/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/060616.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 Friday, June 16, 2006, Vol. 7, Issue 119 Headlines A R G E N T I N A ACAPEA SRL: Trustee Verifies Proofs of Claim Until July 18 ARLENA SA: Sets June 23 Deadline for Verification of Claims CENTRO CONDECORADO: Claims Verification Deadline Is on July 19 FAVUZZI CONSTRUCCIONES: Claims Verification Ends on June 29 FLAMARION SA: Verification of Proofs of Claim Ends on Aug. 10 INDUSTRIAS METALURGICAS: Fitch Arg Puts BB- Ratings on 5 Debts INDUSTRIAS PIP: Trustee Verifies Proofs of Claim Until June 28 LIBERIAN SRL: Asks Court Approval to Restructure Debts POL SUDAMERICANA: Concludes Reorganization Proceeding REALLY SA: Seeks Court Approval to Reorganize Business TELEFONICA DE ARGENTINA: Launches CAM24 Surveillance Camera ZEOX SA: Last Day for Verification of Claims Is on July 19 B A H A M A S TEEKAY SHIPPING: Moody's Holds Corporate Family Rating at Ba1 B E R M U D A FOSTER WHEELER: Unit Secures US$65MM PC Boiler Contract from SRP GLOBAL CROSSING: Provides New Communication Network to DE-STA-CO INTELSAT LTD: PanAmsat Receives Requisite Consents for Sr. Notes SEA CONTAINERS: Further Delays 10-K Filing & Remains on Default B O L I V I A * BOLIVIA: Government Eyes Reforms on Pension System B R A Z I L BANCO NACIONAL: Grants BRL66MM Loan to Rehabilitate Para's Road BANCO NACIONAL: Mulls Sale of 25% Stake in Tele Norte Leste COMPANHIA VALE: Settles Pellet Price with Three Foreign Firms VARIG SA: Judge Ayoub to Consider Other Bids for Company Assets * BRAZIL: IDB Grants US$118 Mil. for Power Transmission Project C A Y M A N I S L A N D S ATACAMA FUND: Last Day to File Proofs of Claim Is on July 14 ATACAMA MASTER: Creditors Must File Proofs of Claim by July 14 BANCREDIT CAYMAN: GFN Corp. Opposes Discovery Authority Request BROWNIE FUNDING: Filing of Proofs of Claim Ends on July 14 CLASSY CAYMAN: Creditors Have Until July 14 to Present Claims CT BONDS: Last Day to File Proofs of Claim Is on July 14 GANNET ONE: Liquidator Won't Accept Claims Filed After July 14 KFC LIMITED: Sets July 14 Deadline for Proofs of Claim Filing LAPUTA V: Schedules July 14 Deadline for Filing of Claims ML/ZWEIG DIMENNA: Proofs of Claim Filing Deadline Is on July 14 POETIC CAYMAN: Deadline to File Proofs of Claim Is on July 14 RIMINI LTD: Creditors Have Until July 3 to File Proofs of Claim C H I L E AES GENER: Plans Maipo Hydro Project with Aguas Andinas C O L O M B I A * COLOMBIA: IMF Completes Second Review of Stand-by Agreement * COLOMBIA: Ministry to Propose Personal Computers Tax Reduction D O M I N I C A N R E P U B L I C FALCONBRIDGE LTD: US DOJ Completes Review of Xstrata's Offer * DOMINICAN REPUBLIC: Aims to Eliminate Energy Subsidy by 2007 * DOMINICAN REPUBLIC: Bank Auctions DOP200-Mil. Certificates * DOMINICAN REPUBLIC: Cement Industry Loses Over DOP100 Mil. E C U A D O R * ECUADOR: Puts Block 15 Oil Field Under State of Emergency E L S A L V A D O R * EL SALVADOR: Draft Bill on Ethanol Use Expected in July * EL SALVADOR: Regulator Campaigns for Reduction of Power Use H A I T I * HAITI: Caribbean Group Urges Global Community's Aid to Nation J A M A I C A DIGICEL LTD: Has 2,000+ Employees in 20 Markets KAISER ALUMINUM: Wants Zurich Insurance Settlement Pact Approved SUGAR COMPANY: Hoping to Pay Debts with Ministry & Creditor Aid M E X I C O DANA CORPORATION: Wants to Enter Into Spicer Share Purchase Pact DIRECTV INC: Adds Azteca America's KODF-26 in Dallas Lineup FORD MOTOR: Report Says Co. Will Invest US$9.2 Billion in Mexico J.L. FRENCH: Creditors Unanimously Approve Chapter 11 Plan KRISPY KREME: Sees Revenue Decline in Fiscal 2006 First Quarter MERIDIAN AUTO: Likely Lenders & Debtors Tap Hilco Appraisal MUNICIPALITY OF TEPATITLAN DE MORELOS: Moody's Withdraws Ratings TELE NORTE: Banco Nacional Mulls Sale of 25% Stake in Company TELE NORTE: Brandes Investment Slams Share Conversion Proposal TV AZTECA: DirecTV Adds Subsidiary's KODF-26 in Dallas Lineup N I C A R A G U A * NICARAGUA: Inks Free Trade Pact With Taiwan P A N A M A GRUPO BANISTMO: Begins Trading on Latibex Under XBAN Symbol P U E R T O R I C O ADELPHIA: America Channel Fights Injunction v. Timer Warner Suit ADELPHIA: Continental Casualty Says Plan Violates Section 1129 KOOSHAREM CORP: Moody's Rates Proposed US$300-Mil. Debt at B2 SAFETY KLEEN: Moody's Rates Proposed Credit Facilities at B1 T R I N I D A D & T O B A G O BWIA WEST: Workers Halt Strike to Meet with Firm Executives V E N E Z U E L A BANCO MERCANTIL: Inquiries on NY Agency Liquidation Due June 29 PETROLEOS DE VENEZUELA: Plans to Issue US$3.5 Billion in Bonds * VENEZUELA: May Oil Output Down 30,000 Barrels Per Day * Mauricio Pons Joins Alvarez & Marsal as Director - - - - - ================= A R G E N T I N A ================= ACAPEA SRL: Trustee Verifies Proofs of Claim Until July 18 ---------------------------------------------------------- Silvia Muavero, the court-appointed trustee for the bankruptcy proceeding of Acapea S.R.L. will verify creditors' proofs of claim until July 17, 2006. Ms. Muavero will present the validated claims in court as individual reports on Sept. 13, 2006. She will also submit a general report containing an audit of the company's accounting and banking records on Oct. 26, 2006. A Buenos Aires court handles the company's bankruptcy case. The trustee can be reached at: Silvia Muavero Avenida Rivadavia 1615 Buenos Aires, Argentina ARLENA SA: Sets June 23 Deadline for Verification of Claims ----------------------------------------------------------- The verification of creditors' proofs of claim for the Arlena S.A. insolvency case will end on June 23, 2006, Infobae reports. Marta Elena Pereyra, the court-appointed trustee who will examine the claims, will submit the validation results as individual reports on Aug. 17, 2006. She will also present a general report in court on Oct. 3, 2006. On April 17, 2007, the company's creditors will vote on a settlement proposal prepared by the company. Infobae says that a court in Resistencia, Chaco, handles the company's reorganization case. The debtor can be reached at: Arlena S.A. Vedia 135/145, Resistencia Chaco, Argentina The trustee can be reached at: Marta Elena Pereyra Cervantes 531, Resistencia Chaco, Argentina CENTRO CONDECORADO: Claims Verification Deadline Is on July 19 -------------------------------------------------------------- Liliana Edith Rey, the court-appointed trustee for the bankruptcy case of Centro Condecorado S.A., will verify creditors' proofs of claim until July 19, 2006. La Nacion relates that Buenos Aires' Court No. 6 declared Centro Condecorado bankrupt at the request of Olga Elena Chiana, whom the company owes US$22,499.95. Clerk No. 12 assists the court in this case. The debtor can be reached at: Centro Condecorado S.A. Santiago del Estero 657/663 Buenos Aires, Argentina The trustee can be reached at: Liliana Edith Rey Avenida Presidente Roque Saenz Pena 651 Buenos Aires, Argentina FAVUZZI CONSTRUCCIONES: Claims Verification Ends on June 29 ----------------------------------------------------------- The verification of creditors' proofs of claim against bankrupt company Favuzzi Construcciones Civiles S.R.L. will end on June 29, 2006. The court is yet to disclose the name of the trustee who will verify the claims. Argentine bankruptcy law requires the trustee to provide the court with individual reports on the forwarded claims and a general report containing an audit of the Company's accounting and business records. The individual reports will be submitted on Aug. 29, 2006, followed by the general report on Oct. 11, 2006. A court in Rosario, Santa Fe, handles Favuzzi Construcciones' bankruptcy case. The debtor can be reached at: Favuzzi Construcciones Civiles S.R.L. Dean Funes 1247, Rosario Santa Fe, Argentina FLAMARION SA: Verification of Proofs of Claim Ends on Aug. 10 ------------------------------------------------------------- Andrea Isabel Sita, the court-appointed trustee for the bankruptcy case of Flamarion S.A., will verify creditors' proofs of claim until Aug. 10, 2006. Buenos Aires' Court No. 1 declared Flamarion bankrupt at the behest of Andrea Gomez, whom the company owes US$148,833.69. Clerk No. 2 assists the court on the case. The debtor can be reached at: Flamarion S.A. Zabala 2488 Buenos Aires, Argentina The trustee can be reached at: Andrea Isabel Sita Cramer 2175 Buenos Aires, Argentina INDUSTRIAS METALURGICAS: Fitch Arg Puts BB- Ratings on 5 Debts -------------------------------------------------------------- The Argentine arm of Fitch assigned these ratings to Industrias Metalurgicas Pescarmona's debts: -- ON Serie 8 for US$122,100,000 * Rated date: June 9, 2006 * Rate: BB- (arg) -- ON serie 2 for US$150 million, emitted under the global program for * Last due: May 30, 2002 * Rated date: June 9, 2006 * Rate: D (arg) -- ON Serie 9 for US$ 4.200.000 * Rated date: June 9, 2006 * Rate: BB- -- ON Serie 10 for US$9,600,000 * Rated date: Jan. 9, 2006 * Rate: BB- (arg) -- ON Serie 11 for US$11,400,000 * Rated date: June 9, 2006 * Rate: BB- (arg) -- ON Serie 12 for US$700,000 * Rated date: June 9, 2006 * Rate: BB- (arg) INDUSTRIAS PIP: Trustee Verifies Proofs of Claim Until June 28 -------------------------------------------------------------- The reorganization of Industrias Pip S.R.L. has turned into bankruptcy -- which means the company's assets will be liquidated and proceeds distributed to creditors. Argentine news source Infobae relates that Court No. 5 of the Civil and Commercial Tribunal of Rosario in Santa Fe, Argentina, ruled that the Company is "Quiebra Decretada." The court-appointed trustee, Osvaldo Luis Depiante, will verify creditors' proofs of claim until June 28, 2006. The trustee will: -- prepare and present in court on Aug. 25 individual reports after the verification process is completed, and -- present in court on Oct. 6, 2006, a general report detailing the bankruptcy process. The debtor can be reached at: Industrias Pip S.R.L. Ruta Nacional Niro 7km 661, Justo Daract San Luis, Argentina The trustee can be reached at: Osvaldo Luis Depiante Corrientes 751, Rosario Santa Fe, Argentina LIBERIAN SRL: Asks Court Approval to Restructure Debts ------------------------------------------------------ Liberian S.R.L., a company operating in Buenos Aires, has requested Buenos Aires' Court No. 17 permission to reorganize its business after failing to pay its liabilities. The reorganization petition, once approved by the court, will allow the company to negotiate a settlement with its creditors in order to avoid a straight liquidation. The debtor can be reached at: Liberian S.R.L. Jeronimo Salguero 3172 Tercer Nivel Local 3340 Buenos Aires, Argentina POL SUDAMERICANA: Concludes Reorganization Proceeding ----------------------------------------------------- The reorganization of Pol Sudamericana S.A. has ended. Data revealed by Infobae on its Web site indicated that the process was concluded after a Buenos Aires court approved the debt agreement signed between the company and its creditors. REALLY SA: Seeks Court Approval to Reorganize Business ------------------------------------------------------ Court No. 21 of Buenos Aires' civil and commercial tribunal is studying the request for reorganization submitted by local company Rally S.A., La Nacion says. The report adds that that the company filed a "Concurso Preventivo" petition following cessation of debt payments on March 13, 2006. If the court approves the petition, the reorganization will allow the company to negotiate a settlement with its creditors in order to avoid a straight liquidation Buenos Aires' Clerk No. 42 assists the court on this case. The debtor can be reached at: Really S.A. Alicia Moreau de Justo 1050 Buenos Aires, Argentina TELEFONICA DE ARGENTINA: Launches CAM24 Surveillance Camera ----------------------------------------------------------- Telefonica de Argentina, in a drive to increase the use of its Asymmetric Digital Subscriber Line or ADSL broadband service, launched CAM24, a surveillance camera facility, for small-to- medium enterprises, local daily el Cronista reports. Business News Americas relates that the service includes the installation of an IP camera connected to an ADSL line. The CAM24 needed an investment of ARS6 million. Temporarily, it will be offered to corporate and residential clients as well as SMEs, BNamericas states. Headquartered in Buenos Aires, Argentina, Telefonica de Argentina S.A. -- http://www.telefonica.com.ar/-- provides telecommunication services which include telephony business both in Spain and Latin America, mobile communications businesses, directories and guides businesses, Internet, data and corporate services, audiovisual production and broadcasting, broadband and Business-to-Business e-commerce activities. * * * As reported in the Troubled Company Reporter on April 27, 2006, Fitch Ratings made these changes to Telefonica de Argentina S.A.: Local Currency -- Previous Rating: 'B' -- New RR: 'BB-', Rating Outlook Stable US$771 million, Senior Unsecured Notes due 2006, 2007, 2008, 2010 and 2011 -- Previous Rating: 'B' -- New IDR: 'B+/RR3' * * * As reported in the Troubled Company Reporter on May 12, 2006, Standard & Poor's Ratings Services said that its ratings on Telefonica de Argentina S.A. or TASA (B/Stable/--) would not be affected by the recent announcement of the approval to acquire Telefonica Data Argentina S.A., a company that provides telecommunication and IT solutions to the corporate sector in Argentina. * * * As reported in the Troubled Company Reporter on May 29, 2006, Moody's Investors Service placed these ratings on Telefonica de Argentina, S.A.: -- Corporate Family Rating (foreign currency): to B2 from B3 with stable outlook; -- Foreign currency issuer rating: to B2 from B3 with stable outlook; and -- Senior Unsecured Rating (foreign currency): to B2 from B3 with stable outlook. ZEOX SA: Last Day for Verification of Claims Is on July 19 ---------------------------------------------------------- Court-appointed trustee Natalio Kinsbrunner will verify claims from Zeox S.A.'s creditors until July 19, 2006. Infobae relates that verified claims will be used as basis in creating individual reports, which will be due in court on Sept. 14, 2006. A general report will be filed in court on Oct. 26, 2006. The informative assembly is scheduled for May 2, 2007, wherein the creditors can ratify on a settlement plan that will be proposed by the company. The debtor can be reached at: Zeox S.A. Ramon Freire 2911 Buenos Aires, Argentina The trustee can be reached at: Natalio Kinsbrunner Marcelo T. de Alvear 1671 Buenos Aires, Argentina ============= B A H A M A S ============= TEEKAY SHIPPING: Moody's Holds Corporate Family Rating at Ba1 ------------------------------------------------------------- Moody's Investors Service lowered the Speculative Grade Liquidity rating of Teekay Shipping Corporation to SGL-2 from SGL-1. Moody's also affirmed all other ratings -- corporate family rating at Ba1. In addition, Teekay's plan to create a second Master Limited Partnership does not affect the ratings at this time. The outlook is stable. The change from SGL-1 is prompted by the expectation of significantly negative free cash flow over the next twelve months due to declining spot market rates for tankers. Lower spot rates will reduce cash flow from operations during a period of stepped-up capital expenditures for new building programs for the company. In addition, Moody's believes that Teekay will also continue to return cash to shareholders via share repurchases or by increasing dividends. Notwithstanding the effects on operating cash flows of a softening spot tanker market, Moody's expects that Teekay will maintain a good liquidity profile over the next 12 months. Moody's anticipates Teekay will hold unrestricted cash above US$200 million along with at least US$550 million available under US$1.7 billion of senior secured revolving bank credit facilities, with significant cushion under financial covenants. However, Moody's estimates that cash flow from operations will decline over the next 12 months by approximately 40% below cash flow from operations over the last twelve months. Free cash flow is likely to be negative of approximately US$250 million due to the decline in cash flow from operations, and the contemporaneous increase in capital expenditures to pproximately US$500 million along with regular dividends of approximately US$80 million. Moody's expects Teekay will fund capital expenditures with either secured term loan facilities pre-arranged for particular new buildings or with the existing revolvers until requisite secured term loans are arranged. However, Teekay also has somewhat limited alternatives to raise cash in the event the company lost access to the revolvers since a substantial amount of its vessels are already pledged to secure credit agreements. As well, the company is likely to continue to return cash to shareholders as evidenced by the nearly US$750 million worth of shares repurchased over the last one and a half years and the additional authorization announced on June 13. Teekay announced on June 12, 2006, that it plans to create a second master limited partnership called Teekay Offshore Partners L.P. which will house its existing shuttle tanker and floating storage & offtake businesses. While Moody's considers the use of MLP's in the equity capital structure as an aggressive financial policy, the effect of placing the Fixed Rate Businesses into an MLP does not affect the ratings at this time. Moody's believes that, similar to the ownership of Teekay LNG Partners, Teekay will retain a significant majority ownership of Teekay Offshore Partners L.P. The existing level of dividends paid by Teekay LNG Partners to third party holders does not overly burden Teekay's free cash flow, and the incremental dividend for Teekay Offshore Partners L.P. should be no more burdensome. Teekay Shipping Corporation, a publicly owned company headquartered in Nassau, Bahamas, having its main operating office in Vancouver, Canada, is the world's largest operator of medium-size and shuttle oil tankers. Teekay operates a fleet of 119 owned or chartered-in crude, refined products and LNG vessels, excluding 21 new buildings on order. ============= B E R M U D A ============= FOSTER WHEELER: Unit Secures US$65MM PC Boiler Contract from SRP ---------------------------------------------------------------- Foster Wheeler Ltd. disclosed that Foster Wheeler North America Corp., an operating unit of its Global Power Group, has been awarded a contract for a pulverized-coal or PC boiler by Salt River Project Agricultural Improvement and Power District or SRP. The contract, valued in excess of US$65 million, calls for Foster Wheeler to design and supply a 400 megawatt PC boiler for the Springerville Generating Station in Arizona. The unit will be owned by SRP and operated by Tucson Electric. The award will be included in Foster Wheeler's second-quarter 2006 bookings. This is the second boiler supplied by Foster Wheeler for the Springerville Generating Station. The previous 400 MWe boiler, supplied to an ownership team including SRP, is currently in the start-up phase. "As a repeat client, we are confident that Foster Wheeler is the right boiler supplier for our Springerville expansion project. We know that Foster Wheeler stands behind its commitments," said Bill Rihs, SRP's manager of new generation projects. The boiler will incorporate Foster Wheeler's low-NOx burner and selective catalytic reduction technologies to cleanly burn low- sulfur Powder River Basin coal and other local western fuels. "The award of a second boiler to a customer is, in many ways, more significant than the award of the first boiler. It underscores SRP's confidence in our ability to deliver a quality product at a competitive price that meets or exceeds all of SRP's high standards," said James Crumm, president and CEO of Foster Wheeler North America Corp. Construction of the facility is expected to begin in the fall of 2006, with commercial operation scheduled for December 2009. About Foster Wheeler Headquartered in Hamilton, Bermuda, Foster Wheeler Ltd. -- http://www.fwc.com/-- is a global company offering, through its subsidiaries, a broad range of engineering, procurement, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. At Dec. 31, 2005, Foster Wheeler's balance sheet showed a US$341,796,000 equity deficit compared to a US$525,565,000 equity deficit on Dec. 31, 2004. * * * As reported in the Troubled Company Reporter on May 25, 2006, Standard & Poor's Ratings Services raised Foster Wheeler's corporate credit rating to to B+ from B- and its senior secured notes rating to B+ from CCC+. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating and '1' recovery rating to the company's five-year, US$250 million credit facility due 2010. * * * On May 26, 2006, Moody's Investors Service upgraded Foster Wheeler's corporate family rating to B1 from B3 and assigned a Ba3 rating to FWC's US$250 million senior secured bank revolving credit facility. The rating outlook is changed to Positive. GLOBAL CROSSING: Provides New Communication Network to DE-STA-CO ---------------------------------------------------------------- Global Crossing disclosed that it is providing primary and secondary networks to DE-STA-CO, a Dover Company. Global Crossing is deploying a new, scalable, 10-site communications network linking DE-STA-CO's automation and manufacturing facilities in North America and Europe. Global Crossing's enhanced IP Virtual Private Network Service will enable DE-STA- CO to benefit from the convergence of its IP and data traffic onto one network. As a secondary measure, Global Crossing is also providing DE-STA-CO with Dedicated Internet Access for business continuity purposes. "When choosing a new network provider, we looked at a range of different companies, and Global Crossing clearly stood out by offering the best solution for our needs, as well as competitive pricing, superior customer care and top- level accountability," said Bart White, IT manager for DE-STA-CO. "Our new IP VPN provides DE-STA-CO with the security and features that will help us remain a worldwide leader in the automation industry today, and they'll be scalable to allow us to take advantage of future technologies." DE-STA-CO, which is involved in the innovation, design, manufacture and support of clamping, gripping, transferring and robotic tooling solutions for workplace and flexible automation needs, is utilizing its new network to transmit internal applications and critical business communications, such as blue prints and designs, among its locations and offices throughout the United States, the United Kingdom, Germany and France. The company will increase the efficiency, security and reliability of their communications by converging IP and data traffic on its network, and will move towards convergence of voice in the future. Global Crossing is also providing DIA for use as back-up Internet access. In case of a natural disaster or a catastrophic service interruption, this business continuity solution will allow DE-STA-CO an additional mode of access, via the public Internet, to their secure IP VPN. DE-STA-CO wanted the ease and convenience of having a single provider for both solutions. "We take great pride in the fact that DE-STA-CO has chosen Global Crossing as both their primary and secondary network provider," said Mike Toplisek, senior view president, global enterprise and collaboration services, Global Crossing. "In addition to providing DE-STA-CO with the tremendous benefits of IP convergence, Global Crossing has designed a business continuity solution that will provide back-up access to DE-STA- CO's network and help with disaster recovery." Available in more than 600 cities in 60 countries, Global Crossing provides one of the highest performance and versatile IP VPN solutions currently in place, with true global reach, scalable connectivity, multiple access options, and flexible billing options. IP VPN traffic is transported over Global Crossing's secure, privately owned and operated MPLS-based IP backbone, which is separate from the public Internet, for greater security and performance. The solution supports the IP convergence of data, voice, video and Internet access, all over a single connection. Global Crossing DIA provides always-on, direct high-speed global Internet connections at speeds ranging from 56/64 Kbps to OC48/STM16, as well as Fast Ethernet, Gigabit Ethernet and even 10-Gigabit Ethernet. The company's fully- meshed IP network, incorporating Multiprotocol Label Switching-traffic engineering as a backbone transport technology, provides the ultimate in network resiliency and flexibility. Not only is DIA the gateway to all Internet domains worldwide, but it also provides access to Global Crossing's portfolio of converged IP services, including VoIP and IP Video. Frame Relay or ATM customers can enjoy the benefits of DIA via internetworking. About Global Crossing Headquartered in Florham Park, New Jersey, Global Crossing Ltd. -- http://www.globalcrossing.com/-- provides telecommunication services over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe including Bermuda, Argentina, Brazil, Chile, Mexico, Panama, Peru and Venezuela. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. The company filed for chapter 11 protection on Jan. 28, 2002 (Bankr. S.D.N.Y. Case No. 02-40188). When the Debtors filed for protection from their creditors, they listed US$25,511,000,000 in total assets and US$15,467,000,000 in total debts. Global Crossing emerged from chapter 11 on Dec. 9, 2003. As of Dec. 31, 2005, Global Crossing's balance sheet reflected a US$173 million equity deficit compared to a US$51 million of positive equity at Dec. 31, 2004. INTELSAT LTD: PanAmsat Receives Requisite Consents for Sr. Notes ---------------------------------------------------------------- Intelsat, Ltd. reported that PanAmSat Holding Corporation announced the results of its previously disclosed offer to purchase and consent solicitation for any and all of their outstanding 10-3/8% Senior Discount Notes due 2014. PanAmSat said that it had received the requisite consents to adopt the proposed amendments to the indenture pursuant to which the 10-3/8% Notes were issued and that a supplemental indenture to effect the proposed amendments has been executed. The proposed amendments, will eliminate, among other things, substantially all of the restrictive covenants and certain events of default and related provisions contained in the indenture, will become operative when, and if, the tendered Notes are accepted for purchase by PanAmSat. Intelsat, Ltd. previously said that, in connection with the contemplated acquisition of PanAmSat by Intelsat (Bermuda), Ltd., PanAmSat intended to offer approximately US$725 million of senior notes due 2016. If the tender offer for the 10-3/8% Notes is consummated, PanAmSat will not issue the senior notes due 2016 and Intelsat (Bermuda), Ltd., will issue additional senior notes to fund the tender offer and consent payments for the Notes, as well as the balance of the Acquisition merger consideration. The additional notes will be offered to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S. The notes will not be registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. 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. * * * On June 12, 2006, Moody's Investor Service affirms Intelsat (Bermuda) Ltd.'s ratings: -- New Guaranteed Sr. Notes: Assigned B2, -- New Sr. Notes: Assigned Caa1, and -- Sr. Discount Notes, due 2015: Downgraded to Caa1 from B3 (these notes will be moved to Intelsat Intermediate Holding Company Ltd. Upon closing of the merger). SEA CONTAINERS: Further Delays 10-K Filing & Remains on Default --------------------------------------------------------------- Sea Containers Ltd. is providing an update on its financial condition pending completion of its annual report on SEC Form 10-K for the year ended Dec. 31, 2005, and its quarterly report on SEC Form 10-Q for the three months ended March 31, 2006. The Company had a consolidated operating loss for the year ended Dec. 31, 2005, and the three months ended March 31, 2006, continues to generate operating losses and currently has negative cash flow. As at May 31, 2006, the Company's total consolidated cash was approximately US$183 million. This compares to US$347 million at Dec. 31, 2005, and US$106 million at Sept. 30, 2005. The increase in total consolidated cash from Oct. 1, 2005, to Dec. 31, 2005, was US$241 million. This increase included the benefit of the net proceeds from the sale of shares in Orient- Express Hotels Ltd. (NYSE:OEH) of US$301 million with operating cash inflows including working capital movements contributing US$43 million and fixed asset sale proceeds contributing another US$32 million. These receipts were partly offset by the payment of senior secured debt of US$87 million and interest of US$24 million and net capital expenditure and other outflows of US$24 million. The reduction in total consolidated cash from Dec. 31, 2005, to May 31, 2006, was US$164 million. Operating cash outflows including working capital movement amounted to US$55 million with scheduled repayment of senior secured debt of US$58 million and interest of approximately US$35 million. Net capital expenditure necessary to maintain the operating capability of the business caused much of the remaining US$16 million reduction. Of the US$183 million of total consolidated cash at May 31, only US$52 million was readily available for the Company's use as free cash. The other US$131 million of cash, was either restricted as security for Sea Containers' obligations to third parties, or was held by subsidiaries and cannot be remitted to the Company for various regulatory or financial covenant reasons. The Company is considering various options to increase its available free cash. The short-term liquidity of Sea Containers is dependent on the successful completion of the Silja transaction, a proposed refinancing of container assets, and/or other potential non-operational sources of funds. Sufficient short-term liquidity is also dependent on there continuing to be no acceleration of repayment of debt facilities in default and for the present, at least, the retention of part of the OEH share sale proceeds. 10-K Filing Delay As announced on May 1, 2006, the Company remains unable to file its 2005 Form 10-K annual report, including its audited 2005 consolidated financial statements, as it has not completed its internal processes with respect to applicable certifications. The Company's external professional advisers are assisting the Board in completing these processes as expeditiously as practicable. Because of the 10-K delay, the filing of the Company's first quarter 2006 Form 10-Q has also been delayed. Public Note Indentures The Company's public note indentures contain a covenant requiring it to maintain consolidated tangible net worth (as defined in the indentures) of at least US$175 million. As noted above, the Company has not completed its internal processes to finalize its financial statements for the year ended Dec. 31, 2005 or for the first quarter ended March 31, 2006. Because the consolidated tangible net worth calculation is based on the financial statements, the Company will not be in a position to confirm whether it has been in compliance with this covenant until the financial statements are finalized. The calculation is subject to adjustment for events up to the date of 10-K and 10-Q filing, of which the most significant is continuing change in the estimated net sale value of ferry assets held for disposal at Dec. 31, 2005, including Silja. These continuing adjusting events could result in the consolidated tangible net worth of the Company being at less than US$175 million as of Dec. 31, 2005, but this matter cannot be confirmed until the relevant financial statements are finalized. The Company's public note indentures also contain a covenant requiring that net proceeds from asset sales be applied to the payment of debt or the investment in replacement assets within six months of receipt of the net proceeds. Thereafter, under the covenant, any remaining net proceeds must be applied to an offer to purchase outstanding public notes. In addition, the Company's indenture for the public notes maturing in 2012 contains a specific covenant for the application of the proceeds of sale of the OEH shares. Of the net proceeds received from the sale of OEH shares, the Company has applied approximately US$200 million as required in the indentures, and estimates that it will have approximately US$100 million of excess proceeds at the time the indenture covenant requires the Company to make an excess proceeds offer. The approximate US$52 million balance of the Company's "free cash" at May 31, 2006, however, includes these US$100 million excess proceeds. Consequently the Company has decided to retain the OEH share sale proceeds unless it determines that they or a portion of them are not needed to fund operations during the coming months. A failure to make an excess proceeds offer would constitute a default under the public note indentures. Further to the Company's May 1, 2006 news release, Sea Containers' management is finalizing its business plan, including an assessment of the appropriate level of debt capacity and appropriate range of values of the Company. Management continues to explore a range of appropriate strategic and financial alternatives, which may include a restructuring of the Company's obligations under the public notes. To facilitate discussions with its public note holders and implementation of any of these alternatives, the Company has signed a confidentiality agreement with a law firm and with a financial advisor, each of whom will act in the interest of the public note holders in discussions with the Company. Sea Containers can give no assurance as to the results of any restructuring including the impact upon creditors and equity holders. The Company is currently unable to confirm whether it expects to pay the US$115 million principal amount of 103/4% senior notes due on Oct. 15, 2006. Payment may not be made unless the Company expects that it will also be able to pay in full when due its other public notes maturing in 2008, 2009 and 2012 and all other unsecured creditors including potential significant pension liabilities. Credit Default The Company remains in default under many of its secured credit facilities due to breaches of certain financial covenants and other requirements contained in these facilities. The Company's secured and other credit facilities also generally include cross-default provisions so that non-compliance with a covenant in one secured credit facility constitutes a default under substantially all other credit facilities. The Company is continuing discussions with its lenders regarding waivers, amendments and forbearances to address pending and prospective defaults. No lender has taken any action to exercise remedies in respect of any events of default and many lenders have signed forebearance agreements effective through the end of June. About the Company Headquartered in London, England, Sea Containers (NYSE: SCRA and SCRB) -- http://www.seacontainers.com/-- engages in passenger and freight transport and marine container leasing. U.S. shareholders primarily own the Bermuda-registered company and its common shares have been listed on the New York Stock Exchange (SCRA and SCRB) since 1974. On May 4, the Troubled Company Reporter-Latin America reported that Standard & Poor's Ratings Services lowered its ratings on Sea Containers Ltd. including lowering the corporate credit rating to 'CCC-' from 'CCC+'. All ratings remain on CreditWatch with negative implications; ratings were initially placed on CreditWatch on Aug. 25, 2005, and lowered on Feb. 16, 2006, and again on March 24, 2006. The rating action followed the company's announcement that it is continuing to evaluate