/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/060706.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 Thursday, July 6, 2006, Vol. 7, Issue 133 Headlines A R G E N T I N A AEROPAGO SA: Court Approves Reorganization Petition AUTOMOTORES PALMINO: Moves Verification Deadline to Aug. 25 CARILO GARDEN: General Report to be Presented in Court on July 7 CERAMICA LOS: Verification of Proofs of Claim Is Until Aug. 31 DUCK JIBE: Trustee to Deliver Gen'l Report in Court on July 7 FERRAPEL SA: Trustee to Submit General Report in Court Tomorrow FIDEICOMISOS APEX: Fitch Arg Puts BB- Rating on US$400K Debt FIDEICOMISO HIPOTECARIO: Fitch Arg Puts CC Rating on US$3.4 Debt GAS ARGENTINO: Moody's Holds D Rating on US$130-Million Debt GELAR SRL: Trustee Submitting Individual Reports Tomorrow IMAGEN SATELITAL: Moody's Puts Default Rating on US$80-Mil. Debt IND-PA SRL: Court Moves Submission of General Report to July 7 LA NUBECITA: Trustee to Present General Report in Court Tomorrow INVERSORA LANCKLEY: Trustee to Submit General Report on July 7 MAGI AGROPECUARIA: Trustee Verifies Claims Until Sept. 20 METROGAS SA: Moody's Latin America Puts D Ratings on Two Debts SUITI SA: General Report Expected in Buenos Aires Court Tomorrow TRIENIUM SRL: Trustee Will Verify Proofs of Claim Until Aug. 21 UNIBACK SA: Presentation of Report on Bankruptcy Case Tomorrow * ARGENTINA: Debt Exploitation Results to Higher Interest Rates B A H A M A S WINN-DIXIE: Ex-Officers Vindicated in Committee Counsel's Report WINN-DIXIE: Wants Wachovia Commitment Letter Approved B E R M U D A REFCO INC: Court Sets July 17 as Refco Capital Claims Bar Date B R A Z I L AOL LATIN AMERICA: 55% of Subscribers Switch to Terra Services BANCO BANEX: Issues ARS45 Million in Securities BANCO DO BRASIL: Gets US$230 Million from Secondary Share Offer BUCKEYE TECH: CEO to Get US$274,000 Cash Bonus on Retirement COMPANHIA ENERGETICA: Confirms Complementary Dividends Payment COMPANHIA ENERGETICA: Cemig GT Sells 355 MW of Electricity COMPANHIA PARANAENSE: Posts Adjustments in Retail Tariffs COMPANHIA SIDERURGICA: May Obtain US$570MM Insurance Payment DURA AUTOMOTIVE: Plans to Shut Down Llaneli Facility INTERCONEXION: CTEEP Buy Cues S&P to Hold BB Currency Rating PETROLEO BRASILEIRO: Discloses 2007-2011 Business Plan UNIAO DE BANCOS: Shareholders Approve New Share Issuance * BRAZIL: Shocked by Paraguay's Itaipu Bond Sale to Venezuela C A Y M A N I S L A N D S A & H MFG: Creditors Must File Proofs of Claim by July 27 ADUSAY: Final Shareholders Meeting Is Scheduled for July 26 BRANDES OFFSHORE: Last Shareholders Meeting Is Set for July 26 CAMOMILLE GLOBAL: Proofs of Claim Filing Deadline Is July 27 CQS (FEEDER): Lenders Have Until July 27 to File Proofs of Claim CQS (MASTER): Proofs of Claim Must be Filed by July 27 DAWNING GLOBAL: Creditors Must File Proofs of Claim by July 27 EOLE LIMITED: Sets July 26 as Last Shareholders Meeting HANABI LIMITED: Last Day to File Proofs of Claim Is July 27 HECTOR FUNDING: Proofs of Claim Must be Filed by July 27 HH CAYMAN: Shareholders Final Meeting Scheduled on July 26 INDOSIRES LIMITED: Final Shareholders Meeting Is Set for July 26 JACKSON CREEK: Last Day to File Proofs of Claim Is July 27 MONTEPIO GERAL: Sets July 26 for Final Shareholders Meeting ORCHID ASIA: Liquidator Presents Wind Up Accounts on July 26 RUBY CAPITAL: Proofs of Claim Filing Deadline Is July 27 SANWA CAPITAL: Creditors Must File Proofs of Claim by July 27 SOEBHIK LIMITED: Final Shareholders Meeting Will be on July 26 TANTS 1: Schedules Final Shareholders Meeting on July 26 C O L O M B I A BANCOLOMBIA: Seeks Purchase Opportunities for Expansion Abroad D O M I N I C A N R E P U B L I C FALCONBRIDGE LTD: European Commission Clears Acquisition by Inco * DOMINICAN REPUBLIC: Proposes Trade Deal with South Korea E C U A D O R PETROECUADOR: Pacts with Venezuela Part of LatAm Integration E L S A L V A D O R MILLICOM INTERNATIONAL: S&P Affirms B+ Corporate Credit Rating * EL SALVADOR: State Firm to Launch Bidding on Chaparral Project H A I T I DYNCORP INT'L: Earns US$28MM in Fiscal Year Ended March 31, 2006 J A M A I C A DELTA AIR: Posts US$16 Million Net Loss in May 2006 KAISER ALUMINUM: US District Court Consolidates Appellate Cases M E X I C O ALERIS INTERNATIONAL: Commences Tender Offer for Senior Notes GENERAL MOTORS: Board to Discuss Renault-Nissan Alliance MERIDIAN AUTOMOTIVE: Reaches Consensual Pact with Major Lenders MERIDIAN AUTOMOTIVE: Files 3rd Amended Plan & Disclosure Papers P A R A G U A Y * PARAGUAY: Will Ask Petroleos de Venezuela to Drill 12 Wells P E R U * PERU: US Free Trade Agreement Gets Congress' Majority Vote P U E R T O R I C O MUSICLAND HOLDING: Excell Wants Court's Ruling on Two Contracts U R U G U A Y BANCO HIPOTECARIO DEL URUGUAY: Restructuring Gets Union Nod V E N E Z U E L A CITGO PETROLEUM: Suit Filed Over Oil Spill in Louisiana Waters PETROLEOS DE VENEZUELA: Pacts with Ecuador an Integration Move PETROLEOS DE VENEZUELA: Paraguay Asks Firm to Drill 12 Wells * VENEZUELA: Lowers Tax Payments for Natural Gas Investors * Large Companies with Insolvent Balance Sheets - - - - - ================= A R G E N T I N A ================= AEROPAGO SA: Court Approves Reorganization Petition --------------------------------------------------- Court No. 26 in Buenos Aires approved Aeropago S.A.'s petition to reorganize its business after it defaulted on its debt obligations. Adalberto Corbelleri is appointed trustee to oversee the proceeding. Under insolvency protection, Aeropago will present a settlement proposal to its creditors in order to avoid an outright liquidation of its assets. Clerk No. 51 assists the court in the case. The debtor can be reached at: Aeropago S.A. Lavalle 1578 Buenos Aires, Argentina The trustee can be reached at: Adalberto Corbelleri Carabobo 2372 Buenos Aires, Argentina AUTOMOTORES PALMINO: Moves Verification Deadline to Aug. 25 ----------------------------------------------------------- Court No. 24 in Buenos Aires moved the deadline for the verification of creditors' proofs of claim against bankrupt company Automotores Palmino S.A. to Aug. 25, 2006. The deadline was originally set for Aug. 21, 2006. Ernesto Puerta is the court-appointed trustee who will verify the claims. The verified claims will be submitted in court as individual reports on Oct. 6, 2006. A general report that contains an audit of Automotores Palmino's accounting and banking records will follow on Nov. 17, 2006. As reported in the Troubled Company Reporter-Latin America on May 4, 2006, Court No. 24 declared Automotores Palmino bankrupt at the request of Rodolfo Santamarina, whom it owes US$28,800. Clerk No. 48 assists the court in this case. The debtor can be reached at: Automotores Palmino SA Uruguay 385 Buenos Aires, Argentina The trustee can be reached at: Ernesto Puerta Fragate Presidente Sarmiento 72 Buenos Aires, Argentina CARILO GARDEN: General Report to be Presented in Court on July 7 ---------------------------------------------------------------- A general report on the bankruptcy case of Carilo Garden S.A. will be presented tomorrow in Court No. 20 of Buenos Aires. A general report contains an audit of the company's accounting and business records as well as a summary of important events relevant to the case. As reported in the Troubled Company Reporter-Latin America on Nov. 29, 2005, the court, with the assistance of Clerk No. 39, declared Carilo Garden bankrupt, in favor of its creditor Osvaldo Avinon. Jose Luis Carriquiry was appointed as the trustee for the case. Mr. Carriquiry stopped accepting proofs of claim on April 3, 2006. He presented in court individual reports on May 24, 2006. The debtor can be reached at: Carilo Garden S.A. Garay 431 Buenos Aires, Argentina The trustee can be reached at: Jose Luis Carriquiry Loyola 660 Buenos Aires, Argentina CERAMICA LOS: Verification of Proofs of Claim Is Until Aug. 31 -------------------------------------------------------------- Court-appointed trustee Maria Ines Petrocelli will verify creditors' proof of claim against bankrupt company Ceramica Los Pinos S.A. until Aug. 31, 2006. Ms. Petrocelli will present the validated claims in court as individual reports on Oct. 19, 2006. A general report that contains an audit of Ceramica Los' accounting and banking records will follow on Nov. 30, 2006. The debtor can be reached at: Ceramica Los Pinos S.A. Rivadavia 24.934 Merlo Buenos Aires, Argentina The trustee can be reached at: Maria Ines Petrocelli San Martin 324 Moron Buenos Aires, Argentina DUCK JIBE: Trustee to Deliver Gen'l Report in Court on July 7 ------------------------------------------------------------- Maria Andrea Di Salvo, the trustee appointed for Duck Jibe S.A.'s reorganization, will present tomorrow a general report on the case in a court in Mar del Plata. A general report contains an audit of the company's accounting and business records as well as a summary of important events that occurred during the reorganization. As reported in the Troubled Company Reporter-Latin America on March 10, 2006, Ms. Di Salvo stopped validating claims from Duck Jibe's creditors on April 11, 2006. On May 24, 2006, the trustee presented the validated claims in court. The company will propose a settlement to its creditors on Feb. 1, 2007. The debtor can be reached at: Duck Jibe S.A. Avda. Independencia 891 Mar del Plata Buenos Aires, Argentina The trustee can be reached at: Maria Andrea Di Salvo Corrientes 1725 Mar del Plata Buenos Aires, Argentina FERRAPEL SA: Trustee to Submit General Report in Court Tomorrow --------------------------------------------------------------- Mauricio Leon Zafran -- the trustee overseeing Ferrapel S.A.'s bankruptcy case -- will present tomorrow a general report in a court in Buenos Aires. A general report contains an audit of the company's accounting and business records as well as a summary of important events relevant to the company's bankruptcy. As reported in the Troubled Company Reporter-Latin America on March 21, 2006, the deadline for the claims verification was April 7, 2006. The individual reports were delivered to the court on May 23, 2006. The debtor can be reached at: Ferrapel S.A. Alsina 1535 Buenos Aires, Argentina The trustee can be reached at: Mauricio Leon Zafran Avenida Callao 420 Buenos Aires, Argentina FIDEICOMISOS APEX: Fitch Arg Puts BB- Rating on US$400K Debt ------------------------------------------------------------ The Argentine arm of Fitch Ratings rates Fideicomisos Financieros APEX II's two debts: -- Valores de Deuda Fiduciaria Clase A for up to US$750,000, BBB, and -- Valores de Deuda Fiduciaria Clase B for up to US$400,000, BB- (arg). FIDEICOMISO HIPOTECARIO: Fitch Arg Puts CC Rating on US$3.4 Debt ---------------------------------------------------------------- Fideicomiso Hipotecario BHN III's four debts are rated by Fitch Argentina: -- TD Clase A1 VN US$14,896,000, BB(arg) -- TD Clase A2 VN US$82,090,000, BB(arg) -- TD Clase B VN US$5,060,000, B-(arg) -- CP VN US$3,374,027, CC(arg) GAS ARGENTINO: Moody's Holds D Rating on US$130-Million Debt ------------------------------------------------------------ Gas Argentino S.A.'s Obligaciones negociables simples for US$130 million carries the D rating of Moody's Investor Service. The rating action is based on the financial status of Gas Argentino at Mar. 31, 2006. GELAR SRL: Trustee Submitting Individual Reports Tomorrow --------------------------------------------------------- Carlos Daniel Ayuso, the trustee overseeing the bankruptcy proceeding of Gelar S.R.L., will present the validated claims of creditors as individual reports in a Buenos Aires court tomorrow. As reported in the Troubled Company Reporter-Latin America on April 25, 2006, Mr. Ayuso stopped accepting claims from Gelar's creditors after May 24, 2006. Creditors whose claims had not been validated were disqualified from receiving any payment that the liquidator would make. A general report on the case will be submitted on Sept. 4, 2006. The trustee can be reached at: Carloss Daniel Ayuso Tucuman 1455 Buenos Aires, Argentina IMAGEN SATELITAL: Moody's Puts Default Rating on US$80-Mil. Debt --------------------------------------------------------------- Moody's Investor Service rates Imagen Satelital S.A.'s Obligaciones Negociables for US$80 million D. The rating action is based on the financial status of Imagen at Mar. 31, 2006. IND-PA SRL: Court Moves Submission of General Report to July 7 -------------------------------------------------------------- Noemi del Valle Budeguer, the court-appointed trustee for the reorganization proceeding of Ind-Pa S.R.L., will present in court a general report that contains an audit of the company's accounting and banking records on July 7, 2006. The submission of the report was originally set for April 24, 2006. A court in San Miguel de Tucuman approved Ind-Pa's petition to reorganize its business after it defaulted on its obligations. The trustee can be reached at: Noemi del Valle Budeguer San Martin 938, San Miguel de Tucuman Tucuman, Argentina LA NUBECITA: Trustee to Present General Report in Court Tomorrow ---------------------------------------------------------------- Jose Angel Tsanis -- the court-appointed trustee for the bankruptcy case of La Nubecita Blanca S.R.L. -- will present tomorrow a general report in Court No. 1 in Lomas de Zamora. A general report contains an audit of the company's accounting and business records as well as a summary of important events relevant to the company's bankruptcy case. As reported in the Troubled Company Reporter-Latin America on Feb. 7, 2006, the court converted La Nubecita's reorganization case to bankruptcy. The claims validation deadline was April 6, 2006. The presentation of the individual reports was made on May 24, 2006. The debtor can be reached at: La Nubecita Blanca S.R.L. Madariaga 374/86 Avellaneda (Buenos Aires) The trustee can be reached at: Jose Angel Tsanis Mariano Acosta 137 Avellaneda (Buenos Aires) INVERSORA LANCKLEY: Trustee to Submit General Report on July 7 -------------------------------------------------------------- Carlos Enrique Wulff, the trustee appointed by a court in Buenos Aires for the liquidation of Inversora Lanckley S.A., will submit a general report tomorrow. A general report contains an audit of the company's accounting and business records as well as a summary of important events relevant to the company's bankruptcy case. Mr. Wulff stopped verifying on April 7, 2006, the claims submitted by creditors against Inversora Lanckley. The trustee presented the validated claim in court on May 24, 2006. The debtor can be reached at: Inversora Lanckley S.A. Reconquista 1011 Buenos Aires, Argentina The trustee can be reached at: Carlos Enrique Wulff Virrey del Pino 2354 Buenos Aires, Argentina MAGI AGROPECUARIA: Trustee Verifies Claims Until Sept. 20 --------------------------------------------------------- Sebastian Barletta, the court-appointed trustee for Magi Agropecuaria S.R.L.'s bankruptcy proceeding, will verify creditors' proofs of claim until Sept. 20, 2006. The verified claims will be submitted in court as individual reports on Nov. 1, 2006. A general report that contains an audit of Magi Agropecuaria's accounting and banking records will follow on Dec. 13, 2006. Court No. 24 in Buenos Aires declared Magi Agropecuaria bankrupt at the request of Barjade Lubricantes S.A., which it owes US$1,902.83. Clerk No. 48 assists the court in this case. The debtor can be reached at: Magi Agropecuaria S.R.L. Junin 658 Buenos Aires, Argentina The trustee can be reached at: Sebastian Barletta Norberto de la Riestra 1209 Buenos Aires, Argentina METROGAS SA: Moody's Latin America Puts D Ratings on Two Debts -------------------------------------------------------------- Metrogas S.A.'s four debts are rated by Moody's Latin America: -- Obligaciones Negociables Serie 2-A for US$6,254,764, B1 -- Serie A for US$100 million included under the global program for US$600 million * Last due: April 1, 2003 * Rate: D -- ON Serie 1 for US$236,285,638, B1 -- ONs Serie B for EUR110 million * Last due: Sept. 27, 2002 * Rate: D The ordinary class B shares have been included in category 4. The ratings actions were based on the financial status of Metrogas at Mar. 31, 2006. SUITI SA: General Report Expected in Buenos Aires Court Tomorrow ---------------------------------------------------------------- A general report on the bankruptcy case of Suiti S.A. will be presented tomorrow in a court in Buenos Aires. A general report contains an audit of the company's accounting and business records as well as a summary of important events relevant to the bankruptcy case. As reported in the Troubled Company Reporter-Latin America on Feb. 9, 