/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/061108.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 Wednesday, November 8, 2006, Vol. 7, No. 222 Headlines A U S T R I A C-BAU LLC: Creditors' Meeting Slated for November 17 CENTE LLC: Creditors' Meeting Slated for November 16 JAGER & KRONSTEINER: Creditors' Meeting Slated for November 14 QUICK PERSONALMANAGEMENT: Creditors' Meeting Slated for Nov. 16 WIR GRILLEN: Claims Registration Period Ends November 24 B E L G I U M CARMEUSE LIME: Moody's Changes Outlook on Improved Performance CHIQUITA BRANDS: Weak Performance Prompts Moody's to Cut Ratings VOLKSWAGEN AG: Eyes 20% Job Cuts Outside Germany, Report Says UNIVERSAL CORP: Declares US$0.44 Per Share Quarterly Dividend C Z E C H R E P U B L I C AES CORP: Incurs US$340 Million Net Loss in 2006 Third Quarter AES CORP: Unit Says Firm Complies with Regulations AES CORP: Board Names John McLaren as Executive Vice President KONINKLIJKE AHOLD: Unveils Strategy for Profitable Growth KONINKLIJKE AHOLD: Fitch Affirms BB Ratings on Strategic Review D E N M A R K SHAMROCK CAPITAL: Moody's Assigns B1 Rating on Class G Notes XEROX CORP: Moody's Reviewing Ratings and May Upgrade F I N L A N D AGCO CORP: Earns US$5.4 Million in Third Quarter 2006 F R A N C E CA INC: Earns US$53 Million for Second Quarter 2007 CA INC: Names Bill Lipsin Sr. Vice Pres. of Worldwide Channels CHURCH & DWIGHT: Declares US$0.07 Per Share Quarterly Dividend OMNOVA SOLUTIONS: Moody's Affirms Low-B Ratings After Asset Sale G E R M A N Y ART DEPOT: Creditors Must Submit Claims by November 14 CAVAR TRANSPORT: Creditors Must Submit Claims by November 14 GATE 2006-1: Fitch Rates EUR15.3 Million Class E Notes at BB+ JUBLA GMBH: Proofs of Claim Deadline Slated for November 14 KUECHENSTUDIO HEINEVETTER: Creditors' Claims Due November 14 MECHANISCHE TRIKOTAGENFABRIK: Claims Filing Ends November 15 VOLKSWAGEN AG: Eyes 20% Job Cuts Outside Germany, Report Says VOLKSWAGEN AG: Building New Site for Cheap Labor & High Demand VOTORANTIM GROUP: Prices Tender Offer on 7.875% Guaranteed Notes G R E E C E ANAPTYXI 2006-1: Moody's Rates EUR225-Mln Class D Notes at Ba2 H U N G A R Y AES CORP: Incurs US$340 Million Net Loss in 2006 Third Quarter AES CORP: Unit Says Firm Complies with Regulations AES CORP: Board Names John McLaren as Executive Vice President BORSODCHEM NYRT: Financial Regulator Wants More Info on Buyout I R E L A N D AFFILIATED COMPUTER: Reports US$1.39 Billion Preliminary Revenue AGCO CORP: Earns US$5.4 Million in Third Quarter 2006 SCOTTISH RE: Board Approves Senior Executive Success Plan I T A L Y ANDREW CORP: Agrees to Acquire EMS Wireless for US$50.5 Million ANDREW CORP: Simplifying Price Structure for Cable Products DA VINCI: Moody's Rates EUR15.6-Million Class C Notes at Ba2 FIAT SPA: Earns EUR195 Million for Third Quarter 2006 INTERNATIONAL PAPER: Completes US$5-Bln Forestland Sale to RMS K A Z A K H S T A N ALMA-PLAST LLP: Creditors Must File Claims by Dec. 3 ARGO TRADE: Proof of Claim Deadline Slated for Dec. 3 DANABANK JSC: Creditors Must File Claims by Nov. 29 DELTA PLUS-2: Proof of Claim Deadline Slated for Dec. 1 DUET LTD: Creditors Must Submit Claims by December 1 MATAY MARKET: Karaganda Court Opens Bankruptcy Proceedings REAL TRANS: Creditors Must Submit Claims by December 3 SHAPAGAT-JER LLP: Creditors Must Submit Claims by December 1 SIMA ALMATY: Creditors Must Submit Claims by December 1 TARAZ KURYLYS: Creditors Must Submit Claims by December 3 K Y R G Y Z S T A N BATKEN PHARMACY: Creditors' Claims Due Dec. 27 FASAL GLOBAL: Claims Registration Ends Dec. 27 N E T H E R L A N D S GETRONICS N.V.: Issues Third Quarter 2006 Operating Results KONINKLIJKE AHOLD: Unveils Strategy for Profitable Growth KONINKLIJKE AHOLD: Fitch Affirms BB Ratings on Strategic Review UNIVERSAL CORP: Declares US$0.44 Per Share Quarterly Dividend P O L A N D AFFILIATED COMPUTER: Reports US$1.39 Billion Preliminary Revenue BORSODCHEM NYRT: Financial Regulator Wants More Info on Buyout OMNOVA SOLUTIONS: Moody's Affirms Low-B Ratings After Asset Sale TK ALUMINUM: S&P Holds Junk Rating on Developing Watch R U S S I A ARKH-AGRO-SERVICE: Court Names P. Tarasov as Insolvency Manager BALTIC INVEST: Court Names S. Suvorov as Insolvency Manager BUILDING ENTERPRISE 1: Court Names A. Fazlyev to Manage Assets DANILOVSKIY FACTORY: Court Starts Reorganization Process DEVELOP INVESTMENTS: Court Names S. Suvorov to Manage Assets HOUSE-BUILDING COMPANY: Court Names S. Suvorov to Manage Assets GRAIN-INVEST: Orel Court Starts Bankruptcy Supervision Procedure LADYINO CJSC: Tver Court Names O. Akinshin as Insolvency Manager MELENKI-SEL-KHOZ-KHIMYA: Bankruptcy Hearing Slated for Feb. 6 NADYMSKIY FACTORY: Court Names S. Suvorov as Insolvency Manager OPTOMECHANICAL FACTORY: Court Names A. Fazlyev to Manage Assets SERDOBSKIY ENGINEERING: Names E. Meshenkova to Manage Assets VOLKSWAGEN AG: Building New Site for Cheap Labor & High Demand ZDOROVYE CJSC: Court Names A. Fazlyev as Insolvency Manager ZODCHIY CJSC: Vladimir Bankruptcy Hearing Slated for February 1 S L O V E N I A BANKA KOPER: Fitch Affirms Individual Rating at C S P A I N CHURCH & DWIGHT: Declares US$0.07 Per Share Quarterly Dividend GETRONICS N.V.: Issues Third Quarter 2006 Operating Results VALENCIA HIPOTECARIO: Fitch Junks EUR10.4 Million Class D Notes T U R K E Y GENERAL NUTRITION: Parent Offers US$325-Million PIK Notes GENERAL NUTRITION: Possible Sale Spurs S&P's Developing Watch GENERAL NUTRITION: Parent Earns US$13.9 Million in Third Quarter U K R A I N E ALABIUS LLC: Court Names Sergij Benedyuk as Insolvency Manager ALTAKOM LLC: Kyiv Court Names Sergij Benedyuk as Liquidator CHECHELNIKRAJAGROTEHSERVICE OJSC: A. Milovanov to Manage Assets HOTEL DNIPRO: Court Names Volodimir Sherepenko as Liquidator IVP BOYARD: Court Names Sergij Benedyuk as Insolvency Manager LANI UKRAINI: Creditors Must Submit Claims by November 10 LIBERTY MARKET: Oleksandr Chechelnitskij to Liquidate Assets POLIPROM JSCCT: Court Names Oleksandr Polishuk as Liquidator PROMKERAM LLC: Court Names R. Chernomaz as Insolvency Manager SEJM LLC: Court Names Oleksandr Bandola as Insolvency Manager U N I T E D K I N G D O M BRECONSHIRE HOSIERY: Joint Liquidators Take Over Operations BRISTOL INN: BDO Stoy Hayward Selling Three-Star Hotel BUILDSTAIR LIMITED: Hires Liquidator from Fisher Partners CA INC: Earns US$53 Million for Second Quarter 2007 CA INC: Names Bill Lipsin Sr. Vice Pres. of Worldwide Channels CHARLES OETEGENN: M. J. Ryan Leads Liquidation Procedure CHELSEA SCAFFOLDING: Creditors Ratify Voluntary Liquidation CNA INSURANCE: Rights Transfer Hearing Slated for Dec. 18 CX REINSURANCE: Rights Transfer Hearing Slated for Dec. 18 DURA AUTOMOTIVE: Wants Court Nod to Obtain US$300-Mln DIP Loan DURA AUTOMOTIVE: Seeks Court Nod to Use All Cash Collateral DURA AUTOMOTIVE: Ontario Court Recognizes Chapter 11 Case DURA AUTOMOTIVE: Receives NASDAQ Delisting Notice DV-COM LIMITED: Creditors Confirm Liquidators' Appointment DUNNSPRINT LIMITED: Taps Liquidators from Fisher Partners GENERAL MOTORS: Delphi Deal Coming Soon, Rick Wagoner Says GENERAL MOTORS: Reduces Third Quarter Net Loss to US$91 Million IMATE WINDOWS: Claims Filing Period Ends Dec. 27 JACKSON'S BASINGSTOKE: Car Dealer & Service Center Up for Sale OCEAN DRIVE: Creditors Confirm Liquidator's Appointment PENWRIGHT CONSTRUCTION: Names Liquidators from Abbott Fielding QUANTUM ENVIRONMENTAL: Appoints J. M. Titley as Liquidator SCOTTISH RE: Board Approves Senior Executive Success Plan SERBHIS GROUP: Brings In Liquidators from O'Hara & Co. SUPERIOR ENERGY: S&P Affirms BB Corporate Credit Rating SUPERIOR ENERGY: Appoints Harold Bouillion as Board Director TOM SOYA: RSM Robson Rhodes Selling Dairy Beverage Supplier UPGRADE RECRUITMENT: Marriotts LLP Selling Human Resource Biz VALENCIA HIPOTECARIO: Fitch Junks EUR10.4 Million Class D Notes WATERFRONT CORP: Fruit-Based Beverage Supplier Up for Sale XEROX CORP: Moody's Reviewing Ratings and May Upgrade ********* ============= A U S T R I A ============= C-BAU LLC: Creditors' Meeting Slated for November 17 ---------------------------------------------------- Creditors owed money by LLC C-Bau (FN 207340m) are encouraged to attend the creditors' meeting at 8:45 a.m. on Nov. 17 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Land Court of Innsbruck Room 214 2nd Floor Maximilianstrasse 4 6020 Innsbruck, Austria Headquartered in Pill, Austria, the Debtor declared bankruptcy on Sept. 14 (Bankr. Case No. 7 S 30/06f). Gernot Hofstadter serves as the court-appointed property manager of the bankrupt estate. The property manager can be reached at: Dr. Gernot Hofstadter Bozner Place 4 6020 Innsbruck, Austria Tel: 0512/5373730 Fax: 0512/56737315 E-mail: hofstaedter@chg.at CENTE LLC: Creditors' Meeting Slated for November 16 ---------------------------------------------------- Creditors owed money by LLC Cente (FN 255848y) are encouraged to attend the creditors' meeting at 9:30 a.m. on Nov. 16 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Trade Court of Vienna Room 1707 Vienna, Austria Headquartered in Vienna, Austria, the Debtor declared bankruptcy on Sept. 14 (Bankr. Case No. 2 S 139/06p). Gerhard Stauder serves as the court-appointed property manager of the bankrupt estate. Georg Kahlig represents Mag. Stauder in the bankruptcy proceedings. The property manager and his representative can be reached at: Mag. Gerhard Stauder c/o Dr. Georg Kahlig Siebensterngasse 42 1070 Vienna, Austria Tel: 523 47 91 E-mail: kahlig.partner@aon.at JAGER & KRONSTEINER: Creditors' Meeting Slated for November 14 -------------------------------------------------------------- Creditors owed money by LLC Jager & Kronsteiner Elektrotechnik (FN 224850m) are encouraged to attend the creditors' meeting at 11:50 a.m. on Nov. 14 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Land Court of St. Poelten Room 216 2nd Floor (Old Building) St. Poelten, Austria Headquartered in Sieghartskirchen, Austria, the Debtor declared bankruptcy on Sept. 14 (Bankr. Case No. 14 S 146/06w). Ulla Reisch serves as the court-appointed property manager of the bankrupt estate. The property manager can be reached at: Dr. Ulla Reisch Kremser Gasse 4 3100 St. Poelten, Austria Tel: 02742/351 550 Fax: 02742/351 550-5 E-mail: office.st.poelten@ulsr.at QUICK PERSONALMANAGEMENT: Creditors' Meeting Slated for Nov. 16 --------------------------------------------------------------- Creditors owed money by LLC Quick Personalmanagement (FN 243278m) are encouraged to attend the creditors' meeting at 3:15 p.m. on Nov. 16 to consider the adoption of the rule by revision and accountability. The creditors' meeting will be held at: The Land Court of Graz Hall L Room 230 2nd Floor Graz, Austria Headquartered in Graz, Austria, the Debtor's bankruptcy case was removed Aug. 25 from Land Court of Klagenfurt (Bankr. Case No. 40 S 67/06 b) to Land Court of Graz (Bankr. Case No. 25 S 81/06h). Helmut Nestler replaced Dr. Arnulf Kracker-Semler as court-appointed property manager of the bankrupt estate. The property manager can be reached at: Helmut Nestler Abstallerstrasse 41 8052 Graz - Wetzelsdorf, Austria Tel: 0664/8334509 Fax: 0316/285624-4 E-mail: nestler.h@aon.at WIR GRILLEN: Claims Registration Period Ends November 24 -------------------------------------------------------- Creditors owed money by LLC Wir grillen fuer Sie (FN 182744t) have until Nov. 24 to file written proofs of claims to court- appointed property manager Oliver Simoncic at: Mag. Oliver Simoncic Wiener Strasse 12 3100 St. Poelten, Austria Tel: 02742/354 234 Fax: 02742/351 448 Email: office@plusjus.at Creditors and other interested parties are encouraged to attend the creditors' meeting at 11:10 a.m. on Nov. 14 to consider the adoption of the rule by revision and accountability. The meeting of creditors will be held at: The Land Court of St. Poelten Room 216 2nd Floor (Old Building) St. Poelten, Austria Headquartered in St. Poelten, Austria, the Debtor declared bankruptcy on Sept. 14 (Bankr. Case No. 14 S 147/06t). ============= B E L G I U M ============= CARMEUSE LIME: Moody's Changes Outlook on Improved Performance -------------------------------------------------------------- Moody's Investors Service changed the outlook on all ratings assigned to Carmeuse Lime B.V. to positive from stable. The change in the outlook to positive reflects: -- the operating and financial improvement realized at the Company in 2004-2005 which has bolstered margins and supported steady deleveraging underpinned by stronger EBITDA; as well as -- further consolidation of the group's ownership structure through acquisition of North American operations, acquiring control of its high-growth Central European assets and divestment of minority stakes with corresponding reduction in debt. Moody's also notes that projected improvement in North American operations is gathering momentum; these operations, however, remain outside of the restricted group, while current ratings remain to be focused on the performance of the restricted group. In 1H 2006, operating performance of the group remained resilient, while margins were affected by increasing energy prices. Carmeuse reported EUR481 million in revenues and EUR98 million in recurring EBITDA for the 6 months of 2006 (Restricted group reported EUR242 million in revenues and EUR61 million in recurring EBITDA). With total debt at the restricted group at EUR308 million at the end of 1H 2006, Carmeuse restricted group leverage was maintained at x2.3 Total Debt / EBITDA. Looking forward, Moody's expects that current strategy for pursuing profitable growth and building presence in high-growth markets is likely to require additional investments in the medium term to be financed from the stronger operating cash flow of the group. Taking into account improving fundamentals of the business and its reduced leverage, Carmeuse is also well positioned to capitalize on the on-going consolidation in the lime sector, as well as to continue to strengthen its position in its key operating areas. In the absence of a material change in shareholders distribution policy, Moody's sees some scope for upgrading the ratings should the Company maintain a conservative leverage profile as reflected in robust FFO / Interest coverage above 2 and strong FCF / Total Debt sustained in middle-teen digits; while expanding the scale and scope of the operations. Ratings affected: Carmeuse Lime B.V * Ba3 Corporate Family Ratings; and * Ba3 Senior Secured rating on 2012 eurobonds. Carmeuse group, headquartered in Louvain-La-Neuve, Belgium, is one of the world's leading producers of lime and lime-related products with FY 2005 revenues of EUR0.8 billion. CHIQUITA BRANDS: Weak Performance Prompts Moody's to Cut Ratings ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings for Chiquita Brands L.L.C., as well as for its parent Chiquita Brands International, Inc. The outlook on all ratings is stable. This rating action follows the company's announcement that had incurred a US$96 million net loss for its 2006 third quarter. This weaker-than-expected operating performance results from a number of factors including: -- continuing weak pricing in core European markets, -- losses in key secondary European banana trading markets, -- unexpected lower demand for bananas in some European markets and -- the resulting need to liquidate at a very low prices excess fruit, as well as -- a US$43 million non-cash impairment charge to write-off goodwill related to an underperforming European subsidiary. Operations are also continuing to suffer from the impact of recent e. coli discoveries in U.S/ fresh spinach products, which during September and October had resulted in an FDA advisory and industry-wide withdrawals of fresh spinach product by most processors, and lower consumption of some salad products. Continuing high fuel and other industry costs, as well as unusually high costs to source fruit during shortages in late 2005/early 2006, have also pressured earnings and cash flow. Given the company's weak operating performance, it is unlikely that it will be able to meet the target credit metrics Moody's had set out in order for it to maintain its prior rating. The stable rating outlook reflects Moody's expectation that Chiquita's operating performance will continue to be pressured by fierce competition and margin pressure in its key European banana markets as the industry adapts to the new banana marketing regulations, which took effect in January 2006. It is Moody's view that Chiquita's ratings reflect the continuing uncertainty surrounding how the company's operations will ultimately be impacted by this new regulatory environment, and the volatility in earnings and cash flow that is likely to exist throughout the transition period. Existing ratings also assume that Chiquita is successful in negotiating an amendment to its bank credit facilities in a manner, which provides ample financial flexibility to the company. Chiquita's existing ratings reflect a company with a good qualitative profile, but with credit metrics, which have been weakening due to a combination of leveraged acquisitions and weaker than expected operating performance, resulting in an overall B3 rating. The key rating factors currently influencing Chiquita's ratings and stable outlook are: -- The company is one of the largest global producers and marketers of fresh fruit and vegetables, with good geographic and product market diversity. -- Its franchise strength and growth potential are considered moderate, with good market share and volume growth in some segments, partially offset by the low margin commodity nature of much of its business which, at times, can lead to earnings and cash flow volatility. -- Liquidity under stress has been weak over the past year, as evidenced by the need to seek financial covenant relief. -- Overall credit metrics had been relatively strong for its rating category, but have been weakening due to a combination of higher debt from leveraged acquisitions and weak operating performance. Chiquita's ratings could be further downgraded if its earnings and cash flow remain weak - conceivably due to the impact of the new EU banana regulations being more negative than anticipated, the company's inability to successfully pass along higher energy costs, or its liquidity becomes constrained as it seeks further amendments to financial covenants from its lenders. Specifically, Chiquita's ratings could be downgraded if three- year average Debt/EBITDA (incorporating Moody's standard analytic adjustments) rose above 6 times and was likely to rise above 8 times on a lagging 12-month basis in a downturn, and/or three year average EBIT/Interest fell below 1.4 times and were likely to fall below 0.7 time on a lagging 12-month basis in a downturn. Given the recent downgrade, a rating upgrade in the near term is unlikely. Over the intermediate term, however, upward rating pressure would start to build if the company successfully adapts to the new EU banana import regulations, its operating performance improves, and it successfully negotiates amendments to its bank facilities which provide it with ample financial flexibility. A ratings upgrade would also require Chiquita to be able to sustain three-year average Debt/EBITDA below 5.5 times and lagging 12-month Debt/EBITDA below 7 times in a downturn, and to maintain three-year average EBIT/Interest above 1.5 times, with lagging 12-month EBIT/Interest above 1 time in a downturn. Ratings downgraded with a stable outlook: Chiquita Brands LLC (operating subsidiary) * US200 million senior secured revolving credit to B1 (LGD2, 26%) from Ba3 (LGD2, 26%) * US$24.5 million senior secured term loan B to B1 (LGD2, 26%) from Ba3 (LGD2, 26%) * US$372.2 million senior secured term loan C to B1 (LGD2, 26%) from Ba3 (LGD2, 26%) Chiquita Brands International, Inc. (holding company parent) * US$250 million 7.50% senior unsecured notes due 2014 to Caa2 (LGD 5, 89%) from Caa1 (LGD 5, 89%) * US$225 million 8.875% senior unsecured notes due 2015 to Caa2 (LGD5, 89%) from (LGD 5, 89%) * Corporate family rating at B3 * Probability of default rating at B3 With 2005 sales of US$3.9 billion, Cincinnati-based Chiquita is one of the largest global producers and marketers of fresh fruit and vegetables. VOLKSWAGEN AG: Eyes 20% Job Cuts Outside Germany, Report Says ------------------------------------------------------------- Volkswagen AG is planning to eliminate up to 2,400 jobs, or 20 percent of the workforce, in Belgium, Spain and Portugal, according to published reports. The carmaker planned to reduce its production capacity in the three countries as it moves to boost its main operation in Wolfsburg, Germany, Reuters states citing the Frankfurter Allgemeine Zeitung as its source. The paper discloses that VW's supervisory board will convene on Nov. 17 to discuss production planning over the next few years. Horst Neumann, VW's personnel director, told the local daily that similar job cuts is planned at VW plants in West Europe with restructuring talks scheduled to begin soon, Richard Milne writes for the Financial Times. VW disclosed in February that its restructuring program, which aims to improve the carmaker's profitability, could affect up to 20,000 workers over the next three years, Reuters relates. Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, Asia and Africa, Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle-related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by Chief Executive Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. UNIVERSAL CORP: Declares US$0.44 Per Share Quarterly Dividend ------------------------------------------------------------- Allen B. King -- chairperson, president, and chief executive officer of Universal Corp. -- disclosed that the company's board of directors has declared a quarterly dividend of US$.44 per share on the common shares of the company, payable Feb. 12, 2007, to common shareholders of record at the close of business on Jan. 8, 2007. Mr. King noted, "This is our 36th consecutive annual dividend increase, and we are proud of our record of delivering value to shareholders." Universal has raised its common dividend every year since 1971. Universal Corp.'s board of directors declared a quarterly dividend of US$16.875 per share on the Series B 6.75% Convertible Perpetual Preferred Stock, payable Dec. 15, 2006, to shareholders of record as of 5:00 p.m. Eastern Time on Dec. 1, 2006. Based in Richmond, Virginia, Universal Corp., (NYSE:UVV) -- http://www.universalcorp.com/-- has operations in tobacco and agri-products. The company, through its subsidiaries, is one of two leading independent tobacco merchants in the world. Universal Corporation's gross revenues for the fiscal year that ended on March 31, 2006, were around US$3.5 billion, which included US$1.4 billion related to operations that were sold on Sept. 1, 2006. The company has operations in India, Brazil, Argentina, the United States, Guatemala, the Netherlands, Belgium and other countries in Europe. 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. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its Ba1 Corporate Family Rating for Universal Corporation, and downgraded its Ba1 rating to Ba2 on the company's US$563 million MTN. Additionally, Moody's assigned an LGD5 rating to the debt obligation, suggesting noteholders will experience a 73% loss in the event of a default. =========================== C Z E C H R E P U B L I C =========================== AES CORP: Incurs US$340 Million Net Loss in 2006 Third Quarter -------------------------------------------------------------- AES Corp. reported record revenues and net cash from operating activities for the third quarter of 2006. Revenues increased 14% to US$3.15 billion, compared with US$2.76 billion in the third quarter of 2005, while net cash from operating activities increased 35% to US$837 million, compared to US$619 million last year. Financial Restructuring During the quarter, the Company completed a portion of a broad financial restructuring of its Brazil businesses by selling part of its interest in Eletropaulo, a regulated utility. AES voting control was unaffected by the sale, and the proceeds were used in early October to repay in full US$608 million in debt and accrued interest owed to the Brazilian National Development Bank. Refinancing of the remaining holding company debt is expected to be completed later in the fourth quarter. The restructuring resulted in a US$500 million after-tax, non-cash charge, or US$0.76 diluted loss per share impact, resulting in a third quarter 2006 GAAP loss and reducing year to date GAAP earnings. Included in the non-cash charge is a US$0.07 per share favorable adjusted earnings per share benefit. The charge and estimated impact was previously disclosed on the Company's second quarter 2006 earnings conference call on Aug. 7. The loss related primarily to the non-cash realization of cumulative currency translation losses associated with the Eletropaulo share sale. On a GAAP basis, which includes the one-time charge, the third quarter 2006 net loss was US$340 million, while the net loss from continuing operations was US$353 million. These results compare to third quarter 2005 net income of US$244 million, or US$0.37 diluted earnings per share, net income from continuing operations of US$214 million, or US$0.32 diluted earnings per share, and adjusted earnings per share of US$0.31. For the nine months ending Sept. 30, 2006 compared to the same 2005 period: -- Revenues increased 14% to US$9.17 billion from last year's US$8.05 billion. -- Net cash from operating activities increased 24% to US$1.81 billion from last year's US$1.46 billion. -- Net income was US$180 million, or US$0.27 diluted earnings per share, versus US$453 million, or US$0.68 diluted earnings per share. -- Net income from continuing operations was US$213 million, or US$0.32 diluted earnings per share, compared to US$423 million, or US$0.64 diluted earnings per share. -- Adjusted earnings per share were US$1.05 compared to US$0.59. "This successful restructuring of our Brazil holding company allows us to reduce subsidiary debt and to receive future dividends from these businesses," said Paul Hanrahan, President and Chief Executive Officer. "During the quarter, we continued to grow our business. We signed a long-term power purchase agreement and began construction in Texas of our largest wind project to date. We also signed a new power purchase agreement for a coal and biomass-fired power plant in Canada and continued to add quality projects to our business development pipeline." Prior period results reflect the decision in the second quarter of this year to dispose of two businesses and account for them as discontinued operations. Financial Highlights The Company reported these highlights for the third quarter of 2006: -- The 14% revenue increase (approximately 12% excluding estimated foreign currency translation impacts) reflects higher prices in all segments, higher demand in Contract Generation and Regulated Utilities and consolidation of Itabo in Contract Generation. -- Gross margin increased 9% over the prior year due to higher demand, consolidation of Itabo and favorable foreign exchange rates in Brazil. Gross margin as a percent of revenue declined 160 basis points to 30.9% driven by higher fuel and maintenance costs in both Contract Generation and Competitive Supply. -- General and administrative expense increased US$17 million, largely from higher business development spending and increased corporate staffing. The Company continues to strengthen its finance function in areas such as accounting and tax. -- The US$500 million after-tax, non-cash Brazil restructuring charge includes US$537 million recorded as loss on sale of subsidiary stock, US$18 million of foreign currency transaction losses related to a transaction-related hedge, US$121 million in favorable tax benefits, and US$66 million of minority interest expense. -- Income tax for the 2006 period includes a US$20 million unfavorable adjustment due to the recent identification and correction of an error on the 2004 income tax return. -- Net income for the third quarter includes US$13 million associated with discontinued operations including a US$5 million gain on the previously announced sale of our Indian Queens business in the U.K. and operating earnings from the discontinued operations. -- Free cash flow (a non-GAAP financial measure) increased to US$664 million from US$380 million in the third quarter of 2005. The Company also reported these segment highlights for the third quarter: -- Regulated Utilities segment revenues increased 13%, or approximately 7% excluding estimated foreign currency translation impacts, primarily driven by higher prices and demand in Latin America. Gross margin increased 29%, largely resulting from the increased revenues, while gross margin as a percent of revenue improved to 28.0% primarily due to lower transmission costs in Latin America and a favorable business tax settlement in Cameroon. Eletropaulo recorded an increase in labor contingencies which was offset by a correction to depreciation expense. -- Contract Generation segment revenues increased 20%. Foreign currency translation was not a significant factor in the quarter. The increase largely relates to consolidation of Itabo, a Dominican Republic business previously carried as an equity investment, and higher demand. Gross margin was consistent with the prior quarter as higher emission allowance sales in Europe were offset by higher maintenance costs in Latin America and North America. Gross margin as a percent of revenue fell to 36.1% due to higher fuel costs and maintenance expenses. -- Competitive Supply segment revenues grew 3%, or approximately 4% excluding the estimated impacts of foreign currency translation, primarily reflecting higher prices in Argentina and New York. Gross margin fell 20% and gross margin as a percent of revenues declined to 25.4% largely due to outage related costs in North America. Earnings Guidance The Company revised its guidance for earnings from continuing operations to US$0.28 per share from US$1.05 per share previously, largely reflecting the Brazil restructuring charge impacts in the third and fourth quarters. It increased its adjusted earnings per share guidance to US$1.09 per share, which includes an estimated US$0.05 per share non-recurring benefit from the Brazil restructuring, from US$1.01 per share previously. The updated guidance also includes expected costs associated with certain fourth quarter debt refinancing transactions. The operating scenario underlying this guidance assumes a number of factors, including effective tax rate, foreign exchange rates, commodity prices, interest rates, tariff increases, new investments, and other significant factors, which could make actual results vary from the guidance. During the quarter, the Company continued to build a strong business development pipeline that includes projects focusing on platform expansion and greenfield investments that generally follow the long-term contract generation business model, complemented by continued growth in the alternative energy business. As of Sept. 30, 2006, the Company had almost 2,400 MW of new generation capacity under construction or in advanced engineering and design in Bulgaria, Chile, Panama, Spain, and the U.S. including fossil fuel and renewable energy projects. During the quarter the Company also acquired 73 MW of wind generation assets in California. About the Company AES Corporation (NYSE: AES) -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for nearly ten years, since it acquired three power plants in Hungary in 1996. Today, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. * * * As reported in the TCR-Europe on Oct. 23, Moody's Investors Service affirmed its B1 Corporate Family Rating for AES Corp. in connection with the implementation of its new Probability-of- Default and Loss-Given-Default rating methodology. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on the company's loans and bond debt obligations including the B1 rating on its senior unsecured notes 7.75% due 2014, which was also given an LGD4 loss-given default rating, suggesting noteholders will experience a 55% loss in the event of a default. AES CORP: Unit Says Firm Complies with Regulations -------------------------------------------------- "AES's purchase complied with all the norms of the regulatory bodies. There is no problem because it complies with all the regulations," Julian Nebreda -- the executive president of Electricidad de Caracas, AES Corp.'s unit in Venezuela -- told reporters. Reuters relates that the Supreme Court of Venezuela disclosed on Oct. 30 that it would hear a lawsuit challenging AES Corp.'s acquisition of a 71.3% stake in 2000 and questioning the legality of a foreign firm controlling a public utility. Electricidad de Caracas contested on Oct. 31 charges that AES Corp.'s purchase of the controlling stake in the company was illegal, Reuters notes. The court will decide whether to continue with the lawsuit after hearing testimony from the executives of Electricidad de Caracas and Venezuela's parliament, Reuters states. About Electricidad de Caracas Electricidad de Caracas is a vertically integrated utility in Venezuela, operating in electricity distribution, transmission, and generation in the capital city of Caracas and its metropolitan area. It is the largest private electric utility in the country and is owned by U.S.-based AES Corp. (B+/Positive/--). Electricidad de Caracas reported net profits of US$20.6 million from January to March, versus net losses of US$26.9 the same period in 2005. AES Corporation -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for nearly ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. * * * As reported in the TCR-Europe on Oct. 23, Moody's Investors Service affirmed its B1 Corporate Family Rating for AES Corp. in connection with the implementation of its new Probability-of- Default and Loss-Given-Default rating methodology. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on the company's loans and bond debt obligations including the B1 rating on its senior unsecured notes 7.75% due 2014, which was also given an LGD4 loss-given default rating, suggesting noteholders will experience a 55% loss in the event of a default. AES CORP: Board Names John McLaren as Executive Vice President -------------------------------------------------------------- The AES Corp.'s board of directors appointed John McLaren as the firm's Executive Vice President and Regional President of Europe and Africa on Oct. 13, 2006. Mr. McLaren served as: -- Vice President of Operations for AES Europe and Africa from 2003-2006 (and AES Europe, Middle East and Africa from May 2005-January 2006), -- AES Group Manager for Operations in Europe and Africa from 2002-2003, -- AES Project Director from 2000-2002, and -- Business Manager for AES Medway Operations Ltd. from 1997-2000. Mr. McLaren joined the company in 1993. The company has not entered into an employment agreement with him in connection with his appointment. Mr. McLaren will assume the role of Regional President of Europe and Africa from Shahzad Qasim. Meanwhile, Mr. Qasim will continue with the company as an Executive Vice President, focusing on business development work. AES Corporation -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for nearly ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. * * * As reported in the TCR-Europe on Oct. 23, Moody's Investors Service affirmed its B1 Corporate Family Rating for AES Corp. in connection with the implementation of its new Probability-of- Default and Loss-Given-Default rating methodology. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on the company's loans and bond debt obligations including the B1 rating on its senior unsecured notes 7.75% due 2014, which was also given an LGD4 loss-given default rating, suggesting noteholders will experience a 55% loss in the event of a default. KONINKLIJKE AHOLD: Unveils Strategy for Profitable Growth --------------------------------------------------------- Koninklijke Ahold N.V. disclosed of plans and financial targets resulting from its Retail Review, which began in May 2006. The plans are designed to accelerate identical sales growth, improve profit returns and strengthen the company's foundation for future expansion, creating additional value for its shareholders. Highlights: -- divest U.S. Foodservice; -- appoint European Chief Operating Officer and U.S. Chief Operating Officer; -- reduce operating costs by EUR500 million by end 2009; -- cut Group Support Office costs by 50% by end 2008; -- divest Tops and retail operations in Poland and Slovakia; -- sell holding in Jeronimo Martins Retail; -- implement brand improvement and value repositioning; -- reaffirm targets as retail net sales growth of 5% and retail operating margin of 5%; and -- return around EUR2 billion to shareholders and reduce debt by around EUR2 billion, following divestments. The new plans focus on Ahold's core retail businesses in the United States and Europe, the continued roll-out of value repositioning programs, and the reduction of operating costs by EUR500 million by end 2009. The company has also announced the appointment of new Chief Operating Officers in the United States and Europe to lead its restructured continental organizations. "Since the crisis in 2003, we have completed a comprehensive revitalization program," Anders Moberg, Ahold President and CEO, said. "We have substantially reduced debt, divested non-core assets, transformed business and financial controls, and resolved multiple investigations and litigation issues. At the same time, we have implemented a successful repositioning program at Albert Heijn and ICA and recovered significant value in U.S. Foodservice." "It is now time for us to focus our efforts on strengthening our retail competitive position, particularly in the United States. We will apply our consumer insight much more actively to improve our product, service and price offering in order to increase customer loyalty." "At the heart of our new continental structure is our commitment to remaining a strong global team." Mr. Moberg continued. "Our new structure will enable us to execute our strategy more effectively as a combined organization. We will be able to better drive operational synergies and leverage our retail capabilities and talent across all of our businesses. Our people have always been and will continue to be our greatest asset." As part of new plans, [the company is] reaffirming [its] primary targets. Based on repositioning experience at Albert Heijn and ICA, [the company] anticipates that margins and sales growth will initially decline somewhat before recovering. In addition, there will be non-recurring profits and charges related to the repositioning and disposal of companies. -- net sales growth: Reaffirming of target to achieve a sustainable retail net sales growth of 5%. Following the implementation of the company's repositioning plans, [the company] expects that this net sales growth will come mainly from identical sales growth; -- return on net sales: Reaffirming of target to achieve a sustainable retail operating margin of 5% on average for the retained retail banners. -- investment grade: Reaffirming of target to achieve investment grade. Full-text copy of Ahold's growth strategy is available free-of- charge at: http://researcharchives.com/t/s?149d About Ahold Headquartered in Amsterdam, Koninklijke Ahold N.V. -- http://www.ahold.com/-- retails food through supermarkets, hypermarkets and discount stores in North and South America, Europe and Asia. The company's chain stores include Stop & Shop, Giant, TOPS, Albert Heijn and Bompreco. Ahold also supplies food to restaurants, hotels, healthcare institutions, government facilities, universities, stadiums, and caterers. * * * Moody's Investors Service and Standard and Poor's has assigned low-B ratings to the company's 5.625% senior notes due 2007. Also, the company's 5.875% senior unsubordinated notes due 2008 and 6.375% senior unsubordinated notes due 2007 carry Moody's, S&P's and Fitch's low-B ratings. KONINKLIJKE AHOLD: Fitch Affirms BB Ratings on Strategic Review --------------------------------------------------------------- Fitch Ratings affirmed Royal Ahold N.V.'s (nka Koninklijke Ahold N.V.) ratings at Issuer Default and senior unsecured 'BB', following the company's announcement of its strategic review. The Outlook is Positive. The strategic review entails a cost reduction program (EUR500 million by end-2009), a disposal of non-core assets (Poland, Slovakia, Tops, holdings in JMR) and a divestment of U.S. Foodservice. "[The] announcement confirms that Ahold's credit profile is evolving towards an upgrade. Simplifying the business has long been part of the Ahold management team's strategy and the announced divestments are not a surprise as most of the retail assets to be disposed of were under-performing," says Johnny Da Silva, Director in Fitch's European RLCP team. Once the disposals are completed, around EUR2 billion will be returned to shareholders and another EUR2 billion will be applied to debt reduction, a move which Fitch views as balanced in terms of evenly benefiting shareholders and bondholders. Should the company achieve its disposal program, its credit profile will improve significantly with leverage on a pro-forma basis of less than 3.5x (from 3.8x as of FY05). As expected the group announced the disposal of some of its Central European operations assets (Poland and Slovakia). In Q306, the unit reported a sharp 6.1% reduction of like- for- like sales. Fitch views positively this divestment as the division did not contribute materially (H206 operating profit of EUR7m) to the overall group performance and its operating performance was low (0.7% operating margin). Fitch reiterates that as the U.S. Foodservice does not carry synergies with the retail operations, the divestment will enable the group to be more focused. "Divesting U.S. Foodservice will enable the group to execute its strategy more effectively as a combined organization, and strengthening the U.S. food retail business is now key given intense retail competition and the weaker U.S. economy," says Mr. Da Silva. With regards to the U.S. retail operations, as of Q306, Stop&Shop and Giant Landover (44% of the group retail division sale) in the U.S. posted like- for- like sales decline of 1.3% and 0.5% respectively, despite the implementation of the value improvement programme aimed at repositioning the group in price, promotion and private label. Giant-Carliste /Top Arena performance (10.6% of the retail sales) were mixed with good growth sales trends at Giant-Carlisle (+4.8% lfl) but negative at Tops (down 6.2% lfl). The group announced in July its intention to dispose 46 Tops stores in North East Ohio, leaving the division with 73 remaining stores in New York and Pennsylvania. Tops will be entirely divested. ============= D E N M A R K ============= SHAMROCK CAPITAL: Moody's Assigns B1 Rating on Class G Notes ------------------------------------------------------------ Shamrock Capital Plc is a synthetic CDO referencing local currency sovereign debt linked Notes (issued by Citigroup Funding Inc.), managed by Sydbank A/S. Shamrock Capital Plc is unique in the transferring of foreign exchange rate risks to investors in addition to the credit risk of the referenced sovereign debt issuers. Moody's assigned these ratings to Notes issued by Shamrock Capital Plc: -- EUR60,000,000 Series 2006-01 Class A-1 Supersenior Floating Rate Notes due 2009: Aaa; -- CZK175,500,000 Series 2006-01 Class A-2 Supersenior Floating Rate Notes due 2009: Aaa; -- US$36,500,000 Series 2006-01 Class A-3 Supersenior Floating Rate Notes due 2009: Aaa; -- US$40,000,000 Series 2006-01 Class B Floating Rate Notes due 2009: Aaa; -- US$20,000,000 Series 2006-01 Class C Floating Rate Notes due 2009: Aa2; -- EUR6,000,000 Series 2006-01 Class D-1 Floating Rate Notes due 2009: A2; -- CZK276,150,000 Series 2006-01 Class D-2 Floating Rate Notes due 2009: A2; -- EUR18,500,000 Series 2006-01 Class E-1 Floating Rate Notes due 2009: Baa2; -- CZK104,100,000 Series 2006-01 Class E-2 Floating Rate Notes due 2009: Baa2; -- US$20,000,000 Series 2006-01 Class F Floating Rate Notes due 2009: Ba2; and -- US$32,000,000 Series 2006-01 Class G Floating Rate Notes due 2009: B1. The ratings of the Notes address the expected loss posed to investors by the legal final maturity date of the notes in 2009. It should be noted that the rating of Class G will not monitored. The ratings are primarily based upon: -- an assessment of the eligibility criteria applicable to the synthetic exposures to control the credit and the FX risk; -- the credit quality of the total return swap counterparty, being Citigroup Global Markets Ltd., guaranteed by Citigroup Inc.; -- protection against losses through the sequentiality of principal payments; -- additional protection provided through the diversion of the interest due on the Subordinated Notes; -- the quality of the management of the pool of underlying exposures provided by Sydbank A/S; and -- the legal and structural integrity of the issue. In order to confirm that credit enhancement levels are consistent with the different ratings of the Notes, Moody's reviewed the eligibility criteria and that apply to the underlying portfolio of exposures. Moody's quantitative analysis of this transaction is derived from two elements: -- the use of CDOROM in order to determine the loss distribution due to credit losses, assuming a flat U.S. dollar-adjusted recovery-in-default rate of 5% across all 50 entities included selection universe; and, -- A bootstrapping of the historical FX rates for similarly diversified portfolios, using the full universe of potential investments. XEROX CORP: Moody's Reviewing Ratings and May Upgrade ----------------------------------------------------- Moody's Investors Service placed the ratings of Xerox Corp. and supported subsidiaries under review for possible upgrade. Overall, Moody's believes that the combination of consistent business execution, secured debt reduction, and positive operating trends warrant the consideration of a rating upgrade. Ratings under review for possible upgrade include: Xerox Corp.: * Corporate Family Rating at Ba1 * Senior unsecured at Ba1, LGD3, 48% * Senior unsecured shelf registration at (P) Ba1, LGD3, 48% * Subordinated at Ba2, LGD6, 94% * Subordinated shelf registration at (P) Ba2, LGD6, 94% * Preferred shelf registration at (P) Ba2, LGD6, 97% Xerox Credit Corp.: * Senior unsecured at Ba1 (support agreement from Xerox Corp.), LGD3, 48% The rating review will focus on the prospects for: (1) continued steady business execution, that includes equipment installation growth that provides the basis for ongoing post sale revenue streams, (2) overall modest revenue growth, (3) consistent operating profitability in the 8-9% range, (4) ongoing annual cash flow from operations in the US$1 to US$1.5 billion range, (5) continued reduction of secured debt, which reduction Moody's expects should approximate US$1 billion annually (6) the maintenance of solid liquidity and continued discipline with respect to share repurchase activity which should funded with with free cash flow generation. Since Moody's changed the ratings outlook to positive in September 2005, Xerox has continued to demonstrate good installation growth throughout its product offering and, with a good product lineup. At the same time, overall product mix has shifted slightly downward, which has contributed to slight pressure on gross margins, although they remain over 40%. Consistent and well-managed operating expenses have contributed to operating margins remaining in the 8% to 9% range. Importantly, the company has continued to consistently reduce the level of secured debt in its capital structure. Since June 2005, secured debt has been nearly cut in half to US$2.3 billion and we expect that this trend should continue. Liquidity remains solid, with cash balances of US$1.6 billion at September 2006 plus access to a US$1.25 billion unsecured revolving credit facility, for which covenant room is expected to remain ample. Xerox Corp., headquartered in Stamford, Connecticut, develops, manufactures and markets document processing systems and related supplies and provides consulting and outsourcing document management services. ============= F I N L A N D ============= AGCO CORP: Earns US$5.4 Million in Third Quarter 2006 ----------------------------------------------------- AGCO Corp. reported net sales of US$1.18 billion and net income of US$5.4 million for the third quarter of 2006. Adjusted net income, excluding restructuring and other infrequent expenses, was US$6.0 million for the third quarter of 2006. For the third quarter of 2005, AGCO reported net sales of US$1,233.6 million and net income of US$27.8 million. Adjusted net income, excluding restructuring and other infrequent income, was US$27.7 million, or US$0.31 per share, for the third quarter of 2005. Net sales for the third quarter of 2006 were US$1.2 billion, a decrease of around 4.3% compared to the same period in 2005. "As we previously announced, our results were negatively impacted by weaker markets in both our North American and Asia/Pacific segments," Martin Rihenhagen -- chairperson, president and chief executive officer of AGCO -- said. "In addition, the continued reduction of dealer inventories in North America resulted in lower sales and operating income in the region. This reduction is part of our plan to reduce both inventory and accounts receivable throughout the year. As of Sept. 30, 2006, our worldwide inventory and accounts receivable were around US$250 million lower than September 2005 levels. The working capital management also generated an improvement in free cash flow for the first nine months of 2006 of around US$200 million compared to the same period in 2005. While our balance sheet focus has impacted our current results, we believe these actions, along with our product and distribution initiatives, will provide a foundation for better returns in the future." "AGCO's third quarter sales were led by continued strong performance in the Europe/Africa/Middle East region. Despite relatively flat industry sales, our European revenues increased around 7.5% in the third quarter of 2006, excluding currency impacts, which demonstrates the value of our products and our strong distribution network," Mr. Richenhagen stated. Year-to-Date Results For the first nine months of 2006, AGCO reported net sales of US$3,801.2 million and net income of US$63.6 million. AGCO's net sales decreased 4.3% for the third quarter and 6.5% for the first nine months of 2006 compared to the same periods in 2005. Excluding the impact of currency translation, AGCO's net sales decreased 7.6% during the third quarter and 7.0% for the first nine months of 2006 compared to the same periods in 2005. Net sales declined in the North America, South America and Asia/Pacific regions, partially offset by sales increases in the Europe/Africa/Middle East region. In North America, net sales were significantly lower during 2006 compared to 2005 primarily due to weaker market conditions and lower deliveries to dealers resulting in a reduction in dealer inventory levels. In the South America and Asia/Pacific regions, weaker market conditions contributed to the sales decline. Adjusted income from operations decreased US$25.7 million for the third quarter of 2006 and US$61.5 million for the first nine months of 2006 compared to 2005 resulting from the decrease in net sales. Gross margins in 2006 were slightly below 2005, due to lower production levels, sales mix and currency impacts. Unit production of tractors and combines for the first nine months of 2006 was around 16% below 2005. In AGCO's Europe/Africa/Middle East region, income from operations increased US$2.6 million in the third quarter and US$11.5 million for the first nine months of 2006 compared to 2005. Income from operations in the third quarter and the first nine months of 2006 increased due to an approximate 3% and 6% increase in net sales, respectively, excluding currency impact, resulting from stronger market conditions in key regions of Europe, particularly in Germany. Operating margins remained strong due to new products and productivity improvements. Income from operations in AGCO's South America region decreased US$0.9 million for the third quarter and US$4.1 million for the first nine months of 2006 compared to 2005. Industry demand in South America was below 2005 levels, resulting in a decline in AGCO's net sales in South America, excluding currency impact, of around 4% and 15% for the third quarter and first nine months of 2006, respectively. In North America, income from operations decreased US$20.9 million in the third quarter and US$46.5 million for the first nine months of 2006 compared to 2005. Income from operations in the third quarter and the first nine months of 2006 was lower primarily due to an approximate 27% and 24% reduction in net sales, respectively, excluding currency impact, compared to 2005. The sales decline is a result of lower retail sales of AGCO products due to weaker industry conditions as well as the impact of dealer inventory reductions, which influence wholesale sales levels. Income from operations in the Asia/Pacific region decreased US$4.1 million in the third quarter and US$12.0 million for the first nine months of 2006 compared to 2005 primarily due to lower sales in Australia, New Zealand and Asia. Regional Market Results North America Industry retail demand softened considerably in the third quarter of 2006. Industry unit retail sales of tractors were down nearly 8% and combines were down over 18% compared to the third quarter of 2005. Third quarter 2006 industry retail sales of tractors over 100 horsepower were 24% below those in the third quarter of 2005. Industry unit retail sales of tractors for the first nine months of 2006 decreased around 2% over the comparable prior year period resulting from decreases in the compact and high horsepower tractor segments, offset by a slight increase in the utility tractor segment. Industry unit retail sales of combines for the first nine months of 2006 were around 8% lower than the prior year period. AGCO's unit retail sales of tractors and combines were also lower in the third quarter and first nine months of 2006 compared to 2005. Europe Industry unit retail sales of tractors for the first nine months of 2006 increased around 1% compared to the prior year period. Retail demand declined in France, Italy, Finland and Spain, but improved in Germany, the United Kingdom, Scandinavia and Central and Eastern Europe. AGCO's unit retail sales for the first nine months of 2006 were higher when compared to the prior year period. South America Industry unit retail sales of tractors and combines for the first nine months of 2006 decreased around 8% and 40%, respectively, compared to the prior year period. Retail sales in the major market of Brazil for tractors increased around 7% compared to 2005 and declined around 47% for combines during the first nine months of 2006 compared to 2005. AGCO's South American unit retail sales of tractors and combines declined in the first nine months of 2006 compared to 2005. Rest of World Markets Outside of North America, Europe and South America, AGCO's net sales for the first nine months of 2006 were around 25% lower than 2005 due to lower sales in Asia and the Middle East. Mr. Richenhagen commented, "Global industry demand in the third quarter showed mixed results. In Europe, industry retail sales improved slightly with increases in Germany and Scandinavia. In North America, third quarter industry retail sales were down sharply, especially in the large equipment sectors. In South America, industry demand remains weak overall with some recent improvement in Brazil driven by the sugar cane, coffee, and citrus sectors." Outlook Industry retail sales of farm equipment in 2006 in all major markets are expected to be relatively flat or below 2005 levels. In North America, 2006 farm income is projected to be below the prior year resulting in lower demand for equipment. In South America, the strength of the Brazilian currency and high farm debt levels are expected to continue to result in lower retail sales. Industry demand in Europe is expected to be flat to slightly increased compared to 2005. AGCO's net sales for the full year of 2006 are expected to decline 2 to 3% versus 2005 based on lower industry demand and planned dealer inventory reductions. AGCO is targeting full year earnings per share to be around US$1.00 per share. In addition, improved working capital utilization in 2006 is expected to result in strong free cash flow. AGCO Corp. is a global manufacturer and distributor of agricultural equipment and related replacement parts. The Co. offers a full line of products under multiple brands through one of the largest global distribution networks in the industry, including more than 3,900 independent dealers and distributors in more than 140 countries including Denmark, Finland, Germany, Italy, France, Spain and the United Kingdom. * * * As reported in the Troubled Company Reporter-Europe on Sept. 29, Moody's Investors Service's confirmed its Ba2 Corporate Family Rating for AGCO Corp. in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Automotive and Equipment sector. Moody's also revised its probability-of-default ratings and assigned loss-given-default ratings on these loans facilities: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 1.750% Conv. Sr. Sub. Notes due 2033 B1 B1 LGD5 89% 6.875% Sr. Sub. Notes due 2014 B1 B1 LGD5 89% Sr. Unsec. Shelf Ba3 Ba3 LGD5 81% =========== F R A N C E =========== CA INC: Earns US$53 Million for Second Quarter 2007 --------------------------------------------------- CA Inc. reported US$996 million revenue for the second quarter of fiscal year 2007, ended Sept. 30, 2006. Financial Overview (in millions of US$, except share data) Q2FY07 Q2FY06 Change ------ ------ ------ Revenue US$ 996 US$ 950 5% GAAP Diluted EPS 0.09 0.08 13% Net Income 53 46 15% GAAP Cash Flow from Operations 6 299 (98%) Non-GAAP Operating EPS 0.25 0.25 0% John Swainson, CA's president and chief executive officer, commented, "Our second quarter total revenue, GAAP earnings per share and non-GAAP earnings per share were at or above our expectations. However, a number of changes we implemented associated with our sales organization affected our business activity in the second quarter, and consequently caused a drag on our bookings and associated billings. While a lower-than- anticipated level of bookings and billings had a negative effect on cash flow in the quarter, changes in working capital -- including a lower cash collections rate and higher-than-expected accounts payable disbursements -- were the primary factors in our cash flow from operations decline compared with the second quarter of fiscal year 2006." "We believe the issues that affected our second quarter performance are behind us and we are confident in our ability to execute in the second half of our fiscal year. While our full- year cash flow from operations will be lower than expected, we believe we are back on track and in a position to grow our business going forward," Mr. Swainson said. CA's revenue for the second quarter was US$996 million, an increase of 5% over the US$950 million reported in the similar period last year. The increase in revenue was primarily attributed to growth in subscription and professional services revenues, partially offset by declines in maintenance and software fees and other revenue. North American revenue was up 8% while revenue from international operations was up 1%, including a positive foreign exchange impact of US$15 million. CA's subscription revenue for the second quarter increased 8% to US$762 million, compared with the US$704 million reported in the second quarter of last year, and was affected positively by increases in new deferred subscription value from acquired products. Subscription revenue accounted for 77% of total revenue in the quarter, increasing from the 74% reported in the second quarter of fiscal year 2006. CA expects subscription revenue to continue to become a larger percentage of its total revenue as more contracts are renewed on a subscription basis. The company added that as it begins to reach maturity on its model and based upon the timing of remaining old business model contract renewals, the impact of the transition to its new business model on revenues will decline. CA's total product and services bookings in the second quarter decreased 10% to US$690 million, from the US$765 million reported in the same period a year ago. This decrease is attributed to a decision to realign and restructure the sales force to achieve lower cost of sales and higher productivity and more discipline on contract renewals. Direct product bookings declined 13% to US$498 million. Indirect bookings grew 3% to US$75 million. Despite flat bookings performance in the first half of the year, the company continues to expect total bookings for the full year to grow. Total expenses of CA for the second quarter increased 3% to US$918 million, from the US$893 million reported in the similar period last year. The increase was mainly due to higher selling, general and administrative expenses associated with personnel costs from recent acquisitions and increased cost of professional services related to higher revenues. The expense increase was offset partially by a decline in the amortization of capitalized software costs and a gain from the sale of marketable securities. The company announced a restructuring plan in August 2006 designed to eliminate US$200 million in costs on an annual basis by the end of fiscal year 2008. CA recorded GAAP (Generally Accepted Accounting Principles) net income US$53 million for the second quarter of 2006, compared with net income of US$46 million reported in the same period in 2005. The company reported non-GAAP net income of US$145 million for the second quarter of 2006, compared with US$151 million in 2005. For the second quarter, CA generated cash flow from operations of US$6 million, compared with US$299 million in cash flow from operations reported in the prior year period. Second quarter cash flow was adversely affected by: -- working capital management issues; -- lower bookings and associated billings; and -- higher operating expenses. Cash flow from operations in the second quarter of fiscal year 2006 was negatively affected by a US$75-million Restitution Fund payment. Cost Reduction and Restructuring Plan CA disclosed in August of a cost reduction and restructuring plan designed to significantly improve the company's expense structure and increase its competitiveness. CA expects to deliver about US$200 million in annualized savings when the plan is completed by the end of fiscal year 2008. In the second quarter, CA recorded severance costs, relating to around 750 positions, or US$39 million, US$11 million of which was paid during the period. The company expects total restructuring charges of US$150 million, most of which will be recognized in fiscal 2007, and a reduction in workforce of around 1,400 positions, including around 300 positions associated with the divestiture of a number of joint ventures. The company also expects to eliminate an additional 300 positions through attrition. Capital Structure The balance of cash, cash equivalents and marketable securities at Sept. 30, 2006, was US$1.295 billion. With US$2.588 billion in total debt outstanding, the company has a net debt position of around US$1.293 billion. Repurchase Program The company completed a US$1 billion tender offer during the second quarter and repurchased 41.2 million shares of common stock. Fiscal year-to-date, CA has repurchased about 51.1 million shares of common stock at a cost of US$1.2 billion. The tender offer was the first phase of a total of up to US$2 billion repurchase plan. Nancy Cooper, CA's chief financial officer, noted, "We are exploring options regarding the remaining portion of the share repurchase program and will provide updates on the timing and method at the appropriate time. However, we will want to see performance meeting our expectations, a return to strong cash flows, and favorable market conditions before we move forward." Updated Outlook for Fiscal Year 2007 CA updated its outlook for the fiscal year and expects to meet or exceed revenue guidance of US$3.9 billion and its original guidance for non-GAAP operating earnings per share of US$0.83. The company expects GAAP earnings per share to be below its original outlook of US$0.44 per share as a result of the still- to-be-determined timing of 2007 restructuring plan costs. The company expects cash flow from operations of between US$900 million and US$1 billion, which would be lesser than the original outlook of US$1.3 billion. The new cash flow outlook includes the company's estimates of the impact of the lower- than-expected growth in bookings for the full year, borrowing costs associated with the tender offer and payments related to the 2007 restructuring plan. The cash flow outlook also assumes that the sales force will perform as expected and the company will improve its working capital management. Headquartered in Islandia, New York, CA Inc. (NYSE:CA) -- http://www.ca.com/-- is an information technology management software company that unifies and simplifies the management of enterprise-wide IT. Founded in 1976, CA serves customers in more than 140 countries including France, Germany, Italy and the United Kingdom. * * * As reported in the Troubled Company Reporter-Europe on Oct. 10, Moody's Investors Service confirmed its Ba1 Corporate Family Rating for CA Inc. in connection with Moody's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Technology Software sectors. Standard & Poor's Rating Services affirmed its 'BB' corporate credit and senior unsecured debt ratings on CA Inc., and removed them from CreditWatch where they were placed on July 5, with negative implications. S&P said the outlook is negative. CA INC: Names Bill Lipsin Sr. Vice Pres. of Worldwide Channels -------------------------------------------------------------- CA Inc. named W.B. Bill Lipsin senior vice president of worldwide channels, reporting to CA Chief Operating Officer Michael Christenson. Mr. Lipsin has 30 years of experience in sales and operations management, including 19 years with the channel. He joined CA in 2005 as senior vice president and general manager for its Western Region sales organization. "Growth in the channel business is a top priority for CA," Christenson said. "We will continue to develop our relationships with channel partners worldwide by empowering them with best-in-class management technologies needed to solve customers' most pressing IT challenges. With his experience and proven success on both sides of the channel-vendor relationship, Bill Lipsin will drive the development of these relationships to the next level." Prior to CA, Lipsin was president and chief executive officer of SEEC, an enterprise software and services vendor. Earlier, he was president and CEO of Ironside Technologies, guiding the company's growth from a start-up of six employees to a leading enterprise software vendor. Mr. Lipsin also was general manager of Bay Networks Canada where he oversaw an increase in revenue from US$10 million to more than US$100 million and helped establish the company as one of the largest players in the networking market. Prior to that, he was senior vice president of services and marketing for Crowntek, one of Canada's largest reseller/systems integrators. He also has held key positions with IBM Canada's direct and indirect sales and marketing organizations. "I'm very excited about leveraging CA's technology leadership to extend its channel leadership," said Lipsin. "As enterprise IT environments become increasingly complex -- and as nonstop performance becomes increasingly critical to revenue -- the value proposition of CA's management software becomes increasingly compelling to both channel partners and their customers." Headquartered in Islandia, New York, CA Inc. (NYSE:CA) -- http://www.ca.com/-- is an information technology management software company that unifies and simplifies the management of enterprise-wide IT. Founded in 1976, CA serves customers in more than 140 countries including France, Germany, Italy and the United Kingdom. * * * As reported in the Troubled Company Reporter-Europe on Oct. 10, Moody's Investors Service confirmed its Ba1 Corporate Family Rating for CA Inc. in connection with Moody's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Technology Software sectors. Standard & Poor's Rating Services affirmed its 'BB' corporate credit and senior unsecured debt ratings on CA Inc., and removed them from CreditWatch where they were placed on July 5, 2006, with negative implications. S&P said the outlook is negative. CHURCH & DWIGHT: Declares US$0.07 Per Share Quarterly Dividend -------------------------------------------------------------- Church & Dwight Co., Inc.'s board of directors declared a regular quarterly dividend of US$0.07 per share. This quarterly dividend will be payable Dec. 1, 2006, to stockholders of record at the close of business on Nov. 13, 2006. It is the company's 423rd regular consecutive quarterly dividend. Headquartered in Princeton, New Jersey, Church & Dwight Co. Inc. -- http://www.churchdwight.com/-- manufactures and sells sodium bicarbonate products popularly known as baking soda. The company also makes laundry detergent, bathroom cleaners, cat litter, carpet deodorizer, air fresheners, toothpaste, and antiperspirants. The company's international business includes operations in Australia, Canada, Mexico, the United Kingdom, France and Spain. * * * As reported in the troubled Company reporter-Latin America on Sept. 29, 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. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B2 Corporate Family Rating for Church & Dwight Company, Inc. 