/raid1/www/Hosts/bankrupt/TCRLA_Public/060606.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
Tuesday, June 6, 2006, Vol. 7, Issue 111
Headlines
A R G E N T I N A
ALVEAR MOTOR: Individual Reports Due in Court on July 7
AMORI SA: Trustee Stops Verifying Proofs of Claim After July 10
BASICOS BUENOS: Creditors Must Submit Proofs of Claim by July 19
BREME SA: Verification of Proofs of Claim Ends on July 5
DALLA CARS: Proofs of Claim Will be Verified Until July 3
DEVELOP SA: Sets July 18 Deadline for Submission of Claims
DUVILIER SA: Sets June 30 Deadline for Claims Verification
FAB SRL: Seeks Reorganization Approval from Court
FRIGRAS SCA: Trustee Won't Validate Claims After July 21
STARTRADE SA: Creditors Must Present Proofs of Claim by June 28
* ARGENTINA: Netherlands Helps Reduce Country's Gas Emissions
B E R M U D A
CANE MASTER: Schedules Final General Meeting on July 7
B O L I V I A
PETROLEO BRASILEIRO: Gets Accused of Sabotaging Diesel Supply
* BOLIVIA: Oil Firm Gets US$25MM Payment from Private Companies
B R A Z I L
BANCO NACIONAL: Finances BRL124.8M for Pernambuco Infrastructure
BANCO NACIONAL: Grants BRL15.2M to Modernize Duque City Hall
CONSTRUTORA NORBERTO: S&P Affirms BB- Corporate Credit Ratings
VARIG: Brazilian Court Moves Auction to June 8
* BRAZIL: Money Changers Laundered US$20 Bil. to United States
C A Y M A N I S L A N D S
ADDITIONAL REALTY: Proofs of Claim Filing Deadline Is June 21
CITY CLUBS: Schedules Last Shareholders Meeting for June 23
ELENA AIRCRAFT: Claims Filing Deadline Is Set for June 30
EUROPEAN VENTURES: Filing of Proofs of Claim Ends on June 19
EXPORT LEASING: Sets June 16 for Final Shareholders Meeting
FRANKLIN CLO III: Creditors Must Submit Claims by June 9
GERALDINE AIRCRAFT: Creditors Have Until June 30 to File Claims
GIT FUND: Creditors Must File Proofs of Claim by June 30
IVY ENHANCED: Creditors Must File Claims by June 8
HYGROVE OFFSHORE: Last Day to File Proofs of Claim Is June 22
JB ALPHA: Creditors Have Until June 29 to File Proofs of Claim
LPG SHIPPING: Creditors Must Present Proofs of Claim by June 19
MORGAN CRUCIBLE: Sets June 30 Deadline for Claims Filing
MULTI-STRATEGY PPF: Holds Final General Meeting on June 20
NOCH OFFSHORE: Creditors Have Until June 9 to File Claims
STANLEY FUND: Final Shareholders Meeting Is Set for June 19
UBS CURRENCY: Schedules June 16 for Final Shareholders Meeting
YL CAPITAL: Liquidator Presents Wind Up Accounts on June 19
C O L O M B I A
* COLOMBIA: Airport Concession Bid Submission Moved to June 16
D O M I N I C A N R E P U B L I C
FALCONBRIDGE LTD: Acquisition Transaction Important to Inco Ltd.
* DOMINICAN REPUBLIC: Mexico Asks Country to Join Energy Plan
E C U A D O R
* ECUADOR: Reports Say Gov't Mulls Oil Refinery with Venezuela
E L S A L V A D O R
MILLICOM INTERNATIONAL: China Mobile to Buy Firm for US$5.3 Bil.
G U A T E M A L A
* GUATEMALA: In Dispute with Panama on Hosting Mexican Refinery
H O N D U R A S
* HONDURAS: Telecoms to Benefit from UN's US$75-Mil. Investment
J A M A I C A
KAISER ALUMINUM: Asks Court to Okay ACE Insurers Settlement Pact
* JAMAICA: Malaysian Prime Minister Clinches Deals with Country
M E X I C O
AMERICAN TOWER: Facing Class Action Lawsuit in Massachusetts
BALLY TOTAL: Focuses on Domestic and International Franchising
BALLY TOTAL: Grants Stock Options to Two New Employees
DELTA MILLS: Posts US$2.1-Mil Net Loss for Quarter Ended April 1
GRUPO IUSACELL: Closes Exchange Offer & Consent Solicitation
INTELSAT LTD: Justice Dept. Closes Antitrust Investigation
* MEXICO: Wants to Include Dominican Republic in Energy Project
P A N A M A
GRUPO BANISTMO: Launches Central America Credit Card Unit
* PANAMA: In Dispute with Guatemala on Hosting Mexican Refinery
P U E R T O R I C O
ADELPHIA COMMS: Files Monthly Operating Report for April 2006
DRESSER INC: Gets Consents to Amend 9-3/8% Sr. Notes Indenture
G+G RETAIL: Has Until August 22 to File Chapter 11 Plan
G+G RETAIL: Selling Remaining Assets to Max Rave for US$300,000
MAXXAM Inc: Buying Back Stock from Scion for US$22.3 Million
T R I N I D A D & T O B A G O
MIRANT: Battles Ensues Over Wilson's Multi-Mil. Admin. Claim
MIRANT CORP: Sells Wichita Falls Facility to Signal Hill
ROYAL CARIBBEAN: Announces Buy-Back Program for 4 Million Shares
V E N E Z U E L A
CITGO PETROLEUM: Says Oil Spill Is Only 5.5 Barrels
CITGO PETROLEUM: Parent Firm Receives Offers for Houston Plant
PETROLEOS DE VENEZUELA: Holds 500,000+ Barrels of La Ceiba Oil
* VENEZUELA: Party Wants Probe on Chavez's Gifts to Bolivia
* VENEZUELA: Suggests Binational Oil Refinery with Ecuador
* Ten Latin American Nations Agree on Energy Plan
- - - - -
=================
A R G E N T I N A
=================
ALVEAR MOTOR: Individual Reports Due in Court on July 7
-------------------------------------------------------
The individual reports for the bankruptcy case of Alvear Motor
S.A.C.I.F. will be due in court on July 7, 2006. Adriana Maria
Cagnolo, the court-appointed trustee of the proceeding, stopped
verifying creditors' proofs of claim on May 24, 2006.
A general report is expected in court on Sept. 5, 2006.
A court in General Alvear, Mendoza, handles the bankruptcy case.
The debtor can be reached at:
Alvear Motor S.A.C.I.F.
Avenida Alvear Oeste 720
General Alvear
Mendoza, Argentina
The trustee can be reached at:
Adriana Maria Cagnolo
26 de Julio 75, General Alvear
Mendoza, Argentina
AMORI SA: Trustee Stops Verifying Proofs of Claim After July 10
---------------------------------------------------------------
The court-appointed trustee, Emilio Gallego, of the bankruptcy
case of Amori S.A. will stop verifying creditors' proofs of
claim after July 10, 2006, Infobae reports.
Ms. Gallego will present the validated claims in court as
individual reports on Sept. 12, 2006. The trustee will also
submit a general report on the case on Oct. 24, 2006.
A Buenos Aires court handles the company's bankruptcy case.
The debtor can be reached at:
Amori S.A.
Avenida Francisco Beiro 4388
Buenos Aires, Argentina
The trustee can be reached at:
Emilio Gallego
Esmeralda 1066
Buenos Aires, Argentina
BASICOS BUENOS: Creditors Must Submit Proofs of Claim by July 19
----------------------------------------------------------------
Creditors of bankrupt company Basicos Buenos Aires S.A. are
required to submit proofs of claim to Monica Olga Rajo, the
court-appointed trustee, by July 19, 2006, La Nacion reports.
Creditors who can't submit the required documents by July 19
will not qualify for any post-liquidation distributions.
The verified claims will be used as basis for creating
individual reports that are due in court on Sept. 28, 2006. A
general report that contains an audit of the company's
accounting and banking records will follow on Nov. 29, 2006.
Buenos Aires' Court No. 21 declared Basicos Buenos bankrupt at
the behest of Daniel David, whom the company owes US$24,000.
Clerk No. 42 assists the court on the case.
The debtor can be reached at:
Basicos Buenos Aires S.A.
Aguilar 2679
Buenos Aires, Argentina
The trustee can be reached at:
Monica Olga Rajo
Viamonte 2359
Buenos Aires, Argentina
BREME SA: Verification of Proofs of Claim Ends on July 5
--------------------------------------------------------
Jorge Ernesto del Hoyo, the trustee appointed by the Buenos
Aires court for the bankruptcy proceeding of Breme S.A., won't
verify creditors' proofs of claim after July 5, 2006, Infobae
reports. Creditors whose claims are not validated will be
disqualified from receiving any payment that the company will
make.
Argentine bankruptcy law requires the court-appointed trustee to
present an individual report that is based on the verified
claims and a general report that contains an audit of the
company's accounting and banking records. The dates of
submission of these reports are yet to be disclosed.
The debtor can be reached at:
Breme S.A.
Avenida de Mayo 1235
Buenos Aires, Argentina
The trustee can be reached at:
Jorge Ernesto del Hoyo
Cerrito 484
Buenos Aires, Argentina
DALLA CARS: Proofs of Claim Will be Verified Until July 3
---------------------------------------------------------
Creditors' proofs of claim against Dalla Cars S.A. will be
verified until July 3, 2006. The court-appointed trustee, Ramon
Antonio Ruiz, will validate the claims.
Infobae relates that validated claims will be presented in court
as individual reports on Aug. 15, 2006. The submission of a
general report will follow on Sept. 27, 2006.
A court in Quilmes, Buenos Aires, handles Dalla Cars' bankruptcy
case.
The debtor can be reached at:
Dalla Cars S.A.
Avenida Hipolito Yrigoyen 267, Quilmes
Buenos Aires, Argentina
The trustee can be reached at:
Ramon Antonio Ruiz
San Martin 528, Quilmes
Buenos Aires, Argentina
DEVELOP SA: Sets July 18 Deadline for Submission of Claims
----------------------------------------------------------
Creditors of Develop S.A. must present their claims to Jose
Maria Larrory Pantaleo, the court-appointed trustee, by
July 18, 2006.
Infobae relates that these claims will constitute the individual
reports to be submitted in court on Sept. 13, 2006. The court
also requires the trustee to present an audit of the company's
accounting and business records through a general report due on
Oct. 26, 2006.
The trustee can be reached at:
Jose Maria Larrory
Rodriguez Pena 231
Buenos Aires, Argentina
DUVILIER SA: Sets June 30 Deadline for Claims Verification
----------------------------------------------------------
The verification of creditors' claims for the Duvilier S.A.
bankruptcy case will end on June 30, 2006, states Infobae.
Court-appointed trustee Adriana Beatriz Elisii will validate the
claims.
Argentine bankruptcy law requires the submission of an
individual report that is based on the verified claims and a
general report that contains an audit of the company's
accounting and banking records. The dates of submission of
these reports are yet to be disclosed.
The trustee can be reached at:
Adriana Beatriz Elisii
Avenida Cabildo 2040
Buenos Aires, Argentina
FAB SRL: Seeks Reorganization Approval from Court
-------------------------------------------------
Buenos Aires Court No. 24 is currently reviewing the merits of
the reorganization petition filed by FAB S.R.L. Argentine daily
La Nacion reports that the company filed the request after
defaulting on its debt payments since Jan. 6, 2004.
The reorganization petition, if granted by the court, will allow
FAB to negotiate a settlement with its creditors in order to
avoid a straight liquidation. Clerk No. 48 assists the court on
this case.
The debtor can be reached at:
FAB S.R.L.
Cardenas 2271
Buenos Aires, Argentina
FRIGRAS SCA: Trustee Won't Validate Claims After July 21
--------------------------------------------------------
The court-appointed trustee, Ernesto Carlos Borzone, will not
validate claims against bankrupt company Frigras S.C.A. after
July 21, 2006, Infobae reports.
Mr. Borzone will present the validated claims in court as
individual reports on Sept. 18, 2006. The trustee will also
submit a general report on the case on Oct. 31, 2006.
A Buenos Aires court handles the company's bankruptcy case.
The trustee can be reached at:
Ernesto Carlos Borzone
Cuenca 1464
Buenos Aires, Argentina
STARTRADE SA: Creditors Must Present Proofs of Claim by June 28
---------------------------------------------------------------
Startrade S.A.'s creditors are required to submit proofs of
claim by June 28, 2006. Infobae relates that the claims will
undergo a verification phase.
The trustee will present an individual report in court that is
based on the results of the verification and a general report
that contains an audit of the company's accounting and banking
records. The dates of submission of these reports are yet to be
disclosed.
A Buenos Aires court declared the company bankrupt and appointed
Carlos Alberto Chaud Perez as trustee for the proceeding.
The debtor can be reached at:
Startrade S.A.
Boedo 394
Buenos Aires, Argentina
The trustee can be reached at:
Carlos Alberto Chaud Perez
Tacuari 643
Buenos Aires, Argentina
* ARGENTINA: Netherlands Helps Reduce Country's Gas Emissions
-------------------------------------------------------------
The government of The Netherlands will provide US$6 million to
purchase greenhouse gas emission reductions from a landfill gas
project in Argentina.
Under the IFC-Netherlands Carbon Facility, a joint initiative of
the International Finance Corporation and the government of the
Netherlands, the bank will use the Dutch government's funds to
purchase greenhouse gas emission reductions in accordance with
the Clean Development Mechanism of the Kyoto Protocol. The
Dutch government will then use the purchased Certified Emission
Reductions to help comply with its commitment under the
Protocol.
Rachel Kyte, Director of IFC's Environment and Social
Development Department, said, "The Clean Development Mechanism
is now a real opportunity for companies to invest in
environmental projects in emerging markets. This is a win-win
situation. Greenhouse gas emissions will be reduced, a landfill
in Argentina will be better managed, and the Netherlands is
helping fulfill its emission reduction commitments."
CERs are independently verified reductions of:
-- carbon dioxide,
-- methane, and
-- other GHG emissions
in developing countries. Under the Kyoto Protocol's Clean
Development Mechanism, they are eligible for trade and can be
sold in countries that have undertaken such reductions.
Atul Mehta, IFC's Director for Latin America and the Caribbean,
noted that, "Our role in helping the region's companies
participate in the carbon credit markets follows IFC's objective
to provide innovative and effective solutions for the private
sector, both in Argentina and throughout the region."
