/raid1/www/Hosts/bankrupt/TCRLA_Public/061101.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, November 1, 2006, Vol. 7, Issue 217
Headlines
A R G E N T I N A
CAPITAL FOOD: Seeks for Court Approval to Reorganize Business
DEAYA SA: Asks for Court Approval to Restructure Debts
ESPODA SRL: Verification of Proofs of Claim Is Until Dec. 27
MECALI SA: L. Gabriele Replaces C. Moreno as Bankruptcy Trustee
MERCADOMANIA.COM: Last Day for Claims Verification Is Nov. 21
VIDEGARD SA: Claims Verification Deadline Is Set for Dec. 6
YPF SA: Parent Inks Pact to Regulate Firm's Activity in Bolivia
B A H A M A S
WINN-DIXIE: Court Approves Deutsche Bank Stipulation
WINN-DIXIE: Wants to Assume Hobart Corp. Agreement
B E R M U D A
CORALSTONE LTD: Last Day to File Proofs of Claim Is Today
QUANTA CAPITAL: Inks New Credit Facility with ING Bank
SAFE ASTORIA: Proofs of Claim Filing Is Until Today
SAFE BRISTOLIA: Proofs of Claim Filing Is Until Today
SAFE CONCORDIA: Creditors Have Until Today to File Claims
SAFE ESBJERG: Deadline for Proofs of Claim Filing Is Today
SEA CONTAINERS: Chapter 11 Filing Cues Moody's to Junk Ratings
B R A Z I L
AMRO REAL: Parent Posts EUR178MM Third Quarter 2006 Net Profits
BANCO NACIONAL: Moody's Reviews Rating for Possible Upgrade
BUCKEYE TECHNOLOGIES: Henry Frigon Resigns from the Board
DEVELOPERS DIVERSIFIED: Buying Inland Retail for US$6.2 Billion
DEVELOPERS DIVERSIFIED: Filing Form S-3 for 3.50% Senior Notes
DEVELOPERS DIVERSIFIED: Fitch Holds BB+ Preferred Stock Rating
DURA AUTOMOTIVE: U.S. & Canadian Operations File for Chapter 11
DURA AUTOMOTIVE: Case Summary & 30 Largest Unsecured Creditors
DURA AUTOMOTIVE: Bankruptcy Filing Is Third Largest in 2006
DURA AUTOMOTIVE: Chapter 11 Filing Cues S&P's Default Ratings
GOL LINHAS: Declares BRL0.16611 Per Share Complementary Dividend
VIACAO AEREA: Creditors Approve Restructuring Plan
C A Y M A N I S L A N D S
CLYDESDALE CLO: Creditors Must Submit Proofs of Claim by Nov. 16
COATES EUROPEAN: Deadline for Proofs of Claim Filing Is Nov. 16
CRYSTAL BLUE: Last Day to File Proofs of Claim Is on Nov. 16
DESCARTES (DEPOSITOR): Proofs of Claim Must be Filed by Nov. 16
DESCARTES CDO: Creditors Must File Proofs of Claim by Nov. 16
DESCARTES CDO TRANSFEROR: Claims Must be Submitted by Nov. 16
DEVONSHIRE TRADING: Proofs of Claim Filing Is Until Nov. 16
DOM FINANCE: Last Day for Filing of Proofs of Claim Is Nov. 16
DRESDNER FUND: Deadline for Proofs of Claim Filing Is on Nov. 16
C H I L E
SHAW GROUP: Completes Review of Stock-Based Compensation Awards
C O L O M B I A
BANCO DE BOGOTA: Will Wrap up Merger with Megabanco on Nov. 7
BANCOLOMBIA: Says It Is Not Being Eyed by Citigroup
HEXION: Prices Tender Offer for 9% Second-Priority Sr. Notes
MEGABANCO: Banco de Bogota Completing Merger with Firm on Nov. 7
C O S T A R I C A
ARMSTRONG WORLD: Sept. 30 Balance Sheet Upside-Down by US$1.2B
DENNY'S CORP: Earns US$25.5 Mil. for the Quarter ended Sept. 27
D O M I N I C A N R E P U B L I C
BANCO LEON: Launches New & Modern Service Subsidiary in Samana
G U A T E M A L A
BANCAFE: Protesters Demand Recovery of Their Money
BANCO INDUSTRIAL: Bancafe's Suspension Cues S&P to Affirm Rating
GOODYEAR TIRE: Closing Tire Manufacturing Plant in Tyler, Texas
J A M A I C A
AIR JAMAICA: Sub-Committee Submitting Report on Proposal Study
KAISER ALUMINUM: Gramercy Alumina Moves for Summary Judgment
KAISER ALUMINUM: Trustee Balks at LeBlanc's Administrative Claim
M E X I C O
BALLY TOTAL: Files Restated Results for Quarter Ended June 30
CHEMTURA CORP: Sells Davis-Standard Interest for US$72 Million
DAVE & BUSTERS: Moody's Assigns Loss-Given-Default Rating
EMPRESAS ICA: Reports MXN5MM Revenue for the Third Quarter 2006
FORD MOTOR: Closes Production at Atlanta Assembly Plant
HERBALIFE LTD: Amends Employment Pact with CEO Richard Goudis
KANSAS CITY: Commences Cash Tender Offer for 10.25% Sr. Notes
KANSAS CITY SOUTHERN: Fitch Ratings Holds B+ IDR Rating
MERIDIAN AUTOMOTIVE: Plan-Filing Period Extended Until Dec. 31
MERIDIAN AUTOMOTIVE: Has Until March 1 to Remove Civil Actions
RADIOSHACK CORP: Fitch Affirms Low B Ratings
VALASSIS COMM: Moody's Lowers Sr. Unsecured Note Rating to Ba1
X-RITE INC: Moody's Assigns Loss-Given-Default Ratings
P A N A M A
HUNTSMAN INTERNATIONAL: S&P Rates Senior Subordinated Notes at B
P U E R T O R I C O
ADELPHIA COM: Discloses Claims Classification Under Revised Plan
CARIBBEAN RESTAURANTS: Moody's Assigns Loss-Given-Default Rating
FIRST BANCORP: Fitch Places Ratings on Negative Watch
PEP BOYS: Closes US$120MM Expansion of Senior Unsecured Loan
PILGRIM'S PRIDE: Extends Gold Kist Notes Tender Offer to Nov. 29
R&G FINANCIAL: Late Filing Cues Fitch to Lower Rating to BB
T R I N I D A D & T O B A G O
HILTON HOTELS: Expects US$2.5 Bil. Revenue from Website Bookings
V E N E Z U E L A
INTERNATIONAL PAPER: Completes US$1.13-Bil. Sale of Forestland
* IDB Says Latin America Needs safer Sovereign Debt Management
* LatAm and Caribbean Are Largest Recipients in IFC Financing
- - - - -
=================
A R G E N T I N A
=================
CAPITAL FOOD: Seeks for Court Approval to Reorganize Business
-------------------------------------------------------------
Court No. 20 in Buenos Aires is studying the merits of Capital Food SA's
petition to reorganize its business after it stopped paying its obligations
on May 30, 2006.
The petition, once approved by the court, will allow Capital Food to
negotiate a settlement plan with its creditors in order to avoid a straight
liquidation.
Clerk No. 39 assists the court in the case.
The debtor can be reached at:
Capital Food SA
Avenida Callao 500
Buenos Aires, Argentina
DEAYA SA: Asks for Court Approval to Restructure Debts
------------------------------------------------------
Court No. 16 in Buenos Aires is studying the merits of Deaya SA's petition
to restructure its debts after it stopped paying its obligations on January
2002.
The petition, once approved by the court, will allow Deaya to negotiate a
settlement plan with its creditors in order to avoid a straight liquidation.
Clerk No. 31 assists the court in the case.
The debtor can be reached at:
Deaya SA
Emilio Ravignani 1146
Buenos Aires, Argentina
ESPODA SRL: Verification of Proofs of Claim Is Until Dec. 27
------------------------------------------------------------
Lia Stella Maris Alvarez, the court-appointed trustee for Espoda SRL's
insolvency case, will verify creditors' proofs of claim until Dec. 27, 2006.
Ms. Alvarez will present the validated claims in court as individual reports
on March 12, 2007. A court in Buenos Aires will determine if the verified
claims are admissible, taking into account the trustee's opinion and the
objections and challenges raised by Espoda and its creditors.
Inadmissible claims may be subject for appeal in a separate proceeding known
as an appeal for reversal.
A general report that contains an audit of Espoda's accounting and banking
records will follow on Apr. 23, 2007.
The trustee can be reached at:
Lia Stella Maris Alvarez
Cerrito 146
Buenos Aires, Argentina
MECALI SA: L. Gabriele Replaces C. Moreno as Bankruptcy Trustee
---------------------------------------------------------------
A court in Buenos Aires appointed Luis A. Gabriele in replacement of Carlos
Moreno as bankruptcy trustee. Control of the company's assets is now
transferred to Mr. Gabriele.
As trustee, Mr. Gabriele will:
-- submit in court individual reports based on the
verified creditor's proofs of claim on Nov. 16, 2006;
-- submit on Feb. 1, 2007, a general report that contains an
audit of Mecali's accounting and banking records; and
-- administer Mecali's assets under court supervision
and take part in their disposal to the extent established
by law.
After the verification phase, the court will determine if the verified
claims are admissible, taking into account the trustee's opinion and the
objections and challenges raised by Mecali and its creditors.
Inadmissible claims may be subject for appeal in a separate proceeding known
as an appeal for reversal.
The trustee can be reached at:
Luis A. Gabriele
Zuviria 5262
Buenos Aires, Argentina
MERCADOMANIA.COM: Last Day for Claims Verification Is Nov. 21
-------------------------------------------------------------
Eduardo Facciuto, the court-appointed trustee for Mercadomania.com SA's
bankruptcy case, will verify creditors' proofs of claim until Nov. 21, 2006.
Under the Argentine bankruptcy law, Mr. Facciuto is required to present the
validated claims in court as individual reports. Court No. 23 in Buenos
Aires will determine if the verified claims are admissible, taking into
account the trustee's opinion and the objections and challenges raised by
Mercadomania.com and its creditors.
Inadmissible claims may be subject for appeal in a separate proceeding known
as an appeal for reversal.
Mercadomania.com was forced into bankruptcy at the request of Nestor Pujo,
whom it owes US$56,301.24.
Clerk No. 45 assists the court in the proceeding.
The debtor can be reached at:
Mercadomania.com SA
Riobamba 463
Buenos Aires, Argentina
The trustee can be reached at:
Eduardo Facciuto
Arevalo 3070
Buenos Aires, Argentina
VIDEGARD SA: Claims Verification Deadline Is Set for Dec. 6
-----------------------------------------------------------
Roberto Jorge Massacane, the court-appointed trustee for Videgard SA's
insolvency case, will verify creditors' proofs of claim until Dec. 6, 2006.
