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 Tuesday, January 15, 2008, Vol. 11, No. 10 Headlines A U S T R A L I A ARROW ENERGY: Inks Production Sharing Contract with PetroVietnam BASETRON PTY: To Declare Dividend on January 31 CARRYCALL PTY: Members and Creditors to Meet on February 11 CBH RESOURCES: Ore Production Increases 17% for 3-Month Period COMMSCOPE INC: Andrew Commences Tender Offer for 3-1/4% Notes DIKRANIS DESIGN: Commences Liquidation Proceedings DINARA PTY: To Declare First Dividend on January 31 EMPEROR MINES: Approves PNG Government’s Pollution Study F. V. ELITE: To Declare First Dividend on January 29 GERRY’S ELECTRICAL: To Declare First Dividend on February 8 HART'S TYRE: Liquidator Presents Wind-Up Report HEISER BROS: Placed Under Voluntary Liquidation MARITIME INDUSTRY: Liquidator Presents Wind-Up Report MBI COMPUTERS: Sets Final Meeting for Today SENTRY FIRE: To Declare First Dividend on February 11 SYMBION HEALTH: Primary Extends AU$2.7-Bil Offer to February 7 WONSANA PTY: To Declare First Dividend on January 31 C H I N A , H O N G K O N G & T A I W A N ACCORD CONTAINER: Liquidator Quits Post ANDREW CORP: Commences Tender Offer for 3-1/4% Convertible Notes ARVINMERITOR: Fitch Cuts Issuer Default Rating to B+ from BB- AVENTIS CROPSCIENCE: Creditors' Proofs of Debt Due on Feb. 1 CATHAY TEXTILE: Commences Liquidation Proceedings CHINA EASTERN: Air China Wants “Comprehensive” Tie-Up CRUISER ENTERPRISES: Members Meeting Fixed for February 11 FAR EAST: Creditors' Proofs of Debt Due on Feb. 11 FOCAL_JM: Creditors' Proofs of Debt Due on Feb. 11 HOPSON DEVELOPMENT: Moody's Affirms Ba2 Ratings After Land Bid KEENSEN LIMITED: Appoints New Liquidator MAINLINE GLOBAL: Liquidator Quits Post MAXTOR ASIA: Commences Liquidation Proceedings OCEAN SCOPE: Appoints New Liquidator I N D I A BALLARPUR INDUSTRIES: Board to Consider Q2 Results on Jan. 23 BANK OF BARODA: Raises INR1,000 Crore from Bond Issue CABLE & WIRELESS: Resolves Conflict with Union Workers in LatAm DECCAN AVIATION: To Start Calcutta-Jaipur Flights on Jan. 15 EASTMAN KODAK: Earns US$37 Million in 2007 Third Quarter HMT LTD: To Consider Third Quarter Results on Jan. 29 ITI LTD: Names B. P. Gupta as Director-Finance JCT ELECTRONICS: Books INR84.3-Mil. Loss in Qtr. Ended Sept. 30 I N D O N E S I A AVNET INC: Signs Definitive Pact Acquiring Azzurri Tech BANK LIPPO: CIMB to Disclose Findings From Merger Study FOSTER WHEELER: Subsidiary Bags Supply Contract for UTE CT FOSTER WHEELER: Supplying Steam Generators to SINOCHEM PERUSAHAAN LISTRIK: Suggests Gov't to Supply Power to 30 Hamlets PHILIPS VAN: Unit Hires Robert Vignola as Pres. of Calvin Klein J A P A N ALITALIA SPA: Air France-KLM Chief Holds Preliminary Talks BOSTON SCIENTIFIC: S&P Ratings Unmoved by Affirmed Court Ruling DELPHI CORP: S&P Expects to Put B Rating After Chapter 11 Exit GOODWILL GROUP: Ministry Halts Operations Due to Unlawful System JABIL CIRCUIT: To Sell US$250 Million of Senior Unsecured Notes JABIL CIRCUIT: Fitch Assigns BB+ Rating on US$300-Mln Sr. Notes JABIL CIRCUIT: Moody's Puts Ba1 Rating on US$300MM Senior Notes JAPAN AIRLINES: MUFG to Buy 49% of JALCard for JPY40 Billion JAPAN AIR: To Set Up Cargo Service Venture with Mitsui, et al. K O R E A BIOMET INC: Reports US$89-Million Net Income in Second Quarter BOE HYDIS: PVI Expects 85% Utilization Rate This Year HYNIX SEMICONDUCTOR: Sees DRAM Rebound in 2Q This Year M A L A Y S I A ARK RESOURCES: Unveils Changes to Audit Committee SOLUTIA INC: Mulls Offering US$400 Mil. of Senior Unsec. Notes SOLUTIA INC: Joins Panel in Showing Cross-Appeal Issues v. BNY TALAM CORP: Unit Completes MYR63-Mil. Disposal of Land PM 1038 N E W Z E A L A N D BUILDTECH CONSTRUCTION: Names James Stewart Murray as Liquidator CAPITAL HOG: Court to Hear Wind-Up Petition on January 22 COMMAND RECRUITMENT: Taps Chilcott and Chatfield as Liquidators CREATIVE PLAY: Commences Liquidation Proceedings DENNY'S CORP: Reports 4th Qtr. & Full-Year 2007 Same-Store Sales ELITE POOLS: Court Sets Wind-Up Petition Hearing for January 24 RESIDENTIAL MORTGAGES: Fixes Jan. 31 as Last Day to File Claims WESTOX NEW ZEALAND: Subject to CIR's Wind-Up Petition P H I L I P P I N E S ATLAS CONSOLIDATED: Infuses Additional US$10 Million to Unit BANK OF THE PHIL. ISLANDS: Seeks to Dispose of PHP30-Bil. ROPAs BANK OF THE PHIL. ISLANDS: Sees No Need to Hike Capital in 2008 BANCO DE ORO-EPCI: BSP OKs Partnership with Property Developers CE CASECNAN: Posts 3rd Quarter 2007 Profit of US$16.291 Million CITY RESOURCES (PHIL): Stocks to Trade Under New Name on Jan. 18 GUESS? INC: Brean Murray Maintains Buy Rating on Firm's Shares MANILA ELECTRIC: Files Proposed Amendment to Rates Schedules METROPOLITAN BANK: Announces PHP722.91-Million Cash Dividend SECURITY BANK: Francia Lina Marcelo Resigns as Vice-President S I N G A P O R E BIOFUEL INDUSTRIES: Wind-Up Petition Hearing Set for January 18 ENZER ELECTRONICS: Court to Hear Wind-Up Petition on January 16 FLEXTRONICS INT'L: Dr. Willy Shih Joins Board of Directors PETROLEO BRASILEIRO: Subsea 7 Bags Gulf of Mexico Contract T H A I L A N D ADVANCE AGRO: Always Rich Holding Buys 75.79% Ownership Stake PICNIC CORP: SET Posts Suspension “SP” Sign on Securities TMB BANK: Six Board Members Resign * BOND PRICING: For the Week 07 January to 11 January 2008 - - - - - - - - ================= A U S T R A L I A ================= ARROW ENERGY: Inks Production Sharing Contract with PetroVietnam ---------------------------------------------------------------- Arrow Energy Ltd. signed a production sharing contract with the Vietnam government-owned PetroVietnam in Hanoi. In a statement lodged with the Australian Securities Exchange, Arrow stated that the project will be known as the Hanoi Trough (MVHN-01KT) Onshore PSC, wherein Arrow will be entitled to a highly prospective Coal Seam Gas tenement area of 2,743 sq. km. in the Hanoi Basin. Under the terms of the contract, Arrow will receive a 70% interest in the block and PetroVietnam Exploration and Production, a subsidiary of PetroVietnam, will receive 30%. Arrow, as required by the PSC, will spend US$1.5 million over a period of 12 months to drill 8 wells on the block. Arrow believes the PSC to be a technically and commercially attractive proposition. According to the statement, Arrow is also considering bringing an additional local partner into the project. About Arrow Energy Arrow Energy NL -- http://www.arrowenergy.com.au/-- is an Australian company engaged in the undertaking of gas exploration and development activities. The Company is focused on coal seam gas exploration and production in the Surat, Clarence-Moreton and Ipswich Basins in southeast Queensland and northern New South Wales and the Styx Basin and Nagoorin Graben in coastal central Queensland. Arrow Energy NL has been carrying out exploration/appraisal drilling (over 50 wells) and has proven a large CSG resource. The Company's projects include Kogan North, Tipton West, Moranbah, Daandine, Dundee, Mt Lindesay, Silverdale and Boyne River. The Troubled Company Reporter-Asia Pacific's Distressed Bonds Column on January 8, 2008, listed Arrow Energy's bond, with a 10.000% coupon and a March 31, 2008 maturity date, as trading at 2.56% on the AU dollar. BASETRON PTY: To Declare Dividend on January 31 ----------------------------------------------- Basetron Pty Limited, which is in liquidation, will declare dividend on January 31, 2008. Only creditors who were able to file their proofs of debt by January 1, 2008, will be included in the company's dividend distribution. The company's liquidator is: Roderick Mackay Sutherland Jirsch Sutherland Chartered Accountants Level 4, 55 Hunter Street Sydney, New South Wales 2000 Australia Telephone:(02) 9236 8333 Facsimile:(02) 9236 8334 About Basetron Pty Located at Sydney, in New South Wales, Australia, Basetron Pty Limited is an investor relation company. CARRYCALL PTY: Members and Creditors to Meet on February 11 ----------------------------------------------------------- The members and creditors of Carrycall Pty Limited will have their final meeting on February 11, 2008, at 10:00 a.m. The company's liquidator is: Sule Arnautovic Jirsch Sutherland Level 4, 55 Hunter Street Sydney, New South Wales 2000 Australia Telephone:(02) 9236 8333 Facsimile:(02) 9236 8334 e-mail: admin@jirschsutherland.com.au About Carrycall Pty Carrycall Pty Limited is in the business of local trucking without storage. The company is located at Leppington, in New South Wales, Australia. CBH RESOURCES: Ore Production Increases 17% for 3-Month Period -------------------------------------------------------------- CBH Resources Ltd.'s Endeavor Mine achieved full rated throughput capacity of 1.2 million tons per annum for the quarter ended December 31, 2007, with a 17% increase in ore processed compared to the previous quarter. Ore production for the quarter continued to be dominantly sourced from the bottom development level of the mine as planned, however a number of secondary stopes were brought on line in the central section of the mine as backfilling and mine development progressed. The focus for ore production is shifting from primary stopes in the bottom level where the ore is harder and grades lower to secondary stopes in the center section where the majority of the mine's Ore Reserves are located. Production from the central min area is expected to provide 70% of the mill feed in the March 2008 quarter. Ore mined for the month of December was a record 118,600 tons with 30,000 tons currently on the surface stockpile. Access to multiple high grade stopes in the central part of the mine is being achieved through the paste backfill operation. Pastefill for the first two quarters has been 102% of budget. This process is being accelerated through the introduction from the beginning of 2008 of a second backfill system that places cemented fill from the surface directly into mine voids via drill holes. Ore grades for the December 2007 quarter were slightly lower than for the previous quarter but are expected to improve in the coming quarter. Zinc metal output was up 6.8% compared to the previous quarter while lead metal output was down 5.1%. About CBH Resources CBH Resources Limited -- http://www.consbh.com.au/-- is a Sydney-based mineral resources company engaged in the production of zinc, lead and silver from the Endeavor Mine at Cobar. Development studies are underway for the zinc, lead and silver resources at Broken Hill, and copper and zinc resources a Sulphur Springs in Western Australia. The Troubled Company Reporter-Asia Pacific's Distressed Bonds column on July 3, 2007, listed CBH Resources’ bond with a 9.500% coupon and a Dec. 16, 2009 maturity date, trading at 0.39 cents on the Australian dollar. COMMSCOPE INC: Andrew Commences Tender Offer for 3-1/4% Notes ------------------------------------------------------------- CommScope, Inc.'s indirect wholly owned subsidiary, Andrew Corporation has commenced an offer to repurchase any and all of its 3-1/4% Convertible Subordinated Notes due 2013. The indenture governing the Notes requires Andrew to make the offer as a result of CommScope's acquisition of Andrew Corp., by way of merger, effective Dec. 27, 2007. Andrew Corp. is offering to purchase the Notes for cash at a purchase price of 100% of their principal amount. If all of the outstanding Notes are tendered in the tender offer, the aggregate purchase price required to purchase the tendered Notes is estimated to be approximately US$167 million. The tender offer for the Notes will expire at 5:00 p.m., New York City time, on Feb. 15, 2008, unless extended or earlier terminated. Holders may withdraw their tendered Notes at any time prior to the expiration time. On Feb. 15, 2008, Andrew will make a semi- annual interest payment on the Notes to holders of record on Feb. 1, 2008. Andrew expects to fund the tender offer from cash advanced by CommScope, which will utilize its available cash on hand, and through borrowings under CommScope's existing credit agreement. As a result of the merger, each US$1,000 principal amount of the Notes is now convertible at the option of the holder, on the terms and subject to the conditions of the indenture governing the Notes, into US$986.15 in cash and 2.304159 shares of CommScope common stock, subject to adjustment from time to time and payments for fractional shares, as provided in the indenture; this represents a conversion price equal to the consideration payable to Andrew stockholders in the merger of (i) US$13.50 in cash per share of Andrew common stock, multiplied by 73.0482, and (ii) 0.031543 shares of CommScope common stock, multiplied by 73.0482. On Jan. 9, 2008, the closing price of CommScope common stock on the New York Stock Exchange was US$42.37 per share. Neither CommScope nor Andrew Corp.'s Board of Directors, nor any other person makes any recommendation as to whether holders of Notes should choose to tender their Notes in the offer, and no one has been authorized to make such a recommendation. About Andrew Corp. Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries including China, India, Italy, Czech Republic, Argentina, Bahamas, Belize, Barbados, Bermuda and Brazil. About CommScope Based in Hickory, North Carolina, CommScope Inc. (NYSE: CTV) -- http://www.commscope.com/-- is a world leader in infrastructure solutions for communication networks. Through its SYSTIMAX(R) Solutions(TM) and Uniprise(R) Solutions brands, CommScope is the global leader in structured cabling systems for business enterprise applications. It is also the world's largest manufacturer of coaxial cable for Hybrid Fiber Coaxial applications. CommScope has facilities in Brazil, Australia, China and Ireland. * * * As reported in the Troubled Company Reporter on Oct. 19, 2007, Standard & Poor's Ratings Services affirmed its ratings on CommScope Inc. and Westchester, Illinois-based Andrew Corp. and removed them from CreditWatch, where they were placed on June 27, 2007, with negative implications. S&P also affirmed the 'BB-' corporate credit and 'B' subordinated debt ratings for both companies. The ratings on Andrew will be withdrawn following its acquisition and debt refinancing. S&P said the outlook is stable. DIKRANIS DESIGN: Commences Liquidation Proceedings -------------------------------------------------- During a general meeting held on November 7, 2007, the members of Dikranis Design & Construct Pty Ltd agreed to voluntarily wind up the company's operations. 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 Dikranis Design Dikranis Design & Construct Pty Ltd is a general contractor of single-family houses. The company is located at Melbourne, in Victoria, Australia. DINARA PTY: To Declare First Dividend on January 31 --------------------------------------------------- Dinara Pty Limited, which is in liquidation, will declare its first dividend on January 31, 2008. Creditors who were not able to file their proofs of debt by January 1, 2008, will be excluded from the company's dividend distribution. The company's liquidator is: Roderick Mackay Sutherland Jirsch Sutherland Chartered Accountants Level 4, 55 Hunter Street Sydney, New South Wales 2000 Australia Telephone:(02) 9236 8333 Facsimile:(02) 9236 8334 About Dinara Pty Dinara Pty Limited provides business consulting services. The company is located at Willetton, in Western Australia, Australia. EMPEROR MINES: Approves PNG Government’s Pollution Study -------------------------------------------------------- Emperor Mines Ltd. welcomed a Papua New Guinea government-funded study to determine if the company's Tolukuma gold mine endangers villagers by polluting rivers, the Australian Associated Press reports. AAP relates that acting PNG Prime Minister Puka Temus said the 450,000 kina (AU$190,000) study would be approved by cabinet later this month and it was hoped to have a report by mid-year. If the new study would confirm that dumped mine tailings harmed humans, agreements with Emperor would be reviewed, a tailings dam would be pushed for and compensation might be warranted, Mr. Temus conveys to AAP. Mr. Temus noted a study done by Sydney-based pathologist Sylvester Kotapu, who was commissioned by the Central Province Government last year, saying that there were question marks over the study claiming high levels of heavy metals in rivers downstream from the mine about 100 km. north of Port Moresby. Mr. Kotapu, in his report, stated that Mekeo and Goilala villagers picked up lead, mercury, arsenic and cyanide from the Auga and Angabanga Rivers where they washed, fished and drew their fresh water, which makes the tenants more susceptible to cancers and other prolonged illnesses, infertility and birth deformities, recalls AAP. Tolukuma's general manager, Brad Simpson claims that "Kotapu's findings were totally contradictory to previous scientific findings" and Emperor welcome PNG government's approval of a new study, states AAP. AAP reports that Mr. Temu believes that some aspects of the first study "were not properly done." However, should the new study confirm results of Kotapu's study, then the government would "favor the people to protect the environment" and would prompt the government to push very hard for a tailings dam and look at provisions for damage payment, AAP cites Mr. Temu. AAP added that Emperor is in the process of selling the Tolukuma mine. About Emperor Mines Based in Sydney, Australia, Emperor Mines Limited -- http://www.emperor.com.au/-- is engaged in the exploration, development and exploitation of gold deposits. The Troubled Company Reporter-Asia Pacific, on January 11, 2008, included in its "Large Companies with Insolvent Balance Sheets" column Emperor Mines Ltd., with US$50.63 million in stockholders' equity deficit on total assets of US$138.99 million. F. V. ELITE: To Declare First Dividend on January 29 ---------------------------------------------------- F. V. Elite (Aust.) Pty Ltd, which is in liquidation, will declare its first dividend on January 29, 2008. Creditors who were not able to file their proofs of debt by January 14, 2008, will be excluded from the company's dividend distribution. The company's liquidator is: David H. Scott Scott Partners Consulting Level 1, 173 Burke Road Glen Iris, Victoria 3146 Australia Telephone:(03) 9500 0511 About F. V. Elite F.V. Elite (Aust.) Pty Ltd is a distributor of machine tools, metal forming type. The company is located at Noble Park, in Victoria, Australia. GERRY’S ELECTRICAL: To Declare First Dividend on February 8 ----------------------------------------------------------- Gerry’s Electrical Services Pty Limited, which is in liquidation, will declare its first dividend on February 8, 2008. Only creditors who were able to file their proofs of debt by January 2, 2007, will be included in the company's dividend distribution. The company's liquidator is: R. M. Sigelski Lawler Partners Chartered Accountants 763 Hunter Street Newcastle West, New South Wales 2302 Australia About Gerry's Electrical Gerry's Electrical Services Pty Ltd operates electrical repair shops. The company is located at Gosford, in New South Wales, Australia. HART'S TYRE: Liquidator Presents Wind-Up Report ----------------------------------------------- The members and creditors of Hart's Tyre & Mechanical Service Pty Limited met on January 14, 2008, and received the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Roderick Mackay Sutherland Jirsch Sutherland Level 4, 55 Hunter Street Sydney, New South Wales 2000 Australia Telephone:(02) 9236 8333 Facsimile:(02) 9236 8334 e-mail: admin@jirschsutherland.com.au About Hart's Tyre Hart's Tyre & Mechanical Service Pty Limited operates auto and home supply stores. The company is located at Balgowlah, in New South Wales, Australia. HEISER BROS: Placed Under Voluntary Liquidation ----------------------------------------------- During a general meeting held on November 22, 2007, the members of Heiser Bros Pty Ltd resolved to voluntarily liquidate the company's business. Gregory Warwick Huggett was then appointed as liquidator. The Liquidator can be reached at: Gregory Warwick Huggett 107 Mulga Road Oatley West, New South Wales Australia About Heiser Bros Heiser Bros Pty Ltd is a distributor of packaging paper, coated, laminated and plastics film. The company is located at Punchbowl, in New South Wales, Australia. MARITIME INDUSTRY: Liquidator Presents Wind-Up Report ----------------------------------------------------- The members of Maritime Industry Finance Company Ltd met on January 11, 2008, and heard the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: John Frederick Lord PKF Level 10, 1 Margaret Street Sydney, New South Wales 2000 Australia About Maritime Industry Maritime Industry Finance Company Limited operates federal and federally-sponsored credit agencies. The company is located at Canberra, in ACT, Australia. MBI COMPUTERS: Sets Final Meeting for Today ------------------------------------------- The members of MBI Computers Pty Limited will have their final meeting today, January 15, 2008, at 10:30 a.m., to hear the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is: Ozem Kassem Cor Cordis Chartered Accountants Level 10, 76-80 Clarence Street Sydney Australia About MBI Computers MBI Computers Pty Limited is a distributor of durable goods. The company is located at South Granville, in New South Wales, Australia. SENTRY FIRE: To Declare First Dividend on February 11 ----------------------------------------------------- Sentry Fire Protection Pty Limited, which is in liquidation, will declare its first dividend on February 11, 2008. Only creditors who were able to file their proofs of debt by January 4, 2008, will be included in the company's dividend distribution. The company's liquidator is: Robert Moodie c/o Rodgers Reidy Chartered Accountants Level 8, 333 George Street Sydney, New South Wales 2000 Australia About Sentry Fire Sentry Fire Protection Pty Limited is a special trade contractor. The company is located at Monterey, in New South Wales, Australia. SYMBION HEALTH: Primary Extends AU$2.7-Bil Offer to February 7 -------------------------------------------------------------- Symbion Health Ltd.'s procurer, Primary Health Care Ltd., has extended, for the second time, its AU$2.7-billion offer for its rival to February 7 from January 21, Ben Wilson writes for Reuters. Reuters did not note of any specific reason for Primary's extension of the bid offer. The Troubled Company Reporter-Asia Pacific reported on Jan. 2, 2008, that Primary first extended its offer period to January 21 from January 7. In a statement filed with the Australian Securities Exchange on January 11, Primary currently has 14.92% shares through the institutional acceptance facility, plus 21.23% of relevant interests in Symbion. Primary now has a total of 36.15% of shares in Symbion. Primary has been vying with Healthscope Ltd. for control of Symbion's pathology, diagnostic imaging and medical centers assets as Australia's healthcare sector is set for rapid growth as the population ages and use of private health insurance increases, says Reuters. Reuters recalls that Healthscope has seen two bids for Symbion fail in recent months, one blocked by Primary and the other by an adverse tax ruling. Reuters adds that Symbion shares fell after the announcement, reflecting investor doubt that the eal will go ahead. Investors, according to the report, are waiting to see if Healthscope comes up with another offer for Symbion. About Symbion Health Symbion Health Limited, headquartered in Melbourne, is a diversified Australian domestic health care business. Most of its earnings are derived from the provision of pathology and diagnostic imaging services. The company also manufactures and markets vitamin and mineral supplements (consumer nutriceuticals). In addition, it operates a wholesale medical products distribution network, focusing on the distribution of prescription drugs to pharmacies and hospitals. * * * 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). WONSANA PTY: To Declare First Dividend on January 31 ---------------------------------------------------- Wonsana Pty Ltd, which is in liquidation, will declare its first dividend for its unsecured priority creditors on January 31, 2008. Only creditors who were able to file their proofs of debt by January 1, 2008, will be included in the company's dividend distribution. The company's liquidator is: R. M. Sutherland Jirsch Sutherland GPO Box 4256 Sydney, New South Wales 2001 Australia Telephone:(02) 9236 8333 Facsimile:(02) 9236 8334 e-mail: admin@jirschsutherland.com.au About Wonsana Pty Wonsana Pty Ltd, which is also trading as Tower Taxi Trucks, is in the business of local trucking without storage. The company is located at Mascot, in New South Wales, Australia. ================================================ C H I N A , H O N G K O N G & T A I W A N ================================================ ACCORD CONTAINER: Liquidator Quits Post --------------------------------------- On January 11, 2008, Lau Siu Hung stepped down as liquidator for Accord Container Line (HK) Limited, which is undergoing liquidation. ANDREW CORP: Commences Tender Offer for 3-1/4% Convertible Notes ---------------------------------------------------------------- Andrew Corporation, CommScope, Inc.'s indirect wholly owned subsidiary, has commenced an offer to repurchase any and all of its 3-1/4% Convertible Subordinated Notes due 2013. The indenture governing the Notes requires Andrew to make the offer as a result of CommScope's acquisition of Andrew Corp., by way of merger, effective Dec. 27, 2007. Andrew Corp. is offering to purchase the Notes for cash at a purchase price of 100% of their principal amount. If all of the outstanding Notes are tendered in the tender offer, the aggregate purchase price required to purchase the tendered Notes is estimated to be approximately US$167 million. The tender offer for the Notes will expire at 5:00 p.m., New York City time, on Feb. 15, 2008, unless extended or earlier terminated. Holders may withdraw their tendered Notes at any time prior to the expiration time. On Feb. 15, 2008, Andrew will make a semi- annual interest payment on the Notes to holders of record on Feb. 1, 2008. Andrew expects to fund the tender offer from cash advanced by CommScope, which will utilize its available cash on hand, and through borrowings under CommScope's existing credit agreement. As a result of the merger, each US$1,000 principal amount of the Notes is now convertible at the option of the holder, on the terms and subject to the conditions of the indenture governing the Notes, into US$986.15 in cash and 2.304159 shares of CommScope common stock, subject to adjustment from time to time and payments for fractional shares, as provided in the indenture; this represents a conversion price equal to the consideration payable to Andrew stockholders in the merger of (i) US$13.50 in cash per share of Andrew common stock, multiplied by 73.0482, and (ii) 0.031543 shares of CommScope common stock, multiplied by 73.0482. On Jan. 9, 2008, the closing price of CommScope common stock on the New York Stock Exchange was US$42.37 per share. Neither CommScope nor Andrew Corp.'s Board of Directors, nor any other person makes any recommendation as to whether holders of Notes should choose to tender their Notes in the offer, and no one has been authorized to make such a recommendation. About CommScope Based in Hickory, North Carolina, CommScope Inc. (NYSE: CTV) -- http://www.commscope.com/-- is a world leader in infrastructure solutions for communication networks. Through its SYSTIMAX(R) Solutions(TM) and Uniprise(R) Solutions brands, CommScope is the global leader in structured cabling systems for business enterprise applications. It is also the world's largest manufacturer of coaxial cable for Hybrid Fiber Coaxial applications. CommScope has facilities in Brazil, Australia, China and Ireland. About Andrew Corp. Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries including China, India, Italy, Czech Republic, Argentina, Bahamas, Belize, Barbados, Bermuda and Brazil. * * * As reported in the Troubled Company Reporter-Latin America Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its ratings on Andrew Corp. and removed them from CreditWatch, where they were placed on June 27, 2007, with negative implications. S&P also affirmed the 'BB-' corporate credit and 'B' subordinated debt ratings for the company. ARVINMERITOR: Fitch Cuts Issuer Default Rating to B+ from BB- ------------------------------------------------------------- Fitch Ratings has taken these rating actions on ArvinMeritor: -- Issuer Default Rating downgraded to 'B+' from 'BB-'; -- Senior secured revolver affirmed at 'BB' and assigned 'RR1'; -- Senior unsecured notes affirmed at 'B+' and assigned 'RR4'. The Rating Outlook is Negative. The ratings affect approximately US$1.1 billion of outstanding debt. The downgrade of the IDR reflects Fitch's expectation for negative free cash flow in fiscal 2008 and deterioration in ARM's key credit metrics. Rating concerns include low margins in ARM's light vehicle operations, the effects of increased cyclicality in light vehicle volume (resulting in lower 2008 OEM production volumes), and expectations of a muted rebound in the company's heavy vehicle operations. Partially offsetting Fitch's concerns, ArvinMeritor has a diversified customer base, limited exposure to the Detroit Three (revenue from domestic light vehicle customers represents 9% of total revenue), a global manufacturing footprint, and strong market positions in key products. The company has also made progress in its restructuring program. The Recovery Ratings and the notching in the debt structure reflect Fitch's recovery expectations in a scenario in which distressed enterprise value is allocated to the various debt classes, and the RR are explicitly assigned when IDRs are 'B+' or lower. The assignment of the 'RR1' recovery rating to the senior secured revolving credit facility incorporates a US$200 million reduction in the revolver and an expectation of full recovery. The secured facility benefits from first lien status on certain U.S. assets and a 15% carve-out of consolidated net tangible assets. The affirmation of the senior unsecured 'B+' rating and the assignment of the 'RR4' recovery rating reflect Fitch's view that unsecured debtholders would receive, after administrative, priority, trade creditor and secured claims, 31% to 50% of their investment, which is about average recovery in a distressed scenario. The Negative Rating Outlook takes into consideration the uncertain macro-economic environment which increases the potential for lower than anticipated light and heavy vehicle production volumes, higher than expected capital expenditures and greater restructuring cash requirements. Fitch believes a return to positive free cash flow in fiscal 2008 is unlikely for ARM due to low margin LVS operations, the cash needed for capital investment to improve CVS Europe's efficiency and potential customer volume declines due to a weakened economy. Also, Fitch believes LVS' capital expenditures may need to increase as ARM's annual spending level as a percent of revenue lags its peers, as LVS moves operations into low cost countries as well as growth regions where its customers have migrated and due to shortening light vehicle makers' product cycles. While Fitch believes ARM will continue to experience negative free cash flow in fiscal 2008, free cash flow is unlikely to deteriorate from 2007 levels, and could be higher than 2007 levels, for several reasons. Going forward, Fitch expects ARM to benefit from already completed LVS restructuring activity including the divestiture of the emissions business late in fiscal 2007, investment in Europe CVS to improve those operations' efficiency beginning in the second calendar quarter and an increase in second half North American heavy truck production after a substantial decline in demand in 2007. The cyclical heavy truck industry continues to affect ARM's financial performance. After the divestiture of LVS discontinued operations, ARM's revenue is roughly 65% generated from CVS. The heavy truck industry is coming out of a legislation-induced cycle-trough year due to emissions regulations implemented in 2007. U.S. Class 8 unit sales for calendar 2007 are likely to be in the 148,000 range, dropping precipitously by 47% from 284,008 units in calendar 2006, slightly more than Fitch's original expectations of a 35% to 45% decline. For 2008, Fitch had been expecting healthy heavy truck demand on the assumption that sales volume would be more normalized after the 2006 pull-ahead of 2007 demand. However, the potential for an economic slow down in 2008 will likely cause tractor sales volumes to increase only modestly from 2007 levels as fleet operators take a cautious wait-and-see approach to investing in new capacity to better gauge freight demand. Mitigating the potential economic impact to Class 8 volume, aging tractors may become an issue for fleet operators and will eventually need to be replaced. As a result, Fitch believes that calendar 2008 U.S. Class 8 unit sales will probably be in the 160,000 to 170,000 unit range, with demand being more heavily weighted towards the second half of the year. Since ArvinMeritor's fiscal year ends Sept. 30, the company should experience a modest volume benefit in the fourth quarter of fiscal 2008. ARM's fiscal 2009 free cash flow should benefit from increased U.S. Class 8 sales volumes due to the implementation of stricter diesel emissions standards beginning in 2010. However, a legislation-induced demand pull-ahead may be muted due to the early introduction of 2010 compliant engine technology and that the new engines and exhaust treatments are not expected to be as costly as the 2007 technology. LVS revenue generation and cost reduction efforts should enable even more improvement in margins for fiscal 2009, supporting the potential for positive free cash flow. CVS Europe operations have experienced higher than expected demand but due to a lack of investment in more flexible operations, ARM did not capitalize on the higher volume. The inefficient European operations contributed to the decline in consolidated EBITDA for fiscal 2007. Fitch expects inefficiencies to continue into at least the first half of fiscal 2008. ARM will also increase capital investment in CVS Europe in the first half of fiscal 2008 to increase operational flexibility. ARM's LVS operations may be impacted by domestic volume declines, although Detroit Three light vehicle sales only account for 9% of total consolidated revenue. Through the past two cycle troughs, domestic manufacturers have reduced inventories by spurring demand with heavy incentives. Unlike the past two cycle downturns, Fitch expects the domestics to be much more aggressive in cutting production in order to better manage inventory levels, in part due to greater flexibility gained in the recent UAW contract. Despite operational difficulties and due in large part to proceeds from the sale of discontinued operations, ArvinMeritor maintains good liquidity, including US$409 million in cash and cash equivalents as of Sept. 30, 2007. With the exception of the undrawn US$700 million revolver which expires in 2011, ARM has no substantial maturities in the next 5 years. Total debt, including outstanding securitizations and factoring but excluding operating leases, declined slightly in fiscal 2007 to US$1,463 million from US$1,500 million despite negative free cash flow during the year of US$252 million (negative US$108 million excluding discontinued operations). ARM was able offset negative free cash flow with US$310 million in gross proceeds from the sale of discontinued operations. The company substantially increased its utilization of European securitizations and factoring during fiscal 2007, after paying off a US$170 million secured term loan and a US$40 million balance under its U.S. securitization program. Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets. ArvinMeritor employs about 29,000 people at more than 120 manufacturing facilities in 25 countries. These countries are: China, India, Japan, Singapore, Thailand, Australia, Venezuela, Brazil, Argentina, Belgium, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Spain, Sweden, Switzerland, United Kingdom, among others. AVENTIS CROPSCIENCE: Creditors' Proofs of Debt Due on Feb. 1 ------------------------------------------------------------ The creditors of Aventis Cropscience China Limited are required to file their proofs of debt by February 1, 2007, for them to be included in the company's dividend distribution. The company commenced liquidation proceedings on December 28, 2007. The company's liquidators are: Ying Hing Chui Chung Miu Yin, Diana Level 28 Three Pacific Place 1 Queen's Road East Hong Kong CATHAY TEXTILE: Commences Liquidation Proceedings ------------------------------------------------- Cathay Textile Corporation Limited commenced liquidation proceedings on January 7, 2008. The company's liquidator is: Yang Sih Yu Samuel of Room 2 1st Floor, Block A Sea View Estate 2-8 Watson Road Hong Kong CHINA EASTERN: Air China Wants “Comprehensive” Tie-Up ----------------------------------------------------- China National Aviation Holding Co., the parent of Air China, will propose a "comprehensive" alliance with China Eastern Airlines Corp. that could include code-sharing, a joint cargo venture and an equity tie-up, Reuters reports, citing a CNAHC official who refused to be named. Reuters source also said that the alliance might also involve a share swap between Air China and China Eastern, instead of CNAC's mere purchase of a stake in China Eastern. According to the report, the official said CNAHC wants to work with China Eastern so that both of them can be stronger and more competitive. "Cooperation does not mean one side would be eaten up by the other. It could be a win-win situation," Reuters quotes the official as saying. Moreover, the official told Reuters that China Eastern would remain "an independent legal entity." As reported by the Troubled Company Reporter-Asia Pacific on Jan. 10, 2008, shareholders of China Eastern rejected a bid by Singapore Airlines to buy a minority stake after CNAHC pledged a higher offer. Specifically, CNAHC vowed to pay at least HK$5.00 a share, or at least 32% more than Singapore Airlines' and Temasek Holding Pte Ltd's HK$3.80 per share, or HK$7.2 billion (US$923 million) in aggregate, bid for a holding in China Eastern. The rejection, the TCRAP stated, paved the way for a possible counterbid for China Eastern by CNAHC. Headquartered in Shanghai, China, China Eastern Airlines Corporation Limited's -- http://www.ce-air.com-- principal activity is operation of domestic and international commercial air transportation. The Group also is involved in the common aircraft industry. Other activities include general aviation, air catering, advertisement, import and export, equipment manufacturing, real estate, hotel business, finance and training. The fleet includes more than 60 large and medium size airplanes, Airbus and Boeing mostly. Its operation centering from Shanghai to the whole People's Republic of China and linking to Asia, Europe, America and Australia. On April 28, 2006, Fitch Ratings downgraded China Eastern's foreign currency and local currency issuer default ratings to B+ from BB-. The outlook on the IDRs is stable. Xinhua Far East China Ratings gave the company a BB+ issuer credit rating. CRUISER ENTERPRISES: Members Meeting Fixed for February 11 ---------------------------------------------------------- The members of Cruiser Enterprises Limited will have their final general meeting on February 11, 2008, at Strada Acquasalata, 5D, Serravalle, in the Republic of San Marino, Central, Hong Kong, to hear the liquidator's report on the company's wind-up proceedings and property disposal. The company's liquidator is Seto Sau Kuen Christine. FAR EAST: Creditors' Proofs of Debt Due on Feb. 11 -------------------------------------------------- The creditors of far East Refractories Limited are required to file their proofs of debt by February 11, 2007, for them to be included in the company's dividend distribution. The company's liquidators are: Thomas Andrew Corkhill Iain Fegurson Bruce 8th Floor, Gloucester Tower The Landmark 15 Queen's Road Central Hong Kong FOCAL_JM: Creditors' Proofs of Debt Due on Feb. 11 -------------------------------------------------- The creditors of Focal_JM Lab Asia Limited are required to file their proofs of debt by February 11, 2008, for them to be included in the company's dividend distribution. The company's liquidator is: Jacques Marie-Paul Suite 2414, Level 24 Two Pacific Place 88 Queensway Hong Kong HOPSON DEVELOPMENT: Moody's Affirms Ba2 Ratings After Land Bid -------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 corporate family rating and senior unsecured debt rating of Hopson Development Holdings Limited. The outlook for both ratings remains stable. The affirmation follows the company's announcement that it has successfully bid for the initial land development of approximately 4.1 square kilometers situated at Houzaiwan, Dayawan Economic and Technology Development Zone, in Guangdong Province, China. The development will entail an aggregate investment of around CNY3 billion and Hopson is expected to complete the process by phases over a period of about 2 years. "The funding requirement at any time will be lower than CNY3 billion as Hopson will receive reimbursements from the municipal government through the sale of parcels of land," says Peter Choy, a Moody's Vice President and Senior Credit Officer, adding, "While the company is expected to raise certain financing for this project, the additional debt will not materially alter its near term credit metrics -- the projected Debt/Cap of around 45-48% remains consistent with the rating." Upon completion of the land development, the municipal government will sell the land in parcels to prospective property developers. Moody's expects Hopson to bid for some of the land to develop its own properties. However, if Hopson funds such land acquisitions aggressively through additional debt, its ratings will come under pressure. Hopson Development Company Holdings Limited is one of the largest property developers in China. Its principal businesses are residential developments in four major cities -- Guangzhou, Beijing, Shanghai and Tianjin -- and their surrounding areas. KEENSEN LIMITED: Appoints New Liquidator ------------------------------------------ The members of Keensen Limited appointed Ying Hing Chui as liquidator for the company. The Liquidator can be reached at: Ying Hing Chui Level 28 Three pacific Place 1 Queen's Road East Hong Kong MAINLINE GLOBAL: Liquidator Quits Post -------------------------------------- On January 11, 2008, Ying Hing Chui and Chung Mui Yin, Diana, stepped down as liquidators for Mainline Global Hong Kong Limited, which is undergoing liquidation. MAXTOR ASIA: Commences Liquidation Proceedings ---------------------------------------------- Maxtor Asia Pacific Limited commenced liquidation proceedings on December 31, 2007. The company's liquidators are: Lai Kar Yan Darach E. Haughey 35th Floor One Pacific Place 88 Queensway Hong Kong OCEAN SCOPE: Appoints New Liquidator ------------------------------------ The members of Ocean Scope Limited appointed Wong Hou Nung, Lawrence, as liquidator for the company. The Liquidator can be reached at: Wong Hou Nung, Lawrence Room 1307-8, Dominion Centre 43-59 Queen's Road East Wanchai, Hong Kong ========= I N D I A ========= BALLARPUR INDUSTRIES: Board to Consider Q2 Results on Jan. 23 ------------------------------------------------------------- Ballarpur Industries Ltd's board of directors will hold a meeting on Jan. 23, to consider the company's unaudited financial results for the second quarter and half year ended Dec. 31, 2007. In the quarter ended Dec. 31, 2006, the company posted a net profit of INR621.5 million on net sales of INR5.51 billion. Headquartered in Ballarpur, India, Ballarpur Industries Limited -- http://www.bilt.com/-- is a paper manufacturer and exporter. BILT has five product groups: coated wood-free, uncoated wood- free, copier, creamwove, and business stationery. There are three types of products in the coated wood-free segment: two side coated paper, two side coated boards, and single side coated products. The company has a presence in all segments of the paper usage spectrum that includes writing and printing paper, industrial paper, and specialty paper. On April 12, 2004, Standard and Poor's Ratings Services gave Ballarpur Industries BB- ratings for both its long-term local and foreign issuer credit. As of Dec. 2, 2007, the company still carry those ratings. BANK OF BARODA: Raises INR1,000 Crore from Bond Issue ----------------------------------------------------- Bank of Baroda informed the Bombay Stock Exchange that its issue of unsecured, non-convertible, redeemable, subordinated upper tier II bonds opened for subscription on Jan. 3, 2008. The bonds, in the nature of promissory notes series VIII with face value of INR10 lacs each, raised INR1,000 crore. The bonds carry a fixed annual coupon of 9.30% and a tenure of 15 years with call option at the end of 10 years. Having received full subscription on the first day itself, Bank of Baroda has decided to exercise the option of early closure of the issue. Headquartered in Vadodara, India, Bank of Baroda -- http://www.bankofbaroda.com/-- is a provider of banking services in India. Bank of Baroda has branches in the Bahamas, Belgium, the Fiji Islands, Mauritius, Republic of South Africa, Seychelles, Singapore, Sultanate of Oman, United Arab Emirates, the United Kingdom, and the United States of America. * * * On July 2007, Standard & Poor's assigned its 'BB' issue rating to Bank of Baroda's US$300 million upper Tier-II subordinated notes due in 2022. Fitch Ratings, on May 9, 2007, assigned 'BB' ratings to Bank of Baroda's proposed unsecured subordinated Upper Tier 2 notes (expected size: US$250 million plus greenshoe option), as well as the hybrid Tier 1 debt to be issued under its USD1.5 billion medium-term notes programme. Fitch said the outlook on all ratings is stable. CABLE & WIRELESS: Resolves Conflict with Union Workers in LatAm --------------------------------------------------------------- The Caribbean Broadcasting Corp. reports that the conflict between Cable & Wireless and the union representing its workers has been resolved, after Prime Minister Owen Arthur brokered an accord between the two parties. CBC relates that Cable & Wireless Prime Minister intervened in the industrial dispute between Cable & Wireless and the union after protests have interrupted most of the company's operations in Barbados for five days. He ordered a meeting with the company and the union at government headquarters. As reported in the Troubled Company Reporter-Latin America on Jan. 8, 2008, Cable & Wireless' workers in Barbados launched demonstrations against the firm after negotiations over wages, retroactive payments and other "protracted issues" failed. Cable & Wireless's head Donald Austin said that the company's offer of 10.5% over two years was made up of 6% in year one and 4.5% in year two across all categories of staff. For some workers, the offer would eventually equate to as high as a 30% wage hike. These employees would benefit from "movement in scales of 4% and a proposed retro payment of around 4% -- translating to an increase of about 15% over two years on an ongoing basis. CBC relates that union general secretary Sir Roy Trotman accused Cable & Wireless of breaching aspects of the collective agreement. Mr. Trotman commented to CBC, "We charge Cable & Wireless with attempting to circumvent the accepted practices. We charge Cable & Wireless with trying to undermine the trade union in the exercise of their loyal functions. And we are telling that the workers of Barbados that we may be calling on you shortly, to demonstrate to all employers in Barbados that neither at Cable & Wireless nor at any other workplace should employers be allowed to disrespect the rights of workers." Prime Minister Arthur told the press, "We have been able to broker a settlement in relation to wages and all outstanding issues [during the meeting]." Mr. Trotman told Anmarie Bailey at The Nation Newspaper, "We looked at about four items. We have agreed that a timetable will be set very slowly to deal with all of the nine or so matters which have caused all of the unrest. We have especially dealt with matters of relations, management to staff, because the Prime Minister himself has been able, from our presentations, to recognize that that is the major underlying difficulty between the management on the one hand and the staff on the other." According to CBC, the settlement will result in a 12.5% salary increase and retroactive payments. Mr. Trotman told CBC that there will be significant dual payment that will be paid out to all workers in hired by the company for the period 1997 to 2007. According to him, the salary settlement is a 2% increase over what Cable & Wireless was refusing to give. "There will be an increase of seven-and-a-half-per cent in year one, which is another one-and-a-half per cent on the company's offer, and then there is a further half per cent in year two," Mr. Trotman explained to The Nation Newspaper. The Nation notes that the issue of bonuses, where some high- level managers received high cash bonuses, was also settled. The demonstrations had a minimal impact on Cable & Wireless' operations, Mr. Austin assured CBC. He explained, "We have been able to maintain all of our major systems. Obviously some individual customers have been impacted and we will get out to them as soon as possible." "We are also going to have, importantly, a discussion on and we are going to develop an incentive program that will cause workers to share in the profitability of the company, so we won't any longer be having situations of one man with œ20 million and others with only promises," Mr. Trotman told The Nation Newspaper. Headquartered in London, Cable & Wireless Plc -- http://www.cw.com/new/-- provides voice, data and IP (Internet Protocol) services to business and residential customers, as well as services to other telecoms carriers, mobile operators and providers of content, applications and Internet services. The company has operations are in the United Kingdom, India, China, the Cayman Islands and the Middle East. * * * In April 2007, in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the corporate families in the Telecommunications, Media and technology sector, Moody's Investors Service confirmed its Ba3 Corporate Family Rating for Cable & Wireless Plc. Moody's also assigned a Ba3 Probability-of-Default rating to the company. * Issuer: Cable & Wireless Plc Projected Debt LGD Loss-Given Debt Issue Rating Rating Default ---------- ------- ------- -------- 4% Senior Unsecured Conv./Exch. Bond/Debenture Due 2010 B1 LGD4 60% GBP200 million 8.75% Senior Unsecured Regular Bond/Debenture Due 2012 B1 LGD4 60% DECCAN AVIATION: To Start Calcutta-Jaipur Flights on Jan. 15 ------------------------------------------------------------ Deccan Aviation Ltd will start servicing daily flights between Calcutta and Jaipur on Jan. 15, 2008, The Telegraph reports. “The new flight between Calcutta and Jaipur will facilitate easy connectivity at affordable fares for corporate travellers and tourists,” the daily quoted Deccan Officiating CEO Ramki Sundaram as saying. As previously reported in the Troubled Company Reporter-Asia Pacific, Deccan's board of directors has unanimously approved a merger of the scheduled airline business undertaking of UB Group's Kingfisher Airlines Ltd into Deccan. The merger calls for Deccan's changing of name to Kingfisher Airlines Ltd, which merged entity will become a subsidiary of UB Holdings. The merger is still subject to statutory approvals including those of the shareholders. Bangalore, India-based Deccan Aviation Limited -- http://www.deccanair.com/-- is a charter aviation company in the private sector. Deccan Aviation provides company charters, tourism, medical evacuation, off-shore logistics and a host of other services. In the financial year ended June 30, 2007, Deccan Aviation reported a net loss of INR4.2 billion, up 23% from the INR3.41- billion loss incurred in FY 2006. EASTMAN KODAK: Earns US$37 Million in 2007 Third Quarter -------------------------------------------------------- Eastman Kodak Company reported net income of US$37.0 million for the quarter ended Sept. 30, 2007, compared with a net loss of US$37.0 million in the same period last year. Sales for the 2007 third quarter totaled US$2.58 billion, a decrease of 1% from US$2.60 billion in the third quarter of 2006. Digital revenue totaled US$1.59 billion, a 12% increase from US$1.42 billion. Traditional revenue totaled US$986.0 million, a 16% decline from US$1.17 billion in the year-ago quarter. The company reported third-quarter earnings from continuing operations of US$29.0 million pre-tax, US$34.0 million after tax, compared with a loss of US$53.0 million pre-tax, US$83.0 million after tax in the year-ago period. This represents an improvement of US$82.0 million pre-tax and US$117.0 million after-tax. Items of net expense impacting comparability in the third quarter of 2007 totaled US$94.0 million after tax. The most significant item was restructuring costs of US$127.0 million before tax and US$96.0 million after tax. In the third quarter of 2006, items of net expense impacting comparability totaled US$137.0 million after tax, primarily reflecting restructuring costs. "I am very pleased with our third-quarter performance, which represents a milestone in the emergence of the new Kodak," said Antonio M. Perez, chairman and chief executive officer, Eastman Kodak Company. "We delivered solid, value-creating digital growth, powered by a 12% increase in digital revenue, as well as expanded gross margins and positive net earnings. This increases my confidence in achieving our full-year goals and positions us well as we enter 2008." The company's third-quarter earnings from continuing operations, before interest, other income, net, and income taxes were US$20.0 million, compared with a loss of US$11.0 million in the year-ago quarter. Gross Profit margin was 26.4% for the quarter, up from 25.1% in the prior year, primarily attributable to lower costs from manufacturing footprint reductions, offset by adverse silver and aluminum costs. Net Cash Generation for the third quarter represented a use of US$95.0 million, compared with positive cash flow of US$151.0 million in the year-ago quarter. This corresponds to net cash provided by operating activities from continuing operations of US$1.0 million for the third quarter, compared with US$237.0 million in the year-ago quarter. The company's debt level stood at US$1.63 billion as of Sept. 30, 2007. This is a US$1.15 billion reduction from the 2006 year-end debt level of US$2.78 billion. Kodak held US$1.85 billion in cash and cash equivalents as of Sept. 30, 2007, an increase of US$745.0 million from the year- ago period. This was primarily the result of proceeds from the company's sale of its Health Group, which was completed in the second quarter of 2007. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed US$12.93 billion in total assets, US$10.27 billion in total liabilities and US$2.66 billion in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26f7 About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Co. (NYSE: EK)-- http://www.kodak.com/-- develops, manufactures, and markets digital and traditional imaging products, services, and solutions to consumers, businesses, the graphic communications market, the entertainment industry, professionals, healthcare providers, and other customers. The company has operations in Argentina, Chile, Denmark, Greece, Jordan, Yemen, Australia, China, India, among others. * * * As reported in the Troubled Company Reporter on Sept. 14, 2007, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Eastman Kodak Co. and removed the ratings from CreditWatch, where they had been placed with negative implications on Aug. 2, 2006. The outlook is negative. HMT LTD: To Consider Third Quarter Results on Jan. 29 ----------------------------------------------------- HMT Ltd's board of directors will consider the company's unaudited results for the third quarter ended Dec. 31, 2007, at a meeting on Jan. 29. In the same quarter in 2006, the company booked a net loss of INR44.9 million on revenues of INR701.3 million. 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. ITI LTD: Names B. P. Gupta as Director-Finance ---------------------------------------------- B. P. Gupta, 57 years old, has taken over as Director-Finance of ITI Ltd. He previously held the position of General Manager – Finance at the Corporate Office of the company. A Honours in B.Com., he qualified as Chartered Accountant in 1976. After several stints in private and public sector companies, Mr. Gupta began his career with ITI as Chief Manager- Finance in 1989. Working in different plants, he gained experience in finance, accounts and audit management, which tempered his post-qualification experience of over 31 years. With his track record in financial management and commercial negotiations, the company believes Mr. Gutpa will have an effective role to play in the turnaround of ITI. As previously reported by the Troubled Company Reporter-Asia Pacific, ITI has just asked the government for a INR2,000-crore fund infusion. The telecom company reportedly will use the funds to help get rid of accumulated losses of INR2,225 crore and to obtain working capital for telecom equipment manufacturing. ITI Limited -- http://www.itiltd-india.com/-- is a telecom company, which manufactures a range of telecom equipment, including switching products; transmission systems, such as satellite communication systems, optical line terminating equipments and digital microwave systems; access products, such as fixed wireless local loop systems and digital local loop carriers; terminal equipment, such as telephones, integrated services digital network products and video conferencing systems; microelectronic products and software; information technology products and telecom products for the defense sector, and other products, including solar power systems and bank mechanizing products. It also provides value- added services, such as shared hub very-small aperture terminal services, and public mobile radio trunked services and turnkey solutions. Its customers include The Department of Telecommunications, defense, railways, oil sector and corporates in India, and certain African and South Asian nations. * * * As reported in the Troubled Company Reporter-Asia Pacific on April 23, 2007, Credit Analysis & Research Ltd. revised the rating assigned to the 'L' series long term bond issue of ITI Limited to CARE D (SO) [Single D (Structured Obligation)] from CARE AAA (SO) [Triple A (Structured Obligation))] with Credit Watch. The rating revision took into account the delay in the interest payment of the above said bond issue. The TCR-AP reported on Nov. 3, 2006, that Fitch Ratings assigned final National ratings of 'D(ind)(SO)' to ITI's INR550 million 'J-1' Series long-term bonds. ITI has incurred losses for at least two consecutive years -- INR4.12 in FY2006-07 and INR4.51 billion in FY2006-06. The company is a sick company as per provisions of India's Sick Industrial Companies Act 1985. JCT ELECTRONICS: Books INR84.3-Mil. Loss in Qtr. Ended Sept. 30 --------------------------------------------------------------- JCT Electronics Ltd recorded a net loss of INR84.3 million in the three months ended Sept. 30, 2007, down 83% from the INR520.4-million loss incurred in the same quarter in 2006. Even with decreased revenues, the net loss narrowed because of the huge slide in interest charges. The company's total revenues decreased 6% to INR811.3 million in the July-Sept. 2007, from the INR864.1 million last year. Operating expenses also slightly decreased to INR863.4 million, bringing the company an operating loss of INR 52.1 million. Interest charges, however, took a plunge to INR8.7 million from the INR349.4 million in the July-Sept. 2006 quarter. A copy of the company's financial results for the quarter ended Sept. 30, 2007, is available for free at: http://ResearchArchives.com/t/s?2701 JCT Electronics Ltd. manufactures color picture and black & white tubes for television sets. The company also manufactures cathode ray tubes and gas discharge tubes. JCT Electronics incurred net losses for at least two consecutive years -- INR1.83 billion in FY2005-06 and INR1.73 billion in FY2006-07. The Troubled Company Reporter-Asia Pacific reported on Jan. 11, 2008, that JCT Electronics has a stockholder's equity deficit of INR50.17 million. ================= I N D O N E S I A ================= AVNET INC: Signs Definitive Pact Acquiring Azzurri Tech ------------------------------------------------------- Avnet Inc. has entered into a definitive agreement to acquire the UK-based distributor Azzurri Technology Ltd. Azzurri is one of Europe's leading design distributors of high technology semiconductors and embedded systems products. The closing of the transaction is subject to customary regulatory approval and other closing conditions. Upon closing, Azzurri will be integrated into Avnet Electronics Marketing EMEA primarily within the Avnet Memec specialist division. Azzurri has been in business for more than ten years and has operations in the UK, Germany, France and Italy. Its annual revenue is approximately US$100 million and it employs about 80 people. Azzurri has established a first class reputation for introducing leading technology products into the European electronics market. Azzurri is focused on a small number of franchised suppliers with the prime objective of assisting customers with the design-in of complex semiconductors and sub- system level solutions. Harley Feldberg, president of Avnet Electronics Marketing, commented, "Adding Azzurri's design and engineering expertise to our European team will enhance Avnet Memec's position as the leading pan-European specialist distributor and will benefit both customers and suppliers alike. The acquisition will add new semiconductor suppliers to Avnet Memec's breadth of product offerings in microprocessors, microcontrollers and analog components and expands our presence in Europe's largest markets." "Design-in distribution with exceptional service to our customers and suppliers is the foundation of our company," said Mike Carlucci, Azzurri's president and CEO. "Avnet Memec has a similar approach to the marketplace and that is why the strategic fit is so strong. Both companies have much to gain from working together and merging them will bring many benefits to employees, suppliers and customers," added Mr. Carlucci. With the addition of Mr. Azzurri, Avnet Memec will add talented employees in several important markets and increase its revenue base over 40%. The combined organization's strength in engineering will be complemented by Avnet's world-class supply chain management and logistics capabilities. The transaction is expected to be immediately accretive to earnings, excluding minimal integration charges, and supports Avnet's long-term return on capital goals. The two organizations share the same market approach, have complementary line cards and put design and engineering expertise at the core of their value proposition for customers and suppliers. Steve Haynes, president of Avnet Memec EMEA stated, "I am enthusiastic about this acquisition, not just because it creates an opportunity to broaden our presence within our customer base, but also because Azzurri is the ideal match to Avnet Memec." About Avnet Inc. Headquartered in Phoenix, Arizona, Avnet, Inc. -- http://www.avnet.com/-- distributes electronic components and computer products, primarily for industrial customers. It has operations in the following countries: Australia, Belgium, China, Germany, Hong Kong, India, Indonesia, Italy, Japan, Malaysia, New Zealand, Philippines, Singapore, and Sweden, Brazil, Mexico and Puerto Rico. * * * Moody's Investors Service affirmed Avnet's Ba1 corporate family long-term debt ratings in March 2007. Moody's said the outlook is positive. BANK LIPPO: CIMB to Disclose Findings From Merger Study ------------------------------------------------------- CIMB group, which is currently conducting a feasibility study on Khazanah Nasional Bhd's proposed merger of its Indonesian banks, PT Bank Niaga and PT Lippo Bank Tbk, expects to disclose results in the first quarter this year, various reports say. Group Chief Executive Datuk Nazir Razak told The Star Online News that details such as the execution process needed to be ironed out. Mr. Razak was quoted by The Edge Daily News as saying, "It shouldn't take too long. We will hear something in terms of the next step we have to take, in the first quarter this year." Mr. Razak did not expect Bank Indonesia to reject the merger proposal. As reported by the Troubled Company Reporter-Asia Pacific on Dec. 19, 2007, Khazanah Nasional is looking into the possibility of merging Lippo Bank and Bank Niaga given the synergy involved, and also to comply with Indonesia's single presence policy. Under Bank Indonesia's single-presence policy, foreign parties cannot own a controlling stake in more than one Indonesian bank and must submit statements of compliance to this rule. Currently, Khazanah has an indirect equity interest of approximately 93% in Bank Lippo, through Santubong Investments BV and Greatville Pte Ltd, and an indirect equity interest of approximately 64% in Bank Niaga through Bumiputra-Commerce Holdings Berhad. Yong Yen Nie of The Edge writes that Mr. Nazir said the banks have very good fit with each other, and they have gone some distance in realizing the synergies between CIMB and Niaga. With Lippo Bank coming into the equation, the prospects are even greater, he added. Mr. Nazir also said, The Star relates, CIMB group was excited about the merger of both banks. In fact, this proposed merger was even contemplated by previous shareholders of the two banks without the single-presence policy, he added. About Bank Lippo Headquartered in Jakarta, Indonesia, PT Lippo Bank Tbk -- http://www.lippobank.co.id/-- offers two product segments: Consumer Products, comprised of personal accounts, debit cards, distribution cards, VIP banking, credit cards, loans, bancassurance, payment services, loyalty programs and safe deposit boxes, and Corporate Products, consisting of LippoKredit, LippoTrade, LippoGiro, LippoDeposit, e-LippoLink and MFTS. The bank is supported by 134 branch offices, 21 sub branch offices, 238 cash offices and four payment service offices nationwide. The Troubled Company Reporter-Asia Pacific reported on Oct. 19, 2007, that Moody's Investors Service raised the foreign currency long-term debt and foreign currency long-term deposit ratings of PT Lippo Bank Tbk. The detailed ratings are: -- The issuer/foreign currency subordinated debt ratings were raised to Ba2/Ba2 from Ba3/Ba3 and foreign currency long-term deposit rating to B1 from B2. -- The Not Prime foreign currency short-term deposit rating and D BFSR were unaffected. On Sept. 11, 2007, Fitch Ratings upgraded the Individual Ratings of PT Bank Lippo Tbk to 'C/D' from 'D. At the same time, the agency upgraded Bank Lippo's National Long-term Rating to 'AA-' from 'A+'. The Outlook remains Stable. All other ratings have been affirmed: * Long-term foreign currency IDR at 'BB-' with Positive Outlook, * Short-term foreign currency Rating at 'B', * Support Rating at 4 and Support Rating Floor at 'B', On July 12, 2007, Standard & Poor's Ratings Services assigned 'B+' long-term and 'B' short-term counterparty credit ratings to Indonesia-base Lippo Bank. The outlook is stable. Standard & Poor's also assigned its 'D' bank fundamental strength rating to the bank. At the same time, Standard & Poor's assigned its 'B-' issue rating to Lippo Bank's US$200 million subordinated notes due in 2016. The differential between the 'B+' counterparty credit rating on Lippo Bank and the 'B-' rating on its subordinated notes reflects the subordinated feature of the notes. FOSTER WHEELER: Subsidiary Bags Supply Contract for UTE CT ---------------------------------------------------------- Foster Wheeler Ltd.'s subsidiary of its Global Power Group has been awarded a contract by the Spanish company UTE CT Mejillones, which is owned by Cobra Instalaciones y Servicios S.A., part of the ACS group., for a 165 MWe (gross megawatt electric) circulating fluidized-bed boiler island to be located at the Andino power plant in Mejillones, in the north of Chile. This is the second unit to be awarded to Foster Wheeler at the Andino power plant. Foster Wheeler has received a full notice to proceed on this contract. The terms of the award were not disclosed, and the contract will be included in the company's bookings for the fourth-quarter of 2007. Foster Wheeler will supply the 165 MWe CFB steam generator, auxiliary equipment and advisory services for erection and commissioning of the boiler island. The boiler will be designed to burn imported bituminous coal and/or petroleum coke, as well as providing the option to burn small amounts of biomass-type fuels. Commercial operation of the new boiler is scheduled for the second half of 2010. "The award of this second unit is further assurance of our customer's confidence in our CFB technology as reliable and environmentally responsible," said Tomas Harju-Jeanty, chief executive officer of Foster Wheeler Energia Oy. About Foster Wheeler Foster Wheeler Ltd. (Nasdaq: FWLT) -- http://www.fwc.com/-- offers a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey. The company has offices in China, India, Indonesia, Malaysia, Singapore, Thailand, and Vietnam. * * * As reported in the Troubled Company Reporter on Dec. 18, 2006, Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to positive from stable. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating and other ratings on the company. The company had about US$217 million of total debt at Sept. 29, 2006. FOSTER WHEELER: Supplying Steam Generators to SINOCHEM ------------------------------------------------------ Foster Wheeler Ltd.'s subsidiaries of its Global Power Group have been awarded a contract for two circulating fluidized-bed -- CFB -- steam generators by SINOCHEM Quanzhou Petrochemical Co. Ltd, a subsidiary of Sinochem Corporation, located in southeast Fujian Province in the People's Republic of China. This CFB project is part of a major residue-processing project by SINOCHEM Quanzhou Petrochemical Co. Ltd. Foster Wheeler has received a full notice to proceed on the engineering and supply of two 75 MWe class (gross megawatt electric) CFB steam generators. The terms of the award were not disclosed, and the contract will be included in the company's bookings for the fourth-quarter of 2007. "Foster Wheeler's ability to provide reliable efficient combustion of petcoke in our CFB technology was key in the selection of our technology by SINOCHEM," said Byron Roth, chief executive officer of Foster Wheeler Power Group Asia. "We are looking forward to a long term, mutually beneficial relationship between Foster Wheeler and SINOCHEM." "We are fully confident in Foster Wheeler's high quality CFB product and the outstanding service they will bring to our refinery," said Mr. Wang Zhongshang, president of SINOCHEM Quanzhou Petrochemical Co. Ltd. "Foster Wheeler's previous work on projects in the petrochemical industry demonstrated the company's expertise and professionalism in completing complex jobs - and was a major factor in our selection of the company to provide the boilers for Quanzhou." The coke-fired CFBs will be designed by Foster Wheeler International Engineering & Consulting (Shanghai) Company Limited. Foster Wheeler Power Machinery Company Limited, which owns a state-of-the-art manufacturing facility in Xinhui, China, will be responsible for the manufacturing. Commercial operation of the new boilers is scheduled for the fourth quarter of 2009. About Foster Wheeler Foster Wheeler Ltd. (Nasdaq: FWLT) -- http://www.fwc.com/-- offers a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey. The company has offices in China, India, Indonesia, Malaysia, Singapore, Thailand, and Vietnam. * * * As reported in the Troubled Company Reporter on Dec. 18, 2006, Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to positive from stable. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating and other ratings on the company. The company had about US$217 million of total debt at Sept. 29, 2006. PERUSAHAAN LISTRIK: Suggests Gov't to Supply Power to 30 Hamlets ---------------------------------------------------------------- PT Perusahaan Listrik Negara's Bali office has suggested that the central government supply power to 30 of the 98 hamlets in Bali, which have yet to enjoy electricity, Antara News reports. PLN Bali Office Spokesman I Wayan Redika told the news agency that the suggestion is expected to be approved by the central government and realized in March this year. According to the report, Mr. Redika said the hamlets are generally remotely located far from company's networks and power relay stations. The power for the hamlets would be supplied in stages based depending on availability of the funding, he added. The cost currently available was enough to supply power to two to five hamlets each year, the report notes. The 98 hamlets, Antara relates, have yet to get electricity supplies because they have divided and expanded, while new settlements have emerged and later developed into new hamlets. About Perusahaan Listrik 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. The Troubled Company Reporter-Asia Pacific reported on June 18, 2007, that Standard & Poor's Ratings Services affirmed its 'BB-' foreign currency rating and 'BB' local currency rating on Indonesia's PT Perusahaan Listrik Negara (Persero). The outlook is stable. At the same time, Standard & Poor's assigned its 'BB-' issue rating to the proposed senior unsecured notes to be issued by PLN's wholly owned subsidiary, Majapahit Holding B.V. PHILIPS VAN: Unit Hires Robert Vignola as Pres. of Calvin Klein --------------------------------------------------------------- Phillips-Van Heusen Corporation's unit Calvin Klein, Inc. appointed Robert Vignola as President of Calvin Klein Collection, a newly created position to support the brand's global business. Based in the company's New York headquarters, Mr. Vignola will be responsible for sales and merchandising and will report to Fabio Fusco, subject to the completion of the proposed transfer to CKI of Confezioni Moda Italia S.r.l., the Trento-based licensee of Calvin Klein Collection men's and women's apparel and accessories. Mr. Fusco is CEO of CMI and would remain with the company after the completion of the transfer. Mr. Fusco would report to Tom Murry, President & COO, Calvin Klein, Inc. PVH announced in December 2007 that it had reached an agreement in principle with The Warnaco Group, Inc. pursuant to which Warnaco would transfer CMI to CKI. The transaction is targeted to close in mid-January 2008 but is not final and is subject to the negotiation and the execution of definitive documentation, which in turn could be subject to closing conditions. "This is a very exciting time for Calvin Klein Collection and the appointment of Robert Vignola is an important step to enhance the structure of the business for global growth and intensified brand development," said Mr. Murry. "Robert is a talented executive who will strengthen the existing Calvin Klein Collection management team and support Fabio Fusco with the level of talent required to build the Calvin Klein Collection brand into a top global luxury business." Mr. Vignola has over 30 years of experience in luxury and designer brand development, as well as extensive licensing, merchandising, and sourcing experience. Most recently he served as the President and CEO of Judith Leiber LLC, where he oversaw the turnaround and revitalization of that luxury accessories company, as well as the Judith Leiber brand's expanded global sales distribution. Prior to that position, Mr. Vignola held senior positions at Burberry, Hartmarx Corporation, GFT Corporation, and Polo Ralph Lauren. About Calvin Klein Calvin Klein, Inc. is one of the leading fashion design and marketing studios in the world. It designs and markets women's and men's designer collection apparel and a range of other products that are manufactured and marketed through an extensive network of licensing agreements and other arrangements worldwide. Brands/lifestyles include Calvin Klein Collection, ck Calvin Klein, Calvin Klein, Calvin Klein Jeans, and Calvin Klein Underwear. Product lines under the various Calvin Klein brands include apparel, accessories, shoes, sleepwear, hosiery, socks, swimwear, belts, eyewear, watches, jewelry, coats, suits and fragrances, as well as products for the home. About Phillips-Van HeUSSen Phillips-Van Heusen Corporation -- http://www.pvh.com/-- owns and markets the Calvin Klein brand worldwide. It is a shirt company that markets a variety of goods under its own brands: Van HeUS$en, Calvin Klein, IZOD, Arrow, Bass and G.H. Bass & Co., Geoffrey Beene, Kenneth Cole New York, Reaction Kenneth Cole, BCBG Max Azria, BCBG Attitude, Sean John, MICHAEL by Michael Kors, Chaps and Donald J. Trump Signature. It has operations in the Asia-Pacific region, including Indonesia, China, Philippines, Malaysia, and Thailand. The Troubled Company Reporter - Asia Pacific reported on Dec. 21, 2007, Moody's Investors Service affirmed Phillips-Van Heusen Corporation's Corporate Family and Probability of Default ratings at Ba2, its senior secured debenture rating at Baa3, and its senior unsecured notes rating at Ba3. At the same time, Moody's revised the outlook to positive from stable. ========= J A P A N ========= ALITALIA SPA: Air France-KLM Chief Holds Preliminary Talks ---------------------------------------------------------- Air France-KLM Group S.A. CEO Jean-Cyril Spinetta has held preliminary meetings with Alitalia S.p.A. executives, government officials and trade unions over its planned acquisition of Italy's 49.9% stake in the national carrier, various reports say. "[I had] very useful meetings," Mr. Spinetta was quoted by Bloomberg News as saying. "We're carrying on the dossier." During the meetings, Mr. Spinetta confirmed plans to: -- acquire 100% of the shares of Alitalia through an exchange offer; -- acquire 100% of Alitalia convertible bonds; and -- immediately inject at least EUR750 million into Alitalia through a capital increase, that will be open to all shareholders and be fully underwritten by Air France. Mr. Spinetta also confirmed plans to cut 1,700 jobs, Reuters relates. The Air France CEO, however, downplayed reports that Italy would hold a 3% stake in the merged Air France-Alitalia after a share- swap deal is completed, Reuters reports. Mr. Spinetta added that acquiring AZ Servizi, Alitalia's ground services and maintenance unit, would be based on "economic and social" considerations, Reuters added. Milan Plans Mr. Spinetta, on a press conference, defended plans to downsize Alitalia's operations in Milan's Malpensa airport, and assured that the national carrier will not abandon its slots in the northern hub, Agenzia Giornalistica Italia reports. "The big majority of Alitalia's losses come from Malpensa," Mr. Spinetta was quoted by Reuters as saying. "Continuing to ignore this fact would bring about the end of Alitalia." Mr. Spinetta revealed that should the French carrier acquire 100% of Alitalia shares, Air France would list itself in the Milan bourse. Renata Polverini, head of the UGL labor union, said Mr. Spinetta showed "flexibility" on the issue of downscaling Milan operations and AZ Servizi plans, the airline's ground services and maintenance unit, Bloomberg News says. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes. The Italian government owns 49.9% of Alitalia. The company has operations in Argentina and Japan. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, and EUR625.6 million in 2006. Italian Transport Minister Alessandro Bianchi has warned that Alitalia may file for bankruptcy if the current attempt to sell the government's 49.9% stake fails. BOSTON SCIENTIFIC: S&P Ratings Unmoved by Affirmed Court Ruling --------------------------------------------------------------- Boston Scientific Corp. announced that the Court of Appeals for the Federal Circuit affirmed a District Court ruling that found the NIR stent infringed one claim of a patent owned by Johnson & Johnson. Standard & Poor's Ratings Services' says that this does not affect its ratings or outlook for Boston Scientific. Boston Scientific's corporate credit rating is rated 'BB+' by S&P with a negative outlook. The District Court must now rule on Johnson & Johnson's request for the reinstatement of damages of US$324 million. Also, the company has not indicated that it will appeal this decision, but noted that the District court may need to revisit the issue of validity in light of a revised claim construction. As a result, the amount and timing of a potential payment by Boston Scientific are unknown. To some degree, the financial uncertainty of litigation is factored into the rating. Boston Scientific, like many of its peers, is involved in several patent and product liability lawsuits. The company has both initiated litigation and been subject to challenges by other companies, and such proceedings can be protracted. Boston Scientific continues to make progress in reducing its debt burden; adjusted debt to EBITDA declined to 3.8x for the 12 months ended Sept. 30, 2007, from 4.1x at the end of the second quarter of 2007. Cash was US$1.2 billion at the end of the second quarter, and proceeds from recently announced asset divestitures should provide the means for further debt reduction. Headquartered in Natick, Massachusetts, Boston Scientific Corporation (NYSE: BSX) -- http://www.bostonscientific.com/-- develops, manufactures and markets medical devices used in a broad range of interventional medical specialties. The company has offices in Argentina, Chile, France, Germany, and Japan, among others. * * * As reported in the Troubled Company Reporter-Latin America on Oct. 24, 2007, Standard & Poor's Ratings Services affirmed its ratings on Boston Scientific Corp., including the 'BB+' corporate credit rating, and removed them from CreditWatch, where they were placed with negative implications Aug. 3, 2007. S&P said the rating outlook is negative. DELPHI CORP: S&P Expects to Put B Rating After Chapter 11 Exit -------------------------------------------------------------- Standard & Poor's Ratings Services expects to assign its 'B' corporate credit rating to Troy, Michigan-based automotive supplier Delphi Corp. upon the company's emergence from Chapter 11 bankruptcy protection, which may occur by the end of the first quarter of 2008. S&P expects the outlook to be negative. In addition, Standard & Poor's expects to assign these issue-level ratings: -- A 'B+' issue rating (one notch above the corporate credit rating), and '2' recovery rating to the company's proposed US$3.7 billion senior secured first-lien term loan; and -- A 'B-' issue rating (one notch below the corporate credit rating), and '5' recovery rating to the company's proposed US$825 million senior secured second-lien term loan. The expected ratings are based upon preliminary terms and conditions and assume successful placement of the loans as represented to S&P. Any changes to the terms of the loans prior to placement may result in different ratings. In addition, the expected ratings are subject to confirmation and substantial consummation of Delphi's plan of reorganization, and to S&P's receipt and satisfactory review of final documentation. The expected ratings reflect Delphi's highly leveraged financial risk profile, based on poor profitability and near-term negative cash flow in North America despite substantial cost improvements obtained in the company's reorganization. The ratings also reflect Delphi's vulnerable business risk profile as an automotive supplier that still depends highly on the very difficult North American market in general, and on former parent General Motors Corp. (GM; B/Stable/B-3) for sales as well as ongoing operational support. Pro forma for the proposed exit financings and emergence from bankruptcy, Delphi would have total debt of US$5.35 billion, or a little more than US$8 billion, including Standard & Poor's adjustments for underfunded postretirement benefits and the present value of operating leases. In S&P's debt ratio calculations, S&P also treated as debt Delphi's proposed US$1.1 billion of junior convertible preferred equity. This preferred equity, which GM will hold after emergence, has no dividend and minimal voting rights-- characteristics that leads S&P to view it as a temporary piece of Delphi's capital structure. Although this equity has no maturity and could be replaced without an increase in Delphi's debt (for example, if GM converts it into common equity or if a third party purchases it), S&P believes it is also possible that Delphi could raise debt in the future and use proceeds to repurchase the junior preferred--in effect, reproducing the capital structure under an earlier version of Delphi's plan of reorganization, before weakness in the credit markets forced a reduction in planned emergence debt levels. S&P has not treated as debt the proposed US$800 million in Series A and Series B convertible preferred equity, to be held by Appaloosa Management L.P. and other plan investors after emergence, because S&P consider these tranches to be more permanent in nature. Delphi's leverage will remain high after emergence, with adjusted debt to expected 2008 EBITDA of about 6.5x. This calculation excludes restructuring costs, but incorporates various transactions that lower adjusted leverage and that will take place soon after emergence. These transactions include Delphi's payment of a US$1.2 billion "catch-up" contribution to its worldwide pension plans, and the transfer of US$1.5 billion in net pension liabilities to GM in exchange for a US$1.5 billion cash payment to the same. Excluding the junior preferred equity in S&P's ratio calculations, pro forma 2008 leverage would be a little less than 6x. "Following emergence, we would characterize Delphi's business risk profile as vulnerable," said Standard & Poor's credit analyst Gregg Lemos Stein. "Delphi has made significant strides in shedding burdensome legacy costs in North America and in transforming the company's mix of businesses during bankruptcy. Nevertheless, customer pricing pressure and competition are severe, and production volumes are likely to remain volatile-- especially in North America, where vehicle demand has been sluggish and the outlook remains clouded amid increasing signs of macroeconomic weakness." Other steps Delphi has taken, or is in the process of taking, to address its cost structure include: -- Dramatically reducing its U.S. hourly work force to about 17,000 as of the end of 2007 from nearly 35,000 prior to bankruptcy via asset sales and attrition programs that GM partly subsidizes. Additional planned asset sales will result in further U.S. headcount reductions over the next few years. -- Significantly reducing labor costs for remaining U.S. hourly workers (about US$27 per hour plus benefits to start, but increasing over time) in exchange for lump-sum payments, also subsidized by GM. -- Selling or closing 31 of the 39 U.S. manufacturing sites in operation as of the bankruptcy filing, plus additional non-U.S. plants mainly in higher-cost European locations. -- Transferring virtually all of its U.S. hourly other postemployment benefit liabilities to GM soon after emergence, reducing liabilities by more than US$8 billion. -- Freezing its U.S. defined-benefit pension plans as of emergence and replacing them with a defined-contribution plan. In addition to these items, Delphi will also receive from GM ongoing cash payments that will reduce Delphi's cost for remaining United Auto Workers (UAW) employees to about US$26 per hour, including benefits. The UAW accounts for a majority of Delphi's U.S. work force. GM also has agreed to support noncore manufacturing sites so that they are cash flow neutral to Delphi prior to their sale or closure. Despite the magnitude of these cost-cutting initiatives and the exit from weaker product segments, S&P expects profitability to return to only acceptable levels by the end of the 2008 at the earliest. S&P expects EBITDA margin, excluding restructuring expense, to improve to about 8% of sales in 2008, compared with less than 2% in 2007. Margins should be higher in Europe and Asia-Pacific, which account for a growing minority share of Delphi's sales (about 37% and 15%, respectively, based on expected 2008 revenues and excluding noncontinuing businesses). However, this won't be enough to offset weak margins in North America, which represents about 44% of projected 2008 revenues. South America accounts for the remaining 4%. Customer diversity has improved, but GM exposure remains a risk factor. Delphi expects GM to account for about 30% of sales in 2008, excluding noncontinuing businesses. Prior to Delphi's bankruptcy in 2005, this figure was about 50%. S&P expects Delphi to continue to gradually diversify its customer base. However, further market share losses or sudden production cuts by GM would still pressure Delphi's results, potentially negating the future cost savings Delphi aims to achieve in areas such as administrative overhead and materials purchasing. After emergence, continued cash usage in North America will challenge Delphi's liquidity. Standard & Poor's expects free cash flow from global operations to be negative in 2008, excluding a series of transactions with GM following emergence and the US$1.2 billion catch-up pension contribution. However, S&P expects borrowing availability will be sufficient to fund expected cash usage and ongoing restructurings. An unrated US$1.6 billion asset-based lending (ABL) revolving credit facility will have about US$1.4 billion of borrowing availability after anticipated borrowings and outstanding-but- undrawn LOCs are taken into account. Governing the ABL is a borrowing base calculation, under which GM accounts receivable can account for no more than 25% of eligible accounts receivable and inventory, or 20% beginning in 2010. Therefore, a GM production decline would not severely reduce ABL borrowing availability. Cash balances after the post-emergence transactions will be about US$800 million, but only about US$100 million will be in the U.S., where cash usage is greatest. The cash costs of Delphi's ongoing restructuring efforts could total nearly US$500 million in 2008. Delphi plans to make additional pension contributions for the next several years, on top of the US$1.2 billion catch-up contribution, in an effort to bring its U.S. plans to fully funded status. However, these should be manageable, averaging about US$150 million per year, with some latitude as to timing. Delphi's proposed exit financings include minimal maturities through the end of the decade. As with most automotive original equipment suppliers, working capital needs are highest in the middle of the calendar year because of typical seasonal production patterns, and this results in weaker cash flow in the first and second quarters. S&P expects Delphi's cash flow to benefit from improved terms, with its suppliers following emergence from bankruptcy, potentially offsetting its cash usage in early 2008. However, S&P remains concerned about cash flow prospects in the U.S. over the longer term. Standard & Poor's expects to rate Delphi's proposed US$3.7 billion first-lien senior secured term loan 'B+', one notch higher than the corporate credit rating. This and the expected recovery rating of '2' indicate that lenders can expect substantial (70%-90%) recovery in the event of a payment default or bankruptcy. Delphi's proposed US$825 million second-lien secured term loan is expected to be rated 'B-', one notch lower than the company's corporate credit rating. This and the expected recovery rating of '5' indicates that lenders can expect modest (10%-30%) recovery. S&P expects the outlook to be negative, reflecting Delphi's cash use in North America, ongoing restructuring needs, and the uncertain outlook for vehicle demand in the U.S. in 2008. S&P's expected ratings assume that Delphi will continue to make some progress on its cost structure and profitability, enabling it to reduce leverage, including Standard & Poor's adjustments, to 6x or less over time. S&P could lower the ratings if overall leverage or negative cash flow in North America failed to improve, or if liquidity were to diminish. On the other hand, S&P could revise the outlook to stable, perhaps by the end of 2008, if Delphi demonstrates positive and sustainable cash flow for debt reduction, enabling it to reduce leverage to significantly less than 6x, including S&P's adjustments. S&P is unlikely to upgrade the company or revise the outlook to positive, given the current challenges facing the North American auto supplier industry and sluggish vehicle demand. GOODWILL GROUP: Ministry Halts Operations Due to Unlawful System ---------------------------------------------------------------- Goodwill Group Inc. was ordered by the Health, Labor and Welfare Ministry to suspend operations due to a series of law violations involving the dispatch of temporary workers to jobs they