aug. 8, 2006, its ratings on Philadelphia-based ARAMARK Corp. and its subsidiary, ARAMARK Services Inc., including its corporate credit rating to 'BB+' from 'BBB-'. Fitch has downgraded on Aug. 8, 2006, the Issuer Default Rating and senior unsecured debt ratings for both ARAMARK Corporation and its wholly owned subsidiary, ARAMARK Services, Inc., to 'BB- ' from 'BBB'. The ratings remain on Rating Watch Negative. DONG-AH CONSTRUCTION: Prime-Led Group Named Preferred Bidder ------------------------------------------------------------ The Korea Asset Management Corporation said that a consortium led by Prime Industrial Co. Ltd. has been named as the preferred bidder for Dong-Ah Construction Industrial Co. Ltd., Seo Jee- yeon of the Korea Times states. According to FactSet Mergerstat, LLC, Prime has offered to acquire Dong-Ah Construction for approximately KRW650 billion (US$674.1 million) -- which takeover offer is the largest among the six firms that participated in the bid. FactSet says that Daeju Construction Co Ld had offered more that KRW600 billion (US$622.2 million), while Kolon Engineering & Construction Co Ltd offered about KRW570 billion (US$591.1 million) and Soosan Consortium bid at KRW500 billion (US$518.5 million). State-run debt restructuring agency KAMCO, which is arranging the sale, said that it will soon sign a memorandum of understanding with Prime and will conduct due diligence before signing the main contract in October, The Korea Times notes. The report says that a key issue for a successful deal is Dong- Ah regaining its license for construction, which was revoked when it went under court receivership. As reported in the Troubled Company Reporter - Asia Pacific on Aug. 28, 2006, Dong-Ah will not be allowed to recover its canceled license for projects on electricity. The company cannot get back its canceled license, which is essential for it to work on power plants and nuclear reactors, the Ministry of Commerce, Industry and Energy said. Yet, the TCR-AP stated that, according to MOCIE, it will examine whether Dong-Ah can get a fresh license immediately or two years after a new owner of the construction firm registers for it. The Korea Times relates that on the news that Prime was selected to be the preferred bidder for Dong-Ah, stocks connected to the builder soared. About Dong-Ah Construction Dong-Ah Construction Industrial Co., Ltd. -- http://www.dongah.co.kr/-- is a construction firm that focuses on fields such as civil engineering, architectural and electrical works, and plant constructions. The Company's projects consist of land developments, bridges, tunnels, subways, apartment complexes, and commercial buildings. In addition, Dong-Ah is building the Great Man-made River in Libya. After being hit hard by the 1997-98 Asian financial crisis, the firm underwent debt workout programs, but failed to overcome financial trouble amid soured investor sentiment for the construction industry. It was officially declared bankrupt in May 2001. Dong-Ah's stock was suspended from trading on Feb. 7, 2001, after an accounting firm advised a court that closing the Company would cost less than trying to keep it afloat. Minority shareholders owned 88% of the Company's outstanding shares, according to the Company's financial statements in 1999. In 2005, Goldman Sachs Group Inc. and Korea Asset Management Corp., the main creditors of Dong-Ah, asked a Seoul court to halt bankruptcy filing procedures for the construction company and place it under court receivership, to be sold later. Claims by all creditors against the Company were KRW4.05 trillion, but industry estimates that the Company is valued at more than KRW400 billion, including premiums to business rights. Of Dong-Ah's assets, only KRW289.7 billion have not been pledged as security, according to the Company's financial statement as of March 31, 2006. =============== M A L A Y S I A =============== EKRAN BERHAD: Books MYR92-Million Net Loss in Fourth Quarter ------------------------------------------------------------ Ekran Berhad released on August 28, 2006, its unaudited financial report for the fourth quarter ended June 30, 2006. For the quarter under review, the group booked a higher pre-tax loss of MYR77.43 million on MYR8.65 revenue, as against a pre- tax loss of MYR1.85 million on revenue of MYR6.7 million in the same quarter last year. The group registered a net loss of MYR92 million in the quarter ended June 30, 2006, compared with a net profit of MYR895,000 in the quarter ended June 30, 2006. For the twelve months ended June 30, 2006, the group posted a turnover of MYR26.37 million from its construction sector, oil palm plantation and hotel business and a pre-tax loss of MYR97.65 million attributed mainly to the provision for doubtful debts from associated companies and interest expenses. The Group recorded a pre-tax loss of MYR95 million for the fourth quarter this year compared to MYR3.4 million pre-tax gain for the preceding quarter ended March 31, 2006. The fourth- quarter loss was mainly due to the provision of doubtful debts on the amount owing from associated companies. For the 12 months ended June 30, 2006, the group accumulated MYR1,130,904,000 in losses. According to the June 30, 2006, balance sheet, the group has current assets of MYR348,649,000 available to pay current liabilities of MYR290,924,000. The June 30, 2006, balance sheet also showed total assets of MYR1,098,592,000, total liabilities of MYR497,164,000, and total shareholders' equity of MYR601,428,000. There was no dividend declared for the quarter under review. The group's financial report is available for free at: http://bankrupt.com/misc/tcrap_ekranberhad083006.xls About Ekran Berhad Ekran Berhad is a Malaysian company engaged in investment holding and the provision of management services to its subsidiary companies. Through its subsidiaries, the Company is engaged in property development; the provision of property management services; timber logging and saw milling; the sale of timber products, and the operation of oil palm plantations. The Company's operations are mainly concentrated in Malaysia, China and the Philippines. As reported by the Troubled Company Reporter on August 8, 2006, the company is facing a wind-up petition by United Overseas Bank for defaulting on a bank loan. The company is classified as a Practice Note 1 company for defaulting on various credit facilities. KRAMAT TIN: High Court Approves Scheme of Arrangement ----------------------------------------------------- The High Court of Malaya, on August 28, 2006, entered an order approving the scheme of arrangement under Section 176 of the Companies Act, 1965, between Kramat Tin Dredging Berhad and all its shareholders in relation to the restructuring proposals. As reported by the Troubled Company Reporter - Asia Pacific on July 27, 2006, Kramat Tin's shareholders on July 26, 2006, approved the Scheme, which is part of the Company's restructuring plan. The TCR-AP disclosed that the Plan was unveiled on April 24, 2004, and was approved by the Securities Commission on June 9, 2005. About Kramat Tin Dredging Headquartered in Kuala Lumpur, Malaysia, Kramat Tin Dredging Berhad is currently in the process of identifying suitable business opportunities. The Company ceased its mining operations in 1988. In 2001, Bursa Malaysia Securities Berhad classified Kramat Tin as a Practice Note 10 company, given its inadequate level of operations. To avoid being de-listed, Kramat Tin, in 2004, entered into an arrangement to restructure its operational and financial position. On April 24, 2004, the Company's restructuring plan was unveiled and subsequently approved by the Securities Commission on June 9, 2005. For the financial year ended December 31, 2005, Kramat Tin registered a smaller loss of MYR524,000 compared with the MYR1.3-million net loss in 2004. HO WAH GENTING: Second Quarter Pre-tax Loss Drops to MYR2 Mil. -------------------------------------------------------------- Ho Wah Genting Berhad has submitted for public release its financial report for the second quarter ended June 30, 2006. The group registered revenue of MYR60.87 million for the quarter under review, up from a revenue figure of MYR43.89 million in the same quarter last year. The Company recorded a loss before taxation of MYR2 million for the quarter ended June 30, 2006, compared to a loss before taxation of MYR5.19 million in the same period last year. Net loss for the quarter under review stood at MYR3.24 million. As of June 30, 2006, the Company accumulated MYR244.35 in losses. The group's June 30, 2006, balance sheet revealed weak liquidity with current assets of MYR80,838,000 available to pay current liabilities of MYR1387,752,000 coming due in the next 12 months. The group has total assets of MYR243,552,000, total liabilities of MYR168,766,000 and total stockholders' equity of MYR74,786,000. There was no dividend paid for the current financial period ended June 30, 2006. The group's financial report and its accompanying notes are available for free at: http://bankrupt.com/misc/tcrap_howahgenting083006.xls http://bankrupt.com/misc/tcrap_howahgentingnotes083006.doc About Ho Wah Genting In 2004, the Company was served with a wind-up petition from United Overseas Bank Limited in connection with the US$2.5-million balance the Company owed to UOB as of Sept. 17, 2001. Ho Wah Genting came out of its first restructuring program in 2000. However, continuous losses promoted the Company to propose another restructuring scheme, which was approved by the Singapore High Court in July 2004. INTAN UTILITIES: Provides Default Updates ----------------------------------------- Intan Utilities Berhad provided an update of the borrowings in default and the steps taken to address the defaults by Intan Utilities Berhad's 70% effectively owned subsidiaries, IDS Electonics Sdn Bhd and IDS Technology Sdn Bhd. As reported by the Troubled Company Reporter - Asia Pacific on June 29, 2006, Intan Utilities Berhad's board of directors disclosed that IDS Electronics and IDS Technology have been negotiating with Bank Islam Malaysia Berhad to restructure a total of MYR10,678,953 in existing loans from short term to long term. Since the loans were defaulted, the total repayment by IDS Electronics made as of July 31, 2006, amounted to approximately MYR3.93 million. The repayments comprise fixed monthly repayment of MYR90,000 from February 2004 to July 2005, and thereafter MYR120,000 per month for August and September 2005. The repayment from October 2005 to April 2006 amounted to MYR150,000 per month. For the month of May 2006 to July 2006, the repayment increases to MYR180,000. About Intan Utilities The company is classified as a Parctice