/raid1/www/Hosts/bankrupt/TCRAP_Public/070215.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, February 15, 2007, Vol. 10, No. 33
Headlines
A U S T R A L I A
ADVANCED MARKETING: Wells Fargo Won't Object to PGW Payment
ADVANCED MARKETING: Wants to Hire Capstone as Financial Advisor
ADVANCED MARKETING: Panel Objects to Wells Fargo DIP Financing
ARIS ELECTRICAL: Receiver and Manager Quits Post
AUSTRALIAN EQUITY: To Declare Interim Dividend on March 9
CONSTELLATION BRANDS: Acquires SVEDKA Vodka Brand for US$384 Mln
CONSTELLATION BRANDS: S&P Says SVEDKA Buy Won't Affect Ratings
CUSTOM LEASE: Proofs of Debt Due on March 8
GULSON PTY: Members' Final Meeting Set for March 19
J.K.P.L. PTY: Placed Under Members' Voluntary Wind-Up
LARGA PTY: Undergoes Liquidation Proceedings
LIRI AUSTRALASIA: Liquidator to Present Wind-Up Report
NELSCO & ASSOCIATES: Final General Meeting Slated for March 13
PEOPLE TELECOM: Renews Major Mobile Supply Agreement with Optus
ROSELANDS DRAPER: Names Lord and Crowe-Maxwell as Liquidators
SYMBION HEALTH: Says Primary's AU$2.3B Merger Proposal Unfair
TREDEGAR PTY: Enters Wind-Up Proceedings
UNIVERSAL COMPRESSION: Board OKs Merger of Equals with Hanover
UNIVERSAL COMPRESSION: Merger Cues Moody's to Review Ratings
UNIVERSAL COMPRESSION: Merger Cues S&P to Hold BB Corp. Rating
C H I N A & H O N G K O N G
AGRICULTURAL BANK: Hires ABN-AMRO to Manage Investments Abroad
CITIC GROUP: S&P Amends Outlook on Ratings to Developing
FORT DODGE: Contributories and Creditors to Meet on March 13
GENERAL MULTI-WITS: Appoints Leung Chui Mei as Liquidator
HOPSON DEV: Fitch Hands BB Rating on Long-Term For. Currency IDR
KENBERG LIMITED: Members' Final Meeting Slated for March 13
PRODUCT SAFETY (INTERNATIONAL): Members' Meeting Set on March 13
PRODUCT SAFETY (HONG KONG): Final Meeting Set for March 13
SUPERB EARNING: Appoints Yip Pui Yee as Liquidator
SUPREME AIRFRT: Creditors Must Prove Debts by March 16
TRULY FAIR: Creditors' Proofs of Debt Due on March 12
VALENCE TECHNOLOGY: Sells US$1 Mil. Common Stock to West Coast
VALENCE TECHNOLOGY: Posts US$4.8MM Loss in Qtr Ended Sept. 30
WAYWIN CORPORATION: Names Yip Pui Yee as Liquidator
WINKO LIMITED: Members to Receive Liquidator's Report
I N D I A
BAGALKOT UDYOG: Posts INR10.99-Mil. Net Loss in Dec. '06 Quarter
ELCOM INT'L: Selects John Halnen as Interim President & CEO
EXIDE TECH: Posts US$11.2-Mil. Net Loss in Quarter Ended Dec. 31
HMT LTD: Cabinet Approves Cash Infusion as Revival Plan
ICICI BANK: Hikes Deposit and Lending Rates Effective Feb. 9
INDIAN RAILWAY: Moody's Assigns Baa3 Rating to JPY15-Bil. Notes
JUNIPER NETWORKS: Stock Options Probe Cues S&P's Negative Watch
SUN MICROSYSTEMS: CFO Reaffirms Fourth Quarter Outlook
I N D O N E S I A
ALCATEL-LUCENT: Unveils 2007 Financial Calendar
ALCATEL-LUCENT: Fitch Keeps BB Rating Two Months After Merger
ALCATEL-LUCENT: Costa Rica to Stop Working with Firm
ANEKA TAMBANG: Ties Up with BHP for Halmahera Island Development
BAKRIE SUMATERA: To Build Four More CPO Processing Plants
BANK INTERNASIONAL: Launches 'Fixed Rate Program'
BANK MANDIRI: Expects IDR10 Billion in Losses Due to Floods
COMVERSE TECH: To Buy US$293MM Pref. Stock from Verint Systems
CORUS GROUP: Tata In Talks with Indian Banks Over Debt Financing
GENERAL NUTRITION: Moody's Says Buyout Won't Affect Ratings
HILTON HOTELS: Fights Accor for Newly Sold Macdonald Hotels
PERTAMINA: Exasperated Over PLN Plans on Tender for Fuel Oil
PERUSAHAAAN GAS: Councilors Seeks Gas Pipes' Relocation
PERUSAHAAN LISTRIK: Eyes IDR12.3 Trillion Bonds This Year
J A P A N
DELPHI CORP: To Sell Brake Hose Biz to Harco Mfg. for US$9.8MM
EDDIE BAUER: CEO and Board Member Fabian Mansson Resigns
FLOWSERVE CORP: Fitch Rates Senior Secured Bank Facilities at BB
MITSUBISHI MATERIAL: Moody's Changes Ratings Outlook To Positive
NIKKO CORDIAL: Executive VP Steps Down Over Accounting Scandal
NIKKO CORDIAL: To Improve Internal Controls to Prevent Bad Deals
SOLO CUP: Stephen Macadam Joins Board of Directors
XERIUM TECH: Moody's Drops Ratings to B2 Due to Weak Performance
* Japanese Dairy Firms to Keep Financial Strength, Moody's Says
K O R E A
BURGER KING: Declines CIW's "Penny Per Pound" Proposal
BURGER KING: Earns US$38 Mil. in Quarter Ended Dec. 31, 2006
CITIBANK KOREA: Computer System Unsafe, Credit Card Users Say
HANAROTELECOM INC: Incurs KRW86-Billion Net Loss for FY2006
HANAROTELECOM INC: Board to Convene AGM on March 23
TOWER AUTOMOTIVE: Enters Into 8th Amendment of DIP Financing
TOWER AUTOMOTIVE: Plan-Filing Period Extended to February 28
TOWER AUTOMOTIVE: Has Until April 30 to Remove Civil Actions
M A L A Y S I A
MALAYSIA AIRLINES: Rival May Get License to Fly Singapore Route
METROPLEX BERHAD: Books MYR1.81 Bil. Loan Default as of Jan. '07
MOL.COM. BERHAD: Posts MYR4.05-Mil. Net Profit in 2nd Qtr. 2007
STAR CRUISES: To Review Planned Investment Deal in Macau
N E W Z E A L A N D
A A WORLDWIDE: Court to Hear Liquidation Petition Today
AKITA CONSTRUCTION: Creditors Must Prove Debts by Feb. 28
ANCHOR RIGHT: Court Sets Liquidation Hearing on February 26
AOTEAROA OLIVES: Fisk and Sanson to Act as Liquidators
B & J LTI: Faces Liquidation Proceedings
COMMUNITY TRUST: Commences Liquidation Proceedings
HALLS EARTHWORKS: Creditors' Proofs of Claim Due on March 5
KEISH HOLDINGS: Shareholders Opt to Liquidate Business
LOVELL MEWS: Court Sets Date to Hear Liquidation Petition
ORION PROPERTY: Court Appoints Joint Liquidators
PLUS SMS: Subsidiary Creates Advisory Board to Accelerate Growth
PLUS SMS: CRE8 Signs LOI to Acquire American Content Provider
PLUS SMS: CRE8 Extends Content Services Agreement with Movistar
SEALEGS CORP: Unit Appoints Malaysian Distributor
SEALEGS CORP: Narrows Interim Net Deficit Down to NZ$499,343
SOLUTION DYNAMICS: Teams Up With PrintSoft for Mail Software
TM PRODUCTIONS: Appoints Joint Liquidators
P H I L I P P I N E S
ATLAS CONSOLIDATED: To Increase Authorized Capital to PHP20 Bil.
PHIL. NATIONAL BANK: 2006 Net Income Up 30% to PHP810 Million
WARNER MUSIC: Operating Income Drops to US$80MM in 1st Qtr '07
* Gov't. Calls for Disciplined Spending to Hasten Debt Payments
S I N G A P O R E
COMPACT METAL: Completes Ratus Projek Acquisition Agreement
COMPACT METAL: Accepts 507,686,843 Rights Shares on February 8
DIGILAND INTERNATIONAL: Director Acquires 250,000 Shares
DONOVAN SYSTEMS: High Court to Hear Wind-Up Petition on Feb. 23
EVERGREAT CONSTRUCTION: Petition Hearing Slated for February 23
LEAR CORP: Carl Icahn Deal Prompts S&P's Negative CreditWatch
PETROLEO BRASILEIRO: Appeals to Court on Compensation Issues
PETROLEO BRASILEIRO: Gets 40% Working Interest in Rufisque
PETROLEO BRASILEIRO: To Spend US$12.1 Bil. in Projects Abroad
THAI IMPERIAL: Commences Liquidation Proceedings
T H A I L A N D
DAIMLERCHRYSLER: Chrysler Reveals Recovery & Transformation Plan
DAIMLERCHRYSLER: Reports EUR3.2BB Preliminary Net Income in 2006
KRUNG THAI: To Reduce NPLs in 2007 Through Write-Offs
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A U S T R A L I A
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ADVANCED MARKETING: Wells Fargo Won't Object to PGW Payment
-----------------------------------------------------------
Wells Fargo Foothill, Inc., as DIP loan agent, tells the United
States Bankruptcy Court for the District of Delaware that it
doesn't object to Advanced Marketing Services Inc. and its
debtor-affiliates' request to:
* pay the prepetition claims of Bailor Publishers of
Publishers Group West, Inc.; and
* pay up to US$12,000,000 in PGW claims, if and as approved
by the lenders under the DIP Loan Agreement.
As reported in the Troubled Company Reporter on Jan. 10, 2007,
the Court authorized the Debtors, on an interim basis, to dip
their hands into the DIP financing facility arranged by
Foothill.
As reported in the TCR on Jan. 15, 2007, the Debtors had asked
the Court for authority to pay, in the ordinary course of
business, up to US$12,000,000 in prepetition claims of
publishers who supply goods and credit critical to the continued
operation of PGW's business.
Kimberly E.C. Lawson, Esq., at Reed Smith, LLP, in Wilmington,
Delaware, representing Wells Fargo, says that, nevertheless,
Foothill reserves all of its rights to object to payment of the
PGW Publisher claims on all grounds in the event that the
Debtors seek to make payments contrary to the terms of the DIP
Loan Agreement and without Wells Fargo's express written
consent.
The Debtors wanted to make the payments to minimize disruption
and possible "domino effect" of further insolvencies that could
be caused if PGW immediately ceased all payments with respect to
the PGW Publisher Claims.
About Advanced Marketing
Based in San Diego, California, Advanced Marketing Services,
Inc. -- http://www.advmkt.com/-- provides customized
merchandising, wholesaling, distribution and publishing
services, currently primarily to the book industry. The company
has operations in the U.S., Mexico, the United Kingdom, and
Australia, and employs approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group
Incorporated and Publishers Group West Incorporated filed for
Chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos.
06-11480 through 06-11482). Chun I. Jang, Esq., Mark D.
Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton &
Finger, P.A., represent the Debtors. When the Debtors filed for
protection from their creditors, they listed estimated assets
and debts of more than $100 million. The Debtors' exclusive
period to file a Chapter 11 Plan will expire on Apr. 28, 2007.
ADVANCED MARKETING: Wants to Hire Capstone as Financial Advisor
---------------------------------------------------------------
Advanced Marketing Services and its debtor-affiliates ask the
United States Bankruptcy Court for the District of Delaware
Court for permission to employ Capstone Advisory Group LLC as
their financial advisors.
Specifically, the Debtors will look to Capstone to:
(a) analyze and challenge the Debtors' short-term and long-
term cash flow forecasts;
(b) assist management, as appropriate, in developing
corresponding liquidity analysis;
(c) analyze the Debtors' business plan and any alternative
business plans suggested by the Debtors;
(d) assist the Debtors and their advisors in identifying and
evaluating strategic financial and restructuring
alternatives;
(e) support or assist investment banks of the Debtors in
their efforts to sell or restructure the business entity;
(f) act as a liaison between the Debtors and their investment
bankers;
(g) assist in providing data and information requested by
Houlihan, Lokey, Howard & Zukin Capital, Inc., in its
efforts to market and refinance the Debtors;
(h) assist Houlihan Lokey in its efforts to market or
refinance the Debtors;
(i) assist Houlihan, Lokey in identifying and executing an
alternative transaction that best meets the objectives of
the Debtors' and their estates; and
(j) perform other tasks as may be requested by the Debtors
from time to time.
Mark D. Collins, Esq., at Richards, Layton & Finger, PA, in
Wilmington, Delaware, relates that Capstone specializes in
providing creative value-added solutions for stakeholders,
lenders and investors dealing with distressed and fraud
situations; for parties in commercial disputes; and, for lenders
and investors evaluating capital transactions.
Capstone has provided services to the Debtors since May 2006.
At that time, Capstone was hired, through the Debtors' counsel,
O'Melveny & Myers, LLP, to review the Debtors' short-term and
long-term financial forecasts, and assist the Debtors in
identifying and evaluating restructuring alternatives.
The Debtors are also seeking to employ Focus Management Group
U.S.A., Inc., as their financial advisors. Mr. Collins says
that Focus was retained prior to Capstone and Focus' familiarity
with the Debtors' books, records and financial reporting has
aided Capstone's provision of financial analysis and advisory
services. Furthermore, the Debtors, Focus and Capstone have
conferred and will continue to do so to ensure there is no
duplication of effort or overlap of work between and among Focus
and Capstone in order to ensure that the Debtors estates receive
their maximum value.
"Focus will be working on a number of projects either in
conjunction with Capstone or under the supervision of Capstone,"
Mr. Collins says.
The Debtors will pay Capstone hourly rates on actual hours
worked at Capstone's standard hourly rates in effect when the
services are rendered. Capstone's hourly rates are:
Designation Hourly Rate
----------- -----------
Executive Directors US$505 - US$595
Staff US$275 - US$475
Support US$90 - US$200
The Capstone employees that are expected to be directly
responsible for the engagement and their hourly rates are:
* Mark Rohman, Capstone Executive Director -- US$595
* Monique Atkins -- US$450
Mr. Collins notes that there will be a fee awarded to Capstone
upon the completion of a successful sale or refinancing of the
Debtors, equal to 30% of any transaction fee or financing fee
paid by the Debtors to Houlihan Lokey.
In addition, Mr. Collins states that Capstone will be reimbursed
for all reasonably incurred out-of-pocket expenses in connection
with the rendering of services. These include travel, lodging,
costs of reproduction, reasonable out-of-pocket counsel fees and
other direct expenses.
The Debtors will also indemnify Capstone for its services.
Mr. Rohman assures the Court that Capstone and its partners and
associates do not have any connection with or any adverse
interest to the Debtors, their creditors, or any other parties-
in-interest.
About Advanced Marketing
Based in San Diego, California, Advanced Marketing Services,
Inc. -- http://www.advmkt.com/-- provides customized
merchandising, wholesaling, distribution and publishing
services, currently primarily to the book industry. The company
has operations in the U.S., Mexico, the United Kingdom, and
Australia, and employs approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group
Incorporated and Publishers Group West Incorporated filed for
Chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos.
06-11480 through 06-11482). Chun I. Jang, Esq., Mark D.
Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton &
Finger, P.A., represent the Debtors. When the Debtors filed for
protection from their creditors, they listed estimated assets
and debts of more than US$100 million. The Debtors' exclusive
period to file a Chapter 11 Plan will expire on Apr. 28, 2007.
ADVANCED MARKETING: Panel Objects to Wells Fargo DIP Financing
--------------------------------------------------------------
The Official Committee of Unsecured Creditors and Simon &
Schuster Inc. contend the DIP Facility offers no benefit to
Advanced Marketing Services Inc. and its debtor-affiliates and
would only serve to improve the secured lenders' position.
As reported in the Troubled Company Reporter on Jan. 10, 2007,
the Court authorized the Debtors, on an interim basis, to dip
their hands into the DIP financing facility arranged by Wells
Fargo Foothill.
The Committee also asserts that the DIP Facility effectuates
cross-collateralization of pre- and postpetition debt. The
Committee wants denied the proposed payment of the prepetition
obligations first from the proceeds of Wells Fargo Foothill's
collateral.
Causes of action under Section 549 of the Bankruptcy Code should
also be excluded from Foothill's collateral, the Committee
suggests.
The Committee also wants more time to review the extent,
validity and priority of the prepetition lenders' liens, as well
as any claims against the lenders. The Committee says the 60-
day probe period in the DIP Motion is too short. The Committee
also wants equal access to information.
Simon & Schuster says if the Interim DIP Order becomes a final
order, unsecured creditors will be irreparably harmed and unduly
prejudiced. Representing Simon & Schuster, Craig A. Wolfe,
Esq., at Kelley Drye & Warren LLP, in New York, says unsecured
creditors stand to lose the most in the Debtors' cases. He
explains that the DIP Loan Facility provides no real benefit to
the Debtor and is simply a mechanism for the senior lenders to
force a quick liquidation of Debtor's businesses while being
paid substantial fees in the process.
Simon & Schuster sold books and multimedia products to the
Debtor. It asserts a US$26,000,000 prepetition clam against the
Debtor.
During the 45-day period prior to the Dec. 29, 2006, Simon &
Schuster delivered goods aggregating US$5,105,629, including
US$2,146,126 in goods delivered within 20 days before Debtor's
bankruptcy filing.
LearningExpress LLC objects to the DIP Financing Motion to the
extent that the Debtors' request:
(a) seeks to eliminate its rights of set-off and recoupment
on account of amounts the Debtors owe against amounts
LearningExpress owes to the Debtors;
(b) grants the Debtors' lenders right, title or interest in
LearningExpress' books, any of its copyrights, trademarks
and intellectual property rights or the proceeds of sale
of its books; and
(c) impairs its reclamation rights.
LearningExpress is a party to a September 2004 marketing and
distribution agreement with Advanced Marketing Services Inc.,
and Publishers Group West Incorporated. LearningExpress is also
a borrower under a prepetition loan agreement with PGW.
Representing LearningExpress, Michael E. Foreman, Esq., at
Proskauer Rose LLP, in New York, relates that as of the Petition
Date, PGW owes LearningExpress approximately $167,000 on account
of book sales. In addition, PGW is holding LearningExpress'
books with estimated market value of US$2,000,000 to
US$2,500,000.
Rich Publishing says the Debtors' request is unclear regarding
any effort by the Debtors' senior secured lender to obtain or
assert a lien against the books PGW holds under their bailment
arrangement. Rich Publishing is a party to a marketing and
distribution agreement with PGW. It asserts a US$4,500,000
claim against PGW.
Rich Publishing, hence, wants any order approving the Debtors'
request to recognize that Rich Publishing retains title to all
of its books in PGW's possession and no lien or interest granted
to the Debtors' lenders extends to or includes Rich Publishing's
books or intellectual property in PGW's possession.
Avalon Publishing, Inc., supplies books and other items to PGW
under an April 2006 Marketing and Distribution Agreement.
Avalon holds a US$3,900,000 prepetition claim and an
unliquidated administrative priority claim against PGW.
Representing Avalon, Mark Minuti, Esq., at Saul Ewing, LLP, in
Wilmington, Delaware, asserts that any of Avalon's products in
the Debtors' possession, or coming into their possession, should
not be subject to any lien, claim or encumbrance in favor of the
Senior Lenders or their agent under the Debtors' existing loan
documents.
Carus Publishing Group also has a marketing and distribution
deal with PGW. Carus also wants any final order approving the
Debtors' request to reflect that the Debtors have no lien or
ownership interest in Carus' books, and the Books remain
property of Carus free of any claim of the Debtors' Lenders.
Meredith Corp. and Leisure Arts, Inc., ask the Court that any
Final Order entered with respect to the DIP Motion must make
clear that each of their set-off, recoupment and reclamation
rights remain preserved and unimpaired.
Meredith and Leisure assert that the Debtors:
(a) may not be permitted to prime or impair their set-off and
recoupment rights; and
(b) seek effectively to prime their right to reclaim their
reclamation goods even though their rights in the
reclamation goods are prior to the rights of the
postpetition lender.
Nowhere in the DIP Motion or proposed final order, Meredith
says, do the Debtors propose to reserve the set-off rights.
Foothill Responds
Wells Fargo Foothill Inc., as agent to the Debtors' DIP Lenders,
tells Judge Sontchi that the Debtor and PGW creditors
erroneously argue that the DIP Facility provides the Debtors
with no availability.
Foothill points out that the Debtors enjoy sufficient liquidity
and availability as a result of -- and only because of -- the
DIP Facility. Moreover, the DIP Facility does not improve the
lender's position in any way, Foothill attests.
Foothill clarifies that the DIP Facility does not effectuate
cross-collateralization of pre- and postpetition debt because it
does not secure prepetition debt with postpetition assets.
Foothill also notes that the payment of the Debtors' prepetition
obligations first from the proceeds of the collateral is a
common feature of postpetition financing, particularly in large
complex Chapter 11 bankruptcies.
The practice, which is referred to as a "roll-up," Foothill
says, makes sense:
-- on a practical level, the first proceeds coming to
foothillpostpetition are in fact proceeds of prepetition
collateral; and
-- roll-ups are typically approved where the secured creditor
is oversecured because there is no harm to other creditors
and no preferential benefit to the secured creditor.
Foothill says the Court may impose any remedy, including
disgorgement, if it turns out that Foothill is not oversecured.
With regard to the Qualified Transaction Timeline, Foothill says
it is merely the tail end of a very long and intensive process
in which the Debtors attempted to accomplish a strategic
transaction to resolve significant financial and operational
issues. The Debtors, Foothill points out, have for more than
six months actively pursued buyers, refinancings and other deals
-- to no avail.
Foothill says it is willing to provide some flexibility in the
timeline.
Foothill also insists that its limited liens on avoidance
actions and on recoveries under Section 549 are reasonable.
That DIP provision, Foothill explains, is designed to protect it
in the event it makes payments on account of the Professional
Fee Carve Out, and then comes up short after the liquidation of
collateral. The provision, Foothill says, protects against
professionals obtaining a windfall at Foothill's expense in the
form of the carve out plus, as administrative claimants, the
proceeds of avoidance actions.
Foothill agrees that whatever rights to setoff or recoupment the
vendors have should be retained. However, Foothill notes that
Section 9-404 of the Uniform Commercial Code addresses the
relative priorities between a secured creditor and the holder of
a setoff right. A security in an account is subject to the
right of an account debtor to setoff against the account, but
only if that right accrued before the account debtor received
authenticated notice of the security interest in the account.
Foothill believes that most, if not all, of the Debtor's
creditors received that notice, eliminating the seniority of
their setoff rights.
Foothill also reminds Judge Sontchi that in asset-based lending,
the concept of eligible inventory, or inventory included in the
borrowing base, is typically a smaller subset of inventory
collateral. Hence, if PGW's transactions with its vendors are
true bailments, Foothill says its security interest likely does
not attach to the books.
About Advanced Marketing
Based in San Diego, California, Advanced Marketing Services,Inc.
-- http://www.advmkt.com/-- provides customized merchandising,
wholesaling, distribution and publishing services, currently
primarily to the book industry. The company has operations in
the U.S., Mexico, the United Kingdom, and Australia, and employs
approximately 1,200 people Worldwide.
The company and its two affiliates, Publishers Group
Incorporated and Publishers Group West Incorporated filed for
Chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos.
06-11480 through 06-11482). Chun I. Jang, Esq., Mark D.
Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton &
Finger, P.A., represent the Debtors. When the Debtors filed for
protection from their creditors, they listed estimated assets
and debts of more than US$100 million. The Debtors' exclusive
period to file a Chapter 11 Plan will expire on Apr. 28, 2007.
ARIS ELECTRICAL: Receiver and Manager Quits Post
------------------------------------------------
Brian Raymond Silvia resigned from his post as the receiver and
manager of Aris Electrical Services Pty Ltd on Jan. 30, 2007.
Mr. Silvia was appointed as the receiver and manager of the
company on Oct. 25, 1999.
The former Receiver and Manager can be reached at:
Brian Silvia
Ferrier Hodgson
GPO Box 4114
Sydney, New South Wales 2001
Australia
About Aris Electrical
Aris Electrical Services Pty Ltd provides business services.
The company is located in New South Wales, Australia.
AUSTRALIAN EQUITY: To Declare Interim Dividend on March 9
---------------------------------------------------------
Australian Equity Corporation Limited will declare an interim
dividend on March 9, 2007.
In this regard, creditors are asked to file their proofs of debt
by March 8, 2007, to be included in the distribution of
dividend.
The liquidator can be reached at:
A. G. Hodgson
Ferrier Hodgson
Level 29, 600 Bourke Street
Melbourne, Victoria 3000
Australia
About Australian Equity
Australian Equity Corporation Ltd operates personal credit
institutions.
The company is located in New South Wales, Australia.
CONSTELLATION BRANDS: Acquires SVEDKA Vodka Brand for US$384 Mln
----------------------------------------------------------------
Constellation Brands Inc. has reached an agreement with
Guillaume Cuvelier and Belgian-based Alcofinance S.A., the
owners of SVEDKA Vodka, to acquire the brand and related
business for US$384 million. The transaction, which includes
the acquisition of Spirits Marque One LLC, the SVEDKA brand
owner, is expected to close approximately in March 1, 2007.
SVEDKA, an 80-proof premium vodka produced in Sweden, was
launched in 1998 and it is now the fastest growing major
imported premium vodka in the United States. Approximately
1.1 million cases of SVEDKA were sold during calendar 2006,
predominantly in the U.S., a 60% increase over 2005 sales
volume.
"SVEDKA's phenomenal success is largely due to the eye-catching
and effective marketing and advertising campaigns that reach a
key segment of the young adult market," Constellation Brands
chairman and chief executive officer Richard Sands commented.
"SVEDKA complements and enhances our premium spirits offerings
by providing a popular and rapidly growing vodka brand in the
largest U.S. spirits category.
"It has strong brand equity and positive momentum, which we can
build upon through increased U.S. distribution, as well as
international expansion.
"We believe SVEDKA is a perfect fit, providing us with a
platform for expansion of our premium spirits portfolio. With
continued marketing investment we will look to maximize the
brand's long-term growth potential and value," Mr. Sands
concluded.
Spirits Marque One founder, and SVEDKA creator, Guillaume
Cuvelier will lead the New York-based brand management team with
the same independent spirit that has successfully differentiated
SVEDKA from the competition. The brand marketing and sales team
will retain their autonomy with the SVEDKA_Grl(TM) campaign
continuing to promote the brand.
"Constellation recognizes SVEDKA's unique culture and
capabilities," Mr. Cuvelier stated. "Its management realizes
SVEDKA's future is extremely bright and they will fully support
us as we continue to build upon the brand's current phenomenal
growth rate and marketplace momentum. Our entrepreneurial
culture fits perfectly with Constellation's, which
differentiates our companies from others in the business."
SVEDKA is the fastest growing major premium vodka imported to
the U.S., and fifth largest imported vodka with 8% market share
in the imported vodka category according to Information
Resources Inc. (IRI) data. SVEDKA is 40% alcohol by volume (80
proof) and is also available in four, 70 proof (35% alcohol by
volume) flavor variations: Citron, Clementine, Raspberry, and
Vanilla.
Constellation estimates that this acquisition will be dilutive
to diluted earnings per share by approximately $0.05 - $0.06 for
fiscal 2008. It is also expected to be dilutive the following
two fiscal years, before becoming accretive. The transaction
will be financed with debt under Constellation's senior credit
facility. The transaction is also subject to customary
regulatory approvals and other closing conditions.
Michel Dyens & Co. acted as exclusive financial advisor to
SVEDKA and Spirits Marque One.
About Alcofinance
Belgium's Alcofinance S.A. produces and distributes ethanol
worldwide.
About Constellation Brands
Constellation Brands, Inc. (NYSE:STZ, ASX:CBR), --
http://www.cbrands.com/-- is an international producer and
marketer of beverage alcohol brands with a broad portfolio
across the wine, spirits and imported beer categories. Well-
known brands in Constellation's portfolio include: Almaden,
Arbor Mist, Vendange, Woodbridge by Robert Mondavi, Hardys,
Goundrey, Nobilo, Kim Crawford, Alice White, Ruffino, Kumala,
Robert Mondavi Private Selection, Rex Goliath, Toasted Head,
Blackstone, Ravenswood, Estancia, Franciscan Oakville Estate,
Inniskillin, Jackson-Triggs, Simi, Robert Mondavi Winery,
Stowells, Blackthorn, Black Velvet, Mr. Boston, Fleischmann's,
Paul Masson Grande Amber Brandy, Chi-Chi's, 99 Schnapps,
Ridgemont Reserve 1792, Effen Vodka, Corona Extra, Corona Light,
Pacifico, Modelo Especial, Negra Modelo, St. Pauli Girl,
Tsingtao. The company has operations in Australia, Japan, and
New Zealand
* * *
Moody's Investors Service assigned a Ba2 rating to Constellation
Brands, Inc.'s new US$3.5 billion secured credit facility, which
replaced its US$2.9 billion secured credit facility. The US$1.3
billion incremental add-on facility, which was proposed at the
time of the Vincor International Inc. acquisition announcement,
was never executed and the rating has been withdrawn.
Constellation's existing ratings are not affected by these
actions, and have been affirmed. The ratings outlook remains
negative. Ratings affirmed:
* US$200 million 8.625% senior unsecured notes, due 2006, Ba2
* US$200 million 8% senior unsecured notes, due 2008, Ba2
* GBP 80 million 8.5% senior unsecured notes, due 2009, Ba2
* GBP 75 million 8.5% senior unsecured notes, due 2009, Ba2
* US$250 million 8.125% senior subordinated notes, due 2012,
Ba3
* Ba2 Corporate Family Rating
* The SGL-2 Speculative Grade Liquidity rating
CONSTELLATION BRANDS: S&P Says SVEDKA Buy Won't Affect Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services said that there would be no
effect on the ratings or outlook of Fairport, N.Y.-based
Constellation Brands Inc. (BB/Negative/--) following the
announcement that it has reached an agreement to acquire the
SVEDKA Vodka brand and related business for US$384 million. The
transaction, subject to customary regulatory approvals and other
closing conditions, will be financed with debt under
Constellation Brands' senior credit facility and is expected to
close on or about March 1, 2007. The acquisition will enhance
the company's premium spirits offerings and provide a platform
for expansion. Although Standard & Poor's does not expect
credit measures to change materially pro forma for the
acquisition, these measures are already weak for the rating.
Constellation Brands' ratings could be lowered if its financial
profile is further leveraged or if its credit protection
measures do not improve to levels more in line with its 'BB'
rating.
The company has operations in Australia, Japan, and New Zealand.
CUSTOM LEASE: Proofs of Debt Due on March 8
-------------------------------------------
Custom Lease Pty Ltd will declare an interim dividend for its
creditors on March 9, 2007.
Accordingly, creditors must prove debts by March 8, 2007, to be
included in the distribution of dividend.
The liquidator can be reached at:
P. D. McCluskey
Ferrier Hodgson
Level 29, 600 Bourke Street
Melbourne, Victoria 3000
Australia
About Custom Lease
Custom Lease Pty Ltd operates miscellaneous business credit
institution.
The company is located in Victoria, Australia.
GULSON PTY: Members' Final Meeting Set for March 19
---------------------------------------------------
The members of Gulson Pty Ltd will hold a final meeting on
March 19, 2007, at 9:30 a.m., to receive the liquidator's final
account on the company's wind-up proceedings.
As reported by the Troubled Company Reporter - Asia Pacific, the
company commenced wind-up proceedings on Sept. 29, 2006.
The liquidator can be reached at:
Douglas John Greig Macculloch
BSM Bird Cameron Partners
143 Bourke Street
Goulburn, New South Wales 2580
Australia
Telephone:(02) 4821 1066
About Gulson Pty
Gulson Pty Ltd is a distributor of brick and structural clay
tile.
The company is located in New South Wales, Australia.
J.K.P.L. PTY: Placed Under Members' Voluntary Wind-Up
-----------------------------------------------------
At a general meeting held on Feb. 6, 2007, the members of
J.K.P.L. Pty Limited resolved to close the company's business.
In this regard, George Jason Elias was appointed as liquidator.
The Liquidator can be reached at:
George Jason Elias
Level 6, 309 Kent Street
Sydney, New South Wales
Australia
About J.K.P.L. Pty
J.K.P.L. Pty Limited operates offices of holding companies.
The company is located in New South Wales, Australia.
LARGA PTY: Undergoes Liquidation Proceedings
--------------------------------------------
The members and creditors of Larga Pty Ltd met on Jan. 31, 2007,
and resolved to liquidate the company's business.
Accordingly, Gregory Stuart Andrews was appointed as liquidator.