a range of strategic and financial alternatives, including the "appropriate level of debt capacity, with the intent to engage the public note holders and other stakeholders." ============= B O L I V I A ============= * BOLIVIA: Government Eyes Reforms on Pension System ---------------------------------------------------- The government of Bolivia is planning on a pension system reform, an official from ABI or Agencia Boliviana de Informacion -- the government news service -- told Business News Americas. The reform will focus on the increase of pension coverage, BNamericas states, citing the ABI official. Among the key issues to be reviewed is the retirement age, which is currently at 65. BNamericas recalls that in a move to privatize industries under the first administration of President Gonzalo Sanchez de Lozada in the 1990s, the old pension system was intervened and a private one was founded in 1997. BNamericas relates that the current pension system comprises pension fund managers: -- AFP Futuro of the Swiss group Zurich, and -- AFP Prevision of Spanish group BBVA. * * * 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: Grants BRL66MM Loan to Rehabilitate Para's Road --------------------------------------------------------------- Banco Nacional de Desenvolvimento Economico e Social aka BNDES approved a financing for the State of Para for BRL66 million. The funds will be used to reconstruct 125 km of roadways. The total investment is BRL82.5 million -- 80% financed by BNDES and the remaining 20% by the State Government. The project will involve the highways: -- PA-415, in the southeast of Para, connecting Altamira to Vitoria do Xingu; -- PA-154, in Ilha de Marajo; and -- PA-395, in the northeast of the State, joining the highway PA-127 to the municipalities of Magalhaes Barata and Cafezal. The three sections will ensure access to the region which is not passable in some periods of the year due to rains. The project financed by BNDES involves: -- works of draining, -- wood bridge replacement, -- earthwork services, -- plan modifications, and -- asphalt revetment, without limitation. The works will contribute for the regional development, improvement in the access to public services and logistic cost reduction. The highway PA-415 will enable the land access to the Xingu region, enabling the improvement of the goods transportation conditions and social services maintenance to the population, harmed by the current situation of the road. Nowadays the integration of that region is performed by Transamazonica and Xingu river in its navigable part. The highway PA-154, located in Ilha de Marajo, will have as main function to guarantee better access to the tourism regions of the island, thus allowing better use of the potential of that economic activity, currently thwarted by the lack of infrastructure. Besides, Marajo island has important fishing and farming activity. The highway PA-395, inserted in a roadway system already consolidated (PA-127), will contribute for the improvement in the product drainage conditions of the region, and shall operate as inductor of a major economic development. Para, with 142 municipalities, is the second largest state of Brazil, with an area of 1,253,164.5 Km2, which represents 14.65% of the entire Brazilian territory. It has inferior area only to the State of Amazonas. The population of Para sums up almost 6.2 million inhabitants, with high concentration in urban areas. The State of Para shows GDP growth above the Brazilian average, ranking in the 11th position among the Federation units, with BRL25.5 billion shared by the main economic sectors: -- 35% for the industry, -- 24% for the farming and -- 41% for the trade and services sector. The farming sector has great importance in the State's economy, with highlight for the heard of cattle, fifth biggest of Brazil, production and export of tropical wood, production of palm and black pepper oil. It is to be noted the international insertion of the State economy, having a foreign trade reaching 39% of GDP participation of the State in 2004. In economies with significant presence of farming and extractivist activities, the infrastructure for the transportation acquires high degree of relevance, being decisive factor for the international competitiveness. Because of that, BNDES included the support to infrastructure of Par as one of its priorities. * * * 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: Mulls Sale of 25% Stake in Tele Norte Leste ----------------------------------------------------------- Fabio Sotelino, the capital markets manager of the Brazilian Development Bank aka BNDES, told financial daily Valor Economico that the bank is studying a proposal to sell its 25% in Tele Norte Leste Participacoes aka Telemar. BNDES' decision came as a result of a share conversion proposal laid by Tele Norte. The share restructuring scheme will convert all shares into voting shares simplifying Telemar's structure and bring its shareholders under one firm. The company urrently operates in 16 Brazilian states. The restructuring is expected to be approved this week, BNamericas says. "I can't anticipate a decision," Mr. Sotelino told Business News Americas. However, he said that any sale would be for BNDES' entire stake in the operator. The restructuring, according to BNamericas, will lead to a secondary offering of ordinary shares to be sold on the new market listing of stock exchange Bolsa de Valores do Estado de Sao Paulo or Bovespa, as well as on the New York Stock Exchange or NYSE. * * * As reported in the Troubled Company Reporter on May 26, 2006, Standard & Poor's Ratings Services disclosed that its 'BB' l long-term corporate credit ratings on Brazil-based integrated telecommunications carrier Telemar Norte Leste S.A. and its holding company Tele Norte Leste Participacoes S.A. remain on CreditWatch with positive implications, where they were placed on Feb. 28, 2006. The national scale rating assigned to three local debentures issued by Telemar Participacoes S.A. (Tele Norte's holding company) also remain on CreditWatch with positive implications. * * * As reported in the Troubled Company Reporter on May 29, 2006, Fitch Ratings has taken these rating actions for Tele Norte Leste Participacoes S.A. and Telemar Norte Leste S.A.: Tele Norte Leste Participacoes: -- International scale local currency issuer default rating upgraded to 'BBB-' from 'BB+' with Stable Outlook; -- International scale foreign currency IDR affirmed at 'BB-' with Positive Outlook; -- National scale rating upgraded to 'AA+(bra)' from 'AA-(bra)' with Stable Outlook; and -- BRL1.3 billion local debenture issuance upgraded to 'AA+(bra)' from 'AA-(bra)' with Stable Outlook. Telemar Norte Leste S.A.: -- International scale local currency IDR affirmed at 'BBB-' with Stable Outlook; -- International scale foreign currency IDR affirmed at 'BB-' with Positive Outlook; and -- National scale rating upgraded to 'AA+(bra)' from 'AA(bra)' with Stable Outlook. COMPANHIA VALE: Settles Pellet Price with Three Foreign Firms ------------------------------------------------------------- Companhia Vale do Rio Doce aka CVRD concluded the negotiations for the 2006 direct reduction of pellets price with Saudi Arabia's Hadeed Saudi Iron & Steel Company, Malaysia's Amsteel Mills SDN BHD, and Egypt's Al Ezz Dekheila Steel. After several rounds of negotiation, CVRD and the companies agreed on a 3% price reduction for Tubarao and Sao Luis direct reduction pellets relatively to the 2005 price. CVRD reinforces its long-term commitment with its clients, investing a significant amount of resources, despite of rising investment costs, in the production and logistics of iron ore and pellets. CVRD capex budget for 2006 allocated US$2.1 billion to investments in the ferrous minerals division. Currently, CVRD is developing seven projects for iron ore and pellet production capacity expansion, which will come on stream between 2006 and 2008. Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio Doce -- http://www.cvrd.com.br/-- engages primarily in mining and logistics businesses. It engages in iron ore mining, pellet production, manganese ore mining, and ferroalloy production, as well as in the production of nonferrous minerals, such as kaolin, potash, copper, and gold. * * * On Jan. 5, 2006, Fitch Ratings assigned a long-term foreign currency rating of 'BB' to Vale Overseas Limited's US$300 million issuance due 2016. Vale Overseas is a wholly owned subsidiary of Companhia Vale do Rio Doce, a large diversified mining company located in Brazil. The notes are unsecured obligations of Vale Overseas and are unconditionally guaranteed by CVRD. The obligation to guarantee the notes rank pari passu with all of CVRD's other unsecured and unsubordinated debt obligations. Fitch also maintained these ratings for CVRD and CVRD Finance Ltd., a wholly owned subsidiary of CVRD: -- CVRD foreign currency rating: 'BB', Outlook Positive; -- CVRD local currency rating: 'BBB' Outlook Stable; -- CVRD national scale rating: 'AAA(bra)', Outlook Stable; -- CVRD Finance Ltd.: series 2000-1 and series 2000-3: 'BBB'; -- CVRD Finance Ltd., series 2000-2 and series 2003-1: 'AAA'. VARIG SA: Judge Ayoub to Consider Other Bids for Company Assets --------------------------------------------------------------- Judge Luiz Roberto Ayoub of the 8th District Bankruptcy Court in Rio de Janeiro, Brazil, postponed a ruling on a US$446 million bid submitted by NV Participacoes for VARIG, S.A.'s assets after receiving last minute offers. NV Participacoes emerged as the lone bidder at the June 8, 2006 auction. NVP, a company formed by VARIG pilots and flight attendants, offered to acquire VARIG's entire air transportation operations. According to papers filed with the U.S. Bankruptcy Court, NVP's US$446-million bid is comprised of: * approximately US$126 million cash; * debentures totaling around US$220 million; and * the conversion of approximately US$100 million of labor claims. Bloomberg News reports that NVP offered US$449 million. Last-Minute Interest As widely reported, the Brazilian Court received a late offer from Fundo de Investimento Multilong Corporation. Bloomberg, citing Agencia Estado, relates that Multilong, a Sao Paulo-based investment fund, presented an US$800-million bid for VARIG's domestic and international operations. Multilong fund will seek to finance the purchase by issuing debentures in a restructured VARIG and obtaining loans from Banco Nacional de Desenvolvimento Economico e Social, a national development bank run by the Brazilian government. Syn Logistica and Fontidec have also submitted offers for VARIG, Bloomberg says, citing Judge Ayoub's spokeman as its source. Furthermore, Portugal's TAP SA is reportedly joining forces with Air Canada and Brookfield Asset Management Inc. to bid for the bankrupt airline. According to Bloomberg, TAP will only make a formal offer after Judge Ayoub rejects NVP's bid and calls for a new auction. June 8 Auction Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, relates that the June 8 auction was conducted in two stages and provided two options. The first stage of the auction included a minimum bid requirement and the second stage had no minimum bid. Both stages provided bidders with the option to bid on either: -- the entire air transportation operations with the proceeds of the sale to be paid towards the airline's ongoing operations and toward the payments required under the Consolidated Recovery Plan; or -- the domestic and regional operations with the proceeds of the sale to be applied to the then outstanding postpetition debts and the remainder to be injected into VARIG's international operations and to make the payments required under the Recovery Plan. Since NVP's bid did not reach the $860 million minimum bid requirement, a second auction commenced immediately. With no other bids for VARIG's entire air operation, the auction concluded with NVP as the successful bidder, subject to the Brazilian Court's approval. NVP Bid Gets Conditional Approval On June 9, 2006, the Brazilian Court approved the NVP bid subject to the requirement that: a. NVP immediately provide proof of its ability to fund the US$75 million require deposit to VARIG; and b. NVP change the US$220 million debenture feature of its bid to either cash or the assumption of an equal amount in postpetition debt with proof of its ability to fund the postpetition debt. Bloomberg says the Brazilian Court will look into NVP's offer next week. 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: IDB Grants US$118 Mil. for Power Transmission Project --------------------------------------------------------------- The Inter-American Development Bank approved a US$118.1 million loan to a private concessionaire in Brazil for the development of an energy transmission line to cross the country's Northern and Northeastern areas. The program will help reinforce and improve power supply in a national interconnected system and improve the efficiency and reliability of the electricity system. The project comprises the development, construction, erection, commissioning, operation and maintenance of a 1,200 Megawatt, 922-kilometer, 500-kilovolt energy transmission line from the Colinas substation in the state of Tocantins to the Sobradinho substation in the state of Bahia. The project company, ATE II Transmissora de Energia S.A. -- sponsored by Abengoa S.A., ATE II's controlling shareholder -- was awarded the concession by the Government of Brazil in November 2004. Construction began in 2005 and the project is expected to be in operation in March 2007. "The project is vital for the Brazilian integrated energy system and particularly attends the energy needs of the Northeastern region of Brazil, by increasing its transmission to 1200 Megawatts capacity and improving its reliability by reducing energy shortages and interruptions caused by long distance transmission instabilities," said IDB Team Leader Rocio Medina- Bol�var. "Project benefits will be evidenced by increasing storage capacity, reducing energy deficit, increasing energy flows between regions and savings in fuel cost, as ATE II will enable the system to take advantage of the hydrological differences between the regions interconnected by the project." The IDB financing includes an "A-loan" of up to US$107.8 million from the Bank's ordinary capital and a syndicated "B-loan", of up to US$10.3 million, consisting of resources from financial institutions that subscribe participation agreements with the IDB. BNDES and local commercial banks, through on-lending of BNDES, will also be co-lenders for approximately US$162.6 million. * * * 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 =========================== ATACAMA FUND: Last Day to File Proofs of Claim Is on July 14 ------------------------------------------------------------ Atacama Fund Limited's creditors are required to submit proofs of claim by July 14, 2006, to the company's liquidators: Mike Hughes Richard Gordon Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 14 deadline won't receive any distribution that the company will make. Creditors are required to present proofs of claim personally or through their solicitors. Atacama Fund's shareholders agreed on April 27, 2006, for the company's voluntary liquidation under Section 135 of Cayman's Companies Law (2004 Revision). ATACAMA MASTER: Creditors Must File Proofs of Claim by July 14 -------------------------------------------------------------- Atacama Master Fund Limited's creditors are required to File proofs of claim by July 14, 2006, to the company's liquidators: Mike Hughes Richard Gordon Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 14 deadline won't receive any distribution that the company will make. Creditors are required to present proofs of claim personally or through their solicitors. Atacama Master's shareholders decided on April 27, 2006 to place the company into voluntary liquidation under Section 135 of Cayman's Companies Law (2004 revision). BANCREDIT CAYMAN: GFN Corp. Opposes Discovery Authority Request --------------------------------------------------------------- GFN Corp., Ltd., balks at the discovery authority request included in Bancredit Cayman Limited's chapter 15 petition filed with the U.S. Bankruptcy Court for the Southern District of New York. John K. Cunningham, Esq., at White & Case LLP, in Manhattan, clarified that GFN does not object to recognition of Bancredit's liquidation proceeding in the Cayman Islands as a foreign main proceeding. What GFN doesn't like is providing the liquidators with unfettered authority to act as a roving commission to obtain unidentified information from unidentified parties. Mr. Cunningham argued that this relief is inappropriate without first requiring the liquidators to demonstrate to the Court what information is sought, why it might be relevant to the administration of the Cayman Proceeding, and against whom the information requests are directed, and to provide notice to those parties. According to Mr. Cunningham, the overly broad authority sought by the liquidators is beyond what a trustee, a debtor-in- posssession, or other party-in-interest could be granted in other cases under the Bankruptcy Code. Headquartered in Grand Cayman, Cayman Islands, Bancredit Cayman Ltd. is a banking institution. Richard Fogerty & G. James Cleaver of Kroll (Cayman) Ltd., the joint official liquidators for the Company, filed a chapter 15 petition on May 10, 2006 (Bankr. S.D.N.Y. Case No. 06-11026). Timothy T. Brock, Esq., at Satterlee Stephens Burke & Burke LLP represents the liquidators. When the petitioners filed for chapter 15, they reported that the Debtor's assets amount to US$100 million and its liabilities aggregate US$215 million. BROWNIE FUNDING: Filing of Proofs of Claim Ends on July 14 ---------------------------------------------------------- Creditors of Brownie Funding Corp. are required to prove their claims to Martin Couch and Emile Small, the company's liquidators, by July 14, 2006, or be