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 Revolving Credit Ba2 Baa3 LGD2 23% US$531 million Sr. Secured Term Loan Ba2 Baa3 LGD2 23% US$100 million Conv. Debentures Ba2 Ba2 LGD4 59% US$250 million Sr. Sub. Notes Ba3 Ba3 LGD5 85% OMNOVA SOLUTIONS: Moody's Affirms Low-B Ratings After Asset Sale ---------------------------------------------------------------- Moody's Investors Service affirmed OMNOVA Solutions Inc.'s corporate family rating at B2 and moved the company's rating outlook to positive. This follows the recent sale of the firm's building products business. Current ratings: OMNOVA Solutions Inc. * Corporate family rating -- B2 * US$165 million 11.25% Sr. Sec. Notes due 2010 -- B3 (LGD4, 64%) The change to a positive outlook reflects Moody's expectation that the firm will continue to improve its credit metrics, achieve top line growth and benefit from moderating prices for its key raw materials and improving EBITDA margins. With the divestiture of its buildings products business, the firm will be able to concentrate on growth opportunities for its remaining two businesses, which enjoy strong market positions in their niche markets. OMNOVA sold the building products business for a cash value of around US$40 million (plus the buyer assumed certain liabilities) and has targeted the proceeds for reduction of outstanding debt under the firm's revolving credit facility and the outstanding notes due 2010, once the issue becomes callable in May 2007, and to fund growth in the remaining businesses. The business sold represented 14% of 2005 sales, but only 3% of 2005 operating profit. The outlook and ratings reflect the firm's debt reduction over the past three years, the better financial profile of the remaining businesses and improvement in credit metrics in 2005 and 2006. Prior to the assets sale, OMNOVA had been successful in reducing long-term debt (before Moody's adjustments for underfunded pensions liabilities and leases) by around US$27 million over the past three years (August 2003 - August 2006). After repayment of revolving credit facility borrowings with the building products divestiture proceeds, OMNOVA should have improved liquidity with no outstanding borrowings under the facility other than letters of credit. In the past year, OMNOVA has improved its operating margin through reductions in SG&A expenses that have helped offset the negative impact of increased manufacturing costs. Despite improvement in OMNOVA's credit metrics, it still has suffered some deterioration in gross margins and is impacted by volatile raw material costs and is subject to cyclical markets. OMNOVA's ratings would likely be moved up if industry conditions were supportive of an upgrade and OMNOVA was able to sustain recent margins, reduced debt, made progress in managing working capital, and generated free cash flow greater than US$20 million per year. OMNOVA manufactures decorative and functional surfaces, emulsion polymers and specialty chemicals. The company operates in two business segments, Decorative Products (around one-third of 2005 consolidated sales, excluding the divested building products business), which makes commercial wallcoverings, coated fabrics and decorative laminates, and Performance Chemicals, which offerings include binders, coatings and adhesives for the paper and carpet industries. OMNOVA is the second largest producer of styrene butadiene latex in North America. Headquartered in Fairlawn, Ohio, OMNOVA was formed when it was spun-off from GenCorp in 1999. Revenues, excluding the divested building products business, were US$698 million for the LTM ended Aug. 31, 2006. ============= G E R M A N Y ============= ART DEPOT: Creditors Must Submit Claims by November 14 ------------------------------------------------------ Creditors of Art Depot 24 GdbR have until Nov. 14 to register their claims with court-appointed provisional administrator Stefan Haas. Creditors and other interested parties are encouraged to attend the meeting at 10:00 a.m. on Dec. 12, 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 Straubing Kolbstrasse 11 94315 Straubing Tel: (09421) 9495 Fax: (09421) 949650 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 Straubing opened bankruptcy proceedings against Art Depot 24 GdbR on Sept. 14. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Stefan Haas Theresienplatz 29 94315 Straubing Tel: 09421/3303930 The Debtor can be reached at: Art Depot 24 GdbR Dammweg 2 94315 Straubing Germany CAVAR TRANSPORT: Creditors Must Submit Claims by November 14 ------------------------------------------------------------ Creditors of Cavar Transport GmbH have until Nov. 14 to register their claims with court-appointed provisional administrator Christopher Seagon. Creditors and other interested parties are encouraged to attend the meeting at 9:00 a.m. on Dec. 12, 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 Karlsruhe Hall IV 1st Floor Schlossplatz 23 76131 Karlsruhe 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 Karlsruhe opened bankruptcy proceedings against Cavar Transport GmbH on Sept. 14. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Christopher Seagon Blumenstr. 17 69115 Heidelberg Germany Tel: 06221/91180 The Debtor can be reached at: Cavar Transport GmbH Bruchstuecker 91-93 76661 Philippsburg Germany GATE 2006-1: Fitch Rates EUR15.3 Million Class E Notes at BB+ ------------------------------------------------------------- Fitch Ratings assigned final ratings to GATE 2006-1 Ltd's issue of EUR185 million of floating-rate notes as follows: -- EUR42,000,000 Class A: 'AAA' -- EUR26,500,000 Class B: 'AA' -- EUR7,500,000 Class C: 'A+' -- EUR20,000,000 Class D: 'BBB+' -- EUR15,300,000 Class E: 'BB+' The Class F notes, totalling EUR73,500,000 are not rated. This transaction is a partially funded, synthetic securitisation of debt obligations originated by Deutsche Bank Aktiengesellschaft (rated 'AA-'(AA minus)/'F1+') to certain small-and medium sized enterprise clients domiciled mainly in Germany, while a smaller percentage is located around the globe. The transaction is designed to provide credit protection on a EUR2.1 billion portfolio that can be replenished until January 2015, of which the issuer will bear aggregate losses up to EUR185 million. The ratings of the notes are based on the credit quality of the reference portfolio, the credit enhancement provided by subordination, the quality of the collateral, the strength of the swap counterparty and the transaction's sound financial and legal structure. The ratings address the timely payment of interest and the ultimate repayment of principal. DB has entered into a credit default swap with the issuer and a super senior credit default swap with an investor. Under the CDS, the issuer has sold credit protection to DB with respect to the reference portfolio. The issuer hedges itself by issuing credit-linked notes. The replenishment criteria include, amongst others, the weighted-average rating factor test, a weighted-average life covenant of four years and compliance with the Fitch VECTOR model, which is used as a portfolio management tool. The WARF test is met if the weighted-average Fitch-equivalent rating of the reference obligations to be added is not lower than 'BBB-' (BBB minus)/'BB+' according to the Fitch VECTOR model. In this transaction, the issuer depends on the swap counterparty to make the quarterly CDS premium payments to provide timely interest payments on the notes. Therefore, adequate downgrade provisions are in place for the ratings of the notes to be de- linked from the rating of the swap counterparty. Credit enhancement for the Class A totals 8.8% and is provided by subordination of the Class B to Class F notes. JUBLA GMBH: Proofs of Claim Deadline Slated for November 14 ----------------------------------------------------------- Creditors of Jubla GmbH have until Nov. 14 to register their claims with court-appointed provisional administrator Dr. Wolfgang Schroeder. Creditors and other interested parties are encouraged to attend the meeting at 11:00 a.m. on Dec. 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 Neuruppin Hall 325 Karl Marx Road 18a 16816 Neuruppin, 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 Neuruppin opened bankruptcy proceedings against Jubla GmbH on Sept. 21. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Dr. Wolfgang Schroeder Genthiner Strasse 48 10785 Berlin Germany The Debtor can be reached at: Jubla GmbH Liebenwalder Ausbau 7/8 16792 Zehdenick Germany KUECHENSTUDIO HEINEVETTER: Creditors' Claims Due November 14 ------------------------------------------------------------ Creditors of Kuechenstudio Heinevetter GmbH have until Nov. 14 to register their claims with court-appointed provisional administrator Siegfried Mueller. Creditors and other interested parties are encouraged to attend the meeting at 9:10 a.m. on Dec. 19, 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 Bonn Hall S 2.22 2. Stick William Route 21 53111 Bonn, 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 Bonn opened bankruptcy proceedings against Kuechenstudio Heinevetter GmbH on Sept. 21. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Siegfried Mueller Zum Markt 10 53894 Mechernich Germany The Debtor can be reached at: Kuechenstudio Heinevetter GmbH Aachener Str. 30 53359 Rheinbach Germany MECHANISCHE TRIKOTAGENFABRIK: Claims Filing Ends November 15 ------------------------------------------------------------ Creditors of Mechanische Trikotagenfabrik Taura Guido Unger GmbH have until Nov. 15 to register their claims with court-appointed provisional administrator Dr. Christoph Junker. Creditors and other interested parties are encouraged to attend the meeting at 10:30 a.m. on Dec. 19, 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 Mechanische Trikotagenfabrik Taura Guido Unger GmbH on Sept. 19. Consequently, all pending proceedings against the company have been automatically stayed. The administrator can be reached at: Dr. Christoph Junker Karcherallee 25 a 01277 Dresden Germany E-mail: dresden@junker-kollegen.de Web: http://www.junker-kollegen.de/ The Debtor can be reached at: Mechanische Trikotagenfabrik Taura Guido Unger GmbH Hauptstrasse 62 09249 Taura Germany VOLKSWAGEN AG: Eyes 20% Job Cuts Outside Germany, Report Says ------------------------------------------------------------- Volkswagen AG is planning to eliminate up to 2,400 jobs, or 20 percent of the workforce, in Belgium, Spain and Portugal, according to published reports. The carmaker planned to reduce its production capacity in the three countries as it moves to boost its main operation in Wolfsburg, Germany, Reuters states citing the Frankfurter Allgemeine Zeitung as its source. The paper discloses that VW's supervisory board will convene on Nov. 17 to discuss production planning over the next few years. Horst Neumann, VW's personnel director, told the local daily that similar job cuts is planned at VW plants in West Europe with restructuring talks scheduled to begin soon, Richard Milne writes for the Financial Times. VW disclosed in February that its restructuring program, which aims to improve the carmaker's profitability, could affect up to 20,000 workers over the next three years, Reuters relates. Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, Asia and Africa, Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle-related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by Chief Executive Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. VOLKSWAGEN AG: Building New Site for Cheap Labor & High Demand -------------------------------------------------------------- Volkswagen AG is building a EUR400-million assembly plant in Kaluga, Russia, to tap low labor cost and to fill the growing demand for cars in Russia, Grigory Tambulov writes for the Associated Press. VW CEO Bernd Pischetsrieder and Economic Development and Trade Minister German Gref have laid the symbolic foundation stone for the production plant, which could make up to 115,000 cars a year. Kaluga Governor Anatoly Artamonov also attended the groundbreaking ceremony. "The automotive market in Russia is one of the world's most interesting," Mr. Pischetsrieder said. "So far, the group brands have only been represented in Russia through sales companies. However, if we wish to enjoy sustained benefits from the growth forecast for this market, we have to produce in Russia as well. "The fact that a world-famous company is coming to Russia, to Kaluga, speaks for itself," Mr. Gref said. "But the annual production of 115,000 economical cars -- which Russian citizens will buy -- makes us happy most of all because this increases their prosperity." The site is expected to employ around 3,500 people when it reaches full production capacity by 2008. The site would assemble the Skoda Octavia, Polo, Passat and Touareg brands. According to the European Bank for Reconstruction and Development, Russia has around 157 cars per 1,000 people. Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, Asia and Africa, Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle-related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by Chief Executive Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. VOTORANTIM GROUP: Prices Tender Offer on 7.875% Guaranteed Notes ---------------------------------------------------------------- Votorantim Group disclosed of the price for its cash tender offer for any and all of its wholly owned subsidiary Voto- Votorantim Overseas Trading Operations III Ltd.'s US$300,000,000 aggregate principal amount outstanding 7.875% guaranteed Notes due 2014 (CUSIP Nos.: 92908FAA4, G9393BAA2). The offer expired at 5:00 p.m., New York time, on Nov. 2. Votorantim will pay the purchase price and accrued and unpaid interest to, but excluding, the settlement date, for the notes accepted pursuant to the offer. Settlement of the offer is expected to occur on the third business day following the Expiration Date. Details of the relevant pricing information include: Notes: 7.875% Guaranteed Notes Due 2014 CUSIP/ISIN: 92908FAA4/US92908FAA49 G9393BAA2/ USG9393BAA29 Reference Security: UST 4.875% Notes Due Aug. 15, 2016 Fixed Spread: 1.44% Actual Reference Yield: 4.642% Tender Offer Yield: 6.082% Purchase Price per US$1,000 Original Principal Amount of Notes: 1,103.28 Quotation Report: Bloomberg PXI Votorantim retained J.P. Morgan Securities Inc. to serve as Dealer Manager for the offer, Bank of New York to serve as Depositary for the offer, Dexia Banque Internationale a Luxembourg SA to serve as Luxembourg Agent for the offer and D.F. King & Co., Inc. to serve as Information Agent for the offer. Requests for the Offer to Purchase and the related Letter of Transmittal and supplements to the documents may be directed to: D.F. King & Co., Inc. Tel: (212) 269-5550 (Banks and Brokers) (800) 290-6429 toll-free (others) Requests for documentation may also be made to: Dexia Banque International Tel: + 352 4590 1 Fax: + 352 4590 4227 Questions regarding the offer may be directed to: J.P. Morgan Securities Inc. Tel: (866) 846-2874 (U.S. toll-free) (212) 834-7279 (collect) Headquartered in Sao Paulo, Brazil, the Votorantim group is one of the largest private industrial conglomerates in Latin America, with large-scale production in cement, pulp and paper, and metals and mining industries. The group is also actively engaged in the production of chemicals, frozen concentrated orange juice, energy, financial services and venture capital investments. The company has global presence in Australia, Singapore, and Germany. * * * Moody's Investors Service upgraded on Sept. 5, the foreign currency rating of Voto -- Votorantim Overseas Trading Op. III's US$300 million senior unsecured guaranteed notes due 2014 to Ba1 from Ba2, while maintaining the stable outlook. The rating action was prompted by Moody's upgrade of Brazil's long-term foreign currency ceiling for bonds and notes to Ba1 from Ba2, with stable outlook. =========== G R E E C E =========== ANAPTYXI 2006-1: Moody's Rates EUR225-Mln Class D Notes at Ba2 -------------------------------------------------------------- Moody's Investors Service assigned these definitive ratings to four classes of Notes to be issued by ANAPTYXI 2006-1 PLC: -- EUR1,750,000,000 Class A Asset Backed Floating Rate Notes due 2041: Aaa; -- EUR150,000,000 Class B Asset Backed Floating Rate Notes due 2041: A1; -- EUR125,000,000 Class C Asset Backed Floating Rate Notes due 2041: Baa1; and -- EUR225,000,000 Class D Asset Backed Floating Rate Notes due 2041: Ba2. This transaction is the first Greek securitization of SME loans originated by EFG Eurobank Ergasias S.A. According to Moody's, the definitive ratings reflect the following factors, among others: -- the characteristics of the loan pool; -- the historic performance and default data provided by Eurobank EFG; -- the swap provided by IXIS CIB, which will guarantee a gross spread of 350 basis points (net of Levy 128 Tax) on the balance of the performing rate loans; -- the legal and structural integrity of the transaction; -- the servicing arrangements including Eurobank EFG's role as day to day servicer for the SME loan portfolio. The notes are supported by subordination and Cash Collateral Account initially funded at 6% building up to 8% with excess spread. Additionally a 2% liquidity line, to be built up with excess spread, is expected to be available to cover liquidity needs in the transaction. The transaction is structured as a Master Trust, with the originator retaining the Seller piece. The Minimum Seller piece is 10%. On Series Pay Out event, the pool will amortize. New additions to the portfolio will be possible as long as: -- at least 30,000 debtors are in the pool, -- the largest exposure remains 0.05% and -- a minimum 40% of the loans are secured. The collateral test has to be passed every month regardless of the new additions, and will trigger a series pay out event if not passed for 3 consecutive months. The ratings address the expected loss posed to investors by the legal final maturity of the Notes. In Moody's opinion, the structure allows for timely payment of interest and ultimate payment of principal by the legal final maturity. 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 Moody's will monitor this transaction on an ongoing basis. ============= H U N G A R Y ============= AES CORP: Incurs US$340 Million Net Loss in 2006 Third Quarter -------------------------------------------------------------- AES Corp. reported record revenues and net cash from operating activities for the third quarter of 2006. Revenues increased 14% to US$3.15 billion, compared with US$2.76 billion in the third quarter of 2005, while net cash from operating activities increased 35% to US$837 million, compared to US$619 million last year. Financial Restructuring During the quarter, the Company completed a portion of a broad financial restructuring of its Brazil businesses by selling part of its interest in Eletropaulo, a regulated utility. AES voting control was unaffected by the sale, and the proceeds were used in early October to repay in full US$608 million in debt and accrued interest owed to the Brazilian National Development Bank. Refinancing of the remaining holding company debt is expected to be completed later in the fourth quarter. The restructuring resulted in a US$500 million after-tax, non-cash charge, or US$0.76 diluted loss per share impact, resulting in a third quarter 2006 GAAP loss and reducing year to date GAAP earnings. Included in the non-cash charge is a US$0.07 per share favorable adjusted earnings per share benefit. The charge and estimated impact was previously disclosed on the Company's second quarter 2006 earnings conference call on Aug. 7. The loss related primarily to the non-cash realization of cumulative currency translation losses associated with the Eletropaulo share sale. On a GAAP basis, which includes the one-time charge, the third quarter 2006 net loss was US$340 million, while the net loss from continuing operations was US$353 million. These results compare to third quarter 2005 net income of US$244 million, or US$0.37 diluted earnings per share, net income from continuing operations of US$214 million, or US$0.32 diluted earnings per share, and adjusted earnings per share of US$0.31. For the nine months ending Sept. 30, 2006 compared to the same 2005 period: -- Revenues increased 14% to US$9.17 billion from last year's US$8.05 billion. -- Net cash from operating activities increased 24% to US$1.81 billion from last year's US$1.46 billion. -- Net income was US$180 million, or US$0.27 diluted earnings per share, versus US$453 million, or US$0.68 diluted earnings per share. -- Net income from continuing operations was US$213 million, or US$0.32 diluted earnings per share, compared to US$423 million, or US$0.64 diluted earnings per share. -- Adjusted earnings per share were US$1.05 compared to US$0.59. "This successful restructuring of our Brazil holding company allows us to reduce subsidiary debt and to receive future dividends from these businesses," said Paul Hanrahan, President and Chief Executive Officer. "During the quarter, we continued to grow our business. We signed a long-term power purchase agreement and began construction in Texas of our largest wind project to date. We also signed a new power purchase agreement for a coal and biomass-fired power plant in Canada and continued to add quality projects to our business development pipeline." Prior period results reflect the decision in the second quarter of this year to dispose of two businesses and account for them as discontinued operations. Financial Highlights The Company reported these highlights for the third quarter of 2006: -- The 14% revenue increase (approximately 12% excluding estimated foreign currency translation impacts) reflects higher prices in all segments, higher demand in Contract Generation and Regulated Utilities and consolidation of Itabo in Contract Generation. -- Gross margin increased 9% over the prior year due to higher demand, consolidation of Itabo and favorable foreign exchange rates in Brazil. Gross margin as a percent of revenue declined 160 basis points to 30.9% driven by higher fuel and maintenance costs in both Contract Generation and Competitive Supply. -- General and administrative expense increased US$17 million, largely from higher business development spending and increased corporate staffing. The Company continues to strengthen its finance function in areas such as accounting and tax. -- The US$500 million after-tax, non-cash Brazil restructuring charge includes US$537 million recorded as loss on sale of subsidiary stock, US$18 million of foreign currency transaction losses related to a transaction-related hedge, US$121 million in favorable tax benefits, and US$66 million of minority interest expense. -- Income tax for the 2006 period includes a US$20 million unfavorable adjustment due to the recent identification and correction of an error on the 2004 income tax return. -- Net income for the third quarter includes US$13 million associated with discontinued operations including a US$5 million gain on the previously announced sale of our Indian Queens business in the U.K. and operating earnings from the discontinued operations. -- Free cash flow (a non-GAAP financial measure) increased to US$664 million from US$380 million in the third quarter of 2005. The Company also reported these segment highlights for the third quarter: -- Regulated Utilities segment revenues increased 13%, or approximately 7% excluding estimated foreign currency translation impacts, primarily driven by higher prices and demand in Latin America. Gross margin increased 29%, largely resulting from the increased revenues, while gross margin as a percent of revenue improved to 28.0% primarily due to lower transmission costs in Latin America and a favorable business tax settlement in Cameroon. Eletropaulo recorded an increase in labor contingencies which was offset by a correction to depreciation expense. -- Contract Generation segment revenues increased 20%. Foreign currency translation was not a significant factor in the quarter. The increase largely relates to consolidation of Itabo, a Dominican Republic business previously carried as an equity investment, and higher demand. Gross margin was consistent with the prior quarter as higher emission allowance sales in Europe were offset by higher maintenance costs in Latin America and North America. Gross margin as a percent of revenue fell to 36.1% due to higher fuel costs and maintenance expenses. -- Competitive Supply segment revenues grew 3%, or approximately 4% excluding the estimated impacts of foreign currency translation, primarily reflecting higher prices in Argentina and New York. Gross margin fell 20% and gross margin as a percent of revenues declined to 25.4% largely due to outage related costs in North America. Earnings Guidance The Company revised its guidance for earnings from continuing operations to US$0.28 per share from US$1.05 per share previously, largely reflecting the Brazil restructuring charge impacts in the third and fourth quarters. It increased its adjusted earnings per share guidance to US$1.09 per share, which includes an estimated US$0.05 per share non-recurring benefit from the Brazil restructuring, from US$1.01 per share previously. The updated guidance also includes expected costs associated with certain fourth quarter debt refinancing transactions. The operating scenario underlying this guidance assumes a number of factors, including effective tax rate, foreign exchange rates, commodity prices, interest rates, tariff increases, new investments, and other significant factors, which could make actual results vary from the guidance. During the quarter, the Company continued to build a strong business development pipeline that includes projects focusing on platform expansion and greenfield investments that generally follow the long-term contract generation business model, complemented by continued growth in the alternative energy business. As of Sept. 30, 2006, the Company had almost 2,400 MW of new generation capacity under construction or in advanced engineering and design in Bulgaria, Chile, Panama, Spain, and the U.S. including fossil fuel and renewable energy projects. During the quarter the Company also acquired 73 MW of wind generation assets in California. About the Company AES Corporation (NYSE: AES) -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for nearly ten years, since it acquired three power plants in Hungary in 1996. Today, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. * * * As reported in the TCR-Europe on Oct. 23, Moody's Investors Service affirmed its B1 Corporate Family Rating for AES Corp. in connection with the implementation of its new Probability-of- Default and Loss-Given-Default rating methodology. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on the company's loans and bond debt obligations including the B1 rating on its senior unsecured notes 7.75% due 2014, which was also given an LGD4 loss-given default rating, suggesting noteholders will experience a 55% loss in the event of a default. AES CORP: Unit Says Firm Complies with Regulations -------------------------------------------------- "AES's purchase complied with all the norms of the regulatory bodies. There is no problem because it complies with all the regulations," Julian Nebreda -- the executive president of Electricidad de Caracas, AES Corp.'s unit in Venezuela -- told reporters. Reuters relates that the Supreme Court of Venezuela disclosed on Oct. 30 that it would hear a lawsuit challenging AES Corp.'s acquisition of a 71.3% stake in 2000 and questioning the legality of a foreign firm controlling a public utility. Electricidad de Caracas contested on Oct. 31 charges that AES Corp.'s purchase of the controlling stake in the company was illegal, Reuters notes. The court will decide whether to continue with the lawsuit after hearing testimony from the executives of Electricidad de Caracas and Venezuela's parliament, Reuters states. About Electricidad de Caracas Electricidad de Caracas is a vertically integrated utility in Venezuela, operating in electricity distribution, transmission, and generation in the capital city of Caracas and its metropolitan area. It is the largest private electric utility in the country and is owned by U.S.-based AES Corp. (B+/Positive/--). Electricidad de Caracas reported net profits of US$20.6 million from January to March, versus net losses of US$26.9 the same period in 2005. AES Corporation -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for nearly ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. * * * As reported in the TCR-Europe on Oct. 23, Moody's Investors Service affirmed its B1 Corporate Family Rating for AES Corp. in connection with the implementation of its new Probability-of- Default and Loss-Given-Default rating methodology. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on the company's loans and bond debt obligations including the B1 rating on its senior unsecured notes 7.75% due 2014, which was also given an LGD4 loss-given default rating, suggesting noteholders will experience a 55% loss in the event of a default. AES CORP: Board Names John McLaren as Executive Vice President -------------------------------------------------------------- The AES Corp.'s board of directors appointed John McLaren as the firm's Executive Vice President and Regional President of Europe and Africa on Oct. 13, 2006. Mr. McLaren served as: -- Vice President of Operations for AES Europe and Africa from 2003-2006 (and AES Europe, Middle East and Africa from May 2005-January 2006), -- AES Group Manager for Operations in Europe and Africa from 2002-2003, -- AES Project Director from 2000-2002, and -- Business Manager for AES Medway Operations Ltd. from 1997-2000. Mr. McLaren joined the company in 1993. The company has not entered into an employment agreement with him in connection with his appointment. Mr. McLaren will assume the role of Regional President of Europe and Africa from Shahzad Qasim. Meanwhile, Mr. Qasim will continue with the company as an Executive Vice President, focusing on business development work. AES Corporation -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. AES has been in Eastern Europe for nearly ten years, since it acquired three power plants in Hungary in 1996. Currently, AES has two distribution companies in Ukraine, which serve 1.2 million customers and generation plants in the Czech Republic and Hungary. AES is also the leading company in biomass conversion in Hungary, generating 37% of the nation's total renewable generation in 2004. * * * As reported in the TCR-Europe on Oct. 23, Moody's Investors Service affirmed its B1 Corporate Family Rating for AES Corp. in connection with the implementation of its new Probability-of- Default and Loss-Given-Default rating methodology. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on the company's loans and bond debt obligations including the B1 rating on its senior unsecured notes 7.75% due 2014, which was also given an LGD4 loss-given default rating, suggesting noteholders will experience a 55% loss in the event of a default. BORSODCHEM NYRT: Financial Regulator Wants More Info on Buyout -------------------------------------------------------------- Penzuegyi Szervezetek Allami Feluegyelete, the Hungarian financial supervisory authority, is asking for more information from First Chemical Holding Vagyonkezelo Korlatolt Felelossegu Tarsasag regarding the group's buyout offer of BorsodChem Nyrt, Budapest Business Journal says. According to the report, PSzAF, which recently completed a probe into market circumstances that would affect influence in Borsodchem, stressed that First Chemical must supplement its buyout offer to reflect changes to a prior agreement between the company, Vienna Capital Partners Group and Kikkolux S.a.r.l. PSzAF warned First Chemical Holding to submit until Friday a copy of the supplemented buyout offer or it would cancel the approval of the buyout offer. In October, PSzAF suspended the buyout offer while investigating whether it violated rules regarding acquisitions. As reported in the TCR-Europe on Sept. 26, First Chemical Holding offered to acquire all outstanding shares in BorsodChem Nyrt, in behalf of the Kikkolux Group and Vienna Capital. As previously reported, Kikkolux signed an option agreement with VCP and Firthlion (26.158%) and Vienna Capital Partners (21.83%) to buy all their shares at HUF3,000 apiece. The offer is subject to approval by financial market regulator PSzAF and the Competition Office. About BorsodChem Headquartered in Kazincbarcika, Hungary, BorsodChem Rt. -- http://www.borsodchem.hu/-- produces chlorine, chloric alkali, hydrochloric acid, caustic lye and PVC resins, and additives for the plastic and rubber industries. The Company exports its products mainly to Western Europe. The group's EBITDA for 2005 amounted to HUF27.0 billion, 31.7% higher than HUF20.5 billion in 2004. BorsodChem's net profit was down 17.7%, to HUF14.4 billion in 2005, from HUF17.8 billion a year ago. At Dec. 31, 2005, BorsodChem's balance sheet showed HUF237.9 billion in total assets, HUF98.9 billion in total liabilities and HUF139.02 billion in total equity. * * * The Company's long-term foreign and local issuer credit carry Standard and Poor's BB rating with stable outlook. ============= I R E L A N D ============= AFFILIATED COMPUTER: Reports US$1.39 Billion Preliminary Revenue ---------------------------------------------------------------- Affiliated Computer Services Inc. reported preliminary revenue of US$1.39 billion. Affiliated Computer disclosed of certain summary preliminary first quarter fiscal year 2007 financial information. Summary Preliminary First Quarter Fiscal Year 2007 -- preliminarily reported total revenues was US$1.39 billion, an increase of 6% compared with the first quarter of the prior year. -- preliminarily reported total revenue growth was 10% after adjusting for the divestiture of the welfare to workforce services business, substantially all of which was sold in the second quarter of fiscal year 2006. Consolidated internal revenue growth for the first quarter was 4%. The Commercial segment grew 10%, of which 6% was internal revenue growth, and accounted for 61% of revenues this quarter. The government segment had 1% internal revenue growth and 10% total revenue growth, excluding the WWS Divestiture, and accounted for 39% of consolidated revenues this quarter. -- preliminarily reported diluted earnings per share was US$0.60 for the first quarter of fiscal year 2007 (which also has not been modified to take into account the financial effects of the completion of the ongoing internal investigation into stock option matters). The preliminary results include US$0.05 per diluted share of legal expenses related to the ongoing stock option investigation and shareholder derivative lawsuits, US$0.04 per diluted share related to restructuring activities, US$0.01 per diluted share related to a waiver fee on the company's credit facility and US$0.01 per diluted share related to asset impairments and other charges. -- reported diluted earnings per share for the first quarter of fiscal year 2006 was US$0.74 (which also has not been modified to take into account the financial effects of the completion of the ongoing internal investigation into stock option matters). Reported results included US$0.04 per diluted share of compensation expense related to the departure of the company's former chief executive officer and the company's assessment of risk related to the bankruptcies of certain airline clients. -- during the first quarter of fiscal year 2007, the company executed certain restructuring activities to further support its competitive position. These activities, which were largely completed in late September, will serve to reduce annual costs by around US$75 million. The company believes the bulk of its restructuring activities have been completed, but will continue to review its operations. The company may execute other restructuring activities in the future if it believes these activities will benefit its business both operationally and competitively over the long-term. -- Cash flow from operations was the company's highest ever for a first quarter, preliminarily reported at around US$173 million, or 12% of revenues. Capital expenditures and additions to intangible assets were preliminarily reported at around US$110 million, or 8% of revenues. Free cash flow during the first quarter was preliminarily reported at US$63 million. -- during the first quarter of fiscal year 2007, the company acquired Primax Recoveries, Inc. for US$40 million, plus contingent payments of up to US$10 million based on future performance. Primax, with trailing 12-month revenues of around US$39 million, is one of the oldest and largest health care recovery firms providing subrogation and overpayment recovery services to help its clients improve their profitability. -- subsequent to Sept. 30, the company acquired Systech Integrators, Inc., for US$65 million, plus contingent payments of up to US$40 million based upon future performance. Systech, with trailing 12-month revenues of around US$61 million, is a premier partner of SAP Americas and will expand ACS' existing SAP service offering with consulting and systems integration services. -- the company signed US$132 million of annual recurring revenue during the first quarter of fiscal year 2007. In addition to the first quarter signings, the company has also been awarded around US$170 million of annual recurring revenue. These awards will be reflected as closed new business once the related contracts are finalized and executed. -- during the quarter, the company repurchased around 14.4 million shares for an aggregate purchase price of US$730.4 million, before transaction costs, or an average purchase price per share of US$50.62 pursuant to the June 2006 US$1 billion share repurchase program. As of Sept. 30, 2006, the company has completed the Prior Program and has US$1 billion of availability under the August 2006 US$1 billion share repurchase program. As a result of the company's share repurchase activity, weighted average shares used to calculate diluted earnings per common share at Sept. 30, 2006, were 104.6 million. Actual shares outstanding at September 30, 2006 were 98.9 million, consisting of 92.3 million Class A shares and 6.6 million Class B shares. Internal Stock Investigation Affiliated Computer is providing only certain summary preliminary quarterly financial information at this time because of the previously announced ongoing internal investigation it has been conducting into stock option matters, the outcome of which could impact these and prior period results and could involve a restatement of prior periods. The investigation, which is being conducted by an ad hoc committee of the Affiliated Computer's board of directors consisting of all the independent directors, who are proceeding with the assistance of specially engaged independent outside legal counsel, is expected to be completed later this quarter. For the same reason, the company will not be in a position to file its Quarterly Report on Form 10-Q for the quarterly period ended Sept. 30, 2006, on Nov. 9, 2006, when it would ordinarily be due for filing. Filing Delay Affiliated Computer has also delayed the filing of its Annual Report on Form 10-K for its fiscal year ended June 30, 2006, in view of the ongoing internal investigation. The company expects to file the Form 10-K and Form 10-Q as soon as practical following completion of the internal investigation. The summary preliminary quarterly financial information has been prepared by Affiliated Computer's management and does not take into account the financial effects of the completion of the company's internal investigation into stock option matters and has not been approved by the company's Audit Committee. In view of the company's decision to provide more limited information than is customary, there will not be a conference call to more fully discuss the results. Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland and Singapore. * * * As reported in the TCR-Europe on Oct. 4, Moody's Investors Service placed the Ba2 ratings of Affiliated Computer Services on review for possible downgrade. The review for downgrade was prompted by the company's ongoing independent investigation into historical stock option practices, which has resulted in the company's delay in filing its 10-K for its fiscal year ended June 2006. The company has received certain waivers from credit facility lenders through Dec. 31 related to the options matter. The review will examine the company's access to internal and external sources of liquidity as well as the prospects for filing the June 10-K and subsequent financial statements with the SEC by Dec. 31. As part of this review, Moody's will assess the company's acquisition plans and contract commitments. If the company becomes current in the filing of its financial statements by Dec. 31 and any restatement is unlikely to result in a material cash outflow, the ratings will likely be confirmed at Ba2. Ratings Placed on Review for Possible Downgrade: * Ba2 Senior Secured Term Loan Rating * Ba2 Senior Secured Revolving Credit Facility Rating * Ba2 Senior Notes Rating (US$500 Million due 2010 and 2015) * Ba2 Corporate Family Rating At the same time, Standard & Poor's Ratings Services lowered its corporate credit rating and senior secured ratings on Dallas, Texas-based Affiliated Computer Services, Inc. to 'B+' from 'BB'. The ratings remain on CreditWatch with negative implications where they were placed on Jan. 27. Fitch Ratings assigned its BB issuer default rating, BB senior secured revolving bank credit facility rating, BB senior secured term loan rating, and BB senior notes rating on Affiliated Computer Services, Inc. Fitch said the rating outlook is negative. AGCO CORP: Earns US$5.4 Million in Third Quarter 2006 ----------------------------------------------------- AGCO Corp. reported net sales of US$1,180.9 million and net income of US$5.4 million for the third quarter of 2006. Adjusted net income, excluding restructuring and other infrequent expenses, was US$6.0 million for the third quarter of 2006. For the third quarter of 2005, AGCO reported net sales of US$1,233.6 million and net income of US$27.8 million. Adjusted net income, excluding restructuring and other infrequent income, was US$27.7 million, or US$0.31 per share, for the third quarter of 2005. Net sales for the third quarter of 2006 were US$1.2 billion, a decrease of around 4.3% compared to the same period in 2005. "As we previously announced, our results were negatively impacted by weaker markets in both our North American and Asia/Pacific segments," Martin Rihenhagen -- chairperson, president and chief executive officer of AGCO -- said. "In addition, the continued reduction of dealer inventories in North America resulted in lower sales and operating income in the region. This reduction is part of our plan to reduce both inventory and accounts receivable throughout the year. As of Sept. 30, 2006, our worldwide inventory and accounts receivable were around US$250 million lower than September 2005 levels. The working capital management also generated an improvement in free cash flow for the first nine months of 2006 of around US$200 million compared to the same period in 2005. While our balance sheet focus has impacted our current results, we believe these actions, along with our product and distribution initiatives, will provide a foundation for better returns in the future." "AGCO's third quarter sales were led by continued strong performance in the Europe/Africa/Middle East region. Despite relatively flat industry sales, our European revenues increased around 7.5% in the third quarter of 2006, excluding currency impacts, which demonstrates the value of our products and our strong distribution network," Mr. Richenhagen stated. Year-to-Date Results For the first nine months of 2006, AGCO reported net sales of US$3,801.2 million and net income of US$63.6 million. AGCO's net sales decreased 4.3% for the third quarter and 6.5% for the first nine months of 2006 compared to the same periods in 2005. Excluding the impact of currency translation, AGCO's net sales decreased 7.6% during the third quarter and 7.0% for the first nine months of 2006 compared to the same periods in 2005. Net sales declined in the North America, South America and Asia/Pacific regions, partially offset by sales increases in the Europe/Africa/Middle East region. In North America, net sales were significantly lower during 2006 compared to 2005 primarily due to weaker market conditions and lower deliveries to dealers resulting in a reduction in dealer inventory levels. In the South America and Asia/Pacific regions, weaker market conditions contributed to the sales decline. Adjusted income from operations decreased US$25.7 million for the third quarter of 2006 and US$61.5 million for the first nine months of 2006 compared to 2005 resulting from the decrease in net sales. Gross margins in 2006 were slightly below 2005, due to lower production levels, sales mix and currency impacts. Unit production of tractors and combines for the first nine months of 2006 was around 16% below 2005. In AGCO's Europe/Africa/Middle East region, income from operations increased US$2.6 million in the third quarter and US$11.5 million for the first nine months of 2006 compared to 2005. Income from operations in the third quarter and the first nine months of 2006 increased due to an approximate 3% and 6% increase in net sales, respectively, excluding currency impact, resulting from stronger market conditions in key regions of Europe, particularly in Germany. Operating margins remained strong due to new products and productivity improvements. Income from operations in AGCO's South America region decreased US$0.9 million for the third quarter and US$4.1 million for the first nine months of 2006 compared to 2005. Industry demand in South America was below 2005 levels, resulting in a decline in AGCO's net sales in South America, excluding currency impact, of around 4% and 15% for the third quarter and first nine months of 2006, respectively. In North America, income from operations decreased US$20.9 million in the third quarter and US$46.5 million for the first nine months of 2006 compared to 2005. Income from operations in the third quarter and the first nine months of 2006 was lower primarily due to an approximate 27% and 24% reduction in net sales, respectively, excluding currency impact, compared to 2005. The sales decline is a result of lower retail sales of AGCO products due to weaker industry conditions as well as the impact of dealer inventory reductions, which influence wholesale sales levels. Income from operations in the Asia/Pacific region decreased US$4.1 million in the third quarter and US$12.0 million for the first nine months of 2006 compared to 2005 primarily due to lower sales in Australia, New Zealand and Asia. Regional Market Results North America Industry retail demand softened considerably in the third quarter of 2006. Industry unit retail sales of tractors were down nearly 8% and combines were down over 18% compared to the third quarter of 2005. Third quarter 2006 industry retail sales of tractors over 100 horsepower were 24% below those in the third quarter of 2005. Industry unit retail sales of tractors for the first nine months of 2006 decreased around 2% over the comparable prior year period resulting from decreases in the compact and high horsepower tractor segments, offset by a slight increase in the utility tractor segment. Industry unit retail sales of combines for the first nine months of 2006 were around 8% lower than the prior year period. AGCO's unit retail sales of tractors and combines were also lower in the third quarter and first nine months of 2006 compared to 2005. Europe Industry unit retail sales of tractors for the first nine months of 2006 increased around 1% compared to the prior year period. Retail demand declined in France, Italy, Finland and Spain, but improved in Germany, the United Kingdom, Scandinavia and Central and Eastern Europe. AGCO's unit retail sales for the first nine months of 2006 were higher when compared to the prior year period. South America Industry unit retail sales of tractors and combines for the first nine months of 2006 decreased around 8% and 40%, respectively, compared to the prior year period. Retail sales in the major market of Brazil for tractors increased around 7% compared to 2005 and declined around 47% for combines during the first nine months of 2006 compared to 2005. AGCO's South American unit retail sales of tractors and combines declined in the first nine months of 2006 compared to 2005. Rest of World Markets Outside of North America, Europe and South America, AGCO's net sales for the first nine months of 2006 were around 25% lower than 2005 due to lower sales in Asia and the Middle East. Mr. Richenhagen commented, "Global industry demand in the third quarter showed mixed results. In Europe, industry retail sales improved slightly with increases in Germany and Scandinavia. In North America, third quarter industry retail sales were down sharply, especially in the large equipment sectors. In South America, industry demand remains weak overall with some recent improvement in Brazil driven by the sugar cane, coffee, and citrus sectors." Outlook Industry retail sales of farm equipment in 2006 in all major markets are expected to be relatively flat or below 2005 levels. In North America, 2006 farm income is projected to be below the prior year resulting in lower demand for equipment. In South America, the strength of the Brazilian currency and high farm debt levels are expected to continue to result in lower retail sales. Industry demand in Europe is expected to be flat to slightly increased compared to 2005. AGCO's net sales for the full year of 2006 are expected to decline 2 to 3% versus 2005 based on lower industry demand and planned dealer inventory reductions. AGCO is targeting full year earnings per share to be around US$1.00 per share. In addition, improved working capital utilization in 2006 is expected to result in strong free cash flow. AGCO Corp. is a global manufacturer and distributor of agricultural equipment and related replacement parts. The Co. offers a full line of products under multiple brands through one of the largest global distribution networks in the industry, including more than 3,900 independent dealers and distributors in more than 140 countries including Denmark, Finland, Germany, Italy, France, Spain and the United Kingdom. * * * As reported in the Troubled Company Reporter-Europe on Sept. 29, Moody's Investors Service's confirmed its Ba2 Corporate Family Rating for AGCO Corp. in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the Automotive and Equipment sector. Moody's also revised its probability-of-default ratings and assigned loss-given-default ratings on these loans facilities: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 1.750% Conv. Sr. Sub. Notes due 2033 B1 B1 LGD5 89% 6.875% Sr. Sub. Notes due 2014 B1 B1 LGD5 89% Sr. Unsec. Shelf Ba3 Ba3 LGD5 81% SCOTTISH RE: Board Approves Senior Executive Success Plan --------------------------------------------------------- In a filing with the U.S. Securities and Exchange Commission, Scottish Re Group Ltd. disclosed of the approval of an amended employment agreement, dated July 1, 2002, between Paul Goldean and the company. Pursuant to the amendment, Mr. Goldean will serve as President and Chief Executive Officer of Scottish RE, nunc pro tunc to Oct. 26, with an annual base salary of US$550,000. Also, the company's board of directors approved a Senior Executive Success Plan. The Plan's purpose is to retain essential personnel through the transition period relating to the possible sale Scottish RE. Participation in the Plan is limited to these executives, each of whom will receive the guaranteed payout listed below if the transaction is completed: Executive Guaranteed Payout --------- ----------------- Paul Goldean US$300,000 Dean Miller US$200,000 Cliff Wagner US$200,000 David Howell US$200,000 Jeff Delle Fave US$100,000 In addition to the guaranteed payouts, each of the executives will receive additional payments to the extent that the sales price of the company in the transaction exceeds certain thresholds established by the Board. If any of the executives leave Scottish RE prior to the completion of the transaction, that executive will forfeit his right to any payments under the Plan. The executives will be entitled to payments under the Plan 90 days after the completion of the transaction unless that executive is terminated by the company for cause or due to resignation without good reason, in which case the payment will be forfeited. Payments under the Plan will be includable in calculations related to Section 280G of the United States Internal Revenue Code of 1986, as amended. Scottish Re Group Limited -- http://www.scottishre.com/-- is a global life reinsurance specialist. Scottish Re has operating companies in Bermuda, Charlotte, North Carolina, Dublin, Ireland, Grand Cayman, and Windsor, England. At March 31, 2006, the reinsurer's balance sheet showed US$12.2 billion assets and US$10.8 billion in liabilities * * * On Aug. 21, Standard & Poor's Ratings Services lowered its counterparty credit rating on Scottish Re Group Ltd. to 'B+' from 'BB+'. Moody's Investor Service downgraded Scottish Re's senior unsecured debt rating to Ba3 from Ba2 due to liquidity issues. A.M. Best Co. has downgraded on Aug. 22, the financial strength rating to B+ from B++ and the issuer credit ratings to "bbb-" from "bbb+" of the primary operating insurance subsidiaries of Scottish Re Group Limited (Scottish Re) (Cayman Islands). A.M. Best has also downgraded the ICR of Scottish Re to "bb-" from "bb+". AM Best put all ratings under review with negative implications. ========= I T A L Y ========= ANDREW CORP: Agrees to Acquire EMS Wireless for US$50.5 Million --------------------------------------------------------------- Andrew Corp. has agreed to acquire EMS Wireless -- a Norcross, Georgia-based division of EMS Technologies, Inc. Under the agreement, Andrew will pay US$50.5 million in cash for EMS Wireless, a major designer and manufacturer of base station antennas and repeaters for cellular networks in North America. Its customers include the major wireless operators in the US. John DeSana, a group president in the Antenna and Cable Products Segment of Andrew Corp., said, "EMS Wireless and its employees have a successful track record in innovation and customer responsiveness, and their addition to Andrew will deliver compelling strategic and financial benefits. EMS Wireless will strengthen our relationships with key customers and extend our leadership position in wireless subsystems." EMS Wireless had revenues of US$28.5 million for the first half of 2006. It employs 200 people in Norcross, Georgia, and Curitiba, Brazil. The transaction is expected to close within 30-60 days and be slightly accretive to earnings in fiscal 2007. Andrew expects to achieve US$5 million to US$10 million annually in synergies and reduced corporate spending beginning in fiscal 2007. Paul Domorski, the president and chief executive officer of EMS Technologies, noted, "We are very proud of our Wireless division and its remarkable achievements over the past 13 years. I credit our highly talented personnel with building the EMS Wireless cellular and PCS base station antenna business. Meanwhile, the industry is consolidating rapidly and greater scale is very important. We believe EMS Wireless and its dedicated employees will have a better future as part of a larger organization, such as Andrew, that is less affected by swings in sales of particular products and has a wider array of products to offer to wireless carriers. For these reasons, we think Andrew Corporation is the perfect match." Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ:ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries including Italy and Czech Republic, among others. * * * As reported in the Troubled Company Reporter, Standard & Poor's Ratings Services revised its CreditWatch implications on Andrew Corp. to negative from developing. The 'BB' corporate credit rating and other ratings on the company were placed on CreditWatch developing on Aug. 7. ANDREW CORP: Simplifying Price Structure for Cable Products ----------------------------------------------------------- Andrew Corp. will implement a simplified pricing structure for all cable products. Effective Jan. 1, 2007, Andrew will eliminate standalone surcharges and adjust list prices to reflect fluctuating costs of raw materials, especially copper, that are used in manufacturing Andrew's HELIAX(r) and RADIAX cable and related products. Prices will be adjusted quarterly, as necessary. Andrew began applying surcharges on its cable products in April 2006 to partially offset the ongoing, dramatic rise in raw material costs. Effective Jan. 1, surcharges instead will be included in the adjusted prices. On average, however, the new price structure is expected to have little or no impact on current net pricing paid by customers. "This new structure will simplify pricing of cable products for Andrew customers, and is in direct response to our customers' feedback regarding standalone surcharges," said John DeSana, group president, Antenna and Cable Products Segment, Andrew Corporation. "We remain committed to cost-effectively providing the world's highest quality and performance in cable products, including a simplified pricing plan and new options such as our recently introduced aluminum cable products." Headquartered in Westchester, Illinois, Andrew Corporation (NASDAQ:ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries including Italy and Czech Republic, among others. * * * As reported in the Troubled Company Reporter, Standard & Poor's Ratings Services revised its CreditWatch implications on Andrew Corp. to negative from developing. The 'BB' corporate credit rating and other ratings on the company were placed on CreditWatch developing on Aug. 7. DA VINCI: Moody's Rates EUR15.6-Million Class C Notes at Ba2 ------------------------------------------------------------ Moody's Investors Service assigned these definitive ratings to three classes of asset-backed notes issued by Da Vinci Synthetic plc: -- EUR25.9 million Class A Secured Credit Linked Notes due 2018: A2; -- EUR20.8 million Class B Secured Credit Linked Notes due 2018: Baa2; and -- EUR15.6 million Class C Secured Credit Linked Notes due 2018: Ba2. This transaction represents the second synthetic securitization of aircraft financing and aviation industry loans originated by Banca Intesa S.p.A rated Aa3, Prime-1. It also represents the re-securitization of the majority of the Leonardo Synthetic plc portfolio with the addition of three new loans. The Originator's objective in this transaction is to benefit from credit risk protection on a revolving pool of aircraft financing, secured by aircraft collateral mainly by means of financial lease. The risk transfer is achieved through a credit default swap between Merrill Lynch International and Intesa and part of the risk is transferred by Merrill Lynch International via the issuance of several classes of credit-linked notes and unfunded Credit Default Swaps between Merrill Lynch and the swap counterparties. The net proceeds from the issuance of the credit-linked Notes will be deposited in a Euro denominated deposit account, bearing interest at the rate of 3 month Euribor in the name of the Issuer with Intesa (London Branch) as the deposit bank. This deposit account will be subject to downgrade triggers, such that upon loss of Prime-1, Intesa (London Branch) will need to procure a replacement counterparty to or find a Prime-1 rated guarantor of its obligations under the deposit account agreement. This transaction is very similar to the previous Leonardo Synthetic plc note issuance but has a shorter replenishment period of three years instead of five years. The underlying portfolio shows similar concentrations on the airlines companies and the replenishment criteria have been slightly amended to allow a higher weighted average loan to value of 80% instead of 70%. According to Moody's, the ratings take account of, among other factors: -- the relative diversification of the reference portfolio within the airline industry; -- the weighted average loan to value of the portfolio (78% in the initial portfolio) which will not exceed 80% on any of the replenishment dates; -- the quality and diversity of the aircraft collateral; -- the limited exposure to Banca Intesa in its role as servicer (limited to the realization of sale proceeds of the aircraft following a reference obligation default); and -- the tight definition of credit events affecting the Notes. The credit quality of the reference portfolio on an unsecured basis, which is in the high B range category was considered in the modeling of the transaction portfolio. However, the low unsecured rating of the underlying airlines companies is mitigated by the credit events definition and the loan to value level. The ratings address the expected loss posed to investors by the legal final maturity of the notes. In Moody's opinion, the structure allows for timely payment of interest and ultimate payment of principal with respect to the Notes by the legal final maturity. 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. Moody's assigned provisional ratings to this transaction on Oct. 18. Moody's will monitor this transaction on an ongoing basis. FIAT SPA: Earns EUR195 Million for Third Quarter 2006 ----------------------------------------------------- Fiat S.p.A. released its consolidated financial results for the third quarter and nine months ended Sept.30, 2006. The company posted EUR195 million in net profit against EUR11.8 billion in revenues for the third quarter of 2006, compared with EUR818 million in net profit against EUR10.6 billion in revenues for the same period in 2005. Fiat recorded EUR613 million in profit against EUR38 billion in revenues for the first nine months of 2006, compared with EUR1.3 billion in profit against EUR33.5 billion in revenues for the same period in 2005. The third quarter 2006 results confirm the company's improvement achieved in the first half of the year. Consequently, the company remains on track towards achieving the upward revised targets for the year: -- trading profit of EUR1.85 billion, of which EUR250 million coming from Fiat Auto; -- net income of EUR800 million (exclusive of one-off gains); and -- net industrial debt slightly higher than EUR2 billion (subject to the completion of the Fidis transaction by the end of 2006). Headquartered in Turin, Italy, Fiat S.p.A. -- http://www.fiatgroup.com/-- is one of the largest industrial groups in Italy and the fourth largest European-based automobile manufacturer, with revenues of EUR33.4 billion in the first nine months of 2005. Fiat's creditors include Banca Intesa, Banca Monte dei Paschi di Siena, Banca Nazionale del Lavoro, Capitalia, Sanpaolo IMI, and UniCredito Italiano. * * * As reported in the TCR-Europe on Nov. 6, Moody's Investors Service changed the outlook on Fiat S.p.A.'s Ba3 Corporate Family Rating to positive from stable and affirmed the long-term senior unsecured ratings as well as the short-term non-Prime rating. Outlook Actions: Issuer: Fiat Finance & Trade Ltd. * Outlook, Changed To Positive From Stable Issuer: Fiat Finance Canada Ltd. * Outlook, Changed To Positive From Stable Issuer: Fiat Finance Luxembourg S.A. * Outlook, Changed To Positive From Stable Issuer: Fiat Finance North America Inc. * Outlook, Changed To Positive From Stable Issuer: Fiat France S.A. * Outlook, Changed To Positive From Stable Issuer: Fiat S.p.A. * Outlook, Changed To Positive From Stable Fiat's Ba3/non-Prime ratings continue to reflect -- Fiat Group's scope and geographically well spread operations, -- the solid market position of Case New Holland and its potential to improve its highly indebted financial profile, and -- Iveco's stable market share in the European truck markets. On Oct. 4, Fitch Ratings affirmed Fiat S.p.A.'s Issuer Default and senior unsecured ratings at BB- and Short-term rating at B. This follows Fiat's exercise of its call option to buy back 29% of Ferrari's capital from a consortium led by Mediobanca. Fitch said the Outlook is Positive. On Aug. 8, Standard & Poor's Ratings Services raised its long- term corporate credit rating on Fiat S.p.A. to 'BB' from 'BB-'. At the same time, Standard & Poor's affirmed its 'B' short-term rating on Fiat. S&P said the outlook is stable. INTERNATIONAL PAPER: Completes US$5-Bln Forestland Sale to RMS -------------------------------------------------------------- International Paper has completed the previously announced sale of 4.2 million acres of forestland in the Southeastern U.S. and Michigan to an investor group led by Resource Management Service, LLC, for around US$5 billion in cash and notes, subject to certain post-closing adjustments. Together with the US$1.13 billion sale to TimberStar Southwest completed earlier, 2006 fourth-quarter proceeds from these two forestland transactions total around US$6.1 billion in cash and notes, and will result in an estimated special fourth-quarter pre-tax gain in excess of US$4 billion. With the closing of this sale, proceeds from transformation-related forestland sales now total around US$6.6 billion. International Paper's sale of the majority of its U.S. forestlands is part of the company's transformation plan to improve returns and position the company for long-term success by focusing on uncoated papers and packaging businesses, exploring strategic options for other businesses, returning value to shareowners, strengthening the balance sheet, and strategically reinvesting in growing markets. "I'm pleased that this milestone substantially completes the sale of our U.S. forestlands, which is a big step forward for International Paper's transformation plan," said IP Chairman and Chief Executive Officer John Faraci. "So far, we've received around US$9.5 billion of the US$9.7 billion in proceeds expected from sale agreements announced to date. "We've returned around US$1.4 billion to our shareowners through a share repurchase, and we've also begun the process of strengthening our balance sheet by repaying debt. We continue to improve results in our platform businesses, and we've announced plans for strategic, accretive reinvestments in China, Brazil and Russia, significantly strengthening our global positions in uncoated papers and packaging." The transaction with RMS was announced in April 2006, as part of International Paper's sale of the majority of its U.S. forestlands. RMS led negotiations for the 4.2 million-acre purchase on behalf of an investor group comprising RMS, Atlanta- based Forest Investment Associates, Boston-based GMO Renewable Resources and other investors. In connection with the transaction, the parties also entered into a 20-year fiber supply agreement for International Paper's pulp and paper mills in the South, a 10-year fiber supply agreement on the Michigan forestlands to be assigned to IP's former coated paper facilities in the region (now owned by Verso Paper), and a 10-year fiber supply agreement for IP's wood products facilities, all at market prices. Under the terms of the agreement, the forestlands will continue to be managed and third-party certified under the requirements of the Sustainable Forestry Initiative Standard. About Resource Management Service Based in Birmingham, Ala., RMS is an independent timberland investment management firm that manages forest investments in the U.S. South on behalf of private clients and institutional investors. About International Paper Based in Stamford, Connecticut, International Paper Company (NYSE: IP) -- http://www.internationalpaper.com/-- is in the forest products industry for more than 100 years. The company is currently transforming its operations to focus on its global uncoated papers and packaging businesses, which operate and serve customers in the U.S., Europe, South America and Asia. Its South American operations include, among others, facilities in Argentina, Brazil, Bolivia, and Venezuela. These businesses are complemented by an extensive North American merchant distribution system. International Paper is committed to environmental, economic and social sustainability, and has a long-standing policy of using no wood from endangered forests. * * * Moody's Investors Service assigned a Ba1 senior subordinate rating and Ba2 Preferred Stock rating on International Paper Company on Dec. 5, 2005. =================== K A Z A K H S T A N =================== ALMA-PLAST LLP: Creditors Must File Claims by Dec. 3 ---------------------------------------------------- LLP Alma-Plast has declared insolvency. Creditors have until Dec. 3 to submit written proofs of claim to: LLP Alma-Plast Boralday Ilyi District Almaty Region Kazakhstan ARGO TRADE: Proof of Claim Deadline Slated for Dec. 3 ----------------------------------------------------- LLP Argo Trade has declared insolvency. Creditors have until Dec. 3 to submit written proofs of claim to: LLP Argo Trade Volochaevskyi Str. 96 Petropavlovsk North Kazakhstan Region Kazakhstan DANABANK JSC: Creditors Must File Claims by Nov. 29 --------------------------------------------------- A Branch of JSC Danabank has declared insolvency. Creditors have until Nov. 29 to submit written proofs of claim to: JSC Danabank Bigeldinov Str. 41 Saryarka District Astana, Kazakshtan DELTA PLUS-2: Proof of Claim Deadline Slated for Dec. 1 ------------------------------------------------------- The Specialized Inter-Regional Economic Court of Akmola Region declared LLP Delta Plus-2 insolvent on Sept. 7. Creditors have until Dec. 1 to submit written proofs of claim to: LLP Delta Plus-2 Room 228 Auelbekov Str. 139a Kokshetau Akmola Region Kazakhstan Tel: 8 (3162) 25-79-32 DUET LTD: Creditors Must Submit Claims by December 1 ---------------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty declared LLP Duet Ltd. (RNN 600700196497) insolvent on Aug. 25. Subsequently, bankruptcy proceedings were introduced at the company. Creditors have until Dec. 1 to submit written proofs of claim to: LLP Duet Ltd. Micro District Mamyr-2, 4-24 Almaty, Kazakhstan Tel: 8 (3272) 57-10-19 8 (3335) 62-62-33 MATAY MARKET: Karaganda Court Opens Bankruptcy Proceedings ---------------------------------------------------------- The Specialized Inter-Regional Economic Court of Karaganda Region commenced bankruptcy proceedings against LLP Matay Market (RNN 302600210099). LLP Matay Market is located at: Pobedy Str. 102-58 Satpaev Karaganda Region Kazakhstan REAL TRANS: Creditors Must Submit Claims by December 3 ------------------------------------------------------ LLP Real Trans has declared insolvency. Creditors have until Dec. 3 to submit written proofs of claim to: LLP Real Trans Gogol Str. 84a Almaty, Kazakhstan SHAPAGAT-JER LLP: Creditors Must Submit Claims by December 1 ------------------------------------------------------------ The Specialized Inter-Regional Economic Court of Pavlodar Region declared LLP Firm Shapagat-Jer insolvent on July 5. Subsequently, bankruptcy proceedings were introduced at the company. Creditors have until Dec. 1 to submit written proofs of claim to: LLP Shapagat-Jer Tkachev Str. 17-185 Pavlodar Pavlodar Region Kazakhstan SIMA ALMATY: Creditors Must Submit Claims by December 1 ------------------------------------------------------- The Specialized Inter-Regional Economic Court of Almaty declared LLP Sima Almaty (RNN 600200081065) insolvent on Sept. 