/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/051012.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Wednesday, October 12, 2005, Vol. 6, Issue 202 Headlines A R G E N T I N A CONARTE CONSTRUCCIONES: General Report Filing Expected DISTRI GOM: General Report Due in Court October 13 B E R M U D A FOSTER WHEELER: Initiates New Equity-for-Debt Exchange FOSTER WHEELER: Elects Vice President, General Counsel GOSHAWK INSURANCE: May Sell Bermuda Reinsurer PXRE GROUP: Watch Negative Remains Even after Capital Raise B R A Z I L AES CORP.: Senior Credit Facility Commitment Increased to $650M AES TIETE: Bear Stearns Lowers Share Recommendation BANCO MERCANTIL: Rating Reflects Low Profitability VARIG: Restructuring Plan Presented to US Court C A Y M A N I S L A N D S BAC SYNTHETIC: Shareholders Initiate Voluntary Liquidation DIVERSIFIED ASSET: To be Wound Up Voluntarily DUPLEX CORPORATION: Appoints Liquidators EMPLOYEE LLC: Creditors Claims Due On or Before Nov. 3 KIRTLAND PDM: Debt Proof to Be Filed By November 15 PREDRILL STRESSES: Final General Meeting Set for Nov. 4 SMF CAPITAL: Shareholders Decide on Voluntary Liquidation ZAIS MATRIX IV: Company Wind Up Made Official C O L O M B I A GRANAHORRAR: Fogafin Concludes First Phase of Privatization J A M A I C A DYOLL GROUP: Shares Resume Trading at JSE KAISER ALUMINUM: Seeks Exclusive Periods Extention M E X I C O AEROMEXICO/MEXICANA: Pilots' Union to Get 5% Stake in Airlines BALLY TOTAL: Sets Stockholders Meeting for Jan. 26 SATMEX: Taps White & Case's Thomas Heather as Mediator V E N E Z U E L A PDVSA: Improving Plant to Boost Production Capacity - - - - - - - - - - - ================= A R G E N T I N A ================= CONARTE CONSTRUCCIONES: General Report Filing Expected ------------------------------------------------------ The deadline for the submission of the general report on the Conarte Construcciones S.R.L. liquidation will be tomorrow, Oct. 13, 2005. The report shall contain a summary of the Company's financial status as well as relevant events pertaining to the bankruptcy. Ms. Nora Cristina Roger, the trustee selected by the court, verified creditors' claims until July 7, 2005. The verified claims were presented in court as individual reports on Sep. 1, 2005. The Company began liquidating its assets following the "Quiebra" pronouncement of Buenos Aires' civil and commercial Court No. 16. The bankruptcy process will end with the disposal of company assets in favor of its creditors. CONTACT: Conarte Construcciones S.R.L. Avda Rivadavia 5474 Buenos Aires Ms. Nora Cristina Roger, Trustee Hipolito Yrigoyen 1349 Buenos Aires DISTRI GOM: General Report Due in Court October 13 -------------------------------------------------- The general report on the bankruptcy case of Distri Gom S.R.L. will be presented in court tomorrow, Oct. 13, 2005. The Company entered bankruptcy protection after Court No. 9 of Buenos Aires' civil and commercial tribunal, with the assistance of Clerk No. 17, ordered the Company's liquidation. Court-appointed trustee Jose Luis Abuchdid verified creditors' proofs of claim until June 9, 2005. Mr. Abuchdid prepared individual reports out of the verified claims and submitted them on Aug. 17, 2005. CONTACT: Mr. Jose Luis Abuchdid, Trustee Tacuari 119 Buenos Aires ============= B E R M U D A ============= FOSTER WHEELER: Initiates New Equity-for-Debt Exchange ------------------------------------------------------ Foster Wheeler Ltd. (Nasdaq: FWLT) announced Monday that it intends to launch, within five business days, an exchange offer and related consent solicitation for up to $150 million of the $261.5 million outstanding principal amount of its 10.359% Senior Secured Notes due September 15, 2011. In connection with the exchange offer and consent solicitation, Foster Wheeler has entered into a lock-up agreement with certain holders of Senior Notes holding approximately $133.5 million, or 51.1 percent, of the outstanding principal amount of the Senior Notes. Under the terms of the offer, the Company intends to exchange 40.179 of its common shares for each $1,000 aggregate principal amount of Senior Notes including accrued and unpaid interest thereon. The Senior Notes are currently callable at a price of approximately 113.1 percent of each $1,000 aggregate amount of principal plus accrued and unpaid interest. On October 7, 2005, the market value of each Senior Note approximated 112.5 percent. The number of common shares outstanding prior to the proposed exchange is 50,647,387. "This latest exchange offer is another significant step in our Company's deleveraging," said Raymond J. Milchovich, chairman, president and chief executive officer. "The three key accomplishments of this exchange offer are as follows: - Most importantly, this exchange will be accretive to expected 2006 earnings per share; - Up to $150 million principal amount of debt will be eliminated, reducing the Company's gross debt to its lowest level in more than 15 years; - Up to $15 million of interest expense will be eliminated in 2006, all of which will flow to annual income. "I am very pleased that this exchange offer, together with our two previous successful exchange offers, establishes a much stronger financial foundation for Foster Wheeler, further enhancing our ability to deliver successful products and services that meet or exceed the expectations of our worldwide client base." Concurrently with the exchange offer, Foster Wheeler intends to solicit consents from holders of the outstanding Senior Notes to proposed amendments to the indenture under which the outstanding Senior Notes were issued. The amendments would eliminate the restrictive covenants contained in the Senior Note indenture but would not affect the security pledged to the Senior Notes or the guarantees. Under the terms of the consent solicitation, holders are being offered a consent fee of $10 for each $1,000 aggregate principal amount of Senior Notes. Mr. Milchovich added, "A successful consent solicitation will provide Foster Wheeler with an additional level of financial and operating flexibility." Foster Wheeler has entered into a lock-up agreement with certain Senior Notes holders for approximately $133.5 million, or 51.1 percent, of the outstanding principal amount of the Senior Notes. This agreement requires such holders to tender their Senior Notes and deliver their consent to the indenture amendments within 10 business days after the exchange offer is commenced. The minimum consent requirement will be satisfied upon the delivery of consents by such holders. In the event that Foster Wheeler receives tenders in excess of $150 million, Foster Wheeler intends to exchange (i) first, all notes tendered by holders that have signed the lock-up agreement and (ii) second, notes tendered by other holders pro- rata up to the $150 million limit. The consent fee will be paid on all notes tendered on, or prior to, the tenth business day. Foster Wheeler expects to have two settlement dates for the delivery of the common shares. The first will be for those holders with whom Foster Wheeler has entered into a lock-up agreement and shall be