The project is managed by Van der Wiel Stortgas b.v., a Dutch
company that specializes in engineering, design, and supply of
systems for extracting and using landfill gas. VdW has
implemented a system of gas collection wells and pipes at the
Villa Dominico landfill, which is located south of Buenos Aires
and owned by a government agency. VdW collects the gas, which
contains significant quantities of methane, and burns it in a
controlled flare to reduce its global warming potency. Since
Argentina, like many other emerging market countries, has no
laws requiring collection and destruction of landfill gas, this
project is a significant contribution to environmental
protection. It is being implemented specifically to reduce
greenhouse gas emissions under the Kyoto Protocol. VdW and the
landfill owner will share the revenues from the sale of CERs
according to an agreed formula.
IFC manages two carbon purchase facilities and offers financial
products for the growing carbon market, including an AAA-rated
carbon delivery guarantee on behalf of projects generating
emission reductions as well as loans against forward contracts.
From July 2005 to March 2006, IFC committed US$233 million for
its own account and an additional US$383 million in syndications
in private sector projects in Argentina. IFC's total portfolio
in the country as of December 2005 is US$1.029 billion.
In Argentina, IFC has shifted its focus from short-term lines to
long-term financing. IFC's priority for its direct investments
is to provide long-term financing and structured finance
products to companies and projects in strategic sectors, with a
focus on businesses expanding into other developing countries
and on export-facilitating projects. Strategic sectors for
investment include:
-- oil, gas, and mining;
-- agribusiness and forestry products; and
-- the financial sector.
IFC is emphasizing high-impact projects, such as housing finance
and support of export-oriented small and medium enterprises.
* * *
Fitch Ratings assigned these ratings on Argentina:
Rating Rating Date
------ -----------
Country Ceiling RD Dec. 14, 2005
Long Term IDR B Dec. 14, 2005
Short Term IDR B- Jun. 3, 2005
Local Currency
Long Term Issuer
Default Rating B Jun. 3, 2005
=============
B E R M U D A
=============
CANE MASTER: Schedules Final General Meeting on July 7
------------------------------------------------------
Cane Master Fund Limited's final general meeting is scheduled at
10:00 a.m. on July 7, 2006, at:
PricewaterhouseCoopers
Dorchester House, 7 Church Street
Hamilton, HM 11, Bermuda
The meeting is set for the purposes of:
-- receiving an account on the wind up process of
the company by the liquidator -- Nigel J.S. Chatterjee.
Mr. Hoskins will show the manner in which the winding-up
has been conducted, how the property of the company has
been disposed of and explain the process;
-- by resolution determining the manner in which the
books, accounts and documents of the company and of the
liquidator shall be disposed; and
-- by resolution dissolving the company.
The company began liquidating assets on May 31, 2006.
=============
B O L I V I A
=============
PETROLEO BRASILEIRO: Gets Accused of Sabotaging Diesel Supply
-------------------------------------------------------------
The Bolivian government alleged that Petroleo Brasileiro S.A.
cut off of its diesel supply in the country as an act of
sabotage, the Associated Press reports.
Petrobras Bolivia de Refinacion, Petrobras' subsidiary in
Bolivia, supplies diesel into Bolivia but has stopped the
importation in the last few days, Pres. Jorge Alvarado of
Yacimientos Petroliferos Fiscales Bolivianos aka YPFB told the
AP.
"I interpret the attitude assumed by Petrobras as an act of
sabotage toward the country, I can't understand in any other
way," Mr. Alvarado told AP.
In response to the Bolivian government's charges, Petrobras said
in a statement that it had no choice but to interrupt the diesel
supply into Bolivia because of the government's untimely
payment.
"The temporary suspension of diesel imports was not, and never
will be, an act of sabotage nor a tool to pressure," Petrobras
said in the statement. "This measure is nothing but the last
resort for Petrobras which it is obliged to take, faced with the
financial inability to keep importing, due to nonpayment."
However, the Bolivian government also denied Petrobras' claims
of delayed payment, asserting that all its payments are up to
date. Oscar Navarro, the vice minister of treasury and public
development told AP that Petrobras can do all the legal actions
that it deems suitable if and only if the government pays 15
days late, as was established in their deal.
Tension between the Bolivian government and Petrobras sparked
after Pres. Evo Morales declared the nationalization of
Bolivia's oil and gas industry. Petrobras is the state's
principal investor with about US$6.1 billion worth of
investments. After the declaration of the decree, Petrobras
said that it plans to cut down on its dependence on Bolivian
gas.
Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro
S.A. aka Petrobras was founded in 1953. The company explores,
produces, refines, transports, markets, distributes oil and
natural gas and power to various wholesale customers and retail
distributors in the country.
* * *
Petroleo Brasileiro SA's long-term corporate family rating is
rated Ba3 by Moody's and its foreign currency long-term debt is
rated BB by Fitch.
* * *
Fitch assigned these ratings on Petroleo Brasileiro's senior
unsecured notes:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
April 1, 2008 US$400,000,000 9% BB+
July 2, 2013 US$750,000,000 9.125% BB+
Sept. 15, 2014 US$650,000,000 7.75% BB+
Dec. 10, 2018 US$750,000,000 8.375% BB+
* BOLIVIA: Oil Firm Gets US$25MM Payment from Private Companies
---------------------------------------------------------------
Bolivia's state-run oil company, YPFB aka Yacimientos
Petroliferos Fiscales Bolivianos, received a total of US$25
million from private oil firms, according to the local press.
This is due to the interim terms mandated by the nationalization
decree implemented on May 1, local press states.
According to Business News Americas, the payment is the first
related to the 32% participation the state firm will get from
the San Antonio and San Alberto fields until the firms working
on them enter new accords to give Bolivia a minimum 50% share on
oil production.
BNamericas reports that the deposits related to the 32%
participation will give Bolivia an additional US$300 million per
year.
BNamericas relates that both blocks are owned:
-- 50% by Brazil's federal energy company Petrobras,
-- 15% by France's Total, and
-- 35% by local company Andina, in which Spanish oil major
Repsol YPF holds a 50% stake.
A source from the government news service ABI told BNamericas
that the firms were paying US$420 million annually to Bolivia
for royalties and taxes before the nationalization decree.
* * *
Fitch Ratings assigned these ratings on Bolivia:
Rating Rating Date
------ -----------
Country Ceiling B- Jun. 17, 2004
Long Term IDR B- Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating B- Dec. 14, 2005
===========
B R A Z I L
===========
BANCO NACIONAL: Finances BRL124.8M for Pernambuco Infrastructure
----------------------------------------------------------------
Demian Fiocca, the president of Banco Nacional de Desenvovimento
Economico e Social aka BNDES, met with governor Mendonca Filho,
at Campo das Princesas Palace on May 31, 2006, to announce a
financing for the State of Pernambuco for BRL124.8 million. The
loan will be used for investments in the implementation and
expansion of water supply and sanitary sewerage systems in
several municipalities of the State of Pernambuco. The program
will benefit about 700 thousand people.
The project provides for the expansion of the Gurjau/Pirapama
Production System, guaranteeing
-- the water supply to Suape's Industrial and Port Complex;
-- expansion of the water distribution network in Recife,
Olinda and Sao Jose do Belmonte; and
-- implementation of sanitary sewerage systems in seven
municipalities.
Total investment will be BRL141.6 million, of which 88%
correspond to BNDES financing. The remaining 12% will be
invested using the state's own resources.
* * *
As reported in the Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its foreign currency
counterparty credit rating on Banco Nacional de Desenvolvimento
Economico e Social S.A. aka BNDES to 'BB' with a stable outlook
from 'BB-' with a positive outlook. The company's local
currency credit rating was also shifted to 'BB+' with a stable
outlook from 'BB' with a positive outlook.
BANCO NACIONAL: Grants BRL15.2M to Modernize Duque City Hall
------------------------------------------------------------
Banco Nacional de Desenvolvimento Economico e Social aka BNDES
approved a financing for BRL15.2 million to Duque de Caxias city
hall in the State of Rio de Janeiro. The funds will be used for
a municipal administration project, in the ambit of the Program
for the Modernization of the Tax Administration or PMAT. The
investment aims at:
-- expanding the efficiency in tax and administrative
management, with the performance of a group of
initiatives to increase administrative and fiscal process
computerization;
-- rationalizing the physical occupation of administrative
spaces;
-- expanding and organizing the registry database for fiscal
purposes;
-- physical and electronic integration of the city hall's
administrative and functional units; and
-- improving personnel qualification.
Duque de Caxias city hall, functionally divided within 23
departments, has about 11 thousand active employees and 2.4
thousand inactive employees.
The investments will be distributed within different
departments:
For the Finance and Planning Department, for instance, which
concentrates the city hall's tax area, investments comprise the
acquisition of 27 desktop computers, three servers, three
printers and four softwares.
For the Administration Department, it will be use to prepare an
IT director plan and implement three service centers for
taxpayers and one cost computing system.
For the Education Department, the main investments consist in
the implementation of a network interlinking all city hall's
administrative and functional units to allow for the electronic
transfer of data.
For the Health Department, the investments, which involve 22
desktop computers and 22 printers, will allow for the electronic
processing of data and a better management for distribution and
control of drug inventories.
The city hall expects that, after project completion, the
municipality's own tax collection will present 30% increase
potential within next five years.
Duque de Caxias presents a good budget and financial status,
generating annual surplus since 2001. Current expenses have
been increasing at rates lower than current revenues and the own
tax collection proceeds has been increasing throughout recent
years. The municipality's debt level is low. In 2005, debt was
10% of current revenues.
The Municipality of Duque de Caxias, Rio de Janeiro, holds the
second leading industrial area of the state, the Duque de Caxias
Refinery or Reduc, the Chemical Gas Center and the largest gas
thermoelectric plant in Brazil, TermoRio. The municipality's
GDP is BRL14 billion, ranking sixth in the country and second in
the State of Rio de Janeiro, pursuant to the Brazilian Institute
of Geography and Statistics or IBGE. It ranks fifth among
Brazilian municipalities with respect to tax collection.
* * *
As reported in the Troubled Company Reporter on March 3, 2006,
Standard & Poor's Ratings Services raised its foreign currency
counterparty credit rating on Banco Nacional de Desenvolvimento
Economico e Social S.A. aka BNDES to 'BB' with a stable outlook
from 'BB-' with a positive outlook. The company's local
currency credit rating was also shifted to 'BB+' with a stable
outlook from 'BB' with a positive outlook.
CONSTRUTORA NORBERTO: S&P Affirms BB- Corporate Credit Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' local- and
foreign-currency corporate credit ratings on Construtora
Norberto Odebrecht S.A., the largest heavy engineering and
construction company in Brazil. The outlook on the ratings has
been revised to positive from stable. At the same time,
Standard & Poor's raised the corporate credit rating in the
Brazil national scale rating to 'brA' from 'brA-'. The outlook
on that rating is also positive.
"The rating action reflects CNO's improved capital structure and
strengthened liquidity, coupled with improved revenues and
profitability prospects in the next couple of years due to a
growing and improving domestic and international backlog," said
Standard & Poor's credit analyst Reginaldo Takara.
The ratings on CNO reflect the company's exposure to four
factors:
-- the competitive, volatile, and cyclical heavy E&C
business,
-- some backlog concentration in public works in economically
and politically volatile countries (although projects are
typically prefunded),
-- a somewhat leveraged financial profile, and
-- an aggressive dividend policy.
These risks are partly offset by CNO's long-standing experience
in the E&C business, the geographic and business diversification
of its backlog (a positive business factor that has been
sustained over time), stronger margin stability when compared
with peers, and consistent cash-flow protection measures within
the past few years as a result of the company's significant
efforts to focus on more profitable projects.
CNO had net sales of US$2.7 billion and EBITDA of US$210 million
in the 12 months ended March 31, 2006. The company reported a
total debt balance of US$520 million at the same date.
The positive outlook on CNO reflects the upward rating potential
and depends on four factors:
-- if the company is able to preserve strong liquidity for
any possible working capital swings;
-- if it can sustain strong cash-flow protection measures in
the medium term;
-- if it can maintain low debt levels relative to cash flows;
and
-- if it can extend the average life of its backlog while
preserving adequate diversity and profitability.
Standard & Poor's believes that CNO has already accomplished
significant improvement in its debt management; however, an
upgrade would depend on more permanent credit measure
improvements in the medium term. Backlog deterioration,
however, could foreshadow a reversal in current trends. Along
with adverse changes in profitability trends and cash
generation, this could be a reason for the outlook to be revised
to stable or for a negative rating action to be taken in the
future.
VARIG: Brazilian Court Moves Auction to June 8
----------------------------------------------
The auction of operating assets in embattled airline Viacao
Aerea Rio-Grandense, or Varig, is postponed to Thursday, June 8
from Monday, June 5 to allow investors more time to put together
bids, the airline said in a statement late Friday.
Judge Luiz Roberto Ayoub of the 8th District Bankruptcy Court in
Rio de Janeiro, Brazil, adjusted the schedule after creditors
threatened to stop delivering products or services to Varig and
lessors pressured the U.S. Bankruptcy Court to allow
repossession of their planes currently in Varig's service.
Reuters says that at least five entities have paid fees to
access a data room that VARIG has set up for potential bidders:
1. TAM Linhas Aereas,
2. Gol Linhas Aereas Inteligentes,
3. OceanAir,
4. TAP Portugal, and
5. Brookefield, a U.S. investment fund.
The amount of the fees were not disclosed.
Varig's domestic and international operations will be sold as a
going concern for a minimum price of US$860,000,000, pursuant to
the terms of a bankruptcy plan accepted by the airline's
creditors. If Varig fails to attract buyers, its assets will be
sold separately. The minimum bid for VARIG's domestic
operations will be US$700,000,000.
The eventual buyer will be required to deposit US$75,000,000
with the airline within three days of the auction.
Only this week, the sale was brought forward from early July as
the airline risked ceasing operations before the asset was sold.
The delay comes two days after a New York court extended
bankruptcy protection for the airline until June 13.
At the end of the hearing, Judge Robert Drain of the U.S.
Bankruptcy Court in New York said that the rights of airplane
leasing companies weren't being respected by Varig, which is
neither paying its leasing debts nor returning planes, but he
said he would extend the protection deadline so the company can
be sold.
About VARIG
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.
* BRAZIL: Money Changers Laundered US$20 Bil. to United States
--------------------------------------------------------------
A group of 64 Brazilian money changers laundered US$20 billion
to the United States in the period between 1996 to 2003, Folha
de Sao Paulo reports.
Federal prosecutors in Parana investigated the case. Documents
from U.S. authorities aided the tracking of the illegally sent
money from Brazil, Folha relates.
A Congressional probe uncovered that a former state bank
laundered approximately US$30 billion between 1996 and 2002,
prompting Brazilian authorities to focus on investigating money
laundering, Folha says.
According to the Brazilian Institute for Tax Planning, money
changers in the country are involved in illegal currency deals
amounting to about US$63 billion per year.