Mr. Massacane will present the validated claims in court as individual
reports on Feb. 20, 2007. A court in Buenos Aires will determine if the
verified claims are admissible, taking into account the trustee's opinion
and the objections and challenges raised by Videgard and its creditors.
Inadmissible claims may be subject for appeal in a separate proceeding known
as an appeal for reversal.
A general report that contains an audit of Videgard's accounting and banking
records will follow on Apr. 3, 2007.
On Aug. 13, 2007, Videgard's creditors will vote on a settlement plan that
the company will lay on the table.
The trustee can be reached at:
Roberto Jorge Massacane
Roque Saenz Pena 846
Buenos Aires, Argentina
YPF SA: Parent Inks Pact to Regulate Firm's Activity in Bolivia
---------------------------------------------------------------
Repsol YPF, the parent company of YPF SA, has signed with the Bolivian
government the new operating contracts that will regulate the company's
activity in that country under the new legal regime established by the
Bolivian authorities within the framework of the new Hydrocarbon Law.
Repsol YPF deems that this agreement is in line with the commitment made
public by the President of Bolivia, Evo Morales, to guarantee a secure legal
framework for its investments. This is a principle that Repsol YPF
considers essential for the development of its business in that country. In
this respect, Repsol YPF values that the new contracts guarantee the return
on the investments made to date in Bolivia and those to be developed in the
future.
This scenario of legal warranty together with public recognition of the
investments made to date by Repsol YPF in Bolivia will permit the
development of new investment projects in that country, which will enhance
the welfare of the Bolivian people.
Repsol YPF holds mining rights on 32 blocks in Bolivia, seven exploration
blocks with a net surface area of 9,264 km2 and 25 exploitation blocks with
a surface area of 2,174 km2.
Between October 1997 and March 2006, Repsol YPF has invested US$1,167
million and became one of the largest tax payers in the country, disbursing
US$1,275 million in direct taxes, patents on mining acreage, royalties and
stake holdings. The company also gives direct employment to 300 workers and
has created 3,000 indirect jobs.
About Repsol
Repsol YPF, SA, is an integrated oil and gas company engaged in all aspects
of the petroleum business, including exploration, development and production
of crude oil and natural gas, transportation of petroleum products,
liquefied petroleum gas and natural gas, petroleum refining, petrochemical
production and marketing of petroleum products, petroleum derivatives,
petrochemicals, LPG and natural gas.
About YPF SA
YPF SA is an integrated oil and gas company engaged in the exploration,
development and production of oil and gas and natural gas and
electricity-generation activities (upstream), the refining, marketing,
transportation and distribution of oil and a range of petroleum products,
petroleum derivatives, petrochemicals and liquid petroleum gas (downstream).
Repsol, which holds 99.04% of YPF's shares, controls YPF.
* * *
As reported in the Troubled Company Reporter-Latin America on June 9, 2006,
under the revised foreign currency ceilings, Moody's Investors Service
upgraded YPF Sociedad Anonima's Foreign Currency Corporate Family Rating to
B2 from B3 with negative outlook.
=============
B A H A M A S
=============
WINN-DIXIE: Court Approves Deutsche Bank Stipulation
----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
approved a stipulation between Deutsche Bank Trust Company
Americas and Winn-Dixie Stores, Inc., and its debtor-affiliates.
As reported in the Troubled Company Reporter on Oct. 3, 2006,
Deutsche Bank, fka Bankers Trust Company, acts as Pass-Through
Trustee under an amended and restated Pass-Through Trust Agreement
(Winn-Dixie Pass-Through Certificates, Series 1999-1) dated Feb. 1, 2001,
and as an Indenture Trustee under 15 indentures.
In the transaction contemplated by the Pass-Through Trust
Agreement, certain of the Debtors sponsored the issuance of over
US$402,000,000 in securities denominated of which approximately
US$245,200,000 remains outstanding as of Sept. 19, 2006.
The securities represent undivided interests in a pool of notes
issued pursuant to the Indentures that are secured by:
-- mortgages on 15 properties each owned by a special
purpose entity and leased under separate leases to the
Debtors under a guaranty agreement;
-- assignments of the 15 Leases; and
-- a Residual Value Surety Bond issued by Centre Reinsurance
(U.S.) Limited to assure the residual value of the leased
premises at the end of the Lease terms.
After the Debtors' bankruptcy filing, Deutsche Bank timely filed
14 proofs of claim relating to the properties leased to the
Debtors:
Claim No. Facility Location
--------- -----------------
8869 Miami Florida Dairy
8870 Orlando Florida Distribution Center
8871 Sarasota Florida Distribution Center
8872 Jacksonville Florida Corporate Headquarters
8873 Miami Florida Distribution Center
8874 Bartow Florida Egg Plant
8875 Fitzgerald Georgia (Deep South/Chek Beverage)
8876 Hammond Louisiana Distribution Center
8877 Atlanta Georgia Distribution Center
8878 Montgomery Alabama Perishables Distribution
Center
8879 Montgomery Alabama Pizza Plant
8880 Greenville South Carolina Distribution Center
8882 Clayton North Carolina Distribution Center
8883 Charlotte North Carolina Distribution Center
Deutsche Bank also filed Claim No. 8868 asserting guarantee
claims in connection with the properties.
On Dec. 20, 2005, Deutsche Bank filed Claim Nos. 12795, 12796,
12797, and 12798 to amend Claim Nos. 8877, 8879, 8880, 8881, and
8883. The Court, however, sustained the Debtors' 11th Omnibus
Claims Objection, disallowing the Amended Claims, among others.
Following discussions between the parties, Deutsche Bank advised
the Debtors that the Claims that related to the Leases that were
rejected by the Debtors -- Claim Nos. 8868, 8871, 8874, 8877,
8879, 8880, 8882, and 8883 -- totaled approximately US$52,200,000.
In addition, Deutsche Bank filed Claim No. 8881 for claims
associated with a dairy in Highpoint, North Carolina.
On June 30, 2006, the Debtors filed their 2nd Omnibus Motion to
Assume Non-Residential Property Leases, seeking to assume
several of the Leases.
Deutsche Bank objected to the Assumption Motion, arguing, among
other things, that the proposed cure amounts should be increased
to reflect additional items.
To resolve their dispute with respect to the allowance and
treatment of Deutsche Bank's Claims, the parties agree that:
(1) Claim 8871 will be allowed as a Class 13-Landlord Claim
for US$51,500,000. This is intended as a global
settlement of several claims;
(2) Claim Nos. 8868, 8870 to 8880, 8882, and 8883 will be
disallowed and expunged with prejudice;
(3) Deutsche Bank will withdraw its objection to the
Assumption Motion;
(4) the Highpoint Claim will not be affected by the
stipulation;
(5) Deutsche Bank will be precluded from asserting any
administrative claims with respect to the leases that are
subject of the stipulation;
(6) Deutsche Bank waives and releases all claims it may have
against the Debtors or any of them through
Sept. 19, 2006, provided that the stipulation will not
limit the fees and expenses that it is entitled to
recover pursuant to Section 12.3 of the Debtors' proposed
Joint Plan of Reorganization; and
(7) if the Plan is not confirmed, the claims disallowed by
the agreement will be deemed reinstated.
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 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi. 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. 57; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
WINN-DIXIE: Wants to Assume Hobart Corp. Agreement
--------------------------------------------------
Winn-Dixie Stores Inc. and its debtor-affiliates ask the Honorable Jerry A.
Funk of the U.S. Bankruptcy Court for the Middle District of Florida to:
(i) approve the assumption of the Hobart Corp. contract;
(ii) fix US$282,876 as the cure amount for the contract, but
preserve full cure rights with respect to any Section
502(h) Claims; and
(iii) allow Claim No. 10193.
The Debtors and Hobart are parties to a Service Contract dated
Feb. 12, 2002, as amended. Under the Contract, Hobart provides
24/7 maintenance, repair, and services with respect to Hobart-made weighing
equipment that includes scales that are used in the everyday operation of
the Debtors' stores.
Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in
Jacksonville, Florida, tells the Court that the services provided by Hobart
under the Contract are essential to ensure the continued proper function of
the Equipment.
The Debtors have negotiated with Hobart as to the terms pursuant
to which the Contract will be assumed. Specifically, the parties agreed
that:
(a) The Debtors will assume the Contract as modified under
Section 365 of the Bankruptcy Code, effective as of the
later of the effective date of the Debtors' Joint Plan of
Reorganization and the date the Court approves this
request;
(b) Subject to the occurrence of the Effective Date, the
"Duration and Termination" provision of the Contract will
be amended to provide that the Contract will continue in
force until terminated by either party. The Contract
can't be terminated without cause until two years after
the later of (1) the Plan Effective Date, and (2)
Bankruptcy Court approval of the Debtors' assumption of
the Contract;
(c) Hobart will facilitate the assumption of the Contract as
modified by agreeing that, effective as of the Effective
Date, Hobart's Claim No. 10193 will be allowed for
US$565,753 of which: (i) US$282,876 will have
administrative expense status and be paid as a reduced
cure, and (ii) US$282,876 will have the status of a
prepetition non-priority unsecured claim to be treated as
a Class 14-Vendor/Supplier Claim;
(d) The Debtors' cure obligations with respect to the
Contract will be limited to the payment of the Reduced
Cure, with Hobart waiving any additional requirements
under Section 365(b)(1) of the Bankruptcy Code as it
relates to any prepetition default under the Contract;
and
(e) The reduction in cure payment and other concessions by
Hobart will not negate the impact of assumption on any
claims held by the Debtors against Hobart or otherwise
expose Hobart to potential preference actions with
respect to payments made on account of the Contract.
Upon assumption of the Contract, Hobart will be entitled
to an administrative claim for cure in the event (albeit
unlikely) that any amounts become owing to Hobart
pursuant to Section 502(h) of the Bankruptcy Code for
sums relating to the Contract that may be required to be
paid pursuant to Section 550.
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 527 stores in Florida,
Alabama, Louisiana, Georgia, and Mississippi. 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. 57; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
=============
B E R M U D A
=============
CORALSTONE LTD: Last Day to File Proofs of Claim Is Today
---------------------------------------------------------
Coralstone Ltd.'s creditors are given until Nov. 1, 2006, to prove their
claims to Gemma Morrison, the company's liquidator, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full names,
addresses, the full particulars of their debts or claims, and the names and
addresses of their lawyers, if any.
A final general meeting will be held at the liquidator's place
of business on Nov. 20, 2006, at 10:00 a.m., or as soon as
possible.
Coralstone Ltd.'s shareholders will determine during the meeting, through a
resolution, the manner in which the books, accounts and documents of the
company and of the liquidator will be disposed.
Coralstone Ltd.'s shareholders agreed on Oct. 13, 2006, to place the company
into voluntary liquidation under Bermuda's Companies Act 1981.
