/raid1/www/Hosts/bankrupt/TCRAP_Public/080508.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Thursday, May 8, 2008, Vol. 11, No. 91
Headlines
A U S T R A L I A
A L Y MEATS: Placed Under Voluntary Liquidation
ALAN MCKINNEY: Placed Under Voluntary Liquidation
AVCPL PTY: To Declare Dividend on May 30
BTCP PTY: Placed Under Voluntary Liquidation
CAPRICORN CHILDCARE: Liquidator Presents Wind-Up Report
CENTRO PROPERTIES: Still in Talks; Extension Expected Today
ERIC WHITBREAD: Liquidator Presents Wind-Up Report
FAUSTAS PTY: Placed Under Voluntary Liquidation
IRENE SIMPSON: Placed Under Voluntary Liquidation
J D MANAGEMENT: Liquidator Gives Wind-Up Report
PANAVISION INC: Weakening Liquidity Cues Moody's Rating Reviews
POLYPORE INT'L: Moody's Lifts Ratings to B2 on Reduced Leverage
ST. GEORGE BANK: Union Criticizes "Outsourcing" Plan
TIFAM INVESTMENTS: Placed Under Voluntary Liquidation
VAN KLOOSTER: Members and Creditors to Meet Today
ZINIFEX LTD: Jinchuan Accepts Offer for Allegiance Mining Stake
ZINIFEX LTD: CFO to Retire After Oxiana Merger
C H I N A
MONITOR OIL: Global Maritime & Adshead Sued for Contract Breach
PUDONG BANK: 412.5 Mil. Shares to Become Tradable Next Week
*CHINA: Watchdog Warns State Firms to "Brace for Tough Times"
H O N G K O N G
CENTRAL UNITY: Liquidator Quits Post
COACTIVE TECH: S&P Holds Rating on Failure to File Fin'l Report
ECR EUROCURRENCY: Liquidator Quits Post
FOKA DEVELOPMENT: Creditors' Proofs of Debt Due May 21
GOLDIAN LIMITED: Creditors' Proofs of Debt Due May 16
GWA INT'L: Members' Final Meeting Set for May 27
HELPING METAL: Members & Creditors to Meet on May 27
HONG KONG YOSHITOKU: Liquidator Quits Post
MORIRIN (ASIA): Creditors' Final Meeting Set for May 6
PARKSON RETAIL: 2007 Net Profit Up 46.7% to CNY676.0 Million
PARKSON RETAIL: Khazanah Sells Company Shares Via Placement
PENAR LIMITED: Liquidator Quits Post
SUCCESS WIDE: Commences Liquidation Proceedings
I N D I A
GENERAL MOTORS: Charges on Delphi Corp. Issues Reach $8.3 Bil.
GENERAL MOTORS: Plastech Inks MOU with GM for Exit Financing
GMAC LLC: Home Mortgage Unit Unable to Pay Debts Due June 2008
TATA MOTORS: Sales Decline by 5.8% in April 2008
I N D O N E S I A
BANK RAKYAT: To Sell Mutual Funds With Trimegah & Danareksa
GARUDA INDONESIA: Extends MOU With Jasindo Insurance
GARUDA INDONESIA: May Acquire Smaller Airlines
PERUSAAHAN LISTRIK: Non-Subsidized Tariffs to Bring Savings
J A P A N
ALITALIA SPA: Receives EUR300-Million Loan Italian Government
ALITALIA SPA: May Now Sell Slots for Fund Following EU Directive
DELPHI CORP: Plastech Can Return Tooling to Delphi Automotive
DELPHI CORP: Court Moves Exclusive Plan-Filing Period to Aug. 31
DELPHI CORP: GM's Charges on Delphi Issues Reach $8.3 Billion
FORD MOTOR: CAW Union Members Ratify New Labor Agreement
USINAS SIDERURGICAS: J Mendes To Produce 5 Million Tons in 2008
USINAS SIDERURGICAS: Positive About Local Economy & Steel Demand
* Moody's Says Outlook for Japan Cosmetics Industry Still Stable
K O R E A
DAEWOO ELECTRONIC: Adjusts Conversion Price of Convertible Bonds
DURA AUTOMOTIVE: Court Approves Merger with Automotive Aviation
DURA AUTOMOTIVE: Wants to Expand Assessment Tech's Scope of Work
EG SEMICON: Makes Amendments to its Third Bonds Issuance
EG SEMICON: Moves Private Placement Listing Date to May 23
NVIDIA CORP: Court Rejects Trustee's Claim for $100 Million
M A L A Y S I A
CNLT (FAR EAST): 2 Bank Creditors Approve Restructuring Scheme
LUSTER INDUSTRIES: Equity Less Than 50% of Paid-Up Share Capital
LIQUA HEALTH: Incurs MYR10.72MM Net Loss in Qtr. Ended Dec. 31
PILECON ENGINEERING: Hong Kong Subsidiary Struck Off
PUTERA CAPITAL: Feb. 29 Balance Sheet Upside-Down by MYR22.18MM
SYARIKAT KAYU: Incurs MYR989,000 Net Loss in Qtr. Ended Feb. 29
TALAM CORPORATION: SC Approves Revised Regularization Plan
N E W Z E A L A N D
ACACIA EMPLOYMENT: Brown and Rodewald Appointed as Liquidators
BLUE CHIP: Barrister Renews Call for Statutory Management
CENTRAL RIGGING: Brown and Rodewald Appointed as Liquidators
CONTRAK CARTAGE: Face's Stevenson's Wind-Up Petition on May 16
DE-LUSH VINEYARD: Taps Crichton and Horne as Liquidators
FASTFORWARD HOLDINGS: Shareholders Appoint Barlow as Liquidator
HEAVY DIESEL: Court Appoints Shephard and Dunphy as Liquidators
I AM IMPORT: Court Appoints Shephard and Dunphy as Liquidators
ISLAND BAY: Creditors Have Until May 16 to File Claims
JADEWOOD INTERNATIONAL: Court to Hear Wind-Up Petition on May 16
JOANNIE PROPERTIES: Shareholders Appoint Barlow as Liquidator
KENDALL EARTHMOVERS: Creditors Must File Claims by May 16
LIBERTY LIVE: Shareholders Appoint Barlow as Liquidator
M N T LIMITED: Brown and Rodewald Appointed as Liquidators
MAXBUILD LIMITED: Creditors Must File Claims by May 16
MILKKAN LIMITED: Commences Liquidation Proceedings
NEWLINE CONSTRUCTION: Claims Filing Deadline is May 16
NZ QUALITY: Creditors Must File Claims by May 16
OXFORD FARMLANDS: Trevor Croy Appointed as Liquidator
REMUERA 464: Commences Liquidation Proceedings
T & F KENT: Brown and Rodewald Appointed as Liquidators
UPG LIMITED: Brown and Rodewald Appointed as Liquidators
* NEW ZEALAND: Labor Force Ageing and Growth Slowing
P H I L I P P I N E S
PLDT: First Quarter 2008 Net Income Up by 21% to Php10.4 Billion
PRC LLC: Files Amended Chapter 11 Plan and Disclosure Statement
PRC LLC: Discloses Various Analysis Under Chapter 11 Plan
PRC LLC: Verizon and Affiliates Balk at Disclosure Statement
* PHILIPPINES: April 2008 Inflation Climbs to 8.3%
T H A I L A N D
ARVINMERITOR INC: Spins Off Light Vehicle Biz to Shareholders
ARVINMERITOR: Light Vehicle's Spinoff Cues Fitch's Neg. Watch
ARVINMERITOR INC: S&P Holds 'B+' Rating on Light Vehicle Spinoff
X X X X X X X X
* S&P Says Asian Financial Markets Must Continue New Approaches
- - - - -
=================
A U S T R A L I A
=================
A L Y MEATS: Placed Under Voluntary Liquidation
-----------------------------------------------
A L Y Meats Pty Ltd's members agreed on March 11, 2008, to
voluntarily liquidate the company's business. Angelo Gangemi
was appointed to facilitate the sale of the company's assets.
The liquidator can be reached at:
Angelo Gangemi
134 Martin Street
Brighton, Victoria
ALAN MCKINNEY: Placed Under Voluntary Liquidation
-------------------------------------------------
Alan McKinney Holdings Pty Ltd's members agreed on March 17,
2008, to voluntarily liquidate the company's business. Anthony
M. Long was appointed to facilitate the sale of the company's
assets.
The liquidator can be reached at:
Anthony M. Long
Liquidator
Boyce Chartered Accountants
19 Montague Street
Goulburn NSW 2580
AVCPL PTY: To Declare Dividend on May 30
----------------------------------------
Avcpl Pty Limited will declare dividend on May 30, 2008.
Only creditors who were able to file their proofs of debt by
April 22, 2008, will be included in the company's dividend
distribution.
The company's liquidator is:
Peter P. Krejci
GHK Ferrier Green Krejci Silvia
Level 13, 1 Castlereagh Street
Sydney NSW 2000
BTCP PTY: Placed Under Voluntary Liquidation
--------------------------------------------
Btcp Pty Limited's members agreed on March 17, 2008, to
voluntarily liquidate the company's business. Raymond George
Tolcher and Stewart William Free were appointed to facilitate
the sale of the company's assets.
The liquidators can be reached at:
R. G. Tolcher
Lawler Partners Chartered Accountants
763 Hunter Street
Newcastle West NSW 2302
CAPRICORN CHILDCARE: Liquidator Presents Wind-Up Report
-------------------------------------------------------
Robert Moodie, Capricorn Childcare Development Pty Limited's
estate liquidator, met with the company's members on May 7,
2008, and provided them with property disposal and winding-up
reports.
The liquidator can be reached at:
Robert Moodie
Rodgers Reidy
Level 8, 333 George Street
Sydney NSW 2000
CENTRO PROPERTIES: Still in Talks; Extension Expected Today
-----------------------------------------------------------
Laura Cochrane of Bloomberg News reports that Centro Properties
Group is continuing talks with lenders about extending [the
May 7] deadline to repay its debt.
Ms. Cochrane relates that in a phone interview, Jim Kelly, a
Sydney-based spokesman for Centro, said the company is in
meetings with creditors and an agreement is expected today.
Yesterday, the company halted trading in its shares and is
expected to resume normal trading on May 9.
As previously reported in the Troubled Company Reporter-Asia
Pacific, Centro Properties is seeking an extension of these
these facilities until at least September 30, 2008:
-- Facilities of AU$2.3 billion in aggregate owed to
Australian lending group; and
-- US$450 million in aggregate owed to US private placement
noteholders.
According to Centro Properties, the negotiation of all materials
terms for further extensions has been substantively concluded
with all of its financiers except one which is owed less than
AU$200 million. Centro further said that its Australian
lenders, its US lenders and the US private placement noteholders
have indicated their support for the longer term extension.
About Centro Properties
Centro Properties Group -- http://www.centro.com.au/-- is a
retail investment organisation specialising in the ownership,
management and development of retail shopping centres. Centro
manages both listed and unlisted retail property and has an
extensive portfolio of shopping centres across Australia, New
Zealand and the United States. Centro has funds under
management of $24.9 billion.
* * *
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.
ERIC WHITBREAD: Liquidator Presents Wind-Up Report
--------------------------------------------------
Jennifer Harwood, Eric Whitbread Shoes Pty Limited's estate
liquidator, met with the company's members on April 30, 2008,
and provided them with property disposal and winding-up reports.
The liquidator can be reached at:
Jennifer Harwood
Fortunity
155 The Entrance Road
Erina NSW 2250
FAUSTAS PTY: Placed Under Voluntary Liquidation
-----------------------------------------------
Faustas Pty Limited's members agreed on March 14, 2008, to
voluntarily liquidate the company's business. Raymond George
Tolcher was appointed to facilitate the sale of the company's
assets.
The liquidator can be reached at:
R. G. Tolcher
Lawler Partners Chartered Accountants
763 Hunter Street
Newcastle West NSW 2302
IRENE SIMPSON: Placed Under Voluntary Liquidation
-------------------------------------------------
Irene Simpson Pty Ltd's members agreed on March 19, 2008, to
voluntarily liquidate the company's business. John Frederick
Taylor was appointed to facilitate the sale of the company's
assets.
The liquidator can be reached at:
John Frederick Taylor
WHK Horwath
Level 15, 309 Kent Street
Sydney
J D MANAGEMENT: Liquidator Gives Wind-Up Report
-----------------------------------------------
James Garnsey, J D Management Services Pty Limited's estate
liquidator, met with the company's members on April 7, 2008, and
provided them with property disposal and winding-up reports.
PANAVISION INC: Weakening Liquidity Cues Moody's Rating Reviews
---------------------------------------------------------------
Moody's Investors Service placed the B3 corporate family rating
and all other ratings for Panavision Inc. on review for possible
downgrade. The action reflects weakening liquidity and
fundamental operating concerns.
Moody's believes continued compliance with bank financial
covenants throughout 2008 could prove difficult for Panavision.
Furthermore, its $35 million revolver provides only relatively
modest external capacity for a seasonal, cash consumptive
business with limited visibility, in Moody's view. These
liquidity constraints compound core business challenges,
including the negative impact of the strike by the Writers'
Guild of America, which could result in a permanent loss of
related TV segment revenue in 2008. A potential future strike
by the Screen Actors' Guild would further reduce volume, and
even absent a SAG strike, an increased focus on production costs
by television studios could lead to diminished use of Panavision
equipment. Finally, adoption of Genesis cameras remains below
Panavision's previously lowered forecasts, and the company has
again reduced forecasts for revenue from this initiative.
In resolving the review, Moody's will evaluate Panavision's
prospective ability to improve operating performance and
establish a greater cushion of compliance under bank financial
covenants.
Panavision Inc.
-- Corporate Family Rating, Placed on Review for Possible
Downgrade, currently B3
-- Probability of Default Rating, Placed on Review for
Possible Downgrade, currently B3
-- Senior Secured First Lien Bank Credit Facility, Placed on
Review for Possible Downgrade, currently B2
-- Senior Secured First Lien Bank Credit Facility, Placed on
Review for Possible Downgrade, currently Caa2
-- Outlook, Changed To Rating Under Review From Stable
Panavision's B3 corporate family rating reflects weak liquidity,
high financial risk, some degree of volatility in its core
camera rental business, and uncertain asset coverage.
Panavision's industry leading market share in the feature film
and episodic television markets, strong brand image and
reasonably high EBITDA margins support its ratings. Ratings
also benefit from some evidence of success in identifying and
integrating acquisitions and from recent cost cutting
initiatives undertaken in response to challenging operating
conditions.
Headquartered in Woodland Hills, California, Panavision
manufactures and rents camera systems and lighting equipment to
motion picture and television producers worldwide. Its annual
revenue is approximately $300 million.
Panavision has locations in Australia and New Zealand.
POLYPORE INT'L: Moody's Lifts Ratings to B2 on Reduced Leverage
---------------------------------------------------------------
Moody's Investors Service raised the ratings of Polypore
International, Inc., Corporate of Family to B2 from B3 and
Probability of Default to B2 from B3. Moody's also raised the
ratings of Polypore's bank credit facility to Ba2 from Ba3, and
senior subordinated notes to B3 from Caa1. The outlook is
changed to stable.
The upgrade reflects Polypore's overall improvement in credit
metrics stemming from a reduction in leverage, steady free cash
flow generation, improved interest coverage, and strong
operating margins. Polypore's de-leveraging activities and
actions to shift production to low cost countries, close plants,
and restructure away from its cellulosic membrane business have
all contributed to the improvement of credit metrics. The
ratings also reflect the expectation that the hemodialysis and
lead-acid battery after-markets will continue to support the
company's track record of generating positive free cash, and its
recent turnaround.
Polypore announced in March 2008 the acquisition of 100% of the
stock of Microporous Holding Corporation from Industrial Growth
Partners II L.P. and other stockholders, through its
subsidiaries, Daramic LLC and Daramic Acquisition Corporation,
for total consideration of approximately $76 million. The
acquisition was funded with a combination of cash, assumption of
debt and borrowings under Polypore's existing credit facility.
Polypore said the acquisition of Microporous adds rubber-based
battery separator technology to the Daramic product line. The
acquisition broadens Polypore's participation in the deep-cycle
industrial battery market, adds to the membrane technology
portfolio and product breadth, enhances service to common
customers and adds cost-effective production capacity.
Polypore said, as a result of its acquisition of Microporous, it
has increased its financial guidance for fiscal 2008. For the
year ending Jan. 3, 2009, Polypore now expects to achieve net
sales of $580 million to $605 million, adjusted EBITDA of $170
million to $178 million and earnings. These estimates are based
on an assumed full-year weighted average fully diluted share
count of 40.7 million shares. Additionally, the company
estimates total capital expenditures of approximately $52
million in 2008.
According to Moody's, the acquisition was funded with a
combination of $45 million of cash, $17 million of revolver
borrowings, and $14 million of assumed debt.
Moody's sees that additional debt from this transaction as
nominal and expects these amounts to paid down over the near
term. The acquisition is expected to be accretive to Polypore's
earnings prior to any synergies.
The stable rating outlook reflects the expectation that the
company's solid growth trends and operating performance will
continue, bolstered by solid end-market growth prospects, its
recurring revenue base and strong geographical diversification,
tempered to some extent by a sluggish North American economy.
In addition, the outlook reflects the company's adequate
liquidity profile, including nominal debt maturities over the
near term.
These ratings are raised:
Polypore International, Inc.
-- Corporate Family Rating, to B2 from B3;
-- Probability of Default, to B2 from B3;
-- $90 million guaranteed senior secured revolving credit
facility due 2013; to Ba2 (LGD2, 19%) from Ba3 (LGD2, 19%);
-- $370 million guaranteed senior secured term loan due
November 2014; to Ba2 (LGD2, 19%) from Ba3 (LGD2, 19%);
-- $[_______] guaranteed senior subordinated notes due May
2012, to B3 (LGD5, 76%) from Caa1 (LGD5, 78%);
-- Euro guaranteed senior subordinated notes due May 2012, to
B3 (LGD5, 76%) from Caa1 (LGD5, 78%);
The last rating action was on May 9, 2007 when the bank credit
facility ratings were assigned and the outlook changed to
Positive.
Using Moody's standard adjustments for the last twelve months
ended March 29, 2008, Polypore's consolidated total debt EBITDA
leverage approximated 5.5x, EBIT interest was approximately
1.4x. Pro forma for the exclusion of interest accreted on the
discount notes, EBIT interest coverage was approximately 1.5x.
Polypore maintained a $90 million revolving credit facility
under which there were approximately $17 million of borrowings
at March 29, 2008. The company also maintained $23 million of
cash on hand.
Polypore International Inc., headquartered in Charlotte, North
Carolina, is a leading worldwide developer, manufacturer and
marketer of specialized polymer-based membranes used in
separation and filtration processes. The company is managed
under two business segments. The energy storage segment, which
currently represents approximately two-thirds of total revenues,
produces separators for lead-acid and lithium batteries. These
products have applications in transportation, electronics, and
general industrial applications. The separations media segment,
which currently represents approximately one-third of total
revenues, produces membranes used in various healthcare and
industrial applications. For the twelve months ending March 31,
2008, Polypore's net sales approximated $553 million.
The company has operations in Australia, Germany and Brazil.
ST. GEORGE BANK: Union Criticizes "Outsourcing" Plan
----------------------------------------------------
George Lekakis of The Herald Sun reports that the Finance Sector
Union "launched a major attack on [St. George Bank], claiming
that it had not consulted staff on the outsourcing initiatives."
"We have not received any formal or detailed information on what
was announced [] by the bank," Mr. Lekakis quotes FSU spokesman
Rod Masson. The FSU covers full-time, part-time and casual
staff in banks, insurance companies, credit unions, finance
companies, brokers and financial planners.
"That's pretty poor from a bank that claims to differentiate
itself from its rivals," Mr. Masson added, according to The
Herald Sun.
Citing the Australian Associated Press, the Troubled Company
Reporter-Asia Pacific reported yesterday that St. George Bank
said it will cut jobs when it undertakes its AU$30 million
restructuring program, but company officials declined to specify
how many staff would go.
The TCR-AP noted that St. George missed analysts expectations to
report a cash profit of AU$619 million for the six months ended
March 31, 2008; it reported AU$603 Million instead. In
addition, as a result of recognising a AU$20 million credit loss
on a margin loan during the half and as the effects of the
turmoil in global financial markets flow through to the domestic
economy, the bank revised its EPS growth target to a range of 8
to 10 percent for 2008, on the basis of no further unexpected
material credit losses.
About St. George Bank
Headquartered in Kogarah, New South Wales, Australia --
http://www.stgeorge.com.au-- St. George Bank Limited is a
banking company. The Company operates in four business
segments: Retail Bank (RB), Institutional and Business Banking
(IBB), BankSA (BSA) and Wealth Management (WM). RB is
responsible for residential and consumer lending, provision of
personal financial services including transaction services, call
and term deposits, small business banking and financial
planners. This division manages retail branches, call centers,
agency networks and electronic channels, such as electronic
funds transfer at point of sale (EFTPOS) terminals, automated
teller machines (ATMs) and Internet banking.
On September 28, 2007, it disposed of its 100% interest in
Scottish Pacific Business Finance Holdings Pty. Limited.