excluded from receiving any distribution or payment that the company will make. Creditors are required to send by July 14 their full names, addresses, descriptions, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any, to the liquidators. Brownie Fuunding's shareholders decided on May 30, 2006, to place the company in voluntary liquidation under Section 135 of Cayman's Companies Law (2004 revision). The liquidators can be reached at: Martin Couch Emile Small Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands CLASSY CAYMAN: Creditors Have Until July 14 to Present Claims ------------------------------------------------------------- Classy Cayman Limited's creditors are required to present proofs of claim by July 14, 2006, to Richard Gordon and Mike Hughes, the company's liquidators. Creditors are required to present proofs of claim personally or through their solicitors at the time and place that the liquidator specified. Failure to present claims would mean exclusion from the benefit of any distribution that the company will make. The shareholders of Classy Cayman agreed on May 29, 2006, to place the company in voluntary liquidation under Section 135 of Cayman's Companies Law (2004 revision). The liquidators can be reached at: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands CT BONDS: Last Day to File Proofs of Claim Is on July 14 -------------------------------------------------------- CT Bonds Investment Cayman Limited's creditors are required to submit proofs of claim by July 14, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 14 deadline won't receive any distribution that the company will make. Creditors are required to present proofs of claim personally or through their solicitors. CT Bonds' shareholders agreed on May 29, 2006, for the company's voluntary liquidation under Section 135 of Cayman's Companies Law (2004 Revision). GANNET ONE: Liquidator Won't Accept Claims Filed After July 14 -------------------------------------------------------------- Gannet One Funding Corp.'s creditors are required to file proofs of claim by July 14, 2006, to the company's liquidators: Steven O'Connor Emile Small Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 14 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 shareholders of Gannet One agreed on May 30, 2006, to place the company under voluntary liquidation under Section 135 of Cayman's Companies Law (2004 revision). KFC LIMITED: Sets July 14 Deadline for Proofs of Claim Filing ------------------------------------------------------------- KFC Limited's creditors are required to present proofs of claim by July 14, 2006, to Richard Gordon and Guy Major, the company's liquidators. Creditors who are not able to comply with the July 14 deadline won't receive any distribution that the company will make. Creditors are required to present proofs of claim personally or through their solicitors. KFC Limited's shareholders decided on May 26, 2006, to put the company in voluntary liquidation under Section 135 of Cayman's Companies Law (2004 revision). The liquidators can be reached at: Richard Gordon Guy Major Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands LAPUTA V: Schedules July 14 Deadline for Filing of Claims --------------------------------------------------------- Laputa V Funding Corp.'s creditors are required to prove their claims to Steven O'Connor and Emile Small, the company's liquidators, by July 14, 2006, or be excluded from receiving any distribution or payment that the company will make. Creditors are required to send by the July 14 deadline their full names, addresses, descriptions, the full particulars of their debts or claims, and the names and addresses of their lawyers, if any, to the liquidators. Laputa V's shareholders agreed on May 30, 2006, to place the company in voluntary liquidation under Section 135 of Cayman's Companies Law (2004 revision). The liquidators can be reached at: Steven O'Connor Emile Small Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands ML/ZWEIG DIMENNA: Proofs of Claim Filing Deadline Is on July 14 --------------------------------------------------------------- ML/ZWEIG Dimenna Ltd.'s creditors are required to submit proofs of claim by July 14, 2006, to the company's liquidators: Mike Hughes Richard Gordon Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 14 deadline won't receive any distribution that the company will make. Creditors are required to present proofs of claim personally or through their solicitors. ML/ZWEIG Dimenna's shareholders agreed on May 19, 2006, for the company's voluntary liquidation under Section 135 of Cayman's Companies Law (2004 Revision). POETIC CAYMAN: Deadline to File Proofs of Claim Is on July 14 ------------------------------------------------------------- Poetic Cayman Limited's creditors are required to present proofs of claim by July 14, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 14 deadline won't receive any distribution that the company will make. Creditors are required to present proofs of claim personally or through their solicitors. Poetic Cayman's shareholders decided on May 29, 2006 to place the company into voluntary liquidation under Section 135 of Cayman's Companies Law (2004 revision). RIMINI LTD: Creditors Have Until July 3 to File Proofs of Claim --------------------------------------------------------------- Rimini Limited's creditors are required to send by July 3, 2006, their names, addresses, the particulars of their debts or claims, and the names and addresses of their attorneys-at-law (if any) to the liquidator: Manex Limited, Bahamas c/o Messrs. Maples and Calder P.O. Box 309 George Town, Ugland House South Church Street, George Town Grand Cayman, Cayman Islands Rimini Ltd.'s shareholders agreed on May 29, 2006, to place the company in voluntary liquidation under Section 135 of Cayman's Companies Law (2004 Revision). ========= C H I L E ========= AES GENER: Plans Maipo Hydro Project with Aguas Andinas ------------------------------------------------------- AES Gener, a subsidiary of AES Corp., plans to construct a 530MW hydro project in the Maipo river basin in the Metropolitan Region with Aguas Andinas, according to a report by Diario Financiero. The project, tagged as Alto Maipo, would cost about US$500 million, Diario Financiero states. Diario Financiero recalls that Gener and Aguas Andinas proposed the project to Chile's energy commission, CNE, last week. The two companies will be submitting environmental impact study documents in the coming weeks, says Diario Financiero. Business News Americas relates that Alto Maipo will be made up of two "run-of-the-river" factories on rivers Maipo and Colorado. Alto Maipo is expected to be operational by 2012, BNamericas reports. AES Corporation (NYSE:AES) -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. AES's Latin America business group is comprised of generation plants and electric utilities in Argentina, Brazil, Chile, Colombia, Dominican Republic, El Salvador, Panama and Venezuela. Fuels include biomass, diesel, coal, gas and hydro. The group also pursues business development activities in the region. AES has been in the region since May 1993, when it acquired the CTSN power plant in Argentina. * * * On May 25, 2006, Moody's Investors Service upgraded the senior unsecured debt of AES Gener to Ba1 from Ba3 with stable outlook. =============== C O L O M B I A =============== * COLOMBIA: IMF Completes Second Review of Stand-by Agreement ------------------------------------------------------------- The Executive Board of the International Monetary Fund on June 12, 2006, approved on a lapse-of-time basis the second review of Colombia's performance under an 18-month SDR405 million (about US$597 million) Stand-By Arrangement approved on April 29, 2005. The Board also approved Colombia's request for a rephasing of the remaining purchases under the arrangement. Completion of this review means Colombia's access to a credit line amounting to SDR320.4 million (aboutUS$ 472 million). However, the authorities continue to treat the arrangement as precautionary, and do not intend to draw on the credit available. * * * Colombia's ratings affirmed by Fitch are: -- Foreign currency Issuer Default Rating (IDR) 'BB'; -- Local currency Issuer Default Rating (IDR) 'BBB-'; -- Country Ceiling 'BB'; -- Short-term 'B'. * COLOMBIA: Ministry to Propose Personal Computers Tax Reduction ---------------------------------------------------------------- The communications ministry of Colombia said in a statement that it intends to send a draft bill to congress proposing to reduce taxes on low cost personal computers or PC as a means of increasing its penetration in the country. BNamericas relates that the ministry is aiming to boost Internet penetration and more specifically broadband penetration. According to BNamericas, Internet penetration has been growing 20% per year while that of broadband has a yearly growth of 40%. Martha Pinto de De Hart, the communications minister, told BNamericas, "We are aware that one of the biggest obstacles to increasing Internet and broadband penetration in Colombia is the high cost of PCs." The communications department is discussing with the commerce, industry and tourism ministry the cancellation of taxes imposed on imports of PC parts, BNamericas states, citing Ms. De Hart. * * * Colombia's ratings affirmed by Fitch are: -- Foreign currency Issuer Default Rating (IDR) 'BB'; -- Local currency Issuer Default Rating (IDR) 'BBB-'; -- Country Ceiling 'BB'; -- Short-term 'B'. =================================== D O M I N I C A N R E P U B L I C =================================== FALCONBRIDGE LTD: US DOJ Completes Review of Xstrata's Offer ------------------------------------------------------------ The US Department of Justice confirmed that it has completed its review of Xstrata's proposed acquisition of Falconbridge Limited and has not identified any competition issues under the Hart- Scott-Rodino Act. The DOJ allowed the Hart-Scott-Rodino waiting period to expire without taking action or seeking any type of remedy. Xstrata is free to proceed with its offer with no further US anti-trust review. However, European and Canadian competition authorities have yet to approve Xstrata's proposal, which is due on July 13, 2006, for the European Union, Reuters reports. Claire Divver, Xstrata's spokeswoman, told Reuters that the company expects the Canadian authorities to give their decision before the offering deadline on July 7, 2006. "We don't expect any antitrust issues at all, which encompasses the U.S. Department of Justice, the EU and Canada," Ms. Divver told Reuters. According to Reuters, Inco has petitioned to the Canadian industry minister in an effort to delay the review on Xstrata, which is due on July 12, 2006, before the EU can make a decision. Reuters relates that a Canadian parliamentary industry committee has requested the minister to close the review on Xstarta's proposal after all international regulatory bodies have made their ruling on the Inco-Falconbridge proposal. About Xstrata Xstrata plc -- http://www.xstrata.com/-- is a major global diversified mining group, listed on the London and Swiss stock exchanges. The Group is and has approximately 24,000 employees worldwide, including contractors. Xstrata does business in six major international commodities markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver. The Group's operations and projects span four continents and nine countries: Australia, South Africa, Spain, Germany, Argentina, Peru, Colombia, the U.K. and Canada. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV)(NYSE: FAL) -- 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: Aims to Eliminate Energy Subsidy by 2007 -------------------------------------------------------------- The Dominican Republic plans to eliminate energy subsidies by July 2007 through an integrated three-year plan, Radhames Segura -- the executive vice president of the Energy Consortium or CDEEE -- said during an extensive presentation at the First International Encounter on energy. Dominican Today reports that the meeting, which was attended by the country's President Leonel Fernandez, was held to evaluate the reform on the energy sector. According to Dominican Today, Mr. Segura said that plans include collecting up to US$114 million in July 2007, and US$130 million by December next year. The only costs to be subsidized relate to operational costs that would also be eliminated by December 2007, Mr. Segura told Dominican Today. Dominican Today states that Mr. Segura said the president could use the subsidy funds on social projects that the country needs badly like hospitals, schools and the Armed Forces. Investments would be for the construction of transmission networks to reduce losses to 1.9% from 2.8%, Dominican Today relates. * * * 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. * DOMINICAN REPUBLIC: Bank Auctions DOP200-Mil. Certificates ------------------------------------------------------------ Dominican Republic's Central Bank auctioned on June 14 DOP200 million worth of investment certificates, Dominican Today reports. Dominican Today relates that among those invited to participate are: -- multiple banking entities, -- savings and loans associations, -- savings and loans banks, -- financials, -- small loans units, -- savings and credit cooperatives, -- institutional investors, -- insurance companies, -- public and private investment funds, -- exchange houses, and -- other non-financial entities and individuals. Dominican Today states that the minimum amount for offers is DOP100,000. Offers can be submitted by filling up a form on the Central Bank Web page. As reported in the Troubled Company Reporter on May 26, 2006, Dominican Republic's Central Bank also auctioned DOP2,500 million worth of investment certificates on May 24. * * * 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. * DOMINICAN REPUBLIC: Cement Industry Loses Over DOP100 Mil. ------------------------------------------------------------ The Dominican Republic's cement industry posted losses of more than DOP100 million at November 2005, the DR1 Newsletter reports. Spokesmen of the Cement Producers Association told DR1 that the government's coffers have suffered, revealing a reduction of DOP85 million a month in decreased income from taxes. According to DR1, the losses resulted to an ill-advised price war. As reported in the Troubled Company Reporter on May 31, 2006, a manufacturer had initiated a price war, taking down prices below production costs. This strategy, however, suddenly stopped and now prices have risen over 75%. DR1 relates that Jean Alain Rodriguez, the executive director of Cementos Dominicanos or Domicen, the newest cement provider, admitted that things got out of control when his firms entered the market competing with lower prices. DR1 states that when the producers reversed the price trend and almost doubled the price, the government intervened and asked them to stop the price increases and reduce them. The producers then decreased the price to US$3.79 per bag from US$2.18 a bag. While recognizing the importance of cement in the construction sector, the Cement Producers Association however told DR1 that cement represented 8% of the raw material costs of a building on a per kilogram basis. * * * 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. ============= E C U A D O R ============= * ECUADOR: Puts Block 15 Oil Field Under State of Emergency ----------------------------------------------------------- Ecuador's President Alfredo Palacio has declared a state of emergency on block 15 and other assets formerly operated by US oil company Occidental (NYSE: OXY), the presidential website reported. The state of emergency will allow state oil company Petroecuador to avoid the paperwork associated with public company operations -- for example, tender processes -- and concentrate on operating the assets, a Petroecuador spokesperson told BNamericas, confirming local press reports. Production levels remain roughly at the normal 100,000 barrel-a- day level. The company will operate under the state of emergency until a special committee selects a state-owned company to operate the assets, the spokesperson said. The committee was appointed by presidential decree on Monday. Chile's state oil company Enap, Brazil's Petrobras (NYSE: PBR) and China's Sinopec as well as Indian and Russian state-owned companies have expressed interest in the block, with Colombia's Ecopetrol interested in providing technical assistance, the spokesperson said. Ecuador expropriated Oxy's assets alleging the US company transferred a 40% stake in block 15 to Canadian oil firm EnCana (NYSE: ENC) in 2000 without government permission, overproduced some wells and did not comply with the block's investment plan. Oxy responded by filing an arbitration claim with the International Center for Settlement of Investment Disputes. * * * 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 ===================== E L S A L V A D O R ===================== * EL SALVADOR: Draft Bill on Ethanol Use Expected in July --------------------------------------------------------- The government of El Salvador is expecting in July a draft bill that would promote ethanol use in the country, Mario Salaverria, the minister of agriculture and livestock, told the local press. Reports say that the government aims to add locally produced ethanol into the gasoline mix. This would cut El Salvador's yearly US$1 billion energy expenditure by US$100 million. According to reports, ethanol could also be shipped to the United States under the free trade agreement. A Brazilian specialist has been hired by El Salvador's economy ministry to study the initiative to define the ethanol-gasoline mix, Business News Americas reports. * * * Fitch Ratings assigned these ratings on El Salvador: Rating Rating Date ------ ----------- Country Ceiling BB+ Jun. 