The liquidator can be reached at:
Gemma Morrison
Milner House, 18 Parliament Street
Hamilton, Bermuda
QUANTA CAPITAL: Inks New Credit Facility with ING Bank
------------------------------------------------------
Quanta Capital Holdings Ltd. entered into a new credit facility with ING
Bank N.V., London Branch, as Mandated Lead Arranger, and a syndicate of
lenders. The primary use of the new facility is to support the issuance of
letters of credit securing Quanta's obligations to pay claims under its
remaining reinsurance contracts and other obligations. These letters of
credit will, over time, replace letters of credit previously issued under
the company's credit facility with JPMorgan Chase Bank, NA., after which
time this facility will be terminated. In the interim, Quanta amended the
terms of its JPMorgan Chase facility to permanently waive the default under
that facility due to Quanta's ratings downgrade earlier this year.
Headquartered in Hamilton, Bermuda, Quanta Capital Holdings Ltd.
(NASDAQ: QNTA) -- http://www.quantaholdings.com/-- operates its
Lloyd's syndicate in London and its environmental consulting
business through Environmental Strategies Consulting in the
United States. The Company is in the process of running off its
remaining business lines. The Company maintains offices in
Bermuda, the United Kingdom, Ireland and the United States.
* * *
As reported in the Troubled Company Reporter on Aug. 15, 2006,
Quanta Capital Holdings Ltd. continues to work with its lenders
regarding an amendment to its credit facility and an extension
to its waiver period, which expired Aug. 11, 2006.
On June 7, 2006, A.M. Best Co. downgraded the financial strength
ratings to B from B++ and the issuer credit ratings to bb from
bbb for the insurance/reinsurance subsidiaries of Quanta Capital
Holdings Ltd. These rating actions apply to Quanta Reinsurance
Ltd., its subsidiaries and Quanta Europe Ltd. A.M. Best also
downgraded Quanta's ICR to b from bb and the securities rating
to ccc from b+ for its US$75 million 10.25% Series A non-
cumulative perpetual preferred shares. All ratings have been
removed from under review with negative implications and
assigned a negative outlook.
The company disclosed that the A.M. Best rating action triggered
a default under Quanta's credit facility.
SAFE ASTORIA: Proofs of Claim Filing Is Until Today
---------------------------------------------------
Safe Astoria Ltd.'s creditors are given until Nov. 1, 2006, to prove their
claims to Vincent Slattery, the company's liquidator, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full names,
addresses, the full particulars of their debts or claims, and the names and
addresses of their lawyers, if any.
A final general meeting will be held at the liquidator's place
of business on Dec. 1, 2006, at 9:30 a.m., or as soon as
possible.
Safe Astoria's shareholders will determine during the meeting, through a
resolution, the manner in which the books, accounts and documents of the
company and of the liquidator will be disposed.
Safe Astoria's shareholders agreed on Oct. 16, 2006, to place the company
into voluntary liquidation under Bermuda's Companies Act 1981.
The liquidator can be reached at:
Vincent Slattery
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
SAFE BRISTOLIA: Proofs of Claim Filing Is Until Today
-----------------------------------------------------
Safe Bristolia Ltd.'s creditors are given until Nov. 1, 2006, to prove their
claims to Vincent Slattery, the company's liquidator, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full names,
addresses, the full particulars of their debts or claims, and the names and
addresses of their lawyers, if any.
A final general meeting will be held at the liquidator's place
of business on Dec. 1, 2006, at 9:30 a.m., or as soon as
possible.
Safe Bristolia's shareholders will determine during the meeting, through a
resolution, the manner in which the books, accounts and documents of the
company and of the liquidator will be disposed.
Safe Bristolia's shareholders agreed on Oct. 16, 2006, to place the company
into voluntary liquidation under Bermuda's Companies Act 1981.
The liquidator can be reached at:
Vincent Slattery
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
SAFE CONCORDIA: Creditors Have Until Today to File Claims
---------------------------------------------------------
Safe Concordia Ltd.'s creditors are given until Nov. 1, 2006, to prove their
claims to Vincent Slattery, the company's liquidator, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full names,
addresses, the full particulars of their debts or claims, and the names and
addresses of their lawyers, if any.
A final general meeting will be held at the liquidator's place
of business on Dec. 1, 2006, at 9:30 a.m., or as soon as
possible.
Safe Concordia's shareholders will determine during the meeting, through a
resolution, the manner in which the books, accounts and documents of the
company and of the liquidator will be disposed.
Safe Concordia's shareholders agreed on Oct. 16, 2006, to place the company
into voluntary liquidation under Bermuda's Companies Act 1981.
The liquidator can be reached at:
Vincent Slattery
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
SAFE ESBJERG: Deadline for Proofs of Claim Filing Is Today
----------------------------------------------------------
Safe Esbjerg Ltd.'s creditors are given until Nov. 1, 2006, to prove their
claims to Vincent Slattery, the company's liquidator, or be excluded from
receiving any distribution or payment.
In their proofs of claim, creditors must indicate their full names,
addresses, the full particulars of their debts or claims, and the names and
addresses of their lawyers, if any.
A final general meeting will be held at the liquidator's place
of business on Dec. 1, 2006, at 9:30 a.m., or as soon as
possible.
Safe Esbjerg's shareholders will determine during the meeting, through a
resolution, the manner in which the books, accounts and documents of the
company and of the liquidator will be disposed.
Safe Esbjerg's shareholders agreed on Oct. 16, 2006, to place the company
into voluntary liquidation under Bermuda's Companies Act 1981.
The liquidator can be reached at:
Vincent Slattery
Messrs. Conyers Dill & Pearman
Clarendon House, Church Street
Hamilton, HM DX, Bermuda
SEA CONTAINERS: Chapter 11 Filing Cues Moody's to Junk Ratings
--------------------------------------------------------------
Moody's downgraded all ratings of Sea Containers Ltd., including the senior
unsecured rating to Ca from Caa3. Moody's will withdraw all ratings because
Sea Containers and two of its subsidiaries filed to reorganize under Chapter
11 of the U.S. Bankruptcy Code on Oct. 15, 2006.
The downgrades reflect Moody's belief that holders of the unsecured notes
are likely to recognize a meaningful loss upon the resolution of the
bankruptcy proceedings. Holders of Sea Containers unsecured notes of US$386
million, and the company's pension trusts are expected to be the largest
creditors. Sea Containers is a holding company and its operating
subsidiaries were not included in the bankruptcy filing. The senior
unsecured notes, however, do not benefit from upstream guarantees from the
operating subsidiaries.
In Moody's view, the value of Sea Containers 50% interest in GE SeaCo will
be a primary contributor of value in any debt reorganization plan, although
there is considerable uncertainty in value. Sea Containers has not filed
financial statements for some time (last filed Form 10-Q for the third
quarter of 2005); however, it recently filed the GE SeaCo 2005 annual report
(Form 8-K dated Sept. 26, 2006). At Dec. 31, 2005, GE SeaCo assets totaled
US$1.3 billion, including US$1.1 billion of marine containers, with total
debt of US$939 million including advances due to the parent companies.
There have been no recent sales of large marine container fleets; however,
applying the current market multiples for TAL International Group, Inc.
(publicly-listed intermodal container lessor, not rated), to GE SeaCo's 2005
financial statements, implies a possible value for Sea Containers 50%
interest in the US$100 million to US$200 million range. Moody's notes that
changes in the GE SeaCo container fleet or lease book subsequent to Dec. 31,
2005, could affect the value.
Separately, however, General Electric Capital Corporation or GECC, the 50%
partner in GE SeaCo, notified Sea Containers that GECC will exercise its
right to purchase Sea Containers' 50% equity interest at a fair market value
not disclosed. This notice was made prior to Sea Containers' bankruptcy
filing. GECC believes a change of control, as defined by the GE SeaCo
Member's Agreement, occurred upon the resignation of Sea Containers former
CEO. According to Sea Containers, it will contest GECC's interpretation of
the Members Agreement.
In addition to the senior unsecured notes, Sea Containers is liable for
certain debt obligations of its operating subsidiaries, including
approximately US$60 million of term loans secured by first lien mortgages on
ten vessels. Some of these vessels are trading currently while others are
laid up. While the collateral coverage on a loan-by-loan basis is not
clear, Moody's does not anticipate significant residual claims. While
adequate to cover the secured debt, Moody's does not expect these vessels
nor the residual value of the containers pledged to the recently amended Sea
Containers' container securitization facility to provide significant
additional recovery value relative to the liabilities of Sea Containers. The
remaining unencumbered containers owned by Sea Containers (valued at US$15
million by the company) might also contribute if not used as a source of
liquidity during the bankruptcy proceedings.
Ratings downgraded and to be withdrawn:
-- Corporate Family, to Ca from Caa2;
-- Senior Unsecured, to Ca from Caa3; and
-- Issuer Rating, to Ca from Caa3
Sea Containers Ltd. headquartered in Hamilton Bermuda, is the
franchisee-operator of the Great North Eastern Railroad in the U.K., a
lessor of cargo containers to the shipping industry, and a 50% co-owner of
GE SeaCo, a container leasing joint venture between Sea Containers and
General Electric Capital Corp.
===========
B R A Z I L
===========
AMRO REAL: Parent Posts EUR178MM Third Quarter 2006 Net Profits
---------------------------------------------------------------
ABN Amro, the parent firm of Banco ABN Amro Real SA, said in its financial
statement that its third quarter 2006 net profits for its Latin American
units decreased 53.1% to EUR178 million, compared with the EUR330 million
recorded in the same quarter of 2005.
Business News Americas relates that worldwide, ABN Amro reported its first
decrease in quarterly profits since the second quarter of 2002, due in part
to higher provisions for bad loans. ABN Amro's third quarter net income
decreased 4.3% to EUR1.14 billion, compared with the EUR1.21 billion in the
third quarter of last year.
According to BNamericas, ABN Amro's total Latin American operating income
dropped 6.1% to EUR950 million in the third quarter of 2006, compared with
the third quarter of 2005. Its net interest income increased 28.5% to
EUR752 million.
The report says that ABN Amro's efficiency ratio rose to 60.3% in the third
quarter of 2006, from 48.3% in the third quarter of 2005.
The net profits of ABN Amro fell 14.1% to EUR461 million in the first nine
months of 2006, compared with the first nine months of 2005, BNamericas
notes.
BNamericas underscores that the earnings of ABN Amro for the first nine
months of 2005 included a non-recurring gain of EUR229 million from the sale
of Real Seguros -- its insurance unit in Brazil -- to Tokio Marine, a
Japanese insurer.
Amro Real contributed 95% of ABN Amro's operating income in the region in
the third quarter of 2006, BNamericas says.
ABN Amro told BNamericas that its retail banking in Brazil, which includes
households and small and medium enterprises, increased 20% in the first nine
months of 2006, due to the 31.7% boost in retail lending.
BNamericas emphasizes that individual borrowers represent 51.6% of the
unit's retail loan portfolio, while small and medium enterprises account for
48.4%. In the first nine months of 2006, loans to individual borrowers
increased 25%, and small and medium enterprise lending rose 39.7% form the
first nine months of 2005. Retail banking represent 68.9% of ABN Amro's
operating income in Brazil.