a date promptly following the tenth business day following the commencement of the exchange offer and consent solicitation. The second will be for non-locked-up holders and shall be a date promptly following the twentieth business day following the commencement of the exchange offer and consent solicitation. In each instance, Foster Wheeler expects the settlement date to be the fourth business day immediately following such closing. The Company expects to pay consent fees, if applicable, on the second settlement date. The exchange will result in an improvement in the Company's consolidated net worth, after taking into account a possible, primarily non-cash, accounting charge related to the exchange, by an amount approximately equal to the principal amount of the Senior Notes exchanged. The amount of the potential charge is dependent upon the principal amount of Senior Notes tendered, the principal amount of Senior Notes for which consents are received and the market value of Foster Wheeler's common shares exchanged at the time of closing of the offer. The charge reflects primarily the difference between the fair market value of the common shares to be issued and the book value of the debt exchanged. The actual charge will be determined at the closing date and will be recorded in the fourth quarter of 2005. Further details regarding the exchange offer and consent solicitation will be announced on the date the offer is commenced. The foregoing reference to the exchange offer and consent solicitation and any other related transactions shall not constitute an offer to buy or exchange securities or constitute the solicitation of an offer to sell or exchange any securities in Foster Wheeler Ltd. or any of its subsidiaries. Foster Wheeler Ltd. is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas- to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. CONTACT: Foster Wheeler Ltd. Media Maureen Bingert Phone: 908-730-4444 E-mail: maureen_bingert@fwc.com or Investor Relations John Doyle Phone: 908-730-4270 E-mail: john_doyle@fwc.com or Other Inquiries Phone: 908-730-4000 E-mail: fw@fwc.com URL: www.fwc.com FOSTER WHEELER: Elects Vice President, General Counsel ------------------------------------------------------ Foster Wheeler Ltd. (Nasdaq: FWLT) announced Monday that its board of directors has elected Peter J. Ganz executive vice president and general counsel. "I am delighted that Foster Wheeler has been able to attract such a talented and highly experienced individual," said Raymond J. Milchovich, chairman, president and chief executive officer. "Reporting directly to me, Peter will provide additional leadership and management to Foster Wheeler and will be responsible for the Company's legal function. He has considerable litigation and asbestos liability management experience and will add significant value to our management team." Mr. Ganz was most recently senior vice president, general counsel, secretary and chief compliance officer of International Specialty Products Inc. of New Jersey, and of its affiliate company, Building Materials Corporation of America (BMCA). He also served concurrently as chief executive officer, president and general counsel of BMCA's parent, G-I Holdings Inc. (formerly GAF Corporation). Prior to joining these corporations in 1995, Mr. Ganz was a litigator in private practice with McCarter & English in New Jersey, and with Kramer, Levin, Nessen, Kamin and Frankel in New York. Following law school graduation, he held a judicial clerkship with the Honorable Anne E. Thompson in the United States District Court for the District of New Jersey. Mr. Ganz received an A.B. summa cum laude from Duke University in 1984 and a J.D. magna cum laude from Harvard Law School in 1987. Pursuant to NASDAQ Marketplace Rule 4350(i)(1)(A)(iv), the Company also announced that Mr. Ganz will receive awards of the Company's restricted stock and non-statutory stock options as part of his agreement to join the Company. Specifically, Mr. Ganz will receive 17,417 restricted shares of the Company's common stock, which shares had an aggregate fair market value of $521,639.15 based on the average of the high and low prices of a share of the Company's common stock as of October 7, 2005. He will also receive 52,165 non-statutory stock options bearing an exercise price of $29.95, which is equal to the average of the high and low prices of a share of the Company's common stock as of October 7, 2005. The award of the stock options was pursuant to the Company's 2004 Stock Option Plan and related agreements. The award of the restricted stock was on the same terms as awards made pursuant to the Company's 2004 Management Restricted Stock Plan and related agreements. The foregoing documents provide, among other things, that one-third of the awards will vest on December 31, 2005 and two-thirds will vest on December 31, 2006. Foster Wheeler Ltd. is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas- to-liquids, petrochemicals, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. CONTACT: Foster Wheeler Ltd. Media Maureen Bingert Phone: 908-730-4444 E-mail: maureen_bingert@fwc.com or Investor Relations John Doyle Phone: 908-730-4270 E-mail: john_doyle@fwc.com or Other Inquiries Phone: 908-730-4000 E-mail: fw@fwc.com URL: http://www.fwc.com GOSHAWK INSURANCE: May Sell Bermuda Reinsurer --------------------------------------------- Goshawk Insurance Holdings said it is considering a plan for a 'significant' injection of capital into its main operating subsidiary, Rosemont Re, but said it may alternatively launch an outright sale of the business. Last month, Rosemont Re, a Bermuda-based reinsurer, was threatened with a credit rating downgrade by the AM Best agency. A downgrade in Rosemont's A- rating to the triple B range would prompt reinsurance brokers to stop recommending the Company to clients. A firm proposal will be put to shareholders as soon as possible. "If the company is unsuccessful in raising capital, the company's ability to write new business will be severely impaired," Goshawk said in a statement. Goshawk's announcement regarding its plans for Rosemont Re coincides with its declaration that it has boosted its initial estimated net loss from Hurricane Katrina. Goshawk raised its Katrina net loss estimate to US$60 million from an initial forecast of US$25-US$30 million, and said it expected a further US$30-million hit from Hurricane Rita. PXRE GROUP: Watch Negative Remains Even after Capital Raise ----------------------------------------------------------- Fitch Ratings commented Monday that ratings of PXRE Group Ltd. (PXRE), PXRE Capital Trust I, PXRE Reinsurance Ltd., and PXRE Reinsurance Company remain on Rating Watch Negative following PXRE's successful capital raising in the form of common stock and the private placement of perpetual preferred shares, which together raised approximately $474 million, net of transaction costs. PXRE intends to contribute the proceeds to PXRE Reinsurance Ltd., its Bermuda reinsurance subsidiary, to support the underwriting of reinsurance business during upcoming renewal periods. The ratings are listed