/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/061025.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Wednesday, October 25, 2006, Vol. 9, No. 212 Headlines A U S T R A L I A ADVANCED POLYMER: Court Issues Wind-Up Order AEARO TECHNOLOGIES: Moody's Assigns Loss-Given-Default Rating AHL TOWN: Members' Final Meeting Scheduled on October 27 ANTHILL FREIGHTERS: Commences Wind-Up Process APELRIGHT PTY: Enters Wind-Up Proceedings BRINDLEY LIMOUSINES: Commences Wind-Up of Operations CONNELL WAGNER: Creditors Must Prove Debts by November 10 CUPBOARD WHOLESALERS: Commences Wind-Up Proceedings CYLOCK PTY: Members and Creditors to Meet on October 26 DALLINA PTY: Names Handberg and Morgan as Receiver and Manager DENBUR CONSTRUCTIONS: To Declare First and Interim Dividend DESIGNER TRUSS: To Declare First and Final Dividend on Nov. 7 EAGLE EYE: Members and Creditors to Receive Wind-Up Report ELASTIC WEBBING: Members to Receive Liquidator's Report FIVE STAR: Liquidator Merrifield to Present Wind-Up Report FORTESCUE METALS: Begins Pilbara Earthworks FOURCO PTY: Prepares to Declare Dividend on November 14 FRESH EXPRESS: Westpac Banking Appoints Receivers and Managers FRISMORE PTY: To Declare Dividend for Priority Creditors G, K & R DEAVES: To Declare Dividend for Unsecured Creditors GTB ENTERPRISES: Enters Liquidation Proceedings HERITAGE WINES: Blue Hills Buys Storage Business KOPPERS HOLDING: Moody's Assigns LGD6 Rating on Sr. Unsec. Notes MARUYOSHI INTERNATIONAL: Members Decide to Wind Up Firm PATHOLOGY SERVICES: Members Resolve to Liquidate Firm PEARLCANE PTY: Creditors to Receive Dividend on Nov. 9 PKJS (VIC): Members Agree on Voluntary Liquidation POLYMERLAND AUSTRALIA: Members to Receive Wind-Up Report PORT PACIFIC: Members and Creditors to Convene on October 26 PRESFAST PTY: Will Declare First and Final Dividend on Nov. 10 RICHARDSON HUNTER: Creditors' Final Meeting Set on October 26 SOTHEBY'S HOLDINGS: Moody's Assigns Loss-Given-Default Ratings STOLESKI NOMINEES: Members Opt for Voluntary Wind-Up TECHWEB AUSTRALIA: Liquidator to Present Wind-Up Report UNIVERSAL COMPRESSION: Moody's Gives Ba1 Rating to $500Mil. Loan WEBCO AUSTRALIA: Members' Final Meeting Slated for October 26 XILLIX TECH: Receives Hercules' Demand Letter for Loan Repayment C H I N A & H O N G K O N G AFFILIATED COMPUTER: Continuing SmartPA Operation ASSON HOLDINGS: Court to Hear Wind-Up Petition on November 1 BENQ CORP: BenQ Mobile Confirms 1,900 Job Cuts in Germany BLOUNT INC: Moody's Confirms Ba3 Corporate Family Rating CNH GLOBAL: DBRS Holds Sr. Unsecured Debt's Rating at BB (High) CUMMINS INC: Inks US$126-MM Joint Venture Pact with Beiqi Foton DAILY CHARM: Wind-Up Process Commenced DYNASTY RIGHT: Faces Wind-Up Proceedings EMI GROUP: Expects 3% Revenue Decline in 2006 First Half EMI GROUP: Moody's Cuts Rating on Weak Debt Protection Measures ELECTRICAL COMPONENTS: Moody's Assigns Loss-Given-Default Rating ESTERLINE TECH: Moody's Assigns Loss-Given-Default Ratings FANTEC LIMITED: Placed Under Voluntary Wind-Up FEDDERS NORTH: Moody's Assigns Loss-Given-Default Rating GEARY SAINT: Enters Voluntary Liquidation GLOBAL CROSSING: Provides Broadband Connectivity to OneCommunity HELINGER LTD: Creditors Must Prove Debts by December 8 HEROIC INVESTMENT: Prepares to Close Operations HIGHTOP INTERNATIONAL: Members to Receive Wind-Up Report KEROPY TRAVEL: Wind-Up Petition Hearing Slated for November 8 LILAC LIMITED: Voluntarily Ceases Operations NEW WAY INTERNATIONAL: Members to Receive Liquidator's Account PETROLEOS DE VENEZUELA: Assures No Shortage of Fuel Supply PETROLEOS DE VENEZUELA: Chevron May Build Gas Plant PETROLEOS DE VENEZUELA: May Have to Repay US$1.6 Billion Bonds PIAS INTERNATIONAL: Members to Convene on November 21 POLYMER GROUP: Finalizes Deal to Buy Spunbond Line in Argentina ROAD KING: Fitch Downgrades IDR to BB+ SAM TAI: Members' Final Meeting Scheduled on November 21 SHING YIP: Creditors to Prove Debts on November 6 SINO HAND: Court to Hear Wind-Up Petition on November 15 TMK OAO: Installs Gas Purification System at Volzhsky Site TMK OAO: Raises US$155 Million from Syndicated Credit Facility VINCENT UNION: Creditors' Proofs of Claim Due on November 20 I N D I A BRITISH INDIA: Government Explores Merger with NTC CANARA BANK: Posts INR3.6-Billion Profit for Sept. 2006 Quarter CENTURION BANK: Boosts Net Profit by 49% in Sept. 2006 Quarter CONTINENTAL AIRLINES: Earns US$237 Mil. in Sept. 2006 Quarter GENERAL MOTORS: Korean Unit Will Recall 7,858 Cars QUEBECOR WORLD: Closing French Roto-Gravure Facility SILICON GRAPHICS: Emerges from Chapter 11 Protection SILICON GRAPHICS: Losses Spur KPMG's Going Concern Doubt STATE BANK OF INDIA: Inks EUR30-Mil. Deal with Germany's G&D J A P A N ALITALIA SPA: Updates Industrial Plan & Reviews Alliance Options ALITALIA SPA: Names Giovanni Sabatini to Board of Directors AMR CORP: Earns US$15 Million in 2006 Third Quarter ASHIKAGA BANK: Four Groups Show Interest in Bank BANK OF KYOTO: S&P Affirms B Bank Financial Strength Rating EIGHTEENTH BANK: Ups Profit Forecasts for the First Half of 2006 EIGHTEENTH BANK: JCR Affirms A+ Rating on Senior Debts FORD MOTOR: Restating Results for Accounting Under SFAS 133 FORD MOTOR: Incurs US$5.8 Billion Net Loss in 2006 Third Quarter FORD MOTOR: FMCC Earns US$262 Million in 2006 Third Quarter KYUSHU-SHINWA HOLDINGS: Gets JPY7 Billion from Bank of Fukuoka SOLO CUP: Posts US$299.4-Mil Net Loss for 2006 Second Quarter K O R E A BOE HYDIS: Xinhua Far East Downgrades Parent's Issuer Rating HANA BANK: Parent Denies Takeover Move on Woori Bank SK CORPORATION: 3rd Quarter Net Profit Declines to KRW308.4 Bil. THOMAS EQUIPMENT: Hires M. Luther as Chief Restructuring Officer WOORI BANK: Seeks License to Operate Subsidiary in Russia M A L A Y S I A ARMSTRONG WORLD: Posts Distribution Amount for Class 6 Claims ARMSTRONG WORLD: Registers with SEC 5,349,000 Common Shares ELBA HOLDINGS: Management Holds Off Payment to Creditors FCW HOLDINGS: Still Exploring Financial Regularization Options JIN LIN: Securities To Trade Starting November 14 N E W Z E A L A N D 3D RECYCLING: Shareholders Resolve to Liquidate Firm BARRAUD STREET: Court to Hear Liquidation Petition on Oct. 30 BE-WITCHED LTD: Faces Liquidation Proceedings EXSELL MARKETING: Appoints Joint Liquidators MANAWATU PLASTIC: Liquidation Petition Hearing Set on Oct. 30 METAL PROTECTION: Creditors Must Prove Debts by November 1 OXFORD TIMBER: Liquidation Hearing Set on October 30 QUADRA HOLDINGS: Creditors' Proofs of Debt Due on November 10 SHEEHAN ENTERPRISES: Creditors to Prove Claims on November 20 TAXIS COASTLINE: CIR Seeks to Liquidate Company P H I L I P P I N E S CLIENTLOGIC CORP: Inks Merger Deal with SITEL PHILCOMSAT HOLDINGS: PCGG Must Answer Senate Inquiry on Losses S I N G A P O R E BOON WAN: Court to Hear Wind-Up Petition on October 27 CHUAN YI: Creditors Must Submit Proofs of Debt by November 6 GLOBAL DELIGHT: Wind-Up Hearing Set for November 3 LEVI STRAUSS: Revenue Down to US$1.02-Mil. for 3rd Qtr. 2006 LIANG HUAT: Submits Circular and Listing Application to SGX-ST LOUIS PRESTON: Court Issues Wind-Up Order PETROLEO BRASILEIRO: Unit Supplying Ethanol Biodiesel Mixture SEA CONTAINERS: First Meeting of Creditors Slated for Nov. 21 TARGUS GROUP: Names Michael Hoopis as Chief Executive Officer TIONG POLESTAR: Pays Final Dividend to Creditors T H A I L A N D FEDERAL MOGUL: Court Allows Wilfred Morin, Jr. to Continue Suit KRUNG THAI: Plans to Float Domestic Hybrid Bonds OMNOVA SOLUTIONS: Improved Performance Spurs S&P to Lift Ratings * Upcoming Meetings, Conferences and Seminars - - - - - - - - ================= A U S T R A L I A ================= ADVANCED POLYMER: Court Issues Wind-Up Order -------------------------------------------- On October 4, 2006, the Supreme Court of Victoria issued an order to wind up Advanced Polymer Foam Pty Ltd. Accordingly, Gregory Stuart Andrews was appointed as official liquidator. The Liquidator can be reached at: Gregory Stuart Andrews G. S. Andrews & Associates Certified Practising Accountants 22 Drummond Street Carlton, Victoria 3053 Australia Telephone:(03) 9662 2666 Facsimile:(03) 9662 9544 AEARO TECHNOLOGIES: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed its B2 Corporate Family Rating for Aearo Technologies, Inc., as well as its Caa1 rating on the company's US$170 million Senior 2nd Lien Secured Term Loan due 2013. The debentures were assigned an LGD5 rating suggesting noteholders will experience an 86% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Default ---------- ------- ------- ------ ---------- US$60 million Sr. 1st lien secured revolver due 2012 B2 B1 LGD3 36% US$340 million Sr. 1st lien secured TLB due 2013 B2 B1 LGD3 36% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Indianapolis, Indiana, Aearo Technologies, Incorporated -- http://www.aearo.com/-- makes and sells personal protection equipment in more than 70 countries, including Australia, China, Brazil, France, Germany, Mexico, and Singapore, among others, under brand names such as AOSafety, E- A-R, Peltor, and SafeWaze. Products include earplugs, goggles, face shields, respirators, hard hats, safety clothing, first-aid kits, and communication. Safety products account for about three-quarters of the company's sales. Aearo also sells safety prescription eyewear and makes energy-absorbing foams that control noise, vibration, and shock. AHL TOWN: Members' Final Meeting Scheduled on October 27 -------------------------------------------------------- AHL Town Developments Pty Ltd, which is in liquidation, will hold a final meeting for its members on October 27, 2006, at 10:00 a.m. At the meeting, Liquidator Barry Maxwell Dean will present the final accounts on the Company's wind-up proceedings. The Liquidator can be reached at: Barry Maxwell Dean Level 3, 1C Homebush Bay Drive Rhodes, New South Wales 2138 Australia ANTHILL FREIGHTERS: Commences Wind-Up Process --------------------------------------------- The members of Anthill Freighters Pty Ltd held a general meeting on September 28, 2006, and decided to wind up the company's business operations. Subsequently, Brian McMaster and Oren Zohar were appointed as liquidators. The Liquidators can be reached at: Brian McMaster Oren Zohar KordaMentha Level 11 37 St Georges Terrace, Perth Australia APELRIGHT PTY: Enters Wind-Up Proceedings ----------------------------------------- On September 28, 2006, members of Apelright Pty Ltd resolved to voluntarily wind up the company's operations. Accordingly, Roger David Midgley Smith was appointed as liquidator at the creditors' meeting held that same day. The Liquidator can be reached at: Roger David Midgley Smith 126 George Street Morwell, Victoria 3840 Australia BRINDLEY LIMOUSINES: Commences Wind-Up of Operations ---------------------------------------------------- At an extraordinary general meeting held on September 28, 2006, the members of Brindley Limousines Pty Ltd resolved to voluntarily wind up the company's operations. Andrew Stewart Reed Hewitt was appointed as liquidator at the creditors' meeting held subsequently that day. The Liquidator can be reached at: Andrew Stewart Reed Hewitt Grant Thornton Rialto Towers, Level 35 South Tower, 525 Collins Street Melbourne, Victoria 3000 Australia CONNELL WAGNER: Creditors Must Prove Debts by November 10 --------------------------------------------------------- Liquidator Robert Michael Scales requires the creditors of Connell Wagner Superannuation Ltd to file their proofs of claim by November 10, 2006. Failure to comply with the requirement will exclude a creditor from sharing in the distribution of dividend. The Liquidator can be reached at: Robert Michael Scales Ernst & Young GPO Box 67 Melbourne, Victoria 3001 Australia Telephone: 03 8650 7698 CUPBOARD WHOLESALERS: Commences Wind-Up Proceedings --------------------------------------------------- On October 4, 2006, members of Cupboard Wholesalers Pty Ltd decided to voluntarily wind up the company's operations. Subsequently, Barry Keith Taylor was appointed as liquidator at the creditors' meeting held that same day. The Liquidator can be reached at: Barry Keith Taylor B. K. Taylor & Co. 8/608 St Kilda Road Melbourne, Victoria 3004 Australia CYLOCK PTY: Members and Creditors to Meet on October 26 ------------------------------------------------------- Cylock Pty Ltd, which is in liquidation, will hold a final general meeting for its members and creditors on October 26, 2006, at 11:00 a.m. During the meeting, Liquidator Rod Slattery will present his report on the company's wind-up proceedings and property disposal exercises. The Liquidator can be reached at: Rod Slattery PPB Chartered Accountants Level 10, 90 Collins Street Melbourne, Victoria 3000 Australia DALLINA PTY: Names Handberg and Morgan as Receiver and Manager -------------------------------------------------------------- On September 25, 2006, National Australia Bank Ltd appointed Geoffrey Niels Handberg and Brent Leigh Morgan as receiver and manager of Dallina Pty Ltd. The Receiver and Manager can be reached at: Geoffrey Niels Handberg Brent Leigh Morgan Level 10, 200 Queen Street Melbourne, Victoria Australia DENBUR CONSTRUCTIONS: To Declare First and Interim Dividend ----------------------------------------------------------- Denbur Constructions Pty Ltd, which is in liquidation, will declare the first and interim dividend to its creditors on December 1, 2006. Failure to file proofs of debt by November 7, 2006, will exclude a creditor from sharing in the dividend distribution. The Liquidator can be reached at: Danny Vrkic c/o Jirsch Sutherland & Co PO Box 573 Wollongong, New South Wales 2500 Australia DESIGNER TRUSS: To Declare First and Final Dividend on Nov. 7 ------------------------------------------------------------- Designer Truss and Frame Pty Ltd, which is subject to a deed of company arrangement, will declare its first and final dividend to creditors on November 7, 2006. Creditors who were unable to prove their debts on October 17, 2006, will be excluded from sharing in the dividend distribution. The Deed Administrator can be reached at: Robert W. Morton Mortons Accountants 5th Floor, 347 Flinders Lane Melbourne, Victoria 3000 Australia Telephone: 9620 4222 Facsimile: 9620 4244 EAGLE EYE: Members and Creditors to Receive Wind-Up Report ---------------------------------------------------------- The members and creditors of Eagle Eye Inspections Pty Ltd will hold a meeting on October 27, 2006, at 10:30 a.m. During the meeting, Liquidator Albarran will present the report regarding the company's wind-up proceedings and the manner its properties were disposed of. The Liquidator can be reached at: Richard Albarran c/o Hall Chadwick Level 29, 31 Market Street Sydney, New South Wales 2000 Australia ELASTIC WEBBING: Members to Receive Liquidator's Report ------------------------------------------------------- Elastic Webbing Australia Pty Ltd, which is in liquidation, will hold a final meeting for its members on October 26, 2006, at 10:00 a.m. During the meeting, the members will receive Liquidator Nicol's accounts on the company's wind-up and property disposal exercises. The Liquidator can be reached at: Colin Mcintosh Nicol McGrathNicol+Partners Level 8, IBM Centre 60 City Road, Southbank Victoria 3006 Australia Telephone:(03) 9038 3137 Web site: http://www.mcgrathnicol.com FIVE STAR: Liquidator Merrifield to Present Wind-Up Report ---------------------------------------------------------- Members of Five Star Plastics Pty Ltd will convene for their final meeting on October 26, 2006, at 11:00 a.m., to receive Liquidator Merrifield's report on the company's wind-up and property disposal activities. The Liquidator can be reached at: B. J. Merrifield c/o Five Star Plastics Pty Ltd 12 Lambert Avenue West Lakes Shore, South Australia 5020 Australia FORTESCUE METALS: Begins Pilbara Earthworks ------------------------------------------- Fortescue Metals Group Ltd and its mining operations partner, Roche Mining, has started groundbreaking at its AU$3.7-billion Pilbara project at the Cloud Break Mine in Western Australia as it looks to ship its first ore from early 2008, the Sydney Morning Herald reports. "The mines are the centerpiece of Fortescue's Pilbara Iron Ore and Infrastructure project and this development shows work is on track to commence extracting ore in mid-2007," the company explained. As reported in the Australian Associated Press, the Pilbara Project is expected to lift production to 45 million tonnes a year, placing Fortescue as Australia's third largest iron ore miner. About Fortescue Headquartered in West Perth, Western Australia, Fortescue Metals Group Limited -- http://fmgl.com.au/-- is involved in the exploration of iron ore through a project to mine iron ore in the Chichester Ranges, in the Pilbara region of Western Australia and exporting it from Port Hedland. In 2005, Fortescue's chief executive officer, Andrew Forrest, admitted to a AU$500-million blowout on the cost of port and rail infrastructure in the Pilbara Project because of price hikes for steel, fuel, construction materials, and contract labor. The Company also disclosed that the hampered progress of the Pilbara Project brings in the possibility that the Company may not meet its ore delivery schedule and pushes up costs at resource developments across Western Australia. In May 2005, the Australian Stock Exchange pressured Fortescue to explain matters about the project and to explain how the Company would be able to dispose of its lower grade order for 95% of the price obtained by rivals BHP Billiton and Rio Tinto for their top- quality products. The ASX then referred the matter to the Australian Securities and Investments Commission, which commenced a legal action against the Company. The ASIC alleges that Fortescue is engaged in misleading and deceptive conduct and has failed to comply with its continuous disclosure obligations when it announced various contracts with Chinese entities on August 23 and November 5, 2004. In particular, Fortescue did not disclose that the Chinese parties had not reached a concluded agreement on fundamental aspects of the projects and they had merely agreed that they would in the future jointly develop and agree on the "agreed" matters. The ASIC is seeking civil penalties of up to AU$3 million against Fortescue. * * * Fortescue reported total assets of AU$221 million and total liabilities of AU$84 million as of June 30, 2006. Fortescue reported a net loss for the past two fiscal years. Net loss for the year ended June 30, 2005, was AU$4.52 million and net loss for the year ended June 30, 2006, was AU$2.15 million. FOURCO PTY: Prepares to Declare Dividend on November 14 ------------------------------------------------------- Fourco Pty Ltd, which was placed under liquidation, will declare the first and final dividend for its creditors on November 14, 2006. Creditors who were unable to prove their debts on October 18, 2006, are excluded from sharing in the distribution. The Liquidator can be reached at: John Lindholm Ferrier Hodgson Level 29, 600 Bourke Street Melbourne, Victoria 3000 Australia FRESH EXPRESS: Westpac Banking Appoints Receivers and Managers -------------------------------------------------------------- Westpac Banking Corporation has appointed Peter James Hedge as receiver and manager of Fresh Express Australia Pty Ltd on October 5, 2006. The Receiver and Manager can be reached at: Peter James Hedge Hedge & Associates Suite 3, Level 27, 363 George Street Sydney, New South Wales Australia FRISMORE PTY: To Declare Dividend for Priority Creditors -------------------------------------------------------- Frismore Pty Ltd, which is in liquidation, will declare the first and final dividend for its priority creditors on November 9, 2006. Creditors who were unable to submit their proofs of claim on October 16, 2006, are excluded from sharing in the distribution. The Official Liquidator can be reached at: Alan Geoffrey Scott SimsPartners Level 4, 12 Pirie Street Adelaide, South Australia 5000 Australia G, K & R DEAVES: To Declare Dividend for Unsecured Creditors ------------------------------------------------------------ G, K & R Deaves Pty Ltd, which is in liquidation, will declare the first and final dividend for its unsecured creditors on November 13, 2006. Those who were unable to prove their claims on October 6, 2006, are excluded from sharing in the distribution. The Joint and Several Official Liquidator can be reached at: Ray Richards SimsPartners Level 11, 145 Eagle Street Brisbane, Queensland 4000 Australia GTB ENTERPRISES: Enters Liquidation Proceedings ----------------------------------------------- On October 2, 2006, the members of GTB Enterprises Pty Ltd resolved to voluntarily liquidate the company's business and appointed Kieran Patrick Owens as liquidator. The Liquidator can be reached at: Kieran Patrick Owens Owens Accountants 726 Anzac Highway Glenelg, South Australia 5045 Australia HERITAGE WINES: Blue Hills Buys Storage Business ------------------------------------------------ Heritage Fine Wines Pty Ltd's storage business has been sold to Blue Hills Liquor Distributors Group for AU$700,000, press reports say. As stated in a circular to investors prepared by Receiver Nicholas Crouch, of Crouch Insolvency, both parties are in the process of establishing an on-line wine sales platform. Heritage entered into a sale contract with Wine Investment Services Pty Limited, a member of the Blue Hills Liquor Distributors Group, on October 6, 2006, for the sale of the wine storage business. The sale agreement provides for, among other things: * All investor storage agreements to be transferred to Blue Hills; * All future wine deliveries to be undertaken by Blue Hills; * The on-line WAM wine management system to be transferred to Blue Hills; * All investor wine subject to outstanding levies to be held on behalf of the Receiver and Manager (pursuant to the court approved lien); and * Blue Hills to establish a wine "pick face" and commence wine deliveries within a specified period. According to The Age, investors in Heritage could receive better prices for the premium wines that have been locked away in storage, following the sale of the business to one of New South Wales' largest independent beverage suppliers. The Age notes that the sale of the company has been described as a good outcome for investors who were facing the possibility that their 1.1 million bottles of wine would have to be sold in a mass auction that would force prices down. Decanter.com recounts that around 3,000 investors, including former New South Wales State Premier Nick Greiner, had poured AU$70 million into the business, hoping to cash in on the American-led craze for "cult" Australian wines. "There will be no massive auction of the wine. Nor will there be an opportunity for buyers to cherry pick," The Age cites Mr. Crouch as saying. "Instead the wine will be sold in an orderly manner." Blue Hills will soon begin selling the wine to its customers, locally and overseas, The Age says. Sales information is expected to be distributed to shareholders in the coming weeks. * * * Heritage Fine Wines, founded by Simon Farid and Ben Tilley, was placed in voluntary administration in March 2005 with the directors blaming a downturn in sales, high overheads and a lack of capital. At the time, Heritage held more than 1.2 million bottles of premium wine on behalf of 3,000 customers who had invested in the company. Nicholas Crouch, of Crouch Insolvency, was appointed as Heritage's administrator. He has discovered that 300,000 bottles valued at AU$11 million are missing from the company's warehouses. It is possible that criminal charges could be laid in relation to the missing wine. Mr. Crouch can be reached at: Nicholas Crouch Crouch Insolvency Level 28, St. Martins Tower 31 Market St. Sydney NSW 2000 Telephone: 02 8262 9333 Fax: 02 8262 9300 Web site: http://www.bankruptcy.net.au/contact-us.htm KOPPERS HOLDING: Moody's Assigns LGD6 Rating on Sr. Unsec. Notes ---------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sector, the rating agency confirmed its B1 Corporate Family Rating for Koppers Holding Inc. and its B3 rating on the company's US$203 million 9.875% Sr Unsec Discount Global Notes due 2014. Additionally, Moody's assigned an LGD6 rating to those bonds, suggesting noteholders will experience a 90% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Pittsburgh, Pennsylvania, Koppers Holding Inc., -- http://www.koppers.com/-- is an integrated global provider of carbon compounds and commercial wood treatment products. The company's products are used in a variety of applications in a range of end markets, including the aluminum, railroad, specialty chemical, utility, rubber and steel industries. The Company operates two principal businesses: Carbon Materials & Chemicals, and Railroad & Utility Products. Through the Carbon Materials and Chemicals business, the company is a distiller of coal tar in North America, Australia, the United Kingdom and Scandinavia. MARUYOSHI INTERNATIONAL: Members Decide to Wind Up Firm ------------------------------------------------------- At a general meeting of Maruyoshi International Australia Co. Pty Ltd held on September 29, 2006, the members agreed that it is in the company's best interest to wind up its operations. In this regard, James Bettles and Susan Carter were appointed as liquidators. The Liquidators can be reached at: James Bettles Susan Carter Worrells Solvency & Forensic Accountants Level 6, 50 Cavill Avenue Surfers Paradise, Queensland 4217 Australia PATHOLOGY SERVICES: Members Resolve to Liquidate Firm ----------------------------------------------------- After a general meeting held on October 4, 2006, the members of Pathology Services Pty Ltd decided to voluntarily liquidate the company's business. In this regard, James Patrick Downey was appointed as liquidator. The Liquidator can be reached at: James Patrick Downey Cole Downey & Co Chartered Accountants Level 1, 22 William Street Melbourne, Victoria 3000 Australia PEARLCANE PTY: Creditors to Receive Dividend on Nov. 9 ------------------------------------------------------ Pearlcane Pty Ltd, which is in liquidation, will declare the first and final dividend for its preferential creditors on November 9, 2006. In this regard, Liquidator John Morgan will be receiving creditors' proofs of claim until November 3, 2006. The Liquidator can be reached at: John Morgan PKF Chartered Accountants Level 10, 1 Margaret Street Sydney, New South Wales 2000 Australia PKJS (VIC): Members Agree on Voluntary Liquidation -------------------------------------------------- After a general meeting on October 4, 2006, the members of PKJS (Vic) Pty Ltd decided to voluntarily wind up the company's operations. Accordingly, Gregory Stuart Andrews was named liquidator. The Liquidator can be reached at: Gregory Stuart Andrews G. S. Andrews & Associates Certified Practising Accountants 22 Drummond Street Carlton, Victoria 3053 Australia Telephone:(03) 9662 2666 Facsimile:(03) 9662 9544 POLYMERLAND AUSTRALIA: Members to Receive Wind-Up Report -------------------------------------------------------- A final meeting will be held for the members of Polymerland Australia Pty Ltd on October 26, 2006 at 10:00 a.m. During the meeting, the members will receive accounts on the company's wind-up proceedings and property disposal exercises from the liquidators. The liquidators can be reached at: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place, 2 Southbank Boulevard Southbank, Victoria 3006 Australia PORT PACIFIC: Members and Creditors to Convene on October 26 ------------------------------------------------------------ Port Pacific Trading Co. Pty Ltd, which is liquidation, will hold a final meeting for its members and creditors on October 26, 2006, at 9:00 a.m. to: -- receive the final receipts and payments from the Liquidator; and -- receive formal notice of the end of the administration; and The members and creditors may also consider other related matters. The Liquidator can be reached at: Raj Khatri Worrells Solvency & Forensic Accountants 8th Floor, 102 Adelaide Street Brisbane, Queensland 4000 Australia Telephone:(07) 3225 4316 Facsimile:(07) 3225 4311 Web site: http://www.worrells.net.au PRESFAST PTY: Will Declare First and Final Dividend on Nov. 10 -------------------------------------------------------------- Presfast Pty Ltd, which is subject to a deed of company arrangement, will declare the first and final dividend on November 10, 2006. Creditors who failed to submit their proofs of debt by October 5, 2006, are excluded from sharing in the dividend distribution. The Deed Administrator can be reached at: Paul Weston Horwath Sydney Partnership Level 10, 1 Market Street Sydney, New South Wales 2000 Australia Telephone:(02) 9372 0777 Facsimile:(02) 9372 0606 RICHARDSON HUNTER: Creditors' Final Meeting Set on October 26 ------------------------------------------------------------- Richardson Hunter Transport Pty Ltd, which is in liquidation, will hold an annual general meeting and final meeting for its creditors on October 26, 2006, at 9:30 a.m. At the meeting, the creditors will consider any matters arising from the liquidation and to receive Liquidator A. R. Yeo's wind- up report. The Liquidator can be reached at: A. R. Yeo Pitcher Partners Level 19, 15 William Street Melbourne, Victoria 3000 Australia SOTHEBY'S HOLDINGS: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the United States and Canadian Retail sector, the rating agency confirmed its Ba3 Corporate Family Rating for Sotheby's Holdings, Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$100 Mil. Sr. Unsecured Notes B1 B2 LGD6 90% Sr. Unsecured Shelf Registration (P)B1 (P)B2 LGD6 90% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in New York City, Sotheby's Holdings, Inc. (NYSE:BID) -- http://www.search.sothebys.com/-- is the parent company of Sotheby's worldwide auction businesses, art-related financing and private sales activities. The Company operates in 34 countries, with principal salesrooms located in New York and London. The company also regularly conducts auctions in 13 other salesrooms around the world, including Australia, Hong Kong, France, Italy, the Netherlands, Switzerland and Singapore. STOLESKI NOMINEES: Members Opt for Voluntary Wind-Up ---------------------------------------------------- On October 3, 2006, the members of Stoleski Nominees Pty Ltd resolved to voluntarily wind up the Company's operations. Subsequently, Andrew Stewart Reed Hewitt was named liquidator at the creditors' meeting held that same day. The Liquidator can be reached at: Andrew Stewart Reed Hewitt Grant Thornton Rialto Towers, Level 35 South Tower, 525 Collins Street Melbourne, Victoria 3000 Australia TECHWEB AUSTRALIA: Liquidator to Present Wind-Up Report ------------------------------------------------------- Members of Techweb Australia Pty Ltd will hold a final meeting on October 26, 2006, at 10:00 a.m., to receive Liquidator Nicol's