Note 1 company after it defaulted on several loan facilities due to its tight cash flow position. It is currently formulating plans to address the issue. As of March 31, 2006, the Company's balance sheet showed MYR457,961,000 in total assets and MYR267,213,000 in total liabilities. However, the Company's March 31 balance sheet showed strained liquidity with MYR151,393,000 in total current assets available to pay MYR243,032,000 in total current liabilities coming due within the next 12 months. LITYAN HOLDINGS: Creditors Grant Restructuring Deal Extension ------------------------------------------------------------- Lityan Holdings Berhad, on August 28, 2006, entered into a supplemental restructuring agreement with Giant Best Corporation Limited, Chen Xinmim and Lim Chu Fatt to extend until September 28, 2006, the deadline for the company to fulfill all conditions under the restructuring agreement. The Troubled Company Reporter - Asia Pacific reported on August 1, 2006, that Lityan signed an agreement with the three creditors to extend the time to fulfill conditions of the restructuring proposal for another one month until August 28, 2006. A TCR-AP report on July 12, 2006, stated that the Company submitted on July 6, 2006, an application for a review of the Securities Commission's decision to reject the Company's proposed restructuring scheme. The TCR-AP noted that on June 9, 2006, the Securities Commission denied Lityan Holdings' restructuring proposal, as there were issues that raised concerns regarding the Scheme including a requirement to fulfill several conditions of the agreement. In view of the SC's rejection, Bursa Malaysia Securities Berhad commenced delisting procedures on June 13, 2006, against Lityan. Trading in Lityan's shares has been suspended since June 16, 2006. About Lityan Holdings Headquartered in Selangor Darul Ehsan, Malaysia, Lityan Holdings Berhad -- http://www.lityan.com.my/-- sells and provides maintenance services and rental of computer equipment, peripherals, telecommunication equipment and related services. The Company's other activities include provision of building maintenance and management services, developing and marketing of new client-server programming tools and application software, operation of public mobile data network, property investment and investment holding. The Group carries out its operations in Malaysia and the Philippines. On May 10, 2005, the Company was classified as an affected listed issuer pursuant to Bursa Malaysia Securities Berhad's Practice Note 17 category. On January 16, 2006, the Company entered into a conditional Restructuring Agreement to undertake the Proposed Restructuring Scheme with the intention of restoring the Company onto stronger financial footing via an injection of new viable businesses. The total amount of debts defaulted by Lityan Holdings Berhad and its subsidiaries as of June 30, 2006, has reached MYR12,565,005. MBF HOLDINGS: Hearing of Amfinance's Case Adjourned to Jan. 2007 ---------------------------------------------------------------- On August 28, 2006, the Kuala Lumpur High Court further adjourned the management of the case initiated by MBf Holdings Berhad against AmFinance Berhad to January 25, 2007. The Troubled Company Reporter - Asia Pacific reported on June 30, 2006, that the Kuala Lumpur High Court has adjourned for mention on August 28 the pre-trial case management relating to MBf Holdings Berhad's case against AmFinance. The case was initially heard on June 28, 2006. The TCR-AP recounts that on November 5, 2004, MBf Holdings and its subsidiaries, Alamanda Development Sdn Bhd and MBf Project Management Sdn Bhd, served a Writ of Summons against AmFinance. The Writ was filed following a demand by AmFinance for payment of debts allegedly owed by Alamanda on loan facilities in the aggregate of MYR132.9 million as of August 31, 2004, plus accrued interest at 2.5% above the Base Lending Rate per annum and additional default interest of 1% per annum on the principal sum of approximately MYR103.15 million, from September 1, 2004, until date of full payment. The Alamanda loan was purportedly guaranteed by MBf Holdings. The Plaintiffs' claims are for the relief of: -- a declaration that the Deed of Novation dated April 1, 2000, between MBF and Alamanda, and the Defendant is void and unenforceable; -- a declaration that the Deed of Novation dated April 1, 2000, between the 2nd Alamanda and MBf Project, and the Defendant is void and unenforceable; and -- a declaration that the Corporate Guarantees dated September 14, 1996, January 16, 1997, January 17, 1997, June 26, 1997, June 12, 2000, by MBf Holdings in favor of the Defendant are void and unenforceable. The Plaintiffs are advised that the action against the Defendant is premised on a sound legal basis. Save as disclosed, the suit does not have any material financial impact on the Plaintiffs. About MBf Holdings Headquartered in Selangor Darul Ehsan, Malaysia, MBf Holdings Berhad is involved in retailing and wholesaling of merchandise, shipping, automotive and heavy earthmoving equipment and printing of packaging boxes. Its other activities include copra, cocoa, coffee and tea production, issuing of credit cards, acquiring merchants and other related services, provision of financial services, provision of property management, investment in properties, property development including dealing in land and estate management, club management, development and sale of membership of a recreational club, education and investment holding. The Group's operations are carried out in Malaysia, other Asean countries including Singapore, Thailand and Philippines, Hong Kong, South Pacific Islands, Australia and United States of America. MBF Holdings Berhad undertook and completed a restructuring scheme in 2003. Included in the Scheme was a debt-restructuring scheme, which excluded the lease, hire-purchase liabilities, general unsecured liabilities and amounts owing to subsidiary and associated companies. The lease, hire-purchase and general liabilities were to be addressed in the ordinary course of business. However, the Scheme made no provision for the settlement of the Inter-company Loans, which the Group is now having problems with. As of June 30, 2006, balance sheet also showed accumulated losses of MYR425,243,000. SETEGAP BERHAD: Appeals SC's Rejection of Rehab Proposals --------------------------------------------------------- Setegap Berhad submitted on August 24, 2006, an appeal to the Securities Commission to reconsider its decision to reject the company's restructuring proposals. The company's board of directors, having deliberated on the issues raised by the SC, on the proposals in its letter dated July 27, 2006, among others, is presenting certain revisions to the proposals: Revision 1 -- Removal of the proposed subscription of new shares in Sumatec (Sarawak) and Sumatec Trackworks from the proposals. Revision 2 -- Increase in the number of shares under the proposed debt settlement by 2.2 million new ordinary shares of MYR1.00 each in the Newco i.e. an increase from 57 million Newco Shares to 59.2 million Newco Shares. As reported by the Troubled Company Reporter - Asia Pacific on August 3, 2006, the Securities Commission rejected on July 27 Setegap Berhad's application in relation to its restructuring exercise, as the SC has determined that the proposals do not comply with its Policies and Guidelines on Issue/Offer of Securities. The Company's restructuring plan consists of a proposed: -- debt settlement of all outstanding debt owed by the Company to its secured lenders and trade creditors for a total of MYR87.6 million; -- exchange of Setegap shareholders' ordinary shares of MYR1.00 each with Newco, or new company, shares on the basis of one Newco share for every five existing Setegap shares; -- transfer of listing status to Newco; and -- disposal by the Newco of the entire issued and paid-up capital of Setegap for a nominal consideration of MYR1. About Setegap Berhad Headquartered in Petaling Jaya, Malaysia, Setegap Berhad's principal activities consist of the construction and maintenance of roads, railways and building, including services rendered on quarrying. The Company's other activities include manufacturing and selling offroad construction equipment, asphalt plants, mixing plants, asphalt emulsions and premix. The Group also provides mechanical and electrical services, leases machinery and investment holding. Setegap's cash flow and profitability were affected by the Asian financial crisis in 1997/98. As of March 31, 2006, the Company's balance sheet showed MYR71,401,000 in total assets and MYR176,007,000 in total liabilities, resulting in a stockholders' deficit of MYR104,606,000. TANCO HOLDINGS: Net Loss Widens to MYR11.5 Mil in Second Quarter ---------------------------------------------------------------- Tanco Holdings Berhad, on August 28, 2006, released its unaudited financial report for the second quarter ended June 30, 2006. For the quarter under review, the group booked a loss before tax figure of MYR11,701,000 on MYR10,019,000 revenue, as against a pre-tax loss of MYR9,353,000 on MYR7,506,000 revenue in the same quarter last year. The group recorded a net loss of MYR11,526,000 in the quarter ended June 30, 2006, as against a net loss of MYR3,333,000 in the quarter ended June 30, 2005. The current quarter's MYR11.7-million pre-tax loss is higher compared to a loss of MYR10.452 million in the preceding quarter ended March 31, 2006. The increased losses incurred in this quarter are due mainly to lower revenue achieved and higher interest cost incurred. For six months ending June 30, 2006, the group had incurred a loss before taxation and minority interest of MYR22.153 million as compared to the corresponding period loss of MYR18.701 million. The higher losses incurred in this period is due to higher interest costs and marketing expenses. The company's accumulated losses as of June 30, 2006, stood at MYR261,716,000. As of June 30, 2006, the company's balance sheet revealed current assets of MYR113,873,000 available to pay current liabilities of MYR501,784,000 coming due within the next 12 months. The company has a net current deficit of MYR387,911,000. The June 30, 2006, the company's balance sheet also showed total assets of MYR576,177,000, total liabilities of MYR502,954,000, and total stockholders' equity of MYR73,223,000. There was no dividend declared or recommended for the quarter under review. The economic situation whilst showing signs of improvement, remains fluid and abounds with uncertainties and appropriate steps have been and will continue to be taken by the group to deal with the numerous challenges faced by its businesses. In addition to this, there is a need for the group to address its debt position with its creditors. The company's financial report and its accompanying notes are available for free at: http://bankrupt.com/misc/tcrap_tancoholdings083006.xls http://bankrupt.com/misc/tcrap_tancoholdings083006.doc About Tanco Holdings Headquartered in Selangor Darul Ehsan, Malaysia, Tanco Holdings Berhad -- http://www.tancoresorts.com/-- operates resort, golf and marina clubs and provides management services. Its other activities include provision of exchange services in relation to vacation ownership schemes; property holding and development; provision of consultancy services; money lending business; travel and tour agent; multimedia related business; and investment holding. The Group carries out its operations in Malaysia, the British Virgin Islands, New Zealand and Mauritius. The Company is a Practice Note 17 company. As an affected listed issuer, the Company is required to submit and implement a regularization plan to avoid delisting. TECHVENTURE BERHAD: Still In Talks with Lenders for Debt Revamp --------------------------------------------------------------- Techventure Berhad disclosed that it is still working on a debt- restructuring scheme proposal with its financial institution lenders. Techven assures to keep Bursa Malaysia Securities informed of the status of the scheme. As reported by the Troubled company Reporter - Asia Pacific on June 19, 2006, the Company is required to submit a financial restructuring plan to the Securities Commission since it was identified as an affected listed issuer of Bursa Malaysia Securities Berhad's Practice Note 17 category. The Company fell under the category because: -- the auditors have expressed a modified opinion with emphasis on Techven's going concern status in the latest audited accounts for the financial year ended December 31, 2005; and -- there are defaults in payment by Techven and its major subsidiaries as announced pursuant to Practice Note No. 1 and Techven is unable to provide a solvency declaration to Bursa Malaysia Securities Berhad. In the event Techven fails to comply with the obligation to regularize its condition, all its listed securities will be suspended from trading and delisting procedures will be commenced against the Company. About Techventure Bhd Techventure Berhad is based in Selangor, Malaysia. Apart from being a corrugated cartons manufacturer, the Group is also involved in the production of rubber insulation materials and roto-molded plastic products like septic tanks, playground equipment, traffic barriers, and water tanks. It markets its entire corrugated cartons and plastic products locally while about 80% of the rubber insulation materials are exported. In addition, the Group also manufactures ice cream. In June 2003, the Company proposed a debt-restructuring program to its financial institution lenders to avoid liquidation. In May 2006, the Company was categorized under the Amended Practice Note 17 category of the Bursa Malaysia Securities Berhad's Listing Requirements. As an affected listed issuer, the Company is required to regularize its financial condition or risk being delisted from the Official List of Companies. WEMBLEY INDUSTRIES: June 30 Balance Sheet Reveals Insolvency ------------------------------------------------------------ Wembley Industries Holdings Berhad has submitted for public release its unaudited financial report for the second quarter ended June 30, 2006. For the quarter under review, the group reported a net loss figure of MYR14,811,000 compared with the MYR36,679,000 net loss in the same quarter last year. The improvement is mainly due to a write-back of taxes amounting to MYR4.58 million in the current period, otherwise there are no other major incurrence of losses vis-a-vis last quarter's results. The group did not report revenues for the quarter ended June 30, 2006, as in the previous quarters. As of June 30, 2006, the group accumulated MYR1,078,366,000 in losses. The group's balance sheet as of June 30, 2006, revealed strained liquidity with current assets of MYR415,649,000 available to pay current liabilities of MYR1,229,086,000 coming due within the next 12 months. As of June 30, 2006, the group has total assets of MYR422,526,000 and total liabilities of MYR1,229,086,000, resulting into a shareholders' deficit of MYR806,560,000. There was no dividend payment and no dividends are recommended or have been declared during the financial quarter and year to- date ended March 31, 2006. The group's second quarter report and its accompanying notes are available for free at: http://bankrupt.com/misc/tcrap_wembleyindustries083006.xls http://bankrupt.com/misc/tcrap_wembleyindustriesnotes083006.doc About Wembley Industries Headquartered in Sarawak Malaysia, Wembley Industries Holdings Berhad is a developer of commercial properties and investment holding. Its other activities are the development of the inter- state bus and taxi terminal, the retail podium and the budget hotel. The Company has been placed under the Practice Note 4 category due to its tight cash flow position. On January 7, 2003, Malaysia's Foreign Investment Committee approved the Company's regularization plan. Subsequently, on April 7, 2003, the FIC revised its approval to include the possible participation of Daewoo Corporation, the former turnkey contractor of Plaza Rakyat Project in the Company's Proposed Debt Restructuring. The Company's ability to continue as a going concern hinges on the successful implementation of the Scheme. As of June 30, 2006, the group has total assets of MYR422,526,000 and total liabilities of MYR1,229,086,000, resulting into a shareholders' deficit of MYR806,560,000. ===================== P H I L I P P I N E S ===================== CHC HELICOPTER: Invests US$30 Million in New Helicopter Facility ---------------------------------------------------------------- Heli-One, an operating subsidiary of CHC Helicopter Corporation, has established a new helicopter maintenance, repair and overhaul facility at Boundary Bay Airport in Delta, B.C., Canada. Heli-One will establish a 235,000 square-foot facility including aircraft hangar, workshops and office space, with completion anticipated in October 2007. This new facility will support a wide range of components, engines and aircraft types including AgustaWestland, Bell, Eurocopter and Sikorsky. CHC will invest approximately US$30 million in establishing the new facility, which will allow Heli-One to provide total helicopter support and improved efficiency for CHC's rapidly expanding fleet of aircraft and for third-party customers around the world. The facility will consolidate Heli-One's existing workshops and facilities in the Vancouver area, and create additional capacity. This new facility will complement Heli-One's major European Repair and Overhaul center in Stavanger, Norway, which specializes in tip-to-tail support of Eurocopter aircraft. About Heli-One Heli-One is the world's largest independent helicopter support company, providing logistics, maintenance and power-by-the-hour support for 14 different aircraft types operated by customers around the world. About CHC Helicopter CHC Helicopter Corporation (TSX: FLY.A and FLY.B; NYSE: FLI) -- http://www.chc.ca/-- is the world's largest provider of helicopter services to the global offshore oil and gas industry with aircraft operating in more than 30 countries. International bases of operation include the Philippines, Australia, Thailand, and the Middle East. * * * CHC's $250 million senior subordinated notes due 2014 carry Moody's B2 rating. CHC HELICOPTER: Earns CDN$10.8 Million in Quarter Ended April 30 ---------------------------------------------------------------- CHC Helicopter Corporation reports unaudited financial results for the three months and year ended April 30, 2006. Highlights -- Continued year-over-year growth in the fourth quarter contributed to annual revenue of over CDN$1 billion, the highest in the Company's history; and -- During the fourth quarter, revenue increased in all operating segments excluding the negative impact of foreign exchange. Segment EBITDAR (excluding FX) also increased in all operating segments despite increased expenditures related to future growth and restructuring activities. As demand for helicopters continues to grow both in the North Sea oil and gas sector and elsewhere, the Company has continued to invest in future growth through the recruitment, hiring and training of new employees, financing of new aircraft and aircraft deposits, business development, and other related activities. The Company continued to be negatively impacted by the strengthening Canadian dollar in the fourth quarter, consistent with previously reported quarters. -- Revenue (excluding FX) increased CDN$36.4 million for the quarter and CDN$142.7 million for the year for a 15% increase in the fourth quarter and the fiscal year compared to previous periods. Revenue was negatively impacted by FX of CDN$28.1 million in the fourth quarter and CDN$98.4 million for the year ended April 30, 2006; -- Revenue (excluding FX) in all operating segments increased from the fourth quarter of last year. Revenue increases were most significant in Global Operations where revenue increased by approximately 26% (excluding FX); -- Segment EBITDAR increased in European Operations and Global Operations by approximately 17% and 6%, respectively, from the fourth quarter of last year (excluding FX); and -- Net earnings from continuing operations for the fourth quarter were CDN$10.8 million, a decrease of CDN$3.3 million from the fourth quarter of last year. Major items impacting current year fourth quarter earnings from continuing operations are (all amounts are pre-tax): a) Operating costs -- Costs of approximately CDN$2.9 million incurred to support future growth including recruiting, relocation, training, business development and aircraft introduction; -- Segment support and general and administration cost savings of approximately CDN$3.1 million due to current restructuring initiatives; -- Transitional expenses including support, general and administrative and direct costs of approximately CDN$1.7 million incurred during the restructuring process. It is expected that these costs will be reduced or eliminated throughout fiscal 2007; and -- Restructuring expenses of approximately CDN$3.6 million. Restructuring activities are now essentially complete. b) Other costs -- During the fourth quarter, the Company entered into discussions with two unaffiliated private equity firms regarding the potential acquisition of the Company. These discussions terminated near the end of the fourth quarter with no offer