below. Fitch views the new capital as a positive credit event. The amount raised is more than PXRE's current estimate of its net loss from Hurricanes Katrina and Rita of between $265 million and $340 million. Fitch also notes that, in the past, major insurance losses have spurred significant increases in insurance and/or reinsurance prices. PXRE's ability to successfully raise capital is an indication of the capital market's confidence in both PXRE's organization and future reinsurance pricing. Nonetheless, Fitch notes that the loss estimates are significant, with losses from Hurricane Katrina alone representing between 30% and 40% of PXRE's June 30, 2005 shareholders' equity. This represents a greater loss than Fitch had expected from a single event. The additional capital raised will help to replenish losses and replace capital; however, the onus will be on the company to manage risks appropriately so as to not unduly expose the new or existing capital to further loss. Fitch also notes that significant uncertainties remain. Loss estimates from Hurricane Katrina continue to develop, and Fitch believes this event presents unprecedented risks to the insurance industry. Thus, Fitch believes that it may take longer than normal for these losses to fully develop. Fitch further notes that PXRE's loss estimates are based on an industry loss estimate of $30 billion-$40 billion. With some estimates of the industry loss as high as $60 billion, it is very possible that PXRE's loss could grow beyond the high end of its estimated range. Resolution of the Rating Watch Negative will depend upon Fitch's updated assessment of PXRE's risk concentration relative to its capital base net of storm losses and capital replenishment. Fitch believes there is the possibility that some catastrophe reinsurers are materially under-estimating overall catastrophe exposure based in part on extensive reliance on catastrophe modeling and assumptions. Additionally, Fitch expects to be able to resolve the Rating Watch Negative once it believes there is a reasonably stable estimate of the industry's and PXRE's ultimate loss from Hurricane Katrina. Given the very unusual nature of the losses, this could take an extended period of time but no sooner than the reporting of third-quarter 2005 financial results. The following current ratings remain on Rating Watch Negative by Fitch: PXRE Group Ltd. --Long-term rating 'BBB-'. PXRE Capital Trust I --Trust preferred securities $100 million 8.85% due Feb.1, 2027 'BB+'. PXRE Reinsurance Company PXRE Reinsurance Ltd. --Insurer financial strength 'A-'. CONTACT: Gretchen K. Roetzer, +1-312-606-2327 Brian C. Schneider, CPA, CPCU +1-312-606-2321, Chicago MEDIA RELATIONS: Brian Bertsch +1-212-908-0549, New York =========== B R A Z I L =========== AES CORP.: Senior Credit Facility Commitment Increased to $650M --------------------------------------------------------------- The AES Corporation amended its senior credit facility with: * Citicorp USA, Inc., as Administrative Agent; * Citibank, N.A., as Collateral Agent; * Citigroup Global Markets, Inc., as Lead Arranger and Book Runner; * Banc Of America Securities LLC, as Lead Arranger and Book Runner and as Co-Syndication Agent for the Initial Term Loan Facility; * Deutsche Bank Securities Inc., as Lead Arranger and Book Runner for the Initial Term Loan Facility; * Union Bank Of California, N.A., as Co-Syndication Agent for the Initial Term Loan Facility and as Lead Arranger and Book Runner and as Syndication Agent for the Revolving Credit Facility, * Lehman Commercial Paper Inc., as Co-Documentation Agent for the Initial Term Loan Facility; * Ubs Securities LLC, as Co-Documentation Agent for the Initial Term Loan Facility; * Societe Generale, as Co-Documentation Agent for the Revolving Credit Facility; * Credit Lyonnaise New York Branch, as Co-Documentation Agent; and * a consortium of lenders comprised of: Revolving Credit Loan Bank Commitment -------------------------- ---------- Bank of America, N.A. $60,000,000 Citicorp USA, Inc. 60,000,000 Credit Suisse, Cayman Islands Branch 60,000,000 Deutsche Bank Trust Company Americas 60,000,000 JPMorgan Chase Bank, N.A. 60,000,000 Lehman Commercial Paper Inc. 60,000,000 Union Bank of California, N.A. 60,000,000 UBS AG, Stamford Branch 40,000,000 CALYON New York Branch 35,000,000 Merrill Lynch Capital Corporation 35,000,000 Societe Generale - New York Branch 35,000,000 ABN Amro Bank N.V. 25,000,000 BNP Paribas 25,000,000 United Overseas Bank Ltd. 20,000,000 WestLB AG, New York Branch 15,000,000 ------------ Total $650,000,000 ============ The amendments increased the size of the revolving credit facility from $450 million to $650 million. A full-text copy of Amendment No. 4 is available for free at http://ResearchArchives.com/t/s?235 A full-text copy of Amendment No. 5 is available for free at http://ResearchArchives.com/t/s?236 AES Corporation -- http://www.aes.com/-- is a leading global power company, with 2004 revenues of $9.5 billion. AES operates in 27 countries, generating 44,000 megawatts of electricity through 124 power facilities and delivers electricity through 15 distribution companies. AES Corp.'s 30,000 people are committed to operational excellence and meeting the world's growing power needs. * * * As reported in the Troubled Company Reporter on June 23, 2005, Fitch Ratings has upgraded and removed the ratings of AES Corporation from Rating Watch Positive, where it was initially placed on Jan. 18, 2005 pending review of the company's year- end financial results. Fitch said the Rating Outlook is Stable. Following the completion of its review, Fitch's upgrade reflects the significant progress AES had made in retiring parent company recourse debt and improving liquidity. In addition, AES has refinanced several near term debt maturities and extended the company's debt maturity profile. The company has successfully accessed both the debt and equity markets in 2004 and 2003. (Troubled Company Reporter, Oct. 11, 2005, Vol. 9, No. 241) AES TIETE: Bear Stearns Lowers Share Recommendation --------------------------------------------------- Bear Stearns has downgraded its recommendation on shares of Brazilian electric utility AES Tiete to "Peer Perform" from "Outperform." According to Dow Jones Newswires, the move came after AES Tiete announced its failure to secure Brazil's National Power Authority's (Aneel) approval to extend a contract with Eletropaulo. In October 2003, AES Tiete and Eletropaulo agreed to extend the deal to 2028. However, Aneel claimed the extension violates requirements that distribution companies buy power only in official government auctions. The contract is AES Tiete's sole source of revenue from 2006 on, Bear Stearns said. The downgrade on AES Tiete's by Bear Stearns also reflects a shift to growth plays in the sector. "We see less need for 'defensive plays,"' Bear Stearns said in a research report, noting expectations for additional interest rate cuts in South America's largest economy. "We believe that while Tiete will also likely trade up in a bondlike way on lower rates, the best plays are companies with more balance