* * *
Fitch Ratings assigned these ratings on Brazil:
Rating Rating Date
------ -----------
Country Ceiling BB- Nov. 18, 2004
Long Term IDR BB- Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB- Dec. 14, 2005
===========================
C A Y M A N I S L A N D S
===========================
ADDITIONAL REALTY: Proofs of Claim Filing Deadline Is June 21
-------------------------------------------------------------
Creditors of Additional Realty Holdings Limited are required to
submit particulars of their debts or claims by June 21, 2006, to
the company's appointed liquidators, Jamal Young and Janet
Crawshaw. Failure to comply by June 21 will exclude creditors
from receiving the benefit of any distribution that the company
will make.
Additional Realty started liquidating assets on May 3, 2006.
The liquidators can be reached at:
Jamal Young
Janet Crawshaw
Attention: Marguerite Britton
P.O. Box 1109, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-7755
Fax: (345) 949-7634
CITY CLUBS: Schedules Last Shareholders Meeting for June 23
-----------------------------------------------------------
Shareholders of City Clubs International 1, LLC, will convene at
10:00 a.m. on June 23, 2006, for a final general meeting at:
Close Brothers (Cayman) Limited
4th Floor Harbour Place, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting. The shareholders will also authorize the
liquidators to retain the records of the company for a period of
six years, starting from the dissolution of the company.
Destruction of the records may then be allowed after such
period.
Any person who is entitled to attend and vote at this meeting
may appoint a proxy to attend and vote in his stead. A proxy
need not be a member or a creditor.
As reported in the Troubled Company Reporter on May 31, 2006,
City Clubs started liquidating assets on April 4, 2006.
Linburgh Martin and Jeff Arkley, the company's appointed
liquidators, stopped verifying claims after June 16, 2006.
The company's liquidators can be reached at:
Linburgh Martin
Jeff Arkley
Attention: Neil Gray
Close Brothers (Cayman) Limited
Fourth Floor, Harbour Place
P.O. Box 1034, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-8455
Fax: (345) 949-8499
ELENA AIRCRAFT: Claims Filing Deadline Is Set for June 30
---------------------------------------------------------
Elena Aircraft Leasing Co. Ltd.'s creditors are required to send
by June 30 their names and addresses, the particulars of their
debts and claims, and the names and addresses of their
attorneys-at-law, if any, to the company's liquidator:
Michel Schaus
Cargolux Airlines International S.A.
Luxembourg Airport, L-2990 Luxembourg
Grand Duchy of Luxembourg
Tel: (011-352) 4211-3358
Fax: (011-352) 4211-3748
Creditors who are not able to comply by the June 30 deadline
won't receive any distribution that the company will make.
Elena Aircraft started its voluntary liquidation on
May 11, 2006.
EUROPEAN VENTURES: Filing of Proofs of Claim Ends on June 19
------------------------------------------------------------
The creditors of European Ventures Group Limited are required to
prove their claims to Alain Andrey, the company's liquidator, by
June 19, 2006, or be excluded from receiving any distribution or
payment that the company will make.
Creditors are required to send by June 19 their full names,
addresses, the full particulars of their debts or claims, and
the names and addresses of their lawyers, if any, to the
liquidators.
The company began liquidating assets on April 20, 2006.
The liquidator can be reached at:
Alain Andrey
Messrs. Maples and Calder
P.O. Box 309, George Town
Grand Cayman, Cayman Islands
EXPORT LEASING: Sets June 16 for Final Shareholders Meeting
-----------------------------------------------------------
Shareholders of Export Leasing (C.I.) Company Limited will
gather for a final meeting on June 16, 2006, at 9:30 a.m. at the
company's registered office.
Accounts on the company's liquidation process will be presented
during the meeting.
As reported in the Troubled Company Reporter on Jan. 18, 2006,
Export Leasing started liquidating assets on Dec. 9, 2005.
S.L.C. Whicker and K.D. Blake, the company's appointed
liquidators, stopped accepting claims after Feb. 9, 2006.
The liquidators can be reached at:
S.L.C. Whicker
K.D. Blake
Attention: Eleanore Laureles
P.O. Box 493, George Town,
Grand Cayman, Cayman Islands
Tel: (345) 949-4800
Fax: (345) 949-7164
FRANKLIN CLO III: Creditors Must Submit Claims by June 9
--------------------------------------------------------
Creditors of Franklin CLO III, Ltd., are required to send by
June 9 their names and addresses, the particulars of their debts
and claims, and the names and addresses of their attorneys-at-
law, if any, to the company's liquidators:
John Cullinane
Derrie Boggess
c/o Walkers SPV Limited
P.O. Box 908, George Town
Grand Cayman, Cayman Islands
Tel: (345) 914-6305
Creditors who are not able to comply by the June 9 deadline
won't receive any distribution that the company will make.
Franklin CLO started its voluntary liquidation on May 10, 2006.
GERALDINE AIRCRAFT: Creditors Have Until June 30 to File Claims
---------------------------------------------------------------
Geraldine Aircraft Leasing Co. Ltd.'s creditors are asked to
file by June 30, 2006, their names and addresses, particulars of
their debts or claims and the names and addresses of their
attorneys-at-law, if any, to the company's liquidator:
Michel Schaus
Cargolux Airlines International S.A.
Luxembourg Airport, L-2990 Luxembourg
Grand Duchy of Luxembourg
Tel: (011-352) 4211-3358
Fax: (011-352) 4211-3748
Creditors who are not able to comply by the June 30 deadline
won't receive any distribution that the company will make.
Geraldine Aircraft started its voluntary liquidation on
May 11, 2006.
GIT FUND: Creditors Must File Proofs of Claim by June 30
--------------------------------------------------------
GIT Fund's creditors are required to file proofs of claim by
June 30, 2006, to the company's liquidator:
Richard L. Finaly
Conyers Dill & Pearman Cayman
George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply by the June 30 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
GIT Fund started its voluntary liquidation on April 20, 2006.
Parties-in-interest may contact:
Krysten Lumsden
P.O. Box 2681, George Town
Grand Cayman, Cayman Islands
Tel: (345) 945 3901
Fax: (345) 945 3902
IVY ENHANCED: Creditors Must File Claims by June 8
--------------------------------------------------
Ivy Enhanced Feeder Fund I, Ltd.'s creditors are required to
submit by June 8 their names and addresses, the particulars of
their debts and claims, and the names and addresses of their
attorneys-at-law, if any, to the company's joint liquidators:
John Cullinane
Derrie Boggess,
c/o Walkers SPV Limited
Attn: John Cullinane
P.O. Box 908, George Town
Grand Cayman, Cayman Islands
TeL: (345) 914-6305
Creditors who are not able to comply by the June 8 deadline
won't receive any distribution that the company will make.
Ivy Enhanced started its voluntary liquidation on May 5, 2006.
HYGROVE OFFSHORE: Last Day to File Proofs of Claim Is June 22
-------------------------------------------------------------
Hygrove Offshore Fund Ltd.'s creditors are required to prove
their claims by June 22, 2006, to the company's joint
liquidators:
David A.K. Walker
Lawrence Edwards
PricewaterhouseCoopers
Strathvale House, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply by the June 22 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Hygrove Offshore started its voluntary liquidation on
April 26, 2006.
Parties-in-interest may contact:
Miguel M. Brown
P.O. Box 219 George Town
Tel: (345) 9148665
Fax: (345) 949 4590
Grand Cayman, Cayman Islands
JB ALPHA: Creditors Have Until June 29 to File Proofs of Claim
--------------------------------------------------------------
JB Alpha FX Trading Fund's creditors must submit proofs of claim
by June 29, 2006, to the company's joint liquidators:
Ian Wight
Stuart Sybersma
Deloitte & Touch
Attn: Joshua Taylor
P.O. Box 1787, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949 7500
Fax: (345) 949 8258
Creditors who are not able to comply by the June 29 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
The company started its voluntary liquidation on May 8, 2006.
LPG SHIPPING: Creditors Must Present Proofs of Claim by June 19
---------------------------------------------------------------
Creditors of LPG Shipping Limited, which is being voluntarily
wound up, are required to present proofs of claim by
June 19, 2006, to David Dyer, the company's liquidator.
Creditors who are not able to comply by the June 19 deadline
won't receive any distribution that the company will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
LPG Shipping started liquidating assets on May 5, 2006.
The liquidator can be reached at:
David Dyer
Deutsche Bank (Cayman) Limited
P.O. Box 1984GT, George Town
Grand Cayman, Cayman Islands
MORGAN CRUCIBLE: Sets June 30 Deadline for Claims Filing
--------------------------------------------------------
Creditors of Morgan Crucible (Cayman) Limited, which is being
voluntarily wound up, are required by June 30, 2006, to present
claims against the company to David Dyer, the company's
liquidator.
The company started liquidating assets on May 12, 2006.
The liquidator can be reached at:
David Dyer
Deutsche Bank (Cayman) Limited
P.O. Box 1984GT, George Town
Grand Cayman, Cayman Islands
MULTI-STRATEGY PPF: Holds Final General Meeting on June 20
----------------------------------------------------------
Shareholders of Multi-Strategy PPF Ltd. will gather for a final
meeting on June 20, 2006, at 10:00 a.m. at the company's
registered office.
Accounts on the company's liquidation process will be presented
during the meeting.
As previously reported, Multi-Strategy PPF started liquidating
assets on Dec. 16, 2005. Q&H Nominees Ltd., the company's
appointed liquidator, stopped accepting claims on June 20, 2006.
Parties-in-interest may contact the liquidator at:
Q&H Nominees Ltd.
Attention: Greg Link
P.O. Box 1348, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-4123
Fax: (345) 949-4647
NOCH OFFSHORE: Creditors Have Until June 9 to File Claims
---------------------------------------------------------
Creditors of Noch Offshore Fund, Ltd., a company in voluntary
liquidation, are required to send by June 9 their names and
addresses, the particulars of their debts and claims, and the
names and addresses of their attorneys-at-law, if any, to the
company's joint liquidators at:
John Cullinane
Derrie Boggess
c/o Walkers SPV Limited, Walker House
P.O. Box 908, George Town
Grand Cayman, Cayman Islands
Tel: (345) 914-6305
The company started liquidating assets on April 25, 2006.
STANLEY FUND: Final Shareholders Meeting Is Set for June 19
-----------------------------------------------------------
Shareholders of Stanley Fund Managers International Limited will
gather on June 19, 2006, for a final general meeting at 11:00
a.m. at the company's registered office.
Accounts on the company's liquidation process will be presented
during the meeting. The shareholders will also authorize the
liquidators to retain the records of the company for a period of
five years, starting from the dissolution of the company.
Destruction of the records may then be allowed after such
period.
Any person who is entitled to attend and vote at this meeting
may appoint a proxy to attend and vote in his stead. A proxy
need not be a member or a creditor.
As reported in the Troubled Company Reporter on June 1, 2006,
Stanley Fund started liquidating assets on April 27, 2006.
Verification of creditors' claims against GPF Almatis Holdings
will end on June 10, 2006.
The company's liquidators can be reached at:
John Cullinane
Derrie Boggess
c/o Walkers SPV Limited
Walker House
P.O. Box 908, George Town
Grand Cayman, Cayman Islands
Tel: (345) 914-6305
UBS CURRENCY: Schedules June 16 for Final Shareholders Meeting
--------------------------------------------------------------
Shareholders of UBS Currency Fund (USA) LLC will gather for a
final meeting on June 16, 2006, at 10:00 a.m. at:
Deloitte
Fourth Floor, Citrus Grove
P.O. Box 1787, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
As reported in the Troubled Company Reporter on March 28, 2006,
UBS Currency started liquidating assets on Jan. 12, 2006. Ian
Wight and Stuart Sybersma, the company's appointed liquidators,
stopped accepting claims after March 20, 2006.
The liquidators can be reached at:
Ian Wight
Stuart Sybersma
Attention: Joshua taylor
Deloitte & Touche
P.O. Box 1787, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-7500
Fax: (345) 949-8258
YL CAPITAL: Liquidator Presents Wind Up Accounts on June 19
-----------------------------------------------------------
Shareholders of YL Capital Corporation will convene for a final
meeting on June 19, 2006, at 10:00 a.m. at:
HSBC Financial Services (Cayman) Limited
P.O. Box 1109, George Town
Grand Cayman, Cayman Islands
Accounts on the company's liquidation process will be presented
during the meeting.
As reported in the Troubled Company Reporter on May 31, 2006,
the YL Capital began its voluntary liquidation of assets on
April 24, 2006. Creditors were required to present proofs of
their claims by before June 19, 2006.
The liquidators can be reached at:
Janet Crawshaw
Jamal Young
Attention: Marguerite Britton
P.O. Box 1109, George Town
Grand Cayman, Cayman Islands
Tel: (345) 949-7755
Fax: (345) 949-7634
===============
C O L O M B I A
===============
* COLOMBIA: Airport Concession Bid Submission Moved to June 16
--------------------------------------------------------------
The government of Colombia extended the deadline for the filing
of offers for the Bogota El Dorado airport concession to June 16
from June 5, Martin Gonzalez, the spokesman of the country's
airport authority, told Dow Jones Newswires.
Firms interested in bidding for a 20-year concession to run the
airport must file their offer to the government by June 16, Mr.
Gonzalez told Dow Jones.
Andres Uriel Gallego, the transport minister, told reporters
that the bidders had requested for more time to assess
government changes to the bidding rules. According to the
minister, this will be the last delay set to the process.
As reported in the Troubled Company Reporter on June 5, 2006,
Colombia's presidential press office disclosed that nine firms
bought forms to bid for the concession, scheduled to be awarded
in July. Companies who bought bidding forms for COP12 million
include:
-- Organizacion de Ingenieria Internacional SA, a
Colombian engineering company,
-- Argentina's Corporacion America SA,
-- Spain's state-owned Aeropuertos Espanoles y Navegacion
Area,
-- privately operated Abertis Infraestructuras SA,
-- China-based Stratis Cia.,
-- Mexico's MNV,
-- Mexico's Pisa
-- Colombia's Conconcreto SA, and
-- Colombia's Mario Huertas Cote.
Dow Jones recalls that Aerocivil -- the airport authority in
Colombia -- launched the auction process on Dec. 14, 2005.
The government will grant the concession to the bidder with an
offer to transfer the biggest share of revenue back to the
Government, Martin Gonzalez -- the spokesman for Aerocivil --
told Dow Jones. The winning bidder will:
-- operate the country's largest airport,
-- invest as much as US$650 million in upgrades, and
-- commit to building new terminals for:
* international flights,
* domestic flights, and
* for freight.
* * *
On May 30, 2005, Fitch Ratings affirmed Colombia's ratings as:
-- Long-term foreign currency 'BB';
-- Country ceiling 'BB';
-- Local currency 'BBB-';
-- Short-term 'B'.
Fitch said the Rating Outlook is Stable.