2006, Marcelo Carlos Rodriguez -- the court-appointed trustee -- stopped verifying claims after April 7, 2006. Mr. Rodriguez prepared individual reports out of the validated claims and submitted them in court on May 24, 2006. The trustee can be reached at: Marcelo Carlos Rodriguez Parana 768 Buenos Aires TRIENIUM SRL: Trustee Will Verify Proofs of Claim Until Aug. 21 --------------------------------------------------------------- Analia Beatriz Chelala, the court-appointed trustee for Trienium S.R.L.'s bankruptcy case, will verify creditors' proofs of claim until Aug. 21, 2006. Ms. Chelala will present the validated claims in court as individual reports on Oct. 2, 2006. A general report that contains an audit of Trienium's accounting and banking records will follow on Nov. 14, 2006. The debtor can be reached at: Trienium S.R.L. Pasaje Mompox 1750 Buenos Aires, Argentina The trustee can be reached at: Analia Beatriz Chelala Avenida Corrientes 2335 Buenos Aires, Argentina UNIBACK SA: Presentation of Report on Bankruptcy Case Tomorrow -------------------------------------------------------------- A general report on the bankruptcy of Uniback S.A. will be presented in a court in Buenos Aires tomorrow. A general report contains an audit of the company's accounting and business records as well as a summary of important events that are relevant to the company's bankruptcy. As reported in the Troubled Company Reporter-Latin America on June 3, 2004, Court No. 26 in Buenos Aires, with assistance from Clerk No. 52, granted Uniback's petition for reorganization. Carlos Rapetti was appointed as trustee. The deadline for the verification of claims from the company's creditors was April 11, 2006. The presentation of the individual reports was made on May 24, 2006. The debtor can be reached at: Uniback S.A. Avenida Santa Fe 900 Buenos Aires, Argentina The trustee can be reached at: Carlos Rapetti Echeverria 2670 Buenos Aires, Argentina * ARGENTINA: Debt Exploitation Results to Higher Interest Rates --------------------------------------------------------------- Chief Alberto Abad of the Argentine tax agency Administracion Federal de Ingresos Publicos or AFIP, resolved to increase the tax-debt interest rates of larger companies that are under a refinancing program after an exploitation of the said program was discovered, Dow Jones Newswires reports. The program was established last year for taxpayers to pay their obligations at much lower interest rates, but investigations uncovered that some larger companies use it to finance other activities, Mr. Abad told to Dow Jones. "We cannot become a substitute for the financial system," Mr. Abad told Dow Jones. He continued that the interest rates will be increased to 1.5% to 2.0%, and applied to companies with annual sales above ARS50 million or US$16 million. According to Dow Jones, it has been Pres. Nestor Kirchner's goal to eliminate tax evasion, implementing projects like the refinancing program to present motivation for citizens to obey the law. * * * Fitch Ratings assigned these ratings on Argentina: Rating Rating Date ------ ----------- Country Ceiling RD Dec. 14, 2005 Long Term IDR B Dec. 14, 2005 Short Term IDR B- Jun. 3, 2005 Local Currency Long Term Issuer Default Rating B Jun. 3, 2005 ============= B A H A M A S ============= WINN-DIXIE: Ex-Officers Vindicated in Committee Counsel's Report ---------------------------------------------------------------- On June 29, 2006, Milbank, Tweed, Hadley & McCloy LLP, and Akerman Senterfitt submitted a report to the Official Committee of Unsecured Creditors on their investigation of possible claims of the Debtors' estates arising primarily from actions by Winn- Dixie Stores, Inc.'s directors and officers in the period leading up to Winn-Dixie's bankruptcy filing in February 2005. Before the Debtors filed for bankruptcy, allegations of wrongdoing were made against the current and former directors and officers of Winn-Dixie in class action lawsuits and in a demand by shareholders that the company commence litigation against certain directors and officers. An investigation under Section 1103(c)(2) of the Bankruptcy Code was undertaken to determine what viable claims, if any, the Debtors' estates may hold against current and former directors and officers of the company, which if pursued, could bring additional distributable value into the Debtors' estates. Milbank and Akerman conclude that on balance there are likely no viable causes of action by the Debtors' estates against any current or former director or officer of the company that have a reasonable probability of success in producing a benefit for the Debtors' estates. Unless new facts are proven or come to light, claims related to the issues are not likely to prevail. From a broader perspective, Milbank and Akerman conclude that Winn-Dixie's bankruptcy was not directly precipitated by the misconduct of its current or former directors or officers. Milbank and Akerman note that Winn-Dixie operates in a market with intense competition and small margins. As the marketplace changed over the past decade, the company, not for lack of trying, did not successfully adapt and ultimately found itself unable to maintain profitability. Milbank and Akerman examined the way in which the company has accounted for asset impairment and self-insurance, with a focus on the amount and timing of the expenses taken. They conclude that expenses related to both of these issues appear to be appropriate. Another accounting-related issue was the material weakness announced in the company's 2005 Form 10-K related to accounting of vendor contracts. Milbank and Akerman agree with Winn- Dixie's conclusion that proper controls were not in place. Because no company assets were misappropriated, no cause of action exists that could bring additional money into the estate, Milbank and Akerman relate. In addition, Milbank and Akerman examined the company's tax treatment for company-owned life insurance policies and store retrofit expenses stemming from the accounting treatment applied to them by Company management. Milbank and Akerman believe the company's tax positions, although disputed by the Internal Revenue Service, were legitimate and taken in good faith. Milbank and Akerman also investigated the management and administration of a number of retirement plans offered by Winn- Dixie. The investigation suggests that neither the Management Security Plan nor the Supplemental Retirement Plan were managed or administered in any way which gives rise to an actionable claim by the estate. The Management Security Plan is designed to provide retirement and death benefits to certain senior management. The Supplemental Retirement Plan is a non-ERISA, company-matching retirement plan available to all employees. According to Milbank and Akerman, there's also no actionable claim arising from the management and administration of Winn- Dixie's 401(k) plan. Milbank and Akerman gave particular attention to decisions related to investment in Winn-Dixie stock. The Investigation also examined the payment of dividends, which raises an issue of prudence, considering the company's performance at times when certain dividends were paid. However, after investigation, Milbank and Akerman conclude that the company's dividend payments were terminated before the company was within the "zone of insolvency," and that the last dividend paid in January 2004, was relatively small and had no material impact on the company's financial performance. A full-text copy of the Committee Counsel's Report is available for free at http://ResearchArchives.com/t/s?cd2 Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed US$2,235,557,000 in total assets and US$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945- 7000). WINN-DIXIE: Wants Wachovia Commitment Letter Approved ----------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to approve a commitment letter dated June 28, 2006, for Wachovia Bank, National Association's provision of, and Wachovia Capital Markets, LLC's arrangement and syndication of, a US$725,000,000 senior secured exit financing facility. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that, for over several months, the Debtors and their financial advisor, The Blackstone Group, solicited proposals from prospective lenders for financing facilities to ensure that the Debtors have access, upon exit from Chapter 11, to the most cost-effective financing arrangement. After evaluating proposals by 14 financial institutions, the Debtors determined that Wachovia's offer provides them with the most favorable terms for an exit facility. Wachovia has agreed to provide a US$725,000,000 facility consisting of revolving loans, with a US$300,000,000 sublimit for letters of credit. At its option, Winn-Dixie Stores, Inc., may, not less than 30 days prior to the closing of the Exit Facility, upon notice to and after consultation with Wachovia, as agent, elect to reduce the amount of the Maximum Credit but in no event less than US$600,000,000. The Debtors will have the option to increase the Maximum Credit by up to US$100,000,000 in increments of not less than US$25,000,000, subject to certain terms and conditions. The Revolving Loan will have a maturity date five years from the closing date. Upon its execution of the Commitment Letter, Winn-Dixie, as administrative borrower, will specify to Wachovia Capital Markets in writing which of two base alternatives should be included in the Loan Documents. Winn-Dixie Stores and its subsidiaries that are borrowers under the DIP Credit Agreement, dated February 23, 2005, with Wachovia, will act as borrowers under the Exit Facility. Winn- Dixie's direct or indirect U.S. subsidiaries will guarantee the Borrowers' obligations under the Exit Facility. To secure all obligations under the Exit Facility, Wachovia and the Lenders will have first priority, perfected security interests in and liens upon the Collateral, but as to priority, subject to the liens as are permitted under the Loan Documents. Interest The Borrowers may elect that all or portions of the Revolving Loans bear interest at: (a) the Applicable Margin plus the ABR; or (b) the Applicable Margin plus the Adjusted Eurodollar Rate. ABR refers to the higher of (i) Wachovia's prime rate or (ii) the federal funds effective rate plus 0.50%. The Applicable Margin will be calculated and established each fiscal quarter and remain in effect until adjusted thereafter after the end of the next fiscal quarter: Quarterly Average Excess Eurodollar ABR Standby Tier Availability Rate Margin Rate Margin LC Margin ---- -------------- ----------- ----------- --------- 1 less than or equal 1.25% 0% 1.25% to US$400,000,000 2 less than US$400,000,000 1.50% 0% 1.50% & equal to or greater than US$300,000,000 3 less than US$300,000,000 1.75% 0% 1.75% & equal to or greater than US$200,000,000 4 less than US$200,000,000 2.00% .25% 2.00% & equal to or greater than US$125,000,000 5 less than US$125,000,000 2.25% .50% 2.25% Financial Covenants The Debtors agree to maintain Minimum EBITDA in amounts and for periods to be agreed upon by the parties, which will be tested quarterly based on the four immediately preceding fiscal quarters for which Wachovia has received financial statements, except that the first four quarters following the closing date will be tested based upon Minimum EBITDA less capital expenditures in amounts to be agreed upon by the parties for the period, provided, that, compliance with the financial covenants will not be required so long as Excess Availability is greater than US$75,000,000. Fees and Reimbursements The Debtors will promptly reimburse Wachovia for all reasonable costs and expenses it incurs in connection with its continuing review of the transaction and the preparation and negotiation of the Commitment Letter. Wachovia estimates that the costs and expenses it will incur in connection with (i) certain third party appraisals on the Debtors' inventory and pharmacy scripts, and (ii) an updated field examination of the Debtors, for the period from June 29, 2006, through the closing date each will not exceed US$60,000. The Debtors agree to pay: -- an unused line fee of 0.25% per annum on the amount by which the Maximum Credit exceeds the average monthly balance of Revolving Loans and L/Cs outstanding, payable monthly in arrears; and -- letter of credit fees equal to 1.00% on the daily outstanding balance of commercial L/Cs and the applicable percentage of the Applicable Margin for Eurodollar Rate Loans on the daily outstanding balance of standby L/Cs, in each case payable monthly in arrears. Exclusivity, Indemnification & Closing The Debtors' arrangements with Wachovia Capital Markets will be on an exclusive basis and the Debtors will not engage, solicit or otherwise consult with other financial institutions regarding another exit facility. The Debtors will indemnify Wachovia and its affiliates, as well as their directors and employees, against all losses, claims, and liabilities, which may be incurred by, or asserted against, in connection with the Commitment Letter and the Exit Facility. The closing of the Exit Facility is subject to the satisfaction of various conditions, including the entry of the Confirmation Order no later than November 30, 2006, including the occurrence of the closing no later than December 31, 2006. A full-text copy of the Exit Facility Term Sheet is available for free at http://ResearchArchives.com/t/s?cd1 Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed US$2,235,557,000 in total assets and US$1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945- 7000). ============= B E R M U D A ============= REFCO INC: Court Sets July 17 as Refco Capital Claims Bar Date -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York set 5:00 p.m., on July 17, 2006, as the deadline for all persons and entities -- including, without limitation, individuals, partnerships, corporations, joint ventures, trusts and governmental units -- that asserts a claim against Refco Capital Markets, Ltd., prior to Oct. 17, 2005, to file their proofs of claim. Written proofs of claim must be filed on or before the July 15 Claims Bar Date and those forms must be delivered to: If by mail: U.S. Bankruptcy Court Southern District of New York Attn: Refco Inc., Claims Docketing Center Bowling Green Station P.O. Box 5175 New York, New York 10274-5175 If by messenger or overnight courier: U.S. Bankruptcy Court Southern District of New York Attn: Refco Inc., Claims Docketing Center One Bowling Green Room 534 New York, New York 10004-1408 About Refco Inc. Based in New York, New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. Refco Capital Markets Ltd. was Refco's operating subsidiary based in Bermuda. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. =========== B R A Z I L =========== AOL LATIN AMERICA: 55% of Subscribers Switch to Terra Services -------------------------------------------------------------- About 55,000 or 55% of America Online Latin America Inc.'s 100,000 subscribers have transferred to ISP Terra, Brazilian papers report, citing Fernando Madeira -- Terra's president for Latin America. As reported in the Troubled Company Reporter-Latin America on Jan. 30, 2006, the U.S. Bankruptcy Court for the District of Delaware authorized AOLA to transfer its subscribers to Terra. AOL Latin sought bankruptcy protection in June 2005 and submitted in December 2005 a request for the transfer of its subscribers in Brazil to Terra, which is owned by Spain's Telefonica S.A. Business News Americas relates that Terra signed an agreement with AOLA to pay US$1.9 million to take the latter's clients in Brazil, after AOLA decided to end its activities on March 17. Reports did not say whether more AOLA clients would transfer to Terra. Headquartered in Fort Lauderdale, Florida, America Online LatinAmerica, Inc. -- http://www.aola.com/-- offers AOL-branded Internet service in Argentina, Brazil, Mexico, and Puerto Rico, as well as localized content and online shopping over its proprietary network. Principal shareholders in AOLA are Cisneros Group, one of Latin America's largest media firms, Brazil's Banco Itau, and Time Warner, through America Online. The Company and its debtor-affiliates filed for Chapter 11 protection on June 24, 2005 (Bankr. D. Del. Case No. 05-11778). Pauline K. Morgan, Esq., and Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP and Douglas P. Bartner, Esq., at Shearman & Sterling LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of US$28,500,000 and total debts of US$181,774,000. BANCO BANEX: Issues ARS45 Million in Securities ----------------------------------------------- The Equity Trust Company, as financial trustee of Fideicomiso Financiero Banex Creditos XII, issued in June securities for ARS45 million, the Latin Lawyer reports. The securities, according to the Latin Lawyer, is backed by collections on loans granted to residents and pensioners whose retirement pensions are paid through Argentine commercial bank Banco Banex SA. The trust will also receive the proceeds from loans to pensioners where a cooperative association is in charge of the loan collection through the Argentine social security department, the same report adds. Previously, Banco Banex has reclaimed loans by taking direct discounts from the payrolls of employees who work for companies that pay salaries through the bank, and from retired people whose pensions are paid through the bank, the Latin Lawyer relates. Ernst & Young (Pistrelli, Henry Martin Asesores) acted as control and review agent of the issuance, and Infupa and Banco Supervielle were the arrangers. Banco Banex is represented by: Cabanellas, Etchebarne, Kelly & Dell'Oro Maini San Martin 323, 17th Floor C1004AAG Buenos Aires, Argentina Tel: +54-11-4114 5500 Fax: +54-11-4114 5555 * * * As reported in the Troubled Company Reporter on July 4, 2005, Moody's Investors Service upgraded the long term foreign currency deposit rating to Caa1 from Caa2 for Banco Banex S.A. following Moody's upgrade of Argentina's foreign currency ceiling for bank deposits to Caa1. Moody's also raised the bank's National Scale foreign currency deposit rating to Ba1.ar from B1.ar. All the ratings have a stable outlook. * * * As reported in the Troubled Company Reporter on June 2, 2006, Moody's Investors Service upgraded the bank financial strength rating of Banco Banex S.A. to E+ from E. The outlook on this rating is stable. BANCO DO BRASIL: Gets US$230 Million from Secondary Share Offer --------------------------------------------------------------- Banco do Brasil obtained US$230 million or BRL500 million out of a total of BRL1.98 billion from its secondary share offer, an involved source told Business News Americas. According to BNamericas, the remaining amount will be distributed between the major share traders -- BNDESPar, reducing its stake to 3.4% from 5.7%, and Previ, the pension fund for Banco do Brasil's employees that reduced its stakes to 12% from 13.9%. Upon earning a listing in the Novo Mercado index of the Sao Paulo stock exchange, Banco do Brasil sold more than 45.4 million shares at a price of BRL43.50 per share, BNamericas says. Bank president Rossano Maranhao, told reporters that the offer was a success, closing at almost BRL1.98 billion. He did not provide further details on the share offer as local capital market regulations did not allow bank officials to impart details on the offer to the media. Loacl daily O Globo reports that there were 50,000 people who bought the shares, with 30,000 first-time buyers and 10,000 bank employees, who grabbed the 10% discount offered by the bank. The remaining buyers were institutional investors from Brazil, Europe and the US, local reports add. Pres. Maranhao told reporters that investors' demand exceeded Banco do Brasil's supply, prompting the bank to offer before July 27, a supplementary batch of shares that is the equivalent of 15% of the original offer. The Novo Mercado index requires all its listed companies to free float at least 25% of capital. The index has a higher standard for transparency and corporate governance. According to BNamericas, Banco do Brasil's free float has increased to 12.5% from 6.9%, and is expected to grow further to 15% after the sale of the additional batch of shares. Banco do Brasil is the first state-owned company and the second bank after Nossa Caixa to be listed in the Novo Mercado index. The bank has until three years to comply with all of the index's requirements, BNamericas says. * * * As reported on Mar. 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counterparty credit ratings on Banco do Brasil S.A. to 'BB' from 'BB-'. The foreign and local currency ratings of this bank are now equalized at 'BB'. S&P said the outlook is stable. BUCKEYE TECH: CEO to Get US$274,000 Cash Bonus on Retirement ------------------------------------------------------------ Buckeye Technologies Inc. disclosed that David B. Ferraro, the Company's Chairman and Chief Executive Officer who is set to retire in September 2006, will receive a US$274,000 cash bonus in recognition of his past contributions and service to the company. As reported in the Troubled Company Reporter on June 14, 2006, the Company's Board of Directors elected John B. Crowe, currently Buckeye President and Chief Operating Officer, to the office of Chairman and Chief Executive Officer, succeeding Mr. Ferraro. Other key management changes being made in accordance with the Company's succession plan include: -- Kristopher J. Matula, currently Executive Vice President and Chief Financial Officer, will succeed Mr. Crowe as President and Chief Operating Officer. -- Steven G. Dean, currently Vice President and Controller, will succeed Mr. Matula as Chief Financial Officer. On June 23, 2006, the Board's Compensation Committee made these compensation decisions: 1) In connection with his promotion from President and Chief Operating Officer to Chairman and Chief Executive Officer, Mr. Crowe will receive an increase in his base salary from US$475,000 per year to US$575,000 per year. The increased base salary will go into effect July 1, the effective date of Mr. Crowe's promotion. 2) In connection with his promotion from Executive Vice President and Chief Financial Officer, to President and Chief Operating Officer, Mr. Matula will receive an increase in his base salary from US$365,000 per year to US$425,000 per year. The increased base salary will go into effect July 1, 2006, the effective date of Mr. Matula's promotion. Headquartered in Memphis, Tennessee, Buckeye Technologies, Inc. (NYSE:BKI) -- http://www.bkitech.com/-- is a leading manufacturer and marketer of specialty fibers and nonwoven materials. The Company currently operates facilities in the United States, Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods. * * * As reported in the Troubled Company Reporter on March 9, 2006, Standard & Poor's Ratings Services revised its outlook on Buckeye Technologies Inc. to negative from stable. At the same time, Standard & Poor's affirmed its ratings, including the 'BB-' corporate credit rating, on the Memphis, Tennessee-based specialty pulp producer. COMPANHIA ENERGETICA: Confirms Complementary Dividends Payment -------------------------------------------------------------- Companhia Energetica De Minas Gerais aka Cemig re-confirmed during a meeting held on June 29, 2006, the payment of complementary dividends in relation to the balance of Interest on Equity. The company will pay BRL0.4719754821 per thousand shares, completing the balance of the obligatory minimum dividend of BRL76,500,000 payable for the business year 2004. In compliance with the decision of May 3, 2006, by the Brazilian Securities Commission, stockholders whose names are on the company's Nominal Share Register on July 11, 2006, will be entitled to the payment, without retention of income tax at source. The shares will trade ex- this benefit on July 12. Payment will be made on Aug. 10, 2006. The amount will ensure that stockholders equitably receive the minimum obligatory dividends approved by the Annual General Meeting of April 29, 2005. Stockholders must keep their registration information updated. Those who haven't done so may take personal documents to any branch of Banco Itau S.A. -- which administers Cemig's system of registered nominal shares. Cemig's board of directors also made these decisions during the June 29 meeting: -- to re-ratify CRCA-012/2006, to change the date for calculation of the stockholding base to be used for calculation of the complementary dividends of June 10, 2004, Sept. 9, 2004, Dec. 10, 2004 and Jan. 10, 2005, to July 11, 2006 and authorizing payment on Aug. 10, 2006; -- to authorize the giving of a corporate guarantee for the transaction to finance debt via promissory notes and loan to be issued by Cemig D and by Cemig GT; -- contracting of services to model the Services Site within the company's facilities was withdrawn from the agenda; -- the agreement with Industrial Development Institute of Minas Gerais or INDI for concession of staff was withdrawn from the agenda; -- to grant annual remunerated leave to the Chief Corporate Management Officer for the period 17 to July 28, 2006; and -- to authorize the filing of legal actions with a view to suspension of demandability of tax credits and obtaining of a release certifying absence of debit. Companhia Energetica de Minas Gerais -- http://www.cemig.com.br/ -- is one of the largest and most important electric energy utilities in Brazil due to its strategic location, its technical expertise and its market. Cemig's concession area extends throughout nearly 96.7% of the State of Minas Gerais, Brazil. Cemig owns and operates 52 power plants, of which six are in partnership with private enterprises, relying on a predominantly hydroelectric energy matrix. Electric energy is produced to supply more than 17 million people living in the state's 774 municipalities. In addition to those 52 plants, another three are currently under construction. Cemig is also active in several other states, through ventures for the generation or the commercialization of energy in these Brazilian states: in Santa Catarina (generation), Rio de Janeiro (commercialization and generation), Esprito Santo (generation) and Rio Grande do Sul (commercialization). * * * Cemig's BRL312,500,000 12.7% debentures due Nov. 1, 2009, carry Moody's B1 rating. COMPANHIA ENERGETICA: Cemig GT Sells 355 MW of Electricity ---------------------------------------------------------- Cemig GT, the transmission and generation unit of Companhia Energetica De Minas Gerais aka Cemig, traded energy supply totaling 355 MW in the A-3 Brazilian electricity supply auction held by Brazil's Mining and Energy Ministry. The aggregate volume of energy in the transaction was 93 million MWh, for annual revenue of BRL390 million. The contracts are for 30 years' duration, starting on Jan. 1, 2009. Energy will be supplied in these prices: -- BRL125.00/MWh, the initial bidding price for hydroelectric energy at the auction * 84 MW from power plant Aimores, * 206 MW from power plant Irape, and * 47 MW average from power plant Queimado; and -- BRL134.42/MWh, the initial bidding price for hydroelectric energy at the auction, with recovery of the original Tariff for Use of Public Assets established by Aneel, the Brazilian regulator * 18 MW from power plant Porto Estrela Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense de Energia SA -- http://www.copel.com/-- transmits and distributes electricity to more than 3 million customers in the state of Paran and has a generating capacity of nearly 4,600 MW, primarily from hydroelectric plants. COPEL also offers telecommunications, natural gas, engineering, and water and sanitation services. The company restructured its utility operations in 2001 into separate generation, transmission, and distribution subsidiaries to prepare for full privatization, which has been indefinitly postponed. In response, COPEL is re-evaluating its corporate structure. The government of Parana controls about 59% of COPEL. * * * Copel's BRL100,000,000 debentures due March 1, 2007, is rated Ba3 by Moody's. COMPANHIA PARANAENSE: Posts Adjustments in Retail Tariffs --------------------------------------------------------- Companhia Paranaense de Energia aka Copal adjusted its retail tariffs by an average 5.12% as of June 24, 2006. This is in compliance with the June 20 Resolution 345 of ANEEL, the electricity regulatory agency, which addresses unit Copel Distribuicao's annual tariff increase. Of the 5.12% retail tariffs, 4.91% represents annual tariff increase while 0.21% is from external financial elements. Headquartered in Parana, Brazil, COPEL aka Companhia Paranaense de Energia SA -- http://www.copel.com/-- transmits and distributes electricity to more than 3 million customers in the state of Paran and has a generating capacity of nearly 4,600 MW, primarily from hydroelectric plants. COPEL also offers telecommunications, natural gas, engineering, and water and sanitation services. The company restructured its utility operations in 2001 into separate generation, transmission, and distribution subsidiaries to prepare for full privatization, which has been indefinitly postponed. In response, COPEL is re-evaluating its corporate structure. The government of Parana controls about 59% of COPEL. * * * Copel's BRL100,000,000 debentures due March 1, 2007, is rated Ba3 by Moody's. COMPANHIA SIDERURGICA: May Obtain US$570MM Insurance Payment ------------------------------------------------------------ Companhia Siderurgica Nacional aka CSN, may receive payment of US$570 million from insurance companies for the damages that the accident on its blast furnace no. 3 incurred, Marcelo Aguiar and Marcos Assumpaolo of Merrill Lynch said in a report. According to the analysts, from their discussion with CSN's CFO Otavio Luzcano, reinsurance company Instituto de Resseguros do Brasil substantiated the report, saying that the accident was due to a project error and CSN should be paid US$100 million for the immediate expenses that the company has incurred. Merrill Lynch told BNamericas that CSN could receive as much as US$570 million with US$400 to US$500 million going to operating losses and US$70 million for the damaged equipment. BNamericas relates that blast furnace no. 3 accounts for 70% of CSN's iron pig production. After the accident on January 22, the company bought about 1 million tons of slabs to account for the production losses incurred during the accident. The damaged blast furnace was originally scheduled to resume operations on June 15, but it was delayed to June 23, because final tests were being conducted to ensure operations, BNamericas says. CSN officials told BNamericas that once the operations resumed, it would take about 10 days to reach full capacity. * * * On Jan. 26, 2006, Standard and Poor's Rating Services assigned a 'BB' corporate credit rating on Brazilian flat carbon steelmaker Companhia Siderurgica Nacional. The 'BB' corporate credit rating on CSN reflects the company's exposure to volatile demand and price cycles, increasing competition in its home and predominant market of Brazil, aggressive dividend policy and capital investment plan, and sizable gross-debt position. These risks are partly offset by CSN's privileged cost position and sound operating profile, favorable market position in Brazil, strong export capabilities to offset occasional domestic demand sluggishness, and increasing business diversification. DURA AUTOMOTIVE: Plans to Shut Down Llaneli Facility ---------------------------------------------------- Dura Automotive Systems Inc. intends to cut 270 jobs as it seeks to shutdown its Llanelli plant in the United Kingdom by year-end to improve overall capacity utilization, according to published reports. Dura's UK facility is the second plant to shutdown following the Ontario, Canadia plant closure announced by the company in May. The company blames competition in the motor industry for the plant closures. "We operate in a very competitive automotive environment and are closely examining all of our facilities to ensure we meet our 50-cubed goals," Dura's Chairman and Chief Executive Larry Denton disclosed in a statement. The Associated Press said the company devised a 50-cubed efficiency strategy in February to improve performance goals in quality, worldwide efficiency and profitability. This included a restructuring plan that was directed in closing about five to 10 manufacturing facilities worldwide by the end of next year. Headquarted in Rochester Hills, Michigan, DURA Automotive Systems, Inc. -- http://www.duraauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive and recreation & specialty vehicle industries. DURA, which operates in 63 locations, sells its products to every major North American, Asian and European automotive original equipment manufacturer and many leading Tier 1 automotive suppliers. It currently operates in 63 locations including joint venture companies and customer service centers in 14 countries including Brazil. * * * As reported by the Troubled Company Reporter on Feb. 13, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Dura Automotive Systems Inc. to 'B-' from 'B'. INTERCONEXION: CTEEP Buy Cues S&P to Hold BB Currency Rating ------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BBB' local currency long-term corporate credit rating on Interconexion Electrica S.A. E.S.P. on CreditWatch with negative implications, following the company's acquisition of a 50.1% controlling stake in Companhia de Transmissao de Energia Paulista (CTEEP; not rated) for about US$540 million. CTEEP is the main electric transmission company in Brazil. Located in the state of Sao Paolo, it has roughly 11,800 kilometers of transmission lines. For the 12 months ended March 31, 2006, CTEEP posted US$543 million in revenues, and an EBITDA of about US$283 million. S&P believes the acquisition of CTEEP reflects ISA's continuous efforts to pursue geographic diversification and to capitalize growth opportunities throughout the region. "However, the negative CreditWatch listing reflects our concern that the acquisition could also result in higher leverage that could weaken the company's financial profile," said Standard & Poor's credit analyst Fabiola Ortiz. It is expected that part of the CTEEP acquisition will be financed with debt. The 'BB' foreign currency rating is affirmed and reflects S&P's expectation that the downgrade would be limited to one notch. Standard & Poor's will monitor developments related to the acquisition process and any associated financing plans, and will resolve the CreditWatch after assessing the effect that the acquisition will have on the company's risk profile. In particular, we will focus on the evaluation of the company's indebtedness, as well as on its ability to generate adequate cash flow streams and to maintain profitability indicators consistent with the investment-grade rating category. The ratings on ISA reflect the company's dominant position in Colombia's National Transmission System, its strategic importance for the Republic of Colombia, its natural monopoly, and the government's ownership. These strengths are mitigated by the risks of operating in the economic and political environment of Colombia, foreign-exchange risk related to its foreign-currency-denominated debt, and its increased exposure to more volatile economies. PETROLEO BRASILEIRO: Discloses 2007-2011 Business Plan ------------------------------------------------------ Petroleo Brasileiro, a Brazilian international energy company, approved on June 30 a business plan for the period 2007-2011. The salient terms of the plan include: -- a long term 2015 oil and natural gas production target, -- substantial expansion in the natural gas production chain -- a greater role in petrochemicals, and -- refining and development of green fuels. The business plan uses the same fundamental premises defined in the Petrobras 2015 Strategic Plan -- which was approved in May 2004 -- in what concerns the Mission and 2015 Vision of the Company, and adjusts corporate objectives and strategies. The 2007-2011 Business Plan maintains the company's aggressive growth targets. Worldwide oil, natural gas liquids, and gas production should reach 3,493 thousand barrels of oil equivalent (boe) by 2011, of which 2,925 thousand come from Brazil. For the first time the company also disclosed its longer term production target for 2015 of 4,556 thousand boe by 2015, re-emphasizing the strength of the new plan. These projections take into consideration the maintenance of a reserve-production ratio. In the downstream segment, the targets reflect the objective of maintaining a balance between production and processing capacity, and expand activities in petrochemicals and fertilizers, promoting synergies with other Petrobras operations. Consequently, worldwide refining throughput should reach 2,376 thousand bpd by 2011, and 3,201 thousand bpd by 2015. Target Indicators The plan calls for investments of US$87.1 billion, in the period, representing a yearly average of US$17.4 billion -- of which 86% or US$75.0 billion goes to Brazil while 14% or US$12.1 billion goes to other countries. These figures represent a 66% increase in relation to the previous plan for the same period. Concerning investments in Brazil, besides the expressive growth in E&P and Downstream, the expansion of investments in gas and energy, to meet growing demand for natural gas in the Brazil, and Distribution, to assure the leadership and growth of the company in this business segment, are also noteworthy. Internationally, 70% of investments are directed to E&P with a concentration in the US Gulf and West Coast of Africa. The growth in the value of the project portfolio is due to: -- US$17.4 billion worth of new projects, -- US$7.8 billion of cost increases as a result of the tight equipment and oil services market, -- US$ 4.2 billion as a result of currency appreciation, and -- the rest as a result of other factors including changes to project scope and business modeling. The investment also includes US$17.6 billion to be used by different segments in the whole natural gas production chain in Brazil, with a view towards developing, leading, and assuring a reliable source of natural gas for the Brazilian market. Investments by Petrobras' partners should reach another US$4.5 billion in the same period. Petrobras is maintaining its product pricing policy of alignment to international prices. As a result, expected cash generation should reach US$86.7 billion in the period (net of dividends), which should be sufficient to finance almost the entire Investment Plan. New capital market borrowing is projected to amount to US$12.6 billion, and projected debt amortization to equal US$12.2 billion. Uses Sources and Uses Petrobras will continue its policy of lengthening its debt maturity profile and reduction of leverage so that despite of the expansion of investments average financial leverage should be less than under the previous plan. Return and Financial Leverage Indicators The revised plan takes into account realistically international petroleum price increases. This increase has reflected in the whole production chain principally in what concerns service costs, maintenance, equipment and special operations in the oil sector, impacting lifting and refining costs of all companies. The expanding global economy has also had a direct impact in various industries that compose the supply chain of the industry. Quantitative assumptions relating to market tendencies and oil and oil products prices and margins, at the international level, were re-evaluated taking into account the higher price levels observed beginning in 2004. Macroeconomic Premises Beginning with this business plan, Petrobras will announce its targets for greenhouse gas emissions, in line with its strategy of sustainable growth. Petrobras aims to expand its participation in the bio-fuels market by leading national production of bio-diesel and expanding its role in the ethanol business. In line with this strategy the H-BIO technology that transforms vegetable oils into diesel represents a driver for the growth of this market. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. aka Petrobras was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in the country. * * * Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. * * * Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings ------------- ------ ---- ------- April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. UNIAO DE BANCOS: Shareholders Approve New Share Issuance -------------------------------------------------------- Uniao de Bancos Brasileiros S.A. aka Unibanco and Unibanco Holdings S.A. approved during their Extraordinary Shareholders Meetings on June 29 the proposals of their Board of Directors to increase corporate capital through the issuance of new shares. Unibanco's corporate capital will be increased by BRL3 billion. Unibanco's overall corporate capital will be raised to BRL8 billion from BRL5 billion. This will be done through the capitalization of all of the funds in the Currency Exchange Risk Reserve and a portion of the funds allocated to the reserve designed to ensure that Unibanco maintains adequate operating margins, by means of the issuance of one new share of the same type for each existing common and preferred share of Unibanco. According to the provisions in the Normative Instruction issued by the Brazilian Federal Revenue Secretary, the unitary cost assigned to the new shares will be BRL2.144546. Meanwhile, Unibanco Holdings' corporate capital will increase by BRL2,691,925,722.32. Unibanco Holdings' overall corporate capital will then be raised to BRL4,555,375,681.04 from BRL1,863,449,958.72. This will be done through the capitalization of the same amount of the profit reserves, by means of the issuance of one new share of the same type for each existing common and preferred share of Unibanco Holdings. According to the provisions of the Normative Instruction issued by the Brazilian Federal Revenue Secretary, the unitary cost ascribed to the new shares will be BRL3.310068. Shareholders who hold Units or share deposit certificates -- each representing one preferred share issued by Unibanco and one preferred share issued by Unibanco Holdings -- shall receive, for each Unit held, one additional Unit. The unitary cost assigned to the additional Unit will be BRL5.454614. The Global Depositary Shares traded on the New York Stock Exchange -- each representing five Units -- shall represent 10 Units, which means that there will be no issuance of new GDSs. The Central Bank of Brazil must approve the decision Unibanco and Unibanco Holdings made regarding the stock dividend. The action on the GDSs also requires the approval of the Brazilian Security Exchange Commission. Once the two approvals have been obtained, the record date for the shareholders of both Unibanco and Unibanco Holdings -- for the purpose of determining the right to receive the new shares -- will be released. Therefore, until the record date is being disclosed, the existing shares of Unibanco and of Unibanco Holdings will be traded with the right to receive the new shares issued. The new shares shall be delivered to the shareholders and traded after the record date is disclosed. Unibanco and Unibanco Holdings aim to boost their shares' liquidity in the Brazilian stock market by means of having a quotation value accessible to small investors. * * * As reported in the Troubled Company Reporter on March 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counterparty credit rating on Unibanco -- Uniao de Bancos Brasileiros, S.A. -- to 'BB/Stable/B' from 'BB-/Positive/B'. The company's local currency counterparty credit rating remains at 'BB/Stable/B'. * * * As reported in the Troubled Company Reporter-Latin America on July 4, 2006, Fitch Ratings upgraded these ratings of Unibanco -- Uniao de Bancos Brasileiros S.A.: -- Foreign currency long-term IDR to BB from BB-; -- Local currency long-term IDR to BB+ from BB; and -- National long-term rating to 'AA(bra)' from 'AA-(bra)'. The long-term Outlook is Stable. * BRAZIL: Shocked by Paraguay's Itaipu Bond Sale to Venezuela ------------------------------------------------------------- The government of Brazil was taken aback by Paraguayan Pres. Nicanor Duarte's proposal to sell its bonds from the Itaipu utility, which is jointly owned by the two countries, for US$3 billion to Venezuela, Valor Economico reports. Itaipu gets hydroelectric energy from the Itaipu dam on the Parana river, forming a border between the two countries, Dow Jones says. Brazilian officials were quoted by Valor as saying that their government has no plans to offer their bonds for sale to Venezuela under Hugo Chavez' administration. But this is not the only factor on Brazil's decision, the government sees no immediate need for new financing for Itaipu and adds that a bond issue would only increase to subsequent costs through interest payments, Valor relates. However, Pres. Duarte told Valor that Venezuela might consider buying the bonds at a much lower interest rate than those of international levels, consequently saving the utility money on interest payments. * * * As reported in the Troubled Company Reporter on May 26, 2006, Moody's Investors Service upgraded these ratings on Paraguay: -- Long-term foreign currency rating: B3 from Caa1 with stable outlook. Moody's assigned this rating: -- Short-term foreign currency rating: Not Prime. * * * Standard & Poor's assigned these ratings on Paraguay: -- Foreign Currency LT Debt B- -- Local Currency LT Debt B- -- Foreign Currency ST Debt C -- Local Currency ST Debt C * * * Fitch upgraded these ratings of Brazil on June 29, 2006: -- Long-term foreign currency IDR: to 'BB' from 'BB-'; -- Long-term local currency IDR: to 'BB' from 'BB-'; and -- Country ceiling to 'BB' from 'BB-'. Fitch also affirms Brazil's short-term rating at 'B'. Fitch said the Rating Outlook is Stable. =========================== C A Y M A N I S L A N D S =========================== A & H MFG: Creditors Must File Proofs of Claim by July 27 --------------------------------------------------------- A & H MFG. Co., Inc.'s creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. A & H MFG.'s shareholders agreed on June 7, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. ADUSAY: Final Shareholders Meeting Is Scheduled for July 26 ----------------------------------------------------------- Adusay's shareholders will convene for a final meeting on July 26, 2006, at: Maples Finance Jersey Limited 2nd Floor, Le Masurier House La Rue, Le Masurier St. Helier, Jersey JE2 4YE Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Liam Jones Mark Wanless Maples Finance Jersey Limited 2nd Floor, Le Masurier House La Rue Le Masurier St. Helier, Jersey JE2 4YE BRANDES OFFSHORE: Last Shareholders Meeting Is Set for July 26 -------------------------------------------------------------- Brandes Offshore Investment Fund, Ltd.'s shareholders will gather on July 26, 2006, for a final general meeting at 11:00 a.m. at the company's registered office. Accounts on the company's liquidation process will be presented during the meeting. The shareholders will also authorize the liquidators to retain the records of the company for a period of five years, starting from the dissolution of the company. Destruction of the records may then be allowed after that period. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidators can be reached at: S.L.C. Whicker K.D. Blake Attention: Dorra Mohammed P.O. Box 493, George Town Grand Cayman, Cayman Islands Tel: 345-914-4475 Fax: 345-949-7164 CAMOMILLE GLOBAL: Proofs of Claim Filing Deadline Is July 27 ------------------------------------------------------------ Camomille Global Opportunities Master Fund's creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Camomille Global's shareholders agreed on June 12, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. CQS (FEEDER): Lenders Have Until July 27 to File Proofs of Claim ---------------------------------------------------------------- CQS Equity Opportunities Feeder Fund Limited's creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. CQS Equity's shareholders agreed on June 7, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. CQS (MASTER): Proofs of Claim Must be Filed by July 27 ------------------------------------------------------ CQS Equity Opportunities Master Fund Limited's creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. CQS Equity's shareholders agreed on June 7, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. DAWNING GLOBAL: Creditors Must File Proofs of Claim by July 27 -------------------------------------------------------------- Dawning Global Asset Funding I Limited's creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Andrew Millar Emile Small Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Dawning Global's shareholders agreed on June 7, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. EOLE LIMITED: Sets July 26 as Last Shareholders Meeting ------------------------------------------------------- Eole Limited's shareholders will convene for a final meeting on July 26, 2006, at: Cititrust (Cayman) Limited CIBC Financial Centre, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Buchanan Limited P.O. Box 1170, George Town Grand Cayman, Cayman Islands HANABI LIMITED: Last Day to File Proofs of Claim Is July 27 ----------------------------------------------------------- Hanabi Limited's creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Helen Allen Emile Small Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Hanabi Limited's shareholders agreed on June 7, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. HECTOR FUNDING: Proofs of Claim Must be Filed by July 27 -------------------------------------------------------- Hector Funding II Limited's creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Helen Allen Emile Small Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Hector Funding's shareholders agreed on June 7, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. HH CAYMAN: Shareholders Final Meeting Scheduled on July 26 ---------------------------------------------------------- HH Cayman Co. Ltd.'s shareholders will convene for a final meeting on July 26, 2006, at: Maples Finance Jersey Limited 2nd Floor, Le Masurier House La Rue, Le Masurier St. Helier, Jersey JE2 4YE Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Liam Jones Mark Wanless Maples Finance Jersey Limited 2nd Floor, Le Masurier House La Rue Le Masurier St. Helier, Jersey JE2 4YE INDOSIRES LIMITED: Final Shareholders Meeting Is Set for July 26 --------------------------------------------------------------- Indosires Limited's shareholders will convene for a final meeting on July 26, 2006, at: Deutsche Bank (Cayman) Limited Elizabethan Square, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: David Dyer P.O. Box 1984, George Town Grand Cayman, Cayman Islands Tel: (345) 949-8244 Fax: (345) 949-5223 JACKSON CREEK: Last Day to File Proofs of Claim Is July 27 ---------------------------------------------------------- Jackson Creek CDO, Ltd.'s creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Phillip Hinds Richard Gordon Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Jackson Creek's shareholders agreed on June 13, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. MONTEPIO GERAL: Sets July 26 for Final Shareholders Meeting ----------------------------------------------------------- Montepio Geral - Cayman's shareholders will gather on July 26, 2006, for a final general meeting at 12:00 p.m. at the company's registered office. Accounts on the company's liquidation process will be presented during the meeting. The shareholders will also authorize the liquidators to retain the records of the company for a period of five years, starting from the dissolution of the company. Destruction of the records may then be allowed after that period. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidators can be reached at: S.L.C. Whicker K.D. Blake Attention: Peter de Vere P.O. Box 493, George Town Grand Cayman, Cayman Islands Tel: (345) 945-4334 Fax: (345) 949-7164 ORCHID ASIA: Liquidator Presents Wind Up Accounts on July 26 ------------------------------------------------------------ Orchid Asia, Ltd.'s shareholders will convene for a final meeting on July 26, 2006, at Mavibel (Maatschappij voor Internationale Beleggingen) B.V. in Rotterdam. Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Kent Huang P.O. Box 309, George Town Grand Cayman, Cayman Islands RUBY CAPITAL: Proofs of Claim Filing Deadline Is July 27 -------------------------------------------------------- Ruby Capital One Limited's creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Martin Couch Emile Small Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Ruby Capital's shareholders agreed on June 8, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. SANWA CAPITAL: Creditors Must File Proofs of Claim by July 27 ------------------------------------------------------------- Sanwa Capital Finance 1 Limited's creditors are required to submit proofs of claim by July 27, 2006, to the company's liquidators: Martin Couch Mike Hughes Maples Finance Limited P.O. Box 1093GT Grand Cayman, Cayman Islands Creditors who are not able to comply with the July 27 deadline won't receive any distribution that the liquidator will make. Creditors are required to present proofs of claim personally or through their solicitors. Ruby Capital's shareholders agreed on June 15, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. SOEBHIK LIMITED: Final Shareholders Meeting Will be on July 26 -------------------------------------------------------------- Soebhik Limited's shareholders will convene for a final meeting on July 26, 2006, at: Cititrust (Cayman) Limited CIBC Financial Centre, George Town Grand Cayman, Cayman Islands Accounts on the company's liquidation process will be presented during the meeting. The liquidators can be reached at: Buchanan Limited P.O. Box 1170, George Town Grand Cayman, Cayman Islands TANTS 1: Schedules Final Shareholders Meeting on July 26 -------------------------------------------------------- T.A.N.T.S. 1 Limited's shareholders will gather on July 26 for a final general meeting at 10:00 a.m. at the company's registered office. Accounts on the company's liquidation process will be presented during the meeting. The shareholders will also authorize the liquidators to retain the records of the company for a period of five years, starting from the dissolution of the company. Destruction of the records may then be allowed after that period. A member entitled to attend and vote at the meeting may appoint a proxy, who need not be a member, in his stead. The liquidators can be reached at: S.L.C. Whicker K.D. Blake Attention: Dorra Mohammed P.O. Box 493, George Town Grand Cayman, Cayman Islands Tel: (345) 914-4475 Fax: (345) 949-7164 =============== C O L O M B I A =============== BANCOLOMBIA: Seeks Purchase Opportunities for Expansion Abroad -------------------------------------------------------------- Jorge Londono, the Chief Executive Officer of Bancolombia, told Business News Americas that the company continues to look for purchase opportunities to expand abroad as well as within Colombia. Bancolombia has a 20% market share in Colombia in terms of assets. The company has representative offices in Panama and the Cayman Islands, an agency in Miami, Banco Corfinsura Internacional in Puerto Rico as well as international leasing unit, Suleasing. "Over the next few years, we will continue strengthening as a universal bank both in Colombia as well as abroad," Mr. Londono told BNamericas. Mr. Londono said that Bancolombia's consolidated solvency ratio stood at 12.1% at the end of May, which is beyond the 11% legal minimum in Colombia, BNamericas says. He said that Bancolombia aims to keep it at that level. However, Bancolombia did not set a time frame for the goal, Mr. Londono told BNamericas. Also, the company has not yet decided whether to participate in the coming auction of Bancafe, the largest state bank in Colombia that Fogafin will auction on Oct. 2. At the end of May, Bancafe posted COP7.61 trillion worth of assets in Colombia, equivalent to a 7.5% market share, making it the country's seventh largest bank. According to BNamericas, Mr. Londono said that loans have been growing at about 15% this year in real terms, due to a stronger economy as well as domestic demand. DANE, the national statistics agency indicated that Colombia's GDP increased 5.2% in the first quarter, propelled by the sectors: -- finance, -- transport, -- commerce, and -- industrial. According to BNamericas, Mr. Londono said Bancolombia aims to grow at the same pace as the market this year. Mr. Londono told BNamericas, "We hope macroeconomic conditions that have curbed unemployment and boosted disposable income do not change substantially for the remainder of the year." Bancolombia expects to conclude its merger with Conavi, a home- loan provider, and Corfinsura -- an investment bank -- in the second half of 2006, BNamericas reports, citing Mr. Londono. "We have already completed the administrative, accounting and treasury integration, and during this year's first half began broadening our portfolio of products in each of the distribution networks. During the second half, we will focus on integrating operating, commercial and technological processes," Mr. Londono told BNamericas. BNamericas states that the merger -- praised by analysts for being carried out without incurring significant extraordinary expenses -- will bring Bancolombia with more than 4.68 million customers. The bank currently has about 1.83 million clients. Bancolombia's branches have also increased to 665 from 388, and when the merger is completed, the company will have around 18% of the financial system's total deposits, according to BNamericas. The local stock exchange said on Tuesday that Bancolombia would be the heaviest stock for the July-September period, BNamericas reports. * * * The Troubled Company Reporter-Latin America reported on April 28, 2006, that Moody's Investors Service upgraded Bancolombia's bank financial strength ratings to D+ from D with a stable outlook. Moody's added that the action concludes the review for possible upgrade that was announced on October 13, 2005. Moreover, Bancolombia's Ba3/Not Prime long- and short-term foreign currency deposit ratings were affirmed. Moody's said the outlook on all ratings is stable. * * * On Dec. 22, 2005, Fitch affirmed the ratings assigned on Bancolombia, as: -- Long-term/short-term foreign currency at 'BB/B'; -- Long-term/short-term local currency at 'BBB-/F3'; -- Individual at 'C'; -- Support at '3'. =================================== D O M I N I C A N R E P U B L I C =================================== FALCONBRIDGE LTD: European Commission Clears Acquisition by Inco ---------------------------------------------------------------- The proposed acquisition of Falconbridge Limited by Inco Limited was cleared by the European Commission. Inco satisfied the final outstanding regulatory condition to the acquisition, and Falconbridge shareholders may tender their shares to Inco's enhanced offer, which expires on July 13, 2006. The Inco offer has been recommended to Falconbridge shareholders by the Board of Directors of Falconbridge. The regulatory clearance, set forth in a decision issued by the Commission, is structured on the same remedy agreed upon with the U.S. Department of Justice. This remedy is outlined in the Troubled Company Reporter on June 8, 2006. About Inco Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) -- http://www.inco.com/-- is the world's #2 producer of nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the UK. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL) (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: Proposes Trade Deal with South Korea ---------------------------------------------------------- The Dominican Republic's Pres. Leonel Fernandez asked South Korea to help it set up an electronic government system in the country in return for making it as a channel for South Korea's exports to the United States, the Associated Press reports. The AP says that Pres. Fernandez visited his South Korean counterpart, Roh Moo-hyun, to ink the pact. Pres. Fernandez regarded the visit as a means to boost the ties between the two countries. "Korea has been very successful in the application of its e- government. The Dominican Republic is in its early stage," Mr. Fernandez said at a news conference. South Korea leads in broadband Internet connections according to a per capita rate, the AP relates. To meet his part of the bargain, Pres. Fernandez relies on his government's free-trade agreement with the United States, making it easier for South Korea to strengthen its exports in the US, the AP says. "We can triangulate our relationship, as the Dominican Republic can serve as a springboard for (South Korean) exports targeted into the eastern seaboard of the U.S.," Pres. Fernandez told AP. * * * 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 ============= PETROECUADOR: Pacts with Venezuela Part of LatAm Integration ------------------------------------------------------------ The accords signed by Petroecuador, Ecuadorean state-run oil firm, with Petroleos de Venezuela, its Venezuelan counterpart, is part of an extensive process of cooperation and energy fusion to foster Latin American integration, Inside Costa Rica reports, citing Rafael Ramirez, Venezuela's energy minister. Inside Costa Rica relates that Ecuador and has established a strategic energy alliance with Venezuela, aiming to foster the integration. According to the report, Petroecuador and Petroleos de Venezuela signed two agreements that will allow exploration of businesses of mutual interest like: -- refining, -- production, -- staff's training, and -- trade. Inside Costa Rica states that the first signed agreement sets up the bases to begin an extensive cooperation process in the hydrocarbon sector, for the development and promotion of oil, gas, electricity and petro-chemistry in both Ecuador and Venezuela. Meanwhile, the second document signed is an accord on the exchange and process of the Ecuadorian crude oil for Venezuelan by-products, which will allow savings of almost US$200 million to Ecuador, Inside Costa Rica says. According to Minister Ramirez, this pact allows revealing the crude oil exchange formula for by-products. The minister said that Venezuela is ready to receive the first oil shipment and deliver by-products. Oil exchange for by- products will be in August, BNamericas states. About Petroloes de Venezuela Petroleos de Venezuela SA 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. About Petroecuador Petroecuador, according to published reports, is faced with cash-problems. The state-oil firm has no funds for maintenance has no funds to repair pumps in diesel, gasoline and natural gas refineries, and has no capacity to pay suppliers and vendors. The government refused to give the much-needed cash alleging that Petroecuador has been inefficient and non-transparent in its accounts. ===================== E L S A L V A D O R ===================== MILLICOM INTERNATIONAL: S&P Affirms B+ Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' long-term corporate credit and 'B-' senior unsecured debt ratings on Luxembourg-headquartered emerging-markets wireless telecommunications operator Millicom International Cellular S.A. The ratings were removed from CreditWatch with developing implications, where they had been placed on Jan. 20, 2006, on the initiation of a strategic review that could have led to a transaction such as the sale of all or part of the company. The outlook is stable. "The affirmation reflects the removal of any immediate positive or negative change in credit quality following the termination of all discussions concerning a potential sale of the company's entire share capital," said Standard & Poor's credit analyst Michael O'Brien. Millicom's more mature operations in Central America have performed well under a unified brand, while its operations in Pakistan will undergo a relaunch later in 2006. Although Millicom will be investing heavily in its growing operations this year, particularly in Pakistan, Standard & Poor's expects the group to maintain adequate liquidity in cash and undrawn facilities to cover network investments, license fees, and operating liability management. At March 31, 2006, Millicom's lease-adjusted debt on a nominal basis, including supplier credit guarantees of US$29.3 million, was about US$1.0 billion. Total debt to EBITDA for the 12 months ended March 31, 2006, was 2.1x, which is in line with the ratings. Careful use of cash at the corporate level will be key for rating evolution. "Millicom should be able to sustain its credit quality, assisted by careful liquidity management," Mr. O'Brien added. "The group should also continue to benefit, when necessary, from portfolio diversification." In addition, we expect that EBITDA will continue to grow meaningfully and that EBITDA in Pakistan will show strong growth potential given the level of network investments in that country, leading to sustainable free operating cash flow generation. Any significant deviation from Millicom's growth path could negatively affect the ratings. This would include lackluster EBITDA growth and significantly reduced liquidity due to operating cash flow underperformance or excessive payments for entry into new high-risk ventures. Additionally, the event risk and associated financial implications of a potential return to the Vietnam market could put pressure on the ratings. Conversely, the ratings could be positively affected by meaningful operating performance growth from Pakistan and continuing satisfactory developments in Central America. Millicom International Cellular S.A. -- http://www.millicom.com/ -- is a global telecommunications investor with cellular operations in Asia, Latin America and Africa. It currently has cellular operations and licenses in 16 countries. The Group's cellular operations have a combined population under license of approximately 391 million people. The Central America Cluster comprises Millicom's operations in El Salvador, Guatemala and Honduras. The population under license in Central America as at December 2005 is 26.4 million. The South America Cluster comprises Millicom's operations in Bolivia and Paraguay. The population under license in South America as at December 2005 is 15.2 million. * EL SALVADOR: State Firm to Launch Bidding on Chaparral Project ---------------------------------------------------------------- Rodolfo Caceres -- the production manager of Comision Ejecutiva Hidroelectrica del Rio Lempa aka CEL, the state power company of El Salvador -- told El Diario de Hoy that the company will launch an auction in September for the construction of a 65.3MW El Chaparral hydro project. Nicolas Salume, the president of CEL, told Business News Americas that among entities that have shown interest in the project include: -- Alstom of France, -- Mexican group Ideal, and -- German companies Voigt and Siemens. El Diario relates that the public-private project will cost about US$92.5 million, and will be built on the river Torola in the San Miguel department. Operations of the hydro project could start in 2010. Ana Vilma de Escobar, El Salvador's vice president, told BNamericas that Proesa, whom she heads as president, has met with Decalion, a French bank, and Banco Nacional de Desenvolvimento Economico e Social S.A. -- Brazil's national development bank. The construction of the project has to be done with funding from the private sector as El Salvador doesn't have the capacity to take on more debt, BNamericas states, citing Mr. Nicolas. * * * 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 ========= DYNCORP INT'L: Earns US$28MM in Fiscal Year Ended March 31, 2006 ---------------------------------------------------------------- DynCorp International LLC earned US$28,385,000 of net income on US$1,966,993,000 of net sales for the fiscal year ending March 31, 2006, the Company disclosed in its Annual Report in Form 10-K filed with the Securities and Exchange Commission. As of March 31, 2006, the Company's balance sheet showed assets totaling US$1,148,193,000 and a US$223,908,000 stockholders' equity. Liquidity and Capital Resources Historically, the Company financed its capital and working capital requirements through a combination of cash flows from operating activities and transfers from the predecessor parent companies. The Company did not incur interest-bearing debt during the year ended April 2, 2004. In connection with its 2005 acquisition, the Company entered into a US$75-million revolving credit facility available to fund working capital and other cash requirements not funded from ongoing operations. Subsequently, in January 2006, this revolving credit facility was increased to US$90 million. Leading up to the 2005 acquisition, Computer Sciences Corp. accelerated collection of receivables where possible and delayed payments to vendors and subcontractors. As a result, the Company had to draw US$20 million on the revolving credit facility shortly after the closing of the 2005 acquisition, and as of April 1, 2005, the outstanding balance was US$35 million. The Company repaid its revolving credit facility during the three months ended July 1, 2005. Cash and cash equivalents as of March 31, 2006, were US$20.6 million compared to US$13.5 million as of April 1, 2005. Concurrently with, and as a condition to, the offering of its senior subordinated notes, the Company entered into a senior secured credit facility. The Company's senior secured credit facility provided it with a US$345 million term loan, maturing in 2011, and up to US$90 million in available revolving loan borrowings, maturing in 2010. As of March 31, 2006, the Company's revolving credit facility was undrawn and we had US$661.6 million of indebtedness, of which US$341.6 million was secured, including the senior subordinated notes and excluding accrued interest. This does not take into account the partial redemption of the Company's senior subordinated notes with a portion of the proceeds that it received from its parent's equity offering. On the same date, the Company had approximately US$82.5 million available under its senior secured credit facility (which gives effect to US$7.5 million of outstanding letters of credit). During fiscal 2006, US$56.7 million of interest expense was incurred, which included both the interest costs applicable to the fiscal year, as well as amortization of the deferred financing fees resulting from the 2005 acquisition. This interest expense includes the interest on the senior secured credit facility, the revolving credit facility and the senior subordinated notes. On May 9, 2006, the Company's parent consummated an equity offering of 25,000,000 shares of its Class A common stock, par value US$0.01 per share, at a price of US$15 per share. The gross proceeds from the Equity Offering of US$375 million, together with cash on hand, were used: (1) to redeem all of the parent's outstanding preferred stock, of which US$222.8 million, including accrued and unpaid dividends, was outstanding as of May 9, 2006; (2) to pay a special Class B distribution in the amount of US$100 million to the holder of the parent's common stock, DIV Holding LLC; (3) to redeem US$28 million of the Company's senior subordinated notes on June 8, 2006; (4) to pay prepayment penalties of US$8.4 million as of May 9, 2006, US$5.7 million of which represented prepayment penalties on the parent's preferred stock and US$2.7 million of which represented prepayment penalties on our senior subordinated notes; and (5) to pay transaction expenses of approximately US$35 million, including an underwriters' commission of US$22.5 million, a fee of US$5 million to Veritas Capital and US$7.5 million of miscellaneous fees and expenses related to the equity offering. In addition, the Company used cash on hand to pay special cash bonuses subsequent to its parent's equity offering of US$3.125 million in the aggregate to the Company's executive officers and certain other members of management. A full-text copy of the Company's Annual Report in Form 10-K filed with the Securities and Exchange Commission is available for free at http://ResearchArchives.com/t/s?cef About DynCorp DynCorp International LLC -- http://www.dyn-intl.com/-- the operating company of DynCorp International Inc., provides specialized mission-critical technical and professional services to civilian and military government agencies and commercial customers. Headquartered in Irving, Texas, DynCorp International employs more than 14,0000 people in 35 countries including Haiti. * * * As reported in the Troubled Company Reporter on June 19, 2006, Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating to 'BB-' from 'B+', on DynCorp International LLC. The ratings were removed from CreditWatch where they were placed with positive implications on Oct. 3, 2005. S&P said the outlook is stable. As reported in the Troubled Company Reporter on June 13, 2006, Moody's Investors Service upgraded the ratings of DynCorp International LLC based on DI's consistently improving performance over the past year plus the marginal added benefits to its credit metrics from the recently completed IPO. This concludes the review for possible upgrade that was initiated by Moody's on April 20th. These ratings were upgraded: * US$90 million senior secured revolver maturing February 11, 2010, to Ba3 from B2; * US$345 million senior secured term loan B due February 11, 2011, to Ba3 from B2; * US$320 million 9.5% senior subordinated notes due Feb. 15, 2013, to B3 from Caa1; * Corporate Family Rating, to B1 from B2; * Speculative Grade Liquidity Rating, to SGL-2 from SGL-3; and * The ratings outlook is stable. ============= J A M A I C A ============= DELTA AIR: Posts US$16 Million Net Loss in May 2006 --------------------------------------------------- Delta Air Lines (Other OTC: DALRQ) posted US$16 million net loss in May 2006, according to the Monthly Operating Report for May 2006 that it filed with the U.S. Bankruptcy Court for the Southern District of New York. Delta reported a net loss of US$16 million in the month of May 2006, compared to a net loss of US$140 million in May 2005. Delta Air's net income before reorganization items was US$8 million for May 2006, a US$148 million improvement versus the net loss in the prior year period. As of May 31, 2006, Delta Air had US$3.8 billion of cash, cash equivalents and short-term investments, of which US$2.7 billion was unrestricted. Restructuring Progress In September 2005, Delta Air disclosed a comprehensive restructuring plan intended to deliver an additional US$3 billion in annual financial benefits through revenue improvements and cost reductions by the end of 2007. During the month of May, the progress that Delta Air has made is reflected by: -- A reduction in operating costs to achieve a mainline non- fuel CASM (cost per available seat mile) of 6.95 cents for the month, a 2.8% decrease year over year. This unit cost improvement was achieved despite a 10.9% reduction in mainline capacity. -- Improved consolidated passenger unit revenue of 10.77 cents, an 18.5% increase compared to May 2005. "Despite a 35% increase in fuel prices year over year, May's results represent our second consecutive month of profitability, excluding the impact of reorganization items. While our improved results in traditionally high-traffic months are an encouraging sign that our restructuring plan is working, the continuing high price of fuel remains a significant risk factor to our restructuring plan and drives the increased urgency in completing our restructuring objectives," said Edward H. Bastian, Delta Air's executive vice president and chief financial officer. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta Air offers customers more weekly flights between the United States and destinations across Europe, India and Israel than any other global airline, including service on 11 new transatlantic routes launched since March. Delta Air also is a major carrier to Mexico, South and Central America and the Caribbean, with nearly 40 new routes announced in the last year. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed US$21.5 billion in assets and US$28.5 billion in liabilities. KAISER ALUMINUM: US District Court Consolidates Appellate Cases --------------------------------------------------------------- The U.S. District Court for the District of Delaware has consolidated for administrative purposes the appellate proceedings commenced by Law Debenture Trust Company of New York and Liverpool Limited Partnership with respect to the U.S. Bankruptcy Court for the District of Delaware's ruling on the Guaranty Subordination Dispute. As reported in the Troubled Company Reporter on March 13, 2006, Law Debenture and Liverpool took an appeal to the District Court from Judge Judith K. Fitzgerald's: (1) order and memorandum decision overruling the Plan Objections of Law Debenture and Liverpool Limited Partnership; (2) order granting Law Debenture's request for reconsideration and overruling the Plan Objection; and (3) Order overruling the Plan objections of Law Debenture and Liverpool and the accompanying Memorandum Decision. Appellants' Briefs (a) Law Debenture Law Debenture Trust Company of New York, indenture trustee in respect of the 1993 Notes, asks the U.S. District Court for the District of Delaware to reverse the ruling because the Bankruptcy Court erred in: a. its construction of the plain and unambiguous language of the 1993 Indenture; b. considering extrinsic and parol evidence to construe the plain language of the Indenture's subordination provisions; and c. its conclusion that the fees and expenses incurred by Law Debenture should be subordinated to the 1994/96 Note Guarantees. Francis A. Monaco, Jr., Esq., at Monzack and Monaco, P.A., in Wilmington, Delaware, explains that under the terms of the Indenture, Kaiser Aluminum Corporation's obligation to pay the 1993 Notes is expressly subordinated to the company's obligation to pay subsequent senior notes issuances, including the 1994/96 Notes. However, the Subsidiary Guarantors' obligation to pay the 1993 Note Guarantees is not subordinated to their obligation to pay the 1994/96 Note Guarantees. Mr. Monaco points out that nothing in the Indenture provides that the 1993 Note Guarantees are subordinated to the 1994/96 Note Guarantees. According to the Bankruptcy Court's analysis, the Subsidiary Guarantors' obligations under the 1993 Note Guarantees must be subordinated to their obligations under the 1994/96 Note Guarantees unless the Indenture expressly says that they are not subordinated. This rationale is erroneous, Mr. Monaco asserts. Furthermore, the Bankruptcy Court's admission of extrinsic and parol evidence to add subordination terms was improper under New York law, Mr. Monaco contends. The Bankruptcy Court failed to consider authority specific to the construction of the Indenture as a public indenture, which differs significantly from typical bilateral private contracts. The Bankruptcy Court compounded its errors by concluding that Law Debenture's fees and expenses as trustee should also be subordinated to payment in full under the 1994/96 Note Guarantees. The subordination provisions of the Indenture do not extend to Kaiser's obligations in respect of the Fees, Mr. Monaco says. (b) Liverpool Liverpool Limited Partnership, holder of the 12-3/4% and 9-7/8% notes issued by Kaiser Aluminum & Chemical Corporation, asserts that the plain language and structure of the Indenture provides that the 1993 Guarantees are not subordinated to the 1994/96 Guarantees. They are only subordinated to the "Senior Indebtedness of the Subsidiary Guarantors." Rebecca S. Beste, Esq., at Potter Anderson & Corroon LLP, in Wilmington, Delaware, says that the Bankruptcy Court failed to construe the Indenture's subordination provisions strictly and in accordance with their precise terms. In effect, it ignored the difference between the subordination of the 1993 Notes and the subordination of the 1993 Guarantees. Moreover, the Bankruptcy Court's overly broad reading of the Indenture violated established principles of contract interpretation under New York law, specifically the rule that governs public indentures. The Bankruptcy Court further erred in considering extrinsic evidence to "explain" the terms of the Indenture. New York law bars the consideration of extrinsic evidence unless the contract is ambiguous on its face, Ms. Beste asserts. Liverpool asks the District Court to reverse the Bankruptcy Court's ruling on the Guaranty Subordination Dispute and to conclude that the 1993 Guarantees are not subordinated to the 1994/96 Guarantees. Ad Hoc Committee's Response The Ad Hoc Committee of Senior Note Holders asserts that Article 3 of the Indenture effects the complete subordination by precluding any payment with respect to the subordinated notes until after Kaiser's senior debts are paid in full. Furthermore, Article 16 of the Indenture expressly subordinates the 1993 Guarantees to Senior Indebtedness of the Subsidiary Guarantors, which must be construed to include the 1994/96 Guarantees. It also confirms the subordination of the Guarantees in the event of a bankruptcy. According to Marc J. Phillips, Esq., at Connolly Bove Lodge & Hutz, LLP, in Wilmington, Delaware, the x-clauses in both articles reveal the full scope of the intended subordination scheme they were designed to preserve and negate Law Debenture's central claim that Article 3 deals only with the Notes and Article 16 deals solely with Guarantees. The Ad Hoc Committee also contends that the Bankruptcy Court properly considered the uncontroverted evidence of the circumstances surrounding the Indenture. The evidence demonstrated the intent of all involved that the 1993 Notes and Guarantees be fully subordinated debt. In addition, New York law does not apply special rules of construction to an Indenture contract. New York courts do not recognize a "Rule of Explicitness" for subordination agreements, Mr. Phillips asserts. Law Debenture's claim for Fees as a trustee is also subordinated to the same extent as the 1993 Notes and Guarantees. The fee provisions carve out no exception that would permit Law Debenture to receive payments before senior noteholders are paid in full. For these reasons, the Ad Hoc Committee asks the District Court to affirm the Bankruptcy Court's judgment. 