sheet restructuring and longer-term cash flow growth," Bear Stearns said. BANCO MERCANTIL: Rating Reflects Low Profitability -------------------------------------------------- Rationale The rating assigned to Banco Merantil Do Brasil S.A. (MB) reflects the challenges faced by a midsize bank operating in the segment of small and midsize companies and individuals in the competitive banking industry in Brazil; its low profitability when compared to the industry, which is negatively affected by the bank's large and costly operational structure and small scale; and its capitalization, which can be a limiting factor in the long term, though it is adequate in the short term. These risk factors are partially offset by MB's long track record operating in the market and knowledge of its core/niche market, mainly the state of Minas Gerais, which translate into good market share and brand-name recognition on a regional basis, its diversified operation, and good liquidity management. With total assets of Brazilian reais (BrR) 4.4 billion as of June 2005 (equivalent to $1.9 billion at BrR2.35 to $1), MB is a small bank, positioned as the 22nd-largest private bank in the competitive Brazilian system. While the bank's national market share is not relevant (market share in total assets and lending is less than 1%), it holds a more significant market presence in the region where the bank focuses its operations (mainly Minas Gerais and the interior of Sao Paulo). MB's brand name is well recognized in the region, where it focuses its activities on consumer banking, mainly to low-income individuals, and in servicing midsize and local companies. MB has a long track record in the market, operating since 1943. MB went through a restructuring process in the past four years and, by doing so, was prepared for the competitive environment. While Standard & Poor's Ratings Services believes the bank has streamlined its operations, it remains challenged to translate its customer-oriented strategy and its reshaped operational structure into higher profitability and gains of scale. MB's primary strategic goal is the protection of its business model through the diversification of its activities and adequate profitability coming from the increase in clientele and higher financial intermediation. After the Banco Santos event at the end of 2004 and the consequent reduction of funding from institutional investors, MB adopted a conservative approach toward asset-liability management, preserving cash instead of pursuing lending more aggressively. After March 2005, the bank returned to the normal pace of its lending activities and was able to grow its total lending portfolio by 3% in second-quarter 2005, after a reduction of 8% in the first quarter. Despite the slowdown in lending activities, asset quality indicators have been maintained at the same levels of the banking industry in general. The ratio of nonperforming loans to total loans reached 6.4% in June 2005 (6% when adjusted by the amount of credit ceded in the period), which is less than the 7.7% ratio the bank showed in 2003 and in line with the 6% presented by the banking system. The better economic environment in 2004 and 2005 positively affected the ratio of net charge-offs to total loans, which declined to 3.7% in June 2005 from 4.3% in 2004. Nevertheless, as is the case with other banks, MB's credit portfolio is susceptible to adverse economic and market conditions that could affect its asset quality indicators. For the future, we expect the bank to be able to improve its credit matrix while benefiting from the prospective economic growth. One of the main factors constraining the rating is MB's low bottom-line results. The bank has maintained average ROA of 0.5% in the past three years adjusted for nonrecurrent results. Despite the bank's efforts to improve core earnings with enhancements in its asset mix (such as moving toward more profitable lending to individuals) and to increase revenues from fees and cross selling, its structure is still costly (it presented a noninterest expenses-to-revenues ratio of 77% in June 2005, which compares poorly with Brazilian and international standards) and still lacks the necessary scale (revenues from fees to total revenues reached only 16% as of June 2005) and revenues stream. We believe the bank still has to build a track record of stronger and more consistent returns to reverse its weak profitability and improve its financial standing. We view MB's capital as just adequate in view of its strategy of gradual expansion and its low internal capital generation capacity. MB has planned a capital injection of BrR50 million in November 2005. This would bring the risk adjusted asset ratio to 14.5% and give more comfort to the bank's growth strategy in the short term. Despite the fact that, like other midsize and small banks that operate in the Brazilian market, MB suffered certain redemptions in its deposit base from institutional investors at the end of 2004, the bank's more diversified funding base (with stronger reliance on time deposits from individuals and companies on its funding base than its peers) and good liquidity attenuated the reduction. Nevertheless, the bank faces the challenges of continuing to grow its funding and capitalization at the same pace as its expansion. Outlook The stable outlook reflects our expectations that the bank will maintain its conservative operation (which explains in part its profitability level) and preserve its liquidity. Asset quality indicators are also expected to be maintained at average industry levels, supported by the bank's reinforcement on credit policy and procedures. Deterioration of asset quality indicators and the reduction of its profitability would prompt a change to a negative outlook or a downgrade. On the other hand, the ratings could trend upward if the bank is successful in presenting sustainable and recurring profitability of more than 1.5%, improving asset quality indicators following credit growth, and a stronger capital base to support its operation and expansion. Primary Credit Analyst: Tamara Berenholc, Sao Paulo (55) 11- 5501-8950; tamara_berenholc@standardandpoors.com Secondary Credit Analyst: Daniel Araujo, Sao Paulo (55) 11- 5501-8939; daniel_araujo@standardandpoors.com VARIG: Restructuring Plan Presented to US Court ----------------------------------------------- Vicente Cervo and Eduardo Zerwes, as Foreign Representatives of VARIG, S.A., and its debtor-affiliates, filed with the U.S. Bankruptcy Court for the Southern District of New York an English copy of the Judicial Recovery Plan for VARIG, S.A., Rio Sul Linhas Aereas S.A. and Nordeste Linhas Aereas S.A. on September 20, 2005. The Recovery Plan aims to assure that: 1. VARIG, Rio Sul and Nordeste overcome their current economic and financial difficulties and continue with the VARIG business while preserving the interests of their creditors and shareholders; 2. VARIG's business is feasible on the long term, enabling the resurgence of the Companies after the recognition of the "future assets," which will enable them to resolve their public tax and social security debt; and 3. the interests of all the parties involved are treated in a fair, reasonable and balanced manner. The Recovery Plan, presented in accordance with the New Bankruptcy and Restructuring Law of Brazil, is categorized according to the Debtors' operational restructuring, financial restructuring, and restructuring of their tax and social security liabilities and contingencies. Classification of Claims The Judicial Recovery Plan for VARIG, S.A., Rio Sul Linhas Aereas S.A. and Nordeste Linhas Aereas S.A. provides for a restructuring of the Companies' financial obligations. The Foreign Debtors group claims in this manner: Class Description ----- ----------- I - Employees and Credits totaling BRL168,000,000 Former Employees II - Creditors with Real Credits totaling BRL1,814,500,000, Guarantee (AERUS) consisting of BRL1,059,400,000 relative to the Private Instrument of Consolidation and Renegotiation of VARIG's debts to AERUS related to the payment of non-realized contributions, and BRL755,000,000 relative to an actuarial deficit of the pension plan. The AERUS Debt is guaranteed by a pledge of lien on 5% of the shares in VARIGLOG and 5% of the shares in VEM. The Aerus Credits are guaranteed by a lien on credit rights derived from the Judicial Action to Adjust Airfares. Creditors with Real Credits totaling BRL256,800,000. Guarantee (except The credits pertaining to the AERUS) guaranteed creditors that exceed the value of the respective guarantees are classified under Class III. III - Current Lessors Credits totaling BRL740,300,000. Former Lessors Credits totaling BRL370,400,000. Other Creditors Credits totaling BRL579,100,000. Related Companies Credits totaling BRL182,400,000. The Recovery Plan provides for this treatment of claims: A) Class I The labor credits are divided into three sub-categories: (a) FGTS equal to BRL76,000,000 Credits related to the Fundo de Garantia do Tempo de Servico, a form of sinking fund for employees, will be paid under the conditions established in an agreement the Companies entered into with Caixa Economica Federal. (b) PIA equal to BRL32,500,000 The credits relative to the Retirement Incentive Program -- PIA -- will be paid under the existing conditions, to wit: Deadline: up to 36 months Correction Amount: tied to the salaries (c) Other labor credits equal to BRL59,600,000 Until the Companies obtain new funds, the Companies will pay the other labor creditors up to the maximum overall limit of BRL1,000,000 per month, prorated over the number of creditors and in compliance with their claim amounts, with the remaining balance to be prorated over the subsequent months for full liquidation in June 2006. The monthly installments may be liquidated via offsetting, barter, or any other means of eliminating the obligation. B) Class II * Creditors with Real Guarantee (AERUS): Instituto Aerus De Seguridade Social's credits will stay with the Companies, and the guarantees contracted will remain valid. 1. AERUS' credits derived from the Private Agreement of Debt Consolidation and Renegotiation entered into on April 10, 2003, will be liquidated under the same currently existing conditions, establishing an intermediate grace period of one year counting from the date of approval of the Recovery Plan for suspension of the payments. After that period, the credit may be liquidated in two ways, at the discretion of the Companies: -- Regular installments for the period contracted; or -- A single payment in the event the judicial action against the Federal Government relative to airfare ends successively for VARIG. If there are funds leftover after paying AERUS' Credits, they will revert back to VARIG and may be used to pay off the Government's Credits. 2. AERUS' actuarial credit will be paid in the manner contracted, with an additional grace period of one year. * Creditors with Real Guarantee (except AERUS) The creditors' guarantees will be kept in the manner contracted. Payment of the debt will follow the same model prepared for Class III. C) Class III Unsecured creditors will be paid initially at face value via fixed monthly installments, with no interest or monetary correction, up to the overall amount of BRL100,000,000. Payment of the first installment will be made 30 days after approval of the Recovery Plan, and the value of the first six installments may be increased if and when funds are received from the sale of shareholder control of the New Company, or the operational segment is sold to the New Company, as the case may be. The monthly installments may be liquidated via offsetting, barter or any other means of eliminating the obligation and adjustments must be made for current suppliers that have received advance payments. Twenty-four months after the approval of the Recovery Plan, the remaining creditors with credits against the Companies will receive payment via one of these two modes, at the discretion of the creditor: (a) In exchange for a security issued by VARIG, with no commitment or guarantee from the New Company, with these payment characteristics: -- A 5-year no-interest grace period counting from the security's date of issue; -- Payment of the principal 20 years from the issue date of the security; and -- Interest rate: Long-Term Interest Rate (TJLP) + 1% per annum, paid annually, computed from the date of issue of the security. (b) In exchange for securities to be issued by the New Company, the price or conversion rate of which will be established via an auction for exchanging the Companies' debt for a security issued by the New Company. Other creditors are FRB-Par Investimentos S.A. and other shareholders. The shareholders hope to retain a minority interest in the New Company. A full-text list of creditors is available for free at: http://bankrupt.com/misc/List_of_Claims.pdf Operational Restructuring VARIG has appointed Lufthansa Consulting as technical advisor in preparing the Operational Recovery Plan to assure that the Companies would achieve an adequate and sustainable level of operational profit. Together, VARIG and Lufthansa Consulting have identified key initiatives to achieve a sustainable operating profit in the short, medium, and long term: (1) Further strengthen VARIG's current position as a strong competitor in the international market; (2) Maintain and strengthen VARIG's position in the domestic market; (3) Create a clear hub structure in Sao Paulo's main airport to enhance the power of the network, attracting additional traffic; (4) Restructure, modernize and harmonize the fleet to reduce unit cost and improve operational efficiency; (5) Improve revenue management consistent with competitive positioning; (6) Strengthen organizational and strategic decision-making and accountability to meet targets and adhere to plans; (7) Clearly define organizational structures, interfaces and responsibilities within VARIG and the VARIG group of companies; (8) Optimize processes to improve efficiency and productivity in all areas of the company; (9) Adapt personnel count to match optimized company structure; (10) Improve product and customer services to re-gain market share; and (11) Establish relevant co-operations and alliances and intensify current alliances to strengthen network and product. A full-text copy of the Operational Restructuring Plan is available for free at: http://bankrupt.com/misc/Operating_Plan_by_Lufthansa.pdf Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) =========================== C A Y M A N I S L A N D S =========================== BAC SYNTHETIC: Shareholders Initiate Voluntary Liquidation ---------------------------------------------------------- BAC SYNTHETIC CLO 2000-1 LIMITED (In Voluntary Liquidation) The Companies Law (2004 revision) Section 135 TAKE NOTICE that the following special resolution was passed by the shareholder(s) of BAC Synthetic CLO 2000-1 Limited at an extraordinary general meeting of the shareholder(s) held on September 21, 2005: THAT the Company be placed into voluntary liquidation forthwith. THAT Phillipa White and Jon Roney be appointed as liquidators of the Company. Creditors of BAC Synthetic CLO 2000-1 Limited are to prove their debts or claims on or before November 3, 2005, and to send full particulars of their debts or claims to the joint liquidators of the Company. In default thereof, they will be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Ms. Phillipa White and Mr. Jon Roney Joint Voluntary Liquidators Maples Finance Limited, P.O. Box 1093GT Grand Cayman, Cayman Islands DIVERSIFIED ASSET: To be Wound Up Voluntarily --------------------------------------------- DIVERSIFIED ASSET LIBOR INVESTMENTS III LIMITED (In Voluntary Liquidation) The Companies Law (2004 revision) Section 135 TAKE NOTICE that the following special resolution was passed by the shareholder(s) of Diversified Asset Libor Investments III Limited at an extraordinary general meeting of the shareholder(s) held on September 12, 2005: THAT the Company be placed into voluntary liquidation forthwith. THAT Carrie Bunton and Johann Le Roux be appointed as liquidators of the Company. Creditors of Diversified Asset Libor Investments III Limited are to prove their debts or claims on or before November 3, 2005, and to send full particulars of their debts or claims to the joint liquidators of the Company. In default thereof, they will be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: CARRIE BUNTON and JOHANN LE ROUX Joint Voluntary Liquidators Maples Finance Limited, P.O. Box 1093GT Grand Cayman, Cayman Islands DUPLEX CORPORATION: Appoints Liquidators ---------------------------------------- DUPLEX CORPORATION (In Voluntary Liquidation) The Companies Law (2004 Revision) Section 135 TAKE NOTICE that the following special resolution was passed by the shareholder(s) of Duplex Corporation at an extraordinary general meeting of the shareholder(s) held on September 22, 2005: THAT the Company be placed into voluntary liquidation forthwith. THAT Mark Wanless and Tun Win be appointed as liquidators of the Company. Creditors of Duplex Corporation are to prove their debts or claims on or before November 3, 2005, and to send full particulars of their debts or claims to the joint liquidators of the Company. In default thereof, they will be excluded from the benefit of any distribution made before the debts are proved. CONTACT: Mr. Mark Wanless, Joint Voluntary Liquidator Maples Finance Jersey Limited, 2nd Floor Le Masurier House, La Rue Le Masurier St. Helier, Jersey JE2 4YE EMPLOYEE LLC: Creditors Claims Due On or Before Nov. 3 ------------------------------------------------------ EMPLOYEE LLC MEMBER LTD (In Voluntary Liquidation) The Companies Law (2004 revision) Section 135 TAKE NOTICE that the following special resolution was passed by the shareholder(s) of Employee LLC Member Ltd at an extraordinary general meeting of the shareholder(s) held on September 15, 2005: THAT the Company be placed into voluntary liquidation forthwith. THAT Jon Roney be appointed as liquidators of the Company. Creditors of Employee LLC Member Ltd are to prove their debts or claims on or before November 3, 2005, and to send full particulars of their debts or claims to the joint liquidators of the Company. In default thereof, they will be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: Mr. Jon Roney, Joint Voluntary Liquidators Maples Finance Limited, P.O. Box 1093GT Grand Cayman, Cayman Islands KIRTLAND PDM: Debt Proof to Be Filed By November 15 --------------------------------------------------- KIRTLAND PDM BRIDGE LLC (In Voluntary Winding Up) The Companies Law (2004 Revision) NOTICE IS HEREBY GIVEN that the creditors of the above-named company which is being wound up voluntarily are required on or before 15th November 2005 to send in their names and addresses and the particulars of their debts or claims and the names and addresses of their attorneys-at-law (if any) to the undersigned, the attorneys-at-law for the liquidator of the said company, and if so required by notice in writing from the said liquidator either by their attorneys-at-law or personally to come in and prove the said debts or claims at such time and place as shall be specified in such notice or in default thereof they will be excluded from the benefit of any distribution made before such debts are proved. CONTACT: MICHAEL T. DEGRANDIS Voluntary Liquidator c/o Maples and Calder, Attorneys-at-law PO Box 309 GT, Ugland House South Church Street, George Town Grand Cayman, Cayman Islands PREDRILL STRESSES: Final General Meeting Set for Nov. 4 ------------------------------------------------------- PREDRILL STRESSES INTERNATIONAL (In Voluntary Winding Up) The Companies Law (2004 Revision) Section 145 NOTICE is hereby given pursuant to section 145 of the Companies Law that the final general meeting of the above-named Company will be held at the offices of Wise Lord and Ferguson, 1st Floor, 160 Collins Street, Hobart, Australia, on 4th November 2005, for the purpose of presenting to the members an account of the winding up of the Company and giving any explanation thereof. CONTACT: ROBERT PAUL WHITEHOUSE Voluntary Liquidator Maples and Calder, Attorneys-at-law P.O. Box 3 09 GT, Ugland House South Church Street, George Town Grand Cayman, Cayman Islands SMF CAPITAL: Shareholders Decide on Voluntary Liquidation --------------------------------------------------------- SMF CAPITAL CORPORATION (In Voluntary Liquidation) (The "Company") The Companies Law (2004 Revision) Take notice that the following special resolutions were passed by the shareholders of this Company on 13th September 2005. THAT the Company be placed into voluntary liquidation forthwith; and THAT Ian Wight and Stuart Sybersma, of Deloitte, be appointed liquidators, jointly and severally, for the purposes thereof. Creditors of the Company are to prove their debts or claims on or before 3rd November 2005, and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before the debts are proved or from objecting to the distribution. CONTACT: STUART SYBERSMA Joint Voluntary Liquidator For enquiries: Nicole Ebanks, Deloitte P.O. Box 1787 GT, Grand Cayman Cayman Islands Telephone: (345) 949 7500 Facsimile: (345) 949 8258 ZAIS MATRIX IV: Company Wind Up Made Official --------------------------------------------- ZAIS MATRIX IV