The Liquidator can be reached at:
Gregory Stuart Andrews
G. S. Andrews & Associates
22 Drummond Street
Carlton, Victoria 3053
Australia
Telephone:(03) 9662 2666
Facsimile:(03) 9662 9544
About Larga Pty
Larga Pty Ltd operates miscellaneous retail stores.
The company is located in Victoria, Australia.
LIRI AUSTRALASIA: Liquidator to Present Wind-Up Report
------------------------------------------------------
The members and creditors of Liri Australasia Pty Limited will
hold a final meeting on March 16, 2007, at 11:00 a.m., to
receive the report of Liquidator Adam Shepard regarding the
company's wind-up proceedings.
The Liquidator can be reached at:
Adam Shepard
Star Dean-Willcocks
Level 1, 32 Martin Place
Sydney, New South Wales 2000
Australia
Telephone: 9223 2944
About Liri Australasia
Liri Australasia Pty Limited manages investment offices.
The company is located in New South Wales, Australia.
NELSCO & ASSOCIATES: Final General Meeting Slated for March 13
--------------------------------------------------------------
The members and creditors of Nelsco & Associates Pty Limited
will hold a final general meeting on March 13, 2007, at 10:30
a.m., to receive the liquidator's report on the company's wind-
up proceedings and property disposal exercises.
The liquidator can be reached at:
Manfred Holzman
Holzman Associates, Level 2
32 Martin Place
Sydney, New South Wales 2000
Australia
Telephone:(02) 9222 9070
About Nelsco & Associates
Nelsco & Associates Pty Ltd provides business & professional
services.
The company is located in New South Wales, Australia.
PEOPLE TELECOM: Renews Major Mobile Supply Agreement with Optus
---------------------------------------------------------------
People Telecom has renewed its five-year relationship as a
mobile service provider with Optus by signing a AU$21-million
agreement for the continuing provision of mobile telephone
services to existing and new People Telecom customers, the
company said in a corporate disclosure filed with the New
Zealand Exchange, Ltd.
The agreement enables People Telecom to continue its strong
growth in the Australian corporate and wholesale mobile
communications market and to further grow the product and
feature set for its expanding customer base.
The new agreement will also enable People Telecom to begin
offering third-generation or "3G" mobile voice and data services
during 2007.
The signing of the agreement follows several months of
negotiation with all wholesale GSM providers in Australia and
will enable People Telecom to deliver greater value to customers
while also improving its underlying operating margins.
People Telecom grew its mobile telephone business by 16% to
AU$20.2 million in 2005/06 and today has more than 15,000 mobile
subscribers.
People Telecom CEO John Stanton said that the new 18-month
agreement with Optus would enable the company to build on its
current success.
"We see ongoing growth opportunities, particularly as mobile
services form an integral part of the bundled service offerings
which are highly valued by our customers, particularly in the
small-to-medium-enterprise sector.
"The Australian businesses that People Telecom serves also stand
to benefit from the advanced functionality and data applications
available via 3G mobile services," Mr. Stanton said.
He said the new agreement would also underpin further expansion
in People Telecom's wholesale business.
"People Telecom is a long-established wholesale provider of
Optus services to emerging and established service providers
throughout Australia, and we see significant further growth in
the wholesale channel."
Optus Wholesales' David Katz, said Optus remained committed to
the wholesale market as a full service telecommunications
provider and that includes providing 3G services to customers in
2007.
"Optus continues to work with our diverse range of partners
enabling them to deliver innovative services to wholesale
customers.
"People Telecom have a growing customer base who are looking for
new and emerging capabilities, and we look forward to continuing
and strengthening our partnership with them in the years to
come," he said.
Headquartered in North Sydney Australia, and listed with the
Australian Stock Exchanges and the New Zealand Exchange Ltd.,
People Telecom Ltd.-- http://www.peopletelecom.com.au/--
formerly Swiftel Ltd, is engaged in the provision of
telecommunication services to the Australian corporate and
public markets. The Company offers a range of products to homes
and businesses, including broadband Internet access, fixed wire
phone services, mobile phone services and corporate data
products. The Company's wholly owned subsidiaries include
Swiftel Communications Pty Ltd, Swift Broadband Pty Ltd, People
Telecommunications Pty Limited, People Mobile Pty Ltd and PTS
Australia Pty Ltd.
Going Concern Doubt
The directors said in the company's annual report that the
company and the consolidated entity have made a loss from
ordinary activities of AU$22,103,061 and AU$21,609,667,
respectively, for the year ended June 30, 2006 (2005:
AU$2,746,931 and AU$596,412 respectively). Excluding the asset
impairment loss of AU$21,241,233, the company and the
consolidated entity made a loss of AU$861,828 and AU$368,434
respectively for the year ended June 30, 2006. These factors
cast fundamental uncertainty on the company's ability to
continue as a going concern.
ROSELANDS DRAPER: Names Lord and Crowe-Maxwell as Liquidators
-------------------------------------------------------------
Roselands Draper Avenue Kindy Pty Ltd commenced wind-up
proceedings on Jan. 23, 2007.
In this regard, John Lord and Atle Crowe-Maxwell were appointed
as liquidators.
The Liquidators can be reached at:
John Lord
Atle Crowe-Maxwell
PKF Chartered Accountants
Level 10, 1 Margaret Street
Sydney
Australia
About Roselands Draper
Roselands Draper Avenue Kindy Pty Limited provides child day
care services.
The company is located in New South Wales, Australia.
SYMBION HEALTH: Says Primary's AU$2.3B Merger Proposal Unfair
-------------------------------------------------------------
Primary Health Care has launched a AU$2.3-billion takeover offer
for Symbion Health, Teresa Ooi writes for The Australian, and
notes that Primary Health's founder and managing director,
Edmund Bateman, calls it "a merger of equals."
However, Symbion Chief Executive Robert Cooke disagreed.
Mr. Cooke said the AU$3.50-a-share cash offer "is neither fair
nor reasonable and shareholders could not possibly even consider
it," The Australian says.
Primary could increase its offer and pay up to AU$4.65 for
Symbion if it could find a buyer to offload the pharmacy
business, The Australian cites analyst Hamish Tadgell of Goldman
Sachs JB Were as saying.
"If nothing else, Primary's move has woken the market up to the
potential strategic value of Symbion's portfolio of assets in a
consolidating market," Mr. Tadgell said.
The Australian notes that Primary also wanted to manage the
merged company.
Mr. Cooke contended that Symbion is bigger than Primary, with
revenues of more than AU$3.2 billion across five major
businesses and employing more than 11,000 staff, the paper
relates.
Primary, on the other hand, operated a niche market of medical
centers, which turned over revenues of AU$300 million and had a
staff strength of 700, the paper says.
According to The Australian, Symbion has about 30% market share,
operating 75 pathology laboratories controlling about 33% of the
market compared with Primary's 5%.
Symbion's biggest presence is in Queensland, Western Australia,
and Victoria, while Primary's strength has always been in NSW,
the paper says, citing Merrill Lynch.
Primary's Proposal
According to The Australian, Primary was offering:
* one Primary share for every four Symbion shares subject to
negotiation; alternatively,
* a cash offer of AU$3.50 per Symbion Health share.
Primary said its cash offer of AU$3.50-a-share was at a premium
compared with the three-month weighted average of Symbion shares
of AU$3.28, the paper notes.
A merger with Symbion would bring synergies of between
AU$40 million and AU$100 million, Primary asserted.
However, Mr. Cooke disputed the figure, saying it was not
"realistic or achievable," The Australian relates.
A better option is for Symbion to take over Primary's pathology
business, Mr. Cooke said, noting that he is prepared to pay a
fair and reasonable price.
Mr. Cooke further said that the company had a strong management
team, which turned around the business and improved its share
price significantly.
The Primary proposal has not progressed as it was not considered
to be in the best interests of Symbion Health shareholders, the
company said in a media release.
About Symbion Health
Melbourne-based Symbion Health Limited --
http://www.symbionhealth.com/-- formerly Mayne Group Limited,
provides health products and services. The company's principal
activities during the fiscal year ended June 30, 2006, consisted
of diagnostic and wellness products and services through its
Pathology, Imaging, Medical Centers, Pharmacy Services and
Consumer divisions. Symbion Pathology owns and operates private
pathology practices, providing pathology services to healthcare
professionals and their patients. Symbion Medical Centers
provides local communities with healthcare and family medicine.
Symbion Imaging provides imaging services to patients on the
eastern seaboard of Australia. Symbion Pharmacy Services
supplies a line of pharmaceuticals and associated products to
pharmacies. Symbion Consumer manufactures and markets
nutraceuticals (vitamins and mineral supplements).
On Jan. 30, 2007, Moody's Investors Service placed the Ba1
issuer rating of Symbion Health Limited on review for possible
downgrade after the company's announcement that it has
received an ownership proposal from Primary Health Care Limited
(unrated).
As reported in the Troubled Company Reporter - Asia Pacific on
Oct. 12, 2005, Moody's affirmed the company's senior unsecured
rating of Ba1. At the same time, Moody's revised the rating
outlook to stable from negative. The company also carries
Moody's NP short-term rating.
The TCR-AP has also reported that Standard & Poor's Ratings
Services placed its 'BB' corporate credit rating and debt issue
ratings on Mayne Group Ltd. on CreditWatch with positive
implications. The action follows the lodgment of the company's
scheme booklet for consideration by shareholders.
TREDEGAR PTY: Enters Wind-Up Proceedings
----------------------------------------
A special resolution was passed on Jan. 30, 2007, to wind up the
operations of Tredegar Pty Limited.
Accordingly, John Lord was appointed as liquidator.
The Liquidator can be reached at:
John Lord
PKF Chartered Accountants
Level 10, 1 Margaret Street
Sydney, New South Wales 2000
Australia
About Tredegar Pty
Tredegar Pty Limited is an investor relation company.
The company is located in New South Wales, Australia.
UNIVERSAL COMPRESSION: Board OKs Merger of Equals with Hanover
--------------------------------------------------------------
Hanover Compressor Co. and Universal Compression Holdings, Inc.,
disclosed that their boards of directors have approved a stock-
for-stock merger of equals and that the companies have signed a
definitive merger agreement.
Under the terms of the merger agreement, Hanover stockholders
will receive 0.325 shares of the new company for each share of
Hanover they own, and Universal stockholders will receive 1.0
share of the new company for each share of Universal they own.
Based on the closing market prices for the shares of both
companies on Feb. 2, 2007, the combined company would have an
equity market capitalization of approximately US$3.8 billion.
It is anticipated that Hanover stockholders initially will own
about 53% and Universal stockholders about 47% of the new
company. The merger is expected to be tax free to stockholders
of both companies.
"The combination of Hanover and Universal brings together two
highly respected companies in the natural gas compression and
production and processing equipment fabrication industry. Both
companies have an excellent team of employees known for their
dedication to customer service," said Stephen A. Snider,
Universal's Chairman, President and Chief Executive Officer.
"Operating under a new corporate name, we will be able to fully
leverage our combined capabilities to provide an enhanced level
of customer support and a wider product and service offering to
meet the full compression services and production and processing
equipment needs of our customers worldwide."
John E. Jackson, Hanover's President and Chief Executive
Officer, said, "This merger will create a new company with a
portfolio of high quality assets, products, services and
financial capabilities to generate enhanced value for
stockholders of both companies. It also affords excellent
opportunities for the employees and customers of both companies
to benefit from our combined global expertise in an increasingly
competitive market place."
Stephen Snider added, "The combination also provides a larger
pool of domestic contract compression customers and equipment
that can be offered for sale to Universal Compression Partners,
L.P., over time. The transfer of these domestic contract
compression assets to Universal Compression Partners should
further improve our cost of capital, and enable us to provide
our services on a more efficient basis to our customers over the
long term."
Following the merger, Stephen Snider will serve as President and
Chief Executive Officer and as a director of the new company.
Gordon T. Hall, Hanover's Chairman, will serve as Chairman of
the Board of the combined company, which will consist of ten
directors, five designated by each company. John Jackson will
serve as a director of the new company.
The merger is expected to be accretive to earnings per share for
stockholders of both companies in 2008 after achieving expected
annualized pre-tax cost savings of approximately US$50 million.
These synergies are expected to arise from the closure of
overlapping facilities, increased operational efficiencies and
reduction of corporate overhead.
Additional Information About the Merger
The merger agreement provides for the formation of a new holding
company that will own all the stock of both Hanover and
Universal. The new company will be headquartered in Houston,
and its common stock is expected to be listed on the New York
Stock Exchange.
The merger is subject to various conditions including approval
of the stockholders of both Hanover and Universal and customary
regulatory approvals, including the expiration or termination of
the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. It is anticipated that the
closing of the merger will occur in the third quarter of this
year. Hanover and Universal intend to file a proxy
statement/prospectus with the Securities and Exchange Commission
as promptly as practicable after each company files its 2006
Annual Report on Form 10-K.
Hanover Fourth Quarter Financial Results Update
Hanover also announced that, for the three months ended Dec. 31,
2006, it expects to report:
-- revenue of US$465 million to US$470 million, up from
US$424 million in the third quarter;
-- income from continuing operations before income taxes
and minority interest in the range of US$27 million to
US$31 million, compared with US$23 million in the third
quarter; and
-- backlog of US$808 million, including SU$325 million for
compression at Dec. 31, 2006, compared with US$689
million, including US$192 million for compression at
Sept. 30, 2006.
With respect to fourth quarter income taxes, Hanover has not yet
finalized its tax analysis, but it currently expects the
effective tax rate in the fourth quarter to be less than the
mid-40% range, which
Universal Fourth Quarter and Full Year Earnings Updates
Universal also announced updated revenue and earnings guidance
for the fourth quarter and full year 2006. For the three months
ending Dec. 31, 2006, Universal expects revenue of US$250
million to US$255 million and earnings per diluted share of
US$0.66 to US$0.70; this compares with previously reported
guidance of revenue of US$240 million to US$250 million and
earnings per diluted share of US$0.70 to US$0.74.
The reduced earnings guidance is primarily the result of higher
labor costs in the domestic contract compression segment. For
the twelve months ended Dec. 31, 2006, Universal expects revenue
of US$945 million to US$950 million and earnings per diluted
share of US$2.84 to US$2.88; this compares with previously
reported guidance of revenue of US$935 million to US$945 million
and earnings per diluted share of US$2.88 to US$2.92.
Universal's fabrication backlog was approximately $289 million
at Dec. 31, 2006. Universal plans to conduct its fourth quarter
earnings joint conference call for both Universal Compression
Holdings and Universal Compression Partners during the week of
Feb. 26, 2007.
The parties expect:
* Merger will create a global leader in the natural gas
compression services and production and processing
equipment fabrication industry;
* Anticipated annual pre-tax cost savings of approximately
US$50 million;
* Combined company, which will have a new name, will be
better positioned to compete in the global market place;
* Combination provides a larger pool of domestic contract
compression contracts and assets that can be offered for
sale to Universal Compression Partners, L.P.;
* Gordon T. Hall to be Chairman; and
* Stephen A. Snider to be President and Chief Executive
Officer.
Headquartered in Houston, Texas, Universal Compression, Inc. --
http://www.universalcompression.com/-- provides natural gas
compression equipment and services, primarily to the energy
industry in the United States, as well as in Canada, Venezuela,
Argentina, Columbia, and Australia.
Moody's Investors Service assigned a Ba1, LGD 3 (36%) rating to
Universal Compression Inc.'s US$500 million senior secured bank
credit facility. At the same time, Moody's affirmed Universal's
Ba2 Corporate Family Rating, its Ba2 Probability of Default
Rating and its B1, LGD5 (88%) ratings on its US$175-million 7-
1/4% Senior Notes. Universal Compression Inc. is a wholly owned
subsidiary of Universal Compression Holdings Inc.
Standard & Poor's Ratings Services raises its corporate credit
rating on Universal Compression Holdings Inc. to 'BB' from
'BB-'. At the same time, assigns its 'BB' rating and '3'
recovery rating to Universal Compression's US$500 million
revolving credit facility. The Houston, Texas-based oilfield
services company had approximately US$807 million in debt
outstanding following the IPO of its subsidiary Universal
Compression Partners L.P.
UNIVERSAL COMPRESSION: Merger Cues Moody's to Review Ratings
------------------------------------------------------------
Moody's Investors Service placed the ratings for Hanover
Compressor Company under review for possible upgrade.
Simultaneously, Moody's placed the ratings for Universal
Compression Inc. on review for possible downgrade. Moody's
anticipates this review will be completed on or about the close
of the merger, which is expected in the third quarter of 2007.
The ratings review is prompted by the all-stock merger
announcement between Hanover and Universal. The merger will be
conducted through a new holding company -- Newco -- that will
exchange Newco shares for Hanover and Universal shares.
Following the merger, Hanover shareholders are expected to own
approximately 53% of Newco, with Universal shareholders owning
the remainder. Universal's Chairman, President and CEO, Stephen
Snider, will serve as President and CEO for Newco and Hanover's
Chairman, Gordon T. Hall, will serve as Newco's Chairman.
Newco's board will be evenly split between representatives from
both companies.
The merger combines two companies with comparable size, market
positions and diversity of product lines and geographic reach.
However, both companies have materially different leverage
profiles, with Hanover carrying much more debt than Universal
relative to EBITDA and capitalization. Therefore, Moody's
believes the transaction is likely a credit positive for Hanover
and have placed its ratings under review for possible upgrade.
Conversely, Newco's combined leverage profile is higher than
Universal's which has raised concerns that led to the review for
possible downgrade of Universal's ratings.
Moody's estimates that the combined company will have pro forma
assets of US$6.3 billion at Sept. 30, 2006, making the new
company the largest natural gas compression services company in
the world with approximately 4.4 million of domestic horsepower
and 1.5 million internationally. The combination effectively
doubles the size of the asset base and further enhances the
business profile of the combined entity.
These potential benefits of the merger are tempered by the
capital intensity of the compression business and the
significant inherent challenges for domestic growth, requiring
the pursuit of growth in international markets that bring both
opportunities and increased political risks. Moody's views this
merger to be a favorable resolution for Hanover of its difficult
strategic choice between growth expenditures (primarily
international) and needed debt reduction. Moody's also notes
that both Hanover's and Universal's capital structures have a
high level of complexity with their Equipment Trusts and ABS
facility, respectively. Furthermore, the creation of Universal
Compression Partners, LP created uncertainties regarding the
future capital structure and leverage profile of Universal,
which also will apply to the combined entity.
The ratings review will focus on the market position and
financial profile of the combined group, the strategic direction
chosen by management with respect to the pace and scale of
international growth, the plans for further drop downs of
compression assets into Universal Compression Partners, LP, and
management's targets for leverage and potential share buybacks
post combination. In Moody's view, any downgrade of Universal's
corporate family rating would likely be limited to one notch and
it is possible that the enhanced size and other benefits of the
merger will enable Moody's to confirm the ratings.
The Hanover ratings affected by the review for upgrade:
* Hanover's B1 corporate family rating and probability of
default rating.
* The Ba3 rating on Hanover Equipment Trust 2001A 8.50%
partly secured notes due 2008.
* The Ba3 rating on Hanover Equipment Trust 2001B 8.75%
partly secured notes due 2011.
* The B3 rating on Hanover's two 4.75% non-guaranteed senior
convertible note issues due 2008 and 2014, respectively.
* The B2 rating on Hanover's 7.5% senior unsecured notes due
2013, 8.625% senior unsecured notes due 2010 and 9% senior
unsecured notes due 2014, each with senior subordinated
guarantees from core operating subsidiary Hanover
Compression, L.P.
* The B3 rating on Hanover's 7.25% non-guaranteed convertible
trust preferred stock.
The Universal ratings affected by the review for downgrade:
* Universal's Ba2 corporate family rating and probability of
default rating.
* The Ba1 rating on Universal's senior secured bank
facilities due 2010.
* The B1 rating on Universal's 7.25% senior unsecured notes
due 2010.
Headquartered in Houston, Texas, Universal Compression, Inc. --
http://www.universalcompression.com/-- provides natural gas
compression equipment and services, primarily to the energy
industry in the United States, as well as in Canada, Venezuela,
Argentina, Columbia, and Australia.
UNIVERSAL COMPRESSION: Merger Cues S&P to Hold BB Corp. Rating
--------------------------------------------------------------
Standard & Poor's Ratings Services placed the 'BB-' corporate
credit ratings on oilfield service company Hanover Compressor
Co. and its related entity Hanover Compression L.P. on
CreditWatch with positive implications.
At the same time, Standard & Poor's affirmed the 'BB' corporate
credit ratings on oilfield service company Universal Compression
Holdings Inc. and its related entity Universal Compression Inc.
The rating actions comes after the report that Hanover
Compressor and Universal Compression Holdings have entered into
a definitive agreement to merge in an all-stock transaction.
Pro forma the transaction, the combined entity will have US$2.2
billion in debt outstanding.
"The CreditWatch listing for Hanover reflects the likelihood
that the ratings could be raised in the near term following an
assessment of the merged entity's likely credit profile," said
Standard & Poor's credit analyst Aniki Saha-Yannopoulos.
Although the combined entity's business profile is strengthened
significantly, Standard & Poor's haas affirmed the ratings on
Universal Compression for the following reasons: The combined
entity's credit measures are weaker than Universal's stand-alone
credit measures. There are concerns regarding the integration
that we will have to assess over time, particularly plans to
achieve US$50 million in synergies and the likelihood of
achieving such goals.
Standard & Poor's expects the combined entity to place more of
its contract compression fleet in master limited partnership
Universal Compression Partners L.P., thus increasing the
proportion of cash flows to the combined entity from the MLP.
Standard & Poor's generally does not consider the cash flow
associated with MLP distributions as supportive of credit
quality.
Standard & Poor's will meet with management to assess the
combined company's business strategy, financial policy, and
expected financial profile before resolving the CreditWatch
listing.
Headquartered in Houston, Texas, Universal Compression, Inc. --
http://www.universalcompression.com/-- provides natural gas
compression equipment and services, primarily to the energy
industry in the United States, as well as in Canada, Venezuela,
Argentina, Columbia, and Australia.
================================
C H I N A & H O N G K O N G
================================
AGRICULTURAL BANK: Hires ABN-AMRO to Manage Investments Abroad
--------------------------------------------------------------
The Agricultural Bank of China hired ABN AMRO-Mellon as its
global custodian bank to help it invest abroad, Reuters reports.
In an email statement, the bank told Reuters that ABN AMRO NV
and U.S. firm Mellon Financial Corp will provide accounting and
investment advisory services to help manage assets under the
Qualified Domestic Institutional Investor scheme.
Reuters recounts that the Agricultural Bank received the banking
regulator's approval to invest its clients' money overseas under
the QDII scheme at the beginning of the year.
The QDII scheme was launched last year as a way of encouraging
capital outflows and relieving some of the upward pressure on
the yuan. It led more than a dozen domestic and foreign
financial institutions to invest a total of more than US$13
billion overseas, Reuters notes.
According to Reuters, Mellon Financial Corp currently holds
nearly US$5 trillion in assets under management, administration,
or custody. It opened a Beijing office in June to boost its
China business opportunities, Reuters adds.
* * *
The Agricultural Bank of China -- http://www.abocn.com/-- is
the mainland's fourth largest bank. It has lagged behind other
major Chinese commercial banks, which have received government
injections of new capital and been allowed to link up with
foreign partners in preparation for raising money on foreign
stock exchanges.
Despite posting operating profits of over CNY42.4 billion in
2005, the Bank is still carrying billions of dollars in unpaid
loans to state companies, which it says accounted for 26% of its
lending at the end of last year.
The Troubled Company Reporter - Asia Pacific reported on June
27, 2006, that the National Audit Office found accounting
irregularities involving CNY51.6 billion, CNY14.27 billion of
which come from deposit business, CNY27.62 billion from loan
grants, and CNY9.72 billion from fraudulent bill issuance.
Fitch Ratings gave the Bank an 'E' Individual rating.
CITIC GROUP: S&P Amends Outlook on Ratings to Developing
--------------------------------------------------------
On Feb. 13, 2007, Standard & Poor's Ratings Services said that
it had removed the BB+ long-term and B short-term foreign
currency counterparty credit rating on CITIC Group from
CreditWatch.
The outlook on the ratings is developing. At the same time,
Standard & Poor's also removed the BB+ foreign currency issue
rating on the group's senior unsecured debt from CreditWatch.
All the ratings were placed on CreditWatch with developing
implications on Nov. 14, 2006, following the group's
announcement of a US$1.91 billion acquisition of Kazakh oil
assets from Canada-based Nations Energy Co. Ltd.
"The developing outlook reflects continued uncertainty about
CITIC Group's funding arrangements and its capital expenditure
plans," said Standard & Poor's credit analyst Liao Qiang.
The impact of the Kazakh transaction on the group's overall
credit profile is dependent on funding arrangements, future
capex plans, oil price volatility, and interest rate movements.
Ongoing reform of the group's banking arm continues to support
its overall financial profile. In addition, government support
is an important consideration.
A one-year call option granted to KazMunaiGas, a state-owned
Kazakhstan-based oil company, could significantly affect
investment returns.
KMG has the option to acquire a 50% interest in the oil assets
at the price CITIC Group paid.
If KMG exercises its call option, CITIC Resources Holdings Ltd.,
a 60.46%-owned subsidiary of CITIC Group, is likely to acquire
the balance of the oil assets from its parent. While this would
substantially offset our concern about CITIC Group's debt
leverage, related capex will continue to exert pressure on the
group and fuel uncertainty.
While the transaction was in line with the country's overseas
resources strategy and the government appears to have
significantly helped CITIC Group make this acquisition, this
does not necessarily reflect a greater policy role for the
group. Further understanding of the government's role in this
transaction is needed. The ratings on CITIC Group already factor
in extraordinary support linked to its 100% government ownership
and role in developing China's economic and financial reforms.
FORT DODGE: Contributories and Creditors to Meet on March 13
------------------------------------------------------------
Fort Dodge Animal Health (China) Limited, which is in creditors'
voluntary liquidation, will hold a final meeting for its
contributories and creditors on March 13, 2007, at 10:00 a.m.
and 10:30 a.m., respectively.
At the meeting, the liquidators will present a report on the
company's wind-up proceedings and property disposal exercises.
GENERAL MULTI-WITS: Appoints Leung Chui Mei as Liquidator
--------------------------------------------------------
On Feb. 2, 2007, Leung Chui Mei was appointed as liquidator of
General Multi-Wits Company Limited.
The Liquidator can be reached at:
Leung Chui Mei
Room 502, 5/Floor
Prosperous Building
48 C52 Des Voeux Road Central
Hong Kong
HOPSON DEV: Fitch Hands BB Rating on Long-Term For. Currency IDR
----------------------------------------------------------------
Fitch Ratings on Feb. 14, 2007, assigned a Long-term foreign
currency Issuer Default Rating of BB to China-based Hopson
Development Holdings Limited. Fitch has also assigned a rating
of BB to Hopson's senior unsecured debt.
The Outlook for the IDR is Stable.
Hopson's ratings are constrained by the heavy concentration of
its business in residential property development. This focus
exposes the company to any unfavorable regulatory changes and
market downturn, potentially resulting in volatile revenues and
cash flow. Additionally, Hopson has historically focused its
development activities in Guangdong but is in the process of
expanding its portfolio into other top-tier Chinese cities such
as Beijing and Shanghai.
While Fitch views the company's efforts to raise geographical
diversification positively, it notes that property prices in
Beijing and Shanghai are most susceptible to fluctuations among
the top-tier cities, given the more of speculative nature of the
property markets there.
Hopson's ratings also reflect the company's aggressive land and
project acquisitions. These acquisitions, which are partly
debt-funded, may lead to a more leveraged balance sheet,
although Fitch notes that this can be moderated by equity
placement and funding from presales.
Fitch has also considered China's evolving regulatory
environment and believes that Hopson's market position will
enable it to better weather any market fluctuations resulting
from future austerity measures, compared to smaller developers.
The Chinese government's recent austerity measures, such as the
land appreciation tax, have affected market sentiment, which may
result in slowing growth for Hopson in the near term. The
tightened credit and anti-speculation measures are likely to
accelerate the consolidation of the whole industry and expel the
weaker players from the market. Fitch views that larger
property developers such as Hopson are likely to take the
opportunity to expand their market share and thus be in a better
position to capitalize on the benefits of the expected strong
housing demand underpinned by urbanization, availability of
mortgage finance and increasing disposable household income.
Hopson's ratings are supported by its position as one of the
largest property developers with a large-scale high-quality
project portfolio and a sizeable, low-cost land bank. Fitch
views that Hopson's land bank inventory is sufficient to secure
sustainable growth for its business over the next five to seven
years. The company's business strategy of targeting the mid- to
high-end market segments, aided by low-cost land and rising
property prices has enabled the company to achieve high
profitability and operating cash flow.
The Stable Outlook reflects Fitch's expectations that Hopson
will continue to maintain a stable credit profile, underpinned
by its solid business profile and satisfactory credit metrics.
Any significant adverse change in government regulations and
economic environment or deterioration in capital structure,
indicated by FFO adjusted net leverage sustained above 5.5x, may
result in a negative rating action. On the other hand, a
significant increase in recurring income, continuous low-cost
land replenishment or a materially improved capital structure,
signalled by FFO adjusted net leverage sustained below 2.5x, may
be positive rating triggers.
Hopson Development Holdings Limited is a leading mainland China-
based property developer with a primary focus on residential
property markets in China's first-tier cities such as Guangzhou,
Beijing and Shanghai. The company is also engaged in property
investment and property management. Hopson realized a turnover
of HKD6.1 billion and operating profit of HKD1.7bn in FY05.
Sounda Properties Limited -- a private company wholly-owned by
Hopson's Chairman, Chu Mang Yee -- is the controlling
shareholder with a 53.4% stake.
KENBERG LIMITED: Members' Final Meeting Slated for March 13
-----------------------------------------------------------
The members of Kenberg Limited will hold a final meeting on
March 13, 2007, at 9:00 a.m., at Suites 2109-10, Asian House, 1
Hennessy Road in Wanchai, Hong Kong.
At the meeting, the members will receive the liquidator's
accounts on the company's wind-up proceedings and property
disposal exercises.
PRODUCT SAFETY (INTERNATIONAL): Members' Meeting Set on March 13
----------------------------------------------------------------
Product Safety Coordination (International) Limited will hold a
final meeting for its members on March 13, 2007, at 11:00 a.m.,
at Unit 801B, 8/F., Dina House, Ruttonjee Centre, 11 Duddell
Street in Central, Hong Kong.
At the meeting, Liquidator Andrew George Hung will present his
report regarding the company's wind-up proceedings.
As reported by the Troubled Company Reporter-Asia Pacific, the
company commenced a wind-up of its operations on Aug. 25, 2006.
PRODUCT SAFETY (HONG KONG): Final Meeting Set for March 13
----------------------------------------------------------
The members of Product Safety Coordination (Hong Kong) Limited
will hold a final meeting on March 13, 2007, at 11:30 a.m., to
receive the liquidator's report on the company's wind-up
proceedings.
Product Safety entered voluntary wind-up on Aug. 25, 2006.
SUPERB EARNING: Appoints Yip Pui Yee as Liquidator
--------------------------------------------------
On Feb. 2, 2007, Yip Pui Yee was appointed as liquidator of
Superb Earning Limited, which is in members' voluntary wind-up.
The Liquidator can be reached at:
Yip Pui Yee
24th Floor, Prosperous Commercial Building
54-58 Jardine's Bazaar
Causeway Bay
Hong Kong
SUPREME AIRFRT: Creditors Must Prove Debts by March 16
------------------------------------------------------
Supreme Airfrt Investment Company Limited will be receiving
proofs of debt from its creditors until March 16, 2007.
As reported by the Troubled Company Reporter - Asia Pacific, the
company commenced a wind-up of its operations on Aug. 1, 2006.
The liquidator can be reached at:
Au Yeung Huen Ying
8/F., Shum Tower
268 Des Voeux Road Central
Hong Kong
TRULY FAIR: Creditors' Proofs of Debt Due on March 12
-----------------------------------------------------
The creditors of Truly Fair Limited are required to submit their
proofs of debt by March 12, 2007.
Failure to prove debts by the due date will exclude a creditor
from sharing in the company's distribution of dividend.
The liquidator can be reached at:
Chan Po Kau
Room D, 11/F., 8 Hart Avenue
8 C10 Hart Avenue
Tsim Sha Tsui, Kowloon
Hong Kong
VALENCE TECHNOLOGY: Sells US$1 Mil. Common Stock to West Coast
--------------------------------------------------------------
Valence Technology Inc. sold US$1 million of its common stock to
West Coast Venture Capital Inc., an affiliate of Carl E. Berg of
the company's chairman of the board. The proceeds will be used
to fund corporate operating needs and working capital.
Under the terms of the purchase, the company issued 657,894
shares of our common stock, par value US$0.001 per share, in a
private placement transaction exempt from the registration
requirements of the Securities Act of 1933, as amended, pursuant
to Section 4(2) thereof.