made to shareholders. The Company incurred legal, advisory and other costs of approximately CDN$1.0 million relating to this event; -- During the fourth quarter the Company recorded additional payroll taxes and related penalties, interest and other costs associated with activities in various foreign jurisdictions of approximately CDN$1.2 million; and -- Lease expense increases of approximately CDN$1.7 million as a result of higher interest rates. c) Financing costs --Interest expense increases of approximately CDN$2.0 million primarily as a result of higher debt levels related to investment in fleet and working capital, net of the benefit of FX; and -- Foreign exchange losses of approximately CDN$1.2 million on foreign currency denominated monetary items. d) FX impact -- A negative FX impact (net of hedging gains) on operating income of approximately CDN$2.2 million due to the strengthening of the Canadian dollar in relation to the functional currencies of the Company's subsidiaries. Subsequent Events The Company was awarded a contract renewal by the Irish Minister for Transport for the continued provision of marine Search and Rescue services in Ireland from July 2007 to July 2010, plus three option years. The contract is anticipated to generate revenue of approximately CDN$74 million over the fixed three- year term. BHS-Brazilian Helicopter Services Taxi Aereo Ltd. was awarded a new five-year contract for the provision of eight Sikorsky S- 76C+ helicopters in support of Petrobras' operations in the Brazilian offshore sector, commencing in January 2007. Total revenue from this contract is estimated at approximately CDN$170 million over five years. The Company has exercised its option to acquire a significant equity position in BHS. The acquisition is expected to close in the second quarter of fiscal 2007. The Company was awarded one three-year contract and two five- year contracts by Statoil for the provision of helicopter services in the Norwegian Sea. These new contracts commence in mid-2007 and are anticipated to generate incremental revenue of approximately $200 million over the fixed terms of the contracts. About CHC Helicopter CHC Helicopter Corporation (TSX: FLY.A and FLY.B; NYSE: FLI) -- http://www.chc.ca/-- is the world's largest provider of helicopter services to the global offshore oil and gas industry with aircraft operating in more than 30 countries. International bases of operation include the Philippines, Australia, Thailand, and the Middle East. * * * CHC's US$250 million senior subordinated notes due 2014 carry Moody's B2 rating. EQUITABLE PCI: Sy Family Proposes to Buy EBCII-Owned Shares ----------------------------------------------------------- Equitable PCI Bank, Inc., advises the Philippine Stock Exchange Limited, Inc., that on August 29, 2006, it received a copy of a letter from Teresita T. Sy, on behalf of the Sy Family and their nominees, addressed to the Board of Directors of EBC Investments, Inc., and the Board of Directors of EPCIB. The letter presented a binding offer to buy all the Equitable PCI common shares owned by EBCII -- approximately 78,807,098 common shares -- for a consideration of PHP92 per share or a total consideration of PHP7,250,253,016, payable in cash: Downpayment on Closing Date 10% PHP725,025,301.60 8 Months from Closing Date 10% PHP725,025,301.60 16 MOnths from Closing Date 10% PHP725,025,301.60 24 Months from Closing Date 70% PHP5,075,177,111.20 subject to all necessary corporate and regulatory approvals, including the approval of Bangko Sentral ng Pilipinas, which will be obtained prior to the Closing Date, and subject further to all the other terms and conditions stated in the letter. The letter further states that "[S]imultaneously to these transactions, the Buyer intends to commence a tender offer to purchase Equitable PCI shares of common stock pursuant to the Tender Offer Rules of the Securities and Regulation Code of the Philippines, and its amended Implementing Rules and Regulations." About Equitable PCI Equitable PCI Bank, Inc. -- http://www.equitablepci.com/-- is a universal bank formed from the consolidation of Equitable Banking Corporation and PCI Bank on September 2, 1999. EBC and its subsidiaries provide a wide range of commercial, corporate, and retail banking and financial services, including lending and deposit taking, branch banking, international banking, electronic banking, trade finance, cash management, and trust and treasury services. Aside from commercial banking, the Bank also capitalizes in credit card, investment banking, leasing, trust banking, and remittance business. * * * Moody's Investors Service gave Equitable PCI Bank's Subordinated Debt and Long-Term Bank Deposits 'Ba3' ratings effective May 25, 2006. Standard & Poor's Rating Service gave Equitable PCI Bank's senior unsecured debt a 'B' rating and its subordinated debt a CCC+ rating. LIBERTY TELECOMS: Postpones ASM; Date to be Determined ------------------------------------------------------ At the Special Meeting of the Board of Directors of Liberty Telecoms Holdings, Inc., it was resolved that the Annual Regular Stockholders Meeting scheduled for September 29, 2006, was postponed to a suitable date, time, and place, within Metro Manila to be determined by the company's president. About Liberty Telecoms Headquartered in Makati City, Philippines, Liberty Telecoms Holdings, Inc. was incorporated in January 1994 primarily to engage in real and personal property businesses; to deal in stocks, bonds and other securities or evidence of indebtedness of any entity; and to acquire all or any part of the business of any entity. Shortly after its incorporation, the company acquired all of the shares of stock of Liberty Broadcasting Network, Inc., Radionet, Inc. and Tanya Development, Inc. Consequently, these companies became wholly owned subsidiaries of Liberty Telecoms. On March 15, 2000, the three wholly owned subsidiaries of the company merged, with Liberty Broadcasting as the surviving company. A report by the Troubled Company Reporter - Asia Pacific on July 18, 2006, stated that Liberty Telecoms suffered a PHP338.44-million net loss for fiscal 2005, against a net loss of PHP436.41 million in 2004. The Company filed for corporate rehabilitation in August 2005 to restructure debts totaling PHP616.19 million. METROPOLITAN BANK: Partners with 35 Mid-East Remittance Houses -------------------------------------------------------------- Metropolitan Bank & Trust Company has partnered with 35 remittance and exchange houses in the Middle East to give overseas foreign workers more outlets to send their remittances. "Metrobank is establishing mroe partnerships to bring our products and services closer to Filipinos across the globe," Metrobank International Offices and Subsidiaries Group head and executive vice president Carmelita R. Araneta, explains. The bank has signed an agreement with reputable remittance companies in countries where many Filipinos are expatriated like Qatar, Bahrain, Lebanon, Saudi Arabia, United Arab Emirates, Oman, and Kuwait. These remittance partners included Bahrain Exchange Company, Asia Express Exchange, Al Fardan Exchange & Finance Co., Al Rahji Banka, and Al Ansari Exchange, among others. "More than 1.5 million OFWs are currently deployed in the region," Ms. Araneta says, adding "our compatriots stand to benefit from using a Metrobank remittance partner in these areas." The new remittance tie-ups complement Metrobank's vast network of remittance officers and correspondent banks worldwide. "Most of our remittance hubs operate on extended hours and during weekends. This is advantageous for OFWs who don't have time to do transactions during regular banking hours," Ms. Araneta notes. The bank also opened Metro Remittance Center, Inc. (Canada) Vancouver Office, its first remittance office in Canada. It is expected to serve the requirements of overseas Filipinos, now numbering close to 500,000 in North America. Metrobank currently enjoys market leadership in countries where it has presence and continues to develop remittance markets across the globe. About Metrobank Metropolitan Bank and Trust Company -- http://www.metrobank.com.ph/-- is the flagship company of the Metrobank Group. Metrobank provides a host of deposit, savings, and loan products as well as electronic banking services like internet banking, mobile banking, and phone banking, as well as its huge ATM network. Metrobank is also the leading provider of trade finance in the country, and its overseas branch network has enabled it to service the fund remittances of Filipino overseas contract workers. The Bank has 583 local branches and 35 international branches and offices located in Taiwan, China, Japan, Korea, Guam, United States, Hong Kong, Singapore, Bahamas, and in Europe. * * * On March 3, 2006, the Troubled Company Reporter - Asia Pacific reported that Standard and Poor's Rating Service assigned a CCC+ rating on its US$125-million non-cumulative capital securities, whereas Moody's Investors Service Rating Agency issued a B- rating on the same capital instruments. Moreover, Moody's gave Metrobank a Ba3 Foreign Long-Term Bank Deposits and Subordinated Debt Rating effective May 25, 2006. Fitch Ratings Ltd. gave Metrobank a B- Subordinated Debt Rating. SECURITY BANK: Appoints J. Jereza as 1st VP of N. Metro Manila -------------------------------------------------------------- The Board of Directors of Security Bank Corporation, in its Board meeting held on August 29, 2006, approved the appointment of Jose Raul E. Jereza IV as First Vice President/Area Business Manager of North Metro Manila Area 1 effective September 1, 2006. The Board also approved the declaration of a regular semestral cash dividend of PHP0.25 per share and a special cash dividend of PHP0.50 per share on the outstanding capital stock of the corporation, subject to the approval of the Bangko Sentral ng Pilipinas. The record date and date of payment will be fixed upon receipt by the Bank of the approval of the cash dividend declaration by the BSP. About Security Bank Security Bank Corporation -- http://www.securitybank.com.ph/-- offers a wide variety of financial products and services. The Bank's services include peso, dollar and third currency deposits, domestic and international fund transfers, deposit pick-up and payroll services, and ancillary services. Security Bank also provides working capital financing, term arrangements and loan syndication services. Fitch Ratings gave Security Bank a 'BB' Long-Term Foreign Currency Issuer Default Rating, a 'BB' Long-Term Local Currency Issuer Default Rating, a 'D' Individual Rating and a '4' Support Rating. ================= S I N G A P O R E ================= CHEMTURA