/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/061102.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, November 2, 2006, Vol. 9, No. 218 Headlines A U S T R A L I A ALLSTATE EXPLORATIONS: Sets Annual General Meeting for Nov. 30 EVANS & TATE: Pays Convertible Notes Interest to Noteholders J&P FERGUSSON: Creditors Must Prove Debts by November 8 JAMES HARDIE: Final Funding Deal with Govt. Extended to Nov. 14 JONADA PTY: Creditors to Prove Claims by November 16 L.U. SIMON: Placed Under Members' Voluntary Wind-Up KOPPERS HOLDINGS: Reports Problem at Monessen, Pa. Plant MD VICTORIA: Members & Creditors to Receive Liquidator's Report METAL STORM: General Downing Resigns Effective November 1 MULATTO NOMINEES: Final Meeting Slated for October 31 MULTIPLEX GROUP: Board Reviews Alternatives to Capital Structure NEPEAN WASTE: Liquidator Judson to Present Wind-Up Report ONTRAK RAILWAY: Will Declare Final Dividend on November 10 PETER GYORI: Undergoes Voluntary Liquidation PLASTECH INDUSTRIES: Final Meeting Scheduled on November 3 POST HASTE: To Hold Final Meeting on November 10 RYCOMM SYSTEMS: Creditors' Proofs of Claim Due on November 8 SPRING MOUNT: Schedules Final Meeting on November 1 STEPHEN D. THOMAS: Members to Hold Final Meeting on November 1 TIWARRIE PTY: Members to Receive Liquidator's Final Account TRANSOL HOLDINGS: Enters Voluntary Liquidation TRANSOL PTY: Commences Wind-Up of Operations VAPORATE PTY: Creditors Resolve to Wind-Up Firm VAPORATE TRADING: Creditors Resolve to Close Business WAPF INVESTMENTS: Members' Final Meeting Set for November 7 WILLY & RAOS: To Declare Third and Final Dividend on November 2 WOODREIN PTY: Members to Receive Wind-Up Report C H I N A & H O N G K O N G ACXIOM CORP: Posts US$21.7MM Earnings for 2nd Quarter 2007 BALL CORP: Reports US$101.5MM Earnings for Third Quarter 2006 BALL CORP: Declares US$0.10 Per Share Cash Dividend BANTA CORP: High Leverage Prompts Moody's to Assign Ba2 Rating BANTA CORP: Board Rejects Cenveo's Acquisition Proposal BOMBARDIER INC: Moody's Rates EUR1.8-Bln Sr. Unsec. Notes at Ba2 BOMBARDIER INC: Operating Pressures Prompt S&P to Affirm Rating CELESTICA INC: Incurs US$42.1 Million Net Loss in Third Quarter COOPER TIRE: Moody's Assigns Loss-Given-Default Ratings DAIMLERCHRYSLER AG: Rules Out Sale of Chrysler Unit DAIMLERCHRYSLER AG: Losses Continue at Chrysler Group EMI GROUP: Unearths Accounting Fraud at Brazilian Unit HOPSON DEVELOPMENT: Keeps BB+ Credit Rtg, Outlook Shifts to Neg. INTELSAT LTD: Names Vicki Warker Sr. Vice President of Marketing PARKSON RETAIL: Moody's Hands Ba1 Corp. Family Rating PETROLEOS DE VENEZUELA: Launches Proyecto Etanol PETROLEOS DE VENEZUELA: Awards Study Contract to SNC-Lavalin SEMICONDUCTOR MANUFACTURING: 3rd Qtr Net Loss Reaches US$35 Mil. SENSUS METERING: Moody's Assigns Loss-Given-Default Rating TRW AUTOMOTIVE: Moody's Assigns Loss-Given-Default Ratings VOLKSWAGEN AG: Earns EUR1.2 Billion for January-September 2006 WESCO INT'L: Commences Offering on Convertible Debentures WESCO INT'L: Offers US$250-Mln Convertible Senior Debentures I N D I A GENERAL MOTORS: Posts US$115-Mil. Net Loss in 2006 Third Quarter GENERAL MOTORS: Receiving 10,000 Tons of Steel from Usinas GENERAL MOTORS: S&P Holds Low-B Ratings on Watch Negative INDIAN OIL: Eyes Stake in Indonesia's Tuban Petrochemical JAMMU & KASHMIR: Second Quarter FY2006-07 Net Profit Up 54% JUNIPER NETWORKS: Powers Beijing's First 40G Link KARNATAKA BANK: Sept. 2006 Quarter Net Profit Up 43% KOTAK MAHINDRA: Consolidated Profit Up 13% YOY in Q2/FY2006-07 KOTAK MAHINDRA: Acquires 51% Stake in 4 Indirect Subsidiaries KOTAK MAHINDRA: Grants Stock Options to Employees LAKSHMI VILAS: Reports Business Performance for Q2/FY2006-07 I N D O N E S I A ANEKA TAMBANG: Nine-Month Net Profit Rises to IDR808.84 Bil. YoY BANK CENTRAL ASIA: Fitch Affirms All Ratings BANK NIAGA: Fitch Affirms All Bank Niaga Ratings BANK RAKYAT: Fitch Affirms BB- Long-Term For. Currency Rating EXCELCOMINDO PRATAMA: Net Profit for 9-Month Period Rises 57% FAJAR SURYA: Fitch Assigns Final 'B+' Rating to Secured Notes HM SAMPOERNA: Nine-Month Net Profit Rises 24.8% NORTEL NETWORKS: Doubles Network Capacity Through Wireless Tech. NORTEL NETWORKS: Nortel Government Bags Elite Improvement Rating TELKOM INDONESIA: Nine-Month Net Profit Ups by 60% YoY J A P A N FTI CONSULTING: Names James Crownover to Class II of the Board MAVERICK TUBE: Tenaris Deal Prompts Moody's to Withdraw Ratings METALDYNE CORP: Moody's Assigns Loss-Given-Default Ratings MITSUBIHI MOTORS: First-Half Net Loss Down to JPY16.1 Billion SOFTBANK MOBILE: To Cut Call Fees in November 2006 SOLO CUP: Moody's Assigns Loss-Given-Default Ratings TENNECO INC: Moody's Assigns Loss-Given-Default Ratings TIMKEN CO: Earns US$46 Million in Third Quarter of 2006 TIMKEN CO: Moody's Assigns Loss-Given-Default Rating XEROX CORP: Moody's Confirms Ba1 Corporate Family Ratings * Moody's: Paper Makers Face Challenges But Finances Suit Rating K O R E A * Korea Exchange to Consolidate System with Tokyo Exchange N E W Z E A L A N D AIR NEW ZEALAND: Introduces J. Harrison as GM-Australia P H I L I P P I N E S METROPOLITAN BANK: 3rd-Quarter Net Profit Up 37%, Reuters Says PHILIPPINE NATIONAL BANK: To Hold Joint Auctions with Allied RIZAL COMMERCIAL BANKING: Fitch Sets Hybrid Issue Rating at B- S I N G A P O R E ADVANCED MICRO: Moody's Assigns Loss-Given-Default Ratings AKER KVAERNER: Earns NOK414 Million for Third Quarter 2006 AKER KVAERNER: Inks US$80-Mln Riser Deal with Queiroz Galvao AVAGO TECHNOLOGIES: Moody's Assigns Loss-Given-Default Ratings CHEMTURA CORP: Declares Quarterly Dividend of US$0.05 Per Share HEXION SPECIALTY: Extends Tender Offer for Sr. Notes to Nov. 13 INTERMEC INC: Moody's Assigns Loss-Given-Default Rating LINDETEVES-JACOBERG: Enters Sale and Licensing Agreement MAE ENGINEERING: Notes Shareholders' Change of Interests PETROLEO BRASILEIRO: Reaches Gas Exploration Pact with Bolivia PREMIER INTERNATIONAL: Creditors Proofs of Debt Due on Nov. 20 UNITED TEST AND ASSEMBLY: S&P Gives 'BB-' Corp. Credit Rating T H A I L A N D BANK OF AYUDHYA: GE Confirms Stock Purchase Deal SAS AB: To Sell 75% Outstanding Shares in Rezidor Hotel SAS AB: Stake Sale Plan Prompts Moody's to Affirm Ratings TMB BANK: May Miss THB10-Billion Net Profit Target for 2006 - - - - - - - - ================= A U S T R A L I A ================= ALLSTATE EXPLORATIONS: Sets Annual General Meeting for Nov. 30 -------------------------------------------------------------- Allstate Explorations NL advises the Australian Stock Exchange that its Annual General Meeting will be held on November 30, 2006, at 11:00 a.m., at The Grace Hotel, 77 York Street, in Sydney, New South Wales. The AGM's agenda include the consideration of the company's financial statements for the financial year ending June 30, 2006, together with the Deed Administrators' Report and Declaration, and the Auditors' Report. The time for the purpose of determining the voting entitlements at the meeting is 7:00 p.m., on November 28, 2006. About Allstate Allstate Explorations NL solely operates in Australia. The Company manages, develops, and operates the Beaconsfield Mine Joint Venture in Beaconsfield, Tasmania. Allstate partially owns the Beaconsfield gold mine with its partner Beaconsfield Gold NL. The Beaconsfield mine is located in Launceston, Tasmania, Australia. Allstate was placed under administration in 2004. The Administrator can be reached at: Allstate Explorations NL The Administrator Taylor Woodings Corporation Services 6th Floor, 30 The Esplanade Perth, Australia, 6000 Telephone: 08 9321 8533 Fax: 08 9321 8544 EVANS & TATE: Pays Convertible Notes Interest to Noteholders ------------------------------------------------------------ Evans & Tate Limited discloses with the Australian Stock Exchange that under the terms of the company's 8.25% Convertible Notes, the company has made the half-yearly interest payment of 4.125% per Convertible Note payable to all Convertible Noteholders. The payment was made on November 1, 2006. The record date for the payment was October 17, 2006. The interest payment is unfranked. About Evans & Tate Headquartered in Wembley, Western Australia, Evans & Tate Limited -- http://www.etw.com.au/-- is an Australian wine company listed on the Australian Stock Exchange. The primary businesses of the Evans & Tate Wine Group are the production, marketing and distribution of a number of branded, exclusive labeled and unbranded wines; contract winemaking; wine trading; viticultural services; and wine tourism through its Visitor Centers. In June 2005, rumors began brewing that the wine maker was carrying total liabilities of AU$127.5 million, of which AU$102.5 million was interest-bearing debt. A few days later, Evans & Tate admitted that it had been coordinating with insolvency firm KordaMentha on the recommendation of its major creditor, ANZ Banking Group Limited. It had appointed KordaMentha's 333 Performance Management "to improve its forecasting, planning and business efficiencies." Evans & Tate also admitted that it was cash flow negative and had sought an AU$8.5-million capital injection from ANZ Bank. The firm further said that it would cut the value of its wine inventories by AU$8 million to AU$10 million, offload stock at a discount, and cut the carrying value of certain wineries. In July 2005, Evans & Tate has secured an additional AU$10 million in short- term working capital from ANZ. The Troubled Company Reporter - Asia Pacific reported on July 18, 2006, that Evans & Tate has already written down the value of its inventory by AU$39 million over the past year and reported a AU$44-million first-half loss. In the first half of 2006, Evans & Tate has taken steps to sell its Griffith and Mildura Wineries to reduce debts, which are estimated to be more than AU$160 million, and meet restructuring costs. On August 25, 2006, it has completed the sale of its Griffith winery in the New South Wales Riverina to TWG Australia, which is the Australian subsidiary of California-based The Wine Group LLC, for AU$8 million. The Griffith Winery Sale, the TCR-AP had noted, brings the amount that Evans & Tate will get from asset realization to more than AU$30 million. Furthermore, a company statement disclosed that on August 29, 2006, the sale of its Mildura Winery to Roberts Estate was completed for a total consideration of AU$22 million. J&P FERGUSSON: Creditors Must Prove Debts by November 8 ------------------------------------------------------- J&P Fergusson Pty Ltd, which is in liquidation, will declare the first dividend for its creditors on November 22, 2006. Failure to file proofs of debt by November 8, 2006, will exclude a creditor from sharing in the dividend distribution. The liquidator can be reached at: R. J. Porter Moore Stephens Level 6, 460 Church Street Parramatta, New South Wales 2150 Australia JAMES HARDIE: Final Funding Deal with Govt. Extended to Nov. 14 --------------------------------------------------------------- James Hardie Industries Limited and the NSW Government have agreed to further extend the deadline to satisfy certain conditions precedent to the Final Funding Agreement until November 14, 2006. The current deadline expired on October 31, 2006. According to James Hardie, the extension signifies that it remains involved in discussions with the NSW Government and the Australian Taxation Office to resolve outstanding issues relating to the tax treatment of the Special Purpose Fund. Since receipt in June 2006 of an adverse declaration on an application for the proposed SPF to be endorsed as a tax exempt charity, James Hardie has worked with the NSW Government and others to make structural changes to some of the elements of the voluntary compensation arrangements which were the subject of agreements entered into, and legislation enacted, in December 2005. In mid-October James Hardie submitted to the ATO a revised FFA and other draft transaction documents, together with private ruling applications relating to the tax treatment of the proposed revised arrangements. The only outstanding documents yet to be sent to the ATO and which are required for the ATO to have the full suite of relevant documents, are final private ruling applications for Amaca and Amaba, drafts of which have already been provided by James Hardie to the ATO. These ruling applications can only be submitted in final form to the ATO by -- or with the consent of -- Amaca and Amaba, which are subject to the control of Medical Research and Compensation Foundation and are subject to the direction of the New South Wales Government. James Hardie has recently sought, but not yet received, the necessary authorizations to enable private ruling applications to be made to the ATO in respect of Amaca and Amaba. The ATO has advised James Hardie that all relevant rulings, including the Amaca and Amaba rulings, will be handled in accordance with its policy on expedited rulings. James Hardie has offered to provide interim funding to Amaca in the event that Amaca's finances would otherwise be exhausted before the FFA is implemented in full. Initial negotiations to settle the commercial terms of the funding have been held, and it is expected James Hardie will enter into that interim funding documentation during November. Meanwhile, James Hardie and other relevant parties are well- advanced in preparations to secure lender approval, complete an updated actuarial assessment, obtain an independent expert's report, and finalize an Explanatory Memorandum for shareholders, in anticipation of an amended FFA being agreed with the NSW Government. It is anticipated that an extraordinary general meeting of shareholders to approve the implementation of the FFA could be convened within 10 weeks of James Hardie and the NSW Government executing an amended FFA, subject to scheduling difficulties over the Christmas and New Year holiday period. About James Hardie James Hardie Industries Limited -- http://www.jameshardie.com/ -- manufactures, markets and distributes fiber cement and gypsum products, fiberglass reinforced plastic and PVC products, sanitary ware and bathroom products, insulating materials and fillers, strippers and adhesives. On July 2, 1998, the then public company announced a plan of reorganization and capital restructuring. James Hardie N.V. was incorporated in August 1998 as an intermediary holding company, with all of its common stock owned by indirect subsidiaries of JHIL. Effective as of November 1998, JHIL contributed its fiber cement businesses, its United States gypsum wallboard business, its Australian and New Zealand building systems businesses and its Australian windows business to JHNV and its subsidiaries. On July 24, 2001, JHIL announced a further plan of reorganization and capital restructuring, which reorganization was completed on October 19, 2001. In connection with the 2001 Reorganization, James Hardie Industries N.V., formerly RCI Netherlands Holdings B.V., issued common shares represented by CHESS Units of Foreign Securities on a one for one basis to existing JHIL shareholders in exchange for their shares such that JHINV became the new ultimate holding company for JHIL and JHNV. Following the 2001 Reorganization, JHINV controls the same assets and liabilities as JHIL controlled immediately prior to the 2001 Reorganization. The Company's troubles began with its "under-funded" allocation for asbestos claims, which were brought in by people who suffer or may have diseases caused by exposure to the asbestos-related products produced by JHIL. In 2001, James Hardie set up an independent entity, Medical Research and Compensation Foundation, to handle asbestos claims. The Foundation has warned that it could run out of money within five years. The Asbestos Diseases Foundation of Australia and workers unions called for all the Company's asbestos profits to be immediately placed in the fund. James Hardie was later accused of topping up the dwindling asbestos fund it established. By 2004, James Hardie's former asbestos manufacturing subsidiaries -- Amaca Pty Ltd, Amaba Pty Ltd, and ABN 60 Pty Ltd -- are three of around 150 defendants in asbestos litigation, and based on the Foundation's own figures, they account for US$1,000,000,000 of the predicted US$6,000,000,000 future asbestos liabilities in Australia. Although James Hardie stopped making asbestos products in 1987, the average 35-year latency of mesothelioma, an asbestos-related disease, means asbestos compensation funds will be needed until mid-century. In a 2005 report by a company-hired actuary from KPMG, it was predicted that 4,915 Australians would contract mesothelioma from exposure to Hardie products in the coming decades. When less serious forms of asbestos-related disease are included, James Hardie should expect to compensate 8,725 victims. On December 1, 2005, the Company announced that the NSW Government and a wholly owned Australian subsidiary of the Company -- LGTDD Pty Ltd -- had entered into a conditional agreement to provide long-term funding to a special purpose fund that will provide compensation for Australian asbestos-related personal injury claims against certain former James Hardie asbestos companies. The amount of the asbestos provision of AU$1 billion, at March 31, 2006, is the Company's best estimate of the probable outcome, which estimate includes an actuarial calculation prepared by KPMG Actuaries Pty Ltd of the projected future cash outflows, undiscounted and uninflated, and the anticipated tax deduction arising from Australian legislation which came into force on April 6, 2006. JONADA PTY: Creditors to Prove Claims by November 16 ---------------------------------------------------- Jonada Pty Ltd, which is in liquidation, will declare the first and final dividend on December 1, 2006. Creditors are required to formally prove their debts by November 16, 2006, for them to share in the dividend distribution. The official liquidator can be reached at: Greg Meredith Ferrier Hodgson Level 29, 600 Bourke Street Melbourne, Victoria 3000 Australia L.U. SIMON: Placed Under Members' Voluntary Wind-Up --------------------------------------------------- At a general meeting held on August 31, 2006, the members of L. U. Simon Pty Ltd resolved to voluntarily wind up the company's operations and appointed Moshe Trebish as liquidator. The Liquidator can be reached at: Moshe Trebish c/o Guests Pty Ltd 234 Balaclava Road Caulfield, Victoria 3161 Australia KOPPERS HOLDINGS: Reports Problem at Monessen, Pa. Plant -------------------------------------------------------- Koppers Holdings Inc. reported an operational problem at its coke facility in Monessen, Pennsylvania. The company disclosed that production at the plant was interrupted on Oct. 20, 2006 due to a pipeline failure. Repairs have been completed and operations are in the process of restarting; the company expects production to be back to normal today. The company also disclosed that the impact on fourth quarter pre-tax earnings is expected to be approximately US$600,000 to US$800,000. Koppers Holdings Inc., (NYSE: KOP) -- http://www.koppers.com/-- with corporate headquarters and a research center in Pittsburgh, Pennsylvania, is an integrated producer of carbon compounds and treated wood products. Including its joint ventures, Koppers operates facilities in the United States, United Kingdom, Denmark, Australia, China, the Pacific Rim and South Africa. Koppers Holdings Inc.'s balance sheet at June 30, 2006 showed total assets of US$625 million and total liabilities of US$733 million resulting in a total stockholders' deficit of US$108 million. Total stockholders' deficit at Dec. 31, 2005 stood at US$206 million. MD VICTORIA: Members & Creditors to Receive Liquidator's Report --------------------------------------------------------------- A final meeting of the members and creditors of MD Victoria Pty Ltd will be held on November 10, 2006, at 10:00 a.m., to hear Liquidator Cooper's final account on the company's wind-up. The Liquidator can be reached at: M. F. Cooper Frasers Insolvency Advisory Level 5, 99 Elizabeth Street Sydney, New South Wales 2000 Australia METAL STORM: General Downing Resigns Effective November 1 --------------------------------------------------------- At a meeting held on October 31, 2006, the Board of Metal Storm Limited accepted the resignation of its director, Gen. Wayne Downing, effective on November 1, 2006. General Downing was appointed to the Board in October 1999, shortly after the company's listing. He left the Board in late 2001 to take up a position as the US National Director and Deputy National Security Adviser for combating terrorism. He returned to the Board in October 2002. According to the Chairman of Metal Storm, General Downing's roles on the Board include Deputy Chairman and Head of the Remuneration Committee. "Wayne has been generous with his time and commitment. He has been a knowledgeable supporter of the technology and a bridge between US and Australian interests at the time the Company was building its operations here and in America. The Company owes a debt of great gratitude to General Downing for his constructive advice and determination to see the technology well placed and funded," the Chairman says. The Executive Chairman advises that the Company does not intend to fill the casual vacancy in the foreseeable future. About Metal Storm Metal Storm Limited -- http://www.metalstorm.com/-- is headquartered in Brisbane, Australia, and incorporated in Australia, with an office in Arlington, Virginia. Metal Storm works with government agencies and departments, as well as industries, to develop a variety of systems utilizing the Metal Storm non-mechanical, electronically fired stacked ammunition system. Metal Storm reflected a loss of AU$10,914,600 in its Annual Financial Report for the year ended December 31, 2005, which was attributable to members of its parent company. The Directors noted that they are actively seeking funding to continue the Company's operations. After auditing the Company's 2005 Annual Report, Winna Irschitz, a partner at Ernst & Young, raised significant uncertainty regarding the Company's and its consolidated entity's ability to continue as going concerns. As stated in the 2005 Annual Report, Metal Storm's continuing viability, and ability to continue as a going concern and to meet debts and commitments as and when they fall due is dependent on its ability to secure additional equity funding in the near future and to continue the development and progress the commercialization of its electronically initiated "stacked projectile" weapons systems. MULATTO NOMINEES: Final Meeting Slated for October 31 ----------------------------------------------------- Mulatto Nominees Pty Ltd, which is in liquidation, will hold a final meeting for its members and creditors on October 31, 2006, at 11:00 a.m. During the meeting, Liquidator McCann will present a report on the company's wind-up and property disposal exercises. The Liquidator can be reached at: M. G. McCann Grant Thornton Chartered Accountants Level 4, 102 Adelaide Street Brisbane, Queensland 4000 Australia MULTIPLEX GROUP: Board Reviews Alternatives to Capital Structure ---------------------------------------------------------------- On November 1, 2006, Multiplex Group disclosed that its board of directors was reviewing alternatives to its existing capital structure, but did not indicate whether it would move to separate its property and development businesses, Paddy Manning of The Australian reports. The report relates that at its annual general meeting, which is a stapled entity comprising Multiplex Ltd and Multiplex Property Trust, Multiplex revealed that there is currently an imbalance in the allocation of capital between the trust and the company, which has an impact on its distribution policy. "The board is currently reviewing alternatives to the existing capital structure for the group going forward," The Australian cites Multiplex Chairman Allan McDonald as saying. "The outcome of these changes may have flow on consequences for the distribution policy, however, until the review is finalized it is not possible to quantify what, if any, impact this may have on future distributions," Mr. McDonald notes. The funds management and facilities management businesses were expected to build on the growth achieved in fiscal 2006, while the trust portfolio was expected to continue to perform well, the Australian Associated Press notes. The paper also cites Multiplex Chief Executive Officer Andrew Roberts as saying that the group had begun a revaluation of its office portfolio, as required under new international accounting standards. Mr. Roberts further says, "while the valuation process is ongoing, the preliminary results are encouraging and we estimate fair value adjustments for the half year period in excess of AU$150 million." The adjustment would, on a prima facie basis, increase the net tangible assets per security of the group by about 18c to AU$3.04, Mr. Roberts notes. About Multiplex Headquartered at Miller's Point, in New South Wales, Australia, Multiplex Group -- http://www.multiplex.biz/-- derives its revenue from property funds management, construction, property development, and facilities management. The Group employs over 2,000 people and has established operations and offices throughout Australia, New Zealand, the United Kingdom and the Middle East. In December 2003, Multiplex Limited listed on the Australian Stock Exchange as a part of the Multiplex Group, raising a total of AU$1.2 billion. Multiplex Group was formed by combining the various businesses of Multiplex Limited and the newly established portfolio of investments held by Multiplex Property Trust. Early in 2005, Multiplex began facing cost pressures on its reconstruction project for the Wembley Stadium in London, prompting it to conduct its own internal investigation into the Wembley difficulties. Its auditor, KPMG, later conducted its own thorough review of the problems, leading to an unpredicted write-down. In February 2005, stunned investors sold down Multiplex shares after the Company reversed its stance on two United Kingdom projects, writing off AU$68.3 million from its profits. This started a series of profit downgrades throughout 2005. The Company's troubles continue with plunging share prices, extortion attempts, and threats of class action from disgruntled shareholders. The Roberts family, as founder and controlling shareholder of Multiplex, opted to offer AU$50 million indemnity in a bid to appease dissatisfied shareholders. In May 2005, Multiplex admitted that its troubled Wembley Stadium construction project may end up with a multimillion loss. As of February 2006, the Company is faced with liquidity crisis after posting a massive AU$474 million loss on Wembley and is currently in talks to bring down possible delay fees, pegged at AU$138,000 per day beyond the scheduled March 31, 2006, completion date. The Troubled Company Reporter - Asia Pacific reported on August 18, 2006, that Multiplex Group's financial results for the year ended June 30, 2006, noted that the Wembley project in the United Kingdom incurred a pretax loss of AU$364.3 million or AU$255 million after tax loss. The project loss position has remained unchanged since December 31, 2005. NEPEAN WASTE: Liquidator Judson to Present Wind-Up Report --------------------------------------------------------- Nepean Waste Removal Pty Ltd will hold a final meeting for its members on November 1, 2006, at 10:45 a.m. During the meeting, the members will receive Liquidator Judson's report regarding the company's wind-up and property disposal exercises. The Liquidator can be reached at: Richard Judson Members Voluntarys Pty Ltd 1st Floor, 10 Park Road Cheltenham 3192 Australia ONTRAK RAILWAY: Will Declare Final Dividend on November 10 ---------------------------------------------------------- Ontrak Railway Engineers Pty Ltd will declare a final dividend for its creditors on November 10, 2006. Creditors who were not able to prove their claims on October 27, 2006, will be excluded from sharing in any distribution the company will make. The Official Liquidator can be reached at: S. J. Parbery PPB 15th Floor, 25 Bligh Street Sydney, New South Wales 2000 Australia PETER GYORI: Undergoes Voluntary Liquidation -------------------------------------------- At a general meeting held on October 12, 2006, the members of Peter Gyori & Associates Cleaning Services Pty Ltd resolved to voluntarily liquidate the company's business. Subsequently, Richard Herbert Judson was appointed as liquidator at the creditors' meeting held that same day. The Liquidator can be reached at: Richard Herbert Judson Judson & Co Chartered Accountants Suite 4, Level 1, 10 Park Road Cheltenham, Victoria 3192 Australia Telephone: 9585 4155 PLASTECH INDUSTRIES: Final Meeting Scheduled on November 3 ---------------------------------------------------------- Plastech Industries Pty Ltd, which is in liquidation, will hold a final meeting for its members and creditors on November 3, 2006, at 10:00 a.m. At the meeting, Liquidator M. C. Smith will present the final report regarding the liquidation proceedings. The Liquidator can be reached at: M. C. Smith c/o McGrathNicol+Partners Level 9, 10 Shelley Street Sydney, New South Wales 2000 Australia POST HASTE: To Hold Final Meeting on November 10 ------------------------------------------------ Members and creditors of Post Haste Productions Pty Ltd will hold a final meeting on November 10, 2006, at 11:30 a.m., to receive an account of the company's wind-up and property disposal exercises from Liquidator Brent Kijurina. The Liquidator can be reached at: Brent Kijurina Smith Hancock Chartered Accountants Level 4, 88 Phillip Street Parramatta, New South Wales 2150 Australia RYCOMM SYSTEMS: Creditors' Proofs of Claim Due on November 8 ------------------------------------------------------------ Rycomm Systems Pty Ltd, which is in liquidation, will declare the first and final dividend for its creditors on November 22, 2006. Creditors who cannot prove their debts by November 8, 2006, will be excluded from sharing in the distribution. The Liquidator can be reached at: R. J. Porter Moore Stephens Level 6, 460 Church Street Parramatta, New South Wales 2150 Australia SPRING MOUNT: Schedules Final Meeting on November 1 --------------------------------------------------- Members of Spring Mount Pty Ltd will hold their final meeting on November 1, 2006, at 11:15 a.m., to receive Liquidator Judson's account on the company's wind-up and property disposal exercises. According to the Troubled Company Reporter - Asia Pacific, the company has distributed its first and final dividend to its creditors on October 25, 2006. The Liquidator can be reached at: Richard Judson Members Voluntarys Pty Ltd 1st Floor, 10 Park Road Cheltenham 3192 Australia STEPHEN D. THOMAS: Members to Hold Final Meeting on November 1 -------------------------------------------------------------- A final meeting for the members of Stephen D. Thomas & Associates Pty Ltd will be held on November 1, 2006, at 11:00 a.m. At the meeting, Liquidator Judson will give the accounts regarding the company's wind-up proceedings. The Liquidator can be reached at: Richard Judson Members Voluntarys