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 * EL SALVADOR: Regulator Campaigns for Reduction of Power Use ------------------------------------------------------------- Siget, the power and telecom regulator of El Salvador, said in a statement that it launched Ahorre, a campaign to reduce power consumption and maintain competitive energy prices. Business News Americas relates that the energy savings campaign aims to help consumers reduce bills on electricity usage by being able to identify equipment power consumption requirements. * * * Fitch Ratings assigned these ratings on El Salvador: Rating Rating Date ------ ----------- Country Ceiling BB+ Jun. 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 ========= H A I T I ========= * HAITI: Caribbean Group Urges Global Community's Aid to Nation --------------------------------------------------------------- The Caribbean Community and Common Market or CARICOM has asked the international community's participation in providing long- term commitment to support Haiti in its stabilization, Radio Jamaica reports. The CARICOM was established by the Treaty of Chaguaramas, which came into effect on Aug. 1, 1973. It replaced the 1965-1972 Caribbean Free Trade Association or CARIFTA, which had been organized to provide a continued economic cooperation between the English-speaking nations of the Caribbean. Radio Jamaica relates that Frank Davies, Bahamas' United Nations Charge d'Affairs, told the United Nations' Fifth Committee -- which deliberated on the budget for the UN Stabilization Mission in Haiti -- that the road ahead for the stabilization of Haiti would be long and difficult and so support to the country must be commended and pursued. Mr. Davies told Radio Jamaica that he was pleased that the mission is continuing to review its staffing requirements to guarantee a greater proportion of national staff. However, Mr. Davies said that the CARICOM wanted to know why the mission must go on using consultancy services for disarmament, demobilization and reintegration, Radio Jamaica relates. Posts have been made available by the General Assembly, Radio Jamaica states, citing Mr. Davies. * * * Haiti is currently seeking international help to spur economic development in the country. President Rene Preval submitted that the country's poverty, widespread unemployment and the dilapidated state of infrastructures will be alleviated with increased international assistance. ============= J A M A I C A ============= DIGICEL LTD: Has 2,000+ Employees in 20 Markets ----------------------------------------------- Digicel Ltd.'s number of employees has reached more than 2,000 throughout its 20 markets of operation. In the past year, Digicel has expanded from seven to 20 markets and doubled the number of its employees. "The Digicel family has grown significantly in the past year and we are very proud of our staff's accomplishments. The commitment of our employees is the cornerstone of our unmatched level of service and ability to provide more value and a better customer experience then the competition," said Colm Delves, CEO of Digicel. "As we continue to deliver on our vision of a seamless pan-Caribbean network, Digicel will demonstrate unrivalled growth through the entrance into new markets in conjunction with sustained growth in our existing markets. As a result our number of employees will grow in tandem." With a significant amount of growth over the past five years, Digicel has become a significant employer in the region. More than 90% of Digicel's staff is from the Caribbean. The company receives an average 400 resumes and inquires for employment each day according to Digicel's human resources department. Digicel reached this latest milestone through a combination of internal growth and acquisition. Almost one year ago, Digicel announced the acquisition of Cingular Wireless assets in the Caribbean and Bermuda, which quickly accelerated the expansion of its operations to several new markets. In April, Digicel closed its US$196 million acquisition of Bouygues Telecom Caribe establishing operations in: -- Martinique, -- Guadeloupe and -- French Guiana, and in the same month launched operations in Trinidad & Tobago. On May 2006, Digicel commenced operations in Haiti, a market of over 8 million people. As the employee base continues to grow, Digicel has made more investments in professional development including the recent introduction of its Digicel University, a comprehensive portfolio of mentoring and training programs for all staff. Digicel's ongoing commitment to developing staff and providing growth opportunities has paid off significantly in high employee retention rates. Many employees have been with Digicel since its launch in 2001. The employee growth has been across all of Digicel's markets including its headquarters in Jamaica. The company has plans to develop a state-of-the-art facility to house its Jamaica and head office operations in New Kingston, Jamaica. With over US$1 billion invested in the Caribbean region, Digicel has become one of the most admired and leading brands in the region. Digicel Limited is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in 13 countries of the Caribbean including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * On Mar. 10, 2006, Fitch affirmed the 'B' rating of Digicel Limited, senior unsecured debt, including the US$300 million senior notes due 2012, following the announcement that it is in the process of acquiring Bouygues Telecom Caraibe. Fitch said the Outlook for the Ratings is Stable. KAISER ALUMINUM: Wants Zurich Insurance Settlement Pact Approved ---------------------------------------------------------------- Kaiser Aluminum & Chemical Corporation and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to: (i) approve their settlement agreement with Zurich Insurance Company (Switzerland), and Zurich International (Bermuda), Ltd.; and (ii) authorize the sale of certain Zurich-issued policies back to Zurich free and clear of liens, claims, encumbrances or other interests. In May 2000, KACC instituted an insurance coverage action against Zurich and other insurers before the Superior Court of California for the County of San Francisco. KACC is seeking: -- a declaratory judgment that the insurers are obligated to cover the asbestos-related bodily injury products that have been asserted against KACC; and -- damages for breach of contract and breach of the covenant of good faith and fair dealing against several of the insurers. Zurich subscribed to or issued certain policies that provide KACC insurance coverage that spans the period from 1977 to 1979, and 1985 to 1987. The Debtors and Zurich have engaged in negotiations to resolve their dispute regarding the Subject Policies, Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, relates. Pursuant to the Settlement Agreement, Zurich agrees to make a US$1,600,000 settlement payment not later than June 30, 2006. Zurich will deliver the settlement amount to U.S. Bank National Association, as settlement account agent, unless a Trigger Date has occurred, in which case, payment will be made 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: -- the order approving the Settlement Agreement becomes a Final Order; -- the order confirming the Reorganizing Debtors' Plan becomes final; and -- the occurrence of the Plan Effective Date. Other terms of the Settlement Agreement are: (a) Zurich will receive all benefits of being designated as a Settling Insurance Company in the Plan of Reorganization, including the benefits of the Personal Injury Channeling Injunctions; (b) KACC releases all its rights with respect to Zurich's participation under the Subject Policies and other rights under additional policies, and will dismiss Zurich from the Products Coverage Action; (c) KACC will sell the Subject Policies back to Zurich, and Zurich will buy back the Policies free and clear of all liens, claims, or interests, with Zurich's payment of the Settlement Amount constituting the consideration for the buy-back; (d) If any claim is brought against any of the Zurich that is subject to a PI Channeling Injunction, the Funding Vehicle Trust will exercise all reasonable efforts to establish that the claim is enjoined as to Zurich; and (e) Zurich will not seek from any entity other than its reinsurers or retrocessionaires: * reimbursement of any payments that it is obligated to make under the Settlement Agreement; * any other payments Zurich has made to or for the benefit of KACC or, upon its creation, the Funding Vehicle Trust, under the Subject Policies, whether by way of contribution, subrogation, indemnification or otherwise. In no event will Zurich make any claim for or relating to the insurance, reinsurance or retrocession against any KACC Party. The Settlement Agreement contains certain rights to adjustment of the Settlement Amount if Asbestos Litigation is enacted into law before the earlier of the Trigger Date and June 30, 2006, and the Asbestos Legislation does not provide Zurich a dollar- for-dollar credit for payments under the Settlement. Ms. Newmarch tells the Court that through the Settlement Agreement: (i) KACC will eliminate its continuing costs of prosecuting the Products Coverage Action against Zurich; (ii) uncertainty regarding future payments by Zurich will be eliminated; and (iii) total fixed payment from Zurich will be 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, along with its Jamaican subsidiaries -- Alpart Jamaica Inc. and Kaiser Jamaica Corporation -- 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. 98; Bankruptcy Creditors' Service, Inc., 215/945-7000) SUGAR COMPANY: Hoping to Pay Debts with Ministry & Creditor Aid --------------------------------------------------------------- The Sugar Company of Jamaica hopes to solve its financial crisis and be able to pay debts through the assistance of the Ministry of Finance and Europe's KBC Group, the firm's creditor, The Jamaica Gleaner reports. Roger Clarke, the minister of agriculture and lands, told Farmers Weekly, "We are pinning our hopes on what we can do through the Ministry of Finance and we do have some credit arrangement with KBC out of Europe, they have been funding us to a certain extent." Negotiations were taking place between the company and the ministry, The Gleaner relates, citing Mr. Clarke. Mr. Clarke told The Gleaner, "We do have some money coming in at the second and final payment from the sugar produced, but the problem is it is committed to paying debt so what we want to do is to see if we can find a way to hold that (the first and second payments) to deal with our present needs." The divestment of the SCJ would aid the government in solving the debt problem. Eight firms from the United States, Brazil, Canada India and China have shown interest in acquiring the company's assets, the minister told The Gleaner. SCJ registered a net loss of almost US$1.1 billion for the financial year ended Sept. 30, 2005, 80% higher than the US$600 million reported in the previous financial year. The SCJ blamed its financial deterioration to the reduction in sugar cane production. =========== M E X I C O =========== DANA CORPORATION: Wants to Enter Into Spicer Share Purchase Pact ---------------------------------------------------------------- Dana Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to: (a) enter into and perform a Master Share Purchase Agreement dated May 30, 2006, by and among the Debtors, Desc Automotriz, S.A. de C.V., Inmobilaria Unik, S.A. de C.V., Spicer, S.A. de C.V., and Dana Holdings Mexico, S. de R.L. de C.V., relating to dissolution of the Spicer Joint Venture; and (b) assume the Trademark License Agreement between Dana and Transmisiones TSP, S.A. de C.V., as amended, regarding the license of the "Spicer" trademark. A full-text copy of the Master Share Purchase Agreement is available for free at http://researcharchives.com/t/s?b4d Spicer is a holding company, which, through its subsidiaries, is engaged in the manufacture and sale of automotive parts in Mexico. The Debtors have full title to 5,329,801,806 Spicer shares, which represents 48.803% of the issued and total outstanding shares of Spicer. The Debtors and Desc Automotriz are parties to the Spicer, S.A. de C.V. Shareholders Agreement, as amended, dated as of May 19, 2000, which: -- prohibits the Debtors from manufacturing or selling products in Mexico directly competitive with those of Spicer; and -- provides that Desc Automotriz will be a preferred partner through Spicer should the Debtors expand their production in Mexico. According to Corinne Ball, Esq., at Jones Day, in New York, the Debtors and Desc Automotriz have agreed on a series of transactions to unwind the Spicer JV which are memorialized in the Share Purchase Agreement and other related agreements. Upon completion of the transactions: (a) the Dana Companies will have acquire sole ownership of the Spicer Entities involved in the manufacture of axles, driveshafts and gears and the casting and forging businesses, along with some companies that support those operations -- the Dana Targets -- which include: * Ejes Tractivos, S.A. de C.V. -- Etrac, * Engranes C>nicos, S.A. de C.V. -- ENCO, * Cardanes, S.A. de C.V., * Autometales, S.A. de C.V. -- AMSA, * Forjas Spicer, S.A. de C.V., * Direcspicer, S.A. de C.V., * Spicer Servicios, S.A., and * Corporaci>n Inmobiliaria; and (b) Desc Automotriz and Spicer will have acquire sole ownership of the remaining JV Subsidiaries. The Share Purchase Agreement provides for the Debtors' divestiture of the Dana JV Shares and the acquisition of the shares of the Dana Targets: 1. The Debtors will contribute US$19,500,000, to ENCO and Cardanes in return for hybrid securities, which will be treated as equity under U.S. law and debt under Mexican law; 2. The debt owed by AMSA to Spicer will be capitalized by each of Desc Automotriz and Inmobiliaria Unik, contributing cash to AMSA in an amount equal to their percentage ownership in AMSA times the value of AMSA's debt, with the remaining portion of AMSA's indebtedness to Spicer being converted into additional equity held by Spicer in AMSA; 3. All intercompany debt owed by the Dana Targets to Spicer will be assigned to Corporacion Inmobiliaria in return for Corporacion Inmobiliaria's issuance of additional shares of its stock to Spicer in satisfaction of all of the debt; 4. After satisfaction of certain obligations, the Debtors and Desc Automotriz will split the cash held in Spicer and all of its subsidiaries based on their ownership interests in Spicer, with the resulting cash distribution to the Dana Targets being used to fund their ongoing operations; 5. Desc Automotriz will buy the Debtors' shares in Spicer for US$166,010,000, to be paid in the form of a promissory note; 6. ENCO and Cardanes will dividend the funds they received under the Hybrid Loans to Spicer and Inmobiliaria Unik; 7. The Debtors will transfer the Desc Automotriz Promissory Note to Dana Holdings Mexico SRL de C.V., which is a wholly owned non-debtor Mexican subsidiary, to facilitate the contemplated transactions; and 8. Dana Mexico will buy the Dana Targets from Spicer by transferring the Desc Automotriz Promissory Note to Spicer. After the Spicer Transaction is consummated, the Debtors will have swapped around 49% of their interest in Spicer, plus US$19,500,000, for 100% ownership of the Dana Targets. A diagram of the Spicer Transaction is available for free at: http://researcharchives.com/t/s?b4e Pursuant to the Share Purchase Agreement, the parties will adjust the purchase prices of the Dana JV Shares and the shares of the Dana Targets at Closing to take into account levels of working capital and cash in Spicer and its subsidiaries as of June 30, 2006, with an adjustment for any prepetition payables paid after June 30, 2006. In the event that the actual working capital amounts for either the Desc Targets or the Dana Targets diverge by 15% or more from the average of the projected working capital amounts of the Desc Targets and the Dana Targets, Desc Automotriz or Dana Mexico will pay an adjustment to the purchase prices in the amount by which the divergence exceeds 15%. The parties have also agreed to estimate the level of cash as of June 30, 2006, in Spicer and its subsidiaries and to debit and credit from their own portions of that cash, which is based on the ownership percentages in Spicer and the JV Subsidiaries, the amounts required to satisfy the obligations of certain parties. The Share Purchase Agreement contemplates that the Debtors will reimburse Spicer for certain expenditures totaling US$7,000,000, made on the Debtors' behalf to prepare and execute certain projects to be pursued by the Dana Targets post-Closing. The Debtors will reimburse Spicer for any amounts required to terminate certain leases with GE relating to automobiles used by employees of the Dana Targets. To optimize the production capacity of the Dana Targets, the Debtors plan to move a variety of production equipment from certain of their U.S. facilities to facilities that will be owned by the Dana Targets after the Spicer Transaction closes, including: 1. the moving assembly equipment from Fort Wayne, Indiana, and Buena Vista, Virginia, to a facility owned by Etrac in Mexico City; 2. the moving axle related equipment from Cape Girardeau, Missouri, and Fort Wayne, Indiana, to the Etrac Facility; 3. the moving plant steering machinery and assembly operations from Lima, Ohio, to a plant owned by Cardanes in Quer,taro, Mexico; 4. the moving plant driveshaft machining from Bristol, Virginia, to the Cardanes Facility; and 5. the moving plant driveshaft machining from Pottstown, Virginia, to the Cardanes Facility. About Dana Corporation Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed US$7.9 billion in assets and US$6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000). DIRECTV INC: Adds Azteca America's KODF-26 in Dallas Lineup ----------------------------------------------------------- DIRECTV, Inc., provider of digital television service, has added KODF-26, Azteca America, to the Dallas-Ft. Worth local broadcast channel lineup. DIRECTV is the only multichannel service provider to deliver Azteca America throughout the entire Dallas- Ft. Worth designated market area. The launch of Azteca America in the Dallas DMA marks the first time Azteca America programming is available to DIRECTV customers in the sixth largest Hispanic market, as ranked by Nielsen Media Research. DIRECTV customers in this DMA who subscribe to the local channel package can now see a variety of Azteca America's Spanish-language entertainment programming, including: -- worldwide soccer highlight coverage, -- Ventaneando with Patti Chapoy, -- newscasts from Mexico, -- highly popular novelas and -- professional Mexican League Soccer matches. TV Azteca, the second-largest producer of Spanish-language programming in the world, provides KODF-26 with the full array of TV Azteca's hard-hitting, highly popular novelas in weekday primetime, including two brand new novellas, "Amor sin Condiciones" and "Amores Cruzados." On July 6 begins the brand new season of "La Academia." DIRECTV currently offers customers in the Dallas-Ft. Worth DMA access to additional Spanish-language local channels, including: -- KXTX/Telemundo Channel 39, -- KSTR/Telefutura Channel 49 and -- KUVN/Univision Channel 23. About TV Azteca TV Azteca is one of the two largest producers of Spanish- language television programming in the world, operating two national television networks in Mexico -- Azteca 13 and Azteca 7 -- through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing US Hispanic market, and Todito, an Internet portal for North American Spanish speakers. * * * Moody's Investor Services rated TV Azteca's senior unsecured debt at B1. About DIRECTV The DIRECTV Group, Inc., formerly Hughes Electronics Corporation, headquartered in El Segundo, California, is a world-leading provider of multi-channel television entertainment, and broadband satellite networks and services. The DIRECTV Group, Inc. with sales in 2004 of approximately US$11.4 billion is 34% owned by Fox Entertainment Group, Inc., which is owned by News Corporation. DIRECTV is currently available in Latin American countries: Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Puerto Rico, Trinidad & Tobago, Uruguay, Venezuela and several Caribbean island nations. * * * Standard & Poor's Rating Services placed a BB credit rating on DIRECTV Group'S long-term foreign and local currency ratings effective Aug. 9, 2004. S&P said the outlook is stable. FORD MOTOR: Report Says Co. Will Invest US$9.2 Billion in Mexico ---------------------------------------------------------------- Ford Motor Co. will invest US$9.2 billion in Mexico to leverage its low operating costs in the country, Reuters reports, citing the Oakland Press. The investment could potentially create up to 150,000 jobs in the country over a six-year period. Ford Motor has been slashing jobs and planning plant closures in the United States in its effort to return its North American operations to profitability. The automaker faces rising costs and decling market share in the United States. Ford spokesman Oscar Suris said the Mexico investment news is "speculative" when asked by Reuters. Oakland Press said it got the information from a document given to it by an unnamed Ford employee. The newspaper added that a second source vouched for the authenticity of the information. * * * On May 30, 2006, Standard & Poor's Ratings Services placed its ratings on nine U.S. single-issue synthetic ABS transactions related to Ford Motor Co. (Ford; BB-/Watch Neg/B-2) and Ford Motor Credit Co. (Ford Credit; BB-/Watch Neg/B-2) on CreditWatch with negative implications. The May 25, 2006, placement of the ratings on Ford, Ford Credit, and all related entities on CreditWatch with negative implications does not have any immediate rating impact on the Ford-related ABS supported by collateral pools of consumer auto loans or auto wholesale loans. Ford Motor has two assembly plants and an engine plant in Mexico. J.L. FRENCH: Creditors Unanimously Approve Chapter 11 Plan ---------------------------------------------------------- Each of the five voting creditor classes overwhelmingly accepted J.L. French Automotive Castings, Inc.'s Plan of Reorganization, which readies the company for its confirmation hearing on June 21. The second lien noteholders voted unanimously to accept the Plan, along with more than 98% in claims amount and 95% in number of the two classes of unsecured creditors who voted. The senior subordinated noteholders who voted also unanimously accepted the Plan. In addition, the company's rights offering, which was conducted concurrently with the solicitation of plan acceptances, was fully subscribed at US$130 million by the second lien noteholders. Details on the rights offering subscriptions and the voting report will be filed with the Court prior to the confirmation hearing. The unsecured creditors' committee has filed a statement in support of Plan confirmation, and no objections to confirmation were filed prior to the objection deadline. If the court confirms the Plan, the company expects to emerge from bankruptcy shortly thereafter. Headquartered in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc. -- http://www.jlfrench.com/-- is one of the world's leading global suppliers of die cast aluminum components and assemblies. There are currently nine manufacturing locations around the world including plants in the United States, United Kingdom, Spain, and Mexico. The company has fourteen engineering/customer service offices to globally support its customers near their regional engineering and manufacturing locations. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. Miller Buckfire & Co., LLC, serves as their financial advisor. Ricardo Palacio, Esq., and William Pierce Bowden, Esq., at Ashby & Geddes, PA, represents the Official Committee Of Unsecured Creditors. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than US$100 million. KRISPY KREME: Sees Revenue Decline in Fiscal 2006 First Quarter --------------------------------------------------------------- Krispy Kreme Doughnuts, Inc. (NYSE: KKD), expects to report revenues of US$116 million for the first quarter of fiscal 2007, which ended April 30, 2006, compared to revenues of US$153 million for the first quarter of fiscal 2006. The decrease in revenues principally reflects a decrease in the number of Company stores, lower sales to franchisees from the Company's Manufacturing and Distribution segment, and lower royalties and fees from franchisees. Systemwide sales fell approximately 17% in the first quarter of fiscal 2007 compared to the first quarter of the prior year primarily due to a 19% decrease in the number of factory stores to 310 (total stores, including satellites, decreased 6%). Average weekly sales per factory store increased 10% and 2% in Company stores and systemwide, compared to the first quarter of fiscal 2006. Average weekly sales per store increased approximately 10% for Company stores and decreased approximately 11% systemwide, compared to the first quarter of fiscal 2006. The average sales per unit data reflect, among other things, store closures and the related shift in off-premises doughnut production into a smaller number of stores. Systemwide sales data include sales at all Company and franchise locations. Systemwide sales are a non-GAAP financial measure; however, the Company believes systemwide sales information is useful in assessing the overall performance of the Krispy Kreme brand and, ultimately, the performance of the Company. "We are taking steps to turn around the Company," Daryl Brewster, President and Chief Executive Officer, said. "We have filed our fiscal 2005 financial statements. We have reached an initial settlement of the ERISA class action. We continue to see growth in our international markets, including two new international development agreements. We are also seeing signs of stability in the United States." The Company's financial results continue to be adversely affected by the substantial costs associated with the legal and regulatory matters. The Company expects to report a net loss for the first quarter of fiscal 2007. Financial Position The Company ceased consolidation of its sole remaining consolidated franchisee, Glazed Investments, in early February 2006 when Glazed filed for bankruptcy protection. Substantially all of Glazed's assets subsequently were sold to another of the Company's franchisees, which is continuing the business, and Glazed's affairs are being wound up. The Company believes that the amount, if any, it will be required to pay pursuant to its guarantee of a portion of certain of Glazed's indebtedness will not be significant. The indebtedness totaled US$13 million. The Company believes that cash flow from operations, combined with other anticipated cash inflows, will be sufficient to meet its liquidity needs. As of April 30, 2006, the Company's cash balance was US$19 million and its indebtedness was US$121 million, compared to approximately US$20 million and US$122 million at Jan. 29, 2006. The January amount excludes any amount relating to Glazed Investments, its sole consolidated franchisee at the time. As of April 30, 2006, the Company had no consolidated franchisees. In May 2006, the Company sold for cash its notes receivable from Krispy Kreme Australia for their par balance of approximately US$3.8 million and entered into a definitive agreement to sell its interest in Krispy Kreme UK for approximately US$5.6 million cash. The Company's unused borrowing capacity under its credit facilities is expected to have declined during the quarter due to a reduction in the operating earnings on which such availability depends. The Company's operating plan for fiscal 2007 does not forecast any additional borrowings under these credit facilities. About Krispy Kreme Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme (NYSE: KKD) --http://www.krispykreme.com/-- is a leading branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. There are currently approximately 320 Krispy Kreme stores and 80 satellites operating systemwide in 43 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC is a majority-owned subsidiary and franchisee partner of Krispy Kreme Doughnuts, Inc., in the Philadelphia region. The Debtor operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated US$10 million to US$50 million in assets and debts. Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). The bankruptcy filing will facilitate the sale of 12 Krispy Kreme stores, as well as the franchise development rights for Colorado, Minnesota and Wisconsin, for approximately US$10 million to Westward Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP represents Glazed in its restructuring efforts. When Glazed filed for protection from its creditors, it estimated assets and debts between US$10 million to US$50 million. KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently restructuring under the Companies' Creditors Arrangement Act. Pursuant to the Court's Initial Order, Ernst & Young Inc. was appointed as Monitor in KremeKo's CCAA proceedings. The Monitor is attempting to sell the KremeKo business. MERIDIAN AUTO: Likely Lenders & Debtors Tap Hilco Appraisal ----------------------------------------------------------- Meridian Automotive Systems, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Hilco Appraisal Services, LLC, as appraiser, nunc pro tunc to May 26, 2006. The Debtors want Hilco to appraise their inventory, machinery and equipment, and real property. The Debtors and their potential exit lenders have agreed to retain one set of mutually agreed upon appraisers, which will be paid for by the Debtors. Hilco will perform separate machinery and equipment appraisals for the Prospective Lenders and the Debtors. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that the Prospective Lenders' appraisal, to be used in connection with the Exit Facility due diligence, will focus on various machinery and equipment at various locations, assigning the machinery and equipment an "orderly liquidation value." Hilco will physically appraise the Debtors' machinery and equipment located at: Location Size in Sq. Ft. -------- --------------- Ionia, Michigan 650,318 Ionia, Michigan 94,700 Grabill, Indiana 447,000 Huntington, Indiana 180,000 Shelbyville, Indiana 432,000 Lenoir, North Carolina 131,091 Kentwood, Michigan (Plant #1) 207,000 Kentwood, Michigan (Plant #5) 244,000 Kentwood, Michigan (Plant #7) 268,000 Kentwood, Michigan (29th St.) 52,000 Angola, Indiana 115,000 Angola, Indiana 73,000 Canton, Michigan 120,000 Detroit, Michigan 306,000 Detroit, Michigan 67,765 Kansas City, Kansas 200,000 Shreveport, Louisiana 72,000 Brantford, Ontario 172,000 Rushville, Indiana 97,000 Salisbury, North Carolina 282,000 Grabill, Indiana (SMC) 62,000 Fowlerville, Michigan 234,000 Newton, North Carolina 65,000 Jackson, Ohio 217,000 The appraisal to be used by the Debtors in connection with their fresh start accounting will also focus on those machinery and equipment, assessing their "fair value" in accordance with Statement of Position No. 90-7: Location Size in Sq. Ft. -------- --------------- Ionia, Michigan 650,318 Ionia, Michigan 94,700 Grabill, Indiana 447,000 Huntington, Indiana 180,000 Shelbyville, Indiana 432,000 Lenoir, North Carolina 131,091 Kentwood, Michigan (Plant #1) 207,000 Kentwood, Michigan (Plant #5) 244,000 Kentwood, Michigan (Plant #7) 268,000 Kentwood, Michigan (29th St.) 52,000 Angola, Indiana 115,000 Angola, Indiana 73,000 Canton, Michigan 120,000 Detroit, Michigan 306,000 Detroit, Michigan 67,765 Kansas City, Kansas 200,000 Shreveport, Louisiana 72,000 Brantford, Ontario 172,000 Rushville, Indiana 97,000 Salisbury, North Carolina 282,000 Grabill, Indiana (SMC) 62,000 Fowlerville, Michigan 234,000 Newton, North Carolina 65,000 Jackson, Ohio 217,000 Muzquiz, Mexico 220,000 Celaya, Mexico 102,000 Rio Claro, Brazil 226,000 Hilco will perform an orderly liquidation value appraisal of the Debtors' inventory, to be used as part of the Prospective Lenders' due diligence, delineated between raw materials, work- in-progress, and finished good inventory categories, Mr. Brady tells the Court. With respect to the Debtors' real estate, Hilco will estimate the market value of several of the Debtors' properties located in the United States. This appraisal will be used in connection with the Debtors' fresh start accounting. The Debtors propose to pay Hilco a flat fee for each of these appraisals: Appraisal Fee --------- --- Inventory US$48,500 Machinery & Equipment US$138,000 Real Estate US$76,500 On the Court's approval, the Debtors will pay Hilco a US$50,000 retainer, which will be applied to the total fees charged by Hilco. Andrew Dahlman, senior vice president of Hilco Appraisal Services, LLC, assures the Court that: * Hilco has no connection with, and holds no interest adverse to, the Debtors or their estates in the matters on which Hilco is proposed to be engaged, except as disclosed; * Hilco does not hold any prepetition claims against the Debtors and as a result, it is not a "creditor" of the Debtors within the meaning of Section 101(10) of the Bankruptcy Code; and * Hilco is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Meridian Automotive Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed US$530 million in total assets and approximately US$815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000). MUNICIPALITY OF TEPATITLAN DE MORELOS: Moody's Withdraws Ratings ---------------------------------------------------------------- Moody's withdrew the issuer ratings A2.mx (Mexico National Scale) and Ba2 (Global Scale, local currency) assigned to the municipality of Tepatitlan de Morelos. Moody's has withdrawn these ratings for business reasons. TELE NORTE: Banco Nacional Mulls Sale of 25% Stake in Company ------------------------------------------------------------- The Brazilian Development Bank aka BNDES is studying a proposal to sell its 25% in Tele Norte Leste Participacoes aka Telemar, Fabio Sotelino, the capital markets manager of BNDES, told financial daily Valor Economico. BNDES' decision came as a result of a share conversion proposal laid by Tele Norte. The share restructuring scheme will convert all shares into voting shares simplifying Telemar's structure and bring its shareholders under one firm. The company urrently operates in 16 Brazilian states. The restructuring is expected to be approved this week, BNamericas says. "I can't anticipate a decision," Mr. Sotelino told Business News Americas. However, he said that any sale would be for BNDES' entire stake in the operator. The restructuring, according to BNamericas, will lead to a secondary offering of ordinary shares to be sold on the new market listing of stock exchange Bolsa de Valores do Estado de Sao Paulo or Bovespa, as well as on the New York Stock Exchange or NYSE. * * * As reported in the Troubled Company Reporter on May 26, 2006, Standard & Poor's Ratings Services disclosed that its 'BB' l long-term corporate credit ratings on Brazil-based integrated telecommunications carrier Telemar Norte Leste S.A. and its holding company Tele Norte Leste Participacoes S.A. remain on CreditWatch with positive implications, where they were placed on Feb. 28, 2006. The national scale rating assigned to three local debentures issued by Telemar Participacoes S.A. (Tele Norte's holding company) also remain on CreditWatch with positive implications. * * * As reported in the Troubled Company Reporter on May 29, 2006, Fitch Ratings has taken these rating actions for Tele Norte Leste Participacoes S.A. and Telemar Norte Leste S.A.: Tele Norte Leste Participacoes: -- International scale local currency issuer default rating upgraded to 'BBB-' from 'BB+' with Stable Outlook; -- International scale foreign currency IDR affirmed at 'BB-' with Positive Outlook; -- National scale rating upgraded to 'AA+(bra)' from 'AA-(bra)' with Stable Outlook; and -- BRL1.3 billion local debenture issuance upgraded to 'AA+(bra)' from 'AA-(bra)' with Stable Outlook. Telemar