CORP: Earns US$420,000 in Second Quarter of 2006 --------------------------------------------------------- Chemtura Corp. filed its second quarter financial statements for the three months ended June 30, 2006, with the United States Securities and Exchange Commission on August 7, 2006. Chemtura reported net income of US$420,000 on US$1 billion of net sales for the second quarter ended June 30, 2006, compared with a US$17 million net loss on US$602.3 million of net sales for the same period in 2005. For the six months ended June 30, 2006, Chemtura reported net income of US$13.62million on US$1.9 billion of net sales compared with US$3.4 million of net income on US$1.19 billion of net sales for the same period in 2005. Chemtura's net sales and operating profit increased for both the quarter and six month periods ended June 30, 2006, as compared with the same periods in 2005, notwithstanding increases in general corporate expense, antitrust costs, a charge for impairment of long-lived assets and merger costs for the six- month period, which were partially offset by decreases to facility closures, severance and related costs for the quarter period. At June 30, 2006, Chemtura's balance sheet showed US$4.89 billion in total assets, US$3.02 billion in total liabilities, and US$1.8 billion in total stockholders' equity. Significant Transactions Chemtura Corp. continues to assess its business portfolio and debt position. To date, the Company has undertaken these initiatives: 1. In July 2006, the company completed the redemption of the remaining US$158.9 million of outstanding 9.875% Senior Notes due 2012, which was funded through the revolving credit facility, the uncommitted working capital facilities and available cash. The purchase price to tender the notes was US$1,123.87 per US$1,000 principal amount. The company anticipates that the premium and other costs associated with the redemption will be approximately US$25.0 million and will be recorded as a loss on early extinguishment of debt in the third quarter of 2006. 2. On June 23, 2006, the company sold a significant portion of the real estate at the West Lafayette, Indiana location, for net proceeds of US$6.1 million, inclusive of US$400,000 of associated costs. There was no gain or loss recognized on this sale. 3. On May 12, 2006, the company sold its Industrial Water Additives business to BWA Water Additives for US$85 million, exclusive of a US$10.2 million adjustment for retained accounts receivable and payable. A reduction in net assets of US$81.0 million, primarily related to US$33.6 million of goodwill; US$32.5 million of net intangibles related to technology, brands and customer relationships; and US$12.2 million of finished goods inventory was a result of this sale. Additionally, the Company incurred US$3.3 million in associated costs, US$400,000 related to employee retention agreements, US$2.3 million due to future losses related to supply agreements with BWA, and US$400,000 related to other expenses. A loss of US$12.5 million (US$14.1 million after-tax) has been included in other expense, net on the condensed consolidated statement of earnings. No facilities or manufacturing assets were included in this transaction and Chemtura will continue to manufacture and sell products to BWA via supply agreements. These assets were reviewed for recoverability under the requirements of Financial Accounting Standards Board Statement No. 144, "Accounting for the Impairment of Disposal of Long-Lived Assets," and a charge of US$5.6 million related to the impairment of the fully-dedicated manufacturing assets retained was recorded in operating profit. Contemporaneous with the sale, the Company entered into an exclusive distribution agreement with BWA related to the Liquibrom product line. 4. On May 24, 2006, the Company completed a tender offer to repurchase the remaining US$164.8 million of its outstanding Senior Floating Rate Notes due 2010. The purchase price to tender notes was US$1,095.83 per US$1,000 principal amount. As a result of the tender, the Company recorded a loss on early extinguishment of debt of US$19.5 million during the second quarter of 2006. The loss includes a premium of US$15.8 million and the write- off of unamortized deferred costs of US$3.7 million. 5. On April 19, 2006, the Company and certain of its consolidated subsidiaries entered into an underwriting agreement with several financial institutions for the sale of US$500 million aggregate principal amount of 6.875% Senior Notes due 2016. The offering closed on April 24, 2006, and the Company received net proceeds from the offering of US$492.3 million after expenses. The proceeds were utilized to repay the outstanding balance on the Company's revolving credit facility of US$364 million, the outstanding balance on uncommitted lines of credit of US$50 million and to repurchase receivables under the domestic receivable securitization programs of US$60 million, with the remaining proceeds used for general corporate purposes. 6. On March 24, 2006, the Company acquired the Trace Chemicals business from Bayer CropScience LP for net cash of US$6.7 million. Trace Chemicals is a leader in farmer- applied seed treatments in markets serving the United States of America. The acquisition will serve to enhance the Company's offerings in the Crop Protection business. Full-text copies of the Company's second quarter financials are available for free at: http://ResearchArchives.com/t/s?f4f About Chemtura Corp. Headquartered in Middlebury, Connecticut, Chemtura Corp. (NYSE: CEM) -- http://www.chemtura.com/-- is a global manufacturer and marketer of specialty chemicals, crop protection and pool, spa and home care products. The Company has approximately 6,400 employees around the world and sells its products in more than 100 countries. In the Asia Pacific, Chemtura has facilities in Australia, China, Hong Kong, India, Japan, Singapore, South Korea, Taiwan, and Thailand. * * * Moody's Investors Service assigned a Ba1 rating to Chemtura Corp.'s US$400 million of senior notes due 2016 and affirmed the Ba1 ratings for its other debt and the corporate family rating. Standard & Poor's Ratings Services assigned its 'BB+' senior unsecured debt rating to Chemtura Corp.'s US$400 million notes due 2016. Standard & Poor's affirmed Chemtura's 'BB+' long-term corporate credit rating. The outlook remains positive. CHEMTURA CORP: Faces Albermarle's Decabromodiphenyl Patent Suits ---------------------------------------------------------------- Chemtura Corp. is facing Albemarle Corp.'s suits for alleged infringement of patents on the use of decabromodiphenyl ethane. In May 2002, Albemarle filed two suits against the company in the U.S. District Court for the Middle District of Louisiana. The first suit alleged that the company infringed three of Albemarle's process patents on bromine vacuum tower technology, while the second claimed that the company has infringed, contributed to or induced others to violate its patent on using decabromodiphenyl ethane as a flame retardant in thermoplastics. The company has counterclaimed that the patent in the flame retardant case is invalid, and obtained through inequitable conduct in the U.S. Patent and Trademark Office. These cases were later consolidated upon the Company's motion. Albemarle amended this consolidated complaint in March 2004 to add new counts of patent infringement and trade secret violations. On October 25, 2005, Albermarle filed suit in the same Court against the company and Great Lakes Chemical Corp. for allegedly infringing its recently issued patent on decabromodiphenyl ethane "wet cake" intermediate product. Based in Middlebury, Connecticut, Chemtura Corp. manufactures plastic additives, petroleum additives, flame retardants, and swimming pool chemicals. The Company was formed from the merger of Crompton Corp. and Great Lakes Chemical Corp. About Chemtura Corp. Headquartered in Middlebury, Connecticut, Chemtura Corp. (NYSE: CEM) -- http://www.chemtura.com/-- is a global manufacturer and marketer of specialty chemicals, crop protection and pool, spa and home care products. The Company has approximately 6,400 employees around the world and sells its products in more than 100 countries. In the Asia Pacific, Chemtura has facilities in Australia, China, Hong Kong, India, Japan, Singapore, South Korea, Taiwan, and Thailand. * * * Moody's Investors Service assigned a Ba1 rating to Chemtura Corp.'s US$400 million of senior notes due 2016 and affirmed the Ba1 ratings for its other debt and the corporate family rating. Standard & Poor's Ratings Services assigned its 'BB+' senior unsecured debt rating to Chemtura Corp.'s US$400 million notes due 2016. Standard & Poor's affirmed Chemtura's 'BB+' long-term corporate credit rating. The outlook remains positive. HIBEX SINGAPORE: Wind-Up Petition Hearing Slated for Sept. 11 ------------------------------------------------------------- A wind-up petition was filed against Hibex Singapore Pte Ltd on February 16, 2006. The High Court of Singapore will hear the petition on September 11, 2006, at 10:00 a.m. The Petitioner's solicitors can be reached at: Wong Thomas & Leong 5 Shenton Way#26-05/07 UIC Building Singapore 068808 ISOFT GROUP: Inks Revised Credit Agreement with Banks ----------------------------------------------------- iSoft Group PLC has revised its credit loan agreement with its banks. The terms of the revised agreement include: -- a GBP25 million facility on top of its existing loan; -- a GBP36 million term loan; and -- a GBP105 million revolving facility. "The terms are more favorable to the lenders, but iSoft got the cash they need to keep the business going for the year," Stefan Slowinski, an analyst at SG Cowen Securities in London, was quoted by Bloomberg News as saying. "New banking agreements will be a relief to ISoft," Kevin Ashton, an analyst in London at Bridgewell Securities Ltd., told Bloomberg. The amendments reflect iSoft's revised revenue recognition policies and business expectations. According to Alex Armitage of Bloomberg, the company said it will need to use its loans more extensively because of lower up- front customer payments and because of a new policy in the way it accounts for revenue. In eight months, iSoft twice delayed its 2006 results, restated three years of revenue and faced the departure of its chief executive officer. Its shares fell about 90 percent this year. Health Care Software Contract On August 25, the company signed a GBP153 million agreement with Computer Sciences Corp., for delivery into the North West and West Midlands regional cluster of the National Program for IT and on the installation of iSoft software in London and Southern