4. Subsequently, bankruptcy proceedings were introduced at the company. Creditors have until Dec. 1 to submit written proofs of claim to: Micro District Mamyr-2, 4-24 Almaty, Kazakhstan Tel: 8 (3272) 57-10-19 8 (3335) 62-62-33 TARAZ KURYLYS: Creditors Must Submit Claims by December 3 --------------------------------------------------------- LLP Taraz Kurylys Design has declared insolvency. Creditors have until Dec. 3 to submit written proofs of claim to: LLP Taraz Kurylys Design Micro District Alatau, 22-28 Taraz Jambyl Region Kazakhstan =================== K Y R G Y Z S T A N =================== BATKEN PHARMACY: Creditors' Claims Due Dec. 27 ---------------------------------------------- CJSC Batken Pharmacy has declared insolvency. Creditors have until Dec. 27 to submit written proofs of claim to: CJSC Batken Pharmacy Zavodskaya Str. 14 Kadamjai Kadamjai District Batken Region Kyrgyzstan FASAL GLOBAL: Claims Registration Ends Dec. 27 ---------------------------------------------- LLC Fasal Global Trading and Construction has declared insolvency. Creditors have until Dec. 27 to submit written proofs of claim to: LLC Fasal Global Trading and Construction Free Economic Zone Bishkek Ak-Chyi Mira Ave. 303 Bishkek, Kyrgyzstan ===================== N E T H E R L A N D S ===================== GETRONICS N.V.: Issues Third Quarter 2006 Operating Results ----------------------------------------------------------- Getronics N.V. released its operating results for the third quarter of 2006. Highlights: -- total revenue increased 1% to EUR622 million (Q3 2005: EUR618 million); total revenue reported excludes EUR16 million of revenue from discontinued operations (France) compared with EUR76 million from discontinued operations in Q3 2005 (France and Italy). -- service revenue increased by 3% to EUR550 million (Q3 2005: EUR533 million); service revenue growth on a comparable basis ** +5.0% in Q3 2006; service revenue growth breakdown: good in the Netherlands (+5.2%), strong in the Rest of Europe (+13.8%) and the Rest of the World (+10.3%); year-on-year decline in North America (-10.3%). -- product revenue decreased by 15% to EUR72 million (Q3 2005: EUR85 million), as the Company continues to de- emphasize non service-related product sales; revenue mix improved in Q3 to 88.4% services and 11.6% products from 86.2% and 13.8% in Q3 2005, respectively. * Unaudited results from continuing operations. Discontinued operations include the operating companies in Italy (divested in June 2006) and France (expected to be divested for 67% in Q4 2006). ** On a comparable basis is derived by calculating organic growth at constant rates assuming Getronics and PinkRoccade were combined as of Jan. 1, 2005, instead of March 14, 2005. Getronics remains on target to achieve around EUR2.6 billion of annual revenue in 2006 from continuing operations, barring unforeseen circumstances. The target range of EBITAE margin for the Group in 2006 remains between 3.0% and 4.0%, barring unforeseen circumstances. The Company currently considers it likely that the EBITAE margin for 2006 will benefit from some pension curtailments and other employee benefit plan related gains. Positive and negative employee benefit plan related profit & loss items are not treated as exceptional and may have material effects on the Company's operating results. As in previous years, the Company acknowledges that changes in its workforce (e.g. headcount reductions, acquisitions and divestments) or changes in the employee benefit plans will have positive or negative effects on its reported operating results this year and going forward. As indicated before, the planned cost savings of the Breakout Program are expected to improve the EBITAE margin by at least 1% on an annual basis when completed. Consistent with previous Trading Statements, limited management commentary has been provided. However, Getronics' CEO will be providing a more formal company update to all stakeholders in early December. "The growth of revenues in key markets underscores the strength of our market proposition and the trust our customers have in the value we add to their business," Klaas Wagenaar, CEO of Getronics, stated. "Workspace management is of increasing importance to companies all over the world and Getronics is one of the few companies to benefit from this." About Getronics Headquartered in Amsterdam, Netherlands, Getronics N.V. -- http://www.getronics.com/-- designs, integrates and manages ICT infrastructures and business solutions for many of the world's largest global and local companies and organizations, helping them maximize the value of their information technology investments. Getronics has some 27,000 employees in over 30 countries and approximate revenues of EUR3 billion. The company has regional offices in Boston, Madrid and Singapore. Its shares are traded on Euronext Amsterdam. * * * As reported in Troubled Company Reporter - Asia Pacific Getronics N.V.'s 'B' long-term corporate credit rating, along with the 'CCC+' senior unsecured debt, 'B' bank loan, and '3' recovery ratings on CreditWatch with negative implications, where they had originally been placed on Jan. 19. The '3' recovery rating indicates Standard & Poor's expectation of meaningful (50%-80%) recovery of principal for secured lenders in the event of a payment default. As reported in the TCR-AP, Moody's Investors Service downgraded Getronics' corporate family rating to B2 from B1 and placed the ratings on review for possible downgrade following the company's announcement of half year results showing a widening of net losses and fall in margins below the company's expectations. Concurrently the rating on the EUR100 million senior unsecured convertible Dutch bonds due 2008 has been downgraded to Caa1 from B3. KONINKLIJKE AHOLD: Unveils Strategy for Profitable Growth --------------------------------------------------------- Koninklijke Ahold N.V. disclosed of plans and financial targets resulting from its Retail Review, which began in May 2006. The plans are designed to accelerate identical sales growth, improve profit returns and strengthen the company's foundation for future expansion, creating additional value for its shareholders. Highlights: -- divest U.S. Foodservice; -- appoint European Chief Operating Officer and U.S. Chief Operating Officer; -- reduce operating costs by EUR500 million by end 2009; -- cut Group Support Office costs by 50% by end 2008; -- divest Tops and retail operations in Poland and Slovakia; -- sell holding in Jeronimo Martins Retail; -- implement brand improvement and value repositioning; -- reaffirm targets as retail net sales growth of 5% and retail operating margin of 5%; and -- return around EUR2 billion to shareholders and reduce debt by around EUR2 billion, following divestments. The new plans focus on Ahold's core retail businesses in the United States and Europe, the continued roll-out of value repositioning programs, and the reduction of operating costs by EUR500 million by end 2009. The company has also announced the appointment of new Chief Operating Officers in the United States and Europe to lead its restructured continental organizations. "Since the crisis in 2003, we have completed a comprehensive revitalization program," Anders Moberg, Ahold President and CEO, said. "We have substantially reduced debt, divested non-core assets, transformed business and financial controls, and resolved multiple investigations and litigation issues. At the same time, we have implemented a successful repositioning program at Albert Heijn and ICA and recovered significant value in U.S. Foodservice." "It is now time for us to focus our efforts on strengthening our retail competitive position, particularly in the United States. We will apply our consumer insight much more actively to improve our product, service and price offering in order to increase customer loyalty." "At the heart of our new continental structure is our commitment to remaining a strong global team." Mr. Moberg continued. "Our new structure will enable us to execute our strategy more effectively as a combined organization. We will be able to better drive operational synergies and leverage our retail capabilities and talent across all of our businesses. Our people have always been and will continue to be our greatest asset." As part of new plans, [the company is] reaffirming [its] primary targets. Based on repositioning experience at Albert Heijn and ICA, [the company] anticipates that margins and sales growth will initially decline somewhat before recovering. In addition, there will be non-recurring profits and charges related to the repositioning and disposal of companies. -- net sales growth: Reaffirming of target to achieve a sustainable retail net sales growth of 5%. Following the implementation of the company's repositioning plans, [the company] expects that this net sales growth will come mainly from identical sales growth; -- return on net sales: Reaffirming of target to achieve a sustainable retail operating margin of 5% on average for the retained retail banners. -- investment grade: Reaffirming of target to achieve investment grade. Full-text copy of Ahold's growth strategy is available free-of- charge at: http://researcharchives.com/t/s?149d About Ahold Headquartered in Amsterdam, Koninklijke Ahold N.V. -- http://www.ahold.com/-- retails food through supermarkets, hypermarkets and discount stores in North and South America, Europe and Asia. The company's chain stores include Stop & Shop, Giant, TOPS, Albert Heijn and Bompreco. Ahold also supplies food to restaurants, hotels, healthcare institutions, government facilities, universities, stadiums, and caterers. * * * Moody's Investors Service and Standard and Poor's has assigned low-B ratings to the company's 5.625% senior notes due 2007. Also, the company's 5.875% senior unsubordinated notes due 2008 and 6.375% senior unsubordinated notes due 2007 carry Moody's, S&P's and Fitch's low-B ratings. KONINKLIJKE AHOLD: Fitch Affirms BB Ratings on Strategic Review --------------------------------------------------------------- Fitch Ratings affirmed Royal Ahold N.V.'s (nka Koninklijke Ahold N.V.) ratings at Issuer Default and senior unsecured 'BB', following the company's announcement of its strategic review. The Outlook is Positive. The strategic review entails a cost reduction program (EUR500 million by end-2009), a disposal of non-core assets (Poland, Slovakia, Tops, holdings in JMR) and a divestment of U.S. Foodservice. "[The] announcement confirms that Ahold's credit profile is evolving towards an upgrade. Simplifying the business has long been part of the Ahold management team's strategy and the announced divestments are not a surprise as most of the retail assets to be disposed of were under-performing," says Johnny Da Silva, Director in Fitch's European RLCP team. Once the disposals are completed, around EUR2 billion will be returned to shareholders and another EUR2 billion will be applied to debt reduction, a move which Fitch views as balanced in terms of evenly benefiting shareholders and bondholders. Should the company achieve its disposal program, its credit profile will improve significantly with leverage on a pro-forma basis of less than 3.5x (from 3.8x as of FY05). As expected the group announced the disposal of some of its Central European operations assets (Poland and Slovakia). In Q306, the unit reported a sharp 6.1% reduction of like- for- like sales. Fitch views positively this divestment as the division did not contribute materially (H206 operating profit of EUR7m) to the overall group performance and its operating performance was low (0.7% operating margin). Fitch reiterates that as the U.S. Foodservice does not carry synergies with the retail operations, the divestment will enable the group to be more focused. "Divesting U.S. Foodservice will enable the group to execute its strategy more effectively as a combined organization, and strengthening the U.S. food retail business is now key given intense retail competition and the weaker U.S. economy," says Mr. Da Silva. With regards to the U.S. retail operations, as of Q306, Stop&Shop and Giant Landover (44% of the group retail division sale) in the U.S. posted like- for- like sales decline of 1.3% and 0.5% respectively, despite the implementation of the value improvement programme aimed at repositioning the group in price, promotion and private label. Giant-Carliste /Top Arena performance (10.6% of the retail sales) were mixed with good growth sales trends at Giant-Carlisle (+4.8% lfl) but negative at Tops (down 6.2% lfl). The group announced in July its intention to dispose 46 Tops stores in North East Ohio, leaving the division with 73 remaining stores in New York and Pennsylvania. Tops will be entirely divested. UNIVERSAL CORP: Declares US$0.44 Per Share Quarterly Dividend ------------------------------------------------------------- Allen B. King -- chairperson, president, and chief executive officer of Universal Corp. -- disclosed that the company's board of directors has declared a quarterly dividend of US$.44 per share on the common shares of the company, payable Feb. 12, 2007, to common shareholders of record at the close of business on Jan. 8, 2007. Mr. King noted, "This is our 36th consecutive annual dividend increase, and we are proud of our record of delivering value to shareholders." Universal has raised its common dividend every year since 1971. Universal Corp.'s board of directors declared a quarterly dividend of US$16.875 per share on the Series B 6.75% Convertible Perpetual Preferred Stock, payable Dec. 15, 2006, to shareholders of record as of 5:00 p.m. Eastern Time on Dec. 1. Based in Richmond, Virginia, Universal Corp., (NYSE:UVV) -- http://www.universalcorp.com/-- has operations in tobacco and agri-products. The company, through its subsidiaries, is one of two leading independent tobacco merchants in the world. Universal Corporation's gross revenues for the fiscal year that ended on March 31, 2006, were around US$3.5 billion, which included US$1.4 billion related to operations that were sold on Sept. 1. The company has operations in India, Brazil, Argentina, the United States, Guatemala, the Netherlands, Belgium and other countries in Europe. 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. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its Ba1 Corporate Family Rating for Universal Corporation, and downgraded its Ba1 rating to Ba2 on the company's US$563 million MTN. Additionally, Moody's assigned an LGD5 rating to the debt obligation, suggesting noteholders will experience a 73% loss in the event of a default. =========== P O L A N D =========== AFFILIATED COMPUTER: Reports US$1.39 Billion Preliminary Revenue ---------------------------------------------------------------- Affiliated Computer Services Inc. reported preliminary revenue of US$1.39 billion. Affiliated Computer disclosed of certain summary preliminary first quarter fiscal year 2007 financial information. Summary Preliminary First Quarter Fiscal Year 2007 -- preliminarily reported total revenues was US$1.39 billion, an increase of 6% compared with the first quarter of the prior year. -- preliminarily reported total revenue growth was 10% after adjusting for the divestiture of the welfare to workforce services business, substantially all of which was sold in the second quarter of fiscal year 2006. Consolidated internal revenue growth for the first quarter was 4%. The Commercial segment grew 10%, of which 6% was internal revenue growth, and accounted for 61% of revenues this quarter. The government segment had 1% internal revenue growth and 10% total revenue growth, excluding the WWS Divestiture, and accounted for 39% of consolidated revenues this quarter. -- preliminarily reported diluted earnings per share was US$0.60 for the first quarter of fiscal year 2007 (which also has not been modified to take into account the financial effects of the completion of the ongoing internal investigation into stock option matters). The preliminary results include US$0.05 per diluted share of legal expenses related to the ongoing stock option investigation and shareholder derivative lawsuits, US$0.04 per diluted share related to restructuring activities, US$0.01 per diluted share related to a waiver fee on the company's credit facility and US$0.01 per diluted share related to asset impairments and other charges. -- reported diluted earnings per share for the first quarter of fiscal year 2006 was US$0.74 (which also has not been modified to take into account the financial effects of the completion of the ongoing internal investigation into stock option matters). Reported results included US$0.04 per diluted share of compensation expense related to the departure of the company's former chief executive officer and the company's assessment of risk related to the bankruptcies of certain airline clients. -- during the first quarter of fiscal year 2007, the company executed certain restructuring activities to further support its competitive position. These activities, which were largely completed in late September, will serve to reduce annual costs by around US$75 million. The company believes the bulk of its restructuring activities have been completed, but will continue to review its operations. The company may execute other restructuring activities in the future if it believes these activities will benefit its business both operationally and competitively over the long-term. -- cash flow from operations was the company's highest ever for a first quarter, preliminarily reported at around US$173 million, or 12% of revenues. Capital expenditures and additions to intangible assets were preliminarily reported at around US$110 million, or 8% of revenues. Free cash flow during the first quarter was preliminarily reported at US$63 million. -- during the first quarter of fiscal year 2007, the company acquired Primax Recoveries, Inc. for US$40 million, plus contingent payments of up to US$10 million based on future performance. Primax, with trailing 12-month revenues of around US$39 million, is one of the oldest and largest health care recovery firms providing subrogation and overpayment recovery services to help its clients improve their profitability. -- subsequent to Sept. 30, the company acquired Systech Integrators, Inc., for US$65 million, plus contingent payments of up to US$40 million based upon future performance. Systech, with trailing 12-month revenues of around US$61 million, is a premier partner of SAP Americas and will expand ACS' existing SAP service offering with consulting and systems integration services. -- the company signed US$132 million of annual recurring revenue during the first quarter of fiscal year 2007. In addition to the first quarter signings, the company has also been awarded around US$170 million of annual recurring revenue. These awards will be reflected as closed new business once the related contracts are finalized and executed. -- during the quarter, the company repurchased around 14.4 million shares for an aggregate purchase price of US$730.4 million, before transaction costs, or an average purchase price per share of US$50.62 pursuant to the June 2006 US$1 billion share repurchase program. As of Sept. 30, 2006, the company has completed the Prior Program and has US$1 billion of availability under the August 2006 US$1 billion share repurchase program. As a result of the company's share repurchase activity, weighted average shares used to calculate diluted earnings per common share at Sept. 30, 2006, were 104.6 million. Actual shares outstanding at September 30, 2006 were 98.9 million, consisting of 92.3 million Class A shares and 6.6 million Class B shares. Internal Stock Investigation Affiliated Computer is providing only certain summary preliminary quarterly financial information at this time because of the previously announced ongoing internal investigation it has been conducting into stock option matters, the outcome of which could impact these and prior period results and could involve a restatement of prior periods. The investigation, which is being conducted by an ad hoc committee of the Affiliated Computer's board of directors consisting of all the independent directors, who are proceeding with the assistance of specially engaged independent outside legal counsel, is expected to be completed later this quarter. For the same reason, the company will not be in a position to file its Quarterly Report on Form 10-Q for the quarterly period ended Sept. 30, 2006, on Nov. 9, 2006, when it would ordinarily be due for filing. Filing Delay Affiliated Computer has also delayed the filing of its Annual Report on Form 10-K for its fiscal year ended June 30, 2006, in view of the ongoing internal investigation. The company expects to file the Form 10-K and Form 10-Q as soon as practical following completion of the internal investigation. The summary preliminary quarterly financial information has been prepared by Affiliated Computer's management and does not take into account the financial effects of the completion of the company's internal investigation into stock option matters and has not been approved by the company's Audit Committee. In view of the company's decision to provide more limited information than is customary, there will not be a conference call to more fully discuss the results. Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland and Singapore. * * * As reported in the TCR-Europe on Oct. 4, Moody's Investors Service placed the Ba2 ratings of Affiliated Computer Services on review for possible downgrade. The review for downgrade was prompted by the company's ongoing independent investigation into historical stock option practices, which has resulted in the company's delay in filing its 10-K for its fiscal year ended June 2006. The company has received certain waivers from credit facility lenders through Dec. 31 related to the options matter. The review will examine the company's access to internal and external sources of liquidity as well as the prospects for filing the June 10-K and subsequent financial statements with the SEC by Dec. 31. As part of this review, Moody's will assess the company's acquisition plans and contract commitments. If the company becomes current in the filing of its financial statements by Dec. 31 and any restatement is unlikely to result in a material cash outflow, the ratings will likely be confirmed at Ba2. Ratings Placed on Review for Possible Downgrade: * Ba2 Senior Secured Term Loan Rating * Ba2 Senior Secured Revolving Credit Facility Rating * Ba2 Senior Notes Rating (US$500 Million due 2010 and 2015) * Ba2 Corporate Family Rating At the same time, Standard & Poor's Ratings Services lowered its corporate credit rating and senior secured ratings on Dallas, Texas-based Affiliated Computer Services, Inc. to 'B+' from 'BB'. The ratings remain on CreditWatch with negative implications where they were placed on Jan. 27. Fitch Ratings assigned its BB issuer default rating, BB senior secured revolving bank credit facility rating, BB senior secured term loan rating, and BB senior notes rating on Affiliated Computer Services, Inc. Fitch said the rating outlook is negative. BORSODCHEM NYRT: Financial Regulator Wants More Info on Buyout -------------------------------------------------------------- Penzuegyi Szervezetek Allami Feluegyelete, the Hungarian financial supervisory authority, is asking for more information from First Chemical Holding Vagyonkezelo Korlatolt Felelossegu Tarsasag regarding the group's buyout offer of BorsodChem Nyrt, Budapest Business Journal says. According to the report, PSzAF, which recently completed a probe into market circumstances that would affect influence in Borsodchem, stressed that First Chemical must supplement its buyout offer to reflect changes to a prior agreement between the company, Vienna Capital Partners Group and Kikkolux S.a.r.l. PSzAF warned First Chemical Holding to submit until Friday a copy of the supplemented buyout offer or it would cancel the approval of the buyout offer. In October, PSzAF suspended the buyout offer while investigating whether it violated rules regarding acquisitions. As reported in the TCR-Europe on Sept. 26, First Chemical Holding offered to acquire all outstanding shares in BorsodChem Nyrt, in behalf of the Kikkolux Group and Vienna Capital. As previously reported, Kikkolux signed an option agreement with VCP and Firthlion (26.158%) and Vienna Capital Partners (21.83%) to buy all their shares at HUF3,000 apiece. The offer is subject to approval by financial market regulator PSzAF and the Competition Office. About BorsodChem Headquartered in Kazincbarcika, Hungary, BorsodChem Rt. -- http://www.borsodchem.hu/-- produces chlorine, chloric alkali, hydrochloric acid, caustic lye and PVC resins, and additives for the plastic and rubber industries. The Company exports its products mainly to Western Europe. The group's EBITDA for 2005 amounted to HUF27.0 billion, 31.7% higher than HUF20.5 billion in 2004. BorsodChem's net profit was down 17.7%, to HUF14.4 billion in 2005, from HUF17.8 billion a year ago. At Dec. 31, 2005, BorsodChem's balance sheet showed HUF237.9 billion in total assets, HUF98.9 billion in total liabilities and HUF139.02 billion in total equity. * * * The Company's long-term foreign and local issuer credit carry Standard and Poor's BB rating with stable outlook. OMNOVA SOLUTIONS: Moody's Affirms Low-B Ratings After Asset Sale ---------------------------------------------------------------- Moody's Investors Service affirmed OMNOVA Solutions Inc.'s corporate family rating at B2 and moved the company's rating outlook to positive. This follows the recent sale of the firm's building products business. Current ratings: OMNOVA Solutions Inc. * Corporate family rating -- B2 * US$165 million 11.25% Sr. Sec. Notes due 2010 -- B3 (LGD4, 64%) The change to a positive outlook reflects Moody's expectation that the firm will continue to improve its credit metrics, achieve top line growth and benefit from moderating prices for its key raw materials and improving EBITDA margins. With the divestiture of its buildings products business, the firm will be able to concentrate on growth opportunities for its remaining two businesses, which enjoy strong market positions in their niche markets. OMNOVA sold the building products business for a cash value of around US$40 million (plus the buyer assumed certain liabilities) and has targeted the proceeds for reduction of outstanding debt under the firm's revolving credit facility and the outstanding notes due 2010, once the issue becomes callable in May 2007, and to fund growth in the remaining businesses. The business sold represented 14% of 2005 sales, but only 3% of 2005 operating profit. The outlook and ratings reflect the firm's debt reduction over the past three years, the better financial profile of the remaining businesses and improvement in credit metrics in 2005 and 2006. Prior to the assets sale, OMNOVA had been successful in reducing long-term debt (before Moody's adjustments for underfunded pensions liabilities and leases) by around US$27 million over the past three years (August 2003 - August 2006). After repayment of revolving credit facility borrowings with the building products divestiture proceeds, OMNOVA should have improved liquidity with no outstanding borrowings under the facility other than letters of credit. In the past year, OMNOVA has improved its operating margin through reductions in SG&A expenses that have helped offset the negative impact of increased manufacturing costs. Despite improvement in OMNOVA's credit metrics, it still has suffered some deterioration in gross margins and is impacted by volatile raw material costs and is subject to cyclical markets. OMNOVA's ratings would likely be moved up if industry conditions were supportive of an upgrade and OMNOVA was able to sustain recent margins, reduced debt, made progress in managing working capital, and generated free cash flow greater than US$20 million per year. OMNOVA manufactures decorative and functional surfaces, emulsion polymers and specialty chemicals. The company operates in two business segments, Decorative Products (around one-third of 2005 consolidated sales, excluding the divested building products business), which makes commercial wallcoverings, coated fabrics and decorative laminates, and Performance Chemicals, which offerings include binders, coatings and adhesives for the paper and carpet industries. OMNOVA is the second largest producer of styrene butadiene latex in North America. Headquartered in Fairlawn, Ohio, OMNOVA was formed when it was spun-off from GenCorp in 1999. Revenues, excluding the divested building products business, were US$698 million for the LTM ended Aug. 31, 2006. TK ALUMINUM: S&P Holds Junk Rating on Developing Watch ------------------------------------------------------ Standard & Poor's Ratings Services placed its 'CCC+' long-term corporate credit rating on Bermuda-incorporated TK Aluminum Ltd. -- a manufacturer of aluminum auto parts -- on CreditWatch with developing implications, meaning that the rating could be raised, lowered, or affirmed. The CreditWatch placement follows TKA's announcement of the sale of its operations in North and South America, China, and Poland to Tenedora Nemak S.A. de C.V., and a subsequent financial restructuring. "While we view favorably TKA's intention to use the sale proceeds to repay existing debt, there is uncertainty as to the resulting credit profile, in terms of both business and financial risk," said Standard & Poor's credit analyst Barbara Castellano. "We will resolve the CreditWatch status based on the outcome of the transaction and following discussions with TKA regarding its future plans." The transaction is scheduled to close during the first quarter of 2007, subject to various conditions, including the approval of bondholders and secured creditors. =========== R U S S I A =========== ARKH-AGRO-SERVICE: Court Names P. Tarasov as Insolvency Manager --------------------------------------------------------------- The Arbitration Court of Arkhangelsk Region appointed Mr. P. Tarasov as Insolvency Manager for CJSC Arkh-Agro-Service. He can be reached at: P. Tarasov Post User Box 183 OPS-100 170100 Tver Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A56-8286/2006. The Arbitration Court of Arkhangelsk Region is located at: Loginova Str. 17 163069 Arkhangelsk Region Russia The Debtor can be reached at: CJSC Arkh-Agro-Service P. Mostotryad 9, 53 163035 Arkhangelsk Region Russia BALTIC INVEST: Court Names S. Suvorov as Insolvency Manager ----------------------------------------------------------- The Arbitration Court of Moscow appointed S. Suvorov as Insolvency Manager for CJSC Baltic Invest. He can be reached at: S. Suvorov Post User Box 183 127018 Moscow Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40-43632/06-101-760B. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: CJSC Baltic Invest Building 7 1st Novokuznetskiy Per. 5 Moscow Region Russia BUILDING ENTERPRISE 1: Court Names A. Fazlyev to Manage Assets -------------------------------------------------------------- The Arbitration Court of Bashkortostan Republic appointed Mr. A. Fazlyev as Insolvency Manager for CJSC Building Enterprise #1. He can be reached at: A. Fazlyev Post User Box 220 Ufa 450080 Bashkortostan Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A07-15355/06-GADM. The Arbitration Court of Bashkortostan Republic is located at: Oktyabrskoy Revolyutsii Str. 63a Ufa Bashkortostan Republic Russia The Debtor can be reached at: CJSC Building Enterprise #1 Tuymazy Bashkortostan Republic Russia DANILOVSKIY FACTORY: Court Starts Reorganization Process -------------------------------------------------------- The Arbitration Court of Yaroslavl Region commenced external management bankruptcy procedure on OJSC Danilovskiy Factory of Woodworking Machines. The case is docketed under Case No. A82-2800/06-3-B/27. The External Insolvency Manager is: V. Ryabchenkov Post User Box 17 127106 Moscow Region Russia The Debtor can be reached at: OJSC Danilovskiy Factory of Woodworking Machines Zavodskaya Str. 7 Danilov 152070 Yaroslavl Region Russia DEVELOP INVESTMENTS: Court Names S. Suvorov to Manage Assets ------------------------------------------------------------ The Arbitration Court Moscow appointed Mr. S. Suvorov as Insolvency Manager for LLC Develop Investments. He can be reached at: S. Suvorov Post User Box 183 127018 Moscow Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40-29773/06-101-332B. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: LLC Develop Investments Moscow Region Russia HOUSE-BUILDING COMPANY: Court Names S. Suvorov to Manage Assets --------------------------------------------------------------- The Arbitration Court of Moscow appointed Mr. S. Suvorov as Insolvency Manager for CJSC House-Building Company. He can be reached at: S. Suvorov Post User Box 183 127018 Moscow Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40-41155/06-78-912B. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: CJSC House-Building Company Administration Building 1 Parshina Str. 27 Moscow Region Russia GRAIN-INVEST: Orel Court Starts Bankruptcy Supervision Procedure ---------------------------------------------------------------- The Arbitration Court of Orel Region commenced bankruptcy supervision procedure on LLC Grain-Invest. The case is docketed under Case No. A48-3673/06-20b. The Temporary Insolvency Manager is: P. Klemenko Office 607 Skovskoye Shosse 137 Orel Region Russia The Arbitration Court of Orel Region is located at: Gorkogo Str. 42 302000 Orel Region Russia The Debtor can be reached at: LLC Grain-Invest Kolkhoznaya Str. 11A Orel Region Russia LADYINO CJSC: Tver Court Names O. Akinshin as Insolvency Manager ---------------------------------------------------------------- The Arbitration Court of Tver Region appointed Mr. O. Akinshin as Insolvency Manager for CJSC Agricultural Enterprise Ladyino (TIN 6943005247). He can be reached at: O. Akinshin Post User Box 444 OPS 100 170100 Tver Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A66-7930/2005. The Arbitration Court of Tver Region is located at: Room 7 Sovetskaya Str. 23b Tver Region Russia The Debtor can be reached at: CJSC Agricultural Enterprise Ladyino Ladyino Torzhokskiy Region 172031 Tver Region Russia MELENKI-SEL-KHOZ-KHIMYA: Bankruptcy Hearing Slated for Feb. 6 ------------------------------------------------------------- The Arbitration Court of Vladimir Region will convene at 1:30 p.m. on Feb. 6, 2007, to hear the bankruptcy supervision procedure on OJSC Melenki-Sel-Khoz-Khimya. The case is docketed under Case No. A11-11906/2006-K1-444B/3B. The Temporary Insolvency Manager is: A. Shurov Radiozavodskoye Shosse 2a Murom 602264 Vladimir Region Russia The Arbitration Court of Vladimir Region is located at: Oktyabrskiy Pr. 14 600025 Vladimir Region Russia The Debtor can be reached at: OJSC Melenki-Sel-Khoz-Khimya Dzerzhinskogo Str. 54a Melenki 602101 Vladimir Region Russia NADYMSKIY FACTORY: Court Names S. Suvorov as Insolvency Manager --------------------------------------------------------------- The Arbitration Court of Moscow appointed Mr. S. Suvorov as Insolvency Manager for CJSC Nadymskiy Factory of Large Panel Homebuilding. He can be reached at: S. Suvorov Post User Box 183 127018 Moscow Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A40-42954/06-101-752B. The Arbitration Court of Moscow is located at: Novaya Basmannaya Str. 10 Moscow Region Russia The Debtor can be reached at: CJSC Nadymskiy Factory of Large Panel Homebuilding Matveevskaya Str. 6 Moscow Region Russia OPTOMECHANICAL FACTORY: Court Names A. Fazlyev to Manage Assets --------------------------------------------------------------- The Arbitration Court of Bashkortostan Republic appointed Mr. A. Fazlyev as Insolvency Manager for CJSC Optomechanical Factory. He can be reached at: A. Fazlyev Post User Box 220 Ufa 450080 Bashkortostan Republic Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A07-19418/06-G-KhRM. The Arbitration Court of Bashkortostan Republic is located at: Oktyabrskoy Revolyutsii Str. 63a Ufa Bashkortostan Republic Russia The Debtor can be reached at: CJSC Optomechanical Factory Salavat Bashkortostan Republic Russia SERDOBSKIY ENGINEERING: Names E. Meshenkova to Manage Assets ------------------------------------------------------------ The Arbitration Court of Penza Region appointed Ms. E. Meshenkova as Insolvency Manager for CJSC Industrial Enterprise Serdobskiy Engineering Plant. She can be reached at: E. Meshenkova Vokzalnaya Str. 10 Serdobsk 442891 Penza Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A49-1912/2006-1436/10. The Arbitration Court of Penza Region is located at: Belinskogo Str. 2 440600 Penza Region Russia The Debtor can be reached at: CJSC Industrial Enterprise Serdobskiy Engineering Plant Serdobsk Vokzalnaya Str. 10 Penza Region Russia VOLKSWAGEN AG: Building New Site for Cheap Labor & High Demand -------------------------------------------------------------- Volkswagen AG is building a EUR400-million assembly plant in Kaluga, Russia, to tap low labor cost and to fill the growing demand for cars in Russia, Grigory Tambulov writes for the Associated Press. VW CEO Bernd Pischetsrieder and Economic Development and Trade Minister German Gref have laid the symbolic foundation stone for the production plant, which could make up to 115,000 cars a year. Kaluga Governor Anatoly Artamonov also attended the groundbreaking ceremony. "The automotive market in Russia is one of the world's most interesting," Mr. Pischetsrieder said. "So far, the group brands have only been represented in Russia through sales companies. However, if we wish to enjoy sustained benefits from the growth forecast for this market, we have to produce in Russia as well. "The fact that a world-famous company is coming to Russia, to Kaluga, speaks for itself," Mr. Gref said. "But the annual production of 115,000 economical cars -- which Russian citizens will buy -- makes us happy most of all because this increases their prosperity." The site is expected to employ around 3,500 people when it reaches full production capacity by 2008. The site would assemble the Skoda Octavia, Polo, Passat and Touareg brands. According to the European Bank for Reconstruction and Development, Russia has around 157 cars per 1,000 people. Headquartered in Wolfsburg, Germany, the Volkswagen Group -- http://www.volkswagen.de/-- is one of the world's leading automobile manufacturers and the largest carmaker in Europe. With 47 production plants in eleven European countries and a further seven countries in the Americas, Asia and Africa, Volkswagen has more than 343,000 employees producing over 21,500 vehicles or are involved in vehicle-related services on every working day. * * * Volkswagen has been carrying out measures to cut costs and raise profits, which could affect up to 30,000 jobs. The potential job cuts represent about a third of the carmaker's workforce and three times higher than initial estimates made by Chief Executive Bernd Pischetsrieder and Volkswagen brand head, Wolfgang Bernhard. ZDOROVYE CJSC: Court Names A. Fazlyev as Insolvency Manager ----------------------------------------------------------- The Arbitration Court of St. Petersburg and the Leningrad Region appointed Mr. A. Fazlyev as Insolvency Manager for CJSC Joint- Stock Insurance Medical Company Zdorovye. He can be reached at: A. Fazlyev Post User Box 383 OPS-100 170100 Tver Region Russia The Court commenced bankruptcy proceedings against the company after finding it insolvent. The case is docketed under Case No. A56-28763/2006. The Arbitration Court of St. Petersburg and the Leningrad Region is located at: Hall 113 Suvorovskiy Pr. 50/52 St. Petersburg Russia The Debtor can be reached at: CJSC Joint-Stock Insurance Medical Company Zdorovye Rubinshteyna Str. 3 St. Petersburg Region Russia ZODCHIY CJSC: Vladimir Bankruptcy Hearing Slated for February 1 --------------------------------------------------------------- The Arbitration Court of Vladimir Region will convene at 1:30 p.m. on Feb. 1, 2007, to hear the bankruptcy supervision procedure on CJSC Building Assembly Enterprise Zodchiy. The case is docketed under Case No. A11-22907/06-K1-443/2B. The Temporary Insolvency Manager is: A. Shurov Radiozavodskoye Shosse 2a Murom 602264 Vladimir 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 Building Assembly Enterprise Zodchiy Lenina Str. 48 Vyazniki 601400 Vladimir Region Russia =============== S L O V E N I A =============== BANKA KOPER: Fitch Affirms Individual Rating at C ------------------------------------------------- Fitch Ratings upgraded Banka Koper's ratings to Issuer Default 'A+', Short-term 'F1' and Support '1' from 'BBB+', 'F2' and '3' respectively. The Individual rating is affirmed at 'C'. The Outlook remains Stable. The upgrade reflects Fitch's expectation of stronger integration with and a higher propensity for support from BK's majority shareholder Sanpaolo IMI (rated Issuer Default 'AA-' (AA minus) with Stable Outlook) following the increase of SPIMI's voting rights to 63.94% from 32.99%. In addition, SPIMI has a shareholder pact with three local minority shareholders. Together, they represent 93.94% of shares and voting rights. The shareholder pact has been renewed in July 2006 for five years. "We expect BK to be more closely tied to SPIMI now, given SPIMI has gained control," says Sabine Bauer, Associate Director in Fitch's Financial Institutions group. "Closer cooperation on the day-to-day activities, reflecting operational support from SPIMI, should also benefit BK on a standalone basis." BK's Individual rating reflects good capitalization, adequate asset quality and reserve coverage and a stable profitability. The dip in 2005 operating profitability is mainly due to higher loan impairment charges, caused by one exposure that has since been recovered. Despite this, BK's profitability is still in line with that of peers. The rating, however, also takes into account concentration risk, a high proportion of equity holdings and BK's small size. Loan quality and loan impairment coverage have slightly weakened in 2005 and H106 but remain adequate. BK was the sixth largest bank in Slovenia by total assets at end-2005. It operates nationwide and has a strong franchise in and around the port of Koper and the Adriatic coast. In 2002, SPIMI acquired 62.1% of BK's shares but its voting rights were until recently limited to 32.99% by the Bank of Slovenia. ========= S P A I N ========= CHURCH & DWIGHT: Declares US$0.07 Per Share Quarterly Dividend -------------------------------------------------------------- Church & Dwight Co., Inc.'s board of directors declared a regular quarterly dividend of US$0.07 per share. This quarterly dividend will be payable Dec. 1, 2006, to stockholders of record at the close of business on Nov. 13, 2006. It is the company's 423rd regular consecutive quarterly dividend. Headquartered in Princeton, New Jersey, Church & Dwight Co. Inc. -- http://www.churchdwight.com/-- manufactures and sells sodium bicarbonate products popularly known as baking soda. The company also makes laundry detergent, bathroom cleaners, cat litter, carpet deodorizer, air fresheners, toothpaste, and antiperspirants. The company's international business includes operations in Australia, Canada, Mexico, the United Kingdom, France and Spain. * * * As reported in the troubled Company reporter-Latin America on Sept. 29, 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. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B2 Corporate Family Rating for Church & Dwight Company, Inc. 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 Revolving Credit Ba2 Baa3 LGD2 23% US$531 million Sr. Secured Term Loan Ba2 Baa3 LGD2 23% US$100 million Conv. Debentures Ba2 Ba2 LGD4 59% US$250 million Sr. Sub. Notes Ba3 Ba3 LGD5 85% GETRONICS N.V.: Issues Third Quarter 2006 Operating Results ----------------------------------------------------------- Getronics N.V. released its operating results for the third quarter of 2006. Highlights: -- total revenue increased 1% to EUR622 million (Q3 2005: EUR618 million); total revenue reported excludes EUR16 million of revenue from discontinued operations (France) compared with EUR76 million from discontinued operations in Q3 2005 (France and Italy). -- service revenue increased by 3% to EUR550 million (Q3 2005: EUR533 million); service revenue growth on a comparable basis ** +5.0% in Q3 2006; service revenue growth breakdown: good in the Netherlands (+5.2%), strong in the Rest of Europe (+13.8%) and the Rest of the World (+10.3%); year-on-year decline in North America (-10.3%). -- product revenue decreased by 15% to EUR72 million (Q3 2005: EUR85 million), as the Company continues to de- emphasize non service-related product sales; revenue mix improved in Q3 to 88.4% services and 11.6% products from 86.2% and 13.8% in Q3 2005, respectively. * Unaudited results from continuing operations. Discontinued operations include the operating companies in Italy (divested in June 2006) and France (expected to be divested for 67% in Q4 2006). ** On a comparable basis is derived by calculating organic growth at constant rates assuming Getronics and PinkRoccade were combined as of Jan. 1, 2005, instead of March 14, 2005. Getronics remains on target to achieve around EUR2.6 billion of annual revenue in 2006 from continuing operations, barring unforeseen circumstances. The target range of EBITAE margin for the Group in 2006 remains between 3.0% and 4.0%, barring unforeseen circumstances. The Company currently considers it likely that the EBITAE margin for 2006 will benefit from some pension curtailments and other employee benefit plan related gains. Positive and negative employee benefit plan related profit & loss items are not treated as exceptional and may have material effects on the Company's operating results. As in previous years, the Company acknowledges that changes in its workforce (e.g. headcount reductions, acquisitions and divestments) or changes in the employee benefit plans will have positive or negative effects on its reported operating results this year and going forward. As indicated before, the planned cost savings of the Breakout Program are expected to improve the EBITAE margin by at least 1% on an annual basis when completed. Consistent with previous Trading Statements, limited management commentary has been provided. However, Getronics' CEO will be providing a more formal company update to all stakeholders in early December. "The growth of revenues in key markets underscores the strength of our market proposition and the trust our customers have in the value we add to their business," Klaas Wagenaar, CEO of Getronics, stated. "Workspace management is of increasing importance to companies all over the world and Getronics is one of the few companies to benefit from this." About Getronics Headquartered in Amsterdam, Netherlands, Getronics N.V. -- http://www.getronics.com/-- designs, integrates and manages ICT infrastructures and business solutions for many of the world's largest global and local companies and organizations, helping them maximize the value of their information technology investments. Getronics has some 27,000 employees in over 30 countries and approximate revenues of EUR3 billion. The company has regional offices in Boston, Madrid and Singapore. Its shares are traded on Euronext Amsterdam. * * * As reported in Troubled Company Reporter - Asia Pacific Getronics N.V.'s 'B' long-term corporate credit rating, along with the 'CCC+' senior unsecured debt, 'B' bank loan, and '3' recovery ratings on CreditWatch with negative implications, where they had originally been placed on Jan. 19. The '3' recovery rating indicates Standard & Poor's expectation of meaningful (50%-80%) recovery of principal for secured lenders in the event of a payment default. As reported in the TCR-AP, Moody's Investors Service downgraded Getronics' corporate family rating to B2 from B1 and placed the ratings on review for possible downgrade following the company's announcement of half year results showing a widening of net losses and fall in margins below the company's expectations. Concurrently the rating on the EUR100 million senior unsecured convertible Dutch bonds due 2008 has been downgraded to Caa1 from B3. VALENCIA HIPOTECARIO: Fitch Junks EUR10.4 Million Class D Notes --------------------------------------------------------------- Fitch Ratings assigned expected ratings to Valencia Hipotecario 3 FTA's residential mortgage-backed floating-rate notes as follows: -- EUR90 million Class A1: 'AAA' -- EUR780.7 million Class A2: 'AAA' -- EUR20.8 million Class B: 'A+' -- EUR9.1 million Class C: 'BBB' -- EUR10.4 million Class D: 'CCC' The final ratings are contingent upon receipt of final documents conforming to information already received. This EUR911m transaction is the third standalone securitisation of residential mortgage loans originated by Banco de Valencia (rated 'A'/'F1'). The expected ratings are based on the quality of the collateral, the available credit enhancement, Banco Valencia's underwriting and servicing capabilities, the integrity of the transaction's legal and financial structure and Europea de Titulizacion's administrative capabilities. The expected ratings address payment of interest on the notes according to the terms and conditions of the documentation, subject to a deferral trigger on the Class B and C notes, as well as the repayment of principal by legal final maturity in September 2044. At closing credit enhancement for the Class A1 and A2 notes will total 4.47% and will be provided by the subordination of the Class B and C notes (3.31%) and the reserve fund (1.15%). In addition to subordination and the reserve fund, the transaction will also benefit from excess spread. At closing, the proceeds of the un-collateralised Class D notes will be used to fund the initial balance of the reserve account. =========== T U R K E Y =========== GENERAL NUTRITION: Parent Offers US$325-Million PIK Notes --------------------------------------------------------- GNC Corp. disclosed that GNC Parent Corp., a newly formed holding company that controls GNC, intends to offer, subject to market conditions, US$325 million in aggregate principal amount of floating rate senior PIK notes due 2011. The Notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and to persons outside the United States under Regulation S of the Securities Act. The pricing and terms of the Notes are to be determined. The Notes will be senior unsecured obligations of Parent. The proceeds from the sale of the Notes, together with cash on hand, will be used to: -- redeem GNC's outstanding Series A preferred stock; -- repay a portion of the indebtedness of General Nutrition Centers, Inc., a wholly owned subsidiary of the Company, under Centers' senior term loan facility; -- pay a dividend to the common stockholders of Parent; and -- pay transaction-related fees and expenses. The Notes have not been registered under the Securities Act and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws. Strategic Alternatives GNC also disclosed that the Company has decided to explore strategic alternatives to enhance stockholder value, including a possible sale of the Company or an initial public offering of shares of common stock by Parent. GNC previously filed a Form S-1 registration statement with the SEC for an initial public offering of common shares, which was postponed in August 2006. The registration statement has not been withdrawn. There can be no assurance that the exploration of strategic alternatives will result in the completion of any transaction. The Company does not intend to disclose of developments with respect to the exploration of strategic alternatives unless and until the board of directors of the Company has approved a specific transaction. Headquartered in Pittsburgh, Pennsylvania, General Nutrition Centers, Inc. -- http://www.gnc.com/-- a wholly owned subsidiary of GNC Corp, is the largest global specialty retailer of nutritional products; including vitamin, mineral, herbal and other specialty supplements and sports nutrition, diet and energy products. GNC has more than 4,800 retail locations throughout the United States and franchise operations in 46 international markets including Turkey, Ukraine, Australia, Colombia, Singapore, among others. * * * As reported in the Troubled Company Reporter on Oct. 30, Moody's Investors Service confirmed its B2 Corporate Family Rating for General Nutrition Centers, Inc., in connection with Moody's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the US & Canadian Retail sector. GENERAL NUTRITION: Possible Sale Spurs S&P's Developing Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on General Nutrition Centers Inc., including the 'B' corporate credit rating, on CreditWatch with developing implications. "The placement follows news that GNC is evaluating alternatives that include a possible sale of the company or an IPO," said Standard & Poor's credit analyst Jackie Oberoi. The sale of the company, which could be financed with a substantial amount of additional debt, may lead to lowered ratings. Conversely, the company has an S-1 filing outstanding with the SEC by parent company GNC Corp. for an IPO of up to US$400 million of its common stock. Should proceeds be used to reduce debt levels, ratings could be raised. Standard & Poor's also assigned its 'CCC+' rating on Pittsburgh, Pa.-based GNC Parent Corporation's (a newly formed holding company that controls GNC) US$325 million payment-in-kind (PIK) notes, due 2011. The rating was placed on CreditWatch Developing. Given the expected use of proceeds from the PIK notes, the existing ratings on GNC's senior unsecured notes and bank facility may be raised. Proceeds from the notes, along with of cash on hand, will be used to redeem the company's preferred stock, repay a portion of its bank debt, and pay a dividend to common equity. The rating reflects a resulting capital structure that is highly leveraged, with total lease-adjusted debt of about US$1.2 billion and expected debt to EBITDA of about 6.3x. GNC's operating performance has improved in the current year to date due to solid comparable-store sales growth and better margins. Management attributes the turnaround largely to a new national pricing model and new marketing efforts. U.S.-based company-owned stores experienced 12.6% comparable-store growth for the nine months ended Sept. 30, 2006; U.S. franchised stores posted 6.6% growth. GENERAL NUTRITION: Parent Earns US$13.9 Million in Third Quarter ---------------------------------------------------------------- GNC Corp., the parent company of General Nutrition Centers Inc., has released its financial results for the third quarter and nine months ended Sept. 30, 2006. The Company reported consolidated revenues of US$367.7 million for the quarter, a 14.0% increase over the same quarter in 2005. The increase in revenues was primarily the result of significant domestic comparable store sales growth of 11.7% for company- owned stores and 7.0% for franchise locations. For the quarter, the Company generated earnings before interest, income taxes, depreciation and amortization (EBITDA) of US$41.8 million compared to US$25.5 million in the third quarter of 2005, a 64.1% increase. The increase in EBITDA was primarily generated by significant improvements in the retail and franchising businesses driven by the growth in comparable store sales. EBITDA for the third quarter of 2006 included a charge of US$1.1 million associated with the loss on the pending sale of the Company's Australian manufacturing facility, which is expected to close in the fourth quarter of 2006. Excluding this charge, Adjusted EBITDA would have been US$42.9 million in the third quarter of 2006 compared to US$25.5 million in the same quarter of 2005, a 68.3% increase. In addition, EBITDA for the third quarter of 2006 was reduced by US$0.7 million of non-cash stock-based compensation expense. There was no non-cash stock- based compensation expense in the third quarter of 2005. Net income for the third quarter of 2006 increased 336.8% to US$13.9 million, compared with US$3.2 million in the third quarter of 2005. "I am extremely pleased with the continued strong sales performance we are seeing across every major category and in all store formats. This quarter is especially encouraging since it not only represents the fourth consecutive quarter of strong single- to double-digit same store sales growth, but also double-digit same store sales growth against positive growth from last year," Joseph Fortunato, President and Chief Executive Officer, said. "Overall, results reflect our strongest EBITDA quarter of the year with all critical financial and operating areas meeting or exceeding expectations." For the nine months ended Sept. 30, 2006, consolidated revenue increased by 14.6% to US$1,137.4 million from US$992.3 million in the comparable period of 2005. EBITDA for the nine months ended Sept. 30, 2006 increased 41.6% to US$119.7 million from US$84.5 million in the prior year period. EBITDA for the nine months ended Sept. 30, 2006 included a US$4.8 million discretionary payment to GNC Corporation stock option holders in conjunction with the previously reported March 2006 payments to GNC Corporation common stockholders and a charge of US$1.1 million associated with the loss on the sale of the Company's Australian manufacturing facility, which is expected to close in the fourth quarter of 2006. Excluding these charges, Adjusted EBITDA for the nine months ended Sept. 30, 2006 would have been US$125.6 million compared to US$84.5 million for the nine months ended Sept. 30, 2005, a 48.6% increase. EBITDA for the nine months ended Sept. 30, 2006 was reduced by non-cash stock-based compensation expense of US$1.9 million. There was no non-cash stock-based compensation expense in the nine months ended Sept. 30, 2005. EBITDA for the nine months ended Sept. 30, 2005 included income of US$2.5 million from a transaction fee received by the Company as a result of transferring its Australian franchise rights to an existing franchisee. Net income for the nine months ended Sept. 30, 2006 increased 194.8% to US$38.4 million compared to US$13.0 million in the nine months ended Sept. 30, 2005. For the nine months ended Sept. 30, 2006, the Company generated cash from operating activities of US$68.9 million with ending cash on the balance sheet of US$87.4 million. For the nine months ended Sept. 30, 2006, the Company had capital expenditures of US$16.1 million and repaid US$1.6 million of outstanding debt. At Sept. 30, 2006, the Company had US$471.8 million of total debt outstanding, with its revolving credit facility undrawn. Headquartered in Pittsburgh, Pennsylvania, General Nutrition Centers, Inc. -- http://www.gnc.com/-- a wholly owned subsidiary of GNC Corp, is the largest global specialty retailer of nutritional products; including vitamin, mineral, herbal and other specialty supplements and sports nutrition, diet and energy products. GNC has more than 4,800 retail locations throughout the United States and franchise operations in 46 international markets including Turkey, Ukraine, Australia, Colombia, Singapore, among others. * * * As reported in the Troubled Company Reporter on Oct. 30, Moody's Investors Service confirmed its B2 Corporate Family Rating for General Nutrition Centers, Inc., in connection with Moody's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the US & Canadian Retail sector. Standard & Poor's Ratings Services placed its ratings on General Nutrition Centers Inc., including the 'B' corporate credit rating, on CreditWatch with developing implications. ============= U K R A I N E ============= ALABIUS LLC: Court Names Sergij Benedyuk as Insolvency Manager -------------------------------------------------------------- The Economic Court of Kyiv Region appointed Sergij Benedyuk as Liquidator/Insolvency Manager for LLC Alabius (code EDRPOU 32732476). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 4. The case is docketed under Case No. 23/444-b. 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 Alabius Chervonogvardijska Str. 5 02094 Kyiv Region Ukraine ALTAKOM LLC: Kyiv Court Names Sergij Benedyuk as Liquidator ----------------------------------------------------------- The Economic Court of Kyiv Region appointed Sergij Benedyuk as Liquidator/Insolvency Manager for LLC Altakom (code EDRPOU 32662912). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 4. The case is docketed under Case No. 23/443-b. 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 Altakom Serafimovich Str. 11 02152 Kyiv Region Ukraine CHECHELNIKRAJAGROTEHSERVICE OJSC: A. Milovanov to Manage Assets --------------------------------------------------------------- The Economic Court of Vinnitsya Region appointed Mr. A. Milovanov as Liquidator/Insolvency Manager for OJSC Chechelnikrajagrotehservice (code EDRPOU 00902257). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 19. The case is docketed under Case No. 5/256-06. The Economic Court of Vinnitsya Region is located at: Hmelnitske Shose 7 21036 Vinnitsya Region Ukraine The Debtor can be reached at: OJSC Chechelnikrajagrotehservice Olshevskij 30 Chechelnik 24800 Vinnitsya Region Ukraine HOTEL DNIPRO: Court Names Volodimir Sherepenko as Liquidator ------------------------------------------------------------ The Economic Court of Dnipropetrovsk Region appointed Volodimir Sherepenko as Liquidator/Insolvency Manager for JSC Hotel Dnipro (code EDRPOU 24248130). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 26. The case is docketed under Case No. 40/246-06. The Economic Court of Dnipropetrovsk Region is located at: Kujbishev Str. 1a 49600 Dnipropetrovsk Region Ukraine The Debtor can be reached at: JSC Hotel Dnipro Karl Marks Avenue 66 49070 Dnipropetrovsk Region Ukraine IVP BOYARD: Court Names Sergij Benedyuk as Insolvency Manager ------------------------------------------------------------- The Economic Court of Kyiv Region appointed Sergij Benedyuk as Liquidator/Insolvency Manager for LLC IVP Boyard (code EDRPOU 33829210). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 4. The case is docketed under Case No. 23/442-b. 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 IVP Boyard Ivan Nehoda Str. 8/23 03141 Kyiv Region Ukraine LANI UKRAINI: Creditors Must Submit Claims by November 10 --------------------------------------------------------- Creditors of Agricultural CJSC Lani Ukraini (code EDRPOU 00708839) have until Nov. 10 to submit written proofs of claim to: Volodimir Parkulab, Liquidator/Insolvency Manager Universitetska Str. 9 61003 Harkiv Region Ukraine The Economic Court of Harkiv Region commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 25. The case is docketed under Case No. B-31/54-06. The Debtor can be reached at: Agricultural CJSC Lani Ukraini Lozovenka Balakliya District 64261 Harkiv Region Ukraine LIBERTY MARKET: Oleksandr Chechelnitskij to Liquidate Assets ------------------------------------------------------------ The Economic Court of Kyiv Region appointed Oleksandr Chechelnitskij as Liquidator/Insolvency Manager for CJSC Liberty Market (code EDRPOU 24592086). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 27. The case is docketed under Case No. 24/449-B. The Economic Court of Kyiv Region is located at: B. Hmelnitskij Boulevard 44-B 01030 Kyiv Region Ukraine The Debtor can be reached at: CJSC Liberty Market Suvorov Str. 4/6 01010 Kyiv Region Ukraine POLIPROM JSCCT: Court Names Oleksandr Polishuk as Liquidator ------------------------------------------------------------ The Economic Court of Donetsk Region appointed Oleksandr Polishuk as Liquidator/Insolvency Manager for JSCCT POLIPROM (code EDRPOU 24314789). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Oct. 2. The case is docketed under Case No. 42/89 B. The Economic Court of Donetsk Region is located at: Artema Str. 157 83048 Donetsk Region Ukraine The Debtor can be reached at: JSCCT Poliprom Shkadinov Str. 33 Kramatorsk 84333 Donetsk Region Ukraine PROMKERAM LLC: Court Names R. Chernomaz as Insolvency Manager ------------------------------------------------------------- The Economic Court of Donetsk Region appointed Mr. R. Chernomaz as Liquidator/Insolvency Manager for LLC Promkeram. The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 27. The case is docketed under Case No. 42/211 B. The Economic Court of Donetsk Region is located at: Artema Str. 157 83048 Donetsk Region Ukraine The Debtor can be reached at: LLC Promkeram Slovyansk, Sverdlov Str. 2 84105 Donetsk Region Ukraine SEJM LLC: Court Names Oleksandr Bandola as Insolvency Manager ------------------------------------------------------------- The Economic Court of Kyiv Region appointed Oleksandr Bandola as Liquidator/Insolvency Manager for LLC Sejm (code EDRPOU 32786469). The Court commenced bankruptcy proceedings against the company after finding it insolvent on Sept. 25. The case is docketed under Case No. 114/2b-2006. 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 Sejm Pidsobne gospodarstvo, room 1 Babintsi Borodyanskij District 07832 Kyiv Region Ukraine =========================== U N I T E D K I N G D O M =========================== BRECONSHIRE HOSIERY: Joint Liquidators Take Over Operations ----------------------------------------------------------- David Rubin and Henry Lan of David Rubin & Partners were nominated Joint Liquidators of Breconshire Hosiery Company Limited on Oct. 16 for the creditors' voluntary winding-up procedure. The company can be reached at: Breconshire Hosiery Company Limited Rossendale Road Earl Shilton Leicester Leicestershire LE9 7LX United Kingdom Tel: 01455 844 456 Fax: 01455 841 481 BRISTOL INN: BDO Stoy Hayward Selling Three-Star Hotel ------------------------------------------------------ Tony Nygate and Graham Randall, in their capacity as Joint Administrators of The Bristol Inn, are offering to sell the company's business and assets. The Bristol Inn is a well-established freehold business with 46 bedrooms and extensive conference facilities. Located at Junction 14 of the M5 motorway, the company is around 13 miles away from the Bristol city center. The Bristol Inn holds an AA three-star rating. Inquiries can be addressed to: BDO Stoy Hayward Belfast Lindsay House 10 Callender Street Belfast BT1 5BN United Kingdom Tel: 028 9043 9009 Fax: 028 9043 9010 E-mail: belfast@bdo.co.uk Simon Wedgewood Tel: +44 (0) 20 7757 6693 Tom Marriott Tel: +44 (0) 20 7491 1555 BDO Stoy Hayward -- http://www.bdo.co.uk/-- focuses on business assurance (audit), corporate advisory, tax, and investment management services, specializing in such industries as charities, educational institutions, family businesses, financial services, leisure, and hospitality. The company is the U.K. arm of BDO International and has offices in more than 15 cities throughout the U.K. BUILDSTAIR LIMITED: Hires Liquidator from Fisher Partners --------------------------------------------------------- Stephen M. Katz of Fisher Partners was appointed Liquidator of Buildstair Limited (t/a Furn Lifestyle Centre) on Oct. 17 for the creditors' voluntary winding-up procedure. Headquartered in Chichester, West Sussex, Buildstair Limited -- http://www.furn.co.uk/-- retails Teak Pub Furniture. The company also specializes in stylish, commercial grade leather sofas, tubs and dining chairs and offers hundreds of other Pub furnishing products. CA INC: Earns US$53 Million for Second Quarter 2007 --------------------------------------------------- CA Inc. reported US$996 million revenue for the second quarter of fiscal year 2007, ended Sept. 30, 2006. Financial Overview (in millions of US$, except share data) Q2FY07 Q2FY06 Change ------ ------ ------ Revenue US$ 996 US$ 950 5% GAAP Diluted EPS 0.09 0.08 13% Net Income 53 46 15% GAAP Cash Flow from Operations 6 299 (98%) Non-GAAP Operating EPS 0.25 0.25 0% John Swainson, CA's president and chief executive officer, commented, "Our second quarter total revenue, GAAP earnings per share and non-GAAP earnings per share were at or above our expectations. However, a number of changes we implemented associated with our sales organization affected our business activity in the second quarter, and consequently caused a drag on our bookings and associated billings. While a lower-than- anticipated level of bookings and billings had a negative effect on cash flow in the quarter, changes in working capital -- including a lower cash collections rate and higher-than-expected accounts payable disbursements -- were the primary factors in our cash flow from operations decline compared with the second quarter of fiscal year 2006." "We believe the issues that affected our second quarter performance are behind us and we are confident in our ability to execute in the second half of our fiscal year. While our full- year cash flow from operations will be lower than expected, we believe we are back on track and in a position to grow our business going forward," Mr. Swainson said. CA's revenue for the second quarter was US$996 million, an increase of 5% over the US$950 million reported in the similar period last year. The increase in revenue was primarily attributed to growth in subscription and professional services revenues, partially offset by declines in maintenance and software fees and other revenue. North American revenue was up 8% while revenue from international operations was up 1%, including a positive foreign exchange impact of US$15 million. CA's subscription revenue for the second quarter increased 8% to US$762 million, compared with the US$704 million reported in the second quarter of last year, and was affected positively by increases in new deferred subscription value from acquired products. Subscription revenue accounted for 77% of total revenue in the quarter, increasing from the 74% reported in the second quarter of fiscal year 2006. CA expects subscription revenue to continue to become a larger percentage of its total revenue as more contracts are renewed on a subscription basis. The company added that as it begins to reach maturity on its model and based upon the timing of remaining old business model contract renewals, the impact of the transition to its new business model on revenues will decline. CA's total product and services bookings in the second quarter decreased 10% to US$690 million, from the US$765 million reported in the same period a year ago. This decrease is attributed to a decision to realign and restructure the sales force to achieve lower cost of sales and higher productivity and more discipline on contract renewals. Direct product bookings declined 13% to US$498 million. Indirect bookings grew 3% to US$75 million. Despite flat bookings performance in the first half of the year, the company continues to expect total bookings for the full year to grow. Total expenses of CA for the second quarter increased 3% to US$918 million, from the US$893 million reported in the similar period