Pty Ltd 1st Floor, 10 Park Road Cheltenham 3192 Australia TIWARRIE PTY: Members to Receive Liquidator's Final Account ----------------------------------------------------------- Members of Tiwarrie Pty Ltd will hold their final meeting on November 1, 2006, at 2:00 p.m., to receive Liquidator McCarthy's final account and explanations regarding the company's wind-up proceedings. As reported by the Troubled Company Reporter - Asia Pacific, the members of the company resolved to wind up its operations on June 23, 2006. The Liquidator can be reached at: Alfred Mccarthy Gregory & McCarthy 94 Pudman Street Boorowa, New South Wales 2586 Australia TRANSOL HOLDINGS: Enters Voluntary Liquidation ---------------------------------------------- At an extraordinary general meeting of the members of Transol Holdings Pty Ltd on October 4, 2006, it was resolved that a voluntary wind-up of the company is appropriate and necessary. Subsequently, Stephen Robert Dixon and Laurence Andrew Fitzgerald were appointed as joint and several liquidators at the creditors' meeting held that same day. The Joint and Several Liquidators can be reached at: Stephen Robert Dixon Laurence Andrew Fitzgerald Horwath BRI (Vic) Pty Ltd Chartered Accountants Level 30, The Rialto 525 Collins Street Melbourne, Victoria 3000 Australia TRANSOL PTY: Commences Wind-Up of Operations -------------------------------------------- Members of Transol Pty Ltd convened on October 4, 2006, and resolved to voluntarily wind up the company's operations. At the creditors' meeting held consequently that day, Stephen Robert Dixon and Laurence Andrew Fitzgerald were appointed as joint and several liquidators. The Joint and Several Liquidators can be reached at: Stephen Robert Dixon Laurence Andrew Fitzgerald Horwath BRI (Vic) Pty Ltd Chartered Accountants Level 30, The Rialto 525 Collins Street Melbourne, Victoria 3000 Australia VAPORATE PTY: Creditors Resolve to Wind-Up Firm ----------------------------------------------- Creditors of Vaporate Pty Ltd on October 13, 2006, resolved to wind up the company's operations and appointed Gideon Rathner and David Coyne as joint and several liquidators. The Joint and Several Liquidators can be reached at: Gideon Rathner David Coyne Lowe Lippmann Chartered Accountants 5 St Kilda Road St Kilda, Victoria 3182 Australia VAPORATE TRADING: Creditors Resolve to Close Business ----------------------------------------------------- At a meeting held on October 13, 2006, the creditors of Vaporate Trading Pty Ltd resolved to close the company's business. Gideon Rathner and David Coyne were consequently appointed as joint and several liquidators. The Liquidators can be reached at: Gideon Rathner David Coyne Lowe Lippmann Chartered Accountants 5 St Kilda Road St Kilda, Victoria 3182 Australia WAPF INVESTMENTS: Members' Final Meeting Set for November 7 ----------------------------------------------------------- WAPF Investments Pty Ltd, which is in liquidation, will hold a final meeting for its members on November 7, 2006, at 10:00 a.m. During the meeting, the members will receive Liquidator John Sheridan's report and explanations on the accounts of wind-up. The Liquidator can be reached at: John Sheridan Suite 2, 600 Military Road Mosman, New South Wales 2088 Australia WILLY & RAOS: To Declare Third and Final Dividend on November 2 --------------------------------------------------------------- Willy & Raos Paper International Pty Ltd, which is in liquidation, will declare the third and final dividend for its creditors on November 2, 2006. Creditors who cannot submit their proofs of claim on October 31, 2006, will be excluded from the benefit of the dividend. The Official Liquidator can be reached at: Michael E. Wayland Wayland Management Pty Limited Level 4, 23 Hunter Street Sydney, New South Wales 2000 Australia WOODREIN PTY: Members to Receive Wind-Up Report ----------------------------------------------- Members of Woodrein Pty Ltd will meet on November 1, 2006, at 10:30 a.m., to receive accounts of the company's wind-up and property disposal exercises from Liquidator Richard Judson. As reported by the Troubled Company Reporter - Asia Pacific, the company declared its first and final dividend on October 25, 2006. The Liquidator can be reached at: Richard Judson Members Voluntarys Pty Ltd 1st Floor, 10 Park Road Cheltenham 3192 Australia ================================ C H I N A & H O N G K O N G ================================ ACXIOM CORP: Posts US$21.7MM Earnings for 2nd Quarter 2007 ---------------------------------------------------------- Acxiom Corp. reported financial results for the second quarter of fiscal 2007 ended Sept. 30, 2006. Consolidated net earnings for the quarter increased 204% to US$21.7 million. Gross margin increased to 27.5% from 26.2% in the same quarter a year ago. Second-quarter revenue totaled US$348.3 million, an increase of 5.4% over the same quarter last year. "We are pleased that Acxiom delivered another solid performance in the second quarter and remains on track to meet the fiscal 2007 targets we communicated at our Sept. 27 analysts' meeting in New York," Company Leader Charles D. Morgan said. "We continue to execute the fundamentals of our business and are delivering the results that we expected. I believe we are well positioned for a successful second half of the fiscal year." Highlights: -- Revenue of US$348.3 million, up 5.4% from US$330.5 million in the second quarter a year ago. -- Income from operations of US$41.9 million, a 123% increase compared to US$18.8 million in the second quarter last year. Last year's second-quarter results included the impact of net pretax charges of US$15.8 million associated with restructuring, the sale of non-strategic operations and other unusual items. Excluding the impact of those charges, income from operations would have been up 21%. -- Diluted earnings per share of US$.25, a 213% increase compared to US$.08 in the second quarter of fiscal 2006. The impact of the net charges described above reduced diluted EPS by US$.12 for the second quarter last year. Excluding this impact, diluted earnings per share increased 25%. -- Operating cash flow of US$64.4 million and free cash flow available to equity of US$15.3 million. -- Gross margin of 27.5% compared to 26.2 percent in the same quarter last year. -- Computer, communications and other equipment expense equaling 20.9% of revenue compared to 23.1 percent of revenue in the second quarter of fiscal 2006. "The improvement in our earnings and margins -- assisted by reduced computer expense as a percentage of revenue -- shows the increasing strength of our business and the results of our initiatives to improve operational efficiencies," Mr. Morgan said. Mr. Morgan also noted that Acxiom recently completed new contracts with Procter & Gamble Co., E*TRADE FINANCIAL Corp., D&B and Safety-Kleen Systems, Inc. Based in Little Rock, Arkansas, Acxiom Corp. (Nasdaq: ACXM) -- http://www.acxiom.com/-- integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions are Customer Data Integration technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom has locations throughout the United States, Europe, Australia and China. Acxiom has a team of specialists with sales and business development associates based in the largest Latin American markets: Brazil, Argentina and Mexico. * * * Standard & Poor's Ratings Services assigned on Sept. 6, 2006, its loan and recovery ratings to Little Rock, Arkansas-based Acxiom Corp.'s proposed US$800 million secured first-lien financing. The first-lien facilities consist of a US$200 million revolving credit facility and a US$600 million term loan. They are rated 'BB' with a recovery rating of '2'. As reported in the Troubled Company Reporter on Aug. 25, 2006, Moody's Investors Service assigned a Ba2 rating to Acxiom Corporation's US$800 million senior secured credit facilities, while affirming its corporate family rating of Ba2. Moody's said the rating outlook is stable. BALL CORP: Reports US$101.5MM Earnings for Third Quarter 2006 ------------------------------------------------------------- Ball Corp. reported third quarter earnings of US$101.5 million, on sales of US$1.82 billion, compared with US$79.3 million, on sales of US$1.58 billion in the third quarter of 2005. For the first nine months of 2006, Ball Corp.'s saw earnings of US$278.8 million, on sales of US$5.03 billion, compared with US$216.9 million on sales of US$4.46 billion in the first three quarters of 2005. Ball Corp.'s 2006 results include a gain of US$2.8 million (US$1.7 million after tax) in the third quarter and US$76.9 million (US$46.9 million after tax) in the first nine months for insurance recovery from a fire that occurred April 1 at a beverage can manufacturing plant in Germany. The 2005 third quarter results include net after-tax costs of US$12.5 million, connected with debt refinancing and with a program to streamline the company's beverage can end manufacturing processes. The nine-month 2005 results included net after-tax costs of US$18.4 million, related to business consolidation and debt refinancing activities. R. David Hoover -- the chairperson, president and chief executive officer of Ball Corp. -- said, "Overall, we were pleased with our third quarter results, especially considering the increased cost pressures we continue to experience throughout the corporation. We are making progress on profit improvement and pricing initiatives that are essential to our achieving acceptable returns. We also are making good progress on integrating the acquisitions we made earlier this year and on completing important projects to improve operating efficiencies." Metal Beverage Packaging Americas Earnings in the quarter for the metal beverage packaging Americas segment were US$63.7 million, on sales of US$659.6 million, compared with US$49.4 million, including a US$19.3 million charge for costs associated with streamlining can end manufacturing processes, on sales of US$636.1 million in the third quarter of 2005. For the first nine months segment earnings were US$182.9 million on sales of US$1.99 billion, compared with US$177.4 million, including the US$19.3 million charge, on sales of US$1.85 billion in the first three quarters of 2005. Inventory adjustment had a negative effect of US$9.3 million on segment earnings in the third quarter of 2006, compared with US$2.7 million in 2005. Mr. Hoover notes, "We made further progress on our project to streamline our beverage can end manufacturing. We expect to cease end manufacturing at our Reidsville, N.C., plant in the fourth quarter. We will supply those ends from other facilities and as a result should begin to realize in 2007 some of the savings anticipated from this multi-year, multi-plant project." Europe/Asia Third quarter earnings in the metal beverage packaging Europe/Asia segment were US$66 million, including US$2.8 million in property insurance gains, on sales of US$425.1 million, compared with US$56.7 million on sales of US$366.1 million in the third quarter of 2005. For the first nine months segment earnings were US$235.7 million, including US$76.9 million in property insurance gains, on sales of US$1.16 billion, compared with US$145 million on sales of US$1.06 billion in the same period in 2005. Mr. Hoover stated, "The loss of production volume resulting from the April 1 fire made for an extremely tight beverage can supply situation for us in Europe this summer. Our new plant in Serbia and improved performance at other facilities helped bridge a portion of the volume gap, but that contribution was partially offset by higher material, freight and energy costs. In China, the demand for beverage cans continues to grow and we continue to work through a year where high raw material prices have hurt results, but where stringent cost controls have been put in place and plant performance has improved." Metal Food & Household Products Packaging Americas Earnings for the third quarter in the metal food and household products packaging Americas segment were US$19.4 million on sales of US$381.3 million, compared with US$10.1 million on sales of US$292.2 million in the third quarter of 2005. For the first nine months of 2006, earnings were US$33.2 million, including a US$1.7 million charge for costs to shut down a food can manufacturing line in Whitby, Ontario, on sales of US$884.8 million, compared to US$16.7 million, including a US$8.8 million charge to shut down a food can manufacturing plant in Quebec, on sales of US$655.5 in the same period in 2005. Ball Corp. acquired U.S. Can Corporation on March 27, 2006, and results from the acquired business have been included in the metal food and household products packaging segment since that date. Mr. Hoover said, "We continue to consolidate the assets acquired from U.S. Can with those of our legacy metal food can operations. Those activities led to our announced decision to close plants in Alliance, Ohio, and Burlington, Ontario, later this year with anticipated annual cost savings of approximately US$8 million." Plastic Packaging, Americas Earnings for the third quarter in the plastic packaging Americas segment were US$8.3 million on sales of US$185.9 million, compared with US$4.2 million on sales of US$124.7 million in the third quarter of 2005. Through the first three quarters of 2006, segment earnings were US$17.1 million on sales of US$486.8 million, compared with US$12.2 million on sales of US$373.9 in the first three quarters of 2005. The 2006 results include those of assets acquired from Alcan on March 28, 2006. Mr. Hoover noted, "We have completed the relocation of some of the equipment acquired from Alcan Plastics into other plants and have consolidated the R&D functions associated with the acquired business into our overall packaging R&D operations in Colorado. Some of the activities from the Alliance plant will be consolidated into one of the facilities we acquired from Alcan Plastics as part of the ongoing integration of our manufacturing assets." Aerospace and Technologies Earnings were US$15.6 million on sales of US$170.4 million during the third quarter of 2006 in the aerospace and technologies segment, compared with US$15.2 million on sales of US$164.8 million in the third quarter of 2005. For the first three quarters, earnings were US$33.4 million on sales of US$505.7 million, compared with US$39 million on sales of US$527.5 in the first three quarters of 2005. Mr. Hoover said, "Excellent performance on several fixed price programs that ended in the quarter helped boost third quarter results in aerospace and technologies. That kind of continued performance, along with some hopeful signs we are beginning to see in the awarding and funding of certain scientific and defense contracts, we believe bode well for this segment as we look to next year." Outlook Raymond J. Seabrook, executive vice president and chief financial officer, said he anticipates full-year free cash flow to be in the range of US$250 million. Mr. Seabrook stated, "The seasonal working capital build we have seen through the first nine months will be largely eliminated in the fourth quarter. We will continue our focus on free cash flow generation in the future as some of the major capital spending projects we have been engaged in wind down and we begin to realize the benefits from them. At mid-year we said we expected results for the second half of 2006 would be better than those of the first half, excluding property insurance recovery related to the fire in Germany. Our solid third quarter results now make us confident of that outcome." "The cost recovery initiatives we have and will continue to implement throughout our reporting segments will be critical to sustaining and improving our performance in 2007. Some of those initiatives have been announced and already are being implemented, and others are being discussed and developed with suppliers and customers," Mr. Hoover noted. Headquartered in Broomfield, Colorado, Ball Corp. -- http://www.ball.com/-- is a supplier of high-quality metal and plastic packaging products. It owns Ball Aerospace & Technologies Corp. -- a developer of sensors, spacecraft, systems and components for government and commercial customers. Ball Corp. reported sales of US$5.7 billion in 2005 and the company employs about 13,100 people worldwide, including Argentina, Hong Kong and China. * * * Moody's Investors Service assigned ratings to Ball Corp.'s US$500 million senior secured term loan D, rated Ba1, and US$450 million senior unsecured notes due 2016-2018, rated Ba2. It also affirmed existing ratings, which include Ba1 Ratings on US$1.475 billion senior secured credit facilities and US$550 million senior unsecured notes due Dec. 12, 2012. Moody's said the ratings outlook is stable. Fitch affirmed Ball Corp.'s 'BB' issuer default rating, 'BB+' senior secured credit facilities, and 'BB' senior unsecured notes. Standard & Poor's Ratings Services also affirmed its 'BB+' corporate credit rating on Ball Corp. All ratings were placed by S&P in March 2006. BALL CORP: Declares US$0.10 Per Share Cash Dividend --------------------------------------------------- Ball Corp.'s board of directors declared a cash dividend of 10 cents per share, payable Dec. 15, 2006, to shareholders of record on Dec. 1, 2006. Headquartered in Broomfield, Colorado, Ball Corp. -- http://www.ball.com/-- is a supplier of high-quality metal and plastic packaging products. It owns Ball Aerospace & Technologies Corp. -- a developer of sensors, spacecraft, systems and components for government and commercial customers. Ball Corp. reported sales of US$5.7 billion in 2005 and the company employs about 13,100 people worldwide, including Argentina, Hong Kong and China. * * * Moody's Investors Service assigned ratings to Ball Corp's US$500 million senior secured term loan D, rated Ba1, and US$450 million senior unsecured notes due 2016-2018, rated Ba2. It also affirmed existing ratings, which include Ba1 Ratings on US$1.475 billion senior secured credit facilities and US$550 million senior unsecured notes due Dec. 12, 2012. Moody's said the ratings outlook is stable. Fitch affirmed Ball Corp.'s 'BB' issuer default rating, 'BB+' senior secured credit facilities, and 'BB' senior unsecured notes. Standard & Poor's Ratings Services also affirmed its 'BB+' corporate credit rating on Ball Corp. All ratings were placed in March 2006. BANTA CORP: High Leverage Prompts Moody's to Assign Ba2 Rating -------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the proposed senior secured bank credit facility of Banta Corp. The majority of the proceeds of the proposed facility will fund an approximately US$390 million special shareholder dividend. Moody's also assigned a Ba2 corporate family rating, a Ba3 probability of default rating, and an SGL-1 speculative grade liquidity rating to Banta. The outlook is stable. The Ba2 corporate family rating reflects relatively high leverage at closing (3.9 times debt-to-EBITDA), weak industry prospects, modest EBITDA margins (in the 11-12% range as per Moody's standard adjustments) and event risk. The rating also reflects relatively good liquidity, including expectations for positive free cash flow; a fairly restrictive credit agreement that somewhat mitigates event risk; and the company's meaningful scale in comparison to other industry participants. Ratings assigned: Banta Corp. * Ba2 Corporate Family Rating * Ba3 Probability of Default Rating * Ba2 Senior Secured Bank Rating, LGD3, 39 * SGL-1 Speculative Grade Liquidity Rating * Outlook: Stable The credit agreement consists of a US$465 million senior secured term loan and a US$50 million revolving credit facility, expected to be undrawn at close. Pro forma for the transaction, Moody's estimates Banta's leverage will rise to 3.9 times debt- to-EBITDA (as per Moody's standard adjustments and based on trailing 12 months results through June 30). Expectations for continued positive free cash flow (after capital expenditures and the regular annual dividend of approximately US$18 million) support the stable outlook. Moody's anticipates Banta will apply a portion of its free cash flow to debt repayment, resulting in a decline in leverage to approximately 3 times debt-to-EBITDA by year end 2007 (as per Moody's standard adjustments). The SGL-1 rating indicates very good liquidity, based on: -- Moody's expectation of positive free cash flow over the next 12 months, -- full availability under the planned US$50 million revolver, and -- covenant cushion (to be finalized) of at least 15%. Moody's would consider a downgrade or negative outlook if Banta increased leverage to fund a shareholder reward beyond the announced US$16 special dividend and modest share repurchase. Deterioration in margins to the single digit level (as per Moody's standard adjustments), whether the result of an inability to cut costs as projected, poor execution of proposed initiatives in its supply chain management segment, or industry conditions could also pressure the rating down. The company is the subject of a hostile bid by Cenveo, and concerns over event risk limit upward ratings momentum. Evidence of moderating event risk and the ability and willingness to repay debt with free cash flow could over time result in an upgrade or positive outlook. Banta Corp. provides a combination of printing and digital imaging solutions to publishers and direct marketers through its printing services segment, and a range of outsourcing capabilities through its supply-chain management services. With headquarters in Menasha, Wisconsin, the company generates approximately US$1.5 billion of annual revenue, deriving about three-fourths of that amount from its printing services segment. * * * Headquartered in Menasha, Wisconsin, Banta Corp. -- http://www.banta.com/-- is a technology and market leader in printing and supply-chain management services. The company focuses on five printing services markets: books, special- interest magazines, catalogs, direct marketing and literature management. Its global supply-chain management business provides a wide range of outsourcing capabilities to some of the world's largest companies. Services range from materials sourcing, product configuration and customized kitting, to order fulfillment and global distribution. The company has operations in Ireland, Hungary, The Netherlands, Scotland, Singapore and China. BANTA CORP: Board Rejects Cenveo's Acquisition Proposal ------------------------------------------------------- Banta Corp.'s Board of Directors has unanimously rejected Cenveo, Inc.'s unsolicited proposal to acquire Banta for US$47 per share after consulting with its financial and legal advisors. The Board determined that the proposal is not in the best interests of Banta shareholders or its other constituents. The Board has also authorized management, in consultation with its financial advisor, UBS Investment Bank, to explore all potential strategies for further maximizing shareholder value, including, but not limited to, remaining independent, joint ventures, mergers, acquisitions, further return of capital, or the sale of the company. Banta advised that there can be no assurances that the evaluation will result in a transaction of any kind. The company also advised that it does not intend to disclose developments regarding its evaluation unless, and until, a final decision is made. Stephanie A. Streeter, Banta Chairman, President and Chief Executive Officer, said, "After a thorough review with our financial and legal advisors, our Board has rejected Cenveo's proposal. While the Board and management continue to have complete confidence in Banta's current long-term strategy and believe Banta is well positioned to thrive as an independent company, the Board remains committed to continuing to seek opportunities to further enhance value for all Banta shareholders. Consistent with that commitment and its fiduciary obligations, the Board believes it is an appropriate time to undertake a comprehensive process to identify and study all of the value-creating options available to the company." The company also disclosed that the unsolicited proposal from Cenveo has automatically triggered the requirement to fund a trust, which will hold restricted cash assets available to cover payments, both immediate and long-term, due to certain retired and active Banta employees. These payments include deferred compensation and retirement benefits already earned by these employees, as well as potential compensation and benefits that may become due to current employees in connection with a change in control. The requirement to irrevocably fund the trust, which was adopted by Banta's Board in January 1990 and has been disclosed regularly in SEC filings since then, was triggered solely by the recent actions taken by Cenveo, and was not the result of any action by the Banta Board of Directors. Banta said that approximately US$100 million has been used to fund the trust. In the event that a change in control does not occur within the time period provided under the trust, the trust assets will be released by the trustee and returned to the control of Banta. On Sept. 14, the company provided guidance for continuing operations for full-year 2006, 2007 and 2008. The company has reaffirmed this prior guidance. Headquartered in Menasha, Wisconsin, Banta Corp. -- http://www.banta.com/-- is a technology and market leader in printing and supply-chain management services. The company focuses on five printing services markets: books, special- interest magazines, catalogs, direct marketing and literature management. Its global supply-chain management business provides a wide range of outsourcing capabilities to some of the world's largest companies. Services range from materials sourcing, product configuration and customized kitting, to order fulfillment and global distribution. The company has operations in Ireland, Hungary, The Netherlands, Scotland, Singapore and China. * * * Moody's Investors Service assigned a Ba2 rating to the proposed senior secured bank credit facility of Banta Corp. The majority of the proceeds of the proposed facility will fund an approximately US$390 million special shareholder dividend. Moody's also assigned a Ba2 corporate family rating, a Ba3 probability of default rating, and an SGL-1 speculative grade liquidity rating to Banta. Moody's said the outlook is stable. BOMBARDIER INC: Moody's Rates EUR1.8-Bln Sr. Unsec. Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned its Ba2 rating to Bombardier Inc.'s proposed EUR1.8 billion in new senior unsecured notes and affirms all current ratings. On Oct. 23, Bombardier opened its offer to tender for cash for approximately EUR1 billion of its debt maturing in 2007 and 2008. The tender offer will be funded with the proceeds of the new debt issuances maturing in 2013 - 2016. Proceeds will also be utilized to support a cash collateral requirement (EUR860 million) associated with its proposed new bank letter of credit facility. The assignment of the Ba2 senior unsecured debt rating considered that the new notes have a similar priority of claim to the notes targeted for tender. The exchange, if completed will extend and smooth the company's debt maturity profile, which previously included relatively large maturities in 2007 and 2008. The issuance does not change the LGD assessment of Bombardier's debt, and the new notes will carry the same LGD4, 54% assessment as the company's existing senior unsecured debt. Bombardier's Ba2 debt rating considers its market share and installed base in the business and regional jet aerospace segment and improving results in the transportation sector. The combination of the debt issuance, the tender for the near term maturing debt and completion of the renewal of the company's bank lines of credit will add to the company's high debt levels but will also will stabilize the company's liquidity profile and reduce near term funding uncertainties. On balance, Moody's considers that the completion of these financial actions will be modestly positive for the overall credit profile. Bombardier's outlook remains negative and reflects business uncertainties in the company's aerospace segment. The expectation is for continued weak demand for its regional jet product highlighted by the recently announced reductions in production rates. Weakness in this important but problematic segment is only partially offset by the favorable near term business jet outlook and recent margin improvements in the company's transportation segment. * * * Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) -- http://www.bombardier.com/-- manufactures innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment. The company has operations in North America, Europe and China. BOMBARDIER INC: Operating Pressures Prompt S&P to Affirm Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' long-term corporate credit rating on Montreal, Que.-based Bombardier Inc. At the same time, Standard & Poor's assigned its 'BB' issue rating to Bombardier's proposed issuance of up to EUR1.8 billion seven-to-ten-year multitranche senior unsecured notes. The notes are to be used to refinance EUR1.175 billion of debt maturing on or before Feb. 22, 2008. The remainder will form part of the collateral required for a new LOC issuance credit facility to be arranged after the completion of the bond issue. The outlook is negative. "The ratings on Bombardier reflect the competitive and operating challenges it faces in its commercial aircraft business, the company's volatile and somewhat unpredictable operating cash flows, and the low profitability of its transportation division," said Standard & Poor's credit analyst Greg Pau. The ratings are supported by: -- the company's business aircraft segment; -- the slowly improving profitability at its transportation division; -- its relatively low capital expenditure requirements in the next few years; and -- its financial policies, which are focused on restoring balance-sheet stability. "The ratings factor in our expectation that Bombardier will successfully execute the proposed bond issuance. Any material delay or failure to complete the bond issuance could result in a weaker liquidity position and trigger a review of the ratings," Mr. Pau added. Bombardier's regional aircraft division continues to struggle, and Standard & Poor's expects that the company's performance will continue to suffer for the balance of the current year and possibly in subsequent years. The company's net orders and backlog, particularly for regional jets, remain weak. The outlook continues to be uncertain, as the prospects for the U.S. airline industry, Bombardier's principal market for regional jets, remain unsettled and financing for expansion or fleet renewal is still difficult to obtain. The company's turboprop division is providing some offset to this weakness, with a better backlog and less exposure to the U.S. airline industry. Strong business aircraft demand and improved cost efficiency in the transportation segment partly offset the impact of the weak regional aircraft division. The outlook is negative, indicating the slow progress in Bombardier's efforts to consistently generate free cash flow and restore balance-sheet strength. The ratings could be lowered if: -- the company's prospective liquidity position weakened; -- profit margins do not improve, resulting in expectations of weak free cash flow; or -- the company's balance sheet does not stabilize (which could be caused by weak free cash generation, expansion of aircraft program spending, or a widening pension deficit). A near-term return to a stable outlook is considered unlikely and would primarily require an improvement in prospects for the commercial aerospace business while maintaining current performance in the business jet and transportation divisions. Although not currently contemplated by the company, a material change in capital structure toward material reduction in leverage through equity injection could be a positive development that could trigger an outlook revision or an upgrade. Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) -- http://www.bombardier.com/-- manufactures innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment. The company has operations in North America, Europe and China. CELESTICA INC: Incurs US$42.1 Million Net Loss in Third Quarter --------------------------------------------------------------- Celestica Inc. reported revenue of US$2.3 billion for the third quarter ended Sept. 30, 2006, up 20% from US$1.9 billion in the third quarter of 2005. Net loss on a GAAP basis for the third quarter was US$42.1 million, compared to GAAP net loss of US$19.6 million for the same period last year. Included in GAAP net loss for the quarter are charges of US$82 million associated with previously announced restructuring plans. For the same period in 2005, restructuring charges of US$41 million were incurred. Adjusted net earnings for the quarter were US$40.5 million, compared to US$27.1 million for the same period last year . Adjusted net earnings is defined as net earnings before amortization of intangible assets, gains or losses on the repurchase of shares and debt, integration costs related to acquisitions, option expense, option exchange costs and other charges, net of tax and significant deferred tax write-offs. These results compare with the company's guidance for the third quarter, announced on July 27, 2006, of revenue of US$2.15 to US$2.35 billion. For the nine months ended Sept. 30, 2006, revenue was US$6,550 million compared to US$6,396 million for the same period in 2005. Net loss on a GAAP basis was US$89.8 million compared to net loss of US$18.6 million for the same period last year. Adjusted net earnings for the first nine months of 2006 were US$87 million compared to adjusted net earnings of US$100.2 million for the same period in 2005. "Revenues were very strong sequentially and year over year driven primarily by the growth realized in our consumer segment. Other segments were solid as well in this seasonally lower quarter," said Steve Delaney, CEO, Celestica. "I'm pleased with the added diversification and the improvement in operating margins, despite the setbacks we've had in the performance of some of our facilities in the Americas and Eastern Europe. We remain focused on overcoming these challenges and accelerating the improvement in our returns on capital." For the fourth quarter ending Dec. 31, 2006, the company anticipates revenue to be in the range of US$2.25 billion to US$2.45 billion. About Celestica Headquartered in Toronto, Ontario, Celestica, Inc. (NYSE: CLS,TSX: CLS/SV) -- http://www.celestica.com/-- is a world leader in the delivery of innovative electronics manufacturing services. Celestica operates a highly sophisticated global manufacturing network with operations in Brazil, China, Ireland, Italy, Japan, Malaysia, Philippines, Puerto Rico, and the United Kingdom, among others, providing a broad range of integrated services and solutions to original equipment manufacturers. Celestica's expertise in quality, technology and supply chain management, enables the company to provide competitive advantage to its customers by improving time-to-market, scalability and manufacturing efficiency. * * * Moody's has affirmed its Ba3 Corporate Family Rating for Celestica International. Celestica carries Fitch's 'BB-' issuer default and unsecured credit facility ratings. Fitch also assigned a 'B+' rating to the company's senior subordinated debt. Fitch said the Rating Outlook is Stable. In February 2005, Moody's Investors Service lowered Celestica's senior implied rating to Ba3 from Ba2, senior unsecured issuer rating to B1 from Ba3 and the subordinated notes rating to B2 from Ba3. COOPER TIRE: 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 U.S. Automotive and Equipment sectors, the rating agency confirmed its B2 Corporate Family Rating for Cooper Tire & Rubber Company. Additionally, Moody's revised or 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 ---------- ------- ------- ------ ---------- 7.75% unsecured notes B2 B2 LGD 4 57% 8.0% unsecured notes B2 B2 LGD 4 57% 7.625% unsecured notes B2 B2 LGD 4 57% Shelf senior unsecured (P)B2 (P)B2 LGD 4 57% Shelf preferred (P)Caa2 (P)Caa1 LGD 6 97% 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%). Cooper Tire & Rubber Company is a global company that specializes in the design, manufacture, marketing and sales of passenger car, light truck, medium truck tires and subsidiaries that specialize in motorcycle and racing tires, as well as tread rubber and related equipment for the retread industry. With headquarters in Findlay, Ohio, Cooper Tire has 59 manufacturing, sales, distribution, technical and design facilities within its family of companies located around the world. Cooper also owns the Avon Tyres brand, mostly used to produce tires for racing. The company has operations in China. DAIMLERCHRYSLER AG: Rules Out Sale of Chrysler Unit --------------------------------------------------- DaimlerChrysler AG is not planning to sell its Chrysler division as the U.S.-German carmaker disclosed of an "aggressive" review of the unit, The Financial Times says. Bodo Uebber, DaimlerChrysler's Finance Director, said the company would review all options, including structural changes, to turn around its U.S. unit. Mr. Uebber, however, ruled out a sale or partnership for the Chrysler unit. "DaimlerChrysler reaffirms its previous statements made to the media that there are no plans to sell Chrysler Group," the company said in a statement. "The company appropriately chose not to add to the speculation regarding this topic. However, the resulting coverage and comments made it clear that this 'not-for-sale' statement needed to be reaffirmed." As reported in the Troubled Company Reporter on Oct. 26, Chrysler posted an operating loss of US$1.477 billion in the third quarter of 2006, compared with an operating profit of US$393 million in the same period last year. The operating loss, according to a statement by DaimlerChrysler, was primarily the result of a decrease in worldwide factory unit sales, an unfavorable shift in product and market mix, and negative net pricing. "These factors reflect a continuing difficult market environment in the United States as the Chrysler Group faced increased dealer inventory levels from the prior quarter, a shift in consumer demand toward smaller vehicles due to higher fuel prices, and increased interest rates," DaimlerChrysler added. About DaimlerChrysler DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- engages in the development, manufacture, distribution, and sale of various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. DaimlerChrysler has operations in Australia, China, Indonesia, Japan, Korea, Malaysia, and Thailand. In Latin America, Daimler/Chrysler is present in Argentina, Brazil and Venezuela. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DAIMLERCHRYSLER AG: Losses Continue at Chrysler Group ----------------------------------------------------- DaimlerChrysler AG achieved a third quarter operating profit of US$1.1 billion, compared to US$2.3 billion of operating profit for the same period in 2005. Net income amounted to US$686 million in the third quarter, compared to US$1.085 billion in 2005. The continuation of the very positive earnings trend at the Mercedes Car Group, the distinct increase in operating profit at the Truck Group as well as the Financial Services' operating profit, which is above the high level of earnings in the prior- year quarter, only partially compensated for the loss contributed by the Chrysler Group. DaimlerChrysler sold 1.0 million vehicles worldwide in the third quarter, not equaling the high level recorded in Q3 2005. As a result of the lower unit sales, the Group's revenues decreased from US$48.4 billion to US$44.6 billion. Adjusted for currency- translation effects, the decrease was 5%. At the end of the third quarter of 2006, DaimlerChrysler employed a workforce of 365,451 people worldwide (end of Q3 2005: 388,014). Of this total, 168,965 were employed in Germany and 95,647 were employed in the United States. Division Results Mercedes Car Group The Mercedes Car Group sold 307,500 vehicles worldwide in the third quarter of this year (Q3 2005: 310,900). Third quarter unit sales by Mercedes- Benz increased slightly to 282,800 vehicles (Q3 2005: 282,100), primarily due to the success of the new models launched in 2005 and 2006. At smart, due to the focus on the smart fortwo, unit sales decreased, as expected, to 24,700 vehicles (Q3 2005: 28,800). Customer orders have been received for nearly all smart fortwo cars that will be produced prior to the model changeover next year. The divisions's revenues increased by 8% to US$17.1 billion. The Mercedes Car Group increased its operating profit by 127% to US$1.257 billion. This significant increase in earnings is primarily due to the efficiency improvements achieved in the context of the CORE program. Staff reductions at Mercedes-Benz Passenger Cars in the context of the CORE program led to charges of US$60 million. Within the framework of the voluntary headcount reduction program announced in September 2005, approximately 9,300 employees had signed severance agreements or had already left the company. The expenses originally planned for the restructuring of smart were adjusted, resulting in a gain of US$51 million. The integration of smart into the Mercedes-Benz organization is progressing according to plan and should be completed by the end of this year. The resulting efficiency improvements will provide a foundation for smart's profitability as of the year 2007. Chrysler Group In a difficult market environment, the Chrysler Group's third quarter retail and fleet sales totaled 635,300 vehicles. Total factory shipments amounted to 504,400 vehicles (Q3 2005: 663,400). Third quarter revenues amounted to US$12.1 billion (-23%); measured in Euros, revenues decreased by 26%. The Chrysler Group posted an operating loss of US$1.477 billion in the third quarter of 2006, compared with an operating profit of US$393 million in the same quarter of last year. The operating loss was primarily the result of a decrease in worldwide factory unit sales, an unfavorable shift in product and market mix, and negative net pricing. These factors reflect a continuing difficult market environment in the United States as the Chrysler Group faced increased dealer inventory levels from the prior quarter, a shift in consumer demand toward smaller vehicles due to higher fuel prices, and increased interest rates. In order to reduce the high levels of dealer inventories, Chrysler Group reduced shipments to dealers, which necessitated corresponding production adjustments. Total factory shipments of 504,400 vehicles in the third quarter were 158,900 units lower than in the third quarter of last year. During the third quarter, the Chrysler Group launched the compact SUV Jeep(R) Compass and the Jeep(R) Wrangler Unlimited (4-door). The Chrysler Aspen, the first SUV from the Chrysler brand, was also launched in the third quarter. By the end of the year, the Chrysler Group will launch three more all-new vehicles featuring fuel-efficient engines: the Chrysler Sebring, the Dodge Nitro and the Jeep(R) Patriot. In July, the Chrysler Group opened its new flexible assembly plant and supplier park in Toledo, Ohio, where the all-new Jeep(R) Wrangler models are produced. This supplier co-location project represents the latest example of Chrysler Group's overall manufacturing strategy, enabling various models to be built on the same assembly line. Truck Group Unit sales by the Truck Group of 141,900 vehicles were 2% above the level of Q3 2005. Due to the higher unit sales and a better model mix, revenues increased by 3% to US$10.2 billion. The Truck Group posted an operating profit of US$705 million (Q3 2005: US$449 million). This significant increase in earnings was due to higher unit sales, a high utilization of capacity combined with strong productivity, and an improved model mix. In addition, further efficiency improvements were realized in the context of the Global Excellence program, which more than compensated for the higher expenses incurred for new vehicle projects and the fulfillment of future emission regulations. Sales by Trucks Europe/Latin America of 37,700 units were slightly higher than in Q3 2005. Unit sales of 55,400 vehicles by Trucks NAFTA under the Freightliner, Western Star and Sterling brands were 3% higher than in Q3 2005. Trucks Asia sold 49,300 units under the Mitsubishi Fuso brand, a 2% increase compared to the prior-year quarter. The "Truck Dedication" initiative, which was launched during the third quarter of this year, aims to focus sales and service activities even more closely on customers' needs. The key elements of the program include more intensive customer interaction such as additional service stations near logistics centers and autobahns, as well as service teams with 24-hour availability. The Financial Services division continued its positive business trend in the third quarter, and improved its operating profit to US$565 million, compared with US$518 million in the third quarter of last year. This increase in earnings was assisted by the higher volume of new business and improved efficiency. There were opposing effects from increased risk costs, which had been extremely low in the prior-year quarter. New business of US$16 billion was 6% higher than in Q3 2005, while contract volume of US$144.6 billion was at the prior-year level. Adjusted for the effects of currency translation, the portfolio grew by 4%. Contract volume of US$104.2 billion in the Americas region (North and South America) was at the same level as a year earlier; adjusted for exchange-rate effects, there was an increase of 4%. Contract volume in the region Europe, Africa and Asia/Pacific increased by 4% to US$40.5 billion. In Germany, DaimlerChrysler Bank increased its contract volume by 5% to US$19.7 billion. The Van, Bus, Other Segment The Van, Bus, Other segment posted a third quarter operating profit of US$400 million (Q3 2005: US$481 million), including expenses of US$91 million for the implementation of the new management model, mainly for the voluntary headcount reduction program in administrative areas. The sale of real estate properties not required for operating purposes led to a gain of US$109 million in the third quarter. Mercedes-Benz Vans posted unit sales of 58,800 vehicles in the third quarter, which was lower than the very high prior year number. The decrease was a result of the launch of the new Sprinter and the associated production changeover in the Dusseldorf and Ludwigsfelde plants. DaimlerChrysler Buses sold 8,600 buses and chassis of the Mercedes-Benz, Setra and Orion brands (Q3 2005: 9,200). The contribution to earnings from the European Aeronautic Defence and Space Company amounted to US$313 million, which was slightly below the result of US$325 million in the prior-year quarter. This was primarily caused by less favorable currency- hedging rates. The delays with the delivery of the Airbus A380 did not affect the profit contribution from EADS to DaimlerChrysler in the third quarter, as the results of EADS are consolidated by the DaimlerChrysler Group with a three-month time lag. Outlook DaimlerChrysler expects a slight decrease in worldwide demand for automobiles in the fourth quarter and thus slower market growth than in Q4 2005. For full-year 2006, the company anticipates market growth of around 3%. In the United States, the world's largest market, demand is likely to decrease slightly (2005: 16.9 million cars and light trucks). The Japanese market is also expected to be smaller than in 2005 (4.7 million passenger cars), while there should be a moderate increase in demand in Western Europe (2005: 14.5 million passenger cars). Car sales are expected to increase significantly in full-year 2006 in nearly all of the major emerging markets of Asia, South America and Eastern Europe. The strong demand for commercial vehicles, especially in the heavy categories, should continue for the rest of this year, although with lower growth rates. In view of the ongoing overcapacity in the automotive industry, DaimlerChrysler assumes that the situation of intense competitive pressure will continue. DaimlerChrysler expects unit sales in 2006 to be lower than in the previous year (4.8 million units). The Mercedes Car Group anticipates full-year unit sales at least as high as in 2005. The division assumes that unit sales by Mercedes-Benz will exceed last year's figure as a result of the market success of the brand's new products. The Mercedes Car Group will continue to effectively implement the CORE efficiency-improving program. The division's positive earnings trend is expected to continue in the fourth quarter. Due to intense competition and the shift in demand towards smaller vehicles, the Chrysler Group assumes that unit sales (factory shipments) in 2006 will be lower than in the prior year. Eight new models, many of which are in the growing segments of passenger cars and small SUVs, are now being launched or will be launched this year. The Chrysler Group will implement further cuts in production volumes during the fourth quarter in order to reduce dealer inventories and clear the way for the current product offensive. DaimlerChrysler expects the division to post a loss of approximately US$1.3 billion for full-year 2006. The Truck Group expects full-year unit sales at least to reach 2005 sales figures. Due to positive market developments in the core markets of Europe, the United States and Japan in connection with upcoming new emission regulations, the ongoing strong demand for its products and further improvements in productivity and efficiency, the Truck Group expects to significantly exceed the prior year's earnings. The Financial Services division anticipates a continuation of its stable business development in the remaining months of the year 2006, despite the higher level of interest rates and falling growth in consumption in the United States. Enhanced process quality and efficiency will help to further improve the division's competitive position. Operating profit in full-year 2006 should be higher than in the prior year. The Vans unit expects lower unit sales than in 2005 due to the Sprinter model change. Unit sales of buses are likely to exceed the high level of the prior year. In connection with the revised delivery planning for the Airbus A380, EADS revoked its original earnings forecast at the beginning of October. EADS has not issued any new earnings guidance since then. The DaimlerChrysler Group's revenues in full-year 2006 should be slightly higher than in 2005 (US$190 billion). On September 15, DaimlerChrysler reduced the Group's operating- profit target for 2006 to an amount in the magnitude of US$6.3 billion. Although the company now has to assume that the profit contribution from EADS will be US$0.3 billion lower than originally anticipated because of the delayed delivery of the Airbus A380, DaimlerChrysler is maintaining this earnings target due to very positive business developments in the divisions Mercedes Car Group, Truck Group and Financial Services. This forecast also includes charges for the implementation of the new management model (US$0.6 billion), the focus on the smart for two (US$1.3 billion) and the staff reductions at the Mercedes Car Group (US$0.5 billion). There are positive effects from gains on the disposal of the off-highway business (US$0.3 billion), the sale of real estate no longer required for operating purposes (US$0.1 billion) and the release of provisions for retirement-pension obligations (US$0.3 billion). Headquartered in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- engages in the development, manufacture, distribution, and sale of various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. DaimlerChrysler has operations in Australia, China, Indonesia, Japan, Korea, Malaysia, and Thailand. * * * DaimlerChrysler lowered its operating profit forecast for full- year 2006 to be in the magnitude of USUS$6.4 billion based on an expected full-year operating loss of approximately USUS$1.2 billion for its Chrysler Group. On Oct. 2, the Troubled Company Reporter - Asia Pacific reported that DaimlerChrysler revealed its plans for a partnership with China's Chery Automobile to produce cars for sale in the United States and other markets. EMI GROUP: Unearths Accounting Fraud at Brazilian Unit ------------------------------------------------------ EMI Group Plc has discovered a one-off accounting fraud at its Brazilian recorded music business, The Guardian reports. The accounting fraud, EMI estimates, resulted in the overstatement of EMI Music's revenues by around GBP12 million and operating profits by around GBP9 million. The scandal, The Times reports, entails false booking of stock as sold and shipped. The Brazilian unit, headed by Marcos Maynard, is understood to have been burden with unexpected stock, The Times adds. "As a one-off hit, [the fraud] accounts for five percent of this year's pre-tax profits and investors might fear there is the risk of further problems," Richard Hitchcock, an analyst at Numis Securities, said. EMI said the impact of the scandal would be be reflected in the financial results for the six months ended Sept. 30, 2006. The recording company said it has launched a full investigation and has suspended the senior management at the Brazilian business. About EMI 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. 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. HOPSON DEVELOPMENT: Keeps BB+ Credit Rtg, Outlook Shifts to Neg. --------------------------------------------------------------- On October 31, 2006, Standard & Poor's Ratings Services revised its outlook on Hopson Development Holdings Ltd to negative from stable. At the same time, it affirmed the 'BB+' long-term corporate credit rating on the company. The 'BB+' issue rating on the company's US$350 million senior unsecured notes was also affirmed. "The outlook revision is based on Hopson's increasingly aggressive land acquisition and slower-than-expected cash generation," said Standard & Poor's credit analyst Jacphanie Cheung. It is also based on escalated financial pressure resulting from expanded debt leverage and increased interest rates, and uncertainty about regulatory changes affecting the property market in China. The rating on the company is constrained by above-average risk facing residential property developers in China, including the cyclical nature of the market, evolving government regulations and changing policies, and strong competition. Other major risks include the geographical concentration of the company's activities and a lack of stable recurring income. These are partly offset by the company's large development portfolio and its large, low-cost land bank that provides it with ample leeway to weather a market downturn. The rating could be lowered if the company's financial profile continues to deteriorate such that its ratio of net debt to capital consistently stays at above 45%, or if its ratio of funds from operations to net debt persistently remains below 25% over a prolonged period, or if the company continues to expand through further borrowings. The outlook could be revised to stable if Hopson can execute its business plan and improve its financial profile such that its ratio of funds from operations to net debt is maintained at above 50% and if its EBITDA interest coverage ratio reaches 7x or greater. INTELSAT LTD: Names Vicki Warker Sr. Vice President of Marketing ---------------------------------------------------------------- Intelsat Ltd. appointed Vicki Warker as the company's new Senior Vice President of Marketing. In this role, Ms. Warker is responsible for the company's growth initiatives and maximizing the company's performance in serving the video and network services customer groups. In addition, she manages all product development, product management and rationalization initiatives, and customer feedback and analysis to ensure Intelsat's products and services anticipate customer needs and market demand. "With more than 20 years experience in telecommunications, Vicki has extensive experience in marketing, product management, customer service and channel management," said Jim Frownfelter, COO, Intelsat. "We expect that Vicki will contribute significantly to the integration and development efforts underway at Intelsat, and have great confidence in her ability to lead our global marketing initiatives." Prior to joining Intelsat in mid-September, Ms. Warker served as Vice President of Marketing and Products within the Sprint Business Solutions organization, where she had responsibility for product marketing, vertical marketing, pricing and offer development for business customers. Prior to Sprint, Vicki held leadership positions at GE Global eXchange Services and Concert Communications where she served in a variety of channel management, product management and marketing capacities. Ms. Warker holds Master of Science and Bachelor of Science degrees in Civil Engineering from the University of Maryland. Intelsat, Ltd. -- http://www.intelsat.com/-- offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high-quality connections, global reach and reliability. In Asia, Intelsat has sales offices in China, Japan, Singapore and Australia. * * * Fitch upgraded the Issuer Default Rating for Intelsat to 'B' from 'B-' pro forma for its pending acquisition of PanAmSat. The ratings were also removed from Rating Watch Negative, where they had originally been placed on Aug. 30, 2005. Fitch said the Rating Outlook is Stable. Moody's Investors Service affirmed the B2 corporate family rating of Intelsat, Ltd., and downgraded the corporate family rating of PanAmSat Corporation to B2, given the greater clarity regarding the final capital structure and the near-term completion of the PanAmSat acquisition by Intelsat. PARKSON RETAIL: Moody's Hands Ba1 Corp. Family Rating ----------------------------------------------------- On November 01, 2006, Moody's Investors Service has assigned a Ba1 corporate family rating to Parkson Retail Group Ltd and a provisional (P)Ba1 rating to its proposed issuance of USD200M in 5-year senior notes. The outlook on the ratings is stable. The bond proceeds will be used, through a Credit Linked Note structure, to finance Parkson's business in China. This is the first time that Moody's has assigned ratings to Parkson, and expects to affirm and remove them from their provisional status upon the issuance of the bond. "Parkson's ratings reflect the company's well-recognized brand name, its national scale coverage and its 12-year operating record in China," says Kaven Tsang, a Moody's analyst, adding, "favorable domestic economic growth and the rise in personal wealth has been fuelling the company's significant like-for-like sales growth." "Furthermore, Parkson benefits from strong working capital management practices, a reflection of the strengths of its concessionaire model and the sound bargaining power it enjoys over its suppliers," says Tsang. However, as the company already consistently generates positive free cash flow, its future credit profile will largely depend upon the success of its expansion plan - after the bond issuance - and management's discipline in pacing any inorganic growth. Currently, it expects to continue growing rapidly, and will open and acquire 3-5 stores each year as well as some of its managed outlets. In terms of its financials, as of December 2005, Adj. Debt/EBITDAR was low at 1.3x, but is expected to increase to around 3x in the next few years in view of its expansion plan. After the bond issuance, Parkson will also turn from net cash to report RCF/Adj. Net Debt of around 30%. "But while such ratios are comparable to those of some investment-grade global retail peers, Moody's also notes that the history of Parkson's current structure is limited, given it was established after its listing and the completion of a corporate restructuring, both of which occurred in 2005," says Tsang. In terms of liquidity, Parkson does not maintain any standby credit facilities, but relies on its operating cash flow and cash balance as liquidity support. Its substantial cash balance reflects the favorable and sustainable payment arrangements that it has established with its concessionaires. Proceeds from the proposed bond will be used to purchase a credit linked note (CLN) issued by JP Morgan Chase Bank, N.A., London Branch and the service of the CLN is linked to loan agreements between Parkson's subsidiaries in China and JP Morgan Chase Bank, Shanghai Branch (the JPM loan). Moody's, in its adjusted debt calculation has netted off the CLN investments against the JPM loan as they essentially mirror each other. No notching for structural subordination is applied to the bond rating. This is because secured and subsidiary borrowings, after netting off the JPM loan, will account for less than 5% of total assets over the next 3 years. Furthermore, it is stated in the terms of the CLN that in a credit event, the amount recovered under the JPM loan will be fully passed through for redemption of the CLN, which would be fully applied for the repayment of the proposed bond. Bondholder's interest will therefore not be subordinated to the lender of the JPM loan. The stable ratings outlook reflects Moody's expectation that Parkson will remain prudent in its expansion plan and that it is likely to achieve steady operating and financial performances in the next few years. The rating is likely to experience upward pressure if Parkson demonstrates a steady track record for successful organic and inorganic growth, while at the same time maintains strong financial discipline. The latter includes maintaining Adj. Debt/EBITDAR under 3x and RCF/Adj. Net Debt above 30%. On the other hand, the rating may experience a downward trend if Adj. Debt/EBITDAR rises above 4x, while RCF/Adj. Net Debt falls below 20-25% on a sustained basis. Such an outcome could be a result of: -- a weakening in profit margins, due to rising competition and/or an erosion in the bargaining power it commands over its concessionaires/suppliers; and/or -- further debt-funded expansions occur, but which are beyond its original plan. Furthermore, any sign of financial support to parent The Lion Group would also pressure ratings. Parkson Retail Group Limited, listed on the Hong Kong Stock Exchange, is the PRC retailing arm of The Lion Group, a Malaysian-based conglomerate. Parkson is one of the largest national retailers in China, operating 23 self-owned and 15 managed stores in over 26 cities. For the year ended 2005, revenues were RMB1.2 billion and net income was RMB248 million. PETROLEOS DE VENEZUELA: Launches Proyecto Etanol ------------------------------------------------ Petroleos de Venezuela, the state-owned oil company of Venezuela, has launched Proyecto Etanol, its ethanol- manufacturing unit, Business News Americas reports. BNamericas relates that Petroleos de Venezuela is looking for private sector partners for Proyecto Etanol, which is located at the Puerto La Cruz refinery in eastern Venezuela. Rafael Ramirez, the president of Petroleos de Venezuela and the country's energy and oil minister, told BNamericas, "The idea is to make all the ethanol right here." According to BNamericas, ethanol production would begin in March 2007. Minister Ramirez told BNamericas, "We want to open space for private participation." BNamericas underscores that Venezuela started substituting premium-gasoline components MTBE and TAME with ethanol last year before the US congress banned the oil-based additives in favor of the specialty alcohol. Everything had to be changed in Petroleos de Venezuela's storage, transportation and distribution chain to handle ethanol, BNamericas says, citing Minister Ramirez. "The handling of ethanol always has these technical complications," Minister Ramirez told BNamericas. 