regions. iSOFT also disclosed that it will continue to supply an enhanced service to seven NHS iSOFT Trusts in the London and Southern Clusters. Accounting Probe As reported in Troubled Company Reporter - Asia Pacific, on Aug. 28, 2006, the Financial Services Authority will be undertaking a more formal investigation into possible accounting irregularities at iSOFT Group plc, which could take months to complete. The initial probe, conducted by Deloitte & Touche and Eversheds LLP, found evidence of accounting irregularities affecting the financial years ended April 30, 2004, and April 30, 2005. The Group has submitted the findings, which contained grounds for a more formal investigation, to the British regulator. Streamlining the Cost Base The Group has been taking, and continues to take, action to realign its operating costs with future revenue expectations. As part of this process, it is examining in detail the operating cost structure of each of its operations, both in the U.K. and internationally, to identify areas for cost reduction and improved organizational efficiency. The Group is targeting to reduce its total operating cost base from an annual run rate of just over GBP209 million at May 1, 2006, to below GBP185 million by the end of the current financial year. The current run-rate is higher than the total actual cost incurred for the year just ended because the Group has increased significantly its level of development resources to support both existing and future applications. As part of the plan to reduce costs, the group entered into a consultation process with employees in the U.K. in early May 2006 and it is likely that at least 150 employees, representing approximately 15% of total headcount in the U.K., will be made redundant. The cost of this action will be about GBP3 million, but is expected to reduce the current annual cost base by approximately GBP6 million. The group also intends to reduce staff levels in some of its international operations and has taken steps to reduce sub- contract and overhead costs as part of the financial year 2007 budget review process. The total cost of action already in hand to reduce the cost base, which will be taken as a one-time charge in the year ending April 30, 2007, is estimated to be at least GBP7 million. About iSOFT Group Headquartered in Manchester, United Kingdom, iSOFT Group plc -- http://www.isoftplc.com/-- supplies advanced medical software applications for the healthcare sector. Its products are used by more than 8,000 organizations in 27 countries for managing patient information and driving improvements in healthcare services. In international markets, the Group has a strong presence in the Asia-Pacific, including Singapore and India. NETWORK EQUIPMENT: Posts US$3.7M Loss in 2007 1st Fiscal Quarter ---------------------------------------------------------------- Telecommunications equipment maker Network Equipment Technologies, Inc., reported its results for the three months ended June 30, 2006, for the first quarter of fiscal 2007. Total revenue was US$17.4 million, up from US$13.4 million in the prior quarter and down from US$18.4 million in the same period of the prior year. Product revenue was US$14.8 million, up from $10.2 million in the prior quarter and up from US$14.7 million in the same period of the prior year. Net loss for the quarter was US$3.7 million compared with a net loss of US$10.2 million in the prior quarter and a net loss of US$5.1 million for the same period of the prior year. Cash and investment balances at the end of the quarter were US$84.8 million, compared with US$86.2 million at the end of the prior quarter and US$100.6 million, including US$405,000 of long-term restricted cash included in other assets, at the end of the first quarter of the prior year. "In the first quarter, our government business rebounded, primarily due to new orders," president and chief executive officer C. Nicholas Keating remarked. "Government revenue was also aided by a US$1.7 million milestone payment on an existing contract. We are making progress on our new product initiatives, which we hope over the course of the next year, will help stabilize our government business and also revitalize our enterprise business. While we are working on our new product portfolio we are striving to maintain a strong cash position. Our cash balance at the end of the quarter declined only US$1.4 million as we continue to work through this transition period." "The new network exchange product we are jointly developing with Bay Microsystems, providing high-speed SAN to WAN communications and secure grid computing, continues to perform in lab trials, and our other NX Series products are on track," Mr. Keating said. "During this past quarter, we introduced the VX Series Universal Voice Exchange, a next-generation solution for delivering integrated, secure lower cost VoIP and mobility to government and enterprise customers. Based on our core voice technology, the VX Series offers a comprehensive VoIP solution with intelligent switching functionality and interoperability with existing telecommunications and data network infrastructure. Additional advances in the VX Series included: -- The NET VX400 Tactical Voice Exchange, a deployment of NET's Voice Exchange VoIP software platform on DTECH LABS' mobile VoIP hardware platform. -- The VX Security Accelerator Module, the industry's first wire-speed, full-capacity solution using the secure real-time transport protocol to provide military-grade encryption." "During the quarter, we established additional reseller agreements including Nanotel, a network integration services provider for applications requiring VoIP telephony, and Aspect Solutions, a data security and IT solutions firm targeting the health care industry. These relationships are early examples of our partnership distribution strategy," Mr. Keating continued About Network Equipment Technologies Network Equipment Technologies, Inc. (NYSE:NWK) -- http://www.net.com/-- provides networking equipment that enables its customers to adapt to a broadband future. An architect of the networking industry, N.E.T. has been supplying service providers, governments and enterprises around the world with networking technology for more than 20 years. It has sales locations in China, Hong Kong, Japan, and Singapore. * * * Network Equipment Technologies, Inc.'s subordinated debt carries Moody's Investors Service's B2 rating. POH LIAN SHIPPING: Faces Liquidation Proceedings ------------------------------------------------ Shia Chong Yian has filed an application to wind up Poh Lian Shipping Pte Ltd on August 17, 2006. The High Court of Singapore will hear the wind-up petition on September 8, 2006, at 10:00 a.m. The Plaintiff's solicitor can be reached at: De Souza Tay & Goh No. 5 Shenton Way #12-05, UIC Building Singapore 068808 SEA CONTAINERS: Restructuring Spurs S&P to Keep Junk Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Sea Containers Ltd. -- including the 'CCC-' corporate credit rating -- remain on CreditWatch with negative implications. Ratings were lowered to current levels May 1; they were initially placed on CreditWatch with negative implications on Aug. 25, 2005. The CreditWatch update follows Sea Containers' update on its operational and financial restructuring efforts, including the statement that it will not pay its US$115 million due Oct. 15, on the 10_% senior notes unless the company concludes that it will be able to pay its other public notes maturing in 2008, 2009, and 2012, and all other unsecured creditors, and retain sufficient working capital. Sea Containers also said it intends in the next few weeks to begin discussions with advisors in respect of a potential restructuring of the company's unsecured financial obligations. "If a restructuring is undertaken that does not provide full value to the noteholders, we would lower our ratings on the affected notes to 'D' and the corporate credit rating to 'SD' or selective default," said Standard & Poor's credit analyst Betsy Snyder. Sea Containers provided also an update on various other ongoing restructuring efforts: -- sale of its Silja ferry unit was completed July 19, and proceeds applied to reduce debt which has declined by US$648 million since Dec. 31, 2005, to US$610 million at July 31, 2006; -- three ferries were sold for US$48 million, which was used to repay secured debt on the vessels, and the company is seeking to sell other ferries with an estimated value of US$127 million to US$137 million; -- cash used in operating activities was US$88 million for the first six months of the year, almost double the US$46 million cash consumption of the prior-year period; and -- the Great North Eastern Railway is significantly underperforming original projections, due to lower-than- forecast revenues, including the effect of terrorist attacks in London in July 2005 and higher-than-forecast costs. The company noted also that it remains in covenant default on various debt instruments, including its public notes, though no creditors has taken action to exercise remedies. About Sea Containers Sea Containers Ltd -- http://www.seacontainers.com/-- is a Bermuda registered company with regional operating offices in London, Genoa, New York City, Rio de Janeiro, Sydney and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange. The company is a market leader in its three main business areas: passenger transport, leisure and marine container leasing. In addition to its three principal divisions, the company has associated investments in property, publishing, and plantations. * * * In June 2006, Moody's Investors Service downgraded the senior unsecured ratings and confirmed the senior secured rating of Sea Containers -- Senior Unsecured to Caa3, Senior Secured at B3. Moody's said the outlook is negative. On May 4, 2006, Standard & Poor's Ratings Services lowered its ratings on SeaContainers, including lowering the corporate credit rating to 'CCC-' from 'CCC+'. All ratings remain on CreditWatch with negative implications. The Troubled Company Reporter -- Asia Pacific report on August 15, 2006, states that Standard & Poor's Ratings Services on August 11, 2006, said that its ratings on Sea Containers Ltd., including the 'CCC-' corporate credit rating, remain on CreditWatch with negative implications. Ratings were lowered to current levels May 1, 2006; they were initially placed on CreditWatch with negative implications on Aug. 25, 2005. SILVERN INVESTMENT: Creditors' Proofs of Debt Due on Sept. 25 ------------------------------------------------------------- Silvern Investment Co (Pte) Ltd notifies parties-in-interest of its intention to declare dividend to creditors. Creditors must admit proofs