Commercial banking operations of ABN Amro in Brazil increased revenues by
35.1% in the first nine months of 2006, compared with the same period in
2005, BNamericas relates. The boost is due to higher lending and
represented 6.1% of the total income from the country in the first nine
months of 2006.
BNamericas reports that Aymor, ABN Amro's consumer finance division in
Brazil that focuses on vehicle and consumer goods funding, boosted revenues
34.8% and contributed 12.2% of operating income from Brazil during the first
nine months of 2006.
The loan-loss provisions for Latin America increased 106% to EUR181 million
in the third quarter of 2006, compared with the third quarter of 2005, the
report says. Provisions for default loans rose 124% to EUR563 million in
the first nine months of 2006, compared with the same period of 2005. Loan
impairment dropped 13.9% in the third quarter of 2006, compared with the
second quarter of 2006.
ABN Amro told BNamericas that its net profits in Latin America rose 2.5% in
the third quarter of 2006, compared with the third quarter of 2005. Its
total operating income grew 4.9% and net interest income increased 3.7%.
ABN Amro expects double-digit revenue growth on the back of strong growth in
loans to retail clients in Latin America in 2007, BNamericas says, citing
Hugh Scott-Barrett, the firm's chief financial officer.
Total assets of ABN Amro in Latin America increased 14% to EUR31.8 billion
in September 2006, compared with September 2005. ABN Amro has units in
Argentina, Chile, Colombia, Ecuador, Mexico, Paraguay, Uruguay and
Venezuela, BNamericas states.
About ABN Amro
ABN AMRO Holding NV, which owns all of the shares of ABN AMRO Bank NV, is an
international banking group offering a range of banking products and
financial services on a global basis through its network of 3,557 offices
and branches in 58 countries and territories. The company's client-focused
business units are Consumer & Commercial Clients, Wholesale Clients, Private
Equity, Private Clients, Asset Management and Transaction Banking Group.
About ABN Amro Real
Banco ABN AMRO Real, a subsidiary of Dutch ABN AMRO, is the 4th largest
Brazilian private retail bank, operating though 1,900 branches and
mini-branches and serving more than 12 million clients. As of December
2005, Banco Real managed over BRL46 billion in credit assets, including
guarantees, and BRL78 billion in client savings.
About Banco Bradesco
Headquartered in Sao Paulo, Brazil, Banco Bradesco S.A. Banco --
http://www.bradesco.com.br/-- prides itself on serving low-and
medium-income individuals in Brazil since the 1960s. Banco Bradesco is
Brazil's largest private bank, with more than 3,000 banking branches, and
also a leader in insurance and private pension management. Bradesco has
branches throughout Brazil as well as one in New York, two in the Bahamas,
and four in the Cayman Islands. Bradesco offers Internet banking,
insurance, pension plans, annuities, credit card services (including
football-club affinity cards for the soccer-mad population), and Internet
access for customers. The bank also provides personal and commercial loans,
along with leasing services.
* * *
As reported by Troubled Company Reporter on Feb. 23, 2006, Moody's Investors
Service shifted Banco Bradesco S.A.'s 'C-' bank financial strength rating to
positive from stable.
* * *
On Oct. 19, 2005, Moody's Investors Service upgraded Banco ABN Amro Real
S.A.'s long-term foreign currency deposit rating to B1 from B2. Moody's
maintained a positive outlook on the rating.
This action followed Moody's upgrade of Brazil's foreign currency ceiling
for deposits to B1, from B2, and the foreign currency country ceiling for
bonds and notes to Ba3, from B1. The country ceilings have a positive
outlook.
BANCO NACIONAL: Moody's Reviews Rating for Possible Upgrade
-----------------------------------------------------------
Moody's Investor Services took these rating actions on Banco Nacional de
Desenvolvimento Economico e Social:
-- long-term Senior Unsecured (foreign currency) --
Baa3/stable from Ba1/under review for upgrade;
-- long-term Bank Deposits (foreign currency) -- Ba3/stable
(unchanged);
-- long-term Issuer Rating (domestic currency) -- A1/stable
from A3/under review for upgrade;
-- short-term Bank Deposits (foreign currency) -- NP
(unchanged);
-- short-term Issuer Rating (domestic currency) -- P-1 from
P-2
-- Baseline Credit Assessment: 12;
-- Support: High; and
-- Brazil's LCDC: A1
This is in connection with Moody's upgrade on the ratings of seventeen
government-related financial institutions following a review prompted by the
implementation in August of a revised rating methodology for the sector.
The revised methodology relies on a country's local currency deposit ceiling
as a measure of its ability to rescue non-bank financial institutions under
its joint-default analysis or JDA framework. Previously, the government's
bond rating fulfilled this role, as it continues to do so for non-financial
government-related entities.
As a result of the change in rating methodology, 26 government-related
non-bank financial institutions were put on review for upgrade in August.
BUCKEYE TECHNOLOGIES: Henry Frigon Resigns from the Board
---------------------------------------------------------
Buckeye Technologies Inc. disclosed that Henry F. Frigon has
resigned from its Board of Directors effective Nov. 3, 2006.
Mr. Frigon, a private investor, has been a member of the Company's Board of
Directors since 1996 and is resigning for personal reasons unrelated to his
service at Buckeye.
The Company's Board of Directors has named Director Lewis Holland to succeed
Mr. Frigon as chair of the Company's Audit Committee effective Nov. 3, 2006.
Mr. Holland is president of Henry Turley Company, a real estate company
specializing in development of urban communities. Prior to joining Henry
Turley Company, Mr. Holland was with National Commerce Bancorporation, prior
to its merger with SunTrust. At NCBC he served as vice chairman and chief
financial officer and also head of its ancillary businesses including fuel
card processing, retirement plan processing, trust and brokerage, until his
retirement in 2001. Mr. Holland is a former partner with the accounting
firm of Ernst & Young and was in charge of E&Y's Memphis audit staff.
Effective with Mr. Frigon's resignation, the Board of Directors
has amended the Company's by-laws to reduce the number of
directors from ten to nine.
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.
Moody's Investors Service, in connection with the implementation
of its new Probability-of-Default and Loss-Given-Default rating
methodology for the North American Forest Products sector,
confirmed its B2 Corporate Family Rating for Buckeye Technologies, Inc.
DEVELOPERS DIVERSIFIED: Buying Inland Retail for US$6.2 Billion
-------------------------------------------------------------
Developers Diversified and Inland Retail Real Estate Trust, Inc.
have entered into a definitive merger agreement.
Under the terms of the agreement, Developers Diversified will
acquire all of the outstanding shares of IRRETI for a total merger
consideration of US$14.00 per share in cash. Developers Diversified may
elect to issue up to US$4.00 per share of the total merger consideration in
the form of Developers Diversified common stock to be based upon the ten-day
average closing price of Developers Diversified shares two trading days
prior to the IRRETI stockholders' meeting to approve the transaction. The
election to issue Developers Diversified common stock may be made up to 15
calendar days prior to the IRRETI stockholders' meeting and may be revoked
by Developers Diversified at any time if the revocation would not delay the
stockholders' meeting for more than ten business days.
The transaction has a total enterprise value of approximately
US$6.2 billion. This amount includes approximately US$2.3 billion of
existing debt, a significant portion of which is expected to be prepaid at
closing. IRRETI's real estate portfolio aggregates 307 community centers,
neighborhood shopping centers and single tenant/net leased retail
properties, comprising 43.6 million square feet of total GLA.
Developers Diversified has reached agreement with a major U.S.
institutional investor on a joint venture which will acquire 67 of IRRETI's
community center assets for approximately US$3 billion of total asset value.
The joint venture will be leveraged up to 60% loan to value and Developers
Diversified will contribute 15% of the equity. Developers Diversified will
leverage its co-investment with fees for asset management, leasing, property
management, development/tenant coordination and acquisitions. Developers
Diversified will also earn a promoted interest equal to 20% of the cash flow
of the joint venture after the partners have received an internal rate of
return equal to 10% on their equity investment. Additionally, Developers
Diversified has received financing commitments totaling in excess of US$3
billion, which it may use to
fund all or a portion of the total merger consideration.
Scott A. Wolstein, Developers Diversified's Chairman and Chief
Executive Officer, commented, "This is an exciting transaction
that strengthens our industry position through control of some of the
highest quality, market-dominant community centers in the
Southeast. We're especially pleased to co-invest in this
opportunity with a new strategic institutional joint venture
relationship. We are excited to add these outstanding properties to our
platform and to apply our leasing and management skills to enhance value
both for the benefit of our shareholders and for the benefit of our new
capital partner."
IRRETI's portfolio of properties is a high quality institutional
retail portfolio which has dominant market positions in several
key growth-oriented Southeast U.S. markets. The properties are
well-leased at 95% occupancy. Deferred maintenance is minimal, as the
portfolio averages seven years of age and the properties have been well
maintained.
Daniel B. Hurwitz, Developers Diversified's Senior Executive Vice President
and Chief Investment Officer, added, "We're pleased with the opportunity to
expand our footprint in such key markets as Atlanta, Charlotte, Miami and
Orlando. Additionally, we strengthen our relationships with numerous
national retailers such as Target, Wal-Mart, Lowe's, Home Depot and Kohl's.
The
combination of outstanding locations coupled with strong co-
tenancy makes the Inland portfolio a natural fit with the
Developers Diversified operating platform."
Over 70% of the portfolio is located in these growth-oriented
southeastern states:
2006-2011
No. Total GLA Population
State Properties (MSF) % Total GLA Growth
--- --------- -------- ----------- ----------
Georgia 53 11.2 25.7% 8.3%
Florida 68 8.7 19.9% 9.7%
North Carolina 41 6.6 15.1% 6.7%
South Carolina 25 2.7 6.2% 5.3%
Virginia 14 2.5 5.7% 6.0%
Subtotal/Wtd. Avg. 201 31.7 72.7% 7.9%
U.S. Average 2006-2011
Population Growth 4.8%
The portfolio is tenanted by the leading retailers in their
respective categories in the Southeast U.S. A summary of the
portfolio's top five tenants by total GLA:
Owned % Total Total
Total Units GLA Owned GLA % Total
Tenant (Owned/Unowned) (MSF) GLA (MSF) GLA
------ --------------- ----- ------- ----- ------Target
27 0.0 0.0% 3.7 8.5%
Wal-Mart 19 1.8 5.1% 3.5 8.1%
Publix 53 2.4 6.7% 2.4 5.5%
Lowe's Home Imp. 13 0.9 2.5% 1.5 3.3%
Kroger 24 1.3 3.6% 1.3 3.0%
Subtotal - Top 5 136 6.3 17.8% 12.4 28.4%
Tenants
In addition to the portfolio of operating properties, Developers
Diversified will acquire a development pipeline of five projects
and numerous potential expansion and redevelopment projects.
Developers Diversified plans to generate additional value by
implementing its proactive leasing, development, redevelopment and property
management systems. In addition, the Company intends, immediately upon
closing, to incorporate the IRRETI assets in its highly successful ancillary
income program, which will result in additional value creation.