Norte Leste S.A.: -- International scale local currency IDR affirmed at 'BBB-' with Stable Outlook; -- International scale foreign currency IDR affirmed at 'BB-' with Positive Outlook; and -- National scale rating upgraded to 'AA+(bra)' from 'AA(bra)' with Stable Outlook. TELE NORTE: Brandes Investment Slams Share Conversion Proposal -------------------------------------------------------------- Brandes Investment Partners balks at a major share restructuring planned by Tele Norte Leste Participacoes SA or Telemar. Under Telemar's share restructuring scheme, the company wants to consolidate the stocks of its subsidiaries into one class of voting shares. Brandes, which owns 8.75% of Telemar's preferred shares, told Bloomberg News that converting all shares into voting shares will compromised the preferred shareholders' stake in the company's profits by more than a third. Brandes asserts that the conversion of shares would reduce preferred shareholders' profits by 19% from 55%. An analyst at Banif Investment Banking quoted by Bloomberg said that Brandes' opposition could put pressure on Telemar to revise its plan that seeks to improve corporate governance. Brandes plans to ask Brazil's stock regulator to allow preferred shareholders to vote separately on the plan, Bloomberg says. * * * As reported in the Troubled Company Reporter on May 26, 2006, Standard & Poor's Ratings Services disclosed that its 'BB' l long-term corporate credit ratings on Brazil-based integrated telecommunications carrier Telemar Norte Leste S.A. and its holding company Tele Norte Leste Participacoes S.A. remain on CreditWatch with positive implications, where they were placed on Feb. 28, 2006. The national scale rating assigned to three local debentures issued by Telemar Participacoes S.A. (Tele Norte's holding company) also remain on CreditWatch with positive implications. * * * As reported in the Troubled Company Reporter on May 29, 2006, Fitch Ratings has taken these rating actions for Tele Norte Leste Participacoes S.A. and Telemar Norte Leste S.A.: Tele Norte Leste Participacoes: -- International scale local currency issuer default rating upgraded to 'BBB-' from 'BB+' with Stable Outlook; -- International scale foreign currency IDR affirmed at 'BB-' with Positive Outlook; -- National scale rating upgraded to 'AA+(bra)' from 'AA-(bra)' with Stable Outlook; and -- BRL1.3 billion local debenture issuance upgraded to 'AA+(bra)' from 'AA-(bra)' with Stable Outlook. Telemar Norte Leste S.A.: -- International scale local currency IDR affirmed at 'BBB-' with Stable Outlook; -- International scale foreign currency IDR affirmed at 'BB-' with Positive Outlook; and -- National scale rating upgraded to 'AA+(bra)' from 'AA(bra)' with Stable Outlook. TV AZTECA: DirecTV Adds Subsidiary's KODF-26 in Dallas Lineup ------------------------------------------------------------- DIRECTV, Inc., has added KODF-26, Azteca America, to the Dallas- Ft. Worth local broadcast channel lineup. DIRECTV is the only multichannel service provider to deliver Azteca America throughout the entire Dallas-Ft. Worth designated market area. The launch of Azteca America in the Dallas DMA marks the first time Azteca America programming is available to DIRECTV customers in the sixth largest Hispanic market, as ranked by Nielsen Media Research. DIRECTV customers in this DMA who subscribe to the local channel package can now see a variety of Azteca America's Spanish-language entertainment programming, including: -- worldwide soccer highlight coverage, -- Ventaneando with Patti Chapoy, -- newscasts from Mexico, -- highly popular novelas and -- professional Mexican League Soccer matches. TV Azteca, the second-largest producer of Spanish-language programming in the world, provides KODF-26 with the full array of TV Azteca's hard-hitting, highly popular novelas in weekday primetime, including two brand new novellas, "Amor sin Condiciones" and "Amores Cruzados." On July 6 begins the brand new season of "La Academia." DIRECTV currently offers customers in the Dallas-Ft. Worth DMA access to additional Spanish-language local channels, including: -- KXTX/Telemundo Channel 39, -- KSTR/Telefutura Channel 49 and -- KUVN/Univision Channel 23. About DIRECTV The DIRECTV Group, Inc., formerly Hughes Electronics Corporation, headquartered in El Segundo, California, is a world-leading provider of multi-channel television entertainment, and broadband satellite networks and services. The DIRECTV Group, Inc. with sales in 2004 of approximately US$11.4 billion is 34% owned by Fox Entertainment Group, Inc., which is owned by News Corporation. DIRECTV is currently available in Latin American countries: Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Puerto Rico, Trinidad & Tobago, Uruguay, Venezuela and several Caribbean island nations. * * * Standard & Poor's Rating Services placed a BB credit rating on DIRECTV Group'S long-term foreign and local currency ratings effective Aug. 9, 2004. S&P said the outlook is stable. About TV Azteca TV Azteca is one of the two largest producers of Spanish- language television programming in the world, operating two national television networks in Mexico -- Azteca 13 and Azteca 7 -- through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing US Hispanic market, and Todito, an Internet portal for North American Spanish speakers. * * * Moody's Investor Services rated TV Azteca's senior unsecured debt at B1. ================= N I C A R A G U A ================= * NICARAGUA: Inks Free Trade Pact With Taiwan --------------------------------------------- Minister of Economic Affairs Hwang Ing-san of Taiwan and his Nicaraguan counterpart, Alejandro Jose Arguello Choiseul, will sign a free trade pact today in Taipei to enhance the bilateral trade and economic cooperation between the two countries, the Taiwan Central News Agency reports. According to the officials, the agreement will officially take effect at the beginning of next year, the CNA relates. The negotiations on the agreement were completed earlier this year. Taiwan is involved with free trade pacts with other Central American countries; today's event makes Nicaragua as the third country to make an accord with Taiwan, the CNA says. The CNA adds that the bilateral trade between Nicaragua and Taiwan reached US$46.27 million in 2005, accounting for a year- on-year growth of 5.2%. It has also credited Taiwan with a US$33.06 million trade surplus. Taiwan mainly exports: -- textiles, -- kitchenware and -- plastic products. Meanwhile, Nicaragua exports: -- frozen beef, -- coffee, -- timber, and -- scrap materials. * * * Moody's Investor Service assigned these ratings to Nicaragua: Rating Rating Date ------ ----------- Long Term Caa1 June 30, 2003 Senior Unsecured Debt B3 June 30, 2003 =========== P A N A M A =========== GRUPO BANISTMO: Begins Trading on Latibex Under XBAN Symbol ----------------------------------------------------------- Panama's Grupo Banistmo began trading on Spain's Latibex on Wednesday, using the ticker symbol XBAN, Dow Jones Newswires reports. Dow Jones recalls that Banistmo said in April it planned to list its shares in Madrid or New York after refusing acquisition offers from international investors. The shares are being traded in Panama's stock exchange. Alberto Vallarino, the executive president of Banistmo, said in a press release that the listing will give the company's shares greater liquidity and will allow it to broaden its investor base. * * * 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. ===================== P U E R T O R I C O ===================== ADELPHIA: America Channel Fights Injunction v. Timer Warner Suit ---------------------------------------------------------------- The America Channel, LLC, filed a complaint against Time Warner Cable, Inc., Time Warner NY Cable, LLC, Time Warner, Inc., and Comcast Corporation in the United States District Court for the District of Minnesota alleging antitrust violations. America Channel is a television-programming network formed in January 2003. According to America Channel, since at least that time, Time Warner and Comcast have unlawfully monopolized, attempted to monopolize, and conspired to monopolize and unreasonably restrain trade in cable system markets in the United States and various regions by anti-competitive practices -- including acquisitions of actual and potential competitors, and swaps and horizontal divisions of markets and customers. Daniel R. Shulman, Esq., at Gray, Plant, Mooty, Mooty & Bennett, P.A., alleges that in April 2005, Time Warner and Comcast engaged in bid-rigging and price-fixing by agreeing jointly to bid for and acquire substantially all of the assets of Adelphia Communications Corporation, and then to divide the acquired assets, including cable systems in Minneapolis and St. Paul, among themselves. Mr. Shulman asserts that completion of the Adelphia acquisition and the planned division of assets will constitute further violations of Sections 1 and 2 of the Sherman Act and Section 7 of the Clayton Act; strengthen and enhance the unlawful monopolies already held by Time Warner and Comcast; and facilitate and better enable defendants to continue and perpetuate their antitrust violations in the cable network market, including specifically the exclusion of America Channel. America Channel seeks to obtain damages for the injuries it has sustained to date and will sustain up to the time of trial. America Channel asks the Minnesota District Court to: -- find that Time Warner and Comcast have violated the law; -- enter a preliminary injunction and then a permanent injunction restraining and prohibiting Time Warner and Comcast from completing the Adelphia acquisition and associated division of markets and customers; -- award it actual damages sustained as a result of Time Warner and Comcast's violations of law; -- treble those damages; -- preliminarily and then permanently enjoin Time Warner and Comcast from continuing to engage in those violations of law; and -- allow it to recover its expenses and cost of suit, including reasonable attorney's fees. Time Warner Denies Allegations Time Warner spokeswoman Susan Duffy told Bloomberg News that the allegations in America Channel's complaint "are entirely frivolous". She says Time Warner is confident that the complaint will not impede closing of the Adelphia transaction. According to Bloomberg, Comcast spokesman Tim Fitzpatrick and Adelphia spokesman Paul Jacobson declined to comment. Early this year, the Federal Trade Commission closed its antitrust investigation into the proposed sale of Adelphia's assets to Time Warner and Comcast. Time Warner is now urging the Federal Communications Commission to approve the Adelphia Transaction, which has been under review for more than a year. Bloomberg reports that Time Warner Cable expects the deal to be approved by July 31, according to spokesman Mark Harrad. ACOM's Complaint vs. America Channel, et al. The ACOM Debtors ask the Bankruptcy Court for a declaration that: -- The America Channel, LLC; Gray, Plant, Mooty, Mooty & Bennett, P.A.; and Alioto Law Firm, have impermissibly interfered with the Bankruptcy Court's jurisdiction and mandate by filing an action against Time Warner Cable, Inc., Time Warner NY Cable, LLC, Time Warner, Inc., and Comcast Corporation in the United States District Court for the District of Minnesota, which seeks, as its primary relief, a preliminary and permanent injunction enjoining the consummation of the Debtors' sale of their assets to Time Warner and Comcast; -- given the nature of the relief sought in the TAC Action, America Channel, et al., should have commenced the TAC Action, if at all, in the Bankruptcy Court; -- the TAC Action violates the automatic stay embodied in Section 362(a)(3) of the Bankruptcy Code; The ACOM Debtors also ask the Bankruptcy Court for an injunctive relief, preliminarily and permanently enjoining America Channel, et al., from interfering with the Bankruptcy Court's jurisdiction over the ACOM Debtors' Chapter 11 cases and the Sale by prosecuting the claims asserted in the TAC Action in any court other than the Bankruptcy Court. America Channel is a television programming network set to launch in late 2006. Alioto Law Firm and Gray, Plant, Mooty, Mooty & Bennett, P.A., represent America Channel in the TAC Action. According to Brian E. O'Connor, Esq., at Willkie Farr & Gallagher LLP, in New York, the TAC Action on its face value represents a blatant attempt by America Channel, et al., to coerce, at the considerable expense of the ACOM Debtors and their stakeholders, Time Warner and Comcast into carrying America Channel's programming on their cable systems. Even though the ACOM Debtors were not named as defendants in the TAC Action, the prosecution of the TAC Action and issuance of the requested injunctive relief will interfere with the Bankruptcy Court's administration of their Chapter 11 cases and will irreparably injure the ACOM Debtors and their stakeholders, Mr. O'Connor says. Mr. O'Connor contends that America Channel's accusations in the TAC Action have been summarily rejected by the Federal Trade Commissions. Judge Gerber Blocks Attempt to Stop Sale Judge Gerber preliminarily enjoins America Channel, et al., from: -- continuation of further proceedings in the TAC Action; and -- taking any other action, with the exception of any action taken in the Bankruptcy Court, to interfere with: * the Bankruptcy Court's jurisdiction over the Debtors' Chapter 11 cases; and * the sale of substantially all of the ACOM Debtors' assets to Time Warner and Comcast. America Channel, et al., Wants Order Vacated America Channel asks the Minnesota District Court to vacate Judge Gerber's order. America Channel also asks the Minnesota District Court to quash service of process on it in the New York bankruptcy proceedings. America Channel relates that until June 5, 2006, the only service of anything related to the adversary proceeding made on America Channel and its counsel was by e-mail. America Channel have told the ACOM Debtors that it does not intend to respond to the ACOM Debtors' papers or participate in any proceedings in the New York Bankruptcy Court until proper service is made. America Channel and its attorneys also informed the ACOM Debtors that they believe that the ACOM Debtors' counsel was attempting to obstruct justice and that they would move to quash any order served on them. On June 2, 2006, the ACOM Debtors served Judge Gerber's order on America Channel, through e-mail. Mr. Shulman asserts that Judge Gerber's Order should be vacated because: (1) None of the persons enjoined by the New York Bankruptcy Court is party to proceedings in that court. (2) The action filed in the Minnesota District Court is against defendants who are not parties to proceedings in the New York Bankruptcy Court. (3) America Channel has filed no action against Adelphia or any other debtor in the New York bankruptcy proceedings. (4) This is an original action to obtain relief for violations of United States antitrust laws by Time Warner and Comcast over which the Minnesota District Court has original jurisdiction. (5) The order of the New York bankruptcy court impermissibly interferes with the rights of The America Channel and its attorneys to prosecute the Antitrust Action and the jurisdiction of the Minnesota Court to hear and decide the matter. (6) The only service of papers on the parties enjoined by the New York bankruptcy court's order has been service by e-mail, which is insufficient. (7) There is no antitrust action pending in the United States bankruptcy court in New York. Debtors Want America Channel Penalized The ACOM Debtors ask the Court to find that: -- America Channel, et al., violated the Temporary Restraining Order by filing their Motion to Quash in the Minnesota District Court; and -- the commencement of the TAC Action violated the automatic stay. Mr. O'Connor asserts that the TRO clearly prohibits actions of the type taken by America Channel, et al., including the Motion to Quash. Accordingly, Mr. O'Connor contends, America Channel, et al., should be found in civil contempt and should be sanctioned in an amount not less than the ACOM Debtors' costs incurred in preparing, filing and prosecuting their Contempt Motion. About Adelphia Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- 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. 135; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA: Continental Casualty Says Plan Violates Section 1129 -------------------------------------------------------------- Continental Casualty Company, a defendant in an adversary proceeding initiated by the Official Committee of Unsecured Creditors and the Official Committee Equity Security Holders, argues that the Fourth Amended Plan of Reorganization filed by Adelphia Communications Corporation and its debtor-affiliates violates Section 1129 of the US Bankruptcy Code. CNA used to own a US$5 million participation interest in the credit agreement among Century Cable Holdings, LLC, Ft. Myers Cablevision, LLC, and Highland Prestige Georgia, Inc., and Bank of America, N.A., and Chase Manhattan Bank as co-Administrative Agents. CNA sold its participation interest in the Loan in September 2002. Leslie Berkoff, Esq., at Moritt Hock Hamroff & Horowitz LLP, in New York, notes that the Plan allows the Plaintiffs to amend the Adversary Proceeding at any time to plead with particularity and allows those amendments to relate back to the original filing, now almost three years old and almost two years after the statute of limitations contained in Section 546 of the Bankruptcy Code has run. According to Ms. Berkoff, the defendants, including CNA, have never had an opportunity to defend themselves or test the allegations of the Adversary Proceeding. "This right to amend violates Section 1129(b) because it unfairly discriminates and is not fair and equitable as to CNA (and the other non-agent participants) in its capacity as a participant in the Loan," Ms. Berkoff asserts. The Plan, Ms. Berkoff continues, also purports to limit CNA's reimbursement obligations from the Debtors from a fund established to pay indemnification claims, regardless of whether that fund is sufficient to pay all claims. CNA maintains a right to indemnification from the Debtors for all damages that it incurs as a result of its being a participant in the loan. CNA, as a participant in a wholly secured credit facility, would be paid in full under a chapter 7 scenario. Ms. Berkoff notes that the Plan provides no assurances that the fund will be sufficient to indemnify CNA. "This potential shortfall is prejudicial to CNA, violates Section 1129(a)(7) and the absolute priority rule, and is purely a litigation strategy in the Adversary Proceeding although CNA has been denied the opportunity to meaningfully participate," Ms. Berkoff says. Although there is no guarantee that CNA will be paid its indemnification obligation, the Plan provides for payment of classes of claims and interests junior to CNA, Ms. Berkoff tells the Court. "This cannot be countenanced." CNA also joins in the objections to confirmation filed by the Ad Hoc Committee of Non-Agent Secured Lenders. About Adelphia Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- 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. 135; Bankruptcy Creditors' Service, Inc., 215/945-7000) KOOSHAREM CORP: Moody's Rates Proposed US$300-Mil. Debt at B2 ------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the proposed US$300 million senior secured credit facility of Koosharem Corporation. This is the first time that Moody's has assigned ratings to Koosharem, a holding company that owns Select Personnel Services, Inc. On May 11, 2006, Select entered into a definitive agreement to acquire RemedyTemp, Inc., for US$17 in cash per share, representing approximately US$169 million in aggregate consideration before US$27.9 million of unrestricted cash received. The acquisition is expected to close in June 2006 and is subject to customary closing conditions, including approval by Remedy shareholders. The acquisition of Remedy together with the refinancing of Select's existing debt is expected to be financed with a US$215 million term loan, approximately US$24 million of borrowings under a proposed US$85 million revolving credit facility and US$27.9 million of unrestricted cash on hand. The ratings reflect solid credit metrics for the rating category, a strong market position in California, low levels of customer concentration and good industry demand trends. The ratings are constrained by substantial integration risks, intense price competition, and pronounced earnings and margin cyclicality. Moody's assigned these ratings: * US$85 million 5-year senior secured revolving credit facility, B2 * US$215 million 6 year senior secured term loan B, B2 * Corporate family rating, B2 * The ratings outlook is stable. The ratings are subject to review of executed documents and Koosharem's 2005 audited financial statements. The stable rating outlook anticipates flat to modestly declining revenues as the company completes the integration of Remedy. The pro forma operating margin, reflecting Moody's estimate of cost savings, is expected to stabilize at about 3.5%. Cash flow from operations over the next year should exceed required capital expenditures, term loan amortization and non-recurring costs related to the integration. The ratings could be upgraded if the company achieves steady organic revenue growth and reaches management's targeted cost savings such that debt to EBITDA and free cash flow to debt can be sustained at less than 4 times and over 8%, respectively. The ratings could be downgraded if the company experiences difficulty completing the merger integration or suffers deteriorating operating margins such that debt to EBITDA and free cash flow to debt are expected to be sustained at over 6.5 times and below 3%, respectively. A material settlement of outstanding employment related litigation could also pressure the ratings. Select is a privately-held staffing services business with over 50 offices throughout California, Arizona, Florida, New Jersey and Texas. Select offers temporary, temp-to-hire, and direct placement positions primarily in the clerical, accounting, customer service, mortgage, industrial and technical fields. Pro forma for the acquisition of Remedy, 2005 revenues were about US$1 billion. The combined company expects to provide its services in 35 states, Puerto Rico and Canada, through a network of 220 offices. SAFETY KLEEN: Moody's Rates Proposed Credit Facilities at B1 ------------------------------------------------------------ Moody's Investors Service assigned B1 ratings to the proposed senior secured credit facilities of Safety-Kleen Systems, Inc., an indirect, wholly-owned subsidiary of Safety-Kleen HoldCo., Inc. Concurrently, Moody's assigned a B1 Corporate Family Rating to HoldCo. The outlook for the ratings is stable. The transaction is in connection with the refinancing of the company's capital structure through a combination of equity and debt financing. This is the first time Moody's is rating the company's debt since its emergence from bankruptcy in December 2003. Notwithstanding the company being in a turnaround mode for a period that effectively spans the last seven years, Moody's believes that the company's track record since it emerged from Chapter 11 bankruptcy protection, including increasing revenue growth, improvements in working capital management, diversity of revenues, overall size, as well as valuable assets and prominence in the oil recycling and re-refinery business, offers substantive indication of ongoing improvement in business performance. Offsetting these positive trends is the need for substantial margin improvements for the company as a prerequisite for profitability. Moody's assigned these ratings: Safety-Kleen HoldCo., Inc.: * Corporate Family Rating, rated B1; Safety-Kleen Systems, Inc.: * US$100 million senior secured revolving credit facility due 2012, rated B1; * US$230 million senior secured term loan B due 2013, rated B1; * US$65 million pre-funded letter of credit facility due 2013, rated B1. * The ratings outlook is stable. The ratings are contingent upon the receipt of executed documentation in form and substance acceptable to Moody's. Profitability improvements that lead to sustainable adjusted EBIT to interest coverage above two times and adjusted debt to EBITDA leverage ratios closer to three times could lead to a positive ratings outlook. Improved pricing, continued growth in the higher margin oil and oil products line of business as well as capturing cost reductions can move the company closer to this goal. Increased costs that cannot be passed through could put negative pressure on the company's margins and, consequently, the ratings. In addition, if the company is unable to make substantive progress toward sustained profitability and adjusted EBIT to interest coverage exceeding 1.5 times, the rating could be downgraded. Safety-Kleen Systems, Inc. headquartered in Plano, TX, is a provider of parts washers, industrial waste management and oil recycling and re-refining services. Safety-Kleen serves 400,000 customers in a broad range of industries in the United States, Canada and Puerto Rico and is the largest recovery and recycling company for used oil products in North America. The company is privately held and had revenues of approximately US$925 million for the fiscal year ending December 31, 2005. Safety-Kleen emerged from Chapter 11 bankruptcy protection in December 2003. ================================= T R I N I D A D & T O B A G O ================================= BWIA WEST: Workers Halt Strike to Meet with Firm Executives ----------------------------------------------------------- Demonstrations against BWIA West Indies Airways were halted on Tuesday when a meeting was scheduled between the company's officials and the Aviation Communication and Allied Workers Union or ACAWU, Trinidad and Tobago's Newsday reports. As reported in the Troubled Company Reporter on June 14, 2006, disgruntled BWIA workers held demonstrations outside BWIA's offices in Piarco and Port of Spain over stalled wage negotiations. The workers said they could not wait any longer for an agreed compensation package, threatening to intensify action against BWIA if an agreement is not reached soon. Curtis John, the head of ACAWU, told Newsday that the meeting would be held at Piarco next Friday. According to Newsday, the two parties would be discussing the workers' grievances during the meeting. Mr. John said that some of the staff's grievances include: -- dismissals, -- suspensions, and -- unlawful terminations of employment of officers since 2001. Mr. John told Newsday that ACAWU had several matters against BWIA before the Industrial Court. Some of BWIA's retrenchments were against the collective agreements the company made with its employees. The union official believed BWIA was trying to bribe workers cheaply to halt actions against the company. BWIA wants to keep the union out of matters concerning workers, including hiring and firing. Newsday reports that Mr. John said BWIA's move to wet lease two aircrafts was to incite workers to hold strikes that would enable the company to fire them without reason. As reported in the Troubled Company Reporter, BWIA wet leased airlines Miami Air and North American Air to handle the New York and London routes since June 12 when several of its employees called in sick over the weekend. The wet lease included the lease of: -- the aircraft, -- flight crew, -- maintenance crew, and -- insurance. Dionne Ligoure, BWIA's corporate communications manager, could not be reached for comments, Newsday reports. BWIA was founded in 1940, and for more than 60 years has been serving the Caribbean islands from Trinidad and Tobago, the hub of the Americas, linking the twin island republic and many other Caribbean islands with North America, South America, the United Kingdom and Europe. The airline has reportedly been losing US$1 million a week due to poor operational management. An employee survey revealed that lack of responsibility by the management is a major issue in the company. ================= V E N E Z U E L A ================= BANCO MERCANTIL: Inquiries on NY Agency Liquidation Due June 29 --------------------------------------------------------------- Banco Mercantil, C.A. (Banco Universal) commenced the voluntary liquidation of its New York agency under the provisions of Sec. 605.11(c) of the New York State Banking Law. Upon completion of the liquidation, all related businesses will be conducted from Banco Mercantil's agency in Coral Gables, Florida. All inquiries regarding the winding up of Banco Mercantil's New York Agency should be directed to Ms. Lourdes Jordan-Caldera on or before June 29, 2006. Ms. Caldera can be reached at this number: (212) 891-7400. Headquartered in Caracas, Venezuela, Banco Mercantil, C.A. -- http://www.bancomercantil.com/-- is a universal bank with which operates under the supervision of the Superintendence of Banks and Other Financial Institutions. It has 300 branches in Venezuela, two agencies in Miami and New York, one branch in Curacao and five representative offices in United Kingdom, Brazil, Colombia, Peru and Mexico. * * * Banco Mercantil's long-term bank deposits carry Moody's B3 rating. The rating was placed on Sept. 8, 2004, with a stable outlook. Standard & Poor's assigned the bank BB long-term local and foreign issuer credit ratings and B short-term local and foreign issuer credit ratings. The ratings were placed on June 4, 1999, with a stable outlook. On Sept. 23, 2004, Fitch assigned the bank single B debt and default ratings with a negative outlook. PETROLEOS DE VENEZUELA: Plans to Issue US$3.5 Billion in Bonds -------------------------------------------------------------- Petroleos de Venezuela SA or PDVSA will be issuing US$3.5 billion in bonds in the domestic and foreign markets, El Universal reports, citing financial sources. PDVSA has reportedly commissioned European investment banks Deutsche Bank, UBS and Calyon to handle the transaction, El Universal says. A report from Santander Investment said that majority of the proposed issue will be sold in Venezuela to support excess liquidity in the country, El Universal says. El Universal says PDVSA has resorted to financial markets in order to fund President Hugo Chavez's social programs. Meanwhile, research firm Ecoanalitica said that the debt issuance is positive in the wake of PDVSA's buyback of foreign debts that were more expensive for the company, El Universal relates. 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. Fitch said the Rating Outlook is Stable. Both rating actions followed Fitch's November 2005 upgrade of Venezuela's sovereign rating. * VENEZUELA: May Oil Output Down 30,000 Barrels Per Day ------------------------------------------------------- Venezuela reports producing 2.6 million barrels of oil per day in May, compared to a 2.63 million bpd output in April, El Universal cites data from the International Energy Agency. As a result, Venezuela failed to meet its production quota under the Organization of Petroleum Exporting Countries. The country's output is 620,000 bpd below the agreed production, El Universal says. The energy agency included in its report a lower estimate for Venezuela's orimulsion production this year: -- 106,000 bpd in 2000; -- 110,000 bpd in 2001; -- 104,000 bpd in 2002; -- 58,000 bpd in 2003; -- 90,000 bpd in 2004; -- 90,000 bpd in 2005; and -- 76,000 bpd to 84,000 bpd in 2006. * * * Venezuela's foreign currency long-term debt is rated B1 by Moody's, B+ by Standard & Poor's, and BB- by Fitch. * Mauricio Pons Joins Alvarez & Marsal as Director -------------------------------------------------- Alvarez & Marsal Real Estate Advisory Services, LLC announced that Mauricio "Guicho" Pons, an experienced hospitality, tourism and real estate industry professional with domestic and international experience, has joined the firm as director. He is based in Dallas and will be a leader in the hospitality and Latin America practice areas. Mr. Pons brings substantial domestic and international experience, and specializes in advising a variety of hospitality properties including hotels, mixed-use resort developments, hotel condominiums, interval ownership, all-inclusive resorts, and marinas. He also has significant experience with residential, commercial and industrial projects in the US and Latin America. "Since forming A&M Real Estate Advisory Services nearly three years ago, we have attracted a highly sophisticated team of professionals with deep and diverse backgrounds," said Chuck Bedsole, managing director and head of the hospitality and Latin America practices for Alvarez & Marsal Real Estate Advisory Services. "Guicho's broad experience working with scores of hospitality and leisure companies strengthens our impressive roster of talent and industry-specific expertise. In addition, his extensive experience in the field of mergers and acquisitions and transaction support is an ideal complement to the restructuring practice we have established." Prior to joining A&M, Mr. Pons was responsible for the merger and acquisition activities in the Americas for Regus PLC, where his responsibilities included the due diligence, contract/deal negotiation, and post closing implementation and transitioning of the acquisitions. He also served as a manager in the transaction advisory services group of PricewaterhouseCoopers, and began his career in the real estate audit group at Ernst & Young. Mr. Pons earned his bachelor's degree in accounting and finance from Texas A&M University. He serves as an executive board member of the Dallas Center for Contemporary Art, and is fluent in Spanish. A&M Real Estate Advisory Services Alvarez & Marsal Real Estate Advisory Services, LLC advises owners, investors, lenders, and users of real estate throughout the real estate lifecycle. Alvarez & Marsal Real Estate Advisory Services professionals align their interests with those of their clients, and are committed to providing senior-level attention, the right resources, objective advice and flawless execution to every engagement. Building on Alvarez & Marsal's operational and problem-solving heritage, the Alvarez & Marsal Real Estate Advisory Services team develops and implements detailed real estate plans that improve operations, unlock value and minimize risk. Alvarez & Marsal Real Estate Advisory services include: Restructuring Advisory, Litigation Advisory, Strategy and Operations Consulting, Corporate Finance, Transaction Advisory, Public Sector Advisory, Hospitality Advisory, and Latin America Advisory. Alvarez & Marsal Real Estate Advisory Services, LLC, is an affiliate of Alvarez & Marsal. Alvarez & Marsal Alvarez & Marsal -- http://www.alvarezandmarsal.com/ -- is a leading global professional services firm with expertise in guiding underperforming companies and public sector entities through complex operational, financial and organizational challenges. The firm excels in problem solving and value creation, and brings a bias toward executing solutions with a distinctive hands-on approach to serving clients, management and stakeholders. Founded in 1983, Alvarez & Marsal draws on its strong operational heritage to provide specialized services, including Turnaround and Management Advisory, Crisis and Interim Management, Performance Improvement, Creditor Advisory Services, Corporate Finance, Dispute Analysis and Forensics, Tax Advisory, Business Consulting, Real Estate Advisory and Transaction Advisory. A network of experienced professionals in locations across the U.S., Europe, Asia and Latin America, enables the firm to deliver on its proven reputation for leadership, problem solving and value creation. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, Stella Mae Hechanova, Christian Toledo, Editors. Copyright 2006. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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