===================================
D O M I N I C A N R E P U B L I C
===================================
FALCONBRIDGE LTD: Acquisition Transaction Important to Inco Ltd.
----------------------------------------------------------------
The Board of Directors of Inco Limited has unanimously
recommended that shareholders reject the unsolicited offer by
Teck Cominco Limited to acquire all of the outstanding shares of
Inco. The Board characterized Teck's offer as opportunistic,
inadequate and contrary to the interests of Inco shareholders,
and strongly reiterated its support for Inco's friendly
acquisition of Falconbridge Limited.
"Our Board views Teck's offer as an opportunistic and calculated
attempt to grab Inco at a bargain basement price when we are
focused on completing our Falconbridge transaction," Inco
Chairman and CEO Scott Hand said. "Teck appears to hope that
our board will be constrained by our Falconbridge transaction
from exploring alternatives to the transaction in the event it
were not completed."
"We are confident that Inco shareholders will see through Teck's
maneuver and reject its inadequate offer," he said. "Inco has
some of the most highly prized mining assets in the world. Our
shareholders deserve full value for those assets. And our Board
is determined to make sure that they get it."
"The best way to accomplish that is through the route we've been
pursuing -- namely, our friendly acquisition of Falconbridge.
It clearly remains the alternative with the greatest potential
to generate strong shareholder value, whether you are looking
short-term, medium-term or long-term," he said.
Teck's unsolicited offer is conditional on Inco terminating the
Falconbridge transaction.
In a Director's Circular filed on May 31, 2006, Inco's Board
outlined a number of compelling reasons why Teck's offer is
disadvantageous to Inco shareholders.
"When you compare what both companies would bring to the
combination Teck is proposing, and especially over the long
term, it's clear that most of the 'power' in the Canadian
powerhouse they talk about would come from Inco's assets," Mr.
Hand said.
"We are the company with the great portfolio of properties, the
great growth projects and expansions under development, and all
the options for further growth down the road. And our strength
is in nickel, which we believe has the best long-term
fundamentals of any metal going forward," he said.
"Teck, by contrast, has declining resources and limited growth
prospects. Not surprisingly, they'd very much like to bind
their fortunes with Inco to fashion a more inspiring future for
their shareholders. But for Inco shareholders, this combination
can only dilute their participation in Inco's world-class nickel
business at a time when our company is poised to outperform from
both a production and a financial perspective," he added.
Furthermore, Teck is only offering Inco shareholders its Class B
subordinated voting shares in exchange for Inco shares. "This
would disenfranchise Inco's shareholders who currently have one
share, one vote," Mr. Hand said.
Inco's Board has reiterated its strong support for Inco's
friendly acquisition of Falconbridge as offering superior value
for Inco shareholders compared to the Teck offer.
The Board notes that the synergies offered by the Falconbridge
transaction are clearly superior and more tangible than those
proposed by Teck. After several months of working together,
Inco and Falconbridge operations personnel have now jointly
identified the potential to realize estimated average annual
pre-tax operating and corporate synergies of approximately
US$550 million, an increase of US$200 million from the estimated
synergies at the time of the announcement of the Falconbridge
transaction.
This increase in the synergies estimate is attributable to
developed improvements in the Inco-Falconbridge integration plan
and to changes in commodity price assumptions as a result of the
improved commodity market outlook since October 2005. Inco
believes that it should be able to achieve synergies approaching
the average annual pre-tax run rate by approximately 24 months
after completion of the Falconbridge Transaction. The net
present value of the estimated annual average pre-tax run-rate
operating and corporate synergies of US$550 million, using a 7%
discount rate, is approximately US$3.5 billion on an after tax
basis.
By contrast, combining Inco and Teck offers no apparent
operational synergies, given that their respective operations
will be geographically dispersed and there is relatively little
overlap in metal production.
The large-scale synergies that the New Inco will achieve in the
Sudbury Basin will require major changes in materials flows as
well as long-term commitments and investments. The Board
believes that synergies on this scale can only be achieved by
combining the assets of Inco and Falconbridge, not through a
joint venture as Teck as suggested.
Additionally, the New Inco would have world-leading nickel and
copper reserve bases, with an attractive portfolio of long-life,
low-cost development properties, and would provide a more
attractive asset mix than the group of products represented by
the current Teck portfolio.
"The test for assessing any merger or acquisition is simple:
Does this combination create real value?" Mr. Hand said.
"However you look at the New Inco, the answer is 'yes'. Our
immediate earnings and cash flow will be very impressive. As
our integration proceeds, we will generate significant value
through the tremendous synergies of our combined operations.
And our growth projects in nickel and copper, the two metals
with the best fundamentals going forward, plus our excellent
portfolio of greenfield and brownfield projects will allow us to
continue expanding and strengthening our position as a world-
scale mining company in the coming years."
"By contrast, where is the value in what Teck is proposing?" he
said. "At the end of the day, it amounts to putting two
disparate mid-sized companies together simply for the sake of
getting bigger."
"We believe Inco shareholders deserve better," he said. "We are
confident that they will get it when we complete our transaction
with Falconbridge and create the New Inco."
About Teck Cominco
Headquartered in Vancouver, Canada, Teck Cominco --
http://www.teckcominco.com/-- is a diversified mining company.
The Company is a world leader in the production of zinc and
metallurgical coal and is a significant producer of copper,
gold, and specialty metals.
About Inco
Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N)
-- http://www.inco.com/-- is the world's #2 producer of nickel,
which is used primarily for manufacturing stainless steel and
batteries. Inco also mines and processes copper, gold, cobalt,
and platinum group metals. It makes nickel battery materials
and nickel foams, flakes, and powders for use in catalysts,
electronics, and paints. Sulphuric acid and liquid sulphur
dioxide are produced as byproducts. The company's primary
mining and processing operations are in Canada, Indonesia, and
the UK.
About Falconbridge
Headquartered in Toronto, Ontario, Falconbridge Limited --
http://www.falconbridge.com/-- is a leading copper and nickel
company with investments in fully integrated zinc and aluminum
assets. Its primary focus is the identification and development
of world-class copper and nickel orebodies. It employs 14,500
people at its operations and offices in 18 countries. The
Company owns nickel mines in Canada and the Dominican Republic
and operates a refinery and sulfuric acid plant in Norway. It
is also a major producer of copper (38% of sales) through its
Kidd mine in Canada and its stake in Chile's Collahuasi mine and
Lomas Bayas mine. Its other products include cobalt, platinum
group metals, and zinc.
* * *
Falconbridge's CDN$150 million 5% convertible and callable bonds
due April 30, 2007, carries Standard & Poor's BB+ rating.
* DOMINICAN REPUBLIC: Mexico Asks Country to Join Energy Plan
-------------------------------------------------------------
Fernando Canales -- Mexico's energy minister -- expressed his
interest to include the Dominican Republic in a submarine
"electrical net" project now being constructed to link Mexico
with Colombia, Dominican Today reports.
The "electrical net" is part of the global energy-solving plan
that includes construction of a petroleum refinery and a
generation plant to be installed in Guatemala or Panama,
Minister Canales told Dominican Today.
"We hope, with the help of submarine technology, to soon be able
to connect the Dominican Republic," Minister Canales said, as
quoted by the Dominican Today.
Minister Canales' proposition solves the energy generation
deficit problems of the Dominican Republic, with both Colombia
and Mexico -- which are petroleum-producing nations --
transmitting energy at a lesser cost, Dominican Today says.
* * *
The Troubled Company Reporter - Latin America reported on
May 9, 2006, that Fitch Ratings upgraded these debt and issuer
Default Ratings of the Dominican Republic:
-- Long-term foreign currency Issuer Default Rating
to B from B-;
-- Country ceiling upgraded to B+ from B-;
-- Foreign currency bonds due 2006 to B-/RR4 from CCC+/RR4;
-- Foreign currency Brady bonds due 2009 to B/RR4
from B-/RR4;
-- Foreign currency bonds due 2011 to B/RR4 from B-/RR4;
-- Foreign currency bonds due 2013 to B-/RR4 from CCC+/RR4;
-- Foreign currency bonds due 2018 to B/RR4 from B-/RR4; and
-- Foreign currency collateralized Brady bonds due 2024
to B+/RR3 from B/RR3.
Fitch also affirmed these ratings:
-- Long-term local currency Issuer Default Rating: B; and
-- Short-term Issuer Default Rating: B.
Additionally, Fitch assigned a debt and Recovery Rating to this
issue:
-- Foreign currency bonds due 2027: B/RR4.
Fitch said the rating outlook for the long-term foreign and
local currency IDRs is Stable.
* * *
As reported in the Troubled Company Reporter on April 17, 2006,
Standard & Poor's Ratings Services placed an mxBB+ long-term
rating on the state of Mexico. The Outlook is Stable.
=============
E C U A D O R
=============
* ECUADOR: Reports Say Gov't Mulls Oil Refinery with Venezuela
--------------------------------------------------------------
Local press in Ecuador reported that the government is
considering a binational oil refinery proposed by Venezuela
following the signing last week of a bilateral agreement, El
Universal reports.
Ecuador energy minister Ivan Rodriguez told TV network Ecuavisa
that the project would take three years to construct and would
require US$400 million. The minister added that the bilateral
cooperation plans comprise installation of an inland gas storage
facility, El Universal relates.
Mr. Rodriguez, El Universal says, denied reports saying that the
bilateral pact is Venezuelan President Hugo Chavez's attempt in
consolidating in Ecuador a regional left-wing axis.
* * *
Fitch Ratings assigned these ratings on Ecuador:
Rating Rating Date
------ -----------
Country Ceiling B- Aug. 29, 2005
Long Term IDR B- Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
* * *
Venezuela's foreign currency long-term debt is rated B1 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
=====================
E L S A L V A D O R
=====================
MILLICOM INTERNATIONAL: China Mobile to Buy Firm for US$5.3 Bil.
----------------------------------------------------------------
China Mobile agreed to purchase Millicom International Cellular
for US$5.3 billion, sources close to the operation said in
reports.
Dow Jones Newswires relates that by acquiring Luxembourg-based
Millicom, China Mobile would obtain wireless assets also in
Latin America, Africa and South Asia.
Li Jing, an investment analyst with Beijing-based Analysys
International, had told China Daily that the US$5.3 billion
offering could be too high. According to her, a reasonable
price might be around US$4 billion.
Business News Americas recalls that Millicom confirmed earlier
last week it was in advanced talks with a prospective purchaser,
but said that it was not certain whether an agreement on a sale
is imminent.
Millicom International Cellular S.A. -- http://www.millicom.com/
-- is a global telecommunications investor with cellular
operations in Asia, Latin America and Africa. It currently has
cellular operations and licenses in 16 countries. The Group's
cellular operations have a combined population under license of
approximately 391 million people.
The Central America Cluster comprises Millicom's operations in
El Salvador, Guatemala and Honduras. The population under
license in Central America as at December 2005 is 26.4 million.
The South America Cluster comprises Millicom's operations in
Bolivia and Paraguay. The population under license in South
America as at December 2005 is 15.2 million.
* * *
Millicom International's 10% senior notes due 2013 carry Moody's
B3 rating and Standard & Poor's B- rating.
=================
G U A T E M A L A
=================
* GUATEMALA: In Dispute with Panama on Hosting Mexican Refinery
---------------------------------------------------------------
Guatemala and Panama are disputing who will host the
construction for Mexico's petroleum refinery project, Fernando
Canales -- the energy minister of Mexico -- told the Dominican
Today.
As reported in the Troubled Company Reporter on May 29, 2006,
Panama and Guatemala are being considered as the probable
locations for the refinery project of the Mesoamerican Energy
Integration Program aka PIEM, a program of the government of
Mexico. Edgar Rangel, an advisor of Mexico's energy ministry
Sener, said that the refinery would supply the Central America
and Mexico, processing about 230,000-250,000 barrels a day (b/d)
of oil to produce 120,000b/d of gasoline. Salvador Beltran del
Rio, the international affairs director of Sener, had said, "The
two locations will be submitted to the heads of state and it
will be investors who decide on the best option depending on
offers made by Guatemala and Panama." The chosen location will
be announced in a summit of regional heads of state in Santo
Domingo in the Dominican Republic on June 1-3.
According to the Dominican Today, Minister Canales said the
location of the project will be determined by the investor who
is going to construct it.
"Each company can select the country that supports the
construction and costs dictated by the SICA members," Minister
Canales told the Dominican Today.
The minister told the Dominican Today that the decision as to
what firm will do the construction will have to be made by an
accord that integrates the 10 SICA countries to ensure the best
prices.
* * *
Fitch Ratings assigned these ratings on Guatemala:
Rating Rating Date
------ -----------
Country Ceiling BB+ Feb. 22, 2006
Long Term IDR BB+ Feb. 22, 2006
Short Term IDR B Feb. 22, 2006
Local Currency
Long Term Issuer
Default Rating BB+ Feb. 22, 2006
* * *
Fitch also rated Guatemala's senior unsecured bonds:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
Aug. 3, 2007 US$150,000,000 8.5% BB+
Nov. 8, 2011 US$325,000,000 10.25% BB+
Aug. 1, 2013 US$300,000,000 9.25% BB+
Oct. 6, 2034 US$330,000,000 8.125% BB+
* * *
Fitch Ratings assigned these ratings on Panama:
Rating Rating Date
------ -----------
Country Ceiling BBB Apr. 8, 2005
Long Term IDR BB+ Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB+ Dec. 14, 2005
* * *
As reported in the Troubled Company Reporter on April 17, 2006,
Standard & Poor's Ratings Services placed an mxBB+ long-term
rating on the state of Mexico. The Outlook is Stable.
===============
H O N D U R A S
===============
* HONDURAS: Telecoms to Benefit from UN's US$75-Mil. Investment
---------------------------------------------------------------
Among priorities set for a US$75 million investment the United
Nations will make in Honduras from 2007-2011 will be telecoms
projects, local daily La Tribuna reports.
The International Telecommunication Union told Business News
Americas, Honduras is the second least developed Central
American nation with regards to fixed and mobile telephony and
Internet.
Jose Fuse Lima, the Honduras coordinator of UN, told BNamericas
that the organization will set up five programs designed to
eradicate poverty. These programs will also focus on five
areas:
-- environment,
-- social activities,
-- food safety,
-- rural development, and
-- democratic govern ability
* * *
Moody's Investor Service assigned these ratings on Honduras:
Rating Rating Date
------ -----------
Senior Unsecured B2 Sept. 29, 1998
Long Term IDR B2 Sept. 29, 1998
=============
J A M A I C A
=============
KAISER ALUMINUM: Asks Court to Okay ACE Insurers Settlement Pact
----------------------------------------------------------------
Kaiser Aluminum & Chemical Corporation asks the U.S. Bankruptcy
Court for the District of Delaware to:
(i) approve the ACE Insurers Settlement Agreement;
(ii) authorize the sale of the Subject Policies to the ACE
Related Companies, free and clear of liens, claims,
interests and other encumbrances; and
(iii) enjoin all Claims against the ACE Parties relating to
or attributable in any way to the Subject Policies,
including, but not limited to, any Claims in the
nature of, or sounding in, tort, contract, warranty,
or any other theory of law, equity or admiralty.