Barry Lazarus, President and CEO of Inland Retail, noted, "We are extremely
gratified to present this exciting liquidity event to our stockholders.
This transaction offers very attractive returns to our investors who
initially acquired our stock at US$10 a share. We are delighted to be able
to offer our investors an outstanding return on their initial investments
while delivering our extremely high quality portfolio to one of the premier
owner/operators in our sector. We look forward to working closely with
Developers Diversified's management throughout the transition process."
Following the merger, Developers Diversified will own or manage
over 800 shopping centers in 45 states, plus Puerto Rico and
Brazil, comprising 162 million square feet.
Completion of the transaction, which is expected to occur in the
first quarter of 2007, is subject to approval of the merger
agreement by IRRETI shareholders and other customary closing
conditions described in the merger agreement. The merger was
unanimously approved by Developers Diversified's Board of
Directors. The merger was unanimously approved by IRRETI's Board of
Directors, with two related party directors recusing
themselves.
Macquarie Capital Partners LLC is acting as exclusive financial
advisor to Developers Diversified. Banc of America Securities LLC is acting
as exclusive financial advisor to IRRETI. Baker &
Hostetler LLP is serving as Developers Diversified's legal
advisers. Houlihan Lokey Howard & Zukin provided a fairness
opinion to the Board of Directors of IRRETI. Duane Morris LLP is serving as
IRRETI's legal advisers.
About Inland Retail
Inland Retail Real Estate Trust, Inc. is a self-administered and
self-managed real estate investment trust primarily focused on
acquiring, developing and managing community and neighborhood
shopping centers in the eastern United States. The Company is a
public, non-listed REIT.
About Developers Diversified
Developers Diversified Realty Corp. -- http://www.ddr.com/
-- currently owns and manages over 500 retail operating and
development properties in 44 states, plus Puerto Rico and Brazil, totaling
118 million square feet. The Company is a self-administered and
self-managed real estate investment trust
operating as a fully integrated real estate company which
acquires, develops and leases shopping centers.
DEVELOPERS DIVERSIFIED: Filing Form S-3 for 3.50% Senior Notes
--------------------------------------------------------------
Developers Diversified Realty Corp. intends to file with the
U.S. Securities and Exchange Commission on or about Nov. 6, 2006 a
Registration Statement on Form S-3 for the registration under the Securities
Act of 1933, as amended, of resales of the Company's previously issued 3.50%
Convertible Senior Notes due 2011 and the common shares, no par value per
share, of the Company which may, under certain circumstances, become
issuable upon conversion of the Notes.
The Notes were originally issued on Aug. 28, 2006; at the same
time a Registration Rights Agreement was entered into among the
Company and the initial purchasers of the Notes, which requires
the Shelf Registration Statement.
In accordance with the Registration Rights Agreement, beneficial
holders of the Registrable Securities that wish to use the Shelf
Registration Statement in connection with a resale of their
Registrable Securities must complete the Selling Security holder
Notice and Questionnaire, copies of which can be obtained by
contacting:
Joan U. Allgood
Executive Vice President
Corporate Transactions and Governance
Developers Diversified Realty Corporation
3300 Enterprise Parkway
Beachwood, OH 44122
Phone: 216-755-5656
Fax: 216-755-1656
Developers Diversified Realty Corp. -- http://www.ddr.com/
-- currently owns and manages over 500 retail operating and
development properties in 44 states, plus Puerto Rico and Brazil, totaling
118 million square feet. The Company is a self-administered and
self-managed real estate investment trust
operating as a fully integrated real estate company which
acquires, develops and leases shopping centers.
DEVELOPERS DIVERSIFIED: Fitch Holds BB+ Preferred Stock Rating
--------------------------------------------------------------
Fitch Ratings has affirmed Developers Diversified Realty
Corp.'s ratings following the company's announcement of the
pending acquisition of Inland Retail Real Estate Trust Inc.:
DDR
-- Issuer Default Rating at 'BBB';
-- Senior unsecured debt at 'BBB';
-- Preferred stock at 'BB+'.
JDN Realty Corp.
-- Unsecured debt at 'BBB'.
The Rating Outlook is Stable.
After completion of the acquisition, DDR will realize an increased size and
geographic foothold, particularly with a focus on higher population growth
markets. Upon culmination of the acquisition, DDR will have a large and
well-diversified portfolio with over 800 shopping centers in 45 states and
Puerto Rico and Brazil. No state will constitute over an 11% concentration
of total square footage and the top five will encompass only approximately
44% of total gross leaseable area. Fitch believes that the transaction will
be leverage-neutral upon closing or shortly thereafter and coverage metrics
will remain adequate for the rating category.
Management continues to pursue a high-quality portfolio with
reasonably comfortable lease maturity schedules to strong credit
quality anchors and in-line tenants. While there is a large
amount of secured debt in the IRRETI portfolio today, DDR intends to pay off
the vast majority (over 75%) on the US$3 billion of assets it wholly own on
its balance sheet, which should serve to improve the company's unencumbered
asset profile and to further strengthen financial flexibility going forward.
Historically, the company has shown a considerable appetite for large
acquisitions and this transaction appears consistent with these others where
management has demonstrated successful integration and shown improved
operating performance.
The ratings do acknowledge that the IRRETI acquisition is a
substantial undertaking for the company that contains inherent
risks such as generating a cohesive transition. Fitch anticipates the
possibility of modest deterioration in DDR's interest and fixed-charge
coverage and leverage ratios in the near term as the transaction closes due
to the assumption of debt and other transaction and integration costs.
Moreover, it is noted that aside from the anticipated additional debt
following closing, the company also has relatively near-term requirements of
30% of existing debt coming due in the next two years. However, Fitch is
comfortable with the financing of the transaction and the company's
experience in successfully handling similar situations in prior
acquisitions.
Support for the rating is also derived from the EBITDA (defined as recurring
earnings before interest, taxes, depreciation and
amortization) to interest expense ratio, which was 2.4 times (x)
for the most recent quarter ended June 30, 2006. Likewise, the
fixed-charge ratio (defined as EBITDA less capital expenditures
and straight line rent adjustments to total interest expense and
preferred dividends) for the company was 1.8x for the most recent quarter.
With respect to leverage, debt to undepreciated book capital and debt plus
preferred stock to undepreciated book
capital basis was 53.9% and 63.2%, respectively, at quarter-end
June 30, 2006. Moreover, Fitch estimates the risk-adjusted
capital ratio for the company at 1.15x as of June 30, 2006. All
of these measures are consistent with the 'BBB' issuer and
unsecured debt rating and are expected to remain within a narrow
range of this level.
Developers Diversified Realty Corporation is a self-administered
Ohio-based real estate investment trust that acquires, develops,
owns, and manages primarily community and neighborhood shopping
centers. As of June 30, 2006, the company had interests in 465
properties aggregating approximately 115 million square feet of
gross leaseable area located in 44 states. Pre-merger
announcement, the company had total assets of approximately US$7.1 billion,
total debt of US$4.1 billion, and an undepreciated total book capital of
US$7.6 billion.
DURA AUTOMOTIVE: U.S. & Canadian Operations File for Chapter 11
---------------------------------------------------------------
DURA Automotive Systems Inc.'s U.S. and Canadian subsidiaries
filed yesterday, Oct. 30, 2006, for protection under Chapter 11 of the U.S.
Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware.
DURA's European and other operations
outside the U.S. and Canada, accounting for approximately 51% of
DURA's revenue, are not part of the filing.
DURA's decision to pursue reorganization under Chapter 11 came
after evaluating all options to restructure its balance sheet to
reduce the company's indebtedness and interest expense. DURA
elected to pursue a restructuring under court protection as it
will facilitate both a financial restructuring and ongoing
operational restructuring, the successful implementation of which will help
DURA overcome current financial and industry pressures and position the
company for long-term success.
DIP Financing
As part of the filing, DURA has arranged for approximately
US$300 million in Debtor-in-Possession financing from Goldman Sachs, GE
Capital, and Barclays, which will be used by DURA to fund normal business
operations and continue its operational
restructuring program initiated in February 2006.
The company has requested, and expects to receive, permission from the Court
to pay employee salaries, wages and benefits. DURA has also asked for
authority to pay certain critical pre-petition vendor claims and will
continue to pay its post-petition obligations in the ordinary course of
business. DURA said the steps it is taking would help ensure continuity of
supply to customers.
"With industry conditions tightening further, we concluded that
our capital structure is no longer appropriate," chairman and
chief executive officer of DURA Automotive Systems Larry Denton
said.
"The Chapter 11 process will enable us to work with our creditors on a plan
that will reduce our debt burden and align the business to meet the
challenges of tomorrow's automotive marketplace.
"The entire North American automotive supply industry is at an
extremely difficult juncture," Mr. Denton continued.
"Pursuing a financial reorganization under court protections is
the prudent course of action and positioning us for long-term
sustainability. This is in the best interest of our employees,
customers, vendors, and other business partners."
DURA said the accelerating deterioration of the North American
automotive industry, in particular, further production cuts by the major
U.S. OEMs and the escalating cost of raw materials,
adversely affected DURA's cash position prior to the filing. The DIP
financing will improve DURA's liquidity, providing the company with
sufficient working capital to continue normal operations and fund its
turnaround.
In February 2006, DURA initiated an operational restructuring
program, focused on improving quality, lowering production costs, increasing
EBITDA and rightsizing the business to account for capacity reductions. The
operational restructuring program is generating improvements today and will
continue to generate
additional improvements throughout the bankruptcy process.
"Once our operational and financial programs are complete, we
believe that DURA will have improved its competitive position in
the automotive supply market, combining best-in-class quality with
best-in-cost production through our global lean-manufacturing footprint,"
Mr. Denton said.
"DURA plans to continue to serve customers with innovative,
competitively priced products that meet the highest standards of
quality today and into the future."
About DURA Automotive Systems
Rochester Hills, Mich.-based DURA Automotive Systems, Inc.
(Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent
designer and manufacturer of driver control systems, seating
control systems, glass systems, engineered assemblies, structural door
modules and exterior trim systems for the global automotive industry. The
company is also a leading supplier of similar products to the recreation
vehicle and specialty vehicle
industries. DURA sells its automotive products to every North
American, Japanese and European original equipment manufacturer
and many leading Tier 1 automotive suppliers. It currently operates in 63
locations including joint venture companies and customer service centers in
14 countries including Brazil.
* * *
As reported in the Troubled Company Reporter on Oct. 19, 2006,
Moody's Investors Service lowered the Probability of Default
rating of Dura Automotive Systems Inc. to D from Caa3.
As reported in the Troubled Company Reporter on Oct. 18, 2006,
Standard & Poor's Ratings Services lowered the corporate credit
rating of Dura Automotive Systems Inc. and its subsidiary, Dura
Operating Corp., to 'D' from 'CCC'.
DURA AUTOMOTIVE: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------------
Lead Debtor: Dura Automotive Systems, Inc.
aka Dura Automotive Holdings, Inc.
aka MC Holding Corp.
2791 Research Drive
Rochester Hills, MI 48309-3575
Bankruptcy Case No.: 06-11202
Debtor-affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Dura Operating Corp. 06-11203
Adwest Electronics Inc. 06-11204
Atwood Automotive, Inc. 06-11205
Atwood Mobile Products, Inc. 06-11206
Automotive Aviation Partners, LLC 06-11207
Creation Group Transportation, Inc. 06-11208
Creation Group, Inc. 06-11209
Creation Windows, Inc. 06-11210
Creation Windows, LLC 06-11211
Creation Group Holdings, Inc. 06-11212
Dura Aircraft Operating Company, LLC 06-11213
Dura Automotive Systems Cable Operations Inc. 06-11214
Dura Automotive Systems of Indiana, Inc. 06-11215
Dura Brake Systems, L.L.C. 06-11216
Dura Cables North LLC 06-11217
Dura Cables South LLC 06-11218
Dura Fremont L.L.C. 06-11219
Dura Gladwin L.L.C. 06-11220
Dura Global Technologies, Inc. 06-11221
Dura G.P. 06-11222
Dura Mancelona L.L.C. 06-11223
Dura Services L.L.C. 06-11224
Dura Shifter L.L.C. 06-11225
Dura Spicebright, Inc. 06-11226
Kemberly, Inc. 06-11227
Kemberly, LLC 06-11228
Mark I Molded Plastics of Tennessee, Inc. 06-11229
Patent Licensing Clearinghouse L.L.C. 06-11230
Spec-Temp, Inc. 06-11231
Trident Automotive, L.L.C. 06-11232
Trident Automotive, L.P. 06-11233
Universal Tool & Stamping Company, Inc. 06-11234
Dura Automotive Canada ULC 06-11235
Dura Automotive Systems (Canada), Ltd. 06-11236
Dura Canada LP 06-11237
Dura Holdings Canada LP 06-11238
Dura Holdings ULC 06-11239
Dura Ontario, Inc. 06-11240
Dura Operating Canada LP 06-11241
Trident Automotive Canada Co. 06-11242
Trident Automotive Limited 06-11243
Type of Business: The Debtors design and manufacture driver
control systems, seating control systems,
glass systems, engineered assemblies,
structural door modules, and exterior trim
systems for the global automotive industry.
The Debtors also supplies similar products
to the recreation vehicle and specialty
vehicle industries. The Debtors sell their
automotive products to every North American,
Japanese, and European original equipment
manufacturer and many leading Tier 1
automotive suppliers.
See http://www.DURAauto.com/
Chapter 11 Petition Date: October 30, 2006
Court: District of Delaware
Judge: Kevin J. Carey
Debtors' Lead
Counsel: Richard M. Cieri, Esq.
Marc Kieselstein, Esq.
Roger James Higgins, Esq.
Ryan Blaine Bennett, Esq.
Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, IL 60601-6636
Tel: (312) 861-2000
Fax: (312) 861-2200
Debtors'
Co-Counsel: Mark D. Collins, Esq.
Daniel J. DeFranseschi, Esq.
Jason M. Madron, Esq.
Richards Layton & Finger, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7575
Fax: (302) 498-7575
Debtors' Special
Counsel: Baker & McKenzie
Debtors'
Conflicts
Counsel: Togut, Segal & Segal LLP
Debtors'
Investment
Banker: Miller Buckfire & Co., LLC
Debtors'
Financial
Advisor: Glass & Associates Inc.
Debtors'
Notice, Claims
and Balloting
Agent: Kurtzman Carson Consultants LLC
Debtors'
Corporate
Communications
Consultants: Brunswick Group LLC
Financial Condition as of July 2, 2006:
Total Assets: US$1,993,178,000
Total Debts: US$1,730,758,000
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
U.S. Bank Trust Services 9% Senior Subd. US$523,530,000
60 Livingston Ave. EP-MN-WS3C Notes
St. Paul, MN 55107
Attn: Richard Prokosch
Tel: (651) 495-3918
Fax: (651) 495-8097
BNY Midwest Trust Company 8.625% Senior US$400,000,000
2 N LaSalle Street, Suite 1020
Chicago, IL 60602
Attn: Roxanne J. Ellwanger
Tel: (312) 827-8574
Fax: (312) 827-8542
JP Morgan Trust Company 7.5% Convertible US$55,205,000
Institutional Trust Service
227 West Monroe, Suite 2600
Chicago, IL 60606
Attn: Sharon K. McGrath
Tel: (402) 496-1960
Fax: (402) 496-2014
Johnson Electric North America Trade US$3,258,156
47660 Halyard Drive
Plymouth, MI 48101
Attn: Jessi Lamb
Doug Eberle
Doug Stange
Tel: (734) 392-5451
Fax: (734) 392-5480
(734) 392-5388
(734) 392-5386
ACH Glass Trade US$2,200,817
17333 Federal Drive, Suite 230
Allen Park, MI 48101
Attn: Dave Thompson
Steve Ewing
Tel: (313) 755-3735
Fax: (313) 755-2285
HS Spring Group Trade US$1,969,900
25 Worchester Road
Toronto, ON M9W IK9
Canada
3805 Business Park Drive
Louisville, KY 40213
Attn: Kerry Pursley
Paul Law
Pamella Collins
Tel: (416) 675-9072
Fax: (416) 675-9074
Ready Rivet and Fastener Ltd. Trade US$1,877,979
170 Hollinger Crescent
Kitchner, ON N2K 2Z3
Canada
Attn: Dan Collins
Tel: (519) 745-6119
Fax: (519) 745-9453
ACH Vidriocar Trade US$837,881
Calle Miguel Calalan
# 420 Parque
Industrial Rio Bravo
Juarez, Chihuahua 32700
Mexico
Attn: Armando Galindo
Tel: (526) 566-295-153
Fax: (595) 021-501-617
MakSteel Trade US$949,700
7615 Torbram Road
Mississauga, ON L4T 4A8
Canada
Attn: Norm Trudeau
Bill Cooke
Tel: (905) 671-3000 x 2255
Fax: (905) 673-4976
Thompson IG LLC Trade US$782,031
3196 Thompson Road
Fenton, MI 48430
Attn: Chris DeSonia
Debbie Schultz
Tel: (810) 629-9558
Fax: (810) 629-0041
Fastco Industries Inc. Trade US$623,113
2685 Mullins Avenue NW
P.O. Box 141427
Grand Rapids, MI 49544
Attn: Craig Gill
Marti Archibald
Tel: (616) 453-5428
Fax: (616) 791-0481
Astro Shapes Inc. Trade US$581,593
65 Main Street
P.O. Box 2
Struthers, OH 44471
Attn: Terri Michaud
Alison Ritchie
Tel: (330) 755-1414
Fax: (330) 755-3641
Technical Services Inc. Trade US$540,704
57006 241st Street
Ames, IA 50010
Attn: Martin Simpson
Tel: (525) 232-3188
Fax: (515) 232-2953
Young Technology Inc. Trade US$527,091
332 Commerce Drive
Carol Stream, IL 60188
Attn: Eric Luhrs
John Wenstrup
Tel: (630) 690-4320 ext. 20
Fax: (630) 690-9487
Royal Plastics Inc. Trade US$525,362
3765 Quincy Street
Hudsonville, MI 49426
Attn: Perry Franco
Tel: (616) 667-4155
Fax: (616) 896-0290
Worthington Steel Trade US$500,232
200 Old Wilson Bridge Road
Columbus, OH 43085
Attn: Tom Grabowski
John Cummings
Tel: (614) 438-3210
Fax: (614) 840-3706
Camcar Textron CDN Trade US$495,869
87 Disco Road
Rexdale, ON M9W 6K2
Canada
Attn: Andrew Chubb
Brian Erickson
Tel: (800) 268-4806
Fax: (416) 675-3762
White Rogers Trade US$463,291
P.O. Box 93638
Chicago, IL 60673
Attn: Debbie Schmidt
Tel: (870) 793-3855
Fax: (870) 793-1822
Kilbank Metal Turning & Trade US$460,115
Forming Inc.
4 Barrie Boulevard
St. Thomas, ON N5P 4B9
Canada
Attn: Donna Dyson
Steve Smith
Tel: (519) 631-4470
Fax: (519) 631-3152
PPG Industries Trade US$441,408
One PPG Place
Pittsburgh, PA 15272
Attn: Karen Blaylock
Jason Skeen
Tel: (412) 434-3131
Fax: (419) 526-7487
AGC Automotive Americas Trade US$426,018
1 Auto Glass Drive
P.O. Box 5000
Elizabethtown, KY 42701
Attn: Darryl Mezigian
Tel: (248) 324-5062
Fax: (270) 769-8295
Sturgis Molded Products Trade US$406,473
70343 Clark Street
P.O. Box 246
Sturgis, MI 49091
Attn: Rejean Schragg
Pam Kain
Tel: 1-800-572-1786
Fax: (269) 651-4072
Freedom Technologies Corp. Trade US$373,596
10370 Citation Drive, Suite 200
Brighton, MI 48116
Attn: John Piatek
Tel: (810) 227-3737
Fax: (810) 227-3909
Carthage Wire Mill Trade US$358,129
1225 East Central Avenue
Carthage, MO 64836
Attn: Christian Lupo
Tel: 1-800-527-1786
Fax: (314) 567-7334
Indalex Aluminum Solutions Trade US$353,787
75 Tri-State International
Suite 450
Lincolnshire, IL 60069
Attn: Pat Wooley
Connie Shinuald
Tel: (866) 576-0146
Fax: (847) 295-3851
McLaughlin Metal Sales Co. Trade US$338,998
12898 Pennridge Drive
Bridgeton, MO 63044
Attn: Wilson Allee
Dan Gutos
Tel: (314) 567-8585
Fax: (314) 567-7334
Orchid Automation Trade US$338,005
331 Alden Road
Markham, ON L3R3L4
Canada
Attn: Darrell Corkum
Tel: (615) 661-4300
Fax: (615) 661-4359
Ford Motor Company Trade US$337,542
P.O. Box 6248
Dearborn, MI 48126
Attn: Steve Martin
Jennifer Zinn
Tel: (313) 322-3000 ext. 9798
Fax: (313) 845-4089
SAIA - Burgess North America Trade US$336,283
801 Scholz Drive
Vandalia, OH 45377
Attn: Ron Rogers
Chris Mullins
Tel: (937) 454-2345
Fax: (937) 898-8624
Pilkington-Clinton Plant Trade US$332,499
11700 Tecumseh-Clinton Road
Clinton, MI 49236
Attn: Terrance Gallagher
Pat Gallagher
Tel: (517) 456-2167
Fax: (517) 456-4242
DURA AUTOMOTIVE: Bankruptcy Filing Is Third Largest in 2006
-----------------------------------------------------------
With total assets of US$2,057,209,000 (as reported on its latest Form 10-K),
Dura Automotive Systems, Inc., became the third largest company to file for
bankruptcy in 2006, according to www.BankruptcyData.com, a Boston-based
website published by New Generation Research, Inc. Dura's October 30th
bankruptcy filing also represents the seventh largest automotive parts
manufacturer filing of all time. To date, the largest automotive parts
manufacturer to file for Chapter 11 was Delphi Corp., which listed
US$16,593,000,000 in assets at the time of its Oct. 8, 2005 filing.