* * *
The Troubled Company Reporter-Asia Pacific reported on March 28,
2008 that Fitch Ratings assigned a 'B' rating on the AU$1.0
million Class E bond of St. George. A subsequent TCR-AP report
on April 2, 2008, said Fitch Ratings rated St. George's AU$1.7
million Class D bond a 'BB'.
TIFAM INVESTMENTS: Placed Under Voluntary Liquidation
-----------------------------------------------------
Tifam Investments Pty Limited's members agreed on March 14,
2008, to voluntarily liquidate the company's business. John
Gibbons and Keiran Hutchison were appointed to facilitate the
sale of the company's assets.
The liquidators can be reached at:
John Gibbons
Keiran Hutchison
Ernst & Young Centre
680 George Street
Sydney NSW 2000
Telephone: (02) 8295-6590
VAN KLOOSTER: Members and Creditors to Meet Today
--------------------------------------------------
Van Klooster Transport Pty Limited will hold a final meeting for
its members and creditors at 10:00 a.m. today. During the
meeting, the company's liquidator, Geoffrey Reidy at Rodgers
Reidy, Level 8, 333 George Street in Sydney, will provide the
attendees with property disposal and winding-up reports.
The company's liquidator can be reached at:
Geoffrey Reidy
Rodgers Reidy
Level 8, 333 George Street
Sydney NSW 2000
ZINIFEX LTD: Jinchuan Accepts Offer for Allegiance Mining Stake
---------------------------------------------------------------
Jinchuan Group Ltd has accepted Zinifex Australia Limited's
offer for its 10.4% interest in Allegiance Mining NL.
With Jinchuan's acceptance, Zinifex will own more than 90% of
Allegiance and will move to compulsorily acquire the outstanding
shares and de-list the company.
Zinifex's CEO Andrew Michelmore said that Zinifex was very
pleased to have gained Jinchuan's support. "We view Jinchuan as
a strategic partner particularly given Jinchuan's leading
position in China's commodity markets which are growing rapidly.
We are excited by the potential for expanding the relationship
between the companies in relation to other base metal projects."
Mr. Michelmore said that the recently announced merger between
Zinifex and Oxiana opens up a whole new suite of possibilities
to extend the relationship with Jinchuan. "The merged company
will be a substantial producer of copper, nickel, and zinc which
are all metals that are part of Jinchuan's business. These
markets present multiple opportunities to grow together."
Zinifex assumes a number of the commitments with Jinchuan
through its acquisition of Allegiance, including:
1. Zinifex will implement Allegiance's commitments under the
"Agreement for the Purchase and Sale of Nickel
Concentrate" between Allegiance and Jinchuan, dated 13
April 2006, despite any changes which have occurred in
respect of Allegiance, including but not limited to
delisting, shareholders' changing, capital reorganisation,
company's merger and acquisition etc. The first delivery
of concentrate from the Avebury nickel mine to Jinchuan is
expected in June or July 2008.
2. Zinifex will also implement Allegiance's commitments under
the "Agreement for Purchase and Sale of All Mineral
Products – Tasmania Projects (other than Avebury)" between
Allegiance and Jinchuan, dated April 30, 2006, (the
Agreement). Zinifex undertakes that all the nickel
resources discovered in Tasmania within the Agreement area
will be produced and delivered to Jinchuan in accordance
with the Agreement. Mineral products that are produced
from Zinifex's Rosebery mine and any discoveries arising
on Zinifex's existing Tasmanian exploration tenements are
excluded from the Agreement.
3. Plans to expand nickel production at Avebury and increase
exploration with the aim of extending the mine life. All
of the increased output would be delivered to Jinchuan
under the existing supply contract.
4. Enhancing the performance of Avebury and our joint
expertise in nickel mining and processing, through
technical collaboration, sharing of operating information
and bilateral site visits.
Zinifex's Offer for Allegiance mining is currently scheduled to
close at 7 p.m. on May 16, 2008, and will not be extended. Any
Allegiance shareholders who have not already done so are
encouraged to accept the Offer before it closes.
Accepting shareholders will be paid within 5 business days of
receipt of a valid acceptance. Payment for shares acquired
compulsorily after the Offer closes could take significantly
longer than by accepting the Offer. If Allegiance shareholders
have any queries in relation to how to accept the offer or any
other matter relating to the takeover bid, please contact the
Zinifex offer information line on 1300 658 985 (within
Australia) and +61 2 8986 9352 (outside Australia).
ZINIFEX LTD: CFO to Retire After Oxiana Merger
----------------------------------------------
Andrew Michelmore, chief executive officer of Zinifex Ltd.,
related last week that Tony Barnes, Zinifex's chief financial
officer, had advised him of his decision to retire following the
merger with Oxiana at a date to be agreed later in 2008.
Mr. Michelmore said, "Tony has made a tremendous contribution to
the company in playing a lead role both in guiding it through
the challenges of administration and importantly transforming
the company to where it is now with an exciting future in front
of it."
Zinifex's Chairman Peter Mansell also praised Tony's
contribution commenting, "Tony leaves Zinifex well placed to
make a significant contribution to the new merged entity, with
an enviable balance sheet that can be used to take advantage of
opportunities to grow shareholder wealth. This is a far cry from
the modest position Zinifex commenced its life with four short
years ago. In particular Tony deserves much credit for what was
achieved during his time as interim CEO with the successful
delivery of the Nyrstar float followed by the offer for
Allegiance Mining. Tony's straight forward approach has been
well valued by the Zinifex board."
Commenting on his departure, Mr. Barnes said, "The past seven
years have been an interesting journey and perhaps a once in a
lifetime experience. In particular being part of the team that
created Zinifex and then transformed into what it is today is
something that I will look back on as a highlight of my
executive life. In making the decision to retire I leave knowing
the company has a great future in front of it but it is now
someone else's turn to help shape that future as CFO."
"My intention is to continue to be involved in the business
world through nonexecutive directorships and to spend more time
doing all those things I have put on hold for too long."
Mr. Barnes will remain as Zinifex's Chief Financial Officer
until completion of the merger with Oxiana.
Some Oxiana Shareholders Are Uneasy
The Australian reports that some Oxiana shareholders have
expressed uneasiness over the proposed merger with Zinifex.
They are apprehensive that Oxiana boss Owen Hegarty will be
retiring in favor of Zinifex's Andrew Michelmore, the report
relates. The Australian notes that this is likely to be
exacerbated by the latest metal forecasts from JPMorgan, which
has downgraded the zinc outlook.
According to The Australian, both Mr. Hegarty and Mr. Michelmore
have sought to counter these concerns "by stressing that the
merger is about capitalising on the long-term benefits of
increased scale."
The report notes that Mr. Hegarty will be staying on the merged
board and had been planning to retire at the end of 2009 anyway.
As previously reported by the Troubled Company Reporter-Asia
Pacific, the parties reached a deal after 12 months of intense
negotiations. Gold and copper miner Oxiana will buy zinc
and lead producer Zinifex for AU$6.2 billion (US$5.8 billion).
The new company will be equally owned by Oxiana and Zinifex
shareholders.
Zinifex shareholders will be voting on the deal at a meeting
scheduled for June 16, The Australian adds.
About Zinifex
Zinifex Limited, one of the world's largest integrated zinc and
lead companies -- http://www.zinifex.com/-- is headquartered in
Melbourne, Australia. The company owns and operates two mines
and four smelters. The mines and two of the smelters are
located in Australia and supply the growing industrial markets
of the Asian-Pacific region, including China. The company
also has a zinc smelter in the Netherlands and the United
States. The company sells a range of zinc metal, lead metal,
and associated alloys in 20 countries. More than 80% of the
company's products are distributed outside Australia,
particularly in Asia, which is experiencing significant growth
in construction activity and vehicle production. Zinc is used
for steel galvanizing and die-casting and lead for lead acid
batteries used mainly in cars and other vehicles.
* * *
The Troubled Company Reporter-Asia Pacific reported on
Dec. 18, 2007, that Fitch Ratings affirmed Zinifex Limited's
'BB+' long-term foreign currency Issuer Default Rating (IDR),
following the announcement of an all cash offer for Allegiance
Mining NL (Allegiance). Fitch's Web site as of April 21, 2008,
says the rating outlook is positive.
=========
C H I N A
=========
MONITOR OIL: Global Maritime & Adshead Sued for Contract Breach
---------------------------------------------------------------
Monitor Oil PLC and its debtor-affiliates commenced an adversary
proceedings against Global Maritime, an offshore engineering and
design firm in Houston, Texas, and Stephen Adshead, a
controlling party of Mancorp AS, for breach of fiduciary duties
to the Debtors.
The Debtors assert that Global Maritime has not complied with
some obligations under a second amended and restated agreement
entered among the parties in August 2006, which remains in
effect and governs the current relationship between the parties.
Global Maritime has failed to provide schematic drawings,
calculations, regulatory approvals and other intellectual
property for the Single Lift Vessel (SLV) design to the Debtors
pursuant to the agreement.
Mancorp entered in an agreement dated June 2006 with the
Debtors, which calls for Mr. Adshead to oversee and manage "all
phases of the SLV construction project." Mr. Adshead was the
president and director of Monitor Offshore Systems AS.
The Debtors say Mr. Adshead failed to obtain documents for the
SLV design from Global Maritime. Mr. Adshead permitted Global
Maritime to take all of the materials constituting the SLV
design back after Global Maritime terminated the second amended
and restated agreement on Nov. 14, 2007.
The Debtors say they requested Global Maritime and Mr. Adshead
to turn over all documents of the SLV design but both refused to
do so. Global Maritime and Mr. Adshead have taken action to use
the SLV design for their own benefit, the Debtors allege.
The Debtors could suffer imminent harm if Global Maritime and
Mr. Adshead still have control over the SLV design.
About Monitor Oil
Headquartered in the Cayman Islands, Monitor Oil, Plc --
htpp://www.monitoroil.com/ -- an oil and gas service company
that provides oil and gas production solutions, offshore
services and engineering services. The Monitor Group has
operations in London, England; Aberdeen, Scotland; Stavanger,
Norway; Caldicot, Wales; Shanghai, China and New York, United
States.
The company and two of its affiliates, Monitor Single Lift 1,
Ltd., and Monitor US FinCo, Inc., filed for Chapter 11
Protection on Nov. 21, 2007 (Bankr. S.D.N.Y. Case No. 07-13709).
Eric Lopez Schnabel, Esq., at Dorsey & Whitney, L.L.P.,
represents the Debtor. The U.S. Trustee for Region 2 appointed
five creditors to serve on an Official Committee of Unsecured
Creditors in the Debtors' cases. Ira L. Herman, Esq., at
Thompson & Knigh t, LLP, represents the Committee. As of
Dec. 31, 2007, the company disclosed total assets of $98,340,000
and total debts of $56,125,000.
PUDONG BANK: 412.5 Mil. Shares to Become Tradable Next Week
-----------------------------------------------------------
Shanghai Pudong Development Bank Co.'s 412.5 million of yuan-
denominated shares will become tradable next week as their two-
year lockup period expires, Luo Jun of Bloomberg News reports.
Pudong Bank's two largest shareholders will be allowed to sell
part of their holdings, representing 7.3 percent of total
outstanding shares, on May 12, Bloomberg says, citing a
statement from the bank.
According to the report, Pudong Bank still has 6.5 billion non-
tradable shares.
On April 15, 2008, the Troubled Company Reporter-Asia Pacific,
citing a report by Edmund Klamann of Reuters, said Pudong Bank's
first quarter net profit rose at least 180% from a year earlier,
attributing the gains to asset growth, rising interest margins,
growth in non-interest income and a lower effective corporate
tax rate.
Pudong Bank President Fu Jianhua said in March that he looks to
boost net profit by at least 50% this year, the TCRAP reported,
citing Reuters.
Headquartered in Shanghai, China, Shanghai Pudong Development
Bank Co., Ltd. -- http://www.spdb.com.cn/-- is a commercial
bank involved in personal banking, corporate banking, and inter-
bank business. The bank also offers Internet banking and
telephone banking.
Fitch Ratings on March 12, 2007, upgraded the Support ratings of
Shanghai Pudong Development Bank to 3 from 4, reflecting the
improved ability of the government to support domestic financial
institutions and the close relationship between the bank and the
central and local governments. At the same time, the agency
affirmed the bank's individual rating at D.
The bank, as of May 4, 2007, also carried Moody's Investors
Service's Ba1 financial strength rating.
*CHINA: Watchdog Warns State Firms to "Brace for Tough Times"
------------------------------------------------------------
China's Assets Supervision and Administration Commission has
warned major state-owned enterprises to "brace for tough times"
given the likelihood of a worsening global economic slowdown,
Agence France-Presse reports.
Li Rongrong, director of the Commission, told Chinese state-
owned enterprises to pay more attention to their financial
position to avoid a potential capital crunch, the report said,
citing the Economic Observer.
Mr. Li added that the SOEs, some of which have already flagged
cash flow shortages, should better prepare themselves for
tightening monetary policy lasting at least two years, AFP
relates, citing the state media.
================
H O N G K O N G
================
CENTRAL UNITY: Liquidator Quits Post
------------------------------------
On April 17, 2008, Hung See Mei, Elina stepped down as
liquidator for Central Unity International Limited, which is
undergoing liquidation.
COACTIVE TECH: S&P Holds Rating on Failure to File Fin'l Report
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating and other ratings on Hong Kong-based CoActive
Technologies Inc. and revised the outlook to negative from
stable. The action follows the company's announcement that its
financial statements for the fiscal year ended Dec. 31, 2008,
would not be filed by the time specified in the covenants of its
Credit Agreements. Financial results were due on April 29,
2008. The company expects to file financial statements within
the 30-day cure period provided in the Credit Agreements.
The delay relates to the auditor having not yet finalized its
examination and review of the company's financial statements for
the year ended Dec. 31, 2007, attributed to completion of
purchase accounting, and is not related to any issues of
accounting for the company's operations.
"We do not expect any material adjustments to 2007 EBITDA in the
review," said Standard & Poor's credit analyst Bruce Hyman.
CoActive, formerly known as DeltaTech Controls Inc., acquired
ITT Corp.'s electromechanical and dome array switch businesses,
and related products, in mid-2007. The ratings on CoActive
reflect the company's estimated 4% share of the highly
fragmented and competitive electronic switch market, and its
lack of a track record as an independent company. These factors
are partly are offset by the company's diverse end markets and
broad customer base, low-cost manufacturing locations, and costs
customers would incur to change suppliers.
CoActive manufactures switches used in a wide range of
electronic products, custom-engineered switches and
electromechanical controllers for automotive and industrial
equipment, and dome array switches used in cellphones.
CoActive's pro forma financial performance for the quarter and
for the nine months ended Sept. 30, 2007, were within
expectations. Debt to EBITDA was about 4.5x for the same
period, and EBITDA margins were in the lower teens percentage
area. The company also stated that it continues to perform well
and expects to show compliance with all financial covenants as
of Dec. 31, 2007, when its statements are released.
ECR EUROCURRENCY: Liquidator Quits Post
---------------------------------------
On April 14, 2008, Kim Tim Hei stepped down as liquidator for
Ecr Eurocurrency Research Limited, which is undergoing
liquidation.
FOKA DEVELOPMENT: Creditors' Proofs of Debt Due May 21
------------------------------------------------------
Creditors of Foka Development Limited are required to file their
proofs of debt by May 21, 2008, to be included in the company's
dividend distribution.
The company commenced liquidation proceedings on April 23, 2008.
The company's liquidator is:
Tam Shing Yan
Shop No. 101, 1st Floor
328 Sha Tsui Road, Tsuen Wan N.T.
Hong Kong
GOLDIAN LIMITED: Creditors' Proofs of Debt Due May 16
-----------------------------------------------------
Creditors of Goldian Limited are required to file their proofs
of debt by May 16, 2008, to be included in the company's
dividend distribution.
The company commenced liquidation proceedings on April 15, 2008.
The company's liquidator is:
Yan Tat Wah
Dah Sing Life Building, 5th Floor
99-105 Des Vouex Road
Central, Hong Kong
GWA INT'L: Members' Final Meeting Set for May 27
------------------------------------------------
Members of GWA International (Hong Kong) Limited will have their
final general meeting on May 27, 2008, at Level 28, Three
Pacific Place, 1 Queens Road East, in Hong Kong to hear the
liquidator's report on the company's wind-up proceedings and
property disposal.
The company's liquidators are:
Natalia Seng Sze Ka Mee
Cynthia Wong Tak Yee
Level 28, Three Pacific Place
1 Queens Road East, Hong Kong
HELPING METAL: Members & Creditors to Meet on May 27
----------------------------------------------------
Helping Metal Company Limited will hold a joint meeting for its
members and creditors at 2:30 p.m. and 3:00 p.m. respectively
on May 27, 2008. During the meeting, the company's liquidator,
Wong Man Chung Francis will provide the attendees with property
disposal and winding-up reports.
The company's liquidator can be reached at:
Wong Man Chung Francis
19th Floor, No.3 Lockhart Road
Wanchai, Hong Kong
HONG KONG YOSHITOKU: Liquidator Quits Post
------------------------------------------
On April 25, 2008, Lai Kar Yan (Derek) and Darach E. Haughey
stepped down as liquidators for Hong Kong Yoshitoku Company
Limited, which is undergoing liquidation.
MORIRIN (ASIA): Creditors' Final Meeting Set for May 6
------------------------------------------------------
Members of Moririn (Asia) Company Limited will have their final
general meeting on May 6, 2008, at Lippo Center, Tower 2, 24th
Floor, Suite 2408, 89 Queensway in Hong Kong to hear the
liquidator's report on the company's wind-up proceedings and
property disposal.
No liquidator information was disclosed.
PARKSON RETAIL: 2007 Net Profit Up 46.7% to CNY676.0 Million
------------------------------------------------------------
Parkson Retail Group Limited and its subsidiaries disclosed
audited consolidated annual results for the year ended
December 31, 2007.
The company continues to achieve impressive growth in both total
gross sales proceeds and total operating revenues. Total gross
sales proceeds rose 46.0% to top CNY9 billion. Total operating
revenues increased by 40.1% to CNY3.1 billion. Net profit
attributable to the Group improved to CNY676.0 million, an
increase of 46.7%. Basic earnings per share was CNY1.22, grew
by 47.0% over the same period of last year.
The board of directors recommended payment of a final dividend
for the year ended December 31, 2007 of CNY0.38 (2006: CNY0.27)
in cash per share. Together with the interim dividend of
CNY0.22 per share, the full year dividend amounts to CNY0.60
(2006:0.42) in cash per share, representing approximately 42.9%
of the year's net profit attributable to the Group.
Business Review
Commenting on the full year results, Mr. Alfred Cheng Yoong
Choong, Managing Director of Parkson said, "We continued our
impressive growth in the year 2007 with same store sales growth
coming in strongly at approximately 18.4%. We carried out
effective promotional activities and introduced quality branded
and innovative products with higher value to our loyal
customers.
Our efforts to re-align the usage of premium and high traffic
floor spaces to high value and productive merchandises have paid
off. The net profit attributable to the Group increased by
46.7% to CNY676.0 million. "
"We made a solid progress in consolidating our position as one
of the leading department store operators in the PRC through
opening new stores and M&A transactions at an earnings accretive
pricing to our shareholders." Mr. Cheng said the Group now
operates and manages a total of 41 stores, 29 self-owned
department stores, 10 managed department stores and 2 "Xtra"
branded super centres.
Prospects
"Despite the uncertainties and threats facing the world economy
due to sub-prime mortgages, we remain bullish about the PRC
economy and believe it will maintain its strong growth in the
coming years as the PRC government will continue to rebalance
the economic growth away from export and fixed asset
investments, and towards domestic consumption, which is expected
to be the main pillar of the economy going forward. We have 41
stores in our existing portfolio and will continue to roll out
more stores in the coming years." Mr. Cheng said Mr. Cheng
concluded, "We will continue to pursue our M&A strategy of
acquiring the minority interest of the existing stores and the
controlling interests of the managed stores to enhance our
shareholder's returns. We will also actively explore the
opportunities to make other acquisitions that meet our strategic
initiatives and return on capital requirements."
About Parkson Retail Group
Headquartered in Hong Kong, Parkson Retail Group Limited
operates department stores including 37 "Parkson" branded
department stores and 2 "Xtra" branded supercentres situated in
26 cities in the People's Republic of China. Other activities
include provision of consultancy and management services,
research and development of computer software and investment
holding.
* * *
As of April 26, 2008, Parkson Retail Group Limited continues to
carry Moody's "Ba1" Senior Unsecured Debt, Senior Secured Debt,
and Long-Term Corporate Family Ratings with a Stable outlook.
In addition, Parkson Retail still carries Standard & Poor's "BB"
long-term local and foreign issuer credit ratings.
PARKSON RETAIL: Khazanah Sells Company Shares Via Placement
-----------------------------------------------------------
Malaysian state investment arm Khazanah Nasional sold its stake
in Parkson Retail Group, raising US$647 million through a share
placement and an exchangeable Islamic bond, Reuters reports.
According to the report, of the proceeds, US$550 million has
been raised by issuing a five-year sukuk exchangeable into a
total of 44 million Parkson Retail shares, or 7.9% of the
company.
The remaining US$97 million was raised through the placement of
10.6 million shares, or 1.9% of Parkson Retail, at HK$71 per
share, the report notes.