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) =========== M E X I C O =========== ALERIS INTERNATIONAL: Commences Tender Offer for Senior Notes ------------------------------------------------------------- Aleris International, Inc., offered to purchase for cash any and all of its outstanding 10-3/8% Senior Secured Notes Due 2010 (CUSIP No. 449681AC9) and 9% Senior Notes Due 2014 (CUSIP No. 014477AA1), on the terms and subject to the conditions in the Offer to Purchase and Consent Solicitation Statement dated June 30, 2006 and the Consent and Letter of Transmittal. Aleris is also soliciting consents from holders of the Notes to, among other things, eliminate or make less restrictive substantially all of the restrictive covenants and the events of default and amend certain related provisions in the indentures under which the Notes were issued. The tender offer and consent solicitation is being conducted in connection with, and is contingent on the consummation of, the acquisition of the downstream aluminum business of Corus Group plc. The consent solicitation will expire at 5:00 p.m., New York City time, on July 14, 2006, unless earlier terminated or extended. The tender offer will expire at midnight, New York City time, on July 28, 2006, unless terminated or extended. The total consideration for each US$1,000 principal amount of Notes validly tendered and accepted for purchase, subject to the terms and conditions of the tender offer and consent solicitation, on or prior to the Consent Date will be US$1,100.78 for the 10-3/8% Notes and US$1,134.96 for the 9% Notes. The total consideration includes a consent payment equal to US$20 per US$1,000 for the 10-3/8% Notes and the 9% Notes. The tender offer consideration for each US$1,000 principal amount of Notes validly tendered and accepted for purchase, subject to the terms and conditions of the tender offer and consent solicitation, tendered after the Consent Date but on or prior to the Expiration Date (and not validly withdrawn) pursuant to the Offer will be US$1,080.78 for the 10-3/8% Notes and US$1,114.96 for the 9% Notes. The total consideration and the tender offer consideration to be paid for each US$1,000 in principal amount of Notes will be paid in cash. In either case, all holders who validly tender their Notes will receive accrued but unpaid interest up to, but not including, the date of settlement. In connection with the tender offer, Aleris is also seeking consents to certain proposed amendments with respect to the Notes. The purpose of the proposed amendments is to, among other things, eliminate or make less restrictive substantially all of the restrictive covenants and the events of default and to amend certain related provisions under the Indentures. Holders who desire to tender their Notes must consent to the proposed amendments. A holder may not deliver consents without tendering the related Notes. The tender offer is subject to the satisfaction of certain conditions, including receipt of consents sufficient to approve the proposed amendments to the Indentures, obtaining the requisite funding and the Acquisition having occurred or occurring substantially concurrent with the Expiration Date. The proposed amendments to the Indentures for which consents are being solicited will be set forth in two supplemental indentures and are described in more detail in the Offer Documents. The supplemental indentures will not be executed unless and until Aleris has received consents from holders of a majority in principal amount of the applicable Notes outstanding, and the amendments will not become operative unless and until Aleris has accepted for purchase at least a majority in principal amount of the applicable Notes pursuant to the Offer Documents. Deutsche Bank Securities Inc. is acting as dealer manager for the tender offer and as the solicitation agent for the consent solicitation and can be contacted at (212) 250-6008 (collect). Mackenzie Partners, Inc. is the depositary and information agent and can be contacted at (212) 929-5500 (collect) or (800) 322-2885 (toll-free). Copies of the Offer Documents and other related documents may be obtained from the information agent. About Aleris International Headquartered in Beachwood, Ohio, a suburb of Cleveland, Aleris International, Inc. (NYSE: ARS) -- http://www.aleris.com/-- is a major North American manufacturer of rolled aluminum products and is a global leader in aluminum recycling and the production of specification alloys. The company is also a leading manufacturer of value-added zinc products that include zinc oxide, zinc dust and zinc metal. The Company operates 42 production facilities in the United States, Brazil, Germany, Mexico and Wales, and employs approximately 4,200 employees. * * * As reported in the Troubled Company Reporter on March 23, 2006, Standard & Poor's Rating Services placed its 'BB-' corporate credit and its other ratings on Aleris International Inc. on CreditWatch with negative implications. The action followed the announcement that Aleris has entered into a non-binding letter of intent to acquire the downstream aluminum operations of Corus Group PLC (BB-/Watch Pos/B) for approximately US$840 million plus the assumption of EUR28 million of debt, and EUR98 million of debt-like pension liabilities. Moody's Investors Service also placed the debt ratings of Aleris International Inc., under review for possible downgrade. The ratings placed on watch include the Company's B1 Corporate Family Rating; B2 rating on the US$210 million 10.375% senior secured notes due 2010; and B3 rating on the US$125 million 9% senior unsecured notes due 2014. GENERAL MOTORS: Board to Discuss Renault-Nissan Alliance -------------------------------------------------------- General Motors Corp.'s Board of Directors will meet tomorrow to discuss the proposal to ally with Renault-Nissan, a French-Japanese company, the Houston Chronicle reports. Renault-Nissan is a collaboration between Nissan Motor Co., Ltd., and Renault S.A. The proponent, Kirk Kerkorian -- who owns 9.9% equity stake in GM through his investment firm Tracinda Corporation -- urged GM chairman Rick Wagoner to sell a 20% stake in GM to Renault-Nissan. Jerome York, a GM director, advised Mr. Kerkorian on the US$3-billion proposed alliance. The French Le Figaro newspaper reported that Renault-Nissan's president and chief executive officer Carlos Ghosn showed great interest for a possible tie-up. But, Mr. Ghosn publicly said that GM should be the one to initiate a definite offer for the alliance. Mr. Ghosn got approval from his company's board of directors to proceed with negotiations. Talks about Mr. Ghosn's next move after the proposed buy-in by Renault-Nissan into GM sparked speculations. Once 20% of GM's equity stake gets into the hands of Renault-Nissan, with Mr. Kerkorian's help, Mr. Ghosn can easily grab the chairmanship or the CEO posts in GM. The Wall Street Journal reported that of the institutional investors holding GM shares, State Street Global Advisors hold the biggest stake, with 15.28% of the pie. Two others institutional shareholders control larger stake than Tracinda. Capital Research & Management, Co., holds 14.17% and Brandes Investment Partners has 10.95% GM is currently implementing a turnaround plan that involves plant closures and job cuts. Moody's Investors Services pointed out that while alliances between auto manufacturers have often under performed original expectations, the Renault-Nissan alliance has been particularly effective and contributed to the successful turnaround of Nissan. The current partnership-alliance between the French and Japanese automakers provides benefits in the areas of product development, sourcing, production, marketing and distribution, and operates on a global basis. The addition of GM to the currently effective partnership-alliance would present a number of opportunities as well as significant challenges, in Moody's opinion. The broader scale of an alliance that incorporated GM would present incremental opportunities for cost savings from engineering, purchasing, manufacturing and distribution. It would also extend the alliance's presence in important markets such as North America and Korea. General Motors Corp. -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader for 75 years. Founded in 1908, GM today employs about 327,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries including Mexico. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM operates one of the world's leading finance companies, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on June 30, 2006, Standard & Poor's Ratings Services held all its ratings on General Motors Corp. -- including the 'B' corporate credit rating and the 'B+' bank loan rating, but excluding the '1' recovery rating -- on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' (recovery of 90%-100%) is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to US$4.5 billion being proposed by General Motors Corp., affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. MERIDIAN AUTOMOTIVE: Reaches Consensual Pact with Major Lenders --------------------------------------------------------------- Meridian Automotive Systems, Inc., has reached a consensual agreement with its major creditor constituency classes. Consequently, Meridian has filed a Third Amended Plan of Reorganization and an Amended Disclosure Statement with the United States Bankruptcy Court for the District of Delaware to reflect the new arrangement. Meridian has asked the Bankruptcy Court to continue the Disclosure Statement hearing currently scheduled for June 27, 2006, until July 17, 2006. "We are extremely pleased to have achieved a consensual plan supported by our major creditor constituencies. This will enable us to emerge from Chapter 11 in a quick, uncontested and orderly manner. We also are committed to completing the remaining steps to emerge from Chapter 11 as efficiently as possible," Richard E. Newsted, Meridian's president and chief executive officer, said. 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. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: Files 3rd Amended Plan & Disclosure Papers --------------------------------------------------------------- On June 30, 2006, Meridian Automotive Systems, Inc., and its eight debtor-affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware their Third Amended Joint Plan of Reorganization and Disclosure Statement. The Third Amended Plan, among others, adds another batch of defined terms, amends the treatment of some classes of claims, revises the Preferred Equity Offering and gives assurance on the continuance of the Company's retiree benefits program. Meridian President and Chief Executive Officer Richard E. Newsted discloses that the principal purpose of the Third Amended Plan is to effect a balance sheet restructuring pursuant to which the Prepetition First Lien Claims will be satisfied, while the Holders of Prepetition Second Lien Claims will receive, among other things, their Pro Rata share of substantially all of the New Common Stock to be issued. Treatment of Class 3 Prepetition First Lien Claims Each Holder of an Allowed Prepetition First Lien Claim will, on the Effective Date, except as otherwise provided in the Plan, receive in full and complete settlement, release and discharge of the Claim: (i) the Lien Avoidance Release; (ii) cash equal to 80% of its Allowed Prepetition First Lien Claim; (iii) (A) Class A Convertible Preferred Stock having an aggregate Class A Stated Value equal to 20% of the Holder's Allowed Prepetition First Lien Claim; or (B) if the Holder delivers to Reorganized Meridian a properly completed Cash Election Form prior to the Cash Election Deadline, cash in an amount equal to 15% of its Allowed Prepetition First Lien Claim; and (iv) consent fee equal to US$0.50 for each US$100 of its Allowed Prepetition First Lien Claim. Under the Plan, Prepetition First Lien Claims will be deemed allowed on the Effective Date in the aggregate principal amount of US$303,400,000, plus: (i) outstanding accrued interest through the Effective Date pursuant to the DIP Order; and (ii) all reasonable fees, expenses and costs payable in respect of the Prepetition First Lien Claims under the Prepetition First Lien Credit Agreement; minus amounts repaid prior to the Effective Date, if any. By accepting the Plan as a Class, and subject to (x) the occurrence of the Effective Date, and (y) the receipt of the cash or Class A Convertible Preferred Stock, all Holders of Prepetition First Lien Claims will be deemed to have waived and relinquished any rights under the Intercreditor Agreements. In addition, on the Effective Date, each Prepetition Letter of Credit will be returned to the issuer undrawn and marked canceled. Treatment of Class 4 Prepetition Second Lien Secured Claims Each Holder of an Allowed Prepetition Second Lien Secured Claim, will, on the Effective Date, receive in full and complete settlement, release and discharge of the Claim: (i) its Pro Rata share of New Common Stock; (ii) the right, through the Preferred Equity Rights Offering, to acquire for cash its Pro Rata share of a number of shares of Class A Convertible Preferred Stock equal to that number of shares of Class A Convertible Preferred Stock that were not issued to Holders of Allowed Prepetition First Lien Claims in accordance with the Plan because of the election by the Holders, if any, to receive the Cash Option; (iii) the Lien Avoidance Release; and (iv) each of the Committed Holders will receive a share of a total commitment fee equal to US$8,000,000, based upon the structure of the commitment fee and the Committed Holder's commitment, each as described in the Preferred Equity Funding Agreement, payable in Class A Convertible Preferred Stock. Under the Plan, Prepetition Second Lien Claims will be deemed allowed on the Effective Date in the aggregate amount of US$180,000,000, which includes all principal and outstanding interest accrued prior to the Petition Date, and all reasonable fees, expenses and costs payable in respect of the Prepetition Second Lien Claims under the Prepetition Second Lien Credit Agreement pursuant to the DIP Order minus amounts repaid prior to the Effective Date, if any, provided that: (x) Claims in Class 4 will be deemed Allowed in the aggregate amount of US$55,000,000; and (y) Claims in Class 5 will be deemed Allowed in the aggregate amount of US$125,000,000. Preferred Equity Offering In accordance with terms of their Preferred Equity Funding Agreements, the Committed Holders and the Final Committed Holders, in the aggregate, will purchase for cash, at a purchase price equal to US$75 for every US$100 of Class A Stated Value, the number of shares of Class A Convertible Preferred Stock equal to the aggregate number of shares of Class A Convertible Preferred Stock that would have been issued to Holders of Allowed Prepetition First Lien Claims under the Plan, but that were not issued to the Holders because of the election by those Holders, if any, to receive the Cash Option, and the Committed Holders will be entitled to a commitment fee as provided for in the Preferred Equity Funding Agreement. An Additional Committed Holder is a Holder of a Prepetition Second Lien Secured Claim who executes a funding agreement in the form attached to the Preferred Equity Funding Agreement. The Cash Election Deadline is set at 5:00 p.m. prevailing Eastern time, on the day that is five days after the Effective Date. Retiree Benefits In accordance with Section 1114 of the Bankruptcy Code, the Plan discloses that the Debtors have reached agreements with the unions representing retirees from the Centralia and Ionia GenCorp plants for the modification of retiree medical benefits at those plants. The Court has approved the agreements pursuant to Section 363 of the Bankruptcy Code. A full-text copy of the blacklined Third Amended Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?d08 A full-text copy of the blacklined Third Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?d08 Plan Compendium The Debtors also delivered to the Court a second Plan Compendium to the Third Amended Plan on June 30, 2006. The Second Plan Compendium contains: 1. Preferred Equity Funding Agreement The Committed Holders and the Final Committed Holders commit, in connection with the implementation of the Plan: (i) in the case of the Committed Holders, not to elect the Cash Option on account of their Prepetition First Lien Claims; and (ii) to purchase, for the Offering Amount, a number of shares of Class A Convertible Preferred Stock equal to an aggregate number of shares of Class A Convertible Preferred Stock that were not issued to Holders of Allowed Prepetition First Lien Claims in accordance with Section 3.3(b)(iii)(A) of the Plan because of the election by Holders Prepetition First Lien Claims, if any, to receive the Cash Option. A full-text copy of the Revised Preferred Equity Funding Agreement is available for free at http://ResearchArchives.com/t/s?d09 2. Certificate of Designation for the Class A Convertible Preferred Stock Each share of Class A Convertible Preferred Stock will have a liquidation preference equal to the greater of: (i) the Class A Stated Value for the share, plus an amount equal to all dividends accrued and unpaid on the share up to the date fixed for distribution; and (ii) the amount that would have been payable on the share(s) of New Common Stock into which the share of Class A Convertible Preferred Stock is convertible as of the date fixed for distribution had all outstanding shares of Class A Convertible Preferred Stock then been converted into New Common Stock. The initial Class A Stated Value of the shares will be $100; however, in the event that a cash dividend is not declared and paid on any payment date in the full specified amount, accumulated and unpaid dividends will instead be added to and increase the Class A Stated Value on the payment date and will no longer be considered accumulated or unpaid dividends for any purposes. Class A Convertible Preferred Stock will earn dividends at 12.5% per annum, payable annually in cash. Accumulated and unpaid cash dividends will be added to the Class A Stated Value. In addition, if there has been declared and paid, or set aside for payment, on each share of New Common Stock then outstanding an aggregate amount of cash dividends equal to: (i) the aggregate amount of cash dividends paid or payable on the then outstanding shares of Class A Convertible Preferred Stock since the first issuance of any share of Class A Convertible Preferred Stock, divided by (ii) the aggregate number of shares of New Common Stock into which the then outstanding shares of Class A Convertible Preferred Stock are then convertible in accordance with the terms of the Certificate of Designation, then Reorganized Meridian will declare and pay, concurrently with the declaration of the dividend or distribution on the New Common Stock, a dividend or distribution on the Class A Convertible Preferred Stock in an amount per share of Class A Convertible Preferred Stock equal to the dividend or distribution declared and paid on the share(s) of New Common Stock into which the share of Class A Convertible Preferred Stock is convertible in accordance with the terms of the Certificate of Designation on the date as of which the dividend or distribution is so declared. A full-text copy of the Amended Certificate of Designation for the Class A Convertible Preferred Stock is available for free at http://ResearchArchives.com/t/s?d0a 3. Litigation Trust A number of provisions and definitions under the Litigation Trust have been omitted. The Plan provides that after the payment of expenses incurred in prosecuting the Avoidance Actions and the Reserved Actions, General Unsecured Claim Trust Interests in the Litigation Trust distributed to Holders of General Unsecured Claims with respect to the assets of the Litigation Trust will be paid the next US$1,750,000 of the net proceeds. Prepetition Second Lien Claim Trust Interests will be paid 86% of the remaining proceeds, and General Unsecured Claim Trust Interests will receive 14% of the remaining net proceeds. A full-text copy of the Amended Litigation Trust is available for free at http://ResearchArchives.com/t/s?d0b 4. Amended Certificate of Incorporation of Reorganized Meridian, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?d0c 5. Amended By-Laws of Reorganized Meridian, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?d0d 6. Amended New Shareholders Agreement, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?d0e 7. Agreement of Plan and Merger, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?c64 8. Michigan Merger Certificate, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?c65 9. Delaware Merger Certificate, a full-text copy of which is available for free at http://ResearchArchives.com/t/s?c66 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. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). =============== P A R A G U A Y =============== * PARAGUAY: Will Ask Petroleos de Venezuela to Drill 12 Wells ------------------------------------------------------------- Paraguay's public works ministry said in a statement that the country's President Nicanor Duarte will make a formal request to Petroleos de Venezuela SA, the state oil firm of Venezuela, to drill 12 exploratory wells in Paraguay. The statement says that the President Duarte particularly wants the wells drilled in the Chaco region. Panfilo Benitez, the public works minister of Paraguay, said in a statement, "We are going to ask them to carry out the exploratory wells to evaluate the fields and hydrocarbons potential." Business News Americas relates that Minister Benitez has been in preparatory meetings with Hector Ruiz Diaz, the Venezuelan deputy minister of energy and mines, for the extraordinary summit of Mercosur presidents on July 4. According to BNamericas, Paraguay is also keen on developing an exchange of technicians between the two nations to prepare PDVSA officials for exploratory works. President Duarte will also ask Venezuelan President Hugo Chavez to buy the US$19 billion debt of hydro plant Itaipu. Brazilian firm Eletrobras holds 20% of the debt while the Brazilian treasury holds 80%, BNamericas states. * * * As reported in the Troubled Company Reporter on May 26, 2006, Moody's Investors Service upgraded these ratings on Paraguay: -- Long-term foreign currency rating: B3 from Caa1 with stable outlook. Moody's assigned this rating: -- Short-term foreign currency rating: Not Prime. * * * Standard & Poor's assigned these ratings on Paraguay: -- Foreign Currency LT Debt B- -- Local Currency LT Debt B- -- Foreign Currency ST Debt C -- Local Currency ST Debt C ======= P E R U ======= * PERU: US Free Trade Agreement Gets Congress' Majority Vote ------------------------------------------------------------ The majority of the Peruvian congress has voted to ratify Peru's Free Trade Deal with the United States, BBC News reports. According to BBC News, 79 congressmen voted for the FTA ratification, overwhelming the 14 anti-FTA vote, coming from the recently elected opposition deputies. The agreement will be passed by the US Congress to be implemented. Businesses say that FTA will boost Peru's economy, while opponents believe that the pact will flood the country with products from the US, BBC News says. BBC News relates that FTA will cancel tariffs on US imports to Peru and remove barriers to trade in services. Peruvian products already enter the US duty-free under a deal providing preferential arrangements for imports from Andean nations. The administration of President Alejandro Toledo, says BBC News, had endorsed for FTA's ratification before Alan Garcia, the president-elect. Mr. Garcia will take office on July 28. Mr. Garcia told BBC News that while he believes the agreement should be modified, many in Apra -- the party where he belongs -- were for FTA's ratification. If approved by the US congress, the FTA will come into effect on 2007, BBC News relates. * * * Fitch Ratings assigned these ratings on Peru: 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 ===================== P U E R T O R I C O ===================== MUSICLAND HOLDING: Excell Wants Court's Ruling on Two Contracts --------------------------------------------------------------- Excell Marketing, L.C., asks the U.S. Bankruptcy Court for the Southern District of New York to rule that its Contracts are not executory and therefore cannot be rejected. As reported in the Troubled Company Reporter on June 7, 2006, Musicland Holding Corp. and its debtor-affiliates asked the Court's authority to reject, as of May 26, 2006, 122 executory contracts and unexpired leases pursuant to the Court-approved Expedited Rejection Procedures. Excell Marketing is a party to a marketing agreement and an indemnification agreement with the Debtors. Martin P. Ochs, Esq., at Ochs & Goldberg, LLP, in New York, contends that the Marketing Agreement does not have substantial performance to be rendered by either Excell or the Debtors and therefore is not executory. Moreover, the Indemnity Agreement is not executory because a contract where the only remaining performance is cash payment is not executory, Mr. Ochs says. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) ============= U R U G U A Y ============= BANCO HIPOTECARIO DEL URUGUAY: Restructuring Gets Union Nod ----------------------------------------------------------- Association of Banking Employees of Uruguay or AEBU, a powerful banking union in Uruguay, has agreed with the government to restructure Banco Hipotecario del Uruguay aka BHU, according to local daily El Pais. As reported in the Troubled Company Reporter on April 5, 2006, BHU disclosed a restructuring plan that would allow it to return to lending in the second half of this year. The loan operations of BHU had been suspended since 2002. However, the bank was allowed to grant mortgage loans to fund already-built houses. The plan, which considered forming a new unit to manage the bank's past-due loans and cutting operating costs, was met with fierce resistance from Association of Bank Employees of Uruguay, Uruguay's powerful banking union, fearing that the cost-cutting program would lead to lay-offs. El Pais reports that the Uruguayan government and AEBU agreed that all laid off employees would have jobs in the government and that the new unit that would be created would remain as a public institution, as planned earlier. Business News Americas relates that the restructuring plan also calls for a minimum US$168 million capitalization, as previously reported, although the International Monetary Fund believed the Uruguayan government would need an additional US$400 million to capitalize BHU. * * * Standard & Poor's Ratings Services assigned Baa2 rating on Banco Hipotecario del Uruguay's local currency long-term bank deposits on May 2, 2005. On April 30, 2004, the bank was assigned an E bank financial strength rating and an NP on its short-term bank deposits. ================= V E N E Z U E L A ================= CITGO PETROLEUM: Suit Filed Over Oil Spill in Louisiana Waters -------------------------------------------------------------- A suit over the massive oil spill at Citgo Petroleum Corp. refinery in Lake Charles, Louisiana claims the company knew about the incident earlier and misled the public about its dangers and initial containment, according to Associated Press. Some 47,000 barrels of oil forced out from Citco tanks during heavy rainstorms on June 19. The company said the spill was noticed the next morning. It resulted to the closure of a ship channel to four refineries from June 20 until June 30. Also named in the purported class action are Global Pollution Services and the Marine Spill Response Corp. An investigation is still ongoing regarding the cause of the spill, MarketWatch reports, citing a Citgo spokesperson. Headquartered in Houston, Texas, CITGO Petroleum Corporation -- http://www.citgo.com/-- is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state-owned oil company of Venezuela. PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As reported at the Troubled Company Reporter on Feb. 16, 2006, Standard and Poor's Ratings Services assigned a 'BB' rating on CITGO Petroleum Corp. PETROLEOS DE VENEZUELA: Pacts with Ecuador an Integration Move -------------------------------------------------------------- The accords signed by Petroleos de Venezuela, the state-run oil firm of Venezuela, with Petroecuador, its Ecuadorean counterpart, is part of an extensive process of cooperation and energy fusion to foster Latin American integration, Inside Costa Rica reports, citing Rafael Ramirez, Venezuela's energy minister. Inside Costa Rica relates that Venezuela and has established a strategic energy alliance with Ecuador, aiming to foster the integration. According to the report, Petroecuador and Petroleos de Venezuela signed two agreements that will allow exploration of businesses of mutual interest like: -- refining, -- production, -- staff's training, and -- trade. Inside Costa Rica states that the first signed agreement sets up the bases to begin an extensive cooperation process in the hydrocarbon sector, for the development and promotion of oil, gas, electricity and petro-chemistry in both Ecuador and Venezuela. Meanwhile, the second document signed is an accord on the exchange and process of the Ecuadorian crude oil for Venezuelan by-products, which will allow savings of almost US$200 million to Ecuador, Inside Costa Rica says. According to Minister Ramirez, this pact allows revealing the crude oil exchange formula for by-products. The minister said that Venezuela is ready to receive the first oil shipment and deliver by-products. Oil exchange for by- products will be in August, BNamericas states. About Petroecuador Petroecuador, according to published reports, is faced with cash-problems. The state-oil firm has no funds for maintenance has no funds to repair pumps in diesel, gasoline and natural gas refineries, and has no capacity to pay suppliers and vendors. The government refused to give the much-needed cash alleging that Petroecuador has been inefficient and non-transparent in its accounts. About Petroloes de Venezuela Petroleos de Venezuela SA 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. PETROLEOS DE VENEZUELA: Paraguay Asks Firm to Drill 12 Wells ------------------------------------------------------------ Petroleos de Venezuela, the state oil firm of Venezuela, will get a formal request from Paraguay's President Nicanor Duarte to drill 12 exploratory wells in Paraguay, according to a statement released by the Paraguayan public works ministry. The statement says that the President Duarte particularly wants the wells drilled in the Chaco region. Panfilo Benitez, the public works minister of Paraguay, said in a statement, "We are going to ask them to carry out the exploratory wells to evaluate the fields and hydrocarbons potential." Business News Americas relates that Minister Benitez has been in preparatory meetings with Hector Ruiz Diaz, the Venezuelan deputy minister of energy and mines, for the extraordinary summit of Mercosur presidents on July 4. According to BNamericas, Paraguay is also keen on developing an exchange of technicians between the two nations to prepare PDVSA officials for exploratory works. President Duarte will also ask Venezuelan President Hugo Chavez to buy the US$19 billion debt of hydro plant Itaipu. Brazilian firm Eletrobras holds 20% of the debt while the Brazilian treasury holds 80%, BNamericas states. Petroleos de Venezuela SA 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: Lowers Tax Payments for Natural Gas Investors ---------------------------------------------------------- The Venezuelan government has decided to lower the tax payments for companies that intend to invest in the state's natural gas fields through its gaseous hydrocarbons law which was implemented on May 24, 2006, the Latin Lawyer reports. The gaseous hydrocarbons law is implemented to fields in the eastern region of Venezuela that contains huge quantities of gas and some crude oil. Normally, these conditions are applied with the hydrocarbons law, under which the government demands a 30% royalty plus surface and extraction taxes, the Latin Lawyer says. According to the Latin Lawyer, under the gaseous hydrocarbons law, the state will only stipulate a 20% royalty from the fields, making them commercially feasible, but Petroleos de Venezuela will be the first to use the reservoirs. "This decision seems to be a smart move of the government towards reactivating the gas industry, in which domestic and foreign private participation is allowed in all primary activities," Luis Eduardo Lopez of Caracas firm Hoet Pelaez Castillo & Duque, told the Latin Lawyer. According to Mr. Lopez this move by the state opens the chance for the government and private investors to jointly develop the local gas industry. He just hopes that this will be regulated and not just become a one-shot deal, the Latin Lawyer relates. Venezuela's foreign currency long-term debt is rated B1 by Moody's, B+ by Standard & Poor's, and BB- by Fitch. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Equity Assets Company Ticker ($MM) ($MM) ------- ------ ------------ ------- Alpargatas SAIC ALPA (262.27) 646.43 Kuala ARTE3 (33.57) 11.86 Kuala-Pref ARTE4 (33.57) 11.86 Bombril BOBR3 (554.69) 488.38 Bombril-Pref BOBR4 (554.69) 488.38 CIC CIC (1,883.69) 22,312.12 Telefonica Holding CITI (1,481.31) 307.89 Telefonica Holding CITI5 (1,481.31) 307.89 IMPSAT Fiber Networks IMPTQ (17.16) 535.01 Paranapanema SA PMAM3 (214.08) 2,847.86 Paranapanema-PREF PMAM4 (214.08) 2,847.86 TEKA TEKA3 (180.22) 557.86 TEKA-PREF TEKA4 (180.22) 557.86 *********** 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, and 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. The TCR Latin America subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *