T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, January 17, 2008, Vol. 11, No. 12 Headlines A U S T R A L I A ARTMILL DISTRIBUTORS: Liquidators Present Wind-Up Report CENTRO PROPERTIES: Former Chief Refuses to Admit Mistakes EVAN STAFFORD: Commences Liquidation Proceedings FEDERATED STEVEDORES: Members Receive Liquidation Report FIRE ENGINEERING: Liquidators Present Wind-Up Report FORD MOTOR: Appoints Mr. Osborne as New President of AU Unit FRESHMARK PTY: Members Hear Liquidation Report KENDLE INT'L: Hires Philip Davies as Phase I Vice President LAFAYETTE MINING: To File Petition for Rehab, Not Bankruptcy MALLEYS TRANSPORT: Members Receive Wind-Up Report MARTIN SHIRLEY: Liquidators Give Wind-Up Report NIPPON MANGANESE: Placed Under Voluntary Liquidation PACK-TAINERS RAIL: Members Receive Wind-Up Report TEREX CORP: Inks Acquisition Deal with ASV for US$488 Million THE COMPLETE TREE: Commences Liquidation Proceedings TOLL RELOCATIONS: Holds Meeting for Members URS CORP: EG&G Division Bags Air Force Contract for US$267 Mil. W. & M. MEAT: Liquidators Present Wind-Up Report C H I N A , H O N G K O N G & T A I W A N BEHAVIOR TECH: Sales Reach TWD7.91 Billion in 2007 CHINA EASTERN: Says No Further Comment on Air China Tie-Up CONCORD SECURITIES: Fitch Upgrades Long-Term Rating to BB+ EMI GROUP: Terra Firma Outlines Restructuring Plan JIANGXI COPPER: Will Purchase Parent's Assets to Boost Profit LEALEA ENTERPRISE: December Sales Rise 53% to TWD823.03 Million PACCO TECH: December 2007 Sales Fall 99.83% PETROLEOS DE VENEZUELA: Shuts Down Amuay Plant QUANTA COMPUTER: Expects to Sell 40 Million Laptops in 2008 RITEK CORP: Sales Hit TWD18.81 Billion in 2007 SHIHLIN PAPER: 2007 Sales Total TWD1.78 Billion SHIMAO PROPERTY: Moody's Revises Rating Outlook to Negative VE WONG: December 2007 Sales Fall 6.42% I N D I A INDUSTRIAL DEV'T BANK: To Propose ESOP Scheme, Works on Details ESSAR OIL: Unit Strikes Deal to Buy 50% in Kenya Petroleum JENSON & NICHOLSON: Posts INR23-Mil. Loss in Qtr. Ended Sept. 30 TATA MOTORS: Nano Will Bring Company to Top, Research Firm Says TATA MOTORS: Eyes Testing Nano in China & Other Markets WESTERN INDIA: Board to Consider Preferential Issue on Jan. 29 I N D O N E S I A ALCATEL-LUCENT: Argentine Unit's Revenues Rose Up to 15% in 2007 ANEKA TAMBANG: Upgrades Corporate Family Rating to Ba3 ARPENI PRATAMA: To Issue IDR750 Billion Bonds in Early March EXCELCOMINDO PRATAMA: 40 Firms Interested to Buy Stake in Unit PERUSAHAAN LISTRIK: Secures US$1.9-BB Loan for Five Power Plants PERUSAHAAN LISTRIK: Signs EPC Contract to Build Four Plants J A P A N DELPHI CORP: Moody's Assigns Ratings After Bankruptcy Emergence DELPHI CORP: S&P Expects to Put B Rating After Chapter 11 Exit DELPHI CORP: Commences Exit Financing Syndication DELPHI CORP: US Trustee Balks at Panel's Exit Loan Participation FIDELITY NAT'L: To Announce 2007 Financial Reports on Feb. 14 FORD MOTOR: Tata May Tap Ford Exec. to Head Two Luxury Brands HARMAN INTERNATIONAL: Amends Fiscal Year 2008 Earnings Guidance IHI CORP: Releases Corrected Financial Results for Q1 of FY2008 IHI CORP: Net Loss for First Half of FY08 Totals JPY37.3 Billion JAPAN AIRLINES: May See Operating Profit of JPY48BB for FY08 NIPPON PAPER: Unit Strengthens Alliance with Kimberly-Clark * New Law to Replace Rehabilitation Law, Moody's Says * Regional Banks' Net Profit Up 2% for 1H of FY07, S&P Says K O R E A FRESH DEL MONTE: John Inserra to Quit as Chief Fin'l Officer HANAROTELECOM: Expects Over KRW1.8 Trillion in Sales for 2007 HYNIX: Creditors Advise Firm to Begin US$4-Bil. Stake Sale in 1Q M A L A Y S I A OCI BERHAD: Ernst & Young Raises Going Concern Doubt TALAM CORP: Aims to Reduce Debts to MYR300 Mil. Through Revamp N E W Z E A L A N D ADVERTISING ADVISORY: Appoints Tay Wilson as Liquidator AUTO SUPREME: Taps Fisk and Sanson as Liquidators AUTOPAC RENTALS: Creditors' Proofs of Debt Due on February 29 CONTACT CONTRACTS: Undergoes Liquidation Proceedings HAWKES BAY: Commences Liquidation Proceedings IBS GROUP: Appoints Fatupaito and Fisk as Liquidators MARFORD DEVELOPMENTS: Court to Hear Wind-Up Petition on Jan. 22 MILLER INVESTMENT: Fixes Jan. 24 as Last Day to File Claims PAKURANGA EARTHMOVERS: Fixes Feb. 10 as Last Day to File Claims PLIMMERTON CAFE: Appoints Fisk and Sanson as Liquidators ROSH HOLDINGS: Fixes Jan. 25 as Last Day to File Proofs of Debt WVC 2004: Subject to CIR's Wind-Up Petition P H I L I P P I N E S EXPORT AND INDUSTRY: Changes Stock Trading Symbol to "EIBA" FIRST PHILIPPINE: Lopez Offers to Buy 7.979 Mil. Common Shares MANILA ELECTRIC: Lopez Firm Reiterates Interest In Gov't Stake PHILCOMSAT HOLDINGS: Board Elects New Members of Exec. Committee S I N G A P O R E CLP ENERGY: Creditors' Proofs of Debt Due on February 11 STATS CHIPPAC: Intends to Undertake Capital Reduction WELLNESS MEDIA: Court to Hear Wind-Up Petition on January 18 ZHONGGUO JILONG: Creditors' Meeting Slated for January 31 T H A I L A N D KRUNG THAI: Expects 6% Growth in Loans for 2008 NFC FERTILIZER: Court to Hear Rehab Petition on February 8 - - - - - - - - ================= A U S T R A L I A ================= ARTMILL DISTRIBUTORS: Liquidators Present Wind-Up Report -------------------------------------------------------- The members of Artmill Distributors Pty Ltd met on January 11, 2008, and received a report by David Clement Pratt and Stephen Graham Longley, the company's liquidators, regarding Artmill's wind-up proceedings and property disposal. The Liquidators can be reached at: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank, Victoria 3006 Australia About Artmill Distributors Artmill Distributors Pty Ltd is a distributor of non-durable goods. The company is located at Newcastle, in New South Wales, Australia. CENTRO PROPERTIES: Former Chief Refuses to Admit Mistakes --------------------------------------------------------- Centro Property Group's former chief executive officer, Andrew Scott, was defiant about his role in the company's debacle when he talked about his resignation, writes Miriam Steffens for The Sydney Morning Herald. As reported by the Troubled Company Reporter - Asia Pacific on Jan. 16, 2007, Mr. Scott stepped down from his post as CEO and will be replaced by Glenn Rufrano, who heads Centro's business in the United States. According to Ms. Steffens, Mr. Scott, while he may have been forced to resign, was not about to admit mistakes. Reading a prepared statement over the phone, SMH relates that Mr. Scott has "stepped aside" for Centro's and his own good. Mr. Scott added that he resigned "without any sense of guilt or belief" that he has failed the company. SMH further quotes Mr. Scott as saying, "Unfortunately circumstances have placed Centro in a difficult position from which I believe it will recover." Centro Properties Group -- http://www.centro.com.au/-- is a Melbourne, Australia-based company that comprises the operations of Centro Property Trust and its entities, which are engaged in property investment, property management, property development and funds management. The Company operates in two business segments: property ownership business and services business. The Company derives income from retail property rentals of shopping center space to retailers across Australasia and the United States. It also derives income from its retail property investments in listed and unlisted entities. Its services business activities include incorporating funds management, property management and development and leasing. During the fiscal year ended June 30, 2007, the Company acquired New Plan Excel Realty Trust, Heritage Property Investment Trust and Galileo Funds Management, as well as assumed full ownership of its United States management operations. The Troubled Company Reporter-Asia Pacific reported on Jan. 4, 2008, that Standard & Poor's Ratings Services lowered its issuer credit, senior-unsecured debt and preferred stock ratings to 'CCC+' with negative implications reflecting the potential of the group's assets to be sold in softening market conditions, particularly in the U.S. EVAN STAFFORD: Commences Liquidation Proceedings ------------------------------------------------ At an extraordinary general meeting held on December 3, 2007, the members of Evan Stafford & Associates resolved to voluntarily wind up the company's operations. Victor Raymond Dye and Roger Darren Grant were then appointed as liquidators. The Liquidators can be reached at: Victor Raymond Dye Roger Darren Grant Dye & Co. Pty Ltd Chartered Accountants 165 Camberwell Road Hawthorn East, Victoria 3123 Australia About Evan Stafford Evan Stafford & Associates P/L operates holding companies. The company is located at Gardenvale, in Victoria, Australia. FEDERATED STEVEDORES: Members Receive Liquidation Report -------------------------------------------------------- The members of Federated Stevedores Darwin Pty Limited met on January 11, 2008, and heard the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank, Victoria 3006 Australia About Federated Stevedores Federated Stevedores Darwin Pty Limited is engaged in the business of marine cargo handling. The company is located at Darwin, in NT, Australia. FIRE ENGINEERING: Liquidators Present Wind-Up Report ---------------------------------------------------- The members of Fire Engineering Pty Limited met on January 11, 2008, and received a report by David Clement Pratt and Stephen Graham Longley, the company's liquidators, regarding Fire Engineering's wind-up proceedings and property disposal. The Liquidators can be reached at: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank, Victoria 3006 Australia About Fire Engineering Fire Engineering Pty Limited provides business services. The company is located at Sydney, in New South Wales, Australia. FORD MOTOR: Appoints Mr. Osborne as New President of AU Unit ---------------------------------------------------------------- Ford Motor Australia appoints a new president as it moves to play a bigger role in the automaker's global operations, the Australian Associated Press reports. According to the report, Bill Osborne, 47, who is currently the chief executive officer of the Ford Motor Company in Canada, will take over the post as president next month. Former Australia chief Tom Gorman, who has led the company for almost four years, is leaving the company to take up other business opportunities, relates AAP. The change comes following one of Ford's most turbulent years in Australia, which included a decision to close its engine plant in Geelong in 2010, a move that would cut 600 jobs, relates AAP. Ford believes its decision to close the Geelong facility will allow it to improve efficiencies and cut costs as it replaces the locally made engine with one sourced from the United States. The Geelong plant closure, states AAP, was prompted by a falling demand for large cars in Australia due to rising cost of fuel. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. FRESHMARK PTY: Members Hear Liquidation Report ---------------------------------------------- The members of Freshmark Pty Ltd met on January 11, 2008, and heard the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank, Victoria 3006 Australia About Freshmark Pty Freshmark Pty Ltd is involved in the trucking business, except local. The company is located at West Melbourne, in Victoria, Australia. KENDLE INT'L: Hires Philip Davies as Phase I Vice President ----------------------------------------------------------- Kendle International Inc. has appointed Philip J.W. Davies to the position of Vice President of Phase I. Mr. Davies will provide global leadership to strengthen and grow the company's Phase I business, which includes a Clinical Pharmacology Unit in The Netherlands and a bioequivalence unit in West Virginia, and will focus on expanding Phase I capabilities globally. Mr. Davies will be based in Kendle's Cincinnati headquarters and will report directly to Chairperson and Chief Executive Officer, Candace Kendle, PharmD. "Phase I is a rapidly growing area of opportunity and is an integral part of Kendle's business plan, with the market expected to grow between 13.4 and 16 percent annually through 2010," said Dr. Kendle. "I am pleased to welcome Phil to this key leadership role as Kendle focuses on the strategic expansion of our early stage capabilities to meet our customers' needs." Mr. Davies brings more than two decades of pharmacology expertise to this position. He joins Kendle from Eli Lilly and Company where he served most recently as Director of Global Exploratory and Program Phase Medical Operations. He has been with Eli Lilly since 2001, serving in multiple roles of increasing responsibility, including Director, Global Exploratory Medicine Operations; Director, Global Clinical Pharmacology Operations; and Director, United States Clinical Pharmacology Operations. Prior to Eli Lilly, Mr. Davies served as Director of Kendle's Clinical Pharmacology Unit in The Netherlands and previously held Clinical Pharmacology roles in Germany and the UK. About Kendle Based in Cincinnati, Kendle International Inc. (Nasdaq: KNDL) -- http://www.kendle.com/-- is a global clinical research organization and provides Phase II-IV clinical development services worldwide. The company's global clinical development business is focused on five regions: North America; Europe; Asia/Pacific, including Australia; Africa; and Latin America, including Brazil. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 14, 2007, Standard & Poor's Rating Services has revised its outlook on Kendle International Inc. to positive from stable. S&P also revised its issue rating on the company's amended US$53.5 million revolver to 'BB' with a recovery rating of '1', indicating the expectation of very high (90%-100%) recovery of principal in the event of default. At the same time, S&P affirmed all existing ratings, including its 'B+' corporate credit rating, on the company. LAFAYETTE MINING: To File Petition for Rehab, Not Bankruptcy ------------------------------------------------------------ Lafayette Mining Ltd. said that its Rapu Rapu Group is filing a petition for rehabilitation, not bankruptcy as reported by the media, The Philippine News Agency reports. According to the report, legal counsel of Lafayette Philippines, Bayani Agabin, explains that rehabilitation means operations will continue and people would remain employed. Bankruptcy, Mr. Agabin points out, "would mean mining operations stop, people would be laid off and the remaining assets sold." Mr. Agabin clarifies this matter as news broke out that the firm has declared bankruptcy, says the report. Mr. Agabin further clarifies that the Rapu Rapu project mine is not closing down and "is definitely not bankrupt, and simply needs time to get back on its feet by being allowed to suspend payment of its present obligations," relates PNA. Carlos G. Dominguez, chairman and president of Lafayette Phils., said the local unit will file a petition for rehabilitation so it can continue normal operations. The petition, states the report, is expected to result in a court order instructing the group's present creditors and suppliers to continue their services and transactions with the local companies for as long as they are paid on cash basis. PNA adds that under rehab protection, payment for existing debts will be suspended until the court has approved a rehabilitation plan that will fairly settle all outstanding debts and ensure the continued operations of the company. About Lafayette Mining Lafayette Mining Philippines, Incorporated, is a subsidiary of Australian firm Lafayette Mining, Incorporated -- http://www.lafayettemining.com/-- which has been listed on the Australian Stock Exchange since August 1997. Lafayette Philippines is currently developing a polymetallic project involving copper, gold, zinc and silver on the Island of Rapu- Rapu in the Philippines. The TCR-AP's "Large Companies with Insolvent Balance Sheets" column on December 14, 2007, reflected Lafayette Mining Limited as having US$190.86 million equity deficit, on total assets of US$105.24 million. MALLEYS TRANSPORT: Members Receive Wind-Up Report ------------------------------------------------- The members of Malleys Transport Pty Ltd met on January 11, 2008, and heard the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank, Victoria 3006 Australia About Malleys Transport Malleys Transport Pty Ltd operates non-classifiable establishments. The company is located at Tully, in Queensland, Australia. MARTIN SHIRLEY: Liquidators Give Wind-Up Report ----------------------------------------------- The members of Martin Shirley & Associates Pty Ltd met on January 11, 2008, and received a report by David Clement Pratt and Stephen Graham Longley, the company's liquidators, regarding Martin Shirley's wind-up proceedings and property disposal. The Liquidators can be reached at: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank, Victoria 3006 Australia About Martin Shirley Martin Shirley & Associates Pty Ltd is involved with freight transportation arrangement. The company is located at Yarraville, in Victoria, Australia. NIPPON MANGANESE: Placed Under Voluntary Liquidation ---------------------------------------------------- At an extraordinary general meeting held on November 28, 2007, the members of Nippon Manganese Sales Pty Ltd resolved to voluntarily wind up the company's operations. John Georgakis of Ernst & Young was then appointed as liquidator. The Liquidator can be reached at: John Georgakis Ernst & Young 8 Exhibition Street, Level 26 Melbourne, Victoria 3000 Australia Telephone:(03) 9288 8000 About Nippon Manganese Nippon Manganese Sales Pty Ltd provides management consulting services. The company is located at Melbourne, in Victoria, Australia. PACK-TAINERS RAIL: Members Receive Wind-Up Report ------------------------------------------------- On January 11, 2008, the members of Pack-Tainers Rail Services Pty Ltd had a meeting and received the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank, Victoria 3006 Australia About Pack-Tainers Pack-Tainers Rail Services Pty Ltd operates non-classifiable establishments. The company is located at Sydney, in New South Wales, Australia. TEREX CORP: Inks Acquisition Deal with ASV for US$488 Million ------------------------------------------------------------- Terex Corporation has reached a definitive agreement to acquire A.S.V. Inc. through a tender offer followed by a merger. The transaction is valued at approximately US$488 million, or US$18 per fully diluted share of ASV common stock, and is subject to the valid tender of a majority of ASV's fully diluted common shares, regulatory approvals and other customary conditions. Terex expects the transaction to close by the end of the first quarter of 2008. "ASV is a leader in compact track loader technology and with the global reach of Terex, we see tremendous opportunity for expanding ASV product sales," said Ronald M. DeFeo, Terex Chairman and Chief Executive Officer. "The ASV acquisition is an excellent strategic and cultural fit and provides a great addition to our product offerings as Terex continues to grow as a global construction equipment manufacturer. From a financial perspective, we expect that ASV will add approximately $220-250 million in sales on a 2008 full-year basis and we are confident that this acquisition will enhance future earnings growth potential for Terex." ASV compact track loaders feature a patent-protected undercarriage and exert one-tenth the ground pressure of a skid steer loader, resulting in much less ground or turf damage during work. In addition, compact track loaders offer increased traction and greater stability. ASV compact track loaders will join an existing Terex compact equipment range of backhoe- loaders, mini excavators, compact wheel loaders, site dumpers, compaction rollers, light towers, generators and telehandlers. "This combination with Terex is a perfect fit for ASV," said Richard A. Benson, Chairman and CEO of ASV. "We gain access to the resources and know-how of a much larger company with a very impressive global footprint. ASV will have access to a broader product line and our production facilities could benefit significantly from the incremental volume of Terex machines. The timetable for meeting ASV's strategic priorities is accelerated considerably by the merger, which is a big plus for employees, dealers and the communities in which we do business. Caterpillar Inc. (NYSE:CAT) a large ASV customer and owner of 23.5% of ASV shares, has indicated its support for the merger." "We are truly