FUND, LTD. (In Voluntary Liquidation) The Companies Law (2004 Revision) Take notice that the following special resolutions were passed by the sole shareholder of the abovementioned company at an extraordinary general meeting held on 21st September 2005: "THAT the company be placed into voluntary liquidation forthwith;" and "THAT David Dyer be appointed liquidator for the purposes thereof." Creditors of the company are to prove their debts or claims on or before 3rd November 2005, and to establish any title they may have under the Companies Law (2004 Revision), or to be excluded from the benefit of any distribution made before such debts are proved or from objecting to the distribution. CONTACT: DAVID DYER Deutsche Bank (Cayman) Limited P.O. Box 1984GT George Town, Grand Cayman =============== C O L O M B I A =============== GRANAHORRAR: Fogafin Concludes First Phase of Privatization ----------------------------------------------------------- The deposit insurance fund Fogafin has wrapped up the first stage of the privatization of state-owned mortgage lender Granahorrar, reports Business News Americas. The first phase included the sale of some 497.446 billion shares, or 1.2% of the bank's capital, worth COP5.1 billion (US$2.2mn) to the Company's workers, cooperatives and pension funds. Fogafin will now open the second stage of the sell-off, under which the remaining 98.8% of Granahorrar will be offered to private companies and investors. Fogafin director Juan Ortega earlier said the sale of Granahorrar could bring in as much as COP438 billion (US$189mn). Granahorrar was intervened by the government during the country's financial crisis in the late 1990s to save it from bankruptcy. ============= J A M A I C A ============= DYOLL GROUP: Shares Resume Trading at JSE ----------------------------------------- The Jamaica Stock Exchange has lifted the suspension on the trading in the shares of Dyoll Group Ltd.. Trading in Dyoll Group's shares was suspended on February 15, 2005 because of its failure to provide material information to the JSE in keeping with the Exchange's Policy Statement on Timely Disclosure (JSE's Rule Book Appendix 8). On September 16, the Board of the JSE decided it will lift the suspension or before October 11, 2005, if the Company submitted its outstanding financial statements. The JSE said Dyoll Group was able to submit the required financial statements by the deadline, paving the way for the lifting of the suspension. KAISER ALUMINUM: Seeks Exclusive Periods Extention -------------------------------------------------- Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, notes that no order has been entered yet regarding the confirmation of the Liquidation Plans of Alpart Jamaica, Inc., Kaiser Jamaica Corporation, Kaiser Alumina Australia Corporation, and Kaiser Finance Corporation. On the other hand, Kaiser Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and certain of their Debtor affiliates have commenced the process for soliciting votes to accept or reject their Plan of Reorganization. Judge Fitzgerald has scheduled a hearing to consider confirmation of the Reorganizing Debtors' Plan on January 9, 2006, to be continued, if necessary, on January 10, 2006. To complete the confirmation process for the Liquidating Debtors and to permit the Reorganizing Debtors to proceed with the solicitation and confirmation of their Plan, both Debtor Groups ask the U.S. Bankruptcy Court for the District of Delaware to extend the period during which they have the exclusive right to: (1) file a plan or plans of reorganization through and including January 31, 2006; and (2) solicit acceptances of that plan through and including March, 31, 2006. Judge Fitzgerald will convene a hearing on November 14, 2005, at 1:30 p.m. to consider the Debtors' request. By application of Del.Bankr.LR 9006-2, the Debtors' Exclusive Filing Period is automatically extended through the conclusion of that hearing. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high-strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02- 10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 80; Bankruptcy Creditors' Service, Inc., 215/945-7000) =========== M E X I C O =========== AEROMEXICO/MEXICANA: Pilots' Union to Get 5% Stake in Airlines -------------------------------------------------------------- State-owned holding company Cintra said Mexico's pilots union has agreed to set productivity goals in exchange for a 5% stake in Aeromexico and Mexicana when they are privatized, reports Dow Jones Newswires. With the agreement, the union - which represents just over 2,000 pilots at Aeromexico, Mexicana and smaller carriers controlled by Cintra - also dropped out of the bidding process for the airlines. Cintra is in the process of selling majority stakes in Aeromexico and Mexicana. Credit Suisse First Boston (CSF.YY) is managing the sale. Economic rights of the pilots' shares will remain in the hands of the buyers until the productivity goals are met, Cintra said, adding that the productivity gains will be equal in value to the stakes based on the price paid by the winning bidders. Meanwhile, Cintra expects five groups of investors to bid for Aeromexico and Mexicana. In a statement to the Mexican Stock Exchange, Cintra said that four of the groups will bid for both AeroMexico and Mexicana, while the fifth is seen making an offer solely for Mexicana. No single bidder will be able to take over both carriers, which together control about 80% of the domestic market, and all interested parties must submit their offers by Nov. 21. Foreign investors can purchase minority stakes in the carriers only by partnering with Mexicans. BALLY TOTAL: Sets Stockholders Meeting for Jan. 26 -------------------------------------------------- Bally Total Fitness Holding Corporation, (NYSE: BFT) intends to hold its Annual Meeting of Shareholders on Thursday, Jan. 26, 2006, at a Chicago area location. The scheduled date is part of an agreed order in Delaware Chancery Court and is subject to Court approval. As reported in the Troubled Company Reporter on Sept. 21, 2005, the Company expects to complete its multi-year audit and file its financial statements by Nov. 30, 2005. On Aug. 31, 2005, the Company received consent from noteholders and lenders to extend the filing waivers under its public indentures until Nov. 30, 2005. Bally Total Fitness is the largest and only nationwide commercial operator of fitness centers, with approximately four million members and 440 facilities located in 29 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With an estimated 150 million annual visits to its clubs, Bally offers a unique platform for distribution of a wide range of products and services targeted to active, fitness-conscious adult consumers. * * * As reported in the Troubled Company Reporter on Aug. 11, 2005, Moody's Investors Service affirmed the Caa1 corporate family (formerly senior implied) rating and debt ratings of Bally Total Fitness Holding Corporation. The affirmation reflects continued high risk of default and Moody's estimate of recovery values of the various classes of debt in a default scenario. The ratings outlook remains negative. Moody's affirmed these ratings: * $175 million senior secured term loan B facility due 2009, rated B3 * $100 million senior secured revolving credit facility due 2008, rated B3 * $235 million 10.5% senior unsecured notes (guaranteed) due 2011, rated Caa1 * $300 million 9.875% senior subordinated notes due 2007, rated Ca * Corporate family rating, rated Caa1 (Troubled Company Reporter, Oct. 10, 2005, Vol. 9, No. 240) SATMEX: Taps White & Case's Thomas Heather as Mediator ------------------------------------------------------ White & Case partner Thomas S. Heather has been appointed by Mexico's Communications Ministry to serve as mediator in the complex restructuring of Satmex, the Mexican satellite company, in order to accelerate the insolvency process. The matter is considered to be one of the first major Mexico-US cross-border insolvency cases. "Satmex has until October 31 to present a draft restructuring plan in the New York court. Failing to meet the deadline without some show of advancement could result in the case being reheard before Judge Robert Drain of US Bankruptcy Court of the Southern District of New York where creditors had filed an involuntary Chapter 11 proceeding, but was then dismissed," said Mr. Heather. "Such litigation could be costly in many ways to all parties involved, so my job is to help move the process forward as efficiently as possible with a plan that works for everyone." Mr. Heather, who is based in White & Case's Mexico City office, has more than 20 years experience in the areas of restructurings, mergers and acquisitions, banking, securities and corporate governance. A co-founder and immediate past chair of the Mexican Mediation Institute, Heather chairs the Financial Law Section of the Mexican Bar Association and is a member of the Board of the Mexican Institute of Corporate Governance. In addition, Heather has been at the forefront of significant alternative dispute resolution and trade-related initiatives. He participated in the NAFTA negotiations with respect to the Financial Services Chapter, and has been selected on several occasions as an arbitrator by the ICC Court of International Arbitration in Paris. He has served on several boards of leading corporations and financial institutions and has lectured extensively in Mexico and in the US. The Mexican magazine Lawyers World (El Mundo del Abogado) named him one of "Mexico's Top 100 Lawyers-2005." Mr. Heather's first task will be to oversee the proof of claims process to make sure all the creditors' claims have been properly identified and are valid. Heather will also oversee Satmex's financial reporting as agreed upon by the company and its creditors, who are mostly US-based investors. Mexican law does not require companies undergoing reorganization to make any information available to creditors, which is unacceptable to Satmex's US investors. The Mexican government is a shareholder of Satmex, a creditor of a Satmex holding company, a regulator of the satellite industry as well as the owner of the satellite concession that is the key to Satmex's business. Both the creditors and Satmex's shareholders have been frustrated by the lack of progress in the restructuring talks, which is why the Ministry made the bold move of appointing an experienced insolvency lawyer with significant cross-border experience to jumpstart the negotiations. Court documents indicate that one reason for the breakdown in talks has been the Mexican government desire to include the menoscabo, a conditional indebtedness incurred by Satmex's parent on behalf of the Mexican government which allowed the new owners of SatMex to leverage their investment in a previously debt-free company. "All issues related to the complex bankruptcy must be analyzed carefully from each stakeholders' point of view. This will be no easy task given that there is a parallel US proceeding in New York, SatMex has several concessions to deal with and the company itself is vital to keeping Mexico operating effectively due to SatMex's communications purpose. Resolving the matter is also compounded by the fact that creditors hold both private and publicly placed debt in the US capital markets and the bankruptcy involves a number of complex issues in multiple jurisdictions involving different agencies even within Mexico," said Mr. Heather. White & Case recently was involved in another milestone bankruptcy in Mexico, representing paper conglomerate Corporacion Durango, S.A. de C.V. in its restructuring of more than $800 million of unsecured debt, marking the largest reorganization to date under Mexico's new bankruptcy act. With more than 150 restructuring and bankruptcy lawyers in 25 countries, White & Case has long been recognized as a leader in complex cross-border insolvencies and workouts such as the Satmex matter. The Firm is serving as key advisors and litigators in some of the most high-profile restructurings, including Asia Pulp & Paper, SK Global, United Pan-Europe Communications and Mirant, generally regarded as one the of most complex Chapter 11 cases in recent years with pre-petition litigation that includes more than 200 matters with a total value exceeding $20 billion. About White & Case White & Case LLP is a leading global law firm with nearly 1,900 lawyers in 38 offices in 25 countries. Our clients value both the breadth of our network and depth of our US, English and local law capabilities in each of our offices and rely on us for their complex cross-border commercial and financial transactions and for international arbitration and litigation. Whether in established or emerging markets, the hallmark of White & Case is our complete dedication to the business priorities and legal needs of our clients. CONTACT: WHITE & CASE LLP Sandi Sonnenfeld, Media Relations Manager Tel: 212 819 8299 E-mail: ssonnenfeld@whitcase.com ================= V E N E Z U E L A ================= PDVSA: Improving Plant to Boost Production Capacity --------------------------------------------------- State oil company Petroleos de Venezuela (PDVSA) will upgrade its El Palito refinery, according to an article published by LatinPetroleum.Com. The refinery's catalytic cracker will be shut down for the upgrade during the first quarter of 2006. PDVSA said the refinery's production capacity will increase once all work is completed in 2009. Instead of producing 54,000 barrels per day, the catalytic cracker will be able to produce as much as 73,000 bpd. Meanwhile, the manager of PDVSA's 200,000 bpd Puerto La Cruz refinery said that the planned maintenance on its catalytic cracker will start on October 21 and will last for 45 days. PDVSA is investing in its domestic refinery system to increase its capacity to refine heavy crude oil and produce more valuable crude for export. *********** 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 - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and Sheryl Joy P. Olano, Editors. Copyright 2005. All rights reserved. ISSN 1529-2746. 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. 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