About Parkson Retail Group
Headquartered in Hong Kong, Parkson Retail Group Limited
operates department stores including 37 "Parkson" branded
department stores and 2 "Xtra" branded supercentres situated in
26 cities in the People's Republic of China. Other activities
include provision of consultancy and management services,
research and development of computer software and investment
holding.
* * *
As of April 26, 2008, Parkson Retail Group Limited continues to
carry Moody's "Ba1" Senior Unsecured Debt, Senior Secured Debt,
and Long-Term Corporate Family Ratings with a Stable outlook.
In addition, Parkson Retail still carries Standard & Poor's "BB"
long-term local and foreign issuer credit ratings.
PENAR LIMITED: Liquidator Quits Post
------------------------------------
On April 17, 2008, Christopher Harvey Hall stepped down as
liquidator for Penar Limited, which is undergoing liquidation.
SUCCESS WIDE: Commences Liquidation Proceedings
-----------------------------------------------
Success Wide Development Limited's members agreed on April 21,
2008 to voluntarily liquidate the company's business. The
company has appointed Fung Kit Yee to facilitate the sale of its
assets.
The liquidator can be reached at:
Fung Kit Yee
Two International Finance Centre
8 Finance Street, Central
Hong Kong
=========
I N D I A
=========
GENERAL MOTORS: Charges on Delphi Corp. Issues Reach $8.3 Bil.
--------------------------------------------------------------
General Motors Corp. said that during the first quarter of 2008,
it took a non-cash charge of $731,000,000 to increase its
liability for estimated net costs associated with its support of
Delphi Corp.'s bankruptcy and restructuring efforts.
"This charge primarily results from updated estimates reflecting
uncertainty around the nature, value and timing of GM's
recoveries," GM said. Delphi was scheduled to emerge from
bankruptcy in mid-April but obtained problems with its exit
equity financing from Appaloosa Management, PC, thus affecting
the timing of GM's recoveries from Delphi.
General Motors has now recorded charges totaling $8,300,000,000
in connection with Delphi-related issues, Reuters reports.
GM has recently agreed to advance Delphi $650,000,000 in 2008 in
anticipation of settlement agreements between the companies that
would have been paid to the supplier had Delphi emerged from
court protection as expected in April.
General Motors also recorded a $1,450,000,000 non-cash partial
impairment charge for its equity investment in its finance unit
GMAC LLC for the first quarter of 2008.
General Motors reported net losses of $3,251,000,000 on
$42,700,000,000 of revenues for the first quarter. GM said its
results were marked by improved adjusted automotive operating
performance, rapid growth in emerging markets, continued cost
performance in North America operations and liquidity of nearly
$24,000,000,000, despite the impact of the American Axle strike
and weakness in the U.S. auto industry.
Bloomberg News said the loss was smaller than analysts
estimated, causing GM shares to gain 9.4% in the New York Stock
Exchange. GM's loss excluding costs for Delphi and the GMAC was
$350,000,000, or 62 cents a share, beating the $1.52 average
estimate of 13 analysts surveyed by Bloomberg.
GM said that in light of the current state of the U.S. economy
and automotive industry, it has revised its 2008 U.S. industry
seasonally adjusted annual rate (SAAR) outlook to the mid to
high 15 million unit range, down from the low 16 million unit
range. As a result of the anticipated softer automotive
industry, GM announced earlier this week that it will eliminate
a shift of production at four assembly plants: Janesville,
Wisconsin; Pontiac and Flint, Michigan; and Oshawa, Ontario.
About Delphi
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: 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
$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 confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 280,000 people around the world and manufactures cars and
trucks in 33 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2006, nearly 9.1 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
* * *
As reported in the Troubled Company Reporter on April 28, 2008,
Standard & Poor's Ratings Services said that its 'B' long-term
and 'B-3' short-term corporate credit ratings on General Motors
Corp. remain on CreditWatch with negative implications, where
they were placed March 17, 2008. The CreditWatch update follows
downgrades of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and
Residential Capital LLC (CCC+/Watch Neg/C). The rating actions
on Residential Capital LLC and GMAC were triggered by the
resignation of the only independent directors at Residential
Capital LLC.
GENERAL MOTORS: Plastech Inks MOU with GM for Exit Financing
------------------------------------------------------------
In connection with the $87,000,000 financing provided by its
major customers General Motors Corporation, Chrysler, LLC,
Johnson Controls, Inc., and Ford Motor Company, Plastech
Engineered Products Inc. and its debtor-affiliates agreed to a
covenant requiring that at least one Major Customer accepts, by
May 15, 2008, a proposal by the Debtors regarding a means of
exiting Chapter 11.
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, informs the U.S. Bankruptcy Court
for the Eastern District of Michigan that General Motors has
accepted Plastech's Chapter 11 exit plan, pursuant to the terms
of a memorandum of agreement, and a related sale of assets in
connection with the memorandum.
"The MOU was only recently finalized, however, and the Debtors
must be authorized to consummate the transactions contemplated
thereby as soon as possible in order to maintain compliance with
their postpetition financing and the terms of the MOU,"
Mr. Galardi said. In that light, the Debtors sought the Court's
permission to shorten the notice period to 17 days, instead of
20, schedule a hearing on the MOU for May 16, 2008 at 9:30 a.m.
Mr. Galardi said if the MOU is not approved by May 16, Plastech
will be unable to comply with the terms of their DIP Financing,
and, absent funding from the Major Customers, the Debtors will
likely be unable to continue to operate their businesses.
Plastech did not disclose the specific terms of the GM
Memorandum of Understanding as it sought and obtained the
Court's permission to file the GM MOU documents under seal.
Mr. Galardi explained the Debtors are seeking relief that is
"of a confidential, commercial nature, which the Debtors believe
would cause severe disruption to their operations if made
publicly available." He said the sealed documents contain
information pricing, quantity and timing of production and other
sensitive business issues.
Plastech will only provide unsealed copies of the GM MOU Motion
to the Court and the U.S. Trustee. Subject to entry into a
confidentiality agreement reasonably acceptable to General
Motors, the Debtors' term loan lenders, sources of financing and
capital necessary for confirmation and implementation of the
Plan, and counsel to the Committee may be provided with an
unsealed copies of the documents.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc.
-- http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded
plastic products primarily for the automotive industry.
Plastech's products include automotive interior trim, underhood
components, bumper and other exterior components, and cockpit
modules. Plastech's major customers are General Motors, Ford
Motor Company, and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is
certified as a Minority Business Enterprise by the state of
Michigan. Plastech maintains more than 35 manufacturing
facilities in the midwestern and southern United States. The
company's products are sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The
Debtors chose Jones Day as their special corporate and
litigation counsel. Lazard Freres & Co. LLC serves as the
Debtors' investment bankers, while Conway, MacKenzie & Dunleavy
provide financial advisory services. The Debtors also employed
Donlin, Recano & Company as their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed
in the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
About GM
Headquartered in Detroit, Michigan, General Motors Corp. (NYSE:
GM) -- http://www.gm.com/-- was founded in 1908. GM employs
about 280,000 people around the world and manufactures cars and
trucks in 33 countries, including the United Kingdom, Germany,
France, Russia, Brazil and India. In 2006, nearly 9.1 million
GM cars and trucks were sold globally under the following
brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden,
HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar
subsidiary is the industry leader in vehicle safety, security
and information services.
* * *
As reported in the Troubled Company Reporter on April 28, 2008,
Standard & Poor's Ratings Services said that its 'B' long-term
and 'B-3' short-term corporate credit ratings on General Motors
Corp. remain on CreditWatch with negative implications, where
they were placed March 17, 2008. The CreditWatch update follows
downgrades of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and
Residential Capital LLC (CCC+/Watch Neg/C). The rating actions
on Residential Capital LLC and GMAC were triggered by the
resignation of the only independent directors at Residential
Capital LLC.
GMAC LLC: Home Mortgage Unit Unable to Pay Debts Due June 2008
--------------------------------------------------------------
Residential Capital LLC, a home mortgage unit of GMAC LLC,
disclosed that it is highly leveraged relative to its cash flow,
and its liquidity position has been declining. According to a
Securities and Exchange Commission filing, there is a
significant risk that the company will not be able to meet its
debt service obligations, be unable to meet certain financial
covenants in its credit facilities, and be in a negative
liquidity position in June 2008.
As of Feb. 29, 2008, ResCap's liquidity portfolio (cash readily
available to cover operating demands from across its business
operations and maturing obligations) totaled $1.8 billion. In
addition, the company has expended a significant amount of its
available cash in recent weeks. ResCap had approximately
$4.4 billion of unsecured long-term debt maturing during the
remainder of 2008, consisting of approximately $1.2 billion
aggregate principal amount of notes due in June 2008,
approximately $1.8 billion of outstanding borrowings under its
term loan due in July 2008, and approximately $1.1 billion
aggregate principal amount of notes due in November 2008.
In addition, the company had approximately $15.6 billion of
secured, short-term debt outstanding as of Dec. 31, 2007, with
various maturity dates in 2008, excluding debt of GMAC Bank. In
an effort to improve its short-term liquidity and its capital
structure and generally reduce its financial risk, ResCap has
undertaken these:
a) ResCap is conducting debt tender and exchange offers, as
reported in yesterday's Troubled Company Reporter, for its
outstanding unsecured notes to improve its financial
flexibility by extending the maturities of such indebtedness
and reducing the company's overall indebtedness. ResCap is
offering eligible holders of ResCap notes that mature in 2008
and 2009, as well as holders of ResCap notes that mature in
2010 through 2015, the ability to exchange such notes for one
of two newly-issued series of notes of ResCap. Holders of
ResCap's floating rate notes maturing on June 9, 2008, have
the ability to tender such notes for cash. In addition,
eligible holders participating in the exchange offers may
elect to receive cash in lieu of new notes that they would
otherwise receive pursuant to a "Modified Dutch Auction"
process. Newly issued notes would be secured by a second or
third priority lien on the assets that would secure the
proposed senior secured credit facility with GMAC.
b) ResCap is in negotiations with its parent, GMAC LLC, to
provide ResCap with a new $3.5 billion senior secured credit
facility, which would be used to fund the cash required for
the offers, to repay the term loan maturing in July 2008, and
to replace its $875.0 million 364-day revolving bank credit
facility and its $875.0 million 3-year revolving bank credit
facility. Such facility would be secured by a first priority
lien in substantially all of its existing and after-acquired
unencumbered assets remaining available to be pledged as
collateral.
c) ResCap is seeking amendments to substantially all of its
secured bilateral facilities that would extend the maturities
of such facilities from various dates in 2008 to May 2009 and
eliminate or modify the tangible net worth covenant contained
in such facilities. Although some of its secured facilities
have been extended during 2008, the extensions have generally
been for periods shorter than such facilities' previous
terms. Between March 1, 2008 and Dec. 31, 2008, the company
has $30.2 billion, or 96.8%, of its secured committed
capacity maturing.
d) ResCap is in negotiations with GMAC for them to contribute to
ResCap by May 31, 2008, approximately $350.0 million
principal amount of its outstanding notes held by GMAC in
exchange for additional ResCap preferred units, which are
exchangeable at GMAC's option at any time after Jan. 1, 2009,
subject to certain conditions, into preferred units of IB
Finance Holdings, LLC, the owner of GMAC Bank.
e) ResCap is seeking approximately $150.0 million in additional
borrowings under one of its existing secured facilities with
GMAC, the availability of which is subject to certain
conditions.
Even if ResCap is successful in implementing all of the actions,
it will be required, in order to satisfy its liquidity needs and
comply with anticipated covenants to be included in its new debt
agreements requiring maintenance of minimum cash balances, to
consummate in the near term certain asset sales or other capital
generating actions over and above its normal mortgage finance
activities to provide additional cash of $600 million by
June 30, 2008.
Asset liquidation initiatives may include, among other things,
sale of retained interest in ResCap's mortgage securitizations,
marketing of loans secured by time share receivables, marketing
of its U.K. and Continental Europe mortgage loan portfolios,
whole loan sales and marketing of businesses and platforms that
are unrelated to its core mortgage finance business. Moreover,
the amount of liquidity ResCap needs may be greater than
currently anticipated as a result of additional factors and
events (such as interest rate fluctuations and margin calls)
that increase its cash needs causing the company to be unable to
independently satisfy its near-term liquidity requirements.
Liquidity and Capital Resources
Domestic and international mortgage and capital markets have
continued to experience significant dislocation. As a result,
the company's liquidity was negatively impacted due to reduced
committed lending levels and lower effective advance rates of
its secured committed sources of liquidity. In addition, the
company has incurred significant losses in the first quarter of
2008, and many of its secured committed facilities experienced
shorter dated extensions than in the past.
On Feb. 21, 2008, ResCap's subsidiary, Residential Funding
Company, LLC, entered into a secured credit agreement with GMAC,
as a lender and as agent, to provide RFC with a revolving credit
facility with a principal amount of up to $750.0 million. To
secure the obligations of RFC under the credit agreement, RFC
has pledged as collateral under a pledge agreement, among other
things, its membership interest in RFC Resort Funding, LLC, a
wholly owned special purpose subsidiary of RFC, certain loans
made by RFC to resort developers secured by time-share loans or
agreements to purchase timeshares and certain loans made by RFC
to resort developers to fund construction of resorts and resort-
related facilities and all collections with respect to the
pledged loans. This funding is supplemental to existing third
party financing for the Resort Finance business. On Feb. 21,
2008, RFC borrowed $635.0 million under the credit agreement
maturing on Aug. 21, 2009, and subsequently drew an additional
$20.0 million in March 2008.
As previously reported in the TCR, ResCap's parent, GMAC LLC,
contributed notes of ResCap that GMAC had previously purchased
in open market purchase transactions with a face amount of
approximately $1.2 billion and a fair value of approximately
$607.2 million to ResCap in exchange for 607,192 ResCap
preferred units with a liquidation preference of $1,000 per
unit. The ResCap preferred units are exchangeable at GMAC's
option on a unit-for-unit basis into preferred membership
interests in IB Finance at any time after Jan. 1, 2009, so long
as neither ResCap nor any of its significant subsidiaries was
the subject of any bankruptcy proceeding on or before that date.
As reported in the Troubled Company Reporter on April 25, 2008,
Residential Funding Company and GMAC Mortgage LLC, both
subsidiaries of Residential Capital, LLC, borrowed $468 million
collectively under a Loan and Security Agreement with ResCap's
parent, GMAC LLC, as lender, to provide ResCap's subsidiaries
with a revolving credit facility with a principal amount of up
to $750 million, providing incremental liquidity for ResCap's
operations until longer-term financing is arranged.
ResCap and GMAC are investigating various strategic alternatives
related to all aspects of ResCap's business, including
extensions and replacements of existing secured borrowing
facilities, and establishing additional sources of secured
funding for ResCap's operations. One potential source of new
secured funding is credit secured by certain of ResCap's
mortgage servicing rights.
About Residential Capital
Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit
of GMAC Financial Services, which is in turn wholly owned by
GMAC LLC.
About GMAC LLC
GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors
Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses. GMAC was established in 1919 and employs
approximately 26,700 people worldwide. Cerberus Capital
Management LP bought 51% GMAC LLC stake from General Motors
Corp. on December 2006.
In Asia, the company has operations in Australia, China, India,
New Zealand and Thailand.
* * *
As reported in yesterday's Troubled Company Reporter, Fitch
Ratings has downgraded the long-term Issuer Default Rating
of GMAC LLC and related subsidiaries to 'BB-' from 'BB'. Fitch
has also downgraded GMAC's unsecured long-term ratings to 'B+'
from 'BB-', reflecting the potential for reduced recovery in a
default scenario should the company encumber assets.
Additionally, Fitch has affirmed the 'B' short-term ratings.
The Rating Outlook remains Negative.
As reported in the Troubled Company Reporter on April 25, 2008,
Moody's Investors Service downgraded GMAC LLC's senior rating to
B2 from B1; the rating remains on review for further possible
downgrade. This action follows Moody's rating downgrade of
ResCap LLC, GMAC's wholly owned residential mortgage unit, to
Caa1 from B2.
TATA MOTORS: Sales Decline by 5.8% in April 2008
------------------------------------------------
Tata Motors reported a total sale of 38,149 vehicles which
includes exports for the month of April 2008, a decline of 5.8%
over 40,486 vehicles sold in April last year.
Commercial Vehicles
The company’s sales of commercial vehicles in April 2008 in the
domestic market were 21,001 nos., an increase of 7% compared to
19,607 vehicles sold in April last year. M&HCV sales stood at
11,248 nos., an increase of 8% over April 2007. LCV sales were
9,753 nos., an increase of 6% over April 2007.
Passenger Vehicles
Tata Motors passenger vehicle business reported a total sale of
14,843 vehicles in the domestic market in April 2008, a decline
of 12% compared to 16,842 nos. sold in April 2007. While the
Indica retails were over 10,000 nos., wholesale billings were
restricted to 7430 nos., a decline of 31.6% over April 2007.
The Indigo family registered sales of 3763 nos., an increase of
43% over April 2007. Sumo and Safari sales at 3650 nos,
registered an increase of 9.3% over April last year.
Exports
The company exported 2,305 vehicles in April 2008 as compared to
4,037 vehicles in April last year, a decline of 43%.
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.
* * *
Standard & Poor's Ratings Services, on July 13, 2007, assigned
its 'BB+' issue rating to the proposed US$490 million
zero-coupon convertible bonds of India's Tata Motors Ltd.
(BB+/Stable/--). The bonds represent a direct, unsecured and
unsubordinated obligation of the company. Proceeds from the
bonds will be used for capital expenditure, overseas
investments, acquisitions, and other general corporate purposes.
Moody's Investors Service, on July 26, 2005, gave Tata Motors
'Ba1' long-term corporate family and senior unsecured debt
ratings.
=================
I N D O N E S I A
=================
BANK RAKYAT: To Sell Mutual Funds With Trimegah & Danareksa
-----------------------------------------------------------
The Jakarta Post reports that PT Bank Rakyat Indonesia signed an
agreement with PT Danareksa Investment Management and PT
Trimegah Securities on Monday to sell various mutual funds.
The Jakarta Post quotes BRI Financial Director Abdul Salam as
saying: "Through our 5,000 branch offices and our newly
developed BRI prioritas service, we are honored that Danareksa
and Trimegah have chosen us as partners to sell mutual funds."
According to the report, BRI BRI expects to sell IDR100 billion
worth of mutual funds in 2008 "for its five partners, which
include ABN Amro, Kresna Securities and another, undisclosed,
securities company the bank hopes to sign with this month."
About RBI
Headquartered in Jakarta, Indonesia, PT Bank Rakyat Indonesia
(Persero) Tbk's -- http://www.bri.co.id/-- services comprise
Savings, Credits and Syariah. In addition, the bank divides its
financial and business services into three groups: Business
Services, consisting of bank guarantees, bank clearance,
automatic teller machines and safe deposit boxes; Financial
Services, consisting of bill payments, CEPEBRI, INKASO, deposit
acceptance, online transactions and transfers, and Other
Services, consisting of tax and fine payments, donations,
Western Union and zakat contributions. During the year ended
Dec. 31, 2005, the bank had one branch office in Cayman Islands
and two representative offices in New York and Hong Kong,
respectively.
The Troubled Company Reporter-Asia Pacific reported on Oct. 19,
2007, that Moody's Investors Service raised Bank Rakyat's
foreign currency long-term debt rating to Ba2 from Ba3 and its
foreign currency long-term deposit ratings to B1 from B2.
Fitch Ratings affirmed all the ratings of PT Bank Rakyat
Indonesia (Persero) Tbk:
* Long-term foreign Issuer Default rating 'BB-',
* Short-term rating 'B',
* National Long-term rating 'AA+(idn)',
* Individual 'C/D', and
* Support '4'.
GARUDA INDONESIA: Extends MOU With Jasindo Insurance
----------------------------------------------------
Garuda Indonesia and Jasindo Insurance extended their existing
MoU to cover cargo as well instead of only passengers need, in
order to improve its service and to cope with the customers
needs.
The MoU was signed in Jakarta on Tuesday by Garuda President and
CEO Emirsyah Satar and President Director Asuransi Jasa
Indonesia (JASINDO) Eko Budiwiyono, and witnessed by State Owned
Enterprise Minister Sofyan A Djalil.
The MoU will be more flexible and will cover more space
including "travel inconvenience insurance, cargo insurance, and
irregularities on tour package," instead of "accident
insurance."
Furthermore, Jasindo Insurance will cover "flight delay", mis-
connection flights, lost baggage, damage baggage, late delivery
baggage, and irregularity of tour package. While for cargo
service, the coverage will include "missing/damage shipment."
With the extension of the MoU, Garuda will be the one and the
only airline in which will give the advance service to its
customers in term of more passenger convenience and cargo
protection.
President & CEO Garuda Emirsyah Satar said that the extension of
this insurance coverage of Jasindo is part of commitment of
Garuda as "full service airline" which focus on service in its
business. Furthermore, Service Enhancement is part Garuda’s
program in 2008.
President Director Jasindo Eko Budiyono said that Jasindo
Insurance will support the needs of Garuda in order to improve
its service to the customers, especially on travel convenience
insurance and cargo protection.
About Garuda Indonesia
Headquartered in Jakarta, Indonesia, government-owned airline PT
Garuda Indonesia -- http://www.garuda-indonesia.com/--
currently has a fleet of about 77 aircraft offering service to
some 27 domestic and 33 international destinations. Under its
Citilink brand, it serves 10 other domestic routes. Garuda also
ships about 200,000 tons of cargo a month and operates a
computerized tracking system.
* * *
The Troubled Company Reporter-Asia Pacific reported on March 18,
2008, that PT Garuda Indonesia is slated to complete the
restructuring of its US$800 million debts, including US$500
million to the European Credit Agency, in the first semester of
this year. As part of efforts to boost efficiency, since Jan.
15, Garuda had halted the operation of its budget-carrier
Citilink pending a reorganization of the division.
The TCR-AP reported on Sept. 6, 2007, that Garuda was saddled
with a debt of around US$750 million of which US$475 million was
owed to the European Credit Agency. The airline was affected by
plunging arrivals on the resort island of Bali, where tourists
have been killed in bomb attacks in 2002 and 2005. It also
suffered from soaring global oil prices, a weakening of the
Indonesian rupiah and rising interest rates.
GARUDA INDONESIA: May Acquire Smaller Airlines
----------------------------------------------
The Jakarta Post reports that Garuda Indonesia Airlines
President Emirsyah Satar commented on Tuesday that consolidation
within Indonesia's aviation industry is the way forward to deal
with cutthroat competition and soaring oil prices.
The report notes that Garuda was forced to raise its fuel
surcharge from about IDR80,000 (US$8) to about IDR100,000.
Mr. Emirsyah points out that the European Union's ban on
Indonesian airlines flying into Europe will also be a factor in
any possible consolidation, the Jakarta Post adds.
According to the Jakarta Post, Mr. Emirsyah did not rule out the
possibility of Garuda acquiring smaller airlines. "If the
opportunity presents itself, and it proves to be lucrative, with
strong benefits coming from such an expansion, then yes we'll
take it," the Post quotes Mr. Emirsyah as saying.
The Post relates that Garuda increased its fleet by 60
airplanes, including 10 Boeing 777-300ER jumbo jets and 50
Boeing 737NG next-generation jets, which would begin arriving in
2009.
About Garuda Indonesia
Headquartered in Jakarta, Indonesia, government-owned airline PT
Garuda Indonesia -- http://www.garuda-indonesia.com/--
currently has a fleet of about 77 aircraft offering service to
some 27 domestic and 33 international destinations. Under its
Citilink brand, it serves 10 other domestic routes. Garuda also
ships about 200,000 tons of cargo a month and operates a
computerized tracking system.
* * *
The Troubled Company Reporter-Asia Pacific reported on March 18,
2008, that PT Garuda Indonesia is slated to complete the
restructuring of its US$800 million debts, including US$500
million to the European Credit Agency, in the first semester of
this year. As part of efforts to boost efficiency, since Jan.
15, Garuda had halted the operation of its budget-carrier
Citilink pending a reorganization of the division.
The TCR-AP reported on Sept. 6, 2007, that Garuda was saddled
with a debt of around US$750 million of which US$475 million was
owed to the European Credit Agency. The airline was affected by
plunging arrivals on the resort island of Bali, where tourists
have been killed in bomb attacks in 2002 and 2005. It also
suffered from soaring global oil prices, a weakening of the
Indonesian rupiah and rising interest rates.
PERUSAAHAN LISTRIK: Non-Subsidized Tariffs to Bring Savings
-----------------------------------------------------------
The Jakarta Post reports that PT Perusahaan Listrik Negara said
it would continue applying non-subsidized tariffs to higher
income consumers and businesses in order to save about IDR474
billion this year in Java and Bali alone.
"PLN President Director Fahmi Mochtar said during a seminar the
company had saved IDR1.3 billion per day for a month following
the introduction of its policy of non-subsidized tariffs," The
Jakarta Post relates.
According to the report, PLN began charging non-subsidized
tariffs to Riau, West Java, East Kalimantan, Bangka Belitung,
Jakarta and Tangerang customers with an electricity capacity of
more than 6,600 megawatts in April because it wanted to reduce
the company's operating costs due to the rise in the price of
oil.
The Post states that the move is part of PLN's cost-cutting
measures to save about IDR2.7 trillion this year to help offset
the deficit of almost IDR5 trillion for the electricity subsidy.
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.
=========
J A P A N
=========
ALITALIA SPA: Receives EUR300-Million Loan Italian Government
-------------------------------------------------------------
Alitalia S.p.A. has received the EUR300-million emergency loan
pledged by the Italian government, Bloomberg News reports.
European Union Transport Commissioner Jacques Barrot, however,
said Alitalia's weak coffers have raised doubts on the legality
of the loan, Bloomberg News relates.
The European Commission gave Italy until May 19, 2008, to
provide details of the bridging loan, which is currently under
review for possible violation of the European Union rule
on state aid.
Italy needs to prove that the loan was offered on commercial
terms to gain approval from the Commission. Alitalia may face
months-long probe over the legality of the loan, which may
further cramp Italy's efforts to sell its 49.9% stake in the
national carrier.
About Alitalia
Headquartered in Rome, Italy, Alitalia S.p.A. --
http://www.alitalia.it/-- provides air travel services for
passengers and air transport of cargo on national, international
and inter-continental routes, including United States, Canada,
Japan and Argentina. The Italian government owns 49.9% of
Alitalia.
Despite a EUR1.4 billion state-backed restructuring in 1997,
Alitalia posted net losses of EUR256 million and EUR907 million
in 2000 and 2001 respectively. Alitalia posted EUR93 million in
net profits in 2002 after a EUR1.4 billion capital injection.
The carrier booked annual net losses of EUR520 million in 2003,
EUR813 million in 2004, EUR168 million in 2005, and
EUR625.6 million in 2006.
Italian Finance Minister Tommaso Padoa-Schioppa had said that if
the sale to Air France fails, Alitalia may seek protection from
creditors and the government would appoint a special
commissioner to initiate bankruptcy proceedings.
ALITALIA SPA: May Now Sell Slots for Fund Following EU Directive
----------------------------------------------------------------
Alitalia S.p.A. may financially benefit from a recent directive
by the European Union allowing European airlines to auction
takeoff and landing block they do not use, Thomson Financial
relates citing a Corriere della Sera report.
Under the directive, Corriere della Sera relates, airlines can
sell or swap unprofitable or idle slots.
The TCR-Europe reported Dec. 28, 2007, the Alitalia sold three
pairs of slots at London's Heathrow airport that it considered
non-strategic for EUR92 million.
The company is planning to give up around 180 of its 357 slots
at Milan's Malpensa airport, and may sell them for more funds,
Corriere della Sera suggests. Proceeds from the sale of slots
would allow Alitalia to finance its operations until the Italian
government's 49.9% is sold, without receiving the planned EUR300
million bridging loan from Italy.
About Alitalia
Headquartered in Rome, Italy, Alitalia S.p.A. --
http://www.alitalia.it/-- provides air travel services for
passengers and air transport of cargo on national, international
and inter-continental routes, including United States, Canada,
Japan and Argentina. The Italian government owns 49.9% of
Alitalia.
Despite a EUR1.4 billion state-backed restructuring in 1997,
Alitalia posted net losses of EUR256 million and EUR907 million
in 2000 and 2001 respectively. Alitalia posted EUR93 million in
net profits in 2002 after a EUR1.4 billion capital injection.
The carrier booked annual net losses of EUR520 million in 2003,
EUR813 million in 2004, EUR168 million in 2005, and
EUR625.6 million in 2006.
Italian Finance Minister Tommaso Padoa-Schioppa had said that if
the sale to Air France fails, Alitalia may seek protection from
creditors and the government would appoint a special
commissioner to initiate bankruptcy proceedings.
DELPHI CORP: Plastech Can Return Tooling to Delphi Automotive
-------------------------------------------------------------
Plastech Engineered Products Inc. and its debtor-affiliates
obtained permission from the U.S. Bankruptcy Court for the
Eastern District of Michigan to return certain tooling equipment
to Delphi Automotive Systems LLC.
As reported in the Troubled Company Reporter on April 21, 2008,
the Debtors sought authority specifically to:
(a) surrender certain tooling owned by Delphi Automotive
Systems, LLC, that is in the Debtors' possession; and
(b) sell to Delphi certain de minimis finished goods
inventory made with the Delphi tooling for $4,671, free
and clear of liens.
The Debtors also asked the Court to lift the automatic stay to
effectuate the release of tooling and the sale of the de minimis
inventory to Delphi.
The Debtors currently are in possession of certain tooling which
is fully paid for and is owned by Delphi at a plant in Croswell,
Michigan, that was used to make service parts for Delphi's
Powertrain Division that are no longer in production.
The Debtors informed that the Inventory represents idle assets
that are of little or no use or value to the Debtors' estates or
restructuring efforts, as the Inventory consists of service
parts that are no longer in production. The Debtors have
determined in their sound business judgment that the sale of the
Inventory to Delphi is the most efficient way to convert idle
assets of de minimis value into cash.
The Debtors believe that the sale of the inventory to Delphi is
commercially reasonable in light of the assets being sold and as
a result, the value of the proceeds from the sale fairly
reflects the value of the Inventory sold. The Debtors proposed
that any party with a lien on the Inventory be given a
corresponding security interest in the proceeds of the sale. In
light of these, the requirements of Section 363(f) of the
Bankruptcy Code would be satisfied for any proposed sales free
and clear of liens, the Debtors said.
Moreover, because the Debtors have no further need for the
Delphi Tooling, the Debtors believe that the automatic stay
should be lifted pursuant to Section 362(d) of the Bankruptcy
Code to allow Delphi to take possession of the Delphi Tooling
and to deem the applicable purchase orders between Delphi and
the Debtors terminated upon the return of the Delphi Tooling and
payment for the Inventory.
About Plastech Engineered
Based in Dearborn, Michigan, Plastech Engineered Products, Inc.
-- http://www.plastecheng.com/-- is full-service automotive
supplier of interior, exterior and underhood components. It
designs and manufactures blow-molded and injection-molded
plastic products primarily for the automotive industry.
Plastech's products include automotive interior trim, underhood
components, bumper and other exterior components, and cockpit
modules. Plastech's major customers are General Motors, Ford
Motor Company, and Toyota, as well as Johnson Controls, Inc.
Plastech is a privately held company and is the largest family-
owned company in the state of Michigan. The company is
certified as a Minority Business Enterprise by the state of
Michigan. Plastech maintains more than 35 manufacturing
facilities in the midwestern and southern United States. The
company's products are sold through an in-house sales force.
The company and eight of its affiliates filed for Chapter 11
protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08-
42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher &
Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C.,
represent the Debtors in their restructuring efforts. The
Debtors chose Jones Day as their special corporate and
litigation counsel. Lazard Freres & Co. LLC serves as the
Debtors' investment bankers, while Conway, MacKenzie & Dunleavy
provide financial advisory services. The Debtors also employed
Donlin, Recano & Company as their claims and noticing agent.
An Official Committee of Unsecured Creditors has been appointed
in the Debtors' cases.
As of Dec. 31, 2006, the company's books and records
reflected assets totaling $729,000,000 and total liabilities of
$695,000,000. (Plastech Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: 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
$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 confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.
DELPHI CORP: Court Moves Exclusive Plan-Filing Period to Aug. 31
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended Delphi Corp. and its debtor-affiliates' exclusive
periods to file a plan of reorganization until 30 days after
substantial consummation of the confirmed First Amended Joint
Plan of Reorganization or any modified Plan, and their exclusive
periods to solicit acceptances of that Plan until 90 days after
substantial consummation of the First Amended Plan or modified
Plan.
The Court ruled that:
(i) the Debtors' exclusive period under Section 1121(d) of the
Bankruptcy Code for filing a plan of reorganization, as
between the Debtors and the Official Committee of
Unsecured Creditors and the Official Committee of Equity
Security Holders is extended through and including
August 31, 2008.
(ii) The Debtors' exclusive period under Section 1121(d) for
soliciting acceptance of a plan of reorganization, as
between the Debtors and the Statutory Committees, is
extended through and including October 31, 2008.
As reported in the Troubled Company Reporter on April 17, 2008,
out of an abundance of caution and to ensure clarity with their
stakeholders, including their customers and supplies, the
Debtors sought an extension of the Exclusive Periods to prevent
any lapse in exclusivity, John Wm. Butler, Jr., Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois,
clarified.
A further extension of the Exclusive Periods, Mr. Butler said,
is justified by the significant progress the Debtors have made
toward emerging from Chapter 11. After obtaining confirmation
of the First Amended Plan, the Debtors secured exit financing
and met all other conditions to the effectiveness of the Plan
and Investment Agreement and were prepared to emerge from
Chapter 11.
The Debtors' efforts to emerge from Chapter 11, however, were
affected by severe dislocations in the capital markets that
began late in the second quarter of 2007 and that have continued
through the present, according to Mr. Butler. Although the
Debtors eventually obtained the exit financing required by the
First Amended Plan, the turbulence in the capital markets was a
principal cause of the delay in the Debtors' emergence from
Chapter 11 before the end of 2007, he maintained. Moreover, the
decision by Appaloosa Management L.P. and the other Plan
Investors to not honor their commitments in the parties' New
Equity Purchase and Commitment Agreement prevented the Debtors
from emerging on April 4, 2008.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: 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
$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 confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
DELPHI CORP: GM's Charges on Delphi Issues Reach $8.3 Billion
-------------------------------------------------------------
General Motors Corp. said that during the first quarter of 2008,
it took a non-cash charge of $731,000,000 to increase its
liability for estimated net costs associated with its support of
Delphi Corp.'s bankruptcy and restructuring efforts.
"This charge primarily results from updated estimates reflecting
uncertainty around the nature, value and timing of GM's
recoveries," GM said. Delphi was scheduled to emerge from
bankruptcy in mid-April but obtained problems with its exit
equity financing from Appaloosa Management, PC, thus affecting
the timing of GM's recoveries from Delphi.
General Motors has now recorded charges totaling $8,300,000,000
in connection with Delphi-related issues, Reuters reports.
GM has recently agreed to advance Delphi $650,000,000 in 2008 in
anticipation of settlement agreements between the companies that
would have been paid to the supplier had Delphi emerged from
court protection as expected in April.
General Motors also recorded a $1,450,000,000 non-cash partial
impairment charge for its equity investment in its finance unit
GMAC LLC for the first quarter of 2008.
General Motors reported net losses of $3,251,000,000 on
$42,700,000,000 of revenues for the first quarter. GM said its
results were marked by improved adjusted automotive operating
performance, rapid growth in emerging markets, continued cost
performance in North America operations and liquidity of nearly
$24,000,000,000, despite the impact of the American Axle strike
and weakness in the U.S. auto industry.
Bloomberg News said the loss was smaller than analysts
estimated, causing GM shares to gain 9.4% in the New York Stock
Exchange. GM's loss excluding costs for Delphi and the GMAC was
$350,000,000, or 62 cents a share, beating the $1.52 average
estimate of 13 analysts surveyed by Bloomberg.
GM said that in light of the current state of the U.S. economy
and automotive industry, it has revised its 2008 U.S. industry
seasonally adjusted annual rate outlook to the mid to high
15 million unit range, down from the low 16 million unit range.
As a result of the anticipated softer automotive industry, GM
announced earlier this week that it will eliminate a shift of
production at four assembly plants: Janesville, Wisconsin;
Pontiac and Flint, Michigan; and Oshawa, Ontario.
Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: 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
$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 confirmed the Debtors' First Amended Plan on
Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 127; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
FORD MOTOR: CAW Union Members Ratify New Labor Agreement
--------------------------------------------------------
For the first time in its history, Ford Motor Company of Canada,
Limited has reached a collective bargaining agreement with the
Canadian Auto Workers more than four months before the current
contract expires. Ford employees represented by the CAW
ratified the new deal in a vote held May 4, 2008.
The early settlement brings stability to Ford's operations as it
prepares to launch the new Ford Flex crossover vehicle at the
Oakville Assembly Complex, which also builds the Ford Edge and
Lincoln MKX. Ford disclosed plans to add 500 positions to
increase production at the Oakville plant due to high demand for
the Ford Edge and Lincoln MKX, and to prepare for the start of
production of the Ford Flex.
"This agreement is the right solution for the Canadian
marketplace," Stacey Allerton Firth, vice president, human
resources, Ford of Canada, said. "The terms recognize the
importance of our employees' contributions and improves the
competitiveness of the Canadian operations."
"It's a credit to the relationship we have with the CAW that we
were able to reach a responsible agreement in record time. Both
the union and the company realized that we had to work
collaboratively, with complete transparency, in order to find
innovative solutions to the challenges facing the industry."
Highlights of the agreement include:
* Each CAW-represented employee receives a $2,200
productivity and quality bonus upon ratification to
recognize their efforts in helping Ford become one of the
best in the industry in product quality.
* Cost-of-living allowance payments are frozen for the next
16 months. Quarterly COLA adjustments resume in December
2009.
* Effective immediately, a unique wage rate has been
established -- during the first three years of employment,
new employees earn 70% of base wages, COLA payments are
suspended, and Supplemental Unemployment Benefits and time-
off provisions are phased in. After three years, employees
receive 100% of base wages and benefits.
* Health care savings generated through a new 10% co-pay
program for prescription drugs and a cap on long-term care
provisions.
* A 40-hour-per-year reduction in vacation pay, offset by a
$3,500 cash payment in January 2009.
* Production at the St. Thomas Assembly Plant, near London,
Ontario is extended by one year to 2011.
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 March 28, 2008,
Standard & Poor's Ratings Services said that the ratings and
outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated
B/Stable/B-3) were not affected by Ford's announcement of an
agreement to sell its Jaguar and Land Rover units to Tata Motors
Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of
pension contributions by Ford for Jaguar-Land Rover).
As reported in the Troubled Company Reporter on Feb. 15, 2008,
Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor
Company and Ford Motor Credit Company at 'B', and maintained the
Rating Outlook at Negative.
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 United Auto Workers.
USINAS SIDERURGICAS: J Mendes To Produce 5 Million Tons in 2008
---------------------------------------------------------------
Usinas Siderurgicas de Minas Gerais SA is expecting from
previously acquired iron ore producer J Mendes to produce
5 million tons in 2008, Business News Americas reports, citing
Spokesperson Paulo Penido in a conference call.
Usiminaas acquired J Mendes hoping to lessen its dependence on
third party iron ore producers. J Mendes' first quarter results,
however, was weak, according to Mr. Penido. J Mendes recorded
BRL10 million (US$6.02 million) of net sales in the first
quarter.
Usiminas Siderurgicas, in March, estimated that J Mendes will
reach an annual production level of 11M-13Mt within three
years.
The company is also considering a pelletizing facility for J
Mendes in 2014-2015 requiring a US$1 billion investment, the
report adds.
Port Facilities
Usiminas' Cosipa in Sao Paulo state's Cubatao, and Sepetiba in
Rio de Janeiro, two ports in southeast Brazil, will received J
Mendes' output.
The company is also planning to deepen the waters at the port to
15m from the current 12m in order to expand exports and improve
logistics at Cosipa.
Headquartered in Minas Gerais, Brazil, Usinas Siderurgicas de
Minas Gerais SA -- http://www.usiminas.com.br-- is among the
world's 20 largest steel manufacturing complexes, with a
production capacity of approximately 10 million tons of steel.
Usiminas System companies produces galvanized and non-coated
flat steel products for the automotive, small and large diameter
pipe, civil construction, hydro-electronic, rerolling,
agriculture, and road machinery industries. Brazil consumes 80%
of its products and the company's largest export markets are the
US and Latin America. The company also sells in China and
Japan.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 5, 2008, Moody's Investors Service assigned a Ba1 local
currency rating and an Aa1.br rating on its Brazilian national
scale to the BRL500 million non-guaranteed subordinated
debentures due 2013 to be issued by Usinas Siderurgicas de Minas
Gerais S.A. (aka Usiminas). Net proceeds from the debentures
issuance will be used to partially fund the company's capex
program. Moody's said the rating outlook is stable.
USINAS SIDERURGICAS: Positive About Local Economy & Steel Demand
----------------------------------------------------------------
Business News Americas reports that Usinas Siderurgicas de Minas
Gerais S.A. remains positive about the economy and steel demand
in Brazil despite a 3% drop in its sales volume in the first
quarter 2008, compared to the first quarter 2007.
According to BNamericas, Usinas Siderurgicas reported sales
volume of 1.9 million tons in this year's first quarter. Usinas
Siderurgicas spokesperson Paulo Penido said in a conference call
that the company's output was affected by 100,000 tons as
production was temporarily stopped due to upgrades at its plant
in Cubatao, Sao Paulo. The upgrades should be completed by June
at the latest, Mr. Penido added.
BNamericas relates that Mr. Penido expects Usinas Siderurgicas
to produce 1.8 million tons in the second quarter 2008 and
eight million tons in the full year 2008.
Mr. Penido told BNamericas that Usinas Siderurgicas' net
revenues increased 7% in the first quarter 2008, from the same
period last year. The firm's EBITDA was 6% higher despite
rising production costs whle net profit rose 1% to
BRL646 million.
Mr. Penido commented to BNamericas, "The Brazilian economy is
presenting a strong expansion rhythm." Steel consumption rose
19% in the first quarter 2008, compared to the first quarter
2007, and automobile sales grew 23%, Mr. Penido added.
BNamericas notes that construction in Brazil increased 24%.
BNamericas notes that Mr. Penido expects continued strong demand
with a slight risk of inflation and an increase in interest
rates. European and Asian markets seem favorable but are
affected by raw material prices, and the U.S. market is still
being affected by an economic slowdown. Steel prices there,
however, remain strong at US$1,230 per ton, Mr. Penido added.
Headquartered in Minas Gerais, Brazil, Usinas Siderurgicas de
Minas Gerais SA -- http://www.usiminas.com.br-- is among the
world's 20 largest steel manufacturing complexes, with a
production capacity of approximately 10 million tons of steel.
Usiminas System companies produces galvanized and non-coated
flat steel products for the automotive, small and large diameter
pipe, civil construction, hydro-electronic, rerolling,
agriculture, and road machinery industries. Brazil consumes 80%
of its products and the company's largest export markets are the
US and Latin America. The company also sells in China and
Japan.
* * *
As reported in the Troubled Company Reporter-Latin America on
Feb. 5, 2008, Moody's Investors Service assigned a Ba1 local
currency rating and an Aa1.br rating on its Brazilian national
scale to the BRL500 million non-guaranteed subordinated
debentures due 2013 to be issued by Usinas Siderurgicas de Minas
Gerais S.A. (aka Usiminas). Net proceeds from the debentures
issuance will be used to partially fund the company's capex
program. Moody's said the rating outlook is stable.
* Moody's Says Outlook for Japan Cosmetics Industry Still Stable
----------------------------------------------------------------
Moody's Investors Service says in a new report that the outlook
for the Japanese cosmetics industry is stable despite the
presence of significant challenges.
The outlook for the Japan Cosmetics Industry is stable. This
report expresses Moody's expectations for fundamental credit
conditions in the industry over the next 12 to 18 months.
"The outlook is based primarily on the prospects of steady
demand through the economic cycle," says Noriko Kosaka, a
Moody's VP/Senior Analyst and author of the report, which
expresses Moody's expectations for fundamental credit conditions
in the industry over the next 12-18 months.
"But given increasingly intense competition, effective brand
management will be much more important if companies are to
strengthen their market positions and improve profitability,"
Kosaka says.
"Moreover, the major manufacturers will have to implement more
effective cost management to deal with growing marketing
expenses, diverse sales channels, and the rising prices of raw
materials, bottles and containers," Kosaka adds.
All the major cosmetics makers in Japan are further accelerating
efforts to realign their brands, re-establish market positions,
as well as strengthen cost structures.
"In particular, the competition between Shiseido and Kanebo
Cosmetics has accelerated," says Kosaka. "But even though they
have implemented their brand strategies -- that call for
concentrating resources on selected brands, as well as
establishing new core brands -- we've seen no significant or
decisive changes in market positions among the majors."
"We also think the smaller players -- which lack the kinds of
resources the majors have for sales promotion -- will find it
more difficult to maintain their brand equity."
Because of the maturity of the domestic market, the major makers
are expanding their overseas operations, especially in Asia, the
report says. In this regard, Shiseido is far ahead of its
competitors, although its overseas sales ratio in FYE3/2008 was
36.5%, still low compared with its global peers.
Looking further ahead, the sector's strong financial
fundamentals will continue to strengthen, the report says. And
so long as its companies maintain their current business models,
which require minimal capital expenditure, their financial
fundamentals should experience little deterioration.
The cosmetics industry's major makers are Shiseido Co Ltd
(A1/positive); Kanebo Cosmetics Corporation (not rated by
Moody's), Japan's second largest maker, which started operating
as a subsidiary of Kao Corporation (not rated by Moody's) in
March 2006; and KOSÉ Corporation (not rated by Moody's), the
third largest.
=========
K O R E A
=========
DAEWOO ELECTRONIC: Adjusts Conversion Price of Convertible Bonds
----------------------------------------------------------------
Daewoo Electronic Components Co. Limited adjusted the conversion
price of its 37th, 38th and 39th convertible bonds from
KRW7,120, KRW8,360 and KRW6,660 per share to KRW710, KRW835 and
KRW665 per share, respectively, effective May 6, 2008, Reuters
reports.
According to the report, the company also adjusted the exercise
price of its 40th bonds with warrants from KRW5,000 to KRW500
per share, effective May 6, 2008.
Headquartered in Chung-Gu, Seoul, Daewoo Electronics Corporation
-- http://www.dwe.co.kr/-- is the third largest Korean consumer
electronics company. It manufactures and sells a variety of
products including televisions, DVD players, refrigerators, air
conditioners, washing machines, microwaves, vacuum cleaners and
car audio systems in over 105 countries.
According to the Troubled Company Reporter-Asia Pacific, Daewoo
Electronics has been under a debt workout program since January
2000, months after its parent group -- the Daewoo Group --
collapsed under debts of nearly US$80 billion in 1999.
Daewoo Electronics Corp. posted a KRW94-billion loss in 2005
after sales declined 6.4%. The net loss compares with the
KRW30-billion profit the company posted in 2004. Sales fell to
KRW2.2 trillion from KRW2.3 trillion in 2004.
The TCR-AP reported on Nov. 14, 2005, that creditors of Daewoo
Electronics placed the firm for sale at US$1 billion. ABN
Amro, PricewaterhouseCoopers and Woori Bank were appointed to
find a buyer for the business. In September 2006, the
consortium led by Videocon Industries submitted a bid for a
controlling stake in Daewoo. As reported in the Troubled
Company Reporter-Asia Pacific on Nov. 28, 2007, Daewoo
Electronics is put up for sale a second time as the US$746-
million Videocon-Ripplewood bid fails. Morgan Stanley's private
equity unit has emerged as the preferred bidder to acquire
Daewoo Electronics.
DURA AUTOMOTIVE: Court Approves Merger with Automotive Aviation
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware
authorized Dura Automotive Systems Inc. and its debtor-
affiliates to merge Automotive Aviation Partners, LLC, into
Aviation Operating Company, LLC.
Upon the merger, there will be no restrictions on the ability to
sell assets held by either entity to a third party other than
the restrictions contained in the Existing Revolver DIP Credit
Agreement and the Replacement Term DIP Credit Agreement.
As reported in the Troubled Company Reporter on April 21, 2008,
Aviation has a clause in its operating agreement that requires
dissolution upon the occurrence of certain events, including the
bankruptcy of a member, Christopher M. Samis, Esq., at Richards,
Layton & Finger, P.A., in Wilmington, Delaware, said.
Minnesota law does not allow the dissolution requirement to be
reversed after the bankruptcy has occurred, Mr. Samis said.
Minnesota law further limits Aviation solely to undertaking
activities to wind up operations once the liquidation clause has
been triggered, he adds.
Due to the automatic stay, liquidation of Aviation has not been
completed, Mr. Samis said. However, out of an abundance of
caution and as part of a general corporate reorganization, the
Debtors desire to eliminate Aviation to resolve any corporate
governance ambiguity. Thus, the Debtors believe that Aviation
should be merged into Aircraft Operating.
Mr. Samis related that Aviation is a guarantor of the Debtors'
DIP Facility and the Second Lien Facility, Senior Notes, and
Subordinated Notes. Aviation and Aircraft Operating are both
guarantors and obligors under the debts. Aviation has
approximately $5,600,000 in assets and there have been no
prepetition claims schedule for or filed against Aviation other
than the debts. Aircraft Operating also has no prepetition
filed against it other than the debts. As a result, the Debtors
believe the merger will not affect recoveries under the Revised
Plan and does not prejudice any third party creditors.
Rochester Hills, Mich.-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies,
structural door modules and exterior trim systems for the global
automotive industry. The company is also a supplier of similar
products to the recreation vehicle and specialty vehicle
industries. DURA sells its automotive products to North
American, Japanese and European original equipment manufacturers
and other automotive suppliers.
The company has three locations in Asia -- China, Japan and
Korea. It has locations in Europe and Latin-America,
particularly in Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006,
(Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C.,
Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq.,
at Kirkland & Ellis LLP are lead counsel for the Debtors'
bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason
M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are
the Debtors' co-counsel. Baker & McKenzie acts as the Debtors'
special counsel. Togut, Segal & Segal LLP is the Debtors'
conflicts counsel. Miller Buckfire & Co., LLC is the Debtors'
investment banker. Glass & Associates Inc., gives financial
advice to the Debtor. Kurtzman Carson Consultants LLC handles
the notice, claims and balloting for the Debtors and Brunswick
Group LLC acts as their Corporate Communications Consultants for
the Debtors.
As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total
assets and $1,623,632,000 in total liabilities.
On April 3, 2008, the Court approved the Debtors' revised
Disclosure Statement explaining their revised Chapter 11 plan of
reorganization. A plan confirmation hearing is set for May 13,
2008.
(Dura Automotive Bankruptcy News, Issue No. 53; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
DURA AUTOMOTIVE: Wants to Expand Assessment Tech's Scope of Work
----------------------------------------------------------------
Dura Automotive Systems Inc. and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to expand the scope of Assessment Technologies, Ltd.'s
employment to include property tax consulting services with
respect to tax year 2008 and future tax years, pursuant to a
first amended service agreement between the Debtors and ATL,
dated March 1, 2008.
The Debtors also ask the Court to allow them to continue to
employ ATL pursuant to the service agreement, dated March 7,
2007.
Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware, relates that the Debtors believe that
extending ATL's services to tax year 2008 and beyond is
reasonable, appropriate, and will help maximize the value of
their estates.
Under the Service Agreement Amendment, ATL's fee for tax year
2008 and future years is 25% or 35% of all tax savings depending
on the nature of the required tax resolution process.
The Service Agreement Amendment also provides that the Debtors
are responsible for all reasonable and necessary expenses
incurred in connection with the services provided for tax year
2008 and beyond. Anticipated expenses include, but are not
limited to, special property tax counsel legal fees, third party
appraisal fees, expert testimony and travel expenses.
Rochester Hills, Mich.-based DURA Automotive Systems Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies,
structural door modules and exterior trim systems for the global
automotive industry. The company is also a supplier of similar
products to the recreation vehicle and specialty vehicle
industries. DURA sells its automotive products to North
American, Japanese and European original equipment manufacturers
and other automotive suppliers.
The company has three locations in Asia -- China, Japan and
Korea. It has locations in Europe and Latin-America,
particularly in Mexico, Germany and the United Kingdom.
The Debtors filed for chapter 11 petition on Oct. 30, 2006,
(Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C.,
Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq.,
at Kirkland & Ellis LLP are lead counsel for the Debtors'
bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason
M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are
the Debtors' co-counsel. Baker & McKenzie acts as the Debtors'
special counsel. Togut, Segal & Segal LLP is the Debtors'
conflicts counsel. Miller Buckfire & Co., LLC is the Debtors'
investment banker. Glass & Associates Inc., gives financial
advice to the Debtor. Kurtzman Carson Consultants LLC handles
the notice, claims and balloting for the Debtors and Brunswick
Group LLC acts as their Corporate Communications Consultants for
the Debtors.
As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total
assets and $1,623,632,000 in total liabilities.
On April 3, 2008, the Court approved the Debtors' revised
Disclosure Statement explaining their revised Chapter 11 plan of
reorganization. A plan confirmation hearing is set for May 13,
2008.
(Dura Automotive Bankruptcy News, Issue No. 53; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
EG SEMICON: Makes Amendments to its Third Bonds Issuance
--------------------------------------------------------
EG Semicon Co. Limited has made amendments to the issuance of
its third bonds with warrants, Reuters reports.
The issuance was initially announced on April 11, 2008, the
report says.
Pursuant to the amendments, the bonds will mature on May 8, 2010
and the exercise period has been moved from May 8, 2009 to
May 8, 2010, Reuters relates.
EG Semicon Co., Ltd. -- http://www.osec.co.kr/-- manufactures
liquid crystal displays. The company is headquartered in
Gyeongsangbuk Province, Korea. It operates two factories in
Korea and one in China.
On January 4, 2008, the Troubled Company Reporter-Asia Pacific
reported that EG Semicon Co. has a shareholders' equity deficit
of US$12.34 million on total assets of US$166.70 million.
EG SEMICON: Moves Private Placement Listing Date to May 23
----------------------------------------------------------
EG Semicon Co. Limited has amended the listing date for the
private placement of its 2,666,667 common shares, to May 23,
2008 from May 16, 2008, Reuters reports.
According to Reuters, the private placement was initially
announced on April 11, 2008.
EG Semicon Co., Ltd. -- http://www.osec.co.kr/-- manufactures
liquid crystal displays. The company is headquartered in
Gyeongsangbuk Province, Korea. It operates two factories in
Korea and one in China.
On January 4, 2008, the Troubled Company Reporter-Asia Pacific
reported that EG Semicon Co. has a shareholders' equity deficit
of US$12.34 million on total assets of US$166.70 million.
NVIDIA CORP: Court Rejects Trustee's Claim for $100 Million
-----------------------------------------------------------
NVIDIA Corporation said Friday that the United States Bankruptcy
Court for the Northern District of California issued its
Memorandum Decision After Trial in the 3dfx bankruptcy action.
The Court found in favor of NVIDIA on all issues and rejected
the Trustee's attempts to obtain damages from NVIDIA in excess
of $100 million. The Trustee's lawsuit arose from NVIDIA's 2001
acquisition of certain assets of its former competitor, 3dfx
Interactive, Inc. Specifically, the Trustee claimed that NVIDIA
did not pay fair value for the assets it acquired in the
transaction, thereby allegedly harming 3dfx's creditors.
"A trial was necessary to fully demonstrate that we conducted
ourselves appropriately in the acquisition and we are very
pleased with the Decision from the Court. The Decision is
comprehensive, thorough, well-reasoned, and a complete rejection
of the Trustee's legal and factual arguments," said David
Shannon, NVIDIA's senior vice president and general counsel.
The Court expressly found that "the Trustee's valuation theory
-- every way it is articulated -- is simply not credible," and
concluded that "the creditors of 3dfx were not injured by the
Transaction."
"We will continue to fight this matter through any and all
appeals," said Mr. Shannon.
About NVIDIA
Headquartered in Santa Clara, California, NVIDIA Corp. (Nasdaq:
NVDA) -- http://www.nvidia.com/-- provides visual computing
technologies and invented the GPU, a high-performance processor
which generates breathtaking, interactive graphics on
workstations, personal computers, game consoles, and mobile
devices. NVIDIA serves the entertainment and consumer market
with its GeForce(R) products, the professional design and
visualization market with its Quadro(R) products, and the high-
performance computing market with its Tesla(TM) products.
Outside the U.S., the company has subsidiaries in these
countries; Canada, Cayman Islands, Singapore, Australia, the
United Kingdom, Germany, Hong Kong, Japan, Mauritius, India,
China, British Virgin Islands, Finland and Netherlands.
* * *
The company carries Standard & Poor's Ratings Services BB-
corporate credit rating.
===============
M A L A Y S I A
===============
CNLT (FAR EAST): 2 Bank Creditors Approve Restructuring Scheme
--------------------------------------------------------------
CNLT (Far East) Berhad has obtained approval from two of its six
secured bank creditors and the agreement-in-principle from the
other remaining four secured bank creditors for its proposed
restructuring scheme.
Meanwhile, the company is also in the midst of finalizing the
submission of its regularization plan to the relevant
authorities for approval and will announce the same to Bursa
Securities upon completion thereof.
The company's last day for submission of its regularization plan
to the relevant approving authorities is on June 10, 2008.
CNLT (Far East) Berhad is engaged in the manufacture and sale of
yarn. Its subsidiary includes Indosen S.A., which is engaged in
the manufacture and sale of textiles and apparel. The company
operates in Malaysia and Senegal.
The company was admitted into the Amended PN17 listing criteria
of the Bursa Malaysia Securities Bhd as it has triggered
Paragraph 2.1(e) of the bourse's listing requirements:
(i) Based on the unaudited quarterly results of CNLT for
the first quarter ended March 31, 2007, as announced
to Bursa Securities, the shareholders' equity on a
consolidated basis is less than 50% of the issued and
paid up capital of the company ; and
(ii) The auditors of CNLT have expressed a modified opinion
with emphasis on the Company's going concern in its
latest audited accounts for the financial year ended
December 31, 2005.
LUSTER INDUSTRIES: Equity Less Than 50% of Paid-Up Share Capital
----------------------------------------------------------------
Luster Industries Bhd. was considered as an affected listed
issuer of the Practice Note No. 17/2005 of Bursa Malaysia
Securities Berhad as the external auditors have expressed a
modified opinion on the company’s going concern and on its
consolidated shareholders’ equity amounting to MYR25,191,597,
which is less than 50% of its total issued and paid-up share
capital of MYR61,183,000.
The company's obligations as an Affected Listed Issuer are to:
* submit a plan that is substantive and falls within the
ambit of Section 212 of the Capital Market and Services Act
2007 to regularize its financial condition to the
Securities Commission and other relevant authorities for
approval within eight months from May 2008;
* implement the Regularization Plan within the timeframe
stipulated by the relevant authorities;
* announce the status of its Regularization Plan and the
number of months to the end of the relevant timeframes on a
monthly basis until further notice from Bursa Securities;
* announce its compliance or non-compliance with a particular
obligation imposed pursuant to the Amended PN 17 on an
immediate basis; and
* announce the details of the Regularization Plan, which
will include timeline for the complete implementation of
the Regularization Plan. The Requisite Announcement must
be made by a merchant banker or a participating
organization that may act as a principal adviser under the
Securities Commission’s Policies and Guidelines on
Issue/Offer of Securities.
Company's Plan to Regularize Condition
Prior to the finalization of the audit of the company’s
financial statements for the year ended December 31, 2007, by
the external auditors, the company's Board of Directors is fully
aware of the company’s and group’s adverse financial performance
arising mainly from impairment losses and operating loss for the
financial year ended on that date. Taking cognizance of this
fact, the Board of Directors has been proactive in taking
corrective measures to arrest the deterioration of the financial
condition of the company and the group from the beginning of
this financial year 2008.
Some of the corrective measures taken and implemented and/or in
the process of being implemented are:
* Cost reduction program including downsizing of operations
and employees, and streamlining of activities by
consolidating certain manufacturing activities into one
subsidiary thereby eliminating duplication of processes and
optimizing the use of resources;
* Revamp business strategy by focusing on higher profit
margin products;
* Disposal of non performing assets thereby improving the
working capital position; and
* Initiate negotiations with the company’s and group’s
bankers to reschedule the terms of payments so as to
improve the working capital position.
Luster Industries Berhad is a Malaysia-based investment holding
company that provides management services to its subsidiaries.
The company is principally engaged in the manufacture of
precision plastic parts and components, and sub assembly and
full assembly of plastic parts and products. During the year
ended December 31, 2005, the company acquired Mctronic Plastic
Sdn. Bhd., Mature Step International Limited and Poly Link
Limited. On June 29, 2006, the company disposed of its
investment in its joint venture, Luster Nakazawa R&D Sdn Bhd,
representing 51% of Luster Nakazawa R&D Sdn Bhd.
LIQUA HEALTH: Incurs MYR10.72MM Net Loss in Qtr. Ended Dec. 31
--------------------------------------------------------------
Liqua Health Corporation Berhad posted a net loss of
MYR10.72 million on MYR9.46 million of revenues in the quarter
ended Dec. 31, 2007, as compared with MYR734,000 net loss on
MYR10.38 million of revenues in the same quarter of 2006.
As of December 31, 2007, the company's consolidated balance
sheet reflected strained liquidity with current assets of
MYR20.49 million, available to pay total current liabilities of
MYR24.87 million coming due within the next twelve months.
The company's balance sheet as at December 31, 2007, also showed
total assets amounting to MYR104.59 million and total
liabilities aggregating to MYR26.76 million resulting to a
shareholders' equity of MYR104.59 million.
Liqua Health Corporation Berhad is principally engaged in the
businesses of investment holding and provision of management
services. Its core business is direct selling of health food
and related products, through its subsidiaries. Liqua Health
and Liqua Spirulina are the two core health products of the
company. The company�s subsidiaries include Liqua Health
Marketing (M) Sdn. Bhd., which is engaged in direct selling of
health food and general merchandise; Packcon (Asia) Sdn. Bhd,
which is engaged in marketing packaging materials and general
trading; Liqua Biotech Sdn. Bhd formerly known as Liqua Heath
Dairy Marketing & Supplies Sdn. Bhd.), which is engaged in
research and development; Quantum Healing Centre Sdn. Bhd
(dormant), which is engaged in the trading and marketing of
health food and general merchandise. In February 2007, Liqua
Health Marketing acquired the remaining 51% interest in Liqua
Health Chain.
The company was classified as an Affected Listed Issuer as it
has triggered Paragraph 2.1 of the Amended PN17 as the
consolidated shareholders' fund has dropped to approximately
MYR5.9 million which is below the 25% of the paid-up share
capital which stands at MYR144.3 million and the minimum issued
and paid up capital of MYR60 million required under paragraph
8.16A(1) of the Listing Requirements.
PILECON ENGINEERING: Hong Kong Subsidiary Struck Off
----------------------------------------------------
Pilecon Engineering Berhad's foreign subsidiary company, Pilecon
(Hong Kong) Limited, has been struck off the Register of the
Companies Registry of Hong Kong pursuant to Section 291(5) of
the Companies Ordinance and dissolved on November 2, 2007.
Accordingly, Pilecon (Hong Kong) Limited ceased to be a
subsidiary of Pilecon Engineering.
Pilecon (Hong Kong) was incorporated in Hong Kong on June 24,
1983, with an issued and paid-up capital of HKD9,608,321.00
comprising 9,608,321 ordinary shares of HKD1.00 each, of which
9,608,320 are held by Pilecon Group. The authorized share
capital of Pilecon (Hong Kong) is HKD10 million divided into
HKD1.00 each. Pilecon (Hong Kong) has ceased its operation of
civil engineering and building construction since year 1996 and
has remained dormant since then.
The dissolution of Pilecon (Hong Kong) has no significant impact
on the financial position of Pilecon Group for the financial
year ended December 31, 2007.
Headquartered in Selangor Darul Ehsan, Pilecon Engineering
Berhad is engaged in building construction and civil engineering
works. The Company is also involved in trading and hiring of
plant and equipment for foundation engineering and civil
engineering works. It also undertakes resort operation and
complex management services. The Group operates in Malaysia,
Hong Kong and Singapore.
The company was classified as an Affected Listed Issuer of the
Amended Practice Note No. 17/2005 of the Listing Requirements of
Bursa Malaysia Securities, as the company defaulted in its
payment and was unable to provide a solvency declaration to the
Bursa Securities.
PUTERA CAPITAL: Feb. 29 Balance Sheet Upside-Down by MYR22.18MM
---------------------------------------------------------------
Putera Capital Berhad's consolidated balance sheet as of
Feb. 29, 2008, went upside down by MYR22.18 million, on total
assets of MYR31.53 million and total liabilities of
MYR53.71 million.
As of February 29, 2008, the company's balance sheet showed
strained liquidity with MYR12.69 million of current assets
available to pay current liabilities of MYR52.19 million coming
due within the next twelve months.
For the third quarter ended Feb. 29, 2008, the company incurred
a net loss of MYR2.23 million on MYR1.57 million revenues, as
compared with MYR2.68 million net loss on MYR3.48 million of
revenues recorded in the same quarter of the preceding year.
Headquartered in Kamunting-Taiping, Malaysia, Putera Capital
Berhad is principally involved in the investment and development
of properties. Its other activities include the manufacture and
sale of yarn and woven fabrics, construction and management of
water and sewage treatment plant, contractor of construction
projects, distribution of marble, tiles, and related business
and investment holding.
The company is classified as an Affected Listed Issuer due to
these reasons:
a) The shareholders' equity of the company on a
consolidated basis has fallen below 25% of its issued
and paid up capital as per its unaudited 3rd quarter
financial results as announced on April 28, 2006. As
such its shareholders equity is less than the minimum
issued and paid up capital.
b) The auditors have expressed a modified opinion with
emphasis on Putera's going concern in its audited
accounts as of May 31, 2005.
c) There are defaults in repayment of certain debt
obligation by Putera and its subsidiaries and Putera is
unable to provide a solvency declaration to Bursa
Malaysia Securities Berhad.
SYARIKAT KAYU: Incurs MYR989,000 Net Loss in Qtr. Ended Feb. 29
---------------------------------------------------------------
Syarikat Kayu Wangi Berhad incurred a net loss of MYR989,000 on
MYR5.51 million of revenues in the quarter ended Feb. 29, 2008,
as compared with a net loss of MYR1.76 million net loss on
MYR4.73 million of revenues recorded in the same quarter of
2007.
As of Feb. 29, 2008, the company's balance sheet reflected total
assets of MYR83.45 million, total liabilities of
MYR72.78 million and shareholders' equity of MYR10.66 million.
Headquartered in Johor, Malaysia, Syarikat Kayu Wangi Berhad is
principally involved in the development of residential and
commercial projects. Its other activities include housing
construction, production of sawn timber, manufacture of
prefabricated timber rooftrusses and timber trading. The
Company first made a loss in 1999 when it defaulted on its first
bond payment. The Company has failed to turn its finances
around and has been suffering continuous losses since then.
The company was classified as an affected listed issuer of the
Amended PN17/2005 on May 8, 2006, since its latest audited
financial statements for the year ended Nov. 30, 2005, showed
that the company's shareholders' equity is MYR7,189,000, which
is less than 25% of the company's issued and paid up capital.
Syarikat Kayu is currently in the process of preparing its
Regularization Plan. Once completed, the Requisite Announcement
outlining the Regularization Plan will be made to the Bursa
Securities.
TALAM CORPORATION: SC Approves Revised Regularization Plan
----------------------------------------------------------
The Securities Commission through a letter dated April 29, 2008,
approved Talam Corporation Berhad's Proposed Revised
Regularization Plan based on these terms:
* proposed reduction in the company's share capital pursuant
to Section 64(1)(b) of the Companies Act 1965 involving the
cancellation of MYR0.40 of the par value of each existing
ordinary share of MYR1.00 each;
* proposed reduction of Talam’s entire share premium account
pursuant to Sections 60(2) and 64(1)(b) of the Act
amounting to MYR124,551,076.73 (based on the unaudited
balance sheet of Talam as at January 31, 2007) and the
credit arising therefrom to be set-off against the
accumulated losses of Talam;
* proposed share split involving the subdivision of every one
existing ordinary share of MYR0.60 each in Talam after the
Proposed Capital Reduction into three ordinary shares of
MYR0.20 each;
* proposed restructuring and settlement of debts due and
owing to the lenders of the Talam group of companies, which
involves, inter-alia, the:
(a) proposed issuance of MYR257,402,000 nominal value of zero
dividend five-year redeemable convertible preference
shares (RCPS) comprising 1,287,010,000 units of RCPS at
MYR0.20 each;
(b) proposed issuance of up to a total of MYR356,250,581
nominal value of four classes of zero coupon five-year
redeemable convertible secured loan stocks (RCSLS),
RCSLS-A, RCSLS-B, RCSLS-C and RCSLS-D, at 100% of their
nominal values. An additional MYR2,000 nominal value of
RCSLS will be issued for each of RCSLS-B, RCSLS-C and
RCSLS-D to selected investors to facilitate the listing
of RCSLS-B, RCSLS-C and RCSLS-D on the Main Board of
Bursa Malaysia Securities Berhad; and
(c) proposed issuance of up to MYR134,213,337 nominal value
of 10-year Al-Bai Bithaman Ajil Islamic Debt Securities
at 100% of its nominal value.
* proposed assumption by Talam of the indebtedness from
Ambang Sentosa Sdn Bhd in respect of the outstanding Asset-
Backed Al-Bai Bithaman Ajil Islamic Debt Securities;
subject to, inter-alia, these conditions:
(a) nominees of IJM Corporation Berhad on the Board of
Directors of Talam to be appointed as Executive
Directors;
(b) further equity condition may be imposed on Talam after
reviewing its equity structure three years from the date
of implementation of the proposed restructuring scheme.
In this respect, RHB Investment Bank/Talam is required to
submit the effective equity structure of Talam three
years after the date of completion of the proposed
restructuring scheme, together with the latest audited
financial accounts of Talam;
(c) applications for approval or notification, where
applicable, be made under the Foreign Investment
Committee Guidelines on the "Acquisition of Properties by
Local and Foreign Interests" for the transactions under
the proposed divestment program of the Group's assets to
the FIC Secretariat;
(d) RHB Investment Bank and Talam to obtain the SC's prior
approval should there be any changes to the terms and
conditions of the RCSLS and Settlement BaIDS;
(e) in relation to the non-investment grade rating assigned
to the RCSLS and Settlement BaIDS, RHB Investment Bank
and Talam are to ensure that the extent of credit risk be
disclosed to the investors and/or potential investors and
their advisers for the purpose of evaluating the risks
relating to the RCSLS and Settlement BaIDS;
(f) RHB Investment Bank to fully disclose to all prospective
investors and relevant parties the following conflict and
potential conflict of interest:
-- arising from the role undertaken by RHB Investment Bank in
the Proposed Revised Regularisation Plan; and
-- all other conflict and potential conflict of interest
arising from the Proposed Revised Regularization Plan;
together with relevant mitigating measures. RHB
Investment Bank to also inform all prospective investors
that the Board of Talam is fully informed of and aware of
the conflict and potential conflict of interest situations
and is agreeable to proceed with the present arrangement;
(g) RHB Investment Bank to ensure that the selling
restriction imposed on the RCSLS-A and Settlement BaIDS
are fully disclosed to all prospective investors and
relevant parties, including making such information
available on the Fully Automated System for
Issuing/Tendering (FAST);
(h) Talam will obtain all necessary approvals from all
relevant parties in relation to the proposed RCSLS and
Settlement BaIDS issues and RHB Investment Bank is to
submit a written confirmation on the same to the SC prior
to the issue date of the RCSLS and Settlement BaIDS;
(i) RHB Investment Bank and Talam to disclose in writing to
potential investors that each RCSLS and Settlement BaIDS
issue will carry different risks and all potential
investors are strongly encouraged to evaluate each RCSLS
and Settlement BaIDS issue on its own merit;
(j) RHB Investment Bank is required to remind all relevant
parties including Talam of the need to observe and fully
comply with all statutory requirements, in particular,
those set out in Division 4 of Part VI of the Capital
Markets & Services Act 2007;
(k) RHB Investment Bank and Talam must fully comply with the
relevant requirements relating to the implementation of
the proposals as stipulated in the Policies and
Guidelines on Issue/Offer of Securities; and
(l) RHB Investment Bank and Talam to inform the SC upon
completion of the Proposed Revised Regularization Plan.
Headquartered in Kuala Lumpur, Malaysia, Talam Corporation
Berhad -- http://www.talam.com.my/-- is principally engaged in
property development. Its other activities include trading
building materials, manufacturing of ready mixed concrete,
provision for higher educational programs, development and
management of hotel, golf and country club horticulturists,
agriculturists and landscaping designers and contractors and
investment holding. Operations of the group are carried out in
Malaysia and China.
The Troubled Company Reporter-Asia Pacific reported on
Sept. 11, 2006, that based on the Audited Financial Statements
of Talam Corporation for the financial year ended Jan. 31, 2006,
the Auditors Ernst & Young were unable to express their opinion
on the Company's Audited Accounts. As such, the Company is an
affected listed issuer of the Amended Practice Note 17 category.
In accordance with PN 17, the company is required to submit and
implement a plan to regularize its financial condition.
====================
N E W Z E A L A N D
====================
ACACIA EMPLOYMENT: Brown and Rodewald Appointed as Liquidators
--------------------------------------------------------------
Kenneth Peter Brown and Thomas Lee Rodewald were appointed joint
and several liquidators of both Acacia Employment Services
Limited on March 18, 2008, and of Hill Christian Limited on
March 31, 2008.
The liquidators can be reached at:
Rodewald Hart Brown Limited
127 Durham Street (PO Box 13380)
Tauranga
Telephone: (07) 571 6280
BLUE CHIP: Barrister Renews Call for Statutory Management
---------------------------------------------------------
David Hargreaves of The Dominion Post Auckland barrister Paul
Dale, acting for about 300 clients of Blue Chip New Zealand
Ltd., is renewing calls for the company to be put under
statutory management so a "coordinated investigation" can be
conducted into the collapse.
According to Mr. Hargreaves, Mr. Dale wrote to Commerce Minister
Lianne Dalziel asking her to rethink her rejection of statutory
management. "Some real money needs to be spent on this, and
people at the moment are struggling. Someone has to round
everything up," Mr. Hargreaves quotes Mr. Dale.
The report notes that about 3,000 Kiwi investors are owed about
NZ$84 million through the collapse of 21 Blue Chip-related
companies. The Troubled Company Reporter-Asia Pacific reported
on April 28, 2008, citing The Dominion Post, that liabilities in
Blue Chip's ledger include $65 million worth of inter-company
loans while conservative estimates list $9.5 million in rent
guarantees and $5.4 million in extra guarantees.
The Dominion Post relates that Blue Chip's liquidator, Jeff
Meltzer of Meltzer Mason Heath, said that investigations into
the collapse of the companies were continuing. "It's all in the
very early stages. We are working our way through what is a
fairly complex investigation."
Mr. Hargreaves adds that the Blue Chip business is the subject
of Serious Fraud Office and Commerce Commission inquiries.
About Blue Chip NZ
Blue Chip New Zealand Ltd. is a financial services company with
offices throughout New Zealand. It is a subsidiary of Blue Chip
Financial Solutions Limited, now known as Northern Crest
Investments. Northern Crest operates in two divisions:
financial services and leasing services. The financial services
division is engaged in the provision of financial structuring
services and investment product to a variety of clients. The
leasing activities division is engaged in rental of residential
property.
As reported by the Troubled Company Reporter-Asia Pacific on
April 15, 2008, Blue Chip New Zealand Ltd. is in voluntary
liquidation, joining 20 other Blue Chip companies that are now
being wound up. Blue Chip New Zealand is a subsidiary of the
company formerly known as Blue Chip Financial Solutions.
CENTRAL RIGGING: Brown and Rodewald Appointed as Liquidators
------------------------------------------------------------
On April 18, 2008, Kenneth Peter Brown and Thomas Lee Rodewald
were appointed as joint and several liquidators of Central
Rigging & Cranes Limited.
The liquidators can be reached at:
Rodewald Hart Brown Limited
127 Durham Street (PO Box 13380)
Tauranga
Telephone: (07) 571 6280
Website: www.rhb.co.nz
CONTRAK CARTAGE: Face's Stevenson's Wind-Up Petition on May 16
--------------------------------------------------------------
On December 20, 2007, an application to put Contrak Cartage
Limited into liquidation was filed in the High Court at
Auckland.
The application will be heard before the High Court at Auckland
on May 16, 2008, at 10.00 a.m.
The plaintiff is Stevenson Engineering Limited and its solicitor
is:
Accounts Enforcement Limited
33B Constellation Drive
Mairangi Bay, North Shore City
PO Box 100163
North Shore Mail Centre
DE-LUSH VINEYARD: Taps Crichton and Horne as Liquidators
--------------------------------------------------------
David Donald Crichton and Keiran Anne Horne, chartered
accountants of Crichton Horne & Associates Limited, were
appointed liquidators of De-Lush Vineyard Services Limited by
the High Court on April 16, 2008.
The liquidators fixed May 16, 2008, as the last day for
creditors to make their claims and to establish any priority
their claims may have, or be excluded from the benefit of any
distribution.
The liquidator can be reached at:
Marie Inch
Crichton Horne & Associates Limited
Old Library Chambers
109 Cambridge Terrace (PO Box 3978)
Christchurch
Telephone: (03) 379 7929
FASTFORWARD HOLDINGS: Shareholders Appoint Barlow as Liquidator
---------------------------------------------------------------
On March 7, 2008, the shareholders of Fastforward Holdings
Limited appointed Rhys Michael Barlow, chartered accountant of
Wellington, as liquidator.
The liquidator can be reached at:
BDO Spicers (Wellington) Limited
Chartered Accountants
PO Box 10340 or DX SP 20033
Level 2, BDO House
99-105 Customhouse Quay
Wellington
Telephone: (04) 472 5850
Facsimile: (04) 473 3582
Email: rhys.barlow@wlg.bdospicers.com
HEAVY DIESEL: Court Appoints Shephard and Dunphy as Liquidators
----------------------------------------------------------------
The High Court at Wellington on April 16, 2008, appointed Iain
Bruce Shephard and Christine Margaret Dunphy, jointly and
severally as interim liquidators of Heavy Diesel Specialists
Limited.
The liquidator can be reached at:
Shephard Dunphy Limited
Level 2, Zephyr House
82 Willis Street, Wellington
Telephone: (04) 473 6747
Facsimile: (04) 473 6748
I AM IMPORT: Court Appoints Shephard and Dunphy as Liquidators
--------------------------------------------------------------
Iain Bruce Shephard and Christine Margaret Dunphy were appointed
joint and several interim liquidators of I Am Import, Export and
Distributor Limited by the High Court at Wellington April 15,
2008.
The liquidators can be reached at:
Shephard Dunphy Limited
Level 2, Zephyr House
82 Willis Street, Wellington
PO Box 11793
Telephone: (04) 473 6747
Facsimile: (04) 473 6748
ISLAND BAY: Creditors Have Until May 16 to File Claims
------------------------------------------------------
On March 28, 2008, Island Bay Fishing Co. Limited was placed
into liquidation and Bryan George Pocock, chartered accountant,
was appointed as liquidator.
The liquidator fixed May 16, 2008, as the last day for creditors
to make their claims and to establish any priority their claims
may have, or be excluded from the benefit of any distribution.
The liquidator can be reached at:
Level 7, 44 Victoria Street
PO Box 10788
Wellington
Telephone: (04) 472 3560
Facsimile: (04) 472 3564
JADEWOOD INTERNATIONAL: Court to Hear Wind-Up Petition on May 16
----------------------------------------------------------------
On December 17, 2007, an application to put Jadewood
International Limited into liquidation was filed in the High
Court at Auckland.
The application will be heard before the High Court at Auckland
on Friday, May 16, 2008, at 10:00 a.m.
The plaintiff is A J Park and its solicitor is:
Dianne S. Lester
Credit Consultants Debt Services NZ Limited
Level 3
3-9 Church Street (PO Box 213 or DX SX 10069)
Wellington
Telephone: (04) 470 5972
JOANNIE PROPERTIES: Shareholders Appoint Barlow as Liquidator
--------------------------=----------------------------------
On April 8, 2008, Rhys Michael Barlow, chartered accountant of
Wellington, was appointed as liquidator of Joannie Properties
Limited by its shareholders.
The liquidator can be reached at:
BDO Spicers (Wellington) Limited
Chartered Accountants
Level 2, BDO House
99-105 Customhouse Quay (PO Box 10340 or DX SP 20033)
Wellington
Telephone: (04) 472 5850
Facsimile: (04) 473 3582
KENDALL EARTHMOVERS: Creditors Must File Claims by May 16
---------------------------------------------------------
Vivien Judith Madsen-Ries, insolvency specialist, and
Barry Phillip Jordan, chartered accountant, were appointed
were appointed joint and several liquidators of Kendall
Earthmovers Limited by the High Court on April 11, 2008
The liquidators fixed May 16, 2008, as the last day last day for
creditors to make their claims and to establish any priority
their claims may have, or be excluded from the benefit of any
distribution.
The liquidators can be reached at:
McCallum Petterson
Level 11, Forsyth Barr Tower
55-65 Shortland Street
Auckland
Telephone: (09) 336 0000
Facsimile: (09) 336 0010
LIBERTY LIVE: Shareholders Appoint Barlow as Liquidator
-------------------------------------------------------
On March 7, 2008, Liberty Live Lobster Quota Holdings Limited
was placed into liquidation and Rhys Michael Barlow, chartered
accountant of Wellington, was appointed as liquidator.
The liquidator can be reached at:
BDO Spicers (Wellington) Limited
Chartered Accountants
Level 2, BDO House
99-105 Customhouse Quay
PO Box 10340 or DX SP 20033
Wellington
Telephone: (04) 472 5850
Facsimile: (04) 473 3582
Email: rhys.barlow@wlg.bdospicers.com
M N T LIMITED: Brown and Rodewald Appointed as Liquidators
----------------------------------------------------------
On April 16, 2008, Kenneth Peter Brown and Thomas Lee Rodewald
were appointed as joint and several liquidators of M N T
Limited.
The liquidators can be reached at:
Rodewald Hart Brown Limited
127 Durham Street (PO Box 13380)
Tauranga
Telephone: (07) 571 6280
Website: www.rhb.co.nz
MAXBUILD LIMITED: Creditors Must File Claims by May 16
------------------------------------------------------
Karen Betty Mason and Jeffrey Philip Meltzer, insolvency
practitioners, were appointed joint and several liquidators of
Maxbuild Limited on April 15, 2008.
The liquidators fixed May 16, 2008, as the last day for
creditors to make their claims and to establish any priority
their claims may have, or be excluded from the benefit of any
distribution.
The liquidator can be reached at:
Rachel Mason
Meltzer Mason Heath
Chartered Accountants
PO Box 6302
Wellesley Street, Auckland 1141
Telephone: (09) 357 6150
Facsimile: (09) 357 6152
MILKKAN LIMITED: Commences Liquidation Proceedings
--------------------------------------------------
On March 22, 2008, Milkkan Limited was placed into liquidation
and Bruce Carlaw Richards, chartered accountant of New Plymouth,
was appointed as liquidator.
The liquidator can be reached at:
Staples Rodway Taranaki Limited
109-113 Powderham Street
New Plymouth
Telephone: (06) 758 0956
Facsimile: (06) 757 5081
NEWLINE CONSTRUCTION: Claims Filing Deadline is May 16
------------------------------------------------------
David Donald Crichton and Keiran Anne Horne, chartered
accountants of Crichton Horne & Associates Limited, were
appointed liquidators of Newline Construction (2006) Limited by
the High Court on April 16, 2008.
The liquidators fixed May 16, 2008, as the last day for
creditors to make their claims and to establish any priority
their claims may have, or be excluded from the benefit of any
distribution.
The liquidators can be reached at:
Marie Inch
Crichton Horne & Associates Limited
Old Library Chambers
109 Cambridge Terrace (PO Box 3978)
Christchurch
Telephone: (03) 379 7929
NZ QUALITY: Creditors Must File Claims by May 16
------------------------------------------------
On April 15, 2008, Damien Grant and Steven Khov, insolvency
practitioners, were appointed as joint and several liquidators
of NZ Quality Homes Limited.
The liquidators fixed May 16, 2008, as the last day for
creditors to make their claims and to establish any priority
their claims may have, or be excluded from the benefit of any
distribution.
The liquidators can be reached at:
Waterstone Insolvency
PO Box 352
Auckland
Facsimile: 0800FAXWSI
OXFORD FARMLANDS: Trevor Croy Appointed as Liquidator
-----------------------------------------------------
On 18 April 2008, Oxford Farmlands Limited was placed into
liquidation and Trevor James Croy, chartered accountant of
Ashburton, was appointed as liquidator.
The liquidator can be reached at:
257 Havelock Street
Ashburton
Telephone: (03) 308 8353
Facsimile: (03) 308 1535
REMUERA 464: Commences Liquidation Proceedings
----------------------------------------------
Robert Laurie Merlo, insolvency practitioner of Auckland, was
appointed liquidator of Remuera 464 Limited by its shareholders
on April 16, 2008.
The liquidator fixed May 16, 2008, as the last day for creditors
to file their proofs of claim.
The liquidator can be reached at:
Merlo Burgess & Co. Limited
PO Box 51486
Pakuranga, Auckland
Telephone: (09) 520 7101
Facsimile: (09) 529 1360
Email: merloburgess@xtra.co.nz
T & F KENT: Brown and Rodewald Appointed as Liquidators
-------------------------------------------------------
Kenneth Peter Brown and Thomas Lee Rodewald were appointed as
joint and several liquidators of T & F Kent (N.Z.) Limited on
April 18, 2008.
The liquidators can be reached at:
Rodewald Hart Brown Limited
127 Durham Street (PO Box 13380)
Tauranga
Telephone: (07) 571 6280
Website: www.rhb.co.nz
UPG LIMITED: Brown and Rodewald Appointed as Liquidators
--------------------------------------------------------
Kenneth Peter Brown and Thomas Lee Rodewald were appointed as
joint and several liquidators of UPG Limited and Computer
Company (1998) Limited (formerly Computer Stuff Limited), on
April 18, 2008.
The liquidators can be reached at:
Rodewald Hart Brown Limited
127 Durham Street (PO Box 13380)
Tauranga
Telephone: (07) 571 6280
Website: www.rhb.co.nz
* NEW ZEALAND: Labor Force Ageing and Growth Slowing
-----------------------------------------------------
An ageing profile and a slowing growth rate are likely to
characterize the New Zealand labor force over the period to
2061, Statistics New Zealand said Tuesday. This is from mid-
range projection (series 5M), one of nine alternative
projections released. Half of the labor force will be older
than 42 years in 2011, compared with a median age of 40 years in
2006 and 36 years in 1991. This reflects the general ageing of
both the population and the labor force.
New Zealand's labor force is projected to grow from an estimated
2.24 million at 30 June 2006 to 2.65 million in 2031 and 2.79
million in 2061. The projections indicate a decelerating growth
rate in the labor force over the next five decades. With the
population ageing, new entrants into the labor force will be
largely offset by retirements from the labor force. The labor
force is projected to grow by an average of 34,000 a year
between 2006 and 2011. Further average growth of 20,000 a year
is projected between 2011 and 2016. However, subsequent growth
is expected to average less than 15,000 a year.
The labor force aged 65 years and over increased from 25,000 in
1991 to 62,000 in 2006. It is projected to increase to 160,000
in 2021 and about 200,000 from the mid-2030s. The proportion of
the population aged 65 years and over who participate in the
labor force increased from 6 percent in 1991 to 12 percent in
2006 and is assumed to increase to 20 percent in 2016. The
number of people aged 65 years and over who are not in the labor
force will double from 450,000 in 2006 to 900,000 in 2031, and
then increase to 1.22 million in 2061.
The labor force comprises people aged 15 years and over who
regularly work for one or more hours per week for financial
gain, or work without pay in a family business, or are
unemployed and actively seeking part-time or full-time work.
People not in the labor force include people under 15 years of
age, students who do not work for pay, people who are unemployed
and not actively seeking work, people with childrearing
responsibilities, people who work without pay (but not in a
family business), and people who have retired.
About Statistics New Zealand
Statistics New Zealand is a government department and New
Zealand's national statistical office. It administers the
Statistics Act 1975, and is the country's major source of
official statistics. Its chief executive has the title of
Government Statistician. Prior to December 1994, Statistics New
Zealand was known as the Department of Statistics.
=====================
P H I L I P P I N E S
=====================
PLDT: First Quarter 2008 Net Income Up by 21% to Php10.4 Billion
----------------------------------------------------------------
Philippine Long Distance Telephone Company disclosed that
consolidated net profit for the first quarter of 2008 increased
by 21% to Php10.4 billion, from the Php8.6 billion net profit
reported last year.
According to the company, this year’s results benefited from
significant mark-to-market foreign exchange and derivative gains
plus a one-time gain of approximately Php0.7 billion arising
from the designation as non-hedges of certain derivatives
related to the company’s 2009, 2012 and 2017 bonds which had
previously been designated as hedges. Core net income, net of
these exceptional items, rose to Php9.3 billion in the first
three months of 2008, 11% over the core net income of Php8.4
billion in the same period in 2007. Consolidated service
revenues increased by 6% to Php34.9 billion, notwithstanding the
16% appreciation of the peso which negatively impacted the
dollar-linked revenues of the Group, which could account for as
much as 36% of consolidated revenues. Consolidated EBITDA
improved by 7% to Php21.8 billion while EBITDA margin improved
slightly to 63%.
The Group’s consolidated balance sheet continued to strengthen,
with consolidated debt balances down to US$1.6 billion. Net
debt as at March 31, 2008 stood at approximately US$406 million
(equivalent to US$ 967 million if the P23.4 billion representing
the common dividend payment due in April 2008 were deducted from
outstanding cash balances). Effecting the same adjustment, net
debt to EBITDA and net debt to equity ratios stood at 0.48 times
and 0.41 times, respectively.
PLDT's March 31 balance sheet also showed strained liquidity
with Php68,115 million in total current assets available to pay
Php75,249 million in total current liabilities.
Consolidated free cash flow stood at Php17.3 billion in the
first quarter of 2008. Consolidated capital expenditures were
at Php3.1 billion, with spending expected to accelerate as the
Company continues to build out capacity and coverage of its
wireless and broadband networks aggressively. Capital
expenditures for the Group in 2008 are expected to approximate
the Php25 billion spent in 2007.
Wireless Business
-----------------
Consolidated wireless service revenues rose to P22.5 billion for
the first three months of 2008, 8% higher than the P20.8 billion
realized in the same period last year. Cellular subsidiaries,
Smart Communications, Inc (“Smart”) and Pilipino Telephone
Corporation (”Piltel”) have consistently maintained their solid
performances.
Consolidated wireless EBITDA improved by 8% to P14.5 billion
this year from P13.5 billion last year. EBITDA margin dipped
marginally to 64% due to certain one-off cash expenses in the
satellite business.
The PLDT Group’s total cellular subscriber base for the first
quarter of 2008 continued to grow strongly as Smart recorded net
additions of approximately 280,000 subscribers and Talk ‘N
Text added about 1.25 million subscribers to end the period with
20.6 million and 11 million subscribers, respectively, or a
total of 31.6 million subscribers. And as at end-April 2008,
the PLDT Group’s cellular subscriber base had surpassed the
32 million mark.
“Despite the increasingly difficult economic environment, Smart
sustained its strong subscriber numbers as we persevered with
our efforts at finding creative solutions and meet our markets’
needs," stated Napoleon L. Nazareno, President and CEO of PLDT
and Smart.
Smart Bro, Smart’s wireless broadband service – through its
wholly-owned subsidiary Smart Broadband, Inc - showed no signs
of slowing down as its wireless broadband subscriber base
grew 14% for the quarter to reach 348,000 at end-March 2008,
adding 46,000 new subscribers for the quarter. Wireless
broadband revenues grew 122% to about P919 million in the first
quarter of 2008, an improvement over the P414 million for the
same period in 2007. On the heels of its postpaid Plug-It
service which was introduced in November 2007, SmartBro has
just launched a prepaid version, making the Internet available
to a broader segment of the population with affordable sachet
pricing, nationwide coverage and easy loading. Plug-It offers
instant, internet access through a portable wireless modem and
is available in all areas where Smart’s network coverage is
present.
“The Internet is the new cellular and just as we have put the
mobile phone in most people’s hands, so will we make the
Internet accessible to all”, added Orlando B. Vea, Chief
Wireless Adviser of Smart.
On 25th March 2008, Smart acquired the entire issued and
outstanding capital stock of PH Communications Holdings
Corporation and Francom Holdings, Inc., which collectively own
100% of Connectivity Unlimited Resource Enterprise, Inc.
(“CURE”), for the total amount of P419.54 million. Smart also
stated its intention to invest up to P210 million in CURE, in
the form of subscriptions for new shares of CURE. CURE is one of
the four licensees awarded by the National Telecommunications
Commission with a 3G frequency in December 2005. It was awarded
an allocation of 10 Mhz in the 2100 Mhz band and expects to
launch its commercial service in May this year. The acquisition
dovetails with Smart’s previously announced plan to provide
expanded and enhanced 3G services nationwide, including higher
speed wireless broadband services. CURE is envisaged to provide
Smart with a platform to offer and provide differentiated 3G
services for targeted markets.
PLDT Fixed Line
-----------------
Fixed Line service revenues increased 4% to P12.4 billion in the
first three months of 2008 from P11.9 billion last year as
improvements in data revenues, both from corporate data and
residential DSL services, were augmented by higher revenues in
local exchange and national long distance. ILD revenues
continued to decline as dollar-linked revenues were adversely
impacted by the 16% appreciation of the average US dollar/peso
exchange rate in 2008. Fixed line revenues would have improved
another 4% year-on-year if foreign exchange rates had remained
stable.
Retail DSL continued to grow as broadband subscribers grew by
over 35,000 to 300,000 at the end of the first quarter 2008 from
264,000 at the end of 2007. PLDT DSL generated P1.3 billion in
revenues for the first three months of 2008, up 33% from P1.0
billion in the same period in 2007, accounting for 51% of the
PLDT Group’s broadband and internet revenues for the period.
Fixed Line EBITDA in the first quarter of 2008 improved 5% to
P6.9 billion, in line with the increased revenues and lower
operating costs. EBITDA margin was stable at 56%.
Representative of the convergent offerings which the Group will
offer more of moving forward, PLDT Landline Plus (“PLP”) is a
fixed-wireless telephone service that uses a combined fixed/
wireless platform in the delivery of fixed line voice and data
services. The Group's plan is to launch PLP in areas with
limited or non-existent PLDT fixed facilities. A postpaid
version has been in the market since March 2007 and a prepaid
offering was introduced in March this year. Demand for the
service has been strong given the service’s value proposition.
Subscribers to this service, net of churn, have reached 153,000
to-date.
"In the area of customer service, I am pleased that our recent
organizational changes have resulted in some early tangible
wins. We have set out to match our financial success with
equally exceptional service and these initial successes bolster
my conviction that we can make the necessary changes to
transform our business and the culture of the Company, yet
again," declared Nazareno.
ePLDT Business
-------------------
ePLDT, the Group’s information and communications technology
arm, reported service revenues of P2.6 billion for the first
quarter of 2008, a 6% increase from the P2.4 billion recorded in
the same period last year. Despite their significant growth,
ePLDT’s revenues were likewise adversely impacted by the strong
appreciation of the peso since approximately 80% of its service
revenues are denominated in U.S. Dollars. As a result of this
impact and combined with higher operating expenses, ePLDT’s
EBITDA margin for the first quarter of 2008 declined to 14%
compared with 17% for the same period in 2007, although higher
than the 11% margin for the full year 2007. ePLDT’s revenues now
account for 7% of PLDT’s consolidated service revenues.
Of total ePLDT revenues, 85% are accounted for by Customer
Interaction Services (more commonly known as “call center”)
through Ventus, and Knowledge Process Solutions through
SPi. As at 31st March 2008, combined employees for SPi and
Ventus totaled nearly 14,000, with over 6,400 for Ventus and
around 7,600 for SPi.
Consolidated customer interaction services revenues continued to
make significant gains, growing 11% to P867 million as a result
of increased capacity utilization and higher billable
hours, despite the appreciation of the peso. ePLDT Ventus, the
umbrella brand for ePLDT’s customer interactive business, now
operates seven customer interaction service facilities with
combined seats of 6,500.
SPi Technologies (SPi), ePLDT’s knowledge processing arm,
generated revenues of Php1.3 billion in the first quarter of
2008. In addition to the Philippines and the USA, SPi has
operations in India and Vietnam.
“The outlook for SPi’s main verticals varies, with publishing
and medical billing looking to continue their strong
performance, legal discovery breaking even and focusing on
stepping up sales efforts to maximize fixed overhead, and
medical transcription continuing to work on improving
productivity and margins. We are proceeding with the integration
of SPi and Ventus which we anticipate will result in improved
margins. Our other businesses, though smaller in scale and in
revenue contribution, are holding their own and will provide
opportunities for growth in the future,” said Ray C. Espinosa,
ePLDT President and CEO.
About PLDT
Headquartered in Manila, Philippine Long Distance Telephone
Company is a telecommunications service provider in the
Philippines. Through its three principal business groups -
wireless, fixed line, and information and communications
technology - PLDT offers a wide range of telecommunications
services to its subscribers in the Philippines. PLDT's
subsidiaries and affiliates include Smart Communications, Inc.
and Pilipino Telephone Corporation, both cellular service
providers, and ePLDT, an integrated information and
communications technology provider.
PLDT was incorporated on November 28, 1928, following the merger
of four telephone companies under US ownership, namely,
Philippine Telephone and Telegraph Company, Cebu Telephone and
Telegraph Company, Panay Telephone and Telegraph Company, and
Negros Telephone and Telegraph Company. In 1967, effective
control of PLDT was sold by General Telephone and Electronics
Corporation to a group of Filipino businessmen.
* * *
As reported in the Troubled Company Reporter-Asia Pacific
on March 24, 2008, Moody's Investors Service affirmed
Philippine Long Distance Telephone Company's Ba2/positive
foreign currency bond rating.
PRC LLC: Files Amended Chapter 11 Plan and Disclosure Statement
---------------------------------------------------------------
PRC LLC and its debtor-affiliates amended their Chapter 11 Plan
of reorganization and accompanying disclosure statement.
Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in
Houston, Texas, informs the Honorable Martin Glenn of the U.S.
Bankruptcy Court for the Southern District of New York that
after the Debtors filed their Disclosure Statement on April 10,
2008, the Official Committee of Unsecured Creditors raised
various concerns related to the proposed treatment of general
unsecured claims under the proposed Plan of Reorganization.
Rather than waiting for those concerns to be raised through
objections to the Court -- and in an effort to avoid a
protracted and costly confirmation process -- the Debtors, their
DIP Lenders, their Prepetition Lenders, and the Creditors
Committee engaged in extensive, arm's-length negotiations to
resolve the Creditors Committee's concerns, Mr. Perez relates.
The negotiations, he states, have resulted in certain revisions
to the Debtors' proposed Plan that, in the parties' judgment,
will allow the Debtors to successfully and expeditiously emerge
from Chapter 11.
"The Creditors' Committee now supports the Plan," Mr. Perez
tells the Court. In furtherance of that support, should the
Court approve the Revised Disclosure Statement to reflect the
parties' Agreement, the Creditors Committee will provide an
appropriate letter of support to be included in the Solicitation
Package delivered to creditors entitled to vote on the Plan, he
adds.
The salient terms of the parties' Agreement incorporated in the
Revised Disclosure Statement are:
* The Plan eliminates the prior distinction between Class 6A
General Unsecured Claims and Class 6B Convenience Claims.
Consequently, all General Unsecured Claims are now
classified in Class 6 of the Plan.
* The cash available for distribution to holders of Allowed
General Unsecured Claims is increased from $430,000 to
$1,350,000.
* The Debtors will waive all causes of action under Section
547 of the Bankruptcy Code against the Debtors' Trade
Creditors -- holders of General Unsecured Claim who had
provided goods or services to the Debtors in the ordinary
course of business. Trade Creditors do not include
IAC/Interactive Corp. and the Debtors' former employees and
officers.
* The Debtors and the Creditors Committee will cooperate in
the prosecution of objections to Material General Unsecured
Claims, which are General Unsecured Claims that, if reduced
or disallowed pursuant to Rule 3007 of the Federal Rules of
Bankruptcy Procedure, would reduce the aggregate amount of
Allowed General Unsecured Claims by at least $200,000.
* To facilitate cooperation between the Debtors and the
Creditors Committee during the claims administration
process, the Creditors Committee and their professionals
will continue to perform their duties with respect to claim
objections for a period after the Effective Date of the
Plan, until any objections to Material General Unsecured
Claims are resolved.
* The Creditors Committee will have standing (i) to appear
and be heard in connection with the administration of
General Unsecured Claims and any pending objections to
those Claims, (ii) to file objections to any Material
General Unsecured Claim as to which, despite the
Committee's urging, the Reorganized Debtors elect not to
object to, and (iii) to oppose any proposed settlement or
compromise of a Material General Unsecured Claim that is
advocated by the Reorganized Debtors.
* The Creditors Committee agrees that from and after May 1,
2008, all fees and expenses incurred by the Creditors
Committee and their professionals that are chargeable to
the Debtors' estates will be capped at $75,000 per month
for a period of two months, and will be capped at $50,000
for all time thereafter. The sum of these amounts will be
a cumulative amount which, if exceeded during one period,
will go against the total cap and, similarly, any amount
which is not used during a given period will be carried
forward, subject to a total cap of $200,000.
Accordingly, the Debtors ask the Court to approve their Revised
Disclosure Statement.
A full-text copy of the black-lined version of the PRC
Disclosure Statement dated May 2 is available for free at:
http://researcharchives.com/t/s?2b81
A full-text copy of the black-lined version of the PRC Plan of
Reorganization dated May 2 is available for free at:
http://researcharchives.com/t/s?2b82
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC
-- http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-
focused, Fortune 500 U.S. corporations and delivers these
services through a global network of call centers in the U.S.,
Philippines, India, and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of
Access Direct Telemarketing, Inc., each of which is a debtor and
debtor- in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring
and turnaround advisor. Additionally, Evercore Group LLC
provides investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of Dec. 31,
2007 showed total assets of $354,000,000 and total debts of
$261,000,000.
The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News,
Issue No. 11; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PRC LLC: Discloses Various Analysis Under Chapter 11 Plan
---------------------------------------------------------
PRC LLC and its debtor-affiliates presented to the U.S.
Bankruptcy Court for the Southern District of New York financial
projections, and valuation and liquidation analyses in support
of their Chapter 11 plan of reorganization.
The Debtors believe that their proposed Plan of Reorganization
meets the U.S. Bankruptcy Code's feasibility requirement, and
that Plan confirmation is not likely to be followed by
liquidation, or the need for further financial reorganization of
the Debtors.
In connection with the development of the Plan, and for the
purposes of determining whether the Plan satisfies the
feasibility standard, the Debtors analyzed their ability to
satisfy financial obligations while maintaining sufficient
liquidity and capital resources, Alfredo R. Perez, Esq., at
Weil, Gotshal & Manges LLP, in Houston, Texas, tells the Court.
In this regard, the Debtors, in consultation with their
professionals, have prepared projected consolidated income
statements and projected consolidated statements of cash flows
of the operating Debtors for the six months ending Dec. 31, 2008
-- the Stub Period -- and for the years ending Dec. 31, 2009 and
2010, and the projected consolidated balance sheets of Debtor
PRC LLC as at Dec. 31, 2008, 2009 and 2010.
According to Mr. Perez, the Projections assume that (i) the Plan
will be confirmed and consummated in accordance with its terms,
(ii) there will be no material change in legislation or
regulations, or the administration thereof, that will have an
unexpected effect on the operations of the Reorganized Debtors,
(iii) there will be no change in generally accepted accounting
principles in the United States that will have a material effect
on the reported financial results of the Reorganized Debtors,
(iv) the application of Fresh Start Reporting will not
materially change the Debtors' revenue accounting procedures,
and (v) thee will be no material contingent or unliquidated
litigation or indemnity Claims applicable to the Reorganized
Debtors.
Nevertheless, Mr. Perez notes, the Projects are only an estimate
and therefore, necessarily speculative in nature.
A full-text copy of the Debtors' Financial Projections is
available for free at:
http://researcharchives.com/t/s?2b84
Valuation Analysis
The Debtors have been advised by Evercore Group LLC, their
investment banker, with respect to the consolidated enterprise
value of the Reorganized Debtors on a going-concern basis.
Evercore undertook an valuation analysis for the purpose of
determining value available for distribution to holders of
Allowed Claims pursuant to the Plan, and to analyze the relative
recoveries to those holders. The estimated total value
available for distribution to holders of Allowed Claims is
comprised of an estimated value of the Reorganized Debtors'
operations on a going concern basis -- the "Enterprise Value."
Based in part on information provided by the Debtors, Evercore
has concluded solely for purposes of the Plan that the
Enterprise Value of the Reorganized Debtors ranges from
approximately $74 to $109 million, Mr. Perez reports.
Evercore's estimated Enterprise Value implies a value for the
equity interests in the Reorganized Debtors of approximately
$0 to $10 million. These values do not assume any value for
potential net operating losses that may be available upon the
Effective Date.
The assumed Enterprise Value range reflects work performed by
Evercore on the basis of information available to it as of
April 7, 2008.
Liquidation Analysis
The Debtors believe that through their proposed Plan of
Reorganization, holders of Allowed Claims will receive a greater
recovery from their estates than they would in a liquidation
under Chapter 7 of the Bankruptcy Code, Alfredo R. Perez, Esq.,
at Weil, Gotshal & Manges LLP, in Houston, Texas, tells the
Court.
Consequently, the Debtors prepared a liquidation analysis that
reflects the estimated cash proceeds, net of liquidation-related
costs that would be realized if each Debtor were liquidated in
accordance with Chapter 7. The Liquidation Analysis is based on
a number of estimates and assumptions that, although considered
reasonable, are inherently subject to significant business,
economic and competitive uncertainties and contingencies beyond
the Debtors' control, and which could be subject to material
change.
The Liquidation Analysis assumes that the Debtors would commence
a Chapter 7 liquidation on June 30, 2008.
PRC LLC, et al.
Liquidation Recovery Analysis
(in thousands)
Book Est. Recovery Est. Liquidation
Value Low High Low High
------- ------------- ----------------
Asset Liquidation
Cash & cash
equivalents 1,000 100.0% 100.0% $1,000 $1,000
Net Accounts
Receivable 51,359 40.3% 62.6% 20,706 32,171
FF&E 41,679 5.9% 11.1% 2,452 4,641
Other Assets 6,091 14.5% 29.0% 884 1,767
------- ------- ------ -------- -------
Proceeds from
Asset Liquidation $100,129 25.0% 39.5% $25,042 $39,579
Proceeds from
Preference
Claims 45,964 5.0% 10.0% 2,298 4,596
-------- -------
Total Proceeds $27,340 $44,176
-------- -------
Costs Associated
with Liquidation:
Payroll/overhead costs 1,506 1,255
Site Clean-Up/Security Cost 1,694 1,694
Professional Fees 1,750 1,750
Chapter 7 Trustee Fees 870 1,375
-------- -------
Total Wind down Costs $5,820 $6,074
-------- -------
Cash Available for Distribution $21,520 $38,101
-------- -------
A full-text copy of the Debtors' Liquidation Analysis is
available for free at http://researcharchives.com/t/s?2b83
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC
-- http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-
focused, Fortune 500 U.S. corporations and delivers these
services through a global network of call centers in the U.S.,
Philippines, India, and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of
Access Direct Telemarketing, Inc., each of which is a debtor and
debtor- in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring
and turnaround advisor. Additionally, Evercore Group LLC
provides investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of Dec. 31,
2007 showed total assets of $354,000,000 and total debts of
$261,000,000.
The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News,
Issue No. 11; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
PRC LLC: Verizon and Affiliates Balk at Disclosure Statement
------------------------------------------------------------
Verizon Communications Inc. and its affiliates object to PRC LLC
and its debtor-affiliates' amended Chapter 11 plan of
reorganization.
The Verizon and its affiliates inform the U.S. Bankruptcy Court
for the Southern District of New York that they have provided
extensive telecommunications services and facilities to the
Debtors before and after the date of
bankruptcy.
On Sept. 30, 2003, InterActiveCorp, the former parent of Debtor
PRC LLC, entered into a Global Services Agreement with Verizon.
In January 2007, PRC entered into a Communications Services
Authorized User Participation Agreement, pursuant to which PRC
was authorized to purchase goods and services from Verizon
pursuant to the GSA.
Verizon says it also has been a major customer of the Debtors.
In May 2005 and March 2006, Verizon and PRC entered into
Agreements for Technical Services, for PRC to provide technical
support to Verizon. In September 2006, PRC and Verizon entered
into a Master Agreement for Call Center Customer Services for
other technical support services to be provided to Verizon.
As a result of these agreements, Verizon is a very large
creditor in the Debtors' cases, with an aggregate prepetition
claim for more than $19.5 million, Darryl S. Laddin, Esq., at
Arnall Golden Gregory LLP, in Atlanta, Georgia, asserts.
Verizon is also a member of the Official Committee of Unsecured
Creditors of the Debtors.
Verizon tells the Court that it objects to the Disclosure
Statement filed by the Debtors for these reasons:
(1) The Debtors seek to reserve, through the date of the
confirmation hearing, the right to amend the schedule of
executory contracts to be assumed pursuant to Section 365
of the Bankruptcy Code.
(2) The Debtors propose to delay the payment of sums
necessary to cure defaults under assumed executory
contracts until as far as 30 days after the effective
date of the confirmation order.
(3) In the event that the cure amount due under an assumed
executory contract is disputed, the Debtors seek to
reserve the right, even well after confirmation, to
remove that contract from the schedule of contracts
originally designated for assumption, and instead reject
the contract.
The Debtors' reservation (i) to amend the Contract Assumption
Schedule and (ii) to remove a contract from that Schedule a few
days before or after the plan confirmation fails to provide
"adequate information" to creditors prior to the voting
deadline, or even prior to confirmation, concerning the
executory contracts that the Debtors do and do not propose to
assume, Mr. Laddin contends. It is also impermissible under
Section 365 of the Bankruptcy Code, which requires executory
contracts to be either assumed or rejected by no later than
confirmation of a plan, he adds.
Even if disputes as to required cure amounts are heard and
finally adjudicated after confirmation, the Debtors are
required, as a matter of law, to make their elections as to
assumption or rejection of executory contracts before
confirmation, and thereafter to be irrevocably bound by those
elections regardless of how a dispute over cure amounts is
ultimately determined, Mr. Laddin notes.
Verizon objects to the procedures that the Debtors have proposed
for tabulation of votes for and against their Plan of
Reorganization. Verizon complains that the Debtors seek the
right to object to a creditor's claim as late as only 10 days
prior to the voting deadline, and on that objection, have the
creditor's claim be deemed temporarily disallowed for voting
purposes "except as ordered by the Court before the Voting
Deadline."
"In so doing, the Debtors effectively seek the right to
disenfranchise creditors of their voting rights merely upon the
filing of a claim objection, as late as only ten days before the
voting deadline, and place the onus on such creditors to seek
what would amount to emergency relief from the Court in an
effort to have their voting rights restored in time to be
counted for or against the Debtors' plan," Mr. Laddin says.
Mr. Laddin argues that the proposal is unsupported by the
Bankruptcy Code, vests the Debtors with far too much power to
manipulate the voting process and places far too onerous and
unreasonable a burden on creditors who wish simply to exercise
the voting rights afforded to them under the Code.
The Disclosure Statement Approval Motion should be denied,
Verizon contends, unless the procedures for vote tabulations are
amended to provide that claims subject to an unresolved
objection by the Debtors will be deemed temporarily allowed for
voting purposes, at the face amount of the claim, unless the
Debtors obtain an order to the contrary from the Court in
advance of the voting deadline.
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC
-- http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-
focused, Fortune 500 U.S. corporations and delivers these
services through a global network of call centers in the U.S.,
Philippines, India, and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of
Access Direct Telemarketing, Inc., each of which is a debtor and
debtor- in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring
and turnaround advisor. Additionally, Evercore Group LLC
provides investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of Dec. 31,
2007 showed total assets of $354,000,000 and total debts of
$261,000,000.
The Debtors submitted to the Court a Chapter 11 Plan of
Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News,
Issue No. 11; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
* PHILIPPINES: April 2008 Inflation Climbs to 8.3%
--------------------------------------------------
The Central Bank of the Philippines said in media release that
the country's headline inflation rose to 8.3 percent year-on-
year in April 2008 from 6.4 percent in March and 2.3 percent a
year ago, bringing the year-to-date average to 6.2 percent. All
major commodity groups, led by food, beverages and tobacco,
posted higher inflation rates relative to the levels in the
previous month. Month-on-month, headline inflation also
accelerated to 2.0 percent in April from 0.9 percent in March.
Core inflation, which measures the underlying trend in inflation
by excluding specific food and energy items, also accelerated to
5.9 percent year-on-year in April from 4.8 percent in March.
Food and energy prices pushed inflation higher in April. In
particular, local rice prices rose due to the elevated prices of
inputs such as fertilizers and fuel and the higher price of
imported rice. Other food items which registered significant
price increases were meat, corn, and miscellaneous food items.
Tight supply, particularly of pork, contributed to higher meat
prices. Non-food items that registered higher inflation
outturns for the month were transport and communication services
(mainly gasoline and diesel products) and electricity. The
high global prices of oil were directly reflected in the three
rounds of increases in the domestic pump prices of petroleum
products in April, while higher power rates reflected the
increase in the spot market price of electricity.
Factors driving inflation are coming predominantly from the
supply side, but the uptrend in core inflation could indicate
more broad-based price pressures. However, as measures to
stabilize the supply of specific commodities take root, and as
prospects of a moderation in global economic activity temper
demand-based pressures, price movements are expected to revert
to manageable levels over the policy horizon.
Meanwhile, the country’s gross international reserves (GIR)
slightly rose to US$36.7 billion as of end-April 2008 from
US$36.6 billion a month ago. Foreign exchange inflows in April
2008 consisted mainly of the National Government’s (NG) deposit
of proceeds from the Asian Development Bank’s Local Government
Financing and Budget Reform Loan, as well as the Bangko
Sentral’s net foreign exchange operations and income from its
investments abroad. These inflows were offset, however, by
payments of maturing foreign currency-denominated obligations of
the NG and the BSP.
The current GIR level can cover 6.2 months of imports of goods
and payments of services and income. It was also equivalent to
5.2 times the country’s short-term external debt based on
original maturity and 3.4 times based on residual maturity. 1
The level of net international reserves (NIR) as of end-April
2008, including revaluation of reserve assets and reserve-
related liabilities, was also higher at US$36.7 billion compared
to the previous month’s level of US$36.6 billion. NIR refers to
the difference between the BSP’s GIR and total short-term
liabilities.
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T H A I L A N D
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ARVINMERITOR INC: Spins Off Light Vehicle Biz to Shareholders
-------------------------------------------------------------
The board of directors of ArvinMeritor, Inc. approved a plan to
spin off its Light Vehicle Systems business to ArvinMeritor
shareholders, with the Commercial Vehicle Systems business
remaining with ArvinMeritor.
"The plan to separate our two businesses is the result of a
comprehensive strategic review to enhance the company's long-
term value for our shareholders," Chip McClure, chairman, CEO
and president, said. "We are confident that this transaction
will not only unlock shareholder value, but will also
significantly strengthen the competitive positions of both
companies and better align them with their respective customer
bases.
"Each company will benefit from a greater strategic focus on its
core business and growth opportunities as well as from increased
recognition in each of its global market segments. In addition,
the separate companies will offer more attractive and targeted
investment opportunities, with incentives for management and
employees that are more closely aligned with company performance
and shareholder interests," Mr. McClure continued.
The planned spinoff of the LVS business -- to be named Arvin
Innovation, Inc. -- would be implemented through a pro rata tax-
free dividend to ArvinMeritor shareholders. Upon completion of
the spinoff, ArvinMeritor shareholders will own 100% of the
common stock of Arvin Innovation. Approval of the spinoff by
ArvinMeritor shareholders is not required, and the company
expects to complete the spinoff within the next 12 months,
contingent upon satisfactory financial and automotive market
conditions as well as other customary approvals.
"Our decision to spin off the LVS business is part of the
company's ongoing corporate transformation -- our 3R strategy to
rationalize, refocus and regenerate -- that has been underway
for the last three years," Mr. McClure said. "Separating these
two businesses and successfully implementing our Performance
Plus initiatives are major steps in the transformation to build
two stronger, more competitive companies for the future.
"Our LVS business group will have the right leadership team, a
solid financial structure, market-leading positions in many of
its product lines, a well-diversified customer mix and the
global reach to grow this new company as a market leader going
forward," Mr. McClure concluded.
Mr. McClure will remain as ArvinMeritor's chairman, CEO and
president. James Marley, currently a board member of
ArvinMeritor, will lead Arvin Innovation's board of directors as
non-executive chairman. Until the spin is completed, Marley, a
retired chairman of the board of AMP Inc., will remain on the
ArvinMeritor board. Phil Martens, currently ArvinMeritor's
senior vice president and president, Light Vehicle Systems, will
become the president and CEO of Arvin Innovation.
"As a separate independent unit, Arvin Innovation will be better
positioned to drive specific growth initiatives, including
improving our customer focus and expanding our global presence,"
Mr. Martens said. "With increased flexibility as a stand-alone
business, Arvin Innovation will have an excellent opportunity to
create next-generation systems technology solutions for our
customers around the world. In addition, we look forward to the
many new and enhanced opportunities the new organization will
provide for our worldwide employees."
Jim Donlon, executive vice president and CFO of ArvinMeritor
will immediately begin supporting ArvinMeritor's LVS business
group in the capacity of chief financial officer as it prepares
to become an independent company. Upon completion of the spin,
he will become executive vice president and CFO of Arvin
Innovation.
Jay Craig, senior vice president and controller, will replace
Donlon as ArvinMeritor's senior vice president and CFO,
effective immediately.
Rakesh Sachdev, senior vice president of ArvinMeritor and
president of Asia Pacific, will become executive vice president,
chief administrative officer and managing director of Emerging
Markets of the new company, upon the completion of the spin.
However, until a successor is named, he will continue to be
responsible for ArvinMeritor's Asia Pacific region.
When the spinoff is completed, Carsten Reinhardt, senior vice
president of ArvinMeritor and president of the company's
Commercial Vehicle Systems business, will be named COO for
ArvinMeritor.
In addition, Mary Lehmann, currently the company's senior vice
president, Strategic Initiatives, and Treasurer, will expand her
responsibilities to include Information Services, M&A
activities, and Investor Relations. Vernon Baker, currently
senior vice president and general counsel, with overall legal
responsibility for all of ArvinMeritor's global operations and
its subsidiaries, and Environmental, Health and Safety, will
also assume responsibility for the global Human Resources
organization.
ArvinMeritor will remain headquartered in Troy, Michigan. Arvin
Innovation will be headquartered in Detroit, Michigan, at the
current location of the LVS Detroit Technology Center, with
other corporate offices located in Europe, Asia Pacific and
South America.
The spinoff is subject to customary conditions, including final
approval by ArvinMeritor's board of directors; completion of all
required activities with employee representatives; receipt of
applicable consents; effectiveness of a registration statement
with the Securities and Exchange Commission; receipt of a tax
ruling from the IRS; and the approval of applicable regulatory
authorities.
ArvinMeritor's common stock will continue to trade on the New
York Stock Exchange under the symbol ARM. Management has
applied for Arvin Innovation to be listed on the NASDAQ global
stock market under the symbol ARVI.
Until the spinoff is effective, ArvinMeritor's management
intends to recommend that its board continue its current
dividend policy. J.P. Morgan Securities Inc. is ArvinMeritor's
lead financial advisor for this transaction. UBS Securities is
also advising ArvinMeritor on financial matters relating to the
transaction. Chadbourne & Parke LLP as well as Miller,
Canfield, Paddock and Stone, P.L.C. are acting as ArvinMeritor's
legal advisors.
Light Vehicle Systems
ArvinMeritor's LVS business is a global provider of dynamic
motion and control automotive systems and components, with sales
of $2.2 billion in 2007 -- $2.0 billion of value-added sales and
$200 million of pass-through sales. Of the value-added sales,
more than 60% were outside North America. ArvinMeritor's LVS
business group is a market leader in many of the product
categories it serves, supplying components and integrated
systems and modules to the world's leading passenger car and
light truck OEMs. The business will have approximately 9,000
employees with 42 facilities in 16 countries. LVS has interests
in eight joint ventures (three consolidated and five non-
consolidated).
About ArvinMeritor
Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM)
-- http://www.arvinmeritor.com/-- supplies a broad range of
integrated systems, modules and components to the motor vehicle
industry. The company serves commercial truck, trailer and
specialty original equipment manufacturers and certain
aftermarkets, and light vehicle manufacturers. ArvinMeritor
employs approximately 19,000 people in 24 countries.
ARVINMERITOR: Light Vehicle's Spinoff Cues Fitch's Neg. Watch
-------------------------------------------------------------
Fitch has placed the ratings of ArvinMeritor on Rating Watch
Negative following the announced spinoff of ArvinMeritor's Light
Vehicle Systems group. As information becomes available Fitch
will review the details of each entity and resolve the Rating
Watch designation.
The spinoff will reduce the business diversification of the
current consolidated entity, increasing exposure of the
remaining Commercial Vehicle Systems business to the cyclical
truck market, and increasing exposure of the LVS entity to
competitive conditions and individual manufacturers in the
automotive market. The benefits of recent restructuring actions
have begun to be reflected in financial results, although
margins at LVS currently remain at low levels and have been
challenging to stabilize. Duplicating corporate functions at
the LVS entity concurrent with the spin will also pressure
margins.
Total liquidity requirements will likely increase from current
levels in order to finance working capital requirements,
continuing restructuring actions, capital expenditures, and to
act as a buffer against cyclical volatility. The combined
entity has forecast continued negative cash flow for its current
fiscal year, indicating that total debt to be allocated at the
time of the spin will be higher than current levels. Existing
senior unsecured debt could be pushed farther down the capital
structure or face reduced recovery prospects depending on the
allocation of debt and new financing arrangements.
Fitch has placed these ratings for ARM on Rating Watch Negative:
-- Issuer Default Rating 'B';
-- Senior Unsecured 'B/RR4'
-- Bank Credit Facility 'BB/RR1'.
ARVINMERITOR INC: S&P Holds 'B+' Rating on Light Vehicle Spinoff
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and other ratings on ArvinMeritor Inc. The
outlook remains negative.
"The affirmations follow ArvinMeritor's announcement of its plan
to spin off its light vehicle systems business to ArvinMeritor
shareholders," said Standard & Poor's credit analyst Lawrence
Orlowski. Management expects that the transaction, which is not
subject to shareholder approval, will be completed within 12
months.
After the spin-off, ARM's primary focus will be trucks and other
commercial vehicles. The company supplies drivetrain systems,
which include axles and drivelines, braking systems, suspension
systems, and ride control products. S&P would continue to
characterize the business risk profile as weak.
S&P are concerned about how profitability and cash flow will
unfold before the legal separation, given uncertainty about
production among many automotive and heavy-truck customers.
Still, S&P expect the company's financial profile to strengthen
in time because of its adequate liquidity. S&P could lower the
rating if the downturn in the company's commercial vehicle
systems business is much more severe or longer than expected,
perhaps because of unexpected economic weakness and worsening
negative free cash flow. S&P could revise the outlook to stable
if the company seems capable of generating positive cash flow as
a result of better operating efficiencies and some end-market
improvements.
===============
X X X X X X X X
===============
* S&P Says Asian Financial Markets Must Continue New Approaches
---------------------------------------------------------------
Asia's economies stand to benefit from ongoing and ever-maturing
approaches to financial innovation as the region's finance
markets develop and become more closely integrated, said
Standard & Poor's at a luncheon seminar held at the 41st annual
general meeting of the Asian Development Bank in Madrid, Spain
on May 5.
"Recent uncertainty in global credit markets has given financial
innovation a bad name, but in Asia, where financial innovation
is in its early stages, it is imperative for the region's
financial markets to continue to develop new approaches to
facilitate the flow of capital, and importantly, to maintain
Asia's fast economic growth rates," said Surinder Kathpalia,
Managing Director and Region Head of Standard & Poor's, ASEAN
region. "But for innovation to work properly, transparency and
sound risk management practices must be applied."
Mr. Kathpalia explained that financial market innovations that
are already well established in developed markets can help boost
economic growth in Asia. Examples include project finance for
infrastructure; derivatives markets for hedging and corporate
finance; ratings and indices for Islamic finance; and small to
medium sized enterprise (SME) credit assessment.
"Financial innovation brings about new and hidden risks, and
requires a "trial and error" period," said Ping Chew, managing
director of Corporate & Government Ratings in Asia. "To ensure
we reap the benefits of financial innovation while limiting the
associated costs, a robust risk management framework must be
developed. In many markets in Asia, basic tenets of financial
markets are absent, which includes adequate information
disclosure and transparency. The role of credit rating agencies
is to provide an independent, objective assessment on credit
risk."
Mr. Chew also explained Standard & Poor's commitment to
transparency, including the implementation of a comprehensive
set of actions designed to strengthen ratings operations.
Examples include appointing an Ombudsman and introducing
independent reviews by an external firm of compliance and
governance practices. "We are committed to transparency,
including the implementation of a comprehensive set of actions
designed to improve the information available to investors about
ratings and complex securities. Examples include steps to
improve disclosure about the collateral backing securitized
bonds and publication of the assumptions underlying Standard &
Poor's ratings of these securities."
A collection of articles produced especially for the event,
titled "Where To From Here? Standard & Poor's View On Credit
Trends In Asia", is available on request.
Standard & Poor's, a division of The McGraw-Hill Companies
(NYSE:MHP), is the world's foremost provider of financial market
intelligence, including independent credit ratings, indices,
risk evaluation, investment research, and data. With
approximately 8,500 employees, including wholly owned
affiliates, located in 23 countries, Standard & Poor's is an
essential part of the world's financial infrastructure and has
played a leading role for more than 140 years in providing
investors with the independent benchmarks they need to feel more
confident about their investment and financial decisions. For
more information, visit http://www.standardandpoors.com/
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
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