of claim by September 25, 2006, form them to share in the company's dividend distribution. The liquidator can be reached at: Ryosuke Mitomo c/o 6 Shenton Way #32-00 DBS Building Tower Two Singapore 068809 SPECTRUM BRANDS: Fitch Junks Rating on US$2.3 Billion Debt ---------------------------------------------------------- Fitch Ratings has initiated rating coverage of Spectrum Brands, Inc.: -- Issuer Default Rating (IDR) CCC; -- Senior secured bank facility B/RR1; and -- Senior subordinated debentures CCC-/RR5. The Rating Outlook is Stable. Approximately US$2.3 billion of debt is covered by these actions. The rating reflects SPC's high leverage with FFO adjusted leverage of 8.06 times as well as debt/EBITDA of 7.68x for the last 12 months ending July 2, 2006. Much of SPC's US$2.3 billion in total debt was the result of seven acquisitions completed since the fiscal year ended September 30, 2003, with the bulk occurring in 2005. The acquisitions served to lessen the company's reliance on essentially one product - the Rayovac battery. However, poor performance in batteries combined with high levels of acquisition-related debt has hampered free cash flow which declined from US$163.5 million at the FYE September 30, 2005 to US$22 million at the LTM ending July 2, 2006. There has also been a declining trend in interest coverages since the 2005 acquisitions. EBITDA/interest has fallen steadily from 3.09x at FYE03 to 1.75x at LTM July 2. The company's high leverage provided little flexibility for a myriad of issues over the past two years: competitive actions in grooming, a structural change in the European battery market, retailer inventory adjustments in batteries and lawn & garden during 2005 and 2006 in North America and escalating commodity costs which served to more than offset restructuring savings and price increases. SPC is a leading provider of private label batteries in its Europe/Rest of World (ROW) segment. Batteries represent 70% of this segment and about half is private label. Private label is growing rapidly, however margins are significantly less robust than SPC's branded batteries and continues to be under pressure. The Europe/ROW segment represented 29% of revenues and 30% of operating income for the nine months ending July 3, 2005 with a nine month operating margin of 14.6%. For the comparable period in 2006, revenues have declined 17% with operating profits down 43%. Part of the revenue decline was the company walking away from US$30 million in low-margined revenues. SPC intends to remain a private-label participant. Given that the pressure is expected to continue while the company works on lowering its operating costs, profits from this key region is expected to be a drag on the consolidated performance in the near term. Additionally, while the company has hedged it zinc exposure through the first half of FYE07, the reset in light of expected tightness in the zinc market and other energy related costs will contribute to margin pressure as well. The current trajectory in the near term appears negative without actions to provide additional financial flexibility. SPC's management has historically been able to achieve cost savings ahead of schedule. The company is in the process of three separate actions -acquisition integration, flattening the North American organization, and reorganizing its European operation. These are expected to lead to cost savings of US$150 million by 2008. The company reports that it is on track with all initiatives. The ability to execute on cost savings and the company's leading brands are also encompassed in the ratings. The company has had to amend their financial covenants twice in the past year to address declining operations. Thus, a concern is that continued declines in Europe which will take several quarters to address, potential competitive actions by participants who have substantially more resources, as well as increased commodity costs still exist and could continue to pressure margins and complying with covenants. SPC reports that it should comply with its covenants into the foreseeable future but the ratios appear to be relatively tight. SPC's ability to continue working well with its bank group is necessary. The Rating Outlook is Stable as the company has announced their discomfort with the present levels of leverage given underperformance against forecast and has hired Goldman Sachs to evaluate potential asset sales. The company's intent is to review its line of business with a plan to begin executing asset sales by next spring. Lines of businesses to be sold, cash flow lost and amount of debt reduction is unknown at present. The goal to de-leverage is viewed positively in light of recent performance trends. Incorporated into the Stable Outlook is the expectation that the company will be able to receive waivers, if needed, from its debt-holders. The Recovery Ratings and notching in the debt structure reflect Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. The recovery ratings for the bank facility benefit from a substantial enterprise value which more than covers maximum outstanding. There is also covenants and conditions precedent to each loan that provides protection and precludes sizeable amounts of debt without sizeable increases in cash flow. The senior subordinated debentures reflect the expectation of below average recovery prospects in a distressed case. Virtually all of SPC's revenue growth from US$573 million in FYE02 to the US$2.359 billion in FYE05 was derived from acquisitions. Revenues in the nine months ending July 2, 2006 also increased 13% to US$1.943 billion benefiting from late FYE05 acquisitions. It is to be noted however that if sales were adjusted to assume that all acquisitions during 2005 were treated as if they had been completed on the first day of fiscal 2005, net sales for the nine months would have declined 6%. On an as reported basis, FYE05's gross margin declined 480bps to 37.9% due to mix (320bps) and purchase accounting inventory value charges (160bps), which increased costs of goods, sold. A normalized EBITDA margin with the 160bps added back would be 14%. However, poor performance in batteries and escalating commodity costs during the nine months ending July 2, 2006 reduced the EBITDA margin to 11.5% -250bps below prior year. Thus while leverage is down slightly to 7.7x from 7.9x at the end of the fiscal year, LTM July 2, 2006 EBITDA/interest has continued to weaken as the current fiscal year bears the full brunt of the debt and interest rate increases as the financial covenants were amended in December and May. SPC is a global branded consumer products company with operations in seven product categories: consumer batteries; lawn and garden; pet supplies; electric shaving and grooming; household insect control; electric personal care products, and portable lighting. Today, batteries represent just 33% of global revenues from 90% in 2002 (41% derived internationally). About Spectrum Brands Headquartered in Atlanta, Georgia, Spectrum Brands (NYSE: SPC) -- http://www.spectrumbrands.com/-- is a consumer products company and a supplier of batteries and portable lighting, lawn and garden care products, specialty pet supplies, shaving and grooming and personal care products, and household insecticides. Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in 120 countries around the world. The company has manufacturing and distribution facilities in China, Australia and New Zealand, and sales offices in Melbourne, Shanghai, and Singapore. * * * On June 15, 2006, Standard & Poor's Ratings Services affirmed its ratings on Spectrum Brands Inc., including the 'B-' corporate credit rating. At the same time, the ratings were removed from CreditWatch, where they were placed with negative implications April 6, 2006, following the Company's substantially lowered earnings guidance for the second quarter. The rating outlook is negative. Moody's Investors Service downgraded all ratings of Spectrum Brands, Inc. The outlook for the ratings is stable. The action concluded the review for downgrade that was initiated on April 7, 2006. Ratings downgraded include Corporate family rating to B3 from B2; US$300 million senior secured revolving credit facilities to B2 from B1; US$1.2 billion senior secured term loan facilities to B2 from B1; US$700 million senior subordinated notes due 2015 to Caa2 from Caa1, and US$350 million senior subordinated notes due 2013 to Caa2 from Caa1. SPECTRUM BRANDS: Third Quarter Earnings Down to US$2.5 Million -------------------------------------------------------------- Spectrum Brands Inc. disclosed that its net income for the quarter ended July 2, 2006, has significantly reduced to US$2.5 million compared from US$23.7 million for the quarter ended July 3, 2005. The company also showed net sales of US$698.3 million for the third fiscal quarter ending July 2, 2006, a slight reduction from US$707.8 million for the corresponding period a year ago. Net income for the nine months ended July 2, 2006, was US$5.4 million, compared to US$49.7 million for the same period in the previous year. For the nine months ended July 2, 2006, net sales was US$1.94 billion, up by 13% from US$1.72 billion, for the same period a year ago. "Spectrum Brands continues to face challenges in our European battery business, which was the leading contributor to our disappointing third quarter results," David A. Jones, chairman and chief executive officer, said. "We also generated lower- than-expected sales this quarter from Remington men's shaving in North America at Father's Day. However, there were a number of bright spots in our third quarter results, including a strong performance from Remington branded products in Europe and a modest but encouraging sequential improvement in our North American battery business," Mr. Jones added. Gross margin for the quarter was 38% versus 38.2% for the same period last year. The decline in gross margin percentage resulted primarily from lower sales in the global battery business and increased raw material costs. Operating income was US$49.0 million versus fiscal 2005's third quarter operating income of US$69.0 million. Third quarter interest expense was US$45.7 million versus US$38.6 million last year due to increased debt levels from the Tetra acquisition and higher interest rates. Total debt at July 2, 2006 was US$2.283 billion. Corporate expenses were US$27.6 million, compared to US$22.1 million in the prior year period. Expansion of the global operations support infrastructure and increased professional fees accounted for the majority of the increase. About Spectrum Brands Headquartered in Atlanta, Georgia, Spectrum Brands (NYSE: SPC) - - http://www.spectrumbrands.com/-- is