excited to welcome ASV, its team members and distributors to the Terex Construction family," said Robert Isaman, President, Terex Construction. "There is no question that our combination with ASV represents a great step forward for both companies and that our customers in the construction, landscaping and homeowners with acreage segments will be the ultimate beneficiaries of our expanded product offerings." About ASV ASV, Inc. -- http://www.asvi.com/-- designs, manufactures and sells rubber track machines and related components, accessories, and attachments. Its purpose-built chassis and patented rubber track undercarriage technology are unique and lead all rubber track loaders in innovation and performance. ASV products are able to traverse nearly any terrain with minimal damage to the ground, making them effective in markets such as construction, landscaping, forestry and agriculture. ASV's wholly owned subsidiary Loegering Mfg., Inc. designs, manufactures and sells traction products and attachments for the skid-steer industry. About Terex Corporation Headquartered in Westport, Connecticut, Terex Corporation (NYSE:TEX) - http://www.terex.com/-- manufactures a broad range of equipment for use in various industries, including the construction, infrastructure, quarrying, surface mining, shipping, transportation, refining, and utility industries. Terex offers a complete line of financial products and services to assist in the acquisition of Terex equipment through Terex Financial Services. The company operates in five business segments: Aerial Work Platforms, Construction, Cranes, Materials Processing & Mining, and Roadbuilding, Utility Products and Other. The company has operations in Australia, Brazil, China, Japan, Germany, United Kingdom, among others. * * * In August 2007, Moody's placed the company's long-term corporate family rating and probability of default rating at Ba2, bank loan debt rating at Ba1, and senior subordinate rating at Ba3. These ratings still hold to date. Moody's said the outlook is stable. Standard & Poor's placed the company's long-term foreign and local issuer credits at BB, which still hold to date. S&P said the rating's outlook is stable. THE COMPLETE TREE: Commences Liquidation Proceedings ---------------------------------------------------- During a general meeting held on December 3, 2007, the members of The Complete Tree & Garden Company Pty Ltd resolved to voluntarily liquidate the company's business. Victor Raymond Dye and Roger Darren Grant were appointed as liquidators. The Liquidators can be reached at: Victor Raymond Dye Roger Darren Grant Dye & Co. Pty Ltd Chartered Accountants 165 Camberwell Road Hawthorn East, Victoria 3123 Australia About The Complete Tree The Complete Tree & Garden Company Pty Ltd is a distributor of durable goods. The company is located at Camberwell East, in Victoria, Australia. TOLL RELOCATIONS: Holds Meeting for Members ------------------------------------------- Toll Relocations Pty Ltd held a meeting for its members on January 11, 2008. At the meeting, David Clement Pratt and Stephen Graham Longley, Toll Relocations' liquidators, presented a report on the company's wind-up proceedings and property disposal. The Liquidators can be reached at: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank, Victoria 3006 Australia About Toll Relocations Toll Relocations Pty Ltd operates non-classifiable establishments. The company is located at Melbourne, in Victoria, Australia. URS CORP: EG&G Division Bags Air Force Contract for US$267 Mil. --------------------------------------------------------------- URS Corporation's EG&G Division has been selected by the U.S. Air Force's Air Education and Training Command to support its Undergraduate Flight Training program. The re-compete contract includes a one-year base period and five one-year options periods. The maximum value of the contract to URS is US$267 million over the full six years. Under the terms of the contract, URS will provide courseware development, simulator and academic instruction for the T-1, T- 6, T-37 and T-38 aircraft, as well as combat systems officer training, in support of the UFT program. Commenting on the award, Randall A. Wotring, President of the EG&G Division, said: "We are very pleased to have been selected by the Air Force for this contract, which underscores URS' position as a leader in military flight training. URS has been working with Air Force for 16 years to support the UFT program and is proud to be continuing this important work." Headquartered in San Francisco, California, URS Corporation (NYSE:URS) -- http://www.urscorp.com/-- offers a comprehensive range of professional planning and design, systems engineering and technical assistance, program and construction management, and operations and maintenance services for transportation, facilities, environmental, water/wastewater, industrial infrastructure and process, homeland security, installations and logistics, and defense systems. The company operates in more than 20 countries with approximately 29,500 employees providing engineering and technical services to federal, state and local governmental agencies as well as private clients in the chemical, pharmaceutical, oil and gas, power, manufacturing, mining and forest products industries. The company also has offices in Argentina, Australia, Belgium, China, France, Germany, and Mexico, among others. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 7, 2007, Moody's Investors Service has downgraded the Corporate Family Rating of URS Corporation to Ba2 from Ba1 following the company's acquisition of Washington Group International, Inc. Moody's said the ratings outlook is stable. W. & M. MEAT: Liquidators Present Wind-Up Report ------------------------------------------------ The members of W. & M. Meat Transport Pty Ltd met on Jan. 11, 2008, and received the liquidators' report on the company's wind-up proceedings and property disposal. The company's liquidators are: David Clement Pratt Stephen Graham Longley PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank, Victoria 3006 Australia About W. & M. Meat W. & M. Meat Transport Pty Ltd is involved in the trucking business, except local. The company is located at Tingalpa, in Queensland, Australia. ================================================ C H I N A , H O N G K O N G & T A I W A N ================================================ BEHAVIOR TECH: Sales Reach TWD7.91 Billion in 2007 -------------------------------------------------- Behavior Technology Computer Corp.'s sales for December 2007 fell 24.14% year-on-year to TWD579.28 million from TWD763.60 million, according to data obtained from Bloomberg. The company's full-year sales totaled TWD7.91 billion, a 13.90% fall year-on-year from TWD9.18 billion. Behavior Technology Computer Corp. -- http://www.btc.com.tw-- designs, manufactures, and markets computer peripheral equipment such as compact disk read only memory drives, keyboards, sound cards and fax modems. The company incurred net losses of TWD942.3 million, TWD2.38 billion and TWD3.12 billion for the years ended Dec. 31, 2006 through 2004. CHINA EASTERN: Says No Further Comment on Air China Tie-Up ---------------------------------------------------------- China Eastern Airlines said on Tuesday that it would make no further comment regarding a tie-up with Air China before any detailed proposal, Reuters reports. "The market is waiting to see what Air China can bring to the table. There is no point speculating what our reaction will be before the proposal actually comes out," Reuters quotes China Eastern spokesman Luo Zhuping as saying. 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 Air China's parent, China National Aviation Holding Co., 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 bid of HK$3.80 per share, or HK$7.2 billion (US$923 million) in aggregate, for a holding in China Eastern. After the rejection, the TCRAP stated, Air China said it will make a rival proposal for a stake in China Eastern. China Eastern, however, expressed that it would not consider having Air China as a strategic investor. Reuters recalls that the Beijing News, however, earlier quoted Mr. Luo as indicating that China Eastern was softening its stance and was prepared to consider a partnership with Air China. In addition, the TCR-AP reported on Jan. 16 that sources told China Knowledge that China Eastern and Air China were discussing an alliance plan that involve a swapping of shares. However, Mr. Luo clarified with Reuters that China Eastern's position had not changed since the shareholders meeting. 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. CONCORD SECURITIES: Fitch Upgrades Long-Term Rating to BB+ ---------------------------------------------------------- Fitch Ratings has upgraded Concord Securities Corporation's ratings as follows: * long-term foreign currency issuer default rating to BB+ from BB, * national long-term rating to A-(twn) from BBB+(twn), and * individual rating to C/D from D. The agency also affirmed CSC's Short-term foreign currency IDR at B, national short-term rating at F2(twn), support rating at 5, and support rating floor at NF. The outlooks on the long- term IDR and national long-term rating remain stable. The upgrades reflect CSC's strengthened franchise and the efficiency of its brokerage business, as well as Fitch's expectations of the company's ability to sustain profitable operations and a financial profile commensurate with its rating level. Improvements in brokerage market share and sales of wealth management services have been notable in 2007. Although its share of the Taiwan Stock Exchange brokerage increased moderately to 1.5% from 1.3% a year ago, CSC actively pursued expansion in providing margin finance in 2007 for better risk- reward. Its margin financing volume nearly doubled in a year and market share increased to 2.1% in September 2007 from 1.98% a year earlier. In addition, CSC sealed an exclusive dealership contract with KBC Asset Management, a wholly-owned asset manager of Belgium's KBC Group (AA-)and started to distribute KBC AM's investment funds in September 2006. Sales of offshore investment funds add a new source of less volatile fee revenues and are above expectations, thanks to the funds' niche investment strategies and CSC's strong sales drive. CSC's profitability improved to an annualised ROE of 13.6% in the first nine months of 2007 (2006: 6.6%), due to strong brokerage revenues, its satisfactory proprietary trading results and better-controlled operating expenses. However, this will not be sustained for the full year owing to trading losses arising from the sharp 16% correction in the Taiwan stock market from end- Q307 so that its ROE for the full year is likely to remain in mid single digits, indicating a modest level of profitability but on a large capital base. CSC's risk management appears adequate for its size and its relatively uncomplicated activities. The rapidly expanded margin finance business has added potential credit risk. However, the market's stringent requirements on margin maintenance and the company's active surveillance could mitigate this risk. CSC actively manages its liquidity and funding. Successful TWD1.7bn two-year syndicated loans and sizeable conversion of its convertible bonds to equities this year have improved CSC's liquidity and funding profile. By end-September, CSC's long-term funding was sufficient to cover 2.8x of its less liquid assets. CSC's statutory risk-based capital ratio was 379% at end-September 2007's well above the regulatory threshold of 150%. CSC, established in 1990, ranks 17th in Taiwan in terms of equity and holds a 1.5% market share of securities brokerage, with 22 brokerage branches. Headquartered in Taipei, Taiwan, Concord Securities Co., Ltd. -- http://www.6016.com.tw/-- is engaged in the brokerage, underwriting and proprietary trading of securities, as well as futures proprietary trading business. EMI GROUP: Terra Firma Outlines Restructuring Plan -------------------------------------------------- Terra Firma Plc, EMI Group Plc's new owner, confirmed plans to restructure the music company, particularly its Recorded Music Division. Guy Hands, EMI Group's chairman, unveiled a fundamental reshaping of the business to reflect the rapidly-changing nature of the music industry. The changes include: * positioning EMI�s labels to ensure they will be completely focussed on A&R and maximizing the potential of all their artists; * developing a new partnership with artists, based on transparency and trust, and helping all artists monetise the value of their work by opening new income streams such as enhanced digital services and corporate sponsorship arrangements; * bringing together all the group�s key support activities including sales, marketing manufacturing and distribution into a single division with a unified global leadership; and * the elimination of significant duplications within the group to simplify processes and reduce waste. The changes, which will be implemented over the next six months, will enable the group to invest more in its A&R operations both to identify and sign promising new artists and to maximize the potential of its existing roster. The restructuring is being carried out following an intense three-month consultation review of the business by Terra Firma since it acquired the business last year and many of the measures being implemented have come at the suggestion of staff, artists or their managers. The restructuring will also enable the group to capture significant efficiencies and cost reductions which are expect to reduce costs by up to �200 million per year. The restructuring is also expected to lead to a worldwide headcount reduction within the group of between 1,500 and 2,000. "We have spent a long time looking intensely at EMI and the problems faced by its Recorded Music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment," Mr. Hands commented. "We believe we have devised a new revolutionary structure for the group that will improve every area of the business," Mr. Hands continued. "In short it will make EMI�s music more valuable for the company and its artists alike. The changes we are announcing today will ensure that this iconic company will be creating wonderful music in a way that is profitable and sustainable." About Terra Firma Terra Firma is a leading European private equity firm, created in 2002 as the independent successor to the Principal Finance Group, a division of Nomura that was created in 1994. Terra Firma focuses on buyouts of large, asset-rich and complex businesses in need of operational and/or strategic change. About EMI Headquartered in London, United Kingdom, EMI Group PLC -- http://www.emigroup.com/-- is the world's largest independent music company, operating directly in 50 countries and with licensees in a further 20. The group has operations in Brazil, China, and Hungary. The group employs over 6,600 people. Revenues in 2005 were near EUR2 billion and operating profit generated was over EUR225 million. EMI Group's consolidated balance sheet for the fiscal year ended March 31, 2007, showed GBP1.498 billion in total assets, GBP2.649 billion in total liabilities and GBP1.151 billion in shareholders' deficit. The company issued two profit warnings since January 2007. JIANGXI COPPER: Will Purchase Parent's Assets to Boost Profit ------------------------------------------------------------- Jiangxi Copper Co. plans to buy assets from its parent -- Jiangxi Copper Group -- to boost faltering profits and asked for shares to be suspended in Shanghai and Hong Kong starting January 16 pending further announcement, Xiao Yu writes for Bloomberg News. According to the report, Jiangxi Copper disclosed to the Hong Kong stock exchange that it plans to sell shares in China as part of the proposal. Bloomberg notes that the company, facing declining profits because a lack of ore forces it to buy two-thirds of raw materials, may buy mines from its parent producing lead, zinc and copper. China wants state-owned companies to inject assets into publicly-traded units to improve competition and transparency, the report adds. Jiangxi Copper Group, owns the Yinshan lead and zinc mine and the Dongxiang copper and gold mine, Bloomberg notes, citing Cazenove Asia Ltd. Buying them would boost the traded unit's copper reserves by 16%, gold reserves by 52% and silver reserves by 27%, the brokerage further told Bloomberg. Jiangxi Copper rose 9% to close at CNY66.85 on Tuesday on the Shanghai Stock Exchange on speculation it would announce the purchase soon, Bloomberg relates. The stock has risen almost fivefold in the past 12 months, compared with the 136% gain on the key CSI 300 index. Bloomberg says that the company didn't say when it would make the announcement. Jiangxi Copper, Bloomberg recounts, posted a 16% decline in third-quarter profit in October as processing fees fell. Jiangxi Copper buys two-thirds of the copper concentrate it processes to make the metal used in wires and pipes, and needs to acquire more mines to cut reliance on imports, Bloomberg explains, citing analysts. Jiangxi Copper Company Limited -- http://www.jxcc.com/-- is an integrated producer of copper in the People's Republic of China. The company's operations consist of copper mining, milling, smelting and refining to produce copper cathode and other related products, including pyrite concentrates, sulphuric acid and electrolytic gold and silver. It also provides smelting and refining services pursuant to tolling arrangements for customers. Xinhua Far East China Ratings gave the company a BB+ issuer credit rating. LEALEA ENTERPRISE: December Sales Rise 53% to TWD823.03 Million --------------------------------------------------------------- Lealea Enterprise Co. Ltd.'s unconsolidated sales in December 2007 rose 52.55% to TWD823.03 million from the TWD539.51 million recorded in December 2006, according to data obtained from Bloomberg. The company's full-year 2007 sales amounted to TWD8.67 billion, a 30.21% improvement against the TWD6.66 billion recorded a year earlier. Taipei, Taiwan-based Lealea Enterprise Co. Ltd. -- http://www.lealea.com.tw/-- manufactures and markets textile products. The company distributes its products within the domestic market and to overseas markets, including Asia, South America and Europe. The company incurred net losses of TWD215.7 million, TWD373.1 million, and TWD5.5 million for the years ended Dec. 31, 2004 through 2006. PACCO TECH: December 2007 Sales Fall 99.83% ------------------------------------------- Pacco Tech Co. Ltd.'s unconsolidated sales in December 2007 fell 99.83% to TWD3,000 from sales of TWD1,774,000 recorded a year earlier, according to data obtained from Bloomberg. The company's full year 2007 sales amounted to TWD3,410,000, a fall of 97.50% year-on-year from TWD136,215,000. Pacco Tech Co. Ltd. -- http://www.paccogroup.com/-- is a Taiwan-based company engaged in the manufacture and sale of electronic products, as well as construction business. As of June 30, 2007, the company had total assets of TWD282.3 million and total liabilities of TWD617.5 million, resulting in a capital deficiency of TWD335.2 million. PETROLEOS DE VENEZUELA: Shuts Down Amuay Plant ---------------------------------------------- Venezuelan state-run oil firm Petroleos de Venezuela SA said in a statement that its Amuay plant in the Paraguana refining complex in Falcon was temporarily closed down due to power failure. Business News Americas relates that the problem came from a power unit in Amuay's block 29. Paraguana managers activated emergency procedures at Amuay. Petroleos de Venezuela said in a statement that operations at the plant would be restored within five days. According to BNamericas, Petroleos de Venezuela ensured fuel supplies for domestic and markets. Petroleos de Venezuela told BNamericas that it has enough inventories. BNamericas notes that Petroleos de Venezuela said its refinery problems were normal. However, industry analysts told BNamericas that the failures indicate larger operational problems within Petroleos de Venezuela. Petroleos de Venezuela SA -- http://www.pdv.com/-- is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. The company has a commercial office in China. * * * In March 2007, Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured long-term credit rating to Petroleos de Venezuela S.A.'s US$2 billion notes due 2017, US$2 billion notes due 2027, and US$1 billion notes due 2037. QUANTA COMPUTER: Expects to Sell 40 Million Laptops in 2008 ----------------------------------------------------------- Quanta Computer Inc. raised its forecast for 2008 laptop shipments to 40 million on increased demand for the portable computers, Bloomberg News reports. Bloomberg recounts that the earlier forecast was 36 million units. Bloomberg estimates that worldwide laptop shipments will climb 26% to 138.6 million this year, outpacing the estimated 3% growth for desktop computers. The Troubled Company Reporter-Asia Pacific reported on Jan. 11, 2008, that Quanta Computer Inc.'s parent sales in December 2007 rose to TWD70.38 billion from TWD39.47 billion in the same month a year earlier. The company's full-year sales rose to TWD751.22 billion for 2007, on the back of the delivery of 31.80 million notebook PCs. Headquartered in Taoyuan, Taiwan, Quanta Computer Inc. -- http://www.quantatw.com/-- is principally engaged in the manufacture, research, development and sale of laptop computers and components. The company offers laptops, cellular telephones, liquid crystal display televisions, servers, LCD monitors, computer peripherals, computer components, wireless local area network (WLAN) bridges and communications products. It serves overseas markets, predominantly the Americas, Asia and Europe. The Troubled Company Reporter-Asia Pacific reported on Feb. 9, 2007, that Fitch Ratings assigned Quanta Computer a long-term foreign currency issuer default rating of BB. RITEK CORP: Sales Hit TWD18.81 Billion in 2007 ----------------------------------------------- Ritek Corporation's unconsolidated sales in December 2007 fell 43.82% year-on-year to TWD1.14 billion from TWD2.03 billion, according to data obtained from Bloomberg. The company's full-year 2007 sales amounted to TWD18.81 billion, falling 23.63% year-on-year from TWD24.63 billion a year earlier. Headquartered in Hsinchu County, Taiwan, Ritek Corporation -- http://www.ritek.com/-- is engaged in the manufacture, processing and sale of optical products. The company's major products include electronic storage media products, such as flash memory cards; information technology products; optoelectronic components, such as indium tin oxide conductive glasses, as well as optical discs and their peripherals. The company distributes its products in the domestic market and to overseas markets, including the rest of Asia, the Americas and Europe. Ritek Corp. reported losses of TWD12.27 billion, TWD2.35 billion, and TWD6.67 billion for the years ended Dec. 31, 2004 through 2006. SHIHLIN PAPER: 2007 Sales Total TWD1.78 Billion ----------------------------------------------- Shihlin Paper Corp.'s unconsolidated sales in December 2007 rose 14.70% year-on-year to TWD139.68 million from TWD121.78 million, according to data obtained from Bloomberg News. The company's full-year 2007 sales totaled TWD1.78 billion, a 32.48% improvement year-on-year from TWD1.34 billion. Taipei, Taiwan-based Shihlin Paper Corp. -- http://www.shihlin.com.tw/-- is engaged in manufacturing and distributing paper and related products. The company incurred annual losses of TWD246.3 million, TWD357.9 million, TWD320.8 million, and TWD33.1 million for the years ended Dec. 31, 2003 through 2006. SHIMAO PROPERTY: Moody's Revises Rating Outlook to Negative ----------------------------------------------------------- Moody's Investors Service has changed the outlook for Shimao Property Holdings Limited's Baa3 issuer and bond ratings to negative from stable. This rating action follows Shimao's announcement that it has acquired new property projects in Hangzhou and Dalian for CNY3.07 billion and CNY1.65 billion respectively. "The negative outlook is due to concerns that the aggressive nature of Shimao's strategy for acquiring land could increase its financial leverage and weaken its liquidity profile in the near term," says Peter Choy, a Moody's Vice President and Senior Credit Officer. "In addition, its latest acquisitions come at a time when the company has fully drawn its US$328 million syndicated revolving loan to meet upcoming land premium payments, while the outstanding issue on the financing terms of the loan remain unresolved," says Mr. Choy. "Until these terms are resolved favorably for Shimao, the availability and continuation of commitments from its banks will stay uncertain," says Mr. Choy, adding, "Any pre-mature cancellation of the facility will further weaken its liquidity profile." "Moreover, management has increased its pace in land acquisitions, exceeding Moody's expectations and leading to concerns about financial discipline," says Mr. Choy. "At the same time, the Baa3 rating stays supported by Shimao's competitive business model, sizeable land bank, the attractive locations of its projects, the good quality of its investment portfolio, and strong brand name," says Mr. Choy. "Moody's also notes the company largely met its cash sales target in 2007." With this latest land acquisitions, debt leverage will be close to 40%. However, any further aggressive land acquisitions will put pressure on the rating. Further downward rating pressure would also emerge if its liquidity and financial strength deteriorate due to: (a) a slowdown in sales; (b) more aggressive debt-funded acquisitions of land/projects; (c) a material increase in debt; (d) premature termination of material financing commitments, or refinancing at higher interest costs; or (e) implementation of austerity measures by the Chinese government, resulting in the group suffering tight liquidity for its projects. On the other hand, the outlook may return to stable if Shimao can: (a) manage its property sales according to plan; (b) demonstrate financial discipline in acquiring land and within its business budget; (c) raise new equity funds to provide a buffer for any downturn in property sales; and (d) obtain agreement from lenders to amend the terms of its US$328 million syndicated loan, such that it will remain available without constraint and not subject to any prepayment risk. About Shimao Shimao Property Holdings Limited -- http://www.shimaogroup.com/ -- is a large-scale developer of real estate projects in China, specializing in high-end developments in prime locations. The company's business portfolio comprises the development of residential properties, retail properties, offices and hotels. The company has 15 projects at various stages of development located in Shanghai, Beijing, Harbin, Wuhan, Nanjing, Fuzhou, Kunshan, Changshu, Shaoxing and Wuhu. The Troubled Company Reporter-Asia Pacific reported on June 13, 2007, that Standard & Poor's Ratings Services said that its rating on Shimao Property Holdings Ltd. (BB+/Stable/--) was not immediately affected by the company's recent proposal to inject most of its retail and commercial assets into A-sharelisted Chinese property company, Shanghai Shimao Co. Ltd., in return for ultimate controlling ownership in the company. In addition, on July 24, 2007, Fitch Ratings has assigned a Long-term Foreign Currency Issuer Default Rating of 'BB+' to China-based Shimao Property Holdings Limited. Simultaneously, Fitch has assigned issue ratings of 'BB+' to Shimao's US$350 million senior notes due 2016 and USD250m senior floating rate notes due 2011, respectively. The Outlook for the IDR is Stable. VE WONG: December 2007 Sales Fall 6.42% --------------------------------------- Ve Wong Corp.'s sales for December 2007 fell 6.42% year-on-year to TWD152.94 million from TWD163.44 million, according to data obtained from Bloomberg. The company's full-year sales totaled TWD1.79 billion, a 5.23% rise year-on-year from TWD1.70 billion. Taipei, Taiwan-based Ve Wong Corp. -- http://www.vewong.com/-- manufactures and markets food products. The company produces monosodium glutamate, instant noodles, soy sauce, canned foods, and soft drinks. The company incurred net losses of TWD76.7 million and TWD138.5 million for the years ended Dec. 31, 2005 and 2006. ========= I N D I A ========= INDUSTRIAL DEV'T BANK: To Propose ESOP Scheme, Works on Details --------------------------------------------------------------- The Industrial Development Bank of India is working on details of a scheme to issue stock options to compensate and retain its employees, the Business Standard reports. The bank will move a proposal to the government for the ESOP scheme, the report relates, citing bank CMD Yogesh Agarwal who did not specify a date. Mr. Argawal told BS that the scheme may cover employees from substaff to top officials like the chairman. Yesterday, however, the bank informed the Bombay Stock Exchange that a section of its employees has proposed a strike on Jan. 25, 2008. Headquartered in Mumbai, India, Industrial Development Bank of India -- http://www.idbi.com-- is a commercial bank that offers a range of products, including secured loans, such as housing loans, mortgage loans and loan against securities, and unsecured loans, such as personal loans, educational loans and overdrafts to merchant establishments. It also distributes third-party products, such as insurance and mutual fund products to its retail customers. IDBI also offers project financing, film financing, equipment financing, asset credits, corporate loans, working capital loans, direct discounting, the financing of receivables, venture capital funds, bill rediscounting, rehabilitation financing, foreign exchange and merchant banking. * * * As part of the application of Moody's Investors Service's refined joint default analysis and updated bank financial strength rating methodologies, the rating agency, on April 24, 2007, affirmed Industrial Development Bank of India's BFSR at D-. Moody's also maintains the bank's Foreign Currency Deposit Rating at Ba2. ESSAR OIL: Unit Strikes Deal to Buy 50% in Kenya Petroleum ---------------------------------------------------------- Essar Energy Overseas Ltd, a subsidiary of Essar Oil Ltd, has entered into an agreement to acquire 50% of Kenya Petroleum Refineries Ltd, a 4 million metric tonne (MMTRA) per annum refinery in Mombasa, Kenya, the company said in a press release. According to the release, the Government of Kenya holds the remaining 50% of KPRL. Essar will acquire the stake from the existing shareholders -- The Shell Petroleum Company Ltd, Chevron Global Energy Inc and BP Africa Ltd. Subject to certain conditions, the acquisition is expected to complete in early 2008. The company, however, did not disclose the financial terms of the deal. The Mombasa refinery is the only refinery in Eastern Africa, the company relates. It currently produces LPG, gasoline, diesel, kerosene and fuel oil. The refinery is planned to be upgraded by adding secondary units at a project cost of USD 400-450 million. Naresh Nayyar, Chief Executive of Essar Energy Holdings Ltd said "We are very pleased that our first refinery acquisition outside of India will be made in Kenya. We look forward to working with the Government of Kenya to develop KPRL further to supply the growing Kenyan and adjacent markets and finalise the upgrade project". KRRL's products are sold into the Kenyan market and exported to neighbouring countries including Tanzania, Uganda, Burundi and Rwanda. Demand for petroleum products in these markets is estimated at 5 million tonnes per annum. The company believes that this first international acquisition in the refining sector fits its strategy of achieving refining capacity of one million barrels per day. In addition, Essar already has three exploration and production blocks in Madagascar and one in Nigeria. About Essar Oil Headquartered in Jamnagar, India, Essar Oil Limited -- http://www.essar.com-- is engaged in the exploration, production and marketing of oil and gas. The company's principal activities are to develop, explore, produce, and refine oil and gas. Vadinar Power Company Limited is a wholly owned subsidiary of the company. On August 23, 2005, CRISIL Ratings reaffirmed the outstanding "D" rating on the INR5.65 billion and INR2 billion Non- Convertible Debenture programmes of Essar Oil Limited. The rating indicates that the instruments are in default. JENSON & NICHOLSON: Posts INR23-Mil. Loss in Qtr. Ended Sept. 30 ---------------------------------------------------------------- Jenson & Nicholson India Ltd, in the three months ended Sept. 30, 2007, reported a net loss of INR23.08 million, a bit higher than the INR22.4-million loss booked in the same quarter last year. The paint maker's negative bottom line widened even with increased revenues because of the much higher expenses incurred in the current quarter under review. In July-Sept. 2007, the company reported total revenues of INR79.06 million, 31% more than that earned last year. Operating expenditures, however, rose 39% to INR91.8 million from last year's INR65.92 million. The company also booked interest charges of INR2.68 million, depreciation expenses of INR10.24 million, INR180,000 in taxes and INR2.75 million for extraordinary items. 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?2711 Jenson & Nicholson India Ltd -- http://www.jensonnicholson.com/ -- is a paint manufacturer catering to domestic and industrial customers. It has 33 branches and stock points across India and manufacturing plants at Naihati (near Calcutta), Sikandrabad (near Delhi) and Panvel (near Mumbai). The company reinvented itself as a completely Indian company in 1973 when the foreign holding was bought over by S. P. Sinha, an industrialist with interest in cement and hotels. The Board for Industrial and Financial Reconstruction has declared the company as sick company with in the purview of SICA, Act. IDBI was appointed as operating agency to work out a package for its revival. Its proposal for financial restructuring is pending with banks and financial institutions. The company said it continues to suffer due to shortages of working capital. TATA MOTORS: Nano Will Bring Company to Top, Research Firm Says --------------------------------------------------------------- Tata Motors Ltd's Nano will propel the auto manufacturer as India's biggest light vehicle manufacturer by 2013, the Press Trust of India cites a study by CSM World Wide, a German research firm, as stating. As previously reported by the Troubled Company Reporter-Asia Pacific, Ratan N. Tata, chairman of the Tata Group and Tata Motors, unveiled on Jan. 10 the INR1-lakh car Tata Nano. Mr. Tata hopes the much-hyped world's cheapest car will get India's masses off motorbikes and into cars. PTI says that Tata Motors would roll out almost 1.2 million light vehicles annually in the next five years, of which Nano would contribute more than 50%. In 2013, PTI continues, Tata will sell about two lakh units more than Maruti Suzuki, the current market leader in the low-cost, small-car segment. The TCR-AP, citing a Reuters report, related that even if the Nano's INR1-lakh price is just for the dealers -- buyers will have to pay more for the taxes and profit margins -- it will still cost about half the price tag of a Maruti Suzuki. CSM's study further noted that by 2013, Tata Motors, Maruti Suzuki and Hyundai will be able to retain the top three position in light vehicle sales in India at 12, 10 and 4 lakh units, respectively. About Tata Motors India's largest automobile company, Tata Motors Limited -- http://www.tatamotors.com/-- is mainly engaged in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the Company. The Company's operating segments consists of Automotive and Others. In addition to its automotive products, it offers construction equipment, engineering solutions and software operations. Tata Motors has operations in Russia and the United Kingdom. * * * On Jan. 7, 2008, Standard & Poor's Ratings Services placed its 'BB+' long-term corporate credit ratings on India-based automaker Tata Motors Ltd. on CreditWatch with negative implications. At the same time, Standard & Poor's placed its 'BB+' foreign currency rating on all of Tata Motor's rated debt issues on CreditWatch with negative implications. As reported in the TCR-Asia-Pacific on Jan. 8, 2008, Moody's Investors Service placed the Ba1 Corporate Family Rating of Tata Motors Ltd on review for possible downgrade. TATA MOTORS: Eyes Testing Nano in China & Other Markets ------------------------------------------------------- Tata Motors Ltd is looking to test Tata Nano, the INR1-lakh car, in other countries, including China, once it makes its mark in India, the China Daily reports, citing Girija Pande, top executive of Tata Consultancy Services, the Asia-Pacific arm of Tata Group's IT subsidiary. Nano, the four-door People's Car, was unveiled on Jan. 10, at the Ninth Auto Expo in New Delhi. The Nano can seat four persons and measures 3.1 meters in length, 1.5 meters in width and stands 1.6 meters. Tata Group Chairman Ratan N. Tata, who helped design the Nano, came up with the world's cheapest car idea, to get India's masses off motorbikes and into cars. The company plans to sell the Nano in India later this year, which will be available in standard and deluxe versions. Mr. Pande also told the Chinese Daily that Tata Motors is in talks with Chinese counterparts to set up joint ventures China. The news agency, however, did not name the Chinese parties whom the car manufacturer had talks with. About Tata Motors India's largest automobile company, Tata Motors Limited -- http://www.tatamotors.com/-- is mainly engaged in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the Company. The Company's operating segments consists of Automotive and Others. In addition to its automotive products, it offers construction equipment, engineering solutions and software operations. Tata Motors has operations in Russia and the United Kingdom. * * * On Jan. 7, 2008, Standard & Poor's Ratings Services placed its 'BB+' long-term corporate credit ratings on India-based automaker Tata Motors Ltd. on CreditWatch with negative implications. At the same time, Standard & Poor's placed its 'BB+' foreign currency rating on all of Tata Motor's rated debt issues on CreditWatch with negative implications. As reported in the TCR-Asia-Pacific on Jan. 8, 2008, Moody's Investors Service placed the Ba1 Corporate Family Rating of Tata Motors Ltd on review for possible downgrade. WESTERN INDIA: Board to Consider Preferential Issue on Jan. 29 -------------------------------------------------------------- Western India Shipyard Ltd board of directors will meet on Jan. 29, 2008, to consider, among others, the preferential allotment of 85,53,350 shares of the company with the face value of INR10 each to UTI Asset Management Company Ltd and to certain small Non-Convertible Debenture holders, a filing with the Bombay Stock Exchange disclosed. The preferential issue of shares is subject to 80% reduction in the face value of each share from INR10 to INR2 each. The allotment is proposed to be made under a scheme of restructuring and to a scheme of arrangement sanctioned by the High Court of Bombay, Goa Bench at Panaji. Pursuant to the schemes: a. not more than 48,32,850 shares will be issued to NCD holders on record on the date yet to be fixed by the company; and b. 37,20,500 shares will be issued UTI Asset Management on conversion of 37,20,500 Zero Coupon Optionally Fully Convertible debentures (series II: Unsecured) . As previously reported by the Troubled Company Reporter-Asia Pacific, the board already has the shareholders' approval of the move. On the Jan. 29 meeting, the board will also take on record the company's unaudited Financial Results for the third quarter ended Dec. 31, 2007. Operating as a composite ship repair facility in India, Western India Shipyard Ltd -- http://www.westinshp.com/-- offers ship routine maintenance and damage repairs; cargo hold/tank space blasting and coating; main engine overhauls; rudder, propeller, and tailshaft repairs; cargo gear overhaul and repairs; heating coil hydro test and electric works; hatch cover modifications and container cell guide conversions; and auxiliary machinery overhauls. The Troubled Company Reporter-Asia Pacific reported on Jan. 4, 2008, that Western India Shipyard has a stockholder's equity deficit of US$22.78 million. The company has incurred at least two years of consecutive net losses -- INR207.58 million in the year ended Mar. 31, 2007, and INR233.68 million in the year ended Mar. 31, 2008. ================= I N D O N E S I A ================= ALCATEL-LUCENT: Argentine Unit's Revenues Rose Up to 15% in 2007 ---------------------------------------------------------------- Alcatel-Lucent Argentine unit's general director Javier Rodriguez Falcon told Business News Americas that the firm's revenues increased up to 15% in 2007, from 2006. The main drivers of Alcatel-Lucent's growth in Argentine in 2008 would be the mass adoption of broadband through wired and wireless technology, BNamericas says, citing Mr. Falcon. Mr. Falcon commented to BNamericas, "I believe that this year we will see the first deployment of WiMax technology based on the standard e, which allows mobility. We have some of our clients studying WiMax development during 2008 and 2009." Mr. Falcon told BNamericas that Alcatel-Lucent underwent restructuring in October 2007. It currently has three business units: -- carrier, -- enterprise, and -- services. The new carrier unit includes former fixed, wireless and convergence units, BNamericas says, citing Mr. Falcon. Alcatel-Lucent sees many opportunities in the local triple play market once regulations let telecoms operators offer broadcasting services. The firm expects that sooner or later, the regulator will allow the service as was the case in Mexico, Brazil and Chile, Mr. Falcon told BNamericas. "Over the next two years, operators will move towards a massive deployment of broadband infrastructure. I believe that by the end of 2009 there will be approximately eight million broadband connections compared to the current 2.4 million," Mr. Falcon commented to BNamericas. Headquartered in Paris, France, Alcatel-Lucent S.A. -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide to deliver voice, data and video communication services to end users. Alcatel-Lucent maintains operations in 130 countries, including, Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada, United States, Costa Rica, Dominican Republic, El Salvador, Guatemala, Peru, Venezuela, Indonesia, Australia, Brunei and Cambodia. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 9, 2007, Moody's Investors Service downgraded to Ba3 from Ba2 the Corporate Family Rating of Alcatel-Lucent. The ratings for senior debt of the group were equally lowered to Ba3 from Ba2 and the trust preferred notes of Lucent Technologies Capital Trust I have been downgraded to B2 from B1. At the same time, Moody's affirmed its Not-Prime rating for short-term debt of Alcatel-Lucent. Moody's said the outlook for the ratings is stable. Alcatel-Lucent's Long-Term Corporate Credit rating and Senior Unsecured Debt carry Standard & Poor's Ratings Services' BB rating. Its Short-Term Corporate Credit rating stands at B. ANEKA TAMBANG: Upgrades Corporate Family Rating to Ba3 ----------------------------------------------------- Moody's Investors Service has upgraded PT Aneka Tambang (Persero) Tbk's corporate family rating to Ba3 from B1. This concludes the review for possible upgrade which commenced on October 22, 2007. At the same time, PT Moody's Indonesia has assigned Antam a national scale rating of Aa3.id. The outlook for both ratings is stable. "The upgrade recognizes Antam's strengthened credit fundamentals, driven in turn by continued strength in the base metals industry, including the persistence of high nickel prices into 2008, because of favorable global demand as well as tight supply," says Kathleen Lee, Moody's lead analyst for Antam. "Moreover, unprecedented levels of strong cash have placed Antam in an enviable net cash position, amounting to about US$460 million as of 30 September 2007," says Lee, adding, "This gives it significant leverage to undertake various acquisitions and/or downstream projects into alumina processing and even further downstream into stainless steel production." "All such activities will broaden its long-term earnings base," says Lee. That said, the rating recognizes Antam's small size and limited diversity with close to 90% of revenues from nickel production, as well as its aggressive debt-funded acquisitions and plans to invest in gold reserves and its pipeline of downstream projects. "The final Ba3 rating further factors in medium support from the Indonesian government, given its 65% ownership in Antam under joint default analysis for government-related issuers, which has provided a one-notch rating uplift," says Lee. The rating outlook is stable, incorporating Moody's expectation of some moderation in nickel and ferro-nickel prices. Cash generation and financial flexibility are expected to remain supportive in the near term for the company's aggressive growth plan. The ratings would experience upward pressure if Antam can successfully grow its productive capacity over the next few years, while maintaining its sound financial and liquidity profiles. On the other hand, Moody's would consider a downgrade if there is a weakening in its underlying credit strength due to: a) industry fundamentals deteriorating beyond Moody's expectations, b) major problems continue to emerge after repairs at its FeNi III plant, or c) higher-than-anticipated investments in its expansion projects, such as the Tayan chemical-grade alumina project and FeNi IV plant, resulting in a deterioration in debt protection measures with EBIT interest coverage less than 6x and CFO (less dividends)/Adjusted Debt below 20% on a sustained basis. The rating could also be lowered if there is a weakening in support from the government. This could result from a sell-down of the government's majority ownership or from a broader trend evidencing a change in the government's strategy towards Antam. A change in the Indonesian government rating would have no impact on Antam's rating. Established in 1968 and listed on the stock exchanges of Indonesia and Australia, PT Aneka Tambang (Persero) Tbk is a leading Indonesian company engaged in the exploration, excavation, processing, refining and marketing of nickel ore, ferronickel, gold, silver, bauxite and iron sands. It has joint venture interests in several exploration projects. Antam is a 65% owned by the Indonesian government with the remaining 35% in the hands of the public. ARPENI PRATAMA: To Issue IDR750 Billion Bonds in Early March ------------------------------------------------------------ PT Arpeni Pratama Ocean Line Tbk plans to offer IDR750 billion bonds in early March to repay debt and for working capital, Reuters reports. According to the report, the company has appointed PT DBS Vickers Securities Indonesia and CIMB-GK to handle the issuance. PT Arpeni Pratama Ocean Line Tbk -- http://www.apol.co.id/-- is a marine shipping company. The company's activities include bulk and liquid transportation services. Arpeni operates a fleet of general-purpose specialist, such as their tweendecker MV Alas, which is designed to transport dry cargoes such as plywood and agricultural products. * * * As reported in the Troubled Company Reporter - Asia Pacific on Jul 05, 2007, that Fitch Ratings has affirmed the 'BB-'Long-term Foreign and Local Currency Issuer Default Ratings, and the 'A+(idn)' National Long-term Rating of PT Arpeni Pratama Ocean Line Tbk. The Outlook for the ratings remains Stable. At the same time, Fitch has affirmed the 'BB-'rating on Arpeni's US$160 million senior notes due 2013. The TCR-AP also reported on April 24, 2006, that Standard & Poor's Ratings Services assigned its B+ corporate credit rating to PT Arpeni. The outlook is stable. At the same time, Standard & Poor's assigned its 'B+' rating to the proposed US$160 million seven-year senior unsecured notes to be issued by the company. The company intends to use a part of the net proceeds -- about US$93 million -- for refinancing existing debt, and the balance for capital expenditure and vessel financing. EXCELCOMINDO PRATAMA: 40 Firms Interested to Buy Stake in Unit -------------------------------------------------------------- Around 40 companies showed interest in buying PT Exelcomindo Pratama Tbk's unit, which specializes in handling all the base transceiver station towers that belong to the telecommunication operator company, Tempo Interactive News reports. According to the report, the firms are interested even though the unit is still in the process of establishment. Exelcomindo Managing Director Hasnul Suhaimi, the report relates, said that the process of establishment will perhaps be finished by the second or third quarter of the year. Mr. Suhaimi told Tempo that the company has between 6,000 and 7,000 towers throughout Indonesia. Tempo points out that some of the company's towers were rented by PT Hutchinson, PT Bakrie Telecom, PT Sampoerna Telekomunikasi Indonesia and PT Natrindo Telepon Seluler. Despite several towers being rented, Mr. Suhaimi told the news agency, it does not mean the company will sell the shares of the new subsidiary to these four companies. About Excelcomindo Pratama Headquartered in Jakarta, Indonesia, PT Excelcomindo Pratama Tbk -- http://www.xl.co.id/-- provides wireless telecommunications services, leased lines and corporate services, which include Internet Service Provider and Voice over Internet Protocol services. In addition, Excelcomindo provides voice, data and other value-added cellular telecommunications services. Its product lines include jempol, bebas and xplor. The company also provides services that allow its customers to purchase electronic voucher reloads at all of its centers and outlets, automated teller machines of various major banks and through its all centers. Excelcomindo starter packs and voucher reloads are also sold by independent retailers. * * * The Troubled Company Reporter-Asia Pacific reported on Dec 12, 2007, Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit ratings on Indonesian cellular operator, PT Excelcomindo Pratama Tbk, and removed them from CreditWatch with negative implications. The outlook is stable. The 'BB-' ratings on all foreign currency senior unsecured debt were also affirmed. In October 2007, Moody's Investors Service upgraded Excelcomindo Finance Company B.V.'s foreign currency senior unsecured bond rating to Ba2 from Ba3. The bond is irrevocably and unconditionally guaranteed by Excelcomindo Pratama. At the same time, Moody's affirmed the Ba2 local currency corporate family rating of XL with a positive outlook. In May 2007, Fitch Ratings affirmed PT Excelcomindo Pratama Tbk's Long-term Foreign Currency and Local Currency Issuer Default Ratings at 'BB-'. The Outlook remains Stable. At the same time, Fitch affirmed the 'BB-' rating on its senior unsecured notes programme. PERUSAHAAN LISTRIK: Secures US$1.9-BB Loan for Five Power Plants ---------------------------------------------------------------- Perusahaan Listrik Negara had secured loans for the construction of its five coal-fired power plants to be built under the government's '10,000 megawatt crash' program. PLN President Director Eddie Widiono told the news agency that the firm was set to sign "financial facilities packages" with six banks in February. The loans would cover 40%, or about US$1.9 billion, of the capital needed to build the mega project, the report adds. According to the report, Head of the Government's Power Sector Development Program Yogo Pratomo said signing might be a follow- up to PLN's tendering process last year, when the firm secured financing worth up to US$1 billion for the 600-MW Rembang plant in Central Java and the 600-MW Indramayu plant in West Java from both local and foreign lenders. For the two projects, Mr. Pratomo told the news agency that PLN had secured dollar-denominated loans from the Bank of China and the U.S. Berkeley Bank, and rupiah-denominated loans from Bank Mandiri and Bank Central Asia. For the remaining three projects, the loans are most likely to be given to the 600-MW Labuan plant in Banten, the 600-MW Paiton Baru plant in East Java and the new 600-MW Suralaya plant in Banten, he added. The Post relates that Mr. Pratomo said PLN would again invite bids for the financing of the company's four coal-fired power plants later this month. The tender would be aimed at obtaining loans of up to US$2 billion for the development of four coal-fired power plants in Java -- the 600-MW Pacitan plant in East Java, the 900-MW Pelabuhan Ratu plan in West Java, the 900-MW Teluk Naga plant in Banten and the 600-MW Tanjung Awar-awar plant in East Java, the report adds. 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. PERUSAHAAN LISTRIK: Signs EPC Contract to Build Four Plants ----------------------------------------------------------- PT Perusahaan Listrik Negara signed four EPC contracts with four consortia made up of local companies and Chinese developers to build four power plants outside Java, The Jakarta Post reports. According to the report, The project is estimated to cost US$190 million, all of which would be paid with the company's internal cash. The operation of the new power plants would cut the company's spending for fuels by IDR3 trillion each year, the report notes. 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. ========= J A P A N ========= DELPHI CORP: Moody's Assigns Ratings After Bankruptcy Emergence --------------------------------------------------------------- Moody's Investors Service has assigned ratings to Delphi Corporation for the company's financing for emergence from Chapter 11 bankruptcy protection: Corporate Family Rating of (P)B2; US$3.7 billion of first lien term loans, (P)Ba3; and US$0.825 billion of 2nd lien term debt, (P)B3. In addition, a Speculative Grade Liquidity rating of SGL-2 representing good liquidity was assigned. The outlook is stable. The (P)B2 CFR reflects the magnitude of the company's indebtedness upon emergence, weak but improving coverage over the intermediate term as the anticipated benefits of restructuring initiatives take hold, and the absence of free cash flow in its initial year after emergence. The rating recognizes substantial improvements in the company's cost structure and operational efficiencies achieved during its period of bankruptcy re-organization and ongoing benefits from its global scale and manufacturing footprint. However, the rating also considers the extent of the company's exposure to General Motors Corp.'s North American operations. While GM's North American exposure has significantly declined, it will continue as the largest individual component in the customer base, leaving Delphi Corp. vulnerable to any further reduction in GM's production volumes or market share in this critical region. Delphi Corp.'s strengths include its geographic diversification, and large book of long term contracts to supply components for various vehicle platforms. The company significantly reduced its legacy liabilities through the bankruptcy process, shed unprofitable operations, and identified other initiatives that should improve its operating cost structure and better position the company to compete in the auto parts supply business. However, the full benefit of these initiatives will only be achieved over time, and during the near term the company's financial metrics will remain consistent with ratings at the low end of the B range. In particular, it is noted that the company will require incremental restructuring disbursements of roughly US$800 million over the next few years, which will likely preclude free cash flow generation during 2008. It is also noted that the company will be emerging from bankruptcy at a time when economic trends suggest potential for further weakness in automotive sales. While the benefits of restructuring initiatives should yield improvement in financial metrics over time, economic pressures could temper the rate of improvement. Consequently, Moody's views the company's rating profile as more consistent with the B2 rating category at this time. The stable outlook is supported by Delphi Corp.'s liquidity profile, expectations that the pace of operational improvements will gain traction over the intermediate term, and the company's participation in multiple geographic regions with different growth prospects. These factors along with an expected transition to positive free cash flow in 2009 have the potential to produce stronger coverage ratios and lower leverage going forward. Ratings assigned: -- Corporate Family Rating, (P)B2 -- Probability of Default Rating, (P)B2 -- US$2,950 million first lien term loan, (P)Ba3 (LGD-2, 26%) -- US$825 million of second lien term debt, (P)B3 (LGD-4, 60%) -- Speculative Grade Liquidity rating, SGL-2 Outlook, stable Delphi Holdings Luxembourg S.ar.l.: -- EUR Equivalent of US$750 million first lien term loan guaranteed by Delphi Corp., (P)Ba3 (LGD-2, 26%) Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and US$23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. 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. DELPHI CORP: Commences Exit Financing Syndication ------------------------------------------------- The syndication of Delphi Corp.'s exit financing package to support the company's planned first quarter of 2007 emergence from Chapter 11 reorganization was set to commence as early as last week with potential lenders' meetings in New York on Jan. 9, and in London on Jan. 10, the company stated in a press release. The proposed exit facilities, which are being arranged on a best efforts basis by J.P. Morgan Securities, Inc., and Citigroup Global Markets, Inc., were approved by the Court on Nov. 16, 2007. Delphi Corp. Controller and Chief Accounting Officer Thomas S. Timko reported, in a regulatory filing with the U.S. Securities and Exchange Commission, that Delphi will provide supplemental financial information at the scheduled meetings containing an unaudited borrowing base calculation for debtor entities as of Sept. 30, 2007, and EBITDAR information covering the periods from Oct. 1, 2006, through Sept. 30, 2007, each as measured by the covenants contained in Delphi's refinanced DIP Facility and selected debt levels. An exhibit containing the borrowing base calculation, EBITDAR information, selected debt levels and a reconciliation to the nearest comparable U.S. GAAP measurements, where applicable, that Delphi intends to provide to potential lenders is available for free at the SEC's Web site at: http://ResearchArchives.com/t/s?2707 The borrowing base calculation and selected debt levels presented should not be considered in isolation or as a substitute for items on Delphi's consolidated balance sheet presented in accordance with generally accepted accounting principles in the U.S., Mr. Timko cautioned. In addition, the EBITDAR information should not be considered as an alternative to operating income, as a substitute for items in Delphi's consolidated statement of operations, or as an indicator of Delphi's operating performance. All the information, he said, should be viewed in conjunction with Delphi's financial statements, footnotes including accounting policies contained in the company's 2006 annual report and subsequent periodic reports as filed with the SEC. Exit Financing Reduced Primarily as a result of improved operating performance and lower capital expenditures for the 2007 fiscal year than forecast in the company's 2007 business plan projections included in its First Amended Disclosure Statement, Delphi estimates its year-end unaudited cash position to be approximately US$850 million favorable to its business plan. After adjusting anticipated cash flows in 2008 to reflect retiming of certain payments previously forecast for 2007 and lower projections for certain forecast emergence cash payments in 2008, Delphi is reducing its proposed exit facilities from the previously announced US$6.8 billion authorized by the Court to approximately US$6.1 billion. The reduced facilities will include: (a) US$1.6 billion in an asset-backed revolving credit facility; (b) US$3.7 billion in a first-lien term loan facility; and (c) US$825 million in a second lien term loan facility. Delphi says it intends to use the exit financing proceeds to make payments on the Effective Date of its First Amended Joint Plan of Reorganization, including repayment of the company's senior secured DIP financing, and to support the post- reorganization operations of the reorganized company. Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed US$11,446,000,000 in total assets and $23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court will convene the hearing to consider confirmation of the Plan on Jan. 17, 2008. (Delphi Bankruptcy News, Issue No. 106; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: US Trustee Balks at Panel's Exit Loan Participation ---------------------------------------------------------------- Diana G. Adams, the U.S. Trustee for Region 2, asserts that members of the Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders who wish to participate in Delphi Corp. and its debtor-affiliates' Exit Financing should be required to resi