last year. The increase was mainly due to higher selling, general and administrative expenses associated with personnel costs from recent acquisitions and increased cost of professional services related to higher revenues. The expense increase was offset partially by a decline in the amortization of capitalized software costs and a gain from the sale of marketable securities. The company announced a restructuring plan in August 2006 designed to eliminate US$200 million in costs on an annual basis by the end of fiscal year 2008. CA recorded GAAP (Generally Accepted Accounting Principles) net income US$53 million for the second quarter of 2006, compared with net income of US$46 million reported in the same period in 2005. The company reported non-GAAP net income of US$145 million for the second quarter of 2006, compared with US$151 million in 2005. For the second quarter, CA generated cash flow from operations of US$6 million, compared with US$299 million in cash flow from operations reported in the prior year period. Second quarter cash flow was adversely affected by: -- working capital management issues; -- lower bookings and associated billings; and -- higher operating expenses. Cash flow from operations in the second quarter of fiscal year 2006 was negatively affected by a US$75-million Restitution Fund payment. Cost Reduction and Restructuring Plan CA disclosed in August of a cost reduction and restructuring plan designed to significantly improve the company's expense structure and increase its competitiveness. CA expects to deliver about US$200 million in annualized savings when the plan is completed by the end of fiscal year 2008. In the second quarter, CA recorded severance costs, relating to around 750 positions, or US$39 million, US$11 million of which was paid during the period. The company expects total restructuring charges of US$150 million, most of which will be recognized in fiscal 2007, and a reduction in workforce of around 1,400 positions, including around 300 positions associated with the divestiture of a number of joint ventures. The company also expects to eliminate an additional 300 positions through attrition. Capital Structure The balance of cash, cash equivalents and marketable securities at Sept. 30, 2006, was US$1.295 billion. With US$2.588 billion in total debt outstanding, the company has a net debt position of around US$1.293 billion. Repurchase Program The company completed a US$1 billion tender offer during the second quarter and repurchased 41.2 million shares of common stock. Fiscal year-to-date, CA has repurchased about 51.1 million shares of common stock at a cost of US$1.2 billion. The tender offer was the first phase of a total of up to US$2 billion repurchase plan. Nancy Cooper, CA's chief financial officer, noted, "We are exploring options regarding the remaining portion of the share repurchase program and will provide updates on the timing and method at the appropriate time. However, we will want to see performance meeting our expectations, a return to strong cash flows, and favorable market conditions before we move forward." Updated Outlook for Fiscal Year 2007 CA updated its outlook for the fiscal year and expects to meet or exceed revenue guidance of US$3.9 billion and its original guidance for non-GAAP operating earnings per share of US$0.83. The company expects GAAP earnings per share to be below its original outlook of US$0.44 per share as a result of the still- to-be-determined timing of 2007 restructuring plan costs. The company expects cash flow from operations of between US$900 million and US$1 billion, which would be lesser than the original outlook of US$1.3 billion. The new cash flow outlook includes the company's estimates of the impact of the lower- than-expected growth in bookings for the full year, borrowing costs associated with the tender offer and payments related to the 2007 restructuring plan. The cash flow outlook also assumes that the sales force will perform as expected and the company will improve its working capital management. Headquartered in Islandia, New York, CA Inc. (NYSE:CA) -- http://www.ca.com/-- is an information technology management software company that unifies and simplifies the management of enterprise-wide IT. Founded in 1976, CA serves customers in more than 140 countries including France, Germany, Italy and the United Kingdom. * * * As reported in the Troubled Company Reporter-Europe on Oct. 10, Moody's Investors Service confirmed its Ba1 Corporate Family Rating for CA Inc. in connection with Moody's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Technology Software sectors. Standard & Poor's Rating Services affirmed its 'BB' corporate credit and senior unsecured debt ratings on CA Inc., and removed them from CreditWatch where they were placed on July 5, with negative implications. S&P said the outlook is negative. CA INC: Names Bill Lipsin Sr. Vice Pres. of Worldwide Channels -------------------------------------------------------------- CA Inc. named W.B. Bill Lipsin senior vice president of worldwide channels, reporting to CA Chief Operating Officer Michael Christenson. Mr. Lipsin has 30 years of experience in sales and operations management, including 19 years with the channel. He joined CA in 2005 as senior vice president and general manager for its Western Region sales organization. "Growth in the channel business is a top priority for CA," Christenson said. "We will continue to develop our relationships with channel partners worldwide by empowering them with best-in-class management technologies needed to solve customers' most pressing IT challenges. With his experience and proven success on both sides of the channel-vendor relationship, Bill Lipsin will drive the development of these relationships to the next level." Prior to CA, Lipsin was president and chief executive officer of SEEC, an enterprise software and services vendor. Earlier, he was president and CEO of Ironside Technologies, guiding the company's growth from a start-up of six employees to a leading enterprise software vendor. Mr. Lipsin also was general manager of Bay Networks Canada where he oversaw an increase in revenue from US$10 million to more than US$100 million and helped establish the company as one of the largest players in the networking market. Prior to that, he was senior vice president of services and marketing for Crowntek, one of Canada's largest reseller/systems integrators. He also has held key positions with IBM Canada's direct and indirect sales and marketing organizations. "I'm very excited about leveraging CA's technology leadership to extend its channel leadership," said Lipsin. "As enterprise IT environments become increasingly complex -- and as nonstop performance becomes increasingly critical to revenue -- the value proposition of CA's management software becomes increasingly compelling to both channel partners and their customers." Headquartered in Islandia, New York, CA Inc. (NYSE:CA) -- http://www.ca.com/-- is an information technology management software company that unifies and simplifies the management of enterprise-wide IT. Founded in 1976, CA serves customers in more than 140 countries including France, Germany, Italy and the United Kingdom. * * * As reported in the Troubled Company Reporter-Europe on Oct. 10, Moody's Investors Service confirmed its Ba1 Corporate Family Rating for CA Inc. in connection with Moody's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Technology Software sectors. Standard & Poor's Rating Services affirmed its 'BB' corporate credit and senior unsecured debt ratings on CA Inc., and removed them from CreditWatch where they were placed on July 5, with negative implications. S&P said the outlook is negative. CHARLES OETEGENN: M. J. Ryan Leads Liquidation Procedure -------------------------------------------------------- M. J. Ryan of M. J. Ryan & Co. was appointed Liquidator of Charles Oetegenn Interiors Limited on Oct. 27 for the creditors' voluntary winding-up procedure. The company can be reached at: Charles Oetegenn Interiors Limited Milstead Manor Farm Milstead Sittingbourne Kent ME9 0SE United Kingdom Tel: 01795 830 322 Fax: 01795 830 133 CHELSEA SCAFFOLDING: Creditors Ratify Voluntary Liquidation ----------------------------------------------------------- Creditors of Chelsea Scaffolding Limited (formerly Calendar (South-East) Limited) ratified Oct. 30 the resolutions for voluntary liquidation the appointment of Daniel Plant of SFP as the company's Liquidator. Headquartered in Mitcham, England, Chelsea Scaffolding Limited -- http://www.chelsea-scaffolding.co.uk/-- does all types of scaffolding from private to homebuilders to construction towers. The company specializes in hire and sale of scaffolding equipment. CNA INSURANCE: Rights Transfer Hearing Slated for Dec. 18 --------------------------------------------------------- CNA Insurance Company Limited and CX Reinsurance Company Limited applied for an order under section 111(1) of the Financial Services and Markets Act 2000 sanctioning a scheme providing for the transfer to CICL of the rights and obligations attaching to personal accident and health reinsurance contracts underwritten in the U.K. on behalf of CX RE (when known as CNA Reinsurance Company Limited) by IGI Underwriting Agencies Limited. The application will be heard before the Applications Judge on Dec. 18 at: The Royal Courts of Justice Strand London EC2A 2LL United Kingdom Any person (including any employee of CX RE or CICL) who alleges that he or she would be adversely affected by the carrying out of the Scheme may appear at the time of the hearing in person or by Counsel. Any person who intends to appear and any policyholder of CX RE or CICL who dissents from the Scheme but does not intend to appear are requested to give written notice, not less than two clear days prior to the date of the hearing, of such intention to dissent to: LeBoeuf, Lamb, Greene & MacRae No. 1 Minster Court Mincing Lanee London EC3R 7YL Ref: N. Bugler/R. Loo Solicitors to CX RE Clyde & Co. 51 Eastcheap London EC3M 1JP Ref: J. Stevens/G. Quirk Solicitors to CICL A copy of a report on the terms of the Scheme prepared by an independent expert in accordance with Section 109 of the Act and a statement setting out the terms of the Scheme and containing a summary of that report may be obtained free of charge from the offices of CX RE at: The London Underwriting Centre 3 Minster Court Mincing Lane London EC3R 7DD United Kingdom -- or -- CNA Insurance Company Limited 77 Gracechurch Street London EC3V 0DL United Kingdom E-mail: lgl@cxre.com CX REINSURANCE: Rights Transfer Hearing Slated for Dec. 18 ---------------------------------------------------------- CX Reinsurance Company Limited and CNA Insurance Company Limited applied for an order under section 111(1) of the Financial Services and Markets Act 2000 sanctioning a scheme providing for the transfer to CICL of the rights and obligations attaching to personal accident and health reinsurance contracts underwritten in the U.K. on behalf of CX RE (when known as CNA Reinsurance Company Limited) by IGI Underwriting Agencies Limited. The application will be heard before the Applications Judge on Dec. 18 at: The Royal Courts of Justice Strand London EC2A 2LL United Kingdom Any person (including any employee of CX RE or CICL) who alleges that he or she would be adversely affected by the carrying out of the Scheme may appear at the time of the hearing in person or by Counsel. Any person who intends to appear and any policyholder of CX RE or CICL who dissents from the Scheme but does not intend to appear are requested to give written notice, not less than two clear days prior to the date of the hearing, of such intention to dissent to: LeBoeuf, Lamb, Greene & MacRae No. 1 Minster Court Mincing Lanee London EC3R 7YL Ref: N. Bugler/R. Loo Solicitors to CX RE Clyde & Co. 51 Eastcheap London EC3M 1JP Ref: J. Stevens/G. Quirk Solicitors to CICL A copy of a report on the terms of the Scheme prepared by an independent expert in accordance with Section 109 of the Act and a statement setting out the terms of the Scheme and containing a summary of that report may be obtained free of charge from the offices of CX RE at: The London Underwriting Centre 3 Minster Court Mincing Lane London EC3R 7DD United Kingdom -- or -- CNA Insurance Company Limited 77 Gracechurch Street London EC3V 0DL United Kingdom E-mail: lgl@cxre.com DURA AUTOMOTIVE: Wants Court Nod to Obtain US$300-Mln DIP Loan -------------------------------------------------------------- DURA Automotive Systems Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to obtain US$300,000,000 of debtor-in-possession financing arranged and provided by Goldman Sachs Capital Partners L.P., General Electric Capital Corporation, and other lender parties. The Debtors propose to borrow or obtain letters of credit from the DIP Lenders in an aggregate principal or face amount not to exceed US$50,000,000, pending the Court's final consideration of the DIP Financing. Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that the Debtors have an immediate need to obtain the DIP Financing to permit, among other things, the orderly continuation of the operation of their businesses, to maintain business relationships with vendors, suppliers and customers, to make payroll, to make capital expenditures and to satisfy other working capital and operational needs, all of which are necessary to preserve and maintain their going-concern values and to successfully reorganize. Beginning in September 2006, the Debtors and Miller Buckfire solicited DIP financing proposals from 10 well-known financial institutions. After thoroughly reviewing all of the proposals, and based on their capital and operational requirements, the Debtors chose the GSCP/GECC proposal as providing the most advantageous and least costly terms to their estates. The salient terms of the Senior Secured Super-Priority Debtor- In-Possession Revolving Credit and Guaranty Agreement, and the Senior Secured Super-Priority Debtor-In-Possession Term Loan and Guaranty Agreement executed by the Debtors and the DIP Agents are: Borrower: Dura Operating Corp. Guarantors: Dura Automotive Systems, Inc., and its domestic and Canadian subsidiaries Agent & Banks: Goldman Sachs Capital Partners L.P., as Joint Lead Arranger, Sole Bookrunner, Sole Syndication Agent, and Administrative Agent and Collateral Agent for the Fixed Asset Facilities; General Electric Capital Corporation as Administrative Agent and Collateral Agent for the DIP Revolver; and Barclays Capital as Joint Lead Arranger Commitment: The DIP Financing Facility provides: -- up to US$130,000,000 asset based revolving credit facility, subject to borrowing base and availability terms, with a US$5,000,000 sublimit for letters of credit; and -- up to US$170,000,000 Fixed Asset Facilities consisting of: * up to US$150,000,000 tranche B term loan; and * up to US$20,000,000 pre-funded synthetic letter of credit facility. Purpose: Repayment of the Debtors' obligations under a US$175,000,000 revolving credit facility, payment of certain adequate protection payments, professionals' fees, transaction costs, fees and expenses incurred in connection with the DIP Financing, other approved expenses prior to bankruptcy filing, to provide working capital, and for other general corporate purposes. Term: The earlier of: (i) December 31, 2007; (ii) the effective date of a reorganization plan in the Debtors' Chapter 11 cases; or (iii) termination of the commitment or acceleration of the loans as a result of an Event of Default. Closing Date: The US$50,000,000 Interim DIP Facility will close upon or shortly after the Interim DIP Order. The DIP Facility will close on the date on or before December 15, 2006, on which all the conditions precedent to the Interim DIP Facility occur. Priority and Liens: All direct borrowings and reimbursement Obligations under letters of credit, other obligations under the DIP Financing, and hedging and cash management arrangements in connection with the DIP Financing, will at all times: (1) constitute under Section 364(c)(1) of the Bankruptcy Code allowed superpriority administrative expense claims against each of the Debtors having priority over all administrative expenses of the kind specified in, or ordered pursuant to, any provision of the Bankruptcy Code, which superpriority claims will, subject to the Carve-Out, be payable from and have recourse to all property of the Debtors and all proceeds thereof; (2) pursuant to Sections 364(c)(2), (c)(3) and (d), for the sole benefit of the Postpetition Secured Parties valid, binding, enforceable, first priority and perfected Liens in the Collateral, which Liens are: (i) subject only to: (x) the Carve-Out, (y) non avoidable, valid, enforceable and perfected Liens that are capitalized leases, purchase money security interests or mechanics' liens in existence on the date of filing for chapter 11 protection and (z) Existing Liens; and (3) senior priming liens on any Collateral securing the First Lien Revolver, the Second Lien Term Loan, and other indebtedness of the Borrower and Guarantor, either upon consent of the affected secured parties or pursuant to Section 364(d). Collateral: The Collateral will include all assets and properties of each of Debtors before and after their filing for chapter 11 protection; provided, however, that with respect the Capital Stock of any Foreign Subsidiary that is not a Canadian Subsidiary, the Postpetition Liens will attach only to 66% of the voting Capital Stock and 100% of the non-voting Capital Stock thereof. Carve Out: The Carve-Out consists of: (a) unpaid fees of the Clerk of the Bankruptcy Court and the U.S. Trustee pursuant to 28 U.S.C. Section 1930(4); (b) unpaid and allowed fees and expenses of professional persons, retained by any Debtor or any Committee pursuant to an order of the Court, incurred prior to notice by any Postpetition Agent that the Carve-out is invoked; and (c) unpaid and allowed fees and expenses, in an aggregate amount not to exceed US$10,000,000, of Professionals incurred subsequent to delivery of a Carve-Out Trigger Notice. Underwriting & Agency Fees: Dura Operating Corp. will pay: -- 1.00% of the maximum amount of the DIP Revolver, payable on the Incremental Facilities Effective Date; -- 1.50% of the maximum of the Fixed Asset Facilities, payable: (x) with respect to that portion of the Underwriting Fees calculated with respect to the Interim DIP Facility, on the Closing Date, and (y) with respect to the remaining portion of the Underwriting Fees, on the Incremental Facilities Effective Date; and -- agency fees to each of the DIP Agents of US$100,000 per annum. The fees will be fully earned and nonrefundable once paid. Expenses: Dura Operating will reimburse the DIP Agents for reasonable out-of-pocket expenses, including an aggregate US$500,000 evergreen expense deposit, which will be evergreen until the Closing Date. Flex Pricing: GSCP may at any time after consultation with Dura Operating, change the terms, conditions, pricing or structure of any of the Facilities if GSCP reasonably determines, in its discretion, that the changes are necessary to ensure the successful syndication of any of the Facilities; provided that: (1) the total aggregate amount of the Facilities remains unchanged; (2) the overall weighted average interest rates under the Facilities may not be increased by more than 67.5 basis points, determined on a combined basis; (3) the amount of the Revolving Facility may not be increased; (4) prepayment premiums may not be required with respect to the Revolving Facility and the prepayment premium for the Term Facility may not be increased or extended; (5) the maturity dates of the Facilities may not be shortened; (6) amortization may not be required under the Facilities; (7) a LIBOR Rate floor or minimum interest rates may not be required; (8) the mandatory prepayment provisions may not be changed; (9) negative covenants restricting incurrence of Indebtedness, Fundamental Changes, Disposition of Assets, Acquisitions and Sales and Lease-backs may not be changed; (10) the financial covenants may not be changed and additional financial covenants may not be required; and (11) a prohibition on voluntary prepayments may not be imposed with respect to the Facilities. Synthetic L/C Fees: The DIP Agents will invest the amounts in the Synthetic L/C Account in their discretion. On each applicable interest payment date, the DIP Agents will distribute to each Lender under the Synthetic L/C Facility its pro rata portion of any interest actually earned on the amounts on deposit in the Synthetic L/C Account. Dura Operating will pay: (i) each Issuer a fronting fee in an amount to be agreed between the Borrower and the Issuer of 25 basis points per annum or the higher rate as agreed to between Borrower and Issuer on the aggregate face amount of the outstanding Synthetic L/Cs issued by the Issuer and (ii) the Lenders under the Synthetic L/C Facility letter of credit participation fees equal to the interest rate for loans under the DIP Term Loan bearing interest with reference to the reserve adjusted Eurodollar Rate on the full amount of the Synthetic L/C Facility. Dura Operating will also pay the Issuers customary issuance fees. Revolving L/C Fees: Dura Operating agrees to pay to Lenders having Revolving Exposure letter of credit fees equal to: (1) the Applicable Margin for Revolving Loans that are Eurodollar Rate Loans, times (2) the average aggregate daily maximum amount available to be drawn under all the Letters of Credit. Dura Operating agrees to pay directly to Issuing Bank, for its own account, these fees: (i) a fronting fee equal to 0.25%, per annum, or the higher rate as may be agreed between Dura and the Issuing Bank, times the average aggregate daily maximum amount available to be drawn under all Letters of Credit; and (ii) the documentary and processing charges for any issuance, amendment, transfer or payment of a Letter of Credit as are in accordance with the Issuing Bank's standard schedule for the charges and as in effect at the time of the issuance, amendment, transfer or payment, as the case may be. Prepayment Fee: Optional prepayments or mandatory prepayments in connection with proceeds of certain debt or equity issuances of the Fixed Asset Facilities made on or before the earlier of the first anniversary of the Closing Date and prior to the effective date of a plan of reorganization will be subject to the payment of a prepayment fee in an amount equal to 1% of the principal amount prepaid. Interest Rate: All amounts outstanding under the DIP Facilities will bear interest: (a) in the case of the DIP Revolver, at the Borrower's option, (i) at the Base Rate plus 0.75% per annum or, (ii) at the reserve adjusted LIBOR Rate plus 1.75% per annum; and (b) in the case of the DIP Term Loan, at the Borrower's option, (i) at the Base Rate plus 1.50% per annum or (ii) at the reserve adjusted LIBOR Rate plus 2.50% per annum. Default Interest: Following the occurrence and during the continuance of an event of default, the interest rates under the DIP Facility will increase by an additional 2.00% per annum and the additional interest will be payable on demand. Charging Expenses Limitation: Subject to and effective upon entry of the Final DIP Order, except to the extent of the Carve Out, no expenses of administration of the Chapter 11 cases or any future proceeding that may result therefrom will be charged against or recovered from the Collateral securing the DIP Obligations pursuant to Section 506(c), without the prior written consent of the DIP Agents. Events of Default: The DIP Documentation contains customary events of default. Financial Covenants: Under the Revolving Credit Agreement, the Debtors are required to maintain minimum EBITDA: Period MINIMUM EBITDA ------ -------------- 11/01/06 - 01/31/07 (US$11,516,665) 11/01/06 - 02/28/07 (13,100,498) 11/01/06 - 03/31/07 (9,785,196) 11/01/06 - 04/30/07 (11,265,601) 11/01/06 - 05/31/07 (10,094,956) 11/01/06 - 06/30/07 (8,016,354) 11/01/06 - 07/31/07 (18,871,520) 11/01/06 - 08/31/07 (17,622,862) 11/01/06 - 09/30/07 (14,986,584) 11/01/06 - 10/31/07 (12,326,569) 12/01/06 - 11/30/07 (8,981,480) 01/01/07 - 12/31/07 (9,030,154) With respect to the Term Loan Credit Agreement, the Debtors are required to maintain: (a) Minimum EBITDA Period MINIMUM EBITDA ------ -------------- 11/01/06 - 01/31/07 (US$5,000,000) 11/01/06 - 02/28/07 3,449,945 11/01/06 - 03/31/07 12,782,777 11/01/06 - 04/30/07 17,206,170 11/01/06 - 05/31/07 22,405,451 11/01/06 - 06/30/07 31,785,513 11/01/06 - 07/31/07 27,779,599 11/01/06 - 08/31/07 29,072,155 11/01/06 - 09/30/07 45,324,997 11/01/06 - 10/31/07 52,586,795 12/01/06 - 11/30/07 55,358,832 01/01/07 - 12/31/07 56,176,951 (b) Maximum Consolidated Capital Expenditures Specified Fiscal Quarter Quarterly Amt. -------------- -------------- Two months ended 12/31/06 US$22,005,225 Fiscal Qrtr ended 03/31/06 21,120,000 Fiscal Qrtr ended 06/30/06 21,120,000 Fiscal Qrtr ended 09/30/07 30,470,000 Fiscal Qrtr ended 12/31/07 30,470,000 By this motion, the Debtors ask the Court: (a) for authorization to borrow up to US$300,000,000 of DIP Financing following a final hearing; (c) for authorization to repay, at the Final Hearing or as soon as practicable thereafter, their obligations owing under the US$175,000,000 prepetition credit facility; (d) for authorization to execute and enter into the DIP Credit Agreement and related documents, and to perform the other and further acts as may be required in connection with the DIP Documents; (e) to grant superpriority claims to the DIP Lenders payable from, and having recourse to, all prepetition and postpetition property of the Debtors' estates and all proceeds thereof, in each case subject to the Carve-Out; (f) to schedule a final hearing to be held within 45 days of the Petition Date to consider entry of a Final DIP Order authorizing the balance of the borrowings and letter of credit issuances under the DIP Documents on a final basis. A full-text copy of the Senior Secured Super-Priority Debtor-In- Possession Revolving Credit and Guaranty Agreement is available free of charge at http://ResearchArchives.com/t/s?1461 A full-text copy of the Senior Secured Super-Priority Debtor-In- Possession Term Loan and Guaranty Agreement is available free of charge at http://ResearchArchives.com/t/s?1462 About DURA Automotive Systems Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a leading supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to every North American, Japanese and European original equipment manufacturer and many leading Tier 1 automotive suppliers. It currently operates in 63 locations including joint venture companies and customer service centers in 14 countries. In Europe, the company maintains operations in Germany, the United Kingdom, France, Spain, Portugal, Czech Republic, Slovakia and Romania. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Seeks Court Nod to Use All Cash Collateral ----------------------------------------------------------- DURA Automotive Systems, Inc., and its debtor affiliates ask the U.S. Bankruptcy Court for the District of Delaware for authority to use all cash collateral existing on or after their filing for chapter 11 protection subject to the First Lien Lenders' and Second Lien Lenders' liens. The Debtors have an urgent need for the immediate use of the Cash Collateral pending the Final DIP Hearing, Mr. Collins tells the Court. He explains that the Debtors require use of the Cash Collateral to, among other things, pay present operating expenses, including payroll, and pay vendors on a going-forward basis to ensure a continued supply of materials essential to the Debtors' continued viability. In addition, the DIP Financing is explicitly conditioned on the Court granting the Debtors' use of the Cash Collateral. On May 3, 2005, Dura Operating Corp. entered into: (i) a five-year asset-based revolving credit facility of US$175,000,000 -- the First Lien Revolver; and (ii) a six-year US$150,000,000 senior secured second lien term loan -- the Second Lien Term Loan. On March 29, the Second Lien Term Loan was amended to include a new US$75,000,000 junior tranche. As of Oct. 25, 2006, the total amount drawn on the First Lien Revolver had increased to around US$106,400,000 and the total First Lien Revolver obligations, including US$18,000,000 of settlement costs associated with certain interest rate swap contracts were around US$124,400,000. The total amount outstanding under the Second Lien Revolver and the Second Lien Term Loan was US$225,000,000. If approved, a portion of the proceeds of the US$300,000,000 DIP financing facility arranged by Goldman Sachs Capital Partners L.P., General Electric Capital Corporation, and Barclays Capital would be used to repay in full the indebtedness and other obligations under the First Lien Revolver. The repayment, however, will not occur until the DIP Lenders fund the DIP Facility upon entry of the Final DIP Order, Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, notes. In addition, the liens securing the DIP Financing temporarily will prime the liens securing the First Lien Revolver until the first lien obligations are repaid. Moreover, the liens securing the DIP Financing will prime the liens granted to secure payment under the Second Lien Agreements. Adequate Protection of the First Lien Lenders A majority of the First Lien Lenders has consented to the Debtors' entry into the DIP Facility and refinancing of the First Lien Revolver. As a condition to the consent, however, pending entry of the Final DIP Order and refinancing of their debt, the First Lien Lenders have requested, and the Debtors have agreed to, certain adequate protection provisions. To protect the First Lien Lenders from diminution, if any, in the value of their interest in their collateral, the Debtors propose to provide adequate protection in these forms: (a) except with respect to default rate interest and swap breakage costs, subject to Section 506(b), they will, on a monthly basis thereafter until the repayment in full in cash of the First Priority Indebtedness made prior to filing for chapter 11 protection, promptly pay in cash all accrued but unpaid reasonable costs and expenses prior to the Debtors' filing for chapter 11 protection of the First Priority Agents for which an invoice was delivered to the Debtors; (b) reasonable fees and expenses, for which an invoice was delivered to the Debtors, of professionals engaged by any First Priority Lender prior to the Debtors' filing for chapter 11 protection, up to a maximum aggregate amount of US$50,000 for all the fees and expenses of professionals engaged by all First Priority Lenders prior to the Debtors' filing for chapter 11 protection; and (c) all accrued but unpaid interest on the First Priority Indebtedness, prior to the date of filing for chapter 11 protection, at the non-default rate specified in the First Priority Credit Agreement, prior to chapter 11 protection and all other reasonable fees, expenses, costs and charges provided under the First Priority Credit Agreement or any other First Priority Financing Document, prior to the filing for chapter 11 protection for which an invoice was delivered to the Debtors, in each case. In connection with the repayment in full in cash of the First Priority Indebtedness before the filing of the bankruptcy case, the Debtors will promptly pay the accrued default interest and any and all swap breakage costs outstanding under the First Priority Credit Agreement or any other First Priority Financing Document prior to the filing for chapter 11 protection. The Debtors will provide copies of any invoices to counsel for the Agents before and after the filing for chapter 11 protection, the Second Lien Committee and any Committee. In addition, the Debtors have also agreed to these provisions: (a) Replacement Liens. To the extent of any diminution in the Collateral prior to the filing for chapter 11 protection, replacement liens and superpriority administrative claims, which liens and claims will be, junior only to the Carve-Out, Permitted Liens, and the Liens and claims securing the DIP Obligations; (b) Debtors' Acknowledgement of Validity of Liens. Subject to a 60-day investigation period for the official committee of unsecured creditors, the Debtors will acknowledge the validity, priority, and perfection of the claims and liens of the First Lien Representatives and First Lien Lenders and will waive any claims or causes of action against the First Lien Representatives and First Representatives; (c) Section 364(e) Protection. To the extent applicable, the First Lien Representatives and First Lien Lenders receive the protections of Section 364(e); (d) Waiver of Section 506(c) Surcharge. The Debtors waive the right to surcharge under Section 506(c) against the Collateral prior to chapter 11 protection filing and will not seek to prime the First Lien Lenders, or use the Collateral, other than pursuant to the terns set forth in the DIP Financing Motion and the DIP Order; (e) Termination Event. Subject to reasonable notice prior to lifting of the automatic stay, consent to use of Cash Collateral terminates if the DIP Facility terminates or the Debtors do not make the First Lien Adequate Protection Payments; (f) Consent Requirement. Nothing in the DIP Order will be deemed a finding of adequate protection for the non- consensual use of Cash Collateral; (g) 45-Day Limit to Use of Cash Collateral. Unless the First Lien Representatives' and First Lien Lenders' otherwise consent, the First Lien Representatives' and First Lien Lenders' consent to the use of Cash Collateral will terminate unless: (i) within the 45 days of the Petition Date, the Court enters the Final DIP Order, and (ii) upon entry of the Final DIP Order, the First Lien Revolver has been refinanced; (h) Reservation of Indemnification Rights. Subsequent to, and notwithstanding, refinancing of the First Lien Revolver, the First Lien Representatives and First Lien Lenders reserve the right to assert indemnification claims against the Debtors under the First Lien Agreements; (i) Reservation of Right to Seek Further Adequate Protection. Subject to the creditors committee's Investigation rights, the First Lien Administrative Agent reserves its right to seek further adequate protection or seek lifting of the automatic stay if refinancing of the First Lien Revolver does not occur upon entry of the Final DIP Order; and (j) Limitations on Use of Cash Collateral. i. Other than with respect to US$25,000 that can be used by the Creditors Committee for the Investigation, no party, including the creditors committee, can use Cash Collateral to pursue actions, claims, or challenges against the First Lien Representatives or the First Lien Lenders; and ii. Cash Collateral will only be used in accordance with the DIP Documents and DIP Orders. Mr. Collins also notes that the First Lien Lenders' interests are also more than adequately protected by the existence of a substantial equity cushion. According to Mr. Collins, despite the comprehensive nature of the proffered adequate protection measures, the Debtors are given to understand that a minority of First Lien Lenders may not have agreed to consent to being primed on an interim basis until entry of the Final DIP Order. The Debtors nonetheless do not expect that any First Lien Lender will object to entry of the Interim DIP Order. If there is an objection, the Debtors are prepared to go forward to establish that the First Lien Lenders are adequately protected, Mr. Collins avers. Adequate Protection of Second Lien lenders The Debtors also seek to provide adequate protection to the Second Lien Lenders on account of the Debtors' continuing use of their Cash Collateral and the priming of the Second Lien Term Loan by the DIP Facility. The Debtors have reached an interim agreement on adequate protection terms with the Ad Hoe Committee of Second Lien Lenders, which holds or controls a majority in principal amount outstanding under the Second Lien Term Loan. The Interim DIP Order will state that for the avoidance of doubt, the Debtors, the DIP Agents and the DIP Lenders acknowledge that the Second Lien Lenders have stated that they do not consent and do not currently intend to consent to the entry of the Final Order unless certain changes are made to the Final Order compared to the Interim Order. If, by the Final Hearing, the Debtors and the Second Lien Committee cannot reach a full and final accord, the Debtors reserve their right to seek Court approval of the repayment of the First Lien Revolver, use of Cash Collateral and priming over the objection of the Second Lien Committee. As adequate protection to protect the Second Lien Lenders from diminution, if any, in the value of their interest in their collateral, the Debtors propose that: (a) they will timely make current cash payment of interest on each monthly "Interest Payment Date" starting with Dec. 1, 2006, and for the next succeeding five monthly Interest Payment Dates, at the rate equal to the greater of: (x) LIBOR plus 4.75% per annum plus the difference, if any, between (i) the weighted average Flex and (ii) 6.75% and (y) the rate applicable to the DIP Term Loan plus 1.55% per annum. Notwithstanding this Stated Rate, the Second Lien Committee has asserted that the appropriate contractual (non-default) rate under the Second Lien Credit Agreement is the "Base Rate" option, and the Second Lien Lenders or the Second Priority Representative will be entitled to assert that the increment between the Stated Rate and the "Base Rate" option should continue to accrue as part of the claims under the Second Lien Credit Agreement. At the same time, the parties have agreed that, for so long as the monthly interest payments at the Stated Rate are timely paid, the contractual default rate under the Second Lien Credit Agreement will be deemed to have been waived. The interest payment due on December 1 will include all interest accrued to the date (at the Stated Rate), provided that if the Final DIP Order has not been entered on or before the date, the first and second interest payments will both occur on Jan. 2, 2007, and will include the amounts that otherwise would have been paid on Dec, 1, 2006, in addition to the amounts owing on Jan. 2, 2007; (b) on a monthly basis, the Debtors will reimburse the reasonable fees and expenses of: (i) Lazard Freres & Co. LLC, the financial advisor to the Second Lien Committee in the amount of US$150,000 per month plus expenses; (ii) Bingham McCutchen LLP, lead counsel to the Second Lien Committee, together with Delaware counsel and, upon notice to the Debtors, other local counsel reasonably necessary to protect the interests of the Second Lien Committee; (iii) JPMorgan Chase Bank, N.A., as the Second Lien Administrative Agent, including its contractual agent fees and the fees and expenses of its counsel, but in each case only to the extent reasonably necessary to administer the Second Lien Credit Agreement and without duplication of the services rendered by counsel to the Second Lien Committee, and (iv) Wilmington Trust Company as the Second Lien Collateral Agent including its contractual agent fees and the fees and expenses of its counsel, but in each case only to the extent reasonably necessary to administer the Second Lien security agreements and without duplication of the services rendered by counsel to the Second Lien Committee or counsel to the Second Lien Administrative Agent; and (c) the monthly interest payments will continue to be timely paid by the Debtors after the sixth monthly interest payment, unless, on no shorter than 20 days' notice, the Debtors will obtain a Court order permitting the Debtors to discontinue making any or all of the monthly interest payments falling due after the entry of the Court order. In all events, the Second Lien Adequate Protection Obligations will remain in full force and effect unless the Court orders otherwise; (d) If they timely make 12 consecutive interest payments starting with the first interest payment, any prepayment fee arising under the Second Lien Credit Agreement will be deemed to have been waived; and (e) to the extent of any diminution in the Collateral prior to the filing for chapter 11 protection, replacement liens and superpriority Administrative claims, which liens and claims will be junior only to the Carve-Out, Permitted Liens, the Liens and claims securing the DIP Obligations, the liens And claims securing the First Lien Revolver, and the replacement liens and superpriority claims of the First Lien Representatives and the First Lien Lenders as part of the First Lien Adequate Protection Obligations. Additionally, the Debtors stipulate that: (i) the DIP Facility commitments will not exceed US$300,000,000; (ii) they waive the right to surcharge under Section 506(c) against the Collateral before the chapter 11 protection filing and will not seek to prime the Second Lien Lenders, or use the Collateral, other than pursuant to the terms set forth in this motion and the DIP Order; and (iii) nothing in the DIP Order will be deemed a finding of adequate protection for the non-consensual use of Cash Collateral. Debtors Say Provisions are Fair & Reasonable The Debtors believe that the Adequate Protection Obligations are sufficient to protect any diminution in the value of the Secured Lenders interests', prior to the filing for chapter 11 protection during the period their collateral is used by the Debtors, and are fair and reasonable. Accordingly, the Debtors ask the Court to enter an interim and final order: (a) authorizing them to use the Cash Collateral; (b) granting the Secured Lenders prior to the bankruptcy case, adequate protection with respect to, inter alia, the use of the Cash Collateral and all use and diminution in the value of the Collateral prior to the filing for chapter 11 protection; (c) approving the Debtors' stipulations with respect to the First Lien Agreements and Second Lien Agreements and the liens and security interests arising therefrom; and (d) limiting their right to surcharge against collateral pursuant to Section 506(c). About DURA Automotive Systems Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a leading supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to every North American, Japanese and European original equipment manufacturer and many leading Tier 1 automotive suppliers. It currently operates in 63 locations including joint venture companies and customer service centers in 14 countries. In Europe, the company maintains operations in Germany, the United Kingdom, France, Spain, Portugal, Czech Republic, Slovakia and Romania. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Ontario Court Recognizes Chapter 11 Case --------------------------------------------------------- The Ontario Superior Court of Justice, entered a "Foreign Recognition Order," which recognized under Canadian law the Chapter 11 bankruptcy proceedings commenced by DURA Automotive Systems Inc. and its U.S. and Canadian subsidiaries filed in the United States Bankruptcy Court for the District of Delaware on Oct. 30, 2006. DURA's European and other operations outside of the U.S. and Canada, accounting for around 51% of DURA's revenue, are not part of the Chapter 11 proceedings nor are they part of the Canadian Court proceedings. DURA's European and other non-US and non-Canadian operations therefore remain unaffected by either orders entered by the U.S. Bankruptcy Court or the Canadian Court's Foreign Recognition Order. In the Foreign Recognition Order, the Canadian Court also: -- Granted a stay of all proceedings in Canada against DURA and its U.S. and Canadian subsidiaries; -- Recognized the U.S. Bankruptcy Court's interim order authorizing DURA to access up to US$50 million of the around US$300 million in Debtor in Possession (DIP) financing from Goldman Sachs, GE Capital and Barclays; -- Appointed RSM Richter Inc. as Information Officer for Canadian stakeholders in respect of DURA's Canadian recognition proceedings; and -- Recognized all other "first day orders" of the U.S. Bankruptcy Court that DURA submitted to the Ontario Court for recognition. These other first day orders authorize DURA and its U.S. and Canadian subsidiaries to: * Pay employee salaries, wages and benefits that accrued prior to the petition filing date; * Pay certain critical pre petition filing date vendor claims and certain claims of vendors whose goods were received within the 20 day period prior to the petition filing date; * Provide "adequate assurance" to utilities in the form of a deposit equal to an average of 2 weeks' worth of utilities' bills; * Pay all "trust fund" and similar taxes accruing prior to the petition filing date; and * Continue using the pre petition cash management system. DURA and its U.S. and Canadian subsidiaries previously said that they will be paying, in the ordinary course of business, all post petition employee, wages, salaries and benefits accruing on and after the petition filing date. They will also be paying on a going forward basis, and in the ordinary course of business, all vendors and service providers who provide goods and services to them after the petition filing date. The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware is presiding over the Chapter 11 proceedings of Dura and its U.S. and Canadian subsidiaries. The Application Record filed in respect of the hearing and the Foreign Recognition Order will be posted at http://www.rsmrichter.com/ About DURA Automotive Systems Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a leading supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to every North American, Japanese and European original equipment manufacturer and many leading Tier 1 automotive suppliers. It currently operates in 63 locations including joint venture companies and customer service centers in 14 countries. In Europe, the company maintains operations in Germany, the United Kingdom, France, Spain, Portugal, Czech Republic, Slovakia and Romania. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Receives NASDAQ Delisting Notice ------------------------------------------------- DURA Automotive Systems Inc. received a delisting notification from the Nasdaq Stock Market dated Oct. 30, 2006. Trading of DURA's common stock will be suspended at the opening of business on Nov. 8, 2006. The company does not intend to appeal the decision. NASDAQ indicated in its letter that the delisting determination was prompted in light of DURA's voluntary filing for protection under Chapter 11 of the U.S. Bankruptcy Code and was based on Nasdaq Marketplace Rules 4300, 4450(f), and IM-4300. On Oct. 30, DURA and its U.S. and Canadian subsidiaries filed for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware. DURA's European and other operations outside of the U.S. and Canada, accounting for around 51% of DURA's revenue, are not part of the filing. About DURA Automotive Systems Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a leading supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to every North American, Japanese and European original equipment manufacturer and many leading Tier 1 automotive suppliers. It currently operates in 63 locations including joint venture companies and customer service centers in 14 countries. In Europe, the company maintains operations in Germany, the United Kingdom, France, Spain, Portugal, Czech Republic, Slovakia and Romania. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for. As of July 2, 2006, the Debtor had US$1,993,178,000 in total assets and US$1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DV-COM LIMITED: Creditors Confirm Liquidators' Appointment ---------------------------------------------------------- Creditors of DV-COM Limited confirmed Oct. 26 the appointment of Mark Elijah Thomas Bowen and Nigel Price of Moore Stephens LLP as the company's Joint Liquidators. The company can be reached at: DV-COM Limited 49 Hanbury Road Droitwich Worcestershire WR9 8PR United Kingdom Tel: 01905 778 957 DUNNSPRINT LIMITED: Taps Liquidators from Fisher Partners --------------------------------------------------------- Stephen Katz and David Birne of Fisher Partners were appointed Joint Liquidators of Dunnsprint Limited on Oct. 25 for the creditors' voluntary winding-up proceeding. The company can be reached at: Dunnsprint Limited Clarence Works Clarence Road Eastbourne East Sussex BN228HJ United Kingdom Tel: 01323 410 902 Fax: 01323 410 573 GENERAL MOTORS: Delphi Deal Coming Soon, Rick Wagoner Says ---------------------------------------------------------- General Motors Corp. anticipates forging a deal with Delphi Corp. over contributions to the bankrupt auto parts maker's labor costs "reasonably soon," The Wall Street Journal reports. GM CEO Rick Wagoner told The Journal's Gordon Fairclough that "a huge amount of progress has been made" towards a compromise with Delphi. GM had recently updated estimates related to benefit guarantees as a result of progress in ongoing discussions with Delphi and its unions. In its report for the quarter-period ended Sept. 30, 2006, GM disclosed that it has narrowed the range of estimated potential exposure related to Delphi's bankruptcy at between US$6 billion and US$7.5 billion pre-tax, as compared to a previously disclosed range of US$5.5 to US$12 billion. Reflecting these updated estimates, GM also increased the reserve for its contingent liability for Delphi by US$500 million in the third quarter, bringing the total charges taken to date to US$6 billion pre-tax. In addition to these charges, the final agreement with Delphi may result in GM agreeing to reimburse Delphi for certain labor expenses to be incurred upon and after Delphi 's emergence from bankruptcy. The initial payment in 2007 is not expected to exceed approximately US$400 million pre-tax, and the ongoing expenses would be of limited duration and estimated to average less than US$100 million pre-tax annually. About Delphi Troy, MI-based Delphi Corporation -- http://www.delphi.com/-- supplies vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed US$17,098,734,530 in total assets and US$22,166,280,476 in total debts. About General Motors 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 TCR-Europe on Oct. 11, 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. In a TCR-Europe report on June 22, 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. Moody's said the rating outlook is negative. GENERAL MOTORS: Reduces Third Quarter Net Loss to US$91 Million --------------------------------------------------------------- General Motors Corporation's consolidated net loss for the third quarter of 2006 has been reduced by US$24 million to a net loss of US$91 million. General Motors Corporation previously announced preliminary consolidated net loss for the third quarter of 2006 as US$115 million. The reduction in net loss is attributable to additional loan sales that had not been previously reported by GM's unit, General Motors Acceptance Corporation LLC. GMAC has also revised its loss to US$325 million, from the US$349 million it reported earlier, the Associated Press reports. A full-text copy of GM's revised quarterly report, filed with the U.S. Securities and Exchange Commission on Nov. 7, 2006, is available for free at http://researcharchives.com/t/s?14a0 About General Motors 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 TCR-Europe on Oct. 11, 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 USUS$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. In a TCR-Europe report on June 22, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to USUS$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. Moody's said the rating outlook is negative. IMATE WINDOWS: Claims Filing Period Ends Dec. 27 ------------------------------------------------ Creditors of Imate Windows & Conservatories Limited have until Dec. 27 to detail their names and addresses (and Solicitors if applicable), together with particulars of their debts or claims, in writing, or in person, to appointed Liquidator Duncan R. Beat at: Tenon Recovery Moriston House 75 Springfield Road Chelmsford Essex CM2 6JB United Kingdom The company can be reached at: Imate Windows & Conservatories Limited 2b Limberline Road Hilsea Portsmouth Hampshire PO3 5JF United Kingdom Tel: 023 9263 9982 JACKSON'S BASINGSTOKE: Car Dealer & Service Center Up for Sale -------------------------------------------------------------- Matthew Wild and Bruce Mackay at Baker Tilly, in their capacity as Joint Administrators of Jackson's (Basingstoke) Ltd., are offering to sell the company's business and assets, which include the sale of its Jackson's (Basingstoke) and Jackson's Motorland operations. Features: Jackson's (Basingstoke) -- long-established truck center and car service center; -- paint and body repair center approved by most insurers; -- HGV safety inspection center; -- MOT center for classes 4,5 & 7; -- Tachograph center; -- excellent long leasehold site measuring 1.066 hectares (2.634 acres) -- 67 years unexpired ground rent; -- annual turnover of around GBP2 million; Jackson's Motorland -- established car dealership business; -- freehold showroom and service center on site measuring 0.255 hectares (0.828 acres); -- fully-equipped service and valeting center; -- good car sales frontage; -- large stock of used cars; and -- annual turnover of GBP3.2 million. Inquiries can be addressed to: Guy Jackson or Michele Lockyer Baker Tilly Tel: 01483 307000 E-mail: guy.jackson@bakertilly.co.uk michele.lockyer@bakertilly.co.uk Baker Tilly -- http://www.bakertilly.co.uk/-- provides auditing and other services for mid-cap and smaller publicly listed companies and private companies, particularly those expanding into new foreign markets. Services include business and financial planning, tax-related services, corporate finance, litigation support, turnaround services, and technology consulting. OCEAN DRIVE: Creditors Confirm Liquidator's Appointment ------------------------------------------------------- Creditors of Ocean Drive Hair & Beauty Limited confirmed Oct. 27 the appointment of Roderick Graham Butcher of Butcher Woods as the company's Liquidator. The company can be reached at: Ocean Drive Hair & Beauty Limited Butcher Woods 79 Caroline Street Birmingham West Midlands B3 1UP United Kingdom Tel: 01527 62076 PENWRIGHT CONSTRUCTION: Names Liquidators from Abbott Fielding -------------------------------------------------------------- Nedim Ailyan and Andrew Tate of Abbott Fielding were nominated Joint Liquidators of Penwright Construction Limited on Oct. 30 for the creditors' voluntary winding-up proceeding. The company can be reached at: Penwright Construction Limited 320a Dukes Mews Haringey London N10 2QN United Kingdom Tel: 020 8883 5767 Fax: 020 8365 3238 QUANTUM ENVIRONMENTAL: Appoints J. M. Titley as Liquidator ---------------------------------------------------------- J. M. Titley of DTE Leonard Curtis was appointed Liquidator of Quantum Environmental Design Limited on Oct. 27 for the creditors' voluntary winding-up proceeding. Headquartered in Bolton, England, Quantum Environmental Design Limited -- http://www.qedbolton.co.uk/-- was established in 1986 as a Practice of professionally qualified Building Services Consulting Engineers. The Practice undertakes all types of design and advisory briefs relating to the building services elements of new build and refurbishment projects. Its services include the design of heating, ventilation, air conditioning, chilled water, water services and public health systems as part of mechanical services duties and fire alarm, CCTV, intruder alarm, public address, general lighting and emergency lighting and power distribution systems as part of electrical services duties. SCOTTISH RE: Board Approves Senior Executive Success Plan --------------------------------------------------------- In a filing with the U.S. Securities and Exchange Commission, Scottish Re Group Ltd. disclosed of the approval of an amended employment agreement, dated July 1, 2002, between Paul Goldean and the company. Pursuant to the amendment, Mr. Goldean will serve as President and Chief Executive Officer of Scottish RE, nunc pro tunc to Oct. 26, 2006, with an annual base salary of US$550,000. Also, the company's board of directors approved a Senior Executive Success Plan. The Plan's purpose is to retain essential personnel through the transition period relating to the possible sale Scottish RE. Participation in the Plan is limited to these executives, each of whom will receive the guaranteed payout listed below if the transaction is completed: Executive Guaranteed Payout --------- ----------------- Paul Goldean US$300,000 Dean Miller US$200,000 Cliff Wagner US$200,000 David Howell US$200,000 Jeff Delle Fave US$100,000 In addition to the guaranteed payouts, each of the executives will receive additional payments to the extent that the sales price of the company in the transaction exceeds certain thresholds established by the Board. If any of the executives leave Scottish RE prior to the completion of the transaction, that executive will forfeit his right to any payments under the Plan. The executives will be entitled to payments under the Plan 90 days after the completion of the transaction unless that executive is terminated by the company for cause or due to resignation without good reason, in which case the payment will be forfeited. Payments under the Plan will be includable in calculations related to Section 280G of the United States Internal Revenue Code of 1986, as amended. Scottish Re Group Limited -- http://www.scottishre.com/-- is a global life reinsurance specialist. Scottish Re has operating companies in Bermuda, Charlotte, North Carolina, Dublin, Ireland, Grand Cayman, and Windsor, England. At March 31, 2006, the reinsurer's balance sheet showed US$12.2 billion assets and US$10.8 billion in liabilities * * * On Aug. 21, 2006, Standard & Poor's Ratings Services lowered its counterparty credit rating on Scottish Re Group Ltd. to 'B+' from 'BB+'. Moody's Investor Service downgraded Scottish Re's senior unsecured debt rating to Ba3 from Ba2 due to liquidity issues. A.M. Best Co. has downgraded on Aug. 22, 2006, the financial strength rating to B+ from B++ and the issuer credit ratings to "bbb-" from "bbb+" of the primary operating insurance subsidiaries of Scottish Re Group Limited (Scottish Re) (Cayman Islands). A.M. Best has also downgraded the ICR of Scottish Re to "bb-" from "bb+". AM Best put all ratings under review with negative implications. SERBHIS GROUP: Brings In Liquidators from O'Hara & Co. ------------------------------------------------------ Peter O'Hara and Simon Weir of O'Hara & Co. were appointed Joint Liquidators of Serbhis Group Limited on Oct. 26 for the creditors' voluntary winding-up procedure. Headquartered in Leeds, England, Serbhis Group Limited provides cleaning and maintenance services. SUPERIOR ENERGY: S&P Affirms BB Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating and its 'BB-' senior unsecured rating on Superior Energy Services Inc., and also assigned its 'BB+' senior secured rating and '1' recovery rating to Superior's US$200 million term loan B. The outlook is stable. Harvey, La.-based Superior, a provider of offshore well services, rental tools, and liftboat-based services primarily in the U.S. Gulf of Mexico and Gulf Coast markets, will have around US$520 million of debt on a pro forma basis after this transaction. Proceeds from the US$200 million term loan will be used to help fund the US$358 million acquisition of Warrior Energy Services Corp., expected to close in fourth-quarter 2006. The balance of the acquisition price will be financed with the issuance of roughly 5.3 million shares of common stock. The ratings on Superior reflect its limited geographic diversification, highly cyclical markets, and a growing crude oil and natural gas production business, viewed as higher risk than the remainder of Superior's business portfolio. Solid financial measures, good cash flow generation, and moderate spending needs buffer these weaknesses. The stable outlook reflects the expectation that Superior will remain focused on its core services business. In addition, Superior is expected to continue to make opportunistic acquisitions, while maintaining a moderate financial policy. "If Superior increases its oil and gas production beyond its stated goal of 25% EBITDA, or if that segment exhibits greater- than-expected volatility, ratings would come under negative pressure," Standard & Poor's credit analyst Paul B. Harvey said. "However, if Superior can successfully expand away from the Gulf of Mexico and bolster its business risk profile, ratings could be raised over the medium to long term," Mr. Harvey continued. Superior Energy Services, Inc., is headquartered in Harvey, Louisiana. The company has operations in the United States, Trinidad and Tobago, Australia, the United Kingdom, and Venezuela, among others. SUPERIOR ENERGY: Appoints Harold Bouillion as Board Director ------------------------------------------------------------ Superior Energy Services, Inc. 's board of directors, at the recommendation of its Nominating and Corporate Governance Committee, has appointed Harold J. Bouillion to serve as a director until the 2007 annual meeting of stockholders. From 1966 until 2002, Mr. Bouillion was with KPMG LLP where he served as Managing Partner of the New Orleans office from 1991 through 2002 and as Tax Partner-in-Charge of the New Orleans office from 1977 through 1991. Since his retirement from KPMG in 2002, Mr. Bouillion has served as the Managing Director of Bouillion & Associates, LLC, which provides tax and financial planning services. Terence Hall, Chairman and CEO of Superior, stated, "We are pleased to welcome Harold to our Board. His financial expertise and knowledge of our company should be an excellent complement to the industry experience and financial background of our other directors." Mr. Bouillion is a Certified Public Accountant. He currently serves on the boards of several New Orleans-area community organizations, including the National World War II Museum, the UNO Foundation, and Goodwill Industries of Southeastern Louisiana, Inc. Mr. Bouillion earned a bachelor's degree in Accounting from the University of Louisiana-Lafayette and his MBA from Louisiana State University. Superior Energy Services, Inc. -- http://www.superiorenergy.com/ -- provides specialized oilfield services and equipment focused on serving the production-related needs of oil and gas companies primarily in the Gulf of Mexico and the drilling-related needs of oil and gas companies in the Gulf of Mexico and select international market areas. The company uses its production related assets to enhance, maintain and extend production and, at the end of an offshore property's economic life, plug and decommission wells. Superior also owns and operates mature oil and gas properties in the Gulf of Mexico. The company has operations in the United States, Trinidad and Tobago, Australia, the United Kingdom, and Venezuela, among others. * * * Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating and its 'BB-' senior unsecured rating on Superior Energy Services Inc., and also assigned its 'BB+' senior secured rating and '1' recovery rating to the company's US$200 million term loan B. S&P said the outlook is stable. TOM SOYA: RSM Robson Rhodes Selling Dairy Beverage Supplier ----------------------------------------------------------- Mike Hore and Charles Escott, in their capacity as joint administrators of Waterfront Corporation Ltd. and Tom Soya Ltd., are offering to sell the companies' businesses and assets. The companies for sale manufacture and pack dairy- and fruit- based beverages, including meal replacement drinks and smoothies. The companies also manage a specialized plant for aseptic packaging and operate from leasehold premises in North Wales. Supplying major supermarkets, the companies have annual turnover of around GBP2.3 million. Inquiries can be addressed to: Ian Richardson or Paul Seddon RSM Robson Rhodes LLP Colwyn Chambers 19 York Street Manchester M2 3BA United Kingdom Tel: 0161 236 3777 Fax: 0161 455 3444 RSM Robson Rhodes LLP -- http://www.robsonrhodes.co.uk/-- provides a wide range of auditing, assurance, advisory and compliance services for both private and public sectors. The firm is a member of the RSM International, the world's sixth largest international organization of accountants and business advisers. UPGRADE RECRUITMENT: Marriotts LLP Selling Human Resource Biz ------------------------------------------------------------- Kevin T. Brown FCA at Marriotts LLP, in his capacity as administrator of Upgrade Recruitment Limited, is offering to sell the company's business and assets as a going concern. The company is an eight-year old recruitment agency posting an annual turnover of GBP1.6 million. Upgrade Recruitment currently has a roll of around 100 "Temp" staff on regular assignment to blue chip and local authority customers. Upgrade Recruitment operates from high street location leasehold premises with fully computerized booking and billing system. Inquiries can be addressed to: Kevin Brown Marriotts LLP Allan House 10 John Princes Street London W1G 0AH United Kingdom Tel: 020 7495 2348 VALENCIA HIPOTECARIO: Fitch Junks EUR10.4 Million Class D Notes --------------------------------------------------------------- Fitch Ratings assigned expected ratings to Valencia Hipotecario 3 FTA's residential mortgage-backed floating-rate notes as follows: -- EUR90 million Class A1: 'AAA' -- EUR780.7 million Class A2: 'AAA' -- EUR20.8 million Class B: 'A+' -- EUR9.1 million Class C: 'BBB' -- EUR10.4 million Class D: 'CCC' The final ratings are contingent upon receipt of final documents conforming to information already received. This EUR911m transaction is the third standalone securitisation of residential mortgage loans originated by Banco de Valencia (rated 'A'/'F1'). The expected ratings are based on the quality of the collateral, the available credit enhancement, Banco Valencia's underwriting and servicing capabilities, the integrity of the transaction's legal and financial structure and Europea de Titulizacion's administrative capabilities. The expected ratings address payment of interest on the notes according to the terms and conditions of the documentation, subject to a deferral trigger on the Class B and C notes, as well as the repayment of principal by legal final maturity in September 2044. At closing credit enhancement for the Class A1 and A2 notes will total 4.47% and will be provided by the subordination of the Class B and C notes (3.31%) and the reserve fund (1.15%). In addition to subordination and the reserve fund, the transaction will also benefit from excess spread. At closing, the proceeds of the un-collateralised Class D notes will be used to fund the initial balance of the reserve account. WATERFRONT CORP: Fruit-Based Beverage Supplier Up for Sale ---------------------------------------------------------- Mike Hore and Charles Escott, in their capacity as joint administrators of Waterfront Corporation Ltd. and Tom Soya Ltd., are offering to sell the companies' businesses and assets. The companies for sale manufacture and pack dairy- and fruit- based beverages, including meal replacement drinks and smoothies. The companies also manage a specialized plant for aseptic packaging and operate from leasehold premises in North Wales. Supplying major supermarkets, the companies have annual turnover of around GBP2.3 million. Inquiries can be addressed to: Ian Richardson or Paul Seddon RSM Robson Rhodes LLP Colwyn Chambers 19 York Street Manchester M2 3BA United Kingdom Tel: 0161 236 3777 Fax: 0161 455 3444 RSM Robson Rhodes LLP -- http://www.robsonrhodes.co.uk/-- provides a wide range of auditing, assurance, advisory and compliance services for both private and public sectors. The firm is a member of the RSM International, the world's sixth largest international organization of accountants and business advisers. XEROX CORP: Moody's Reviewing Ratings and May Upgrade ----------------------------------------------------- Moody's Investors Service placed the ratings of Xerox Corp. and supported subsidiaries under review for possible upgrade. Overall, Moody's believes that the combination of consistent business execution, secured debt reduction, and positive operating trends warrant the consideration of a rating upgrade. Ratings under review for possible upgrade include: Xerox Corp.: * Corporate Family Rating at Ba1 * Senior unsecured at Ba1, LGD3, 48% * Senior unsecured shelf registration at (P) Ba1, LGD3, 48% * Subordinated at Ba2, LGD6, 94% * Subordinated shelf registration at (P) Ba2, LGD6, 94% * Preferred shelf registration at (P) Ba2, LGD6, 97% Xerox Credit Corp.: * Senior unsecured at Ba1 (support agreement from Xerox Corp.), LGD3, 48% The rating review will focus on the prospects for: (1) continued steady business execution, that includes equipment installation growth that provides the basis for ongoing post sale revenue streams, (2) overall modest revenue growth, (3) consistent operating profitability in the 8-9% range, (4) ongoing annual cash flow from operations in the US$1 to US$1.5 billion range, (5) continued reduction of secured debt, which reduction Moody's expects should approximate US$1 billion annually (6) the maintenance of solid liquidity and continued discipline with respect to share repurchase activity which should funded with with free cash flow generation. Since Moody's changed the ratings outlook to positive in September 2005, Xerox has continued to demonstrate good installation growth throughout its product offering and, with a good product lineup. At the same time, overall product mix has shifted slightly downward, which has contributed to slight pressure on gross margins, although they remain over 40%. Consistent and well-managed operating expenses have contributed to operating margins remaining in the 8% to 9% range. Importantly, the company has continued to consistently reduce the level of secured debt in its capital structure. Since June 2005, secured debt has been nearly cut in half to US$2.3 billion and we expect that this trend should continue. Liquidity remains solid, with cash balances of US$1.6 billion at September 2006 plus access to a US$1.25 billion unsecured revolving credit facility, for which covenant room is expected to remain ample. Xerox Corp., headquartered in Stamford, Connecticut, develops, manufactures and markets document processing systems and related supplies and provides consulting and outsourcing document management services. ********* 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. Go to http://www.bankrupt.com/books/to order any title today. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Jazel Laureno, Julybien Atadero, Carmel Zamesa Paderog, Joy Agravante, and Zora Jayda Zerrudo Sala, Editors. Copyright 2006. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *