/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/061024.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Tuesday, October 24, 2006, Vol. 7, No. 211 Headlines A U S T R I A BAUMEISTER REINHOLD: Vienna Court Orders Closing of Business EXTRA MARKETING: Creditors to Recover 1.84% of Claims GAMA TEXTILMASCHINEN: Property Manager Places Property for Sale NETDISK.CC: Property Manager Declares Insufficient Assets VAMA LLC: Steyr Court Orders Business Shutdown B E L G I U M AEP INDUSTRIES: Moody's Assigns LGD4 Rating on 7.875% Sr. Notes METHANEX CORP.: Moody's Assigns Loss-Given-Default Ratings TEKNI-PLEX INC: Moody's Assigns Loss-Given-Default Ratings F I N L A N D HERCULES INC: Moody's Assigns Loss-Given-Default Ratings F R A N C E ACTUANT CORPORATION: Moody's Assigns Loss-Given-Default Rating CLIENTLOGIC CORP: Inks US$450-Mln Merger Pact with Sitel Corp. CLIENTLOGIC CORP: SITEL Offer Cues S&P to Put Rating on Watch CNET NETWORKS: Fails to Get Needed Consents to Amend Indenture CNET NETWORKS: S&P Junks Credit Rating Due to Indenture Default KB HOME: Disputes Notice of Default for 6-1/4% Senior Notes QUEBECOR WORLD: Closing French Roto-Gravure Facility REMY COINTREAU: Achieves 1.3% Sales Growth in 2006 First Half SAKS INC: Moody's Assigns Loss-Given-Default Ratings VISKASE COMPANIES: Moody's Assigns LGD3 Rating on 11.5% Notes G E R M A N Y A V B VERWOHLT: Claims Registration Ends October 25 ALLGEMEINE HYPOTHEKENBANK: Moody's Cuts Debt and Deposit Ratings AMMERSEE GEBAUDETECHNIK: Claims Registration Ends October 29 AQUATREND GMBH: Claims Registration Ends October 28 COPY TEC: Claims Registration Ends October 27 EDDIE BAUER: Moody's Assigns Loss-Given-Default Rating FINN-HAUS: Claims Registration Ends October 26 GEBR. SPALL: Claims Registration Ends October 25 GFC GRUNDSTUECKSVERWALTUNGS: Creditors' Meeting Set for Oct. 26 HWVZ HANDWERKER: Claims Registration Ends October 27 INVISTA B.V.: Moody's Assigns Loss-Given-Default Ratings KOMUNIK VERLAG: Claims Registration Ends October 27 NATURA 2000: Claims Registration Ends October 27 OPEN TEXT: Plans 15% Workforce Cut on Hummingbird Integration OPEN TEXT: Mulls Streamlining of Employees and Facilities PIXEL-FORM: Claims Registration Ends October 27 TREUGARD RAUMAUSSTATTUNGS: Claims Registration Ends October 26 WACH- UND KONTROLLDIENST: Claims Registration Ends October 27 * Fitch Updates Q-Insurer Financial Strength Ratings in Germany G R E E C E HOUGHTON INT'L: Moody's Assigns Loss-Given-Default Ratings OLYMPIC AIRLINES: Greece to Face EUR10,000 Daily Penalty I T A L Y ALITALIA SPA: Updates Industrial Plan & Reviews Alliance Options ALITALIA SPA: Names Giovanni Sabatini to Board of Directors DRESSER INC: Moody's Rates US$935-Mln Credit Facilities at B1 DRESSER INC: S&P Rates US$935 Million Credit Facilities at B LYONDELL CHEMICAL: Moody's Assigns Loss-Given-Default Ratings K A Z A K H S T A N AVTOTRANSSBYT LLP: Creditors Must File Claims by Nov. 17 BUSINESS TECHNOLOGIIES: Creditors Must File Claims by Nov. 17 DIAS-T LLP: Claims Registration Ends Nov. 17 FREEDOMLAND KAZAKHSTAN: Claims Registration Ends Nov. 17 JULDYZ LLP: Proof of Claim Deadline Slated for Nov. 17 NEFTESTROYENERGOSERVICE LLP: Court Opens Bankruptcy Procedure REMSTROYBYT LLP: Creditors' Claims Due Nov. 17 TECHPROM-TRADE LLP: Pavlodar Court Opens Bankruptcy Proceedings VICTORIYA LLP: Creditors' Claims Due Nov. 17 K Y R G Y Z S T A N MYASOKONSERVNYI KOMBINAT: Public Auction Scheduled for Oct. 27 OPTIKA LLC: Insolvency Manager Sets Oct. 27 Asset Auction L U X E M B O U R G ECONOMY LUXEMBOURG: Fitch Assigns BB Rating to Sub. Notes Issue EVRAZ GROUP: Conflict of Interest Prompts Bruno Bolfo to Resign EVRAZ GROUP: Strong Performance Spurs Moody's to Change Outlook NOVELIS INC: Expects Improved Financial Performance in 2007 M A L T A LE MERIDIEN: Mediterranean Hotel Up for Sale N E T H E R L A N D S ASHLAND INC: Moody's Assigns Loss-Given-Default Ratings CORUS GROUP: Companhia Siderurgica Nacional Eyes Counteroffer CORUS GROUP: Fitch Changes Rating Watch to Negative on Tata Deal FIREARMS TRAINING: Selling Outstanding Shares to Meggitt-USA P O L A N D BRE BANK: Fitch Affirms Individual Rating at D GETIN BANK: Fitch Assigns Issuer Default Rating at BB P O R T U G A L COMPANHIA SIDERURGICA: Eyes Counteroffer for Corus Group R U S S I A ARDATOVSKIY OJSC: Court Names S. Salnik as Insolvency Manager ARZAMASSKAYA CONFECTIONARY: Names V. Veselov to Manage Assets ASPHALT CONCRETE: Penza Bankruptcy Hearing Slated for Oct. 26 BUILDER CJSC: Court Names A. Ptashnikov as Insolvency Manager CHASTINSKIY CHEESE: Court Names I. Korovnikov to Manage Assets DALI CAPITAL: Fitch Puts B+/RR4 Ratings on RUR2 Billion Issue EVRAZ GROUP: Conflict of Interest Prompts Bruno Bolfo to Resign EVRAZ GROUP: Strong Performance Spurs Moody's to Change Outlook IZHEVSKIY FACTORY: Court Names V. Nagovitsyn to Manage Assets KHOSHEVSKAYA NIVA: Court Names I. Zolin as Insolvency Manager KOVROVETS: Court Names V. Pronyushkina as Insolvency Manager LUKOIL OAO: Unveils Strategic Development Plan for 2007-2016 NEVERKINSKIY BUTTER: Court Names L. Bychkova to Manage Assets NOVOLIKEEVSKOYE LLC: Bankruptcy Hearing Slated for Jan. 16 PSB FINANCE: Fitch Places B+/RR4 Ratings to US$125-Mln Issue RYB-KHOZ MOZHAYSKIY: Bankruptcy Hearing Slated for Dec. 21 SEL-KHOZ-TEKHNIKA: Court Names A. Baskakov as Insolvency Manager SHIGONY-SEL-KHOZ-TRANS: Court Starts Bankruptcy Supervision STILLWATER MINING: Moody's Assigns Loss-Given-Default Rating TRANS-TOUR-SERVICE: Court Names V. Veselov as Insolvency Manager S P A I N TDA IBERCAJA: Moody's Rates EUR7-Mln Series E Notes at Ba1 S W I T Z E R L A N D GRAFTECH INT'L: Moody's Assigns Loss-Given-Default Ratings HCA INC: Shareholders' Special Meeting Set for November 16 HCA INC: US$33-Bln Merger Deal Cues S&P's B+ Corp. Debt Rating REYNOLDS & REYNOLDS: S&P Affirms Loan and Recovery Ratings UNIVERSAL COMPRESSION: Moody's Rates New Credit Facility at Ba1 T U R K E Y TURK EKONOMI: Fitch Assigns Low-B Ratings on Sub. Notes Issue PROFILO TELRA: Fitch Assigns Foreign Currency IDR at B U K R A I N E ALLIANCE LLC: Court Names Pavlo Duplika as Insolvency Manager BK UKRSPECMONTAZH: Odessa Court Starts Bankruptcy Supervision MUSTANG LLC: Court Names Oleksandr Shevich as Insolvency Manager OKEAN LLC: Herson Court Starts Bankruptcy Supervision REGUL LLC: Kyiv Court Starts Bankruptcy Supervision Procedure SVITANOK LLC: Harkiv Court Starts Bankruptcy Supervision VASILKIV BREAD: Court Starts Bankruptcy Supervision Procedure U N I T E D K I N G D O M ACTUANT CORPORATION: Moody's Assigns Loss-Given-Default Rating ADVERT ENGINE: Claims Filing Period Ends Nov. 6 ALLEN POWER: Appoints Fanshawe Lofts to Administer Assets AQUARIUS INFORMATION: Liquidator Sets Nov. 16 Claims Bar Date BAA PLC: Hochtief AG Eyes Majority Stake in Budapest Airport BUSINESS MORTGAGE: Fitch Rates GBP8.7-Mln Class C Notes at BB CAIRNSERVE LTD.: Taps BDO Stoy as Joint Administrators CARDEW COMMUNICATIONS: Names J. Harvey Madden Liquidator CLIFF NICHOLLS: Names Administrator from Haines Watts CNET NETWORKS: Fails to Get Needed Consents to Amend Indenture CNET NETWORKS: S&P Junks Credit Rating Due to Indenture Default COLLINS & AIKMAN: GM Balks at Consolidation of Tooling Plea COLLINS & AIKMAN: Resolves Tooling Dispute with Huron Mold CONSTAR INT'L: Moody's Assigns Loss-Given-Default Ratings COREL CORP: Earns US$5.5 Million in Third Quarter 2006 CORUS GROUP: Companhia Siderurgica Nacional Eyes Counteroffer CORUS GROUP: Fitch Changes Rating Watch to Negative on Tata Deal DALI CAPITAL: Fitch Puts B+/RR4 Ratings on RUR2 Billion Issue DANCERS WORLD: Creditors Confirms Voluntary Liquidation DEETFREE LIMITED: Creditors Confirm Liquidators' Appointment EMI GROUP: Expects 3% Revenue Decline in 2006 First Half EMI GROUP: Moody's Cuts Rating on Weak Debt Protection Measures ENTERPRISE INNS: Moody's May Upgrade Rating on Strong Finances FIREARMS TRAINING: Selling Outstanding Shares to Meggitt-USA FORD MOTOR: Restating Results for Accounting Under SFAS 133 FORD MOTOR: Incurs US$5.8 Billion Net Loss in 2006 Third Quarter FORD MOTOR: FMCC Earns US$262 Million in 2006 Third Quarter FORD MOTOR: Taps Delphi to Build Hybrid Powertrain Systems FTI CONSULTING: Buys Brower Kriz & G3 Consulting for US$14 Mln FURNITURE EXPRESS: Brings In PwC as Joint Administrators GENERAL MOTORS: GMAC Gets EC Clearance for Cerberus Purchase GENERAL MOTORS: Prepares for Possible Proxy Battle vs. Kerkorian GENERAL STEELS: Appoints Administrators from Gerald Edelaman HCA INC: Shareholders' Special Meeting Set for November 16 HCA INC: US$33-Bln Merger Deal Cues S&P's B+ Corp. Debt Rating HEMRO ASSOCIATES: Appoints G.D. Sharma as Administrator HERGOLD AND COMPANY: Claims Registration Ends Dec. 23 HUGHES LIMITED: Brings In PKF to Administer Assets INFO-TECH SYSTEMS: Taps Liquidator from B & C Associates INGREDIENT MANAGEMENT: Appoints Liquidator from Findlay James INSTRUMENT TECHNOLOGY: Hires Menzies to Administer Assets INVESTA PLC: FA Simms Selling Structured Product Provider KOPPERS HOLDING: Moody's Assigns LGD6 Rating on Sr. Unsec. Notes N.P.W. DUCTWORK: Appoints Administrators from Rothman Pantall NATIONWIDE SECURITY: Creditors' Claims Due Nov. 13 NEIL GRINNALL: Dunbar Bank Appoints Moore Stephens as Receivers NEWMAN SUPPORT: Brings In XL Business to Administer Assets NOVELIS INC: Expects Improved Financial Performance in 2007 OVERSEAS SHIPHOLDING: Gets Early Termination of Waiting Period PROFILO TELRA: Fitch Assigns Foreign Currency IDR at B PURVES & PURVES: Creditors Confirm Liquidator's Appointment QUEBECOR WORLD: Closing French Roto-Gravure Facility RADNOR HOLDINGS: Blocks Panel's Move to Extend Bidding Process RBA RESEARCH: Appoints Begbies Traynor as Administrators ROY FIRMAN: HSBC Bank Taps PwC as Administrative Receivers ROY FIRMAN: PwC Selling Garden Furniture Distributor SEA CONTAINERS: First Meeting of Creditors Slated for Nov. 21 SEA CONTAINERS: Trustee Sets Organizational Meeting for Oct. 26 SEA CONTAINERS: Reed Conner Ceases to be Major Shareholder SOLO CUP: Ends Review of Accounting Issues & Restates Financials SOLO CUP: Moody's Reviewing Ratings & May Downgrade SOLO CUP: Incurs US$299 Million Net Loss in 2006 Second Quarter SOLO CUP: S&P Cuts Corp. Credit Rating to CCC+ & Removes Watch TIMKEN CO: To Exit U.K. Seamless Steel Tube Manufacturing VICFORGE AIR: Brings In Rothman Pantall as Joint Administrators WHE EUROPE: Claims Filing Period Ends Jan. 9, 2007 WORDMAP LIMITED: Creditors' Meeting Slated for October 31 * Large Companies with Insolvent Balance Sheets ********* ============= A U S T R I A ============= BAUMEISTER REINHOLD: Vienna Court Orders Closing of Business ------------------------------------------------------------ The Trade Court of Vienna entered an order Sept. 8 closing the business of LLC Baumeister Reinhold Weiss (FN 82053t). Court- appointed property manager Florian Gehmacher recommended the business closure after determining that the continuing operations would reduce the value of the estate. The property manager and his representative can be reached at: Dr. Florian Gehmacher c/o Dr. Matthias Schmidt Dr. Karl Lueger-Ring 12 1010 Vienna, Austria Tel: 533 16 95 Fax: 535 56 86 E-mail: gehmacher@preslmayr.at Headquartered in Vienna, Austria, the Debtor declared bankruptcy on July 7 (Bankr. Case No. 5 S 97/06h). Matthias Schmidt represents Dr. Gehmacher in the bankruptcy proceedings EXTRA MARKETING: Creditors to Recover 1.84% of Claims ----------------------------------------------------- The Land Court of Wiener Neustadt approved Sept. 8 the final decision on allocation of Gernot Faber, the court-appointed property manager of LLC Extra Marketing (FN 66102i). Under the property manager's project by final allocation, creditors will recover 1.84% of their claims. Headquartered in Traiskirchen, Austria, the Debtor declared bankruptcy on March 9, 2005 (Bankr. Case No. 11 S 23/05a). The property manager can be reached at: Mag. Gernot Faber Neunkirchner Road 34 2700 Wiener Neustadt, Austria Tel: 02622/82118 Fax: 02622/82118-6 E-mail: kanzlei@ra-faber.at GAMA TEXTILMASCHINEN: Property Manager Places Property for Sale --------------------------------------------------------------- Mag. Werner Dax, the court-appointed property manager for LLC GAMA Textilmaschinen (FN 262231i), declared Sept. 8 that the Debtor's property is up for sale or rent. Headquartered in Lafnitztal, Austria, the Debtor declared bankruptcy on July 14 (Bankr. Case No. 26 S 67/06i). On July 19, the Land Court of Eisenstadt ordered the closing of the Debtor's business. The property manager can be reached at: Mag. Werner Dax Esterhazyplatz 5 7000 Eisenstadt, Austria Tel: 05/90105500 Fax: 05/90105510 E-mail: guessing@rapartner.at NETDISK.CC: Property Manager Declares Insufficient Assets --------------------------------------------------------- Dr. Richard Bickel, the court-appointed property manager for LLC Netdisk.cc (FN 230549v), declared Sept. 8 that the Debtor's property is insufficient to cover creditors' claim. The Land Court of Feldkirch is yet to rule on the property manager's claim. Headquartered in Goetzis, Austria, the Debtor declared bankruptcy on May 10 (Bankr. Case No. 13 S 21/06b). Michael Brandauer represents Dr. Bickel in the bankruptcy proceedings. The property manager and his representative can be reached at: Dr. Richard Bickel c/o Dr. Michael Brandauer Marktplatz 11 6800 Feldkirch, Austria Tel: 05522/71900 Fax: 05522/71900-4 E-mail: kanzlei@bmplegal.at VAMA LLC: Steyr Court Orders Business Shutdown ---------------------------------------------- The Land Court of Steyr entered an order Sept. 8 shutting down the business of LLC Vama (FN 123632m). Court-appointed property manager Hubert Just recommended the business shutdown after determining that the continuing operations would reduce the value of the estate. The property manager can be reached at: Dr. Hubert Just Hauptplatz 7 4560 Kirchdorf/Krems, Austria Tel: 07582/62 0 74 E-mail: ra.just.kirchdorf@utanet.at Headquartered in Molln, Austria, the Debtor declared bankruptcy on Aug. 17 (Bankr. Case No. 14 S 46/06x). Julius Bitter represents Dr. Just in the bankruptcy proceedings. The property manager's representative can be reached at: Dr. Julius Bitter Schmideggstrasse 5 4560 Kirchdorf/Krems, Austria Tel: 07582/60040 Fax: 07582600404 E-mail: ra.bitter@aon.at ============= B E L G I U M ============= AEP INDUSTRIES: Moody's Assigns LGD4 Rating on 7.875% Sr. Notes --------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the non-paper Packaging sector, the rating agency confirmed its Ba3 Corporate Family Rating for AEP Industries Inc., and its B1 rating on the company's US$175 million 7.875% senior notes due 2015. Additionally, Moody's assigned an LGD4 rating to those bonds, suggesting noteholders will experience a 69% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in South Hackensack, New Jersey, AEP Industries Inc. -- http://www.aepinc.com/-- is engaged in the production, manufacture and distribution of plastic packaging films. The Company manufactures and markets a line of polyethylene, polyvinyl chloride (PVC) and polypropylene flexible packaging products, with consumer, industrial and agricultural applications. In Europe, AEP maintains its Flexibles division in Belgium and The Netherlands. METHANEX CORP.: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sector, the rating agency confirmed its Ba1 Corporate Family Rating for Methanex Corp. Moody's also affirmed its probability-of-default ratings and assigned loss-given-default ratings to these two bond issues: Projected POD LGD Loss-Given Debt Issue Rating Rating Default ---------- ------- ------- ---------- US$200 million 8.75% Sr Unsec Notes due 2012 Ba1 LGD4 56% US$150 million 6.00% Sr Unsec Notes due 2015 Ba1 LGD4 56% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Vancouver, British Columbia, Methanex Corp. -- http://www.methanex.com-- is a producer and marketer of methanol. The marketing and logistics offices in Waterloo, Belgium, and Tees, United Kingdom, oversee the management and administration of all Methanex's sales and distribution operations in Europe. TEKNI-PLEX INC: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the non-paper Packaging sector, the rating agency confirmed its Caa1 Corporate Family Rating for Tekni-Plex Inc. Moody's also revised its probability-of-default ratings and assigned loss-given-default ratings on these bond issues: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$150 million 10.87% Sr. Sec. Notes due 2012 B3 B1 LGD2 15% US$275 million 8-3/4% Sr. Sec. Notes due 2013 Caa2 Caa1 LGD3 45% US$275 million 12-3/4% Sr. Sub. Notes due 2010 Ca Caa3 LGD5 85% US$40 million 12-3/4% Sr. Sub. Notes due 2010 Ca Caa3 LGD5 85% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Somerville, New Jersey, Tekni-Plex Inc. -- http://www.tekni-plex.com/-- is a global, diversified manufacturer of packaging, products, and materials for the healthcare, consumer, and food packaging industries. The company maintains its European headquarters in Belgium. ============= F I N L A N D ============= HERCULES INC: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sector, the rating agency confirmed its Ba2 Corporate Family Rating for Hercules Inc. Moody's also revised and affirmed its probability-of-default ratings and assigned loss-given-default ratings on these loans, bonds and securities: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$150 million Gtd Sr Sec Revolving Credit Facility due 10/2010 Ba1 Baa3 LGD2 18% US$391 million Gtd Sr Sec Term Loan B due 10/2010 Ba1 Baa3 LGD2 18% US$100 million 6.60% Gtd Sr Sec Notes due 2027 Ba1 Baa3 LGD2 18% US$16 million 11.125% Gtd Sr Unsec Notes due 2007 Ba2 Ba2 LGD3 40% US$250 million 6.75% Gtd Sr Sub Notes due 2029 Ba3 Ba3 LGD4 61% US$3 million 8.00% Conv Sub Debentures due 2010 B1 B1 LGD5 89% US$217 million 6.50% Jr Sub Deferrable Int. Debentures due 2029 B1 B1 LGD5 89% Shelf - Sr Unsec Ba2 Ba2 LGD3 40% Shelf - Sub B1 Ba3 LGD4 61% Shelf - Jr Sub B1 B1 LGD5 89% Shelf - Pref Cum B1 B1 LGD6 97% Shelf - Pref Non Cum B1 B1 LGD6 97% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Wilmington, Delaware, Hercules Inc. -- http://www.herc.com/-- manufactures and markets specialty chemicals and related services for a range of business, consumer and industrial applications. The Company's principal products include chemicals used by the paper industry, water-soluble polymers, polypropylene fibers and polypropylene/polyethylene bicomponent fibers, and specialty resins. It operates on a global scale, with significant operations in North America, Europe, Asia and Latin America. In Europe, Hercules maintains operations in Switzerland, The Netherlands, France, Spain Germany, and Finland. =========== F R A N C E =========== ACTUANT CORPORATION: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency affirmed its Ba2 Corporate Family Rating for Actuant Corp. Additionally, Moody's held its Ba2 ratings on the company's US$250 million Senior Unsecured Revolver Due 2009, and US$250 million Senior Term Loan Due 2009. Moody's assigned those debentures an LGD3 rating suggesting lenders will experience a 43% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Glendale, Wisconsin, Actuant Corp. (NYSE:ATU) -- http://www.actuant.com/-- is a diversified industrial company with operations in more than 30 countries, including Austria, Hungary, Poland, Italy, Spain, the Netherlands, France, Russia, Turkey, Germany, and the United Kingdom. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Since its creation through a spin-off in 2000, Actuant has grown its sales from US$482 million to over US$1 billion and its market capitalization from US$113 million to over US$1.5 billion. The company employs a workforce of approximately 6,000 worldwide. Actuant Corporation trades on the NYSE under the symbol ATU. CLIENTLOGIC CORP: Inks US$450-Mln Merger Pact with Sitel Corp. -------------------------------------------------------------- ClientLogic Corp. will acquire rival Sitel Corp. for US$450 million in cash. The parties entered into a definitive merger agreement under which a newly formed subsidiary of ClientLogic will merge with SITEL and pay US$4.05 per share in cash for all of the outstanding common stock of SITEL. The Board of Directors of each company has unanimously approved the transaction. The transaction is expected to be completed in the first quarter of 2007 and is subject to customary closing conditions, including approval of SITEL's shareholders and regulatory clearances. SITEL's Board of Directors has recommended to SITEL's shareholders that they vote in favor of the transaction. Approximately 19.9% of the outstanding common stock of SITEL is subject to voting agreements, which require such shares to be voted in favor of the merger. SITEL has agreed to pay a termination fee to ClientLogic should the transaction not close due to certain circumstances. ClientLogic will fund the transaction with the proceeds of a committed loan facility. The transaction values SITEL at approximately US$450 million. Commenting on the pending transaction, Jim Lynch, Chairman and CEO of SITEL Corporation, said, "Our board and our financial advisor Citigroup reviewed numerous opportunities while searching for strategic alternatives that would create the greatest value for our shareholders. Based on this review, it was clear to SITEL's board that the offer from ClientLogic represents the best alternative to create significant shareholder value." The US$4.05 to be paid in cash in the merger for each SITEL share represents a 33% premium to the volume-weighted average SITEL share price for the 30-trading day period ending Oct. 11. The combined entity will continue to be named ClientLogic Corporation, and will have approximately 65,000 employees across 28 countries. Dave Garner will be Chief Executive Officer of the combined entity. "Growing market demand for bigger, more complex customer-care BPO solutions requires larger service providers with increased geographic presence, capacity and service capabilities", said Dave Garner, President and CEO of ClientLogic. "Our missionwill be to deliver the BPO industry's highest-quality services, while providing our clients with the strategic insight, scale and diversity of offerings to guarantee success." The combination of ClientLogic and SITEL will create a company with revenue of over US$1.7 billion, and one of the most diverse client bases, service offerings, and geographic footprint in the industry. The combined entity will offer clients world-class options for onshore, nearshore and offshore customer care solutions, in over 145 facilities throughout the Americas, EMEA and Asia Pacific. Client benefits from the combined entity include: * proven experience that will deliver better results Clients of both companies will benefit from the in-depth knowledge acquired through a combined corporate heritage of over thirty years. The merged team will have deep industry experience and expertise across many different vertical markets, providing clients with strategic insight into their business and how to best achieve measurable results. * expanded capacity, geographic footprint and communications network will offer greater flexibility and choice With over 145 facilities in 28 countries and unparalleled routing capability, the combined company will provide even more Right-Shore options to best serve its clients' in- country and global service needs. * broadest solutions offering in the customer care BPO industry, providing measurable value to clients The combined company will offer the broadest array of customer care service including customer service, technical support, sales and saves, outbound acquisition, collections, professional services, technology solutions and transaction processing. This more diversified service base will allow the combined entity to offer greater value to current and potential clients. Citigroup Global Capital Markets is acting as financial advisor to SITEL and has provided a fairness opinion in connection with the transaction. Davis Polk & Wardwell and Faegre & Benson are acting as legal counsel to SITEL in connection with the transaction. Goldman, Sachs & Co. is acting as financial advisor to ClientLogic. Mayer, Brown, Rowe & Maw LLP and Oppenheimer Wolff & Donnelly LLP are acting as legal counsel to ClientLogic in connection with the transaction. About SITEL SITEL Corp. -- http://www.sitel.com/-- is a leading global provider of outsourced customer support services. SITEL designs and improves customer contact models across its clients' customer acquisition, retention, and development cycles. SITEL manages approximately two million customer interactions per day via the telephone, e-mail, Internet, and traditional mail. SITEL has over 42,000 employees in 101 global contact centers located in 26 countries. About ClientLogic ClientLogic Corp. (NYSE:SWW) -- http://www.clientlogic.com/-- is a leading global business process outsourcing (BPO) provider in the customer care and back office processing industries. ClientLogic's global footprint spans 49 facilities in 13 countries throughout North America, Europe, Africa, Central America and Asia. In Europe, the company maintains operations in Austria, France, Germany, Ireland, Netherlands, and the United Kingdom. Its clients include Sony Corp., DIRECTV, ABN AMRO, TiVo, British Telecom (BT), National Geographic Television, LTU, Neuf Telecom and United Online (Juno/NetZero). A portfolio company of Canadian diversified company Onex Corporation, ClientLogic is among the top five global customer care providers, managing more than half a million customer interactions each day of the year. * * * In February 2005, Moody's Investors Service assigned a B3 rating to ClientLogic Corporation's US$122 million first lien bank credit facilities and a Caa2 rating to its US$35 million second lien bank credit facilities -- Term Loan C. This is the first time that Moody's has rated the debt of the Company. The rating outlook is stable. CLIENTLOGIC CORP: SITEL Offer Cues S&P to Put Rating on Watch ------------------------------------------------------------- Standard & Poor's Rating Services placed its 'B' corporate credit rating on Nashville, Tenn.-based ClientLogic Corp. on CreditWatch with positive implications. The CreditWatch listing follows ClientLogic's announcement that it has made an offer to acquire Omaha, Neb.-based SITEL Corp. for approximately US$450 million in cash, which has been accepted by SITEL's board of directors and recommended to the shareholders. The transaction price includes the assumption of SITEL's debt. Standard & Poor's estimates the transaction would result in pro forma financial leverage in the high 4x to low 5x, up from about 3.7x currently, and believe the transaction will provide the combined company with increased scale, with revenue estimated to reach US$1.7 billion on a pro forma basis. It also should provide operational efficiencies, a more diversified customer base, and significant cost savings, which could bring leverage below the pro forma level. On a standalone basis, ClientLogic provides outsourced customer- care and fulfillment services through its 42 customer contact centers and five distribution warehouses located across the globe. Revenues, which reached about US$586 million in 2005, were concentrated on several large companies: The company's top five clients generated 44% of 2005 revenues. Standard & Poor's believes the acquisition of SITEL -- also involved in outsourced customer support services -- would triple the revenue, further diversify the client base, expand service offerings, and increase the geographic footprint for the combined company. In completing the CreditWatch review, the rating agency will meet with management from ClientLogic to better understand both the integration risks and opportunities and future growth strategies to determine the rating. CNET NETWORKS: Fails to Get Needed Consents to Amend Indenture -------------------------------------------------------------- CNET Networks Inc. disclosed the results of its solicitation of consents of holders of any and all of its US$125,000,000 aggregate principal amount of outstanding 0.75% Convertible Senior Notes due 2024 pursuant to its consent solicitation for the securities, which expired on Oct. 18, 2006. CNET Networks did not receive a sufficient number of consents from holders to satisfy the 70% requisite consent threshold. Therefore, CNET Networks will not accept any of the consents delivered by the holders of the notes, and the indenture related to the notes will not be amended. Form 10-Q Filing Delay As reported in the TCR-Europe on Oct. 17, the Company will not be in a position to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 on a timely basis, pending the completion of its financial restatements related to its independent investigation of stock option granting practices and of the requisite audit procedures by the Company's independent registered public accountants. Consequently, CNET Networks is not in a position to provide actual results or guidance regarding operating expense, operating income, net income or earnings per share. As reported in the Troubled Company Reporter on Aug. 22, CNET Networks received a notice from the trustee under the indenture governing the Company's USUS$125 million aggregate principal amount of 0.75% Convertible Senior Notes due 2024, stating that the company is in default of its covenant to file its Form 10-Q with the trustee within fifteen days after it is required to be filed with the SEC. If the default is not cured within 60 days, the bonds may be accelerated by the holders of 25% outstanding principal amount or the trustee. As of June 30, 2006, the Company had approximately USUS$143.3 million of cash and investments. Headquartered in San Francisco, California, CNET Networks, Inc. (Nasdaq: CNET) -- http://www.cnetnetworks.com/-- is an interactive media company that builds brands for people and the things they are passionate about, such as gaming, music, entertainment, technology, business, food, and parenting. The Company's leading brands include CNET, GameSpot, TV.com, MP3.com, Webshots, CHOW, ZDNet and TechRepublic. Founded in 1993, CNET Networks has a strong presence in the US, Asia and Europe including Russia, Germany, Switzerland, France and the United Kingdom. CNET NETWORKS: S&P Junks Credit Rating Due to Indenture Default --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on CNET Networks Inc., including lowering the corporate credit rating to 'CCC+' from 'B', and placed the ratings on CreditWatch with developing implications. The action was based on the company receiving a notice of acceleration from the trustee for the holders of US$125 million in 0.75% senior convertible notes due 2024 and not having a sufficient number of consents to waive default from indenture violation. Total debt outstanding as of June 30, 2006, was US$143.3 million. San Francisco-based CNET connects buyers and suppliers of information technology and electronic products through advertiser-supported online news and product reviews. More recently, the company has branched out to automotive and other categories. The trustee is accelerating the maturity on the convertible notes because CNET failed to file its quarterly report for the period ended June 30, 2006, with the SEC. CNET was unable to file because a special committee formed by its board of directors is reviewing stock option practices. Certain stock options granted between 1998 and 2001 differ from the recorded measurement dates. As a result of the filing delinquency, the company violated provisions of the indenture that require the report to be filed with the trustee 15 days after the report is submitted to the SEC. If the company repays the accelerated maturity of US$125 million, S&P may raise the rating back to the 'B' category. On the other hand, if the company does not meet the accelerated maturity, S&P will likely lower the ratings to 'D'. KB HOME: Disputes Notice of Default for 6-1/4% Senior Notes ----------------------------------------------------------- KB Home received a letter on Oct. 18, 2006, purporting to be a notice of default under the indenture related to its 6-1/4% Senior Notes due 2015. The letter asserts that KB Home is in default under the indenture because of the delay in filing its Quarterly Report on Form 10-Q for the quarter ended Aug. 31, 2006 with the Securities and Exchange Commission. KB Home has notified the senders of this letter, and the trustee under the Indenture, that the letter does not satisfy the indenture requirements for a notice of default, in part because the letter fails to take into account the 15 day period following the Securities and Exchange Commission filing date as specified in the reporting covenant at issue. In the event the above-mentioned letter is not invalid, or if a subsequent valid notice of default for the delayed 10-Q filing is delivered to KB Home under the indenture for any series of its senior notes, and KB Home fails to cure the default within the 60 days after notice is given, the default could become an "event of default" under the indenture, allowing the Trustee or the holders of at least 25% in aggregate outstanding principal amount of such senior notes to accelerate the maturity of the series of senior notes. Headquartered in Los Angeles, California, KB Home (NYSE: KBH) -- http://www.kbhome.com/-- is a homebuilder with domestic operating divisions in some of the fastest-growing regions and states: West Coast-California; Southwest-Arizona, Nevada and New Mexico; Central-Colorado, Illinois, Indiana and Texas; and Southeast-Florida, Georgia, North Carolina and South Carolina. Kaufman & Broad S.A., the Company's publicly traded French subsidiary, a homebuilding company in France. It also operates KB Home Mortgage Company, a full-service mortgage company for the convenience of its buyers. * * * As reported in the Troubled Company Reporter on Sept. 15, 2006, Fitch Ratings affirmed and revised the Rating Outlook to Stable from Positive these ratings for KB Home's Issuer Default Rating 'BB+', Senior unsecured debt and revolving credit facility 'BB+' and Senior subordinated debt 'BB-'. As reported in the Troubled Company Reporter on July 14, 2006, Moody's Investors Service affirmed all of the ratings of KB Home, including its Corporate Family Rating of Ba1, senior debt rating of Ba1, and senior subordinated debt rating of Ba2. Moody's said the rating outlook is revised to stable, from positive. QUEBECOR WORLD: Closing French Roto-Gravure Facility ---------------------------------------------------- Quebecor World Inc. intends to close its roto-gravure facility in Lille, France as part of its ongoing restructuring efforts. The Lille facility will be phased out during the coming months and is expected to close at the end of the second quarter of 2007. The closure will affect approximately 230 employee positions. Some of the workforce will be offered opportunities to transfer to the Charleroi, Belgium facility. Taking into account earlier restructuring initiatives and the investment in the latest wide-web gravure technology in Charleroi, the Company estimates the impact to its European gravure capacity is essentially neutral. Quebecor World Inc. -- http://www.quebecorworld.com/-- provides print solutions to publishers, retailers, catalogers and other businesses with marketing and advertising activities. Quebecor World has approximately 29,000 employees working in more than 120 printing and related facilities in the United States, Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, India, Mexico, Peru, Spain, Sweden, Switzerland and the United Kingdom. * * * As reported in the Troubled Company Reporter on Oct. 2, 2006, Standard & Poor's Ratings Services lowered its ratings on commercial printer Quebecor World Inc., including its long-term corporate credit rating to 'B+' from 'BB-', and placed the ratings on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Aug. 18, 2006, Moody's Investors Service placed the Ba3 Corporate Family Rating, Ba3 Senior Unsecured rating and B2 Senior Subordinated ratings of Quebecor World Inc.'s subsidiaries under review for possible downgrade. As reported in the Troubled Company Reporter on Aug. 11, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of Quebecor World Inc. and related entities to BB from BB (high) and downgraded the Cumulative Redeemable Preferred Shares to Pfd-4 from Pfd-4 (high). DBRS said the trends remain negative. REMY COINTREAU: Achieves 1.3% Sales Growth in 2006 First Half ------------------------------------------------------------- At Sept. 30, 2006, Remy Cointreau reported consolidated turnover of EUR354.4 million for the first six months of the 2006/07 financial year. This represented a year-on-year organic growth of 1.3%. The Group's own brands grew by 4.8%, due to the dynamic performance of the Champagne and Cognac divisions. Cognac Remy Martin consolidated its position in the superior quality segment, particularly in the top-of-the-range cognacs, which showed strong growth in Europe (Russia), Asia (China) and the U.S. Liqueurs & Spirits Divisional sales increased in all geographic areas, with accelerated growth in the U.S. for Cointreau, in Europe for St. Remy and in France for Passoa in particular. Champagne The excellent performance by the Champagne division was primarily due to Piper-Heidsieck. The brand experienced a 13.8% increase in sales, the higher volumes combining with a firm price increase policy and an improved product mix. The U.S. and Japanese markets confirmed their growth potential. Partner brands The division recorded a growth in sales of Scotch whisky and Californian wines in the U.S. The decline in overall sales was due to discontinuing a number of distribution contracts after the end of the previous financial year. Performance in the first six months of the financial year was driven by the quality of the brands and the Group's value strategy. It is fully in line with the profitability growth target Remy Cointreau set itself for the 2006/07 financial year. Headquartered in Cognac, France, Remy Cointreau -- http://www.remycointreau.com/-- offers a range of premium wine and spirit brands, known and recognized throughout the world. These brands include, among others, Remy Martin, Cointreau, Passoa, Metaxa, Mount Gay Rum, Charles Heidsieck and Piper- Heidsieck. * * * Remy Cointreau's senior unsecured debt carries a Ba2 rating from Moody's Investors Service since 2003. Standard & Poor's rated the Company's issuer credit at BB- in 2004. SAKS INC: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the the US and Canadian Retail sector, the rating agency confirmed its B2 Corporate Family Rating for Saks Incorporated. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 2% Convertible Senior Notes due 2024 B2 B3 LGD4 69% 7% Senior Unsecured Notes due 2013 B2 B3 LGD4 69% 7.375% Senior Unsecured Notes due 2019 B2 B3 LGD4 69% 7.5 Senior Unsecured Notes due 2010 B2 B3 LGD4 69% 8.25% Senior Unsecured Notes due 2008 B2 B3 LGD4 69% 9.875% Senior Unsecured Notes due 2011 B2 B3 LGD4 69% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Birmingham, Alabama, Saks Incorporated (NYSE: SKS) -- http://www.saksincorporated.com/-- operates Saks Fifth Avenue Enterprises, which consists of 55 Saks Fifth Avenue stores, 50 Saks Off 5th stores, and Saks.com. The Company also operates 39 Parisian stores and 57 Club Libby Lu specialty stores. VISKASE COMPANIES: Moody's Assigns LGD3 Rating on 11.5% Notes ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the non-paper Packaging sector, the rating agency confirmed its B2 Corporate Family Rating for Viskase Companies Inc., and upgraded its B2 rating on the company's US$90 million 11.5% senior secured notes due 2011 to B1. Additionally, Moody's assigned an LGD3 rating to those bonds, suggesting noteholders will experience a 32% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Darien, Illinois, Viskase Companies Inc. -- http://www.viskase.com/-- is a global producer of non-edible cellulosic and plastic casings, and specialty plastic bags used to prepare and package processed meat products, and provides value-added support services relating to these products. It operates eight manufacturing facilities and eight distribution centers in North America, Europe and South America. In Europe, the company has manufacturing locations in France and sales offices in Germany, Italy and Poland. ============= G E R M A N Y ============= A V B VERWOHLT: Claims Registration Ends October 25 --------------------------------------------------- Creditors of A V B Verwohlt Baumaschinen GmbH i.L have until Oct. 25 to register their claims with court-appointed provisional administrator Ingo Thurm. Creditors and other interested parties are encouraged to attend the meeting at 2:10 p.m. on Nov. 14 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Hildesheim Hall 13 Main Building Emperor Route 60 31134 Hildesheim, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Hildesheim opened bankruptcy proceedings against A V B Verwohlt Baumaschinen GmbH i.L on Sept. 8. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: A V B Verwohlt Baumaschinen GmbH i.L Gutenbergstr. 6 31157 Sarstedt, Germany Attn: Alois Verwohlt, Liquidator Holzweg 4 30880 Laatzen, Germany The administrator can be contacted at: Ingo Thurm Aegidientorplatz 2B 30159 Hanover, Germany Tel: 0511/475577-0 Fax: 0511/475577-98 E-mail: kanzlei@rae-bax.de ALLGEMEINE HYPOTHEKENBANK: Moody's Cuts Debt and Deposit Ratings ---------------------------------------------------------------- Moody's Investors Service downgraded the long-term debt and bank deposit ratings of Allgemeine Hypothekenbank Rheinboden to Ba3 from Baa3 and the short-term debt and deposit ratings to Not Prime from Prime-3. The rating for AHBR's subordinated debt (lower tier 2) was downgraded to B1 from Ba1. The outlook on all long-term ratings is negative. The rating for AHBR's profit participation rights (Genussscheine) was confirmed at Ca with a stable outlook. These actions conclude the rating review initiated on Dec. 23, 2005. The E financial strength rating was affirmed and the outlook was changed to positive. The downgrade of the long-term debt and deposit ratings to Ba3 and the subordinated debt rating (lower tier 2) to B1 reflects Moody's concern that AHBR now benefits from a weaker level of support than in the past. Furthermore, in Moody's view, the likelihood of medium- to long-term support from majority owner Lone Star Funds may ultimately reflect the relative future success of AHBR's still unproven business model and the potential investment exit strategies available. The long-term ratings continue to incorporate AHBR's status as a regulated banking institution in Germany, but the bank's systemic importance is declining as the bank downsizes and this is a main contributing factor to the negative outlook. The short-term debt and deposit ratings were downgraded to Not- Prime from Prime-3 to reflect the non-investment grade status of AHBR's senior obligations. The Ca rating for AHBR's Genussscheine continues to reflect the highly speculative nature of these securities due to their documented participation in past and future balance sheet losses at AHBR and the resultant write-down to principal suffered by investors. In affirming the E FSR and assigning a positive outlook, Moody's highlighted the progress made by AHBR towards preparing the institution for its future as a specialized institution serving the commercial real estate and capital markets. The bank has already sold major portions of its historical business portfolios and Moody's expects that the bank would be successful in pursuing plans to sell its sizeable portfolio of low-risk and low-margin public finance business over the coming months. Moody's views AHBR's management as strong and experienced and therefore able to successfully implement their new strategy. Nonetheless, the FSR also reflects the competitive environment for real estate finance in Germany, AHBR's still untested business model, as well as legacy issues such as the bank's still sizeable portfolio of non-performing assets. Allgemeine Hypothekenbank Rheinboden is headquartered in Frankfurt, Germany and is majority owned by U.S.-based Lone Star Funds. AMMERSEE GEBAUDETECHNIK: Claims Registration Ends October 29 ------------------------------------------------------------ Creditors of Ammersee Gebaudetechnik GmbH have until Oct. 29 to register their claims with court-appointed provisional administrator Nikolaus Gaede. Creditors and other interested parties are encouraged to attend the meeting at 8:40 a.m. on Nov. 15 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Augsburg Law Courts Meeting Room 162 1 Stick Alten Einlass 1 86150 Augsburg, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Augsburg opened bankruptcy proceedings against Ammersee Gebaudetechnik GmbH on Sept. 5. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Ammersee Gebaudetechnik GmbH Attn: Uwe Scharrelmann, Manager Lindenstr. 1a 86949 Windach, Germany The administrator can be contacted at: Nikolaus Gaede Buerkleinstr. 10 80538 Munich, Germany AQUATREND GMBH: Claims Registration Ends October 28 --------------------------------------------------- Creditors of AQUATREND GmbH have until Oct. 28 to register their claims with court-appointed provisional administrator Georg Kreplin. Creditors and other interested parties are encouraged to attend the meeting at 8:30 a.m. on Nov. 17 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Duesseldorf Area A 341 3rd Floor Muehlenstrasse 34 40213 Duesseldorf, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Duesseldorf opened bankruptcy proceedings against AQUATREND GmbH on Sept. 19. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: AQUATREND GmbH Attn: Zvonko Sabljak, Manager Flachshof 1 41462 Neuss, Germany The administrator can be contacted at: Georg Kreplin Breite Strasse 27 40213 Duesseldorf, Germany COPY TEC: Claims Registration Ends October 27 --------------------------------------------- Creditors of Copy Tec GmbH have until Oct. 27 to register their claims with court-appointed provisional administrator Matthias Riemer. Creditors and other interested parties are encouraged to attend the meeting at 8:00 a.m. on Nov. 17 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Landshut Meeting Room 9/I Insolvency Court Maximilianstrasse 22-24 Landshut, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Landshut opened bankruptcy proceedings against Copy Tec GmbH on Sept. 4. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Copy Tec GmbH Neustadt 528 84028 Landshut, Germany The administrator can be contacted at: Matthias Riemer Bayerwaldstrasse 57 84030 Landshut, Germany Tel: 0871/4307593 Fax: 0871/4307595 EDDIE BAUER: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US and Canadian Retail sector, the rating agency confirmed its B2 Corporate Family Rating for Eddie Bauer, Inc. and its B2 rating on the Company's US$300 million term loan. In addition, Moody's assigned an LGD4 rating to notes, suggesting noteholders will experience a 55% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Redmond, Washington, Eddie Bauer Holdings, Inc. -- http://www.eddiebauer.com/-- is a specialty retailer that sells casual sportswear and accessories for the "modern outdoor lifestyle." Established in 1920 in Seattle, Eddie Bauer believes the Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style, and customer service. Eddie Bauer products are available at approximately 375 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebaueroutlet.com/The Company also participates in joint venture partnerships in Japan and Germany and has licensing agreements across a variety of product categories. Eddie Bauer employs approximately 10,000 part-time and full-time associates in the United States and Canada. FINN-HAUS: Claims Registration Ends October 26 ---------------------------------------------- Creditors of Finn-Haus Beteiligungs- und Verwaltungsgesellschaft mbH have until Oct. 26 to register their claims with court- appointed provisional administrator Hans-Achim Ernst. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Nov. 16 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Bielefeld Hall 4065 4 Floor Court Route 6 33602 Bielefeld, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Bielefeld opened bankruptcy proceedings against Finn-Haus Beteiligungs- und Verwaltungsgesellschaft mbH on Sept. 6. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Finn-Haus Beteiligungs- und Verwaltungsgesellschaft mbH Attn: Marlies Trunk, Manager Kokturkanal 18 32549 Bad Oeynhausen, Germany The administrator can be contacted at: Hans-Achim Ernst Bunsenstr. 3 32052 Herford, Germany GEBR. SPALL: Claims Registration Ends October 25 ------------------------------------------------ Creditors of Gebr. Spall GmbH u. Co. KG have until Oct. 25 to register their claims with court-appointed provisional administrator Jochen Lang. Creditors and other interested parties are encouraged to attend the meeting at 11:20 a.m. on Nov. 22 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Aschaffenburg Meeting Room 5.103 1st Upper Floor Schlossplatz 5 63739 Aschaffenburg, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Aschaffenburg opened bankruptcy proceedings against Gebr. Spall GmbH u. Co. KG on Sept. 8. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Gebr. Spall GmbH u. Co. KG Viktoriaheim 3 63906 Erlenbach, Germany The administrator can be contacted at: Jochen Lang Fruehlingstr. 11 63743 Aschaffenburg, Germany Tel: 06021/909100 Fax: 06021/4497831 GFC GRUNDSTUECKSVERWALTUNGS: Creditors' Meeting Set for Oct. 26 --------------------------------------------------------------- The court-appointed provisional administrator GFC Grundstuecksverwaltungs GmbH, Christoph Rosenmueller, will present his first report on the Company's insolvency proceedings at a creditors' meeting at 9:30 a.m. on Oct. 26. The meeting of creditors and other interested parties will be held at: The District Court of Charlottenburg II. Stock Hall 218 District Court Place 1 14057 Berlin, Germany The Court will also verify the claims set out in the administrator's report at 9:40 a.m. on Jan. 11, 2007, at the same venue. Creditors have until Nov. 30 to register their claims with the court-appointed provisional administrator. The District Court of Charlottenburg opened bankruptcy proceedings against GFC Grundstuecksverwaltungs GmbH on Sept. 5. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be reached at: GFC Grundstuecksverwaltungs GmbH Keithstr.26 10787 Berlin, Germany The administrator can be reached at: Christoph Rosenmueller Berliner Str. 117 10713 Berlin, Germany HWVZ HANDWERKER: Claims Registration Ends October 27 ---------------------------------------------------- Creditors of HWVZ Handwerker-Verrechnungszentrum Ag have until Oct. 27 to register their claims with court-appointed provisional administrator Mechthild Bruche. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Nov. 30 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Nuernberg Meeting Room 152/I Flaschenhofstr. 35 Nuernberg, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Nuernberg opened bankruptcy proceedings against HWVZ Handwerker-Verrechnungszentrum Ag on Sept. 6. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: HWVZ Handwerker-Verrechnungszentrum Ag Attn: Klaus Platzer and Matthias Koenig, Managers Johannisstr. 44 90419 Nuernberg, Germany The administrator can be contacted at: Mechthild Bruche Stahlstr. 17 90411 Nuernberg, Germany Tel: 0911/951285-0 Fax: 0911/951285-10 INVISTA B.V.: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sector, the rating agency confirmed its Ba2 Corporate Family Rating for Invista B.V. Moody's also revised and held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$400 million Gtd Sr Sec Revolving Credit Facility due Apr 2010 Ba2 Ba1 LGD2 29% US$303 million Gtd Sr Sec Credit Facility- Tranche A-1, A-2 Term Loan due 2010 Ba2 Ba1 LGD2 29% US$930 million Gtd Sr Sec Credit Facility- Tranche B-1, B-2 Term Loan due 2011 Ba2 Ba1 LGD2 29% US$675 million 9.25% Sr Notes 2012 Ba3 Ba3 LGD5 79% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Wichita, Kansas, Invista V.B. -- http://invista.com/ -- manufactures textile and polymer. Invista is composed of five business units -- Apparel, Interiors, Intermediates, Performance and Textile Fibers, and Polymers and Resins. Invista owns more than 700 unique pending or granted U.S. patents, with corresponding patents in almost all of the countries where it has a business presence. In Europe, the company maintains operations in Switzerland and Germany. KOMUNIK VERLAG: Claims Registration Ends October 27 --------------------------------------------------- Creditors of Komunik Verlag & Marketing GmbH have until Oct. 27 to register their claims with court-appointed provisional administrator Hanns Poellmann. Creditors and other interested parties are encouraged to attend the meeting at 9:10 a.m. on Nov. 21 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Munich Meeting Room 102 Infanteriestr. 5 Munich, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Munich opened bankruptcy proceedings against Komunik Verlag & Marketing GmbH on Sept. 4. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Komunik Verlag & Marketing GmbH Lucile-Grahn-Str. 39 81675 Munich, Germany The administrator can be contacted at: Hanns Poellmann Prannerstr. 11 80333 Munich, Germany Tel: 089/330080999 NATURA 2000: Claims Registration Ends October 27 ------------------------------------------------ Creditors of Natura 2000 Medienservice GmbH have until Oct. 27 to register their claims with court-appointed provisional administrator Rainer U. Mueller. Creditors and other interested parties are encouraged to attend the meeting at 9:05 a.m. on Nov. 28 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Augsburg Law Courts Meeting Room 162 Alten Einlass 1 86150 Augsburg, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Augsburg opened bankruptcy proceedings against Natura 2000 Medienservice GmbH on Sept. 6. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Natura 2000 Medienservice GmbH Attn: Klaus Griehl, Manager Rotter Str. 18 86911 Diessen am Ammersee, Germany The administrator can be contacted at: Rainer U. Mueller Schiessstattenstr. 15 86159 Augsburg, Germany OPEN TEXT: Plans 15% Workforce Cut on Hummingbird Integration ------------------------------------------------------------- Open Text Corporation has disclosed plans to integrate the newly acquired operations of Hummingbird. The changes align Open Text with its business strategy to lead the ECM market by delivering advanced software solutions in vertical markets and leveraging strategic relationships with major enterprise software partners. Open Text is moving quickly on its integration plan to leverage its strong and unique position as the world's largest independent software company focused exclusively on ECM. Open Text also remains the only ECM vendor with strong global partnerships with three of the world's largest enterprise software companies -- Microsoft, Oracle and SAP. This is matched with deep vertical-market solutions expertise realized through the combination of Open Text and Hummingbird. This position allows Open Text to deliver powerful solutions that bridge content across multiple enterprise systems, helping customers across many industries manage their toughest business and compliance challenges. "Our plan to integrate the companies is based on our long-term vision for the future and the strategic plans we've staked out to lead the ECM market," said John Shackleton, President and Chief Executive Officer of Open Text. "With the changes we're making, we will be organized to deliver on our strategy, and leverage our unique strengths, including our extensive vertical- market expertise, to deliver leading solutions to customers." Business Integration Strategy Open Text is continuing to organize its product and solutions expertise into groups focused on key vertical segments, including legal, financial services, energy, pharmaceuticals, retail, manufacturing, and media and entertainment. This structure allows the Company to align its industry and ECM solutions expertise with specific customer needs in each segment. RedDot Solutions will be maintained as part of the Company's Web Content Management strategy and the Hummingbird Connectivity unit will continue to operate as a distinct brand. As part of the integration, Open Text said that it is reducing worldwide employment by approximately 15 percent of a combined workforce of 3,500 people. Functions impacted by the cuts include redundant positions or areas of the business that are not consistent with the Company's strategic focus. Open Text is also reducing facilities by closing or consolidating offices. As of the current date, the full details of the reductions in the workforce and facilities are still being determined and it is expected that these details will be determined during the second quarter of fiscal 2007. "The changes we're making involve some tough decisions. Unfortunately, this is necessary to eliminate the redundancies that invariably come when turning two companies into one," said Mr. Shackleton. "As we go through this transition, customers will remain our top priority. Customers expect us to be there for them when they need us. We have a track record of delivering excellent service and we will continue to do so through a combined organization composed of highly trained service and support professionals." "In our experience with acquisitions, we typically see a reduction of the acquired company's revenue run-rate going forward, usually in the 30 percent range. We believe this metric is consistent with our expectations of Hummingbird ECM revenue," said Mr. Shackleton. About Open Text Open Text Corp -- http://www.opentext.com/-- provides Enterprise Content Management solutions, processes and information in global organizations. The company supports approximately 20 million seats across 13,000 deployments in 114 countries and 12 languages worldwide. In Europe, the company is headquartered in Grasbrunn, Germany. * * * As reported in the Troubled Company Reporter on Sept. 18, 2006, Moody's Investors Service assigns a first-time Ba3 rating to the senior secured facilities and B1 rating to the corporate family of Open Text Corp. The ratings reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B2, and a loss-given-default of LGD-2 for the senior secured facilities. Moody's also assigned a SGL-1 speculative grade liquidity rating, reflecting very good liquidity. Moody's said the ratings outlook is stable. As reported in the Troubled Company Reporter on Sept. 12, 2006, Standard & Poor's Ratings Services assigned its 'BB-' long-term corporate credit rating to Open Text Corp. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating, with a recovery rating of '2', to the company's proposed US$490 million senior secured bank facility, which consists of a US$75 million five-year revolving credit facility and a US$415 million seven- year term loan B. OPEN TEXT: Mulls Streamlining of Employees and Facilities --------------------------------------------------------- Open Text Corporation will release financial results for its first quarter of fiscal 2007 on Monday, Nov. 6, 2006 at approximately 4:00 p.m. Easter Time. For the quarter ended Sept. 30, 2006, the Company expects to report revenue of between US$99 million and US$101 million. As reported in the Troubled Company Reporter on Oct. 18, 2006 Open Text, through its wholly owned subsidiary 6575064 Canada Inc., acquired all of the issued and outstanding common shares of Hummingbird at a cash price of US$27.85 per common share which, together with the 764,850 common shares of Hummingbird owned by Open Text prior to the transaction, represent all of the issued and outstanding shares of Hummingbird. The transaction is valued at approximately US$489 million. John Shackleton, president and chief executive officer, commented on the Company's restructuring: "As part of the integration of Hummingbird into Open Text, we are examining global operations to ensure we leverage the best assets of both companies," Mr. Shackleton said. "Streamlining employees and facilities of both Hummingbird and Open Text is necessary to fully capitalize on the economies of scale and synergies that are available from this integration." About Open Text Open Text Corp -- http://www.opentext.com/-- provides Enterprise Content Management solutions, processes and information in global organizations. The company supports approximately 20 million seats across 13,000 deployments in 114 countries and 12 languages worldwide. In Europe, the company is headquartered in Grasbrunn, Germany. * * * As reported in the Troubled Company Reporter on Sept. 18, 2006, Moody's Investors Service assigns a first-time Ba3 rating to the senior secured facilities and B1 rating to the corporate family of Open Text Corp. The ratings reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B2, and a loss-given-default of LGD-2 for the senior secured facilities. Moody's also assigned a SGL-1 speculative grade liquidity rating, reflecting very good liquidity. Moody's said the ratings outlook is stable. As reported in the Troubled Company Reporter on Sept. 12, 2006, Standard & Poor's Ratings Services assigned its 'BB-' long-term corporate credit rating to Open Text Corp. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating, with a recovery rating of '2', to the company's proposed US$490 million senior secured bank facility, which consists of a US$75 million five-year revolving credit facility and a US$415 million seven- year term loan B. PIXEL-FORM: Claims Registration Ends October 27 ----------------------------------------------- Creditors of Pixel-Form GmbH have until Oct. 27 to register their claims with court-appointed provisional administrator Heinrich Stellmach. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Nov. 8 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court Nordhorn Hall 42 Seilerbahn 15 48529 Nordhorn, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Nordhorn opened bankruptcy proceedings against Pixel-Form GmbH on Sept. 1. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Pixel-Form GmbH Alfred-Mozer-Str. 50 48527 Nordhorn, Germany Attn: Martin Koernig, Manager Marrinksweg 12 48531 Nordhorn, Germany The administrator can be contacted at: Heinrich Stellmach Kollegienwall 3-4 D-49074 Osnabrueck, Germany Tel: 0541/18170 Fax: 0541/1817-3209 TREUGARD RAUMAUSSTATTUNGS: Claims Registration Ends October 26 -------------------------------------------------------------- Creditors of TREUGARD Raumausstattungs-GmbH have until Oct. 26 to register their claims with court-appointed provisional administrator Andreas Schenk. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Dec. 7 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Chemnitz Hall 28 Law Courts Prince Road 21 Chemnitz, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Chemnitz opened bankruptcy proceedings against TREUGARD Raumausstattungs-GmbH on Sept. 12. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: TREUGARD Raumausstattungs-GmbH Attn: Bernd Schaarschmidt, Manager Weissensander Road 2 08233 Treuen, Germany The administrator can be contacted at: Andreas Schenk Franz-Mehring-Str. 15 08058 Zwickau, Germany WACH- UND KONTROLLDIENST: Claims Registration Ends October 27 ------------------------------------------------------------- Creditors of Wach- und Kontrolldienst Oberfranken GmbH have until Oct. 27 to register their claims with court-appointed provisional administrator Gerald Bittner. Creditors and other interested parties are encouraged to attend the meeting at 1:30 p.m. on Nov. 29 at which time the administrator will present his first report on the insolvency proceedings. The meeting of creditors will be held at: The District Court of Hof Meeting Room 012 Ground Floor Berliner Place 1 95030 Hof, Germany The Court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors' committee or opt to appoint a new insolvency manager. The District Court of Hof opened bankruptcy proceedings against Wach- und Kontrolldienst Oberfranken GmbH on Sept. 1. Consequently, all pending proceedings against the company have been automatically stayed. The Debtor can be contacted at: Wach- und Kontrolldienst Oberfranken GmbH Maulschelle 7 95213 Muenchberg, Germany The administrator can be contacted at: Gerald Bittner Schillerstr. 2 95028 Hof, Germany Tel: 09281/71550 Fax: 09281/715555 * Fitch Updates Q-Insurer Financial Strength Ratings in Germany --------------------------------------------------------------- Fitch Ratings updated its Quantitative Insurer Financial Strength (Q-IFS) ratings for 134 insurers in Germany. Of the 134 updated ratings, only companies carrying low-B ratings were included in this report. There are eight upgrades, one downgrade, one new rating, 17 affirmations and one rating withdrawn. A full list of the Q-IFS ratings is provided along with definitions, limitations and details of which entities provided additional disclosure. The Q-IFS ratings are point-in-time ratings using year-end 2005 and prior years' annual financial results and are based on publicly available financial information, unless otherwise indicated. Entities that have an asterisk (*) after their name have offered additional data disclosures, which have, on occasion, proved material to the ratings. Upgrades: -- ARAG Krankenversicherungs-Aktiengesellschaft*: BBBq from BBq; -- Concordia Lebensversicherungs-Aktiengesellschaft: BBBq from BBq; -- Fahrlehrerversicherung Verein auf Gegenseitigkeit: BBBq from BBq; -- Inter Allgemeine Versicherung Aktiengesellschaft: BBBq from BBq; -- Inter Krankenversicherung aG: BBBq from BBq; -- ONTOS Versicherung Aktiengesellschaft: BBBq from BBq; -- Provinzial Krankenversicherung Hannover AG: BBBq from BBq; and -- Vereinigte Hagelversicherung VVaG: BBBq from BBq. Downgrade: -- Saarland Lebensversicherung Aktiengesellschaft: BBq from BBBq. New Rating: -- PAX-Familienfursorge Krankenversicherung im Raum der Kirche: BBq. Affirmations: -- ARAG Lebensversicherungs-Aktiengesellschaft*: BBq; -- Badische Allgemeine Versicherung Aktiengesellschaft: BBq; -- Bayerische Beamten Lebensversicherung a.G.: BBq; -- Freie Arzt- und Medizinkasse der Angehoerigen der Berufsfeuerwehr und der Polizei VVaG: BBq; -- German Assistance Versicherung AG: BBq; -- Haeger Versicherungsverein auf Gegenseitigkeit: BBq; -- HanseMerkur Speziale Krankenversicherung AG: BBq; -- Inter Lebensversicherung aG: BBq; -- Muenchener Verein Lebensversicherung a.G.: BBq; -- oeco capital Lebensversicherung Aktiengesellschaft: BBq; -- Prudentia Lebensversicherungs-Aktiengesellschaft: BBq; -- Rheinland Lebensversicherung Aktiengesellschaft: BBq; -- Rheinland Versicherungs Aktiengesellschaft: BBq; -- Schwestern-Versicherungsverein vom Roten Kreuz in Deutschland a.G.: Bq; -- Sueddeutsche Krankenversicherung a.G.*: BBq; -- Suedeutsche Lebensversicherung a.G.*: BBq; and -- Union Reiseversicherung Aktiengesellschaft: Bq. Withdrawal: -- uniVersa Lebensversicherung a.G.: BBq. Quantitative Insurer Financial Strength Ratings Definitions: Q-IFS ratings differ from traditional IFS ratings based on the methodology employed. Traditional IFS ratings are established by a Fitch rating committee using a methodology that incorporates a comprehensive review of both quantitative and qualitative factors. In-depth discussions with senior management typically play an important part in Fitch's evaluation. In contrast, Q-IFS ratings are generated solely using a statistical model that utilizes financial statement information. This information is the historical publicly available information generally available to brokers, Independent Financial Advisers and other counterparties to insurers. The model incorporates "rating logic" that mirrors the quantitative analysis used to assign traditional IFS ratings, and the model itself is subject to rating committee review. However, individual ratings are not established or reviewed by the rating committee. The statistical model generally requires a minimum of three years of financial statement information - Fitch will not publish Q-IFS ratings if the information is deemed incomplete. Additional differences between the Q-IFS ratings and traditional IFS ratings include the following: Q-IFS ratings make no assessment of management quality; affiliate/parent relationships are not considered; and qualitative factors requiring subjective assessment are excluded, such as prudence of reserving assumptions, reinsurance and asset hedging strategies. Q-IFS Ratings are identified using a "q" subscript. They are 'point-in-time' ratings, and are reviewed on no less than an annual basis. The concept of 'point-in-time' is intended to denote the fact that the ratings are valid as of the last balance sheet date used to derive the rating and carry no forward-looking elements. The ratings do not incorporate Rating Outlook or Rating Watch designations used in traditional IFS ratings. The Q-IFS rating uses a rating scale and definitions that are similar to that used by Fitch for traditional IFS ratings. Ratings of BBBq and higher are considered to be Secure, and those of BBq and lower are considered to be Vulnerable. The rating scale does not utilize the + and - suffixes associated with traditional IFS ratings. In addition, the rating scale does not incorporate the CC and C equivalent ratings, which require certain qualitative analytical judgments that are not included in the model. Insurers that have either failed to make payments on their obligations in a timely manner, are deemed to be insolvent, or have been subject to some form of regulatory intervention are assigned ratings using the traditional IFS rating scale. BBq: Moderately weak. Insurers are viewed as moderately weak with an uncertain capacity to meet policyholder and contract obligations based solely on their stand-alone publicly available financial statement information. Though positive factors are present, overall risk factors are high, and the impact of any adverse business and economic factors is expected to be significant. Bq: Weak. Insurers are viewed as weak with a poor capacity to meet policyholder and contract obligations based solely on their stand-alone publicly available financial statement information. Risk factors are very high, and the impact of any adverse business and economic factors is expected to be very significant. CCCq: Very weak. Insurers rated in this category are viewed as very weak with a very poor capacity to meet policyholder and contract obligations based solely on their stand-alone publicly available financial statement information. Risk factors are extremely high, and the impact of any adverse business and economic factors is expected to be insurmountable. Some form of insolvency or liquidity impairment appears probable or imminent. =========== G R E E C E =========== HOUGHTON INT'L: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sector, the rating agency confirmed its B2 Corporate Family Rating for Houghton International Inc. Moody's also affirmed its probability-of-default ratings and assigned loss-given-default ratings on these loans facilities: Projected POD LGD Loss-Given Debt Issue Rating Rating Default ---------- ------- ------- ---------- US$90 million Gtd Sr Sec Term Loan due 2011 B2 LGD3 45% US$25mm Gtd Sr Sec Revolving Credit Facility due 2010 B2 LGD3 45% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Valley Forge, Pennsylvania, Houghton International Inc. -- http://www.houghtonintl.com/-- manufactures oils and specialty chemicals for lubrication in most of the big Midwestern industries: metalworking, automotive, and steel. Its products range from aluminum and steel rolling lubricants to rust preventatives to fire-resistant hydraulic fluids. Houghton maintains more than 30 sales and manufacturing facilities in North and South America, Europe, Africa, Australia, and Asia. In Europe, Houghton operates in Austria, Denmark, United Kingdom, Finland, France, Germany, Greece, Ireland, Italy, Poland, Norway, Romania, and Turkey. OLYMPIC AIRLINES: Greece to Face EUR10,000 Daily Penalty -------------------------------------------------------- The Greek government may face a EUR10,000-a-day penalty for failing to recover EUR161 million in illegal aid allotted to national carrier Olympic Airlines, BBC News reports. As reported in TCR-Europe on Oct. 11, the European Commission warned the Greek government of a possible legal action if the state remains adamant in recovering amount from Olympic Airlines. The Greek government, however, still refused to reclaim the state aid, saying it would assess the ruling before responding. BBC says Greece's position apparently caused the regulator to lose its patience and requested the European Union Court of Justice to impose the daily fine. The daily penalty would continue until Greece recovers all the money from Olympic Airlines. Inaction on the part of the Greek government may push the Commission to raise the fine to EUR53,000 daily. As reported in TCR-Europe on May 20, 2005, the European Court ordered Greece to recover EUR194 million (US$249.2 million) in illegal aid from the carrier. In May 2006, the European Commission referred Greece to the European Court of Justice for failure to comply with its state aid decision of Sept. 14, 2005. In its decision of September 2005, the Commission found that Greece had granted illegal and incompatible state aid through a number of measures: -- EUR40 million from the Greek State and Olympic Airways to cover part of the costs to Olympic Airlines of leasing aircraft; -- an unjustified payment of some EUR90 million from the Greek State to Olympic Airways when Olympic Airlines was set up and transferred to the State, achieved by overvaluing the assets transferred to the State; -- the Greek State's toleration of Olympic Airways' failure to pay more than EUR350 million in tax and social security liabilities due between December 2002 and December 2004; -- the assumption by the Greek State of a number of Olympic Airways' financial obligations, e.g. in connection with aircraft leasing contracts and the repayment of a bank loan, amounting to up to EUR60 million. The European Court of Justice then ruled that Greece infringed European Union rules by failing to comply with the EC's request. The Commission also deemed the Greek government of distorting competition for failure to recover the illegal state aid. Headquartered in Athens, Greece, Olympic Airlines S.A. -- http://www.olympicairlines.com/-- the holding company of the Olympic Airways group of companies, flies passengers and cargo to five continents, while offering ground handling, technical maintenance and information technology services to third parties. The group's net loss widened to EUR87 million in 2004 from EUR23 million a year before. Together with the 2004 deficit, Olympic's EUR110 million in accumulated losses are nearly equivalent to its EUR130 million in equity. ========= I T A L Y ========= ALITALIA SPA: Updates Industrial Plan & Reviews Alliance Options ---------------------------------------------------------------- The Board of Directors examined an update of Alitalia S.p.A.'s Industrial Plan which constitutes a useful and appropriate basis to be further integrated, taking into consideration -- as in the guidance provided by the Italian government -- a feasible and convenient alliance, in order to ensure a suitable long term industrial framework in which the company can operate. This updated plan confirms the strategic positioning of Alitalia as a "highly efficient network carrier" as well as the medium term financial targets previously announced. According to the company, certain events that occurred in 2006 have slowed the company's restructuring. These include: -- higher fuel prices; -- higher than expected growth of low cost airlines in Italy; -- strikes and threat of strikes that have periodically impacted the company; and -- the delay in implementation of certain restructuring measures foreseen in the plan. Although key performance figures for 2006 provide confirmation and show progress towards the Plan targets, they also show delays in achieving some of the results. The review of the strategic guidelines examined represents continuity with the recent past and confirm Alitalia's positioning as a "highly efficient network carrier" with a strong focus on its core business. The structure of the plan is confirmed to be in two phases: -- the restructuring phase: aimed at restoring the company's financial equilibrium; and -- the relaunch phase: aimed at increasing Alitalia's presence in the market. The Plan regards all key areas of the Company: -- fleet: increased capacity, improved product quality and reduced average age of the fleet and its maintenance costs will be achieved thanks to the introduction of new airplanes. -- network: increased activity will be generated during the implementation of the plan (this increase will take place all airports operated by the company) thanks to a redesign of the network and development of the fleet. -- group Companies: each company will be used and developed in accordance to demand. This, in particular, will affect the Group's positioning in new markets through Volare. -- sales and marketing: improvement in service will boost sales particularly direct sales through web channels and call centers and leading to further cost reductions. -- cost reduction: confirmation of the stated target of reduction of unit costs (excluding fuel) up to 24%, to be achieved through both efficiency projects and improved use of resources. In this context and considering all above, the Board has also mandated the Chairman and Chief Executive Officer to start immediately examining structural alliance options with another carrier aimed at generating industrial synergies and maximizing the company's profitability, and therefore to adjust the Industrial Plan accordingly. The Board also examined the Group's recent performance both in terms of financial results. Based on these results and also in compliance with a request made by CONSOB under the terms of article 114, section 5, of Decree no. 58/98, these are stated: -- indication of key updated financial results, in particular revenues and main costs, such as personnel and fuel costs. From January to August 2006 the Group's key financial results were: -- consolidated profits of about EUR3.101 million; -- fuel cost of about EUR678 million; -- labor cost of about EUR510 million; -- update regarding the implementation of the Industrial Plan 2005-2008 announced to the market, highlighting, from a quantitive perspective, the main variances between the financial results outlined in point 1 and forecasts formulated on the basis of this plan. In order to compare figures from point 1 with those figures originally foreseen in the first year of the Plan, it is important to remember that on Jan. 31, 2006 the Board approved a budget that identified the same positive results target foreseen in the first year of the Industrial Plan as announced to the market. The budget is today the most accurate base on which to analyze such variances. The major quantitative shifts in the figures regarding January-August 2006 and the budget available can be summarized as: -- in terms of consolidated revenues, there is a negative difference of about EUR82 million mainly due to reduced capacity in the first 8 months of the year, due to strikes that occurred in January and the actual flight hours. -- fuel costs are about EUR25 million higher than originally expected also due to the sharp increase of fuel prices in the past few months (almost US$80 per barrel) -- in terms of labor costs, the difference is EUR40 million compared to the planned target for the first eight months of 2006 mainly due to the unsuccessful implementation of efficiency programs -- data, updated with respect to what was previously declared in the first half results for 2006, on forecasted results for the second half of 2006 and, where available, on the estimated results for the same period, in order to highlight the main variances regarding the targets laid out in the Industrial Plan. Since what described in the above point 1) was already available to the company at the time of the approval for its first half results, the Company confirms what was announced in the release regarding first half results for 2006. The forecast for the second half of the year is for positive operating and net results, partly due to some non-recurring items. The Group's consolidated net result for the full year 2006 should approach the level achieved in 2005. -- directors' valuation regarding the impairment test on the Group's assets carried out with reference to the first half 2006 results and foreseen changes to the Industrial Plan As regards the test for value reduction (also known as impairment test), aimed at ascertaining the recoverability of the book value of the assets that generate financial flows (assets relative to short or medium haul activities, long haul of expected future cash flow activities and all cargo) through the discounting retrievable from the same assets, the result was positive. this test, carried out in accordance Group does not need to devaluate the assets with IAS 36, was conducted on the basis of the documentation regarding the update to the Industrial Plan, starting from the forecast regarding the end of 2006 examined at the Board Meeting that took place on Sept. 12, 2006. -- update on the implementation of non-recurring operations indicated in the first half results for 2006. With reference to non-recurring operations indicated in the half results for 2006, there is confidence in a positive result by the end of the year. A selection process to find buyers is currently underway. -- evaluation of the Directors regarding the existence of sufficient cash flow over the next 12 months to cover the Group's financial needs -- the Board of Directors has also examined the projection of the Group's financial flows, which highlight that the current available liquidity and future cash flow generation of the Company are enough to cover its financial needs over the next 12 months and thereafter -- timing and mode of the review of the business plan. The timeframe to adjust the Industrial Plan will be strictly correlated to the mandate given to Chairman and Chief Executive Officer with regards to structural alliance options. As reported on Oct 13, 2006, Italian Prime Minister Romano Prodi foresees a bankrupt national carrier in January 2007 unless involved parties come up with an "agreed solution." "We have until January to hammer out a solution which can avoid bankruptcy," Mr. Prodi said, sharing the same observation posed by Alitalia CEO Giancarlo Cimoli. According to the TCR-Europe on Oct. 11, Mr. Cimoli revealed that Alitalia is poised for collapse given its current cost structure and market conditions. "At present, the national carrier is unable to generate profit, even for previously invested capital," Mr. Cimoli said. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- generates around EUR4.8 billion in annual revenue and employs more than 11,000 people. Alitalia flies to about 80 destinations in more than 60 countries from hubs in Rome and Milan and operates a fleet of about 185 aircraft. 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 registered EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked consecutive annual net losses of EUR520 million in 2003, EUR813 million in 2004, and EUR168 million in 2005. ALITALIA SPA: Names Giovanni Sabatini to Board of Directors ----------------------------------------------------------- The Board of Directors of Alitalia S.p.A. appointed Giovanni Sabatini, as Director of the Company. Mr. Sabatini is General Manager at the Treasure Department of the Ministry of Economy and Finance. Mr Sabatini's curriculum vitae is available at the Company's registered office, so are the curricula of the other Directors. Mr Sabatini is not member of internal committees or has not been awarded mandates that would make him Executive Director. He is not an independent Director of Alitalia. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- generates around EUR4.8 billion in annual revenue and employs more than 11,000 people. Alitalia flies to about 80 destinations in more than 60 countries from hubs in Rome and Milan and operates a fleet of about 185 aircraft. 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 registered EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked consecutive annual net losses of EUR520 million in 2003, EUR813 million in 2004, and EUR168 million in 2005. DRESSER INC: Moody's Rates US$935-Mln Credit Facilities at B1 ------------------------------------------------------------- Moody's Investors Service assigned a B1, LGD 3 (37%) rating to Dresser, Inc.'s proposed US$935 million of senior secured bank credit facilities. At the same time, Moody's affirmed Dresser's B1 Corporate Family Rating and changed the company's Probability of Default Rating to B2 from B1. The outlook remains negative pending the filing of its restated financial statements. Proceeds from the new bank credit facility are being used to refinance Dresser's existing senior secured credit facility, senior unsecured term loan, and senor subordinated notes. Moody's will withdraw the ratings on the existing secured credit facility, senior unsecured term loan, and subordinated notes upon their redemption. The negative outlook reflects: (1) Moody's concern that the amount of time to complete the restatements could be considerable and (2) the challenges the company faces to remediate its material weaknesses over internal controls. In March of this year, Dresser announced its inability to file its 2005 Annual Report on Form 10-K by the March 31, 2006 requirement. And in May, the company announced that it would need to restate its financial statements for fiscal year 2004, as well as the 2004 and 2005 quarterly financial statements, representing the third time that the company has had to restate its financial results over the past three years. It remains unclear at this time if the company will need to restate its financial statements for periods prior to 2004. Moody's believes that ongoing financial statement filing delays have created significant management distractions. It is possible that the restatement process could continue to be protracted. Dresser has reported six material weaknesses, two of which relate to its former on/off valves business, which was sold in November 2005. These weaknesses are the root cause for the company's filing delays and restatements. While Moody's notes that the financial impact of the restatements appears to be modest, the nature and pervasiveness of the internal control issues reported are very serious because they relate to company-level controls and indicate a weak control environment. Dresser is making efforts to address the material weaknesses; however, the company still has substantial work to do in addressing company-level controls and the control environment, which will continue to remain a significant distraction for management. Until the material weaknesses are fully resolved, some uncertainty remains regarding the company's financial reporting, particularly given the company's substantial international exposure. Should the delay in completing the financial statements become extended materially beyond December 2006 and if Moody's determines that it lacks sufficient financial information to appropriately monitor the company's credit, the ratings could be withdrawn. The ratings could be pressured if the company does not maintain relatively conservative financial policies. The company is currently exploring strategic alternatives, including the potential sale of the company. Approximately 88% of Dresser's outstanding equity is currently owned by First Reserve Corporation and Odyssey Investment Partners. Uncertainty remains as to a potential new owner's strategic direction for the company, depth of industry experience, and credit quality. The outlook could stabilize if Dresser: -- is able to file its restated financial statements with the SEC in the near-term and becomes current on its quarterly financial statement filings; -- is able to make material progress in resolving its material weaknesses; and -- continues to exhibit positive trends with respect to its financial performance. However, the rating and outlook would be subject to a full review of the audited financial statements. Dresser's B1 Corporate Family Rating is restrained by the company's: -- high leverage relative to cyclical and competitive sector conditions; -- working capital intensity; -- low hard asset coverage of debt (high intangible assets and low tangible fixed assets), reflecting a significant service orientation; -- increasing exposure to political risk as a result of expected growth in certain international markets; -- financial performance that while improving has been below expectations; and -- weak internal controls. The B1 rating is supported by the company's -- substantial scale and diversification; -- long-standing, leading market positions; -- large installed base of client infrastructure, deployed and served by Dresser over many decades, which adds durability to its earnings; -- manageable cash flow cycles for the rating and leverage; -- seasoned management; -- improving financial performance; -- the breadth and financial strength of much of its customer base; and -- low maintenance capital spending needs. Dresser's proposed US$935 million senior secured credit facilities consist of: -- a seven-year US$785 million term loan facility, -- a seven-year US$50 million synthetic letter of credit facility, and -- a six-year US$100 million revolving credit facility, which is expected to be unfunded at closing. The term loan facility, which has minimal amortization until maturity, is expected to have a cash sweep mechanism that would require a portion of free cash flow to be applied toward debt reduction if leverage exceeds certain thresholds. Financial covenants under the facilities are expected to include a leverage ratio, interest coverage ratio, and maximum capital expenditures. In addition to the proposed credit facilities, Dresser's pro-form capitalization will consist of a modest amount of debt at foreign subsidiaries (approximately US$15 million as of June 30, 2006). The B1 rating and LGD 3 assessment on Dresser's senior secured credit facilities and the company's B2 Probability of Default Rating reflect a pro forma capital structure that is comprised almost entirely of first lien bank debt. The credit facilities are secured pari passu by perfected liens on Dresser's domestic receivables, inventory, and fixed assets, as well as a pledge of stock of domestic subsidiaries and a pledge of stock of 65% of the stock of foreign subsidiaries. The facilities are guaranteed by Dresser Holdings, Inc. and by all of Dresser, Inc.'s wholly- owned domestic subsidiaries. The ratings on the bank facilities are restrained by the amount of non-debt liabilities at the foreign operating subsidiaries (primarily comprised of accounts payables and unfunded pension obligations), the ability for Dresser to incur additional debt at these subsidiaries (up to the sum of US$75 million and 10% of the backlog of all foreign subsidiaries), and by weak coverage of secured debt by the tangible assets of the domestic subsidiaries. Foreign operating subsidiaries account for more than half of Dresser's total tangible assets. About Dresser Based in Addison, Texas, Dresser, Inc. -- http://www.dresser.com/-- designs, manufactures and markets equipment and services sold primarily to customers in the flow control, measurement systems, and compression and power systems segments of the energy industry. The Company has a comprehensive global presence, with over 8,500 employees and a sales presence in over 100 countries worldwide including Italy, Germany and Switzerland. DRESSER INC: S&P Rates US$935 Million Credit Facilities at B ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' senior secured rating and its '3' recovery rating to energy and oilfield equipment manufacturer Dresser Inc.'s US$935 million credit facilities, which are composed of a new US$785 million term loan B, a US$50 million synthetic LOC facility, and a US$100 million revolving credit facility. In addition, Standard & Poor's revised its CreditWatch listing on Dresser to developing implications from negative implications. Dresser will use proceeds from the new term loan to refinance existing bank debt and outstanding subordinated note issues. The CreditWatch listing reflects the potential for ratings to be raised, lowered, or affirmed in the near term. The ratings on Dresser had been placed on CreditWatch with negative implications due to delays in filing audited financial statements. "Pending completion of the announced refinancing and receipt of audited financial statements from prior periods, we will conduct a full review and resolve the CreditWatch listing on Dresser in the near term," said Standard & Poor's credit analyst Jeffrey Morrison. Key considerations for whether the corporate credit rating will be raised, affirmed at 'B', or lowered additionally, will include: * implications of the company's previous announcement that it is currently exploring strategic alternatives, which could include a potential sale of the company; * Dresser's ability to successfully resolve recent accounting issues that have resulted in delayed filings; * financial policy with regard to growth capital and potential acquisitions; * a comprehensive review of Dresser's financial statements and its recent operating and financial performance; and * an assessment of the near- to intermediate-term outlook for Dresser's various business lines. LYONDELL CHEMICAL: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US Chemicals and Allied Products sector, the rating agency confirmed its Ba3 Corporate Family Rating for Lyondell Chemical Co. Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$800 million Gtd Sr Sec Revolving Credit Facility due 8/2011 Ba3 Ba2 LGD2 28% US$1,775 million Gtd Sr Sec Term Loan due 8/2013 Ba3 Ba2 LGD2 28% US$430 million 9.5% Gtd Sr Sec Global Notes due 12/2008 Ba3 Ba2 LGD2 28% US$849 million 9.625% Sr Sec Notes Series A due 5/2007 Ba3 Ba2 LGD2 28% US$325 million 10.5% Gtd Sr Sec Global Notes due 6/2013 Ba3 Ba2 LGD2 28% US$278 million 11.125 Gtd Sr Sec Notes due 7/2012 Ba3 Ba2 LGD2 28% US$875 million 8.0% Gtd Sr Unsec Notes due 9/2014 B1 B1 LGD5 73% US$900 million 8.25% Gtd Sr Unsec Notes due 9/2016 B1 B1 LGD5 73% US$100 million 10.25% Sr Unsec Debentures due 11/2010 B1 B1 LGD5 73% US$225 million 9.8% Sr Unsec Debentures due 2/2020 B1 B1 LGD5 73% US$500 million 10.875% Sr Sub Notes due 5/2009 B2 B2 LGD6 95% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Houston, Texas, Lyondell Chemical Company (NYSE: LYO) -- http://www.lyondell.com/-- is North America's third-largest independent, publicly traded chemical company. Lyondell manufacturers basic chemicals and derivatives including ethylene, propylene, titanium dioxide, styrene, polyethylene, propylene oxide and acetyls. It also refines heavy, high-sulfur crude oil and produces gasoline- blending components. It operates on five continents and employs approximately 11,000 people worldwide. In Europe, the company maintains operations in Austria, Belgium, France, Germany, Italy, The Netherlands, Spain, and the United Kingdom. =================== K A Z A K H S T A N =================== AVTOTRANSSBYT LLP: Creditors Must File Claims by Nov. 17 -------------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda Region declared LLP Auto Sale Company Avtotranssbyt insolvent. Creditors have until Nov. 17 to submit written proofs of claim to: LLP Avtotranssbyt Jambyl Str. 9 Karaganda Karaganda Region Kazakhstan BUSINESS TECHNOLOGIIES: Creditors Must File Claims by Nov. 17 ------------------------------------------------------------- LLP Business Technologiies Corp. has declared insolvency. Creditors have until Nov. 17 to submit written proofs of claim to: LLP Business Technologiies Corp. Ablaihan Ave. 10-7 Almaty District Astana, Kazakhstan DIAS-T LLP: Claims Registration Ends Nov. 17 -------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda Region declared LLP Dias-T insolvent. Creditors have until Nov. 17 to submit written proofs of claim to: LLP Dias-T Jambyl Str. 9 Karaganda Karaganda Region Kazakhstan FREEDOMLAND KAZAKHSTAN: Claims Registration Ends Nov. 17 -------------------------------------------------------- LLP Freedomland Kazakhstan has declared insolvency. Creditors have until Nov. 17 to submit written proofs of claim to: LLP Freedomland Kazakhstan Gornaya Str. 11 Saryagash South Kazkhstan Region Kazakhstan JULDYZ LLP: Proof of Claim Deadline Slated for Nov. 17 ------------------------------------------------------ The Tax Committee of Almaty Region entered an order placing LLP Juldyz (RNN 090400004961) into compulsory liquidation. Creditors have until Nov. 17 to submit written proofs of claim to: LLP Juldyz (RNN 090400004961) Room 208 Jangusurov Str. 113a Taldykorgan Almaty Region Kazakhstan Tel: 8 (32822) 24-19-77 NEFTESTROYENERGOSERVICE LLP: Court Opens Bankruptcy Procedure ------------------------------------------------------------- The Specialized Inter-Regional Economic Court of Mangistau Region commenced bankruptcy proceedings against LLP Oil Company Neftestroyenergoservice on Sept. 13. REMSTROYBYT LLP: Creditors' Claims Due Nov. 17 ---------------------------------------------- The Tax Committee of Almaty Region entered an order placing LLP Remstroybyt (RNN 090400017699) into compulsory liquidation. Creditors have until Nov. 17 to submit written proofs of claim to: LLP Remstroybyt Room 208 Jangusurov Str. 113a Taldykorgan Almaty Region Kazakhstan Tel: 8 (32822) 24-19-77 TECHPROM-TRADE LLP: Pavlodar Court Opens Bankruptcy Proceedings --------------------------------------------------------------- The Specialized Inter-Regional Economic Court of Pavlodar Region commenced bankruptcy proceedings against LLP Techprom-Trade on May 31. VICTORIYA LLP: Creditors' Claims Due Nov. 17 -------------------------------------------- The Specialized Inter-Regional Economic Court of East Kazakhstan Region declared LLP Victoriya insolvent on Aug. 23. Subsequently, bankruptcy proceedings were introduced at the company. Creditors have until Nov. 17 to submit written proofs of claim to: LLP Victoriya Lenin Ave. 40-41 Ust-Kamenogorsk East Kazakhstan Region Kazakhstan Tel: 8 (3232) 47-61-94 =================== K Y R G Y Z S T A N =================== MYASOKONSERVNYI KOMBINAT: Public Auction Scheduled for Oct. 27 -------------------------------------------------------------- The Chui-Bishkek-Talas Territorial Department of the State Committee on State Property will auction 16.15% of OJSC Bishkeksky Meat Packing Plant Myasokonservnyi Kombinat's state share holding, representing 206,558 shares, at 10:00 a.m. on Oct. 27 at: Chui-Bishkek-Talas Territorial Department of the State Committee on State Property Room 5 Floor 5 Moskovskaya Str. 172 Bishkek, Kyrgyzstan The entity has declared a KGS6,321,151 starting price for the equity stake. OJSC Bishkeksky Meat Packing Plant Myasokonservnyi Kombinat is engaged in the meat-processing business. It has 1,307,810 total number of shares. The company has an authorized capital of KGS76.9 million and reports KGS400.2 million in cost of assets as of Jan. 1. The company also reports a clear profit of KGS54,344 as of Jan. 1. Participants have until 5:00 p.m. on Oct. 26 to deposit an amount equivalent to 10% of the starting price to the settlement account of: Chui-Bishkek-Talas Territorial Department of the State Committee on State Property Settlement Account No. 8504172080101005/205802605 OJSC Settlement and Saving Company Treasure Department of Lenin District MFO 129001 and submit their bids and necessary documents to: Chui-Bishkek-Talas Territorial Department of the State Committee on State Property Room 1 Floor 5 Moskovskaya Str. 172 Bishkek, Kyrgyzstan The winner of the auction will pay 7% of the selling price. Inquiries can be addressed to (+996 312) 21-87-34, 21-87-25. OPTIKA LLC: Insolvency Manager Sets Oct. 27 Asset Auction --------------------------------------------------------- The bidding organizer and insolvency manager of LLC Optics Optika will auction the company's spherical lens and equipment mini-factory to the public at 2:00 p.m. on Oct. 27 at: LLC Optics Optika Building of Mini Factory Pirogov Str. 14 Kara-Balta Chui Region Kyrgyzstan The mini-factory has a total area of 579.3 square meters. The property's starting price is set at EUR173,173, which was reduced by 75%. Participants have until Oct. 26 to deposit an amount equivalent to 10% of the starting price and submit their bids to: LLC Optics Optika Building of Mini Factory Pirogov Str. 14 Kara-Balta Chui Region Kyrgyzstan Tel: (0-502) 76-06-62 =================== L U X E M B O U R G =================== ECONOMY LUXEMBOURG: Fitch Assigns BB Rating to Sub. Notes Issue --------------------------------------------------------------- Fitch Ratings assigned Economy Luxembourg S.A.'s issue of step- up loan participation notes a foreign currency Long-term rating of BB. The notes are to be used solely to finance a subordinated loan to Turkey's Turk Ekonomi Bankasi A.S. The issue will only pay noteholders amounts, if any, received from TEB under the subordinated loan agreement. TEB has a foreign currency Issuer Default rating of BB and a local currency IDR of BB+, all with Positive Outlook. The BB rating of the subordinated notes reflects Fitch's standard notching practice for subordinated instruments of issuers with IDRs of BB- or higher. The subordinated issue rating has been notched down once from TEB's BB+ local currency rating. TEB Mali Yatirimlar A.S., which is jointly owned by BNP Paribas and the Colakoglu Group, holds 84.25% of TEB, with 15.63% of the shares publicly traded and 0.12% held by other shareholders. EVRAZ GROUP: Conflict of Interest Prompts Bruno Bolfo to Resign --------------------------------------------------------------- Evraz Group S.A. disclosed that Bruno Bolfo has tendered his resignation as a member of the Board of Directors of the Company. He will also cease to be a member of the Company's Audit Committee. On Oct. 20, Mr. Bolfo notified the Company of his resignation from the Board effective immediately due to a conflict of interests arising out of a proposed joint venture agreement between Duferco, a steel trader and producer, and steel making company NLMK. Mr. Bolfo is the owner and Chairman of the Board of Directors of Duferco. Bruno Bolfo had been a member of Evraz's Board since Aug. 9 following his election by the extraordinary general meeting of shareholders in July 2006. About Evraz Headquartered in Luxembourg, Evraz Group S.A. -- http://www.evraz.com/-- manufactures and distributes steel and related products. In addition, the Company owns and operates certain mining assets. Its steel production and mining facilities are mainly located in the Russian Federation. It operates three steel mills in Russia, one mill in Sverdlovsk region and two mills in Kemerovo region. * * * As reported by TCR-Europe on Oct. 11, Fitch Ratings upgraded Luxembourg-registered Evraz Group S.A.'s Issuer Default and senior unsecured ratings to BB from BB-. The agency also upgraded Cyprus-registered subsidiary Mastercroft Limited's Issuer Default rating and Evraz Securities S.A.'s senior unsecured notes to BB from BB-. Mastercroft's and Evraz's Short-term B ratings are affirmed. The Outlooks for both IDRs remain Stable. Evraz Securities is a 100%-owned subsidiary of Mastercroft. Evraz Group's 8-1/4% notes due November 2015 has been given by Moody's Investors Service's (P)B2 rating, Standard & Poor's B+ rating and Fitch's BB- rating. EVRAZ GROUP: Strong Performance Spurs Moody's to Change Outlook --------------------------------------------------------------- Moody's Investors Service changed the outlook on all ratings assigned to Evraz Group S.A. to positive from stable. The change in the outlook for positive reflects EVRAZ's continuous robust performance in 2006 and Moody's expectation that the Russian steel market will remain resilient and will continue to support financial performance of the group. In 1H 2006, EVRAZ reported strong USD 3.7 billion in Revenues and US$1.1 billion in EBITDA, while cash flow generation improved and liquidity remained satisfactory. The positive outlook also reflects Moody's expectation that EVRAZ should sustain its strong financial metrics and maintain cash flow cushion to service the increased absolute level of debt through the cycle, particularly as its substantial CAPEX programme in Russia is at its closing stages. Taking into account recent changes in the ownership of the group, Moody's will monitor any potential developments to EVRAZ's corporate profile, in particular changes to corporate and financial policies before considering any future upward rating actions. Ratings affected: EVRAZ Group S.A. * Ba3 Corporate Family Ratings Ba3 * B2 Senior Unsecured rating on global bonds EVRAZ Securities S.A * B1 Senior guaranteed rating on eurobonds EVRAZ group is Russia's largest vertically integrated steel company (by volume and assets) that produced 13.9 m tones of crude steel in 2005. EVRAZ principal assets are three steel plants and three iron ore mining and processing facilities, as well as two coal mines and logistics and trading assets. NOVELIS INC: Expects Improved Financial Performance in 2007 ----------------------------------------------------------- Novelis Inc. would be providing guidance for 2006 and 2007 as part of its strategic and financial update. Highlights -- the company continues to generate solid cash flow. Novelis expects total free cash flow for 2006 to be between US$150 million and US$200 million, and believes it will remain in that range for 2007 as the company improves its risk mitigation program. -- the company anticipates a return to positive earnings before taxes in 2007. For the full year of 2006, Novelis expects to post a loss before taxes of between US$240 million and US$285 million. For the full year of 2007, the company anticipates earnings before taxes of between US$35 million and US$100 million. This expected upswing is due primarily to the elimination of half of the company's can sheet price ceiling exposure, expected increases in rolled product shipments, and expected corporate cost reductions. -- the company estimates that shipments for 2006 will be between 3,140 and 3,170 kilotons. In 2007, shipments are forecasted to grow by 3 to 4 percent compared to 2006. -- for 2006, Novelis estimates capital expenditures of between US$110 million and US$115 million. For 2007, the company expects that its capital expenditure run rate will return to traditional investment levels of between US$165 million and US$175 million. -- longer term, the company will target: * an annual growth rate of 7% to 10% for regional income less corporate costs; * annual returns on invested capital exceeding 12%; * annual free cash flow surpassing USUS$400 million; and * a debt-to-EBITDA ratio of between 2.5x and 3.0x. Novelis said that all forward estimates assume an average price for primary aluminum of US$2,500 per metric ton on the London Metal Exchange. "We believe that we are nearing the end of a difficult transition period," William T. Monahan, chairman and interim chief executive officer, said. "The fundamentals of our business remain strong, and we are pleased with our future outlook as the result of the actions we have taken, and will continue to take, to enhance shareholder value." The company reiterated that it is on track to file its Form 10-Q for the second quarter by Oct. 20, 2006, and to be current with its filings once it files its third-quarter report during the fourth quarter. The company also noted that its previously reported commitments for backstop financing facilities totaling US$2.855 billion from Citigroup Global Markets Inc. have been extended to Oct. 31, 2006. In the event that Novelis is not able to file its quarterly report on Form 10-Q for the second quarter of 2006 by the deadlines defined in the notice of default and in its Credit Agreement waiver, the backstop financing facilities would provide the funding necessary to retire the Senior Notes and, if needed, replace the Company's existing term loan and revolving credit facility. In addition, Novelis announced that it will be requesting an amendment to its US$1.8 billion Credit Agreement to modify certain financial covenants and other provisions contained in the Agreement. Specifically, Novelis will request that the lenders under the Credit Agreement temporarily relax the interest coverage covenant, leverage ratio covenant, and fixed charges covenant among other things. About Novelis Inc. Based in Atlanta, Georgia, Novelis, Inc., (NYSE: NVL) (TSX: NVL) -- http://www.novelis.com/-- provides customers with a regional supply of technologically sophisticated rolled aluminum products throughout Asia, Europe, North America, and South America. The company operates in 11 countries and has approximately 13,000 employees. In Europe, the company maintains operations in France, Germany, Luxembourg, Switzerland and the United Kingdom. Through its advanced production capabilities, the company supplies aluminum sheet and foil to the automotive and transportation, beverage and food packaging, construction and industrial, and printing markets. * * * As reported in the Troubled Company Reporter-Europe on Oct. 19, Moody's Investors Service confirmed its B1 Corporate Family Rating for Novelis Inc. in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the North American Metals & Mining sectors. As reported in TCR-Europe on Oct. 13, Fitch initiated the ratings for Novelis Inc. and its subsidiary Novelis Corp.: Novelis Inc. -- Issuer Default Rating B; -- Senior secured credit facility BB/Recovery Rating 1; and -- Senior unsecured notes B/RR4; Novelis Corp. -- Issuer Default Rating B; and -- Senior secured credit facility BB/RR1. ========= M A L T A ========= LE MERIDIEN: Mediterranean Hotel Up for Sale -------------------------------------------- Christie Group Plc is selling Le Meridien Hotels Ltd., Mediterranean Hotels located in Valletta, Malta. The assets for sale features: -- 136 air conditioned bedrooms and suites; -- substantial conference, banqueting and meeting facilities; -- extensive landscaped gardens and grounds; -- further development potential, subject to the necessary consents; -- available with the benefit of a management contract under the Le Meridien brand or alternatively on an unencumbered free of management contract basis -- 2005 total revenue of EUR6.2 million; and -- substantial offers in excess of EUR10 million invited on a share sale basis. Inquiries can be addressed to: Jeremy Jones Christies Group Plc 39 Victoria Street London SW1H 0EU United Kingdom Tel: +44 (0) 20 7227 0755 +44 (0) 20 7227 0792 E-mail: jeremy.jones@christie.com Christie Group Plc -- http://www.christiecorporate.com/-- offers a portfolio of professional business services covering surveying, valuation, agency, consultancy, finance, insurance, stock control and business software solutions. ===================== N E T H E R L A N D S ===================== ASHLAND INC: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sector, the rating agency confirmed its Ba1 Corporate Family Rating for Ashland Inc. Moody's also affirmed its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected POD LGD Loss-Given Debt Issue Rating Rating Default ---------- ------- ------- ---------- Sr Unsec MTN due through 2019 Ba1 LGD4 60% 8.8% Debentures due 2012 Ba1 LGD4 60% 6.86% MTN Series H due 2009 Ba1 LGD4 60% 6.625% Sr Notes due 2008 Ba1 LGD4 60% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Covington, Kentucky, Ashland, Inc. -- http://www.ashland.com/-- manufactures specialty chemicals and gelcoats, metal-casting consumables and adhesives. Its products are used by the building and construction, packaging and converting, transportation, marine and metal-casting industries. Ashland Distribution buys and resells chemicals, plastics and resins in North America and plastics in Europe. In Europe, Ashland maintains operations in The Netherlands. CORUS GROUP: Companhia Siderurgica Nacional Eyes Counteroffer ------------------------------------------------------------- Companhia Siderurgica Nacional S.A. plans to counter the GBP4.3-billion takeover offer of Tata Steel for Corus Group Plc, reports BBC citing the Sunday Times as its source. According to the Sunday Times, CSN has hired investment bank Lazards to advise on a potential deal. Thyssenkrupp Steel, meanwhile, dismissed reports it was also planning to launch an offer for Corus. As reported in the TCR-Europe yesterday, Corus accepted Tata Steel's offer of 455 pence in cash for each Corus Share, subject to shareholder approval. The combination is strategically compelling, creating a vertically integrated global steel group: -- fifth largest global steel producer with pro forma crude steel production of 23.5 million tons in 2005; -- high quality, low cost, attractive growth platform in Asia combined with a leading European steel player; -- high value-added product mix and strong market positions in automotive, construction and packaging; -- a more resilient business model and a strong platform for further growth; -- a strong and committed combined management team; and -- a common business culture and shared values. Tata, however, did not rule job cuts at Corus should it succeed in taking over the Anglo-Dutch steelmaker. About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Portugal and the U.S. About Tata Steel Headquartered in Mumbai, India, Tata Steel -- http://www.tatasteel.com/-- is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added). It is a small steel producer by global standards, but has the backing of the giant Tata Group, one of India's largest companies with interests as diverse as carmaking, communications, tea and oil. About Corus Group Corus Group PLC -- http://www.corusgroup.com/-- produces metal from its major operating facilities in the U.K., the Netherlands, Germany, France, Norway, Belgium and Canada. Corus turns over GBP10 billion annually and employs 47,300 in over 40 countries and sales offices and service centers worldwide, including Indonesia and the Philippines. Corus was created through the merger of British Steel plc and Koninklijke Hoogovens N.V. The group suffered six years ago from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. * * * As reported by TCR-Europe on June 21, Standard & Poor's removed Corus Group PLC's CreditWatch and raised its long-term corporate credit rating to 'BB' from 'BB-', reflecting the group's improved financial risk profile. S&P said the Outlook is stable. Fitch Ratings changed Corus Group PLC's Outlook to Positive from Stable and affirmed the Issuer Default Rating at BB- following the company's announcement of its 2005 results and plan to dispose its aluminium business for EUR826 million. Corus' affirmed debt instruments include: a) Corus Group PLC EUR800 mln 7.5% senior notes B+; b) Corus Group PLC EUR307 mln 3.0% convertible bonds B+; c) Corus Finance PLC GBP200 mln 6.75% guaranteed bonds B+; and d) Corus Finance PLC EUR20 mln 5.375% guaranteed bonds B+. As reported in TCR-Europe on May 11, Moody's Investors Service upgraded Corus Group plc's corporate family rating to Ba2, upgraded its senior unsecured and supported unsecured obligations to B1 and raised senior secured bank facility to Ba1. CORUS GROUP: Fitch Changes Rating Watch to Negative on Tata Deal ---------------------------------------------------------------- Fitch Ratings changed the Rating Watch on Corus Group PLC's Issuer Default and senior unsecured BB- and Short-term B ratings to Negative from Positive. This follows the recommendation by the CS Board of an offer from India-based Tata Steel Ltd. valued at GBP4.3 billion. The RWN also applies to these debt instruments issued by CS: -- CS EUR800 million 7.5% senior notes; -- CS EUR307 million 3% convertible bonds; and -- Corus Finance Plc GBP200 million 6.75% guaranteed bonds. The RWN encompasses the possibilities that the CS's ratings could either be downgraded or affirmed at the current levels. The RWN reflects further clarity on the financing structure for the transaction, in particular that the GBP3.1 billion of debt raised by the acquisition vehicle - Tata Steel U.K. Limited - will not benefit from any credit support provided by Tata Steel, its parent entity, but will be dependant on CS's stand alone cash flows for debt service. In this regard Fitch notes that pro-forma leverage of 4.9x based on CS's LTM Q2 2006 continuing EBITDA would be indicative of a rating in the B rating category. Fitch continues to view that a tie-up with Tata Steel would be positive for CS's operational profile. However, given that CS will continue to operate as a standalone company it is currently unclear to what extent operational benefits, such as the ability to access cheap semi-finished steel from Tata Steel's Indian operations, will be reflected in an improvement in its financial metrics. Fitch will resolve the Rating Watch following publication of CS's 2006 results, further details on the level of synergies and operational benefits that could accrue under the transaction, and the closure of the deal. FIREARMS TRAINING: Selling Outstanding Shares to Meggitt-USA ------------------------------------------------------------ Firearms Training Systems Inc. has sold all of its outstanding shares to Meggitt-USA Inc., an indirect U.S. subsidiary of Meggitt PLC. Holders of the Company's Class A Common Stock received cash in the amount of US$1.08 per share owned immediately before the effective time of the merger and holders of FATS' Series C Preferred Stock received cash in the amount equal to the sum of the liquidation preferences of such preferred stock plus accrued and any unpaid dividends on such shares to the extent not previously added to the liquidation preference, for each outstanding share owned immediately before the effective time of the merger. All holders of stock options outstanding at the closing received cash payments equal to the sum of the difference between the per-share option exercise prices of their respective options and US$1.08 for each share subject to an option. Firearms Training Systems, Inc. -- http://www.fatsinc.com/-- and its subsidiary, FATS, Inc., provides fully-integrated, simulated training to professional military and law enforcement personnel. Utilizing quality engineered simulated weapons, FATS' state-of-the-art virtual training solutions offer judgmental, tactical and combined arms experiences. The company serves U.S. and international customers from headquarters in Suwanee, Georgia, with branch offices in Australia, Canada, Netherlands and United Kingdom. The ISO-certified company celebrated its 20th anniversary in 2004. * * * At June 30, 2006, Firearms Training Systems, Inc.'s balance sheet showed a US$24,931,000 stockholders' deficit compared to a $25,702,000 deficit at Mar. 31, 2006. =========== P O L A N D =========== BRE BANK: Fitch Affirms Individual Rating at D ---------------------------------------------- Fitch Ratings affirmed Poland-based BRE Bank's ratings at Issuer Default A-, Short-term F2, Support 1, and Individual D. The Outlook remains Stable. BRE Bank's financial performance has seen further improvement in 2006. Strong growth in fees and commissions as well as FX income has helped grow and diversify BRE's revenues. Retail banking continued to gain market share, but good results from the core investment banking and corporate divisions are driving profitability. Like other Polish banks, BRE was hit by bond market turbulence in H106, but its losses were comparatively modest. Loan growth remains robust, particularly in retail, but it has also picked up on a revival in the corporate market. "BRE is well placed to benefit from an apparent revival in demand for corporate credit; however, this is likely to put pressure on already weak capital," Chris Birney, Director with Fitch's Financial Institutions team disclosed. "Internal capital generation may not be sufficient to finance this growth." Asset quality continues to improve. Impaired loans net of reserves were a small 2.6% of end-H106 equity. Like most Polish banks, BRE offers Swiss franc mortgages, which Fitch considers higher risk. With a growing retail mortgage portfolio and the addition of BRE Hipoteczny's portfolio of corporate mortgages, real estate lending now represents 20% of BRE's corporate and 86% of its retail loan book. The Issuer Default, Short-term and Support ratings are based on the high potential for support from BRE's 70.3% shareholder, Commerzbank in case of need. Commerzbank includes BRE in the list of subsidiaries backed by its Patronatserklaerung published in its 2005 annual report. In Fitch's view, Commerzbank's oversight of BRE Bank has strengthened in recent years and BRE's risk management functions have become increasingly aligned with those of its parent. Commerzbank is the smallest of Germany's "Big Four" banks. At end-2005, it employed 33,056 staff and had equity of EUR13.7 billion. BRE is Poland's fifth largest bank by assets and is based in Warsaw. The bank operates through 24 corporate branches, 98 retail branches and 47 retail kiosks. BRE group has 4,527 full time employees. GETIN BANK: Fitch Assigns Issuer Default Rating at BB ----------------------------------------------------- Fitch Ratings assigned Poland-based Getin Bank S.A. ratings of Issuer Default BB; Short-term B; Individual D; and Support 5. The Outlook is Stable on the Issuer Default rating. "Getin has rapidly established itself as a significant player on the Polish retail banking market" Chris Birney, Director at Fitch's Financial Institutions Group disclosed. "We are witnessing a transformation of Getin Bank from a regional player into a bank with a national presence. However, the quick succession of acquisitions, combined with rapid growth, means operational risk is relatively high," he added. The Issuer Default, Short-term and Individual ratings reflect Getin Bank's operational risks, short track record, relatively small size, as well as moderate liquidity and capitalization. They also reflect the bank's success in building a profitable franchise, its high cost-efficiency and small appetite for market risk. Downside risk to Getin Bank's ratings could result from evidence of mismanaged growth, a weakening of asset quality caused by a downturn in the housing market or PLN depreciation, or a significant decline in capitalization or liquidity. The bank's rating could be upgraded if Getin Bank continues to increase the size and strength of its franchise and demonstrates a longer track record of successful credit risk management. Getin Bank is 99.3%-owned by Getin Holding, a private-owned integrated financial group quoted on the Warsaw Stock Exchange. At end-H106 the banks' total assets amounted to PLN8.6 billion (US$2.7bn). The bank's history dates back to 2004 when Getin Holding took over Gornoslaski Bank Gospodarczy and renamed it to Getin Bank S.A. The bank expanded through further acquisitions, including Bank Przemyslowy in December 2004 and Wschodni Bank Cukrownictwa in March 2006. Getin Bank's business model is based on targeting the rapidly growing Polish retail banking market and leveraging third-party distribution channels. At end-H106 the loan book was split as follows: mortgage loans, auto loans, consumer lending, and business banking. =============== P O R T U G A L =============== COMPANHIA SIDERURGICA: Eyes Counteroffer for Corus Group -------------------------------------------------------- Companhia Siderurgica Nacional S.A. plans to counter the GBP4.3-billion takeover offer of Tata Steel for Corus Group Plc, reports BBC citing the Sunday Times as its source. According to the Sunday Times, CSN has hired investment bank Lazards to advise on a potential deal. Thyssenkrupp Steel, meanwhile, dismissed reports it was also planning to launch an offer for Corus. As reported in the TCR-Europe yesterday, Corus accepted Tata Steel's offer of 455 pence in cash for each Corus Share, subject to shareholder approval. The combination is strategically compelling, creating a vertically integrated global steel group: -- fifth largest global steel producer with pro forma crude steel production of 23.5 million tons in 2005; -- high quality, low cost, attractive growth platform in Asia combined with a leading European steel player; -- high value-added product mix and strong market positions in automotive, construction and packaging; -- a more resilient business model and a strong platform for further growth; -- a strong and committed combined management team; and -- a common business culture and shared values. Tata, however, did not rule job cuts at Corus should it succeed in taking over the Anglo-Dutch steelmaker. About Tata Steel Headquartered in Mumbai, India, Tata Steel -- http://www.tatasteel.com/-- is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added). It is a small steel producer by global standards, but has the backing of the giant Tata Group, one of India's largest companies with interests as diverse as carmaking, communications, tea and oil. About Corus Group Corus Group PLC -- http://www.corusgroup.com/-- produces metal from its major operating facilities in the U.K., the Netherlands, Germany, France, Norway, Belgium and Canada. Corus turns over GBP10 billion annually and employs 47,300 in over 40 countries and sales offices and service centers worldwide, including Indonesia and the Philippines. Corus was created through the merger of British Steel plc and Koninklijke Hoogovens N.V. The group suffered six years ago from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Portugal and the U.S. * * * Standard & Poor's Ratings Services affirmed on Aug. 4, 2006, its 'BB' long-term corporate credit rating on Brazil-based steel maker Companhia Siderurgica Nacional aka CSN after the announcement of its association with U.S.-based steel maker Wheeling-Pittsburgh Corp. in the U.S. The outlook is stable. Fitch Ratings viewed the proposed merger of Companhia Siderurgica Nacional's or CSN North American operations with those of Wheeling-Pittsburgh Corporation or WPSC to be neutral to CSN's credit quality. Fitch's ratings of CSN include: -- Foreign currency Issuer Default Rating: 'BB+'; -- Local currency IDR: 'BBB-'; -- National scale rating: 'AA (bra)'; -- Senior unsecured notes 'BB+'; and -- Brazilian Real denominated debentures: 'AA (bra)'. =========== R U S S I A =========== ARDATOVSKIY OJSC: Court Names S. Salnik as Insolvency Manager ------------------------------------------------------------- The Arbitration Court of Mordoviya Republic appointed Mr. S. Salnik as Insolvency Manager for OJSC Butter-Making Plant Ardatovskiy. He can be reached at: S. Salnik Post User Box 1068 432026 Ulyanovsk Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A39-369/06-5/7. The Arbitration Court of Mordoviya Republic is located at: Kommunisticheskaya Str. 33 Saransk Mordoviya Republic Russia The Debtor can be reached at: OJSC Butter-Making Plant Ardatovskiy Rabochaya Str. 79 Ardatov 431860 Mordoviya Republic Russia ARZAMASSKAYA CONFECTIONARY: Names V. Veselov to Manage Assets ------------------------------------------------------------- The Arbitration Court of Nizhniy Novgorod Region appointed Mr. V. Veselov as Insolvency Manager for CJSC Arzamasskaya Confectionary (TIN 5202008280). He can be reached at: V. Veselov Office 106 Strelka Str. 4a 603086 Nizhniy Novgorod Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A43-15769/2005 33-270. The Arbitration Court of Nizhniy Novgorod Region is located at: Kremlin 9 603082 Nizhniy Novgorod Region Russia The Debtor can be reached at: CJSC Arzamasskaya Confectionary Berezina Str. 3 Arzamas Nizhniy Novgorod Region Russia ASPHALT CONCRETE: Penza Bankruptcy Hearing Slated for Oct. 26 ------------------------------------------------------------- The Arbitration Court of Penza Region will convene on Oct. 26 to hear the bankruptcy supervision procedure on LLC Asphalt Concrete Factory. The case is docketed under Case No. A49-2225/2006-2220b/3. The Temporary Insolvency Manager is: A. Makeev Apartment 86 Ladozhskaya Str. 35 Penza Region Russia The Arbitration Court of Penza Region is located at: Belinskogo Str. 2 440600 Penza Region Russia The Debtor can be reached at: LLC Asphalt Concrete Factory Ryaboa Str. 3 Penza Region Russia BUILDER CJSC: Court Names A. Ptashnikov as Insolvency Manager ------------------------------------------------------------- The Arbitration Court of Bashkortostan Republic appointed Mr. A. Ptashnikov as Insolvency Manager for CJSC Builder (TIN 0274021891). He can be reached at: A. Ptashnikov Apartment 33 Entuziastov Str. 4 Ufa 450096 Bashkortostan Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A07-15632/06-G-ADM. The Arbitration Court of Bashkortostan Republic is located at: Oktyabrskoy Revolyutsii Str. 63a Ufa Bashkortostan Republic Russia The Debtor can be reached at: CJSC Builder Chernyshevskogo Str. 95 Ufa 450000 Bashkortostan Republic Russia CHASTINSKIY CHEESE: Court Names I. Korovnikov to Manage Assets -------------------------------------------------------------- The Arbitration Court of Perm Region appointed Mr. I. Korovnikov as Insolvency Manager for LLC Chastinskiy Cheese Making Plant. He can be reached at: I. Korovnikov G. Zvezda Str. 13 614045 Perm Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A50-6447/2006-B. The Arbitration Court of Perm Region is located at: Lunacharskogo Str. 3 Perm Region Russia The Debtor can be reached at: LLC Chastinskiy Cheese Making Plant Sovetskaya Str. 63 Chastye 617170 Perm Region Russia DALI CAPITAL: Fitch Puts B+/RR4 Ratings on RUR2 Billion Issue ------------------------------------------------------------- Fitch Ratings assigned Dali Capital PLC's further issue of RUB2 billion Series 23 fixed-rate notes ratings of Long-term B+ and Recovery RR4. The Long-term rating of the issue is placed on Rating Watch Positive. The notes are to finance an unsecured loan made by Barclays Bank PLC to Russia's Rosbank, rated foreign currency and local currency Issuer Default B+/RWP, Short-term B/RWP, Individual D, Support 4/RWP, and National Long-term A-/RWP. The further notes form a single series with the original Series 23 RUB5 billion notes due September 2009 (rated B+/RWP). Dali will only pay noteholders principal and interest received by Barclays from Rosbank. Rosbank was founded in 1992 and ranks among the top 10 banks in Russia by total assets. About 70% of its shares are currently controlled by Interros, one of Russia's largest financial industrial groups, with interests in the metals, power-machine building, agricultural and insurance sectors. Societe Generale holds a stake of 20% minus 1 share in the bank and has acquired from Interros a call option to further increase its stake to 50% plus one share. The RWP on Rosbank's ratings, and hence the notes, reflects the greater probability of support for Rosbank being forthcoming in case of need if Societe Generale becomes the bank's majority owner. EVRAZ GROUP: Conflict of Interest Prompts Bruno Bolfo to Resign --------------------------------------------------------------- Evraz Group S.A. disclosed that Bruno Bolfo has tendered his resignation as a member of the Board of Directors of the Company. He will also cease to be a member of the Company's Audit Committee. On Oct. 20, Mr. Bolfo notified the Company of his resignation from the Board effective immediately due to a conflict of interests arising out of a proposed joint venture agreement between Duferco, a steel trader and producer, and steel making company NLMK. Mr. Bolfo is the owner and Chairman of the Board of Directors of Duferco. Bruno Bolfo had been a member of Evraz's Board since Aug. 9 following his election by the extraordinary general meeting of shareholders in July 2006. About Evraz Headquartered in Luxembourg, Evraz Group S.A. -- http://www.evraz.com/-- manufactures and distributes steel and related products. In addition, the Company owns and operates certain mining assets. Its steel production and mining facilities are mainly located in the Russian Federation. It operates three steel mills in Russia, one mill in Sverdlovsk region and two mills in Kemerovo region. * * * As reported by TCR-Europe on Oct. 11, Fitch Ratings upgraded Luxembourg-registered Evraz Group S.A.'s Issuer Default and senior unsecured ratings to BB from BB-. The agency also upgraded Cyprus-registered subsidiary Mastercroft Limited's Issuer Default rating and Evraz Securities S.A.'s senior unsecured notes to BB from BB-. Mastercroft's and Evraz's Short-term B ratings are affirmed. The Outlooks for both IDRs remain Stable. Evraz Securities is a 100%-owned subsidiary of Mastercroft. Evraz Group's 8-1/4% notes due November 2015 has been given by Moody's Investors Service's (P)B2 rating, Standard & Poor's B+ rating and Fitch's BB- rating. EVRAZ GROUP: Strong Performance Spurs Moody's to Change Outlook --------------------------------------------------------------- Moody's Investors Service changed the outlook on all ratings assigned to Evraz Group S.A. to positive from stable. The change in the outlook for positive reflects EVRAZ's continuous robust performance in 2006 and Moody's expectation that the Russian steel market will remain resilient and will continue to support financial performance of the group. In 1H 2006, EVRAZ reported strong USD 3.7 billion in Revenues and US$1.1 billion in EBITDA, while cash flow generation improved and liquidity remained satisfactory. The positive outlook also reflects Moody's expectation that EVRAZ should sustain its strong financial metrics and maintain cash flow cushion to service the increased absolute level of debt through the cycle, particularly as its substantial CAPEX programme in Russia is at its closing stages. Taking into account recent changes in the ownership of the group, Moody's will monitor any potential developments to EVRAZ's corporate profile, in particular changes to corporate and financial policies before considering any future upward rating actions. Ratings affected: EVRAZ Group S.A. * Ba3 Corporate Family Ratings Ba3 * B2 Senior Unsecured rating on global bonds EVRAZ Securities S.A * B1 Senior guaranteed rating on eurobonds EVRAZ group is Russia's largest vertically integrated steel company (by volume and assets) that produced 13.9 m tones of crude steel in 2005. EVRAZ principal assets are three steel plants and three iron ore mining and processing facilities, as well as two coal mines and logistics and trading assets. IZHEVSKIY FACTORY: Court Names V. Nagovitsyn to Manage Assets ------------------------------------------------------------- The Arbitration Court of Udmurtiya Republic appointed Mr. V. Nagovitsyn as Insolvency Manager for OJSC Izhevskiy Factory of Building Ceramics (TIN 1831059260). He can be reached at: V. Nagovitsyn Post User Box 972 Izhevsk 426069 Udmurtiya Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A71-23/2006-G26. The Arbitration Court of Udmurtiya Republic is located at: Lomonosova Str. 5 Izhevsk 426004 Udmurtiya Republic Russia The Debtor can be reached at: OJSC Izhevskiy Factory Of Building Ceramics Kholmogorova Str. 11 Izhevsk 426011 Udmurtiya Republic Russia KHOSHEVSKAYA NIVA: Court Names I. Zolin as Insolvency Manager ------------------------------------------------------------- The Arbitration Court of Nizhniy Novgorod Region appointed Mr. I. Zolin as Insolvency Manager for OJSC Khoshevskaya Niva. He can be reached at: I. Zolin Post User Box 166 603043 Nizhniy Novgorod Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A43-4186/2006-33-30. The Arbitration Court of Nizhniy Novgorod Region is located at: Kremlin 9 603082 Nizhniy Novgorod Region Russia The Debtor can be reached at: OJSC Khoshevskaya Niva Khvoshevka Bogorodskiy Region Nizhniy Novgorod Region Russia KOVROVETS: Court Names V. Pronyushkina as Insolvency Manager ------------------------------------------------------------ The Arbitration Court of Vladimir Region appointed Ms. V. Pronyushkina as Insolvency Manager for CJSC Engineering Plant Kovrovets (TIN 330505756). She can be reached at: V. Pronyushkina Office 302 Building 15 Nizhegorodskaya Str. 32 109029 Moscow Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A11-9607/2006-K1-439B. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Arbitration Court of Vladimir Region is located at: Oktyabrskiy Pr. 14 600025 Vladimir Region Russia The Debtor can be reached at: CJSC Engineering Plant Kovrovets Lopatina Str. 5 1A Kovrov 601900 Vladimir Region Russia LUKOIL OAO: Unveils Strategic Development Plan for 2007-2016 ------------------------------------------------------------ The President of OAO LUKOIL, Vagit Alekperov, presented the main principles of the Company's strategic development program for 2007-2016 to the business community. The strategy of accelerated growth will place LUKOIL among the largest global energy companies. The main aim is to achieve increasing growth rates and to maximize shareholder value. LUKOIL plans to practically double its main industrial indicators. The average annual rate of growth of hydrocarbon production is scheduled to increase by almost 50% to 6.7% (compared with the previous strategic development program), reaching a daily production level of four million boe. The Company's investment program will total US$78 billion, assuming the conservative scenario, or US$112 billion including acquisitions, assuming the optimistic scenario. In the latter case acquisitions will represent nearly a third of total investments. The proportion between investments in exploration & production and in refining & marketing will be 70:30. Capital expenditures per barrel of production will remain lower than average level of main international companies. LUKOIL's biggest investment projects in Russia are development of oil & gas provinces in the north of the European part of the country and on the shelf of the Caspian Sea. Daily production of hydrocarbons by LUKOIL Group will increase to 3.5-4.0 million boe, depending on the scenario. The share of gas in overall hydrocarbon production volumes will increase from 6% in 2005 to 33%. The Company plans to significantly increase its oil refining capacities in the course of the decade, both in Russia and abroad. LUKOIL expects to increase its daily oil refining capacities by more than 70% to two million barrels by expansion of existing refineries and acquisition of new ones. As a result the proportion between volumes of oil refining and production will become more balanced and will reach 70%. Geographical diversification will increase in favor of refining outside Russia: the share of refining in Russia will decrease from current 70% to 56%. Achievement of this task will increase stability of Company cash flows, making them less vulnerable to price volatility on the crude oil market, and increase profitability of the Company's business. LUKOIL is pressing ahead with modernization of its refineries in order to meet rapid growth of demand for high-quality, environmentally safe petroleum products. The main goal in this context is to increase added value of outputs. LUKOIL expects to produce only high-octane gasoline by 2016, when all of the Company's production will meet the Euro-5 standard. LUKOIL refinery complexity will double by that time, enabling LUKOIL to produce twice as much high-quality motor fuel from the same amount of crude oil. Achievement of targets in the strategic development program should increase the volume and quality of cash flows, generated by the Company, making them less vulnerable to price volatility on the crude oil market. Even using a conservative estimate of long-term international oil prices in a range of US$35-40 per barrel, the potential for LUKOIL value growth will rise by 2 - 2.5 times. The Company's financial policy will remain conservative with debt-to-capital ratio below 30%. This will allow the Company to carry out a flexible financial policy and raise additional funding in an efficient manner, both for implementation of large-scale projects and for acquisition of new assets. One of LUKOIL's strategic tasks is to ensure that ROACE is no lower than 15-17%. The Company is careful to ensure avoidance of harm to people and the environment in all aspects of its industrial activities. LUKOIL is currently insured for environmental risks up to a sum of US$15 billion. LUKOIL's new ecology program plans spending of US$1.7 billion in the period up to 2010. About Lukoil Headquartered in Moscow, Russia, OAO Lukoil (LSE: LKOD; MICEX, RTS: LKOH) -- http://www.lukoil.com/-- explores and produces oil & gas, petroleum products and petrochemicals, and markets the outputs. Most of the Company's exploration and production activity is located in Russia, and its main resource base is in Western Siberia. * * * As reported in TCR-Europe on July 12, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Lukoil OAO to 'BB+' from 'BB'. S&P said the outlook is positive. As reported in the TCR-Europe on Jan. 26, Moody's Investors Service has changed the outlook of OAO Lukoil's Ba1 Corporate Family Rating and Ba2 Issuer Rating to positive from stable. Moody's last rating action on LUKOIL was on April 26, when the agency upgraded the company's ratings from Ba2/Ba3 to Ba1/Ba2. NEVERKINSKIY BUTTER: Court Names L. Bychkova to Manage Assets ------------------------------------------------------------- The Arbitration Court of Penza Region appointed Ms. L. Bychkova as Insolvency Manager for OJSC Neverkinskiy Butter Factory. She can be reached at: L. Bychkova Shmidta Str. 4 440039 Penza Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A49-4226/2006-440b/10. The Arbitration Court of Penza Region is located at: Belinskogo Str. 2 440600 Penza Region Russia The Debtor can be reached at: OJSC Neverkinskiy Butter Factory Kirova Str. 96 Neverkino Penza Region Russia NOVOLIKEEVSKOYE LLC: Bankruptcy Hearing Slated for Jan. 16 ---------------------------------------------------------- The Arbitration Court of Nizhniy Novgorod Region will convene at 1:15 p.m. on Jan. 16, 2007, to hear the bankruptcy supervision procedure on LLC Novolikeevskoye. The case is docketed under Case No. A43-20104/2006-33-199. The Temporary Insolvency Manager is: O. Vdovin Post User Box 5 Kstovo 607663 Nizhniy Novgorod Region Russia The Arbitration Court of Nizhniy Novgorod Region is located at: Kremlin 9 603082 Nizhniy Novgorod Region Russia The Debtor can be reached at: LLC Novolikeevskoye Novolikeevo Kstovskiy Region 607686 Nizhniy Novgorod Region Russia PSB FINANCE: Fitch Places B+/RR4 Ratings to US$125-Mln Issue ------------------------------------------------------------ Fitch Ratings assigned PSB Finance S.A.'s US$125 million 8.75% senior notes due October 2011 final ratings of Long-term B+ and Recovery RR4. The issue is to be used solely for financing a loan to Russia-based JSC Promsvyazbank, rated Issuer Default rating B+ with Stable Outlook, Short-term B, Individual D, and Support 5. Fitch has also assigned PSB Finance S.A.'s US$200 million 9.675% subordinated notes due May 2012 final ratings of Long-term B- and Recovery RR6. The proceeds are to be used for redeeming the outstanding principal of US$45 million privately placed notes, which financed an existing subordinated loan to PSB and for financing a new loan to PSB. In case the new loan is not accepted by the Russian Central Bank as eligible for inclusion as Tier 2 Capital within 60 days after the loan agreement date, PSB has the right to prepay the amount in whole. PSB is one of the six largest Russian privately held banks. It is majority-owned by the Ananiev brothers, who are well- connected businessmen. Germany's Commerzbank has received regulators' preliminary approval for the acquisition of a 15% stake in PSB and may seek to gain control over the bank in the medium term. PSB mainly serves large and mid-sized corporate clients. It has built a network of over 120 points of sale across Russia to facilitate an ongoing regional diversification and franchise expansion into the retail and SME segments. RYB-KHOZ MOZHAYSKIY: Bankruptcy Hearing Slated for Dec. 21 ---------------------------------------------------------- The Arbitration Court of Moscow Region will convene at 10:45 a.m. on Dec. 21 to hear the bankruptcy supervision procedure on OJSC Ryb-Khoz Mozhayskiy (TIN 5028022035). The case is docketed under Case No. A41-K2-18831/06. The Temporary Insolvency Manager is: N. Kopytiva Building 1 Teplyj Stan 11 117465 Moscow Region Russia The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: OJSC Ryb-Khoz Mozhayskiy Bolshie Parfenki 22 Mozhayskiy Region 143231 Moscow Region Russia SEL-KHOZ-TEKHNIKA: Court Names A. Baskakov as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Saratov Region appointed Mr. A. Baskakov as Insolvency Manager for OJSC Sel-Khoz-Tekhnika (TIN 6408000110). He can be reached at: A. Baskakov Ak. Zhuk Str. 27 413853 Saratov region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A57-563B/06-31. The Arbitration Court of Saratov Region is located at: Babushkin Vvoz 1 Saratov Region Russia The Debtor can be reached at: OJSC Sel-Khoz-Tekhnika Privolskaya St. Volsk Saratov Region Russia SHIGONY-SEL-KHOZ-TRANS: Court Starts Bankruptcy Supervision ----------------------------------------------------------- The Arbitration Court of Samara Region commenced bankruptcy supervision procedure on OJSC Shigony-Sel-Khoz-Trans. The case is docketed under Case No. A55-9386/06-40. The Temporary Insolvency Manager is: I. Ponomarev Shmidta Str. 4 440039 Penza Region Russia The Debtor can be reached at: OJSC Shigony-Sel-Khoz-Trans Shigony Shigonskiy Region Samara Region Russia STILLWATER MINING: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the North American Metals & Mining sectors, the rating agency confirmed its B1 Corporate Family Rating for Stillwater Mining Company. Additionally, Moody's revised and held its probability-of- default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$100 Million Term Loan Facility due 2010 B1 B1 LGD3 43% US$40 Million Revolving Credit Facility due 2012 B1 B1 LGD3 43% US$30 Million 8% State of Montana Revenue Bonds due 2020 B2 B3 LGD6 93% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Stillwater Mining Company -- http://www.stillwatermining.com/-- produces palladium and platinum and platinum group metals outside of South Africa and Russia. The Company's shares are traded on the New York Stock Exchange under the symbol SWC. TRANS-TOUR-SERVICE: Court Names V. Veselov as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Primorye Region appointed Mr. V. Veselov as Insolvency Manager for CJSC Trans-Tour-Service. He can be reached at: V. Veselov Post User Box 45 690105 Vladivostok-105 Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A43-15769/2005, 33-270. The Debtor can be reached at: CJSC Trans-Tour-Service Apartment 23 Shilkinskaya Str. 6 Vladivostok Region Russia ========= S P A I N ========= TDA IBERCAJA: Moody's Rates EUR7-Mln Series E Notes at Ba1 ---------------------------------------------------------- Moody's Investors Service assigned these definitive ratings to seven series of Bonos de Titulizacion de Activos (securitization bonds) to be issued by TdA Ibercaja 4 Fondo de Titulizacion de Activos, a Spanish asset securitization fund that has been created by Titulizacion de Activos, S.G.F.T, S.A.: -- EUR250 million Series A1 notes: Aaa; -- EUR819.4 million Series A2 notes: Aaa; -- EUR270.4 million Series A3PAC notes: Aaa; -- EUR14 million Series B notes: Aa1; -- EUR28 million Series C notes: A1; -- EUR11.2 million Series D notes: Baa1; and -- EUR7 million Series E notes: Ba1. Moody's definitive ratings address the expected loss posed to investors by the legal final maturity. The rating agency believes that the structure of the TdA Ibercaja 4 notes allows for timely payment of interest and ultimate payment of principal at par, on or before the final legal maturity date and not at any other expected maturity date. The ratings do not address the full redemption of the notes on the expected maturity date. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. According to Moody's, this deal benefits from strong features, including: -- the swap agreements, which guarantees 65 bppa excess spread; -- a reserve fund that is fully funded upfront to cover a potential shortfall in interest and principal; -- an 18-month artificial write-off mechanism; -- the securing of 100% of loans by residential mortgages; and -- the good performance data on previous Ibercaja deals. However, Moody's notes that the deal also has weaknesses, including: -- the deferral of interest payments on each of Series B, C, D and E increases the expected loss on these subordinated series; and -- pro-rata amortization of the B, C, D and E Series of notes leads to reduced credit enhancement of the senior series in absolute terms. These increased risks were reflected in Moody's Credit Enhancement calculation. The products being securitized are first-lien mortgage loans granted to individuals (all of whom will use these loans to acquire or refurbish properties located in Spain), originated by Ibercaja, which will continue to service them. As of Sept. 14, the provisional portfolio comprised 14,877 loans for a total amount of EUR1,550,004,113. The original weighted average loan-to-value (WALTV) is 74.86%. The current WALTV is 67.72%. The average loan size is EUR104,188. The loans were originated between 1997 and 2006, with a weighted average seasoning of 27.24 months. The pool is concentrated in the Madrid (33%), Aragon (20%) and Catalonia (13%). All the properties on which the mortgage security has been granted are covered by property damage insurance and fire insurance. To hedge the potential mismatch risk derived from the different index reference rates on the assets side and the notes side, or the risk derived from any amendment in the terms of the mortgage agreements, the Fondo will enter into a swap agreement with Ibercaja. Moody's bases its ratings on: -- an evaluation of the underlying portfolio of mortgage loans securing the structure, and -- the transaction's structural protections, which include the subordination, the strength of the cash flows (including the reserve fund) and any excess spread available to cover losses. Moody's assigned provisional ratings to this transaction on Oct. 9. ===================== S W I T Z E R L A N D ===================== GRAFTECH INT'L: Moody's Assigns Loss-Given-Default Ratings ---------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sector, the rating agency confirmed its B1 Corporate Family Rating for Graftech International Ltd. Moody's also affirmed and revised its probability-of-default ratings and assigned loss-given-default ratings on these two bond issues and a loan facility: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$215 millin Gtd Sr Sec Revolving Credit Facility due 2010 Ba3 Ba1 LGD1 7% US$435 million 10.25% Gtd Sr Unsec Global Notes due 2012 B2 B2 LGD4 62% US$225 million 1.625% Gtd Sr Unsec Conv Debentures due 2024 B2 B2 LGD4 62% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Parma, Ohio, Graftech International Ltd.-- http://www.graftech.com/GrafTech/-- manufactures a range of graphite electrodes, products essential to the production of electric arc furnace (EAF) steel and various other ferrous and non-ferrous metals. The Company also manufactures natural graphite products enabling thermal management solutions for the electronics industry, and fuel cell solutions for the transportation and power generation industries. The products, which include carbon and graphite electrodes, carbon and graphite cathode blocks, advanced carbon and graphite materials, and flexible graphite, are manufactured on four continents and sold in over 70 countries around the world. In Europe, Graftech maintains operations facilities and/or sales offices in Russia, France, Spain, Italy and Switzerland. HCA INC: Shareholders' Special Meeting Set for November 16 ---------------------------------------------------------- HCA Inc. has established a record date and special meeting date for its shareholders to consider and vote upon the proposal to adopt the previously announced merger agreement providing for the acquisition of HCA by an investor group led by Bain Capital, Kohlberg Kravis Roberts & Co., Merrill Lynch Global Private Equity and HCA founder Dr. Thomas F. Frist, Jr. HCA shareholders of record at the close of business on Oct. 6, 2006, will be entitled to notice of the special meeting and to vote on the proposal. The special meeting will be held on Nov. 16, 2006 at 11:00 a.m., local time, at HCA's executive offices located at One Park Plaza, Nashville, Tennessee 37203. Headquartered in Nashville, Tennessee, HCA (Hospital Corporation of America) Inc. (NYSE: HCA) -- http://www.hcahealthcare.com/-- is a healthcare services provider, composed of locally managed facilities that include approximately 182 hospitals and 94 outpatient surgery centers in 22 states, England and Switzerland. At its founding in 1968, HCA was one of the nation's first hospital companies. HCA INC: US$33-Bln Merger Deal Cues S&P's B+ Corp. Debt Rating -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its existing ratings on Nashville, Tennessee-based HCA Inc. The corporate credit rating was lowered to 'B+' from 'BB+'. The ratings were removed from CreditWatch, where they were placed with negative implications July 24, 2006, following the announcement that the company had entered into a merger agreement with a private equity consortium; the transaction is valued at about US$33 billion. The rating outlook is negative. "The three-notch downgrade of the corporate credit rating reflects our lower rating opinion of HCA assuming that its pending LBO is completed, and is financed by the US$22.5 billion of proposed senior secured debt currently being considered by investors," explained Standard & Poor's credit analyst David Peknay. Also, Standard & Poor's assigned its loan and recovery ratings to HCA's proposed US$16.8 billion senior secured credit facilities and US$5.7 billion second-lien notes. The first-lien credit facilities were rated 'BB' with a recovery rating of '1', indicating a high expectation for full recovery of principal in the event of a payment default. The second-lien notes were rated 'BB-' with a recovery rating of '1', also indicating a high expectation for full recovery of principal in the event of a default. The ratings are subject to revision if the size or terms of the deal change. In addition, S&P lowered the rating on HCA's senior unsecured notes by five notches, to 'B-' from 'BB+'. The rating on the unsecured notes is now two notches below the 'B+' corporate credit rating -- in line with Standard & Poor's criteria. Although the notes are considered senior, the company will now have a sizable amount of priority debt (primarily secured bank debt and capitalized operating leases). Because of the overwhelming magnitude of priority debt in the capital structure (now totaling about 100% of total eligible assets -- far greater than the 30% threshold in our criteria), the unsecured notes are considered materially disadvantaged. The low-speculative grade rating on HCA reflects the company's significant debt leverage as a result of its pending LBO, as well as key industry risks, such as uncertain third-party reimbursement, rising bad debt, and competitive forces that have hurt patient volume. HCA is the largest U.S. owner and operator of acute health care facilities, with a large portfolio of 172 hospitals and 95 ambulatory surgery centers in 21 U.S. states, the U.K., and Switzerland. REYNOLDS & REYNOLDS: S&P Affirms Loan and Recovery Ratings ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its loan and recovery ratings on Dayton, Ohio-based Reynolds & Reynolds Co.'s first-lien bank facilities, which consist of a six-year, US$75 million revolving credit facility, and a six-year, US$1.640 billion term loan, which was increased from US$1.485 billion. The facilities are rated 'BB-', with a recovery rating of '1', indicating the expectation for full recovery of principal by creditors in the event of a payment default. The second-lien facility, which consists of a seven-year, US$520 million term loan, was notched down to 'B-' from 'B', and the recovery rating was revised to '5' from '3', reflecting lower recovery prospects driven by the increase in higher priority debt within the capital structure. The '5' recovery rating reflects our expectation of negligible (0%-25%) recovery of principal by creditors in the event of a payment default. The third-lien facility has been downsized to US$250 million from US$405 million, and the rating was affirmed at 'B-' with a recovery rating of '5', also reflecting our expectation of negligible (0%-25%) recovery of principal by creditors in the event of a payment default. Proceeds from the facilities will be used to fund the acquisition of Reynolds & Reynolds by privately held and unrated Universal Computer Systems for about US$2.8 billion, including the assumption of the company's debt. The merged company will operate under the Reynolds & Reynolds name. Ratings List Reynolds & Reynolds Co. Ratings Affirmed Corporate credit rating B+/Positive/-- First-lien facilities BB- (Recovery Rating: 1) Third-lien facility B- (Recovery Rating: 5) Ratings Lowered To From -- ---- Second-lien facility B- B (Recovery Rating: 5) (Recovery Rating: 3) UNIVERSAL COMPRESSION: Moody's Rates New Credit Facility at Ba1 --------------------------------------------------------------- Moody's Investors Service assigned a Ba1, LGD3 (36%) rating to Universal Compression, Inc.'s US$500 million senior secured bank credit facility. At the same time, Moody's affirmed Universal's Ba2 Corporate Family Rating, its Ba2 Probability of Default Rating and its B1, LGD5 (88%) ratings on its US$175 million 7 �% Senior Notes. The outlook remains stable. Universal Compression Inc. is a wholly owned subsidiary of Universal Compression Holdings Inc. Proceeds from the new credit facility are being used to refinance Universal's existing senior secured revolver and senior secured term loan. Moody's will withdraw the ratings on the existing secured credit facilities once they have been repaid. Pete Speer, Moody's Vice President/Senior Analyst commented, "While Moody's has affirmed the stable outlook, the recent IPO of Universal Compression Partners creates uncertainties regarding the future capital structure and leverage profile of the combined enterprise which limits Universal's positive credit momentum and could pressure the ratings." Universal believes that the MLP structure of Universal Compression Partners L.P. provides a lower cost of capital that could be utilized to accelerate growth of the domestic compression business. Moody's observes that UCLP adds the MLP constituency to the mix, an equity base that requires substantial and growing distributions. Universal intends to drop down its U.S. compression business into UCLP over time, which provides UCLP with a built-in growth profile. However, the compression business is untested in the MLP model and established MLP's are showing evidence of the strain of simultaneously growing their distributions, pursuing organic and acquisition growth, and maintaining their credit profile. The ratings could be pressured if the company incurs substantial leverage at UCLP in its drop down transactions without an appropriate reduction of leverage at Universal in order to maintain a reasonable combined leverage profile for the Ba2 rating. An aggressive use of UCLP debt to fund share buybacks at the Universal level or acquisitions could result in a negative outlook or downgrade. The Ba2 rating is supported by the company's leading position as the second largest natural gas compression services company in the world with 2.5 million horsepower as of June 2006, its recent pricing power and record fabrication backlog which has strengthened its earnings and cash flows, and its general reduction in leverage over recent years (LTM Debt/EBITDA of 3.1x and debt to capitalization of 43% at June 30, 2006). Universal's core contract compression business provides 85% of the company's gross margin and is very stable in comparison to other oil and gas related businesses. In addition to the uncertainties regarding the future capital structure and leverage profile, Universal's Ba2 Corporate Family Rating is restrained by the growth challenges in the domestic compression sector which necessitates the pursuit of growth in higher risk and more challenging foreign markets, the substantial capital expenditures required for expansions and acquisition event risk. Universal Compression, Inc. is headquartered in Houston, Texas. =========== T U R K E Y =========== TURK EKONOMI: Fitch Assigns Low-B Ratings on Sub. Notes Issue ------------------------------------------------------------- Fitch Ratings assigned Economy Luxembourg S.A.'s issue of step- up loan participation notes a foreign currency Long-term rating of BB. The notes are to be used solely to finance a subordinated loan to Turkey's Turk Ekonomi Bankasi A.S. The issue will only pay noteholders amounts, if any, received from TEB under the subordinated loan agreement. TEB has a foreign currency Issuer Default rating of BB and a local currency IDR of BB+, all with Positive Outlook. The BB rating of the subordinated notes reflects Fitch's standard notching practice for subordinated instruments of issuers with IDRs of BB- or higher. The subordinated issue rating has been notched down once from TEB's BB+ local currency rating. TEB Mali Yatirimlar A.S., which is jointly owned by BNP Paribas and the Colakoglu Group, holds 84.25% of TEB, with 15.63% of the shares publicly traded and 0.12% held by other shareholders. PROFILO TELRA: Fitch Assigns Foreign Currency IDR at B ------------------------------------------------------ Fitch Ratings assigned Turkey-based Profilo Telra Elektronik Sanayi ve Ticaret A.S. a foreign currency Issuer Default rating of B with Stable Outlook. Fitch has also assigned Profilo-related HD Capital S.A.'s prospective EUR100 million fixed-rate guaranteed loan participation notes an expected foreign currency senior unsecured rating of B and an expected Recovery Rating of RR4. At the same time, Profilo's local currency IDR B with Stable Outlook and National Long-term rating BBB+ with Stable Outlook are affirmed. The final ratings on the LPNs are contingent on receipt of final documents conforming to information already received and receipt of satisfactory legal opinions. HD Capital has the sole purpose of using the LPNs proceeds to finance a loan to Profilo as set out in a loan agreement, the rights and benefits of which are charged to the benefit of LPN noteholders. The expected rating of the LPNs is in line with Profilo's foreign currency IDR B. Proceeds of the notes will be used to fund working capital requirements, refinance existing debt and for general corporate purposes. The notes will constitute direct, unsecured and unconditional obligations of Profilo. The notes will rank equally with all other present or future unsecured and unsubordinated obligations of Profilo. The terms and conditions of the loan agreement include a limitation on Profilo's debt, using a maximum leverage ratio of 4x and consolidated fixed charge coverage ratio of 2.25x. There are also restrictions on dividend payments by Profilo. Furthermore, upon asset sales by Profilo above a certain amount, noteholders can request that these proceeds be used to prepay their LPNs at par. In the event of a change of control relating to Profilo, noteholders have the right to require the issuer to prepay their LPNs. There are also covenants relating to transactions with affiliates, mergers and disposals as described in the loan agreement. The governing law of the loan agreement, including the guarantees in place and the LPNs, is English law and the jurisdiction is the courts of England. ============= U K R A I N E ============= ALLIANCE LLC: Court Names Pavlo Duplika as Insolvency Manager ------------------------------------------------------------- The Economic Court of Rivne Region appointed Pavlo Duplika as Liquidator/Insolvency Manager for LLC Alliance (code EDRPOU 13992552). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 13. The case is docketed under Case No. 8/36. The Economic Court of Rivne Region is located at: Yavornitski Str. 59 33001 Rivne Region Ukraine The Debtor can be reached at: LLC Alliance Oleksandriya Rivne District Rivne Region Ukraine BK UKRSPECMONTAZH: Odessa Court Starts Bankruptcy Supervision ------------------------------------------------------------- The Economic Court of Odessa Region commenced bankruptcy supervision procedure on LLC BK Ukrspecmontazh (code EDRPOU 33798957). The case is docketed under Case No. 7/251-06-8225. The Temporary Insolvency Manager is: O. Sharmonov Travnya Str. 3 Pershogo Illichivsk 68000 Odessa Region Ukraine The Economic Court of Odessa Region is located at: Shevchenko Avenue 4 65032 Odessa Region Ukraine The Debtor can be reached at: LLC BK Ukrspecmontazh Travnya Str. 3 Pershogo Illichivsk 68000 Odessa Region Ukraine MUSTANG LLC: Court Names Oleksandr Shevich as Insolvency Manager ---------------------------------------------------------------- The Economic Court of Sumi Region appointed Oleksandr Shevich as Liquidator/Insolvency Manager for LLC Mustang (code EDRPOU 32462070). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 15. The case is docketed under Case No. 12/73-0650. The Economic Court of Sumi Region is located at: Shevchenko Avenue 18/1 40030 Sumi Region Ukraine The Debtor can be reached at: LLC Mustang Bilopilske shose Str. 26 Sumi Region Ukraine OKEAN LLC: Herson Court Starts Bankruptcy Supervision ----------------------------------------------------- The Economic Court of Herson Region commenced bankruptcy supervision procedure on LLC Okean (code EDRPOU 32059825) on Sept. 12. The case is docketed under Case No. 6/170-B-06. The Temporary Insolvency Manager is: Sergij Pavluk Shors Str. 22/9 Nova Kahovka 74900 Herson Region Ukraine The Economic Court of Herson Region is located at: Gorkij Str. 18 73000 Herson Region Ukraine The Debtor can be reached at: LLC Okean Komunariv Str. 73-A Skadovsk 75700 Herson Region Ukraine REGUL LLC: Kyiv Court Starts Bankruptcy Supervision Procedure ------------------------------------------------------------- The Economic Court of Kyiv Region commenced bankruptcy supervision procedure on LLC Agro-Industrial Enterprise Regul (code EDRPOU 31252120) on Sept. 7. The case is docketed under Case No. 165/14 b-06. The Temporary Insolvency Manager is: Mr. U. Bilik Ahmatova Str. 13/67 Kyiv Region Ukraine The Economic Court of Kyiv Region is located at: B. Hmelnitskij Boulevard 44-B 01030 Kyiv Region Ukraine The Debtor can be reached at: LLC Agro-Industrial Enterprise Regul Dniprovskij Avenue 19/48 Ukrainka 08720 Kyiv Region Ukraine SVITANOK LLC: Harkiv Court Starts Bankruptcy Supervision -------------------------------------------------------- The Economic Court of Harkiv Region commenced bankruptcy supervision procedure on Agricultural LLC Svitanok (code EDRPOU 00708590) on Sept. 13. The case is docketed under Case No. 19/95-06. The Temporary Insolvency Manager is: N. Ivleva Tarhov Str. 5/9 61189 Harkiv Region Ukraine The Economic Court of Harkiv Region is located at: Derzhprom 8th Entrance Svobodi Square 5 61022 Harkiv Region Ukraine The Debtor can be reached at: Agricultural LLC Svitanok Ostrovskij Str. 2 Kolomak 63100 Harkiv Region Ukraine VASILKIV BREAD: Court Starts Bankruptcy Supervision Procedure ------------------------------------------------------------- The Economic Court of Dnipropetrovsk Region commenced bankruptcy supervision procedure on OJSC Vasilkiv Bread Receiving Enterprise (code EDRPOU 00954455) on Aug. 31. The case is docketed under Case No. B 29/209-06. The Temporary Insolvency Manager is: Maxim Reva Karl Marks Avenue 98 49038 Dnipropetrovsk Region Ukraine The Economic Court of Dnipropetrovsk Region is located at: Kujbishev Str. 1a 49600 Dnipropetrovsk Region Ukraine The Debtor can be reached at: OJSC Vasilkiv Bread Receiving Enterprise Budyonnij Str. 88 Zhovti Vodi 52209 Dnipropetrovsk Region Ukraine =========================== U N I T E D K I N G D O M =========================== ACTUANT CORPORATION: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. manufacturing sector, the rating agency affirmed its Ba2 Corporate Family Rating for Actuant Corporation. Additionally, Moody's held its Ba2 ratings on the company's US$250 million Senior Unsecured Revolver Due 2009, and US$250 million Senior Term Loan Due 2009. Moody's assigned those debentures an LGD3 rating suggesting lenders will experience a 43% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Glendale, Wisconsin, Actuant Corp. (NYSE:ATU) -- http://www.actuant.com/-- is a diversified industrial company with operations in more than 30 countries, including Austria, Hungary, Poland, Italy, Spain, the Netherlands, France, Russia, Turkey, Germany, and the United Kingdom. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. Since its creation through a spin-off in 2000, Actuant has grown its sales from US$482 million to over US$1 billion and its market capitalization from US$113 million to over US$1.5 billion. The company employs a workforce of approximately 6,000 worldwide. Actuant Corporation trades on the NYSE under the symbol ATU. ADVERT ENGINE: Claims Filing Period Ends Nov. 6 ----------------------------------------------- Creditors of Advert Engine Limited (formerly Rextraven Limited) have until Nov. 6 to send in their full names, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their Solicitors (if any), to appointed Liquidator Martin C. Armstrong at: Martin C. Armstrong Turpin Barker Armstrong Allen House 1 Westmead Road Sutton Surrey United Kingdom Headquartered in Southampton, United Kingdom, Advert Engine Limited provides advertising and design services. ALLEN POWER: Appoints Fanshawe Lofts to Administer Assets --------------------------------------------------------- Antony Robert Fanshawe and Stephen John Adshead of Fanshawe Lofts were appointed joint administrators of Allen Power Equipment Ltd. (Company Number 02229557) on Oct. 9. The administrators can be reached at: Antony Robert Fanshawe and Stephen John Adshead Fanshawe Lofts 41 Castle Way Southampton Hampshire SO14 2BW United Kingdom Tel: 023 8023 3522 Fax: 023 8023 3504 E-mail: sa@fanshawe-lofts.co.uk arf@fanshawe-lofts.co.uk Allen Power Equipment Ltd. can be reached at: The Broadway Didcot Oxfordshire OX11 8ES United Kingdom Tel: 012 3551 5400 AQUARIUS INFORMATION: Liquidator Sets Nov. 16 Claims Bar Date ------------------------------------------------------------- Creditors of Aquarius Information Technology Limited have until Nov. 16 to send in their full names, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their Solicitors (if any), to appointed Liquidator C. H. I. Moore at: K.J.Watkin & Co. Emerald House 20-22 Anchor Road Aldridge Walsall United Kingdom The company can be reached at: Aquarius Information Technology Limited 30A The Green Kings Norton Birmingham West Midlands B38 8SD United Kingdom Tel: 0121 382 0220 BAA PLC: Hochtief AG Eyes Majority Stake in Budapest Airport ------------------------------------------------------------ Hochtief AirPort GmbH, a wholly owned subsidiary of Hochtief AG, plans to acquire BAA Plc's interests in Budapest Airport. BAA, owned by Spain's Grupo Ferrovial SA since June, acquired a 75 percent stake in Budapest Airport from the Hungarian government last December for a consideration of approximately EUR1.9 billion. Under the memorandum of agreement signed Oct. 18, Hochtief will purchase a 50 percent stake in the airport, while Caisse de Depot et Placement du Quebec and KfW will buy the remaining 25 percent. The Hungarian government will keep the 25 percent stake it holds in the airport. BAA and the HOCHTIEF consortium seek to finalize the acquisition in the fourth quarter of 2006, subject to Hungarian government consent. Budapest Airport is the biggest international airport in Hungary. About the HOCHTIEF Ag Headquartered in Essen, Germany, HOCHTIEF Aktiengesellschaft is the country's largest construction company. HOCHTIEF AirPort is an airport management business that has consolidated Hochtief's interests in the privatization and operation of airports since 1997. It holds stakes in Athens International Airport, D�sseldorf International Airport, Hamburg Airport, Kingsford Smith International Airport (Sydney) and a new concession agreement covering Rinas Mother Teresa Airport (Tirana). About BAA Plc Headquartered in London, United Kingdom, BAA plc -- http://www.baa.com/-- owns and operates seven airports in the United Kingdom, including Healthrow, the world's busiest international airport, and Budapest Airport, serving 700 destination by around 300 airlines. Its U.K. airports handled over 117 million international passenger during the 12 months up to October 2005. International passengers make up 81% of its total U.K. airport traffic. BAA had total assets of GBP15.2 billion and pre-tax profits of GBP757 million for the year ended March 31, 2006. * * * As reported in TCR-Europe on June 9, Moody's Investors Service downgraded to Ba1 from Baa3 the issuer rating of BAA Plc as well as the ratings for: -- GBP425 million convertible bonds due August 2009; -- GBP424 million convertible bonds due April 2008; and -- GBP200 million 7.875% bonds due February 2007. BAA's short-term rating was also downgraded to Not Prime from Prime-3. All other long-term debt ratings remain at Baa2. All long-term ratings remain on review for further downgrade. BUSINESS MORTGAGE: Fitch Rates GBP8.7-Mln Class C Notes at BB ------------------------------------------------------------- Fitch Ratings placed final ratings to Business Mortgage Finance 5 PLC's floating-rate notes due April 2039, at the date of closing on Oct. 18: -- GBP100 million Class A1 floating-rate notes: AAA; -- Detachable A1 coupons: AAA; -- EUR180 million Class A2 floating-rate notes: AAA; -- Detachable A2 coupons: AAA; -- Mortgage early redemption certificates: AAA. -- GBP27 million Class M floating-rate notes: A; -- EUR36.5 million Class M floating-rate notes: A; -- GBP12 million Class B1 floating-rate notes: BBB; -- EUR11.5 million Class B2 floating-rate notes: BBB; and -- GBP8.7 million Class C floating-rate notes: BB. This transaction is a securitization of a pool of commercial mortgages originated in the U.K. by Commercial First Mortgages Ltd. The ratings reflect the credit enhancement provided to each Class by subordination of the Classes junior to it, the positive and negative features of the underlying real estate collateral and the integrity of the transaction's legal and financial structures. The rating on the MERCs addresses only the likelihood that the MERC-holders will receive early redemption amounts actually received by the issuer, if enforceable. The detachable A coupons are extremely sensitive to the prepayment rate, an issue that the rating does not address. If borrowers prepay on the loans faster or slower than expected, investors in the interest- only Class or MERCs, respectively, may fail to recover their initial investment. Fitch's analysis is based on a provisional pool consisting of 938 loans with an aggregate outstanding balance of GBP207.9 million, secured by 1,000 secondary and tertiary quality commercial, mixed-use and residential properties in the U.K. The closing pool comprised an additional 197 loans with an aggregate outstanding balance of GBP43.9 million, resulting in the pool now comprising a total of 1,135 loans with an aggregate outstanding balance of GBP252.2 million. Fitch ensured that all the individual and global eligibility criteria for the inclusion of these loans had been met and that these additions would not have a detrimental effect on the transaction. A further, pre-funded loan portfolio of approximately GBP47.8 million will be included on the first interest payment date February 15, 2007. This transaction is the fifth securitization of mortgages originated by CFML; the previous four transactions have thus far performed in line with Fitch's expectations. While approximately 66% of the pool balance is secured by commercial properties, and a large proportion of the remaining balance is secured by assets that are of a semi-commercial nature and/or subject to business-related uses, the pool has many characteristics that are normally found in RMBS transactions. These include full borrower recourse, minimal exposure to individual borrower and asset concentrations, a large proportion of owner occupation and some exposure to borrowers with self- certified income and/or impaired credit histories. CAIRNSERVE LTD.: Taps BDO Stoy as Joint Administrators ------------------------------------------------------ Shay Bannon and Antony David Nygate BDO Stoy Hayward LLP were appointed joint administrators of Cairnserve Ltd. (Company Number 02406689), Cairnserve Northwest Ltd. (Company Number 04844730), and Mickleburgh (HV) Ltd. (Company Number 01615872) on Oct. 9. BDO Stoy Hayward -- http://www.bdo.co.uk/-- is the U.K. member firm of BDO International, the world's fifth largest accountancy network with more than 600 offices in 100 countries. Its services include: audit and assurance, business restructuring, corporate finance, disputes and investigations, investment management, risk assurance services, tax services, and valuations. Cairnserve Ltd., Cairnserve Northwest Ltd., and Mickleburgh (HV) Ltd. can be reached at: 201 Bellegrove Road Welling Kent DA16 3RA United Kingdom Fax: 020 8319 3443 CARDEW COMMUNICATIONS: Names J. Harvey Madden Liquidator -------------------------------------------------------- J. Harvey Madden was appointed Liquidator of Cardew Communications Limited on Oct. 12 for the creditors' voluntary winding-up procedure. Headquartered in Darlington, United Kingdom, Cardew Communications Limited is a telecommunications service provider. CLIFF NICHOLLS: Names Administrator from Haines Watts ----------------------------------------------------- Andrew Appleyard of Haines Watts was named administrator of Cliff Nicholls Roofing & Scaffolding Ltd. (Company Number 04503735) on Oct. 4. Headquartered in Manchester, United Kingdom, Haines Watts -- http://www.hwca.com/-- is a national U.K. business advisory and accountancy firm with a network of practices strategically placed throughout United Kingdom, Wales and Scotland, offering tax and general business advice. Its experienced tax accountants, business advisors and special service teams will help its clients with every aspect of its business. Cliff Nicholls Roofing & Scaffolding Ltd. can be reached at: Patrick Gregory Road Wolverhampton West Midlands WV11 3DU United Kingdom Tel: 01902 739 220 Fax: 01902 304 920 CNET NETWORKS: Fails to Get Needed Consents to Amend Indenture -------------------------------------------------------------- CNET Networks Inc. disclosed the results of its solicitation of consents of holders of any and all of its US$125,000,000 aggregate principal amount of outstanding 0.75% Convertible Senior Notes due 2024 pursuant to its consent solicitation for the securities, which expired on Oct. 18, 2006. CNET Networks did not receive a sufficient number of consents from holders to satisfy the 70% requisite consent threshold. Therefore, CNET Networks will not accept any of the consents delivered by the holders of the notes, and the indenture related to the notes will not be amended. Form 10-Q Filing Delay As reported in the TCR-Europe on Oct. 17, the Company will not be in a position to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 on a timely basis, pending the completion of its financial restatements related to its independent investigation of stock option granting practices and of the requisite audit procedures by the Company's independent registered public accountants. Consequently, CNET Networks is not in a position to provide actual results or guidance regarding operating expense, operating income, net income or earnings per share. As reported in the Troubled Company Reporter on Aug. 22, CNET Networks received a notice from the trustee under the indenture governing the Company's USUS$125 million aggregate principal amount of 0.75% Convertible Senior Notes due 2024, stating that the company is in default of its covenant to file its Form 10-Q with the trustee within fifteen days after it is required to be filed with the SEC. If the default is not cured within 60 days, the bonds may be accelerated by the holders of 25% outstanding principal amount or the trustee. As of June 30, 2006, the Company had approximately USUS$143.3 million of cash and investments. Headquartered in San Francisco, California, CNET Networks, Inc. (Nasdaq: CNET) -- http://www.cnetnetworks.com/-- is an interactive media company that builds brands for people and the things they are passionate about, such as gaming, music, entertainment, technology, business, food, and parenting. The Company's leading brands include CNET, GameSpot, TV.com, MP3.com, Webshots, CHOW, ZDNet and TechRepublic. Founded in 1993, CNET Networks has a strong presence in the US, Asia and Europe including Russia, Germany, Switzerland, France and the United Kingdom. CNET NETWORKS: S&P Junks Credit Rating Due to Indenture Default --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on CNET Networks Inc., including lowering the corporate credit rating to 'CCC+' from 'B', and placed the ratings on CreditWatch with developing implications. The action was based on the company receiving a notice of acceleration from the trustee for the holders of US$125 million in 0.75% senior convertible notes due 2024 and not having a sufficient number of consents to waive default from indenture violation. Total debt outstanding as of June 30, 2006, was US$143.3 million. San Francisco-based CNET connects buyers and suppliers of information technology and electronic products through advertiser-supported online news and product reviews. More recently, the company has branched out to automotive and other categories. The trustee is accelerating the maturity on the convertible notes because CNET failed to file its quarterly report for the period ended June 30, 2006, with the SEC. CNET was unable to file because a special committee formed by its board of directors is reviewing stock option practices. Certain stock options granted between 1998 and 2001 differ from the recorded measurement dates. As a result of the filing delinquency, the company violated provisions of the indenture that require the report to be filed with the trustee 15 days after the report is submitted to the SEC. If the company repays the accelerated maturity of US$125 million, S&P may raise the rating back to the 'B' category. On the other hand, if the company does not meet the accelerated maturity, S&P will likely lower the ratings to 'D'. COLLINS & AIKMAN: GM Balks at Consolidation of Tooling Plea ----------------------------------------------------------- General Motors Corp. asserts that Collins & Aikman Corporation and its debtor-affiliates have failed to explain how its Amended Tooling Request is related to an adversary proceeding filed by General Electric Capital Corporation. As previously reported, GM amended its request to obtain possession of certain tooling to narrow the scope of the request. The Debtors sought to dismiss that request arguing that it should be consolidated with an adversary proceeding by GECC. The GECC Adversary Proceeding addresses prepetition receivables that GECC believes were sold by the Debtors to Carcorp, Inc., and subsequently sold by Carcorp to GECC. GECC seeks a declaratory judgment as to its interest in the prepetition receivables, and the Debtors want to collect them as GECC's collection agent. GM's Arguments Contrary to the Debtors' assertions, the issue of whether GM has paid all outstanding tooling receivables is not the subject of the GECC Adversary Proceeding, Adam L. Kochenderfer, Esq., at Honigman Miller Schwartz and Cohn LLP, in Detroit, Michigan, argues. Mr. Kochenderfer explains that the GECC Adversary Proceeding is concerned only with certain prepetition receivables with no articulated connection to GM's relevant tooling. When considering consolidation, the court must "balance the savings of time and effort gained through consolidation against the inconvenience, delay or expense that might result from simultaneous disposition of separate actions," Mr. Kochenderfer notes, citing Kelly v. Kelly, 911 F. Supp. 66, 69 (N.D.N.Y. 1996). The GECC Adversary Proceeding implicates over US$28 million in prepetition receivables. According to Mr. Kochenderfer, very little of this amount is implicated by GM's Tooling Request. Only two GM purchase orders -- totaling US$26,800 -- were payable prepetition, Mr. Kochenderfer notes. It should also be noted, Mr. Kochenderfer maintains, that the GECC Adversary Proceeding has been repeatedly stayed and consolidation may subject GM's Tooling Request to unnecessary delay. "Consolidation would serve no purpose other than to cause delay, confusion, and inefficiencies for all involved parties," Mr. Kochenderfer notes. GM's Request Fails, Debtors Say Patrick J. Kukla, Esq., at Carson Fischer, P.L.C., in Bloomfield Hills, Michigan, asserts that GM still fails to establish cause with respect to its Amended Tooling Request. Mr. Kukla points out that the Debtors have legal and equitable interest in the Tooling and that the Tooling remains essential to the prospect of a successful reorganization of the Debtors. The Amended Tooling Request is based on speculative and unlikely future events, Mr. Kukla notes. In the Amended Tooling Request, GM asks the Court to lift the automatic stay in case of certain circumstances including the conversion of the Debtors' Chapter 11 cases to Chapter 7 of the Bankruptcy Code, among others. Furthermore, GM has failed to include necessary third parties with asserted ownership or lien rights in the Tooling, Mr. Kukla says. According to Mr. Kukla, while GM asserts that no other parties are know to claim a valid interest in the Tooling, there are indeed parties that have asserted security interests and even ownership interests in the Tooling including Tri-Way Mold & Engineering and Hallmark Tools. The Debtors ask the Court to deny GM's Amended Tooling Request. More Objections (1) Tri-Way and Hallmark Tri-Way Mfg., Inc., doing business as Tri-Way Mold & Engineering, and Hallmark Tools, a division of Hallmark Technologies, Inc., have fabricated certain molds that the Debtors use in making instrument panels for the GMX 384 Saturn Aura. Hallmark has also performed engineering changes on the instrument panel for the Debtors. Tri-Way and Hallmark assert separate liens on their Molds pursuant to the Michigan Mold Lien Act, MCL 445.611 et seq. They believe that some or all of their Molds may be included in the tooling referenced in GM's Amended Motion. Representing both companies, Dennis W. Loughlin, Esq., at Strobl & Sharp, P.C., in Bloomfield Hills, Michigan, relates that Tri- Way and Hallmark filed UCC-1 financing statements relative to their Molds as required by the Act. Pursuant to the Act, Tri- Way and Hallmark have statutory liens against their Molds, Mr. Loughlin says. Mr. Loughlin contends that the GM Amended Motion fails to (i) recognize Tri-Way's and Hallmark's statutory lien on the Molds and (ii) provide for payment to satisfy their lien on the Molds. Based on GM's supporting documentation, Tri-Way and Hallmark believe that GM may have paid the Debtors for their Molds. According to Mr. Loughlin, Tri-Way and Hallmark have not been paid by the Debtors for the Molds. Mr. Loughlin also notes that the Debtors have represented to Tri-Way and Hallmark that GM has not paid for the Molds. Accordingly, Tri-Way and Hallmark object to GM's request to the extent that their ownership interest or statutory lien on their Molds is not recognized or satisfied. They do not object to the request relative to other molds and tools. (2) Creditors Committee The Official Committee of Unsecured Creditors contends that GM's Amended Tooling Motion does nothing to remedy the legal and factual defects of the Original Tooling Motion. To the contrary, the defects apply equally to the Amended Motion. In its Amended Tooling Motion, GM asserts that certain relevant Tooling is not subject to the automatic stay because it contracted with non-debtor entities, including Collins & Aikman Canada, Inc., to produce the Tooling. The Creditors Committee does not agree that GM contracted with non-debtor entities to produce the Tooling. Even assuming that GM did contract with non-debtor entities, GM's assertion is incorrect as a matter of law, Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, contends. Mr. Qureshi reminds Judge Rhodes that courts have applied the protections of Section 362(a) to non-debtor entities where, among other things: -- the debtor and non-debtor entities had an identity of interest; or -- an adverse judgment against the non-debtor entities would have immediate adverse economic consequence for the debtor's estate. Mr. Qureshi points the Court to Queenie Ltd. v. Nygard Int'l, 321 F.3d 282, 287-88 (2d Cir. 2003), wherein the U.S. Court of Appeals for the Second Circuit stayed appeal proceedings against wholly owned non-debtor corporation as well as the debtor; and Badalament, Inc. V. Mel-O-Ripe Banana Brands, Ltd., 265 B.R. 732 (E.D. Mich. 2001), wherein the U.S. Bankruptcy Court for the Eastern District of Michigan extended automatic stay protection to an officer of the non-debtor because strong relationship between the non-debtor and debtor evidence identity of interest. The Debtors and GM are currently conducting discovery concerning, among other things, the relationship between the Debtors and other entities with whom GM contracted to produce the Tooling, as well as the impact granting GM's Amended Motion may have on the Debtors' reorganization efforts. The Creditors Committee reserves the right to supplement its objections upon the conclusion of discovery. GM Talks Back The Debtors' response is fraught with inconsistencies, misinterpretations of case law, and willful ignorance of the limited relief GM seeks, Scott A. Wolfson, Esq., at Honigman Miller Schwartz and Cohn LLP, in Detroit, Michigan, contends. The Debtors blindly cling to the assertion that GM seeks actual repossession via the Bankruptcy Court, Mr. Wolfson points out. He notes that GM only wants relief from the stay to proceed in state court to determine ownership and possessory rights in the relevant Tooling. As a result of the limited relief, no third parties must be joined before the Court adjudicates the Amended Motion. Mr. Wolfson also notes that GM only requests relief from the automatic stay as it relates to Relevant Tooling that GM has paid for. This does not include secondary capital equipment purchased by the Debtors for which GM has not compensated the Debtors. Any third-party vendor's right to assert a lien against the Relevant Tooling is immaterial to the Amended Motion. If third-party vendors wish to assert a lien, they may do so in the state court proceeding that GM would bring to obtain possession of the Relevant Tooling. Mr. Wolfson also argues that the Debtors' intellectual property rights, if any exist, do not affect GM's right to use the Relevant Tooling. GM has fully paid for the Relevant Tooling and now holds a license to use the Relevant Tooling. In addition, the Relevant Tooling is not necessary to an effective reorganization upon the occurrence of certain events. If there was a "material interruption of GM's production," Mr. Wolfson says GM's possession of the Relevant Tooling would actually be helpful to the Debtors because it would reduce GM's administrative expense claim against the Debtors for breach of production purchase orders. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COLLINS & AIKMAN: Resolves Tooling Dispute with Huron Mold ---------------------------------------------------------- Wallace M. Handler, mediator for Huron Mold & Tool, Ltd., tells the U.S. Bankruptcy Court for the Eastern District of Michigan that Huron and Collins & Aikman Corporation have resolved their dispute over certain tooling delivered to the Debtor. As reported in the Troubled Company Reporter on July 28, 2006, Huron asked the Court to lift the automatic stay to repossess tooling from Collins & Aikman. Huron asserted Collins & Aikman and its debtor-affiliates owe Huron approximately US$1.4 million for the tooling. The Debtors moved to block Huron's lift-stay request saying Huron has not established that it has a valid and enforceable first lien on the Molds. After extensive negotiations, the parties agree, with the Court's consent, that the Debtors will pay Huron US$350,000 for its claims. Huron will continue to render services to the Debtors, provided that it will be duly compensated for the continued services. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed US$3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CONSTAR INT'L: Moody's Assigns Loss-Given-Default Ratings --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the non-paper Packaging sector, the rating agency confirmed its B3 Corporate Family Rating for Constar International Inc. Moody's also revised and affirmed its probability-of-default ratings and assigned loss-given-default ratings on these two bond issues: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- US$220 million Sr. Sec. FRNs due 2012 B3 B2 LGD3 33% US$175 million 11% Sr. Sub. Notes due 2012 Caa2 Caa2 LGD5 88% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in One Crown Way, Philadelphia, Constar International Inc. -- http://www.constar.net/-- is a global producer of polyethylene terephthalate (PET), plastic containers for food and beverages. The Company's products are used in a variety of end-use markets, including soft drinks, water, peanut butter, edible oils, salad dressing, juices, teas, beer and flavored alcoholic beverages. It primarily manufactures and sells bottles in the United States. In Europe, the Company primarily sells preforms and maintains operations in the United Kingdom, The Netherlands and Italy. COREL CORP: Earns US$5.5 Million in Third Quarter 2006 ------------------------------------------------------ Corel Corp. reported financial results for its third quarter ended Aug. 31, 2006. Revenues in the third quarter of fiscal 2006 were US$41.3 million, an increase of 7% over revenues of US$38.5 million in the third quarter of fiscal 2005. GAAP net income in the third quarter of fiscal 2006 was US$5.5 million. This compares to a GAAP net loss of US$3.0 million in the third quarter of fiscal 2005. Non-GAAP adjusted net income for the third quarter of fiscal 2006 was US$9.2 million, an increase of 88% compared to non-GAAP adjusted net income for the third quarter of fiscal 2005 of US$4.9 million. Non-GAAP adjusted EBITDA in the third quarter of fiscal 2006 was US$12.4 million, a 16% increase compared to US$10.7 million in the third quarter of fiscal 2005. "Corel continued to execute against all aspects of our strategy in the third quarter," said David Dobson, CEO of Corel Corporation. "Our announced acquisition of InterVideo and recent launches of Snapfire and Paint Shop Pro Photo XI show that we are focused on delivering the products and value that customers and partners demand. We also showed our discipline around driving profits as earnings growth outpaced revenue growth. With strong revenue performance, new global partnerships, and increasing traction in developing and emerging markets, Corel is successfully executing its strategy to deliver long-term, shareholder value." Headquartered in Ottawa, Ontario, Corel Corporation (NASDAQ:CREL) (TSX:CRE) -- http://www.corel.com/-- is a packaged software company with an estimated installed base of over 40 million users. The Company provides productivity, graphics and digital imaging software. Its products are sold in over 75 countries through a scalable distribution platform comprised of original equipment manufacturers, Corel's international websites, and a global network of resellers and retailers. The Company's product portfolio features CorelDRAW(R) Graphics Suite, Corel(R) WordPerfect(R) Office, WinZip(R), Corel(R) Paint Shop(R) Pro, andCorel Painter(TM). In Europe, the company maintains operations in France, Germany, Italy, the Netherlands, and the United Kingdom. * * * As reported in the Troubled Company Reporter-Europe on Oct. 19, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency confirmed its Caa1 Corporate Family Rating for Corel Corporation. CORUS GROUP: Companhia Siderurgica Nacional Eyes Counteroffer ------------------------------------------------------------- Companhia Siderurgica Nacional S.A. plans to counter the GBP4.3-billion takeover offer of Tata Steel for Corus Group Plc, reports BBC citing the Sunday Times as its source. According to the Sunday Times, CSN has hired investment bank Lazards to advise on a potential deal. Thyssenkrupp Steel, meanwhile, dismissed reports it was also planning to launch an offer for Corus. As reported in the TCR-Europe yesterday, Corus accepted Tata Steel's offer of 455 pence in cash for each Corus Share, subject to shareholder approval. The combination is strategically compelling, creating a vertically integrated global steel group: -- fifth largest global steel producer with pro forma crude steel production of 23.5 million tons in 2005; -- high quality, low cost, attractive growth platform in Asia combined with a leading European steel player; -- high value-added product mix and strong market positions in automotive, construction and packaging; -- a more resilient business model and a strong platform for further growth; -- a strong and committed combined management team; and -- a common business culture and shared values. Tata, however, did not rule job cuts at Corus should it succeed in taking over the Anglo-Dutch steelmaker. About Companhia Siderurgica Nacional Headquartered Sao Paolo, Brazil, Companhia Siderurgica Nacional S.A. -- http://www.csn.com.br/-- produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. The group also operates in Portugal and the U.S. About Tata Steel Headquartered in Mumbai, India, Tata Steel -- http://www.tatasteel.com/-- is Asia's first and India's largest private sector steel company. Tata Steel is among the lowest cost producers of steel in the world and one of the few select steel companies in the world that is EVA+ (Economic Value Added). It is a small steel producer by global standards, but has the backing of the giant Tata Group, one of India's largest companies with interests as diverse as carmaking, communications, tea and oil. About Corus Group Corus Group PLC -- http://www.corusgroup.com/-- produces metal from its major operating facilities in the U.K., the Netherlands, Germany, France, Norway, Belgium and Canada. Corus turns over GBP10 billion annually and employs 47,300 in over 40 countries and sales offices and service centers worldwide, including Indonesia and the Philippines. Corus was created through the merger of British Steel plc and Koninklijke Hoogovens N.V. The group suffered six years ago from the crisis in British manufacturing, which prompted it to shake up management, close plants, cut jobs, and sell assets to lower debt. Its debt was thought to stand at GBP1.6 billion in 2002. After posting a net loss of GBP458 million in 2003, it embarked on a restructuring program, signed a new EUR1.2 billion banking facility, and issued GBP307 million worth of shares. It returned to operating profit in the first quarter of 2004. The recent recovery of steel prices and the strength of the euro are expected to help it achieve relatively strong earnings. * * * As reported by TCR-Europe on June 21, Standard & Poor's removed Corus Group PLC's CreditWatch and raised its long-term corporate credit rating to 'BB' from 'BB-', reflecting the group's improved financial risk profile. S&P said the Outlook is stable. Fitch Ratings changed Corus Group PLC's Outlook to Positive from Stable and affirmed the Issuer Default Rating at BB- following the company's announcement of its 2005 results and plan to dispose its aluminium business for EUR826 million. Corus' affirmed debt instruments include: a) Corus Group PLC EUR800 mln 7.5% senior notes B+; b) Corus Group PLC EUR307 mln 3.0% convertible bonds B+; c) Corus Finance PLC GBP200 mln 6.75% guaranteed bonds B+; and d) Corus Finance PLC EUR20 mln 5.375% guaranteed bonds B+. As reported in TCR-Europe on May 11, Moody's Investors Service upgraded Corus Group plc's corporate family rating to Ba2, upgraded its senior unsecured and supported unsecured obligations to B1 and raised senior secured bank facility to Ba1. CORUS GROUP: Fitch Changes Rating Watch to Negative on Tata Deal ---------------------------------------------------------------- Fitch Ratings changed the Rating Watch on Corus Group PLC's Issuer Default and senior unsecured BB- and Short-term B ratings to Negative from Positive. This follows the recommendation by the CS Board of an offer from India-based Tata Steel Ltd. valued at GBP4.3 billion. The RWN also applies to these debt instruments issued by CS: -- CS EUR800 million 7.5% senior notes; -- CS EUR307 million 3% convertible bonds; and -- Corus Finance Plc GBP200 million 6.75% guaranteed bonds. The RWN encompasses the possibilities that the CS's ratings could either be downgraded or affirmed at the current levels. The RWN reflects further clarity on the financing structure for the transaction, in particular that the GBP3.1 billion of debt raised by the acquisition vehicle - Tata Steel U.K. Limited - will not benefit from any credit support provided by Tata Steel, its parent entity, but will be dependant on CS's stand alone cash flows for debt service. In this regard Fitch notes that pro-forma leverage of 4.9x based on CS's LTM Q2 2006 continuing EBITDA would be indicative of a rating in the B rating category. Fitch continues to view that a tie-up with Tata Steel would be positive for CS's operational profile. However, given that CS will continue to operate as a standalone company it is currently unclear to what extent operational benefits, such as the ability to access cheap semi-finished steel from Tata Steel's Indian operations, will be reflected in an improvement in its financial metrics. Fitch will resolve the Rating Watch following publication of CS's 2006 results, further details on the level of synergies and operational benefits that could accrue under the transaction, and the closure of the deal. DALI CAPITAL: Fitch Puts B+/RR4 Ratings on RUR2 Billion Issue ------------------------------------------------------------- Fitch Ratings assigned Dali Capital PLC's further issue of RUB2 billion Series 23 fixed-rate notes ratings of Long-term B+ and Recovery RR4. The Long-term rating of the issue is placed on Rating Watch Positive. The notes are to finance an unsecured loan made by Barclays Bank PLC to Russia's Rosbank, rated foreign currency and local currency Issuer Default B+/RWP, Short-term B/RWP, Individual D, Support 4/RWP, and National Long-term A-/RWP. The further notes form a single series with the original Series 23 RUB5 billion notes due September 2009 (rated B+/RWP). Dali will only pay noteholders principal and interest received by Barclays from Rosbank. Rosbank was founded in 1992 and ranks among the top 10 banks in Russia by total assets. About 70% of its shares are currently controlled by Interros, one of Russia's largest financial industrial groups, with interests in the metals, power-machine building, agricultural and insurance sectors. Societe Generale holds a stake of 20% minus 1 share in the bank and has acquired from Interros a call option to further increase its stake to 50% plus one share. The RWP on Rosbank's ratings, and hence the notes, reflects the greater probability of support for Rosbank being forthcoming in case of need if Societe Generale becomes the bank's majority owner. DANCERS WORLD: Creditors Confirms Voluntary Liquidation ------------------------------------------------------- Creditors of Dancers World Limited confirmed Oct. 6 the resolutions for voluntary liquidation and the appointment of John Russell and Andrew Philip Wood of The P&A Partnership as Liquidators. Headquartered in Mexborough, United Kingdom, Dancers World Limited is a dancewear shop. DEETFREE LIMITED: Creditors Confirm Liquidators' Appointment ------------------------------------------------------------ Creditors of DEETfree Limited confirmed Oct. 10 the resolutions for voluntary liquidation and the appointment of John Russell and Andrew Philip Wood of The P&A Partnership as Liquidators. Headquartered in Ripon, United Kingdom, DEETfree Limited -- http://www.deetfree.com/-- manufactures a range of natural insect repellents and sun care products. EMI GROUP: Expects 3% Revenue Decline in 2006 First Half -------------------------------------------------------- EMI Group PLC provides trading update for the six months ended Sept. 30, 2006, outlining strong second-half release schedule and confirming confidence in its expectations for the full year. EMI Group expects to report a decline in total revenues of approximately 3% on a constant currency basis for the six months to Sept. 30, 2006. The year-on-year decline in revenues is due to the phasing of EMI Music's planned release schedule which, as previously indicated, has a greater weighting to the second half of the financial year than in prior years. After the impact of exchange rate movements over the period, group revenues are expected to decline by close to 5% on a reported basis. Underlying profit before tax, amortization and exceptional items (underlying PBT) is expected to be approximately GBP27 million. The strength of upcoming releases, together with continuing strong momentum at EMI Music Publishing and further good progress on the cost savings initiatives announced in April 2006, give the Board confidence that the Group is on track to deliver results in line with its expectations for the full year. EMI Music is expected to report a decline in revenues at constant currency of approximately 4% for the six months to Sept. 30, 2006. Digital revenues continue to show strong growth and in the first half represented approximately 9% of divisional revenues. Top-selling releases over the period included new albums from international superstar Janet Jackson and local superstars Hikaru Utada, Chingy, Bob Seger, Trace Adkins, Underoath, Tiziano Ferro and Renaud. Of particular note was the strong contribution from breaking and developing acts, with successful new releases from Cherish, Letoya, Lily Allen, Jolin Tsai, 30 Seconds to Mars, The Red Jumpsuit Apparatus and on- going sales of albums from Corinne Bailey Rae, The Kooks and Diam's. The impact on EMI Music's divisional profit from both lower revenues and the changed mix of releases as compared to the prior year will be partly mitigated by progress on the cost savings initiatives announced in April 2006. The divisional operating margin is expected to be approximately 3% for the period to Sept. 30, 2006. EMI Music's planned release schedule for the remainder of the financial year to March 31, 2007 features an exciting line up of albums from long-established international and local superstars, as well as newly emerging global and local talent. The highlights include albums from Norah Jones, Robbie Williams, Keith Urban, Joss Stone, Dierks Bentley, RBD, Relient K, Tina Turner, All Saints, Vasco Rossi, Simon Webbe, Depeche Mode, Moby and a Beatles release which contains new music as featured in the highly acclaimed Cirque du Soleil show, "Love", in Las Vegas. The planned artist releases, continued growth in digital revenues and delivery of the announced cost savings, are expected to drive strong growth in underlying revenues and profits in the second half of the financial year. On a constant currency basis, EMI Music Publishing is expected to report first half revenues in line with the prior year. Performance revenues exhibited particular strength, reflecting strong on-going chart share. The divisional operating margin is expected to increase to approximately 25%. It is expected that EMI Music Publishing will continue to make good progress in the second half of the current financial year, with key releases from the likes of Sting, Kelly Clarkson, Fergie, Diddy, Scissor Sisters, Natasha Bedingfield, Kanye West and Daddy Yankee. Headquartered in London, United Kingdom, EMI Group PLC -- http://www.emigroup.com/-- is the world's largest independent music company, operating directly in 50 countries and with licensees in a further 20. The group employs over 6,600 people. Revenues in 2005 were near EUR2 billion and operating profit generated was over EUR225 million. At March 31, 2006, EMI Group's consolidated balance sheet revealed GBP1.817 billion in total assets, GBP2.544 billion in total liabilities and GBP726.6 million in shareholders' deficit. EMI GROUP: Moody's Cuts Rating on Weak Debt Protection Measures --------------------------------------------------------------- Moody's Investors Service downgraded EMI Group plc's senior debt and guaranteed debt ratings to Ba2 from Ba1. At the same time Moody's assigned a Ba2 Corporate Family Rating to EMI. The downgrade is based on Moody's expectation that EMI's debt protection measurements will not improve near-term to a level commensurate with the Ba1 rating category. The rating outlook is now stable. Despite a visible improvement in operating performance during the 2005/6 financial year EMI's cash-flow based measures of indebtedness have remained relatively weak with Adj. RCF/Adj. Net Debt at 8.3% while free cash flow (after capital expenditures and dividends) was negative as it has been in four out of the last five years. While Moody's believes that EMI's second half release schedule will help to compensate for a weak first half performance (reported revenues -5%) during the company's 2006/7 financial year, it will be challenging for EMI to show meaningfully improved revenue and profits for the year against the backdrop of a still struggling global market for recorded music. Current year operating cash flows will also be held back by significant restructuring spending (GPP60 million) although Moody's acknowledges that EMI has completed compensatory property sales to fund these outflows. In addition, the company is, in Moody's opinion likely to use any financial flexibility gained over the medium term to consider add-on acquisitions (music publishing catalogues, smaller recorded music labels) given that acquisition activity has been very muted over the last couple of years. The Ba2 rating continues to recognize EMI's position as a global player in the oligopolistic recorded music industry as well as the company's leading world-wide position in music publishing with a more stable revenue base compared to recorded music. EMI Music Publishing is currently the world's largest music publisher, but is likely to cede its top place to Universal Music once Universal's acquisition of Bertelsmann Music Group's music publishing business becomes effective. The rating further acknowledges the significant restructuring steps EMI has been taking over the last few years to lower the company's cost base, including the outsourcing of manufacturing in the U.S., Europe and Japan and the tight management of the artist roster. Current year cost savings are expected to save GBP30 million on a run-rate basis from 2007/8 onwards. In addition, EMI's performance in music publishing remains relatively resilient with mechanical revenues directly related to recorded music sales representing no more than 45% (in 2005/6) of EMI's music publishing revenues. The Ba2 rating and a stable outlook assume that EMI can: -- translate its strong release schedule into revenue and profit growth for the second half of 2005/6; -- deliver consolidated revenue growth thereafter; and -- achieve cost reductions as forecast. Failure to deliver these objectives, near-term debt-financed acquisitions or failure to move the ratio of Adj. RCF/Adj. Net Debt towards 10% over time could result in ratings pressure. The possible business combination between EMI and Warner Music Group adds an element of uncertainty to the outlook over time. While any such combination would have significant cost saving potential, the financing of a potential transaction and who would be in the role of acquirer remain unclear. However, merger talks have ceased for the time being as the EU reconsiders the competitive implications of the merger between Sony Music and Bertelsmann Music Group following the annulment of the initial approval for this transaction by the European Court of First Instance. If after the review process the Sony BMG merger were to be re-approved Moody's believes that a resumption of the talks between EMI and Warner would likely follow. Moody's notes that the operating environment for recorded music remains difficult. The global recorded music markets have been shrinking since 2001 and total global music sales (on a trade values basis) fell by a further 4% during the first calendar half of 2006 (after -1.9 % in 2005) despite continuing strong digital sales. Moody's believes that the fall for the first half of 2006 is aggravated by the phasing of release schedules with a further increasing bias towards releases during the second half of the calendar year. Nevertheless it will remain challenging for the industry to reverse first half trends and achieve overall growth for the calendar year. Notwithstanding the relative success of both the industry's legitimate download products and concerted legal action, download and physical music piracy remain a constricting factor for the global recorded music industry. In addition, the very success of the legitimate download product also means that EMI and the industry as a whole will have to carefully manage the retail channel as the continuing move towards digital distribution is likely to take a toll on specialist retailers. Ratings affected are: EMI Group plc * CFR of Ba2 assigned * 8.25% GBP bonds due 2008 * 8.625% notes due 2013 Capitol Records Inc. (gtd. by EMI Group plc) * 8.375% guaranteed notes due 2009 EMI Group plc, one of the world's leading music recording and publishing companies is headquartered in London, England. ENTERPRISE INNS: Moody's May Upgrade Rating on Strong Finances -------------------------------------------------------------- Moody's Investors Service placed the Ba2 corporate family rating and Baa3 senior secured rating of Enterprise Inns plc's on review for possible upgrade due to the recent strengthening of the company's financial profile. The rating review reflects: -- the group's solid cash flow generation which, together with pub disposals and cash transfers from the securitization, results in Enterprise Inns demonstrating strengthening financial metrics, with net adjusted debt to EBITDA now below 5.75x and interest cover above 2.5x, -- the reduced, albeit still existing, potential for sizeable acquisitions, and -- the possibility, albeit low, that Enterprise Inns might convert into a Real Estate Investment Trust (REIT), which could affect its cash retention ability. Moody's adds that the impact of the forthcoming smoking ban on the U.K. pub industry remains uncertain, although Enterprise Inns should be partly protected, in the agency's opinion, by the good quality of its estate. In Moody's view, Enterprise Inns ratings could be upgraded by no more than one notch subject to: -- ongoing management of the share buyback program so as to maintain net adjusted debt to EBITDA below 5.75x and interest cover above 2.5x on a sustainable basis, -- an undertaking by the company not to make new investments into Unique (via loans or equity), and -- greater clarity on the potential of a conversion into a REIT. Moody's adds that, as part of the review, it will assess the impact of the forthcoming roll-out in Europe of the Loss-Given- Default (LGD) methodology on the current notching of Enterprise Inns senior secured rating. Moody's anticipates to conclude its review on Enterprise Inns ratings in the first quarter of 2007. Moody's last rating action on Enterprise Inns was on March 5, 2004, when the agency confirmed the ratings at Ba2/Baa3. Headquartered in Solihull, United Kingdom, Enterprise Inns plc is a leading owner of tenanted pubs in the U.K., and generated turnover of GBP920 million in the year to September 2005. FIREARMS TRAINING: Selling Outstanding Shares to Meggitt-USA ------------------------------------------------------------ Firearms Training Systems Inc. has sold all of its outstanding shares to Meggitt-USA Inc., an indirect U.S. subsidiary of Meggitt PLC. Holders of the Company's Class A Common Stock received cash in the amount of US$1.08 per share owned immediately before the effective time of the merger and holders of FATS' Series C Preferred Stock received cash in the amount equal to the sum of the liquidation preferences of such preferred stock plus accrued and any unpaid dividends on such shares to the extent not previously added to the liquidation preference, for each outstanding share owned immediately before the effective time of the merger. All holders of stock options outstanding at the closing received cash payments equal to the sum of the difference between the per-share option exercise prices of their respective options and US$1.08 for each share subject to an option. Firearms Training Systems, Inc. -- http://www.fatsinc.com/-- and its subsidiary, FATS, Inc., provides fully-integrated, simulated training to professional military and law enforcement personnel. Utilizing quality engineered simulated weapons, FATS' state-of-the-art virtual training solutions offer judgmental, tactical and combined arms experiences. The company serves U.S. and international customers from headquarters in Suwanee, Georgia, with branch offices in Australia, Canada, Netherlands and United Kingdom. The ISO-certified company celebrated its 20th anniversary in 2004. At June 30, 2006, Firearms Training Systems, Inc.'s balance sheet showed a US$24,931,000 stockholders' deficit compared to a $25,702,000 deficit at Mar. 31, 2006. FORD MOTOR: Restating Results for Accounting Under SFAS 133 ----------------------------------------------------------- Ford Motor Company plans to restate previous financial results from 2001 through the second quarter of 2006 to correct the accounting for certain derivative transactions under the Statement of Financial Accounting Standards 133, Accounting for Derivative Instruments and Hedging Activities. The correction to the accounting does not affect the economics of the derivative transactions, nor have any impact on the company's cash. However, the restatements are expected to affect the preliminary financial results Ford reported for its 2006 third quarter. The company expects to finalize restatement amounts for the current period and all previous periods by the time of the filing of its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2006. Ford discovered that since 2001, certain interest rate swaps Ford Motor Credit Company had entered into to hedge the interest rate risk inherent in certain long-term fixed rate debt were accounted for incorrectly under SFAS 133 because they did not satisfy the standard's technical accounting rules to qualify for exemption from the more strict effectiveness testing requirements. Ford Motor Credit Company uses transactions involving derivatives, including swaps, forwards and options, to reduce economic risk and volatility in a disciplined and defensive manner. PricewaterhouseCoopers LLP, the company's independent registered public accounting firm, audited Ford's 2001 through 2005 financial statements, which included a review of these swaps. "This is a very complicated accounting standard, and interpretation of its proper application has continued to evolve," said Executive Vice President and Chief Financial Officer Don Leclair. "Our overall hedging strategy is sound. We will correct our accounting for these types of derivative instruments. We remain committed to strong internal controls and reporting transparency." Ford Motor Credit Company's interest rate swaps were entered into as part of the unit's asset-liability management strategy. The swaps economically hedge the interest rate risk associated with long-term debt issuances. Although the final restatement amounts have not yet been determined, we estimate based on the information to date that Ford and Ford Motor Credit Company's results in 2002 will improve materially. Other periods are still under study. Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive- related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in TCR-Europe on Sept. 21, Moody's Investors Service lowered Ford Motor Company's corporate family rating and senior unsecured to B3 from B2, and Ford Motor Credit Company's senior unsecured to B1 from Ba3. Ford's Speculative Grade Liquidity rating has also been lowered to SGL-3 from SGL-1. The rating outlook is negative. These rating actions conclude a review for possible downgrade that was initiated on Aug. 18. At the same time, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. and all related units -- except FCE Bank PLC -- to 'B' from 'B+' and its short-term ratings on these entities to 'B-3' from 'B-2.' The ratings on FCE Bank, Ford Credit's European bank, were lowered to 'B+/B-3' from 'BB-/B-2', maintaining the one-notch rating differential between FCE and its parent that was established in July. As reported in the Troubled Company Reporter on Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-/RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long- term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. As reported in the Troubled Company Reporter on July 24, 2006, Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12-month period. Moody's said the outlook for the ratings is negative. FORD MOTOR: Incurs US$5.8 Billion Net Loss in 2006 Third Quarter -------------------------------------------------------------- Ford Motor Company reported Monday preliminary third-quarter 2006 financial results. For the third quarter 2006, Ford Motor reported a net loss of US$5.8 billion, compared with a net loss of US$284 million in the same quarter last year. Excluding special items, the third quarter loss from continuing operations was US$1.2 billion, compared with a loss of US$191 million, or 10 cents per share, a year earlier. The performance from continuing operations primarily reflected operating challenges in the company's North America, Asia Pacific and Africa, and Premier Automotive Group operations. Performance also included continued profitability in South America and at Ford Credit. Though it lost money during the quarter, Ford Europe showed a year-over-year improvement in operating results and remained poised to deliver full-year profitability. Special items included in the quarter's net loss primarily reflected the costs associated with restructuring efforts, primarily in North America, as well as the revaluation of long- lived assets related to automotive operations in North America and Jaguar/Land Rover. On an after-tax basis, special items reduced third-quarter earnings by a total of US$4.6 billion. The total pre-tax effect of these special items was US$5.3 billion. In addition, effective this quarter, the company established a valuation allowance of US$2.2 billion against deferred tax assets primarily at its North America and Jaguar/Land Rover operations. The valuation allowance was established because of the cumulative losses the company has incurred and the financial outlook for these operations. Alan Mulally, Ford's president and chief executive officer, said he and his senior management team are committed to creating a viable Ford Motor Company business going forward. "These business results are clearly unacceptable," Mulally said. "We are committed to dealing decisively with the fundamental business reality that customer demand is shifting to smaller, more efficient vehicles. Our focused priorities are to restructure aggressively to operate profitably at lower volumes, and to accelerate the development of new, more efficient vehicles that customers really want. "We have great global assets and resources that we will leverage to significantly improve our product strategy, our production efficiency and quality. This will enable us to meet customer expectations for distinctive vehicles much more cost effectively. These actions will lead to profitable growth of our business over the long term." Automotive Sector On a pre-tax basis, worldwide Automotive Sector losses in the third quarter were US$1.8 billion. This compares with a pre-tax loss of US$1.3 billion during the same period a year ago. Worldwide automotive sales for the third quarter declined to US$32.6 billion from US$34.7 billion in the same period last year. Worldwide vehicle unit sales in the quarter were 1,511,000, down from 1,531,000 a year ago. North America: In the third quarter, Ford's North America automotive operations reported a pre-tax loss of US$2 billion, compared with a pre-tax loss of US$1.2 billion a year ago. The decline was largely attributed to lower volumes and unfavorable mix, primarily associated with lower industry volume and lower market share, and higher incentives. Cost reductions were a partial offset. Sales were US$15.4 billion, down from US$18.2 billion for the same period a year ago. South America: Ford's South America automotive operations reported a third- quarter pre-tax profit of US$222 million, an improvement from a pre-tax profit of US$96 million a year ago. The improvement was primarily explained by higher volume and favorable pricing. Sales for the third quarter improved to US$1.5 billion from US$1.2 billion in 2005. Ford Europe Ford Europe's third-quarter pre-tax loss was US$13 million compared with a pre-tax loss of US$55 million during the 2005 period. The improvement came from higher vehicles sales, partially offset by higher pension-related costs, lower profits from operations in Turkey and negative net pricing. During the third quarter, Ford Europe's sales were US$7.3 billion, compared with US$6.4 billion during third quarter 2005. Premier Automotive Group: Premier Automotive Group reported a pre-tax loss of US$593 million for the third quarter, compared with a pre-tax loss of US$108 million for the same period in 2005. The decline was explained by adverse cost performance, primarily reflecting adjustments to Jaguar and Land Rover warranty accruals and lower volume at all operations, excluding Aston Martin. Improvements in overhead costs were offset by increases in advertising. Third-quarter sales for PAG were US$6.5 billion, compared with US$6.8 billion a year ago. Asia Pacific and Africa: For the third quarter, Asia Pacific and Africa reported a pre- tax loss of US$56 million, compared with a pre-tax profit of US$21 million a year ago. The decline primarily reflected lower production and dealer inventories, adverse mix, and higher incentives, partially offset by cost reductions. Sales were US$1.6 billion, compared with US$1.9 billion in 2005. Mazda: During the third quarter of 2006, Ford's share of Mazda pre-tax profits and associated operations was US$40 million, compared with US$112 million during the same period a year ago. The decline primarily reflected the non-recurrence of mark-to-market gains on Mazda convertible bonds during 2005, which have now been entirely converted to equity. Other Automotive: Third-quarter results included a pre-tax profit of US$553 million in Other Automotive, compared with a loss of US$241 million a year ago. The year-over-year improvement relates to tax-related interest and higher portfolio returns. Financial Services Sector For the third quarter, the Financial Services sector earned a pre-tax profit of US$448 million, compared with a pre-tax profit of US$1.1 billion a year ago. Ford Motor Credit Company reported net income of US$262 million in the third quarter of 2006, down US$315 million from net income of US$577 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned US$428 million in the third quarter, compared with US$901 million in the previous year. The decrease in earnings was attributed to lower financing margins, higher depreciation expense and the impact of lower average receivable levels. Cash and Liquidity The company ended the quarter with total cash, including automotive cash, marketable securities, loaned securities and short-term Voluntary Employee Beneficiary Association assets at Sept. 30, 2006 of US$23.6 billion, unchanged from the end of the second quarter. The company's operating-related cash flow was US$3.1 billion negative for the quarter. During the quarter, US$3 billion was transferred out of long-term VEBA and is now included in total cash. Don Leclair, executive vice president and chief financial officer said, "As we restructure our business we will continue to make investments in products necessary to ensure Ford's future success. Throughout this period, maintaining strong liquidity will continue to be a high priority." Restatement Ford has announced plans to restate certain financial results to correct accounting under SFAS 133. The preliminary third- quarter results do not reflect these corrections. The company expects to finalize restatement amounts for this and previous periods by the time it files its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2006. Financial statements pertaining to the 2006 third quarter will be provided at that time. Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive- related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in TCR-Europe on Sept. 21, Moody's Investors Service lowered Ford Motor Company's corporate family rating and senior unsecured to B3 from B2, and Ford Motor Credit Company's senior unsecured to B1 from Ba3. Ford's Speculative Grade Liquidity rating has also been lowered to SGL-3 from SGL-1. The rating outlook is negative. These rating actions conclude a review for possible downgrade that was initiated on Aug. 18. At the same time, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. and all related units -- except FCE Bank PLC -- to 'B' from 'B+' and its short-term ratings on these entities to 'B-3' from 'B-2.' The ratings on FCE Bank, Ford Credit's European bank, were lowered to 'B+/B-3' from 'BB-/B-2', maintaining the one-notch rating differential between FCE and its parent that was established in July. As reported in the Troubled Company Reporter on Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-/RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long- term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. As reported in the Troubled Company Reporter on July 24, 2006, Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12-month period. Moody's said the outlook for the ratings is negative. FORD MOTOR: FMCC Earns US$262 Million in 2006 Third Quarter ----------------------------------------------------------- Ford Motor Credit Company reported preliminary financial results with third quarter profits. At the same time, Ford Motor Credit disclosed plans to restate previous financial results from 2001 through the second quarter of 2006 to correct the accounting for certain derivative transactions under the Statement of Financial Accounting Standards 133, Accounting for Derivative Instruments and Hedging Activities. Ford Motor Credit reported net income of US$262 million in the third quarter of 2006, down US$315 million from earnings of US$577 million a year earlier. On a pre-tax basis from continuing operations, Ford Motor Credit earned US$428 million in the third quarter, compared with US$901 million in the previous year. The decrease in earnings primarily reflected lower financing margins, higher depreciation expense and the impact of lower average receivable levels. "Our high-quality portfolio continues to perform very well, generating profits and dividends for Ford Motor Company," said Mike Bannister, chairman and CEO. "Our recently announced North American restructuring along with our efforts to reduce our costs globally will further enhance our operational effectiveness." On September 30, Ford Motor Credit's on-balance sheet net receivables totaled US$135 billion, compared with US$132 billion on December 31, 2005. Managed receivables, which include on- balance sheet receivables and securitized off-balance sheet receivables that we continue to service, were US$148 billion, compared with US$150 billion on December 31, 2005. Ford Motor Credit paid cash dividends of US$300 million during the third quarter. Restatement of Financial Results Ford Motor Credit Company plans to restate previous financial results from 2001 through the second quarter of 2006 to correct the accounting for certain derivative transactions under the Statement of Financial Accounting Standards 133, Accounting for Derivative Instruments and Hedging Activities. The correction to the accounting does not affect the economics of the derivative transactions, or have any impact on the company's cash. However, the restatements are expected to affect the preliminary financial results Ford Motor Credit Company for its 2006 third quarter. Ford Motor Credit Company expects to finalize restatement amounts for the current and all previous periods by the time of the filing of its Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2006. The company discovered that since 2001, certain interest rate swaps Ford Motor Credit Company had entered into to hedge the interest rate risk inherent in certain long-term fixed rate debt were accounted for incorrectly under SFAS 133 because they did not satisfy the standard's technical accounting rules to qualify for exemption from the more strict effectiveness testing requirements. Ford Motor Credit Company uses transactions involving derivatives, including swaps, forwards and options, to reduce economic risk and volatility in a disciplined and defensive manner. PricewaterhouseCoopers LLP, the company's independent registered public accounting firm, audited Ford Motor Credit Company's 2001 through 2005 financial statements, which included a review of these swaps. "We are very disappointed that we must restate our earnings," said Bannister. "We are committed to strong internal controls and reporting transparency. Our business fundamentals remain sound, and our operations remain highly efficient and profitable." Ford Motor Credit Company's interest rate swaps were entered into as part of its asset-liability management strategy. The swaps economically hedge the interest rate risk associated with long-term debt issuances. Although the final restatement amounts have not yet been determined, based on the information to date, the Company estimates that Ford Motor Credit Company's results in 2002 will improve materially - other periods are still under study. About FMCC Ford Motor Credit Company -- http://www.fordcredit.com/-- is one of the world's largest automotive finance companies and has supported the sale of Ford products since 1959. Ford Motor Credit operates in 36 countries and manages approximately US$148 billion in receivables. Ford Motor Credit is an indirect, wholly owned subsidiary of Ford Motor Company. Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive- related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in TCR-Europe on Sept. 21, Moody's Investors Service lowered Ford Motor Company's corporate family rating and senior unsecured to B3 from B2, and Ford Motor Credit Company's senior unsecured to B1 from Ba3. Ford's Speculative Grade Liquidity rating has also been lowered to SGL-3 from SGL-1. The rating outlook is negative. These rating actions conclude a review for possible downgrade that was initiated on Aug. 18. At the same time, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. and all related units -- except FCE Bank PLC -- to 'B' from 'B+' and its short-term ratings on these entities to 'B-3' from 'B-2.' The ratings on FCE Bank, Ford Credit's European bank, were lowered to 'B+/B-3' from 'BB-/B-2', maintaining the one-notch rating differential between FCE and its parent that was established in July. As reported in the Troubled Company Reporter on Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-/RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long- term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. As reported in the Troubled Company Reporter on July 24, 2006, Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12-month period. Moody's said the outlook for the ratings is negative. FORD MOTOR: Taps Delphi to Build Hybrid Powertrain Systems ---------------------------------------------------------- Ford Motor Company has selected Delphi Corporation to provide hybrid electrical powertrain systems technologies for two Ford hybrid vehicle platforms. Delphi will provide the battery pack systems and cooling systems for the 2008 Ford Fusion Hybrid and Mercury Milan Hybrid vehicles. It will also provide hybrid vehicle electronics for several other yet-to-be announced vehicle customers. Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive- related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in TCR-Europe on Sept. 21, Moody's Investors Service lowered Ford Motor Company's corporate family rating and senior unsecured to B3 from B2, and Ford Motor Credit Company's senior unsecured to B1 from Ba3. Ford's Speculative Grade Liquidity rating has also been lowered to SGL-3 from SGL-1. The rating outlook is negative. These rating actions conclude a review for possible downgrade that was initiated on Aug. 18. At the same time, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. and all related units -- except FCE Bank PLC -- to 'B' from 'B+' and its short-term ratings on these entities to 'B-3' from 'B-2.' The ratings on FCE Bank, Ford Credit's European bank, were lowered to 'B+/B-3' from 'BB-/B-2', maintaining the one-notch rating differential between FCE and its parent that was established in July. As reported in the Troubled Company Reporter on Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB-/RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long- term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. As reported in the Troubled Company Reporter on July 24, 2006, Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12-month period. Moody's said the outlook for the ratings is negative. FTI CONSULTING: Buys Brower Kriz & G3 Consulting for US$14 Mln -------------------------------------------------------------- FTI Consulting Inc. has acquired Brower, Kriz & Stynchcomb and G3 Consulting for a total of US$14 million. Jack Dunn, president and chief executive officer, commented: "We are excited to welcome BKS and G3 to FTI, and these purchases are in keeping with our stated acquisition strategy. These are excellent companies that expand our capabilities to take advantage of related market opportunities. BKS brings unparalleled experience in the domestic and international construction industry to our Forensic and Litigation Consulting segment. G3's overall experience leveraging technology on behalf of clients not only further extends our capabilities in the UK, but also fits well with the needs of our newly-acquired Financial Dynamics client base." Brower, Kriz & Stynchcomb Brower Kriz is a privately held, 31-person construction consulting firm based in Maryland specializing in critical path method schedule development, technical schedule review and progress evaluation. The purchase price for the acquisition was approximately US$11.5 million, payable through a combination of cash and restricted shares of the Company's common stock, plus the opportunity for future contingent consideration based on specified financial objectives over the next five years. The three key Brower Kriz principals, Barry Brower, Jarad Kriz and Paul Stynchcomb have joined the Company and have signed five year employment agreements. Mr. Brower said: "Joining with FTI is a major forward step for us. It offers us a broader range of client opportunities as well as providing FTI's clients in the construction industry with deep service capability." G3 Consulting Privately held G3 Consulting is a UK-based, six-person organization that delivers technology and business consulting to UK clients facing corporate litigation, electronic disclosure and public inquiries. The Company acquired G3 for approximately $2.5 million through a combination of cash and restricted shares of the Company's common stock. For the past six years G3 has served as the primary direct UK supplier of the Company's Ringtail Legal products, as well as provided associated Application Service Provider and professional and consulting services. G3 also brings extensive experience in the area of electronic disclosure, having advised the UK's top law firms and corporate legal departments on how best to increase the speed, efficiency and quality of their electronic review using web based tools. Andrew Kennell, a Director of G3, said: "G3 has enjoyed a long and productive relationship with FTI Ringtail. Joining forces with FTI's team is the natural progression to being able to provide a wider range of services and support to our clients." FTI Consulting Inc. (NYSE:FCN) provides problem-solving consulting and technology services to major corporations, financial institutions and law firms when confronting critical issues that shape their future and the future of their clients, such as financial and operational improvement, major litigation, complex investigations, mergers and acquisitions and regulatory issues. FTI's total workforce of more than 1,400 employees includes numerous PhDs, MBAs, CPAs, CIRAs and CFEs, who are committed to delivering the highest level of service to clients. FTI Consulting has offices in the United States, the United Kingdom, Australia, China, Hong Kong, Japan, and Singapore. * * * As reported in the Troubled Company Reporter on Sept. 19, 2006, Standard & Poor's Ratings Services assigned its 'B+' rating to FTI Consulting Inc.'s US$215 million senior notes due 2016. At the same time, Standard & Poor's affirmed the corporate credit rating of FTI at 'BB-' and revised the outlook to positive from stable, based on strong earnings performance and talent retention. As reported in the Troubled Company Reporter on Sept. 18, 2006 Moody's Investors Service assigned a Ba2 rating to FTI Consulting, Inc.'s proposed US$215 million of senior unsecured notes and lowered the ratings on its US$150 million senior subordinated convertible notes to B1 from Ba3. Moody's affirmed the Ba2 corporate family rating and the Ba2 rating on FTI's existing senior unsecured notes. Moody's said the rating outlook remains stable. FURNITURE EXPRESS: Brings In PwC as Joint Administrators -------------------------------------------------------- David Walker and Roger Marsh of PricewaterhouseCoopers LLP were appointed joint administrators of Furniture Express Ltd. (Company Number 05590213) on Oct. 4. PricewaterhouseCoopers LLP -- http://www.pwcglobal.com/-- provides, among others, auditing services, accounting advice, tax compliance and consulting, financial consulting and advisory services to clients in a variety of industries. Furniture Express Ltd. can be reached at: Unit 8 Colima Avenue Hylton Riverside Sunderland Enterprise Park Sunderland Tyne and Wear SR5 3XF United Kingdom Tel: 01772 888812 GENERAL MOTORS: GMAC Gets EC Clearance for Cerberus Purchase ------------------------------------------------------------ The European Commission has granted clearance under the EU Merger Regulation to the acquisition of sole control of General Motors Acceptance Corporation by Cerberus Group. Cerberus is active in investment in real property and personal property worldwide and is ultimately controlled by Stephen A. Feinberg. GMAC is active in the EEA in vehicle related activities such as loan and leasing finance, reinsurance, second hand vehicle sales and fleet management services and in financial services and employee relocation services. The Commission examined the operation under its simplified merger review procedure. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limitedto B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new US$4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to US$4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL- 3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENERAL MOTORS: Prepares for Possible Proxy Battle vs. Kerkorian ---------------------------------------------------------------- General Motors Corp. has beefed up its ranks of legal and financial advisors in preparation for a possible takeover by investor Kirk Kerkorian, Bernard Simon writes for the Financial Times. Analysts interviewed by FT say that Mr. Kerkorian could launch a proxy battle to replace some of GM's directors and exert greater control over the automaker. Mr. Kerkorian, however, has kept silent about his plans for GM after a proposed merger with Renault-Nissan, which he had supported, collapsed last month. Jerome York, Mr. Kerkorian's representative to GM, resigned from the automaker's board after talks with Renault-Nissan ended. GM had refused to pursue an alliance with Renault-Nissan, saying a partnership with the Franco-Japanese carmaker would substantially disadvantage GM shareholders. GM stated that it will focus its energies on its turnaround program and claimed that it is making real progress in its efforts. Mr. Simon further reports that GM's board has approved certain changes in the Company's bylaws intended to curb outsiders from removing existing directors and putting issues to a shareholder vote. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new US$4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to US$4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL- 3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENERAL STEELS: Appoints Administrators from Gerald Edelaman ------------------------------------------------------------ Ian Douglas Yerrill and Bernard Hoffman of Gerald Edelman Business Recovery were appointed joint administrators of General Steels Ltd. (Company Number 02777360) on Oct. 10. Headquartered in London, United Kingdom, Gerald Edelman -- http://www.geraldedelman.com/-- is registered to carry on audit work by the Institute of Chartered Accountants in England and Wales and is authorized and regulated by the Financial Services Authority. General Steels Ltd. can be reached at: Conduit Road Norton Canes Cannock Staffordshire WS11 9TJ United Kingdom Tel: 01543 458800 HCA INC: Shareholders' Special Meeting Set for November 16 ---------------------------------------------------------- HCA Inc. has established a record date and special meeting date for its shareholders to consider and vote upon the proposal to adopt the previously announced merger agreement providing for the acquisition of HCA by an investor group led by Bain Capital, Kohlberg Kravis Roberts & Co., Merrill Lynch Global Private Equity and HCA founder Dr. Thomas F. Frist, Jr. HCA shareholders of record at the close of business on Oct. 6, 2006, will be entitled to notice of the special meeting and to vote on the proposal. The special meeting will be held on Nov. 16, 2006 at 11:00 a.m., local time, at HCA's executive offices located at One Park Plaza, Nashville, Tennessee 37203. Headquartered in Nashville, Tennessee, HCA (Hospital Corporation of America) Inc. (NYSE: HCA) -- http://www.hcahealthcare.com/-- is a healthcare services provider, composed of locally managed facilities that include approximately 182 hospitals and 94 outpatient surgery centers in 22 states, England and Switzerland. At its founding in 1968, HCA was one of the nation's first hospital companies. HCA INC: US$33-Bln Merger Deal Cues S&P's B+ Corp. Debt Rating -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its existing ratings on Nashville, Tennessee-based HCA Inc. The corporate credit rating was lowered to 'B+' from 'BB+'. The ratings were removed from CreditWatch, where they were placed with negative implications July 24, 2006, following the announcement that the company had entered into a merger agreement with a private equity consortium; the transaction is valued at about US$33 billion. The rating outlook is negative. "The three-notch downgrade of the corporate credit rating reflects our lower rating opinion of HCA assuming that its pending LBO is completed, and is financed by the US$22.5 billion of proposed senior secured debt currently being considered by investors," explained Standard & Poor's credit analyst David Peknay. Also, Standard & Poor's assigned its loan and recovery ratings to HCA's proposed US$16.8 billion senior secured credit facilities and US$5.7 billion second-lien notes. The first-lien credit facilities were rated 'BB' with a recovery rating of '1', indicating a high expectation for full recovery of principal in the event of a payment default. The second-lien notes were rated 'BB-' with a recovery rating of '1', also indicating a high expectation for full recovery of principal in the event of a default. The ratings are subject to revision if the size or terms of the deal change. In addition, S&P lowered the rating on HCA's senior unsecured notes by five notches, to 'B-' from 'BB+'. The rating on the unsecured notes is now two notches below the 'B+' corporate credit rating -- in line with Standard & Poor's criteria. Although the notes are considered senior, the company will now have a sizable amount of priority debt (primarily secured bank debt and capitalized operating leases). Because of the overwhelming magnitude of priority debt in the capital structure (now totaling about 100% of total eligible assets -- far greater than the 30% threshold in our criteria), the unsecured notes are considered materially disadvantaged. The low-speculative grade rating on HCA reflects the company's significant debt leverage as a result of its pending LBO, as well as key industry risks, such as uncertain third-party reimbursement, rising bad debt, and competitive forces that have hurt patient volume. HCA is the largest U.S. owner and operator of acute health care facilities, with a large portfolio of 172 hospitals and 95 ambulatory surgery centers in 21 U.S. states, the U.K., and Switzerland. HEMRO ASSOCIATES: Appoints G.D. Sharma as Administrator ------------------------------------------------------- G. D. Sharma of Sharma & Co. was appointed administrator of Hemro Associates Ltd. (Company Number 04353549) on Oct. 6. The administrator can be reached at: G. D. Sharma Sharma & Co. 50 Newhall Street Birmingham West Midlands B3 3QE Tel: 0121 248 5007 Fax: 0121 248 5010 E-mail: gagen@sharmaandco.com Hemro Associates Ltd. can be reached at: Albany House 14 Shute End Wokingham Berkshire RG40 1BJ United Kingdom Tel: 01189 742 36 HERGOLD AND COMPANY: Claims Registration Ends Dec. 23 ----------------------------------------------------- Creditors of Hergold and Company Limited have until Dec. 23 to send in their full names, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their Solicitors (if any), to appointed Liquidator Anthony Hyams at: Marriotts LLP Allan House 10 John Princes Street London W1G 0AH United Kingdom The company can be reached at: Hergold and Company Limited Cannon Lane Luton LU2 8BJ United Kingdom Tel: 01582 725 506 Fax: 01582 483 454 HUGHES LIMITED: Brings In PKF to Administer Assets -------------------------------------------------- S. P. Holgate and P. L. Armstrong of PKF (U.K.) LLP were appointed joint administrators of Hughes (Finishings) Ltd. (Company Number 3212643) on Oct. 6. Headquartered in London, United Kingdom, PKF (UK) LLP -- http://www.pkf.co.uk-- is one of U.K.'s leading firms of accountants and business advisers, which specializes in advising the management of developing private and public businesses. Its principal services include assurance & advisory; corporate finance; corporate recovery & insolvency; forensic; management consultancy and taxation. It also offers financial services through its FSA authorized company, PKF Financial Planning Limited. Hughes (Finishings) Ltd. can be reached at: Unit 8 Suffolk Drive Chelmsford Essex CM2 6UN United Kingdom Tel: 01245 466 200 Fax: 01245 467 111 INFO-TECH SYSTEMS: Taps Liquidator from B & C Associates -------------------------------------------------------- Jeffrey Mark Brenner of B & C Associates was appointed Liquidator of Info-Tech Systems.com Limited (formerly Task Tick Limited) on Oct. 11 for the creditors' voluntary winding-up procedure. Headquartered in Mansfield, United Kingdom, Info-Tech Systems.com Limited -- http://www.infotechshop.co.uk/-- supplies computer systems, servers, components, networking and consultancy for business, resellers and education. INGREDIENT MANAGEMENT: Appoints Liquidator from Findlay James ------------------------------------------------------------- Alisdair J. Findlay of Findlay James was appointed Liquidator of Ingredient Management Limited on Oct. 10 for the creditors' voluntary winding-up procedure. The company can be reached at: Ingredient Management Limited 7 St. Johns Road Harrow Middlesex HA1 2EY United Kingdom Tel: 01372 379 999 INSTRUMENT TECHNOLOGY: Hires Menzies to Administer Assets --------------------------------------------------------- Andrew Gordon Stoneman and Paul John Clark of Menzies Corporate Restructuring were appointed joint administrators of Instrument Technology Ltd. (Company Number 02631363) on Oct. 9. Headquartered in London, Menzies Corporate Restructuring -- http://www.menzies.co.uk/-- is a member of Moores Rowland International, an association of independent accounting firms throughout the world with some 20,800 partners and staff, operating from 628 offices in 92 countries. Instrument Technology Ltd. can be reached at: Ponswood Industrial Estate Menzies Road St. Leonards-On-Sea East Sussex TN38 9AZ United Kingdom Tel: 01424 442121 INVESTA PLC: FA Simms Selling Structured Product Provider --------------------------------------------------------- R.F. Simms Esq., FCA & M.R. Buttriss Esq., Mipa., of F.A. Simms & Partners Plc., in their capacity as joint administrators for Eurolife Assurance Group Limited, are offering for sale the assets of Investa Plc, a structured product provider. The assets for sale features: -- GBP122 million of funds under management; -- 12,000 current investors -- total database of approximately 70,000 investors; and -- potential to generate in excess of GBP2.5 million in revenue over next four years. Inquiries can be addressed to: F.A. Simms & Partners Plc Insol House 39 Station Road, Lutterworth Leicestershire LE17 4AP Tel: 01455 555444 Fax: 01455 552572 E-mail: Mbuttriss@fasimms.com F.A. Simms and Partners PLC -- http://www.fasimms.com/-- provides insolvency-related service to businesses and individuals. KOPPERS HOLDING: Moody's Assigns LGD6 Rating on Sr. Unsec. Notes ---------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sector, the rating agency confirmed its B1 Corporate Family Rating for Koppers Holding Inc. and its B3 rating on the company's US$203 million 9.875% Sr Unsec Discount Global Notes due 2014. Additionally, Moody's assigned an LGD6 rating to those bonds, suggesting noteholders will experience a 90% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in our notching practices across industries and will improve the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Pittsburgh, Pennsylvania, Koppers Holding Inc., -- http://www.koppers.com/-- is an integrated global provider of carbon compounds and commercial wood treatment products. The Company's products are used in a variety of applications in a range of end markets, including the aluminum, railroad, specialty chemical, utility, rubber and steel industries. The Company operates two principal businesses: Carbon Materials & Chemicals, and Railroad & Utility Products. Through the Carbon Materials and Chemicals business, the Company is a distiller of coal tar in North America, Australia, the United Kingdom and Scandinavia. N.P.W. DUCTWORK: Appoints Administrators from Rothman Pantall ------------------------------------------------------------- R. D. Smailes and S. B. Ryman of Rothman Pantall & Co. were appointed joint administrators of N.P.W. Ductwork Services Ltd. (Company Number 03718390) on Oct. 9. Rothman Pantall & Co. -- http://www.rothman-pantall.co.uk/-- was established in 1955 as a general accountancy practice, and has grown to its present 18 offices across the South of England. It is one of the largest independent firms of Chartered Accountants in the region, and rank in the top 40 in the United Kingdom. Headquartered in Reading, United Kingdom, N.P.W. Ductwork Services Ltd. manufactures metal structures and parts. NATIONWIDE SECURITY: Creditors' Claims Due Nov. 13 -------------------------------------------------- Creditors of Nationwide Security Solutions Limited have until Nov. 13 to send in their full names, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their Solicitors (if any), to appointed Liquidator C. H. I. Moore at: H. I. Moore K J Watkin & Co. Emerald House 20-22 Anchor Road Aldridge Walsall United Kingdom Headquartered in West Bromwich, United Kingdom, Nationwide Security Solutions Limited installs burglar alarms and security systems. NEIL GRINNALL: Dunbar Bank Appoints Moore Stephens as Receivers --------------------------------------------------------------- Dunbar Bank PLC appointed N. Price, M. E. T. Bowen and D. Rolph of Moore Stephens LLP joint administrative receivers of Neil Grinnal Classic Homes Ltd. (Company Number 03591318) on Sept. 20. Moore Stephens -- http://www.moorestephens.co.uk/-- offers audit, business support, corporate finance, corporate recovery, dispute analysis, financial services, insurance broking, IT consultancy, pensions audit, risk advisory services, tax and trusts & estates services. Its U.K. network comprises over 1,400 partners and staff. Headquartered in Stourport on Severn, United Kingdom, Neil Grinnal Classic Homes Ltd. sells and manages real estates. NEWMAN SUPPORT: Brings In XL Business to Administer Assets ---------------------------------------------------------- Jeremy Nicholas Bleazard of XL Business Solutions Ltd. was appointed administrator of Newman Support Services Ltd. (Company Number 05345752) on Oct. 10. The administrator can be reached at: Jeremy Nicholas Bleazard XL Business Solutions Limited 1st Floor 2-4 Market Street Cleckheaton BD19 5AJ United Kingdom Fax: 01274 870606 Tel: 01274 870101 E-mail: enquiries@xlbs.co.uk jbleazard@xlbs.co.uk Newman Support Services Ltd. can be reached at: 9C Sandygate Wath-Upon-Dearne Rotherham South Yorkshire S63 7LN United Kingdom Tel: 01709 760 696 Fax: 01709 876 215 NOVELIS INC: Expects Improved Financial Performance in 2007 ----------------------------------------------------------- Novelis Inc. would be providing guidance for 2006 and 2007 as part of its strategic and financial update. Highlights -- the company continues to generate solid cash flow. Novelis expects total free cash flow for 2006 to be between US$150 million and US$200 million, and believes it will remain in that range for 2007 as the company improves its risk mitigation program. -- the company anticipates a return to positive earnings before taxes in 2007. For the full year of 2006, Novelis expects to post a loss before taxes of between US$240 million and US$285 million. For the full year of 2007, the company anticipates earnings before taxes of between US$35 million and US$100 million. This expected upswing is due primarily to the elimination of half of the company's can sheet price ceiling exposure, expected increases in rolled product shipments, and expected corporate cost reductions. -- the company estimates that shipments for 2006 will be between 3,140 and 3,170 kilotons. In 2007, shipments are forecasted to grow by 3 to 4 percent compared to 2006. -- for 2006, Novelis estimates capital expenditures of between US$110 million and US$115 million. For 2007, the company expects that its capital expenditure run rate will return to traditional investment levels of between US$165 million and US$175 million. -- longer term, the company will target: * an annual growth rate of 7% to 10% for regional income less corporate costs; * annual returns on invested capital exceeding 12%; * annual free cash flow surpassing USUS$400 million; and * a debt-to-EBITDA ratio of between 2.5x and 3.0x. Novelis said that all forward estimates assume an average price for primary aluminum of US$2,500 per metric ton on the London Metal Exchange. "We believe that we are nearing the end of a difficult transition period," William T. Monahan, chairman and interim chief executive officer, said. "The fundamentals of our business remain strong, and we are pleased with our future outlook as the result of the actions we have taken, and will continue to take, to enhance shareholder value." The company reiterated that it is on track to file its Form 10-Q for the second quarter by Oct. 20, 2006, and to be current with its filings once it files its third-quarter report during the fourth quarter. The company also noted that its previously reported commitments for backstop financing facilities totaling US$2.855 billion from Citigroup Global Markets Inc. have been extended to Oct. 31, 2006. In the event that Novelis is not able to file its quarterly report on Form 10-Q for the second quarter of 2006 by the deadlines defined in the notice of default and in its Credit Agreement waiver, the backstop financing facilities would provide the funding necessary to retire the Senior Notes and, if needed, replace the Company's existing term loan and revolving credit facility. In addition, Novelis announced that it will be requesting an amendment to its US$1.8 billion Credit Agreement to modify certain financial covenants and other provisions contained in the Agreement. Specifically, Novelis will request that the lenders under the Credit Agreement temporarily relax the interest coverage covenant, leverage ratio covenant, and fixed charges covenant among other things. About Novelis Inc. Based in Atlanta, Georgia, Novelis, Inc., (NYSE: NVL) (TSX: NVL) -- http://www.novelis.com/-- provides customers with a regional supply of technologically sophisticated rolled aluminum products throughout Asia, Europe, North America, and South America. The company operates in 11 countries and has approximately 13,000 employees. In Europe, the company maintains operations in France, Germany, Luxembourg, Switzerland and the United Kingdom. Through its advanced production capabilities, the company supplies aluminum sheet and foil to the automotive and transportation, beverage and food packaging, construction and industrial, and printing markets. * * * As reported in the Troubled Company Reporter-Europe on Oct. 19, Moody's Investors Service confirmed its B1 Corporate Family Rating for Novelis Inc. in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the North American Metals & Mining sectors. As reported in TCR-Europe on Oct. 13, Fitch initiated the ratings for Novelis Inc. and its subsidiary Novelis Corp.: Novelis Inc. -- Issuer Default Rating B; -- Senior secured credit facility BB/Recovery Rating 1; and -- Senior unsecured notes B/RR4; Novelis Corp. -- Issuer Default Rating B; and -- Senior secured credit facility BB/RR1. OVERSEAS SHIPHOLDING: Gets Early Termination of Waiting Period -------------------------------------------------------------- Overseas Shipholding Group Inc. and Maritrans Inc. jointly disclosed that the Federal Trade Commission, on behalf of the Antitrust Division of the Department of Justice, granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. As reported by the Troubled Company Reporter on Sept. 28, 2006, Overseas Shipholding Group and Maritrans entered into a definitive merger agreement pursuant to which the Company will acquire Maritrans Inc. for US$37.50 per share, subject to other customary conditions, including approval of Maritrans' stockholders. About Maritrans Headquartered in Tampa, Florida, Maritrans Inc., (NYSE: TUG) -- http://www.maritrans.com/-- is a U.S.-based company with a 78-year commitment to building and operating petroleum transport vessels for the U.S. domestic trades. Maritrans employs a fleet of 11 ATBs, five product carriers, two of which have been redeployed to transport non-petroleum cargoes, and three large ATBs under construction. Approximately 75% of the Company's oil carrying fleet capacity is double-hulled with a fleet capacity aggregating approximately 3.4 million barrels, 79% of which is barge capacity. Maritrans maintains an office in the Philadelphia area. About Overseas Shipholding Group, Inc. Overseas Shipholding Group, Inc. (NYSE:OSG) -- http://www.osg.com/-- is a publicly traded tanker companies in the world with an owned, operated and newbuild fleet of 117 vessels, aggregating 13.0 million dwt and 865,000 cbm, as of June 30, 2006. As a market leader in global energy transportation services for crude oil and petroleum products in the U.S. and International Flag markets, the Company is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world's most customer-focused marine transportation companies, with offices in New York, Athens, London, Newcastle and Singapore. * * * As reported in the Troubled Company Reporter on Aug. 9, 2006, Moody's Investors Service affirmed the debt ratings of Overseas Shipholding Group, Inc.'s Senior Unsecured at Ba1. The outlook has been changed to stable from negative. PROFILO TELRA: Fitch Assigns Foreign Currency IDR at B ------------------------------------------------------ Fitch Ratings assigned Turkey-based Profilo Telra Elektronik Sanayi ve Ticaret A.S. a foreign currency Issuer Default rating of B with Stable Outlook. Fitch has also assigned Profilo-related HD Capital S.A.'s prospective EUR100 million fixed-rate guaranteed loan participation notes an expected foreign currency senior unsecured rating of B and an expected Recovery Rating of RR4. At the same time, Profilo's local currency IDR B with Stable Outlook and National Long-term rating BBB+ with Stable Outlook are affirmed. The final ratings on the LPNs are contingent on receipt of final documents conforming to information already received and receipt of satisfactory legal opinions. HD Capital has the sole purpose of using the LPNs proceeds to finance a loan to Profilo as set out in a loan agreement, the rights and benefits of which are charged to the benefit of LPN noteholders. The expected rating of the LPNs is in line with Profilo's foreign currency IDR B. Proceeds of the notes will be used to fund working capital requirements, refinance existing debt and for general corporate purposes. The notes will constitute direct, unsecured and unconditional obligations of Profilo. The notes will rank equally with all other present or future unsecured and unsubordinated obligations of Profilo. The terms and conditions of the loan agreement include a limitation on Profilo's debt, using a maximum leverage ratio of 4x and consolidated fixed charge coverage ratio of 2.25x. There are also restrictions on dividend payments by Profilo. Furthermore, upon asset sales by Profilo above a certain amount, noteholders can request that these proceeds be used to prepay their LPNs at par. In the event of a change of control relating to Profilo, noteholders have the right to require the issuer to prepay their LPNs. There are also covenants relating to transactions with affiliates, mergers and disposals as described in the loan agreement. The governing law of the loan agreement, including the guarantees in place and the LPNs, is English law and the jurisdiction is the courts of England. PURVES & PURVES: Creditors Confirm Liquidator's Appointment ----------------------------------------------------------- Creditors of Purves & Purves Limited (formerly Honeyminster Limited) confirmed Oct. 10 the appointment of Mark Stephen Goldstein as the company's Liquidator. The company can be reached at: Purves & Purves Limited 220 224 Tottenham Court Road Camden London W1T 7PZ United Kingdom Tel: 020 7580 8223 Fax: 020 7580 8244 QUEBECOR WORLD: Closing French Roto-Gravure Facility ---------------------------------------------------- Quebecor World Inc. intends to close its roto-gravure facility in Lille, France as part of its ongoing restructuring efforts. The Lille facility will be phased out during the coming months and is expected to close at the end of the second quarter of 2007. The closure will affect approximately 230 employee positions. Some of the workforce will be offered opportunities to transfer to the Charleroi, Belgium facility. Taking into account earlier restructuring initiatives and the investment in the latest wide-web gravure technology in Charleroi, the Company estimates the impact to its European gravure capacity is essentially neutral. Quebecor World Inc. -- http://www.quebecorworld.com/-- provides print solutions to publishers, retailers, catalogers and other businesses with marketing and advertising activities. Quebecor World has approximately 29,000 employees working in more than 120 printing and related facilities in the United States, Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, India, Mexico, Peru, Spain, Sweden, Switzerland and the United Kingdom. * * * As reported in the Troubled Company Reporter on Oct. 2, 2006, Standard & Poor's Ratings Services lowered its ratings on commercial printer Quebecor World Inc., including its long-term corporate credit rating to 'B+' from 'BB-', and placed the ratings on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Aug. 18, 2006, Moody's Investors Service placed the Ba3 Corporate Family Rating, Ba3 Senior Unsecured rating and B2 Senior Subordinated ratings of Quebecor World Inc.'s subsidiaries under review for possible downgrade. As reported in the Troubled Company Reporter on Aug. 11, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of Quebecor World Inc. and related entities to BB from BB (high) and downgraded the Cumulative Redeemable Preferred Shares to Pfd-4 from Pfd-4 (high). DBRS said the trends remain negative. RADNOR HOLDINGS: Blocks Panel's Move to Extend Bidding Process -------------------------------------------------------------- Radnor Holdings Corporation and its debtor-affiliates oppose the Official Committee of Unsecured Creditors' motion to amend bidding procedures governing the sale of substantially all of their assets. The Debtors say the Committee's extension motion will place them in default under the terms of their debtor-in- possession financing agreement. As reported in the Troubled Company Reporter on Oct. 5, 2006, the Court has scheduled a Nov. 20 auction for the assets. TR Acquisition Company, Inc., an affiliate of Tennenbaum Capital Partners, LLC, the Debtors' prepetition term loan agent, will be offering the face amount of its claim as a substitute for some of the cash at the auction. TR Acquisition has been designated as the "stalking horse bidder" under an agreement previously entered into with the Debtors. Under the approved bid procedures, other bidders have until Nov. 16, 2006 to challenge Tennenbaum's "stalking-horse" status. The Committee wants the Court to move the "stalking horse" bid deadline to Nov. 20, 2006 and set Nov. 21, 2006, as the "stalking horse" selection date. The Committee further asks the Court to extend the remaining dates in the Bid Procedures by approximately 30 days. Committee's Reasons Victoria W. Counihan, Esq., at Greenberg Traurig, LLP, told the Court the Committee remains convinced that the sale process is nothing more than a scheme to transfer the Debtors' assets to Tennenbaum, who is a prepetition lender, a shareholder and insider of the Debtors. According to Ms. Counihan, the Committee agreed to the bid procedures on the premise that it would provide a level playing field for bidders to participate and would be structured so as not to shut out a restructuring plan or other internal reorganization to the extent one was viable. However, the Committee accuses the Debtors of engaging in activities that effectively freeze potential bidders out of the auction and bar the Committee from developing its own reorganization strategy. The Committee says, the proposed revision of the bid process will allow other bidders to participate and give them sufficient time to formulate an alternative reorganization plan. Debtors' Response The Debtors discount the Committee's allegations. According to the Debtors, the committee's motion seeks to enjoin TR Acquisition from exercising its rights as permitted by the bid procedures and is a collateral attack on the final DIP financing order. The Debtors remind the court that a failure to proceed with an auction on Nov. 20, 2006 would constitute a default on the DIP financing agreement, triggering termination of the DIP agreement on Dec. 1, 2006. Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactures and distributes a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of US$361,454,000 and total debts of US$325,300,000. RBA RESEARCH: Appoints Begbies Traynor as Administrators -------------------------------------------------------- Michael Edward George Saville and Rob Sadler of Begbies Traynor were appointed joint administrators of RBA Research Ltd. (Company Number 02345850) on Oct. 11. Headquartered in Manchester, Begbies Traynor -- http://www.begbies.com/-- assists companies, creditors, financial institutions and individuals on all aspects of financial restructuring and corporate recovery. Headquartered in Leeds, United Kingdom, RBA Research Ltd. is engaged in market research and opinion polling. ROY FIRMAN: HSBC Bank Taps PwC as Administrative Receivers ---------------------------------------------------------- HSBC Bank PLC appointed Karen Lesley Dukes, Colin Michael Trevethyn Haig and Michael David Gercke of PricewaterhouseCoopers LLP joint administrative receivers of Roy Firman Ltd. (Company Number 01306909) on Oct. 11. PricewaterhouseCoopers LLP -- http://www.pwcglobal.com/-- provides, among others, auditing services, accounting advice, tax compliance and consulting, financial consulting and advisory services to clients in a variety of industries. Roy Firman Ltd. can be reached at: 14 Maple Road Eastbourne East Sussex BN23 6NY United Kingdom Tel: 01323 644 444 Fax: 01323 410 753 ROY FIRMAN: PwC Selling Garden Furniture Distributor ---------------------------------------------------- Michael Gercke, Colin Haig and Karen Dukes, in their capacity as joint administrative receivers for Roy Firman Ltd., are offering to sell the company's business and assets. The assets for sale features: -- a reputable distributor of garden furniture; -- established for over 25 years; -- turnover of around GBP4 million; -- strong customer base; and -- dedicated and experienced staff. Inquiries can be addressed to: Mark Andrews PricewaterhouseCoopers LLP First Point Buckingham Gate Gatwick RH6 0PP Tel: 01293 566682 Fax: 01293 566601 E-mail: mark.andrews@uk.pwc.com PricewaterhouseCoopers LLP -- http://www.pwcglobal.com/-- provides auditing services, accounting advice, tax compliance and consulting, financial consulting and advisory services to clients in a variety of industries. SEA CONTAINERS: First Meeting of Creditors Slated for Nov. 21 ------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, will convene a meeting of Sea Containers, Ltd., Sea Containers Services, Ltd., and Sea Containers Caribbean, Inc.'s creditors at 10:00 a.m., on Nov. 21. The meeting will be held at: Room 2112 2nd Floor J. Caleb Boggs Federal Building 844 North King Street Wilmington, Delaware This is the first meeting of creditors required under 11 U.S.C. Sec 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. SEA CONTAINERS: Trustee Sets Organizational Meeting for Oct. 26 --------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, will convene an organizational meeting in Sea Containers, Ltd., Sea Containers Services, Ltd., and Sea Containers Caribbean, Inc.'s Chapter 11 cases at 1:00 p.m. on Oct. 26. The meeting will be held at: Room 2112 2nd Floor J. Caleb Boggs Federal Building 844 North King Street Wilmington, Delaware The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' bankruptcy cases. This is not a meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a Debtor's representative will attend and provide background information regarding the cases. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. SEA CONTAINERS: Reed Conner Ceases to be Major Shareholder ---------------------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission, Reed Conner & Birdwell, LLC, discloses that it has ceased to be the beneficial owner of more than 5% of the Common Stock of Sea Containers, Ltd. As of October 20, 2006, the investment adviser beneficially owned 1,100 shares of the Company's common stock. A month earlier, as of September 11, 2006, Reed Conner beneficially owned 2,818,510 shares, representing 10.84% equity stake in Sea Containers. Donn B. Conner is the firm's president and chief executive officer while Jeffrey Bronchick is the chief investment officer. About Sea Containers Ltd. Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. SOLO CUP: Ends Review of Accounting Issues & Restates Financials ---------------------------------------------------------------- Solo Cup Company has completed its review of accounting issues and, based on that review, has restated some of its previously issued consolidated financial statements. The company filed with the Securities and Exchange Commission on Oct. 16, 2006, two restated financials: -- for the year ended Jan. 1, 2006, and -- for the first quarter ended April 2, 2006. The company has also filed its Form 10-Q for the second quarter ended July 2, 2006, with the SEC, the filing of which had been delayed pending completion of the review. The filing of the second quarter 2006 Form 10-Q has satisfied the terms of the indenture for the company's 8.5% Senior Subordinated Notes due 2014. In addition, on Oct. 13, 2006, the company concluded its previously announced discussions with its lenders under its credit facilities and obtained a waiver and amendment through Jan. 2, 2007, with regard to those facilities. The company's second-quarter results included: -- net sales of US$670.3 million, an increase of US$23.4 million, or 3.6%, from the prior-year quarter, as restated; -- gross profit of US$92.0 million, up 12% from the prior- year quarter, as restated; and -- a net loss of US$299.4 million, primarily reflecting a US$228.5 million non-cash charge for the impairment of the company's goodwill and a US$105.0 million non-cash charge to income taxes to establish a valuation allowance for its deferred tax assets. "Two months to the day since we announced the delay in the filing of our second-quarter results and the launch of our internal review, we are pleased to report that we have completed the review, that we have filed our restated consolidated financial statements and our consolidated financial statements for the second quarter of 2006, and that we can now focus 100% of our attention on running the company and building value for our customers, other business partners, investors and employees," Robert M. Korzenski, chief executive officer, said. "The restatement work was a rigorous and intense process that revealed certain material weaknesses in our financial controls and we are taking decisive steps to address those issues," Mr. Korzenski said. "Importantly, this work renewed our confidence in the fundamentals of our business, reaffirmed the compelling strategic, operational and financial rationale of the Solo Cup/Sweetheart merger, and highlighted the quality and dedication of our employee team. "The restatement of our consolidated financial statements has impacted our reported financial results but the process we have gone through positions us well for long-term strength and success," Mr. Korzenski concluded. Full-text copies of the financial statements are available for free at: For the year ended Jan. 1, 2006 http://ResearchArchives.com/t/s?13cc For the first quarter ended April 2, 2006 http://ResearchArchives.com/t/s?13cb For the second quarter ended July 2, 2006 http://ResearchArchives.com/t/s?13cd Headquartered in Highland Park, Illinois, Solo Cup Company -- http://www.solocup.com/-- manufactures disposable foodservice products for the consumer and retail, foodservice, packaging, and international markets. Solo Cup has broad expertise in plastic, paper, and foam disposables and creates brand name products under the Solo, Sweetheart, Fonda, and Hoffmaster names. The Company was established in 1936 and has a global presence with facilities in Asia, Canada, Europe, Mexico, Panama and the United States. SOLO CUP: Moody's Reviewing Ratings & May Downgrade --------------------------------------------------- Moody's Investors Service is continuing the Review for Possible Downgrade of Solo Cup Co. first initiated on Aug. 16, 2006, and reiterated on Sept. 15, 2006. Although Solo Cup has met its obligation to file financial statements and has completed its previously announced review of accounting issues, Moody's continues to have concerns regarding liquidity and ongoing business strategy. Moody's will continue to assess developments, specifically adequacy of any revisions to financial covenants and prospective financial strategy and performance. Moody's notes that Solo Cup continues to face a challenging business environment and that there was no free cash flow for the fiscal second quarter (i.e. deficit of US$66 million), well short of Moody's expectations. Total debt to EBITDA at the end of the quarter was about 7.8 times after Moody's standard adjustments and about 7.0 times unadjusted. EBIT interest coverage was in the area of 0.6 times. Moody's expects to conclude the review by the end of January 2007. These ratings remain under Review for Possible Downgrade: -- US$150 million senior secured revolving credit facility maturing Feb. 27, 2010, B2; -- US$635 million senior secured term loan B due Feb. 27, 2011, B2; -- US$80 million senior secured second lien term loan due Feb. 27, 2012, Caa1; and -- US$325 million 8.5% subordinated notes due Feb. 15, 2014, Caa2. Headquartered in Highland Park, Illinois, Solo Cup Company -- http://www.solocup.com/-- manufactures disposable foodservice products for the consumer and retail, foodservice, packaging, and international markets. Solo Cup has broad expertise in plastic, paper, and foam disposables and creates brand name products under the Solo, Sweetheart, Fonda, and Hoffmaster names. The Company was established in 1936 and has a global presence with facilities in Asia, Canada, Europe, Mexico, Panama and the United States. SOLO CUP: Incurs US$299 Million Net Loss in 2006 Second Quarter --------------------------------------------------------------- Solo Cup Company filed its financial statements for the second quarter ended July 2, 2006, with the U.S. Securities and Exchange Commission on Oct. 16, 2006. For the second quarter ended July 2, 2006, the Company reported a US$299,364,000 net loss, compared with a US$2,787,000 net loss for the quarter ended July 3, 2005. Net sales increased US$23.4 million, or 3.6%, for the 13 weeks ended July 2, 2006, compared with the prior year period. The increase in net sales reflected a 6.5% increase in average realized sales price partially offset by a 2.9% decrease in sales volume compared with the 13 weeks ended July 3, 2005. The increase in average realized sales price reflects price increases implemented during the second half of 2005 and the first half of 2006 in response to higher raw material costs. The volume decrease primarily reflects pricing pressure in the marketplace and, to a lesser extent, the company's decision to eliminate certain less profitable business. Cost of goods sold increased US$13.5 million, or 2.4%, for the 13 weeks ended July 2, 2006, compared with the prior year period. The increase in cost of goods sold for the 13 weeks ended July 2, 2006, included an additional US$9.8 million reserve for spare parts and inventory obsolescence due to changes in estimation methodology related to the valuation of these assets. These increases in cost of goods sold were offset by US$22.1 million of curtailment gains related to negotiated changes in postretirement benefits for certain active employees. The remaining increase in cost of goods sold was a result of increases in raw material and transportation costs. The company continues to experience fluctuations in raw material prices. For the 13 weeks ended July 2, 2006, gross profit increased US$9.8 million compared with the prior year period. As a percentage of net sales, gross profit was 13.7% in the second quarter of 2006 versus 12.7% in the second quarter of 2005. Excluding the additional US$9.8 million reserve for spare parts and inventory obsolescence and US$22.1 million in curtailment gains related to postretirement benefits, the gross profit percentage would have been 11.9% for the 13 weeks ended July 2, 2006. Selling, general, and administrative expenses increased US$7.6 million for the 13 weeks ended July 2, 2006, compared with the 13 weeks ended July 3, 2005. The increase was primarily driven by severance related to its reduction-in-force announced in April 2006 as well as the departure of certain senior executives. As a percentage of net sales, selling, general, and administrative expenses were 11.0% in the second quarter of 2006 versus 10.2% in the second quarter of 2005. Impairment of goodwill for the 13 weeks ended July 2, 2006, was US$228.5 million. For the 13 weeks ended July 2, 2006, interest expense, net, increased US$3.8 million compared with the prior year period. This increase is primarily attributable to amounts outstanding under its Second Lien Facility entered into in March 2006 and higher outstanding balances under its domestic revolving credit facility. To a lesser extent, the increase is due to higher interest rates compared with the prior year period. For the 13 weeks ended July 2, 2006, foreign currency exchange (gain) loss, net, was a gain of US$2.7 million compared with a loss of US$2 million for the 13 weeks ended July 3, 2005. This change is primarily attributed to currency fluctuations in the United Kingdom pound sterling denominated inter-company debt. For the 13 weeks ended July 2, 2006, the income tax provision of US$68.3 million included a US$105.0 million income tax charge to establish a valuation allowance for certain deferred tax assets partially offset by the tax benefit generated from domestic operations. During the 13 weeks ended July 2, 2006, the company prepared an updated analysis of the recoverability of its deferred tax assets considering recent developments in its operations and financial condition, including, among other things, its continued net losses, and the impact of raw material and petroleum cost increases on its cost of goods sold. As a result of these events, and considering the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the management concluded that it is more likely than not that it will not fully realize the benefits of its existing deductible differences. Accordingly, the company recorded an additional provision for income taxes during the second fiscal quarter of 2006 to increase the valuation allowance for its deferred tax assets by US$105.0 million. At July 2, 2006, the Company's balance sheet showed US$1,619,270,000 in total assets, US$1,550,053,000 in total liabilities, and US$69,217,000 in total stockholders' equity. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?13cd Headquartered in Highland Park, Illinois, Solo Cup Company -- http://www.solocup.com/-- manufactures disposable foodservice products for the consumer and retail, foodservice, packaging, and international markets. Solo Cup has broad expertise in plastic, paper, and foam disposables and creates brand name products under the Solo, Sweetheart, Fonda, and Hoffmaster names. The Company was established in 1936 and has a global presence with facilities in Asia, Canada, Europe, Mexico, Panama and the United States. SOLO CUP: S&P Cuts Corp. Credit Rating to CCC+ & Removes Watch -------------------------------------------------------------- Standard & Poor's Ratings Services lowered all its ratings on Solo Cup Co. by two notches, including its corporate credit rating to 'CCC+', and removed them from CreditWatch where they had been placed with negative implications on Aug. 18, 2006. The outlook is negative. "The downgrade was prompted by significantly weaker-than- expected earnings, cash flow, and liquidity as well as concerns about the company's ability to absorb additional raw material cost volatility and to obtain further financial covenant relief or restructure its debt," said Standard & Poor's credit analyst Cynthia Werneth. "Based on these factors, we now believe that meaningful operating and capital structure improvements will have to be achieved to reduce the risk of a default within the next year." Although detailed information on third-quarter performance is not yet available, on Oct. 16, 2006, Solo's liquidity was substantially unchanged from June 30, 2006, with cash and unused bank line availability totaling only US$59 million. Liquidity is unexpectedly low for this time of year, particularly given that the company obtained US$80 million in new second-lien debt in March 2006. This leads S&P to conclude that the company generated little if any operating cash flow in the third quarter, which is usually a seasonally strong period, after having used about US$100 million of cash during the first half of the year. Because of its limited liquidity, S&P is concerned about Solo's ability to continue to shoulder its heavy debt burden and to absorb any future raw material cost increases, any slowdown in demand, or other adverse developments. Also, the company faces higher interest margin on its bank credit facility in conjunction with a waiver of financial covenants through year end and will incur additional costs for an independent review of its supply chain. Solo may also face near-term refinancing risk if it requires and is unable to obtain financial covenant relief after expiration of the current waiver. S&P is are particularly concerned in view of Solo's very weak financial profile, its repeated requests for bank loan waivers and amendments during the past year, and its recent addition of a tranche of second-lien debt. The company is very highly leveraged. As of June 30, 2006, total debt, adjusted to include about US$200 million of capitalized operating leases and unfunded postretirement obligations on a tax-effected basis, was nearly US$1.4 billion. TIMKEN CO: To Exit U.K. Seamless Steel Tube Manufacturing --------------------------------------------------------- The Timken Company disclosed its intention to exit its European seamless steel tube manufacturing operations located in Desford, United Kingdom, as part of its strategy to manage its business portfolio to improve performance. Timken will begin consultations with representatives of the 400 associates located at the Desford facility to explore alternative solutions to closure. "The proposed action is part of the company's strategy to focus on lines of business that produce differentiated products while driving profitable growth," said Salvatore J. Miraglia, Jr., president of Timken's Steel Group. "Exiting this business would further advance the focus of the Steel Group on differentiated products that deliver value to both customers and shareholders." The Desford facility generated sales of approximately US$85 million to US$95 million in recent years but has not been profitable. It manufactures seamless steel tube for machining and mechanical applications, primarily serving the bearing industry in Europe. In conjunction with the proposed exit of the business, Timken would intend to sell some portion of the plant's assets and secure a reliable alternative source of steel tube for its European bearing operations. Headquartered in Canton, Ohio, The Timken Company (NYSE: TKR) -- http://www.timken.com/-- is a manufacturer of highly engineered bearings and alloy steels. It also provides related components and services such as bearing refurbishment for the aerospace, medical, industrial and railroad industries. The Company has operations in 27 countries and employs 27,000 employees. * * * The Timken Company's 7.16% Medium-Term Notes, Series A due 2027 carry Moody's Investors Service's Ba1 rating. VICFORGE AIR: Brings In Rothman Pantall as Joint Administrators --------------------------------------------------------------- R. D. Smailes and S. B. Ryman of Rothman Pantall & Co. were appointed joint administrators of Vicforge Air Systems Ltd. (Company Number 01447901) and Vicforge Management Limited (Company Number 05320885) on Oct. 9. Rothman Pantall & Co -- http://www.rothman-pantall.co.uk/-- was established in 1955 as a general accountancy practice, and has grown to its present 18 offices across the South of England. It is one of the largest independent firms of Chartered Accountants in the region, and rank in the top 40 in the United Kingdom. Vicforge Air Systems Ltd. and Vicforge Management Ltd. can be reached at: Lufton 2000 Oak Way Yeovil Somerset BA22 8HS United Kingdom Tel: 0870 850 9471 Fax: 0870 850 9472 WHE EUROPE: Claims Filing Period Ends Jan. 9, 2007 -------------------------------------------------- Creditors of WHE Europe Limited (formerly Arrestiva Limited and Waterfall Home Entertainment Limited) have until Jan. 9, 2007, to send in their full names, their addresses and descriptions, full particulars of their debts or claims, and the names and addresses of their Solicitors (if any), to appointed Liquidator Kevin Brown at: Marriotts LLP Allan House 10 John Princes Street London W1G 0AH United Kingdom Headquartered in Basingstoke, United Kingdom, WHE Europe Limited engages in the sale and distribution of DVDs. WORDMAP LIMITED: Creditors' Meeting Slated for October 31 --------------------------------------------------------- Creditors of Wordmap Limited (Company Number 03641734) will meet at 11:00 a.m. on Oct. 31 at: BDO Stoy Hayward Fourth Floor One Victoria Street Bristol BS1 6AA United Kingdom Creditors who want to be represented at the meeting may appoint proxies. Proxy forms must be submitted together with written debt claims at noon on Oct. 30 at: S. E. J. Girling Joint Administrator BDO Stoy Hayward Fourth Floor One Victoria Street Bristol BS1 6AA United Kingdom Tel: 0117 934 2800 Fax: 0117 922 5191 BDO Stoy Hayward -- http://www.bdo.co.uk/-- is the U.K. member firm of BDO International, the world's fifth largest accountancy network with more than 600 offices in 100 countries. Its services include: audit and assurance, business restructuring, corporate finance, disputes and investigations, investment management, risk assurance services, tax services, and valuations. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Shareholders Total Working Equity Assets Capital Ticker (US$MM) (US$MM) (US$MM) ------ ----------- ------- -------- AUSTRIA ------- Libro AG (111) 174 (182) Rhi AG (214) 1,756 293 BELGIUM ------- City Hotels CITY.BR (7) 210 (15) Sabena S.A. (86) 2,215 (297) CZECH REPUBLIC -------------- Ceskomoravska Kolben & Danek Praha Holding (89) 192 (2,186) DENMARK ------- Elite Shipping (28) 101 19 FRANCE ------ Acces Industrie (8) 106 (35) Arbel PA.ARB (98) 222 (72) Banque Nationale de Paris Guyane BNPG (41) 352 N.A. BSN Glasspack (101) 1,151 179 Charbo De France (3,872) 4,738 (2,868) Compagnie Francaise de l'Afrique Occidentale (65) 256 21 Dollfus Mieg & Cie S.A. DS (16) 143 (45) Euro Computer System (110) 682 377 Genesys S.A. GNS.PA (10) 120 (5) Grande Paroisse S.A. (927) 629 330 Immob Hoteliere (68) 233 29 Labo Dolisos DOLI.PA (28) 110 (33) Matussiere et Forest S.A. MTF (78) 294 (28) Oeneo S.A. SABT.PA (12) 292 38 Pneumatiques Kleber S.A. (34) 480 139 Rhodia S.A. RHA (788) 6,681 171 SDR Centrest (132) 252 N.A. SDR Picardie (135) 413 N.A. Selcodis S.A. SPVX (18) 128 22 Soderag (3) 404 N.A. Sofal S.A. (305) 6,619 N.A. Spie-Batignolles (16) 5,281 75 St Fiacre (FIN) (1) 111 (33) Teamlog TLO (19) 109 (3) Trouvay Cauvin (0) 134 10 Usines Chausson (23) 249 35 GERMANY ------- Cognis Deutschland GmbH & Co. KG (174) 3,003 606 Dortmunder Actien-Brauerei DABG (13) 118 (29) EM.TV AG EV4G.BE (22) 849 15 F.A. Guenther & Son AG GUSG (8) 111 N.A. Kaufring AG KAUG (19) 151 (51) Maternus Kliniken AG MAK.F (3) 207 (30) Nordsee AG (8) 195 (31) Plambeck Neue Energien AG PNE3 (4) 141 19 Primacom AG PRIG (268) 1,257 (1,048) Rinol AG RLIG (64) 104 (15) Schaltbau Hold SLTG (23) 144 (7) SinnLeffers AG WHGG (4) 454 (145) Spar Handels- AG SPAG (442) 1,433 (234) Vivanco Gruppe (55) 131 (31) GREECE ------ Empedos S.A. EMPED (34) 175 (48) Pouliadis Associates Corporation POUL (28) 124 (31) Radio A.Korassidis KORA (101) 181 (139) Commercial HUNGARY ------- Exbus Asset Management Nyrt. EXBUS (30) 118 (5,162) ICELAND ------- Decode Genetics Inc. DCGN (9) 229 141 ITALY ----- Binda S.p.A. BND (11) 129 (20) Cirio Finanziaria S.p.A. (422) 1,583 (396) Credito Fondiario e Industriale S.p.A. (200) 4,218 N.A. Finpart S.p.A. (152) 732 (322) Gruppo Coin S.p.A. GC (150) 4,218 N.A. I Viaggi del Ventaglio S.p.A. VVE.MI (61) 487 (58) Olcese S.p.A. OLCI.MI (13) 180 (64) Parmalat Finanziaria S.p.A. (18,419) 4,121 (12,481) Technodiffusione Italia S.p.A. TDIFF.PK (90) 152 (24) Wind Telecomunicazioni S.p.A. (10) 12,698 (815) NETHERLANDS ----------- Baan Company N.V. BAAN (8) 610 46 United Pan-Euro Air UPC (5,266) 5,180 (8,730) NORWAY ------ Petroleum-Geo Services PGO (32) 2,963 (5,250) POLAND ------ Mostostal Zabrze MECOF.PK (6) 227 (366) Vista Alegre Atlantis SGPS S.A. VAAAE (18) 193 (83) ROMANIA ------- Oltchim RM Valce OLT (45) 232 (321) RUSSIA ------ OAO Samaraneftegas (332) 892 (16,942) Zil Auto (185) 378 (11,107) SPAIN ----- Altos Hornos de Vizcaya S.A. (116) 1,283 (278) Santana Motor S.A. (46) 223 41 Sniace S.A. (10) 134 (37) SWITZERLAND ----------- Wedins Skor Accessoarer AB (10) 139 (129) TURKEY ------ Nergis Holding (24) 125 26 Yasarbank (948) 623 N.A. UKRAINE ------- Dnepropetrovsk Metallurgical Plant Imeni Petrovsko (2) 278 (509) Dniprooblenergo (38) 478 (797) Donetskoblenergo (166) 706 (1,320) UNITED KINGDOM -------------- Abbott Mead Vickers (2) 168 (16) AEA Technology Plc AAT.L (24) 340 (50) Alldays Plc (120) 252 (202) Amey Plc (49) 932 (47) Anker Plc ANK.L (22) 115 13 Atkins (WS) Plc ATK (63) 1,279 70 Bonded Coach Holiday Group Plc (6) 188 (44) Blenheim Group (153) 198 (34) Booker Plc BKRUY (60) 1,298 (8) Bradstock Group BDK (2) 269 5 Brent Walker Group BWL (1,774) 867 (1,157) British Energy Plc BGY (5,823) 4,921 434 British Nuclear Fuels Plc (4,248) 40,326 977 Compass Group CPG (668) 2,972 (298) Costain Group COST (39) 567 (5) Danka Bus System DNK.L (108) 540 34 Dawson Holdings DWN.L (12) 158 (19) Easynet Group ESY.L (45) 323 38 Electrical and Music Industries Group EMI (1,264) 2,818 (253) Euromoney Institutional Investor Plc ERM.L (88) 297 (56) European Home Retail Plc EHRL (14) 111 (37) Gartland Whalley (11) 145 (8) Global Green Tech Group (156) 408 (18) Gondola Holdings Plc GND.L (239) 987 (396) Heath Lambert Fenchurch Group Plc (10) 4,109 (10) HMV Group Plc HMV (4) 948 (175) Homestyle Group Plc HME (29) 409 (124) Imperial Chemical Industries Plc ICI (835) 8,881 (49) Invensys PLC (1,031) 3,875 494 IPC Media Ltd. (685) 254 16 Jarvis Plc JRVS.L (683) 492 (371) Lambert Fenchurch Group (1) 1,827 3 Lattice Group (1,290) 12,410 (1,228) Leeds United LDSUF.PK (73) 144 (29) M 2003 Plc (2,204) 7,205 (756) Manchester City (17) 154 (21) Micro Focus International Plc MCRO.L (14) 115 (11) Mytravel Group MT.L (283) 1,159 (410) Orange Plc ORNGF (594) 2,902 7 Park Group Plc PKG.L (5) 111 (13) Partygaming Plc PRTY (46) 398 (110) Premier Farner Plc PFL (33) 964 127 Premier Foods Plc PFD.L (31) 1,475 16 Probus Estates Plc PBE.L (28) 113 (49) Regus Plc RGU.L (46) 367 (60) Rentokil Initial Plc RTO (1,134) 2,678 (45) RHM Plc RHM (586) 2,411 59 Saatchi & Saatchi SSI (119) 705 (41) Seton Healthcare (11) 157 0 SFI Group (108) 178 (162) Telewest Communications Plc TLWT (3,702) 7,581 (5,361) UK Coal Plc UKC (25) 865 (62) Virgin Mobile Holdings Plc VMOB.L (490) 155 (80) Wincanton Plc WIN (66) 1,236 (71) ********* Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Thursday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. 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