West Coast Venture Capital purchased these shares at US$1.52 per
share. The purchase price per share equaled the closing bid
price of our common stock as of Jan. 31, 2007, the last trading
day prior to the date of the Agreement.
A full-text copy of the letter of agreement is available for
free at http://ResearchArchives.com/t/s?19bd
Going Concern Doubt
As reported in the Troubled Company Reporter on July 5, 2006,
Deloitte & Touche LLP expressed substantial doubt about
Valence's ability to continue as a going concern after auditing
the Company's financial statements for the fiscal year ending
March 3, 2006. Deloitte & Touche pointed to the Company's
recurring losses from operations, negative cash flows from
operations and net stockholders' capital deficiency.
About Valence
Headquartered in Austin, Texas, Valence Technology, Inc., --
http://www.valence.com/-- develops and markets battery systems
using Saphion(R) technology, the industry's first commercially
available, safe, large-format Lithium-ion rechargeable battery
technology. Valence Technology holds an extensive, worldwide
portfolio of issued and pending patents relating to its Saphion
technology and lithium-ion rechargeable batteries. The company
has facilities in Texas, Las Vegas, Nevada, and Suzhou and
Shanghai, China.
VALENCE TECHNOLOGY: Posts US$4.8MM Loss in Qtr Ended Sept. 30
-------------------------------------------------------------
Valence Technology Inc. incurred a US$4.8 million net loss
available to common stockholders for the fiscal 2007-second
quarter ended Sept. 30, 2006, compared to a net loss available
to common stockholders of US$8.1 million in the second quarter
of fiscal 2006 and a net loss of US$5.7 million in the first
quarter of fiscal 2007.
The Company generated revenue for the second quarter of fiscal
year 2007 of US$6.4 million, an increase of 15.5% over the
second quarter of fiscal 2006, and an increase of 101.3% over
first quarter of fiscal 2007. The substantial increase in
revenue is a result of the small-format N-Charge system order
that were scheduled to ship in the first quarter but were
postponed due to the Company's UL recertification process.
Large-format systems represented 69.0% of total revenue for the
second quarter.
At Sept. 30, 2006, the Company's balance sheet showed
US$18,724,000 in total assets and US$74,834,000 in total
liabilities, resulting in a stockholders' deficit of
US$64,720,000.
A full-text copy of the company's quarterly report is available
for free at http://researcharchives.com/t/s?1504
"I am pleased with our cost reduction programs and enhanced
manufacturing processes, as well as the momentum we are
experiencing for our large-format Saphion(R) batteries," said
Dr. James R. Akridge, president and chief executive officer of
Valence Technology. "We will remain focused on cost control,
quality processes and products, improved productivity and higher
revenue, while diligently working to bring the Company to
profitability."
Going Concern Doubt
As reported in the Troubled Company Reporter on July 5, 2006,
Deloitte & Touche LLP expressed substantial doubt about
Valence's ability to continue as a going concern after auditing
the Company's financial statements for the fiscal year ending
March 3, 2006. Deloitte & Touche pointed to the Company's
recurring losses from operations, negative cash flows from
operations and net stockholders' capital deficiency.
About Valence
Headquartered in Austin, Texas, Valence Technology, Inc., --
http://www.valence.com/-- develops and markets battery systems
using Saphion(R) technology, the industry's first commercially
available, safe, large-format Lithium-ion rechargeable battery
technology. Valence Technology holds an extensive, worldwide
portfolio of issued and pending patents relating to its Saphion
technology and lithium-ion rechargeable batteries. The company
has facilities in Texas, Las Vegas, Nevada, and Suzhou and
Shanghai, China.
WAYWIN CORPORATION: Names Yip Pui Yee as Liquidator
---------------------------------------------------
Yip Pui Yee was appointed as liquidator of Waywin Corporation
Limited on Feb. 2, 2007.
The Liquidator can be reached at:
Yip Pui Yee
24th Floor
Prosperous Commercial Building
54-58 Jardine's Bazaar
Causeway Bay
Hong Kong
WINKO LIMITED: Members to Receive Liquidator's Report
-----------------------------------------------------
Winko Limited, which is in members' voluntary liquidation, will
be receiving proofs of debt from its creditors until March 13,
2007, at 9:30 a.m., at Suites 2109-10, Asian House, 1 Hennessy
Road in Wanchai, Hong Kong.
Failure to prove debts by the due date will exclude a creditor
from sharing in the company's distribution of dividend.
=========
I N D I A
=========
BAGALKOT UDYOG: Posts INR10.99-Mil. Net Loss in Dec. '06 Quarter
----------------------------------------------------------------
Bagalkot Udyog Ltd narrowed its net loss by 60% from
INR27.18 million in the quarter ended Dec. 31, 2005, to
INR10.99 million in the quarter ended Dec. 31, 2006.
Because the company closed down its cement plant operations in
Bagalkot since May 2006, it did not have sales for the fourth
quarter of 2006. The company, however, recorded revenue of
INR710,000 representing "other income" in the December 2006
period. In the three months ended Dec. 31, 2005, the company
booked income totaling INR31.86 million.
The halt in operations also brought the company's expenditures
to sharply fall to INR5.35 million in the December 2006 quarter
from the INR47.96 million incurred in the corresponding quarter
in 2005.
For the current fiscal year's third quarter, the company booked
interest expense of INR1.63 million and depreciation of
INR4.73 million.
A copy of the company's financial results for the quarter ended
Dec. 31, 2006, is available for free at the Bombay Stock
Exchange at http://ResearchArchives.com/t/s?19da
Bagalkot Udyog Ltd manufactures cement, clinker and other by-
products.
The company incurred heavy losses that led to the erosion of its
entire net worth. By order dated June 2, 2000, the Board for
Industrial & Financial Reconstruction, New Delhi, had declared
the company as a sick industrial unit under the provisions of
Sick Industrial Companies (Special Provisions), Act 1985.
On May 11, 2006, the operations of the company's cement plant at
Bagalkot came to a total stop. The company booked net losses of
INR59.16 million for the fiscal year ended March 31, 2006, and
INR115.88 million in FY 2005.
ELCOM INT'L: Selects John Halnen as Interim President & CEO
-----------------------------------------------------------
Elcom International Inc. disclosed that John E. Halnen, the
company's president and chief executive officer, will serve as
its principal financial officer and principal accounting officer
on an interim basis until the time the company appoints a new
officer to serve in those positions.
Although he does not have a specific financial background,
Mr. Halnen has served as the chief executive officer of the
company since December 2005, as president of the company
since November 2000 and as a director of the company since
June 2003.
Mr. Halnen served as the company's principal financial officer
and principal accounting officer during the period of July 21,
2006 to Oct. 2, 2006, prior to the hiring of Mr. Bogonis.
Paul Bogonis, vice president of finance and controller, is
no longer employed effective Feb. 6, 2007. The company is
in discussions with Mr. Bogonis related to final severance
arrangements.
Elcom International, Inc. (OTC Bulletin Board: ELCO and AIM: ELC
and ELCS) -- http://www.elcominternational.com/-- operates
elcom, inc, an international B2B Commerce Service Provider
offering affordable solutions for buyers, sellers and commerce
communities to automate many or all of their purchasing
processes and conduct business online. PECOS, Elcom's remotely
hosted flagship solution, enables enterprises of all sizes to
achieve the many benefits of B2B eCommerce without the burden of
infrastructure investment and ongoing content and system
management. The company has operations in India, Brazil and the
United Kingdom.
Going Concern Doubt
Vitale, Caturano & Company Ltd. expressed substantial doubt
about Elcom International's ability to continue as a going
concern after it audited the company's financial statements for
the year ended Dec. 31, 2005. The auditing firm pointed to the
company's net losses every year since 1998. It has an
accumulated deficit of US$126,252,000 as of Sept. 30, 2006.
EXIDE TECH: Posts US$11.2-Mil. Net Loss in Quarter Ended Dec. 31
----------------------------------------------------------------
Exide Technologies Inc. reported an US$11.2 million net loss on
US$769.7 million of sales for the fiscal 2007 third quarter
ended Dec. 31, 2006, compared with a US$27.7 million net loss on
US$733.4 million of sales for the fiscal 2006 third quarter.
Excluding the favorable impact of currency, sales were
essentially flat year-over-year.
"The somewhat lower unit volumes in both our Transportation
North America and Transportation Europe and Rest of World
businesses continue to be the result of our intended program to
increase profitability," said Gordon Ulsh, Exide Technology
President and CEO. "An unseasonably warm December on both
continents put further downward pressure on volume."
The fiscal 2007 third quarter net loss included an approximate
US$9.2 million after-tax impairment charge relating to the
company's Nanterre, France former manufacturing facility held
for sale.
The decreased net loss is partially the result of improved gross
margins driven by higher pricing and continued productivity
gains, which more than offset the impact of lower volumes.
Results for the current quarter included a tax benefit of US$2.9
million versus a tax provision in the prior year period of
US$3.5 million. Interest expense, net was US$4.4 million higher
in the current quarter due to higher average debt levels and
higher interest rates.
At Dec. 31, 2006, the company's balance sheet showed US$2.1
billion in total assets, US$1.8 billion in total liabilities,
US$14 million in minority interest, and US$299.5 million in
total stockholders' equity.
Full-text copies of the company's consolidated financial
statements for the quarter ended Dec. 31, 2006, are available
for free at http://researcharchives.com/t/s?19b0
About Exide Technologies
Headquartered in Princeton, New Jersey, Exide Technologies
(NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and
distributes lead acid batteries and other related electrical
energy storage products. The Company filed for chapter 11
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland
& Ellis, represented the Debtors in their successful
restructuring. Exide's confirmed chapter 11 Plan took effect on
May 5, 2004. The company has operations in Norway, India and
Italy.
Exide's long-term foreign and local issuer credit both carries
Standard and Poors' CCC rating.
The company's long-term corporate family rating and senior
unsecured debt both carries Moody's Caa1 rating, while its bank
loan debt carries a B1 rating.
Going Concern Doubt
PricewaterhouseCoopers LLP expressed substantial doubt about
Exide Technologies' ability to continue as a going concern after
auditing the Company's financial statements for the fiscal years
ended March 31, 2006, and 2005. The auditing firm pointed to
the company's recurring losses and negative cash flows from
operations. The auditing firm also said that, given the
company's past financial performance in comparison to its
budgets and forecasts, there is no assurance the Company will be
able to meet the budgets and forecasts and be in compliance
through March 31, 2007, with one or more of the debt covenants
of its Senior Secured Credit Facility.
HMT LTD: Cabinet Approves Cash Infusion as Revival Plan
-------------------------------------------------------
India's Cabinet Committee on Economic Affairs approved on
Feb. 1 the revival of HMT Ltd. with a cash infusion of
INR7.23 billion, India Infoline News Service reports.
According to the report, the revival package is comprised of:
-- INR4.43 billion in the form of preferential share capital;
-- INR1.8 billion in fresh equity capital; and
-- INR1 billion through special non-plan loan for the
company's Voluntary Retirement Scheme.
The Hindu news agency says the CCEA actually approved an
INR8.80-billion package, in addition to the INR7.23 billion, the
package further includes:
-- conversion of government's loan of INR1.22 billion into
equity; and
-- waiver of interest amounting to INR350 million.
The restructuring is expected to bring in:
-- reduction in accumulated losses;
-- improved productivity and quality brought about by the
upgrade of manufacturing facilities;
-- technological development or acquisition;
-- programs to enhance the skills of the company's work
force; and
-- reduction in wages.
"With the restructuring of the company, its balance sheet
including the debt equity ratio will improve," India Infoline
quotes Finance Minister P. Chidambaram as saying.
Citing the Finance Minister, The Hindu said that HMT would be
turned into a joint venture company soon. The Finance Minister,
however, did not name HMT's partner yet.
HMT Limited -- http://www.hmtindia.com/-- is a public sector
engineering conglomerate. The company retains the Tractor's
Business, which develops tractors ranging from 25 horsepower to
75 horsepower. It has an installed capacity of 18,000 tractors
for manufacturing and assembly operations. The company has
three tractor manufacturing units in India located at Pinjore in
Haryana, Mohali in Punjab, and Hyderabad in Andhra Pradesh. The
subsidiaries of the company include HMT Machine Tools Limited,
HMT Watches Limited, HMT Chinar Watches Limited, HMT
(International) Limited, HMT Bearings Limited and Praga Tools
Limited. The principal segments include Machine tools, Watches,
Tractors, Bearings and Exports. The company has a Joint Venture
with SUDMO HMT Process Engineers (India) Limited, Bangalore.
Credit Analysis and Research Limited downgraded HMT's long-term
bond issue of INR310 crore to CARE BB(SO) on Feb. 18, 2005.
At the same time, the company's medium term bond issue of
INR40.40 crore was likewise downgraded to CARE BB(SO).
Instruments rated 'Double B' are considered to be speculative,
with inadequate protection for interest and principal payments.
ICICI BANK: Hikes Deposit and Lending Rates Effective Feb. 9
------------------------------------------------------------
ICICI Bank has increased by 1% its Benchmark Advance Rate and
its Floating Reference Rate for consumer loans (including home
loans) with effect from Feb. 9, 2007. The revised I-BAR will be
14.75% p.a. payable monthly as against 13.75% at present. The
revised FRR will be 11.75% p.a. as against 10.75% at present.
For existing floating rate customers, the increase in Floating
Reference Rate by 1% will be effective from the respective reset
dates. The existing fixed rate customers whose loans are fully
disbursed, will, however, not be impacted by the increase and
their contracted rates will remain unchanged.
ICICI Bank also increased its interest rates on 80C Fixed
Deposits of value less than INR0.10 million by 1.25% for five-
year tenor with effect from Feb. 9, 2007. The revised interest
rate on 80C FD will be 9.50% p.a. as against 8.25% at present.
Headquartered in Mumbai, India, ICICI Bank Limited --
http://www.icicibank.com/-- is a financial services group
providing a variety of banking and financial services, including
project and corporate finance, working capital finance, venture
capital finance, investment banking, treasury products and
services, retail banking, broking and insurance. It also has
interests in the software development, software services and
business process outsourcing businesses. The Company's
operations have been classified into three segments: Commercial
Banking, Investment Banking and Others. It has subsidiaries in
the United Kingdom, Canada and Russia, branches in Singapore and
Bahrain, and representative offices in the United States, China,
United Arab Emirates, Bangladesh and South Africa.
* * *
On Jan. 30, 2007, Standard & Poor's Ratings Services affirmed to
Bank Fundamental Strength Rating of ICICI at 'C'.
Moody's Investors Service, on July 14, 2006, assigned to ICICI a
'C-' Financial Strength Rating.
Fitch Ratings gave the bank a 'C' Individual Rating on Dec. 15,
2005.
INDIAN RAILWAY: Moody's Assigns Baa3 Rating to JPY15-Bil. Notes
---------------------------------------------------------------
Moody's Investors Service on Feb. 13, 2007, assigned a Baa3
rating to Indian Railway Finance Corporation Ltd's senior
unsecured notes denominated in Japanese Yen, worth JPY15 billion
(around US$123 million) with a tenor of five years. The rating
has a stable outlook. The proceeds of this issue will be used
by IRFC to finance the acquisition of rolling stock components
to be leased to the Ministry of Railways.
Moody's notes that the rating assigned reflects IRFC's
successful niche franchise established through its role of
arranging lease finances for the MoR and its strategic
importance through this mission. At the end of December 2006
approximately 51.4% of the Indian Railways' fleet was financed
by IRFC, while around 89% of the institution's total assets were
in the form of receivables on account of rolling stock leased to
the MoR.
The rating also takes into account the institution's creditable
track record of financial performance. IRFC's nine-month
preliminary results at the end of December 2006 point to a 17%
year-on-year increase in net income, while gross revenues were
up by 10%.
Full government ownership and the high likelihood that the
government would support the institution were it to face any
financial difficulties are also reflected in the rating. IRFC
falls under the government-related issuers category, and
according to Moody's rating methodology for GRIs, one of the
inputs is the high support element expected from the government
of India. Moody's does not envisage any change in IRFC's
ownership over the foreseeable future.
IRFC is headquartered in New Delhi and had total assets of
INR249.6 billion (US$5.7 billion) at the end of December 2006.
* * *
IRFC is a financing arm of India's Ministry of Railways. Its
aims to raise money from the market to part finance the plan
outlay of Indian Railways. The money so made available is used
for acquisition of rolling stock assets and for meeting other
developmental needs of the Indian Railways.
As reported in the Troubled Company Reporter - Asia Pacific on
Dec. 26, 2006, Standard & Poor's Ratings Services affirmed its
'BB+' foreign currency debt rating on Indian Railway Finance
Corp. The outlook is positive.
JUNIPER NETWORKS: Stock Options Probe Cues S&P's Negative Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services' BB/Watch Neg/B-1 corporate
credit and other ratings on Sunnyvale, California-based Juniper
Networks Inc. remain on CreditWatch with negative implications,
where they were placed on May 22, 2006.
"The CreditWatch placement followed Juniper's announcement that
it had received a request for information from the office of the
U. S. Attorney for the Eastern District of New York relating to
the company's granting of stock options," said Standard & Poor's
credit analyst Bruce Hyman.
On Dec. 20, 2006, the company reported the completion of the
independent investigation in that matter.
The investigation found:
(a) numerous instances in which grant dates were chosen to
give favorable prices;
(b) serious concerns regarding certain former management;
and
(c) insufficient exercise of responsibility by management for
the stock option process.
The company expects to file its June and September 2006 forms
10-Q during the first quarter of 2007; additionally the company
has been notified that continued NASDAQ listing will require it
to file those documents by February 12, 2007. The ratings will
remain on CreditWatch until the company is in compliance with
all listing requirements and has timely filed all required
financial statements, and an assessment of the longer-term
effect of its stock options disclosures can be made.
Juniper's substantial liquidity should provide sufficient
resources for R&D and administrative expenses, strategic
investments and working capital, and also cushion the downside
risk to the rating.
The ratings continue to reflect the company's broadening
business base, continued good market position in the networking
equipment and information security markets, and its moderate
financial profile, tempered by the challenges of rapid growth in
a highly competitive, rapidly evolving market, and the potential
for continued industry volatility. Juniper supplies high-
performance routers and network security products, used in
carrier and enterprise networks, competing against industry
leader Cisco Systems Inc. and others. The company has
distribution arrangements with Alcatel Lucent, Ericsson, Siemens
AG, and Avaya Inc. Ericsson's planned acquisition of Redback
Systems Inc. could reduce Juniper's sales through that channel
over time. Juniper's sales were $596 million in the December
quarter, up 4% sequentially, while full-year sales of $2.3
billion were up 12% from 2005.
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 Australia, China, Hong Kong, India, Japan,
Korea, Malaysia, New Zealand, Singapore, Taiwan, Thailand and
Vietnam.
SUN MICROSYSTEMS: CFO Reaffirms Fourth Quarter Outlook
------------------------------------------------------
Sun Microsystems Inc. is on track to reach its 4% operating
profit margin goal for the fourth fiscal quarter ended June 30,
2007, The Associated Press reports, citing the company's chief
financial officer.
CFO Michael Lehman did not provide new guidance for the third
fiscal quarter ended March 31, 2007, the AP notes. Sun,
however, previously gave a forecast for revenues between US$3.38
billion (EUR2.61 biliion) and US$3.45 billion (EUR2.66 billion)
for the said third quarter.
As reported in the Troubled Company Reporter on Jan. 25, 2007,
Sun reported US$3.56 billion in revenues for the second fiscal
quarter ended Dec. 31, 2006, an increase of 7% as compared with
US$3.33 billion for the second fiscal quarter of 2006.
For the second quarter ended Dec. 31, 2006, Sun reported net
income of US$126 million as compared with a net loss of US$223
million for the second quarter of fiscal 2006.
Headquartered in Santa Clara, California, Sun Microsystems Inc.
-- http://www.sun.com/-- provides network computing
infrastructure solutions that include computer systems, data
management, support services and client solutions and
educational services. It sells networking solutions, including
products and services, in most major markets worldwide through a
combination of direct and indirect channels. The company has
operations in Brazil, Hungary and India, among others.
* * *
As reported in the Troubled Company Reporter - Asia Pacific on
Oct. 27, 2006, Moody's Investors Service confirmed its Ba1
Corporate Family Rating for Sun Microsystems.
=================
I N D O N E S I A
=================
ALCATEL-LUCENT: Unveils 2007 Financial Calendar
-----------------------------------------------
Alcatel-Lucent released its upcoming financial events for 2007.
The schedule of events show:
May 11 First quarter 2007 earnings announcement
June 1 Annual Shareholders' Meeting in Paris
Aug. 1 Second quarter 2007 earnings announcement
Oct. 31 Third quarter 2007 earnings announcement
About Alcatel-Lucent
Headquartered in Paris, France, Alcatel-Lucent
-- http://www.alcatel-lucent.com/-- provides solutions that
enable service providers, enterprises and governments worldwide,
to deliver voice, data and video communication services to end
users. Through its operations in fixed, mobile and converged
broadband networking, Internet protocol technologies,
applications, and services, Alcatel-Lucent offers the end-to-end
solutions that enable communications services for people at
home, at work and on the move. The company has operations in
Indonesia.
On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed
their merger transaction, and began operations as a
communication solutions provider under the name Alcatel-Lucent
on Dec. 1, 2006.
* * *
As reported on Dec. 14, 2006, following the completion of
Alcatel S.A.'s merger with Lucent Technologies Inc., at which
time Alcatel was renamed Alcatel-Lucent, Fitch Ratings
downgraded and removed Alcatel from Rating Watch Negative:
-- Issuer Default Rating to BB from BBB-; and
-- Senior unsecured debt to BB from BBB-.
Alcatel's F3 short-term rating has also been withdrawn.
The Rating Outlook for Alcatel-Lucent is Stable.
Fitch has also withdrawn the following Lucent ratings due to the
lack of clarity regarding Alcatel's support and, therefore,
expected recovery of these securities in a distressed scenario:
-- Issuer Default Rating BB-;
-- Senior unsecured debt BB-;
-- Convertible subordinated debt B; and
-- Convertible trust preferred securities B.
Moody's Investors Service downgraded to Ba2 from Ba1 the
Corporate Family Rating of Alcatel S.A., which has completed its
merger with Lucent Technologies Inc. and was renamed to Alcatel-
Lucent. The ratings for senior debt of Alcatel were equally
lowered to Ba2 from Ba1 and its Not-Prime rating for short-term
debt was affirmed.
At the same time, Moody's raised the ratings for senior debt of
Lucent to Ba3 from B1 reflecting both the standalone credit
profile of Lucent and, given the strategic importance of Lucent
to round-off the group's product range and regional presence,
expected financial support from Alcatel-Lucent, although this is
not formally committed at this time. The ratings for the other
legacy debt of Lucent were raised to B2 from B3 for subordinated
debt and trust preferreds, and to P(B3) from P(Caa1) for
preferred stock issuable under its shelf registration.
Moody's has withdrawn Lucent's Corporate Family Rating of B1,
assuming that management of the two entities will be fully
integrated over the next several months and all of Lucent's non-
US activities merged with their Alcatel counterparts. This
should result in a rapid convergence of the credit risks of the
affected companies. The outlook for all these ratings is
stable. This rating action concludes the rating reviews
initiated on April 3, 2006.
Standard & Poor's, on Dec. 6, 2006, said that following news
that the merger between French telecoms equipment supplier
Alcatel and U.S. peer Lucent Technologies Inc. has received
final approval from the U.S. Committee on Foreign Investments,
it has lowered its long-term corporate credit and senior
unsecured debt ratings on Alcatel -- now named Alcatel-Lucent to
'BB-' from 'BB', in line with its preliminary indication in its
Nov. 7, 2006 research update.
The 'B' short-term corporate credit rating on Alcatel-Lucent was
affirmed. S&P said the outlook is positive.
ALCATEL-LUCENT: Fitch Keeps BB Rating Two Months After Merger
-------------------------------------------------------------
Fitch Ratings reported that Alcatel-Lucent has managed
expectations well and apparently received good support from the
capital markets, despite what was a relatively weak but
well-flagged set of full-year financial results.
The results support Fitch's downgrade of Alcatel to 'BB' from
'BBB-' on Dec. 8, 2006, upon completion of the Lucent merger.
"It is interesting that a well-trailed profit warning in January
and a step-up in restructuring initiatives announced [Fri]day,
combined with a relatively weak set of results, have resulted in
a positive reaction from the equity markets for Alcatel-Lucent
this morning," says Stuart Reid, a Director in Fitch's European
TMT team.
"While the company provided somewhat reassuring guidance for
2007, Fitch believes considerable work remains before the
company might justify a move back into the investment-grade
world."
Alcatel-Lucent results included a fall in pro-forma sales by
1.7% to EUR18.2 billion, at a time when equipment vendors
generally have been reporting healthy levels of growth.
Stripping out the impact of restructuring, impairments and
share-based compensation, operating income fell to EUR1,025
million reflecting a pro-forma margin of 5.6%. Coupled with
relatively weak cash flows and a more leveraged balance sheet,
the agency believes the current rating of 'BB' to be fully
justified.
While it is too early to conclude too much from Alcatel-Lucent's
figures, the weakness in the company's North American mobile
revenues in 2006 - the key strategic benefit contributed by
Lucent - is a concern. Although Ericsson, which reported last
week, also suffered erosion in sales from the region in 2006,
its strong overall revenue and earnings growth confirm the
benefits of the geographic diversity that that company enjoys.
In terms of cash flow performance, analysis is obscured by the
fact that Alcatel-Lucent's numbers only benefit from one month's
consolidation of the merged entity. They nonetheless confirm
Fitch's reservations at the time of the downgrade in December
2006 that cash flow would be weakened and that the company's
capitalization would suffer as a result of the merger. On a
consolidated basis Alcatel-Lucent reported negative free cash
flow of around EUR500 million for the year.
While credit default spreads generally have benefited from
technical conditions in recent months, Fitch views the
tightening in Alcatel-Lucent's credit spreads in recent months
somewhat difficult to rationalize.
Fitch would want to see an improvement in operating margins and
free cash flow before any change in the Outlook might be
considered. While the company has articulated a clear road map
to improved profitability, including the escalation in headcount
cuts from 9,000 to 12,500, execution risk remains. Cash costs
related to the restructuring will weigh on cash flow and
liquidity, although M&A risk is considered relatively low given
the challenges at hand.
Headquartered in Paris, France, Alcatel-Lucent
-- http://www.alcatel-lucent.com/-- provides solutions that
enable service providers, enterprises and governments worldwide,
to deliver voice, data and video communication services to end
users. Through its operations in fixed, mobile and converged
broadband networking, Internet protocol technologies,
applications, and services, Alcatel-Lucent offers the end-to-end
solutions that enable communications services for people at
home, at work and on the move. The company has operations in
Indonesia.
On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed
their merger transaction, and began operations as a
communication solutions provider under the name Alcatel-Lucent
on Dec. 1, 2006.
ALCATEL-LUCENT: Costa Rica to Stop Working with Firm
----------------------------------------------------
Costa Rican state power and telecommunications firm Instituto
Costarricense de Electricidad president Pedro Pablo Quiros told
Business News Americas that the firm will end its GSM mobile
infrastructure rental contract with Alcatel-Lucent after
coverage problems and amid bribery scandal.
Instituto Costarricense will purchase that infrastructure and
won't consider Alcatel-Lucent for future contracts, BNamericas
says, citing Mr. Quiros.
BNamericas underscores that former Alcatel-Lucent executive
Christian Sapsizian was arrested in the United States in
December 2006 on charges related to US$2.5 million in allegedly
paid bribes to an Instituto Costarricense board member to
receive the 2001 contract.
According to BNamericas, Instituto Costarricense will deploy
more mobile lines for its GSM network. The firm said that the
decision to cancel its contract with Alcatel-Lucent was also due
to quality of service problems that the network has faced.
Instituto Costarricense had said that it would purchase about
200,000 additional lines for the network. However, the firm has
scrapped that plan. The firm told BNamericas that it has paid
Alcatel-Lucent some US$153 million since the network was
installed in December 2002.
BNamericas underscores that Instituto Costarricense expects to
complete the line buyback process in the next two weeks.
Instituto Costarricense told BNamericas that it will keep its
contract with Ericsson to install 300,000 new lines, which were
slated to be operational in April 2006.
Headquartered in Paris, France, Alcatel-Lucent
-- http://www.alcatel-lucent.com/-- provides solutions that
enable service providers, enterprises and governments worldwide,
to deliver voice, data and video communication services to end
users. Through its operations in fixed, mobile and converged
broadband networking, Internet protocol technologies,
applications, and services, Alcatel-Lucent offers the end-to-end
solutions that enable communications services for people at
home, at work and on the move. The company has operations in
Indonesia.
On Nov. 30, 2006, Alcatel and Lucent Technologies Inc. completed
their merger transaction, and began operations as a
communication solutions provider under the name Alcatel-Lucent
on Dec. 1, 2006.
* * *
As reported on Dec. 14, 2006, following the completion of
Alcatel S.A.'s merger with Lucent Technologies Inc., at which
time Alcatel was renamed Alcatel-Lucent, Fitch Ratings
downgraded and removed Alcatel from Rating Watch Negative:
-- Issuer Default Rating to BB from BBB-; and
-- Senior unsecured debt to BB from BBB-.
Alcatel's F3 short-term rating has also been withdrawn.
The Rating Outlook for Alcatel-Lucent is Stable.
Fitch has also withdrawn the following Lucent ratings due to the
lack of clarity regarding Alcatel's support and, therefore,
expected recovery of these securities in a distressed scenario:
-- Issuer Default Rating BB-;
-- Senior unsecured debt BB-;
-- Convertible subordinated debt B; and
-- Convertible trust preferred securities B.
Moody's Investors Service downgraded to Ba2 from Ba1 the
Corporate Family Rating of Alcatel S.A., which has completed its
merger with Lucent Technologies Inc. and was renamed to Alcatel-
Lucent. The ratings for senior debt of Alcatel were equally
lowered to Ba2 from Ba1 and its Not-Prime rating for short-term
debt was affirmed.
At the same time, Moody's raised the ratings for senior debt of
Lucent to Ba3 from B1 reflecting both the standalone credit
profile of Lucent and, given the strategic importance of Lucent
to round-off the group's product range and regional presence,
expected financial support from Alcatel-Lucent, although this is
not formally committed at this time. The ratings for the other
legacy debt of Lucent were raised to B2 from B3 for subordinated
debt and trust preferreds, and to P(B3) from P(Caa1) for
preferred stock issuable under its shelf registration.
Moody's has withdrawn Lucent's Corporate Family Rating of B1,
assuming that management of the two entities will be fully
integrated over the next several months and all of Lucent's non-
US activities merged with their Alcatel counterparts. This
should result in a rapid convergence of the credit risks of the
affected companies. The outlook for all these ratings is
stable. This rating action concludes the rating reviews
initiated on April 3, 2006.
Standard & Poor's, on Dec. 6, 2006, said that following news
that the merger between French telecoms equipment supplier
Alcatel and U.S. peer Lucent Technologies Inc. has received
final approval from the U.S. Committee on Foreign Investments,
it has lowered its long-term corporate credit and senior
unsecured debt ratings on Alcatel -- now named Alcatel-Lucent to
'BB-' from 'BB', in line with its preliminary indication in its
Nov. 7, 2006 research update.
The 'B' short-term corporate credit rating on Alcatel-Lucent was
affirmed. S&P said the outlook is positive.
ANEKA TAMBANG: Ties Up with BHP for Halmahera Island Development
----------------------------------------------------------------
PT Aneka Tambang Tbk signed a Heads of Agreement establishing an
alliance with BHP Billiton to investigate the joint development
of an extensive nickel laterite resource on Halmahera Island,
Indonesia.
The Heads of Agreement was signed in Perth during the Asia
Pacific Economic Conference by Antam's President Director, D.
Aditya Sumanagara and BHP Billiton Stainless Steel Materials
President, Jimmy Wilson.
The alliance will investigate development of pyrometallurgical
and hydrometallurgical processing routes for the Buli deposit on
Halmahera Island and other ore bodies.
This move is in line with Antam's strategy to move into higher
technology and downstream metals processing activities. This
strategic alliance with BHP Billiton is also expected to
mitigate the cost and risk of developing mineral deposits.
Antam's President Director D. Aditya Sumanagara said:
"Mining and metals processing is a capital intensive, long term
business. With this move, which is still many years away, we
hope to ensure our future competitiveness in the nickel sector.
The alliance would immediately commence a project study to
develop hydrometallurgical and pyrometallurgical processing
technologies on Halmahera Island."
The project study represented a significant opportunity to
jointly develop a world-class nickel resource with considerable
long-term benefits to Indonesia.
Through the alliance study, Antam and BHP Billiton are committed
to achieving leading mining industry best standards in safety,
environmental and community practice. The project study phase
will provide employment and support local businesses.
Following the signing, Antam and BHP Billiton will move towards
the formation of a joint venture company for the alliance.
Antam and BHP Billiton expect the joint venture agreement will
be completed by end of 2007.
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.
* * *
The Troubled Company Reporter - Asia Pacific reported on Dec. 4,
2006, that Standard & Poor's Ratings Services raised its long
term corporate credit rating on Indonesian state-owned mining
company PT Antam Tbk. to 'B+' from 'B'. The outlook is stable.
At the same time, Standard & Poor's also raised to 'B+', from
'B', the rating on the senior unsecured notes issued by Antam
Finance Ltd. and guaranteed by Antam.
Moody's Investors Service gave Aneka Tambang a local currency B1
corporate family rating, and a B2 foreign currency bond rating.
BAKRIE SUMATERA: To Build Four More CPO Processing Plants
---------------------------------------------------------
PT Bakrie Sumatera Plantations Tbk plans to build four more
crude palm oil processing plants in Sumatra, Antara News
reports, citing Bakrie Sumatera Development Director M. Iqbal
Zainuddin. The director estimates cost for putting up of the
plants to total US$22 million.
According to the report, the company currently has two CPO
processing plants in Jambi and West Sumatra to process fruits
from its plantations.
The report notes that the company produces 150,000 tons of CPO
annually.
Headquartered in Sumatra, Indonesia, Bakrie Sumatera Plantations
Tbk is Indonesia's third largest largest publicly traded
plantation company. It is 54% owned by PT Bakrie & Brothers
Tbk, and its products include crude palm oil, palm kernel oil
and latex. It was listed in 1990 on the Jakarta Stock Exchange.
As reported in the Troubled Company Reporter - Asia Pacific on
Dec. 20, 2006, Moody's Investor Services has affirmed Bakrie
Sumatera Plantations' B2 corporate family rating and B2 senior
secured bond rating after the successful completion of the
US$110 million 5-year bond issue. The provisional status of the
two ratings has also been removed. The outlook for both ratings
is stable.
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Indonesia's PT Bakrie Sumatera Plantations Tbk.
At the same time, Standard & Poor's assigned its 'B' issue
rating to the proposed US$110-million senior secured notes
issued by the company's wholly-owned subsidiary, BSP Finance
B.V.
BANK INTERNASIONAL: Launches 'Fixed Rate Program'
-------------------------------------------------
PT Bank Internasional Indonesia Tbk offers Fixed Rate Program
within five years loan term for BII's mortgage loan and multi
purpose loan. The program launching was executed by Director of
Consumer Banking BII, Rudy N. Hamdani in Jakarta.
'Fixed Rate Program' is valid both for customers who buy new
house, a 'secondary' house and transfers their mortgage loan or
multi purpose loan facilities to BII with maximum tenor of 15
years. This program is held from 1 February 2007 to 31 May
2007.
For customers who buy new house, a 'secondary' house, and the
interest rate is offered in two options, those are:
-- Fixed rate of 12.50% p.a. within 5years; or
-- Fixed rate of 10.98% p.a. within the first 1 year and 13.50%
p.a. for the next 4years.
Meanwhile, for customers who transfer their mortgage loan or
multi purpose loan facilities to BII is charged with 12.98% p.a.
of interest rate for five years and will be free from provision,
administration and appraisal fees.
"Fixed Rate Program is the first in Indonesia. With this
program we answer customers' need to pay mortgage loan and multi
purpose loan with a fixed interest rate within certain period of
time. Therefore customer should not be influenced by the
fluctuation of interest rate in the market," said Rudy N.
Hamdani, Director of Consumer Banking BII.
'Fixed Rate Program' could also be enjoyed by those who desire
more than 5 years of loan term as they will pay fixed rate for
the first 5 years and the rest will be floating.
"'Fixed Rate Program' is one of BII's innovative programs in
order to compete with other banks in mortgage loan and multi
purpose loan segment. We will keep on innovating in order to be
competitive in the market," said Rudy. "With this competitive
rate, we believe that this facility will be absorbed well by
public at large," he added.
PT Bank Internasional Indonesia Tbk -- http://www.bii.co.id/
engages in general banking services and in other banking
activities based on Syariah principles. The bank's services are
divided into three categories: Personal Services, consisting of
Funding, Credit Card Services, Loan, Reksadana and
Bancassurance; Corporate Services, consisting of Funding, Credit
Card Services, Loan and Investment Banking, and Platinum
Services, consisting of Platinum Access, Syariah Platinum Access
and Platinum MasterCard. The bank is headquartered in Jakarta,
Indonesia.
With a total customer deposit base of more than IDR34 trillio
and over IDR47 trillion in assets, Bank Internasional is one of
the largest banks in Indonesia with an international network
that comprises over 230 branches and 700 ATMs across Indonesia,
as well as a banking presence in Mauritius, Mumbai and the
Cayman Islands.
The Troubled Company Reporter - Asia Pacific reported on Feb. 6,
2007, that Moody's Investors Service changed the outlook for
Bank Internasional Indonesia Tbk's long-term credit ratings to
positive from stable. The bank's short-term deposit rating
continues to carry a stable outlook while the BFSR remains on
review for possible upgrade.
The bank's detailed ratings are:
-- issuer/subordinated debt of Ba3/Ba3;
-- foreign currency long-term/short-term deposit of B2/Not
Prime; and
-- bank financial strength of E+.
Another TCR-AP report on Feb. 1, 2007, that Fitch Ratings has
affirmed all the ratings of Bank Internasional as follows:
* Long-term foreign Issuer Default rating 'BB-',
* Short-term rating 'B',
* National Long-term rating 'AA-(idn)'
* Individual 'C/D', and
* Support '4'.
The Outlook for the ratings was revised to Positive from Stable.
BANK MANDIRI: Expects IDR10 Billion in Losses Due to Floods
-----------------------------------------------------------
PT Bank Mandiri is expected to suffer IDR10 billion in material
losses due to the floods that swept through Jakarta, Antara News
reports, citing Mandiri President Director Agus Martowardojo.
According to the report, Mr. Martowardojo said that the losses
suffered by Bank Mandiri include damage to its ATM facilities
and branch offices in and around Jakarta.
The report points out that 33 of the bank's 2,800 ATM facilities
in the region were submerged by flood water causing a total loss
of IDR7 billion.
The recent flood was the worst to hit Jakarta since 2002,
inundating around 70% of the city`s territory, the report
recounts.
PT Bank Mandiri -- http://www.bankmandiri.co.id/-- is
Indonesia's largest and best capitalized bank in terms of
assets, loans and deposits, and provides comprehensive financial
services to more than six million corporate and individual
consumers, as well as small and medium-sized enterprises in
Indonesia.
The Troubled Company Reporter - Asia Pacific reported on Feb. 6,
2007, that Moody's Investors Service revised the outlook to
positive from stable of PT Bank Mandiri's senior debt and
foreign currency long-term deposit ratings. The bank's short-
term deposit rating and long-term subordinated debt rating
continue to carry Moody's stable outlook while the bank
financial strength remains on review for possible upgrade.
Moody's detailed ratings for Bank Mandiri are:
-- senior/subordinated debt of Ba3/Ba3;
-- foreign currency long-term/short-term deposit of B2/Not
Prime; and
-- bank financial strength of E+.
Fitch Ratings has affirmed all the ratings of Bank Mandiri as
follows:
* Long-term foreign and local currency Issuer Default ratings
'BB-',
* Short-term rating 'B',
* National Long-term rating 'AA(idn)',
* Individual 'D', and
* Support '4'.
The Outlook for the ratings was revised to Positive from Stable.
COMVERSE TECH: To Buy US$293MM Pref. Stock from Verint Systems
--------------------------------------------------------------
Comverse Technology Inc. agreed to purchase up to US$293 million
in perpetual preferred stock from its majority-owned Verint
Systems Inc. subsidiary, in order to finance, in part, Verint's
planned acquisition of Witness Systems for US$27.50 per share,
as disclosed by Verint on Feb. 12, 2007.
"This investment advances the Comverse Technology Board's goal
of maximizing value for shareholders, while preserving the
company's flexibility on future choices regarding all of its
assets," Mark C. Terrell, Chairman of Comverse Technology's
Board of Directors stated. "It is consistent with the Board's
ongoing review of Comverse Technology's businesses, corporate
structure and areas of competitive opportunity, and underscores
the Board's commitment to enhancing, preserving and unlocking
the value of all of its businesses and investments. As Verint's
majority shareholder, we recognize and support the value
creation potential of Verint's strategic acquisition of Witness
Systems. Comverse Technology's financial support of the
transaction will help facilitate a powerful combination, with
significant synergies and increased opportunities for growth."
Verint Systems is a provider of analytic software-based
solutions for security and business intelligence, and Witness
Systems is a provider of workforce optimization software and
services. The convergence of Witness' workforce optimization
and Verint's actionable intelligence will create a broad
portfolio of contact center and enterprise performance
solutions, delivering a compelling new vision for the customer-
centric enterprise.
The preferred stock investment, which will pay an initial
dividend of 4.25 per annum, subject to certain adjustments, can
be offered for resale should Comverse Technology so desire. It
will be convertible into Verint common stock, following a vote
of Verint's shareholders to authorize issuance of underlying
common shares, at a 12.5% premium to the weighted average price
of Verint's shares during the 25 days prior to closing.
Comverse Technology's preferred stock investment in Verint is
subject to certain closing conditions.
Deutsche Bank Securities served as exclusive financial advisor
to Comverse Technology in connection with this transaction.
Comverse Technology, Inc. (NASDAQ: CMVT)
-- http://www.comverse.com/-- provides software and systems
that enable network-based multimedia enhanced communication and
billing services. Over 450 communication and content service
providers in more than 120 countries use Comverse products to
generate revenues, strengthen customer loyalty and improve
operational efficiency.
Comverse has offices all over the world, including Indonesia,
Malaysia and the Philippines.
The Troubled Company Reporter - Asia Pacific reported on Jan. 4,
2007, that Standard & Poor's Ratings Services said that it is
leaving its 'BB-' corporate credit and senior unsecured debt
ratings on New York, N.Y.-based Comverse Technology Inc. on
CreditWatch with negative implications, where they were placed
on March 15, 2006.
CORUS GROUP: Tata In Talks with Indian Banks Over Debt Financing
----------------------------------------------------------------
The Export Import Bank of India, Bank of Baroda, ICICI Bank and
Bank of India are in discussions with Credit Suisse, ABN Amro
and Deutsche Bank, the lead financiers and advisors of Tata
Steel Ltd., in the acquisition of Corus Group Plc, regarding a
deal to finance the takeover's US$11.3 billion debt package,
Rajesh Unnikrishnan and Preeti Iyer write for The Economic
Times.
According to the report, the financing is being done with a
debt-equity ratio of nearly 2:1 and Indian banks are likely to
participate only in the senior debt of the tranche.
Tata Steel and its investment bankers are in the process of
finding a mechanism to finance the Corus takeover in which the
key aspect will be setting up loans and fixing a repayment
schedule, The Economic Times relates.
A senior official with the Exim bank revealed that talks
centered on preferred pricing and as to how much can be
mobilized from domestic lenders.
The official added that Exim will consider the deal if the
pricing is appropriate.
"We can lend up to US$110-125 million towards any single
corporate. We have received enquiries from investment banks
involved in the Tata-Corus deal, to arrange funds to facilitate
the transaction. It seems, the lead arrangers are trying to
arrange for US$1-2 billion each from a consortium of banks, and
thus reduce their debt exposure," the official was quoted by The
Economic Times.
As previously reported in the TCR-Europe on Jan. 31, Tata Steel
won an auction for Corus over Companhia Siderurgica Nacional
after offering investors 608 pence per share in cash, or GBP5.7
billion (US$11.3 billion).
About Tata Steel
Established in 1907, Tata Steel is Asia's first and India's
largest private sector steel company. Tata Steel is among the
lowest cost producers of steel in the world and one of the few
select steel companies in the world that is EVA+ (Economic Value
Added).
About Corus Group
Corus Group plc, fka British Steel, was formed when the UK
privatized its major steelworks in 1988. It then changed its
name to Corus Group after acquiring most of Dutch rival
Koninklijke Hoogovens. Corus makes coated and uncoated strip
products, sections and plates, wire rod, engineering steels, and
semi-finished carbon steel products. It also manufactures
primary aluminum products. Customers include companies in the
automotive, construction, engineering, and household-product
manufacturing industries.
Corus turns over GBP10 billion annually and employs 47,300 in
over 40 countries and sales offices and service centers
worldwide, including Indonesia and the Philippines.
* * *
As reported in the Troubled Company Reporter - Asia Pacific on
Feb. 2, 2007, Standard & Poor's Ratings Services kept its 'BB'
long-term corporate credit rating on U.K.-based steelmaker Corus
Group PLC on CreditWatch with developing implications, after the
completion of the auction process, during which India-based
steel manufacturer Tata Steel Ltd. offered the highest bid of
608 pence per share.
This values the company at GBP5.75 billion, up from the 455
pence per share of the initial bid.
At the same time, the 'BB+' long-term debt rating on Corus'
EUR700 million senior secured bank loan and the 'BB-' unsecured
debt ratings on Corus remain on CreditWatch with developing
implications. The 'B' short-term corporate credit rating
remains on CreditWatch with positive implications.
All ratings were placed on CreditWatch on Oct. 18, 2006,
following the dislocure of an initial bid by Tata Steel.
On Feb 2, 2007, Fitch Ratings said that Corus Group Plc's
Issuer Default 'BB-' and Short-term 'B' ratings remain on Rating
Watch Negative following a recommended bid, valued at GBP6.2
billion, from India-based Tata Steel Limited in the wake of an
auction process conducted by the UK Takeover Panel on 30-31
January 2007. The RWN also applies to the 'B+' ratings on CS's
EUR800 million 7.5% senior notes and Corus Finance Plc's GBP200m
6.75% guaranteed bonds.
At the same time, Moody's Investors Service placed Corus Group
plc's Ba2 Corporate Family and other ratings under review.
GENERAL NUTRITION: Moody's Says Buyout Won't Affect Ratings
-----------------------------------------------------------
Moody's Investors Service stated that the intention of Ares
Management and the Ontario Teachers' Pension Plan to buy GNC
Parent Corp. from Apollo Management has no immediate impact on
the company's ratings and/or stable rating outlook. The LBO
that was publicized on Feb. 9, 2007, is consistent with previous
disclosures that the current owners were exploring strategic
alternatives such as the sale of the company. The total
enterprise value of the transaction is approximately US$1.65
billion. As further particulars regarding the acquisition and
its financing plans become available, the ratings and/or outlook
could be adjusted.
These are the ratings of GNC:
-- Corporate family rating of B3;
-- Probability of Default Rating of B3;
-- Senior secured bank loan of Ba3 (LGD 1, 4%);
-- US$150 million of 8.625% senior notes (2011)
of B1 (LGD 2, 25%);
-- US$215 million of 8.5% senior subordinated notes (2010)
of B3 (LGD 4, 56%); and
-- US$425 million notes (2011) issued by GNC Parent Corp.
of Caa2 (LGD 5, 84%).
Pittsburgh, Pennsylvania-based General Nutrition is a subsidiary
of GNC Corp. -- http://www.gnc.com/-- a specialty retailer of
health and wellness products, including vitamins, minerals,
herbal, and specialty supplements (VMHS), sports nutrition
products and diet products. The company sells its products
through a worldwide network of more than 5,800 locations
operating under the GNC brand name and operates in three
business segments: retail, franchise and manufacturing/
wholesale.
GNC's Asian operations include those in Indonesia and the
Philippines.
HILTON HOTELS: Fights Accor for Newly Sold Macdonald Hotels
-----------------------------------------------------------
Hilton Hotels Corp. is competing with French rival Accor for the
contract to run 24 of the former Macdonald hotels acquired by
Moorfield Real Estate, the Scotsman reports.
Accor plans to convert the hotels to its Mercure brand, whereas
Hilton intends to establish its DoubleTree brand for the first
time in Europe through the hotels, the Scotsman states.
Moorfield, which purchased the properties for about GBP400
million, said upon acquisition that it would let Macdonald run
the hotels on an interim basis pending the result of a three-way
bidding process among "two international hotel companies" and
Macdonald, The Times relates.
About Accor
Based in Cedex, France, Accor -- http://www.accor.com/-- is a
global leader in corporate services that operates in nearly 100
countries with 160,000 employees. It offers to its individual
and corporate clients nearly 40 years of expertise in its two
core businesses, Hotels and Services to corporate clients and
public institutions.
About Hilton Hotels
Headquartered in Beverly Hills, California, Hilton Hotels Corp.
-- http://www.hilton.com/-- together with its subsidiaries,
engages in the ownership, management, and development of hotels,
resorts, and timeshare properties, as well as in the franchising
of lodging properties in the United States and internationally,
including Indonesia, Australia, Austria, India, Philippines and
Vietnam.
* * *
The Troubled Company Reporter reported on Feb. 6, 2007, that
Standard & Poor's Ratings Services placed its ratings on Hilton
Hotels Corp., including the 'BB' corporate credit rating, on
CreditWatch with positive implications.
TCR-AP reported on Feb. 2, 2007, that Fitch Ratings has upgraded
the debt ratings for Hilton Hotels as follows:
--Issuer Default Rating to 'BB+' from 'BB';
--Senior credit facility to 'BB+' from 'BB'; and
--Senior notes to 'BB+' from 'BB'.
The ratings apply to its US$5.75 billion credit facility and
roughly US$2.6 billion of its senior notes. Fitch has also
revised Hilton's Rating Outlook to Positive from Stable.
Moody's Investors Service confirmed its Ba2 Corporate Family
Rating for Hilton Hotels Corporation in connection with its
implementation of its new Probability-of-Default and Loss-Given-
Default rating methodology for the gaming, lodging and leisure
sectors.
Additionally, Moody's revised and 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 Notes
with an average
rate of 8.1%
due 2007 - 2031 Ba2 Ba2 LGD4 53%
Chilean inflation
indexed note
effective rate
7.65% due 2009 Ba2 Ba2 LGD4 53%
3.375%
Contingently
convertible
senior notes
due 2023 Ba2 Ba2 LGD4 53%
Minimum Leases
Commitments Ba2 Ba2 LGD4 53%
Term Loan A
at adjustable
rates due 2011 Ba2 Ba2 LGD4 53%
Term Loan B
at adjustable
rates due 2013 Ba2 Ba2 LGD4 53%
Revolving loans
at adjustable
rates, due 2011 Ba2 Ba2 LGD4 53%
Senior unsecured
debt shelf Ba2 Ba2 LGD4 53%
Subordinate debt
Shelf Ba3 B1 LGD6 97%
Preferred B1 B1 LGD6 97%
PERTAMINA: Exasperated Over PLN Plans on Tender for Fuel Oil
------------------------------------------------------------
PT PLN's plans to have a tender for fuel oil procurement made PT
Pertamina (Persero)'s Managing Director Ari Soemarno angry,
Tempo Interactive reports.
According to the report, Mr. Soemarno has asked the PLN to make
clearer the payment mechanism of oil bought from Pertamina,
before holding the tender.
The report, citing Mr. Soemarno, says that Pertamina has been
procuring fuel oil for PNL without a clear contract.
By using the payment pattern, fuel oil sales payment to
Pertamina was often jammed, which caused the claim to PLN to
pile up, and caused PLN's total arrears to reach IDR13 trillion
in early 2007, Tempo says.
PLN, instead of repaying the debt to Pertamina, held a fuel oil
tender for one million kiloliters out of eight kiloliters of
this year's needs, Tempo relates. If one liter fuel oil on
tender costs IDR5,000, then the value of one million kiloliters
tender is IDR5 trillion.
The report points out that Mr. Soemarno wants that fuel oil sale
to PLN using commercial provisions since Pertamina has been a
corporation since Jan. 1, 2006.
PLN's Managing Director, Eddie Widiono said that his side wishes
to obtain fuel oil with a cheaper price compared to buying from
Pertamina, Tempo relates.
According to Mr. Widiono, PLN pays relatively expensive fuel oil
to Pertamina since it includes risk management cost and other
additional costs.
PT Pertamina (Persero) -- http://www.pertamina.com/-- is a
wholly state-owned enterprise. The enactment of Oil and Gas Law
No. 22/2001 in November 2001 and Government Regulation
No.31/2003 has changed its legal status from a special state
owned enterprise into a Limited Liability Company. In carrying
out its activities, PT Pertamina implements an integrated system
from upstream to downstream. Pertamina operates seven oil
refineries with a total output capacity of around 1 million
barrels per day. However, these refineries only cover about
three-quarters of domestic oil demand, with the rest being me by
imports.
In 2003, PT Pertamina finance director Alfred Rohimone disclosed
that the Company's financial condition was in critical condition
because its expenses had surpassed its income due to its
obligation to meet domestic demand with fuel oil bought at
higher prices on the international market. Mr. Rohimone stated
that with a liquidity position below IDR2 trillion, the Company
was already bleeding.
Despite reporting a net profit of IDR3.03 trillion for the first
six months of 2005, Pertamina's failure to service its financial
obligations was pegged as one of the contributors to Indonesia's
decreased income for the year.
In August 2005, Pertamina's debt to United States firm Karaha
Bodas Company rose from IDR2.54 trillion to IDR2.99 trillion.
The debt had increased when, in 2003, a U.S. court ordered the
Company to pay compensation to KBC, relating to an international
arbitration decision, when the Indonesian Government halted a
geothermal project in Karaha Bodas, East Java. Since that time,
the debt has steadily risen due to the Company's failure to pay
the compensation immediately.
PERUSAHAAAN GAS: Councilors Seeks Gas Pipes' Relocation
-------------------------------------------------------
Banten provincial council has asked state PT Perusahaan Gas
Negara to relocate its pipes in Cilegon due to explosion fears,
The Jakarta Post reports.
According to the report, Council Commission I Head La Ode
Asaruddin is worried the heavy load of passing vehicles along
the Grogol-Merak highway could trigger an explosion. The
company is currently laying a high-pressure pipeline in the
area.
Council members also noted that the pipes had not been properly
installed since they were not covered with a thick enough layer
of soil, Tempo relates.
The council members suggested that the company relocate the
connection to a safer and less public area, Tempo adds.
Mr. Asaruddin said that it would be safer to plant the pipes
along the Merak-Jakarta railway track because it is closer to
the industrial estates, the report adds.
Headquartered in Jakarta, Indonesia, PT Perusahaan Gas Negara
(Persero) Tbk -- http://www.pgn.co.id/-- is a gas and energy
company that is comprised of two core businesses: distribution
and transmission. For distribution, PGN signs long-term supply
agreements with upstream operators, which give the company
scheduled and reliable gas volumes and fixed gas prices. These
volumes are subsequently sold to commercial and industrial
customers under gas sales agreements. Under these agreements,
sales volumes are take-or-pay and the gas pricing is fixed and
in US dollar. On the transmission business, PGN ships gas on
behalf of the upstream suppliers under a fixed US dollar tariff
with ship-or-pay volumes agreements. The company is 59.4%
owned by the Government of Indonesia.
The Troubled Company Reporter - Asia Pacific reported on
Jan. 18, 2007, that Moody's Investors Service has affirmed the
Ba2 corporate family rating of PT Perusahaan Gas Negara
(Persero) Tbk. At the same time, Moody's has affirmed the Ba3
debt ratings of PGN Euro Finance 2003 Ltd, which is guaranteed
by PGN. The ratings outlook is stable. This affirmation
followed the recent announcement of a delay in the South
Sumatera West Java gas commercialization.
The TCR-AP reported on Dec. 21, 2006, that Standard & Poor's
Ratings Services revised the outlook on Perusahaan Gas to
positive from stable. The ratings on the company are affirmed
at 'B+'.
On June 28, 2006, the TCR-AP stated that Fitch Ratings Agency
assigned these ratings to PT Perusahaan Gas Negara Tbk:
-- Long-term foreign currency Issuer Default Rating 'BB-';
-- Long-term local currency IDR 'BB-'; and
-- PGN Euro Finance 2003 Limited's IDR1.12-trillion notes due
2014 and IDR1.35-trillion notes due 2013 guaranteed by PGN
and its subsidiaries 'BB-'.
PERUSAHAAN LISTRIK: Eyes IDR12.3 Trillion Bonds This Year
---------------------------------------------------------
Perusahaan Listrik Negara is planning to sell USD$1 billion in
dollar-denominated bonds and IDR3 trillion worth of debt
denominated in the local currency this year, Antara News says,
citing a Bisnis Indonesia report.
According to the report, Perusahaan Listrik Finance Director
Parno Isworo said at a hearing at the lower house that the
company is planning to launch new bonds this year worth USD$1
Billion and IDR3 trillion.
Reutres, also citing Bisnis Indonesia, notes that the bonds
would help finance the IDR10.5 trillion power network
construction, taking the company's outstanding bonds to 25.95
trillion.
The company also reportedly has plans to set up a distribution
network from four of its steam-powered generators in Paiton
Baru, Suralaya Baru, Labuan and Indramayu, Reuters relates.
Reuters adds that the company has been trying to boost its
capacity to avoid shortages due to rising demand in Indonesia,
as well as diversify itself away from oil products as the source
for its power in the wake of higher energy prices.
Indonesian state utility firm PT Perusahaan Listrik Negara
-- http://www.pln.co.id/-- transmits and distributes
electricity to around 30 million customers, roughly 60% of
Indonesia's population. The Indonesian Government decided to
end PLN's power supply monopoly to attract independents to build
more capacity for sale directly to consumers, as many areas of
the country are experiencing power shortages.
PLN posted a IDR4.92-trillion net loss in 2005, against a net
loss of IDR2.02 trillion in 2004.
The Troubled Company Reporter - Asia Pacific reported on Feb.
06, 2007, that Moody's Investors Service has changed the outlook
to positive from stable for the B1 corporate family rating and
senior unsecured bond rating of PT Perusahaan Listrik Negara.
The rating action follows Moody's decision to change the outlook
of Indonesia's B1 foreign and local currency government bond
ratings to positive from stable.
Standard & Poor's Ratings Services also assigned its 'BB-'
foreign currency rating and 'BB' local currency rating to PLN.
The outlook on the ratings is stable. At the same time,
Standard & Poor's assigned its 'BB-' issue rating to the
proposed U.S. dollar senior unsecured notes issued by PLN's
wholly owned subsidiary, Majapahit Holding B.V.
=========
J A P A N
=========
DELPHI CORP: To Sell Brake Hose Biz to Harco Mfg. for US$9.8MM
--------------------------------------------------------------
Delphi Corp. and its debtor-affiliates seek authority from the
Honorable Robert D. Drain of the United States Bankruptcy Court
for the Southern District of New York to sell their Brake Hose
Business and certain of Delphi Technologies Inc.'s intellectual
property related to the Brake Hose Business to Harco Mfg. for
US$9,800,000, free and clear of liens, claims, and encumbrances,
subject to higher and better bids.
The Debtors supply a complete array of brake hose assemblies for
various vehicles from small automobiles to mid-size trucks. The
Debtors operate the Brake Hose Business as part of the Chassis
Systems Product Business Unit within their Automotive Holdings
Group Division.
The Debtors deliver brake hose components to Harco Brake Systems
Inc. for final assembly. Harco Manufacturing Group LLC, an
affiliate of Harco Brake, then ships the finished products to
General Motors Corporation. The Debtors are a Tier I supplier
to GM and a Tier II supplier to several Tier I brake hose
assembly suppliers to GM.
The Debtors' brake hose product line has been an ongoing
business concern since 1936, John Wm. Butler, Jr., Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois,
relates. In 1997, the brake hose final assembly operation was
moved to Harco Mfg.
The Debtors inform the Court that the Brake Hose Business does
not fit within the anticipated product portfolio under their
transformation plan. The Debtors believe they lack a global
manufacturing presence in the Brake Hose product line to make
the Business grow. The Debtors, however, believe that as a
stand alone business unencumbered by legacy costs, the Brake
Hose product line could be a profitable and competitive business
line.
When the Debtors' long-term supply agreement with Harco Mfg.
expired in 2004, Delphi Automotive Systems LLC and Harco Mfg.
executed an extension of the term of the Agreement through
Dec. 31, 2007, under a Brake Hose Assembly Contract Policy
Statement.
The Policy Statement, among other things, provides that:
-- DAS will pay Harco US$2,500,000 in cancellation costs if
the Brake Hose Business is in-sourced or completely exited
by DAS;
-- Harco is entitled to a right of first refusal to buy the
brake hose business before any alternative purchaser is
considered by DAS; and
-- Harco or an alternative purchaser of the Business must
assume the Statement, whereby the Debtors would have no
further obligations under it.
Since early 2005, the Debtors exerted efforts to market the
Brake Hose Business and ultimately, determined that Harco Mfg.'s
bid is the best offer for the Business.
Subsequently, the Debtors and Harco Mfg. entered into a Purchase
Agreement for the sale for Brake Hose Business on Jan. 25, 2007.
The salient terms of the Purchase Agreement are:
* The Purchase Price represents US$9,750,000 for the Acquired
Assets and US$50,000 for the Intellectual Property;
* Harco will place US$500,000 of the Purchase Price into an
escrow account, and another US$750,000 into an indemnity
escrow account;
* Harco is entitled to a US$294,000 Break-Up Fee if the
Debtors sell, transfer, lease, or otherwise dispose the
Acquired Assets to another party; and
* The Debtors will reimburse Harco, up to US$100,000, for
reasonable and actual out-of-pocket fees and expenses it
incurred in connection with the transactions contemplated
by the Agreement upon the Agreement's termination when:
-- the Closing fails to occur within 90 days after the
Court approves the Sale; or
-- the Court fails to enter a Sale Order by May 25,
2007, or the Sale Order is subject to a stay or
injunction.
In the event Harco Mfg. is entitled to receive both the Break-Up
Fee and the Expense Reimbursement, Harco Mfg. will only be
awarded with the larger of the two amounts.
The Agreement does not provide for a transfer of the Business's
workforce to Harco Mfg. Under a manufacturing services
agreement to be entered into at the Sale's Closing, the Debtors'
hourly employees will continue to produce brake hose products
for a maximum period of 12 months. Under a transition services
agreement, salaried employees of the Business will support those
activities for a similar period.
The Business's hourly workforce is represented by the United
Steel, Paper And Forestry, Rubber, Manufacturing, Energy, Allied
Industrial And Service Workers International Union. The Debtors
are currently negotiating with the USW to obtain the labor
union's waiver of any no-sale clause contained in agreements
between Delphi Corporation and the USW prior to the Closing, Mr.
Butler informs the Court.
Pursuant to the Agreement, the Debtors also seek to assume and
assign certain executory contracts, unexpired leases, and
liabilities to Harco Mfg. or an alternative purchaser. To the
extent that any defaults exist under the Assumed and Assigned
Contracts or Leases, the Debtors intend to cure those defaults
prior to any assumption and assignment.
A full-text copy of the Harco Sale and Purchase Agreement is
available for free at http://ResearchArchives.com/t/s?1928
Bidding Procedures
To maximize the value of their property, the Debtors seek to
subject the proposed sale to better and higher offers.
Accordingly, the Debtors ask the Court to approve uniform
bidding
procedures to govern the sale of the Brake Hose Business.
For a potential bidder to become a Qualified Bidder, it must:
-- execute a confidentiality agreement;
-- provide certain financial assurances as to its ability to
close a transaction; and
-- submit a preliminary purchase proposal.
The Debtors propose to establish 11:00 a.m., March 2, 2007, as
the Bid Deadline.
For a bid to be deemed a Qualified Bid, it must be received by
the Bid Deadline and, among other things, must have a value
greater than the aggregate value of the Purchase Price, the
Break-Up Fee, and US$500,000. The Bid must not be conditioned
on bid protections and must include a commitment to consummate
the purchase of the Acquired Assets within 15 days after the
Court approves the alternative purchase.
If the Debtors receive a Qualified Bid, they will conduct an
auction of the Acquired Assets before March 20, 2007.
A full-text copy of the proposed Bidding Procedures for the sale
of the Brake Hose Business is available for free at
http://ResearchArchives.com/t/s?1971
The Court will conduct a hearing on March 22, 2007, to consider
the Proposed Sale.
About Delphi Corporation
Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) --
http://www.delphi.com/-- is the single largest global supplier
of vehicle electronics, transportation components, integrated
systems and modules, and other electronic technology. The
Company's technology and products are present in more than 75
million vehicles on the road worldwide. Delphi has regional
headquarters in Japan, Brazil and France.
The Company filed for chapter 11 protection on Oct. 8, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr.,
Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden,
Arps, Slate, Meagher & Flom LLP, represent the Debtors in their
restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A.
Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP,
represents the Official Committee of Unsecured Creditors. As of
Aug. 31, 2005, the Debtors' balance sheet showed
US$17,098,734,530 in total assets and US$22,166,280,476 in total
debts.
EDDIE BAUER: CEO and Board Member Fabian Mansson Resigns
--------------------------------------------------------
Eddie Bauer Holdings Inc. disclosed the resignation of its
President, Chief Executive Officer and Board member, Fabian
Mansson.
Howard Gross, a member of the Board, has been named Interim CEO
as the Board conducts a search for a permanent CEO. Mr. Gross
has over 35 years of experience in the retail apparel industry,
having served as President and CEO of Limited Stores and
Victoria's Secret Stores, as well as CEO of the Hub
Distributing, Millers Outposts, and Levi's Outlet Stores
divisions of American Retail Group, Inc.
"On behalf of the entire Board, I'd like to thank Fabian for his
leadership over the past four and a half years," William End,
Chairman of the Board, said. "He guided the Company through its
difficult reorganization and the early stages of its turnaround
and restored positive sales momentum this past Holiday season
with the refocusing of the Company's product line. We wish him
well in his future endeavors."
"Our Board is committed to taking the necessary actions to put
Eddie Bauer on a path to improve its performance and capitalize
on the strong potential of its brand," Mr. Gross commented. "We
are moving forward thoughtfully and expeditiously to position
the Company to execute its turnaround strategy."
At a special stockholders meeting held Feb. 8, 2007, an
insufficient number of shares were voted in favor of approving
the company's proposed sale to Eddie B Holding Corp., a company
owned by affiliates of Sun Capital Partners Inc. and Golden Gate
Capital. As a result, the Board is evaluating appropriate next
steps for the company to effectuate its turnaround.
About Eddie Bauer Holdings, Inc.
Headquartered in Redmond, Washington, Eddie Bauer Holdings, Inc.
-- http://www.eddiebauer.com/-- is a specialty retailer that
sells casual sportswear and accessories for the "modern outdoor
lifestyle." Established in 1920 in Seattle, Eddie Bauer
believes the Eddie Bauer brand is a nationally recognized brand
that stands for high quality, innovation, style, and customer
service. Eddie Bauer products are available at approximately
375 stores throughout the United States and Canada, through
catalog sales and online at http://www.eddiebaueroutlet.com/
The company also participates in joint venture partnerships in
Japan and Germany and has licensing agreements across a variety
of product categories. Eddie Bauer employs approximately 10,000
part-time and full-time associates in the United States and
Canada.
As reported in the Troubled Company Reporter on Oct. 13, 2006,
Moody's Investors Service confirmed Eddie Bauer Inc.'s B2
Corporate Family Rating. Moody's also confirmed its B2 rating
onthe company's 300 million term loan.
On Nov. 13, 2006, Standard & Poor's assigned the company's long-
term foreign and local issuer credit rating at B.
FLOWSERVE CORP: Fitch Rates Senior Secured Bank Facilities at BB
----------------------------------------------------------------
Fitch Ratings has initiated coverage of Flowserve Corporation
and assigned these ratings:
--Issuer Default Rating 'BB';
--Senior secured bank facilities 'BB'.
The Rating Outlook is Stable.
Flowserve had slightly more than US$650 million of debt
outstanding at Sept. 30, 2006.
The ratings incorporate Flowserve's product and geographic
diversification within the flow control industry, its leading
market positions, and strong demand across many of its end
markets. Other rating strengths include a conservative debt
structure, ample liquidity and declining leverage. The company
has consistently reduced debt over the past several years, and
segment operating income has also been improving. Rating
concerns include weak controls over financial reporting, a
number of potential litigation liabilities, further
rationalization required in the company's management information
systems, and cyclicality in many of Flowserve's end-markets.
Concerns about cyclicality are mitigated by the substantial
portion of aftermarket business, long-term growth in
international markets which represent more than half of total
revenue, and a favorable outlook for long term investment in the
oil and gas industries. Much of the senior management team has
been replaced since early 2004, and the company is gradually
consolidating its and management information systems.
Increases in bookings and revenue from the important oil, gas
and process industries have contributed to improving operating
results despite a number of ongoing challenges involving
financial controls and potential litigation liabilities. Fitch
anticipates that as Flowserve eventually resolves these issues,
the company's financial profile could improve further. SEC
filings were brought current as of Sept. 30, 2006 but the
company is still addressing material weaknesses as disclosed in
its financial statements. The challenges surrounding Flowserve's
financial controls and management information systems follow a
period of acquisitions and mergers several years ago under a
previous management team. The company is currently taking steps
to boost its accounting and compliance capabilities and has
implemented a program to gradually upgrade and integrate the
large number of disparate information systems currently in
place. The completion of this effort will be important to
Flowserve's ability to implement operating strategies, maintain
its competitive position and control costs related to financial
reporting.
Potential litigation liabilities represent additional rating
concerns, including asbestos, shareholder lawsuits, export
control laws, and investigations of Flowserve's compliance with
the U.N. Oil-for-Food Program. These potential liabilities are
reduced by insurance coverage. While the effectiveness of such
coverage is difficult to ascertain, the ratings incorporate
Fitch's view that, in the absence of unexpectedly large awards
against it, Flowserve's net litigation liabilities are not
likely to result in a substantial use of cash.
Improved results through the first nine months of 2006 benefited
by comparison with 2005 when Flowserve recorded certain
non-recurring costs. These costs included the extinguishment of
debt as well as losses from the General Services Group that was
divested in 2005. Stronger operating results have been partly
offset by high professional fees as Flowserve addresses its
financial control weaknesses and upgrades its finance and
compliance capabilities. Operating margins have improved in
recent periods, rising modestly to 7.8% for the first nine
months of 2006. They can be expected to improve further when
professional fees eventually decline and as Flowserve increases
sourcing from low-cost locations and takes other steps to
control costs. Flowserve's long term target for operating
margins is 15%.
The company has used most of its free cash flow in recent years
to reduce debt and leverage. At Sept. 30, 2006, Flowserve had
reduced debt/EBITDA to 2.24x compared to levels above 4x prior
to 2004. Going forward, however, improving operating trends and
cash flow should support discretionary spending for potential
acquisitions and share repurchases. Share repurchases were
recently implemented partly to offset the impact of employee
stock option plans that were unexercisable while SEC filings
were delinquent. Despite the increase in Flowserve's
discretionary spending, Fitch believes the company is likely to
maintain leverage near current levels over the long term and
could potentially report stronger financial measures in the
absence of acquisition opportunities.
Debt at Sept. 30, 2006 totaled $654 million, consisting
primarily of a $562 million term loan under its domestic credit
facilities and an $85 million borrowing from the European
Investment Bank. The EIB borrowing, which was backed by a
letter of credit issued under a $400 million domestic bank
revolving credit, was repaid in December 2006. Liquidity was
supported by $52 million of cash and the $400 million revolver.
Flowserve's domestic bank facilities are secured by
substantially all of its domestic assets and 65% of the capital
stock of certain foreign subsidiaries. The facilities contain a
comprehensive set of covenants that were put in place while the
company was delinquent on its SEC filings, and the company was
well within its covenant limits at Sept. 30, 2006. The bank
revolver and term loan mature in 2010 and 2012, respectively,
and would become unsecured if Flowserve maintains investment
grade ratings, as defined in the agreement, for at least 90
days.
Headquartered in Irving, Texas, Flowserve Corp. (NYSE: FLS) --
http://www.flowserve.com/-- provides fluid motion and control
products and services. Operating in 56 countries, the company
produces engineered and industrial pumps, seals and valves as
well as a range of related flow management services. In Latin
America, Flowserve operates in 36 countries, including in Japan.
MITSUBISHI MATERIAL: Moody's Changes Ratings Outlook To Positive
----------------------------------------------------------------
Moody's Investors Service has changed to positive from stable
the outlook for Mitsubishi Materials Corporation's (Mitsubishi
Materials) Baa3 long-term debt ratings. The outlook change
reflects Mitsubishi Materials' improving profitability and cash
flow generation capability, a result of business restructuring
and disposition of latent losses, as well as its improvement in
capital structure over the past few years.
With progress in the company's continuing business
restructuring, including the streamlining of group company
operations and of assets, Moody's believes that Mitsubishi
Materials has lowered its risk of incurring significant
extraordinary losses, which in turn has enhanced its
profitability and cash flow generation capability. This should
help the company in further balance sheet improvement and in
executing capital expenditure.
Mitsubishi Materials' capital structure has also improved over
the past few years, supported by increases in equity through
strong operating results -- led by copper and fabrication
businesses, the IPO of an affiliated company, SUMCO, in November
2005 and convertible bond conversion in December 2006. The
company's total debt also continued to fall during this time,
resulting in improved financial leverage: its total debt to
total capitalization ratio was lowered to 58% in December 2006
from 72% in March 2005.
Moody's recognizes that some of Mitsubishi Materials' key
business segments continue to be of volatile nature, affected by
such factors as fluctuating non-ferrous metals prices and
electronic device demand. While robust performance of the
copper segment has been a strong driver of the company's
operations in the past few years, supported by a continuing rise
in copper price and smelting margins, it may decline depending
on price levels and margin negotiations with the mining
companies. Nonetheless, the rating agency believes that the
company's improving equity position will provide additional
cushion for profit volatility and that its diverse business
portfolio will help contain operational volatility in each
division and maintain its overall cash flow stability, as it has
thus far.
In the light of the financial improvement, Mitsubishi Materials
is increasing its capital expenditure and strategic investment
-- including spending on a new electric power plant for the
cement segment -- which may tighten its free cash flow. While
Moody's will continue to observe possible changes in Mitsubishi
Materials' financial policy and future capital expenditure
level, the rating agency expects that it will maintain its focus
on financial leverage and balance its future investments with
depreciation.
About Mitsubishi Materials
Headquartered in Tokyo, Mitsubishi Materials Corp. --
http://www.mmc.co.jp/english/-- was formed on Dec. 21, 1990,
from the merger of two firms, Mitsubishi Metal Mining Company
Limited and Mitsubishi Cement Limited. The company's principal
activity is the manufacture of metals and ceramics.
The company has international offices in the United States,
Canada, Brazil, Chile, France, Italy, Indonesia and the rest of
Asia.
As reported by the Troubled Company Reporter - Asia Pacific on
June 1, 2006, Standard & Poor's Ratings Services had on May 31,
2006, raised its long-term corporate credit rating on Mitsubishi
Materials Corp. to BB from BB- and its senior unsecured debt
rating on the company to BB+ from BB, on the company's improved
revenue base and stronger cash flow generation.
NIKKO CORDIAL: Executive VP Steps Down Over Accounting Scandal
--------------------------------------------------------------
Nikko Cordial Executive Vice President Hiroaki Sugioka is the
latest executive to quit his post over the accounting scandal
that erupted and plagued the brokerage firm, press reports
relate.
Mr. Sugioka resigned on Feb. 13 to take responsibility for the
accounting irregularities surrounding Nikko Cordial, The Japan
Times says. According to the report, Mr. Sugioka was replaced
by Kazuyoshi Kimura.
Bloomberg News says that Mr. Sugioka was in charge of corporate
governance.
As reported in the Troubled Company Reporter - Asia Pacific on
Feb. 7, 2007, Nikko Cordial's former chief financial officer,
Hajime Yamamoto, was the fifth top Nikko executive who had
stepped down since the accounting scandal erupted in December.
The other four who have already resigned are Nikko ex-President
Junichi Arimura; Nikko ex-Chairman Masashi Kaneko; Hirofumi
Hirano, chairman of Nikko Principal Investments Japan Ltd.; and
Nikko Principal President Kazuyuki Kido.
The Times states that the Nikko Cordial may take legal action
against those implicated in the accounting scandal, but the
company did not give details as to how it would seek damages.
About Nikko Cordial
Headquartered in Tokyo, Japan, Nikko Cordial Corporation --
http://www.nikko.jp/-- is mainly engaged in the provision of
financial services in the securities-related field. The Company
operates in four business segments. The Retail segment provides
consulting services for financial products management. The
Asset Management segment provides asset management services for
individual, corporate and foreign investors. The Investment
Banking segment provides corporate finance and capital market
services, mergers and acquisitions, advisory services, trading
services for institutional investors and research services. The
Merchant Banking segment is involved in the investment of
corporate issued stocks, bonds, securities-related financial
products and other financial products. Nikko Cordial has 62
consolidated subsidiaries. It has oversea operations in the
United States, the United Kingdom, Luxemburg and Singapore.
The company has a global network.
* * *
The Troubled Company Reporter - Asia Pacific reported on
Feb. 13, 2007, that Fitch Ratings has downgraded Nikko Cordial
Corporation's Long- term foreign and local currency Issuer
Default ratings to 'BBB-' from 'BBB', the Short-term foreign and
local currency IDRs to 'F3' from 'F2', and the Individual rating
to 'C/D' from 'C'.
The TCR-AP reported on Dec. 22, 2006, that Fitch placed its
ratings on Nikko Cordial Corp. and Nikko Cordial Securities Inc.
on Rating Watch Negative following the decision announced on
Dec. 18 by the Tokyo Stock Exchange to place the shares of NCC
on its official watchlist pending the full investigation into
reported accounting breaches by the company.
As reported in the TCR-AP on Dec. 22, 2006, Japan's Securities
and Exchange Surveillance Commission began investigating Nikko
Cordial for falsifying its annual financial statements for the
business year ended March 30, 2005, declaring JPY14 billion in
false profits, and using them to procure money from the market.
NIKKO CORDIAL: To Improve Internal Controls to Prevent Bad Deals
----------------------------------------------------------------
Nikko Cordial Corp. is planning to implement measures that will
boost its internal control system and prevent accounting
irregularities, The Japan Times reports.
According to Bloomberg News, the company will add 50 people to
its compliance staff, increasing it to 150.
Bloomberg notes that Nikko, in a statement to the Tokyo Stock
Exchange, said that it will also appoint a chief compliance
officer, a chief risk management officer and a new chief
financial officer.
Moreover, The Times states that Nikko intends to create a new
section, dubbed as "group risk management office", which will
bring internal control to the company so as to prevent
fraudulent deals involving affiliated entities.
The Times' Kaho Shimizu relates that this new section will have
a staff of 10 employees to check transactions already approved
by the company's management.
In addition, Nikko will also set up an "internal controls
office" to monitor ongoing projects involving its affiliates,
The Times says. The company already has eight workers engaged
in internal controls but will raise the number to 14.
Bloomberg points out that Nikko Chief Executive Officer Shoji
Kuwashima is trying to bring back investor confidence and avoid
a stock market delisting.
"Nikko's corporate governance was insufficient. We failed to
respond to the significant warnings by the auditors, which could
eclipse our prestige," Bloomberg quotes Mr. Kuwashima.
As reported in the Troubled Company Reporter - Asia Pacific on
Feb. 1, 2007, a report issued on Jan. 30 by a special panel
looking into the accounting fraud at Nikko Cordial stated that
the company's top management was involved in inflating profits.
The TCP-AP report said that Hajime Yamamoto, Nikko Cordial's
former senior group executive in charge of finance, and Hirofumi
Hirano, former president of Nikko Principal Investments Japan
Ltd, were directly involved in the falsification of the
company's consolidated earnings report for the year through
March 2005.
Mr. Kuwashima said that the misstatements stemmed from a lack of
internal controls to check for fraud and error, as well as a
lack of awareness among executives and staff toward compliance,
The Times notes.
"There were problems with our organisation that we have to fix,"
Reuters cites newly appointed chairman Kazuyoshi Kimura as
saying in a news conference. "But ultimately it is up to top
managers to set an example by behaving ethically," Mr. Kimura
adds.
About Nikko Cordial
Headquartered in Tokyo, Japan, Nikko Cordial Corporation --
http://www.nikko.jp/-- is mainly engaged in the provision of
financial services in the securities-related field. The Company
operates in four business segments. The Retail segment provides
consulting services for financial products management. The
Asset Management segment provides asset management services for
individual, corporate and foreign investors. The Investment
Banking segment provides corporate finance and capital market
services, mergers and acquisitions, advisory services, trading
services for institutional investors and research services. The
Merchant Banking segment is involved in the investment of
corporate issued stocks, bonds, securities-related financial
products and other financial products. Nikko Cordial has 62
consolidated subsidiaries. It has oversea operations in the
United States, the United Kingdom, Luxemburg and Singapore.
The company has a global network.
* * *
The Troubled Company Reporter - Asia Pacific reported on Feb 13,
2007, that Fitch Ratings has downgraded Nikko Cordial
Corporation's Long- term foreign and local currency Issuer
Default ratings to 'BBB-' from 'BBB', the Short-term foreign and
local currency IDRs to 'F3' from 'F2', and the Individual rating
to 'C/D' from 'C'.
The TCR-AP reported on Dec. 22, 2006, that Fitch placed its
ratings on Nikko Cordial Corp. and Nikko Cordial Securities Inc.
on Rating Watch Negative following the decision announced on
Dec. 18 by the Tokyo Stock Exchange to place the shares of NCC
on its official watchlist pending the full investigation into
reported accounting breaches by the company.
As reported in the TCR-AP on Dec. 22, 2006, Japan's Securities
and Exchange Surveillance Commission began investigating Nikko
Cordial for falsifying its annual financial statements for the
business year ended March 30, 2005, declaring JPY14 billion in
false profits, and using them to procure money from the market.
SOLO CUP: Stephen Macadam Joins Board of Directors
--------------------------------------------------
Solo Cup Company elects Stephen E. Macadam to its Board of
Directors. Mr. Macadam replaces Jack M. Feder on the 11-member
board.
Mr. Macadam, 46, is the chief executive officer of BlueLinx
Holdings Inc. (NYSE:BXC), a building products distributor in
North America. Mr. Macadam has been a member of the Board of
Directors of BlueLinx since June 2004. Prior to joining
BlueLinx as CEO in 2005, he served as president and CEO of
Consolidated Container Company, LLC beginning in August 2001.
He also held executive positions at Georgia-Pacific Corporation
from March 1998 until August 2001, including executive vice
president, pulp and paperboard and senior vice president,
containerboard and packaging. Mr. Macadam held positions of
increasing responsibility with McKinsey and Company, Inc. from
1988 until 1998 and began his career with E.I. DuPont de
Nemours.
The Company also announced the formation of an Audit Committee
and a Compensation Committee of the Board of Directors. The
Audit Committee will assist the Board in fulfilling its
oversight responsibilities, which include reviewing the
Company's financial reporting process, its system of internal
controls, the audit process and the process of monitoring
compliance with laws and regulations. Audit Committee members
appointed by the Board are Norman W. Alpert (Chair), Peter W.
Calamari and Mr. Macadam. The Compensation Committee will have
responsibility for reviewing the Company's employee benefit
plans, the compensation of the company's executives and
preparing reports for issuance in the company's public
securities filings. Compensation Committee members appointed by
the Board are Jeffrey W. Long (Chair), Kevin A. Mundt and Daniel
S. O'Connell.
About Solo Cup Company
Headquartered in Highland Park, Illinois, Solo Cup Company
-- http://www.solocup.com/-- manufactures disposable
foodservice products for the consumer and retail, foodservice,
packaging, and international markets. Solo Cup has broad
expertise in plastic, paper, and foam disposables and creates
brand name products under the Solo, Sweetheart, Fonda, and
Hoffmaster names. The company was established in 1936 and has a
global presence with facilities in Asia, Canada, Europe, Mexico,
Panama and the United States.
The Troubled Company Reporter - Asia Pacific reported on
Jan. 16, 2007 that Fitch Ratings has initiated the following
ratings for Solo Cup Company:
-- Issuer default rating 'B-';
-- Senior secured first lien credit facility 'B+/Recovery
Rating 2';
-- Senior secured second lien credit facility 'CCC+/RR5';
-- Senior subordinated notes 'CCC/RR6'
The TCR-AP also reported on Feb. 8, 2007, that Standard & Poor's
Ratings Services revised its recovery rating on Solo Cup Co.'s
second-lien term loan to '5' from '4'. This, together with the
'CCC-' rating on the second-lien loan, indicates Standard &
Poor's expectation that lenders under this facility would
experience negligible recovery of principal in a payment
default.
XERIUM TECH: Moody's Drops Ratings to B2 Due to Weak Performance
----------------------------------------------------------------
Moody's Investors Service downgraded the long-term debt and
corporate family ratings of Xerium Technologies Inc. and
maintained a stable outlook.
In addition, Moody's affirmed Xerium's speculative grade
liquidity rating of SGL-3 due to the recent amendment of its
bank credit facility.
The downgrade reflected Moody's belief that Xerium's operating
performance will remain weak relative to historic norms as
increased competition in its main markets has reduced growth
prospects and pressured margins. Xerium's customers in North
America and Europe continue to struggle operationally due to a
slowdown in global paper production and significant
overcapacity.
Moody's believes that this trend will continue with the closure
of additional mills and further downtime at existing facilities
in North America and Europe, Xerium's main markets. Moody's
also anticipates that volume losses in 2006 will take longer
than expected to recover and that recent investments in
developing economies will take several years before they have a
meaningful positive impact on cash flow.
In response to the changes in the paper and board industry,
Xerium continues to realign its manufacturing footprint. The
company is still in the process of rebounding from production
inefficiencies in North America, delays in achieving benefits
from cost reduction initiatives, and a difficult pricing
environment for certain of its products. Challenges remain in
the clothing segment, as the company has recently experienced
losses in market share and volume in Europe.
At the same time, Xerium's roll covers business has improved due
to an improved market position in North America, offsetting the
flat operating performance within the clothing segment. Moody's
believes the impact of these factors, coupled with the company's
inability to increase prices, particularly within clothing
products, will continue to negatively affect operating
performance over the next two to three years. Furthermore, the
uncertainty, variability, and sustainability of the company's
free cash flows better reflect a B2 corporate family rating at
this time.
The B2 corporate family rating incorporates the company's
sizable market position and moderate geographic diversity.
However, the ratings also reflect the limited scope and modest
size of the company's operations in developing countries that
hold the greatest potential for future sales growth. Xerium's
elevated business risk due to its focus on the paper industry,
its potential for bolt-on acquisitions, high debt levels, lack
of meaningful free cash flow, and potential dividend
requirements constrain the ratings. Due to Xerium's business
risks and limited product diversity, Moody's would expect the
company to generate stronger credit metrics than many other B2
rated industrial companies.
On Jan. 20, 2006, Moody's changed Xerium's outlook to negative
from stable due to the same challenges addressed above.
Specifically, Moody's stated that if the company fails to
improve operating performance and fails to generate any free
cash flow in the near term, the ratings could be lowered. Other
factors that could negatively impact the ratings would be a
deterioration in paper industry fundamentals resulting in a
further decline in paper production, weaker liquidity, or a
larger-than-anticipated debt financed acquisition. In Moody's
opinion, many of these factors may materialize in the short-term
and will continue to negatively impact the company's financial
metrics. As a result, the ratings have been lowered.
Downgrades:
* Xerium Technologies, Inc.
-- Corporate Family Rating, Downgraded to B2 from B1
-- Senior Secured Term Loan, Downgraded to B2 from B1
-- Senior Secured Revolving Credit Facility, Downgraded to
B2 from B1
-- Probability of Default Rating, Downgraded to B2 from B1
Outlook Actions:
* Xerium Technologies, Inc.
-- Outlook, Changed To Stable From Negative
Xerium Technologies, Inc., headquartered in Youngsville, North
Carolina, is a manufacturer and supplier of consumable products
used primarily in the production of paper.
Headquartered in Wesborough, Massachusetts, Xerium Technologies,
Inc. -- http://xerium.com/-- manufactures and supplies two
types of products used primarily in the production of paper:
clothing and roll covers. The company operates under a variety
of brand names and owns a broad portfolio of patented and
proprietary technologies to provide customers with tailored
solutions and products, designed to optimize performance and
reduce operational costs. With 35 manufacturing facilities in
15 countries, including Japan, Austria and Brazil, Xerium
Technologies has approximately 3,900 employees.
Headquartered in Westborough, Massachusetts, Stowe Woodward, a
unit of Xerium Technologies, Inc., supplies roll covers, bowed
rolls and manufacturing services for the pulp and paper
industry. Stowe Woodward has manufacturing operations around
the world.
* Japanese Dairy Firms to Keep Financial Strength, Moody's Says
---------------------------------------------------------------
Although sales growth will slow, the Japanese dairy companies
rated by Moody's Investors Service will maintain stable
profitability through the intermediate term -- partly as a
result of Japan's supply system for raw milk, which is based on
demand estimates, as well as decreasing but predictable demand
for milk and milk-based beverages and increasing demand for
functional dairy products and cheese.
In response to increasingly intense competition and the
possibility of an increased international presence in each
respective home market, Moody's rated Japanese dairy companies
-- Meiji Dairies Corporation (Baa1), Morinaga Milk Industry Co.,
Ltd. (Baa1) and Snow Brand Milk Products Co., Ltd. (Ba2) -- have
been investing in production facilities for some time, aiming to
strengthen product competitiveness, notes the report, "Japanese
Dairy Companies."
However, Moody's expects the companies to maintain financial
stability, despite temporary downward movement in financial
ratios from this investment, based on their sound financial
policies.
In addition, the companies' recently increased investment in
production facilities supports their business strategies and is
intended to expand their volumes of more profitable products,
which Moody's believes will allow them to maintain profitability
and stable cash flow.
The report comments that at this point there is no substantial
difference among the companies in profitability or cash flow
measurements, but the rating agency anticipates that the speed
at which their finances improve may differ depending on their
progress in making further cost cuts, increasing the efficiency
of operations, improving branding and enhancing product mix.
Further, the rated dairy companies' current profit growth
strategies are based on initiating various cost cuts and
streamlining supply chains, Moody's explains, in addition to
eliminating and consolidating production lines to improve the
effectiveness of operations. The companies have slashed
interest-bearing debts for the past five years and are striving
to continue strengthening financial flexibility.
=========
K O R E A
=========
BURGER KING: Declines CIW's "Penny Per Pound" Proposal
------------------------------------------------------
Burger King Corp. has extensively considered the Coalition of
Immokalee Workers or CIW's "penny per pound" request and has
declined to accept the proposal. Burger King notified the CIW
of its decision on Feb. 5.
Over the citsse of the past year and a half, Burger King Corp.
executives have met with CIW representatives more than a dozen
times, as well as with religious groups who support the CIW and
the Immokalee workers. In addition, Burger King Corp.
executives traveled to Immokalee to meet with the group's
leadership and to view living and working conditions first-hand.
The company agrees with the CIW that the workers' living
conditions are, in fact, substandard, and is sympathetic and
concerned about the housing.
The company reached its decision for several reasons. Burger
King Corp. and its purchasing agent, RSI, do not have a direct
relationship with any tomato grower or its employees, as is the
case with some of the other large chain restaurants. Instead,
the company purchases tomatoes -- based on best market price --
from tomato re-packing companies. It is these re-packing
companies that have a relationship with the actual growers who
employ the CIW. As a result, the company does not identify the
specific growers, tomatoes or workers who pick the tomatoes that
are used in its restaurants.
To ask Burger King Corp. to pay a penny more a pound for
tomatoes to increase workers' wages is similar to asking
shoppers to voluntarily pay a penny more per pound at the
grocery store for tomatoes to increase workers' wages. Both
Burger King Corp. and grocery store shoppers have no business
relationship with the workers and cannot get the extra penny to
them.
Increasing the cost of tomatoes by a penny per pound does
nothing to ensure support for the workers directly. Burger King
Corp. has no business relationship with the workers and cannot
control how they are compensated.
In addition, the Immokalee workers' typical wages are unclear
because of conflicting reports and a general lack of IRS
reporting. In an April 2006 study by the Center for Reflection,
Education and Action, the average hitsly wage for Immokalee
tomato pickers ranged from US$9.65 per hits for the slowest
workers to a high of US$18.27 per hits for the fastest. The
average pay for workers is clearly well above the Florida
minimum wage of US$6.40 per hits and well above standard wages
for similar work.
The company has spoken to CIW representatives about its interest
in recruiting interested Immokalee workers into the Burger King
system. The company has offered to send Burger King Corp.
recruiters to the area to speak with the CIW and with workers
themselves about permanent, full-time employment at BURGER KING
restaurants. Burger King Corp. offers ongoing professional
training and advancement opportunities around the country for
both entry-level and skilled employee jobs, and the company is
hopeful the CIW will accept its offer.
The company has also spoken to the CIW about the strong interest
from the charitable arm of Burger King Corp., the HAVE IT YOUR
WAY Foundation. The Foundation's mission is to contribute to
non-profit organizations whose goal is to improve education,
alleviate hunger or disease or to support youth programs. The
Foundation is keenly interested in working with the CIW and
others to identify charitable organizations that could improve
the lives of the workers and their families.
Additionally, Burger King Corp. stands ready to cooperate with
state and federal officials to identify any possible violations
of U.S. labor laws, including minimum wage, overtime and child
labor provisions of the Fair Labor Standards Act.
Headquartered in Miami, Florida, The Burger King(R) system
(NYSE: BKC) -- http://www.bk.com/-- operates more than 11,100
restaurants in all 50 states and in more than 65 countries and
U.S. territories worldwide, including Australia, China, Hong
Kong, Korea, Malaysia, New Zealand, Philippines, Singapore,
Taiwan and Thailand. Approximately 90% of BURGER KING
restaurants are owned and operated by independent franchisees,
many of them family-owned operations that have been in business
for decades. Burger King Holdings Inc., the parent company, is
private and independently owned by an equity sponsor group
comprised of Texas Pacific Group, Bain Capital and Goldman Sachs
Capital Partners.
* * *
As reported in the Troubled Company Reporter - Asia Pacific on
Oct. 18, 2006, in connection with Moody's Investors Service's
implementation of its new Probability-of-Default and Loss-Given-
Default rating methodology for the restaurant sector, the rating
agency revised its Corporate Family Rating for Burger King
Corporation to Ba3 from Ba2.
Additionally, Moody's held its Ba2 ratings on the company's
US$150 million Senior Secured Revolver Due 2011 and US$250
million Senior Secured Term Loan A Due 2011. Moody's assigned
those loan facilities an LGD3 rating suggesting lenders will
experience a 35% loss in the event of default.
Fitch, in June 2006, assigned initial ratings for Burger King
Corp. Fitch assigned the company its 'B+' Issuer Default Rating
and rated the company's US$150 million revolving credit facility
maturing June 2011; and US$967 million aggregate remaining term
loan A and B outstandings maturing June 2011 and June 2012,
respectively, at 'BB/RR2'. Fitch said that the Outlook on all
Ratings is Positive.
BURGER KING: Earns US$38 Mil. in Quarter Ended Dec. 31, 2006
------------------------------------------------------------
Burger King Holdings Inc. delivered robust results for the
second quarter of its 2007 fiscal year. The company again
posted solid growth in revenues, driven broadly by strong
comparable sales and new restaurant openings. Company
restaurant margins, net income and earnings per share also
improved.
Worldwide, comparable sales were up 3.7%, making this the 12th
consecutive quarter of positive comparable sales increases. In
North America, comparable sales were up 4.4%, the 11th
consecutive quarter of positive comparable sales increases.
"We're consistently delivering strong results by staying focused
on our global 'Go Forward' growth plan," said Burger King CEO
John W. Chidsey. "Our brand and our great food continue to
resonate with our restaurant guests. Specifically, our BK(TM)
Value Menu, as well as our innovative Xbox(R) game collection,
which was the best-selling video game of the holiday season,
with more than 3.2 million copies sold-increased both sales and
restaurant traffic."
Driven by positive comparable sales in every region worldwide
and an increase in new restaurant openings, revenues for the
second quarter of fiscal year 2007 reached a record US$559
million-an increase of 9% from the same quarter of the previous
fiscal year.
Company restaurant margins increased for a third consecutive
quarter-up 70 basis points to 15.9% from 15.2% in the same
period last year-driven primarily by lower food costs and higher
revenues at company-owned restaurants.
Net income increased 41% to US$38 million from US$27 million
during the same period last year. On an adjusted basis, net
income rose 9% to US$38 million from US$35 million during the
same period last year, which takes into account US$5 million in
unusual items in the prior year, including US$3 million in
sponsor-management fees.
Earnings per share increased 17% to 28 cents per share in the
second quarter, as compared to 24 cents per share in the same
quarter last year. Earnings per share rose 8% to 28 cents per
share from adjusted earnings per share of 26 cents in the same
period last year.
Dividend Payment
The company is announcing its first quarterly dividend as a
public company. The dividend payment of 6.25 cents per share
will be paid on March 15, 2007, to shareholders of record as of
the close of business on Feb. 15, 2007.
"We have elected to pay our first cash dividend as a public
company because we have consistently generated strong cash flow,
and we expect our cash flow to continue to strengthen," said Ben
K. Wells, CFO and treasurer. "Because we believe that our
business will remain financially strong, we expect to be able to
return capital to our shareholders and simultaneously grow our
restaurant count.
"The company plans to pay down debt during the second half of
this fiscal year in order to reduce interest expense. In fact,
as we announced on Jan. 25, we are retiring an additional US$25
million in debt. We are now focused on evaluating other
initiatives that will contribute to shareholder value, such as
strategic investments, increasing cash dividends and share
repurchases."
The company retired US$50 million in debt during the quarter,
using cash generated from operations. The company has retired a
total of US$125 million in debt during the first seven months of
the current fiscal year.
Average Restaurant Sales
System-wide average restaurant sales increased 6% to US$297,000
during the second quarter of fiscal 2007, as compared to
US$279,000 in the same quarter last year. System-wide trailing
12-month ARS reached a record high of US$1.16 million for the
period, as compared to US$1.12 million for the trailing 12
months year-over-year.
"We are staying focused on increasing ARS in the United States
to our interim goal of US$1.3 million annually. A higher ARS is
attractive to existing and potential franchisees and increases
our royalties and, ultimately, generates attractive returns for
our shareholders," said Mr. Chidsey.
Of U.S. restaurants open for at least 12 months, more than
2,140-or about 31%-were operating at or above the US$1.3 million
ARS level by the end of the second quarter. The last 50 free-
standing restaurants that opened in the United States and have
operated for at least a year have achieved an ARS of US$1.51
million, which is about 30% higher than the current U.S. system
average.
Future Growth
The company continued its expansion of new restaurants
internationally, including 85 new restaurant openings in Europe,
the Middle East and in the Asia Pacific region (EMEA/APAC). In
Latin America, 90 new restaurants have opened in the last 12
months. The BURGER KING(R) brand continues to grow in existing
markets and to expand into new markets where there is an
expected attractive economic return. For example, since
entering Brazil just two years ago, BURGER KING(R) franchisees
have opened 27 restaurants, and those open for at least a year
have a trailing 12-month ARS of US$1.7 million.
During the quarter, the company announced its entrance into two
financially attractive markets: Japan and Indonesia. BURGER
KING(R) restaurants are scheduled to open in both of these
countries during the fiscal year.
"We will continue an energetic expansion of our presence
worldwide. As we have said previously, we are highly
franchised; therefore, unit growth has a disproportionately
positive impact on earnings with minimal capital investment,"
Mr. Chidsey said. "As we anticipated, we expect net openings to
accelerate and closures to diminish during the second half of
this fiscal year."
The company is on target to achieve its key financial goals for
the fiscal year:
-- Growing top-line revenue 6-7%;
-- Growing adjusted EBITDA 10-12%;
-- Increasing adjusted net income in excess of 20%; and
-- Reducing debt using excess cash generated from operations.
Mr. Chidsey said, "We remain financially strong and are very
pleased with the second quarter's success. As we look to the
next quarter and the immediate future, we are especially
enthusiastic about our Feb. 19 launch of the BK(TM) Breakfast
Value Menu-the first to national market in the quick service
restaurant segment."
"We'll keep achieving strong results by building on the
foundation we've set: To maintain a dynamic product pipeline of
great food at great prices; to open new restaurants; to continue
to launch innovative and compelling marketing and advertising
campaigns; to lead the way in operational excellence; and to
follow our commitment to the HAVE IT YOUR WAY(R) brand promise."
Headquartered in Miami, Florida, The Burger King(R) system
(NYSE: BKC) -- http://www.bk.com/-- operates more than 11,100
restaurants in all 50 states and in more than 65 countries and
U.S. territories worldwide, including Australia, China, Hong
Kong, Korea, Malaysia, New Zealand, Philippines, Singapore,
Taiwan and Thailand. Approximately 90% of BURGER KING
restaurants are owned and operated by independent franchisees,
many of them family-owned operations that have been in business
for decades. Burger King Holdings Inc., the parent company, is
private and independently owned by an equity sponsor group
comprised of Texas Pacific Group, Bain Capital and Goldman Sachs
Capital Partners.
* * *
As reported in the Troubled Company Reporter - Asia Pacific on
Oct. 18, 2006, in connection with Moody's Investors Service's
implementation of its new Probability-of-Default and Loss-Given-
Default rating methodology for the restaurant sector, the rating
agency revised its Corporate Family Rating for Burger King
Corporation to Ba3 from Ba2.
Additionally, Moody's held its Ba2 ratings on the company's
US$150 million Senior Secured Revolver Due 2011 and US$250
million Senior Secured Term Loan A Due 2011. Moody's assigned
those loan facilities an LGD3 rating suggesting lenders will
experience a 35% loss in the event of default.
Fitch, in June 2006, assigned initial ratings for Burger King
Corp. Fitch assigned the company its 'B+' Issuer Default Rating
and rated the company's US$150 million revolving credit facility
maturing June 2011; and US$967 million aggregate remaining term
loan A and B outstandings maturing June 2011 and June 2012,
respectively, at 'BB/RR2'. Fitch said that the Outlook on all
Ratings is Positive.
CITIBANK KOREA: Computer System Unsafe, Credit Card Users Say
-------------------------------------------------------------
A credit card customer of Citibank Korea has complained that the
bank's old computer system makes him prone to "cyber criminal,
bent on stealing his personal data," The Chosun Ilbo reports.
According to the report, the customer discovered that the
Citibank Web site did not require an ID, password, or authorized
electronic certificate, which is adopted by most major financial
institutions. The customer stated that he was able to log on to
the Web site just by typing in credit card numbers, the PIN
number, a phone number, and resident registration numbers.
However, Chosun relates that a staffer of the bank said the
method is the standard used by all Citibank branches worldwide.
Chosun recounts that in December 2006, a Citibank credit card
subscriber reported to the Financial Supervisory Service that
someone had run up debts of KRW1.35 million (US$1=W935) by using
his credit card details.
On Dec. 27, 2006, some 2,000 Citibank credit card users suffered
a double debit of credit card payments from their bank accounts,
Chosun relates.
The paper explains that the incidents occurred because Citibank
Korea continues to use the old computer system when it was the
Seoul branch of Citibank. The bank has failed to integrate the
computer networks with KorAm Bank since it took over Citibank in
2004, Chosun says.
Chosun notes that Citibank has promised to introduce the
authorized electronic certificate system and complete the
network integration this year.
About Citibank Korea
Citibank Korea Inc. -- http://www.citibank.co.kr/-- provides a
variety of commercial banking, trust, and investment services.
The bank's services include consumer loans, deposits, trust
accounts, credit cards, Internet banking, financial derivatives,
foreign exchange, and securities dealing and brokeraging.
Moody's Investors Service gave Citibank Korea a Bank Financial
Strength Rating of 'D+' effective on June 28, 2005.
HANAROTELECOM INC: Incurs KRW86-Billion Net Loss for FY2006
-----------------------------------------------------------
On Feb. 14, 2007, hanarotelecom Inc. disclosed that it posted
revenues of KRW1,723.3 billion, operating profit of
KRW30.8 billion, and net loss of KRW86.0 billion for the year
2006.
The company explained that full-year revenues rose 19.3% year-
on-year on the back of the revenue growth in broadband, voice,
corporate business, etc. While operating profit fell 42.1% from
2005 due to an increase in operating and marketing expenses
driven by fierce competition in the broadband market, net loss
decreased 58.8% owing to the onetime expenses incurred from the
integration with Thrunet, etc. in 2005.
In terms of earnings for the fourth quarter of 2006, the company
stated that revenues rose slightly to KRW431.3 billion whereas
operating loss and net loss stood at KRW3.3 billion and
KRW45.9 billion, respectively, due to an increase in subscriber
acquisition costs, the expansion of call centers and a seasonal
hike in maintenance expenses.
The company places priority on increasing the number of
subscribers to hanaSet, a service bundle of broadband, voice and
hanaTV that offers up to 20% discount on service fees. Its
strategy is to promote the acquisition of new subscribers by
offering deeper discounts compared to single products and to
focus on up-selling targeting existing subscribers in order to
increase customer-level ARPU and strengthen customer retention.
In particular, the company will dramatically increase revenues
in 2007 through new growth engines such as hanaTV and corporate
business. With the cumulative number of hanaTV subscribers
reaching 300,000 as of the end of January 2007, Hanaro plans to
achieve revenues of KRW70-80 billion and 1 million subscribers
by the end of 2007.
On the corporate business side, the company aims to achieve
revenues of KRW440 billion in 2007, up 18% compared to the
previous year, by strengthening existing businesses like
corporate voice and IDC and advancing into NI/solution
businesses.
The cumulative number of optical LAN subscribers reached 900,000
as of the end of 2006, accounting for 40% of the 100Mbps market.
Mainly through upgrading Hanaro's own HFC networks to 100Mbps
networks, the company is planning to expand the total 100Mbps
coverage to 12.6 million households by the end of 2007 from the
current optical LAN coverage of 4.3 million households.
Mr. Byung-Moo Park, Representative Director & CEO, said "by
providing competitive customer services, we will lay the
foundation for stable growth for existing businesses this year.
In addition, we will focus on fostering new growth engines such
as hanaTV and corporate business so that we will be able to
achieve sustained profits. "To this end, we will maximize
corporate efficiency through continuous innovation as well as
selective and focused investment," Mr. Byung-Moo Park added.
Meanwhile, Hanaro stated that the upward trend in subscriber net
adds is strengthening with 20,000 subscribers in broadband and
28,000 subscribers in voice for January 2007, backed by the
success of hanaSet, the bundled service the Company launched in
January 2007 for the first time in Korea.
About hanarotelecom
hanarotelecom Inc. -- http://www.hanaro.com/-- is the second
largest player in the Korean local telephone market. It
provides high-speed Internet services in Korea. It provides
high-speed Internet services in Korea. In June 2001, the
company integrated broadband Internet access services which
included ADSL, Hybrid Fiber Coaxial cables and Broadband
Wireless Local Loop into a single brand called HanaFOS.
hanarotelecom offers VoIP services to its broadband business
customers as a bundled service and also as a stand alone
service.
* * *
Moody's Investor Service has given hanarotelecom's long-term
corporate family and senior unsecured debt 'Ba2' ratings.
Standard and Poor's gave both hanarotelecom's long-term foreign
issuer credit and long-term local foreign issuer credit 'BB'
ratings.
HANAROTELECOM INC: Board to Convene AGM on March 23
---------------------------------------------------
In a filing with the United States Securities and Exchange
Commission, hanarotelecom Inc. discloses that its board of
directors resolved on Feb. 7, 2007, to convene its Annual
General Meeting of Shareholders on March 23, 2007, at 10:00 a.m.
(Korean Time).
The AGM will be held at Auditorium, Asia One Building (10th
fl.), 17-7 Yeouido-dong, in Yeongdeungpo-gu, Seoul.
The AGM's agenda include:
(a) the approval of the company's Financial Statements for
2006;
(b) the appointment of Varun Bery as an Outside Director;
(c) the approval of the Ceiling Amount of Compensation for
Directors for 2007.
The company notes that Mr. Bery is currently the managing
director of TVG Capital Partners Ltd.
About hanarotelecom
hanarotelecom Inc. -- http://www.hanaro.com/-- is the second
largest player in the Korean local telephone market. It
provides high-speed Internet services in Korea. It provides
high-speed Internet services in Korea. In June 2001, the
company integrated broadband Internet access services which
included ADSL, Hybrid Fiber Coaxial cables and Broadband
Wireless Local Loop into a single brand called HanaFOS.
hanarotelecom offers VoIP services to its broadband business
customers as a bundled service and also as a stand alone
service.
* * *
Moody's Investor Service has given hanarotelecom's long-term
corporate family and senior unsecured debt 'Ba2' ratings.
Standard and Poor's gave both hanarotelecom's long-term foreign
issuer credit and long-term local foreign issuer credit 'BB'
ratings.
TOWER AUTOMOTIVE: Enters Into 8th Amendment of DIP Financing
------------------------------------------------------------
Tower Automotive Inc. and its debtor-affiliates obtained
authority from the United States Bankruptcy Court for the
Southern District of New York to enter into an eighth amendment
to their DIP credit agreement to extend the loan's maturity date
to Aug. 2, 2007.
The Revolving Credit, Term Loan and Guaranty Agreement, dated
Feb. 2, 2005, among R.J. Tower Corp., as borrower; Tower
Automotive and its subsidiaries, as guarantors; and JP Morgan
Chase Bank, N.A., as Agent for the Lenders, would have expired,
and the indebtedness in it would have matured February 2, 2007.
Due to the continuing negative trends in the domestic automotive
industry, including widely publicized volume reductions
announced by domestic original equipment manufacturers, the
Debtors were unable to propose a plan of reorganization by the
Existing DIP Deadline, Anup Sathy, Esq., at Kirkland & Ellis
LLP, in Chicago, Illinois, says.
Without a confirmed Plan that refinances the DIP Credit Facility
or alternative DIP financing, the expiration and maturity of the
DIP Credit Facility would have obvious and significant adverse
effects on the Debtors. In addition, when the DIP Credit
Facility expires, the Debtors' obligations would immediately
become due and payable.
The Eight Amendment provides that it will constitute an Event of
Default under the DIP Credit Facility if the Debtors do not file
a Chapter 11 plan on or before May 2, 2007, that provides for
the payment of the Debtors' obligations under the DIP Credit
Facility in full and in cash on the effective date of that Plan.
Pursuant to the Eight Amendment, interest rate is increased by:
(i) an additional 75 basis points for the revolver tranche;
and
(ii) an additional 100 basis points for the term loan tranche.
Furthermore, under the Eight Amendment, the Debtors will pay
certain waiver and amendment fees to JPMorgan for:
(i) the accounts of the DIP Lenders, including JPMorgan, in
an amount equal to 1.00% of the DIP Lenders' commitments
under the DIP Credit Facility; and
(ii) JPMorgan's own account as an arrangement fee for
US$500,000.
The payment of those fees is a condition precedent to the
effectiveness of the Eight Amendment, Mr. Sathy tells the Court.
A full-text copy of the Eighth Amendment to the DIP Credit
Agreement that the Debtors filed with the Securities and
Exchange Commission in Form 8-K is available for free at:
http://ResearchArchives.com/t/s?197b
Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer,
including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda,
Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products
include body structures and assemblies, lower vehicle frames and
structures, chassis modules and systems, and suspension
components. The company has operations in Korea, Spain and
Brazil.
The Company and 25 of its debtor-affiliates filed voluntary
chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No.
05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan
B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and
Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructuring efforts. Ira S. Dizengoff,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, they listed
US$787,948,000 in total assets and US$1,306,949,000 in total
debts.
TOWER AUTOMOTIVE: Plan-Filing Period Extended to February 28
------------------------------------------------------------
In a bridge order, the Honorable Allen L. Gropper of the United
States Bankruptcy Court for the Southern District of New York
ruled that Tower Automotive Inc. and its debtor-affiliates'
exclusivity hearing is adjourned until Feb. 28, 2007. Judge
Gropper extended the Debtors' time to file a plan through and
including Feb. 28, 2007.
The Debtors asked Judge Gropper to further extend, without
prejudice, their exclusive periods to:
(a) file a plan of reorganization until May 3, 2007; and
(b) solicit acceptances of that plan until June 29, 2007.
While the Debtors believed that they have made significant
progress in preparing and distributing a draft Chapter 11 Plan
to the Official Committee of Unsecured Creditors, negotiations
are ongoing, Anup Sathy, Esq., at Kirkland & Ellis LLP, in
Chicago, Illinois, told Judge Gropper. The Debtors stressed
that their ability to formulate a Chapter 11 Plan is predicated
upon obtaining a substantial equity investment, possibly
implemented through a rights offering.
As evidence of the their good faith efforts to negotiate the
terms of an equity investment, late in December 2006, the
Debtors obtained the Court's permission to indemnify and pay
fees to certain investment funds managed by Strategic Value
Partners LLC, Wayzata Investment Partners LLC and Stark
Investments pursuant to a Backstop Commitment Letter and
Restructuring Term Sheet, Mr. Sathy notes. While the Debtors
later withdrew the Term Sheet Motion after receiving a notice of
termination from the Initial Committed Purchasers, the Debtors
continued to evaluate other alternatives.
Moreover, if the Debtors are unable to locate a suitable
investor, the Debtors may consider alternative exit structures
that would be implemented through a Plan, Mr. Sathy said. The
Debtors have continued to update the Creditors Committee's
advisors regarding these discussions.
Mr. Sathy maintained that the Debtors' Exclusive Periods should
be extended because:
(a) The Debtors' Chapter 11 cases are large and complex;
(b) The Debtors have made considerable progress in their
Chapter 11 cases, are paying their obligations as they
come due and are effectively managing their business and
preserving the value of their assets; and
(c) The Debtors have been actively working with the Creditors
Committee and other key parties-in-interest to facilitate
the Debtors' emergence from bankruptcy as soon as
possible.
Creditors Committee's Objection
The Creditors Committee asked the Court to deny the Debtors'
request for extension because the Debtors have not met their
increased burden of showing that "cause" exists for purposes of
extending their Exclusive Periods for a ninth time.
Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP,
in New York, asserted that the Debtors have not earned another
extension of their Exclusive Periods as the continuance of the
Exclusive Periods will only further impede the reorganization of
the Debtors' Chapter 11 cases, do further damage to the value of
the estates and likely further diminish creditors' recoveries.
Mr. Dizengoff asserted that the Debtors' situation has
significantly deteriorated due to, among other things, the
Debtors' singular focus on a failed equity raise, and is thus
fundamentally different than it was in November 2006, when the
Debtors last sought and received an extension.
The Creditors Committee did not object to the Debtors' prior
requests for extensions of their Exclusive Periods, recognizing
that the Debtors deserved an opportunity to develop an exit
strategy for the Chapter 11 cases, and to formulate a viable
Plan that could be negotiated with the Committee, Mr. Dizengoff
said.
As of Jan. 26, 2007, the Debtors have failed to formulate, let
alone file a feasible Plan. Mr. Dizengoff further asserted that
the draft Plan sent to the Creditors Committee, as the Debtors'
concede, was only a draft that did not contain any of the
substance that would be necessary to even begin plan
negotiations.
The Committee believed that an open process at this juncture --
a process with no restrictions on the ability of parties-in-
interest to formulate and propose a Plan -- is necessary to
salvage the value of the Debtors' estates for the benefit of
creditors and enable the conclusion of the Debtors' Chapter 11
cases.
As evidence of the Creditors Committee's commitment to, and the
prospects of, an open process, the Committee believed it is
close to finalizing:
(i) a commitment letter and term sheet with a strategic
investor seeking to purchase substantially all of the
Debtors' North American assets; and
(ii) a plan term sheet based on the proposed sale.
Headquartered in Grand Rapids, Michigan, Tower Automotive Inc.
-- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer,
including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda,
Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products
include body structures and assemblies, lower vehicle frames and
structures, chassis modules and systems, and suspension
components. The company has operations in Korea, Spain and
Brazil.
The Company and 25 of its debtor-affiliates filed voluntary
chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No.
05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan
B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and
Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructuring efforts. Ira S. Dizengoff,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, they listed
US$787,948,000 in total assets and US$1,306,949,000 in total
debts. (Tower Automotive Bankruptcy News, Issue No. 53;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
TOWER AUTOMOTIVE: Has Until April 30 to Remove Civil Actions
------------------------------------------------------------
At the request of Tower Automotive Inc. and its debtor-
affiliates, the Honorable Allen L. Gropper of the United States
Bankruptcy Court for the Southern District of New York extended
the period within which they may file notices of removal with
respect to civil actions pending on their bankruptcy filing, to
and including the earlier to occur of:
(1) April 30, 2007; or
(2) 30 days after the entry of a Court order terminating the
automatic stay with respect to the particular action that
is sought to be removed.
Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,
maintains that the Debtors are continuing to evaluate their
files and records to determine whether they should remove
actions pending in state or federal court to which they might be
a party.
Mr. Sathy says that since the Debtors are parties to 225
lawsuits, and their key personnel and legal professionals are
assessing the lawsuits while being actively involved in the
Debtors' reorganization, they have not decided whether to file
notices of removal in those actions and proceedings.
Since October 2006, the Debtors' management personnel and
professionals have been, and continue to be, actively involved
in supervising and implementing several key steps in the
Debtors' reorganization, including:
(a) preparing and distributing a draft plan of reorganization
and accompanying disclosure statement;
(b) analyzing and addressing issues related to the
formulation of a plan of reorganizations;
(c) evaluating and negotiating the Debtors' post-
reorganization capital structure;
(d) negotiating with various potential investors regarding
the terms of a possible rights offering;
(e) identifying and terminating unprofitable business
ventures;
(f) continuing the process of reconciling reclamation and
other priority claims;
(g) maintaining the Debtors' sensitive supply chain with
their customers and vendors;
(h) negotiating amendments and waivers with the Debtors'
secured lenders;
(i) marketing and selling certain non-core assets;
(j) preparing and filing the Debtors' monthly operating
reports;
(k) reviewing various revenue enhancing alternatives and
cost-reducing measures;
(l) developing a business plan; and
(m) negotiating and settling claim and set-off issues among
the Debtors' vendors and customers.
The Debtors believe the extension will provide sufficient time
to allow them to consider, and make decisions concerning the
removal of the civil actions.
Headquartered in Grand Rapids, Michigan, Tower Automotive Inc. -
- http://www.towerautomotive.com/-- is a global designer and
producer of vehicle structural components and assemblies used by
every major automotive original equipment manufacturer,
including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda,
Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products
include body structures and assemblies, lower vehicle frames and
structures, chassis modules and systems, and suspension
components. The company has operations in Korea, Spain and
Brazil.
The Company and 25 of its debtor-affiliates filed voluntary
chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No.
05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan
B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and
Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent
the Debtors in their restructuring efforts. Ira S. Dizengoff,
Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the
Official Committee of Unsecured Creditors. When the Debtors
filed for protection from their creditors, they listed
US$787,948,000 in total assets and US$1,306,949,000 in total
debts. (Tower Automotive Bankruptcy News, Issue No. 53;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
===============
M A L A Y S I A
===============
MALAYSIA AIRLINES: Rival May Get License to Fly Singapore Route
---------------------------------------------------------------
AirAsia, a budget carrier operating in Malaysia, expects to get
the rights to fly the lucrative but restricted Kuala Lumpur-
Singapore route by May this year, New Sabah Times reports.
Currently, only Malaysia Airlines and Singapore International
Airlines dominate the route, which handles more than 200 flights
weekly.
AirAsia and other budget carriers are restricted to operate on
this route due to the 34-year air services agreement between
both Singapore and Malaysia that do not allow new players.
However, according to New Sabah Times, both governments have
already agreed to meet in March to discuss opening the route to
other airline companies.
Asked if AirAsia's flying through Singapore would affect
Malaysia Air's revenue and sales target, Malaysia Airlines
Managing Director Idris Jala told the paper that the current
Asean road map requires the KL-Singapore route along with some
other routes only to be opened in December 2008.
"We have not heard of any other things other than that. We are
in conversation with the government and will continue to discuss
with the government the open sky policy," Mr. Jala added.
* * *
Headquartered in Selangor, Malaysia, Malaysia Airlines --
http://www.malaysiaairlines.com/-- services domestic and
international flights. Its global network comprised 32 domestic
and 86 international destinations. Of the 86 international
destinations, 17 were operated in collaboration with airlines
partners.
The carrier made a loss after tax of MYR1.3 billion for fiscal
year 2005, due to high fuel and operating costs, and
unprofitable routes. In late February 2006, it unveiled a
radical rescue plan to raise MYR4 billion to stay afloat and
return to profitability by 2007. Under the restructuring plan,
the airline pledged to cut its budget by 20% across the board,
terminate many unprofitable routes, freeze recruitment except
for front-line staff, crack down on corruption by encouraging
whistle-blowing and stop corporate sponsorship.
METROPLEX BERHAD: Books MYR1.81 Bil. Loan Default as of Jan. '07
----------------------------------------------------------------
Metroplex Berhad filed before the Bursa Malaysia Securities Bhd
its status of default to various credit facilities as of
Jan. 31, 2007.
As of end-January 2007, the company's estimated amount of
default, an aggregate of the principal amount and its interest,
reached MYR1,810,929,163.97
Metroplex is still in negotiation with its lenders on a proposed
composite scheme of arrangement, which will essentially address
the default in payment.
A full-text copy of the company's default status can be viewed
for free at:
http://bankrupt.com/misc/metroplex-jan.default.xls
* * *
Headquartered in Kuala Lumpur, Malaysia, Metroplex Berhad's
activities are hotel and casino operations. Other activities
include property investment, property development, provision of
administrative services, general and building construction,
leasing and financing, trading of building materials and
operation of hotel management training school. Operations are
carried out in Malaysia, Hong Kong, and the Philippines.
As of October 31, 2006, the company reported MYR1.22 billion in
total assets and MYR1.46 billion in total liabilities, resulting
in a shareholders' deficit of MYR241.23 million.
MOL.COM. BERHAD: Posts MYR4.05-Mil. Net Profit in 2nd Qtr. 2007
---------------------------------------------------------------
Mol.com Bhd gained MYR4.05 million net profit on
MYR11.87 million revenues in the second quarter ended Dec. 31,
2006, a turnaround from the MYR1.9-million net loss on
MYR9.12 million revenues recorded in the same quarter of 2005.
As of end-December 2006, the company's balance sheet showed
current assets of MYR48 million and current liabilities of
MYR44.32 million.
In addition, the company's balance sheet as of Dec. 31, 2006,
showed total assets of MYR80.26 million and total liabilities of
MYR68.27 million, resulting to a shareholders' equity of MYR12
million.
A full text-copy of the company's financial report for the
quarter ended Dec. 2006 can be viewed for free at:
http://bankrupt.com/misc/mol.com-2q-2007.pdf
* * *
Based in Malaysia, Mol.Com Bhd's principal activities are
provision of electrical engineering services and contracting and
trading of electrical machinery and apparatus. Other activities
include operation and maintenance of web portals, registration
and marketing of internet domain names, provision of web and
information technology solutions, advertising, promotional
activities and investment holding.
Operations are carried out in Malaysia, British Virgin Islands
and Singapore.
Mol.Com is an Affected Listed Issuer pursuant to the Amended
Practice Note 17/2005 of the Listing Requirements of Bursa
Malaysia and is therefore required to implement a regularization
plan to the Securities Commission.
After auditing the company's annual financial report ended
June 30, 2006, the auditors drew the attention on the ability of
the Group and of the Company to continue as a going concern in
view of the current liabilities exceeding its current assets by
MYR6.3 million. The ability of the Group and of the Company to
continue as a going concern is dependent upon the successful
outcome of the proposed disposal of a property and the Group's
plan to regularize its financial condition, continuing financial
support from a significant shareholder and financial
institutions as well as achieving successful future operations.
STAR CRUISES: To Review Planned Investment Deal in Macau
--------------------------------------------------------
Star Cruises, part of the Genting Bhd group, will conduct a
review on the deal structure of its investment plan in a piece
of property in Macau, The Edge Daily says, citing a report from
Reuters.
The Daily recounts that on Jan. 22, Star Cruises said it would
be buying a Macau property, which would be developed into a
casino hotel and would be operated by gambling mogul Stanley Ho.
Star Cruises' statement with the Hong Kong Stock Exchange, where
the company is publicly listed, said that it is "reviewing the
structure in relation to its investment in Macau Land Investment
Corporation" and has therefore delayed sending out a circular
with regards to the transaction.
The paper notes that the statement comes after the Singapore
Government sought for clarification from Genting Bhd's plan to
build and run a US$3.4 billion casino in Macau.
* * *
Star Cruises Limited -- http://www.starcruises.com/-- is a
Company publicly listed in Hong Kong and is a core member of the
Genting Group and 36.1% owned by Resorts World, which is, in
turn, 57.7% owned by Genting Berhad. Star Cruises operates 22
ships with 35,000 lower berths under five main brands: Star
Cruises and Cruise Ferries, which service Asia Pacific, and
three brands under NCL. The company also has operations in
Malaysia.
Moody's Investors Service has placed the B1 corporate family
rating of Star Cruises Limited on review for possible downgrade
on Jan. 25, 2007.
The review has been prompted by SCL's announcement that it and
Genting International Plc, a subsidiary of Genting Berhad, will
acquire a 75% interest in Macau Land Investment Corporation,
which will develop a hotel and casino project on the foreshore
of downtown Macau.
In addition, on December 11, 2006, Standard & Poor's Ratings
Services placed its BB- long-term corporate credit ratings on
Malaysia-based cruise operator Star Cruises Ltd. on CreditWatch
with negative implications.
S&P also placed its BB- long-term corporate credit ratings on
U.S. based cruise operator NCL Corp. Ltd. (NCL) and its B
foreign currency ratings on NCL's senior unsecured debt of
US$250 million due 2014 on CreditWatch with negative
implications.
=====================
N E W Z E A L A N D
=====================
A A WORLDWIDE: Court to Hear Liquidation Petition Today
-------------------------------------------------------
The High Court of Auckland heard a liquidation petition filed
against A A Worldwide Machinery Spares Ltd today --
Feb. 15, 2007, at 10:45 a.m.
Hopper Nominees Ltd filed the petition with the Court on Oct.
31, 2006.
Hopper Nominees' solicitor can be reached at:
N. J. Carter
Carter & Partners
Barristers & Solicitors
9th Floor, West Plaza Tower
1-3 Albert Street, Auckland
New Zealand
AKITA CONSTRUCTION: Creditors Must Prove Debts by Feb. 28
---------------------------------------------------------
The creditors of Akita Construction Ltd are required to prove
their debts to Liquidators Jeffrey Philip Meltzer and Lloyd
James Hayward by Feb. 28, 2007.
Failure to prove debts by the due date will exclude a creditor
from sharing in any distribution the company will make.
The Liquidators can be reached at:
Jeffrey Philip Meltzer
Lloyd James Hayward
Meltzer Mason Heath
Chartered Accountants
PO Box 6302
Wellesley Street, Auckland 1141
New Zealand
Telephone:(09) 357 6150
Facsimile:(09) 357 6152
ANCHOR RIGHT: Court Sets Liquidation Hearing on February 26
-----------------------------------------------------------
The High Court of Hamilton will hear a liquidation petition
against Anchor Right Manufacturing Ltd on Feb. 26, 2007, at
10:45 a.m.
Stewart & Cavalier Ltd filed the petition on Jan. 10, 2007.
Stewart & Cavalier's solicitor can be reached at:
Malcolm David Whitlock
Whitlock & Co.
c/o Level 2, Baycorp House
15 Hopetoun Street, Auckland
New Zealand
AOTEAROA OLIVES: Fisk and Sanson to Act as Liquidators
------------------------------------------------------
On Jan. 29, 2007, the High Court appointed John Howard Ross Fisk
and Craig Alexander Sanson as joint and several liquidators of
Aotearoa Olives Ltd.
Accordingly, creditors are required to make their claims, and
establish any priority claims they may have -- on March 31,
2007.
The Joint and Several Liquidators can be reached at:
John Howard Ross Fisk
Craig Alexander Sanson
c/o PricewaterhouseCoopers
113-119 The Terrace (PO Box 243)
Wellington
New Zealand
Telephone:(04) 462 7000
Facsimile:(04) 462 7492
B & J LTI: Faces Liquidation Proceedings
----------------------------------------
A petition to liquidate B & J lti Contracting Ltd was heard
before the High Court of Auckland on Feb. 8, 2007.
The Commissioner of Inland Revenue filed the petition on Nov. 1,
2006.
The CIR's solicitor can be reached at:
Justine Berryman
Technical and Legal Support Group
Auckland North Service Centre
Inland Revenue Department
5-7 Byron Avenue (PO Box 33150)
Takapuna, Auckland
New Zealand
Telephone:(09) 984 1538
Facsimile:(09) 984 3116
COMMUNITY TRUST: Commences Liquidation Proceedings
--------------------------------------------------
On Jan. 30, 2007, the shareholders of The Community Trust
District Improvement Company Ltd resolved by special resolution
to liquidate the company's business and appointed Matthew David
Taylor as liquidator.
The Liquidator can be reached at:
Matthew David Taylor
44 York Place, Dunedin
New Zealand
Telephone:(03) 477 5790
Facsimile:(03) 474 1564
HALLS EARTHWORKS: Creditors' Proofs of Claim Due on March 5
-----------------------------------------------------------
The creditors of Halls Earthworks Ltd are required to submit
their proofs of claim by March 5, 2007.
Failure to comply with the requirement will exclude a creditor
from sharing in any distribution the company will make.
The joint and several liquidators can be reached at:
Bernard Spencer Montgomerie
Stuart James Cunningham
Montgomerie & Associates
Insolvency Practitioners
CPO Box 65, Auckland 1015
New Zealand
Telephone:(09) 368 7672
Facsimile:(09) 307 0174
KEISH HOLDINGS: Shareholders Opt to Liquidate Business
------------------------------------------------------
The shareholders of Keish Holdings Ltd resolved by special
resolution to liquidate the company's business.
Accordingly, Gilbert Dale Chapman and Grant Bruce Reynolds were
appointed as liquidators on Jan. 24, 2007.
As reported by the Troubled Company Reporter - Asia Pacific, the
Commissioner of Inland Revenue filed the petition.
The Liquidators can be reached at:
Gilbert Dale Chapman
Grant Bruce Reynolds
Reynolds & Associates Limited
PO Box 259059, Greenmount
East Tamaki, Auckland
New Zealand
Telephone:(09) 577 0162
Facsimile:(09) 576 5503
LOVELL MEWS: Court Sets Date to Hear Liquidation Petition
---------------------------------------------------------
On Oct. 12, 2006, Framerite Installation Ltd filed a liquidation
petition against Lovell Mews No. 1 Ltd before the High Court of
Auckland.
The petition will be heard on Feb. 22, 2007, at 10:00 a.m.
Framerite Installation's solicitor can be reached at:
Malcolm David Whitlock
Whitlock & Co.
c/o Level 2, Baycorp House
15 Hopetoun Street, Auckland
New Zealand
ORION PROPERTY: Court Appoints Joint Liquidators
------------------------------------------------
The High Court of Wellington appointed Barry Phillip Jordan and
David Stuart Vance as joint and several liquidators of Orion
Property Ventures Ltd on Jan. 23, 2007.
In this regard, the liquidators fixed Feb. 23, 2007, as the last
day for creditors to make their claims and establish any
priority claims they may have.
The Joint and Several Liquidators can be reached at:
Barry Phillip Jordan
David Stuart Vance
PPB McCallum Petterson
Level 8, The Todd Building
95 Customhouse Quay (PO Box 3156)
Wellington
New Zealand
Telephone:(04) 499 7796
Facsimile:(04) 499 7784
PLUS SMS: Subsidiary Creates Advisory Board to Accelerate Growth
----------------------------------------------------------------
On Feb. 8, 2007, CRE8 (NZAX: PLS), a subsidiary company of Plus
SMS Holdings Limited, disclosed that a group of international
media and telecommunications entrepreneurs, executives and
investors, have formed an Advisory Board to help drive and
accelerate the company's growth.
Members of the Advisory Board include:
1) Rob Hersov (Chairman), Vice Chairman of NetJets Europe,
and former CEO of Telepiu Italia as well as founder of
Sportal.com;
2) Juan Villalonga, Private Investor and former CEO of the
Telefonica Group;
3) Marco de Benedetti, Managing Director of the Carlyle
Group, and former CEO of Telecom Italia Mobile;
4) Bill Roedy, President of MTV Networks International;
5) Sir Christopher Lewinton, Chairman CL Partners;
6) Jim Wiatt, CEO of William Morris Agency;
7) Jean Chalopin, CEO of MoviePlus, and founder of DIC;
8) Michael Watt, Chairman of MW Productions, and founder of
CSI Sports;
9) John Gregg, Founder and Managing Director of Bluewater
Ventures LTD;
10) Johan von Holstein, founder of IQUBE and Icon Medialab,
LetsBuyIt.com, and numerous other internet and media
companies; and
11) Gonzalo de la Cierva, Spanish entrepreneur and founder CEO
of Movilisto.
"The CRE8 management team will work closely together with the
Advisory Board and leverage their experience and contact network
to further enhance the company's position as a leading provider
of content, connectivity and network services," Christopher
Tiensch, CEO of CRE8 stated.
About CRE8
CRE8 (NZAX: PLS) is a subsidiary company of Plus SMS Holdings
Limited. CRE8 is a provider of content, connectivity, and
network services for mobile operators, brands and media
companies worldwide.
About Plus SMS
Plus SMS Holdings Ltd. -- http://www.cre-eight.com/-- is the
parent company of Plus SMS Limited. It provides access to
businesses to the number ranges required for the routing of
short message service (SMS) and multimedia messaging system
(MMS) messages worldwide using a single short number. On July
4, 2005, Plus SMS Limited acquired Plus SMS Holdings Limited in
a reverse acquisition.
The company suffered net losses of NZ$366,000 and NZ$362,000 for
the years ended March 31, 2006 and 2005, respectively.
PLUS SMS: CRE8 Signs LOI to Acquire American Content Provider
-------------------------------------------------------------
CRE8 has signed a letter of intent to acquire a leading South
American content provider that has operations and connectivity
to mobile operators in seven countries as well as distribution
agreements with worldwide brands, the company said in a media
release.
"This acquisition is an important part of our strategy to expand
into new regions and offer synergistic services that complements
existing offerings," Christopher Tiensch, Chief Executive
Officer of CRE8 said.
By combining key assets and capabilities, the two companies aim
to create the largest footprint for content services throughout
South America. The deal is forecasted to close in the first
quarter of 2007 and generate significant revenue streams for
CRE8.
Nicolas Barrera Rios, CRE8's General Manager in Latin America
commented: "The two companies are an ideal match, and we are
excited about the technology, talent and customer relationships
that this opportunity will bring to CRE8."
The transaction is subject to the signing of definitive
agreements and customary closing conditions.
About CRE8
CRE8 (NZAX: PLS) is a subsidiary company of Plus SMS Holdings
Limited. CRE8 is a provider of content, connectivity, and
network services for mobile operators, brands and media
companies worldwide.
About Plus SMS
Plus SMS Holdings Ltd. -- http://www.cre-eight.com/-- is the
parent company of Plus SMS Limited. It provides access to
businesses to the number ranges required for the routing of
short message service (SMS) and multimedia messaging system
(MMS) messages worldwide using a single short number. On July
4, 2005, Plus SMS Limited acquired Plus SMS Holdings Limited in
a reverse acquisition.
The company suffered net losses of NZ$366,000 and NZ$362,000 for
the years ended March 31, 2006 and 2005, respectively.
PLUS SMS: CRE8 Extends Content Services Agreement with Movistar
---------------------------------------------------------------
CRE8's subsidiary company -- Content Technology Mexico -- has
renewed and extended its agreement with Movistar, a leading
wireless operator in Mexico and a subsidiary of Telefonica
Moviles.
Under the agreement, Content Technology will continue to provide
Movistar customers with downloadable mobile content like music,
games, images, WAP services for the Emocion portal, dedication
and voice mail greetings, and has been selected to be the
exclusive provider of ringback tones and video streaming.
"Our agreement with Movistar further establishes CRE8's position
as a leading provider of content delivery solutions," says
Nicolas Barrera Rios, General Manager of Latin America at CRE8.
"The renewal and extension of our partnership solidifies our
position within Movistar and is an important step in our
expansion throughout the region."
Financial terms of the deal were not disclosed, however the
company said it would generate significant revenue from the
agreement.
About Telefonica Moviles Mexico
Movistar is the trademark that unifies Telefonica Moviles
operations in Mexico, with more than 6.86 million mobile
subscribers and 78.8 million mobile subscribers throughout Latin
America (information from the second and third quarter of 2006).
About CRE8
CRE8 (NZAX: PLS) is a subsidiary company of Plus SMS Holdings
Limited. CRE8 is a provider of content, connectivity, and
network services for mobile operators, brands and media
companies worldwide.
About Plus SMS
Plus SMS Holdings Ltd. -- http://www.cre-eight.com/-- is the
parent company of Plus SMS Limited. It provides access to
businesses to the number ranges required for the routing of
short message service (SMS) and multimedia messaging system
(MMS) messages worldwide using a single short number. On July
4, 2005, Plus SMS Limited acquired Plus SMS Holdings Limited in
a reverse acquisition.
The company suffered net losses of NZ$366,000 and NZ$362,000 for
the years ended March 31, 2006 and 2005, respectively.
SEALEGS CORP: Unit Appoints Malaysian Distributor
-------------------------------------------------
Sealegs International Ltd., a unit of Sealegs Corporation Ltd.,
has appointed LMT Maritime as the distributor for Sealegs
amphibious boats in Malaysia, Sealegs International said in a
press release.
LMT Maritime Managing Director Ibrahim Ali said that "Sealegs
has numerous application possibilities in Malaysia and we are
very excited by the prospect of showing Sealegs to several
Malaysian government agencies, who would all benefit by having
such technology in their respective fleets."
Sealegs CEO David McKee Wright said that "this appointment
continues to demonstrate the global potential of Sealegs. The
Malaysian market, in particular the government sector,
represents a good sales opportunity for Sealegs."
The first Sealegs amphibious boat purchased by LMT Maritime will
be used for field demonstrations, focused at the government and
commercial sectors. A Sealegs amphibious boat will be on LMT
Maritime's display at the 2007 Langkawi International Maritime
and Aerospace Show (LIMA 07) later this year.
The appointment of LMT Marine brings the number of international
Sealegs distributors and agents to six, as Sealegs continues its
expansion into new international markets.
About Sealegs Corp.
Headquartered in Albany, New Zealand, Sealegs Corporation
Limited -- http://www.sealegs.com/-- is engaged in the
manufacture of amphibious marine craft. The company's wholly-
owned subsidiaries are Sealegs International Limited, Sealegs
Middle East Limited, and Sealegs Australia Pty Limited. Sealegs
International Limited manufactures amphibious marine craft.
Sealegs Middle East Limited and Sealegs Australia Pty Limited
are dormant. Sealegs are motorized, retractable and steerable
boat wheels, which are fitted to a customized 5.6-meter rigid
inflatable boat. Sealegs amphibious boats are used by customers
in New Zealand, Australia, the United States, the United Arab
Emirates, France and the United Kingdom.
The group and parent posted consecutive net deficits after
taxation for the years ended March 31, 2006 and 2005, with the
group suffering net losses of NZ$1,211,061 and NZ$1,063,354 for
2006 and 2005 (company: NZ$209,582 and NZ$3,575,464),
respectively.
SEALEGS CORP: Narrows Interim Net Deficit Down to NZ$499,343
------------------------------------------------------------
Sealegs Corporation Ltd. reports trading revenue of
NZ$2,619,100, for the six-month period ending Sept. 30, 2006, an
increase of 118% on the same period last year of NZ$1,201,180,
the company said in its interim report.
Total operating deficit for the half year totaled NZ$499,343, an
improvement of 31% over the same period last year with a deficit
of NZ$722,865. The operating deficit of NZ$499,343 is
represented by NZ$107,597 in operating deficit and NZ$391,746
from research and development expenses. The operating deficit
(excluding R&D) in the same period last year was NZ$663,523, so
the recent result of NZ$107,597 shows a strong movement towards
operating break even point.
The company has signaled that it expects the operations result
(excluding R&D expenses) to reach break-even point in 2007.
The issue of shares in September improved the cash balance of
the company which at September 30 had NZ$1,270,832 in cash.
This cash may possibly be enough to see the company through to
profitability. Management has some reservation about this as a
focus on cash expenditure could stifle innovation and could
delay some beneficial bulk purchases and capital investments.
Overhead expenses have been managed well but will see an
increase over the next six months due to the increase in
transaction volume.
About Sealegs Corp.
Headquartered in Albany, New Zealand, Sealegs Corporation
Limited -- http://www.sealegs.com/-- is engaged in the
manufacture of amphibious marine craft. The company's wholly-
owned subsidiaries are Sealegs International Limited, Sealegs
Middle East Limited, and Sealegs Australia Pty Limited. Sealegs
International Limited manufactures amphibious marine craft.
Sealegs Middle East Limited and Sealegs Australia Pty Limited
are dormant. Sealegs are motorized, retractable and steerable
boat wheels, which are fitted to a customized 5.6-meter rigid
inflatable boat. Sealegs amphibious boats are used by customers
in New Zealand, Australia, the United States, the United Arab
Emirates, France and the United Kingdom.
The group and parent posted consecutive net deficits after
taxation for the years ended March 31, 2006 and 2005, with the
group suffering net losses of NZ$1,211,061 and NZ$1,063,354 for
2006 and 2005 (company: NZ$209,582 and NZ$3,575,464),
respectively.
SOLUTION DYNAMICS: Teams Up With PrintSoft for Mail Software
------------------------------------------------------------
In a filing with the New Zealand Exchange Ltd., Solution
Dynamics Ltd. disclosed that it has signed a five-year license
agreement with PrintSoft, a subsidiary of Australia Post, for a
state-of-the-art desktop mail solution.
"The trans Tasman deal which will see us process printing and
lodgment services for new clients is an important step for us in
building on the progress in 2006 and achieving our aim of
meeting higher profit targets in the 2006-07 financial year,"
said Solution Dynamics CEO Nelson Siva. "Our investment in
leading edge technology and software is a key part of our
development strategy. It will enhance our competitiveness and
appeal by enabling us to provide existing and new customers with
a total package of business communications solutions and
services. This new mail product offers customers the
opportunity to reduce costs and streamline their customer
communications in a way that has not been previously possible."
The Albany-based company, with annual turnover of almost
NZ$10 million, has seen a substantial improvement in results for
the 12 months ending June 2006. EBITDA rose 130% over the prior
year, term debt reduced by 38%, NZ$1 million in overhead savings
were delivered and operating cash flows lifted by NZ$1 million.
"We're now pushing for growth and are rolling out a planned and
manageable strategy that we hope will see us become the most
profitable and competitive player in the document lifecycle
management business."
Mr. Siva said the current focus is on growing market share by
going "back to basics" to provide customers with superb service,
products and relationship management, supported by improved
internal business processes and efficiencies, up-skilling of
core resources and investment in new plant and technology.
"We are in good shape to move forward with a value add offering.
We have the people, a superior range of competitive products,
including a new Desk Top Mail offering to be launched in New
Zealand in early 2007, service, marketing and commercial
business capabilities and focused strategy to earn our place as
the chosen outsourcing partner for customers from across the
public and private sectors," Mr. Siva said.
"We have a long way to go to meet our aspirations but we're
encouraged by the international opportunities resulting from the
introduction of this new technology, along with the prospect of
migrating our existing clients to an expanding portfolio of
solutions that will help simplify business communications."
About Solution Dynamics
Headquartered in Albany, New Zealand, Solution Dynamics Ltd. --
http://www.solutiondynamics.com/-- through its subsidiaries,
offers a range of solutions encompassing data management,
electronic digital printing, document distribution, Web
presentment and archiving, fulfillment, traditional print
services, scanning, data entry, and document management.
During the fiscal year ended June 30, 2006, the Company
deregistered its subsidiaries companies, including Comit Group
Limited, Complete Data Services Limited, Complete Print
Solutions Limited and Dejar Holdings Limited, Efactor
Investments Limited and Advantage Payment Services Limited.
The company reported two consecutive net deficits of NZ$610,000
and NZ$735,000 for the years ended June 30, 2006 and 2005,
respectively. The company also had a working capital deficit of
NZ$679,000 as of June 30, 2006.
TM PRODUCTIONS: Appoints Joint Liquidators
------------------------------------------
Kenneth Peter Brown and Thomas Lee Rodewald were appointed as
joint and several liquidators of TM Productions Ltd on Jan. 25,
2007.
According to the Troubled Company Reporter - Asia Pacific, the
High Court of Auckland heard the liquidation petition against
the company on that day.
The Joint and Several Liquidators can be reached at:
Kenneth Peter Brown
Thomas Lee Rodewald
c/o Rodewald Hart Brown Limited
127 Durham Street (PO Box 13380)
Tauranga
New Zealand
Telephone:(07) 571 6280
=====================
P H I L I P P I N E S
=====================
ATLAS CONSOLIDATED: To Increase Authorized Capital to PHP20 Bil.
----------------------------------------------------------------
Shareholders of Atlas Consolidated Mining and Development Corp.
have approved the increase of the company's authorized capital
stock from INR12 billion to PHP20 billion.
The shareholders gave their nods at a Special Meeting of
Stockholders on Feb. 9, 2007.
As reported in the Troubled Company Reporter - Asia Pacific on
Dec. 15, 2006, the Securities and Exchange Commission has
approved the increase of the company's authorized capital stock
from PHP6.5 billion to PHP12 billion.
On the Feb. 9 meeting, the shareholders also ratified the
application for the listing of the company's 546,159,244 shares
issued in the name of Alakor Corp. and its assignees, which was
filed with the Philippine Stock Exchange.
Headquartered in Mandaluyong City, Philippines, Atlas
Consolidated Mining and Development Corporation was established
through the merger of assets and equities of three Soriano-
controlled pre-war mines, the Masbate Consolidated Mining
Company, IXL Mining Company and the Antamok Goldfields Mining
Company. The Company is engaged in mineral and metallic mining
and exploration that primarily produces copper concentrates and
gold with silver and pyrites as major by-products. The
Company's copper mining operations are centered in Toledo City,
Cebu, where two open pit mines, two underground mines and
milling complexes (concentrators) are located. The Cebu copper
mine ceased operations in 1994. Activities after the shutdown
were limited to safeguarding and maintaining the property, plant
and equipment at the minesite. The closure has brought huge
losses to the mining firm.
In January 2004, Atlas decided to rehabilitate its assets since
copper and nickel prices have recovered.
According to a TCR-AP report on June 1, 2006, Atlas reported a
capital deficiency of PHP3.035 billion for the year ended
December 31, 2005. Moreover the Company's auditor, Jaime F. Del
Rosario, of Sycip Gorres Velayo, raised substantial doubt on the
Company's ability to continue as a going concern.
As of Dec. 21, 2006, Atlas Consolidated posted total assets of
US$33.59 million, and total shareholders' equity deficit of
US$57.17 million.
PHIL. NATIONAL BANK: 2006 Net Income Up 30% to PHP810 Million
-------------------------------------------------------------
Philippine National Bank has reported PHP810 million in net
income for 2006 based on unaudited financial statements
submitted to the Bangko Sental ng Pilipinas in compliance with
its Regulatory Accounting Policies. This figure is a growth of
over 30% compared to last year's Audited 2005 Income Statement
without minority interest of PHP621 million, a fourth straight
solid year of growth for the bank.
Before a PHP742 million provision for probable losses, PNB's
income from operations exceeded the PHP1.5 billion mark.
Key revenue drivers for PNB's impressive performance include
interest income from loans upon boosting lending operations
across the country and consumer finance as the company maximized
its capabilities and reach utilizing its extensive branch
network here and abroad. Likewise, fee-based income and other
non-interest income increased significantly due to increase in
remittance volume and alignment of Bank's service fee with
market rates. Another key revenue source is the high income
derived from trading gain and profit on foreign exchange which
further increased the bank's net income.
PNB's asset quality dramatically improved in 2006 due to the
recent sale worth PHP11.7B in non-performing assets, a first
tranche of a total sale of PHP19.3 billion under the special
purpose vehicle program. As a result of the sale, non-
performing loans were reduced by PHP7.75 billion. Non-
performing loan ratio in 2006 was 15.89% versus 28.17% in 2005.
Omar Byron Mier, PNB President and CEO said, "We have sustained
our growth momentum, where efforts continue to bear fruit.
Since 2003, our income has been on the uptrend and our company
has managed to hurdle tremendous odds through clear and
effective strategic direction, and through a collaborative team
effort across various segments of the Bank."
PNB continues to sustain business growth and an aggressive push
to focus on core competencies and fundamental strengths --
stepping up efforts on the expansion of lending activities
particularly to small and medium enterprises, along with
developing the consumer finance market that will benefit from
responsive and innovative housing and car loan programs. The
Bank is confident in attaining the levels of profitability
commensurate to its size among the top five private banks in the
country today.
PNB was voted for the third straight year by consumers as one of
the most trusted Philippine banks through AC Nielsen Research in
the 2006 Reader's Digest Trusted Brands Awards. PNB is among
the country's leading universal banks, and continues to expand
operations in the overseas market. PNB now operates in over 300
local and 100 overseas branches and offices, employing over
5,600 employees.
A copy of Philippine National Bank's financial report for the
year ended Dec. 31, 2006, is available for free at Philippine
Stock Exchange at http://www.pse.com.ph/
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.
* * *
The Troubled Company Reporter - Asia Pacific reported on
November 6, 2006, that Moody's Investors Service has revised the
outlook of Philippine National Bank's foreign currency long-term
deposit rating of B1, local currency senior debt rating of Ba2,
and local currency subordinated debt rating of Ba3 to stable
from negative.
The outlook for PNB's foreign currency Not-Prime short-term
deposit rating and bank financial strength rating of E remains
stable.
The TCR-AP reported on Nov. 1, 2006, that Fitch Ratings affirmed
Philippine National Bank's Individual rating at 'E' and Support
rating '3' after a review of the bank.
Standard and Poor's Ratings Services has given PNB 'B' Short-
Term Foreign Issuer Credit and Short-Term Local Issuer Credit
Ratings, as well as 'B-' Long-Term Foreign Issuer Credit and
Long-Term Local Issuer Credit Ratings effective as of April 26,
2006.
WARNER MUSIC: Operating Income Drops to US$80MM in 1st Qtr '07
--------------------------------------------------------------
Warner Music Group Corp. reported its first-quarter financial
results for the period ended Dec. 31, 2006.
Financial Highlights
-- Total revenue of US$928 million for the first quarter of
fiscal 2007 decreased 11% from the prior-year quarter.
-- Digital revenue was US$100 million, or 11% of total
revenue in the quarter, up 45% from US$69 million in the
prior-year quarter and down 4% sequentially from US$104
million in the fourth quarter of fiscal 2006.
-- Operating income declined 44% to US$80 million in the
quarter compared to US$144 million in the prior-year
quarter.
-- Operating income before depreciation and amortization
declined 31% to US$140 million from US$202 million in the
prior-year quarter.
"Last year's successes provide an excellent foundation on which
to build. As expected, we faced unusually difficult year-over-
year comparisons this quarter, which do not reflect our
prospects for the fiscal year," said Edgar Bronfman, Jr., Warner
Music Group's Chairman and CEO. "We remain the leader in the
music industry's digital transformation, having concluded a
series of key partnership agreements and having reached the
US$100 million threshold in digital revenue for two consecutive
quarters. Even in the face of a challenging market backdrop, we
continue to deliver value to our shareholders and aggressively
seek new opportunities for growth."
Michael Fleisher, Warner Music Group's Executive Vice President
and CFO, added: "As we have previously discussed, based on the
timing of our releases, we expect 2007 to be a back-end-weighted
year. We manage our performance on a full-year basis, and are
confident about the 2007 fiscal year."
A full-text copy the company's Form 10Q regulatory filing is
available for free at http://ResearchArchives.com/t/s?19c5
Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/--
is a music company that operates through numerous international
affiliates and licensees in more than 50 countries, including
the Philippines.
* * *
In November 2006, Standard & Poor's Ratings Services raised its
long-term corporate credit and senior secured ratings on Warner
Music Group Corp. to 'BB-' from 'B+'. At the same time,
Standard & Poor's raised its senior subordinated debt rating on
WMG to 'B' from 'B-', two notches below the 'BB-' corporate
credit rating. S&P said the outlook is stable.
Warner Music Group Corp. carries Fitch Ratings' BB- issuer
default rating assigned in May 2006.
* Gov't. Calls for Disciplined Spending to Hasten Debt Payments
---------------------------------------------------------------
The country's public debt remains sensitive to boost further
capital inflows and market confidence but the continuation of
reform momentum will support economic growth, according to Reza
Baqir, the resident representative of the International Monetary
Fund.
President Gloria Macapagal-Arroyo's economic team is confident
that with fiscal reforms in place and the continuous improvement
in the economy, we should be able to accelerate debt payments.
The Arroyo government is gaining headway in the strict
implementation of revenue-generating measures that include the
Reformed Value-Added Tax Law and the imminent passage of a bill
rationalizing tax incentives to cut redundant tax perks.
The IMF noted that about 83% of incentives given by the Board of
Investment are supposedly redundant.
Presidential Spokesman Ignacio R. Bunye said that the government
is in a position to pre-pay debt service obligations thereby
attracting more investments and more job opportunities.
Baqir noted that continued fiscal restraint would help the
economy grow faster adding that the IMF's forecast inflation of
4% will fuel growth this year.
President Arroyo cited the need for disciplined spending and
said that once the PHP1.126 trillion 2007 budget is submitted to
Malacanang for her signature she will see to it that the
"people's budget" will be spent on the people's needs and
nothing else.
The IMF, the so-called lender of last resort, noted that the
country's external debt stood at US$54.1 billion but now lowered
by 2.6% due to loan repayments the government undertook last
year.
Baqir said that RP's fiscal reforms allowed the public debt to a
downward path, sustaining business confidence. The downward
trend in global risk aversion such as the oil crisis greatly
helps in foreign reserves build up as well as downward pressure
on the peso-dollar exchange rate.
President Arroyo has vowed to honor our foreign debt obligations
while at the same time the benefits of a growing economy would
be felt by the poorest of the poor and every household even in
the farthest barangay in the country.
* * *
On January 10, 2007, Standard & Poor's Ratings Services assigned
its 'BB-' senior unsecured debt rating to the Republic of
Philippines' (foreign currency BB-/Stable/B, local currency
BB+/Stable/B) proposed US$1.0 billion global bond issue maturing
in 2032.
On January 10, 2007, Fitch Ratings assigned a Long-term foreign
currency rating of 'BB' to the Republic of the Philippines'
(rated foreign currency Issuer Default 'BB') US$1 billion global
bond maturing in 2032 and priced to yield 6.55%.
On November 3, 2006, the Troubled Company Reporter - Asia
Pacific reported that Moody's Investors Service changed to
stable from negative the outlook on the Philippines' key ratings
due to the progress made in reining in fiscal deficits in 2006
and an easing in dependence on external financing.
The affected ratings include the B1 long-term government
foreign- and local-currency ratings, the B1 foreign-currency
bank deposit ceiling and Ba3 foreign currency country ceiling,
the TCR-AP noted.
=================
S I N G A P O R E
=================
COMPACT METAL: Completes Ratus Projek Acquisition Agreement
-----------------------------------------------------------
Compact Metal Industries Ltd has completed the Ratus Projek
Acquisition Agreement on Feb. 12, 2007.
Following the acquisition, Ratus Projek Sdn. Bhd. is now a
wholly owned subsidiary of the company. Compact Metal also
issued 214,149,478 new ordinary shares pursuant to the
acquisition.
The company also wants to list and quote the 214,149,478 shares
in the Singapore Stock Exchange - Trading Limited tomorrow, Feb.
16, 2007.
About Compact Metal
Headquartered in Singapore, with offices in Malaysia, Compact
Metal Industries Limited manufactures, fabricates, and sells
aluminum windows and doors, aluminum sections, and other metal
products. The company also manufactures and sells bricks,
undertakes aluminum architectural contracts and engineering
works, and sub-contracts building projects. Its other
activities include trading aluminium and related products, and
hotel ownership and others.
As reported by the Troubled Company Reporter - Asia Pacific on
Aug. 10, 2006, auditors KPMG raised significant doubt on
Compact Metal's ability to continue as a going concern, citing
reasons that include:
i. the group's and company's current liabilities that
exceeded their current assets by SGD81.96 million and
SGD78.82 million, respectively, as of December 31, 2005;
ii. the group's and company's recorded net liabilities
attributable to equity holders of the parent of
SGD43.10 million and US$43.83 million, respectively, as
of December 31, 2005; and
iii. the group's recorded recurring losses with net losses
attributable to equity holders of the parent of
US$24.09 million for the year ended December 31, 2005.
COMPACT METAL: Accepts 507,686,843 Rights Shares on February 8
--------------------------------------------------------------
Compact Metal Industries Ltd disclosed that, as at the close of
the Rights Issue, on Feb. 8, 2007, the company received a total
of 507,686,843 Right Shares of valid acceptances and excess
applications. This represents approximately 2.3 times of the
total number of Rights Shares under the Rights Issue that were
received.
The Rights Issue was in relation to the company's renounceable
non-underwritten rights issue of 221,223,260 new ordinary shares
at an issue price of SGD0.02 for each Rights Share with up to
221,223,260 free detachable warrants. Each warrant carries the
right to subscribe for one new ordinary share in the capital of
the company at an exercise price of SGD0.01 for each new share,
on the basis of one Rights Share with one warrant for every one
existing ordinary share held by the company's shareholders as at
the books closure date.
The details of the Rights Shares received includes:
-- valid acceptances were received for a total of 193,296,309
Rights Shares with free warrants, representing
approximately 87.38% of the total number of Rights Shares
with free warrants; and
-- excess applications were received for a total of
314,390,534 Rights Shares with free warrants, representing
approximately 142.11% of the total number of Rights Shares
with free warrants.
Compact Metal also added that the balance of 27,926,951 Rights
Shares that were not subscribed were allocated to satisfy the
excess applications for the Rights Shares in a manner the
directors deem fit. In the allotment of excess Rights Shares,
preference was given to the shareholders for the rounding of odd
lots, and substantial shareholders and directors ranked last in
priority.
Proceeds Of Rights Issue
The company has raised net proceeds of approximately
SGD4.2 million, after deducting estimated expenses of
approximately SGD0.2 million, from the Rights Issue. Compact
Metal intends to use SGD3.6 million of the net proceeds for
working capital purposes, and approximately SGD0.6 million for
the down payment for the construction of a new paint line and
an extrusion press line.
Compact Metal expects that 221,223,260 Rights Shares and
221,223,260 warrants will be issued pursuant to the Rights Issue
on Feb. 14, 2007. The Rights Shares will be credited into the
respective CDP accounts by Feb. 16, 2007. The warrants will be
credited into the respective CDP accounts by Feb. 21, 2007.
The company also expects that the Rights Shares and the
Warrants will be listed and quoted on the Official List of the
SGX-ST with effect from 9.00 a.m. on Feb. 16, 2007, and
Feb. 21, 2006, respectively.
About Compact Metal
Headquartered in Singapore, with offices in Malaysia, Compact
Metal Industries Limited manufactures, fabricates, and sells
aluminum windows and doors, aluminum sections, and other metal
products. The company also manufactures and sells bricks,
undertakes aluminum architectural contracts and engineering
works, and sub-contracts building projects. Its other
activities include trading aluminium and related products, and
hotel ownership and others.
As reported by the Troubled Company Reporter - Asia Pacific on
Aug. 10, 2006, auditors KPMG raised significant doubt on
Compact Metal's ability to continue as a going concern, citing
reasons that include:
i. the group's and company's current liabilities that
exceeded their current assets by SGD81.96 million and
SGD78.82 million, respectively, as of December 31, 2005;
ii. the group's and company's recorded net liabilities
attributable to equity holders of the parent of
SGD43.10 million and US$43.83 million, respectively, as
of December 31, 2005; and
iii. the group's recorded recurring losses with net losses
attributable to equity holders of the parent of
US$24.09 million for the year ended December 31, 2005.
DIGILAND INTERNATIONAL: Director Acquires 250,000 Shares
--------------------------------------------------------
Digiland International Ltd unveiled that Dr. Philip Poh Siew
Chuan, a director of the company, has acquired 250,000 shares in
the company.
Dr. Philip purchased in an open market, 150,000 and 100,000
shares on Feb. 8, and Feb. 9, 2007, subsequently. Thus Dr.
Philip holds 250,000 direct shares with 0.000033% issued share
capital.
About Digiland
Digiland International Limited -- http://www.digiland.com.sg/--
is a major distributor of IT products and provider of IT
services in the Asia-Pacific. The Digiland International Group
of Companies was set up initially as the distribution arm of GES
International Limited to handle sales, marketing and
distribution of GES products, specifically the Datamini brand of
Personal Computer, designed and manufactured by GES
International Limited. It was renamed Digiland International
Private Ltd in 1998 and has since expanded geographically to
cover most countries in Asia-Pacific. The company has been
reporting a string of losses in the recent years due to the
negative impact of the highly cyclical nature of the computer
industry. Sales were adversely affected by the shortening
product cycles of IT products and downward pressure on selling
prices as newer and more technologically advanced products enter
mass production. Aside from recurring losses, the company's
subsidiaries have also been bombarded by wind-up petitions filed
by creditors.
The company has acquired losses for the past two years. For the
fiscal year ended June 2005, the Company's annual report showed
a US$18.7-million loss while fiscal year ended June 2004 showed
a US$44.7-million loss.
As reported in the Troubled Company Reporter - Asia Pacific on
Oct. 13, 2006, the company registered US$31.32 million in total
assets and a US$11.94 million shareholders' equity deficit as of
October 12, 2006.
DONOVAN SYSTEMS: High Court to Hear Wind-Up Petition on Feb. 23
---------------------------------------------------------------
Foong Mun Keong and Foong Mun Wah filed a petition to wind up
the operations of Donovan Systems Pte Ltd on January 31, 2007.
Accordingly, the High Court of Singapore will hear the petition
on February 23, 2007, at 10:00 a.m.
Foong Mun's solicitor can be reached at:
Chong Chia & Lim LLC
No. 20, Maxwell Road
#03-01E/F, Maxwell House
Singapore 069113
EVERGREAT CONSTRUCTION: Petition Hearing Slated for February 23
---------------------------------------------------------------
The High Court of Singapore has filed a petition to wind up the
operations of Evergreat Construction Company Pte Ltd.
The petition will be heard before the Court on Feb. 23, 2007, at
10:00 a.m.
As reported by the Troubled Company Reporter - Asia Pacific, the
company was placed under judicial management on Jan. 20, 2006.
The Court's solicitor can be reached at:
Drew & Napier LLC
20 Raffles Place
#17-00, Ocean Towers
Singapore 048620
LEAR CORP: Carl Icahn Deal Prompts S&P's Negative CreditWatch
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Southfield, Michigan-based Lear Corp. to 'B' from 'B+'
and placed its ratings on CreditWatch with negative implications
following Lear's that it had agreed to be acquired by Carl
Icahn- controlled American Real Estate Partners, L.P. AREP has
offered to purchase Lear for US$36 per share in cash, or more
than US$2 billion. AREP currently owns about 20% of Lear.
"The downgrade reflects our expectation that the transaction
will result in an increase in debt at Lear," said Standard &
Poor's credit analyst Robert Schulz.
The CreditWatch resolution will focus on the post-transaction
capital structure and any shifts in the company's business
strategies, whether from the Icahn transaction or as a result of
any other bids that may arise. The 'B+' rating on Lear's senior
secured bank debt is affirmed and is not on CreditWatch, since
we expect that change in control language in the bank agreement
means that the bank facility will be replaced at closing. While
some of the senior unsecured debt issues also contain change in
control language, the offer by AREP does not trigger change in
control provisions in those bonds.
Lear, an automotive supplier, has total debt of about
US$3.7 billion, including the present value of operating leases
and underfunded employee benefit liabilities.
Although Lear has strong market positions, good growth prospects
outside of North America, and fair financial flexibility, its
operating performance has been challenged by severe industry
pressures that caused credit protection measures to weaken in
recent years. Lear reported improved results during 2006,
following very poor performance during 2005 when full-year
EBITDA fell by 35%. Core operating earnings, as defined by Lear
to exclude restructuring costs and special charges, increased by
22% in 2006, but still remain relatively low. Cash from
operating activities, before the net change in accounts
receivable sold but after capital spending, was US$116 million
in 2006, compared to a negative US$419 million in 2005. Lear
has agreed to sell its U.S. interior components operations to a
joint venture controlled by Wilbur Ross, following a similar
transaction for its European business.
About Lear Corporation
Headquartered in Southfield, Michigan , Lear Corporation (NYSE:
LEA) -- http://www.lear.com/-- supplies automotive interior
systems and components. Lear provides complete seat systems,
electronic products and electrical distribution systems and
other interior products.
Lear has operations in these Asian countries: Singapore, China,
India, Japan, the Philippines and Thailand.
PETROLEO BRASILEIRO: Appeals to Court on Compensation Issues
------------------------------------------------------------
Petroleo Brasileiro SA aka Petrobras will appeal the first
instance decision handed down by the Rio de Janeiro Judiciary
regarding compensating fishermen as a result of the accident
that occurred in the Guanabara Bay in 2000.
The company argues that:
(1) At the time, Petrobras compensated, extra-judicially, all
of those who proved to be fishermen at the time of the
accident.
(2) According to the national fishermen reference file
records, of the some 12,000 listed in the above-mentioned
decision, only 3,339 could demand compensation for to the
Petrobras accident at the time of the accident in 2000.
(3) The company also questions the payment of compensations
for a 10-year period, since 30 days after the accident, a
technical inspection carried out by universities and
environmental agencies approved fishing to be retaken at
the Guanabara Bay.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, and 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.
Scottish Re Group Ltd. -- http://www.scottishre.com/-- is a
global life reinsurance specialist. Scottish Re has operating
businesses in Bermuda, Grand Cayman, Guernsey, Ireland,
Singapore, the United Kingdom and the United States. Its
flagship operating subsidiaries include Scottish Annuity & Life
Insurance Company (Cayman) Ltd. and Scottish Re (US), Inc.
Scottish Re Capital Markets, Inc., a member of Scottish Re Group
Ltd., is a registered broker dealer that specializes in
securitization of life insurance assets and liabilities.
PETROLEO BRASILEIRO: Gets 40% Working Interest in Rufisque
----------------------------------------------------------
Brazilian state-run oil firm Petroleo Brasileiro SA said in a
statement that it has acquired a 40% working interest in the
Rufisque Profond block offshore Senegal.
Business News Americas relates that Petroleo Brasileiro
purchased the interest form Italian energy firm Edison Spa, who
reduced its operating share to 55% from 95%.
The statement did not reveal the amount Petroleo Brasileiro paid
for the share.
According to BNamericas, Senegal's state-run oil company
Petrosenhas owns a 5% stake in the block.
The firms are conducting three-dimensional seismic studies, the
first of three exploration stages of the block awarded to Edison
in 2004, BNamericas reports.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, and 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.
PETROLEO BRASILEIRO: To Spend US$12.1 Bil. in Projects Abroad
-------------------------------------------------------------
Brazil's state-run oil firm Petroleo Brasileiro will spend
US$12.1 billion in projects outside the country between
2007-2011, Peter Howard Wertheim of Brazzil Magazine reports.
Brazzil Magazine relates that US$12.1 billion is about 14% of
Petroleo Brasileiro's total US$87.1 billion investment budget
for the 2007-2011 period.
Brazil's previous five-year plan, which covers 2006-2010,
indicated that Petroleo Brasileiro had planned US$7.1 billion in
international spending, or 12.5% of the firm's US$56.4 billion
total investment forecast, Brazzil Magazine states.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA
aka Petrobras -- http://www2.petrobras.com.br/ingles/index.asp
-- was founded in 1953. The company explores, produces,
refines, transports, markets, and 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.
THAI IMPERIAL: Commences Liquidation Proceedings
------------------------------------------------
J Morita (Singapore) Pte Ltd -- trading as Ming Wei Food
Supplies -- has filed a petition to wind up the operations of
Thai Imperial (Singapore) Pte Ltd.
The Court entered an order on Feb. 2, 2007, to wind up the
company's operations.
The Liquidator can be reached at:
The Official Receiver
Insolvency & Public Trustee's Office
The URA Centre (East Wing)
45 Maxwell Road #05-11/#06-11
Singapore 069118
===============
T H A I L A N D
===============
DAIMLERCHRYSLER: Chrysler Reveals Recovery & Transformation Plan
----------------------------------------------------------------
DaimlerChrysler AG's Chrysler Group has announced a three-year
Recovery and Transformation Plan that seeks a return to
profitability by 2008 while also taking steps to change its
business model for the long run. The plan will result in an
employee reduction of 13,000 people from 2007 to 2009.
Chrysler Group President and Chief Executive Officer Tom LaSorda
outlined the plan at the DaimlerChrysler AG Annual Press
Conference, held in Auburn Hills, Mich.
DaimlerChrysler Chairman of the Board of Management Dr. Dieter
Zetsche said: "The Chrysler Team worked out a comprehensive
Recovery and Transformation Plan using all resources within
DaimlerChrysler. In addition to that and in order to optimize
and accelerate the presented plan we are looking into further
strategic options with partners beyond the business cooperation
partners mentioned. In this regard, we do not exclude any
option in order to find the best solution for both the Chrysler
Group and DaimlerChrysler."
Overall, the Recovery and Transformation Plan is aimed at a
return to profitability with a primary focus on costs. It is
structured to over-achieve in order to offset potential
unforeseen market headwinds, resulting in a target of
EUR3.5 billion (US$4.5 billion) of financial improvements -- or
a return on sales of 2.5% -- by 2009.
"There are two integrated parts to the plan," Mr. LaSorda said.
"First, the Chrysler Group needs to solidify its position in the
North American marketplace. In addition, the key to our long-
term success will be our ability to transform the organization
into a different company to achieve and sustain long-term
profitability."
The program will be supported by a EUR2.3 billion (US$3 billion)
investment in new engines, transmissions, and axles, which will
set the table for a product offensive of more than 20 all-new
and 13 refreshed vehicles from 2007 to 2009.
Recovery
The Recovery plan is aimed at a return to profitability through
a combination of revenue programs and by sharply focusing on
costs.
The key measures include:
A. Revenue Management
* Continue the product offensive with eight new and five
refreshed products in 2007. Key products include the new
Chrysler Town and Country and Dodge Grand Caravan minivans,
midsize Dodge Avenger sedan, Chrysler Sebring convertible,
and a Jeep Liberty that completes the revamping and
expansion of the Jeep family.
* Improve the retail-to-fleet mix, build momentum with new
offerings in global markets, and improve the effectiveness
of marketing and incentive spending.
* Reduce and optimize the dealer network to improve dealer
profitability.
B. Material and Fixed Costs
* Reduce material costs by up to EUR1.15 billion (US$1.5
billion) by 2009.
* Explore the sale of support operations, including
transportation services.
C. Capacity & Efficiency
* Reduce total production capacity by 400,000 units per year.
* In 2007, eliminate a shift at Newark (Delaware) Assembly
Plant and the Warren (Michigan) Truck Plant. In 2008,
eliminate a shift at St. Louis (Missouri) South Assembly
Plant.
* Idle Newark Assembly Plant in 2009.
* Idle the Cleveland (Ohio) Parts Distribution Center in
December 2007.
* Adjust powertrain, stamping, and component operations to
reflect reduced capacity.
D. Employee Reduction
* Overall, Chrysler Group will reduce the number of employees
by 13,000, or approximately 16%.
* Hourly employment will be reduced by 11,000 over three
years, with 9,000 in the U.S., and 2,000 in Canada (4,700
in the U.S. and 1,100 in Canada in 2007 alone).
* Of the U.S. hourly total, 4,000 employees will be impacted
by assembly plant actions; 1,000 by reduced capacity in
powertrain, stamping and other component operations, 1,000
by other actions including the potential sale of support
functions and 3,000 through technology, efficiency, and
productivity.
* Salaried employment will be reduced by 2,000 over the next
two years, with 1,000 each in 2007 and 2008.
* Special retirement programs and other termination and
attrition programs will be announced separately.
Mr. LaSorda said these actions complement significant other
restructuring measures taken since 2001. Previous to this
announcement, the company closed, idled, or sold 16 plants (five
assembly, 11 component) and reduced its workforce by one-third.
The financial impact of these Recovery measures will be seen
beginning in 2007 with a restructuring charge of up to
EUR1 billion (US$1.3 billion), with the net cash impact for the
year of about EUR800 million (US$1 billion). The impact of the
balance will be in the following two years.
In 2007, the Chrysler Group expects to further reduce dealer
inventories to align with market demand, which will result in a
reduction in operating profit of approximately EUR230 million
(US$300 million).
Transformation
Key parts of the Transformation will be a greater global
footprint and a shift in the product mix to smaller, more fuel-
efficient vehicles.
Currently, North America represents some 90% of the Chrysler
Group's business, and its product line-up has historically been
heavily weighted toward minivans, trucks and sport utility
vehicles.
"Those two factors were advantages for Chrysler Group once upon
a time," Mr. LaSorda said, "but the rules of the global
marketplace have changed. High fuel prices and other dramatic
shifts in the market have driven a shift in consumer preferences
to smaller, more fuel-efficient vehicles. We must make some
strategic adjustments to build off our historic strengths, but
not rely on them so much so that we are put at a competitive
disadvantage," he said.
"That will require a redesigned business model, with three
primary areas of strategic focus," Mr. LaSorda said. "First,
the Chrysler Group will add a more robust customer and brand
focus while continuing to stress product leadership. In
addition, we must achieve better global balance and rely more
heavily on leveraging partnerships to manage costs while finding
growth opportunities."
Specifically, Mr. LaSorda pointed to the following initiatives:
A. Customer and Brand Focus
* Continue the product offensive through 2009, with more than
20 all-new vehicles and 13 refreshed vehicles.
* Build on its existing product strengths through new entries
in the minivan, pick-up truck, and select rear-drive
full-size vehicles. At the same time, the company will
learn to do more with less with a plan to reduce product
platforms from the current 12 to seven by the year 2012.
* Expand into new commercial vehicle segments, including
entering the Class 4 & 5 truck segments for the first time.
* Continue the shift to a car/truck mix that is less reliant
on trucks.
* Invest in powertrain with EUR2.3 billion (US$3 billion)
dedicated to new engines, transmissions, and axles, in
order to move toward a portfolio that is more fuel
efficient. That will include a common axle program for all
vehicles, plus work on a new transmission technology. Last
week, the company signed a non-binding memorandum of
understanding with Getrag (a German-based supplier) to
develop this more fuel efficient "dual clutch" transmission
technology.
* As part of that powertrain offensive, the company has under
development a new V-6 engine platform (dubbed "Phoenix")
which is targeted to reduce the number of six-cylinder
engine families from four to one.
* In addition, Chrysler Group will introduce its first two-
mode full hybrid with the 2008 Dodge Durango, and is also
evaluating a mild hybrid for future applications.
* Finally, it will expand its line-up of diesel engines,
including several BLUETEC-labeled vehicles, a designation
emblematic of the cleanest diesel in its class.
B. Increase Global Presence
* Avoid nameplate redundancies in North America and develop
and introduce vehicle programs aimed at global markets.
* Use third parties where possible to access regional
products and markets where it makes economic sense.
* Balance supplier purchasing globally by targeting
EUR3.8 billion ($5 billion) of additional purchasing to
low-cost sources to complement the company's global growth.
C. Partnerships
* Better use of alliances and partnerships around the world,
such as the Chrysler Group does currently with:
-- In manufacturing, an agreement with Volkswagen to build
minivans in North America for VW's dealers.
-- In retail, such as in Mexico where it sells a
Hyundai-produced vehicle as the Dodge Atos, and soon
Will sell a small cargo van produced in Taiwan.
-- In import opportunities, such as the recently-announced
agreement in principle with Chery Automobile Company of
China (contingent upon approvals from the
DaimlerChrysler Supervisory Board and the Chinese
government) produce a small car for sale in North
America and Europe.
-- And in focused partnerships, such as the GEMA World
Engine project with Hyundai and Mitsubishi in Dundee,
Mich., or the DaimlerChrysler consortium with General
Motors and BMW to develop hybrids.
About DaimlerChrysler
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.
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. Chrysler Group
will take additional production cuts in the third and fourth
quarters to reduce dealer inventories and make way for its
current product offensive.
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: Reports EUR3.2BB Preliminary Net Income in 2006
----------------------------------------------------------------
DaimlerChrysler AG has reported its preliminary Group and
divisional results for the year 2006.
DaimlerChrysler recorded an operating profit of EUR5.517 billion
in 2006, compared with EUR5.185 billion in 2005.
The development of the Group's operating profit was primarily
impacted by the significant decline in earnings at the Chrysler
Group. This was more than offset by the substantial earnings
improvement at the Mercedes Car Group and the repeated increase
in earnings at the Truck Group and the Financial Services
division. The contribution to earnings from the Van, Bus, Other
segment was lower than in the prior year.
Net income increased by EUR4 million to EUR3.2 billion (2005:
EUR2.8 billion). Based on the reported net income, earnings per
share amounted to EUR3.16 compared with EUR2.80 in 2005.
Dividend
The Board of Management proposes to the Supervisory Board that a
dividend of EUR1.50 per share should be distributed for the year
2006 (2005: EUR1.50). This proposal takes account not only of
the development of operating profit and cash flow in 2006, but
also of expectations for the coming years.
Unit Sales and Revenues
DaimlerChrysler sold a total of 4.7 million vehicles in 2006
(2005: 4.8 million), while the Group's total revenues increased
by 1% to EUR151.6 billion. Adjusted for exchange-rate effects
and changes in the consolidated Group, the increase in revenues
amounted to 2%.
The Workforce
As of Dec. 31, 2006, DaimlerChrysler employed a workforce of
360,385 people worldwide (2005: 382,724). Of this total,
166,617 were employed in Germany (2005: 182,060) and 94,792 in
the United States (2005: 97,480).
The implementation of the new management model is running
according to plan. By the end of January 2007, approximately
2,000 employees worldwide had either signed voluntary severance
agreements or had already left the Group.
DaimlerChrysler has been working with the new structures since
Aug. 1, 2006. Important processes have been made faster and
more efficient, allowing substantial efficiency gains. The
total expenditure for the implementation of the program in the
years 2006 through 2008 is likely to be in the region of EUR2
billion. Of this total, EUR393 million was incurred in the year
2006.
Investing to Safeguard Future
Worldwide, the DaimlerChrysler Group invested a total of
EUR5.9 billion in property, plant and equipment in 2006 (2005:
EUR6.6 billion). Capital expenditure at the Mercedes Car Group
of EUR1.7 billion was slightly higher than in the prior year
(EUR1.6 billion). To continue its product offensive and to make
its production facilities more flexible, the Chrysler Group
invested EUR2.9 billion in property, plant and equipment (2005:
EUR3.1 billion). The Truck Group invested EUR907 million in
2006, mainly related to new technologies, powertrains, and
safety concepts (2005: EUR966 million).
Expenditure for research and development totaled EUR5.3 billion
in 2006 (2005: EUR5.6 billion). The most important projects at
the Mercedes Car Group were the new generation of the E-Class,
the new version of the CL-Class, and preparations for the model
change for the C-Class in 2007.
The Chrysler Group's focus was on the development of the new
minivan generation as well as on hybrid vehicles. The Truck
Group's major projects included the successor models for the
Mercedes-Benz Actros and Axor, for the Freightliner Premium
Class and for the Mitsubishi Fuso Super Great.
Additional key areas of R&D activities at DaimlerChrysler were
the further development of powertrain technologies, alternative
propulsion systems such as hybrid drive and fuel cells, and
electronic systems for the improvement of vehicle safety.
During the planning period of 2007 through 2009, DaimlerChrysler
will presumably invest a total of EUR17.5 billion in property,
plant and equipment and EUR16.2 billion in research and
development activities. This adds up to total of investment in
safeguarding the future of EUR33.7 billion.
Mercedes Car Group
The Mercedes Car Group division, comprising the brands Mercedes-
Benz, Maybach, smart, Mercedes-Benz AMG, and Mercedes-Benz
McLaren, sold 1,251,800 vehicles in 2006 (2005: 1,216,800).
Revenues of EUR54.6 billion were 9% higher than the prior year's
level.
The Mercedes Car Group achieved an operating profit of
EUR2.415 billion in 2006, compared with an operating loss of
EUR505 million in the prior year. The results of both years
were significantly affected by special items.
There were expenses of EUR946 million in connection with the
discontinuation of production of the smart forfour in 2006,
while the realignment of the smart business model in 2005
resulted in charges of EUR1.111 billion.
Charges relating to staff reductions at Mercedes-Benz Passenger
Cars in the context of the CORE program decreased to
EUR286 million in 2006 (2005: EUR570 million).
The substantial increase in the division's operating profit is
due in particular to the efficiency improvements achieved in the
context of the CORE program. Other positive factors were the
higher unit sales of Mercedes-Benz passenger cars and the
improved model mix due to the launch of the new S-Class as well
as the M- and GL-Class models. A negative impact on operating
profit in 2006 resulted from currency effects.
The Mercedes-Benz brand increased unit sales in the year under
review by 5% to 1,149,100 vehicles. As a result, the brand was
able to boost its market share in key regions, despite tougher
competition. This positive result was primarily due to the very
successful new model launches in 2005, particularly of the new
S-Class, which went on sale in the United States in February
2006. Like the new CL- and GL-Class models, the updated E- and
SL-Class vehicles launched in 2006 were also very well received
by the market and contributed to the Mercedes-Benz brand's
success in the year under review. On Oct. 15, 2006, the
division launched the E320 BLUETEC -- the world's cleanest
diesel passenger car -- in the United States and Canada.
The extensive measures being implemented to further improve the
quality of DaimlerChrysler's vehicles are having very positive
effects. This claim is supported by internal analyses and many
external studies. The J.D. Power Initial Quality Study 2006
concluded that the Mercedes-Benz brand has a positive trend in
the category of initial quality. Improvements were achieved in
nearly all of the issues that were addressed in last year's
study (IQS 2005).
Unit sales of the smart brand totaled 102,700 vehicles in the
year under review (2005: 124,300). Unit sales of the smart
fortwo developed especially well throughout the year, with the
model's production volume once again exceeding the planned
target in the vehicle's ninth year of production.
More than 750,000 smart fortwos have been sold since the
vehicle's market launch. Despite an increase in production at
the beginning of the year, nearly all smart fortwo models built
had been sold by the end of 2006. Sales of the last smart
roadsters and smart forfour models proceeded according to plan;
nearly all remaining stocks of these vehicles had been sold by
the end of the year under review.
In November 2006, smart unveiled the new smart fortwo, which
will be launched in Europe in April 2007. Starting in 2008, the
new smart fortwo will also be available in the United States,
which has become a promising market for smart due to increasing
traffic volumes and rising fuel prices. The second-largest
automobile retail organization in the United States -- the
UnitedAuto Group -- will act as the exclusive importer of smart
brand vehicles.
Chrysler Group
Worldwide, the Chrysler Group shipped 2.7 million Chrysler,
Jeep(R) and Dodge branded passenger cars, sports tourers,
minivans, SUVs, and light trucks to its dealerships in 2006
(2005: 2.8 million). Worldwide retail sales decreased by 5% in
2006 to 2.7 million units.
As a result of lower volumes and a weaker US dollar on average
for the year, the Chrysler Group's revenues for the year of
EUR47.1 billion were significantly lower than in 2005
(EUR50.1 billion).
The Chrysler Group posted an operating loss of EUR1.118 billion
in 2006, compared with an operating profit of EUR1,534 million
in 2005.
The deterioration in operating results was primarily the result
of negative net pricing, unfavorable product, and sales market
mix, and a decline in factory unit sales in the United States.
These factors reflect the continuing difficult market
environment in the United States during 2006 marked by an
overall decline in market volume, a shift in consumer demand
towards smaller, more fuel-efficient vehicles due to higher fuel
prices, as well as the impact of higher interest rates.
These negative factors were partially offset by the market
success of the new models, most of which were launched in the
second half of the year. Several of these vehicles target this
shift in consumer demand, resulting in a positive contribution
to earnings in the fourth quarter of the year.
In addition, the financial support provided to supplier Collins
& Aikman led to a charge of EUR66 million in 2006, compared to
EUR99 million in 2005. The Chrysler Group's prior-year
operating profit was positively impacted by a EUR240 million
gain on the sale of the Arizona Proving Grounds vehicle testing
facility.
The Chrysler Group launched a total of 10 attractive new models
in 2006, and significantly expanded its sales outside the NAFTA
region (+22% to 214,400 vehicles). Dodge launched its compact
five-door car -- the Dodge Caliber, as well as its first mid-
size SUV -- the Dodge Nitro, and the new Dodge Ram 3500 Chassis
Cab. The new positioning of the Jeep(R) brand portfolio
continued with the launch of the compact Jeep(R) Compass. Other
new models launched were the Jeep(R) Grand Cherokee SRT8, the
new Jeep(R) Wrangler, the four-door Jeep(R) Wrangler Unlimited
and the Jeep(R) Patriot. The Chrysler brand launched the Aspen,
its first full-size SUV, while the new Chrysler Sebring is
intended to strengthen the Chrysler Group's competitive position
in the mid-size sedan category.
The Chrysler Group also made more progress in the field of
vehicle quality in 2006. Internal measurements show that the
quality of the division's vehicles is better than ever before, a
fact which is confirmed by external quality studies: The
Chrysler brand ranked in the top ten in the 2006 J.D. Power
Initial Quality Study.
All three Chrysler Group brands also made gains in the 2006 J.D.
Power Vehicle Dependability Study, showing that customer
perception of quality continues to improve as new vehicles
replace older models in the product range.
The new manufacturing flexibility strategies have helped to
improve the Chrysler Group's efficiency, allowing the division
to better utilize its assets, such as the Belvidere (Illinois)
Assembly Plant, where the Dodge Caliber is built with the use of
highly flexible robots and free of vehicle-specific heavy
tooling. Over the four years of 2002 through 2005, the Chrysler
Group posted a cumulative 24% productivity improvement, with a
6% improvement in 2005, as confirmed by the 2006 Harbour Report,
a recognized industry study that measures the productivity of
North American automotive manufacturers.
One year after the start of production by the Global Engine
Manufacturing Alliance, the second World Engine plant opened in
Dundee (Michigan) in October 2006. The two plants in Dundee are
part of a five-factory global venture developed by
DaimlerChrysler, Hyundai Motor and Mitsubishi Motors.
Truck Group
In 2006, the Truck Group built on the very successful
developments of the prior year, increasing unit sales by 1% to a
new record of 537,000 vehicles.
The higher sales volume and an improved model mix also led
revenues to rise sharply by 5% to EUR32.0 billion.
The Truck Group achieved an operating profit of EUR2.020 billion
in 2006, a significant increase from the previous year's result
of EUR1.606 billion. The operating profit posted in 2005
included exceptional income of EUR276 million from the
settlement reached with Mitsubishi Motors Corporation relating
to expenditure for quality actions and recall campaigns at
Mitsubishi Fuso Truck and Bus Corporation.
The increase in operating profit was primarily the result of
efficiency improvements realized in the context of the Global
Excellence Program as well as improved product positioning and
model mix. In addition, higher unit sales, which were mainly
the result of purchases brought forward because of stricter
emission limits in important markets, contributed to the higher
earnings. Higher expenses for new vehicle projects, for the
fulfillment of future emission regulations as well as currency
effects had a negative impact on operating profit.
Trucks Europe/Latin America (Mercedes-Benz) once again increased
its unit sales in the core markets of Western Europe. However,
due to a market downturn in Brazil and lower sales in the Near
and Middle East, total unit sales of 142,100 vehicles were
slightly below the prior year's high level. Operating in a very
positive market environment, the Trucks NAFTA unit
(Freightliner, Sterling, Western Star, Thomas Built Buses)
increased its sales by 3% in 2006 to the record level of 208,300
vehicles. Trucks Asia (Mitsubishi Fuso) sold 186,600 vehicles
in 2006, a sharp increase (+4%) on the prior year.
In the summer of 2006, as part of a roadshow through 12 major
European cities the division presented the Mercedes-Benz Safety
Truck, which combines all of the currently available assistance
and safety systems, including Active Brake Assist (emergency
braking support), Lane Assistant, Adaptive Cruise Control, and
the Stability Program.
Large-scale trials have shown that accident frequency can be
reduced by 50% by the Mercedes-Benz Safety Package.
Furthermore, The Truck Group's Hybrid Technology Competence
Center passed one of its first milestones with the introduction
of Fuso's Canter Eco Hybrid in Japan. In 2006, to ensure that
it is ideally prepared to face future challenges, the Truck
Group began to build a Development and Testing Center in the
vicinity of the W"rth, Germany, truck assembly plant. The first
stage of construction is scheduled to be completed during the
year 2007.
Coinciding with Group-wide implementation of the new management
model, the Truck Group was launched on Aug. 1, 2006, with a
modified organizational structure. The division now consists of
three operating units: Trucks Europe/Latin America, Trucks
NAFTA, and Trucks Asia, each of which is responsible for
production and sales operations in its respective region.
In order to more extensively exploit synergies as early as the
product creation phase -- and to allow the enhanced
harmonization of parts and components -- the former Truck
Product Creation unit was split into two powerful units: Truck
Product Engineering, which is responsible for the three vehicle
development centers in Stuttgart, Portland and Kawasaki as well
as the integrated development of large components, and Truck
Powertrain Operations & Manufacturing Engineering, which
oversees worldwide component production and production planning
for vehicle and component plants.
Financial Services
The Financial Services division once again developed positively
and further improved its market position in 2006. Financial
Services significantly improved its operating profit from
EUR1.468 billion in 2005 to EUR1.714 billion in 2006, thus
achieving record earnings for the fifth consecutive year. The
increase in operating profit was the result of higher new
business and ongoing efficiency improvements. These factors
more than offset higher expenses resulting from higher interest
rates and increased cost of risk. In addition, the business
development at Toll Collect also contributed to the positive
earnings trend.
New business increased by 10% to EUR53 billion, while contract
volume of EUR113.3 billion was 4% lower than in the prior year.
Adjusted for exchange-rate effects, contract volume rose by 5%.
At the end of 2006, Financial Services' portfolio comprised
6.5 million leased and financed vehicles.
The Americas region (North and South America) managed a total
contract volume of EUR80.4 billion at the end of 2006 (end of
2005: EUR85.9 billion). This was once again the highest volume
recorded by any Financial Services region, accounting for 71% of
the total portfolio. Adjusted for exchange-rate effects, the
portfolio in the region expanded by 4%.
The Europe, Africa & Asia/Pacific region also developed
positively in 2006. Contract volume of EUR32.9 billion was 3%
higher than the prior year's level. In Germany, DaimlerChrysler
Bank further improved its market position: contract volume at
the biggest European national company rose by 5% to EUR16
billion. DaimlerChrysler Bank welcomed its one-millionth
customer in May 2006.
DaimlerChrysler Financial Services expanded its financing
activities for commercial vehicles in Japan by establishing the
new Fuso Financial business unit. Since September 2006, Fuso
Financial is in charge of Mitsubishi Fuso's entire dealer
network in Japan.
Van, Bus, Other
Within the framework of the new management model,
DaimlerChrysler decided that the vans and buses activities,
which until 2005 were part of the Commercial Vehicles division,
would be directly managed as separate units. In addition, the
Corporate Research department and the development departments of
the Mercedes Car Group were merged; as a result, they are now
directly allocated to the Mercedes Car Group.
The Van, Bus, Other segment recorded an operating profit of
EUR913 million in 2006 (2005: EUR1.091 billion). Operating
profit in 2006 includes charges of EUR393 million for the
implementation of the new management model. These charges were
mainly incurred for workforce reductions in the DaimlerChrysler
Group's administrative areas. Exceptional income was achieved
in 2006 from the sale of real estate not required for operating
purposes (EUR133 million) and the consummation of the sale of
the off-highway business (EUR248 million).
Operating profit for 2005 included a positive contribution from
the off-highway business of EUR144 million. The Van and Bus
operating units again achieved positive results.
Unit sales at the Vans unit totaled 256,900 vehicles worldwide
in the year under review (2005: 267,200). This slight decrease
in sales was due to the Sprinter model changeover and associated
production bottlenecks at the Dsseldorf plant. DaimlerChrysler
Buses comprises the bus operations of the Mercedes-Benz, Setra,
and Orion brands. The unit sold 36,200 buses and chassis
worldwide in 2006 (2005: 36,200). The Buses unit thus repeated
the high level of unit sales it achieved in the prior year and
maintained its position as the global market leader.
EADS contributed EUR649 million to the segment's operating
profit, which was below the prior-year result of EUR757 million.
The reduction is primarily related to delays with the delivery
of the Airbus A380. EADS will publish its results for the 2006
financial year on March 9, 2007.
Outlook
On the basis of the divisions' planning, DaimlerChrysler expects
the Group's total unit sales to increase slightly in the year
2007. DaimlerChrysler assumes that total revenues in 2007 will
be at least in the magnitude of the prior year.
Based on the divisions' projections, DaimlerChrysler should
achieve a significant increase in profitability in the planning
period of 2007 through 2009.
A fundamental condition for the targeted increase in earnings is
a generally stable economic and political situation, as well as
the moderate rise in the worldwide demand for passenger cars and
commercial vehicles expected for the years 2007 through 2009.
Opportunities and risks may arise from the development of
currency exchange rates and raw-material prices.
In the year 2007, DaimlerChrysler will change over its
accounting and financial reporting to the International
Financial Reporting Standards. The present main performance
measure, operating profit according to US GAAP, will then be
replaced with EBIT (earnings before interest and taxes). The
earnings outlook will be put into more detail with the
publication of the interim report on the first quarter of 2007.
A full-text copy of the company's 2006 results is available for
free at http://ResearchArchives.com/t/s?19dc
About DaimlerChrysler
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.
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. Chrysler Group
will take additional production cuts in the third and fourth
quarters to reduce dealer inventories and make way for its
current product offensive.
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.
KRUNG THAI: To Reduce NPLs in 2007 Through Write-Offs
-----------------------------------------------------
Krung Thai Bank expects to reduce its non-performing loans by
one to two percentage points this year through writeoffs and
debt restructuring, The Bangkok Post reports.
The Post recounts that Krung Thai recorded gross non-performing
loans of 9% of total loans at the end of 2006, with net bad
loans of 6% after deducting provisions.
According to the report, Krung Thai President Apisak
Tantivorawong said that the bank would continue to set aside
THB300 million per month in general provisioning this year. It
had set aside THB16 billion in loan-loss provisions last year
out of THB30 billion in operating profits.
Mr. Tantivorawong adds that Krung Thai has sufficient capital
funds for the next three years, but plans to launch new
short-term debentures to offset issues due for redemption over
the next several months, The Bangkok Post says.
The report adds that Krung Thai also has no plans to cut short-
term deposit rates, although the bank has cut fixed deposit
rates in line with other banks.
"Due to various uncertainties, we will cut only long-term
interest rates as it allows us greater flexibility in case of a
market reversal," The Post quotes Mr. Apisak, who also said that
the central bank expects to further cut rates at its meeting at
the end of the month.
Krung Thai has a net lending target of THB60 billion in 2007, or
6% growth, compared with last year's loan growth of 4%,
The Post adds.
On the other hand, Reuters says that Krung Thai plans to sell up
to THB100 billion (US$2.8 billion) of its bonds to refinance
existing debt and expand loans.
According to Mr. Tanaivorawong, Krung Thai' shareholders will
comment on the plan in April, Reuters adds.
About Krung Thai Bank
Krung Thai Bank Public Company Limited -- http://www.ktb.co.th/
-- began its operation on March 14, 1966, through the merger of
business between the Agricultural Bank Limited and the
Provincial Bank Limited with the Ministry of Finance as its
major shareholder.
The Bank provides financial assistance to large and small
business, it also renders financial assistance to other state
enterprises, both business-oriented and public utility types.
Currently the bank is operating 511 domestic and 12 foreign
branches and representative offices.
Fitch Ratings, on September 12, 2006, affirmed the individual
C/D rating of Krung Thai Bank Public Company Limited.
The bank currently carries Moody's Investors Service's bank
financial strength rating of D.
*********
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. Andrei Sanchez, 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 2007. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$625 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Christopher Beard at 240/629-3300.
*** End of Transmission ***