a consumer products company and a supplier of batteries and portable lighting, lawn and garden care products, specialty pet supplies, shaving and grooming and personal care products, and household insecticides. Spectrum Brands' products are sold by the world's top 25 retailers and are available in more than one million stores in 120 countries around the world. The company has manufacturing and distribution facilities in China, Australia and New Zealand, and sales offices in Melbourne, Shanghai, and Singapore. * * * On June 15, 2006, Standard & Poor's Ratings Services affirmed its ratings on Spectrum Brands Inc., including the 'B-' corporate credit rating. At the same time, the ratings were removed from CreditWatch, where they were placed with negative implications on April 6, 2006, following the Company's substantially lowered earnings guidance for the second quarter. The rating outlook is negative. Moody's Investors Service downgraded all ratings of Spectrum Brands, Inc. The outlook for the ratings is stable. The action concluded the review for downgrade that was initiated on April 7, 2006. Ratings downgraded include Corporate family rating to B3 from B2; US$300 million senior secured revolving credit facilities to B2 from B1; US$1.2 billion senior secured term loan facilities to B2 from B1; US$700 million senior subordinated notes due 2015 to Caa2 from Caa1, and US$350 million senior subordinated notes due 2013 to Caa2 from Caa1. TIANJIN ZHONG: Creditors Should Prove Debts by September 25 ----------------------------------------------------------- Tianjin Zhong Xin Pharmaceutical Group Corporation Singapore Pte Ltd require its creditors to submit their proofs of claims by September 25, 2006. Failure to comply with the requirement will exclude a creditor from sharing in the company's dividend distribution. The liquidators can be reached at: Chia Soo Hien Ng Geok Mui c/o BDO Raffles 5 Shenton Way #07-01 UIC Building Singapore 068808 =============== T H A I L A N D =============== BANK OF AYUDHYA: Finance Ministry Approves GE Deal -------------------------------------------------- Bank of Ayudhya disclosed on August 28, 2006, that it would now push through with the agreement to sell a 25.4% stake to General Electric's financial arm following approval from the Finance Ministry and the Bank of Thailand, The Nation reports. The Troubled Company Reporter - Asia Pacific reported on August 18, 2006, that the agreement between Bank of Ayudhya and GE Capital Asia Pacific Ltd, expected to close on August 15, was postponed indefinitely as the Ministry failed to endorse the deal. "Through cooperation between BAY and GE Money in the credit card sector, BAY is confident the business synergy will further strengthen the bank's position and lead BAY to the forefront of Thailand's banking industry," bank's chairman Krit Ratanarak said in a press statement. According to the Bangkok Post, the deal would cost GE around US$600-million to acquire a quarter of ownership with the bank. The transaction, however, is still subject to the approval of the bank's shareholders, the Post said. Yoshiaki Fujimori, president and chief executive officer of GE Money Asia, said, "This partnership will further strengthen the Thai financial market by contributing to economic growth and offering more competitive options for both Thai consumer and commercial customers. The combination of BAY's performance history and local banking experience and GE's global expertise and business management processes will help fulfill our shared vision to become Thailand's 'bank of choice' and to drive sound growth for the future." Bank of Ayudhya and GE Money have been Joint Venture partners since 2001, successfully managing the growth of the Krungsriayudhya Card Company Ltd, offering credit cards and personal loans to Thai consumers, the Post relates. The Joint Venture serves 700,000 card customers and held total assets of US$339 million in 2005, generating US$61 million in revenues. * * * Headquartered in Bangkok, Thailand, Bank of Ayudhya Public Co. Ltd. -- http://www.krungsri.com/-- provides a full range of banking and financial services. The bank offers corporate and personal lending, retail and wholesale banking; international trade financing asset management; and investment banking services to customers through its branches. It has branches in Hong Kong, Vietnam, Laos, and the Cayman Islands. Moody's Investors Service gave Bank of Ayudha an E+ bank financial strength rating. Fitch Ratings gave the bank a 'BB+' Long-Term Foreign Currency Issuer Default Rating, a 'B' Short-Term Foreign Currency Rating, a 'BB' Foreign Currency Subordinated Debt Rating, and a 'D' Individual Rating. SIAM COMMERCIAL: President Tenders Resignation ---------------------------------------------- Arun Chirachavala, president of Siam City Bank Pcl, submitted a letter on August 28, 2006, to the Stock Exchange of Thailand notifying his intention to resign from his post. Subsequently, the bank's board of directors unanimously approved the resignation to be effective on September 1, 2006. It was also resolved that Tasna Rajatabhothi -- Director, Executive Director and Director of Nomination and Remuneration Committee -- be appointed as acting president of Siam Commercial. Clash with Board Prompted Pres' Resignation Conflict within the board of directors of Siam City Bank was the reason behind the president's resignation, The Nation reports, quoting chairman of the board, Sompol Kiatphaibool. According to Mr. Sompol, there were disagreements between the board and Mr. Arun over business strategy, so the president resigned in order to allow a new leader to take over. Mr. Sompol further relates that the board and the president had some differences of opinion over the second-quarter results, in which several items showed growth rates lower than the industry level. Based on the bank's financial statements, net profit of THB743.29 million was posted in the second quarter, 53.25% down from the THBB1.59 billion achieved in the corresponding period last year. "Arun showed spirit as the bank's management chief, although differences of opinion are a normal thing. Meanwhile, he is an honest man and he supported the bank during his tenure," Mr. Sompol said. Mr. Sompol said that the bank's board of directors has always supported management policy, and in particular a universal banking concept, but in some cases it requires the bank to have influence over the management of its affiliates. Meanwhile, the bank's selection committee will be responsible for naming a new president. However, no definite time frame was given. * * * Thailand's fourth largest commercial bank, Siam Commercial Bank -- http://www.scb.co.th/-- provides a wide variety of personal and business banking options, including funds management, loan and investment services, foreign currency exchange, and more. The bank has more than 500 branches countrywide. The bank had total assets worth THB814 billion as of December 31, 2005. On March 31, 2006, The Troubled Company Reporter - Asia Pacific reported that Moody's Investors Service placed Siam Commercial Bank Public Company Limited's bank financial strength rating of "D+" on review for possible upgrade. THAI DURABLE: SET Suspends Securities Trading --------------------------------------------- Securities of Thai Durable Group Public Company Ltd were suspended from trading by the Stock Exchange of Thailand due to the Company's failure to submit its financial statements for the second quarter ended June 30, 2006. The SET fixed August 15, 2006, for all the listed companies to submit their latest quarter financial statements and indicated that failure to present the report would result to suspension of any company's securities from trading. According to a statement on the SET Web site, Thai Durable's securities would be suspended effective on the first trading session, which started on August 16, 2006. The Troubled Company Reporter - Asia Pacific reported on May 29, 2006, that the SET previously posted SP -- Suspension -- sign on the company's securities after it also failed to submit its first quarter results. Thai Durable said in a statement that the company has yet to appoint an auditor, resulting to the delay of the submission of its financial reports. * * * The Thai Durable Group Public Company Limited -- http://www.tdt.co.th/-- manufactures woven fabrics and yarns from natural and synthetic fibers. The majority of its production is sold to industrial factories for further processing. The Company is under the REHABCO, or Companies under rehabilitation sector, of Thailand's Stock Exchange. The Troubled Company Reporter - Asia Pacific stated on April 12, 2006, that the Company's Board of Directors passed a resolution not to allocate net profit as legal reserve in the amount of 5% of the net profit of the Company and not pay the dividend from its 2005 operating income. Going Concern of the Company The Company had sustained significant accumulated losses and has suffered recurring loss from operations. As at December 31, 2005, Thai Durable has a THB2-billion equity deficit. The Company incurred negative cash flows from operating activities for the year ended December 31, 2005, amounting to THB73.3 million. The Company's current liabilities exceeded its current assets as of December 31, 2005, by THB644.4 million. Moreover, the Company could not repay short-term loans and long- term loans from two local banks which were due and on Jan. 27, 2006, the Company was sued by a local bank to repay all short- term loans and long-term loans totaling THB273.8 million, including principal and accrued interest. In addition, the management is in the process of negotiating for the postponement of loans from another local bank. The ultimate outcome of these matters cannot be determined yet. Presently, the Company is performing a feasibility study to change its current business. The continuing operation of the Company in the future substantially depends on 1. results of the negotiation with the financial institution creditors relating to the postponement of loans; and 2. the new business plan of the Company and its ability to operate successfully in the future and has adequate cash flows from operations. These matters indicate the existence of a material uncertainty about the Company's ability to continue its operation as a going concern. ********* 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., Frederick, Maryland, USA. Catherine Gutib, Valerie Udtuhan, Francis Chicano, Reiza Dejito, Freya Natasha Fernandez, and Peter A. Chapman, Editors. Copyright 2006. 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. 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