report regarding the company's wind-up proceedings and property disposal exercises. The Liquidator can be reached at: Colin Mcintosh Nicol McGrathNicol+Partners Level 8, IBM Centre 60 City Road, Southbank Victoria 3006 Australia Telephone:(03) 9038 3137 Web site: http://www.mcgrathnicol.com UNIVERSAL COMPRESSION: Moody's Gives Ba1 Rating to $500Mil. Loan ---------------------------------------------------------------- Moody's Investors Service assigned a Ba1, LGD 3 (36%) rating to Universal Compression Inc.'s US$500 million senior secured bank credit facility. At the same time, Moody's affirmed Universal's Ba2 Corporate Family Rating, its Ba2 Probability of Default Rating and its B1, LGD5 (88%) ratings on its US$175 million 7- 1/4% Senior Notes. Universal Compression Inc. is a wholly owned subsidiary of Universal Compression Holdings Inc. Proceeds from the new credit facility are being used to refinance Universal's existing senior secured revolver and senior secured term loan. The outlook remains stable. Moody's will withdraw the ratings on the existing secured credit facilities once they have been repaid. Pete Speer, Moody's Vice President and Senior Analyst commented, "While Moody's has affirmed the stable outlook, the recent IPO of Universal Compression Partners creates uncertainties regarding the future capital structure and leverage profile of the combined enterprise which limits Universal's positive credit momentum and could pressure the ratings." Universal believes that the MLP structure of Universal Compression Partners, L.P. provides a lower cost of capital that could be utilized to accelerate growth of the domestic compression business. Moody's observes that UCLP adds the MLP constituency to the mix, an equity base that requires substantial and growing distributions. Universal intends to drop down its U.S. compression business into UCLP over time, which provides UCLP with a built-in growth profile. However, the compression business is untested in the MLP model and established MLP's are showing evidence of the strain of simultaneously growing their distributions, pursuing organic and acquisition growth, and maintaining their credit profile. The ratings could be pressured if the company incurs substantial leverage at UCLP in its drop down transactions without an appropriate reduction of leverage at Universal in order to maintain a reasonable combined leverage profile for the Ba2 rating. An aggressive use of UCLP debt to fund share buybacks at the Universal level or acquisitions could result in a negative outlook or downgrade. The Ba2 rating is supported by the company's leading position as the second largest natural gas compression services company in the world with 2.5 million horsepower as of June 2006, its recent pricing power and record fabrication backlog which has strengthened its earnings and cash flows, and its general reduction in leverage over recent years (LTM Debt/EBITDA of 3.1x and debt to capitalization of 43% at June 30, 2006). Universal's core contract compression business provides 85% of the company's gross margin and is very stable in comparison to other oil and gas related businesses. In addition to the uncertainties regarding the future capital structure and leverage profile, Universal's Ba2 Corporate Family Rating is restrained by the growth challenges in the domestic compression sector which necessitates the pursuit of growth in higher risk and more challenging foreign markets, the substantial capital expenditures required for expansions and acquisition event risk. Headquartered in Houston, Texas, Universal Compression, Inc. -- http://www.universalcompression.com/-- provides natural gas compression equipment and services, primarily to the energy industry in the United States, as well as in Canada, Venezuela, Argentina, Columbia, and Australia. WEBCO AUSTRALIA: Members' Final Meeting Slated for October 26 ------------------------------------------------------------- A final meeting for the members of Webco Australia Pty Ltd will be held on October 26, 2006 at 10:00 a.m. At the meeting, the members will receive accounts of the Company's wind-up and property disposal activities from Liquidator Nicol. The Liquidator can be reached at: Colin Mcintosh Nicol McGrathNicol+Partners Level 8, IBM Centre 60 City Road, Southbank Victoria 3006 Australia Telephone:(03) 9038 3137 Web site: http://www.mcgrathnicol.com XILLIX TECH: Receives Hercules' Demand Letter for Loan Repayment ---------------------------------------------------------------- Xillix Technologies Corp. received a demand letter from Hercules Technology Growth Capital Inc. for the repayment of a term loan, after the close of trading on Friday, October 13, 2006. The term loan was advanced by Hercules to the company's wholly owned subsidiary, Xillix US Ltd., pursuant to the loan agreement dated as of December 20, 2005, which loan is guaranteed by the company. Hercules has alleged that Xillix is in default under the Loan Agreement and related security agreement by reason of the occurrence of material adverse effects consisting of the company's failure to meet its internal forecasts of sales and EBITDA for August, 2006 and the fact that the company's total assets to liabilities ratio in August was less than 1.0 to 1.0. Hercules has demanded repayment of the loan in the amount of US$4,091,034, plus interest from October 1st at a daily rate of US$1,369 and a back end fee of US$115,500, all by October 23, 2006. The loan was advanced by Hercules to Xillix US in December 2005, bears interest at the rate of 12.40% per annum, is repayable in equal blended monthly installments of principal and interest in the amount of US$260,000 each, and is guaranteed by the company and secured by a security interest in all of the company's assets. In August 2006, Xillix had a number of discussions with Hercules regarding the restructuring of the loan, which on August 21, 2006 culminated in the execution of an amendment to the Loan Agreement, pursuant to which the company agreed to amend certain of the terms of the Loan, including the amount of the monthly payments, and paid the sum of US$1 million to Hercules as a partial prepayment of principal. In exchange, Hercules agreed to waive certain claims which it otherwise may have had with respect to defaults under the Loan Agreement. Since August 2006, the company has continued to keep Hercules' apprised of developments in its business and has made all required payments and believes that it has complied with all of the covenants set out in the Loan Agreement. In view of the foregoing, the company is considering its response to Hercules' demand, and will take whatever steps are necessary to protect its intellectual property and other assets. About Xillix Xillix Technologies Corp. (TSX:XLX) -- http://www.xillix.com/-- is a Canadian medical device company and is known for using fluorescence endoscopy for improved cancer detection. The company's currently approved device, Onco-LIFETM, incorporates fluorescence and white-light endoscopy in a single device that has been developed for the detection and localization of lung and gastrointestinal cancers. Onco-LIFE is approved for sale in the United States for the lung application and in Europe, Canada and Australia for both lung and gastrointestinal applications. The company also recently developed a new product, LIFE LuminusTM, designed to allow fluorescence imaging of the colon using conventional video endoscope technology. * * * In its financial statements for the quarterly period ended June 30, 2006, Xillix Technologies reports a shareholders' deficit of US$89,689,422 at June 30, 2006. The company discloses that the losses have been primarily funded by the issuance of debt and equity, and their ability to continue as a going concern is uncertain and dependent upon its ability to achieve profitable operations, to obtain additional capital and on the continued support of its shareholders. ================================ C H I N A & H O N G K O N G ================================ AFFILIATED COMPUTER: Continuing SmartPA Operation ------------------------------------------------- Affiliated Computer Services, Inc., has signed a two-year, estimated US$4.8 million extension to its contract to continue conducting clinical editing and pharmacy prior authorizations with its SmartPA tool for the Texas Health and Human Services Commission or HHSC Vendor Drug Program. The HHSC Vendor Drug Program provides prescription drugs for the Texas Medicaid, Children's Health Insurance Program or CHIP, Children with Special Healthcare Needs, and Kidney Health Care programs. Affiliated Computer has supported the Texas HHSC Vendor Drug prior authorization program since its inception and is consistently recognized as meeting and exceeding the State's legislative mandate for cost savings. Affiliated Computer's SmartPA, introduced into this program in 2004, is a clinical editing and pharmacy prior authorization program that delivers pharmaceutical cost containment, efficient pharmacy benefit administration, and continued access to quality medications. Unlike other prior authorization programs, this program uses a clinical rules system, in conjunction with drug and medical claims data, to help pharmacists determine the appropriateness of dispensing certain medications to Medicaid patients. The system also uses information from healthcare providers, when required, to determine if specific medications should be dispensed. SmartPA streamlines the prior authorization process for all stakeholders -- physicians, pharmacists, recipients, and payors -- and it adjudicates prior authorization requests online in real time. Prescriptions that meet a pre-defined set of clinical and fiscal criteria are approved in seconds. The SmartPA program results in substantial savings in administrative costs compared with traditional prior authorization programs. Savings result from the lower volume of call center use. Lower call center volume yielded considerable administrative savings for the Texas Medicaid and CHIP programs. In addition, SmartPA leads to major time savings for patients, physicians, and pharmacists, who would otherwise have to contact call centers, reprocess prescriptions, or experience delays in therapy. John Crysler, the managing director of Affiliated Computer Services Government Healthcare Solutions said, "SmartPA is a revolutionary tool that saves valuable time for physicians and pharmacists, while creating prescription drug cost savings and quality improvement. We are proud that the Texas Health and Human Services Commission turned to Affiliated Computer for its pharmacy prior authorization needs." Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland and Singapore. * * * Standard & Poor's Ratings Services lowered in June 2006 its corporate credit and senior secured ratings to BB from BB+ for Affiliated Computer Services Inc. The ratings remain on CreditWatch with negative implications, where they were placed Jan. 27, 2006. Fitch Ratings assigned its BB issuer default rating, BB senior secured revolving bank credit facility rating, BB senior secured term loan rating, and BB senior notes rating on Affiliated Computer Services, Inc. The rating outlook is negative. ASSON HOLDINGS: Court to Hear Wind-Up Petition on November 1 ------------------------------------------------------------ A petition to wind up Asson Holdings Ltd will be heard before the High Court of Hong Kong on November 1, 2006, at 9:30 a.m. The Director of Legal Aid filed the petition with the Court on September 1, 2006. The Solicitor for the Petitioner can be reached at: Joe Poon 34/F, Hopewell Centre 183 Queen's Road East Wanchai Hong Kong BENQ CORP: BenQ Mobile Confirms 1,900 Job Cuts in Germany --------------------------------------------------------- BenQ Mobile GmbH & Co. OHG, the German unit of BenQ Corp., confirmed plans to cut 1,900 jobs of its 3,000-strong workforce, Deutsche Welle reports. BenQ Mobile administrator Martin Prager said the cuts would affect all areas of the business including administration, marketing, sales and production. According to the report, 1,100 jobs will be reduced at the company's Kamp Lintfort site and around 850 jobs in Munich. Mr. Prager said that the reorganization would help safeguard the remaining 1,150 jobs at the insolvent division. Mr. Prager previously disclosed that the insolvent handset maker is now working on a new business model that will focus on research, development and design. The remaining business would develop and manufacture mobile phone handsets under license for other makers, the German daily says. "After three weeks of intensive scrutiny, it's clear that this is the only chance to save the company as a whole," Mr. Prager told a news conference last week. The company intends to raise a profit by the end of the year in order to invite investors to rescue the troubled handset maker, after losing EUR850 million (US$1 billion) in the past 12 months. As reported in the TCR-Europe on October 10, 2006, the IG Metall union in Germany was investigating the possibility of a legal action, possibly through a class action, to preserve the jobs of 3,000 BenQ Mobile staff who now stand to lose their jobs after the company's insolvency filing. The planned suit is aimed at forcing Siemens to create a EUR200- million emergency program for the affected workers. In defense, Siemens spokesman Marc Langendorf said: "So far we've been the only ones to contribute substantial aid to the affected employees, without it being legally binding on us to do so," pointing to a special EUR35-million fund set up for affected BenQ Mobile's employees. * * * Headquartered in Taiwan, Republic of China, BenQ Corporation, Inc. -- http://www.benq.com/-- is principally engaged in manufacturing, developing and selling of computer peripherals and telecommunication products. It is also a major provider of 3G handset, 3G handset, Camera phones, and other products. BenQ Mobile GmbH & Co., the company's wholly owned subsidiary, operates from Munich, Germany. Taiwan Ratings Corp., on August 17, 2006, lowered its long-term corporate credit rating and unsecured corporate bond rating on BenQ Corporation to twBB+ from twBBB. At the same time, the short-term corporate rating on the company was lowered to twB from twA-3. All ratings remain on CreditWatch with negative implications, where they were placed on March 14, 2006. BLOUNT INC: Moody's Confirms Ba3 Corporate Family Rating -------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed its Ba3 Corporate Family Rating for Blount, Incorporated, as well as its B2 rating on the company's US$175 million 8.875% Senior Subordinate Notes Due 2012. The notes were assigned an LGD5 rating suggesting noteholders will experience an 86% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$150 Million Sr. Sec. Revolver due 2009 Ba3 Ba1 LGD2 27% US$150 Million Sr. Sec. Term Loan due 2010 Ba3 Ba1 LGD2 27% Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). * * * Headquartered in Portland, Oregon, Blount, Incorporated,- http://www.blount.com- manufactures equipment, accessories, and replacement parts to the forestry, yard care, and general contractor industries worldwide. Blount manufactures its products in the United States, Canada, China, and Brazil, and sells them in more than 100 countries. CNH GLOBAL: DBRS Holds Sr. Unsecured Debt's Rating at BB (High) --------------------------------------------------------------- Dominion Bond Rating Service confirmed the ratings of CNH Global N.V. and Case New Holland Inc. at BB (high) for the Issuer Rating and Senior Unsecured Debt, respectively. DBRS expects CNH's rating to remain steady as the Company has made progress in enhancing its competitive position and has substantially improved its balance sheet. However, DBRS notes that the Company needs to accomplish much more operationally to narrow the gap between itself and major rivals. In addition, the extent to which the Company remains committed to reducing debt levels will have a considerable impact on the Company's credit profile, as leverage remains relatively high for a cyclical entity with cash flow-to-debt of 0.18 at June 30, 2006. The Company's results were primarily driven by strong global economic conditions that bolstered demand for industrial equipment. However, demand was not balanced, as construction equipment accounted for all revenue growth, while agricultural was flat with rising farming costs and uncertainty with U.S. government farming subsidies constraining spending decisions. DBRS expects these trends to continue, but weakened residential housing construction could contract growth. In addition, CNH's strategic imperatives and reorganization have gained traction. Equipment-buying decisions are heavily based on brand loyalty, quality of a company's dealers, and product performance and innovation. As such, CNH has focused on strengthening its brand heritage and revitalizing its product line, which is important as customers tend to be loyal and this adds stability. However, this element also makes it more challenging to take customers from rivals. CNH introduced initiatives that have improved dealer customer support, which is key as dealers are the customer's primary contact. Finally, cost efficiencies have been gained from establishing a more common product platform, rationalizing the supply chain, and building a lean and more flexible manufacturing system. This has driven recent EBITDA margin growth of three percentage points from 2002 to the recent 12-month period. CNH Global N.V. -- http://www.cnh.com-- is a global, full-line company in both the agricultural and construction equipment industries. The company's global scope and scale includes integrated engineering, manufacturing, marketing and distribution of equipment on five continents. It organizes its operations into three business segments: agricultural equipment, construction equipment and financial services. CNH markets its products globally through its two brand families, Case and New Holland. Case IH and New Holland make up its agricultural brand family. Case and New Holland Construction (along with Kobelco in North America) make up its construction equipment brand family. The company has manufacturing plants in Austria, Belgium, Italy, China, India, Brazil, Mexico, among others. CUMMINS INC: Inks US$126-MM Joint Venture Pact with Beiqi Foton --------------------------------------------------------------- Cummins Inc. and Beiqi Foton Motor Company signed an agreement to form an equally owned joint venture company, Beijing Foton Cummins Engine Company Limited, to produce two types of the company's light-duty, high-performance diesel engines in Beijing. The engines primarily will be used in light-duty commercial trucks, pickup trucks, multipurpose and sport utility vehicles, including certain types of marine, small construction equipment and industrial applications. The company and Beiqi Foton will initially invest a combined US$126 million into BFCEC. The joint venture plant will have an annual capacity of 400,000 units and will produce the company's 2.8-liter and 3.8-liter clean diesel engines, which will meet stringent on-highway and off-highway emission standards worldwide, including Euro IV and above. BFCEC is scheduled to begin production in 2008. "This joint venture provides Cummins with the opportunity to enter an exciting new market with the support of a well- respected partner," Joe Loughrey, president and chief operating officer, said. "These new products represent the company's latest efforts to expand its presence in the important China market, where Cummins has enjoyed considerable success over the years." "Foton Motor is a strong player in China's commercial vehicle industry, while Cummins is a global power leader," Wang Jinyu, Beiqi Foton president, said. "The cooperation between the two powerhouses will bring us a win-win relationship." BFCEC represents a further expansion of the company's product line in China, where it already is a foreign producer of heavy- duty and mid-range diesel engines. The company says that it currently operates more than 20 facilities in China, including nine manufacturing sites and BFCEC will be the 10th. About Foton Motor Based in Beijing, China, Beiqi Foton Motor Co., Ltd., -- http://www.foton.com.cn-- is a producer of commercial vehicles and a maker of light-duty trucks in China. Foton's product line includes trucks with payload under 35 tons, light bus, SUV, pickup truck, medium and large buses. The company has 28,000 employees. About Cummins Inc. Headquartered in Columbus, Indiana, Cummins Inc. (NYSE: CMI) -- http://www.cummins.com/-- designs, manufactures, distributes and services engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Cummins serves customers in more than 160 countries, including China and India, through its network of 550 Company-owned and independent distributor facilities and more than 5,000 dealer locations. * * * Cummins' Junior Convertible Subordinated Debentures carry Fitch's 'BB' rating with a stable outlook. Moody's Investors Service raised Cummins' convertible preferred stock rating to Ba1 from Ba2 and withdrew the company's SGL-1 Speculative Grade Liquidity rating and its Ba1 Corporate Family Rating. DAILY CHARM: Wind-Up Process Commenced -------------------------------------- On October 17, 2006, a statement was delivered to the Registrar of Companies that Daily Charm Industrial Ltd has commenced voluntary winding-up. Huen Ho Yin was appointed Provisional liquidator on October 16, 2006. The Liquidator can be reached at: Huen Ho Yin Units 3307-3312 33/F, West Tower Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan Hong Kong DYNASTY RIGHT: Faces Wind-Up Proceedings ---------------------------------------- A wind-up petition filed against Dynasty Right Ltd will be heard before the High Court of Hong Kong on November 15, 2006, at 9:30 a.m. Bank of China (Hong Kong) Ltd filed the petition with the Court on September 18, 2006. The Solicitors for the Petitioner can be reached at: Tsang, Chan & Wong 16/F, Wing On House No. 71 Des Voeux Road, Central Hong Kong EMI GROUP: Expects 3% Revenue Decline in 2006 First Half -------------------------------------------------------- EMI Group PLC provides trading update for the six months ended September 30, 2006, outlining strong second-half release schedule andconfirming confidence in its expectations for the full year. EMI Group expects to report a decline in total revenues of approximately 3% on a constant currency basis for the six months to September 30, 2006. The year-on-year decline in revenues is due to the phasing of EMI Music's planned release schedule which, as previously indicated, has a greater weighting to the second half of the financial year than in prior years. After the impact of exchange rate movements over the period, group revenues are expected to decline by close to 5% on a reported basis. Underlying profit before tax, amortization and exceptional items (underlying PBT) is expected to be approximately GBP27 million. The strength of upcoming releases, together with continuing strong momentum at EMI Music Publishing and further good progress on the cost savings initiatives announced in April 2006, give the Board confidence that the Group is on track to deliver results in line with its expectations for the full year. EMI Music is expected to report a decline in revenues at constant currency of approximately 4% for the six months to September 30, 2006. Digital revenues continue to show strong growth and in the first half represented approximately 9% of divisional revenues. Top-selling releases over the period included new albums from international superstar Janet Jackson and local superstars Hikaru Utada, Chingy, Bob Seger, Trace Adkins, Underoath, Tiziano Ferro and Renaud. Of particular note was the strong contribution from breaking and developing acts, with successful new releases from Cherish, Letoya, Lily Allen, Jolin Tsai, 30 Seconds to Mars, The Red Jumpsuit Apparatus and on-going sales of albums from Corinne Bailey Rae, The Kooks and Diam's. The impact on EMI Music's divisional profit from both lower revenues and the changed mix of releases as compared to the prior year will be partly mitigated by progress on the cost savings initiatives announced in April 2006. The divisional operating margin is expected to be approximately 3% for the period to September 30, 2006. EMI Music's planned release schedule for the remainder of the financial year to March 31, 2007 features an exciting line up of albums from long-established international and local superstars, as well as newly emerging global and local talent. The highlights include albums from Norah Jones, Robbie Williams, Keith Urban, Joss Stone, Dierks Bentley, RBD, Relient K, Tina Turner, All Saints, Vasco Rossi, Simon Webbe, Depeche Mode, Moby and a Beatles release which contains new music as featured in the highly acclaimed Cirque du Soleil show, "Love", in Las Vegas. The planned artist releases, continued growth in digital revenues and delivery of the announced cost savings, are expected to drive strong growth in underlying revenues and profits in the second half of the financial year. On a constant currency basis, EMI Music Publishing is expected to report first half revenues in line with the prior year. Performance revenues exhibited particular strength, reflecting strong on-going chart share. The divisional operating margin is expected to increase to approximately 25%. It is expected that EMI Music Publishing will continue to make good progress in the second half of the current financial year, with key releases from the likes of Sting, Kelly Clarkson, Fergie, Diddy, Scissor Sisters, Natasha Bedingfield, Kanye West and Daddy Yankee. Headquartered in London, United Kingdom, EMI Group PLC -- http://www.emigroup.com/-- is the world's largest independent music company, operating directly in 50 countries and with licensees in a further 20. The group has operations in China. The group employs over 6,600 people. Revenues in 2005 were near EUR2 billion and operating profit generated was over EUR225 million. At March 31, 2006, EMI Group's consolidated balance sheet revealed GBP1.817 billion in total assets, GBP2.544 billion in total liabilities and GBP726.6 million in shareholders' deficit. EMI GROUP: Moody's Cuts Rating on Weak Debt Protection Measures --------------------------------------------------------------- Moody's Investors Service downgraded EMI Group plc's senior debt and guaranteed debt ratings to Ba2 from Ba1. At the same time Moody's assigned a Ba2 Corporate Family Rating to EMI. The downgrade is based on Moody's expectation that EMI's debt protection measurements will not improve near-term to a level commensurate with the Ba1 rating category. The rating outlook is now stable. Despite a visible improvement in operating performance during the 2005/6 financial year EMI's cash-flow based measures of indebtedness have remained relatively weak with Adj. RCF/Adj. Net Debt at 8.3% while free cash flow (after capital expenditures and dividends) was negative as it has been in four out of the last five years. While Moody's believes that EMI's second half release schedule will help to compensate for a weak first half performance (reported revenues -5%) during the company's 2006/7 financial year, it will be challenging for EMI to show meaningfully improved revenue and profits for the year against the backdrop of a still struggling global market for recorded music. Current year operating cash flows will also be held back by significant restructuring spending (GPP60 million) although Moody's acknowledges that EMI has completed compensatory property sales to fund these outflows. In addition, the company is, in Moody's opinion likely to use any financial flexibility gained over the medium term to consider add-on acquisitions (music publishing catalogues, smaller recorded music labels) given that acquisition activity has been very muted over the last couple of years. The Ba2 rating continues to recognize EMI's position as a global player in the oligopolistic recorded music industry as well as the company's leading world-wide position in music publishing with a more stable revenue base compared to recorded music. EMI Music Publishing is currently the world's largest music publisher, but is likely to cede its top place to Universal Music once Universal's acquisition of Bertelsmann Music Group's music publishing business becomes effective. The rating further acknowledges the significant restructuring steps EMI has been taking over the last few years to lower the company's cost base, including the outsourcing of manufacturing in the U.S., Europe and Japan and the tight management of the artist roster. Current year cost savings are expected to save GBP30 million on a run-rate basis from 2007/8 onwards. In addition, EMI's performance in music publishing remains relatively resilient with mechanical revenues directly related to recorded music sales representing no more than 45% (in 2005/6) of EMI's music publishing revenues. The Ba2 rating and a stable outlook assume that EMI can: -- translate its strong release schedule into revenue and profit growth for the second half of 2005/6; -- deliver consolidated revenue growth thereafter; and -- achieve cost reductions as forecast. Failure to deliver these objectives, near-term debt-financed acquisitions or failure to move the ratio of Adj. RCF/Adj. Net Debt towards 10% over time could result in ratings pressure. The possible business combination between EMI and Warner Music Group adds an element of uncertainty to the outlook over time. While any such combination would have significant cost saving potential, the financing of a potential transaction and who would be in the role of acquirer remain unclear. However, merger talks have ceased for the time being as the EU reconsiders the competitive implications of the merger between Sony Music and Bertelsmann Music Group following the annulment of the initial approval for this transaction by the European Court of First Instance. If after the review process the Sony BMG merger were to be re-approved Moody's believes that a resumption of the talks between EMI and Warner would likely follow. Moody's notes that the operating environment for recorded music remains difficult. The global recorded music markets have been shrinking since 2001 and total global music sales (on a trade values basis) fell by a further 4% during the first calendar half of 2006 (after -1.9 % in 2005) despite continuing strong digital sales. Moody's believes that the fall for the first half of 2006 is aggravated by the phasing of release schedules with a further increasing bias towards releases during the second half of the calendar year. Nevertheless it will remain challenging for the industry to reverse first half trends and achieve overall growth for the calendar year. Notwithstanding the relative success of both the industry's legitimate download products and concerted legal action, download and physical music piracy remain a constricting factor for the global recorded music industry. In addition, the very success of the legitimate download product also means that EMI and the industry as a whole will have to carefully manage the retail channel as the continuing move towards digital distribution is likely to take a toll on specialist retailers. Ratings affected are: EMI Group plc * CFR of Ba2 assigned * 8.25% GBP bonds due 2008 * 8.625% notes due 2013 Capitol Records Inc. (gtd. by EMI Group plc) * 8.375% guaranteed notes due 2009 EMI Group plc, one of the world's leading music recording and publishing companies is headquartered in London, England. The group has operations in China. ELECTRICAL COMPONENTS: Moody's Assigns Loss-Given-Default Rating ---------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency confirmed its B1 Corporate Family Rating for Electrical Components International Holdings Company, as well as its B3 rating on the company's US$60 million second-lien secured term loan due 2014. Those debentures were assigned an LGD5 rating suggesting lenders will experience a 84% loss in the event of default. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations of the company: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$35 Million Sr. First-Lien Sec. Revolver due 2012 B1 Ba3 LGD3 36% US$155 Million Sr. First-Lien Sec. Term Loan due 2013 B1 Ba3 LGD3 36% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Electrical Components International Holdings Company -- http://www.electricalcomponentsinternational.com/-- manufactures wire harnesses and leads for traditional and specialty markets, complex harness sub-assemblies, radiant glass heaters, power cords and we have contract manufacturing capabilities. The company has facilities in the United States, Mexico, and China. ESTERLINE TECH: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Ba2 Corporate Family Rating for Esterline Technologies Corp. and its Ba3 rating on the company's 7.75% Senior Subordinated Notes due 2013. Moody's assigned those debentures an LGD5 rating suggesting noteholders will experience a 75% loss in case of default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Bellevue, Washington, Esterline Technologies Corp. -- http://www.esterline.com/-- is a specialized manufacturing company serving principally aerospace and defense markets. Esterline operates in three business segments: Avionics and Controls, Sensors and Systems and Advanced Materials. The company has operations in China. FANTEC LIMITED: Placed Under Voluntary Wind-Up ---------------------------------------------- On October 10, 2006, the sole member Chau Wai Fong of Fantec Ltd passed a resolution to voluntarily wind up the company's operations. Subsequently, Chan Wing Kit was appointed liquidator. The Liquidator can be reached at: Chan Wing Kit Units 2009-18 20/F, Shui On Centre Nos. 6-8 Harbour Road, Wanchai Hong Kong FEDDERS NORTH: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency affirmed its Caa1 Corporate Family Rating for Fedders North America, Inc., as well as revised the rating on the company's US$155 million 9.875% senior subordinate notes due 2014 to Caa2 from Caa3. Those debentures were assigned an LGD5 rating suggesting that noteholders will experience a 73% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). * * * Headquartered in Liberty Corner, New Jersey, Fedders North America, Incorporated - http://www.fedders.com- provides air conditioning and other air treatment products for commercial and residential applications to markets worldwide. Product lines include residential central air conditioning systems, including condensing units, air handlers, gas furnaces, air cleaners, and humidifiers, as well as rooftop, vertical and horizontal packaged air conditioners and heat pumps for commercial, residential and telecommunications applications and also, appliance air treatment products. The company's international headquarters is in China, and has operations in India, Germany, and Canada. GEARY SAINT: Enters Voluntary Liquidation ----------------------------------------- On October 6, 2006, members of Geary Saint Company Ltd resolved to voluntarily wind up the company's operations and appointed Lau Vui Cheong as liquidator. The Liquidator can be reached at: Lau Vui Cheong 7/F, Hong Kong Trade Centre 161-167 Des Voeux Road, Central Hong Kong GLOBAL CROSSING: Provides Broadband Connectivity to OneCommunity ---------------------------------------------------------------- Global Crossing Ltd. has renewed and expanded its relationship with OneCommunity, an ultra broadband services and applications provider for municipal and non-profit organizations in Northeastern Ohio. Under the terms of a new agreement, Global Crossing is providing Dedicated Internet Access services to OneCommunity to maximize their existing infrastructure and investment and increase value to the participants in their network. The two companies will also jointly market Global Crossing's enterprise Voice over Internet Protocol and IP videoconferencing offerings, including IP Video and iVideoconferencing, to OneCommunity subscribers. Commenting on the deal, Scot Rourke, president of OneCommunity, said, "Global Crossing has been a reliable and consistent network partner that has in turn enabled us to deliver quality next-generation broadband services to community governments and nonprofits such as the Cleveland Clinic, Case Western Reserve University and the City of Cleveland in northeastern Ohio. Through Global Crossing, OneCommunity is expanding its future offerings to include VoIP and IP videoconferencing services -- everything an intelligent community requires to do business in our region and around the world." OneCommunity has been a Global Crossing customer for the past two years and continues to experience exponential growth each year attributed to both an expanded customer base and substantial usage growth enabled by the fiber-optic community network. As an example, One Community's first customer, Case Western Reserve University has seen usage by students, faculty and researchers surge literally ten-fold in the past two years. For the first time, the two companies will also jointly market VoIP Outbound, VoIP Local and IP video and iVideoconferencing to OneCommunity subscribers. Mike Toplisek, Global Crossing's senior vice president of enterprise sales, noted, "By leveraging Global Crossing's IP solutions, OneCommunity offers its subscribers leading-edge services, further supporting the growth of businesses and nonprofits in northeastern Ohio. We're delighted to be a key provider to OneCommunity and assist them in expanding their subscriber offering to include VoIP and our award winning iVideoconferencing services." Global Crossing Enterprise VoIP Services may be provisioned over DIA, public Internet or fully meshed IP VPN connections, providing unlimited VoIP Local Services and VoIP Outbound connection options to maximize flexibility and control expenses. Global Crossing's VoIP Local Service is a direct inward dial service that offers local origination for nationwide local numbers through a single IP point of interconnection as a cost- effective alternative to traditional toll-free applications. Global Crossing's iVideoconferencing allows customers to place ISDN calls directly on Global Crossing's IP network and transports them directly to service nodes around the world. This results in increased quality and ISDN cost reductions of 40% to 70% as compared to calls switched over traditional voice networks. IP Video is a videoconferencing transport vehicle that uses Global Crossing's fully meshed MPLS-based global IP VPN to augment existing legacy infrastructure. About OneCommunity Founded in 2003, OneCommunity is a non-profit organization that serves as northeast Ohio's platform for collaboration and innovation leveraging its regional community fiber-optic network. It serves research, education, government, healthcare, culture and other nonprofit facilities via a 10-gigabit backbone with one-gigabit uplinks. OneCommunity also partners with leading technology businesses to develop innovative new services and applications that drive economic development, enhanced quality of life and create economic opportunities for the region. About Global Crossing Headquartered in Florham Park, New Jersey, Global Crossing Ltd. -- http://www.globalcrossing.com/-- provides telecommunication services over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe including Hong Kong. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. The company filed for chapter 11 protection on Jan. 28, 2002 (Bankr. S.D.N.Y. Case No. 02-40188). When the Debtors filed for protection from their creditors, they listed US$25,511,000,000 in total assets and US$15,467,000,000 in total debts. Global Crossing emerged from chapter 11 on December 9, 2003. As of December 31, 2005, Global Crossing's balance sheet reflected a US$173 million equity deficit compared to US$51 million of positive equity at December 31, 2004. HELINGER LTD: Creditors Must Prove Debts by December 8 ------------------------------------------------------ Creditors of Helinger Ltd are required by Liquidator Lo Wai Tsun to file their proofs of debt by December 8, 2006, to be included in any distribution the company will make. The Liquidator can be reached at: Lo Wai Tsun 22/F, JPMorgan Tower 138 Rural Committee Road Shatin, New Territories Hong Kong HEROIC INVESTMENT: Prepares to Close Operations ----------------------------------------------- At an extraordinary general meeting of Heroic Investment Company Ltd held on October 14, 2006, shareholders passed a special resolution to voluntarily wind up the company's operations. In this regard, Ho Lo Mai Ying was appointed as liquidator. The Liquidator can be reached at: Ho Lo Mai Ying Room 508 5/F, Wing On House 71 Des Voeux Road, Central Hong Kong HIGHTOP INTERNATIONAL: Members to Receive Wind-Up Report -------------------------------------------------------- Members of Hightop International Ltd will hold a final meeting on November 21, 2006, at Room 1307-8 Dominion Centre, 43-59 Queen's Road East, Wanchai, Hong Kong. During the meeting, members will receive a report regarding the company's wind-up and property disposal exercises from Liquidator Poon Chi Woo. As reported by the Troubled Company Reporter - Asia Pacific, the Company commenced a wind-up of its operations on August 8, 2006. KEROPY TRAVEL: Wind-Up Petition Hearing Slated for November 8 ------------------------------------------------------------- The High Court of Hong Kong will hear a wind-up petition against Keropy Travel on November 8, 2006, at 9:30 a.m. Pang Mei Ling, Chan Pui Ching and Cheung Lung Fu presented the petition with the Court on September 13, 2006. The Solicitors for the Petitioner can be reached at: Juliana O. Y. Chan 26/F, Queensway Government Offices 66 Queensway Hong Kong LILAC LIMITED: Voluntarily Ceases Operations -------------------------------------------- Shareholders on October 12, 2006, passed a special resolution to voluntarily wind up Lilac Ltd's operations and appointed Kong Chi How, Johnson as liquidator. The Liquidator can be reached at: Kong Chi How, Johnson 25/F, Wing On Centre 111 Connaught Road, Central Hong Kong NEW WAY INTERNATIONAL: Members to Receive Liquidator's Account -------------------------------------------------------------- New Way International Development Ltd will hold a final general meeting for its members on November 21, 2006, 10:00 a.m., at Room 3508 Edinburgh Tower, The Landmark, 15 Queen's Road Central, Hong Kong. During the meeting, members will receive Liquidator Hung Chun Ming's account on the company's wind-up and property disposal exercises. The Liquidator can be reached at: Hung Chun Ming Room 701, 7th Floor Nam Wo Hong Bldg 148 Wing Lok Street Sheung Wan, Hong Kong PETROLEOS DE VENEZUELA: Assures No Shortage of Fuel Supply ---------------------------------------------------------- Petroleos de Venezuela SA assured total normality of fuel supply, domestically and internationally, after announcing that all its commercialization processes are going according to the established plan. Asdrubal Chavez, the Commerce and Supply Executive Director of Petroleos de Venezuela, stated, "Venezuelans have a reliable supply." Mr. Chavez commented that all international trade agreements are evolving according to the plan established by the industry, and delivery guidelines have always been met. Petroleos de Venezuela maintains a 3.4 million barrel production after unifying statistics of crude and natural gas, a figure supported by domestic fuel consumption and commitments established by the industry in the international market. Mr. Chavez noted, "Domestic fuel consumption is approximately 500 mil barrels, and supported by our production levels, we guarantee that versions of an alleged shortage of supply in the central region are false." Full normality in the central region The operation of the Yagua Distribution Plant is completely normal, and its daily load average is around 245 oil tank trucks, an amount that guarantees full fuel supply in the area. Similarly, Mr. Chavez disclosed the full operation of El Palito Refinery, a complex that maintains its processing of 140 thousand crude barrels per day, and explained that the works carried out are part of a plan of scheduled shutdowns established by the refining circuit of the industry. * * * Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower the company's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. PETROLEOS DE VENEZUELA: Chevron May Build Gas Plant --------------------------------------------------- Petroleos de Venezuela SA, the state-owned oil firm of Venezuela, is negotiating with Chevron Corp. to construct the country's first liquefied natural gas plant, Contra Costa Times reports. The plant would produce 4.7 million tons of liquefied natural gas yearly. The plant would be located in Guiria in the eastern state of Sucre, Contra Costa says, citing Carlos Figueredo, the head of Petroleos de Venezuela's offshore unit. Mr. Figueredo told Contra Costa, "We hope it would be operating before the end of the decade." Mr. Figueredo said that Chevron would take a stake in plant, Contra Costa states. * * * Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower thecompany's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. PETROLEOS DE VENEZUELA: May Have to Repay US$1.6 Billion Bonds -------------------------------------------------------------- Petroleos de Venezuela SA, the state-owned oil company of Venezuela, may have to repay US$1.6 billion in bonds, Bloomberg reports. Bloomberg relates that Venezuela's President Hugo Chavez's plan to take control of Exxon Mobil Corp.'s and ConocoPhillips' oil production joint ventures may lead to defaults on US$1.6 billion in bonds. President Chavez told Bloomberg that his government would seize four units owned in part by Exxon, ConocoPhillips, Chevron Corp., France's Total SA and Norway's Statoil ASA. Bloomberg notes that the ventures, set up before President Chavez became president in 1999, pump 540,000 barrels of crude per day, or 22% of Venezuela's oil. Two of them sold the bonds and the others owe UUS$2.3 billion in loans. The report says that the ventures include: -- Petrozuata CA, 50.1% owned by ConocoPhillips; -- Cerro Negro CA, run by Petroleos de Venezuela, Exxon and BP Plc; -- Sincor SA, run by Total and Statoil; and -- Hamaca, owned by ConcoPhillips, Chevron, and Petroleos de Venezuela. Miguel Octavio, a fund manager at BBO Financial Services in Caracas who holds the securities, told Bloomberg that defaults may require Petroleos de Venezuela to repay bonds that now cost 90% of their face value, providing a nice windfall for investors. Gersan Zurita, an analyst with Fitch Ratings, told Bloomberg, "You would have a completely different project than the bondholders originally agreed to finance. What the government wants would constitute a major material change. If it's done without private bondholder consent, we could have a default." Bloomberg emphasizes that Petrozuata sold US$1 billion in bonds in three parts. Its US$625 million of 8.22% bonds due in 2017 have increased to 97.8 cents from 95 cents on the dollar in 2005. If the bonds are paid in full by the end of 2006, they would generate a price gain of 2.25%. Cerro Negro, which is operated by Exxon, has US$600 million in outstanding bonds with three maturities, according to Bloomberg. The firm's US$50 million of 8.03% bonds due in 2028 would bring in about 11% if repaid at face value. The securities were trading at about 90.12 cents on the dollar. Petroleos de Venezuela and Exxon each own less than 42% of Cerro Negro, while BP Plc holds the remainder. Sincor has US$1.2 billion in outstanding loans, while Hamaca has US$1.1 billion in loans, Bloomberg states. * * * Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * Standard & Poor's said on July 17 that it may lower thecompany's B+ foreign-currency debt rating in part because of the absence of timely financial and operating information. PIAS INTERNATIONAL: Members to Convene on November 21 ----------------------------------------------------- Pias International Hong Kong Ltd will hold a final meeting for its members on November 21, 2006, at 10:00 a.m., to receive Liquidator Ho Wai Ip's account on the company's wind-up proceedings and property disposal activities. The Liquidator can be reached at: Ho Wai Ip Room 1903 19/F, World-Wide House 19 Des Voeux Road, Central Hong Kong POLYMER GROUP: Finalizes Deal to Buy Spunbond Line in Argentina --------------------------------------------------------------- Polymer Group, Inc., disclosed that it has finalized a contract with Reifenhauser REICOFIL to purchase a state-of-the-art spunbond line for the expansion of its Dominion Nonwovens Sudamericana SA facility near Buenos Aires, Argentina. The new wide-width, multi-beam line will be a Reifenhauser REICOFIL 4 spunbond line that will increase the capacity of Dominion Nonwovens. The new line comes in response to customers' needs for its products in the South American region. Continued growth in the Mercosur trading region is increasing customer demand for the high-quality materials that Polymer Group has built a reputation for providing at Dominion Nonwovens. Polymer Group will begin construction of the new facility in the fourth quarter of this year and expects to complete installation of the line by the end of fiscal year 2007. This will enable Dominion Nonwovens to begin producing high-quality fine denier products for customers that meet the highest standards in the industry. William B. Hewitt, Polymer Group's interim chief executive officer, stated, "Polymer Group's strategy of growing on a global basis to provide the right products where customers need them continues to be a focus for our business. Our strategic relationship with Reifenhauser REICOFIL has been paramount to executing that strategy for many year and we are focused on sustaining the mutually beneficial relationship for many years to come. By leveraging the industry leading strengths of each company, PGI (Polymer Group) will continue to demonstrate its commitment to its customers and core markets." * * * Headquartered in Charlotte, North Carolina, Polymer Group, Inc. -- http://www.polymergroupinc.com/-- is a global, technology- driven developer, manufacturer and marketer of engineered materials. The company has manufacturing offices in Argentina, China and France, among others. The Troubled Company Reporter - Asia Pacific reports that in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B2 Corporate Family Rating for Polymer Group, Inc. Additionally, Moody's held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$45 million Sr. Secured Revolver due 2010 B1 B1 LGD3 33% US$410 million Sr. Secured Term Loan B due 2012 B1 B1 LGD3 33% ROAD KING: Fitch Downgrades IDR to BB+ -------------------------------------- Fitch Ratings, on October 23, 2006, has downgraded Hong Kong- based Road King Infrastructure Limited's long-term issuer default rating to BB+ from BBB- and removed it from Rating Watch Negative on which it was placed on September 14, 2006. The rating outlook is now stable. The rating action follows the announcement by Road King that the company has exercised the first option as prescribed by the framework agreement with China's Sunco China Holdings Limited announced on 5 September 2006. According to the framework agreement, Sunco has granted Road King three options to acquire Sunco's property assets in stages over the next 18 months. The first stage has now been completed and the consideration is approximately HKD440 million for a 49% stake in Sunco Binhai Land Limited -- Sunco A. Sunco A's subsidiaries have controlling stakes in 12 property development projects in eight cities. In addition, Road King has provided a working capital loan of RMB100m to one of Sunco A's subsidiaries. Fitch is of the view that Road King is very likely to exercise all granted options, though some operational details of the agreement have yet to be disclosed. The consideration of equity investments in the three options would be approximately HKD1 billion. The rating action has factored in the high possibility of Road King exercising the other two options granted by Sunco and the quality of Sunco's assets. The downgrade reflects a substantial increase in Road King's exposure to real estate development in mainland China and hence a material change in its risk profile of the group. Assuming that all granted options are eventually exercised, the on- balance sheet real estate related assets would account for more than 40% of Road King's total assets, up from the current level of 20%. This represents a major shift in business strategy, from a focus on high stability, underpinned by mostly transportation infrastructure assets, to a higher risk tolerance strategy. The agency notes that the company's increasing focus on property development will increase its cash flow volatility. Fitch also highlights that a substantial portion of assets have been acquired on an off-balance sheet basis, given that Road King's stake in those assets do not exceed 49%. However, Road King would gain effective control of those assets given that its parent company, Wai Kee Holdings Limited, would hold a 4% stake as prescribed by the framework agreement. Taking this into account, the proportion of Road King's assets in real estate would be even higher. The agency notes that the funding of these potential investments is less of a concern. Road King has a cash balance of HKD776m as at 30 June 2006, complemented by steady operating cash flows from its toll road portfolio and the options' timeframe of 18 months. Road King is a toll road owner/operator with a portfolio of 21 toll roads in eight provinces in China. The company is also engaged in property development in Guangzhou and Changzhou in the Jiangsu province. Road King is controlled by Wai Kee, a Hong Kong-listed civil engineering company. Based in Beijing, Sunco currently has 42 projects in 16 different cities in China. Sunco commenced its property development business in 1994 and has developed a total gross floor area of over 7m square meters. SAM TAI: Members' Final Meeting Scheduled on November 21 -------------------------------------------------------- A final general meeting of the members of Sam Tai Stevedore Ltd will be held on November 21, 2006, at Room 1307-8 Dominion Centre, 43-59 Queen's Road East, Wanchai, Hong Kong. At the meeting, Liquidator Poon Chi Woo will present an account regarding the company's wind-up proceedings and the manner its properties were disposed of. According to the Troubled Company Reporter - Asia Pacific, members of the company resolved to wind up the company's operations on July 21, 2006. SHING YIP: Creditors to Prove Debts on November 6 ------------------------------------------------- Creditors of Shing Yip Rent Office Ltd are required to prove their debts on November 6, 2006, to Liquidator Ho Robert Yau Chung. Failure to prove their debts on the due date will exclude a creditor from sharing in any distribution the company will make. The Liquidator can be reached at: Ho Robert Yau Chung 20/F, East Town Building 41 Lockhart Road, Wanchai Hong Kong SINO HAND: Court to Hear Wind-Up Petition on November 15 -------------------------------------------------------- The High Court of Hong Kong received an application to wind up Sino Hand Ltd on September 18, 2006, from Bank of China (Hong Kong) Ltd. The Court will hear the petition on November 15, 2006, at 9:30 a.m. The Solicitors for Bank of China can be reached at: Robertsons 57/F, The Center 99 Queen's Road, Central Hong Kong TMK OAO: Installs Gas Purification System at Volzhsky Site ---------------------------------------------------------- OAO TMK launched a new gas purification system in the electrical steel smelting production unit of Volzhsky Pipe Plant, a subsidiary. The new system was launched as part of a program to modernize and re-equip the production capacity of TMK subsidiaries. The reconstruction of the gas purification system for electric steel smelting at Volzhsky Pipe Plant is one of TMK's most important investment projects. Quad Engineering of Canada, one of the world's leading manufacturers of industrial gas purification systems, engineered and supplied the equipment for the gas purification system. The gas conduits, electrical equipment, automation gear and water systems were assembled by Montazhspetsstroy, which acted as general contractor. The need to reconstruct the gas purification system was due to the increased capacity of the electric smelting furnace after its modernization in 2005, as well as the intensification of the technological process. The governor of Volgograd Oblast Nikolai Maksyuta congratulated the employees of Volzhsky Pipe Plant on the launch of the new modern gas purification system. Speaking at a gala celebration to mark the event, the governor noted TMK's significant contribution to the increased investment attractiveness of the region and to preserving its natural environment. In the words of TMK General Director Konstantin Semerikov, TMK's ecological investments reflect the company's commitment to the principles of sustainable development and to ensuring the conformity of the company's ecological management system with international standards. About TMK Headquartered in Moscow, Russia, OAO TMK -- http://www.tmkgroup.ru/eng/-- manufactures the entire product range of existing pipe products, which are used in the oil-and- gas industry, the chemical and petrochemical industries, the energy and machine-building industries, construction and the municipal housing economy, shipbuilding, aviation, space and rocket equipment, and agriculture. TMK has operations in UAE, the United States and China, among others. * * * Moody's Investors Service assigned a B1 corporate family rating to TMK and a (P)B2 senior unsecured rating to the loan participation notes issued by TMK Capital S.A., guaranteed by the operating subsidiaries of TMK. Moody's said the outlook on both ratings is positive. Standard & Poor's Ratings Services assigned a 'B+' long-term corporate credit rating to OAO TMK. Standard & Poor's also assigned its 'B+' preliminary senior unsecured debt rating to TMK's proposed Eurobond, which will be issued by special-purpose vehicle TMK Capital S.A. TMK OAO: Raises US$155 Million from Syndicated Credit Facility -------------------------------------------------------------- OAO TMK has successfully closed a US$155 million syndicated structured facility. Bank Natexis (ZAO), Moscow, the Russian banking subsidiary of Natexis Banques Populaires, acted in the sole of mandated lead arranger, facility agent and book runner. The syndication is regarded as having been very successful: the loan has been 47% oversubscribed from the US$105 million originally sought allowing for an increase of the loan up to US$155 million. The pool of banks includes Russian banks and international banks through their local subsidiaries: -- Mandated Lead Arranger: Bank Natexis ZAO -- Senior Lead Arrangers: * Commerzbank (Eurasia), Moscow * Gazprombank, Moscow * ING Bank "Eurasia" ZAO, Moscow * International Moscow Bank * Societe Generale S.A., Paris, and * Banque Societe Generale Vostok, Moscow The facility has been signed and drawn at the end of September 2006. The transaction has a margin of 2.20% p.a. and is a 30-month multi-currency amortizing structured facility with an option for tenor extension up to 42 months. The facility is secured at all times by an assignment and pledge of commercial contracts for the delivery of tubular products by TH TMK to prime Russian oil companies and by a pledge of goods in circulation. The transaction is very innovative as it is the first loan for a Russian borrower backed with a security package registered purely under Russian law syndicated among international and Russian banks. About TMK Headquartered in Moscow, Russia, OAO TMK -- http://www.tmkgroup.ru/eng/-- manufactures the entire product range of existing pipe products, which are used in the oil-and- gas industry, the chemical and petrochemical industries, the energy and machine-building industries, construction and the municipal housing economy, shipbuilding, aviation, space and rocket equipment, and agriculture. TMK has operations in UAE, the United States and China, among others. * * * Moody's Investors Service assigned a B1 corporate family rating to TMK and a (P)B2 senior unsecured rating to the loan participation notes issued by TMK Capital S.A., guaranteed by the operating subsidiaries of TMK. Moody's said the outlook on both ratings is positive. Standard & Poor's Ratings Services assigned a 'B+' long-term corporate credit rating to OAO TMK. Standard & Poor's also assigned its 'B+' preliminary senior unsecured debt rating to TMK's proposed Eurobond, which will be issued by special-purpose vehicle TMK Capital S.A. VINCENT UNION: Creditors' Proofs of Claim Due on November 20 ------------------------------------------------------------ Liquidators Thomas Andrew Corkhill and Iain Ferguson Bruce require creditors of Vincent Union (International) Ltd to submit their proofs of debt by November 20, 2006. Failure to comply with the requirement will exclude a creditor from participating in any distribution Vincent Union will make. As reported by the Troubled Company Reporter - Asia Pacific, the members of Vincent Union decided on October 11, 2006, to voluntarily liquidate the company's business. The Liquidators can be reached at: Thomas Andrew Corkhill Iain Ferguson Bruce 8/F, Gloucester Tower The Landmark 15 Queen's Road, Central Hong Kong ========= I N D I A ========= BRITISH INDIA: Government Explores Merger with NTC -------------------------------------------------- The Government of India is exploring the possibility of merging British India Corporation Ltd with National Textiles Corporation, the Press Trust of India reports, citing Union textile minister Shankersinh Vaghela. The Government reportedly decided to look into the possible merger of two state-owned firms because of the absence of interest from the private sector. Despite tenders being invited, no private player has shown interest in taking over the company and running it, PTI observes. PTI believes the merger could make easier British India's revival and its modernization viable. With the merger, PTI points out, National Textile's Voluntary Retirement Scheme would become applicable for British India's workers, which Scheme could shed off British India's excess work force. British India's modernization is estimated to entail INR25 crore, just about equal to the INR24 crore paid by the Government to the company to pay employees' salaries, PTI notes. About National Textile Headquartered in New Delhi, India, National Textile Corporation Ltd -- http://texmin.nic.in/-- is the single largest textile central public sector enterprise under Ministry of Textiles managing 52 textile mills through its nine subsidiary companies spread all over India. It has around 22000 employees. The annual turnover of the company in the year 2004-05 was approximately INR638 crores. In 2002, the Board for Industrial and Financial Reconstruction approved the revival of 53 viable mills and closure of 66 unviable mills. National Textile is in the process of a major restructuring. A new corporate plan is under formulation for repositioning of the organization by merging all its nine subsidiaries into one holding company. About British India Corporation The British India Corporation Ltd was taken over by the Government of India in 1981 through the acquisition of all private shares. The Company has two woolen mills -- Cawnpore Woollen Mills Branch (Lalimli) at Kanpur in Uttar Pradesh and New Egerton Woollen Mills Branch at Dhariwal in Punjab -- under its direct control. It also has two cotton subsidiaries, Elgin Mills Co. Ltd. and Cawnpore Textiles Ltd., at Kanpur in Uttar Pradesh. In 1993, the Company was referred to the Board for Industrial and Financial Reconstruction, which declared it a Sick Industrial Company. The BIFR passed orders on October 31, 1994, recommending the winding up of the Company. Against this order of BIFR, the Company filed an appeal before the Appellate Authority of Industrial and Financial Reconstruction on Dec. 26, 1996. The AAIFR also dismissed BIC's appeal on May 9, 1997, as the AAIFR felt that no rehabilitation scheme was feasible for the Company. In 1999, BIC's two cotton subsidiaries were wound up by the High Court. The Company has been implementing a INR214 crore rehabilitation scheme since early 2003 as per BIFR orders. CANARA BANK: Posts INR3.6-Billion Profit for Sept. 2006 Quarter --------------------------------------------------------------- Canara Bank reported a net profit of INR3.618 billion for the quarter ended September 30, 2006, an increase of more than INR500 million from the INR3.07 billion for the same period last year. Total operating income has increased from INR24.902 billion for the quarter ended Sept. 30, 2005, to INR29.932 billion for the quarter ended Sept. 30, 2006. With the increase in revenues came the rise in operating expenses from INR6.184 billion for the September quarter last year, to INR6.792 billion for the latest quarter. Earnings per share figure for the September 2006 quarter is INR8.82. A full-text copy of the Canara Bank's financial results for the quarter and half-year periods ended Sept. 30, 2006, is available for free at http://ResearchArchives.com/t/s?13ea About Canara Bank Headquartered in Bangalore, India, Canara Bank -- http://www.canbankindia.com/-- provides services to a diverse clientele group with a range of subsidiaries and sponsored institutions. The bank services include networked automated teller machines, anywhere banking, telebanking, remote access terminals Internet, and mobile banking and debit card. The bank's Merchant Banking Division handles assignments as arrangers/lead manager/co-manager/manager to the offer/advisor/share valuator. Bancassurance arm of the Bank has tie up arrangements in both life and non-life insurance segments. Corporate Cash Management Services network of the Bank provides services related to local and upcountry cheque collection, bulk cheques collection and zero balance account facility. Executor, Trustee and Taxation Services of the bank provides services, such as debenture trusteeship, will and executorship, trusteeship, personal tax assistance and power of attorney services. Its Agricultural Consultancy Services handled 60 projects during the fiscal year ended March 31, 2006. Fitch Ratings gave Canara Bank an individual rating of D on June 1, 2005. CENTURION BANK: Boosts Net Profit by 49% in Sept. 2006 Quarter -------------------------------------------------------------- Centurion Bank of Punjab reported a net profit of INR311 million for the quarter ended September 30, 2006 (Q2-FY2007). Net profit for the quarter grew by 49% as compared to the corresponding quarter of the previous year. This is the 10th quarter of sequential growth in net profits for the Bank. Profit before tax for the quarter at INR506 million demonstrates a growth of 593% over the corresponding quarter of the previous year. The net advances of the Bank at INR83.85 billion on September 30, 2006, have grown by 64% over those on September 30, 2005. The bank's deposits grew by 41% over those last year. Operating Results For the quarter ended September 30, 2006 (Q2-FY2007), Net Interest Income increased by 44 % to INR1.35 billion from INR941 million in the corresponding quarter last year. Net Interest Margin for the quarter ended September 30, 2006, has improved to 4.7% this is significantly higher than that last year (Net Interest Margin for the Q2-FY2006 was 4.4%) and is among the highest in the industry. Other income increased by 70% to INR881 million in Q2-FY2007 from INR517 million in Q2-FY2006. Non-interest income now forms 40% of the Bank's total operating income as compared to 36% in the corresponding quarter last year. Operating expenses for Q1-FY2007 increased to INR1.61 billion from INR1.19 billion during Q2-FY2006. Subsequent to the merger with Bank of Punjab the Bank had tax credits which resulted in a tax credit of INR136 million in the quarter ended September 30, 2006. The bank has now exhausted all its tax credits and its earnings are now subject to the maximum tax rate. Consequently the Bank has provisions for taxes amounting to INR195 million this quarter. The Bank's earnings per share (non-annualized) increased to INR0.21 from INR0.16 in the same period last year. The bank has fully provided for all the provisions required under 'Accounting Standards 15' related to retirement benefits. Advances Portfolio As of September 30, 2006, retail advances constituted 68% of the total advances of the Bank. Net Retail Advances grew by 61% to INR57.02 billion from INR35.31 billion as of September 30, 2005, and by 9% over the previous quarter i.e. the quarter ended June 30, 2006 (Q1 FY2006). The Bank has increased its focus towards the business generated by Corporates including small and medium enterprises, leading to a growth of 72% this quarter in the Bank's corporate and SME advances as compared to the corresponding quarter in the previous year; 19% over the previous quarter i.e. the quarter ended June 30, 2006 (Q1 FY2006). This segment is fast emerging as an important engine of growth for the Bank in addition to the existing retail business. Asset Quality As of September 30, 2006 the Bank's Net Non-Performing Loans were 1.3% of Net Advances, against 2.6% as of September 30,2005. The bank follows an accelerated provisioning policy which is over and above the prudential provisioning norms prescribed by the Reserve Bank of India in respect of both NPAs as well as standard assets. The bank is fully compliant with the prescribed provisions for standard assets that will come in effect from March 2007. No further provisions would be required to be made on the Bank's existing standard asset portfolio. Deposits The deposits of the Bank grew 41% to INR113.836 billion as on September 30, 2006, from those in the corresponding quarter last year. The cost of deposits was 5.4% for the quarter ended Sept. 30, 2006, however the Net Interest Margin for the Bank grew from 4.4% in the corresponding quarter of the previous year to 4.7% this quarter. The bank's CASA ratio is 33% at the end of this quarter as compared to 38% at the end of the corresponding quarter last year. The Credit-Deposit ratio for the bank was 74% as on September 30, 2006. Capital Adequacy and Net Worth As of September 30, 2006, the Bank's total capital adequacy stood at 11.6%, the Tier I capital of the Bank was 10.5%. The Net Worth of the Bank was INR11.099 billion and the Book Value per Share was INR7.5 as compared to INR5.4 in the quarter ended September 30, 2005. The Board of directors and the shareholders of the Bank have approved a preferential placement of up to 75 million shares to India Advantage Fund V acting through its investment manager ICICI venture funds Management Company limited; and up to 95 million shares to Bank Muscat. This preferential issue, which is subject to regulatory and statutory approvals, would raise the Bank's capital adequacy and provide the capital to drive further organic growth. Merger with Lord Krishna Bank The proposed merger of Centurion Bank of Punjab and Lord Krishna Bank was approved by the Board of directors of both banks in their respective meetings on September 4, 2006. Subsequently the proposal was approved by the shareholders of the Banks' at their respective general meetings held on September 30, 2006. Both banks have made an application to the Reserve Bank of India on October 3, 2006, for the requisite regulatory approvals. Once approved, the merger will result an improved nationwide franchise of 373 branches and extension counters, 446 ATM's, and about 3.5 million customers. About Centurion Bank of Punjab Headquartered in Goa, India, Centurion Bank of Punjab Limited -- http://www.centurionbop.co.in/-- is a private-sector bank. The bank provides a range of transaction banking products under cash management services to various customer segments, such as corporates, small and medium enterprises, utility providers and domestic correspondent banks. The bank has entered into an enterprise partnership with Indecomm Global Services to form Centillion Solutions and Services. Centillion will focus on operations and services for banking and related financial services. The Retail Asset servicing operations of the Bank are being transitioned to Centillion. The bank has entered into an arrangement with IL&FS Investsmart Limited for offering equity broking services to its customers. The wholesale banking business is divided into Corporate, SME and Financial Institutions Group. NRI business has been a focus of the bank. In Trade Finance business, the bank provides services, such as export trade, import trade, remittance, domestic trade and structured trade. Fitch Ratings, on November 2, 2005, gave Centurion Bank of Punjab a support rating of 5. CONTINENTAL AIRLINES: Earns US$237 Mil. in Sept. 2006 Quarter ------------------------------------------------------------- Continental Airlines reported third quarter 2006 net income of US$237 million, which includes a US$92 million gain on the sale of a portion of the its investment in Copa Airlines. Excluding net special charges of US$1 million and the US$92- million Copa gain, the company's net income was US$146 million. Operating income for the third quarter was US$192 million, an US$83 million improvement over the same period of 2005. Results for the third quarter of 2006 also include a US$42 million accrual for employee profit sharing, bringing the cumulative accrued profit sharing pool to over US$100 million. The company also reported that passenger revenue for the quarter increased 17.1% or US$471 million over the same period in 2005, to US$3.2 billion, with double digit percentage growth in each mainline geographic region and in regional jet operations. Consolidated revenue per available seat mile for the quarter increased 7.4% year-over-year. Mainline fuel costs for the quarter increased US$174 million over the third quarter of 2005, primarily due to a 17.8% increase in fuel prices compared to the same period last year. The company ended the third quarter with approximately US$2.5 billion in unrestricted cash and short-term investments. During the third quarter, the company recorded net special charges of US$1 million consisting of an US$8 million settlement charge related to lump-sum payments to retiring pilots and a US$7 million reduction of previous charges related to permanently grounded MD-80 aircraft. Fuel Efficiency Program The company disclosed that it has signed an agreement to acquire winglets for 37 of its 737-500 and 11 of its long-range 737-300 aircraft, with installation beginning in 2007. The company has already completed the installation of winglets on its entire fleet of 737-700s and -800s and plans to finish the installation of winglets on its entire 757-200 fleet in the fourth quarter of 2006. When the installations are complete, the company will operate 230 narrow-body aircraft outfitted with winglets. Winglets lower drag and improve aerodynamic efficiency, which can reduce fuel consumption by up to 5%. The company has disclosed that it converted 12 existing orders for Boeing 737 Next Generation aircraft into orders for 12 new Boeing 737-900ERs, expected to be delivered in 2008. Pension Plans During the quarter the company contributed US$79 million to its pension plans and an additional US$70 million to the plans in October. The contributions bring its 2006 pension contributions to US$246 million. Since the beginning of 2002, the company has contributed more than US$1.1 billion to its pension plans. Credit Facility and New Contract The company also disclosed that it has amended its US$350 million loan facility, secured by substantially all of its Pacific operations, which lowered the interest rate and is expected to save the company approximately US$6 million annually. The company further disclosed that it was awarded a US$258 million, five-year mail contract with the U.S. Postal Service effective Sept. 30, 2006. The contract includes Priority, First Class and Express mail products within the U.S. and Puerto Rico. Continental Airlines (NYSE: CAL) -- http://continental.com/-- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,200 daily departures throughout the Americas, Europe and Asia, serving 154 domestic and 138 international destinations. More than 400 additional points are served via SkyTeam alliance airlines. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 61 million passengers per year. Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. The company has Asian operations in India, Indonesia, Japan, Philippines, and Taiwan, among others. * * * The Troubled Company Reporter - Asia Pacific reports that Standard & Poor's Ratings Services affirmed its ratings, including the 'B' long-term and 'B-3' short-term corporate credit ratings, on Continental Airlines Inc. The outlook is revised to stable from negative. Houston, Texas-based Continental has about US$17 billion of debt and leases. GENERAL MOTORS: Korean Unit Will Recall 7,858 Cars -------------------------------------------------- General Motors Corp.'s Korean subsidiary, GM Daewoo Auto & Technology Co., will recall 7,858 units because of defective parts, the Korean government said on its Web site. GM Daewoo manufactures automobiles under the Daewoo brand. According to Korea's Ministry of Construction and Transportation, the recall affects: -- 7,598 units of its Winstorm sport utility vehicles produced between June 1 and September 14 this year; and -- 260 units of Gentra sedans produced between July 1 and October 2. The fog lamps of the Winstorm SUVs have problems, and the fuel pipes in the Gentra units are too close to parts in its brake system that might lead to fires in a traffic accident, the Ministry explained. Owners of the recalled vehicles can have them repaired free of charge at GM Daewoo's service centers. About General Motors General Motors Corp. -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader for 75 years. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In India, GM is headquartered in Panchmahals, Gujarat. On June 30, 2006, Standard & Poor's Ratings Services held all its ratings on General Motors Corp. -- including the 'B'corporate credit rating and the 'B+' bank loan rating, butexcluding the '1' recovery rating -- on Credit Watch with negative implications, where they were placed March 29, 2006. On June 22, 2006, Fitch assigned a rating of 'BB' and a RecoveryRating of 'RR1' to General Motor's new US$4.48 billion seniorsecured bank facility. The 'RR1' (recovery of 90%-100%) isbased on the collateral package and other protections that areexpected to provide full recovery in the event of a bankruptcyfiling. On June 21, 2006, Moody's Investors Service assigned a B2 ratingto the secured tranches of the amended and extended securedcredit facility of up to US$4.5 billion being proposed byGeneral Motors Corporation, affirmed the company's B3 corporatefamily and SGL-3 speculative grade liquidity ratings, andlowered its senior unsecured rating to Caa1 from B3. Moody'ssaid the rating outlook is negative. QUEBECOR WORLD: Closing French Roto-Gravure Facility ---------------------------------------------------- Quebecor World Inc. intends to close its roto-gravure facility in Lille, France as part of its ongoing restructuring efforts. The Lille facility will be phased out during the coming months and is expected to close at the end of the second quarter of 2007. The closure will affect approximately 230 employee positions. Some of the workforce will be offered opportunities to transfer to the Charleroi, Belgium facility. Taking into account earlier restructuring initiatives and the investment in the latest wide-web gravure technology in Charleroi, the Company estimates the impact to its European gravure capacity is essentially neutral. Quebecor World Inc. -- http://www.quebecorworld.com/-- provides print solutions to publishers, retailers, catalogers and other businesses with marketing and advertising activities. Quebecor World has approximately 29,000 employees working in more than 120 printing and related facilities in India, the United States, Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, Mexico, Peru, Spain, Sweden, Switzerland and the United Kingdom. * * * As reported in the Troubled Company Reporter - Asia Pacific on Oct. 3, 2006, Standard & Poor's Ratings Services lowered its ratings on commercial printer Quebecor World Inc., including its long-term corporate credit rating to 'B+' from 'BB-', and placed the ratings on CreditWatch with negative implications. In August 2006, Moody's Investors Service placed a Ba3 Corporate Family Rating, Ba3 Senior Unsecured rating and B2 Senior Subordinated ratings of Quebecor World Inc.'s subsidiaries under review for possible downgrade. Also in August 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of Quebecor World Inc. and related entities to BB from BB (high) and downgraded the Cumulative Redeemable Preferred Shares to Pfd-4 from Pfd-4 (high). DBRS said the trends remain negative. SILICON GRAPHICS: Emerges from Chapter 11 Protection ---------------------------------------------------- In fewer than six months after filing for bankruptcy protection, Silicon Graphics, Inc., officially concluded its reorganization and has emerged from chapter 11 a new company on Oct. 17, 2006. The "New SGI" is the result of a massive overhaul of the Company's global operations. SGI has: * Re-engineered the Company's business model around customer needs and workflows; * Strengthened its product and solutions, creating the most competitive offering in years; * Installed a new management team fully accountable to meeting company objectives; * Installed a new Board of Directors; * Achieved annualized cost savings of $150 million; and * Recapitalized the company, eliminating long-term debt and arming it with $115 million in exit financing and a balanced operating budget. "[On Oct. 17, 2006,] we debut the New SGI, an efficient and fully recapitalized company armed with a new, market-centric business model and empowered by a rekindled commitment to solving the problems of customers in a targeted range of markets," said Dennis McKenna, CEO of SGI. "In these past six months, everyone at SGI has worked intensely to remake the organization into one engineered for stability and growth with innovative new products targeting the largest market opportunities in the history of the company. We still have considerable work ahead in implementing our growth initiatives, but we are focused on Innovation for Results. Without doubt, this is a new day for SGI." As it emerges from chapter 11, SGI is bringing competitive new server, storage and services solutions to a combined addressable market that annually invests more than US$80 billion in technology. New SGI Board of Directors To help chart its new direction, SGI also appointed a new Board of Directors. Joining the Board will be Eugene I. Davis, chairman and CEO of PIRINATE Consulting Group, LLC, and Anthony Grillo, founder and CEO of American Securities Advisors, LLC; both seasoned executives with significant board and financial experience in restructuring. Kevin Katari, managing member of Watershed Asset Management, LLC, and Chun Won Yi, associate of Quadrangle Group LLC, will also join the Board and represent the new investors in the Company. Continuing on the Board will be SGI CEO Dennis McKenna and James A. McDivitt, former astronaut and retired senior vice president of Government Operations and International of Rockwell International Corporation. New Financing SGI also disclosed the completion of its exit financing facility with Morgan Stanley Senior Funding, Inc. and General Electric Capital Corporation, as lending agents. The new facility provides US$115 million in financing consisting of an $85 million term loan and a US$30 million revolving line of credit. The new facility is secured by substantially all of the assets of SGI and its domestic subsidiaries and has customary terms and conditions, including covenants related to minimum levels of EBITDA (earnings before interest, taxes, depreciation and amortization) and minimum levels of cash and cash equivalents, and limits on capital expenditures. This facility, combined with US$57 million in proceeds from the previously announced Rights Offering and sale of Overallotment shares, will be used to pay off US$113 million in existing DIP financing, make distributions pursuant to the Company's Plan of Reorganization, and provide working capital for the Company's ongoing operations. The exit financing facility matures in five years. Pursuant to the Plan of Reorganization, the Company issued 11,125,000 shares of new SGI common stock to certain SGI creditors in satisfaction of claims and upon exercise of stock purchase rights and overallotment options. SGI's prior common stock has been canceled as of today's effective date with no distribution made to holders of such stock. SGI has applied for listing of its new common stock on NASDAQ under the symbol SGIC. SGI Financial Results On Oct. 16, 2006, SGI filed, with the SEC, its Report on Form 10-Q for the quarter ended March 31, 2006, and its Annual Report on Form 10-K for the year ended June 30, 2006. The Company expects to announce results for the quarter ended Sept. 29, 2006, including the effects of its fresh-start accounting, in November. 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. As of July 28, 2006, the company has total assets of US$352,980,000 and total liabilities of US$662,258,000 resulting into a stockholders' deficit of US$309,278,000. SILICON GRAPHICS: Losses Spur KPMG's Going Concern Doubt -------------------------------------------------------- KPMG LLP in Mountain View, California, raised substantial doubt about Silicon Graphics Inc. and subsidiaries' ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended June 30, 2006. The auditing firm pointed to the Company's recurring operating losses, negative cash flows, stockholders' deficit and voluntary Chapter 11 petition. For the fiscal year ended June 30, 2006, the Company reported a US$146.1 million net loss on US$518.8 million of net revenues compared to a US$76 million net loss on US$729.9 million of net revenues for the previous fiscal year. As of June 30, 2006, the Company's balance sheet showed US$380 million in total assets and US$710.5 million in total liabilities resulting in a US$330.4 million stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with US$261 million in total current assets available to pay US$316.6 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's annual report is available for free at http://researcharchives.com/t/s?13b0 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. As of July 28, 2006, the company has total assets of US$352,980,000 and total liabilities of US$662,258,000 resulting into a stockholders' deficit of US$309,278,000. STATE BANK OF INDIA: Inks EUR30-Mil. Deal with Germany's G&D ------------------------------------------------------------ The State Bank of India inked a EUR30-million agreement with Giesecke & Devrient for the supply and maintenance more than 1,700 Banknote Processing Systems. Under the deal, Germany's G&D will equip SBI's offices with its Numeron or BPS 200 units. India's vendor local infrastructure was key to securing the SBI contract, G&D general manager Alexander Seelander told finextra.com. About State Bank of India State Bank of India Ltd -- http://www.sbi.co.in/-- is the oldest and largest bank in India. SBI, along with its associate banks, offers a wide range of banking products and services across client markets. In 2005-06, SBI has embarked on implementing a business process re-engineering project to enhance customer service and profitability levels. The bank has branches in Bahrain, Japan, Mauritius and the United States. * * * The Troubled Company Reporter - Asia Pacific reported on April 21, 2006, that Fitch Ratings has affirmed State Bank of India's Long-term Issuer Default rating at BB+, Short-term rating at "B", Individual rating at "C" and Support rating at '3'. The outlook on the ratings is stable. Additionally, Standard and Poor's Rating Service gave State Bank of India a BB+ long-term foreign issuer credit rating on February 2, 2005. Moody's Investors Service placed a Ba2/Not Prime rating on State Bank of India's foreign currency bank deposits, a Ba2/Not Prime rating on its domestic currency bank deposits, and a D Bank Financial Strength Rating in June 2006. ========= J A P A N ========= ALITALIA SPA: Updates Industrial Plan & Reviews Alliance Options ---------------------------------------------------------------- The Board of Directors examined an update of Alitalia S.p.A.'s Industrial Plan which constitutes a useful and appropriate basis to be further integrated, taking into consideration -- as in the guidance provided by the Italian government -- a feasible and convenient alliance, in order to ensure a suitable long term industrial framework in which the company can operate. This updated plan confirms the strategic positioning of Alitalia as a "highly efficient network carrier" as well as the medium term financial targets previously announced. According to the company, certain events that occurred in 2006 have slowed the company's restructuring. These include: -- higher fuel prices; -- higher than expected growth of low cost airlines in Italy; -- strikes and threat of strikes that have periodically impacted the company; and -- the delay in implementation of certain restructuring measures foreseen in the plan. Although key performance figures for 2006 provide confirmation and show progress towards the Plan targets, they also show delays in achieving some of the results. The review of the strategic guidelines examined represents continuity with the recent past and confirm Alitalia's positioning as a "highly efficient network carrier" with a strong focus on its core business. The structure of the plan is confirmed to be in two phases: -- the restructuring phase: aimed at restoring the company's financial equilibrium; and -- the relaunch phase: aimed at increasing Alitalia's presence in the market. The Plan regards all key areas of the company: -- fleet: increased capacity, improved product quality and reduced average age of the fleet and its maintenance costs will be achieved thanks to the introduction of new airplanes. -- network: increased activity will be generated during the implementation of the plan (this increase will take place all airports operated by the company) thanks to a redesign of the network and development of the fleet. -- group Companies: each company will be used and developed in accordance to demand. This, in particular, will affect the Group's positioning in new markets through Volare. -- sales and marketing: improvement in service will boost sales particularly direct sales through web channels and call centers and leading to further cost reductions. -- cost reduction: confirmation of the stated target of reduction of unit costs (excluding fuel) up to 24%, to be achieved through both efficiency projects and improved use of resources. In this context and considering all above, the Board has also mandated the Chairman and Chief Executive Officer to start immediately examining structural alliance options with another carrier aimed at generating industrial synergies and maximizing the company's profitability, and therefore to adjust the Industrial Plan accordingly. The Board also examined the Group's recent performance both in terms of financial results. Based on these results and also in compliance with a request made by CONSOB under the terms of article 114, section 5, of Decree no. 58/98, these are stated: -- indication of key updated financial results, in particular revenues and main costs, such as personnel and fuel costs. From January to August 2006 the Group's key financial results were: -- consolidated profits of about EUR3.101 million; -- fuel cost of about EUR678 million; -- labor cost of about EUR510 million; -- update regarding the implementation of the Industrial Plan 2005-2008 announced to the market, highlighting, from a quantitive perspective, the main variances between the financial results outlined in point 1 and forecasts formulated on the basis of this plan. In order to compare figures from point 1 with those figures originally foreseen in the first year of the Plan, it is important to remember that on Jan. 31, 2006 the Board approved a budget that identified the same positive results target foreseen in the first year of the Industrial Plan as announced to the market. The budget is today the most accurate base on which to analyze such variances. The major quantitative shifts in the figures regarding January-August 2006 and the budget available can be summarized as: -- in terms of consolidated revenues, there is a negative difference of about EUR82 million mainly due to reduced capacity in the first 8 months of the year, due to strikes that occurred in January and the actual flight hours. -- fuel costs are about EUR25 million higher than originally expected also due to the sharp increase of fuel prices in the past few months (almost US$80 per barrel) -- in terms of labor costs, the difference is EUR40 million compared to the planned target for the first eight months of 2006 mainly due to the unsuccessful implementation of efficiency programs -- data, updated with respect to what was previously declared in the first half results for 2006, on forecasted results for the second half of 2006 and, where available, on the estimated results for the same period, in order to highlight the main variances regarding the targets laid out in the Industrial Plan. Since what described in the above point 1) was already available to the company at the time of the approval for its first half results, the company confirms what was announced in the release regarding first half results for 2006. The forecast for the second half of the year is for positive operating and net results, partly due to some non-recurring items. The Group's consolidated net result for the full year 2006 should approach the level achieved in 2005. -- directors' valuation regarding the impairment test on the Group's assets carried out with reference to the first half 2006 results and foreseen changes to the Industrial Plan As regards the test for value reduction (also known as impairment test), aimed at ascertaining the recoverability of the book value of the assets that generate financial flows (assets relative to short or medium haul activities, long haul of expected future cash flow activities and all cargo) through the discounting retrievable from the same assets, the result was positive. this test, carried out in accordance Group does not need to devaluate the assets with IAS 36, was conducted on the basis of the documentation regarding the update to the Industrial Plan, starting from the forecast regarding the end of 2006 examined at the Board Meeting that took place on Sept. 12, 2006. -- update on the implementation of non-recurring operations indicated in the first half results for 2006. With reference to non-recurring operations indicated in the half results for 2006, there is confidence in a positive result by the end of the year. A selection process to find buyers is currently underway. -- evaluation of the Directors regarding the existence of sufficient cash flow over the next 12 months to cover the Group's financial needs -- the Board of Directors has also examined the projection of the Group's financial flows, which highlight that the current available liquidity and future cash flow generation of the company are enough to cover its financial needs over the next 12 months and thereafter -- timing and mode of the review of the business plan. The timeframe to adjust the Industrial Plan will be strictly correlated to the mandate given to Chairman and Chief Executive Officer with regards to structural alliance options. As reported on Oct 13, 2006, Italian Prime Minister Romano Prodi foresees a bankrupt national carrier in January 2007 unless involved parties come up with an "agreed solution." "We have until January to hammer out a solution which can avoid bankruptcy," Mr. Prodi said, sharing the same observation posed by Alitalia CEO Giancarlo Cimoli. According to the TCR-Europe on Oct. 11, Mr. Cimoli revealed that Alitalia is poised for collapse given its current cost structure and market conditions. "At present, the national carrier is unable to generate profit, even for previously invested capital," Mr. Cimoli said. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- generates around EUR4.8 billion in annual revenue and employs more than 11,000 people. Alitalia flies to about 80 destinations in more than 60 countries, including Argentina, China, and Japan, from hubs in Rome and Milan and operates a fleet of about 185 aircraft. The Italian government owns 49.9% of Alitalia. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia registered EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked consecutive annual net losses of EUR520 million in 2003, EUR813 million in 2004, and EUR168 million in 2005. ALITALIA SPA: Names Giovanni Sabatini to Board of Directors ----------------------------------------------------------- The Board of Directors of Alitalia S.p.A. appointed Giovanni Sabatini, as Director of the company. Mr. Sabatini is General Manager at the Treasure Department of the Ministry of Economy and Finance. Mr Sabatini's curriculum vitae is available at the company's registered office, so are the curricula of the other Directors. Mr Sabatini is not member of internal committees or has not been awarded mandates that would make him Executive Director. He is not an independent Director of Alitalia. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- generates around EUR4.8 billion in annual revenue and employs more than 11,000 people. Alitalia flies to about 80 destinations in more than 60 countries, including Argentina, China, and Japan, from hubs in Rome and Milan and operates a fleet of about 185 aircraft. The Italian government owns 49.9% of Alitalia. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia registered EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked consecutive annual net losses of EUR520 million in 2003, EUR813 million in 2004, and EUR168 million in 2005. AMR CORP: Earns US$15 Million in 2006 Third Quarter ------------------------------------------------- AMR Corporation, the parent company of American Airlines Inc., reported a net profit of US$15 million for the third quarter of 2006. The results include a US$99 million non-cash charge in Other Income (Expense) to reduce the book value of certain outstanding fuel hedge contracts. Excluding the special item, the company's profit was US$114 million. The company's net loss was US$153 million in the third quarter of last year. Excluding the US$58 million net negative impact of two special items, the net loss in the third quarter of 2005 was US$95 million. "We are pleased to report a profit for the third quarter, which represents the first time in nearly six years that we have recorded a profit in two consecutive quarters," Gerard Arpey, chairman and chief executive officer, said. "These results show continuing improvements in the company's core business operations, even in the face of new challenges. But we also have more hard work ahead of us as we build a company that is better positioned for long-term success." The company reported third quarter consolidated revenues of US$5.8 billion, an increase of 6.6% from US$5.5 billion for the same period last year. In the third quarter, Other revenues increased 13.3% year over year to US$333 million. The company estimates that the London security threat in August reduced revenues in August and September by more than US$50 million. American Airlines' mainline load factor was 81.7% during the third quarter. Yield increased 7% compared to the third quarter of 2005, and passenger revenue per available seat mile for the third quarter increased 7.7% year over year. American's mainline cost per available seat mile in the quarter was up 3.8% year over year and excluding fuel and special items, the airline's unit cost for the third quarter increased 1% year over year. "While falling fuel prices provide significant benefits to our company, fuel prices remain at historically high levels and continue to be volatile," Mr. Arpey said. "That's a reminder that we must continue our efforts to conserve fuel and reduce other expenses." The company says that it regularly uses fuel hedging instruments, including options and collars, to dampen the impact of volatile fuel prices. The company's fuel hedging activities reduced fuel expenses by US$300 million during the period from 2003 through 2005, and have reduced year-to-date 2006 fuel expense by US$66 million. Cash and short-term investment balance of the company was US$5.5 billion, including a restricted balance of US$464 million, at the end of the third quarter of 2006. In addition to making scheduled principal payments of US$1.1 billion, the company said that it has repurchased approximately US$128 million of debt since January 2006 and depending on market conditions, cash position and other considerations, may from time to time redeem or repurchase its debt or take other steps to reduce its debt or lease obligations. The company disclosed that it continues to execute on the strategy laid out in its Turnaround Plan by working together with employees to identify ways to reduce costs, grow revenues, improve the customer experience and simplify its operations, which included: -- The signing, in September, of a 5-year service agreement with the U.S. Postal Service potentially worth US$500 million in revenue to American, the largest single contract ever awarded to the its Cargo division. -- The setting, also in September, by a team of Transport Workers Union employees at American line maintenance bases and management of a goal to obtain US$95 million of annual value creation for the airline by the end of 2008. The announcement followed more than US$1 billion in similar goals set previously by maintenance employees at the company's Tulsa, Kansas City and Fort Worth maintenance bases. The company also disclosed that in continuing efforts to bolster its international business, American in July filed an application with the United States Department of Transportation to operate daily nonstop service between Dallas/Fort Worth International Airport and Bejing, China, starting in March 2007. The company further disclosed that the collaboration over the past several years between management, unions and employees helped produce a positive result in August, when Congress passed a bill that enhances the company's ability to fund its pension obligations. Mr. Arpey noted that the company was able to contribute US$104 million to its various defined benefit pension plans since the end of the second quarter, bringing its total 2006 contributions to the plans to US$223 million through Oct. 13, 2006. American Airlines -- http://www.AA.com/-- is the world's largest airline. American, American Eagle and the AmericanConnection regional airlines serve more than 250 cities in over 40 countries with more than 3,800 daily flights. American Airlines flies to Belgium, Brazil, Japan, among others. The combined network fleet numbers more than 1,000 aircraft. American Airlines is a founding member of the oneworld Alliance, whose members serve more than 600 destinations in over 135 countries and territories. At Dec. 31, 2005, AMR Corporation's equity deficit doubled to US$1.478 billion from a US$581 million deficit from Dec. 31, 2004. * * * Standard & Poor's Ratings Services, effective June 6, 2006, placed its ratings on AMR Corp. (B-/Watch Pos/B-3) and subsidiary American Airlines Inc. (B-/Watch Pos/--) on CreditWatch with positive implication. ASHIKAGA BANK: Four Groups Show Interest in Bank ------------------------------------------------ At least four groups of companies are believed to have strong interest in Ashikaga Bank, the Asian Banker reports. The Asian Banker lists the groups as: * a group of regional banks in the Kanto region, led by the Bank of Yokohama, and Nikko Citigroup; * Tochigi Bank and Daiwa Securities Sumitomo Mitsui Banking Corp.; * Nomura Securities and Orix Corp., and; * Polaris Principal Finance, an investment fund affiliated with Mizuho Securities. Bloomberg News adds that Ashikaga Bank may get bids from companies including U.S.-based General Electric Co. and Lone Star Funds. The Troubled Company Reporter - Asia Pacific reported on Aug. 28, 2006, that the Japanese Government will commence the process of selecting a white knight for state-administered Ashikaga Bank in September 2006. Financial Services Minister Kaoru Yosano said that Ashikaga Bank is making progress in its rehabilitation and that the government is preparing to screen financial institutions willing to take over the Utsunomiya-based regional bank. The report also said that for the acquisition of Ashikaga, the buyer is expected to allocate JPY150 billion to JPY200 billion on capital to achieve an 8% capital-to-asset ratio, and some JPY200 billion on goodwill. In addition, possible buyers will be required to show management policies for meeting regional needs. To win the final selection, the major companies are competing to get influential regional banks to join their groups. The TCR-AP also explained that the government is expected to pick the new owners through a bidding process, which is expected to be finished by March 2007. An earlier TCR-AP report on February 8, 2005 explained that Ashikaga Bank collapsed in 2001 after its officials mismanaged and tampered with the bank's accounts. It was discovered that in its financial statements submitted in June 2001, the bank underreported future losses on bad loans and declared overly optimistic earnings forecast. The TCR-AP further revealed that the bank was placed under government control in November 2003 after it was found to be insolvent with a negative net worth of JPY102.3 billion as of September 30, 2003. Bloomberg News says that the auction of state-owned Ashikaga, with 150 branches and JPY4.2 trillion of guaranteed deposits, may attract as many as 20 bidders and sell for as much as JPY400 billion. The Ashikaga Bank, Ltd. -- http://www.ashikagabank.co.jp/-- is a regional bank operating mainly in Tochigi prefecture in the Northern Kanto area. The bank handles banking, loans, mortgages, foreign exchanges and investment trust through its 106 branches and 68 representative offices. It also operates a debt collection business, a real estate survey service, a system programming and development business and a credit card business through its 13 consolidated subsidiaries. Standard & Poor's Ratings Services gave Ashikaga Bank a BB+ long-term foreign and local issuer credit rating on December 10, 2004. BANK OF KYOTO: S&P Affirms B Bank Financial Strength Rating ----------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term counterparty credit rating on Bank of Kyoto Ltd. to 'A' from 'A- ', reflecting the bank's improving financial flexibility and lending asset quality. At the same time, Standard & Poor's assigned its 'A-1' short-term counterparty rating to the bank, and affirmed its 'B' Bank Financial Strength Rating. The outlook on the long-term rating is stable. Bank of Kyoto's lending asset quality is improving, reflecting the recovering economy in the bank's home market of Kyoto Prefecture. Its net NPL ratio declined to 1.86% in fiscal 2005 from 2.47% the previous year. The bank's lending portfolio is well diversified compared to those of other regional banks, with a high 83% of its loans extended to small and midsize enterprises (SMEs). Bank of Kyoto is also expanding into adjacent prefectures, using stricter lending criteria to compensate for its limited information and track record with customers in those regions. Standard & Poor's believes that the bank's credit controls should keep its overall risk volume within an appropriate range relative to its capitalization and profitability. On the other hand, the stock market recovery has caused the bank's pretax latent profit on equity holdings to exceed its Tier 1 capital. Given that the volatility of its stock portfolio, as measured by portfolio beta, is about even with that of the overall market, and its book value is low, the surge in latent profit has improved Bank of Kyoto's financial flexibility. Despite its large holdings of government bonds, the bank's interest rate risk relative to shareholders' equity and profit is about even with the average of rated regional banks. Concentration risk, credit risk, and foreign exchange risk for other investments are also limited. The bank's credit quality is expected to remain stable over the midterm, supported by its strong customer base in its local market. A future upgrade would require the bank to improve profitability while also controlling risks related to lending or securities. On the other hand, if the bank increases its risk relative to capitalization or profitability beyond expectation, it would negatively impact the rating. Headquartered in Kyoto, Japan, The Bank of Kyoto, Ltd. -- http://www.kyotobank.co.jp/-- is a regional bank, which mainly provides banking services for corporate and individual clients. The bank operates in two business segments. The Banking segment provides various banking services such as deposits, loans, commodity trading, securities investment, domestic and foreign exchange and other services. Together with its subsidiaries, the Others segment is involved in the management and leasing of real estate, the research on regional economy, as well as the provision of commercial support services, credit guarantee services, investment and loan consulting services, business consulting services, credit card services and other services. EIGHTEENTH BANK: Ups Profit Forecasts for the First Half of 2006 ---------------------------------------------------------------- The Eighteenth Bank Ltd increased its revenue forecasts for the first half period ending September 30, 2006, from JPY25.0 billion to JPY26.7 billion, Bloomberg News reports. According to the Bloomberg report, the bank also increased its net income forecast to JPY5.9 billion, an increase of 96.7% from the earlier forecasted net income of JPY3.0 billion. The bank earned JPY3.8 billion in the same period in 2005. Headquartered in Nagasaki Prefecture, The Eighteenth Bank, Limited -- http://www.18bank.co.jp/-- is a regional bank that operates in three business segments. The banking segment is engaged in the provision of banking services, such as such as loan services, deposit services, securities investment services, foreign trading services, foreign exchange services, investment trust services and other banking services. The Leasing segment is involved in the leasing of movable assets and others. The Others segment is involved in the provision of credit card services, venture capital services, credit guarantee services, computer services, temporary staffing services, building maintenance services and other services. Fitch Ratings assigned a C individual rating to Eighteenth Bank on November 15, 2005. EIGHTEENTH BANK: JCR Affirms A+ Rating on Senior Debts ------------------------------------------------------ Japan Credit Rating Agency, Ltd. has affirmed the A+/Stable rating on senior debts of The Eighteenth Bank Ltd. Eighteenth Bank is a regional bank that is headquartered in Nagasaki City. Its funds reach JPY2 trillion. It has strong presence in Nagasaki as the leading bank there. It has been expanding market shares in Nagasaki centering on the northern part of the prefecture. The bank incurred large loss for fiscal year ended March 31, 2005, disposing of large non-performing loans. The loss impaired capital. Drop in credit costs and recovery of capital have been going well as scheduled since then. The ratio of non- performing loans to total loans declined to 5.49% for the fiscal year ended March 31, 2006. JCR evaluates highly the improved quality of loans through strengthened corporate rehabilitation and establishment of distressed fund, disposing of non- performing loans. The bank aims to reduce the ratio of non- performing loans to total loans to a range of 4% less than 5% for fiscal year ending March 31, 2007. JCR will pay attention to the future developments. * * * Fitch Ratings assigned a C individual rating to Eighteenth Bank on November 15, 2005. FORD MOTOR: Restating Results for Accounting Under SFAS 133 ----------------------------------------------------------- Ford Motor Company plans to restate previous financial results from 2001 through the second quarter of 2006 to correct the accounting for certain derivative transactions under the Statement of Financial Accounting Standards 133, Accounting for Derivative Instruments and Hedging Activities. The correction to the accounting does not affect the economics of the derivative transactions, nor have any impact on the company's cash. However, the restatements are expected to affect the preliminary financial results Ford reported for its 2006 third quarter. The company expects to finalize restatement amounts for the current period and all previous periods by the time of the filing of its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2006. Ford discovered that since 2001, certain interest rate swaps Ford Motor Credit Company had entered into to hedge the interest rate risk inherent in certain long-term fixed rate debt were accounted for incorrectly under SFAS 133 because they did not satisfy the standard's technical accounting rules to qualify for exemption from the more strict effectiveness testing requirements. Ford Motor Credit Company uses transactions involving derivatives, including swaps, forwards and options, to reduce economic risk and volatility in a disciplined and defensive manner. PricewaterhouseCoopers LLP, the company's independent registered public accounting firm, audited Ford's 2001 through 2005 financial statements, which included a review of these swaps. "This is a very complicated accounting standard, and interpretation of its proper application has continued to evolve," said Executive Vice President and Chief Financial Officer Don Leclair. "Our overall hedging strategy is sound. We will correct our accounting for these types of derivative instruments. We remain committed to strong internal controls and reporting transparency." Ford Motor Credit Company's interest rate swaps were entered into as part of the unit's asset-liability management strategy. The swaps economically hedge the interest rate risk associated with long-term debt issuances. Although the final restatement amounts have not yet been determined, we estimate based on the information to date that Ford and Ford Motor Credit Company's results in 2002 will improve materially. Other periods are still under study. Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive- related services include Ford Motor Credit Company and The Hertz Corporation. The Company has operations in Japan. * * * Moody's Investors Service, on Sept. 20, 3006, lowered Ford Motor Company's corporate family rating and senior unsecured to B3 from B2, and Ford Motor Credit Company's senior unsecured to B1 from Ba3. Ford's Speculative Grade Liquidity rating has also been lowered to SGL-3 from SGL-1. The rating outlook is negative. These rating actions conclude a review for possible downgrade that was initiated on Aug. 18. At the same time, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. and all related units -- except FCE Bank PLC -- to 'B' from 'B+' and its short-term ratings on these entities to 'B-3' from 'B-2.' The ratings on FCE Bank, Ford Credit's European bank, were lowered to 'B+/B-3' from 'BB-/B-2', maintaining the one-notch rating differential between FCE and its parent that was established in July. As reported in the Troubled Company Reporter on Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-/RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long- term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. The TCR reported on July 24, 2006, that Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12-month period. Moody's said the outlook for the ratings is negative. FORD MOTOR: Incurs US$5.8 Billion Net Loss in 2006 Third Quarter ---------------------------------------------------------------- Ford Motor Company reported Monday preliminary third-quarter 2006 financial results. For the third quarter, Ford Motor reported a net loss of US$5.8 billion. This compares with a net loss of US$284 million in the 2005 third quarter. Excluding special items, the third quarter loss from continuing operations was US$1.2 billion, compared with a loss of US$191 million, or 10 cents per share, a year earlier. The performance from continuing operations primarily reflected operating challenges in the company's North America, Asia Pacific and Africa, and Premier Automotive Group operations. Performance also included continued profitability in South America and at Ford Credit. Though it lost money during the quarter, Ford Europe showed a year-over-year improvement in operating results and remained poised to deliver full-year profitability. Special items included in the quarter's net loss primarily reflected the costs associated with restructuring efforts, primarily in North America, as well as the revaluation of long- lived assets related to automotive operations in North America and Jaguar/Land Rover. On an after-tax basis, special items reduced third-quarter earnings by a total of US$4.6 billion. The total pre-tax effect of these special items was US$5.3 billion. In addition, effective this quarter, the company established a valuation allowance of US$2.2 billion against deferred tax assets primarily at its North America and Jaguar/Land Rover operations. The valuation allowance was established because of the cumulative losses the company has incurred and the financial outlook for these operations. Alan Mulally, Ford's president and chief executive officer, said he and his senior management team are committed to creating a viable Ford Motor Company business going forward. "These business results are clearly unacceptable," Mulally said. "We are committed to dealing decisively with the fundamental business reality that customer demand is shifting to smaller, more efficient vehicles. Our focused priorities are to restructure aggressively to operate profitably at lower volumes, and to accelerate the development of new, more efficient vehicles that customers really want. "We have great global assets and resources that we will leverage to significantly improve our product strategy, our production efficiency and quality. This will enable us to meet customer expectations for distinctive vehicles much more cost effectively. These actions will lead to profitable growth of our business over the long term." Automotive Sector On a pre-tax basis, worldwide Automotive Sector losses in the third quarter were US$1.8 billion. This compares with a pre-tax loss of US$1.3 billion during the same period a year ago. Worldwide automotive sales for the third quarter declined to US$32.6 billion from US$34.7 billion in the same period last year. Worldwide vehicle unit sales in the quarter were 1,511,000, down from 1,531,000 a year ago. North America: In the third quarter, Ford's North America automotive operations reported a pre-tax loss of US$2 billion, compared with a pre-tax loss of US$1.2 billion a year ago. The decline was largely attributed to lower volumes and unfavorable mix, primarily associated with lower industry volume and lower market share, and higher incentives. Cost reductions were a partial offset. Sales were US$15.4 billion, down from US$18.2 billion for the same period a year ago. South America: Ford's South America automotive operations reported a third- quarter pre-tax profit of US$222 million, an improvement from a pre-tax profit of US$96 million a year ago. The improvement was primarily explained by higher volume and favorable pricing. Sales for the third quarter improved to US$1.5 billion from US$1.2 billion in 2005. Ford Europe Ford Europe's third-quarter pre-tax loss was US$13 million compared with a pre-tax loss of US$55 million during the 2005 period. The improvement came from higher vehicles sales, partially offset by higher pension-related costs, lower profits from operations in Turkey and negative net pricing. During the third quarter, Ford Europe's sales were US$7.3 billion, compared with US$6.4 billion during third quarter 2005. Premier Automotive Group: Premier Automotive Group reported a pre-tax loss of US$593 million for the third quarter, compared with a pre-tax loss of US$108 million for the same period in 2005. The decline was explained by adverse cost performance, primarily reflecting adjustments to Jaguar and Land Rover warranty accruals and lower volume at all operations, excluding Aston Martin. Improvements in overhead costs were offset by increases in advertising. Third-quarter sales for PAG were US$6.5 billion, compared with US$6.8 billion a year ago. Asia Pacific and Africa: For the third quarter, Asia Pacific and Africa reported a pre- tax loss of US$56 million, compared with a pre-tax profit of US$21 million a year ago. The decline primarily reflected lower production and dealer inventories, adverse mix, and higher incentives, partially offset by cost reductions. Sales were US$1.6 billion, compared with US$1.9 billion in 2005. Mazda: During the third quarter of 2006, Ford's share of Mazda pre-tax profits and associated operations was US$40 million, compared with US$112 million during the same period a year ago. The decline primarily reflected the non-recurrence of mark-to-market gains on Mazda convertible bonds during 2005, which have now been entirely converted to equity. Other Automotive: Third-quarter results included a pre-tax profit of US$553 million in Other Automotive, compared with a loss of US$241 million a year ago. The year-over-year improvement relates to tax-related interest and higher portfolio returns. Financial Services Sector For the third quarter, the Financial Services sector earned a pre-tax profit of US$448 million, compared with a pre-tax profit of US$1.1 billion a year ago. Ford Motor Credit Company reported net income of US$262 million in the third quarter of 2006, down US$315 million from net income of US$577 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned US$428 million in the third quarter, compared with US$901 million in the previous year. The decrease in earnings was attributed to lower financing margins, higher depreciation expense and the impact of lower average receivable levels. Cash and Liquidity The company ended the quarter with total cash, including automotive cash, marketable securities, loaned securities and short-term Voluntary Employee Beneficiary Association assets at Sept. 30, 2006 of US$23.6 billion, unchanged from the end of the second quarter. The company's operating-related cash flow was US$3.1 billion negative for the quarter. During the quarter, US$3 billion was transferred out of long-term VEBA and is now included in total cash. Don Leclair, executive vice president and chief financial officer said, "As we restructure our business we will continue to make investments in products necessary to ensure Ford's future success. Throughout this period, maintaining strong liquidity will continue to be a high priority." Restatement Ford has announced plans to restate certain financial results to correct accounting under SFAS 133. The preliminary third- quarter results do not reflect these corrections. The company expects to finalize restatement amounts for this and previous periods by the time it files its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2006. Financial statements pertaining to the 2006 third quarter will be provided at that time. Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive- related services include Ford Motor Credit Company and The Hertz Corporation. The Company has operations in Japan. * * * Moody's Investors Service, on Sept. 20, 3006, lowered Ford Motor Company's corporate family rating and senior unsecured to B3 from B2, and Ford Motor Credit Company's senior unsecured to B1 from Ba3. Ford's Speculative Grade Liquidity rating has also been lowered to SGL-3 from SGL-1. The rating outlook is negative. These rating actions conclude a review for possible downgrade that was initiated on Aug. 18. At the same time, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. and all related units -- except FCE Bank PLC -- to 'B' from 'B+' and its short-term ratings on these entities to 'B-3' from 'B-2.' The ratings on FCE Bank, Ford Credit's European bank, were lowered to 'B+/B-3' from 'BB-/B-2', maintaining the one-notch rating differential between FCE and its parent that was established in July. As reported in the Troubled Company Reporter on Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-/RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long- term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. The TCR reported on July 24, 2006, that Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12-month period. Moody's said the outlook for the ratings is negative. FORD MOTOR: FMCC Earns US$262 Million in 2006 Third Quarter ----------------------------------------------------------- Ford Motor Credit Company reported preliminary financial results with third quarter profits. At the same time, Ford Motor Credit disclosed plans to restate previous financial results from 2001 through the second quarter of 2006 to correct the accounting for certain derivative transactions under the Statement of Financial Accounting Standards 133, Accounting for Derivative Instruments and Hedging Activities. Ford Motor Credit reported net income of US$262 million in the third quarter of 2006, down US$315 million from earnings of US$577 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned US$428 million in the third quarter, compared with US$901 million in the previous year. The decrease in earnings primarily reflected lower financing margins, higher depreciation expense and the impact of lower average receivable levels. "Our high-quality portfolio continues to perform very well, generating profits and dividends for Ford Motor Company," said Mike Bannister, chairman and CEO. "Our recently announced North American restructuring along with our efforts to reduce our costs globally will further enhance our operational effectiveness." On September 30, Ford Motor Credit's on-balance sheet net receivables totaled US$135 billion, compared with US$132 billion on December 31, 2005. Managed receivables, which include on- balance sheet receivables and securitized off-balance sheet receivables that we continue to service, were US$148 billion, compared with US$150 billion on December 31, 2005. Ford Motor Credit paid cash dividends of $300 million during the third quarter. Restatement of Financial Results Ford Motor Credit Company plans to restate previous financial results from 2001 through the second quarter of 2006 to correct the accounting for certain derivative transactions under the Statement of Financial Accounting Standards 133, Accounting for Derivative Instruments and Hedging Activities. The correction to the accounting does not affect the economics of the derivative transactions, or have any impact on the company's cash. However, the restatements are expected to affect the preliminary financial results Ford Motor Credit Company for its 2006 third quarter. Ford Motor Credit Company expects to finalize restatement amounts for the current and all previous periods by the time of the filing of its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2006. The company discovered that since 2001, certain interest rate swaps Ford Motor Credit Company had entered into to hedge the interest rate risk inherent in certain long-term fixed rate debt were accounted for incorrectly under SFAS 133 because they did not satisfy the standard's technical accounting rules to qualify for exemption from the more strict effectiveness testing requirements. Ford Motor Credit Company uses transactions involving derivatives, including swaps, forwards and options, to reduce economic risk and volatility in a disciplined and defensive manner. PricewaterhouseCoopers LLP, the company's independent registered public accounting firm, audited Ford Motor Credit Company's 2001 through 2005 financial statements, which included a review of these swaps. "We are very disappointed that we must restate our earnings," said Bannister. "We are committed to strong internal controls and reporting transparency. Our business fundamentals remain sound, and our operations remain highly efficient and profitable." Ford Motor Credit Company's interest rate swaps were entered into as part of its asset-liability management strategy. The swaps economically hedge the interest rate risk associated with long-term debt issuances. Although the final restatement amounts have not yet been determined, based on the information to date, the Company estimates that Ford Motor Credit Company's results in 2002 will improve materially - other periods are still under study. About FMCC Ford Motor Credit Company -- http://www.fordcredit.com/-- is one of the world's largest automotive finance companies and has supported the sale of Ford products since 1959. Ford Motor Credit operates in 36 countries and manages approximately $148 billion in receivables. Ford Motor Credit is an indirect, wholly owned subsidiary of Ford Motor Company. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive- related services include Ford Motor Credit Company and The Hertz Corporation. The Company has operations in Japan. * * * Moody's Investors Service, on Sept. 20, 3006, lowered Ford Motor Company's corporate family rating and senior unsecured to B3 from B2, and Ford Motor Credit Company's senior unsecured to B1 from Ba3. Ford's Speculative Grade Liquidity rating has also been lowered to SGL-3 from SGL-1. The rating outlook is negative. These rating actions conclude a review for possible downgrade that was initiated on Aug. 18. At the same time, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. and all related units -- except FCE Bank PLC -- to 'B' from 'B+' and its short-term ratings on these entities to 'B-3' from 'B-2.' The ratings on FCE Bank, Ford Credit's European bank, were lowered to 'B+/B-3' from 'BB-/B-2', maintaining the one-notch rating differential between FCE and its parent that was established in July. As reported in the Troubled Company Reporter on Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-/RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long- term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. The TCR reported on July 24, 2006, that Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12-month period. Moody's said the outlook for the ratings is negative. KYUSHU-SHINWA HOLDINGS: Gets JPY7 Billion from Bank of Fukuoka -------------------------------------------------------------- Kyushu-Shinwa Holdings Inc. will be getting about JPY7 billion from the Bank of Fukuoka in exchange for a 13% stake, Bloomberg News reports. According to the report, the move will make the Bank of Fukuoka the top shareholder in the struggling regional bank, and will pave the way for the Bank to take the initiative in rehabilitating Kyushu-Shinwa, based in Sasebo, Nagasaki Prefecture. Bloomberg explains that Kyushu-Shinwa expects to go into the red in the current fiscal year through March 2007 because its banking unit, Shinwa Bank, was instructed by the Financial Services Agency to accelerate bad-loan disposals. Kyushu-Shinwa now projects JPY38.4 billion in consolidated net loss in the current business year, in a reversal from JPY5.3 billion in profit the previous year. Bank of Fukuoka would also purchase Kyushu-Shinwa's common shares with voting rights for JPY7 billion. Domestic investment fund J-Will Partners Co. will buy Kyushu-Shinwa's preferred shares worth about JPY23 billion through a special purpose corporation. The Bank of Fukuoka and the investment fund will each dispatch two officials to Shinwa Bank's board. About the Bank of Fukuoka The Bank of Fukuoka, Ltd. -- http://www.fukuokabank.co.jp/-- is a Japan-based regional bank that serves its home market of Fukuoka Prefecture and the Kyushu region in western Japan. The bank is principally engaged in the provision of services that include deposits, loans, as well as domestic and foreign exchange services. Additionally, the bank is involved in the provision of corporate revival support, debt management and collection, guarantee and administrative services. Through one of its wholly owned subsidiaries, the bank also specializes in the management of real estate and the dispatch of manpower. As reported in the Troubled company Reporter - Asia Pacific on October 18, 2006, Moody's Investors Service affirmed The Bank of Fukuoka, Ltd.'s A3 long-term deposit rating, Prime-2 short-term deposit rating, A3 issuer rating, Baa1 subordinated convertible bond rating and D+ bank financial strength rating. The rating outlook remains stable. The Troubled Company Reporter - Asia Pacific reported that Fitch Ratings has affirmed the ratings of Bank of Fukuoka as follows: -- Long-term foreign and local currency Issuer Default ratings at 'BBB+' with Positive Outlook; -- Short-term foreign and local Currency IDRs at 'F2'; -- Individual at 'C'; and -- Support '2'. About Kyushu-Shinwa Holdings Headquartered in Nagasaki, Kyushu-Shinwa Holdings Inc. -- http://www.ksfg.co.jp/-- is chiefly engaged in the banking business, such as the assessment and research of real estate collateral, the provision of initial public offering (IPO) support services and the management of loans, as well as the clerical work, leasing, credit guarantee and credit card businesses. The Troubled Company Reporter - Asia Pacific reported on October 18, 2006, that in 2002, Shinwa Bank and Kyushu Bank, both based in Nagasaki Prefecture, consolidated under the Holdings and subsequently in 2003, the subsidiary banks merged. Fitch Ratings has affirmed Shinwa Bank's ratings at Individual 'E' and Support '3'. According to Bloomberg News, Kyushu-Shinwa's capital-adequacy ratio is estimated to have fallen to about 6% at the end of September 2006 but the ratio is expected to rise to about 8% due to the capital reinforcement. Domestically operating banks are required to have capital ratios of at least 8%. SOLO CUP: Posts US$299.4-Mil Net Loss for 2006 Second Quarter ------------------------------------------------------------- Solo Cup Company has completed its review of accounting issues and has restated certain previously issued consolidated financial statements. The Company disclosed that it has filed its second quarter 2006 Form 10-Q and has satisfied the terms of the indenture for the its 8.5% senior subordinated notes due 2014. In addition, on Oct. 13, 2006, the Company concluded discussions with its lenders under its credit facilities and obtained a waiver and amendment through Jan. 2, 2007. "The restatement work was a rigorous and intense process that revealed certain material weaknesses in our financial controls and we are taking decisive steps to address those issues," Robert M. Korzenski, chief executive officer, said. "Importantly, this work renewed our confidence in the fundamentals of our business, reaffirmed the compelling strategic, operational and financial rationale of the Solo Cup/Sweetheart merger, and highlighted the quality and dedication of our employee team." For the thirteen weeks ended July 2, 2006, the Company reported net sales of US$670.3 million, an increase of US$23.4 million, or 3.6%, from net sales of US$646.9 million, as restated, for the three months ended July 3, 2005. Gross profit for the thirteen weeks ended July 2, 2006, was US$92 million, an increase of $9.8 million, or 12%, from gross profit of US$82.1 million, as restated, for the comparable period in 2005. For the thirteen weeks ended July 2, 2006, the Company reported a net loss of US$299.4 million, versus a net loss of US$2.8 million, as restated, for the comparable period in 2005. The 2006 loss reflects a non-cash charge of US$228.5 million for the impairment of goodwill and a non-cash charge of US$105 million to income tax expense to increase the valuation allowance for deferred tax assets. Restatement of Previously Issued Financial Statements The Company, on Aug. 16, 2006, disclosed a temporary delay in the filing of its Form 10-Q with the SEC for the second quarter ended July 2, 2006, saying it would need additional time to complete an internal review initiated by Mr. Korzenski of issues regarding certain accounting practices and procedures related to the Company's second quarter of 2006 and prior periods. The internal review was led by Eric A. Simonsen, its interim chief financial officer, and its findings were discussed with KPMG LLP, the company's independent registered public accountants. The categories of restated items included in one or more of the company's restated consolidated financial statements include timely recognition of certain credits to customers, certain credits from vendors and certain accrued expenses; accrued payroll and other related costs; accrued freight; and inventory valuation. The aggregate change in operating income associated with the restatement was an increase of US$3.2 million in the first quarter of 2006; a decrease of US$19.7 million in full fiscal year 2005; a decrease of US$8.2 million in full fiscal year 2004; a decrease of US$7.1 million in full fiscal year 2003; a decrease of US$900,000 in full fiscal year 2002; and an increase of US$200,000 in full fiscal year 2001. The Company says that the restatement of its consolidated financial statements did not impact its cash balances. It currently has approximately US$23 million of cash on hand and approximately US$36 million of borrowing availability under the terms of its domestic revolving credit facility. Mr. Korzenski added: "It should be noted that we now have a new and very strong financial and accounting team; newly implemented accounting controls; and a strong organizational commitment at both the board and management levels to improved internal and external communication." Headquartered in Highland Park, Illinois, Solo Cup Company -- http://www.solocup.com/-- manufactures disposable foodservice products for the consumer and retail, foodservice, packaging, and international markets. Solo Cup has broad expertise in plastic, paper, and foam disposables and creates brand name products under the Solo, Sweetheart, Fonda, and Hoffmaster names. The Company was established in 1936 and has a global presence with facilities in Asia, Canada, Europe, Mexico, Panama and the United States. In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the non-paper Packaging sector, the rating agency confirmed its B3 Corporate Family Rating for Solo Cup Company. Moody's also revised its probability-of-default ratings and assigned loss-given-default ratings on these loans facilities: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$150 million Sr. Sec. First Lien Revolver Maturing Feb 27, 2010 B2 B2 LGD3 34% US$637 million Sr. Sec. First Lien Term Loan B due Feb 27, 2011 B2 B2 LGD3 34% US$80 million Second Lien Term Loan due Feb 27, 2012 Caa1 Caa1 LGD5 70% US$325 million 8.5% Senior Sub Notes due Feb 15, 2014 Caa2 Caa2 LGD5 87% ========= K O R E A ========= BOE HYDIS: Xinhua Far East Downgrades Parent's Issuer Rating ------------------------------------------------------------ Xinhua Far East China Ratings downgraded the issuer credit rating of BOE Technology Group Co Ltd to CC from B. Its rating outlook remains negative. The CC rating indicates the Company is very likely to default in the foreseeable future. As predicted by Xinhua Far East's downgrade in April, BOE's vulnerable credit profile has been further weakened by a harsh operating environment and high capital expenditures. Sharply falling product prices have overwhelmed the competitiveness of the Company's 5th generation TFT-LCD production line and resulted in a negative profit margin with heavy losses reported in the first half of this year. Meanwhile, the Company's tremendous capital expenditure requirements, together with its negative operating cash flow, pushed its debt burden to an extremely high level. Thus, Xinhua Far East considers BOE's credit strength has been severely impaired and has rendered it highly vulnerable to default on its financial commitments. In the first half of 2006, adverse market conditions for the Company's major products have plummeted BOE's gross margin and EBITDA margin sharply to negative 23.9% and negative 14.9%, respectively. The considerable negative EBITDA means that it could not even meet its variable costs of production. Despite enhanced cost savings by local sourcing and increased sales of its 5th generation TFT-LCD products, improvements in operating efficiency could not offset the impact of diving product prices, particularly in 2nd quarter of this year. As BOE expects to report a net loss in the first three quarters of 2006 and the competition in TFT-LCD sector is very intensive and globalized, Xinhua Far East considers BOE's heavy losses stemming from its core operations can hardly turn around in the foreseeable future. In addition to the Company's poor operating results, the downgrade action has factored in the highly risky nature of the TFT-LCD sector and BOE's limited resources against operating and financial volatilities. In particular, BOE faces heightened competition from its large international peers which are flooding the market with 6th and 7th generation products, and accordingly are dampening the market demand and product prices of BOE's 5th generation products. As the sector is highly capital intensive and characterized by shortening product life cycles, BOE has very limited flexibility in holding back its capital expenditures. Xinhua Far East anticipates it will be difficult for BOE to sustain its development in the long run given its constraints in capital and technology, operating experience and risk control relative to its international peers. The downgrade also reflects BOE's extremely weak financial profile and very limited solvency and financial flexibility. Following an aggressive financial policy, the Company relies heavily on bank loans for expansion and capital expenditures, the Company's debt level kept climbing since 2002, and it has reached to such a seriously high level with its gross debt to total capital ratio increasing to 84.5% in mid 2006. On the other hand, BOE continued to generate negative operating cash flow in the first half of 2006. It also exhibited negative EBITDA/interest coverage ratio, far less than adequate liquidity ratio of 0.63 and limited cash reserves in hand, compared with its mounting debt burden of CNY13,409 million as of mid 2006. In addition, the Company's wholly owned subsidiary in Korea, BOE Hydis, has entered into bankruptcy after years of losses, although it is not consolidated in BOE. These all indicate BOE's extremely vulnerable creditworthiness. Xinhua Far East noted BOE has completed funding of CNY1,860 million in October through a private placement. However, the funds are mainly for producing product components for its 5th generation production line, its direct contribution to BOE's financial flexibility is limited. Historically, Xinhua Far East has downgraded BOE several times to reflect its worsening credit profile, as a result of its aggressive acquisition for Korea companies and its construction of 5th generation production line. Although BOE has raised four rounds of equity financing since 1997, with total amount of CNY5,117.9 million, adverse operating conditions and huge funding requirements have overwhelmed the growth of its capital base and hindered the Company from materially reducing its financial and liquidity pressure. BOE is one of the largest display device manufacturers in China. Its main products are TFT-LCD panels used for PC monitors and TV sets. In 2005, BOE's turnover reached CNY13.450 billion. BOE is a constituent of the Xinhua/ FTSE China 200 and B35 Indices. As of market close on October 23, 2006, its total A- share market capitalization and investable capitalization were CNY3,078 million and CNY616 million respectively. Its B-share market cap totaled US4186 million, of which all is investable. About BOE Hydis Technology Headquartered in Seoul, South Korea, BOE Hydis Technology Company, Limited, -- http://www.boehydis.com/-- develops, manufactures and distributes flat panel display products for a wide range of applications, including laptop computers, Tablet PC's, monitors, medical, avionic and car navigation systems. China's BOE Technology Group Co. acquired the Company from Korea's Hynix Semiconductor Inc. in 2003. As reported by the Troubled Company Reporter - Asia Pacific, BOE Hydis applied for corporate rehabilitation on September 8, 2006, with the Seoul Central District Court. HANA BANK: Parent Denies Takeover Move on Woori Bank ---------------------------------------------------- Hana Financial Group, Hana Bank's parent company, rejects a report that the Bank made moves to takeover Woori Bank, XFN-Asia reports. The Financial Times, quoting people familiar with the discussions, previously reported that Hana Bank had approached Woori Financial Group, offering a plan to gradually gain control of Woori Bank. The FT report said that the talks between Hana and Woori are at a preliminary stage and are ongoing, XFN-Asia recounts. "The report is not true," XFN-Asia quotes a Hana representative as saying. "We have not approached Woori about a takeover." About Woori Bank Woori Bank -- http://www.wooribank.com/-- is a government-owned bank headquartered in Seoul, Korea. The bank was established in 2002, and includes the former Hanbit Bank, Sangup Bank and Hanil Bank. It is a part of the Woori Financial Group. It has branches all over the world, including in New York, Los Angeles, Beijing, Tokyo, Hong Kong, Indonesia, Bahrain, Singapore, Moscow, London, and Dhaka. Fitch Ratings gave Woori Bank an individual rating of 'B/C' effective July 20, 2005. Moody's Investors Service gave Woori a 'D+' Bank Financial Strength Rating effective March 14, 2006. About Hana Bank Hana Bank -- http://www.hanabank.com/-- provides financial services to individuals and corporate clients such as international banking, trust business and security investment business through 298 domestic branches and one head office. Fitch Ratings gave Hana Bank an Individual Rating of B/C. Moody's Investors Service gave the bank a D+ Bank Financial Strength Rating. SK CORPORATION: 3rd Quarter Net Profit Declines to KRW308.4 Bil. ---------------------------------------------------------------- SK Corporation reported record quarterly revenue of KRW6.515 trillion, up 13% compared to KRW5.755 trillion reported for the third quarter a year ago. Sales revenue was primarily driven by increased oil prices and higher product prices. The company's overall operating profit was up 5% year-over-year supported by strong performance by both the lubricant and petrochemical divisions. Commenting on the results, the Head of Investor Relations Seung- Hoon Lee said: "We are pleased with the increase in operating profit this quarter compared to a year ago, especially given the fact that we achieved record profit in last year's third quarter." Mr. Lee continued, "With a diversified business portfolio that allows the company to hedge against cyclical nature of the energy business, SK Corporation is well positioned to continue its solid performance through the fourth quarter. Improved refining margins coupled with solid performances from other business divisions will help the company achieve its 2006 operating guidance of KRW1.41 trillion." The company's non-operating profit decreased by 45% year-on- year, due to a KRW134.5 billion write-back of provisions for allowances of exchangeable bonds in the 3rd quarter of 2005. Excluding this one-off write-back, non-operating profits are considerably stronger year-on-year. Business Sector Performance * Lubricant Third quarter lubricant division sales and operating profit increased 51% and 91% year-over-year to KRW262.8 billion and KRW56.2 billion respectively. This improved operating profit was attributed to many factors, including the increased capacity of the Lube Base Oil plants, resulting from the change of de-waxing catalysts earlier this year. In addition, tight supply market conditions and increased demand for Group III VHVI base oil, contributed to the increase in sales and operating profit. * Petrochemicals The petrochemicals division's third quarter total sales and operating profit increased by 27% and 30%, to KRW1.566 trillion and KRW139.4 billion, respectively. The increase was propelled by the New Reforming Center's successful operation, coupled with favorable market conditions. During the quarter, many companies in North East Asia scheduled regular maintenance shutdowns for their naphtha crackers, which resulted in tightened supply. SK Corporation was able to leverage the market conditions and achieved another strong quarterly performance, despite shutting down its own number two naphtha cracker center for regular maintenance. * Exploration and Production The E&P division's sales and operating income for the third quarter of 2006 decreased by 3% and 9% year-over-year, to KRW95.8 billion and KRW62.8 billion respectively. The company continued to be an active E&P player during the third quarter, preparing its exploration activities in Kazakhstan where it has a 50% share in Kazakhstan Block 8. The division expects additional oil production from Brazil BMC-8 from the second half of 2007, along with LNG production from Yemen LNG and Peru LNG projects from the end of 2008 and 2009, respectively. The company's average daily production and operating profit for E&P division in 2009 is expected to at least double the current levels. * Petroleum Although local market demand weakened during the quarter, sales revenue for the petroleum division increased 9% to KRW4,528.4 billion, primarily due to increased exports and higher petroleum product prices. Operating profit decreased by 21% as compared to the exceptional third quarter of 2005, due to lower simple refining margins. However, after steadily expanding in new markets such as Indonesia, Singapore and China, the petroleum division's export sales volume surpassed domestic sales for the first time in a single quarter, with a total of approximately KRW2.4 trillion. The fourth quarter's outlook for the petroleum market is in the company's favor. Refining margins are forecasted to improve and the coming winter season in the Northern Hemisphere should spur increased demand, on a quarter over quarter basis. 3Q 2006 FINANCIAL PERFORMANCE 1. 3Q 2006 (vs. 3Q 2005) (Unit: KRW billion) --------------------------- 3Q 2005 3Q 2006 Changes Change ------- ------- ------- ------ Sales 5,754.9 6,514.7 759.8 +13% Operating Profit 333.1 349.5 16.4 +5% Non-Operating Profit 176.6 97.5 -79.1 -45% Pretax Income 509.7 447.0 -62.7 -12% Net Profit 430.7 308.4 -122.3 -28% 3Q 2006 BUSINESS SECTOR PERFORMANCE 1. Sales (Unit: KRW billion) --------------------------- 3Q 2005 3Q 2006 Changes Change ------- ------- ------- ------ Petroleum 4,168.0 4,528.4 360.4 +9% Petrochemical 1,228.8 1,565.5 336.7 +27% E&P 99.1 95.8 -3.3 -3% Lubricant 173.6 262.8 89.2 +51% Others 85.4 62.2 -23.2 -27% ------- ------- ------- ------ Total 5,754.9 6,514.7 759.8 +13% 2. Operating Profit (Unit: KRW billion) --------------------------- 3Q 2005 3Q 2006 Changes Change ------- ------- ------- ------ Petroleum 121.9 96.6 -25.3 -21% Petrochemical 106.9 139.4 32.5 30% E&P 68.9 62.8 -6.1 -9% Lubricant 29.5 56.2 26.7 91% Others 5.9 -5.5 -11.4 -19% ------- ------- ------- ------ Total 333.1 349.5 16.4 5% About SK Corporation Headquartered in Seoul, South Korea, SK Corporation -- http://eng.skcorp.com/-- is an energy and petrochemical company with 4,916 employees and 22 offices around the world in 2005. The company is strategically positioned as Korea's largest and Asia's leading refiner next to Sinopec and PetroChina. SK Corp. currently explores, develops and produces oil in 13 nations that span Africa, Asia and the Americas. Moody's Investors Service gave SK Corp. a 'Ba1' Foreign Currency Long-Term Debt Rating effective February 17, 2006. THOMAS EQUIPMENT: Hires M. Luther as Chief Restructuring Officer ---------------------------------------------------------------- Thomas Equipment Inc. appointed Michael S. Luther as Chief Restructuring Officer and he will be responsible for leading all day-to-day operations of the company, effective immediately. Mr. Luther has been involved in corporate finance and merchant banking for 20 years. Most recently, Mr. Luther managed a hedge fund associated with Deutsche Bank and during his tenure Mr. Luther led combined transactions of over US$1 billion, the most notable of which was the purchase of Alamo National Car Rental, acquired for roughly US$4 billion by Cerberus Capital of New York. James E. Patty, President and Chief Executive Officer, and William Davis, Chief Operating Officer, have resigned as part of the next phase of Thomas' restructuring. Thomas' Board of Directors approved an undertaking by Thomas' Compensation Committee to work out separation agreements with both which fairly compensates each for their significant work for Thomas over recent months. Mr. Patty and Mr. Davis will provide Mr. Luther with transitional support. In addition, Mr. Patty is a Thomas Director and will remain on its Board of Directors. "The Board of Directors has appreciated all of the extremely hard work and long hours both James E. Patty and Dr. William Davis have put into the first phase of our restructuring," stated David Marks, Chairman of Thomas Equipment, Inc. "The Board of Directors believes that Mr. Luther is uniquely qualified to interface with Thomas' senior lenders, investors and creditors as the company moves towards the next phase of its restructuring and we expect he will be an extremely valuable part of our senior management team." "The company continues to face significant short-term challenges that must be overcome to successfully implement longer term strategic opportunities," stated Mr. Luther. "We will continue to push forward with the restructuring and I am very confident that we can emerge as a stronger and more vibrant company." About Thomas Equipment Headquartered in Milwaukee, Wisconsin, Thomas Equipment, Inc. -- http://www.thomas-equipment.com/-- is a technologically advanced global manufacturer of a full line of skid steer and mini skid steer loaders as well as attachments, mobile screening plants and six models of mini excavators. The company distributes its products through a worldwide network of distributors and wholesalers. In addition, the company's wholly owned subsidiaries manufacture specialty industrial and construction products, a complete line of potato harvesting and handling equipment, fluid power components, pneumatic and hydraulic systems, spiral wound metal gaskets, and packing material. The company maintains an office in Korea. At March 31, 2006, Thomas Equipment Inc.'s balance sheet showed a stockholders' deficit of US$31,289,000, compared to a US$67,129,000 at June 30, 2005. WOORI BANK: Seeks License to Operate Subsidiary in Russia --------------------------------------------------------- Woori Bank wants Russian regulators' permission to upgrade its representative office to a subsidiary in Moscow, Na Jeong-ju, staff reporter of The Korea Times, reports. For the establishment of the subsidiary, Woori Bank President Hwang Young-key signed a letter of intent with Bank of Russia officials on October 20, 2006, The Chosun Ilbo relates. Foreign banks, the Chosun Ilbo explains, must open subsidiaries instead of branches to provide banking services in Russia. "If [Woori] gets a license, it will be the only Korean commercial bank operating in Russia where a growing number of Korean companies are operating and the demand for banking services is rising," Mr. Na observes. When the deal is approved, Woori will first provide the money transfer, foreign exchange and loan services to Korean expatriates and foreign corporations in Russia, Chosul Ilbo says. Under Russian law, the Bank will only be able to offer deposit services to Koreans and Muscovites two years after it opens a subsidiary. Woori wants the license as early as June 2007. About Woori Bank Woori Bank -- http://www.wooribank.com/-- is a government-owned bank headquartered in Seoul, Korea. The bank was established in 2002, and includes the former Hanbit Bank, Sangup Bank and Hanil Bank. It is a part of the Woori Financial Group. It has branches all over the world, including in New York, Los Angeles, Beijing, Tokyo, Hong Kong, Indonesia, Bahrain, Singapore, Moscow, London, and Dhaka. Fitch Ratings gave Woori Bank an individual rating of 'B/C' effective July 20, 2005. Moody's Investors Service gave Woori a 'D+' Bank Financial Strength Rating effective March 14, 2006. =============== M A L A Y S I A =============== ARMSTRONG WORLD: Posts Distribution Amount for Class 6 Claims ------------------------------------------------------------- Armstrong World Industries Inc. disclosed the amount of the initial distributions it expects to make to general unsecured creditors under its Chapter 11 plan. Specifically, distributions to holders of allowed unsecured claims falling in Class 6 will commence on Oct. 17, 2006, pursuant to its Court- approved "Fourth Amended Plan of Reorganization, as Modified," dated Feb. 21, 2006. The company says that per US$10,000 of the Class 6 claims, an initial distribution of 116 Common Shares of reorganized Armstrong World Industries and approximately US$2,435 in cash are expected. The initial distributions exclude approximately US$11 million of cash and 538,000 shares that are reserved from distribution due to disputed unsecured claims in Class 6. A total of 19,418,520 shares and approximately US$407 million of cash will be distributed to creditors in Class 6 under the Plan. Separately, in discharge of all of its present and future asbestos-related personal injury claims, on October 2 the company issued under the Plan 36,981,480 Common Shares to the Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust and by October 17 will distribute to the Trust approximately US$738 million in cash, representing the portion of cash distributions to which the Trust is entitled under the Plan. All present and future asbestos-related personal injury claims must be asserted against, and will be resolved by, the Trust, and such claims may not be asserted against the company. Under the Plan, payments to unsecured creditors having allowed claims of US$10,000 or less (or who have reduced their claims to US$10,000) began on October 2. The creditors receive distributions entirely in cash in an amount equal to approximately 75% of their allowed claims. The cash amount to be distributed to Class 6 creditors and the Trust includes "Available Cash" as defined in the Plan and $775 million of the cash proceeds expected from US$800 million of term loans that the company is arranging in lieu of issuing notes under the Plan. The term loans are in addition to a US$300 million revolving credit facility already established, which is currently undrawn and will be available to support the company's ongoing liquidity needs. The company also disclosed that its Common Shares have been approved for listing on the New York Stock Exchange under the ticker symbol "AWI." Trading on the NYSE is expected to commence on a "when issued" basis, and "regular way" trading is anticipated to begin on a date to be announced by the New York Stock Exchange. "We are pleased to return to the New York Stock Exchange, where Armstrong first began trading on July 17, 1935," F. Nicholas Grasberger III, senior vice president and chief financial officer, said. "This is the renewal of a long and rewarding relationship between Armstrong and the NYSE." "We are pleased to welcome back Armstrong World Industries to our family of NYSE-listed companies, resuming our 70-plus year partnership with the company," John A. Thain, NYSE Group, Inc. chief executive officer, said. "We look forward to serving Armstrong World Industries and its shareholders, and providing the company with superior market quality and brand visibility." About Armstrong World Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world. The company has Asia-Pacific locations in Malaysia, Singapore, Australia, China, Hong Kong, Indonesia, Japan, Philippines, South Korea, Taiwan, Thailand and Vietnam. It also has locations in Colombia, Costa Rica, Greece and Iceland, among others. The company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. (Armstrong Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service,Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Standard & Poor's Ratings Services assigned its 'BB' bank loan rating to the proposed US$1.1 billion senior secured bank facility of Armstrong World Industries Inc. (D/--/--), based on preliminary terms and conditions. ARMSTRONG WORLD: Registers with SEC 5,349,000 Common Shares ----------------------------------------------------------- Walter T. Gangl, Deputy General Counsel and Assistant Secretary of Armstrong World Industries, Inc., discloses in a regulatory filing with the United States Securities and Exchange Commission that the company has registered 5,349,000 shares of common stock to be issued to officers and key employees in accordance with its 2006 Long-Term Incentive Plan. The maximum offering price for each share is US$35, for an aggregate offering price of US$187,215,000. The company paid a US$20,032 registration fee. About Armstrong World Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior floor coverings and ceiling systems, around the world. The company has Asia-Pacific locations in Malaysia, Australia, China, Hong Kong, Indonesia, Japan, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. It also has locations in Colombia, Costa Rica, Greece and Iceland, among others. The company and its affiliates filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in their restructuring efforts. The company and its affiliates tapped the Feinberg Group for analysis, evaluation, and treatment of personal injury asbestos claims. Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for financial and investment advice. The Official Committee of Asbestos Personal Injury Claimant hired Ashby & Geddes as counsel. The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The Clerk entered the formal written confirmation order on Aug. 18, 2006. The company's "Fourth Amended Plan of Reorganization, as Modified," has become effective and AWI has emerged from Chapter 11. (Armstrong Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service,Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Standard & Poor's Ratings Services raised its corporate credit rating on Armstrong World Industries Inc. to 'BB' from 'D', following the company's emergence from bankruptcy on Oct. 2, 2006. The outlook is stable. ELBA HOLDINGS: Management Holds Off Payment to Creditors -------------------------------------------------------- Pursuant to Paragraph 3.2 of Practice Note 1/2006 of The Bursa Malaysia Securities Berhad's Listing Requirements, Elba Holdings Berhad disclosed that as of October 2, 2006, there is no change to the status of default in payments to its lenders as compared to its Sept. 1, 2006 update. The TCR-AP reported on Sept. 8 that Elba Holdings and its subsidiaries have defaulted on their payments, according to their disclosure on Sept. 1, 2006. According to the TCR-AP report, Elba Holdings received demand notice for the repayment of a MYR45-million term loan facility triggered by a downgrade in corporate credit rating assigned by an independent credit rating company on March 14, 2006. Subsequently, other financial institutions have indicated to the Company and its subsidiaries the wish to recall majority of the credit facilities. The credit facilities utilized by the Company and its subsidiaries amounted to MYR80.75 million as of June 30, 2006. In this regard, the management is of the opinion that all payments to financial institutions should be suspended until a restructuring scheme is put in place. Hence, a reputable financial advisor has been appointed to assist the Company in drawing up plans in conjunction with the input of the major creditors. The Company is currently negotiating with the creditors, including financial institutions, to restructure the outstanding liabilities. The Company and its subsidiaries are in the process of exploring the possibility of undertaking a restructuring exercise. If the Company and its subsidiaries are unable to meet obligations for immediate repayment, the financial institutions have the rights to institute winding up proceedings under the statutory regulations. About Elba Holdings Elba Holdings Berhad -- http://www.elbaholdings.com.my/-- is a Malaysia-based investment holding company engaged in the provision of management consultancy services to its subsidiaries. Through its subsidiaries, the Company manufactures, distributes and trades in apparels. The company disclosed on May 8, 2006, that it is an affected listed issuer of the Amended Practice Note 17 category of the Listing requirements. Based on the audited consolidated results for the year ended December 31, 2005, the company's shareholders' equity on consolidated basis was less than 25% of its issued and paid up capital and less than the minimum issued and paid up capital as required by the Listing Requirements. In addition, the company's auditors have expressed a debt with emphasis on the company's going concern for fiscal 2005. As of June 30, 2006, Elba has total assets of MYR85,230,000 and total liabilities of MYR90,799,000, resulting into a stockholders' deficit of MYR5,569,000. FCW HOLDINGS: Still Exploring Financial Regularization Options -------------------------------------------------------------- FCW Holdings Berhad disclosed on October 2, 2006, that it is still exploring a suitable regularization plan to address its financial condition. On May 5, 2006, the Troubled Company Reporter - Asia Pacific reported that FCW Holdings was classified under Bursa Malaysia Securities Berhad's Practice Note 17 category since the Company's shareholders' equity has fallen well below the minimum requirement of 25%. As an affected listed issuer, the Company was required to submit a plan to regularize its financial condition. Bursa Malaysia Securities may suspend or delist FCW's shares should the Company fail to submit its regularization plan, which is due 12 weeks from now. About FCW Holdings Headquartered in Selangor Darul Ehsan, Malaysia, FCW Holdings Berhad is principally involved in investment holding, providing management services and trading of telecommunications equipment. Its other activities include renting of communication access, selling and hiring of telecommunications equipment and electronic goods, providing paging services and turnkey contracting. FCW Holdings is a Practice Note 17 company. It has been incurring continuous losses since 1999. By March 31, 2006, the Company's accumulated losses has hit MYR135,469,000, from MYR134,410,000 accumulated losses in March 31, 2005. The Company is also facing possible delisting by Bursa Malaysia Securities Berhad if it fails to submit a plan to regularize its financial condition. JIN LIN: Securities To Trade Starting November 14 ------------------------------------------------- Jin Lin Wood Industries Berhad disclosed on October 20, 2006, that its securities will be traded and quoted from November 10, to November 14, 2006. The Scheme of Arrangement with shareholders entails the: (i) reduction of the existing issued and paid-up share capital of Jin Lin for MYR44,000,000 comprising 44,000,000 ordinary shares of MYR1.00 each in Jin Lin to MYR8,800,000 comprising 44,000,000 ordinary shares of MYR0.20 each in Jin Lin; (ii) consolidation of 44,000,000 ordinary shares of MYR0.20 each in Jin Lin into 8,800,000 Jin Lin Shares upon completion of the Reduction; (iii) cancellation of the entire issued and paid-up share capital of Jin Lin of MYR8,800,000 comprising 8,800,000 Jin Lin Shares upon completion of the Consolidation; (iv) in consideration for the Cancellation, Gefung Holdings Berhad shall allot and issue to the shareholders of Jin Lin, 8,800,000 new ordinary shares of MYR1.00 each in Gefung at par, credited as fully paid-up on the basis of one new Gefung Share for every one Jin Lin Share held after the Consolidation; and (v) forthwith and contingent upon the Cancellation, Jin Lin shall apply an amount of MYR8,800,000 out of the credit reserve arising in paying in full at par, 8,800,000 Jin Lin Shares which shall be allotted and issued, credited as fully paid-up to Gefung. The Registrar can be reached at: Symphony Share Registrars Sdn Bhd Level 26, Menara Multi-Purpose, Capital Square No. 8, Jalan Munshi Abdullah 50100 Kuala Lumpur Telephone: 03-27212222 Facsimile :03-27212530 About Jin Lin Headquartered in Kuala, Lumpur Malaysia, Jin Lin Wood Industries Berhad is engaged in the manufacture and trade of timber and related timber products. The Company is also involved in warehousing, chemical treatment, and investment holding. As of June 30, 2006, the Company's balance sheet showed total assets of MYR66,849,000 and total liabilities of MYR100,292,000, resulting into a stockholders' deficit of MYR33,443,000. ===================== N E W Z E A L A N D ===================== 3D RECYCLING: Shareholders Resolve to Liquidate Firm ---------------------------------------------------- On September 26, 2006, shareholders of 3D Recycling Ltd resolved to liquidate the company's business. Subsequently, Stephen Mark Lawrence and Anthony John McCullagh were appointed as joint and several liquidators. Creditors are required to prove their debts by October 26, 2006, or be excluded from participating in any distribution the Company will make. The Liquidators can be reached at: Stephen Mark Lawrence Anthony John McCullagh Horwath Corporate (Auckland) Limited P.O. Box 3678, Auckland 1140 Australia Telephone:(09) 300 1946 Facsimile:(09) 302 0536 BARRAUD STREET: Court to Hear Liquidation Petition on Oct. 30 ------------------------------------------------------------- A petition to liquidate Barraud Street Caf� Ltd will be heard before the High Court of Palmerston North on October 30, 2006, at 10:00 a.m. The Commissioner of Inland Revenue filed the petition with the Court on June 2, 2006. The Solicitor for the Petitioner can be reached at: Kerri Ann Doherty Technical and Legal Support Group Wellington Service Centre First Floor, New Zealand Post House 7-27 Waterloo Quay (P.O. Box 1462) Wellington, New Zealand Telephone:(04) 890 1045 Facsimile:(04) 890 0009 BE-WITCHED LTD: Faces Liquidation Proceedings --------------------------------------------- The High Court of Auckland will hear a liquidation petition against Be-Witched Ltd on November 30, 2006, at 10:45 a.m. Clearview Marketing Ltd filed the petition with the Court on August 30, 2006. The Solicitor for the Petitioner can be reached at: Malcolm Whitlock Debt Recovery Group NZ Limited 149 Ti Rakau Drive Pakuranga, Auckland New Zealand EXSELL MARKETING: Appoints Joint Liquidators -------------------------------------------- On September 25, 2006, shareholders of Exsell Marketing Ltd appointed Peri Micaela Finnigan and John Trevor Whittfield as the company's joint and several liquidators. In this regard, the Liquidators require the company's creditors to prove their claims by November 3, 2006, for them to share in the distribution. The Joint Liquidators can be reached at: Peri Micaela Finnigan John Trevor Whittfield McDonald Vague P.O. Box 6092 Wellesley Street Post Office, Auckland New Zealand Telephone:(09) 303 0506 Facsimile:(09) 303 0508 Web Site: http://www.mvp.co.nz MANAWATU PLASTIC: Liquidation Petition Hearing Set on Oct. 30 ------------------------------------------------------------- On September 25, 2006, the Commissioner of Inland Revenue filed before the High Court of Palmerston North a liquidation petition against Manawatu Plastic Repairers (2002) Ltd. The petition will be heard on October 30, 2006, at 10:00 a.m. The Solicitor for the Petitioner can be reached at: Kerri Ann Doherty Technical and Legal Support Group Wellington Service Centre First Floor, New Zealand Post House 7-27 Waterloo Quay (P.O. Box 1462) Wellington, New Zealand Telephone:(04) 890 1045 Facsimile:(04) 890 0009 METAL PROTECTION: Creditors Must Prove Debts by November 1 ---------------------------------------------------------- Liquidator Robert Laurie Merlo requires creditors of Metal Protection Ltd to prove their debts by November 1, 2006. Failure to prove debts will exclude a creditor from sharing in any distribution the Company will make. The Liquidator can be reached at: Robert Laurie Merlo Merlo Burgess & Co. Limited P.O. Box 51-486 Pakuranga, Auckland New Zealand Telephone:(09) 520 7101 Facsimile:(09) 529 1360 E-mail: merloburgess&co@xtra.co.nz OXFORD TIMBER: Liquidation Hearing Set on October 30 ---------------------------------------------------- On October 30, 2006, the High Court of Christchurch will hear a liquidation petition filed against Oxford Timber and Milling Ltd. Desmond James Lines, Adrienne Anne Lines and Nina Caroline McCallum-Clark (as trustees of The Octon Grange Trust) filed the petition on September 15, 2006. The Solicitor for the Petitioner can be reached at: P. J. Woods Anthony Harper Lawyers Level Five, Anthony Harper Building 47 Cathedral Square (P.O. Box 2646), Christchurch New Zealand Facsimile:(03) 366 9277 QUADRA HOLDINGS: Creditors' Proofs of Debt Due on November 10 ------------------------------------------------------------- On September 27, 2006, John Robert Buchanan and Callum James Macdonald were appointed as liquidators of Quadra Holdings Ltd. Accordingly, creditors are required to submit their proofs of debt to the liquidators by November 10, 2006, or be excluded from sharing in any distribution the Company will make. The Liquidators can be reached at: John Robert Buchanan Callum James Macdonald Buchanan Macdonald Limited Chartered Accountants P.O. Box 101 993 North Shore Mail Centre, Auckland New Zealand Telephone:(09) 441 4165 Facsimile:(09) 441 4167 SHEEHAN ENTERPRISES: Creditors to Prove Claims on November 20 ------------------------------------------------------------- Liquidator Robert James Taylor require creditors of Sheehan Enterprises Ltd -- formerly Frankham Lyne Ltd -- to file their proofs of claim by November 20, 2006. On September 27, 2006, the company's shareholders appointed Mr. Taylor as liquidator. The Liquidator can be reached at: Robert James Taylor Christmas Gouwland & Co. P.O. Box 106-090, Auckland New Zealand Telephone:(09) 309 1799 Facsimile:(09) 307 3113 TAXIS COASTLINE: CIR Seeks to Liquidate Company ----------------------------------------------- On September 21, 2006, the Commissioner of Inland Revenue filed a petition to liquidate Taxis Coastline Ltd. The petition will be heard before the High Court of Rotorua on November 13, 2006, at 10:45 a.m. The Solicitor for the Petitioner can be reached at: E.M. Duncan-Sittlington Inland Revenue Department 1 Bryce Street, Hamilton New Zealand Telephone:(07) 959 0471 ===================== P H I L I P P I N E S ===================== CLIENTLOGIC CORP: Inks Merger Deal with SITEL --------------------------------------------- ClientLogic and SITEL have entered into a definitive merger agreement. Under the terms of the agreement, a newly formed subsidiary of ClientLogic will merge with SITEL and pay US$4.05 per share in cash for all of the outstanding common stock of SITEL. The Board of Directors of each company has unanimously approved the transaction. The transaction is expected to be completed in the first quarter of 2007 and is subject to customary closing conditions, including approval of SITEL's shareholders and regulatory clearances. SITEL's Board of Directors has recommended to SITEL's shareholders that they vote in favor of the transaction. Approximately 19.9% of the outstanding common stock of SITEL is subject to voting agreements which require such shares to be voted in favor of the merger. SITEL has agreed to pay a termination fee to ClientLogic should the transaction not close due to certain circumstances. ClientLogic will fund the transaction with the proceeds of a committed loan facility. The transaction values SITEL at approximately US$450 million. Commenting on the pending transaction, Jim Lynch, Chairman and CEO of SITEL Corporation, said, "Our board and our financial advisor Citigroup reviewed numerous opportunities while searching for strategic alternatives that would create the greatest value for our shareholders. Based on this review, it was clear to SITEL's board that the offer from ClientLogic represents the best alternative to create significant shareholder value." The US$4.05 to be paid in cash in the merger for each SITEL share represents a 33% premium to the volume-weighted average SITEL share price for the 30-trading day period ending October 11. The combined entity will continue to be named ClientLogic Corporation, and will have approximately 65,000 employees across 28 countries. Dave Garner will be chief executive officer of the combined entity. "Growing market demand for bigger, more complex customer-care BPO solutions requires larger service providers with increased geographic presence, capacity and service capabilities", said Dave Garner, President and CEO of ClientLogic. "Our mission will be to deliver the BPO industry's highest-quality services, while providing our clients with the strategic insight, scale and diversity of offerings to guarantee success." The combination of ClientLogic and SITEL will create a company with revenue of over US$1.7 billion, and one of the most diverse client bases, service offerings, and geographic footprint in the industry. The combined entity will offer clients world-class options for onshore, nearshore and offshore customer care solutions, in over 145 facilities throughout the Americas, EMEA and Asia Pacific. Citigroup Global Capital Markets is acting as financial advisor to SITEL and has provided a fairness opinion in connection with the transaction. Davis Polk & Wardwell and Faegre & Benson are acting as legal counsel to SITEL in connection with the transaction. Goldman, Sachs & Co. is acting as financial advisor to ClientLogic. Mayer, Brown, Rowe & Maw LLP and Oppenheimer Wolff & Donnelly LLP are acting as legal counsel to ClientLogic in connection with the transaction. About SITEL Corp SITEL -- http://www.sitel.com/-- provides outsourced customer support services. SITEL designs and improves customer contact models across its clients' customer acquisition, retention, and development cycles. SITEL has over 42,000 employees in 101 global contact centers located in 26 countries. About ClientLogic ClientLogic Corp. -- http://www.clientlogic.com/-- is a business process outsourcing provider in the customer care and back office processing industries. ClientLogic's footprint spans 49 facilities in Austria, Canada, France, Germany, India, Ireland, Mexico, Morocco, Netherlands, Panama, Philippines, United Kingdom, United States. * * * Standard & Poor's Rating Services placed its 'B' corporate credit rating on Nashville, Tennessee-based ClientLogic Corp. on CreditWatch with positive implications. PHILCOMSAT HOLDINGS: PCGG Must Answer Senate Inquiry on Losses -------------------------------------------------------------- As reported by the Troubled Company Reporter - Asia Pacific on May 10, 2006, two rival groups of Philcomsat Holdings Corp. shareholders threw accusations of mismanagement against each other, which led the Philippine Senate to initiate a probe on the Company and summon officials of the Presidential Commission on Good Government, led by Chairman Camilo Sabio. Locked in a long-running battle of control over the Philcomsat groups are the group of Manuel Nieto Jr. and Enrique Locsin, versus the group of minority stockholders led by Victor Africa and Erlinda Ilusorio Bildner. According to news.balita.ph, the Philcomsat investigation was initiated after administration Sen. Miriam Defensor Santiago filed a resolution seeking for an investigation on the alleged anomalous losses incurred by the company supposedly committed by the PCGG nominees sitting on its board of directors. The TCR-AP stated on May 10, 2006, that Philcomsat Holdings reported a PHP22-million net loss, on revenues of PHP111 million and operating expenses of PHP133 million in 2005. The report said that despite its losses, company's officials still receive bonuses. Supreme Court Says PCGG Must Cooperate Fel Maragay recounted in her October 7, 2006 column with the Manila Standard Today that when the PCGG commissioners ignored the summons, the Senate cited them for contempt and ordered their arrest. The Inquirer specifically relates that in September, the Senate issued warrants of arrests against Chairman Sabio and four PCGG commissioners for defying its summons. Chairman Sabio was arrested in his office by a Senate security team, while the others went into hiding. Mr. Maragay noted that the Supreme Court intervened but temporarily lifted the arrest due to the PCGG's claim of exemption from the investigation. However, in an October 17 update, the Philippine Daily Inquirer reported that the Supreme Court issued an order determining that the PCGG had been stripped of its immunity from congressional investigation. Senate to Resume Probe on November 6 The Philippine Senate will resume in November its investigation on the anomalous losses incurred by Philcomsat after the Supreme Court ruling that nullified the PCGG's claim of immunity, news.balita.ph. The report notes that the investigation will be headed by the Senate committee on government corporations and public enterprises chaired by Senator Richard Gordon. news.balita says that Senator Gordon wanted the immediate resumption of the investigation, but upon conferring with administration Sen. Juan Ponce Enrile, they decided to call the hearing after the Senate resumes session on November 6. As the TCR-AP stated on May 10, 2006, Senator Enrile is minority shareholder of Philcomsat. The report cites Senator Gordon as saying in a press conference that the Senate Investigation will also pave the way for the PCGG officials to report to the Filipino people their accomplishments. "We will find out if the PCGG has been doing its job. We will expand our investigation and look into the operations of the companies that the PCGG has taken over, where they have made money, where they lost money and where they made money for themselves," Senator Gordon added. According to Senator Gordon, the investigation is in line with the proposed measure that seeks the abolition of the PCGG. Senator Gordon also clarified that the warrant of arrests ordered against PCGG Chairman Sabio and the rest of its commissioners, and the officials of Philcomsat is still in effect and they could be arrested any time if they continue to disregard the summons and subpoenas of the Upper Chamber to attend the congressional hearings. * * * Philcomsat Holdings Corporation -- formerly Liberty Mines, Inc. -- was incorporated on May 10, 1956. During the 70s and early 80s when the country experienced a boom in geophysical and drilling activities both offshore and onshore, Philcomsat Holdings was one of the active participants in search of oil. The Company has since withdrawn from oil exploration because there was no commercial discovery of oil. On January 10, 1997, the Company approved amendments to its Articles of Incorporation, changing its primary purpose from embarking in the discovery, exploitation, development and exploration of mineral oils, petroleum in its natural state, rock or carbon oils, natural oils and other volatile mineral substances to a holding company. According to a Troubled Company Reporter - Asia Pacific report on May 18, 2006, Philcomsat Holdings has not declared dividends for the past two fiscal years. Philcomsat is involved in an anomaly brought about by huge losses. The Company reported a PHP6.965-million loss in 2004, and a PHP22-million loss in 2005. The Philippine Senate has initiated an inquiry into the matter. Moreover, according to press reports, a huge fraction of the shareholdings of Philcomsat, which is said to be ill gotten, had been confiscated by the Government. ================= S I N G A P O R E ================= BOON WAN: Court to Hear Wind-Up Petition on October 27 ------------------------------------------------------ On October 4, 2006, Tan Siew Chang and Tan Kok Seng have filed an application to wind up Boon Wan Holding Co Pte Ltd. The High Court of Singapore will hear the wind-up petition on October 27, 2006, at 10:00 a.m. The Petitioners' solicitor can be reached at: Yeo Wee Kiong Law Corporation No. 1 Raffles Place #39-02 OUB Centre Singapore 048616 CHUAN YI: Creditors Must Submit Proofs of Debt by November 6 ------------------------------------------------------------ Chuan Yi Marine Pte Ltd, which was placed under members' voluntary liquidation, requires its creditors to submit their proofs of debt by November 6, 2006, for them to be included in the company's distribution of dividend. The company's liquidators are: Chee Yoh Chuang Lim Lee Meng 18 Cross Street #08-01 Marsh & McLennan Centre Singapore 048423 GLOBAL DELIGHT: Wind-Up Hearing Set for November 3 -------------------------------------------------- Reserve Cash Limited has filed on October 5, 2006, an application to wind up Global Delight Pte Ltd. The High Court of Singapore will hear the wind-up petition on November 3, 2006, at 10:00 a.m. Reserve Cash's solicitors can be reached at: Robert Wang & Woo LLC No. 9 Temasek Boulevard #32-01, Suntec Tower 2 Singapore 038989 LEVI STRAUSS: Revenue Down to US$1.02-Mil. for 3rd Qtr. 2006 ------------------------------------------------------------ Levi Strauss & Co has filed on October 10, 2006, its financial results for the third quarter ended August 27, 2006, with the United States Securities and Exchange Commission. For the quarter under review, net revenues were US$1,023 million compared to US$1,037 million for the same quarter in 2005, an approximately 1% decrease on a reported basis and a 2% decrease on a constant-currency basis. The change in net revenue primarily reflects lower U.S. Levi Strauss Signature and Asia Pacific sales, partially offset by increased U.S. Dockers sales. Net income for the third quarter ended August 27, 2006, increased 29% to US$49 million compared to US$38 million in the same quarter of 2005. The improvement reflects a 14% increase in operating income, primarily driven by a US$29 million benefit-plan curtailment gain related to the planned closure of a U.S. distribution center, partially offset by higher income tax expense. "We improved our profitability and cash flow - our primary objective this year," said Phil Marineau, chief executive officer. "We're addressing a number of challenges to our business, including fixture reductions at U.S. Wal-Mart stores and a sales decline in Japan . However, in the face of retailer consolidation in the United States and the challenging European market, I'm pleased with the U.S. Levi's and Dockers performance and the improving trends in Europe ," added Mr. Marineau. Gross profit decreased 1% to US$467 million compared to US$472 million in the third quarter of 2005. Gross margin was stable at 45.7% of revenues for the third quarter of 2006 compared to 45.5% of revenues in the same period last year. Selling, general and administrative expenses decreased 6% or US$21 million to US$307 million in the third quarter of 2006 from US$327 million in same period of 2005. Lower SG&A expenses in the 2006 period were primarily attributable to the curtailment gain and lower advertising and promotion costs, partially offset by the US$8 million compensation and US$5 million non-cash pension costs related to the retirement of the company's CEO and higher selling expense associated with opening new company-operated retail stores in Europe and the United States. Operating income for the third quarter of 2006 increased US$19 million to US$158 million compared to US$139 million in prior year period. The increase was primarily due to lower SG&A, partially offset by lower net revenue. Interest expense for the quarter decreased 6% to US$60 million compared to US$64 million in the third quarter of 2005. The decrease was primarily attributable to lower average interest rates during the 2006 quarter. Income tax expense for the third quarter of 2006 was US$58 million compared to US$40 million in the 2005 period. The increase is primarily driven by the increase in income before taxes in the current period compared to the prior year. The effective tax rate for the first nine months of 2006 was 39% compared to 47% for the same period in 2005. Strong year-to-date cash flow in 2006 is attributable to improved working capital management and lower interest and restructuring payments. "We delivered solid operating income, even as we invested in our business. Better working capital management and cost discipline helped contribute to our bottom line. We expect to see stable revenues in the fourth quarter," said Hans Ploos van Amstel, the Company's Chief Financial Officer. As of August 27, 2006, the Company's balance sheet showed total current assets of US$1.65 billion and total current liabilities of US$924 million. Total assets amounted to US$2.90 billion total liabilities of US$4 billion, which leaves a stockholders' deficit of approximately US$2 billion. The Company's Financial Statement for the Third Quarter Ended August 27, 2006, is available for free at: http://bankrupt.com/misc/tcrap.LeviStrauss.pdf About Levi Strauss Levi Strauss & Co. -- http://www.levistrauss.com/-- is a branded apparel company, with sales in more than 110 countries. Levi Strauss designs and markets jeans and jeans-related pants, casual and dress pants, tops, jackets and related accessories for men, women and children under its Levi's(R), Dockers(R) and Levi Strauss Signature(R) brands. Levi Strauss also licenses its trademarks in various countries throughout the world for accessories, pants, tops, footwear, home and other products. The company's global divisions are based in Singapore, San Francisco and Brussels. * * * In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. and Canadian Retail sector, the rating agency confirmed its B2 Corporate Family Rating for Levi Strauss & Co., and its B3 rating on the company's Various senior unsecured notes. Additionally, Moody's assigned an LGD5 rating to those bonds, suggesting noteholders will experience a 59% loss in the event of a default. LIANG HUAT: Submits Circular and Listing Application to SGX-ST -------------------------------------------------------------- Liang Huat Aluminium Limited has submitted to the Singapore Stock Exchange its circular and the notice of its general meeting for the approval of: -- the allotment and issuance of up to 19,500,000,000 new ordinary shares in Liang Huat's capital at an issue price of US$0.00015 each in connection with: a) the modified scheme of arrangement between the Company and its scheme creditors; and b) the modified scheme of arrangement between Liang Huat and its scheme creditors; -- the allotment and issuance of up to 2,000,000,000 new ordinary shares in the Company's capital at an issue price of US$0.0015 each to the Investor and Lion Capital Group Limited upon completion of the Investment Agreement, representing approximately 70% of the enlarged share capital of the Company, for an aggregate cash consideration of US$3,000,000; -- the grant of an option to the Investor to convert US$1,250,000 of the Investment Amount into up to 840,000,000 new ordinary shares in the capital of the Company at an issue price of US$0.0015 each upon non- completion of the Investment Agreement and the allotment and issuance of the Conversion Shares to the Investor, representing approximately 29% of the enlarged share capital of the Company at the time of the allotment and issuance of such shares, upon exercise of the said option; -- a whitewash resolution for the waiver by the Company's independent shareholders of their right to receive a mandatory general offer from the Investor and its concert parties upon completion of the Investment Agreement; -- a whitewash resolution for the waiver by the Company's independent shareholders of their right to receive a mandatory general offer from Malayan Banking Berhad and its concert parties upon non-completion of the Investment Agreement; -- the reduction of the share capital of the Company; -- the consolidation of every 10 ordinary shares into 1 ordinary share in the Company, pursuant to and in connection with a scheme of arrangement under section 210 of the Companies Act, Chapter 50; -- the allotment and issuance of up to 55,000,000 new ordinary shares in the Company's capital at an issue price of US$0.00015 each to Tan Yong Kee, Tan Tiang Cheng, Tan Cheng Nguan, Koh Boon Teck, Foo Meng Kee, Siew Chee Meng and Chandra Mohan, representing approximately 0.19% of the enlarged share capital of the Company, for the conversion of debt of US$919,693 owed by the Company to the creditors; -- the placement exercise by the Company for the allotment and issuance of up to a maximum of 300 million new ordinary shares in the Company's capital to be allotted and issued at the issue price being an amount which is priced at either: a) up to 50% discount to the weighted average price for trades done on the Singapore Exchange Securities Trading Limited for the full market day on which the placement Agreement are signed between the Company and the placees; or b) US$0.005, whichever is higher for each Mandate Placement Share in the event of Completion or non- completion of the Investment Agreement; -- the new general mandate to issue new ordinary shares in the Company's capital; and -- the amendments to the Articles of Association of the Company; A new Shareholders' mandate for interested person transactions has been submitted to the SGX-ST on October 23, 2006, for clearance. In addition, the Board also wishes to announce that concurrently with the submission of the Circular to the SGX-ST, the additional listing application for the admission to the Official List of the SGX-ST of the Scheme Shares, the Investor Shares, the Conversion Shares, the Creditors' Shares and the Mandate Placement Shares has also been submitted to the SGX-ST on October 23, 2006, for the approval. About Liang Huat Liang Huat Aluminium -- http://www.lianghuatgroup.com.sg/-- is a vertically integrated, professionally run group of companies based in Singapore focusing on producing high quality aluminum products and processed glass for both the industrial and construction industries. It also supplies and installs aluminum and processed glass for major commercial and residential projects mainly in Singapore. Liang Huat was the subject of a wind-up petition filed by Lim Ah Siong trading as Lian Siong Aluminium & Trading on August 26, 2004. Presently, the company is undergoing a financial restructuring exercise. It is also working a Scheme of Arrangement with its major creditor banks. LOUIS PRESTON: Court Issues Wind-Up Order ----------------------------------------- The High Court of Singapore has, on October 13, 2006, ordered Louis Preston Holdings Pte Ltd to wind up its operations. Accordingly, creditors of Louis Preston must file proofs of debt in order to be included in the Company's distribution of dividend. Overseas Union Enterprise Limited had filed the wind-up petition against Louis Preston. The Company's liquidator can be reached at: The Official Receiver 45 Maxwell Road, #05-11/#06-11 The URA Centre, East Wing Singapore 069118 PETROLEO BRASILEIRO: Unit Supplying Ethanol Biodiesel Mixture ------------------------------------------------------------- Petroleo Brasileiro SA, a state-run oil firm of Brazil, said in a statement that BR Ditribuidora, its fuel retailer, will supply an ethanol biodiesel mixture to VIP, an urban transport company in Sao Paulo. Local press says that Petroleo Brasileiro will supply diesel B- 30, which is made up of 62% diesel, 30% biodiesel and 8% ethanol. According to reports, VIP operates about 1,880 buses in Sao Paulo. VIP estimates its demand for the fuel at 14 million litters yearly, Business News Americas reports. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp-- was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. Petrobras has operations in China, India, Japan, and Singapore. Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. SEA CONTAINERS: First Meeting of Creditors Slated for Nov. 21 ------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, will hold a meeting for the creditors of Sea Containers Ltd., Sea Containers Services Ltd., and Sea Containers Caribbean Inc. on Nov. 21, 2006, at 10:00 a.m. The meeting will be held at: Room 2112 2nd Floor J. Caleb Boggs Federal Building 844 North King Street Wilmington, Delaware This is the first meeting of creditors required under 11 U.S.C. Sec 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, 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 (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. TARGUS GROUP: Names Michael Hoopis as Chief Executive Officer ------------------------------------------------------------- Targus Group International Inc. reported that Michael P. Hoopis will become chief executive officer effective Oct. 23, 2006. Howard Johnson, Chairman of the Board of Directors of Targus, and Timothy Mayhew, Managing Director of Fenway Partners, jointly commented: "We are delighted that Mike has joined Targus to provide the leadership and consumer products expertise necessary to lead the next phase of the company's development. Throughout his career, Mike has earned a strong reputation for successfully managing well-known consumer product companies including Black & Decker's Worldwide Household Products Group, Price Pfister Plumbing Products, Kwikset Security Hardware and most recently Water Pik Technologies. His ability to quickly develop and execute focused business plans in difficult competitive environments has led to consistent sales and profit improvements and significant increases in enterprise values." "Mike's proven leadership and strategic capabilities, coupled with his experience in global businesses, multiple channels of distribution, new product innovation and supply chain excellence will be invaluable to Targus as he manages the business to realize its tremendous potential" Messrs. Johnson and Mayhew continued. For the past seven years, Mr. Hoopis served as Water Pik's President and Chief Executive Officer. Mr. Hoopis was responsible for overseeing the spin-off and transition of Water Pik from a segment of Allegheny Teledyne to a public company in 1999. Prior to Water Pik, Mr. Hoopis held several management positions at Black & Decker from 1989-1998, including President of Worldwide Household Products, Price Pfister, Inc. and Kwikset Corporation. Prior to Black & Decker, Mr. Hoopis held several management positions with Beatrice Foods Inc. Mr. Hoopis earned his B.S. from the University of Rhode Island. The company also reported that Victor C. Streufert will assume the position of Chief Financial Officer, Treasurer and Executive Vice President effective October 23, 2006, replacing John McAlpine who has left the company to pursue other opportunities. Messrs. Johnson and Mayhew commented: "With over 25 years of experience in key finance leadership roles, Vic's background in building world-class finance organizations and accelerating revenue and profit growth will be a critical element of Targus' ongoing success. We expect that Vic's unique blend of both public and private company experience will allow him to add significant value to Targus' finance, accounting and information systems efforts in the coming years." Most recently, Mr. Streufert was the Chief Financial Officer at Water Pik, where he worked closely with Mr. Hoopis in creating significant value. Under Messrs. Hoopis and Streufert's leadership, Water Pik's share price nearly quadrupled from the time of the spin-off to US$27.75 at the time the company was sold. Prior to Water Pik, Mr. Streufert served as Senior Vice President of Finance and Administration and Chief Financial Officer of National Telephone & Communications, Inc., where he oversaw the finance, legal, and human resources departments from 1996-1998. In 1995 and 1996, he was Vice President of Finance and Chief Financial Officer of Pyxis Corporation where he refocused the company on earnings growth and completed the company's merger with Cardinal Health, Inc. From 1989-1995, he was Executive Vice President and Chief Financial Officer of American Health Properties, Inc., a US$600 million NYSE-listed health care company. Prior to American Health Properties, Mr. Streufert held a variety of financial/accounting positions at Colgate Palmolive and American Hospital Supply Corporation. Mr. Streufert earned his M.B.A. from the University of Chicago and his B.A. in Economics from Valparaiso University. Eric Brenk, an advisor to Fenway Partners, served as interim CEO during a period of transition for the company and will return to his role at Fenway while continuing to work with Targus as a consultant. Korn/Ferry International completed the placement of Mr. Hoopis at Targus. * * * Targus Group International, Inc, headquartered in Anaheim, California, designs, develops, and distributes notebook computer cases and computer accessories. The company sells its products to original equipment manufacturers, third-party distributors, and retailers worldwide. Targus generated revenue of US$432 million for the twelve months ending June 30, 2006. Targus has operations in the Asia Pacific, specifically in Australia & New Zealand, China, Hong Kong, Japan, Korea, and Singapore. Moody's Investors Service downgraded all ratings of Targus Group International, Inc. including the first-lien secured bank loan to B2 and the second-lien secured bank loan to Caa1. The ratings downgrades are prompted by the decline in operating margin over the past year that has caused substantial deterioration in credit metrics. Operating profit has risen at a much slower pace than revenue as the company has written off obsolete inventory, one of the company's major customers has transitioned to a consignment relationship, and the company ended up paying for unplanned air freight and repackaging costs in order to meet retailer deadlines for new products. The rating outlook is revised to negative from stable. These are the ratings downgraded: * US$230 million first-lien secured bank facilities to B2 from B1, * US$85 million second-lien secured term loan to Caa1 from B3; and * Corporate family rating to B2 from B1. TIONG POLESTAR: Pays Final Dividend to Creditors ------------------------------------------------ Tiong Polestar Engineering Pte Ltd, which is in liquidation, has paid the final dividend to its creditors on October 5, 2006. The company's liquidator can be reached at: Jamshid K Medora 22 Malacca Street Royal Brothers Building #08-02 Singapore 048980 =============== T H A I L A N D =============== FEDERAL MOGUL: Court Allows Wilfred Morin, Jr. to Continue Suit --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware approved the stipulation by Federal-Mogul Corporation and Wilfred J. Morin, Jr., to lift the stay to allow Mr. Morin to proceed with the Vermont Action for the limited purpose of obtaining a decision from the Windsor Superior Court, Windsor County, in Vermont, and accordingly get hold of any applicable insurance coverage. As reported in the Troubled Company Reporter on Aug. 17, 2006, in January 2002, Mr. Morin, commenced a personal injury action in the Windsor Superior Court against among others, the Debtor. Mr. Morin sustained injuries due to defective forklift brakes manufactured by a successor-in-interest to the Debtor. Mr. Morin sustained the injuries prior to Debtor's filing for bankruptcy. The Debtors assert that there is insurance coverage available with respect to Mr. Morin's claim, which claim is unrelated to asbestos. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some US$6 billion. In the Asian Pacific region, the company has operations in Malaysia, Australia, China, India, Japan, Korea, and Thailand. The company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed US$10.15 billion in assets and US$8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. (Federal-Mogul Bankruptcy News, Issue No. 112; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) KRUNG THAI: Plans to Float Domestic Hybrid Bonds ------------------------------------------------ Krung Thai Bank PCL is planning to sell THB3-4 billion of hybrid bonds in November and another THB60 billion of short-term debt in December, Reuters reports, citing a company disclosure. According Apisak Tantivorawong, Krung Thai's president, the 10- year hybrid debt issue is expected to help boost the bank's tier I capital to 11% from 10.51%, enabling the bank to lend more in the future. The new issue, The Bangkok Post notes, would give the bank the capital funds to increase its loan portfolio by about THB30 billion. The hybrid tier-one issue, callable in 2016, was oversubscribed two times and priced with a coupon rate of 7.378%, or at 280 basis points over US treasuries, The Bangkok Post relates. Mr. Apisak said that the domestic bonds would feature a domestic credit rating of A+ from Fitch, compared with the BBB- rating assigned to the US dollar bond. The bank would arrange the bonds itself and other details of the bonds would be decided later, Mr. Apisak adds. Meanwhile, The Post further relates that Krung Thai plans to offer short-term debentures with terms of up to 270 days in December, priced favorably compared with fixed deposit rates and aimed at large bank depositors. One Krung Thai executive who declined to be identified told Reuters that the 270-day bonds in December would amount to THB60 billion. Krung Thai Bank Public Company Limited -- http://www.ktb.co.th/ -- began its operation on March 14, 1966, through the merger of business between the Agricultural Bank Limited and the Provincial Bank Limited with the Ministry of Finance as its major shareholder. The Bank provides financial assistance to large and small business, it also renders financial assistance to other state enterprises, both business-oriented and public utility types. Currently the bank is operating 511 domestic and 12 foreign branches and representative offices. Fitch Ratings, on September 12, 2006, affirmed the individual C/D rating of Krung Thai Bank Public Company Limited. The bank currently carries Moody's Investors Service's bank financial strength rating of D. OMNOVA SOLUTIONS: Improved Performance Spurs S&P to Lift Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on performance chemicals and decorative products manufacturer OMNOVA Solutions Inc. The corporate credit rating was raised to 'B+' from 'B'. The outlook is stable. "The upgrade acknowledges OMNOVA's improving operating performance, the strengthening of the financial profile, and the potential for additional debt reduction following the September 2006 sale of the GenFlex Building Products business," said Standard & Poor's credit analyst David Bird. OMNOVA sold GenFlex to Firestone Building Products Co. for approximately US$40 million. Based on management's commitment to improving the financial profile, Standard & Poor's expects the company to use the majority of the proceeds from the sale to reduce debt. The ratings reflect OMNOVA's vulnerable business position as a niche provider of emulsion polymers, specialty chemicals, and decorative products to mature and highly competitive markets. The ratings also reflect OMNOVA's exposure to volatile raw material costs, many of which are derived from oil and natural gas, and its highly aggressive financial profile. These attributes are only partially offset by competitive business positions as the No. 1 or No. 2 supplier in each of its key end markets and moderate product diversification. OMNOVA generated approximately $698 million in revenues over the past 12 months ended Aug. 31, 2006 (pro forma for the sale of the GenFlex business). Also on that date, the company maintained approximately US$203 million of total debt (adjusted to capitalize operating leases) outstanding, excluding any improvements in the capital structure from the proceeds generated by the sale. The company has operations in China and Thailand. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- October 25, 2006 Beard Audio Conferences Deepening Insolvency - Widening Controversy: Current Risks, Latest Decisions Review Risks, Examine Latest Decisions Affecting Directors, Advisors and Lenders of Troubled Companies Web site: http://www.beardaudioconferences.com/ Telephone: 240-629-3300 October 26, 2006 Turnaround Management Association Breakfast Event "The Latest in Fraud Investigations" with guest speaker Chad Cretney of PricewaterhouseCoopers Ernst & Young Tower Calgary, AB Web site: http://www.turnaround.org/ October 26, 2006 Turnaround Management Association Hedge Funds - Expanded Financing Opportunities in Business Turnarounds Arizona Web site: http://www.turnaround.org/ October 26, 2006 Turnaround Management Association Breakfast Speaker Series #3 TBA, Calgary, Alberta Telephone: 403-294-4954 Web site: http://www.turnaround.org/ October 26, 2006 Turnaround Management Association Breakfast Speaker Series #3 TBA, Calgary, Alberta Telephone: 403-294-4954 Web site: http://www.turnaround.org/ October 27, 2006 Turnaround Management Association Breakfast with Coach Dan Reeves Westin Buckhead, Atlanta, GA Telephone: 678-795-8103 Web site: http://www.turnaround.org/ October 28, 2006 Turnaround Management Association BK/TMA Golf Tournament Orange Tree Golf Resort, AZ Telephone: 623-581-3597 Web site: http://www.turnaround.org/ October 30-31, 2006 Distressed Debt Summit: Preparing for the Next Default Cycle Financial Research Associates LLC Helmsley Hotel, New York, NY Contact: http://www.frallc.com/ October 31, 2006 Turnaround Management Association Luncheon Citrus Club, Orlando, Florida Telephone: 561-882-1331 Web site: http://www.turnaround.org/ October 31 - November 1, 2006 International Women's Insolvency & Restructuring Confederation IWIRC Annual Conference San Francisco, CA, USA Web site: http://www.iwirc.com/ November 1, 2006 Turnaround Management Association Halloween Isn't Over! - Ghosts of turnarounds past who remind you about what you should have done differently Portland, Oregon Web site: http://www.turnaround.org/ November 1-4, 2006 National Conference Of Bankruptcy Judges National Conference of Bankruptcy Judges San Francisco, California Web site: http://www.ncbj.org/ November 2, 2006 Turnaround Management Association TMA UK Annual Conference Millennium Gloucester Hotel, London, UK Web site: http://www.turnaround.org/ November 2-3, 2006 Beard Group & Renaissance American Conferences Third Annual Conference on Physician Agreements & Ventures Successful Strategies for Medical Transactions and Investments The Millennium Knickerbocker Hotel - Chicago Telephone: 903-595-3800; 1-800-726-2524; Web site: http://www.renaissanceamerican.com/ November 3, 2006 Association Of Insolvency & Restructuring Advisors AIRA/NCBJ Breakfast Program Marriott, San Francisco, CA Telephone: 415-896-1600 Web site: http://www.airacira.org/ November 7, 2006 Turnaround Management Association Networking Breakfast Marriott, Bridgewater, New Jersey Telephone: 908-575-7333 Web site: http://www.turnaround.org/ November 7-8, 2006 Euromoney 5th Annual Distressed Debt Investment Symposium Hyatt Regency, London, UK Contact: http://www.euromoneyplc.com/ November 7-8, 2006 International Monetary Fund and the Financial Supervisory Service Macroprudential Supervision: Challenges for Financial Supervisors Seoul, South Korea Telephone: 82-2-3771-5114 Web site: http://www.fss.or.kr/ November 8, 2006 Turnaround Management Association Luncheon & Guest Speaker, Joel Naroff to discuss the economy, lending and M&A markets Davio's Northern Italian Steakhouse, Philadelphia, PA Web site: http://www.turnaround.org/ November 8, 2006 Turnaround Management Association Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Telephone: 703-912-3309 Web site: http://www.turnaround.org/ November 9-10, 2006 Turnaround Management Association - Australia TMA Australia National Conference Telephone: 0438-653-179 e-mail: tma_aust@bigpond.net.au November 15, 2006 LI TMA Formal Event TMA Australia National Conference Long Island, New York, USA Web site: http://www.turnaround.org/ November 15-16, 2006 Euromoney Institutional Investor Asia Capital Markets Forum Island Shangri-La, Hong Kong Web site: http://www.euromoneyplc.com/ November 16, 2006 Insolvency Practitioners Association of Australia Study Group Meetings Chartered Accountants House, Sydney, Australia Telephone: 9416-2395 e-mail: amanda_taylor@aapt.net.au November 23-24, 2006 Euromoney Conferences 5th Annual China Conference China World Hotel Beijing, China Web site: http://www.euromoneyconferences.com/ November 30, 2006 Euromoney Conferences Euromoney/DIFC Annual Conference Managing superabundant liquidity Madinat Jumeirah, Dubai Contact: http://www.euromoneyconferences.com/ December 5, 2006 Euromoney Conferences CFO Forum Hyatt Regency, Hangzhou, China Web site: http://www.euromoneyconferences.com/ December 13, 2006 Turnaround Management Association - Australia Christmas Function Australia GE Commercial Finance, George Street, Sydney, Australia Telephone: 0438-653-179 e-mail: tma_aust@bigpond.net.au February 2007 American Bankruptcy Institute International Insolvency Symposium San Juan, Puerto Rico Telephone: 1-703-739-0800 Web site: http://www.abiworld.org March 27-31, 2007 Turnaround Management Association - Australia 2007 TMA Spring Conference Four Seasons Las Colinas, Dallas, TX, USA e-mail: livaldi@turnaround.org April 11-15, 2007 American Bankruptcy Institute ABI Annual Spring Meeting J.W. Marriott, Washington, DC, USA Telephone: 1-703-739-0800 Web site: http://www.abiworld.org/ October 16-19, 2007 Turnaround Management Association - Australia TMA 2007 Annual Convention Boston Marriott Copley Place, Boston, MA, USA e-mail: livaldi@turnaround.org March 25-29, 2008 Turnaround Management Association - Australia TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, FL, USA e-mail: livaldi@turnaround.org October 28-31, 2008 Turnaround Management Association - Australia TMA 2008 Annual Convention New Orleans Marriott, New Orleans, LA, USA e-mail: livaldi@turnaround.org October 5-9, 2009 Turnaround Management Association - Australia TMA 2009 Annual Convention JW Marriott Desert Ridge, Phoenix, AZ, USA e-mail: livaldi@turnaround.org October 4-8, 2010 Turnaround Management Association - Australia TMA 2010 Annual Convention JW Marriot Grande Lakes, Orlando, FL, USA e-mail: livaldi@turnaround.org Beard Audio Conferences Coming Changes in Small Business Bankruptcy Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Audio Conferences CD Beard Audio Conferences Distressed Real Estate under BAPCPA Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Changes to Cross-Border Insolvencies Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Healthcare Bankruptcy Reforms Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Calpine's Chapter 11 Filing Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Dana's Chapter 11 Filing Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Reverse Mergers-the New IPO? Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences High-Yield Opportunities in Distressed Investing Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ Beard Audio Conferences Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Telephone: 240-629-3300 Web site: http://www.beardaudioconferences.com/ ********* 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. Nolie Christy Alaba, Rousel Elaine Tumanda, Valerie Udtuhan, Francis James Chicano, Catherine Gutib, Tara Eliza Tecarro, 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. TCR-AP subscription rate is $575 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***