Some of the Kaiser Aluminum Corporation and its debtor-
affiliates' insurance policies are currently the subject of two
coverage actions pending in the Superior Court of California for
the County of San Francisco. These insurance policies were
issued by the ACE Related Companies:
(1) ACE Property & Casualty Company, formerly known as CIGNA
Property & Casualty Company, formerly known as Aetna
Insurance Company, on its own behalf and as transferee
of liabilities under Policy EX 05-1009, originally
issued by St. Paul Mercury Insurance Company;
(2) Central National Insurance Company by and through
Cravens, Dargen and Company, its Managing General Agent;
(3) Century Indemnity Company, successor to CCI Insurance
Company, successor to Insurance Company of North
America; also successor to CIGNA Specialty Insurance
Company, formerly known as California Union Insurance
Company;
(4) Pacific Employers Insurance Company; and
(5) Westchester Group of Insurance Companies, which includes
Industrial Underwriters Insurance Company and Industrial
Indemnity Company.
The ACE Related Companies and related persons and entities - the
ACE Parties -- also issued certain other policies, which are not
involved in the Coverage Actions.
To resolve the dispute regarding the Subject Policies, Kaiser
Aluminum & Chemical Corporation, on behalf of itself and other
KACC Parties, and the ACE Parties entered into a settlement
agreement.
The Settlement Agreement will resolve all:
* claims against the ACE Related Companies with respect to
the Subject Policies, including coverage for Channeled
Personal Injury Claims;
* present and future liabilities; and
* tort claims against the ACE Parties with respect to the
Other Policies.
A full-text copy of the Settlement Agreement is available for
free at http://researcharchives.com/t/s?a68
The principal terms of the Settlement Agreement are:
(a) The ACE Related Companies will pay US$108,750,000 as
settlement amount according to their shares:
Payment Date Payment Amount Payor
------------ -------------- -----
February 15, 2007 US$13,000,000 Century Indemnity
February 15, 2008 13,000,000 Century Indemnity
February 15, 2009 15,000,000 Century Indemnity
February 15, 2010 16,000,000 Century Indemnity
February 15, 2011 360,000 Century Indemnity
February 15, 2011 9,640,000 ACE P&C
February 15, 2012 1,190,000 ACE P&C
February 15, 2012 12,560,000 PEIC
February 15, 2013 12,100,000 Westchester Group
February 15, 2013 1,900,000 PEIC
February 15, 2014 14,000,000 Westchester Group
Payment of the Settlement Amount will be made to U.S.
Bank National Association, as settlement account agent,
unless a Trigger Date has occurred, in which case, to
Wells Fargo Bank, N.A., as insurance escrow agent, for
distribution to the Funding Vehicle Trust. The Trigger
Date is the day that the last of these events has
occurred:
(1) the order approving the settlement agreement becomes
a Final Order;
(2) the Confirmation Order becomes final; and
(3) the occurrence of the Plan Effective Date.
A full-text copy of the Escrow Agreement and the Bank
Trust Agreement is available for free at:
http://researcharchives.com/t/s?a69
(b) The ACE Parties agree to receive all of the benefits of
being designated as Settling Insurance Companies in the
Plan of Reorganization, including, but not limited to,
the Personal Injury Channeling Injunctions;
(c) The KACC Parties will release all of their rights under
the Subject Policies and certain other rights under the
Other ACE Parties Policies, and will dismiss each of the
ACE Related Companies from the Coverage Actions;
(d) KACC will sell the Subject Policies back to the ACE
Related Companies, and the ACE Related Companies will
buy back the Subject Policies free and clear of all
liens on, claims against, or interests in the Subject
Policies, with the ACE Related Companies' payment of the
Settlement Amount constituting the consideration for the
buy-back;
(e) If any claim is brought against any of the ACE Parties
that is subject to a PI Channeling Injunction, the
Funding Vehicle Trust will establish that the claim is
enjoined as to the ACE Parties; and
(f) Except to the extent of a limited right to assert claims
against non-settling insurers that have pursued the ACE
Parties, the ACE Parties will not seek from any entity
other than the ACE Parties' reinsurers or
retrocessionaires:
* reimbursement of any payments that the ACE Related
Companies are obligated to make under the Settlement
Agreement; or
* any other payments the ACE Related Companies have made
to or for the benefit of any KACC part under the
Subject Policies or the Other ACE Parties Policies,
whether by way of contribution, subrogation,
indemnification or otherwise.
In no event will the ACE Parties make any claim for or
relating to insurance, reinsurance or retrocession
against any KACC Party.
Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, notes that through the Settlement
Agreement:
(1) KACC will eliminate its continuing costs of prosecuting
the Coverage Actions against the ACE Related Companies;
(2) uncertainty regarding future payments by the ACE Related
Companies will be eliminated; and
(3) installment payment of a substantial aggregate amount
from the ACE Related Companies is secured without
further delay and cost to KACC.
About Kaiser Aluminum
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 US$1.619 billion in assets and US$3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 97; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
* JAMAICA: Malaysian Prime Minister Clinches Deals with Country
---------------------------------------------------------------
Malaysia's prime minister Datuk Seri Abdullah Ahmad Badawi made
trade agreements with business sectors during his visit in
Jamaica last month.
The Star Online reports that among the potential major deals
clinched by the prime minister are:
-- offshore oil exploration,
-- more supply of liquefied natural gas, and
-- construction works, particularly in low-cost housing.
Jamaica agreed to a petroleum exploration project with
Malaysia's Petroliam Nasional Bhd or Petronas, Star Online says.
"We hope other Malaysian companies will have opportunities to
participate in the development of Jamaica's economy especially
in the tourism industry, road construction, housing and other
infrastructure development," the prime minister said at an
official dinner.
* * *
On May 26, 2006, Moody's Investors Service upgraded Jamaica's
rating under a revised foreign currency ceiling:
-- Long-term foreign currency rating: Ba3 from B1 with
stable outlook.
===========
M E X I C O
===========
AMERICAN TOWER: Facing Class Action Lawsuit in Massachusetts
------------------------------------------------------------
American Tower Corporation disclosed that a lawsuit purporting
to be a securities class action was filed in United States
District Court for the District of Massachusetts against the
Company and certain of its officers. The Company intends to
vigorously defend the lawsuit.
The action alleges violations of the federal securities laws in
connection with public statements by American Tower relating to
its stock option practices and related accounting. The Company
announced on May 19, 2006 that it was conducting an internal
review of its historic stock option granting practices.
American Tower also reported that a shareholder derivative
lawsuit was filed in state court in Massachusetts by an
individual identifying himself as a shareholder of the Company,
purporting to act on behalf of the corporation, against certain
current and former officers and directors for alleged breaches
of fiduciary duties with respect to the Company's historic stock
option granting practices. In response to the derivative
lawsuit, the Company's board of directors plans to establish a
special litigation committee to evaluate this lawsuit.
Headquartered in Boston, Massachusetts, American Tower
Corporation (NYSE: AMT) -- http://www.americantower.com/-- is
the leading independent owner, operator and developer of
broadcast and wireless communications sites in North America.
American Tower owns and operates over 22,000 sites in the United
States, Mexico, and Brazil. Additionally, American Tower
manages approximately 2,000 revenue producing rooftop and tower
sites.
* * *
As reported in the Troubled Company Reporter on May 24, 2006,
Standard & Poor's Rating Services placed its ratings on American
Tower Corp., including its 'BB+' corporate credit rating, on
CreditWatch with negative implications. The action followed the
Company's announcement that its board of directors has created a
special committee to conduct an internal review of the company's
historical stock option practices and related accounting.
BALLY TOTAL: Focuses on Domestic and International Franchising
--------------------------------------------------------------
Bally Total Fitness Holding Corp. launched a new franchising
program at the International Franchise Expo on June 2-4, 2006,
in Washington D.C. In addition to its presence at the expo,
Bally is also advertising in key franchise trade publications to
announce the program and attract franchisees. Meanwhile, plans
for two new U.S. franchises are already underway.
According to Paul Toback, chairman and CEO of Bally Total
Fitness, "Franchising is a key part of our strategic growth
plan. We are excited to renew our focus on franchising here in
the States as well as abroad and intend to build our business
through franchising to enhance revenues."
The plans for franchise expansion were set in motion last fall,
when Robert Moschorak joined the company as managing director of
franchise operations. Mr. Moschorak, who will lead the
initiative, has more than 20 years of experience in domestic and
international franchising and has already laid the groundwork
for success in this area. The new structure will include
individual franchise agreements, area development agreements and
master franchise agreements to be used strategically going
forward.
According to Moschorak, "We have developed a comprehensive
strategy for franchise expansion and have a solid program in
place. We seek to become the strongest and most recognizable
franchise brand in the fitness industry."
The fitness leader currently has 32 franchises, most of which
are overseas. However, the company is eager to increase its
domestic franchise locations and is excited to welcome two new
franchisees in Baton Rouge, Louisiana and Jacksonville, Florida.
The Baton Rouge franchise, which is slated to open later this
year, will be the first Bally Total Fitness in the area and has
already been well received by residents, who have been visiting
a temporary location to get in on pre-opening membership offers
and workout on a sample of the equipment the club will offer.
The temporary location, located at 10101 Park Rowe Avenue, Suite
110, in Baton Rouge, offers personal training and fully equipped
locker rooms for guests.
The full facility is expected to open its doors this December
and will feature top of the line cardiovascular and resistance
training equipment, a full range of group exercise classes such
as Kwando and Reaction Cycling, and a full personal training
staff to assist members. The club will be located in the new
Perkins Rowe development, which is slated to house numerous
retailers, office space and a medical center.
Plans for the Jacksonville location have not yet been finalized.
About Bally Total
Bally Total Fitness -- http://www.ballyfitness.com/-- is the
largest and only U.S. commercial operator of fitness centers,
with approximately four million members and 390 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.
* * *
As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's Ratings Services held its ratings on Bally
Total Fitness Holding Corp., including the 'CCC' corporate
credit rating, on CreditWatch with developing implications,
where they were placed on Dec. 2, 2005. The CreditWatch update
followed Bally's announcement that it will not meet the
March 16, 2006, deadline for filing its annual report on SEC
Form 10-K for the year ending Dec. 31, 2005.
BALLY TOTAL: Grants Stock Options to Two New Employees
------------------------------------------------------
As required by New York Stock Exchange rules, Bally Total
Fitness Holding Corp. reported granting stock options to two new
employees:
* Gayle Franger, Vice President, Brand Development and
* Robert Moschorak, Assistant Vice President, Franchising.
Ms. Franger and Mr. Moschorak each received 6,000 stock options.
These inducement stock options vest in three equal annual
installments on the anniversary of the grant date and are
subject to forfeiture in the event of resignation or termination
for cause prior to vesting.
In accordance with NYSE Rule 303A.08, these inducement stock
option grants require a public announcement of the awards and
written notice to the NYSE.
About Bally Total
Bally Total Fitness -- http://www.ballyfitness.com/-- is the
largest and only U.S. commercial operator of fitness centers,
with approximately four million members and 390 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.
* * *
As reported in the Troubled Company Reporter on March 17, 2006,
Standard & Poor's Ratings Services held its ratings on Bally
Total Fitness Holding Corp., including the 'CCC' corporate
credit rating, on CreditWatch with developing implications,
where they were placed on Dec. 2, 2005. The CreditWatch update
followed Bally's announcement that it will not meet the
March 16, 2006, deadline for filing its annual report on SEC
Form 10-K for the year ending Dec. 31, 2005.
DELTA MILLS: Posts US$2.1-Mil Net Loss for Quarter Ended April 1
----------------------------------------------------------------
Delta Mills, Inc., filed its third quarter financial statements
for the three months ended April 1, 2006, with the Securities
and Exchange Commission on May 16, 2006.
The Company reported a US$2,120,000 net loss on US$32,659,000 of
revenues for the three months ended April 1, 2006.
At April 1, 2006, the Company's balance sheet showed
US$89,179,000 in total assets, US$80,346,000 in total
liabilities, and US$8,833,000 in stockholders' equity.
The Company's April 1 balance sheet also showed strained
liquidity with US$27,093,000 in total current assets available
to pay US$48,857,000 in total current liabilities coming due
within the next 12 months.
Full-text copies of the Company's financial statements for the
three months ended April 1, 2006, are available for free at
http://ResearchArchives.com/t/s?a84
Going Concern Doubt
KPMG LLP in Greenville, South Carolina, raised substantial doubt
about Delta Mills, Inc.'s ability to continue as a going concern
after auditing the Company's consolidated financial statements
for the year ended July 2, 2005. The auditor pointed to the
Company's recurring losses from operations and uncertainties
with regard to its ability to operate within the covenants and
availability established by its revolving credit facility with
GMAC Commercial Finance LLC.
Delta Mills, Inc., a wholly owned subsidiary of Delta Woodside
Industries, Inc. (OTCBB:DLWI) -- http://www.deltawoodside.com/
-- produces a broad range of finished apparel fabrics in four
manufacturing plants in South Carolina. Delta Mills sells and
distributes its fabrics through a marketing office in New York
City, with sales agents also operating from Atlanta, Chicago,
Dallas, Los Angeles, San Francisco and Mexico.
* * *
As reported in the Troubled Company Reporter on April 26, 2002,
Standard & Poor's lowered on April 24, 2002, its corporate
credit rating on Delta Mills Inc. (a wholly owned subsidiary of
Delta Woodside Inc.) to 'CCC'.
GRUPO IUSACELL: Closes Exchange Offer & Consent Solicitation
------------------------------------------------------------
Grupo Iusacell, S.A. de C.V. disclosed the expiration on
June 1, 2006, of the exchange offer and consent solicitation
relating to the restructuring of its US$350 million 14.25% notes
due 2006 on the terms previously reported and as described in
greater detail in its Information Memorandum dated
April 18, 2006, as supplemented on May 18, 2006.
The Restructuring contemplates that new notes will be issued in
the principal amount of US$175 million and will bear interest at
an annual rate of 10% with semi-annual interest payments, with
Iusacell having the option to capitalize up to 40% of each
interest payment. The New Notes will have a maturity date of
December 31, 2013 and its terms and conditions are expected to
be as described in the Information Memorandum.
As of the expiration of the exchange offer and consent
solicitation, approximately 89% of the holders of the Existing
Notes tendered their Existing Notes. The participation of the
holders of the Existing Notes demonstrated their support of the
agreements reached with a majority of Iusacell's creditors.
"The results of the exchange offer and consent solicitation
represent the achievement of another milestone in the
restructuring of Iusacell's debt and a step towards the
continued strengthening of our operations," commented Gustavo
Guzman, Chief Executive Officer of Iusacell.
Iusacell also disclosed its decision to implement the
Restructuring by the filing of a plan of reorganization or
convenio concursal, pursuant to the Mexican Business
Reorganization Act or Ley de Concursos Mercantiles. To
implement its decision, and as part of the restructuring
process, Iusacell filed for concurso mercantile on June 1, 2006,
and will in due course provide further information to its
creditors relating to the Plan of Reorganization and the
concurso mercantil proceedings in accordance with the Mexican
Business Reorganization Act. Once the Plan of Reorganization is
presented to, and approved by the Mexican court and the terms
and conditions of the Restructuring are met, all Existing Notes
will be exchanged for New Notes.
During the pendency of the concurso mercantil proceedings,
Iusacell expects that it and its subsidiaries will continue to
operate normally.
Headquartered in Mexico City, Mexico, Grupo Iusacell, S.A. de
C.V. (Iusacell, BMV: CEL) is a wireless cellular and PCS service
provider in Mexico with a national footprint. Independent of
the negotiations towards the restructuring of its debt, Iusacell
reinforces its commitment with customers, employees and
suppliers and guarantees the highest quality standards in its
daily operations offering more and better voice communication
and data services through state-of-the-art technology, including
its new 3G network, throughout all of the regions in which it
operate.
As of Dec. 31, 2005, Grupo Iusacell's stockholders' deficit
widened to MXN2,076,000,000 from a deficit of MXN1,187,000,000
at Dec. 31, 2004.
INTELSAT LTD: Justice Dept. Closes Antitrust Investigation
----------------------------------------------------------
The U.S. Department of Justice has informed Intelsat, Ltd., that
it is closing its antitrust investigation of the Company's
proposed merger with PanAmSat Holding Corporation. The Justice
Department is not seeking any conditions on the proposed merger
and is not otherwise commenting on it. The transaction remains
under review by the U.S. Federal Communications Commission.
"We are gratified that the Justice Department's Antitrust
Division, after a comprehensive review, agreed with us that the
Intelsat-PanAmSat merger does not pose any threat to
competition," said Phillip Spector, Executive Vice President &
General Counsel of Intelsat. "We demonstrated that the
combination of Intelsat and PanAmSat will create powerful
efficiencies, with complementary fleets assuring enhanced
protection and flexibility for our diverse sets of customers."
The Chief Executive Officer of Intelsat, David McGlade, said:
"With the Justice Department's decision not to challenge our
transaction, we are moving full speed ahead with our integration
planning and preparations. We will be finalizing our financing
over the next few weeks, and should be in a position to close
soon after receiving FCC approval. The new Intelsat post-merger
will be one, fully-integrated, world-class provider of advanced
communications solutions, with an employee team focused on
customer service and technical excellence."
Intelsat and PanAmSat announced their merger agreement on
Aug. 29, 2005. Under the agreement, Intelsat will acquire
PanAmSat for US$25 per share in cash, or US$3.2 billion. In
addition, approximately US$3.2 billion in debt of PanAmSat and
its subsidiaries will remain outstanding or be refinanced.
Closing of the transaction is subject, among other things, to
the receipt of financing by Intelsat and to obtaining regulatory
approval from the FCC. All other regulatory approvals required
prior to closing have been obtained.
Intelsat, Ltd. - http://www.intelsat.com/-- offers telephony,
corporate network, video and Internet solutions around the globe
via capacity on 25 geosynchronous satellites in prime orbital
locations. Customers in approximately 200 countries rely on
Intelsat's global satellite, teleport and fiber network for
high-quality connections, global reach and reliability.
* * *
As reported in the Troubled Company Reporter on April 11, 2006,
Standard & Poor's Ratings Services held all ratings on fixed
satellite services provider Intelsat Ltd. (BB-/Watch Neg/--) on
CreditWatch with negative implications.
* MEXICO: Wants to Include Dominican Republic in Energy Project
---------------------------------------------------------------
Fernando Canales -- the energy minister of Mexico -- expressed
his interest to include the Dominican Republic in a submarine
"electrical net" project now being constructed to link Mexico
with Colombia, Dominican Today reports.
The "electrical net" is part of the global energy-solving plan
that includes construction of a petroleum refinery and a
generation plant to be installed in Guatemala or Panama,
Minister Canales told Dominican Today.
Minister Canales, as quoted by Dominican Today, said, "We hope,
with the help of submarine technology, to soon be able to
connect the Dominican Republic."
Minister Canales' proposition is solves the energy generation
deficit problems of the Dominican Republic, with both Colombia
and Mexico -- which are petroleum-producing nations --
transmitting energy at a lesser cost, Dominican Today reports.
* * *
The Troubled Company Reporter - Latin America reported on
May 9, 2006, that Fitch Ratings upgraded these debt and issuer
Default Ratings of the Dominican Republic:
-- Long-term foreign currency Issuer Default Rating
to B from B-;
-- Country ceiling upgraded to B+ from B-;
-- Foreign currency bonds due 2006 to B-/RR4 from CCC+/RR4;
-- Foreign currency Brady bonds due 2009 to B/RR4
from B-/RR4;
-- Foreign currency bonds due 2011 to B/RR4 from B-/RR4;
-- Foreign currency bonds due 2013 to B-/RR4 from CCC+/RR4;
-- Foreign currency bonds due 2018 to B/RR4 from B-/RR4; and
-- Foreign currency collateralized Brady bonds due 2024
to B+/RR3 from B/RR3.
Fitch also affirmed these ratings:
-- Long-term local currency Issuer Default Rating: B; and
-- Short-term Issuer Default Rating: B.
Additionally, Fitch assigned a debt and Recovery Rating to this
issue:
-- Foreign currency bonds due 2027: B/RR4.
Fitch said the rating outlook for the long-term foreign and
local currency IDRs is Stable.
* * *
As reported in the Troubled Company Reporter on April 17, 2006,
Standard & Poor's Ratings Services placed an mxBB+ long-term
rating on the state of Mexico. The Outlook is Stable.
===========
P A N A M A
===========
GRUPO BANISTMO: Launches Central America Credit Card Unit
---------------------------------------------------------
Grupo Banistmo launched Access, a new electronic payments unit
that would handle Central American credit card operations, Dow
Jones Newswires reports.
According to Dow Jones, Banistmo plans to increase its market
share in the credit card business over the next several years.
Dow Jones recalls that Banistmo said the credit card loans in
Panama increased 20% to US$450 million in 2005.
Ramon Martinez, Access Executive Vice President, said in a
statement that this is an area with a lot of opportunity because
in the region, the use of cards as payment constitutes 5% of
consumer spending.
Dow Jones relates that with Access, Banistmo will be challenging
regional credit card banks including BAC International Bank and
Grupo Financiero Uno and big universal banks like Banco
Agricola.
* * *
As reported on Nov. 9, 2005, Moody's Investors Service
affirmed the D+ financial strength rating and Ba1 foreign
currency deposit rating of Primer Banco del Istmo, S.A. The
affirmation follows the announcement that Banistmo's
shareholder, Grupo Banistmo, S.A., has agreed to purchase
between 51% and 60% of Inversiones Financieras Bancosal S.A.,
the owner of Banco Salvadoreno, El Salvador's third largest
bank.
* PANAMA: In Dispute with Guatemala on Hosting Mexican Refinery
---------------------------------------------------------------
Guatemala and Panama are disputing who will host the
construction for Mexico's petroleum refinery project, Fernando
Canales -- the energy minister of Mexico -- told the Dominican
Today.
As reported in the Troubled Company Reporter on May 29, 2006,
Panama and Guatemala are being considered as the probable
locations for the refinery project of the Mesoamerican Energy
Integration Program aka PIEM, a program of the government of
Mexico. Edgar Rangel, an advisor of Mexico's energy ministry
Sener, said that the refinery would supply the Central America
and Mexico, processing about 230,000-250,000 barrels a day (b/d)
of oil to produce 120,000b/d of gasoline. Salvador Beltran del
Rio, the international affairs director of Sener, had said, "The
two locations will be submitted to the heads of state and it
will be investors who decide on the best option depending on
offers made by Guatemala and Panama." The chosen location will
be announced in a summit of regional heads of state in Santo
Domingo in the Dominican Republic on June 1-3.
According to the Dominican Today, Minister Canales said the
location of the project will be determined by the investor who
is going to construct the it.
"Each company can select the country that supports the
construction and costs dictated by the SICA members," Minister
Canales told the Dominican Today.
The minister told the Dominican Today that the decision as to
what firm will do the construction will have to be made by an
accord that integrates the 10 SICA countries to ensure the best
prices.
* * *
Fitch Ratings assigned these ratings on Guatemala:
Rating Rating Date
------ -----------
Country Ceiling BB+ Feb. 22, 2006
Long Term IDR BB+ Feb. 22, 2006
Short Term IDR B Feb. 22, 2006
Local Currency
Long Term Issuer
Default Rating BB+ Feb. 22, 2006
* * *
Fitch also rated Guatemala's senior unsecured bonds:
Maturity Date Amount Rate Ratings
------------- ------ ---- -------
Aug. 3, 2007 US$150,000,000 8.5% BB+
Nov. 8, 2011 US$325,000,000 10.25% BB+
Aug. 1, 2013 US$300,000,000 9.25% BB+
Oct. 6, 2034 US$330,000,000 8.125% BB+
* * *
Fitch Ratings assigned these ratings on Panama:
Rating Rating Date
------ -----------
Country Ceiling BBB Apr. 8, 2005
Long Term IDR BB+ Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
Local Currency
Long Term Issuer
Default Rating BB+ Dec. 14, 2005
* * *
As reported in the Troubled Company Reporter on April 17, 2006,
Standard & Poor's Ratings Services placed an mxBB+ long-term
rating on the state of Mexico. The Outlook is Stable.
=====================
P U E R T O R I C O
=====================
ADELPHIA COMMS: Files Monthly Operating Report for April 2006
-------------------------------------------------------------
Adelphia Communications Corporation, et al.
Unaudited Consolidated Balance Sheet
As of April 30, 2006
(Dollars in thousands)
ASSETS
Cash and cash equivalents US$475,220
Restricted cash 265,122
Accounts receivables - net 112,840
Receivable for securities 10,029
Other current assets 169,114
-----------
Total current assets 1,032,325
Restricted cash 2,735
Investments in equity affiliates 5,984
Property and equipment - net 4,274,534
Intangible assets - net 7,495,998
Other noncurrent assets - net 117,542
-----------
Total Assets US$12,929,118
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable US$71,005
Subscriber advance payments and deposits 35,967
Payable to non-filing entities 1,904
Accrued liabilities 560,094
Deferred income 21,114
Current portion of parent and subsidiary debt 941,239
-----------
Total current liabilities 1,631,323
Other liabilities 32,014
Deferred income 55,645
Deferred income taxes 883,135
-----------
Total noncurrent liabilities 970,794
Liabilities subject to compromise 18,523,049
-----------
Total liabilities 21,125,166
Minority interests in equity of subsidiary 69,805
Stockholders' equity:
Series preferred stock 397
Class A and Class B common stock 2,548
Additional paid-in capital 9,516,510
Accumulated other comprehensive income 94
Accumulated deficit (17,757,465)
Treasury stock, at cost (27,937)
-----------
Total stockholders' equity (8,265,853)
-----------
Total liabilities and stockholders' equity US$12,929,118
Adelphia Communications Corporation, et al.
Unaudited Consolidated Statement of Operations
Month Ended April 30, 2006
(Dollars in thousands)
Revenue US$394,265
Cost and expenses:
Direct operating and programming 223,617
Selling, general and administrative 29,576
Investigation, re-audit and sale transaction co 1,337
Depreciation and amortization 73,200
Impairment of long-lived assets -
Provision for uncollectible amounts from Rigases -
Gains on dispositions of long-lived assets (238)
---------
Operating income (loss) 66,773
Other income (expense):
Interest expense (54,802)
Impairment of cost & available for sale investment -
Other income (expense) - net (2,978)
-----------
Total other expense - net (57,780)
-----------
Loss from continuing operations before reorganization 8,993
Reorganization expenses due to bankruptcy (9,521)
-----------
Loss from continuing operations before income taxe (528)
Income tax benefit -
Share of losses of equity affiliates - net (283)
Minority's interest in subsidiary losses - net 569
-----------
Net loss (242)
Beneficial conversion feature -
-----------
Net loss applicable to common stockholders (US$242)
Adelphia Communications Corporation, et al.
Unaudited Consolidated Statement of Cash Flows
For the Month Ended April 30, 2006
(Dollars in thousands)
Cash flows from operating activities:
Net loss ($242)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 73,200
Impairment of long-lived assets -
Provision for uncollectible amounts from Rig -
Gains on disposition of long-lived assets (238)
Amortization of debt issuance costs 224
Impairment of cost & available for sale investments -
Reorganization expenses due to bankruptcy 9,521
Deferred tax expense (benefit) -
Share in losses of equity affiliates - net 283
Minority interest in losses of subsidiaries (569)
Other noncash gains 2,825
Depreciation, amortization and other non-cash
items from discontinued operations -
Change in operating assets & liabilities (29,636)
-----------
Net cash provided by operating activities before
payment of reorganization expenses 55,368
Reorganization expenses paid during the period (10,935)
-----------
Net cash provided by (used in) operating activities 44,433
Cash flows from investing activities:
Expenditures for property, plant and equipment (44,889)
Changes in restricted cash (591)
Proceeds from sale of investments -
Other (437)
-----------
Net cash used in investing activities (45,917)
Cash flows from financing activities:
Proceeds from debt 16,000
Repayments of debt (968)
Payment of debt issuance costs -
-----------
Net cash provided by financing activities 15,032
Change in cash and cash equivalents cash 13,548
Cash, beginning of period 461,672
-----------
Cash, end of period US$475,220
Based in Coudersport, Pa., Adelphia Communications Corporation
-- http://www.adelphia.com/-- is the fifth-largest cable
television company in the country. Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks. The Company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002. Those cases are jointly
administered under case number 02-41729. Willkie Farr &
Gallagher represents the ACOM Debtors. PricewaterhouseCoopers
serves as the Debtors' financial advisor. Kasowitz, Benson,
Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP
represent the Official Committee of Unsecured Creditors.
(Adelphia Bankruptcy News, Issue No. 134; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
DRESSER INC: Gets Consents to Amend 9-3/8% Sr. Notes Indenture
--------------------------------------------------------------
Dresser, Inc., received the requisite consents to amend the
indenture governing its 9-3/8% Senior Subordinated Notes Due
2011 effective May 31, 2006. Among the provisions to be
amended, the deadlines for reporting the company's 2005 annual
and 2006 quarterly financial statements have been extended to
Dec. 31, 2006, and March 31, 2007, respectively. Various
payments and interest rate increases are associated with these
deadlines and other aspects of the amendment.
Additional details regarding the amendment and waiver are
contained in the company's Consent Solicitation Statement dated
May 9, 2006, as amended on May 26, 2006.
The Supplement seeks an amendment and waiver of certain
reporting requirements related to Dresser's previously announced
delay in issuing its 2005 annual and 2006 quarterly financial
statements.
The Supplement also includes the following additional terms:
-- An increase in the consent payment offered by the
company from US$1.25 to US$2.50 per US$1,000 principal
amount;
-- A 0.50% increase in the interest rate on the notes until
the company files certain periodic reports required
under the indenture's reporting covenant;
-- A one-time payment of 0.50% of the outstanding principal
amount of notes to holders of record on Dec. 31, 2006,
if the company has not filed its financial statements
for the quarters ended March 31, June 30, and Sept. 30,
2006, on or before Dec. 31, 2006, in which case the
company would have until March 31, 2007, to make these
filings;
-- A 0.25 % interest rate increase for any time period
during which the notes are rated CCC+ or lower by
Standard & Poor's; and
-- An additional 0.25 % interest rate increase for any time
period during which the notes are rated Caa1 or lower by
Moody's Investors.
The consent solicitation closed at 5 p. m. New York City time on
May 31, 2006. The supplemental indenture giving effect to the
amendment and waiver has been executed, and consents may no
longer be revoked.
About Dresser, Inc.
Based in Addison, Texas, Dresser, Inc. --
http://www.dresser.com/-- designs, manufactures and markets
equipment and services sold primarily to customers in the flow
control, measurement systems, and compression and power systems
segments of the energy industry. The Company has a
comprehensive global presence, with over 8,500 employees and a
sales presence in over 100 countries worldwide including Mexico
and Puerto Rico.
* * *
As reported in the Troubled Company Reporter on March 30, 2006,
Moody's Investors Service placed the Ba3 Corporate Family
Rating; the Ba3 rated senior secured Tranche C term loan
maturing 2009; the B1 rated senior unsecured term loan maturing
2010; and the B2 rated senior subordinated notes maturing 2011
for Dresser, Inc., under review for possible downgrade as a
result of the company's inability to file its 2005 Annual Report
on Form 10-K by the March 31, 2006, requirement.
G+G RETAIL: Has Until August 22 to File Chapter 11 Plan
-------------------------------------------------------
The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York extended, until Aug. 22, 2006, the
period within which G+G Retail Inc. has the exclusive right to
file a chapter 11 plan of reorganization. Judge Drain also
extended, until Oct. 23, 2006, the Debtor's exclusive period to
solicit acceptances of that plan.
The Debtor reminds the Court that since filing for bankruptcy,
it has devoted its time and effort to complete its transition
from operating as a chapter 11 debtor-in-possession to
completing a sale of substantially all of its assets. The
Debtor further tells the Court that it has paid its debts as
they come due and has acted in good faith throughout the sale
process and maximized the value of its estate for the benefit of
all creditors.
The Debtor says that because of this, it has managed to position
itself for the next phase of its case, which is the negotiation
and confirmation of a liquidating chapter 11 plan that allocates
the proceeds of the sale of its assets.
The Debtor tells the Court that the sale process has been closed
and it is now in the process of completing the formulation of an
appropriate plan of liquidation. The Debtor contends that the
extension would enable it to complete and formulate a consensual
plan.
Headquartered in New York, New York, G+G Retail Inc. retails
ladies wear and operates 566 stores in the United States and
Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor
filed for Chapter 11 protection on Jan. 25, 2006 (Bankr.
S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura
Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A.
Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.
represent the Debtor in its restructuring efforts. Scott L.
Hazan, Esq.. at Otterbourg, Steindler, Houston & Rosen, P.C.,
represents the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it estimated
assets of more than US$100 million and debts between US$10
million to US$50 million.
G+G RETAIL: Selling Remaining Assets to Max Rave for US$300,000
---------------------------------------------------------------
G+G Retail Inc. asks the U.S. Bankruptcy Court for the Southern
District of New York for permission to sell certain personal
property to Max Rave, LLC, for US$300,000.
Early this year, Max Rave, and Guggenheim Corporate Funding LLC,
won the auction of substantially all of the Debtor's assets for
US$35 million. GCF provided equity and loan commitments to Max
Rave to:
* fund the purchase of the company,
* provide fresh inventory for stores, and
* provide operating working capital for operations.
The asset earlierassets sold at the auction did not include the
inventory of network servers and related equipment and certain
computer software and software licenses that Max Rave wants to
own.
Other key terms to the asset purchase agreement on the personal
property also includes:
(a) the release and discharge of the Debtors from any further
obligation to provide computer or information technology
services to Max Rave under that Feb. 17, 2006, Transition
Services Agreement;
(b) reasonable access for the Debtor to records, information
and certain personnel until the closing of the Debtor's
bankruptcy sale; and
(c) the Debtor to have the right to occupy and use certain
areas at Max Rave's facility located at 8501 West Side,
North Bergen, New Jersey.
Headquartered in New York, New York, G+G Retail Inc. retails
ladies wear and operates 566 stores in the United States and
Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor
filed for Chapter 11 protection on Jan. 25, 2006 (Bankr.
S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura
Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A.
Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.
represent the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it estimated
assets of more than US$100 million and debts between US$10
million to US$50 million.
MAXXAM Inc: Buying Back Stock from Scion for US$22.3 Million
------------------------------------------------------------
MAXXAM Inc. entered, on May 25, 2006, into a Stock Purchase
Agreement with Scion Qualified Value Fund and Scion Value Fund
to purchase:
-- the 546,541 shares of MAXXAM Inc. common stock held by
SQVF; and
-- the 157,559 shares of the MAXXAM Common Stock held by
SVF.
The purchase price for the shares is US$31.70 per each share of
MAXXAM Common Stock, for an aggregate purchase price of
US$22,319,970.
A full-text copy of the Stock Purchase Agreement is available
for free at http://researcharchives.com/t/s?a7b
About MAXXAM Inc.
MAXXAM Inc. (AMEX: MXM) is engaged in a wide range of businesses
from aluminum and timber products to real estate and horse
racing. The Company's timber subsidiary, Pacific Lumber, owns
about 205,000 acres of old-growth redwood and Douglas fir
timberlands in Humboldt County, California. MAXXAM's real
estate interests include commercial and residential properties
in Arizona, California, and Texas, and Puerto Rico. The company
also owns the Sam Houston Race Park, a horseracing track near
Houston.
At Dec. 31, 2005, the company's stockholders' deficit widened to
US$661,300,000 from a US$657,100,000 deficit at Dec. 31, 2004.
* * *
As reported in the Troubled Company Reporter on April 5, 2006,
Deloitte & Touche LLP in Houston, Texas, raised substantial
doubt about MAXXAM Inc. and its subsidiaries' ability to
continue as a going concern. Deloitte pointed to the
difficulties of:
-- MAXXAM Inc. and its subsidiaries in realizing their
timber-related assets and discharge their timber-related
liabilities in the normal course of business;
-- The Pacific Lumber Company, an indirect subsidiary, in
meeting its loan agreement covenants; and
-- Scotia Pacific Company LLC, an indirect subsidiary, in
paying the interest on the timber notes.
=================================
T R I N I D A D & T O B A G O
=================================
MIRANT: Battles Ensues Over Wilson's Multi-Mil. Admin. Claim
------------------------------------------------------------
Certain shareholders, on behalf of The Wilson Law Firm, P.C.,
filed two separate applications for payment of US$712,518 in
fees and expenses, and US$6,450,000 in fee enhancement in the
chapter 11 cases of Mirant Corporation and its debtor-
affiliates.
The Shareholders represented by the Wilson Firm are:
(1) Frank Smith,
(2) Kent Koerper,
(3) Peter Depavloff,
(4) Bart Engram,
(5) Mary Leight, and
(6) L. Matt Wilson.
Wilson's US$6,450,000 fee enhancement is based on "1% of the
US$645,000,000 gain realized by existing shareholders".
According to Jason D. Schauer, Esq., at White & Case, LLP, in
Miami, Florida, the US$7,162,518 cannot be recovered under
Section 503(b) of the Bankruptcy Code. Section 503(b) requires
the Shareholders to have actually incurred the amounts for which
reimbursement is sought.
Mr. Schauer noted that under the fee agreements between the
Shareholders and the Firm, the Shareholders are not liable for
any of the fees and costs requested in the Applications.
Consequently, the Applications must be denied as a matter of
law.
Even if the Shareholders have some obligation to compensate the
Firm for its attorney's fees, the Firm represented five
shareholders with less than 0.06% of the old Mirant common
stock. At most, the Shareholders' individual obligations to the
Firm for its attorney's fees would not exceed US$9,567 under the
terms of the Fee Agreements, Mr. Schauer asserted.
Specifically, New Mirant wanted to resolve the issues on
whether:
-- Wilson or the Shareholders should be paid the
US$7,162,518 under Section 503(b) when the Shareholders
are not liable to the firm for the amounts requested; and
-- Wilson should be paid an amount in excess of US$9,567,
which is the maximum amount that Wilson could possibly be
entitled to under any possible theory or interpretation
of the Fee Agreements.
New Mirant, therefore, asked the U.S. Bankruptcy Court for the
Northern District of Texas to:
(i) deny the Applications outright and award nothing to the
Shareholders or the Firm; or
(ii) enter a partial summary adjudication determining that
the maximum possible recovery by Wilson under the
Applications cannot exceed US$9,567.
Wilson Responds
A law firm that represents creditor or equity holders who have
made a "substantial contribution" should be afforded an
administrative claim for its reasonable fees and expenses under
Section 503(b)(4) of the Bankruptcy Code even though the client
might not be obligated to pay and has not paid those fees and
expenses, L. Matt Wilson, Esq., at The Wilson Law Firm, P.C., in
Atlanta, Georgia, asserted.
That "rule" encourages the type of public participation afforded
by The Wilson Law Firm, P.C., on behalf of the Debtors'
shareholders, Mr. Wilson noted.
Mr. Wilson contended that the only way the Court can encourage
sufficient participation by interested parties in a Chapter 11
case is to reward their substantial contribution by permitting
recovery of attorney's fees and expenses. Any other result
effectively closes the door to the courthouse, rendering it
impractical for anyone but the very largest creditors or
shareholders to afford representation, and removes the many
safeguards traditionally provided by public participation.
Mr. Wilson told the Court that, among other authority, In re
Western Asbestos Company, 318 B.R. 527 (Bankr. N.D.Cal. 2004),
remains the only case that is both directly on point and good
authority for the grant of the fee applications. According to
Western Asbestos case, Section 503(b)(4) permits an
administrative claim for fees and expenses of an attorney who
represents a creditor who made a substantial contribution
regardless of whether the fees and expenses were incurred by the
creditor.
Aside from matters that concern him, Mr. Wilson said there is no
dispute of material fact with respect to the relationship
between the Firm and himself and the other client-shareholders
-- Frank Smith, Kent Koerper, Peter Depavloff, Bart Engram and
Mary Leight.
There are no factual disputes or issues raised by the New Mirant
Entities' Motion, other than as to his personal obligation, as
the sole shareholder of the Firm, for any un-reimbursed fees and
expenses, Mr. Wilson says. The Shareholders are not responsible
for hourly fees or expenses, and are only obligated for 1% of
each of their profit as provided in their fee agreements.
In addition, the Shareholders do not dispute the statements
regarding their acquisition of shares, as stated in the third
amended verified statement that the Firm submitted with the
Court pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure.
Mr. Wilson pointed out that it cannot be disputed that the fees
and expenses to be reimbursed are those of the Firm, and not
his. Although he is an attorney of the Firm, who did, in fact,
bill for his time, it is the Firm's fees and expenses that are
to be paid by the Shareholders.
The Shareholders, therefore, asked the Court to deny New
Mirant's request in its entirety.
Mirant Committee Supports New Mirant's Request
The Official Committee of Unsecured Creditors of Mirant
Corporation, et al., agrees with New Mirant that the maximum
award for which the Shareholders may be eligible is US$9,567.
Mirant Committee's attorney, Fredric Sosnick, Esq., at Shearman
& Sterling LLP, in New York, asserted that there is no genuine
dispute that the Shareholders never incurred any obligation to
pay any of the Firm's hourly professional fees or expenses.
Accordingly, the Wilson Shareholders may not seek reimbursement
of the fees under Section 503(b) of the Bankruptcy Code.
Even if the Court were to conclude that the Wilson Shareholders
made a substantial contribution in Mirant's Chapter 11 cases,
Mr. Sosnick argues that there is no factual basis for awarding a
contingency fee under Section 503(b), because no party ever
incurred, or was ever obligated to pay, that fee.
Any payment to the Wilson Shareholders would be measured at best
by the limited share holdings of the Wilson Shareholders, and
the obligations actually incurred by the Wilson Shareholders,
Mr. Sosnick pointed out.
Thus, the Mirant Committee asked the Court to grant New Mirant's
request for summary judgment against the Shareholders.
New Mirant's Reply
Section 503(b) provides for reimbursement of expenses, including
attorney's fees, incurred by an "entity" in providing a
substantial contribution to the bankruptcy case, Jason D.
Schauer, Esq., at White & Case LLP, in Miami, Florida, noted.
As the Shareholders have admitted that they have no obligation
to pay the Firm's fees and expenses, they do not meet the
statutory requirements of Section 503(b)(4), Mr. Schauer said.
Hence, he asserts, the Court must deny the fee requests as a
matter of law.
Mr. Schauer contended that granting the fee applications would
undermine the policy behind Section 503(b). There are two
conflicting policies underlying Section 503(b):
(1) to encourage meaningful creditor participation, and
(2) to keep administrative expenses to a minimum.
To reconcile these two conflicting policies, Mr. Schauer noted
that courts have construed Section 503(b) narrowly and required
strict compliance with the requirements of Sections 503(b)(3)
and (4). Mr. Schauer insists that the Shareholders have failed
to meet those statutory standards and policy objectives.
The Shareholders' reliance on Western Asbestos is misplaced, Mr.
Schauer argued. The case has been heavily criticized by other
courts, and takes a position contrary to the majority of the
case law and learned treatises.
To permit a law firm to be paid its fees and expenses and a
healthy "bonus" under Section 503(b)(4), even though the
"client" was not obligated to pay those fees and expenses is
contrary to the plain language of the statute, established case
law, and the purpose underlying Section 503(b)(4), Mr. Schauer
said.
For these reasons, New Mirant asked the Court to:
(a) overrule the Shareholders' objection; and
(b) approve its summary judgment request.
Court Ruling
Judge Lynn denies New Mirant's request without prejudice,
provided, however, that the Court reserves the right to further
address the legal issues raised when it writes its opinion on
fees.
About Mirant
Headquartered in Atlanta, Georgia, Mirant Corporation
(NYSE: MIR) -- http://www.mirant.com/-- is a competitive energy
company that produces and sells electricity in North America,
the Caribbean, and the Philippines. Mirant's investments in the
Caribbean include three integrated utilities and assets in
Jamaica, Grand Bahama, Trinidad and Tobago and Curacao. Mirant
owns or leases more than 18,000 megawatts of electric generating
capacity globally. Mirant Corporation filed for chapter 11
protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and
emerged under the terms of a confirmed Second Amended Plan on
January 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP,
represented the Debtors in their successful restructuring. When
the Debtors filed for protection from their creditors, they
listed US$20,574,000,000 in assets and US$11,401,000,000 in
debts. (Mirant Bankruptcy News, Issue Nos. 96 & 97; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate
credit rating on Mirant and said the outlook is stable.
MIRANT CORP: Sells Wichita Falls Facility to Signal Hill
--------------------------------------------------------
Mirant Corporation has completed the sale of its Wichita Falls
facility to Signal Hill Power LLC. Wichita Falls is a combined
cycle facility consisting of three gas turbines and a steam
turbine. The facility, which is located near Wichita Falls,
Texas, has a total capacity of 77-megawatts. Financial terms of
the transaction were not disclosed.
The sale of Wichita Falls is consistent with Mirant's U.S.
strategy to focus on core asset operations.
The purchase of Wichita Falls furthers Signal Hill's goal of
owning, operating, managing and developing power generation
assets in North America.
About Signal Hill
Signal Hill Power LLC is a Houston, Texas, company with more
than 30 years of combined experience in the development,
ownership, operations and management of energy infrastructure
projects around the world. R. Clay Spears and Frost W. Cochran
founded Signal Hill Power LLC with the intent of building a
portfolio of North American power generation assets. Signal
Hill will use the Wichita Falls plant to competitively produce
and sell electricity in the ERCOT market.
About Mirant
Headquartered in Atlanta, Georgia, Mirant Corporation
(NYSE: MIR) -- http://www.mirant.com/-- is a competitive energy
company that produces and sells electricity in North America,
the Caribbean, and the Philippines. Mirant owns or leases more
than 18,000 megawatts of electric generating capacity globally.
Mirant Corporation filed for chapter 11 protection on July 14,
2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of
a confirmed Second Amended Plan on January 3, 2006. Thomas E.
Lauria, Esq., at White & Case LLP, represented the Debtors in
their successful restructuring. When the Debtors filed for
protection from their creditors, they listed US$20,574,000,000
in assets and US$11,401,000,000 in debts. (Mirant Bankruptcy
News, Issue No. 97; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
* * *
As reported in the Troubled Company Reporter on Dec. 8, 2005,
Standard & Poor's Ratings Services placed a 'B+' corporate
credit rating on Mirant and said the outlook is stable.
ROYAL CARIBBEAN: Announces Buy-Back Program for 4 Million Shares
----------------------------------------------------------------
Royal Caribbean Cruises Ltd. intends to buy back 4.1 million
shares to redeem debt, Bloomberg News reports.
The amount of shares comprise the amount of stock the company
needs to fill requests to redeem all of the company's
outstanding:
-- Liquid Yield Option notes due 2021, valued at about US%543
million, and
-- zero coupon convertible notes due 2021.
Chief financial officer Luis Leon said in a statement that the
repurchases will help the company simplify its balance sheet.
Moody's Investor Service assigned these ratings to Royal
Caribbean Cruises Ltd.:
-- LT Corp Family Rating Ba1
-- Senior Unsecured Debt Ba1
-- Preferred Stock Ba3
=================
V E N E Z U E L A
=================
CITGO PETROLEUM: Says Oil Spill Is Only 5.5 Barrels
---------------------------------------------------
Citgo Petroleum Corp. estimated that it lost 5.5 barrels of
crude from a holding tank during an oil spill at its Corpus
Christi Refinery East Plant.
As reported in the Troubled Company Reporter on June 5, 2006,
very heavy storms resulted to an oil spill at Citgo Petroleum's
Corpus Christi refinery last week while the company was
restarting a gasoline-producing fluidic catalytic cracking unit
at the refinery. According to the company, a release of oily
water -- 50 gallons, as reported by Reuters -- into the ship
channel from its 156,000-barrel per day Corpus Christi refinery
occurred.
Reuters relates that the refinery was restoring production. The
refinery's FCC No. 1 -- which stopped operating due to steam
loss -- and the FCC No. 2, which was shut because of mechanical
problem, have started operating again.
On June 2, the Coast Guard and Texas General Land Office
released CITGO Refining and Chemicals Company L.P. from the
unified response effort to the washout of oily water from the
Corpus Christi refinery.
Citgo has continued to conduct some clean-up efforts and has
responded to reports of oil pockets and oily sheens near the
Harbor Bridge and the Texas State Aquarium, even though
officials could not attribute these materials to Citgo.
The Corpus Christi Ship Channel was opened this afternoon on a
restricted basis on the east side of Tule Bridge.
The quick resolution of the oil spill is due to the cooperative
efforts among the Coast Guard, Texas General Land Office, Texas
State Aquarium, Citgo and all others who provided assistance.
Headquartered in Houston, Texas, CITGO Petroleum Corporation
-- http://www.citgo.com/-- is owned by PDV America, an
indirect, wholly owned subsidiary of Petroleos de Venezuela
S.A., the state-owned oil company of Venezuela.
PDVSA is Venezuela's state oil company in charge of the
development of the petroleum, petrochemical and coal industry,
as well as planning, coordinating, supervising and controlling
the operational activities of its divisions, both in Venezuela
and abroad.
* * *
As reported at the Troubled Company Reporter on Feb. 16, 2006,
Standard and Poor's Ratings Services assigned a 'BB' rating on
CITGO Petroleum Corp.
CITGO PETROLEUM: Parent Firm Receives Offers for Houston Plant
--------------------------------------------------------------
Citgo Petroleum Corp.'s parent firm -- Petroleos de Venezuela SA
aka PDVSA -- told Dow Jones Newswires that it received
preliminary offers for the acquisition of the Houston-based
Lyondell-Citgo Refining L.P., which is jointly owned by Citgo
and Lyondell Chemical Co.
Alejandro Granado, PDVSA's head of refining, told Dow Jones that
a decision regarding the sale will be made by the end of the
year.
Mr. Granado had refused to tell Dow Jones how many offers were
received.
Dow Jones relates that several firms have shown interest in the
refinery since Citgo and Lyondell had disclosed plans to put the
plant up for sale.
As reported in the Troubled Company Reporter on April 10, 2006,
Citgo had signed a letter of intent with Lyondell to jointly
explore the sale of their Lyondell-Citgo Refining L.P. PDVSA
had said last September that it wanted to sell its stake in the
refinery to recover its US$5 billion investment. Venezuela's
President Hugo Chavez had said the Citgo refineries have been a
bad deal for his country because they buy Venezuelan oil at a
discount while paying taxes in the US, the largest buyer of
Venezuelan crude.
As reported in the Troubled Company Reporter on April 26, 2006,
Citgo and Lyondell appointed Morgan Stanley as financial adviser
for the proposed sale of the refinery, saying that they would
work with Morgan Stanley to prepare an offering memorandum and
establish a data room for interested bidders.
The new owner must maintain the refinery's commitment to
purchase Venezuelan crude, Venezuela officials told Dow Jones.
The refinery was created in 1993, with Lyondell having a 58.75%
stake and Citgo owning about 41.25%, according to Dow Jones.
The plant has a crude oil processing capacity of 268,000 barrels
a day.
Headquartered in Houston, Texas, CITGO is owned by PDV America,
an indirect, wholly owned subsidiary of Petroleos de Venezuela
S.A., the state-owned oil company of Venezuela.
PDVSA is Venezuela's state oil company in charge of the
development of the petroleum, petrochemical and coal industry,
as well as planning, coordinating, supervising and controlling
the operational activities of its divisions, both in Venezuela
and abroad.
* * *
On Jan. 23, 2005, Fitch Ratings upgraded the local and foreign
currency ratings of Petroleos de Venezuela S.A. aka PDVSA to
'BB-' from 'B+'. The rating of PDVSA's exports receivable
future
flow securitization, PDVSA Finance Ltd, was also upgraded to
'BB+' from 'BB'. In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating. The Rating Outlook is Stable.
Both rating actions follow Fitch's November 2005 upgrade of
Venezuela's sovereign rating.
As reported on Feb. 16, 2006, Standard and Poor's Ratings
Services assigned a 'BB' rating on CITGO Petroleum Corp.
Standard & Poor's 'BB' rating on CITGO is higher than the 'B+'
corporate credit rating on PDVSA, because of the relative
strength of the refiner's financial profile and the asset
protection afforded to CITGO creditors, if CITGO defaults for
PDVSA-specific reasons, for example, a Venezuela sovereign
default. Nevertheless, CITGO could be challenged by events
surrounding PDVSA.
PETROLEOS DE VENEZUELA: Holds 500,000+ Barrels of La Ceiba Oil
--------------------------------------------------------------
The Wall Street Journal reports that more than half a million
barrels of crude from the La Ceiba oil field that's bound for
the United States is stuck in Venezuela as a result of a
contract dispute between Petroleos de Venezuela SA and
ExxonMobil Corp.
An ExxonMobil official told the Journal that the company is
upset because it intends to ship the medium-grade crude to one
of its U.S. refineries before the peak gasoline-demand period.
The undelivered oil is currently valued at US$39 million.
"They say we're holding the oil hostage, but it's not theirs," a
PVDSA official told the Journal.
PDVSA holds a 35% stake of the oil in storage. The crude can't
be sold until after a business plan for La Ceiba is approved.
ExxonMobil's troubles in Venezuela came as a result of its
resistance to tax increases and contract changes that are part
of a policy by President Hugo Chavez's government to re-
nationalize" the oil industry. It also was the only company to
publicly criticize a royalty increase on extra-heavy oil
production in the Orinoco river basin in 2004. Exxon even
threatened international arbitration against Venezuela.
In 2005, Exxon sold its stake to its partner Repsol YPF to avoid
signing new joint ventures with Venezuela's state-owned company
PDVSA.
In April, energy minister Rafael Ramirez said that the country
doesn't want ExxonMobil. "We said we don't want them to be here
then. We have many partners, many capabilities and many
countries that are willing to manager our resources with us."
About ExxonMobil
ExxonMobil Corporation operates as a petroleum and
petrochemicals company. It primarily engages in the
exploration, production, and sale of crude oil and natural gas;
and manufacture, transportation, and sale of petroleum products.
About PDVSA
Petroleos de Venezuela SA aka PDVSA is Venezuela's state oil
company in charge of the development of the petroleum,
petrochemical and coal industry, as well as planning,
coordinating, supervising and controlling the operational
activities of its divisions, both in Venezuela and abroad.
* * *
On Jan. 23, 2005, Fitch Ratings upgraded the local and foreign
currency ratings of Petroleos de Venezuela S.A. aka PDVSA to
'BB-' from 'B+'. The rating of PDVSA's export receivable
future flow securitization, PDVSA Finance Ltd, was also upgraded
to 'BB+' from 'BB'. In addition, Fitch has assigned PDVSA a
'AAA(ven)' national scale rating. The Rating Outlook is
Stable. Both rating actions follow Fitch's November 2005
upgrade of Venezuela's sovereign rating.
* VENEZUELA: Party Wants Probe on Chavez's Gifts to Bolivia
-----------------------------------------------------------
Comando Nacional de la Resistencia, Venezuela's opposition
group, asked for an administrative investigation into President
Hugo Chavez's million-dollar donation to the Bolivian
government, El Universal reports.
According to Oscar Perez, Comando Nacional's leader, President
Chavez appears to be mismanaging state funds.
"We are deeply concerned and astonished at the fact that during
his latest trip to Bolivia, President Chavez donated USD 100
million to Evo Morales' Government -by opening a special fund
for economic aid. This money could be used instead for solving
our domestic problems," Mr. Perez told El Universal.
* * *
Venezuela's foreign currency long-term debt is rated B1 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* VENEZUELA: Suggests Binational Oil Refinery with Ecuador
----------------------------------------------------------
Following the signing of a bilateral agreement last week,
Venezuela suggested a binational oil refinery with Ecuador, El
Universal reports.
Local media in Ecuador reported that the proposal is cautiously
considering the proposal.
Ecuador energy minister Ivan Rodriguez told TV network Ecuavisa
that the project would take three years to construct and would
require US$400 million. The minister added that the bilateral
cooperation plans comprise installation of an inland gas storage
facility, El Universal relates.
Mr. Rodriguez, El Universal says, denied reports saying that the
bilateral pact is Venezuelan President Hugo Chavez's attempt in
consolidating in Ecuador a regional left-wing axis.
* * *
Fitch Ratings assigned these ratings on Ecuador:
Rating Rating Date
------ -----------
Country Ceiling B- Aug. 29, 2005
Long Term IDR B- Dec. 14, 2005
Short Term IDR B Dec. 14, 2005
* * *
Venezuela's foreign currency long-term debt is rated B1 by
Moody's, B+ by Standard & Poor's, and BB- by Fitch.
* Ten Latin American Nations Agree on Energy Plan
-------------------------------------------------
The Associated Press reports that leaders of 10 Latin American
countries agreed Saturday on an energy plan that includes the
construction of a:
-- liquefied natural gas plant;
-- hydroelectric dam; and
-- pipeline stretching from Mexico to Panama.
Guatemala and Panama are the leading contenders for
US$6.5-billion refinery. Details of the project are yet to be
disclosed, the AP relates.
"At this meeting there is not going to be a decision on choosing
a location. That is a decision that will go after the
investments are made," Mexican President Vicente Fox told
reporters.
President Fox was quoted by the AP that Mexico will provide two-
thirds of the refinery's supply. This project, AP says, will
help Central American countries struggling under the soaring
cost of oil.
"For the first time, they will have competitive energy prices
like we have in Mexico," President Fox told reporters.
Once completed, the refinery is expected to sell oil at about
US$8 less than open-market prices, AP says.
The countries which gave their consents on the energy plan are:
-- Mexico,
-- Colombia,
-- Belize,
-- Costa Rica,
-- El Salvador,
-- Guatemala,
-- Honduras,
-- Nicaragua,
-- Panama, and
-- the Dominican Republic.
***********
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
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Copyright 2006. All rights reserved. ISSN 1529-2746.
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