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: Awards Study Contract to SNC-Lavalin ------------------------------------------------------------ Petroleos de Venezuela, the state-run oil firm of Venezuela, has awarded a contract to SNC-Lavalin Group Inc. to conduct a study for the Extra Heavy Oil Processing Complex in Orinoco Oil Belt, VHealine reports. According to VHeadline, the complex is a major component of Petroleos de Venezuela's long-term plan to boost oil output from the Orinoco Oil Belt. VHeadlines notes that the contract includes a study to determine suitable locations for the complex. The report says that once the complex is completed, it will process 800,000 barrels of extra heavy oil daily that will be used to produce synthetic crude oils for global crude oil markets. SNC-Lavalin has started work on the complex, which it will carry out with contractors and international process licensors in Venezuela, VHealine says. VHeadline underscores that the study is expected to be completed by the first quarter of next year. "We are pleased that PDVSA (Petroleos de Venezuela) has awarded this significant component of their refining business plan to SNC-Lavalin. This is a very important project that will promote socio-economic development in the Orinoco Oil Belt," Jean Beaudoin, SNC-Lavalin Group Inc.'s executive vice president, told VHeadline. About SNC-Lavalin Group Inc. Headquartered in Montreal, Canada, SNC-Lavalin Group Inc. -- http://www.snc-lavalin.com-- is an engineering and construction company. The company is engaged in engineering and construction activities ranging from engineering, procurement, construction and construction management services to lump sum turnkey packages. It also provides operations and maintenance services, and is involved in the manufacturing of ammunition, as well as investing in infrastructure concession investments. It makes equity investments in infrastructure concessions in various industry sectors, such as airports, energy, mass transit and roads. It operates in nine business segments: Power, Infrastructure and Environment, Chemicals and Petroleum, Mining and Metallurgy, Operations and Maintenance, Defence, Infrastructure Concession Investments, Highway 407 and All Other. About Petroleos de Venezuela SA 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. SEMICONDUCTOR MANUFACTURING: 3rd Qtr Net Loss Reaches US$35 Mil. ---------------------------------------------------------------- Semiconductor Manufacturing International disclosed on Oct. 31, 2006, that its 2006 third-quarter loss widened on lower prices as customers including Texas Instruments cleared inventory, the Bloomberg News reports. According to the company, its net loss widened to US$35.1 million in the 2006 third quarter compared with the US$26.1-million net loss it posted in the same period a year earlier. Sales for the three months ended September 30, 2006, was US$368.9 million, up 19% compared with the same period last year. However cost of sales rose 7.7% to US$336.2 million from the second quarter, as wafer shipments and depreciation increased. Semiconductor Manufacturing cut its capital spending for this year to US$1 billion from the planned US$1.1 billion. Moreover, spending on equipment in the third quarter fell to US$157.4 million from US$189.2 million a year earlier, and US$317.3 million in the second quarter. "We continue to see customers going through a period of inventory correction which will carry through to the fourth quarter," The Standard quotes the company's chief executive officer, Richard Chang, as saying. "This situation is improving and depending on the holiday sell-through, it may continue to improve." Semiconductor Manufacturing's sales growth eased because it was "significantly exposed to inventory-laden Broadcom," according to an October 11, 2006 report by Ivan Goh, an analyst at Dresdner Kleinwort. Broadcom -- a Semiconductor Manufacturing client that supplies chips for electronics including Apple Computer's video iPod -- on October 19, 2006, cut its fourth-quarter sales forecast on customers' inventory correction, Bloomberg notes. Semiconductor Manufacturing predicted that the fourth-quarter gross margin, or the percentage of sales left after paying production costs, would be 9-11%. For 2007, capital expenditure will "be less than $700 million," Mr. Chang said. The Standard recounts that the company had earlier made a forecast that it would spend as much as US$1.1 billion next year. The company is evaluating whether it needed to write off intangible assets related to the licensing of patents from Taiwan Semiconductor Manufacturing because of a lawsuit between the two companies, The Standard relates. The intangible assets have a book value of US$99.5 million. Shares of the company fell to a record low after the company announced its third quarter results. Semiconductor Manufacturing shares have plunged 66.1% since its Hong Kong listing March 18, 2004. Headquartered in Shanghai, China, Semiconductor Manufacturing International Corporation -- http://www.smics.com/-- is an international company and one of the leading semiconductor foundries in the world, providing integrated circuit (IC) manufacturing at 0.35um to 90nm and finer line technologies to customers worldwide. SMIC had been incurring recurring net losses year-on-year. The Troubled Company Reporter - Asia Pacific reported that SMIC's net loss in the 2005 fourth quarter period reached US$15.0 million compared with a net loss of US$26.1 million in the third quarter of the same year. SENSUS METERING: 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 the B2 Corporate Family Rating for Sensus Metering Systems Inc., as well as revised the rating on the company's US$275 Million 8.625% Senior Subordinate Notes due 2013 to B3 from Caa1. Those debentures were assigned an LGD5 rating suggesting noteholders will experience a 77% loss in the event of default. Additionally, Moody's revised or held 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$40 Mil. Sr. Sec U.S. Revolver due 2009 B2 Ba3 LGD2 23% US$200 Mil. Sr. Sec U.S. term Loan Fac. due 2010 B2 Ba3 LGD2 23% US$30 Mil. Sr. Sec. European TL Fac. due 2010 B2 Ba3 LGD2 23% US$30 Mil. Sr. Sec. European Revolver Due 2009 B2 Ba3 LGD2 23% 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 Raleigh, North Carolina, Sensus Metering Systems Inc. -- http://www.sensus.com/-- is a provider of metering and Automatic Meter Reading (AMR) solutions for water, gas, electric, and heat utilities as well as sub-metering entities worldwide including China, Germany, Brazil and Chile, among others. TRW AUTOMOTIVE: 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 U.S. Automotive and Equipment sectors, the rating agency confirmed its Ba2 Corporate Family Rating for TRW Automotive. Additionally, Moody's revised or 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 ---------- ------- ------- ------ ---------- Senior Secured Revolving Credit Facility Ba2 Ba1 LGD2 24% Senior Secured Term Loan A Ba2 Ba1 LGD2 24% Senior Secured Term Loan B Ba2 Ba1 LGD2 24% Senior Secured Term Loan E Ba2 Ba1 LGD2 24% 9.375% Senior Notes Ba3 Ba3 LGD 5 70% 10.125% Senior Notes Ba3 Ba3 LGD 5 70% 11.75% Subordinated Notes B1 B1 LGD 6 94% 11% Subordinated Notes B1 B1 LGD 6 94% 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%). TRW Automotive -- http://www.trw.com-- with 2005 sales of US$12.6 billion is among the world's ten largest automotive suppliers and is one of the top financial performers in the industry. The company supplies more than 40 major vehicle manufacturers and 250 nameplates and holds leading positions in all of its primary product categories. Headquartered in Livonia, MI , the company has more than 63,000 employees worldwide, and significant presence in Brazil, China, Germany and Italy. VOLKSWAGEN AG: Earns EUR1.2 Billion for January-September 2006 -------------------------------------------------------------- Volkswagen AG released its financial report for the nine-month period ending Sept. 30, 2006. Highlights -- increase in Volkswagen Group operating profit before special items of 62.0% year-on-year to EUR3.0 billion in the period January to September 2006, but still below medium-term Group target; -- Negative one-off effects mainly from restructuring expenses and positive one-off factors from the sale of equity investments reduced Automotive Division operating profit by a net EUR1.7 billion; -- at EUR628 million, Automotive Division operating profit after special items 43.9% lower than in previous year; Financial Services operating profit remains at high prior- year level; -- gain on sale of Europcar in the second quarter reported as profit from discontinued operations in the consolidated income statement; cash generated by the sale strengthens Automotive Division net liquidity; -- special items reduced consolidated pre-tax profit from continuing operations by 7.1% to EUR937 million year-on- year; -- consolidated profit after tax rises 76.6% year-on-year to EUR1.2 billion (previous year: EUR0.7 billion), even with an above-average tax rate for continuing activities due to substantial special items; -- ratio of investments in property, plant and equipment (capex) to sales revenue in the Automotive Division at 3.1% (previous year: 4.4%); -- at EUR8.2 billion, net liquidity in the Automotive Division remains at a high level -- collective bargaining agreement reached for the restructuring of Volkswagen AG's six traditional plants -- new model initiative successfully continued: -- deliveries to customers worldwide up by 10.3% year-on-year to 4.3 million vehicles; market share in Germany and Western Europe increased; -- all Group brands record higher year-on-year sales figures; Audi, Bentley, Skoda, Lamborghini and Volkswagen Commercial Vehicles aiming for full-year delivery records; -- new models drive significant growth in deliveries to customers in the U.S.A. (+10.2%) and China (+28.7%); -- Volkswagen Eos records strong sales figures in cabriolet segment; -- Audi S3, S6 and S8 models and the TT Coupe successfully launched in the market -- SEAT presents the Leon Cupra at the London Motor Show; -- 12 world premieres of Group models at the Paris Motor Show and the IAA Commercial Vehicles -- Volkswagen acquires 15.06% stake in MAN Aktiengesellschaft as of Oct. 3 "Despite the difficult economic environment, the most important automotive markets proved to be robust in the first nine months of 2006 and recorded slight year-on-year growth," the company's Board of Management said. "Although oil prices have recently fallen, we are not expecting any sustained easing of the situation in the energy and commodity markets. In combination with the troubled situation in the Middle East, this will continue to dampen growth. We therefore believe that growth in demand for passenger cars in the U.S.A., Western Europe and Germany will only be moderate in 2006." "We will continue our product rollout in the fourth quarter, thus stabilizing this year's improved market position in Western Europe and Germany. The success of the new models in the US market will be maintained and will bolster our market position there. We continue to expect growth in deliveries to customers in China and South America/South Africa. Consequently we expect overall year-on-year growth in worldwide delivery figures for 2006." "We will achieve our goal of cutting material costs by at least EUR1.0 billion in 2006. Driven by the higher unit sales and the success of ForMotionplus, full-year operating profit before special items will be higher than in 2005. We expect the Automotive Division to record a positive net cash flow for the full year and an improvement in net liquidity compared with Dec. 31, 2005. Full-text copy of Volkswagen's nine-month results can be viewed free-of-charge at http://researcharchives.com/t/s?142a Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, Asia and Africa, Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle-related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by Chief Executive Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. In November last year, Volkswagen maintained its 2005 earnings guidance amid rumors it may lower targets. The company predicts a year-on-year improvement in both operating profit after special items and profit before tax this year. Rumors flew that the company would slash full-year earnings forecast due to higher restructuring costs. The company said the impact of its workforce reduction measures, which will be charged as special items in the fourth quarter, will be lower than last year's. The company also admitted there were no significant improvements in the economic environment in the first nine months of 2005, and the overall situation in the important automotive markets remained difficult. It also expected tougher competition in the Chinese and U.S. markets, and the rise in fuel prices to influence consumer confidence. WESCO INT'L: Commences Offering on Convertible Debentures --------------------------------------------------------- WESCO International, Inc., intends to raise approximately US$250 million through an offering of Convertible Senior Debentures due 2026. In addition, WESCO International may issue up to an additional US$50 million of Convertible Debentures upon exercise of an option to be granted to the initial purchasers. The Convertible Debentures of WESCO International will be guaranteed on a senior subordinated basis by WESCO Distribution. Upon conversion, WESCO International will pay cash and, if required, shares of WESCO International common stock. It is expected that the net proceeds from the offering, along with borrowings under credit facilities, will be used to finance WESCO Distribution's previously announced acquisition of Communications Supply Holdings, Inc. The proposed offering of Convertible Debentures is not conditional on the completion of the Communications Supply acquisition. The offering is being made to qualified institutional buyers pursuant to Rule 144A under the Securities Act. None of the Convertible Debentures (including any shares of common stock issuable upon conversion thereof) or the guarantee thereof have been registered under the Securities Act of 1933 or under any state securities laws and, unless so registered, may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to the registration requirements of the Securities Act and applicable state securities laws. Headquartered in Pittsburgh, Pennsylvania, WESCO International, Inc., is a publicly traded Fortune 500 holding company, whose primary operating entity is WESCO Distribution, Inc. WESCO Distribution is a distributor of electrical construction products and electrical and industrial maintenance, repair and operating supplies, and is the nation's largest provider of integrated supply services. Wesco has operations in China, Mexico, and the United Kingdom. * * * In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the wholesale distribution (excluding healthcare) sector in September 2006, the rating agency confirmed its Ba3 Corporate Family Rating for Wesco International Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these two bond issues: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$150 million 2.625% Convertible Debentures B2 B1 LGD4 69% US$150 million 7.50% Subordinated Notes B2 B1 LGD4 69% As reported in the Troubled Company Reporter on June 14, 2006, Moody's affirmed the B2 ratings on both WESCO's guaranteed senior convertible debentures due 2025 and WESCO Distribution, Inc.'s guaranteed senior subordinated notes due 2017, and WESCO's Ba3 corporate family rating. WESCO INT'L: Offers US$250-Mln Convertible Senior Debentures ------------------------------------------------------------ WESCO International, Inc. intends to raise around US$250 million through an offering of Convertible Senior Debentures due 2026. In addition, WESCO International may issue up to an additional US$50 million of Convertible Debentures upon exercise of an option to be granted to the initial purchasers. WESCO Distribution will guarantee the Convertible Debentures of WESCO International on a senior subordinated basis. Upon conversion, WESCO International will pay cash and, if required, shares of WESCO International common stock. It is expected that the net proceeds from the offering, along with borrowings under credit facilities, will be used to finance WESCO Distribution's previously announced acquisition of Communications Supply Holdings, Inc. The proposed offering of Convertible Debentures is not conditional on the completion of the Communications Supply acquisition. The offering is being made to qualified institutional buyers pursuant to Rule 144A under the Securities Act. None of the Convertible Debentures (including any shares of common stock issuable upon conversion thereof) or the guarantee thereof have been registered under the Securities Act of 1933 or under any state securities laws and, unless so registered, may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to the registration requirements of the Securities Act and applicable state securities laws. Headquartered in Pittsburgh, Pennsylvania, WESCO International, Inc. (NYSE: WCC) -- http://www.wesco.com/-- is a publicly traded Fortune 500 holding company, whose primary operating entity is WESCO Distribution, Inc. WESCO Distribution is a distributor of electrical construction products and electrical and industrial maintenance, repair and operating supplies, and is the nation's largest provider of integrated supply services. WESCO operates eight fully automated distribution centers and approximately 370 full-service branches in North America and selected international markets including the United Kingdom and Kazakhstan, providing a local presence for area customers and a global network to serve multi-location businesses and multi- national corporations. Wesco has operations in China, Mexico, and the United Kingdom. * * * In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the wholesale distribution (excluding healthcare) sector in September 2006, the rating agency confirmed its Ba3 Corporate Family Rating for Wesco International Inc. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these two bond issues: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$150 million 2.625% Convertible Debentures B2 B1 LGD4 69% US$150 million 7.50% Subordinated Notes B2 B1 LGD4 69% ========= I N D I A ========= GENERAL MOTORS: Posts US$115-Mil. Net Loss in 2006 Third Quarter ---------------------------------------------------------------- General Motors Corp. reported a net loss of US$115 million for the third quarter of 2006, compared with a loss of US$1.7 billion for the year-ago quarter. The net loss for this year's third quarter included US$644 million in charges for special items, including goodwill impairment at General Motors Acceptance Corp. and an increase to the charge associated with Delphi Corp.'s reorganization. GM reported 2006 third-quarter adjusted net income, excluding special items, of US$529 million on revenue of US$48.8 billion. These results represent a US$1.6 billion improvement from the year-ago loss of US$1.1 billion. GM's global automotive operations almost fully accounted for the improvement, while lower GMAC results were more than offset by benefits associated with certain tax matters. As a result of progress in ongoing discussions regarding the bankruptcy filing by Delphi and updated estimates related to certain benefit guarantees, GM has significantly narrowed the range of its estimated potential exposure related to this filing. The new range is between US$6 and US$7.5 billion pre- tax, as compared to a previously disclosed range of US$5.5 to US$12 billion. GM believes the more likely amount of the liability is at the lower end of this new range. Reflecting these updated estimates, GM has also increased the reserve for its contingent liability for Delphi by US$500 million in the third quarter, bringing the total charges taken to date to US$6 billion pre-tax. In addition to these charges, the final agreement with Delphi may result in GM agreeing to reimburse Delphi for certain labor expenses to be incurred upon and after Delphi 's emergence from bankruptcy. The initial payment in 2007 is not expected to exceed approximately US$400 million pre-tax, and the ongoing expenses would be of limited duration and estimated to average less than US$100 million pre- tax annually. GM expects these payments to be far exceeded by anticipated reductions in Delphi material cost premiums. "Our third quarter results again reflect significant progress in our fast-paced initiatives to turn around our business and create a company that is leaner, faster and positioned for long- term sustainable growth," said Chairman and Chief Executive Officer Rick Wagoner. "Our turnaround efforts in North America and Europe are well underway, and having a large impact on the bottom line, as evidenced by the US$1.6 billion improvement for the quarter. This improvement in North America and Europe, combined with the strong sales growth and earnings performance we see in Asia and Latin America, confirm that our plan is on track. We have more work to do, and we remain focused on continuing progress in the quarters to come. "In addition to the automotive turnaround, our near-term priorities include the successful resolution of the Delphi negotiations and closing the GMAC transaction," said Mr. Wagoner. "While a number of important issues still remain to be resolved, we are encouraged by the progress we have made on Delphi, and remain optimistic that we can achieve a consensual agreement. Regarding GMAC, we have completed several key milestones in the process and continue to work toward a fourth- quarter close." GM Automotive Operations Net income from global automotive operations improved by US$1.5 billion year-over-year, posting a loss of US$116 million on an adjusted basis, excluding special items (reported net loss of US$62 million). This improvement is due primarily to significant improvement in North America, along with continued strong performance in other regions. GM's global market share in the third quarter was 13.9%, up slightly from the second quarter market share of 13.7%, but down from 14.4% in the third quarter of 2005. The change in market share is largely attributable to the company's strategy of reducing sales of low-margin daily rental vehicles in North America and Europe. GM share in the U.S., however, set a stronger pace in the third quarter at 25.1%, its highest quarterly result in 2006. GM North America posted an adjusted net loss of US$367 million in the third quarter of 2006 (reported net loss of US$374 million), a US$1.3 billion improvement year-over-year, despite a decrease in production of 96,000 units. This significant progress largely reflects improvements in structural costs, as the company executes the pension, health care and manufacturing cost reduction initiatives related to its North American turnaround plan. The structural cost reductions, which are on track to total US$6 billion in 2006, far offset the impact of the lower production for the quarter. "There continues to be excellent progress in North America, with over US$3.4 billion of net income improvement in the first nine months of the year. We are encouraged by the results, but we recognize that there is still more work to be done," Mr. Wagoner said. "We are on track to meet the structural cost reduction target of US$9 billion on an average annual running rate basis by the end of 2006. Just as important, our aggressive new product launch program, a result of our increased capital spending, continues this fall with the introduction of our all- new Chevrolet Silverado and GMC Sierra pickups and the Saturn Outlook and GMC Acadia crossovers." GM Europe posted an adjusted net loss for the quarter of US$16 million (reported net loss of US$103 million) reflecting an improvement of US$105 million from the prior year's loss of US$121 million. The results reflect continued execution of the GME restructuring plan, emphasizing both structural cost reductions and improved quality of sales. "Our turnaround in Europe is in full gear. The region continues to make strides in cost reduction, augmented by pricing improvements arising from a focused sales and marketing strategy including lower rental fleet volume," Mr. Wagoner said. "We are seeing strong results from our Chevrolet brand, which posted record sales in Europe for the quarter. And, the newly launched Opel/Vauxhall Corsa is on track to exceed its 2006 objectives, with approximately 130,000 orders already placed in Europe." GM Asia Pacific posted adjusted net earnings of US$83 million for the third quarter (reported net earnings of US$231 million), down from last year's earnings of US$188 million. The difference primarily reflects the loss of income from Suzuki following the reduction in GM's equity interest in Suzuki and costs associated with launching the important all-new Holden Commodore and Statesman models in Australia. Strong sales performance in the region continued as market share increased to 6.2% from 5.9%, driven primarily by growth in Korea and China. GM products continue to gain strong acceptance in the fast- growing China market, with record third quarter sales of 192,000 units, up 17% over the same period last year. GM's global sales of GM Daewoo products exceeded 276,000 units in the third quarter, up 21% over third quarter 2005. GM Latin America, Africa and Middle East posted strong adjusted and reported net earnings of US$184 million for the third quarter, which reflects an improvement of US$153 million from the year-ago period. The results primarily reflect an increase in volume generated by new product launches throughout the region. Market share in the region increased to 17.3% from 16.7% in the year-ago period as a result of strong sales in Brazil, South Africa, Colombia and the Middle East. "Our Latin America, Africa and Middle East region posted their best quarterly financial results in nine years," said Mr. Wagoner. "We are seeing strong performance and growth in virtually every market in the region -- a great example of leveraging our global product portfolio in key growth markets." GMAC GMAC Financial Services earned adjusted net income of US$346 million in the third quarter of 2006, as compared to record net income in the year-ago period of US$654 million. GMAC's reported net loss for the quarter totaled US$349 million, which included non-cash goodwill impairment charges of US$695 million after-tax related to GMAC's Commercial Finance business. GMAC's financing operations earned US$136 million for the third quarter, as compared to US$139 million earned in the year-ago period. These results include an expense of US$135 million related to GMAC's successful third quarter offer to repurchase US$1 billion worth of certain zero coupon bonds, which will result in improved earnings in future quarters. Auto Finance results otherwise benefited from an increase in net financing revenue as a result of strong retail financing penetration as well as lower provisions for credit losses. ResCap's net income was US$76 million in the third quarter of 2006, down from US$282 million earned in the third quarter of 2005. The decrease in earnings was attributable to the challenging U.S. mortgage market that has negatively impacted margins and credit performance despite year-over-year increases in production. Mortgage originations totaled US$51.5 billion for the quarter, representing a slight increase from US$51.3 billion in the same period in the prior year. GMAC's Insurance operations generated record quarterly net income of US$191 million in the third quarter, up US$102 million from earnings of US$89 million in the year-ago period, primarily attributable to a combination of favorable loss performance and higher capital gains. Excluding the goodwill impairment charge, GMAC's Other segment, which includes the Commercial Finance business unit and GMAC's equity investment of approximately 22% in Capmark Financial Group Inc. (Capmark), incurred an adjusted loss of US$57 million (reported net loss of US$752 million including the goodwill impairment charge), compared to US$144 million earned in the same period last year. This decline results partially from GMAC's reduction in ownership interest of Capmark as a result of the first quarter sale. In addition, it includes the negative impact of higher credit provisions at Commercial Finance. GMAC paid GM a US$500 million dividend in the third quarter, resulting in 2006 year-to-date cash dividends of US$1.9 billion. GMAC continues to maintain adequate liquidity, while prudently reducing its excess levels of cash to more moderate levels with cash reserve balances at Sept. 30, 2006 of US$14.1 billion, including US$9.1 billion in cash and cash equivalents and US$5 billion invested in marketable securities. This compares with cash balances of approximately US$23 billion at June 30, 2006. Cash and Liquidity Cash, marketable securities, and readily available assets of the Voluntary Employees' Beneficiary Association trust totaled US$20.4 billion at Sept. 30, 2006, down from US$22.9 billion on June 30, 2006, but up from US$19.2 billion on Sept. 30, 2005. GM withdrew US$2 billion from the VEBA trust in the third quarter to fund health care. About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries, including Mexico, and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corp. and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new US$4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to US$4.5 billion being proposed by General Motors Corp., affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. Moody's said the rating outlook is negative. GENERAL MOTORS: Receiving 10,000 Tons of Steel from Usinas ---------------------------------------------------------- General Motors' unit in Rio Grande do Sul, Brazil, will be receiving a total of 10,000 tons of steel a month from Usinas Siderurgicas de Minas Gerais SA, the latter told Business News Americas. Usinas Siderurgicas posted on its Web site that it will expand by 38% flat steel shipments to General Motors. About Usinas Siderurgicas Headquartered in Minas Gerais, Brazil, Usiminas is among the world's 20 largest steel manufacturing complexes, with a production capacity of approximately 10 million tons of steel. Usiminas System companies produces galvanized and non-coated flat steel products for the automotive, small and large diameter pipe, civil construction, hydro-electronic, rerolling, agriculture, and road machinery industries. Brazil consumes 80% of its products and the company's largest export markets are the US and Latin America. About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries, including Mexico, and its vehicles are sold in 200 countries. * * * Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed March 29, 2006. Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corp. and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new US$4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to US$4.5 billion being proposed by General Motors Corp., affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. Moody's said the rating outlook is negative. GENERAL MOTORS: S&P Holds Low-B Ratings on Watch Negative --------------------------------------------------------- Standard & Poor's Ratings Services said its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed on March 29. The CreditWatch update follows GM's announcement of third-quarter results. Third-quarter earnings improved sharply over those of 2005, with an automotive net loss of US$116 million, before special items of negative US$54 million, compared to a loss of US$1.6 billion in last year's third quarter. "The earnings improvement was driven by expense savings, but did not translate into greatly improved cash flow," said Standard & Poor's credit analyst Robert Schulz. In North America, cost savings of about US$1.8 billion, most of which were non-cash, sharply improved GM's third-quarter net loss to US$400 million from a US$1.7 billion loss in 2005 -- excluding US$7 million of special items in 2006. The North American results were boosted by lower pension and OPEB expenses of US$1 billion and by US$800 million in benefits from attrition and capacity reductions, partially offset by unfavorable mix and volume effects of US$400 million. Higher raw material and freight costs wiped out positive contributions from recently introduced new models, while vehicles from the previous model year faced a more challenging sales environment. Cash flow from automotive operations is expected to be better for 2006; for the first nine months, automotive operating cash flow after cash restructuring costs was a negative US$5.9 billion versus a negative US$7.8 billion in the first nine months of 2005. But in the third quarter of 2006, cash flow after restructuring expenditures was a negative US$5 billion versus a negative US$2.5 billion in the third quarter of 2005. Looking ahead to the fourth quarter, GM's vehicle production, a driver of cash flow, is expected to be at least 13% lower in North America than it was in 2005. GM's ratings are likely to remain on CreditWatch until S&P is able to ascertain the financial effect on GM of its exposure to bankrupt former unit Delphi Corp., and until the sale of a 51% stake in GMAC LLC (formerly General Motors Acceptance Corp.) to an investor consortium is at or near completion. GM narrowed its own estimate of its potential exposure to Delphi benefits guarantee to US$6 billion to US$7.5 billion and indicated that payments by GM to reimburse Delphi for certain labor expenses are not expected to exceed US$400 million in 2007 and would average less than US$100 million thereafter. These amounts would appear to be manageable within GM's liquidity position. INDIAN OIL: Eyes Stake in Indonesia's Tuban Petrochemical --------------------------------------------------------- Indian Oil Corporation plans to acquire a stake in Indonesia's PT Tuban Petrochemical Industries, The Financial Express reports. In that regard, Indian Oil will put up a detailed proposal for approval in its next board meeting, the financial daily says, citing a statement made by senior Indian Oil officials. According to the report, Tuban Petro's shareholders include the Indonesian Government, who holds 70%, and: -- PT Pertamina, -- Itochu Corporation, -- Tuban Petrochemicals Pte Ltd, and -- Sojitz Corporation. "[Indian Oil] is presently fast expanding its presence in petrochemicals industry and the proposal jives well with IOC's globalization plan," the report quoted an Indian Oil senior official as saying. Tuban Petrochem owns a giant US$3-billion petrochemical complex that has a combined capacity of 3.6 million tonne per annum of petrochemicals products. Indonesia is the largest petroleum market in the ASEAN region, currently estimated at 50 mtpa of petroleum products, the financial daily notes. To pursue upcoming opportunities in the Indonesian petroleum retail sector, the daily says, Indian Oil already has in place its board approval for setting up a wholly owned subsidiary in Indonesia. About Indian Oil Corporation Headquartered in New Delhi, Indian Oil Corporation Limited -- http://www.iocl.com/-- is engaged in the sale of petroleum products. Other businesses comprise the sale of imported crude oil, sale of gas, petrochemicals and oil and gas exploration activities jointly undertaken in the form of unincorporated joint ventures. The company's premium fuels include XTRAPREMIUM petrol and XTRAMILE diesel. AutoGas is Indian Oil's auto liquid petroleum gas brand and sells SERVO lubricants in 10 countries. The aviation fuel supply business caters to the aviation fuel requirements of the defense services, national carriers, scheduled private airlines and international airlines. The Digboi Refinery of the Assam Oil Division processes crude oil and its marketing network comprises 366 retail outlets, 399 kerosene/light diesel oil dealerships, and 271 Indane distributors. It owns and operates 18 refineries with a combined refining capacity of 54.20 million tones per annum (1.1 million barrels per day). * * * The Troubled Company Reporter - Asia Pacific reported on April 21, 2006, that Standard & Poor's Ratings Services revised the outlook on Indian Oil to positive from stable. At the same time, S&P affirmed the 'BB+' issuer credit rating on the Company. The outlook revision follows the revision in the outlook on the sovereign credit ratings on India (BB+/Positive/B) on April 19, 2006. Additionally, Moody's Investors Service gave Indian Oil a Ba1 long-term corporate family rating and a Ba2 issuer rating on March 3, 2005. JAMMU & KASHMIR: Second Quarter FY2006-07 Net Profit Up 54% ----------------------------------------------------------- The Jammu & Kashmir Bank Limited recorded a net profit of INR84.02 crore in the second quarter of 2006-07 (quarter ended September 30, 2006), an increase of 54% from the INR54.97 crore net profit in the corresponding quarter of 2005-06. The bank's operating profit is up by 34% at INR142.88 crore for Q2 of the current fiscal year, as compared with INR106.79 crore in Q2 of 2005-06. The total business turnover increased to INR34,412 crore in the first two quarters of 2006-07, an increase of 9.32% over the corresponding period of the previous fiscal year. The total deposits stood at INR20,392 crore, up by 4% and advances at INR14,020 crore up by 18% at the end of first two quarters compared with the corresponding period of the previous fiscal. The Net Interest Margins are up 3.50% from 2.68% in quarter ended March 2006 and 2.93% in quarter ended June 2006 owed to better liability management and compositional shifts in advances and investment portfolios. Taking a step forward towards stabilizing and strengthening of the bank's business, the provisioning levels for bad and doubtful debts in the first half of the current fiscal increased to INR35 crore, an increase of 75% from the corresponding period of the previous fiscal in order to increase the coverage ratio. Having addressed quality issues of assets, the NPA levels now stand below 1% -- one of the lowest in the industry. The NPA Coverage ratio is up at 72.10%, up from 54.63% in Q2 of 2005-06, aimed at international standards of 80% over the next one-year period. The Capital Adequacy Ratio stands at 13.14% comfortable above the mandatory level of 9%. The tier I CAR is 12.73% and tier II is 0.41% for the quarter ended September 30, 2006. This clearly stands at a comfortable level as per Basel II requirements and allows the Bank to meet its strategic and business growth objectives without any constraints on capital. Appetite of foreign investors in the bank's stock continues to grow. In the light of this, the bank is awaiting RBI's approval to hike the cap of FII stake from 33% to 40%. Some major deals have taken place on the bank's stock over the bourses ranging buyers from vanilla to hedge funds. The current quarter also saw the launch of the banks new brand identity, the design of which will hit the shop floors over the next three months to give the bank a modern look, vibrancy and take its services to the new high. The management has expressed satisfaction at the results Q2, 2006-07, calling it the translation of strategic focus within J&K into profitability. Further, if the last six quarters are taken into consideration, a significant turnaround is seen in several areas. The CASA Ratio is up at 41% from 32% in the last quarter of 2004-05, yield on advances is up from 8.48% to 9.60% for the same period. Better balance sheet and capital management leading to performance have generated value for stakeholders. The Book Value has increased from INR343.54/share to INR401.39/share; annualized EPS has almost doubled from INR37.84 to INR69.33 for the last six quarters. Financial Results Highlights (in INR Crore) Q2 2006-2007 Q2 2005-2006 % Change ------------ ------------ -------- Net profit 84.02 54.97 53% Net Total Income 233.70 190.27 23% Net interest income 193.31 163.56 18% Fee based income 40.39 26.71 51% Loans outstanding 14,020.00 11,891.00 18% Deposits 20,392.00 19,588.00 4% Net NPA Ratio 0.75% 1.22% NPA Coverage Ratio 72.10% 54.63% Return on Assets annualized 1.44% 0.99% Return on Equity (%) annualized 17.65% 12.63% About Jammu & Kashmir Bank India-based Jammu & Kashmir Bank Limited -- http://www.jammuandkashmirbank.com/-- is a private sector bank that provides a range of traditional commercial banking products and services to corporations and middle market businesses. The key commercial banking products and services to corporate customers include credit products and structured finance, cash management, trade and commodity finance, and investment banking, local debt syndication and securitization. The bank, through its operations, is focusing on banking, insurance and asset management. Fitch Ratings gave Jammu & Kashmir Bank a 'D' individual rating on June 1, 2005. JUNIPER NETWORKS: Powers Beijing's First 40G Link ------------------------------------------------- Juniper Networks, Inc., disclosed that the China Education and Research Network Information Center has deployed the T-series core routing platform in its next generation China Education and Research Network (CERNET2). CERNET2 is part of the larger nationwide China Next Generation Internet infrastructure and connects over 20 cities and 200 universities across mainland China. The network leverages the T-series platform for unmatched reliability, scalability and performance required to support one of the world's largest, purely Internet Protocol version 6 networks, including the first long-haul 40 Gigabits per second link between major Chinese cities Beijing and Tianjin. "CERNET2, and especially its new 40 Gbps link, represents one of the key segments of the CNGI network and is one of the largest deployments of IPv6 to date," said Professor Jianping Wu, director of CERNIC. "CERNET2 is not dual-stack and since it is critical that this pure IPv6 network perform with the highest levels of performance, security and reliability, we chose to deploy Juniper's T640. It is the industry's most proven multi- terabit scale platform, outperforming all other products in performance and reliability testing, and providing a very rich IPv6 feature set." In addition to the 40 Gbps link, CERNET2 pioneers the use of many other networked applications in China, including remote education, digital library facilities, grid computing, IPv6 multicasting and IP video at scale. The network is also China's test bed for the development of new Internet technologies, such as the Authentic IPv6 specification which has been submitted by CERNIC and is currently under review by the Internet Engineering Task Force. The Juniper Networks T-series has been shipping since April 2002, and is the industry's most proven core routing platform, with over 2000 units deployed in customer networks worldwide. The T-series leverages the feature rich, highly stable and resilient JUNOS operating system, which has been delivering production ready IPv6 capabilities for over 3 years. In addition to extensive fault-tolerance, the T-series has the ability to leverage Juniper Networks' multi-chassis TX Matrix technology, allowing service providers to scale to multi-terabit rates without the risks associated with new and unproven technologies. "The T-series platform has now been selected for several of the most important and technologically advanced communications projects in China, demonstrating the country's demand for secure and assured networking solutions," said Eric Yu, vice president of Greater China for Juniper Networks. "IPv6 is perfectly aligned with Juniper's vision of creating agile, open and customizable next-generation networks, and it's exciting to see organizations like CERNIC take the lead in the deployment of these technologies." About Juniper Networks Juniper Networks Inc. -- http://www.juniper.net/-- enables secure and assured communications over a single IP network. The company's IP platforms enable customers to support many different services and applications at scale. The company has sales offices in India, Australia, China, Hong Kong, Japan, Korea, Malaysia, New Zealand, Singapore, Taiwan, Thailand and Vietnam. * * * Standard & Poor's Rating Services placed its ratings on Juniper Networks, including its 'BB' long-term and 'B-1' short-term corporate credit ratings, on CreditWatch with negative implications. KARNATAKA BANK: Sept. 2006 Quarter Net Profit Up 43% ---------------------------------------------------- For the quarter ended September 30, 2006, Karnataka Bank Ltd recorded a net profit of INR596.1 million, a 43% increase from the INR418.1-million net profit reported by the company for the corresponding quarter last year. The increase in profit could be attributable mostly to the rise in revenues for the latest quarter. Operating income for the September 2006 quarter went up by 23% to INR2.95 billion, from the September 2005 quarter's INR2.4 billion. The Bank also earned more during the September 2006 quarter from interest on advances -- INR1.9 billion from INR4.4 billion for the corresponding period last year. Total income for the third quarter of 2006 was INR3.44 billion, 21% more than the INR2.85 billion in the third quarter last year. A full-text copy of Karnataka Bank's unaudited financial results for the three months and half-year periods ended September 30, 2006, is available for free at http://ResearchArchives.com/t/s?1449 About Karnataka Bank Headquartered in Mangalore, India, Karnataka Bank Ltd -- http://karnatakabank.com/ktk/Index.jsp-- provides products and services for business and personal purposes that include borrowing facilities, deposits, providing optimum returns on surplus funds or helping with overseas transactions. The bank has two business segments: Treasury and Other Banking Operations. Treasury Operations mainly comprise of surplus statutory liquidity ratio and non-SLR investments. Other Banking Operations mainly consist of advance portfolio of the bank and SLR securities to the extent of SLR requirements. The bank provides Working Capital Finance, Term Loans and Infrastructure Finance. The Business Finance Products offers both fund-based and non-fund-based products. The bank has diversified into the marketing of life insurance products of MetLife India Insurance Co. Pvt. Ltd. The Bank has entered into a memorandum of understanding with Bajaj Allianz General Insurance Co. Ltd. for distribution of its general insurance products through its branches. Fitch Ratings gave Karnataka Bank a support rating of 5. KOTAK MAHINDRA: Consolidated Profit Up 13% YOY in Q2/FY2006-07 -------------------------------------------------------------- The Board of Directors of Kotak Mahindra Bank took on record the unaudited consolidated and stand-alone results for the second quarter of fiscal year 2006-2007, at a board meeting held on October 19, 2006, in Mumbai. Consolidated profit after tax for the quarter ended Sept. 30, 2006, was up 13% to INR93.90 crore compared with the figure reported for the same period in the previous fiscal year. Consolidated PAT for the first half of FY 2006-2007 grew by 53% to INR198.33 crore from INR129.84 crore a year ago. Consolidated total income for the FY 2006-2007 second quarter was up 45% to INR903.49 crore as compared with the INR619.90 crore in the same period last year. Consolidated advances were up 48% to INR12,067 crore as on September 30, 2006 (INR8,133 crore as on September 30, 2005) with retail loans comprising 84% of the portfolio. Consolidated NIMs were 5.1% in the current report period. Announcing the results, Uday Kotak, Executive Vice Chairman & Managing Director, Kotak Mahindra Bank said, "This quarter has seen robust growth in lending activities, as we continue to build out and invest in our branch banking network and the life insurance business." Consolidated net NPAs (excluding stressed asset portfolio) as on September 30, 2006, were 0.20% of consolidated net advances (0.32% as on September 30, 2005). Total consolidated net NPAs were 0.44% as on September 30, 2006. Consolidated book value per share as on September 30, 2006, was INR90 (INR52 as on September 30, 2005). Unaudited Stand-Alone Results Profit after tax of Kotak Mahindra Bank on a stand-alone basis for the FY 2006-2007 second quarter was up 12% year-on-year to INR34.80 crore. FY 2005-2006 second quarter's PAT included an amount of INR11.15 crore received as royalty by the Bank from its subsidiary, which had been discontinued from October 4, 2005. PAT for the FY 2006-2007 second quarter is also after considering additional provision of INR4.27 crore on standard assets and a provision of INR2.51 crore on account of liability for employee benefits in accordance with AS 15. Net interest income of the Bank for the FY 2006-2007 second quarter was INR141.28 crore, up 64% from INR86.15 crore in the same period of the previous fiscal year. The Bank had 78 full-fledged branches (44 branches as on September 30, 2005) across 49 towns and cities as on Sept. 30, 2006. The Bank proposes to have around 110 branches by March 2007 across 65 towns and cities. As on September 30, 2006, the deposits of the Bank were INR8,194 crore, up 49% as compared with INR5,498 crore as on Sept. 30, 2005. CASA deposits comprised 21% of total deposits. The Bank had around 255,000 deposit accounts as on September 30, 2006 (113,000 deposit accounts as on September 30, 2005). Advances of the Bank grew by 79% YOY to INR8,386 crore as on September 30, 2006. Capital adequacy ratio of the Bank as on September 30, 2006, was 12.38% (11.16% as on September 30, 2005). Tier 1 ratio was 9.69%. Business Highlights: * Kotak Securities topped the Asiamoney 2006 Brokers Poll as the Best Local Broker. It was also awarded the Best Broker in India by Finance Asia for 2006. * Kotak Mahindra Asset Management Company was adjudged the best Mutual Fund House in NDTV Business Leadership Award 2006. * Total assets managed/ advised by the Group as on Sept. 30, 2006, were INR21,050 crore (INR13,070 crore as on Sept. 30, 2005). * Kotak Life Insurance total premium income grew 165% YOY to INR167.85 crore in Q2FY07. * The group employee strength was around 8,800 as on September 30, 2006 (around 5,000 employees as on Sept. 30, 2005). A full-text copy of the Bank's unaudited financial results for the quarter and half year ended September 2006 is available for free at http://ResearchArchives.com/t/s?1441 About Kotak Mahindra Headquartered in Mumbai, India, Kotak Mahindra Bank Limited -- http://www.kotak.com/-- is a commercial bank. The Commercial Banking segment includes money market, forex market, derivatives and investments; wholesale borrowings and lendings and services; retail borrowings covering savings and current accounts and banking branch network and services, and commercial vehicle finance, personal loans, home loans, agriculture finance and other loans/services. Corporate Centre segment includes strategic investment and activities. Car Finance segment offers car financing. Broking segment includes brokerage related to secondary market transactions, services rendered in connection with primary market subscription mobilization. Investment Banking segment includes advisory and transactional services providing financial advisory services. Trading/Principal Investments segment includes dealing in debt, equity, money market and loans/deposits. Insurance segment offers life insurance. Others segment includes forex broking, asset management services and others. Fitch Ratings assigned a '5' Support rating to Kotak Mahindra Bank. KOTAK MAHINDRA: Acquires 51% Stake in 4 Indirect Subsidiaries ------------------------------------------------------------- Kotak Mahindra Bank Ltd informed the Bombay Stock Exchange that that it has acquired 51% of the paid up share capital of four of its indirect subsidiaries: 1. Kotak Mahindra (International) Ltd; 2. Kotak Mahindra (UK) Ltd; 3. Kotak Mahindra Inc; and 4. Global Investment Opportunities Fund Ltd. With the majority stake, the four subsidiaries are converted from indirect to direct subsidiaries of the Bank. About Kotak Mahindra Headquartered in Mumbai, India, Kotak Mahindra Bank Limited -- http://www.kotak.com/-- is a commercial bank. The Commercial Banking segment includes money market, forex market, derivatives and investments; wholesale borrowings and lendings and services; retail borrowings covering savings and current accounts and banking branch network and services, and commercial vehicle finance, personal loans, home loans, agriculture finance and other loans/services. Corporate Centre segment includes strategic investment and activities. Car Finance segment offers car financing. Broking segment includes brokerage related to secondary market transactions, services rendered in connection with primary market subscription mobilization. Investment Banking segment includes advisory and transactional services providing financial advisory services. Trading/Principal Investments segment includes dealing in debt, equity, money market and loans/deposits. Insurance segment offers life insurance. Others segment includes forex broking, asset management services and others. Fitch Ratings assigned a '5' Support rating to Kotak Mahindra Bank. KOTAK MAHINDRA: Grants Stock Options to Employees ------------------------------------------------- Kotak Mahindra Bank Ltd granted a total number of 29,30,000 options to its employees and the employees of its subsidiary companies on October 29, 2006, the Bank said in a filing with the Bombay Stock Exchange. The grant of options is in accordance with the provisions of the Securities and Exchange board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme), Guidelines, 1999. The exercise period for the options will be from July 31, 2010, to December 31, 2010. About Kotak Mahindra Headquartered in Mumbai, India, Kotak Mahindra Bank Limited -- http://www.kotak.com/-- is a commercial bank. The Commercial Banking segment includes money market, forex market, derivatives and investments; wholesale borrowings and lendings and services; retail borrowings covering savings and current accounts and banking branch network and services, and commercial vehicle finance, personal loans, home loans, agriculture finance and other loans/services. Corporate Centre segment includes strategic investment and activities. Car Finance segment offers car financing. Broking segment includes brokerage related to secondary market transactions, services rendered in connection with primary market subscription mobilization. Investment Banking segment includes advisory and transactional services providing financial advisory services. Trading/Principal Investments segment includes dealing in debt, equity, money market and loans/deposits. Insurance segment offers life insurance. Others segment includes forex broking, asset management services and others. Fitch Ratings assigned a '5' Support rating to Kotak Mahindra Bank. LAKSHMI VILAS: Reports Business Performance for Q2/FY2006-07 ----------------------------------------------------------- Lakshmi Vilas Bank's net profit for the half-year period ended September 2006 stood at INR16.40 crore registering a growth of over 159.90% against INR6.31 crore in the corresponding period of last financial year. The net profit earned in the second quarter ended September 30, 2006, is INR3.83 crore, registering a growth of over 90% against INR2.01 crore in the corresponding quarter of the previous year. The total income of the Bank for the 2nd Quarter ended September 2006 has grown at 24.73% to INR117.33 crore from INR94.06 crore in the corresponding period of the previous year. For the half year ended September 2006 the total income earned is INR224.56 crore against INR174.95 crore in the corresponding period in the previous half year registering 28.4% growth. The interest on advances has grown from INR55.38 crore to INR73.38 crore in the 2nd Quarter of the current year, posting a growth of 32.50%. The other income of the Bank up to September 2006 has touched INR24.76 crore as against INR18.02 crore for the corresponding period of the previous year again registering a growth of 37.40%. The Earnings Per Share for the half year ended September 2006 stands at INR8.39 (not annualized). Deposits level rose from INR3,646.29 crore to INR4,844.11 crore, registering a 32.85% growth and Credit portfolio expanded from INR2,325.86 crore to INR3463.15 crore, a rise of 48.90% over the corresponding previous period. This growth rate is one of the highest in the recent history of this eight-decades old Bank. Headquartered in Tamil Nadu, India, Lakshmi Vilas Bank -- http://www.lvbank.com/index.aspx-- was founded in 1926 mainly to cater to the financial needs of varied customer segments. The bank was incorporated on November 03, 1926 under the Indian Companies Act, 1913 and obtained the certificate to commence business on November 10, 1926. The Bank obtained its license from RBI in June 1958, and in August 1958, it became a Scheduled Commercial Bank. LVB has been focusing on retail banking, corporate banking and bankassurance. * * * On October 26, 2006, the Troubled Company Reporter - Asia Pacific reported that Fitch Ratings gave the Bank a D/E Individual Rating. ================= I N D O N E S I A ================= ANEKA TAMBANG: Nine-Month Net Profit Rises to IDR808.84 Bil. YoY ---------------------------------------------------------------- PT Aneka Tambang Tbk reported these results for the nine-month period ended September 30, 2006: (in IDR billions) 2006 2005 ---- ---- Revenue 3,401.26 2,216.25 Operating profit 1,316.94 844.44 Net Profit 808.84 711.09 Earning per share (rph) 423.99 372.75 PT Aneka Tambang Tbk -- http://www.antam.com/-- mines, processes, develops, and explores natural deposits. The company operates six mines. They are located in Riau (bauxite), Sulawesi and Maluku (nickel), Central Java (iron sand), and West Java (gold). The company also operates a precious metal refinery and a geology unit in Jakarta. * * * As the Troubled Company Reporter - Asia Pacific reported on December 19, 2005, Moody's Investors Service changed the outlook for Aneka Tambang's local currency B1 corporate family rating to positive from stable. The B2 foreign currency bond rating remains unchanged with a positive outlook, which is in line with the positive outlook for Indonesia's sovereign rating. Standard & Poor's Ratings Services gave Aneka Tambang 'B' long- term local and foreign issuer credit ratings, effective Aug. 26, 2003. BANK CENTRAL ASIA: Fitch Affirms All Ratings -------------------------------------------- Fitch Ratings has affirmed all the ratings of Bank Central Asia as follows: * Long-term foreign currency Issuer Default rating: 'BB-' * Short-term foreign currency rating: 'B' * National Long-term rating: 'AA (idn)' * Individual: 'C/D' and * Support: '4'. The Outlook for all the ratings is Stable. BCA's ratings reflect its strong financial position including generally good asset quality and above average capitalisation, with its steady earnings profile reflecting its strengths in transactional banking and deposit taking in Indonesia. Pre-tax ROA improved to 3.8% in H106 from 3.4% in 2005 and 3.2% in 2004 partly reflecting the enhancement to interest margin arising from its ability to garner a high portion of low cost deposits (demand/savings accounts at c.69% of total deposits) and a larger exposure to floating-rate earning assets (at c.70% of total assets). Rapid loan growth over 2003-2005 exacted a slight toll on NPL levels which rose to 1.6% of total loans at end-H106 with Special Mention Loans at a higher 3.6% of total loans. However, both ratios were well below peer averages of 9%-10% while reserves cover was much higher than peers at 1.8x NPLs. Capital ratios were generally stable over 2004-2005 with total CAR at 23.8% (Tier 1: 21.6%) and stress testing suggesting that the risk of capital impairment is low. About Bank Central Asia Headquartered in Jakarta, Indonesia, PT Bank Central Asia Tbk -- http://www.klikbca.com/-- offers individual and business products and services. The bank's individual services consist of savings accounts, home loans and car loans, remittance, collection and safe deposit facilities. The bank's business services consist of working capital loans, investment loans and bank guarantee for small and medium-sized enterprises. In addition, it provides export import facilities such as letters of credit, negotiation and discounting. The bank's subsidiaries include PT BCA Finance, BCA Finance Limited and BCA Remittance Limited. It has 772 branches in Indonesia, Singapore and New York, 42,958 EDCs and operates 4,425 ATMs. The bank serves 6.6 million accounts throughout Indonesia. BANK NIAGA: Fitch Affirms All Bank Niaga Ratings ------------------------------------------------ Fitch Ratings has affirmed all the ratings of PT Bank Niaga Tbk as follows: * Long-term foreign currency issuer default rating 'BB-' * Individual 'D' and * Support '4'. The Outlook for all the ratings is Stable. Niaga's ratings reflect its reasonably strong profitability, with a still high level of impaired loans mitigated by its improved capital position and its parentage in Bumiputra- Commerce Holdings Berhad, the second-largest banking group in Malaysia. While the rapid growth in its loans have led to concerns about its loan quality, its NPL ratio (5.2%) appears to have stabilized since end-2005 after the largely one-off impact last year from the compliance with stricter new regulations on loan classification. Its quite high level of special mention loans (8.7% of loans) and the low reserves cover (0.4x NPLs at H106) suggest that Niaga's loan quality still requires close monitoring although its latest 3Q06 financials showed a reduction in NPL ratio (and higher reserves cover) mainly from the sale of one large, corporate NPL. New capital infusion from a USD100 million subordinated debt and IDR1.3 trillion rights issue in 2005, caused its capital position to strengthen to 12.5% Tier 1and 17.4% Total CAR (2004: 7.7%, 10.3%) at end-H106. Stress testing based on harsher write-offs on its NPLs (as at end-H106) suggest that additional provisions of IDR1 trillion may still be required, although under more extreme conditions and recoverable from about two years of earnings. About Bank Niaga Headquartered in Jakarta, Indonesia, PT Bank Niaga Tbk -- http://www.bankniaga.com-- has a license to operate as a commercial bank, a foreign exchange bank and a bank engaged in activities based on Syariah principles. The bank's products and services include: Funding, Consumer Financing, Business Financing, Credit and Debit Cards, Private Banking, Preferred Circle, e-Banking, Corporate Trust, Bancassurance and Treasury Indicator. The bank's subsidiaries consist of: PT Niaga Aset Manajemen and PT Saseka Gelora Finance. As of January 31, 2006, the Bank operates 54 domestic branches, 145 domestic supporting branches, 22 domestic payment points, seven Syariah units and one overseas branch. BANK RAKYAT: Fitch Affirms BB- Long-Term For. Currency Rating ------------------------------------------------------------- Fitch Ratings has affirmed all the ratings of Bank Rakyat Indonesia as follows: * Long-term foreign currency issuer default rating: 'BB-' * Short-term foreign currency rating: 'B' * National Long-term rating: 'AA+(idn)', * Individual: 'C/D' and * Support '4'. The Outlook for all the ratings is Stable. Bank Rakyat's ratings reflect its strong underlying profitability and above average asset quality, which stem from its largely unchallenged franchise in rural microcredits. Although the higher interest rates in Indonesia since H205 led to some weakening in loan margin and credit quality at BRI, net interest margin remained very strong at 10.7% (which is still among the best in the industry) with ROA at 3.1% in H106. However, rapid loan growth and the more challenging operating conditions in Indonesia (which affected some of its SME customers) caused its NPL ratio to rise to 5.1% in H106 albeit somewhat mitigated by an adequate reserves cover of 1.4x. Capital ratios improved (tier 1: 17.2%, total: 20.3%) but were largely due to the application of reduced regulatory risk weights for housing, micro/ SME and civil servant loans that became effective from end-March 2006. About Bank Rakyat Indonesia Headquartered in Jakarta, Indonesia, PT Bank Rakyat Indonesia (Persero) Tbk's -- http://www.bri.co.id/-- clients services comprise Savings, Credits and Syariah. In addition, the bank divides its financial and business services into three groups: Business Services, consisting of bank guarantees, bank clearance, automatic teller machines and safe deposit boxes; Financial Services, consisting of bill payments, CEPEBRI, INKASO, deposit acceptance, online transactions and transfers, and Other Services, consisting of tax and fine payments, donations, Western Union and zakat contributions. During the year ended December 31, 2005, the bank had one branch office in Cayman Islands and two representative offices in New York and Hong Kong, respectively. EXCELCOMINDO PRATAMA: Net Profit for 9-Month Period Rises 57% ------------------------------------------------------------- PT Excelcomindo Pratama Tbk posted a 57% increase in its net profit for the nine months ended September 30, 2006, boosted by strong subscriber growth, Reuters reports. Excelcom, controlled by Telekom Malaysia Bhd recorded a net profit of IDR712 billion (US$78.14 million) for the first nine months of 2006, compared to IDR453 billion in the same period last year. "The growth was supported by an increase in our subscriber base by 43 percent to 8.4 million at the end of the third quarter this year," Reuters cites Hasnul Suhaimi, Excelcom's president director, as saying in a statement. According to the report, the company boosted its capital spending to IDR988 billion over the 2006 nine-month period from IDR892 billion to support higher subscriber growth. About Excelcomindo Headquartered in Jakarta, Indonesia, PT Excelcomindo Pratama Tbk -- http://www.xl.co.id/-- provides wireless telecommunications services, leased lines and corporate services, which include Internet Service Provider (ISP) and Voice over Internet Protocol (VoIP) services. In addition, Excelcomindoprovides voice, data and other value-added cellular telecommunications services. Its product lines include jempol, bebas and xplor. The company also provides services that allow its customers to purchase electronic voucher reloads at all of its centers and outlets, automated teller machines of various major banks and through its call centers. Excelcomindo starter packs and voucher reloads are also sold by independent retailers. Excelcomindo is Indonesia's third-largest cellular operator; as at the first quarter of 2006 the company had 8.2 million subscribers representing total market share of around 15% but with cellular revenue market share of approximately 10%. TM and its parent Khazanah together hold 73.7% in XL. * * * A May 23, 2006 report of the Troubled Company Reporter - Asia Pacific stated that Moody's Investors Service has upgraded the foreign currency senior unsecured bond rating of Excelcomindo Finance Company B.V. to Ba3 from B1. The outlook is stable. At the same time, Moody's has affirmed PT Excelcomindo Pratama's Ba2 local currency corporate family rating. The rating outlook remains stable. A subsequent TCR-AP report says that Fitch Ratings, on June 5, 2006, upgraded PT Excelcomindo Pratama's Long-term foreign currency and local currency Issuer Default Ratings to 'BB-' from 'B+'. The outlook on the ratings is stable. FAJAR SURYA: Fitch Assigns Final 'B+' Rating to Secured Notes ------------------------------------------------------------- Fitch Ratings has assigned a final rating of 'B+' and a Recovery Rating of 'RR4' to the US$100 million guaranteed secured notes due 2011 issued by Fajar Paper Finance B.V. and guaranteed by PT Fajar Surya Wisesa. The rating action follows the completion of the notes issue and receipt of documents conforming to information previously received. Fajar is among the largest industrial paper manufacturers in Indonesia with a focused range of products comprising liner board, corrugated medium paper and coated duplex board. As at end-2005, it had a production capacity of 500,000 TPA, and with the commissioning of PM7 its production capacity was increased to 700,000 TPA. Average capacity utilization in the past five years was 90.0%. The company's net sales in 2005 amounted to IDR1.5 trillion (US$153 million), while EBITDA was IDR245.9 billion (US$25 million). Fajar's total assets stood at IDR3.5 trillion (US$351 million) as at end-2005. Headquartered in Jakarta, Indonesia, PT Fajar Surya Wisesa Tbk manufactures industrial paper such as container boards, boxboard, and coated paper for use in the packaging of consumer and industrial goods. The company's products are sold locally and also exported to other Asian countries, Australia, and the Middle East. HM SAMPOERNA: Nine-Month Net Profit Rises 24.8% ----------------------------------------------- PT Handaya Mandala Sampoerna Tbk reported on October 31, 2006, a 24.8% rise in its net profit for the nine-month period ended September 30, amid healthy sales growth, Reuters says. Sampoerna, controlled by Philip Morris International and considered as Indonesia's second largest listed tobacco company, posted a IDR3.0-trillion (US$329.3 million) net profit in the nine months ended September 30, 2006, compared with the IDR2.41 trillion posted in the same period a year ago. According to the report, Sampoerna, with a market capitalization of around US$4 billion, saw its sales revenue climb 26% to IDR22.75 trillion in the January-September period. Moreover, Sampoerna's operating margins declined slightly to 18.5% from 19.3% due to higher raw material costs and operating expenses, Reuters notes. About HM Sampoerna Surabaya, East Java-based PT Hanjaya Mandala Sampoerna Tbk -- http://www.sampoerna.com/-- manufactures hand rolled and machine-rolled clove-blended cigarettes. The company distributes its products in the domestic and international market. Through its subsidiaries, the company also develops properties. Standard and Poors gave HM Sampoerna's Long Term Foreign Issuer Credit a 'BB+' rating effective on November 3, 2005. NORTEL NETWORKS: Doubles Network Capacity Through Wireless Tech. ---------------------------------------------------------------- Nortel Networks has conducted the industry's first wireless transmission using Uplink Collaborative MIMO to demonstrate the ability for operators to serve up to double the number of mobile broadband subscribers supported in a cell site as current wireless technologies allow. For 4G wireless operators, MIMO enables the potential to substantially increase their subscription revenue with the same capital investment. Developed by Nortel Networks, Collaborative MIMO is part of the WiMAX industry standard and is also being proposed for 3GPP WCDMA Long-Term Evolution (LTE) and 3GPP2 CDMA EV-DO Rev-C standards. John Hoadley, chief technology officer of Mobility and Converged Core Networks at Nortel Networks, stated, "Uplink Collaborative MIMO creates a technological disruption that offers revolutionary improvement in wireless network capacity and provides a clear path to 4G Mobile Broadband -- of which WiMAX is the first technology." "Nortel's latest demonstration confirms that subscriber count and capacity gains of OFDM-MIMO can be delivered even where individual devices are not MIMO-enabled with multiple transmit antennas. Collaborative MIMO provides the greater uplink capacity and spectral efficiency needed by operators to deliver a full mobile broadband experience which will include Internet, video and VoIP cost-effectively across a wide range of devices," Mr. Hoadley said. The demonstration at Nortel Networks' Advanced Wireless Lab in Ottawa, used Multiple-Input, Multiple-Output (MIMO), an emerging wireless antenna technology that will serve as the foundation of Nortel Networks' 4G Mobile Broadband solutions. For the demonstration, Nortel Networks used MIMO-enabled multiple antennas at the cell site and on 4G devices together with orthogonal frequency division multiplexing transmission technology. Previous Nortel Networks and industry research has shown that a combination of these two technologies offers the ability to deliver the highest network bandwidth and greatest spectral efficiency capabilities at the lowest cost. With OFDM, a single channel within a spectrum band is divided into multiple, smaller sub-carriers that transmit information simultaneously without interference. MIMO allows multiple data streams to be transmitted at the same time and on the same sub- carriers through interference-free MIMO spatial channels. Due to unique spatial channels that result for each antenna path, interference between data streams is reduced. As a result, OFDM-MIMO substantially increases the bandwidth and spectral efficiency. Uplink Collaborative MIMO is a further enhancement that enables the use of the same channel sub-carriers by multiple devices and subscribers -- effectively allowing them to share the same sub- carrier without interference. Without Collaborative MIMO, the traffic being carried on a single sub-carrier would not be maximized across multiple subscribers. The result would be that the traffic would be severely limited, preventing users from having a true broadband experience and limiting VoIP capacity such that conversations would be unintelligible. In March 2005, Nortel was the first company to demonstrate OFDM- MIMO at 37 Mbps peak data rates in 5 MHz of spectrum in the downlink, with the transfer of a 128 MB file in just 30 seconds. Over the last eight years, Nortel Networks has been making progressive investments in OFDM-MIMO technology and owns dozens of critical patents in these areas. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries including Indonesia, Australia, China, Hong Kong, India, Philippines, Singapore, Taiwan and Thailand. * * * Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. Additionally, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed US$2billion senior note issue; downgraded the US$200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed US$2 billion notes. The outlook is stable. NORTEL NETWORKS: Nortel Government Bags Elite Improvement Rating ---------------------------------------------------------------- Nortel Government Solutions, a U.S. company wholly owned by Nortel Networks, has attained an elite process improvement rating based on assessment of its performance in managing on- time delivery of high-quality services and products to U.S. Federal Government agencies. The Information Systems Solutions Sector of Nortel Government Solutions has achieved a Capability Maturity Model Integration Maturity Level 5 rating from a team of independent evaluators certified by the Carnegie Mellon Software Engineering Institute. Nortel Government achieved this rating, based on evaluation of software and systems engineering processes for mission-critical systems, in October. Only seven U.S. companies accomplished this in the 18-month period ending in June 2006. Empirical data from Carnegie Mellon indicates that organizations realize improved schedule, cost and quality performance, higher customer satisfaction, and higher return on investment as they achieve higher levels of maturity. Satya Akula, the president and general manager of Information Systems Solution Sector at Nortel Government Solutions, stated, "Key to this achievement was the predictive quality model we developed from three years of process and product measurement. Our ability to monitor and predict performance throughout the development lifecycle helps us to consistently meet or exceed customer expectations." Chuck Saffell, chief executive officer of Nortel Government Solutions, said, "Our employees have become expert at monitoring and managing project performance, applying corrective actions when necessary, and recommending process improvements. This rating confirms our commitment to high quality and high performance, and places Nortel Government Solutions among the elite U.S. companies serving the Federal Government market." CMMI is a process improvement approach that provides organizations with guidelines to establish effective project management and engineering processes. CMMI helps set process improvement goals and priorities and integrate traditionally separate organizational practices. It also provides a quality process framework and a point of reference for achieving best- in-class performance. About Nortel Government Solutions Based in Fairfax, Virginia, Nortel Government Solutions -- http://www.nortelgov.com/-- is a network-centric integrator, providing the services expertise, mission-critical systems and secure communications that empower government to ensure the security, livelihood, and well being of its citizens. The company is a provider for solutions designed to improve workforce productivity, reduce operating costs, and streamline inter-agency communications. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries including Indonesia, Australia, China, Hong Kong, India, Philippines, Singapore, Taiwan and Thailand. * * * Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. Additionally, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed US$2billion senior note issue; downgraded the US$200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed US$2 billion notes. The outlook is stable. TELKOM INDONESIA: Nine-Month Net Profit Ups by 60% YoY ------------------------------------------------------ PT Telekomunikasi Indonesia Tbk reported a 60% rise in its net profit for the nine-month period ended September 30, 2006, on the back of a strong mobile business, Reuters relates. According to Reuters, Telkom, the biggest company on the Jakarta exchange with a market capitalization of around US$18 billion, booked a net profit of IDR9.22 trillion (US$1.01 billion) for January-September 2006, compared with IDR5.78 trillion in the same period in 2005. Telkom, Reuters notes, controls 65% of PT Telekomunikasi Selular, which is Indonesia's biggest wireless carrier. It had around 31 million subscribers by August, more than half the country's total. The mobile arm accounts for around 40% of Telkom's sales, which grew 23% to IDR37.2 trillion in the first nine months, Reuters says. Based in Bandung, Indonesia, Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk -- http://www.telkom-indonesia.com/ -- provides local and long-distance telephone service in Indonesia. Known as Telkom, the company also offers fixed- wireless service, leased lines, and data transport through affiliates. * * * As reported in the Troubled Company Reporter - Asia Pacific on May 22, 2006, Moody's Investors Service gave Telekomunikasi Indonesia a Ba1 local currency corporate family rating. Standard & Poor's Ratings Services gave the Company foreign and local currency corporate credit ratings of BB+. Fitch Ratings has assigned Telkom Indonesia Long- term foreign and local currency Issuer Default Ratings of 'BB-'. ========= J A P A N ========= FTI CONSULTING: Names James Crownover to Class II of the Board -------------------------------------------------------------- FTI Consulting, Inc.'s Board of Directors appointed James W. Crownover, an independent director, to the Class II of the Board. His term will expire at the company's next annual meeting in the spring of 2007. Mr. Crownover had a 30-year career with McKinsey & Company, Inc. when he retired in 1998. He headed McKinsey's Southwest practice for many years, and also co-headed the firm's worldwide energy practice. He served as a member of McKinsey's Board of Directors and also served as director of Allied Waste Industries, Inc., Chemtura Corporation and Weingarten Realty Investors. Mr. Crownover also is chairman of Rice University's Board of Trustees. Commenting on Mr. Crownover's appointment, Jack Dunn, president and chief executive officer, said: "Jim brings to FTI and its stockholders unquestioned integrity, a wealth of experience and a tremendous amount of energy and enthusiasm for our mission. We will benefit enormously from his addition to our Board." Baltimore, Maryland-based FTI Conslulting Inc. - http://www.fticonsulting.com-- is a consulting firm focusing on five areas: forensics and litigation, corporate finance/restructuring, technology, economic consulting, and strategic communications. FTI Consulting has offices in the United States, the United Kingdom, Australia, China, Hong Kong, Japan, and Singapore. The Troubled Company Reporter - Asia Pacific reported that Standard & Poor's Ratings Services, on September 18, 2006, assigned its 'B+' rating to FTI Consulting Inc.'s proposed US$215 million senior notes due 2016. At the same time, Standard & Poor's affirmed the corporate credit rating of FTI at 'BB-' and revised the outlook to positive from stable, based on strong earnings performance and talent retention. Moody's Investors Service assigned a Ba2 rating to FTI Consulting's proposed US$215 million of senior unsecured notes and lowered the ratings on its US$150 million senior subordinated convertible notes to B1 from Ba3. Moody's affirmed the Ba2 corporate family rating and the Ba2 rating on FTI's existing senior unsecured notes. The rating outlook remains stable. MAVERICK TUBE: Tenaris Deal Prompts Moody's to Withdraw Ratings --------------------------------------------------------------- Moody's Investors Service confirmed and will subsequently withdraw the ratings for Maverick Tube Corp. Moody's will subsequently withdraw the Ba3 rated corporate family rating, the Ba3 LGD assessment, the B1 and the LGD 5 (73%) ratings on the 1.875% convertible senior subordinated notes. The outlook is stable. Moody's does not rate the other notes of Maverick. The ratings are being confirmed and will subsequently be withdrawn because Maverick has been fully acquired by Tenaris SA and consequently, the notes are not expected to remain outstanding since they are expected to be converted to cash within the next month and receive a make-whole premium as per the terms of the indenture. Moody's also does not currently rate Tenaris or any of its subsidiaries. Headquartered Chesterfield, Missouri, Maverick Tube Corp. -- http://www.tenaris.com/-- produces welded tubular steel products used in the oil and natural gas industry and for various electrical applications. The energy products line consists of oil country tubular goods, couplings and coiled tubing which are used in newly drilled oil and natural gas wells, line pipe used in transporting oil and natural gas and coiled tubing used in well workover and subsea applications throughout Japan, the United States, Canada, Argentina, Brazil, China, Colombia, Italy and Venezuela. METALDYNE CORP: 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 U.S. Automotive and Equipment sectors, the rating agency confirmed its Caa1 Corporate Family Rating for Metaldyne Corporation. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given- default ratings on these loans and bond debt obligations: Issuer: Metaldyne Corporation Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 10% Senior Notes Caa2 Caa2 LGD 4 69% 11% Subordinated Notes Caa3 Caa3 LGD 6 92% Issuer: Metaldyne Company LLC Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior Secured Revolving Credit Facility B3 B2 LGD 2 25% Senior Secured Synthetic L/C Facility B3 B2 LGD 2 25% Senior Secured Term Loan D B3 B2 LGD 2 25% 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 Plymouth, Mich., Metaldyne Corp -- http://www.metaldyne.com/-- is a leading global designer and supplier of metal-based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry. The company has operations in these Asian locations: Yokohama, Japan; Suzhou, China; Pyeongtaek, Korea; and Jamshedpur, India. MITSUBIHI MOTORS: First-Half Net Loss Down to JPY16.1 Billion ------------------------------------------------------------- Mitsubishi Motors has announced first-half results for fiscal year 2006, ending March 31, 2007, and outlined its forecasts for the full year, the company said in a press release. Fiscal Year 2006 First-Half Results (1) Performance overview Mitsubishi Motors posted consolidated net sales of JPY1.01 trillion for the first half of fiscal year 2006 (April 1 through September 30, 2006), an increase of JPY14.1 billion over the same period last year (JPY991.3 billion). This increase was partially due to exchange rates despite lower sales volume in Asia and other regions and reduced OEM supply volume in non- domestic markets. The company posted an operating loss of JPY5.5 billion, an improvement of JPY14.3 billion over the same period last year despite lower global sales volume. Factors contributing to the improvement were mainly improved sales and model profitability mix in Japan and North America, improvement of earnings in the U.S. financial service operation, and effects of a weaker yen. Mitsubishi Motors posted an ordinary loss of JPY13.2 billion, a year-on-year improvement of JPY20.4 billion, and a net loss of JPY16.1 billion, a year-on-year improvement of JPY47.7 billion yen. The improvement in net loss resulted from lower asset impairment charges taken in Japan compared to that taken in fiscal year 2005, the absence of restructuring charges booked last year, and extraordinary gains from the dissolution of a special purpose entity related to monetization of real estate assets in Japan. (2) Sales volume Global retail sales volume in the first half of fiscal year 2006 totaled 599,000 units, a reduction of 60,000 compared to 659,000 in the same period last year. Despite falling demand in Japan, Mitsubishi Motors sales volume grew 6,000 vehicles to 114,000. Seventeen consecutive months of year-on-year increases (since May 2005) underscore this achievement, showing steady growth. In North America, the company's policy to strengthen the dealers' sales capabilities is gradually bearing fruit. Volume in the region grew 3,000 vehicles to 84,000, the first half fiscal year period of year-on-year growth since the first half of fiscal 2002 (eight periods). In Europe, volume in Germany, the UK and other markets fell slightly year-on-year. However, in addition to continued robust sales in Russia, sales volume doubled in the Ukraine, bringing the total for the region to 142,000 vehicles, 11,000 more than the same period last year. In Asia and other regions, markets in Latin America, the Middle East, and Africa showed increased sales volume. However, sales fell in Indonesia on high fuel prices due to elimination of government subsidies and tighter credit conditions. Sales also fell in Malaysia, where shipments of production parts and components to Proton Holdings Berhad were reduced, and in Taiwan where overall demand fell. Overall volume on the whole was down 80,000 vehicles to 259,000. The company's investor presentation summarizes the results as follows (in 100 million, JPY): FY05 1H FY06 1H Change --------- --------- --------- Revenue 9,913 10,054 +141 Operating Income -198 -55 +143 Ordinary Income -336 -132 +204 Net Income -638 -161 +477 Unit Volume (Retail) 659 599 -60 Full-Year Forecast Despite severe market conditions, the first half of fiscal year 2006 showed year-on-year improvement in net sales and distinct improvement in earnings. Although targets for net sales and unit sales volume did not meet the figures announced at the beginning of the financial year, losses were reduced in excess of targets. While the sales climate is expected to remain difficult in the coming period, by steadily executing measures in the second half, the company will strive to achieve net sales and earnings goals as announced on April 27, 2006. However, as a result of reviewing the unit sales volume targets by region, the company has opted to revise its fiscal 2006 sales volume to 1,322,000 vehicles, a reduction of 86,000 compared to the April 27th figure. In Japan, reflecting the fact that unit sales volume was below forecast in the first half, the company has opted to revise volume to 281,000 vehicles, a reduction of 21,000 compared to the April 27th figure. In North America, the company has revised volume up 7,000 vehicles to 188,000 reflecting the effect of new model launches in the second half. Sales in Europe's growth markets are expected to grow as they did in the first half; the company has revised volume up 9,000 vehicles to 280,000 for the region. On the other hand, in Asia and other regions, the company has revised volume downward 81,000 vehicles to 573,000 reflecting the severe environment and uncertain outlook for markets in the region. Operational initiatives for the second half of FY2006 (by region) (1) Japan * Introduce the fully redesigned Pajero and DelicaD:5, as well non-turbo versions of "i" * Increase dealer traffic through a new advertising campaign * Strengthen sales capabilities together with dealers * Build a new organizational structure, continue revamping the sales operation (2) North America * Increase buyer appeal and sales through introduction of the new Outlander and Lancer models * Reinforce sales capabilities via dealer training * Effective advertising focusing on Mitsubishi's 25 years in the U.S. market * Enhance sales through effective use of financial service operations * Improve productivity at the Illinois plant (3) Europe * Strengthen lineup through consecutive launch of new SUV models (new L200, Pajero, Outlander) * Expand sales in Russia and the Ukraine (4) Asia and other regions * China: Expand sales of Mitsubishi brand vehicles after the recent equity investment in South East (Fujian) Motor Co., Ltd and reinforce the lineup of vehicles exported from Japan * Thailand: Secure stable profitability through expansion of Triton/L200 1-ton pickup exports * Latin America, the Middle East and Africa: Sustain momentum through introduction of the new Pajero * Australia: Launch 3 new models (Triton, Pajero, Outlander) About Mitsubishi Motors Headquartered in Tokyo, Japan, Mitsubishi Motors Corporation -- http://www.mitsubishi-motors.co.jp/-- is one of the few automobile companies in the world that produces a full line of automotive products ranging from 660-cc mini cars and passenger cars to commercial vehicles and heavy-duty trucks and buses. The company also operates consumer-financing services and provides this to its customer base. MMC adopted the "Mitsubishi Motors Revitalization Plan" on January 28, 2005, as its three- year business plan covering fiscal 2005 through 2007, after investor DaimlerChrysler backed out from the company. The main objectives of the plan are "Regaining Trust" and "Business Revitalization." The company has operations worldwide, covering the United States, Germany, the United Kingdom, Italy, the Netherlands, the Philippines, Indonesia, Malaysia, China and Australia. Its products are sold in over 170 countries. As reported by the Troubled Company Reporter - Asia Pacific on September 29, 2006, Standard & Poor's Ratings Services raised its long-term corporate credit and senior unsecured debt ratings on Mitsubishi Motors Corp. to B- from CCC+, reflecting progress in the company's revitalization efforts and reduced downside risks in its earnings and financial profile. The outlook on the long-term rating is stable. As reported by the Troubled Company Reporter - Asia Pacific on August 4, 2006, Rating & Investment Information Inc. has upgraded its issuer rating on Mitsubishi Motors Corp. from CCC+ to B with a stable outlook and its commercial paper rating from c to b, and has removed the rating from its monitor at the same time. As reported by the Troubled Company Reporter - Asia Pacific on July 19, 2006, Japan Credit Rating Agency, Ltd. upgraded the rating of Mitsubishi Motors Corp.'s senior debts to BB- from B-, with a stable outlook. The agency also affirmed the NJ rating on CP program of the company, while upgrading its rating on the Euro Medium Term Note Program of MMC and subsidiaries Mitsubishi Motors Credit of America, Inc. and MMC International Finance (Netherlands) B.V. to B+ from CCC. SOFTBANK MOBILE: To Cut Call Fees in November 2006 -------------------------------------------------- Softbank Mobile Corp. plans to cut cellphone call fees to other carriers from Nov. 10, MarketWatch.Com says, citing the company's president, Masayoshi Son. MarketWatch says that Softbank Mobile will lower its cellphone call fees to other firms to JPY21 per thirty seconds including tax, which is the same level offered by other firms, such as NTT DoCoMo and KDDI Corp. About Softbank Corporation Based in Tokyo, Japan, Softbank Corporation -- https://www.softbank.co.jp/ -- is a leading Japanese telecommunications and media corporation, with operations in broadband, fixed-line telecommunications, e-Commerce, Internet, broadmedia, technology services, finance, media and marketing, and other businesses. SoftBank was established on September 3, 1981, and had a market capitalization of approximately US$32.8 billion at February 28, 2006. SoftBank's corporate profile includes various other companies such as Japanese broadband company Cable & Wireless IDC, cable company BB-Serve, and gaming company GungHo Online Entertainment. On March 17, 2006, SoftBank announced its agreement to buy Vodafone Japan, giving it a stake in Japan's US$78 billion mobile market. * * * According to a Troubled Company Reporter - Asia Pacific report on April 18, 2006, Standard & Poor's Rating Services agency affirmed its 'BB-' long-term corporate credit rating on the Company, with negative implications. Moody's Investors Service had, on August 9, 2006, upgraded Softbank Corp.'s stable long-term debt rating and issuer rating to Ba2 from Ba3, concluding a review initiated on March 17, 2006, when the company announced that it would acquire a 97.7% stake in mobile phone giant Vodafone Group's Japanese unit, Vodafone K. K. About Softbank Mobile Headquartered in Tokyo, Japan, Softbank Mobile Corp. -- http://www.softbankmobile.co.jp/-- offers mobile voice, data, and wireless Internet services throughout Japan. Formerly known as Vodafone K.K. and operated as Vodafone Japan, the island country's #3 wireless carrier (behind giants NTT Docomo and KDDI) has more than 15 million subscribers with more than 85% also subscribing to Vodafone live!, the company's interactive mobile service. The company also offers innovative "movie sha- mail," its popular photo-messaging service using mobile handsets. UK-based Vodafone Group sold its 98% stake in Vodafone K.K. to SOFTBANK in a deal valued at nearly US$16 billion. The Troubled Company Reporter - Asia Pacific reported on Oct. 4, 2006, that Standard & Poor's Ratings Services said that its 'BB+' long-term ratings on Softbank Mobile Corp., which was renamed from Vodafone K.K. on Oct. 1, 2006, remain on CreditWatch with negative implications. SOLO CUP: 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 non-paper Packaging sector, the rating agency confirmed its B3 Corporate Family Rating for Solo Cup Company. Moody's also confirmed its probability-of-default ratings and assigned loss-given-default ratings on these three loans and a bond issue: Projected POD LGD Loss-Given Debt Issue Rating Rating Default ---------- ------- ------ ------- US$150 million Sr. Sec. First Lien Revolver maturing Feb. 27, 2010 B2 LGD3 34% US$637 million Sr. Sec. First Lien Term Loan B due Feb. 27, 2011 B2 LGD3 34% US$80 million Second Lien Term Loan due Feb 27, 2012 Caa1 LGD5 70% US$325 million 8.5% Sr. Sub. Notes due Feb. 15, 2014 Caa2 LGD5 87% 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 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 Japan, Canada, Europe, Mexico, Panama and the United States. TENNECO INC: 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 U.S. Automotive and Equipment sectors, the rating agency confirmed its B1 Corporate Family Rating for Tenneco Inc. Additionally, Moody's revised or 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 ---------- ------- ------- ------ ---------- Senior Secured Revolving Credit Facility Ba3 Ba1 LGD2 15% Senior Secured Term Loan B Ba3 Ba1 LGD2 15% Senior Secured Revolver B-1 Ba3 Ba1 LGD2 15% 10.25% Senior Notes B2 Ba3 LGD3 42% 8.625% Subordinated Notes B3 B3 LGD6 92% 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%). Tenneco, headquartered in Lake Forest, Illinois, is a leading manufacturer of automotive ride control and emissions control products and systems for both the worldwide original equipment market and aftermarket. Leading brands include Monroe(R), Rancho(R), and Fric Rot ride control products and Walker(R) and Gillet emission control products. The company has global operations in Argentina, Japan, and Germany, among others, with its European operations headquartered in Brussels, Belgium. TIMKEN CO: Earns US$46 Million in Third Quarter of 2006 ------------------------------------------------------- The Timken Company reported sales of US$1.27 billion in the third quarter of 2006, up slightly from US$1.25 billion for the same period in 2005. Strong sales in industrial markets were largely offset by significant declines in automotive markets. The company achieved third-quarter net income of US$46 million, up from US$39 million, in last year's third quarter. Special items in the third quarter of 2006 included manufacturing restructuring and rationalization charges that totaled US$7.1 million of pretax expense, compared to US$28.3 million in the same period a year ago. "Our industrial and steel businesses performed well in the third quarter with industrial markets continuing to drive strong demand for our products," James W. Griffith, president and chief executive officer, said. "Dramatic volume reductions are posing significant challenges across the North American automotive market. We are taking actions to adapt to the decline in demand and will continue to pursue structural changes to bring our Automotive business to profitability." For the first nine months of 2006, sales were US$4 billion, an increase of 3% from US$3.8 billion for the same period in the prior year. Net income for the first nine months of 2006 was US$187 million, versus US$165 million for the comparable nine- month period in 2005. Special items in the first nine months of 2006 totaled US$32.9 million of pretax expense, compared to US$33.1 million in the same period a year ago, and included manufacturing, restructuring and rationalization charges and the impact of asset dispositions. Total debt was US$752.8 million as of Sept. 30, 2006, or 30.7% of capital. Net debt at Sept. 30, 2006, was US$698.7 million, or 29.2% of capital, compared to US$655.6 million, or 30.5% of capital, as of Dec. 31, 2005. The Industrial Group had third-quarter sales of US$501.8 million, up 7% from US$468.2 million for the same period last year. The company continued to benefit from strong demand across its broad industrial segments, led by increases in the aerospace, industrial distribution and heavy industry segments. The company continues to make investments in Asia and key global industrial markets, including construction of the company's fifth manufacturing facility in China, opening of a global aerospace facility in Arizona and introduction of a new line of large-bore seals. For the first nine months of 2006, Industrial Group sales were US$1.5 billion, up 7 percent over the same period a year ago. EBIT for the first nine months of 2006 was US$157.6 million, compared to EBIT of US$158.1 million over the prior-year period. Automotive Group Results The Automotive Group's third-quarter sales of US$363.6 million were 11% below the same period a year ago. The decline in sales was the result of significant reductions in vehicle production by automakers headquartered in North America. The Automotive Group recorded a third-quarter loss of US$26.3 million, compared to a loss of US$6 million for the same period a year ago. In response to the recent drop in demand, the company announced in September 2006 the reduction of 700 positions from its Automotive Group, which is expected to result in savings of approximately US$35 million, to be fully realized by the middle of 2007, at a cost of approximately US$25 million. The program is in addition to the automotive restructuring plan disclosed in July 2005, which has targeted savings of approximately US$40 million by the end of 2007. The company anticipates taking additional actions to structurally improve the performance of the business. For the first nine months of 2006, Automotive Group sales of US$1.2 billion were 3% below the same period last year. The group recorded a loss of US$31.4 million for the first nine months of 2006, compared to a loss of US$12.4 million in the first nine months of 2005. Steel Group third-quarter sales were US$442.6 million, a 3% increase from US$427.9 million in the same period a year ago. During the quarter, the Steel Group disclosed an investment in a new induction heat-treat line that will increase the company's capacity and ability to provide differentiated products to more customers in important global energy markets. In addition, the group recently disclosed its intention to exit its European seamless steel tube manufacturing operation as part of its strategy to strengthen its business portfolio. For the first nine months of 2006, Steel Group sales were US$1.4 billion, a 3% increase over the first nine months of last year. Headquartered in Canton, Ohio, The Timken Company (NYSE: TKR) -- http://www.timken.com/-- is a manufacturer of highly engineered bearings and alloy steels. It also provides related components and services such as bearing refurbishment for the aerospace, medical, industrial and railroad industries. The company has operations in Japan, Argentina, Australia, Belgium, Brazil, Canada, China, Czech Republic, England, France, Germany, India, Italy, Korea, Singapore, South America, Spain, Taiwan, Turkey, United States, and Venezuela and employs 27,000 employees. * * * The company's 7.16% Medium-Term Notes, Series A due 2027 carry Moody's Investors Service's Ba1 rating. TIMKEN CO: 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 the Ba1 Corporate Family Rating for The Timken Company, as well as the Ba1 rating on the company's US$300 Million Unsecured Medium Term Notes Series A due 2028. Those debentures were assigned an LGD3 rating suggesting noteholders will experience a 46% loss in the event 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 its 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 Canton, Ohio, The Timken Company (NYSE: TKR) -- http://www.timken.com/-- is a manufacturer of highly engineered bearings and alloy steels. It also provides related components and services such as bearing refurbishment for the aerospace, medical, industrial and railroad industries. The company has operations in Japan, Argentina, Australia, Belgium, Brazil, Canada, China, Czech Republic, England, France, Germany, India, Italy, Korea, Singapore, South America, Spain, Taiwan, Turkey, United States, and Venezuela and employs 27,000 employees. XEROX CORP: Moody's Confirms Ba1 Corporate Family Ratings --------------------------------------------------------- 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. Technology Hardware sector, the rating agency confirmed its Ba1 Corporate Family Rating for Xerox Corp. Moody's revised its probability-of-default ratings and assigned loss-given-default ratings to these securities: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default US$700 million Sr. Notes due 2016 Ba2 Ba1 LGD3 48% US$620 million 9.75% Sr. Notes due 2009 Ba2 Ba1 LGD3 48% US$688 million 7.125% Sr. Notes due 2010 Ba2 Ba1 LGD3 48% US$542 million 7.625% Sr. Notes due 2013 Ba2 Ba1 LGD3 48% US$50 million 6.875% Sr. Notes due 2011 Ba2 Ba1 LGD3 48% US$1.25 billion Unsec. Revolving Credit Facility Ba2 Ba1 LGD3 48% US$752 million Sr. Notes due 2011 Ba2 Ba1 LGD3 48% US$251 million Notes due 2016 Ba2 Ba1 LGD3 48% US$255 million Yen Notes due 2007 Ba2 Ba1 LGD3 48% US$75 million Notes due 2012 Ba2 Ba1 LGD3 48% US$60 million Notes due 2013 Ba2 Ba1 LGD3 48% US$50 million Notes due 2014 Ba2 Ba1 LGD3 48% US$25 million Notes dye 2018 Ba2 Ba1 LGD3 48% US$27 million Notes due 2008 Ba2 Ba1 LGD3 48% US$260 million Euro Senior Notes due 2009 Ba2 Ba1 LGD3 48% Medium Term Notes US$166 million Ba2 Ba1 LGD3 48% Trust Preferred Ba3 Ba2 LGD6 94% Shelf-Sr. Unsec. (P)Ba2 (P)Ba1 LGD3 48% Shelf-Subordinated (P)Ba3 (P)Ba2 LGD6 94% Shelf-Preferred (P)B1 (P)Ba2 LGD6 97% 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 its ratings as 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 Stamford, Connecticut, Xerox Corp. -- http://www.xerox.com/-- develops, manufactures, markets, services and finances a range of document equipment, software, solutions and services. Xerox operates in over 160 countries worldwide and distributes products in the Western Hemisphere through divisions, wholly owned subsidiaries and third-party distributors. The company has operations in Japan, Italy and Nicaragua. * Moody's: Paper Makers Face Challenges But Finances Suit Rating ---------------------------------------------------------------- While the potential has somewhat increased for a rise in paper manufacturing output in Japan, and key input prices continue to pressure industry profitability, Moody's Investors Service's rated Japanese pulp and paper manufacturer -- Oji Paper Co., Ltd. (Oji Paper) -- should be able to essentially maintain its financial metrics at levels appropriate to its credit rating over the near term, says the rating agency in a new report. "Oji Paper's attempt to merge with Hokuetsu Paper failed in early September, while many major paper manufacturers have announced plans to build new mills in the next few years," comments Motoki Yanase, Moody's Analyst and author of the report, "Japanese Pulp & Paper." "These factors have increased the risk for an output rise and, consequently, pressure on domestic prices of printing papers. However, rapid price falls may be hindered by the limited number of players in most paper segments due to past consolidation and their need to maintain decent price levels." In addition, the report notes that paperboard prices in Japan have generally held up due to there being little threat from imported products and to the recycling-oriented nature of the products. Although paperboard generally has lower profitability than paper due to its price levels, Moody's believes its stability will support Japanese pulp and paper companies' future cash flow. "On the cost side, however, prices of key inputs continue to pressure manufacturers' profitability," describes Moody's Yanase. "Even though companies' continued efforts on cost cuts will help absorb part of the cost push, margins will still experience significant pressure." Overall, considering the industry companies' attempts to raise prices in 2006 and some support from cost-cutting efforts, Moody's anticipates that Oji Paper will be able to prevent significant deterioration in financial metrics in the near term. Its cash flow will also be supported by its relatively large paperboard segment and real estate division. Moody's notes, however, that it will assess the rating implications if the prospect increases that prolonged weakening in paper prices and added capital expenditure will tighten Oji Paper's future cash flow and eventually undermine its financial profile. In this context, Moody's will keep in mind the company's increased capital requirement for its new investments in Japan and China. ========= K O R E A ========= * Korea Exchange to Consolidate System with Tokyo Exchange ---------------------------------------------------------- Korea's stock market operator, Korea Exchange, will seek system integration with its Japanese counterpart, Korea.net relates, citing a statement made by KRX Chairman Lee Young-tak. The computer system integration, which is the most important part of consolidation, will promote cross-stock listings between the two countries, the Korean government Web site says. The system integration is expected to cut costs associated with the maintenance of the listings on the Tokyo exchange, Mr. Lee told Korea.net. KRX is also eyeing consolidation deals with other Asian exchanges. KRX, however, has put priority on listing its own shares on the main Korea Stock Exchange. "We have recently launched a process to select a lead manager for the listing of our shares, Mr. Lee said. "I expect the stock offering will take place around April next year." According to Mr. Lee, about 10 Chinese firms are working on listing their shares on the Korean stock market. "It is not certain how many Chinese firms will list their shares, but some information technology companies are showing strong interest," he added. ===================== N E W Z E A L A N D ===================== AIR NEW ZEALAND: Introduces J. Harrison as GM-Australia ------------------------------------------------------- Air New Zealand Limited introduced John Harrison as its new General Manager - Australia, etravelblackboard.com relates. Mr. Harrison is the airlines' former market planner based in New Zealand. He was also formerly connected with other carriers, American Airlines, Northwest Airlines, and KLM Royal Dutch Airlines. "The Board has growth strategy in place for Air New Zealand," Mr. Harrison says, adding that he will work closely with trade partners with agency sales being "very important." About Air New Zealand Based in Auckland, New Zealand, Air New Zealand is the country's flag air carrier, with domestic and international passenger and freight operations, and an aviation engineering business. As reported in the Troubled Company Reporter - Asia Pacific on September 2, 2005, Moody's Investors Service affirmed its Ba1 issuer rating on Air New Zealand Limited after the airline announced its annual results for FY2005. Air NZ's rating reflected its dominant position in the New Zealand domestic market, with around 80% market share, and the profitability of domestic operations following their restructuring to a low-cost network model. Also supporting Air NZ's rating was its solid liquidity position, with cash balances of NZ$1.071 billion held as at June 30, 2005. However, while Air NZ has a solid position in New Zealand and other parts of the international network are performing well, intense competition on trans-Tasman routes has resulted in it being unprofitable for Air NZ. International competition also limits Air NZ's ability to expand. Its management is also aware of the airline's vulnerability to external shocks and the actions of key competitors. ===================== P H I L I P P I N E S ===================== METROPOLITAN BANK: 3rd-Quarter Net Profit Up 37%, Reuters Says -------------------------------------------------------------- Metropolitan Bank and Trust Co. posted a net profit increase of 37% for the third-quarter ended September 30, 2006, based on Reuters' calculations, as costs fell by nearly a third and offset higher bad debt provisions and a fall in net interest income. According to Reuters Estimates, Metrobank is expected to post full-year ending December 31, 2006, net income of PHP5.08 billion versus PHP4.3 billion in 2005. Reuters states that Metrobank's third quarter net profit of PHP1.3 billion (US$26 million) was fuelled by the drop in costs, which overshadowed a jump in bad debt provisions to PHP2.46 billion from PHP956 million a year ago, and a 20% fall in net interest income to PHP3.5 billion. Metrobank posted net income of PHP950 million a year earlier but did not provide comparative figures, Reuters reports, noting that Metrobank did not say whether its 2005 results had been revised. Fee income was flat at PHP2.8 billion, Reuters reveals. Metrobank is also selling non-performing loans and assets worth a total of about PHP12.5 billion before the year ends to free up its resources for more lending, Reuters adds. About Metrobank Metropolitan Bank and Trust Company -- http://www.metrobank.com.ph/-- is the flagship company of the Metrobank Group. Metrobank provides a host of deposit, savings, and loan products as well as electronic banking services like internet banking, mobile banking, and phone banking, as well as its huge ATM network. Metrobank is also the leading provider of trade finance in the country, and its overseas branch network has enabled it to service the fund remittances of Filipino overseas contract workers. The Bank has 583 local branches and 35 international branches and offices located in Taiwan, China, Japan, Korea, Guam, United States, Hong Kong, Singapore, Bahamas, and in Europe. * * * On March 3, 2006, the Troubled Company Reporter - Asia Pacific reported that Standard and Poor's Rating Service assigned a CCC+ rating on Metrobank's US$125-million non-cumulative capital securities, whereas Moody's Investors Service Rating Agency issued a B- rating on the same capital instruments. Moreover, Moody's gave Metrobank a Ba3 Foreign Long-Term Bank Deposits and Subordinated Debt Rating effective May 25, 2006. On September 21, 2006, the TCR-AP reported that Fitch Ratings upgraded Metrobank's Individual rating to 'D' from 'D/E'. All the bank's other ratings were affirmed: * Long-term Issuer Default rating 'BB-' -- with a stable Outlook, * Short-term rating 'B,' * Support rating '3. PHILIPPINE NATIONAL BANK: To Hold Joint Auctions with Allied ------------------------------------------------------------ The Philippine National Bank and Allied Bank senior executives recently inked a Memorandum of Agreement to hold joint public property auctions nationwide. The project will help the two banks realize benefits as members of the Lucio Tan Group of Companies. About Allied Bank Established in 1963, Allied Banking Corporation was majority acquired by the Lucio Tan Group in 1977. The Lucio Tan Group is a diversified conglomerate and is one of the largest corporates in the Philippines, which also majority owns Philippine National Bank. At end-2005, ABC had a network of 317 branches. About Philippine National Bank Philippine National Bank -- http://www.pnb.com.ph/-- is the Philippine's first universal bank established on July 22, 1916. The Bank's core business consists of lending and deposit-taking activities from corporate, middle market and retail customers, as well as various government units. Its other principal activities include bill discounting, fund transfers, remittance servicing, foreign exchange dealings, retail banking, trust services, treasury operations and trade finance. Through its subsidiaries, PNB engages in a number of diversified financial and related businesses such as international merchant banking, investment banking, life/non-life insurance, leasing, financing of small-and-medium-sized industries, and financial advisory services. It introduced innovations such as the bank on wheels, computerized banking, ATM banking, mobile money changing and domestic travelers' checks. * * * Standard and Poor's Ratings Services has given PNB 'B' Short- Term Foreign Issuer Credit and Short-Term Local Issuer Credit Rating, as well as 'B-' Long-Term Foreign Issuer Credit and Long-Term Local Issuer Credit Ratings effective as of April 26, 2006. Moody's Investors Service has assigned a Ba3 rating to PNB's proposed local currency subordinated notes -- Series A and Series B. On October 31 2006, Fitch Ratings affirmed PNB's Individual rating at 'E' and Support rating '3' after a review of the bank. RIZAL COMMERCIAL BANKING: Fitch Sets Hybrid Issue Rating at B- -------------------------------------------------------------- On October 31, 2006, Fitch Ratings has assigned a final rating of 'B-' to Rizal Commercial Banking Corporation's hybrid issue of up to US$100 million. The rating action follows the receipt of final documents conforming to information previously received. Established in 1960 and listed on the Philippine stock exchange in 1986, RCBC maintains a network of 294 branches and 252 ATMs. Its majority shareholder is the Yuchengco group (controlled by the Yuchengco family), a Philippine conglomerate with an extensive portfolio of other interests. ================= S I N G A P O R E ================= ADVANCED MICRO: 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 U.S. technology semiconductor and distributor sector, the rating agency affirmed its Ba3 corporate family rating on Advanced Micro Devices, Inc. Additionally, Moody's revised or 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$600 Mil. senior unsecured notes B1 Ba3 LGD4 59% Shelf - Sr. Unsecured Notes B1 Ba3 LGD4 59% Shelf - Subor. B2 B2 LGD6 97% Shelf - Preferred B3 B2 LGD6 97% 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%). About Advanced Micro Headquartered in Sunnyvale, California, Advanced Micro Devices, Inc., -- http://www.amd.com/-- designs and manufactures microprocessors and other semiconductor products. The company has a facility in Singapore. It has sales offices in Belgium, France, Germany, the United Kingdom, Mexico and Brazil. AKER KVAERNER: Earns NOK414 Million for Third Quarter 2006 ---------------------------------------------------------- Aker Kvaerner ASA released its pro-forma operating results for the third quarter of 2006. Aker Kvaerner posted NOK414 million in net profit for the third quarter of 2006, an increase of 70% compared with same period in 2005. Consolidated operating revenues in the third quarter totaled NOK13.4 billion, an increase of 33% compared with the same quarter last year. This reflects strong markets and high activity in all reporting segments. EBITDA for the third quarter was NOK822 million, an increase of 53% from NOK539 million in the third quarter 2005. The quarterly EBITDA margin was 6.1% compared to 5.4% in the third quarter last year. Year-to-date EBITDA of NOK2.265 billion increased by 67% from NOK1.356 billion in the corresponding period last year. Year-to-date EBITDA margin is 5.8%. The all-time high third-quarter order intake was NOK24.6 billion, which brings the order backlog to a solid NOK68.3 billion. Cash flow from operating activities was NOK587 million in the third quarter, reflecting a NOK196 million decrease in net current operating assets. Cash and bank deposits at the end of September amounted to NOK6.8 billion. The liquidity buffer, including undrawn credit facilities of NOK2.2 billion, was a comfortable NOK9 billion. Aker Kv'rner is announcing an overall refinancing plan. A group of Nordic and international banks have underwritten the total financing requirement of EUR850 million. The new financing is expected to be in place as of Dec. 1, 2006. Through this refinancing, the gross debt will be reduced by approximately NOK1 billion. The refinancing will increase the financial flexibility of the company substantially. Going forward, interest costs will be reduced by approximately NOK180 million per year, and there will be no dividend restrictions. With the high capacity utilization in the industry, the focus for Aker Kvaerner will continue to be selecting and executing the right projects successfully. The market is still expected to be strong with attractive opportunities. Metso's application for the clearance of its acquisition of Aker Kvaerner's Pulping and Power businesses is currently subject to phase II review under the EU merger regulation. Aker Kvaerner expects closing to take place in the fourth quarter. About Aker Kvaerner Headquartered in Lysaker, Norway, Aker Kvaerner ASA -- http://www.akerkvaerner.com/-- through its subsidiaries and affiliates, provides engineering and construction services, technology products and integrated solutions. The Aker Kvaerner group is organized into two principal business streams, namely Oil & Gas and E&C. The group operates in Singapore, Austria, Azerbaijan, Belgium, Denmark, Finland, France, Germany, Netherlands, Poland, Russia, Spain, Sweden, United Kingdom, Australia, China, India, Indonesia, Japan, Malaysia, South Korea, Thailand, Brazil, Chile, Canada and the United States. * * * Moody's Investors Service upgraded the of Aker Kvaerner Oil & Gas Group and Aker Kvaerner AS, primarily to reflect the sustainable strong recovery in profitability and cash flow generation of the ring- fenced oil and gas group over the past two years, coupled with the clear reduction in senior debt, repaid from internally generated funds. Ratings affected: Aker Kvaerner Oil & Gas Group AS -- Corporate family rating: upgraded to Ba1 from Ba3 Aker Kvaerner AS -- Rating of the second priority lien notes due 2011: upgraded to Ba1 from Ba3. Moody's said the outlook on all ratings is stable. AKER KVAERNER: Inks US$80-Mln Riser Deal with Queiroz Galvao ------------------------------------------------------------ Aker Kvaerner ASA has been awarded contracts to supply three subsea drilling riser systems, featuring Aker Kvaerner's innovative CLIP riser system, to Brazilian drilling company Queiroz Galvao Oleo e Gas S.A. The contracts have a value of around US$80 million. The scope of work comprises three drilling riser systems, including tools and flotation, designed for use in 700 meters, 2000 meters and 2400 meters water depth, respectively. Deliveries of the risers will be completed from Aker Kvaerner's new state-of-the-art facility in Rio das Ostras, Brazil, for delivery within the next 17 to 30 months. The drilling risers will be installed in three different rigs. Two of the rigs will operate throughout the Brazilian offshore coast serving long-term contracts between Queiroz Galvao and Brazil's national oil company Petrobras. The third is analyzing opportunities to work either in Brazil or internationally. "These awards represent another major milestone for Aker Kvaerner's risers business, As the first company to manufacture drilling risers in Brazil, Aker Kvaerner is supporting the development of Rio de Janeiro state industry and reinforcing its established position of strong supplier of subsea equipment in Brazil," Raymond Carlsen, Executive Vice President Aker Kvaerner, said. The agreements are signed between the Aker Kvaerner Subsea division of Aker Kvaerner Oil and Gas Brasil Ltda, Aker Kvaerner Subsea AS and the Queiroz Galvao Group. About Aker Kvaerner Headquartered in Lysaker, Norway, Aker Kvaerner ASA -- http://www.akerkvaerner.com/-- through its subsidiaries and affiliates, provides engineering and construction services, technology products and integrated solutions. The Aker Kvaerner group is organized into two principal business streams, namely Oil & Gas and E&C. The group operates in Singapore, Austria, Azerbaijan, Belgium, Denmark, Finland, France, Germany, Netherlands, Poland, Russia, Spain, Sweden, United Kingdom, Australia, China, India, Indonesia, Japan, Malaysia, South Korea, Thailand, Brazil, Chile, Canada and the United States. * * * Moody's Investors Service upgraded the of Aker Kvaerner Oil & Gas Group and Aker Kvaerner AS, primarily to reflect the sustainable strong recovery in profitability and cash flow generation of the ring- fenced oil and gas group over the past two years, coupled with the clear reduction in senior debt, repaid from internally generated funds. Ratings affected: Aker Kvaerner Oil & Gas Group AS -- Corporate family rating: upgraded to Ba1 from Ba3 Aker Kvaerner AS -- Rating of the second priority lien notes due 2011: upgraded to Ba1 from Ba3. Moody's said the outlook on all ratings is stable. AVAGO TECHNOLOGIES: 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 U.S. technology semiconductor and distributor sector, the rating agency affirmed its B2 corporate family rating on Avago Technologies Finance Pte. Ltd. Additionally, Moody's revised or 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$250MM Senior Secured Revolver due 2012 B1 Ba2 LGD1 4% US$500MM 10.125% Sr. Unsecured Notes due 2013 B3 B2 LGD3 47% US$250MM Floating Rate Sr. Unsecured Notes due 2013 B3 B2 LGD3 47% US$250MM 11.875% Sr. Subordinated Notes due 2015 Caa2 Caa1 LGD6 91% 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%). About Avago Technologies Headquartered both in San Jose, CA, and in Singapore, Avago Technologies Holdings Pte. Ltd. -- http://www.avagotech.com/-- is a semiconductor company, with approximately 6,500 employees worldwide. Avago provides an extensive range of analog, mixed- signal and optoelectronic components and subsystems to more than 40,000 customers. The company's products serve four end markets: industrial and automotive, wired networking, wireless communications, and computer peripherals. It has manufacturing and marketing centers in Singapore, United States, Italy, Germany, Korea, China, Japan and Malaysia. Avago Technologies is the successor to the Semiconductor Products Group of Agilent. Avago Technologies purchased the business of SPG as of December 1, 2005, for US$2.6 billion in cash. CHEMTURA CORP: Declares Quarterly Dividend of US$0.05 Per Share --------------------------------------------------------------- Chemtura Corp. declared a regular quarterly dividend of five cents per share on the common stock of the corporation, payable Nov. 24, 2006, to shareholders of record on Nov. 6, 2006. About Chemtura Corp. Headquartered in Middlebury, Connecticut, Chemtura Corp. (NYSE: CEM) -- http://www.chemtura.com/-- is a global manufacturer and marketer of specialty chemicals, crop protection and pool, spa and home care products. The company has approximately 6,400 employees around the world and sells its products in more than 100 countries. In the Asia Pacific, Chemtura has facilities in Australia, China, Hong Kong, India, Japan, Singapore, South Korea, Taiwan, and Thailand. * * * Standard & Poor's Ratings Services revised its outlook on Middlebury, Connecticut-based Chemtura Corp. to stable from positive and affirmed the existing 'BB+' corporate credit and senior unsecured debt ratings. Moody's Investors Service assigned a Ba1 rating to Chemtura Corp.'s US$400 million of senior notes due 2016 and affirmed the Ba1 ratings for its other debt and the corporate family rating. HEXION SPECIALTY: Extends Tender Offer for Sr. Notes to Nov. 13 --------------------------------------------------------------- Hexion Specialty Chemicals, Inc., has extended the expiration date of its cash tender offers, for any and all of the outstanding 9% Second-Priority Senior Secured Notes due 2014 and the Second-Priority Senior Secured Floating Rate Notes due 2010 issued by Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC, to 5:00 p.m., New York City time, on Nov. 13, 2006, unless further extended. In connection with the extension of the tender offers Hexion is changing the Price Determination Date for the 9% Notes which shall now be Oct. 30, 2006. As of Oct. 24, 2006, tenders and consents had been received with respect to 100% of the outstanding principal amounts of the Notes. The tender offers and consent solicitations are subject to the terms and conditions set forth in Hexion's Offer to Purchase and Consent Solicitation Statement dated Oct. 12, 2006, and the related Consent and Letter of Transmittal. Hexion has retained Credit Suisse Securities (USA) LLC to act as Dealer Manager in connection with the tender offer and consent solicitation. Questions about the tender offer and consent solicitation may be directed to: Credit Suisse Securities (USA) LLC Telephone: (800) 820-1653 (toll free) (212) 325-7596 (collect) Copies of the Offer Documents and other related documents may be obtained from the information agent for the tender offer and consent solicitation at: D.F. King & Co., Inc. Telephone: (800) 290-6426 (toll free) (212) 269-5550 (collect) Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- makes thermosetting resins (or thermosets). Thermosets add a desired quality (heat resistance, gloss, adhesion) to a number of different paints and adhesives. Hexion also makes formaldehyde and other forest product resins, epoxy resins, and raw materials for coatings and inks. The company has 86 manufacturing and distribution facilities in 18 countries. The company has its Asian headquarters in Singapore, with offices in Australia, China, Korea, Malaysia, New Zealand, Taiwan, and Thailand. * * * Moody's Investors Service assigned B3 ratings to the new guaranteed senior secured second lien notes due 2014 of Hexion Specialty Chemicals Inc. The company expects to issue roughly US$825 million of notes split (55/45) between fixed and floating rate notes. The new notes will be used to refinance roughly US$625 million of existing second lien notes and partially fund a US$500 million dividend to existing shareholders. A US$375 million increase in the company's existing guaranteed senior secured first lien term loan to US$2 billion, rated Ba3, will fund the remainder of the extraordinary dividend. Moody's also affirmed Hexion's other long term debt ratings and its SGL-2 speculative grade liquidity rating. As a result of this refinancing, the LGD assessment rates have changed as shown in the table below. The outlook is stable and the ratings on the existing second lien notes will be withdrawn upon successful completion of the refinancing. New ratings assigned: * Hexion Specialty Chemicals Inc. -- Floating Rate Gtd. Second Lien Sr. Sec Notes due 2014 -- B3, LGD5, 75% -- Fixed Rate Gtd Second Lien Sr Sec Notes due 2014, -- B3, LGD5, 75% Ratings affirmed with revised LGD rates: -- US$225mm Gtd Sr Sec Revolving Credit Facility due 5/2011 -- Ba3, LGD2, 24% from 29% -- US$50mm Gtd Sr Sec Letter of Credit Facility due 5/2011 -- Ba3, LGD2, 24% from 29% -- US$1,625mm Gtd Sr Sec Term Loan due 5/2013 -- Ba3, LGD2, 24% from 29%* -- US$300mm Flt Rate Gtd Second Lien Sr Sec Notes due 7/2010 -- B3, LGD5, 75% from 77%** -- US$325mm 9.0% Gtd Second Lien Sr Sec Notes due 7/2014 -- B3, LGD5, 75% from 77%** -- US$34.0mm Pollution Control Revenue Bonds Series 1992 due 12/2009 -- B3, LGD5, 75% from 77% Ratings affirmed: * Hexion Specialty Chemicals Inc. -- Corporate Family Rating -- B2 -- Probability of Default Rating -- B2 -- US$114.8mm 9.2% Sr. Unsec Debentures due 3/2021 -- Caa1, LGD6, 94% -- US$246.8mm 7.875% Sr. Unsec Notes due 2/2023 -- Caa1, LGD6, 94% -- US$78.0mm 8.375% S.F. Sr. Unsec Debentures due 4/2016 -- Caa1, LGD6, 94% Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '3' to Hexion Specialty's US$1.675 billion senior secured term loan and synthetic letter of credit facilities. The rating on the existing US$225 million revolving credit facility was lowered to 'B+' with a recovery rating of '3', from 'BB-' with a recovery rating of '1', to reflect the similar security package as the new term loan and synthetic letter of credit facility. The ratings on the existing senior second secured notes were raised to 'B', with a recovery rating of '3', from 'B-' with a recovery rating of '5'. The ratings on the senior second secured notes reflect the amount of priority claims of the revolving facility and the first-lien term loan lenders. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on Hexion and revised the outlook to stable from negative. INTERMEC INC: 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 Ba2 Corporate Family Rating for Intermec Inc., as well as its Ba3 rating on the company's US$400 million Senior Unsecured Shelf. Those debentures were assigned an LGD5 rating suggesting noteholders will experience an 85% loss in the event of default. Additionally, Moody's revised or affirmed 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$100m 7% Sr. Unsec. Notes Due 2008 Ba3 Ba3 LGD5 85% US$400m Sub. Shelf (P)B1 (P)B1 LGD6 97% US$400m Pref. Shelf (P)B2 (P)B1 LGD6 97% US$400m Pref. Shelf (P)B2 (P)B1 LGD6 97% 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%). Intermec Inc. -- http://www.intermec.com/-- develops, manufactures and integrates technologies that identify, track and manage supply chain assets. Core technologies include RFID, mobile computing and data collection systems, bar code printers and label media. The company has locations in Singapore, Australia, Bolivia, Brazil, China, France, Hong Kong, and the United Kingdom. LINDETEVES-JACOBERG: Enters Sale and Licensing Agreement -------------------------------------------------------- Lindeteves-Jacoberg Limited, on October 27, 2006, inked a sale and purchase agreement with Dalian Motor Co Ltd for the sale and divestment of 70% equity interest of BCW Electric Motor Corp Ltd, currently a wholly owned subsidiary of Lindeteves-Jacoberg. The remaining 30% equity interest of BCW will be sold and transferred to An Xiao Dan, a business associate of Dalian Motor who is based in Australia, under a separate sale and purchase agreement. The aggregate consideration amount of approximately SGD2.00 was arrived at a willing-buyer and willing-seller basis after taking into account the net liabilities and the financial position of BCW. The company will receive the consideration amount upon the completion of the Divestment. Under the sale and purchase agreements, the company will also be assuming approximately MYR11 million aggregate liabilities of BCW of which is owed to certain creditors and approximately MYR19 million which is owed to banks in respect of bank borrowings. The completion of the Divestment is subject to the company having obtained: -- approval of the relevant Chinese authorities for the Divestment; -- approval of its shareholders in a general meeting for the Divestment or a dispensation from the requirement to obtain shareholders' approval from the Singapore Exchange Securities Trading as the Divestment is deemed to be a "major transaction" under Rule 1006 of the Listing Manual of the Singapore Exchange. Thus, the company will be writing to the Singapore Exchange to seek a waiver granting the shareholders' approval. If the waiver is not granted, the company shall hold a general meeting to seeking the shareholders' approval; and -- approval from the Scheme Creditors. The Divestment is expected to result in a net loss of approximately SGD13.7 million, assuming that the transaction had been completed on January 1, 2005. Lindeteves-Jacoberg decided to sell and transfer its BCW shares since BCW has been incurring losses since 2002 and requires a substantial amount of additional funds to enable it to carry on its operations. As at August 31, 2006, the net liabilities of BCW were approximately SGD52.5 million. For the first half-year ended June 30, 2006, BCW reported a pre-tax loss of approximately SGD27.3 million. Its monthly losses continued in the months of July, August and September 2006. The company also needs to finance BCW to be restructured and transformed into a competitive manufacturing facility, which Lindeteves-Jacoberg cannot provide, due to its tight liquidity position and can prejudice other operations of Lindeteves- Jacoberg's group of companies. In connection with the sale and divestment of the equity interest, Lindeteves-Jacoberg has also entered into a licensing agreement with Dalian on October 27, 2006. Under the License Agreement, Dalian is licensed on an exclusive basis to produce and sell motors under the "Brook Crompton" and "Western Electric" brands owned by the Group for distribution and use in China only. Dalian may also sell motors bearing the Brands outside China provided that the sales are made to the Group only. The License Agreement will be effective for a period of three years beginning on October 2006. Dalian will pay Lindeteves-Jacoberg an annual license fees for the use of the Brands. About Lindeteves-Jacoberg Lindeteves-Jacoberg Limited - http://www.linjacob.com/-- was incorporated in Singapore on December 11, 1947 as part of a Dutch international trading group. Its principal activities consist of investment holding, provision of warehousing and rental services and acting as specialist mechanical and electrical contractor for environmental engineering projects. The company is currently working out further debt restructuring plans for its liabilities, in addition to an earlier approved Scheme of Arrangement with its creditors. As reported in the Troubled Company Reporter - Asia Pacific on Oct. 27, 2006, Lindeteves-Jacoberg's total assets as of October 2006 was US$225.52 million and its total shareholder equity deficit was US$53.23 million. MAE ENGINEERING: Notes Shareholders' Change of Interests -------------------------------------------------------- MAE Engineering Ltd, on October 26, 2006, disclosed its shareholders changes of interest. Ong Puay Koon and United Overseas Bank Nominees (Pte) Ltd, both registered shareholders of MAE Engineering held 88,297,814 shares before the change with 10.64% issued share capital. After the change, Mr. Ong holds 133,297,814 shares with 16.06% issued share capital. The change reflects the re-classification of 45,000,000 shares owned by Mr. Ong but held by United Overseas Bank from deemed interest to direct interest. The aggregate shareholding of the direct and deemed interest of Mr. Ong remains unchanged at 393,022,704 shares or 47.35% issued share capital. Bin Tai Holdings Private Limited, a substantial shareholder of the company has re-classified his shareholding from deemed interest to direct interest. Before the change, Bin Tai held 181,500,000 deemed shares with 21.87% issued share capital. After the change, Bin Tai holds 181,500,000 direct shares with 21.87% issued share capital. About MAE Engineering Headquartered in Singapore, MAE Engineering Limited is engaged in the provision of integrated electrical and mechanical engineering services including designing, planning and procurement. These services are categorized into electrical installations, mechanical installations, electrical power supply installations, instrumentation and building automation as well as maintaining electrical and mechanical systems. The Group also offers consulting and specialist services to oceanariums and aquariums. The Group has disposed off its prawn and fish farming as well as edutainment businesses, after suffering accumulated losses of SGD48 million as of September 30, 2005. The company also suffered a liquidity crunch since September 30, 2005, when its total current liabilities of SGD23,695,000 exceeded its total current assets of SGD5,582,000. As of March 31, 2006, the company's balance sheet showed SGD7,404,000 in total assets and SGD27,257,000 in total liabilities, resulting in a SGD19,853,000 stockholders' equity deficit. The Company's March 31, 2006 balance sheet also revealed strained liquidity with SGD6,346,000 in total current assets available to pay SGD27,200,000 in total current liabilities coming due within the next 12 months. PETROLEO BRASILEIRO: Reaches Gas Exploration Pact with Bolivia -------------------------------------------------------------- Petroleos Brasileiro aka Petrobras and Yacimientos Yacimientos Petroliferos Fiscales Bolivianos reached an agreement on Oct. 28, 2006, that will allow the company to remain in Bolivia performing in the gas exploration and production businesses in the San Alberto and San Antonio fields, in Tarija. After extensive negotiations, the agreement that was signed regulates the new gas exploration and production conditions in the above-mentioned fields. The gas price issue and the matter involving the Bolivian refineries that belong to Petrobras were not dealt with in the agreement. The document will be sent to the Bolivian National Congress for final analysis. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA 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. PREMIER INTERNATIONAL: Creditors Proofs of Debt Due on Nov. 20 -------------------------------------------------------------- Premier International Marketing Pte Ltd, which was placed under members' voluntary liquidation, asks its creditors to submit their proofs of debt by November 20, 2006, to be included in the company's distribution of dividend. The company's liquidator can be reached at: Chen Kung 3 Phillip Street #10-03 Commerce Point Singapore 048693 UNITED TEST AND ASSEMBLY: S&P Gives 'BB-' Corp. Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Singapore's United Test And Assembly Center Ltd., the world's sixth-largest outsourced semiconductor assembly and test company. The outlook is stable. At the same time, Standard & Poor's assigned its 'BB-' rating to UTAC's proposed US$200 million convertible bonds due 2013. "The rating on UTAC factors in its favorable position in the semiconductor test market, moderate leverage, and robust growth prospects for the global outsourced semiconductor test and assembly market," said Standard & Poor's credit analyst Raymond Hsu. "Nevertheless, the rating on UTAC is constrained by high industry risks, the company's relatively weak semiconductor assembly operations, and negative free cash flow due to its relatively aggressive expansion plan." UTAC became the world's sixth-largest outsourced semiconductor assembly and test service provider after its acquisition of UTAC Thai Ltd., previously known as NS Electronics Bangkok (1993) Ltd. The acquisition was completed in June 2006. Semiconductor test services accounted for 61% of UTAC's revenue in the first half of 2006. UTAC also provides assembly services for a broad range of leadframe and array packages, partly through turnkey services. About 39% of UTAC's revenues were derived from semiconductor assembly in the first half of 2006. UTAC operated 1,010 wire bonders and 747 testers in its facilities in Singapore, Taiwan, Thailand, and China as at June 30, 2006. The issue proceeds from the proposed convertible bonds will be primarily used to repay the company's US$175 million bridge loan for the acquisition of UTL, pay down other debt and for general corporate purposes. The acquisition of UTL has broadened UTAC's customer base, enhanced its position in the semiconductor assembly market, and diversified its product mix away from the volatile dynamic random access memory market. UTAC's liquidity is adequate. At June 30, 2006, the company had cash and cash equivalent of US$84 million, compared with current debt of US$38 million. The company also has unused committed credit facilities of US$135 million. "The stable outlook reflects our view that UTAC will continue to maintain its favorable position in the semiconductor test market, as well as moderate leverage despite expected high capital spending," said Mr. Hsu. "The rating has factored in the expected impact of the proposed bond issue on UTAC's credit measures. The rating also takes into account integration risks relating to the UTL acquisition." =============== T H A I L A N D =============== BANK OF AYUDHYA: GE Confirms Stock Purchase Deal ------------------------------------------------ GE Capital International Holdings Corp has confirmed that it will buy a 25.4% stake in Bank of Ayudhya, with the first share purchase to be made by January 10, 2007, The Nation reports. As reported by the Troubled Company Reporter - Asia Pacific on September 25, 2006, Bank of Ayudhya shareholders have agreed to sell 2 billion shares to the GE unit, starting with the initial purchase of 1.39 billion shares, to be sold at THB16 each totaling THB22.24 billion. According to press reports, Bank of Ayudhya originally planned to complete the sale on October 10, 2006, but was postponed due to change of situation following Thailand's military coup. In a statement addressed to the Stock Exchange of Thailand, Bank of Ayudhya's president, Pongpinit Tejagupta, said that the bank had received a written confirmation from GE of its intention to subscribe to the new shares. "GE Capital International Holdings has also given a written guarantee from GE Capital Corporation, the parent company of GECIH, to the bank to guarantee the subscription of the capital- increase shares," Bank of Ayudhya also said in its statement. The Nation notes that the sale has been divided into two transactions in order to avoid violating the 49% limit on foreign ownership of Thai banks. Currently, foreign investors hold a combined 32% stake in the Bank, The Nation says. Issuing new shares to GE Capital will serve to dilute the level of foreign ownership in the bank. GE's stake will fall to 25.4% if 1.217 billion outstanding Bank of Ayudhya warrants are fully exercised by September 2008. The initial investment will lift the Bank's capital to THB42.62 billion from THB28.71 billion. Bank of Ayudhya said that the price at which the remaining 609 million shares are sold could vary depending on when GE makes the final purchase, and that this could further dilute the foreign ownership level. Over the next two months, Bank of Ayudhya and GE Capital would draft a business plan for next year focusing on boosting retail loans, The Nation notes. Headquartered in Bangkok, Thailand, Bank of Ayudhya Public Co. Ltd. -- http://www.krungsri.com/-- provides a full range of banking and financial services. The bank offers corporate and personal lending, retail and wholesale banking; international trade financing asset management; and investment banking services to customers through its branches. It has branches in Hong Kong, Vietnam, Laos, and the Cayman Islands. * * * Moody's Investors Service gave Bank of Ayudha an 'E+' bank financial strength rating. Fitch Ratings gave the bank a 'BB+' Long-Term Foreign Currency Issuer Default Rating, a 'B' Short-Term Foreign Currency Rating, a 'BB' Foreign Currency Subordinated Debt Rating, and a 'D' Individual Rating. SAS AB: To Sell 75% Outstanding Shares in Rezidor Hotel ------------------------------------------------------- SAS Group's subsidiary, Rezidor Hotel Group AB, has commenced the formal process of seeking a listing on the Nordic List of the Stockholm Stock Exchange. The IPO will be completed by the end of 2006, subject to market conditions and final SAS AB's Board approval. On June 22, 2006, SAS disclosed its intention to prepare for a listing of Rezidor through an IPO on the Stockholm Stock Exchange. The divestiture of Rezidor is in line with SAS's strategy to focus on its core airline activities. The offering is expected to allow SAS to exit completely from the hotel business, continuing the process initiated in 2005 when Carlson acquired 25% of Rezidor's shares. Over the last several years, Rezidor has generated significant growth. In parallel, Rezidor has made a strategic shift from owning hotel properties to hospitality management, initiated in 1997 and completed in 2005 when Rezidor sold its last remaining hotel. Rezidor continues to grow based on this flexible, asset- light business model and believes it is well positioned to continue to generate profitable growth. Rezidor believes it will be able to improve its strategic focus even further as a public company. The board of directors and management team will be accountable directly to its shareholders and focused exclusively on its core hospitality management operations. Rezidor will not receive any of the proceeds from the sale of the shares by SAS in the offering. Rezidor believes its listing will increase attention from the capital markets and the media and improve the profile of both the company and the Rezidor brands. Rezidor believes this should further enhance its position in its markets, expand its opportunities to obtain contracts with attractive partners and property owners, and further strengthen the platform for the future development of its business. In connection with the IPO, SAS expects to sell its entire shareholding, equal to 75% of all the outstanding Rezidor shares. No new Rezidor shares will be issued. Carlson, a leading U.S. travel and hospitality company, has confirmed its intention to remain a significant shareholder in Rezidor and will increase its stake from 25 to 35% of Rezidor through the purchase of shares from SAS at the IPO price. Gunnar Reitan, Acting President and CEO of SAS Group, commented: "Listing Rezidor on the Stockholm Stock Exchange benefits all parties. For Rezidor, it is a logical move as it prepares for its next stage of development and for SAS, the listing of Rezidor is in line with SAS's stated strategy of focusing on core airline activities." About Rezidor Rezidor is one of the fastest growing hotel companies in Europe as measured by the number of hotel rooms added to the portfolio from 2003 through 2005. The hotels in its portfolio are principally operated under two key hotel brands, Radisson SAS and Park Inn, but also under three development brands, Regent, Hotel Missoni and Country Inn. As of September 30, 2006, Rezidor had 226 hotels in operation and 46 hotels under development, all of which, except for one hotel in China, are located in the EMEA area. About SAS Headquartered in Stockholm, Sweden, SAS AB -- http://www.sasgroup.net/-- is the Nordic region's largest listed airline and travel group and the fourth-largest airline group in Europe, in terms of passengers. It had revenues of SEK61.89 billion in fiscal year 2005. The company has operations in China, Japan, and Thailand. * * * On Oct. 26, 2006, Moody's Investors Service affirmed SAS's B1 Corporate Family, B2 Senior Unsecured, and B3 Subordinated ratings and changed the outlook to stable from negative following the recent improvement in operating performance of SAS AB, and the company's announcement that it plans to sell the remaining 75% stake it owns in Rezidor by the end of the year. SAS AB: Stake Sale Plan Prompts Moody's to Affirm Ratings --------------------------------------------------------- Moody's Investors Service affirmed SAS AB's ratings and changed the outlook to stable from negative following the recent improvement in the company's operating performance, and in its announcement that it plans to sell the remaining 75% stake it owns in Rezidor Hotek Group AB by the end of the year. The ratings of SAS (B1 Corporate Family Rating, B2 Senior Unsecured, B3 Subordinated) reflect the application of Moody's rating methodology for government-related issuers, which combine these inputs: -- SAS's Baseline Credit Assessment (BCA) of 15 (on a scale of 1 to 21, 15 representing the equivalent of B2), which is Moody's opinion on the stand-alone credit quality of the company, -- the Aaa ratings of the supporting governments: Denmark, Norway and Sweden, -- the default dependence between SAS and the supporting governments, which is considered as low, and -- the expected level of support from the supporting governments, which is also viewed as low. Moody's acknowledges that SAS's BCA has enjoyed a gradual strengthening, reflecting the company's improved operating performance, driven by positive traffic and yield development, higher load factors, the introduction of a new business model, and the positive impact on its cost structure of the successfully executed restructuring program. SAS's BCA of 15 reflects the company's good position as Scandinavia's number-one passenger carrier under the SAS brand and other leading regional airlines, as well as its commitment to improve its competitiveness through a substantial cost- cutting program. The current BCA also factors in the increasingly competitive environment, particularly from low-cost carriers, and the continuous pressure on profitability from high fuel prices. Furthermore, Moody's notes SAS's recent announcement of the company's intention to list its remaining 75% stake in its hotel business Rezidor. When the transaction is completed and if the proceeds were to be applied to debt reduction, Moody's may revisit the ratings in light of the new corporate structure and the pro forma credit metrics excluding Rezidor that will benefit from a reduction in financial debt and lease-adjusted debt, which could lead Moody's to raise SAS's BCA to 14 from 15. Moody's also factors into the rating a degree of uncertainty related to the potential change in SAS's ownership structure. The newly elected Swedish government has publicly stated that its stake in SAS could be sold as part of an upcoming privatization program. However, Moody's notes that there is little clarity at this stage regarding the details of this privatization program, in particular the sequencing of such sales. Should a change in the ownership structure occur, Moody's would revisit its assessment of the level of support now embedded into the rating. Should the BCA remain unchanged at 15, any reduction in the level of support would likely imply a one-notch downgrade of all ratings. If the BCA were to be upgraded to 14, the ratings would likely be affirmed regardless of any change in support. SAS AB, headquartered in Stockholm, Sweden, is the Nordic region's largest listed airline and travel group and the fourth- largest airline group in Europe, in terms of passengers. It had revenues of SEK61.89 billion in fiscal year 2005. The company has operations in China, Japan, and Thailand. TMB BANK: May Miss THB10-Billion Net Profit Target for 2006 ----------------------------------------------------------- TMB Bank Pcl disclosed on November 1, 2006, that it will likely miss its THB10-billion net profit target for 2006 due to lower than expected loan growth, Reuters says. "It should not reach THB10 billion because our loans to large clients grew a little bit slower," Somchainuk Engtrakul, the bank's chairman, told Reuters. In addition, TMB president Subhak Siwaraksa said he expected the bank's 2006 net profit would be lower than the THB7.8 billion earned in 2005, but forecast earnings would rise in 2007. Nine analysts polled by Reuters estimate a mean net profit of THB5.9 billion in 2006, down 24% from a year earlier, and a net profit of THB6.3 billion in 2007. Reuters notes that in the first nine months of this year, TMB made THB4.6 billion in net profit, down 25% from the same period a year earlier. The bank with assets of about US$19 billion should see loan growth of only 2-3% this year, below its 4% target, Mr. Subhak said and forecast growth of 8-9% next year. It would also postpone a plan to sell non-performing loans worth about THB20 billion to next year from December, he said. "We have hired an adviser to study the plan, which should be concluded in the fourth quarter or early next year," Mr. Suphak added. Headquartered in Bangkok, Thailand, TMB Bank Public Co. Ltd -- http://www.tmbbank.com/-- is a commercial bank that renders financial services to all groups of customers. TMB Bank had total assets of about THB717 billion as at December 31, 2005. * * * Fitch Ratings gave TMB Bank a 'BB+' Long-Term Foreign Currency Issuer Default Rating; 'B' Short-Term Foreign Currency Rating; 'BB' Foreign Currency Subordinated Debt Rating; 'D' Individual Rating; and Support rating of 3. Moody's Investor Service gave TMB Bank a 'Ba1' Junior Subordinated Debt Rating and an 'E+' Bank Financial Strength Rating. Standard & Poor's Ratings Services gave TMB Bank's US$200- million hybrid Tier 1 securities a 'BB' rating. ********* 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 ***