According to Dura, the company's decision to pursue a reorganization under
Chapter 11 came after evaluating all options to restructure its balance
sheet to reduce the Company's indebtedness and interest expense. Dura
elected to pursue a restructuring under court protection as it will
facilitate both a financial restructuring and Dura's ongoing operational
restructuring, the successful implementation of which will help Dura
overcome current financial and industry pressures and position the Company
for long-term success.
To date, the total assets of the 49 publicly traded companies that filed for
bankruptcy in 2006, including Dura, are US$21,053,795,350, according to
www.BankruptcyData.com.
The largest public company filings of 2006:
Company Ch. 11 Date Assets
Dana Corporation 03/03/06 US$9,047,000,000
Sea Containers Ltd. 10/15/06 US$2,736,100,000
Dura Automotive
Systems, Inc. 10/30/06 US$2,075,209,000
Satelites Mexicanos,
S.A. de C.V. (2006) 08/11/06 US$925,271,000
Pliant Corporation 01/03/06 US$777,092,000
OCA Inc. 03/14/06 US$660,303,000
Silicon Graphics, Inc. 05/08/06 US$452,145,000
Integrated Electrical
Services, Inc. 02/14/06 US$416,372,000
Global Power Equipment
Group Inc. 09/28/06 US$381,131,000
J.L. French Automotive
Castings, Inc. 02/10/06 US$366,681,000
At this time last year, there were a total of 81 publicly traded company
filings with over US$105,905,000,000 in assets.
The largest automotive parts manufacturer filings 1980 - 2006:
Company Ch. 11 Date Assets
Delphi Corporation 10/08/05 US$16,593,000,000
Federal-Mogul
Corporation 10/01/01 US$10,150,000,000
Dana Corporation 03/03/06 US$9,047,000,000
Collins & Aikman
Corporation 05/17/05 US$3,191,200,000
Tower Automotive, Inc. 02/02/05 US$2,846,406,000
Hayes Lemmerz
International, Inc. 12/05/01 US$2,811,100,000
Dura Automotive
Systems, Inc. 10/30/06 US$2,075,209,000
Breed Technologies,
Inc. 09/20/99 US$1,649,900,000
Venture Holdings
Company, LLC 03/28/03 US$1,416,131,000
Oxford Automotive,
Inc. (2004) 12/07/04 US$888,660,000
Headquartered 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.
* * *
Moody's Investors Service lowered on Oct. 18, 2006, the Probability of
Default rating of Dura Automotive Systems, Inc., to D from Caa3. The
ratings for the company's various debt instruments are unaffected. The
lowered Probability of Default rating reflects the company's announcement
that it did not make the interest payment due on Oct. 16, 2006, on the
8-5/8% Senior Notes due 2012 issued by Dura Operating Corp.
Standard & Poor's Ratings Services took these rating actions on Oct. 16,
2006, on Dura Automotive Systems Inc. and its subsidiary, Dura Operating
Corp., following the company's announcement that it will not make a required
bond interest payment due on Oct. 16:
-- The corporate credit rating on Dura was lowered to 'D'
from 'CCC';
-- The rating on Dura Operating's US$400 million senior notes
due 2012, for which the interest payment is due, was
lowered to 'D' from 'CC';
-- Dura's senior secured debt rating was lowered to 'CC' from
'CCC+' and placed on CreditWatch with negative
implications. The '1' recovery rating on the secured debt
was affirmed; and
-- Dura's 'CC' subordinated debt rating was placed on
CreditWatch with negative implications.
DURA AUTOMOTIVE: Chapter 11 Filing Cues S&P's Default Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered Dura Automotive Systems Inc.'s
senior secured and subordinated debt ratings to 'D' from 'CC' following the
company's announcement that it and its U.S. and Canadian subsidiaries had
filed for Chapter 11 bankruptcy protection. In addition, these ratings were
removed from CreditWatch with negative implications.
At the same time, the '1' recovery rating on the secured debt was affirmed
and then withdrawn. The corporate credit rating on Dura and the rating on
Dura Operating Corp.'s US$400 million senior notes were already 'D'
following the company's failure to make an interest payment earlier this
month.
Well-known challenges cited by the company in its bankruptcy filing included
production cuts by major U.S. automakers and escalating costs of raw
materials. Dura indicated that its operations outside the U.S. and Canada,
which in total account for about 51% of revenues, were not part of the
filing. Dura has arranged a US$300 million DIP loan.
Dura Automotive has total debt of about US$1.2 billion.
Headquartered 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.
GOL LINHAS: Declares BRL0.16611 Per Share Complementary Dividend
----------------------------------------------------------------
GOL Linhas Aereas Inteligentes SA's board of directors, approved on Oct. 27,
2006, the payment of quarterly intercalary dividends to the shareholders,
calculated based on the profits verified on the financial statements
referring to the third quarter of the 2006 fiscal year. The total amount of
the dividends is BRL32,592,000.00, corresponding to BRL0.16611 per preferred
and ordinary share.
All outstanding shares on Nov. 13, 2006, inclusive, will be entitled to
receive the dividends approved. The company's shares will be traded on Sao
Paulo Stock Exchange or BOVESPA and New York Stock Exchange, "ex" dividends
as of, and including, Nov. 14, 2006. Dividends will be paid on Dec. 26,
2006, with no remuneration.
The payment of the dividends was resolved by the board in accordance with
the GOL's quarterly dividend policy.
The amount of the quarterly intercalary dividends and the interest on
capital related to the third quarter of 2006 approved on Sept. 15, 2006, in
the amount of BRL28,239,710.00, net of withholding tax, will be imputed to
the mandatory dividends related to the corporate year of 2006.
The total value of dividends and interest on capital for the third quarter
of 2006, net of withholding tax, is BRL60,831,710.00, corresponding to
0.29393 per share, net of withholding tax, and BRL0.31649 per share for the
tax exempt and/or immune shareholders.
Headquartered in Sao Paulo, Brazil, Gol Linhas Areas
Inteligentes S.A. -- http://www.voegol.com.br-- through its
subsidiary, Gol Transportes Aereos S.A., provides airline
services in Brazil, Argentina, Bolivia, Uruguay, and Paraguay.
The company's services include passenger, cargo, and charter
services. As of March 20, 2006, Gol Linhas provided 440 daily
flights to 49 destinations and operated a fleet of 45 Boeing 737
aircraft. The company was founded in 2001.
* * *
On March 21, 2006, Moody's Rating Services assigned a Ba2 rating
on Gol's Long-Term Corporate Family Rating.
On June 14, 2006, Fitch Ratings assigned a rating of 'BB' to GOL
Linhas' outstanding US$200 million 8.75% perpetual
bond. In addition, Fitch assigned:
-- National Scale Rating of 'AA-(bra)' with Stable Outlook,
and
-- Local Currency Issuer Default Rating of 'BB+'- with
Stable Outlook.
VIACAO AEREA: Creditors Approve Restructuring Plan
--------------------------------------------------
Viacao Aerea Sao Paulo's creditors have ratified a restructuring plan to
help the firm to pay its BRL4 billion debt, LatinLawyer Online reports.
LatinLawyer relates that Ivo Waisberg -- a representative of Wald e
Associados Advogados, who advised Viacao Aerea, is positive that the plan
will help get the firm recover.
"With this approval VASP (Viacao Aerea) will be able to restart its
business. At the moment it is maintaining its service, but with this
decision, it can start planning again to create a new operation," Mr.
Waisberg told LatinLawyer.
According to LatinLawyer, Viacao Aerea's creditors have two ways of being
paid:
-- through bidding at auction for quotas of funds that
will be created from Viacao Aerea's assets, and
-- by taking payment over 15 years with a 60%
reduction.
Viacao Aerea presented a restructuring plan in December 2006 to avoid
bankruptcy, LatinLawyer notes. The Brazilian labor court had removed the
firm's management in March 2005, replacing it with a board representing:
-- the shareholders,
-- the labor courts, and
-- the labor general attorney.
LatinLawyer underscores that the assets of Viacao Aerea totaled BRL6.5
billion, which included:
-- planes,
-- equipment, and
-- real estate.
LatinLawyer states that lawyers that worked on the deal include:
Wald E Associados, Advogados
Avenida Presidente Juscelino Kubitschek 50, 12th Floor
Sao Paulo, SP 04543-000
Brazil
Ciampolini e Calvo, Advogados
Cerqueira Cesar
Sao Paulo, Brazil
Joao Boyadjian - Advogados Associados
Joao C Boyadjian
R Mucajai 26
Sao Paulo, SP 04084-040
Brazil
===========================
C A Y M A N I S L A N D S
===========================
CLYDESDALE CLO: Creditors Must Submit Proofs of Claim by Nov. 16
----------------------------------------------------------------
Clydesdale CLO 2001-1, Ltd.'s creditors are required to submit proofs of
claim by Nov. 16, 2006, to the company's liquidators:
Helen Allen
Richard Gordon
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Nov. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Clysdale CLO's shareholders agreed on Sept. 29, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law (2004 Revision)
of the Cayman Islands.
COATES EUROPEAN: Deadline for Proofs of Claim Filing Is Nov. 16
---------------------------------------------------------------
Coates European Fund Ltd.'s creditors are required to submit proofs of claim
by Nov. 16, 2006, to the company's liquidators:
Mark Wanless
Steven Wilderspin
Maples Finance Jersey Limited
2nd Floor, Le Masurier House
La Rue Le Masurier
St. Helier, Jersey JE2 4YE
Creditors who are not able to comply with the Nov. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Coates European's shareholders agreed on July 31, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law (2004 Revision)
of the Cayman Islands.
CRYSTAL BLUE: Last Day to File Proofs of Claim Is on Nov. 16
------------------------------------------------------------
Crystal Blue Funding Corp.'s creditors are required to submit proofs of
claim by Nov. 16, 2006, to the company's liquidators:
Mark Wanless
Liam Jones
Maples Finance Jersey Limited
2nd Floor, Le Masurier House
La Rue Le Masurier
St. Helier, Jersey JE2 4YE
Creditors who are not able to comply with the Nov. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Crystal Blue's shareholders agreed on Oct. 5, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law (2004 Revision)
of the Cayman Islands.
DESCARTES (DEPOSITOR): Proofs of Claim Must be Filed by Nov. 16
---------------------------------------------------------------
Descartes CDO Depositor Ltd.'s creditors are required to submit proofs of
claim by Nov. 16, 2006, to the company's liquidators:
Carlos Farjallah
Mike Hughes
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Nov. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Descartes CDO's shareholders agreed on Oct. 2, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law (2004 Revision)
of the Cayman Islands.
DESCARTES CDO: Creditors Must File Proofs of Claim by Nov. 16
-------------------------------------------------------------
Descartes CDO Ltd.'s creditors are required to submit proofs of claim by
Nov. 16, 2006, to the company's liquidators:
Carlos Farjallah
Mike Hughes
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Nov. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Descartes CDO's shareholders agreed on Oct. 2, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law (2004 Revision)
of the Cayman Islands.
DESCARTES CDO TRANSFEROR: Claims Must be Submitted by Nov. 16
-------------------------------------------------------------
Descartes CDO Transferor Depositor Ltd.'s creditors are required to submit
proofs of claim by Nov. 16, 2006, to the company's liquidators:
Carlos Farjallah
Mike Hughes
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Nov. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Descartes CDO's shareholders agreed on Oct. 2, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law (2004 Revision)
of the Cayman Islands.
DEVONSHIRE TRADING: Proofs of Claim Filing Is Until Nov. 16
-----------------------------------------------------------
Devonshire Trading Ltd.'s creditors are required to submit proofs of claim
by Nov. 16, 2006, to the company's liquidators:
Phillipa White
Jan Neveril
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Nov. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Devonshire Trading's shareholders agreed on Oct. 5, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law (2004 Revision)
of the Cayman Islands.
DOM FINANCE: Last Day for Filing of Proofs of Claim Is Nov. 16
--------------------------------------------------------------
Dom Finance Ltd.'s creditors are required to submit proofs of claim by Nov.
16, 2006, to the company's liquidators:
Phillip Hinds
Emile Small
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Nov. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Dom Finance's shareholders agreed on Sept. 2, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law (2004 Revision)
of the Cayman Islands.
DRESDNER FUND: Deadline for Proofs of Claim Filing Is on Nov. 16
----------------------------------------------------------------
Dresdner Fund Administration (Cayman) Ltd.'s creditors are required to
submit proofs of claim by Nov. 16, 2006, to the company's liquidators:
Mike Hughes
Richard Gordon
Maples Finance Limited
P.O. Box 1093, George Town
Grand Cayman, Cayman Islands
Creditors who are not able to comply with the Nov. 16 deadline
won't receive any distribution that the liquidator will make.
Creditors are required to present proofs of claim personally or
through their solicitors.
Dresdner Fund's shareholders agreed on Oct. 4, 2006, for the company's
voluntary liquidation under Section 135 of the Companies Law (2004 Revision)
of the Cayman Islands.
=========
C H I L E
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SHAW GROUP: Completes Review of Stock-Based Compensation Awards
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The Shaw Group Inc. has completed its review of accounting for prior year
stock-based compensation awards. On Oct. 3, 2006, the company along with
the Audit Committee of its Board of Directors concluded that neither the
company nor any employee engaged in "backdating" or "spring loading"
activities with regard to past option grants. However, new guidance issued
on Sept. 19, 2006, from the Office of the Chief Accountant of the SEC
provided clarification regarding the appropriate measurement date for stock
option grants pursuant to the requirements of Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25), and
caused the Company to review its accounting with respect to this new
guidance. While the company's recently completed review confirmed that no
backdating or spring loading of stock options occurred, the review did
indicate that with regards to its Fiscal 2000 stock option awards, an error
was made in the accounting for non-cash compensation costs, based on the SEC
guidance released in September 2006. The restatement reduces or (increases)
net income (loss) in each year, by US$7.1 million, US$3.9 million, US$3.0
million, US$2.6 million and (US$0.4) million for 2001 through 2005,
respectively. In the aggregate, net income over the 5 year period was
reduced by US$16.2 million, with a corresponding reduction in Aug. 31, 2005
retained earnings. There was no effect on fiscal 2006 financial results.
During the preparation of its annual financial statements for fiscal 2006,
Shaw also has determined that an error was made in the accounting for
periodic pension service cost of a foreign subsidiary's defined benefit
plan. In connection with workforce reductions in 2003, 2004 and 2005, Shaw
offered certain terminated employees an enhanced early retirement benefit
that provided immediate retirement benefit payments. However, the additional
costs of these enhanced benefits were not recorded. Shaw will restate its
2003, 2004 and 2005 financial statements to reflect these additional costs.
The restatement reduces net income (loss) by US$0.2 million, US$1.5 million,
and US$0.8 million in 2003, 2004 and 2005, respectively, with a cumulative
effect to reduce retained earnings by US$2.5 million as of
Aug. 31, 2005. There was no effect on fiscal 2006 financial results.
The Shaw Group Inc. -- http://www.shawgrp.com/-- is a leading
global provider of technology, engineering, procurement,
construction, maintenance, fabrication, manufacturing,
consulting, remediation, and facilities management services for
government and private sector clients in the energy, chemical,
environmental, infrastructure and emergency response markets.
Headquartered in Baton Rouge, Louisiana, with over US$3 billion in annual
revenues, Shaw employs approximately 20,000 people at its offices and
operations in Venezuela, Chile, North America,
Europe, the Middle East and the Asia-Pacific region.
* * *
As reported on the Troubled Company Reporter on Oct 06, 2006,
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating and other ratings for The Shaw Group Inc. on
CreditWatch with negative implications.
"The CreditWatch placement followed the company's announced agreement to
take a 20% ownership interest in the US$5.40 billion acquisition, led by
Toshiba Corp. (BBB/Watch Neg/A-2), of Westinghouse Electrical Company Co.
from British Nuclear Fuels Ltd.," said Standard & Poor's credit analyst Dan
Picciotto.
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C O L O M B I A
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BANCO DE BOGOTA: Will Wrap up Merger with Megabanco on Nov. 7
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Banco de Bogota SA said in a filing with Superfinanciera, the financial
regulator of Colombia, that the firm expects to complete the merger with
Megabanco by Nov. 7.
Business News Americas relates that Banco de Bogota won the auction for a
94.99% stake in Megabanco with a COP808-billion bid in March.
According to the report, Banco de Bogota will absorb Megabanco and exchange
each Megabanco share for 0.01 of its own shares.
Superfinanciera had ratified the merger on Oct. 26, BNamericas states.
* * *
As reported by Troubled Company Reporter on March 13, 2006, Moody's
Investors Service assigned a 'Ba3' long-term foreign currency deposit rating
on Banco de Bogota and changed the outlook to stable from negative. Moody's
also assigned a 'D+' bank financial strength rating on the company, while
the outlook remained stable.
BANCOLOMBIA: Says It Is Not Being Eyed by Citigroup
---------------------------------------------------
Bancolombia SA denied in a press release that it is being eyed by Citigroup
for a possible purchase.
The Troubled Company Reporter-Latin America reported on
Oct. 10, 2006, Bancolombia denied reports on a planned sale. The 3%
Bancolombia stock increase on the local exchange was the result of strong
sale rumors. Reports say that HSBC, Citigroup and Deutsche Bank were
considering the purchase of Bancolombia. Superfinanciera, the local
financial regulator, requested a formal reply from Bancolombia regarding the
sale. Bancolombia said in a fling with Superfinanciera that its major
shareholders have no agreement or sale intentions. Bancolombia also denied
any ongoing talks for a sale.
Bancolombia asked Superfinaciera on Oct. 6 to conduct an investigation
regarding the origin of the rumors.
* * *
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 Oct. 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.
HEXION: Prices Tender Offer for 9% Second-Priority Sr. Notes
------------------------------------------------------------
Hexion Specialty Chemicals, Inc., disclosed the consideration to be paid in
its cash tender offer and consent solicitation for any and all of the
outstanding 9% Second-Priority Senior Secured Notes due 2014, issued by
Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC. The tender
offer and consent solicitation is subject to the terms and conditions set
forth in Hexion's Offer to Purchase and Consent Solicitation Statement dated
Oct. 12, 2006, and the related Consent and Letter of Transmittal.
The total consideration for the 9% Notes which will be payable in respect of
9% Notes accepted for payment that were validly tendered with consents
delivered and not withdrawn on or prior to 5:00 p.m., New York City time, on
Oct. 24, 2006, will be US$1,133.84 per US$1,000 principal amount of 9%
Notes. Hexion currently expects to accept for payment, subject to
conditions set forth in the Offer Documents, all of the validly tendered 9%
Notes on Nov. 3, 2006; accordingly, the total consideration for the 9% Notes
was determined assuming payment on such date. In addition to the total
consideration, which includes a consent payment of US$30 per US$1,000
principal amount of 9% Notes, Hexion will pay accrued and unpaid interest up
to but not including the payment date for 9% Notes purchased in the Tender
Offer.
The tender offer by Hexion will expire at 5:00 p.m., New York City time, on
Nov. 13, 2006, unless extended or earlier terminated by Hexion. In the
event that the Expiration Date is extended, new pricing terms may be
determined. Information regarding the pricing, tender and delivery
procedures and conditions to the tender offer and consent solicitation
relating to the 9% Notes is contained in the Offer Documents.
Hexion's tender offer is subject to the conditions set forth in the Offer
Documents including, among other things, Hexion obtaining the financing
necessary to pay for the Notes and consents in accordance with the terms of
the tender offer and consent solicitation.
Hexion has retained Credit Suisse Securities (USA) LLC to act as Dealer
Manager in connection with the tender offer and consent solicitation.
Questions about the tender offer and consent solicitation may be directed
to:
Credit Suisse Securities (USA) LLC
Tel: (800) 820-1653 (toll free)
(212) 325-7596 (collect)
Copies of the Offer Documents and other related documents may be obtained
from the information agent for the tender offer and consent solicitation at:
D.F. King & Co., Inc.
Tel: (800) 290-6426 (toll free)
(212) 269-5550 (collect).
Based in Columbus, Ohio, Hexion Specialty Chemicals Inc.
-- http://hexionchem.com/-- makes thermosetting resins (or
thermosets). Thermosets add a desired quality (heat resistance,
gloss, adhesion) to a number of different paints and adhesives.
Hexion also makes formaldehyde and other forest product resins,
epoxy resins, and raw materials for coatings and inks. The
Company has 86 manufacturing and distribution facilities in 18
countries. In Latin America, the company has operations in
Argentina, Brazil and Colombia.
* * *
As reported in the Troubled Company Reporter on May 4, 2006,
Standard & Poor's Ratings Services assigned its 'B+' rating and
its recovery rating of '3' to Hexion Specialty's US$1.675 billion senior
secured term loan and synthetic letter of credit
facilities.
The rating on the existing US$225 million revolving credit facility was
lowered to 'B+' with a recovery rating of '3', from 'BB-' with a recovery
rating of '1', to reflect the similar security package as the new term loan
and synthetic letter of credit facility.
The ratings on the existing senior second secured notes were
raised to 'B', with a recovery rating of '3', from 'B-' with a
recovery rating of '5'. The ratings on the senior second secured notes
reflect the amount of priority claims of the revolving facility and the
first-lien term loan lenders.
At the same time, Standard & Poor's affirmed its 'B+' corporate
credit rating on Hexion and revised the outlook to stable from
negative.
MEGABANCO: Banco de Bogota Completing Merger with Firm on Nov. 7
----------------------------------------------------------------
Megabanco's merger with Banco de Bogota SA is expected to be completed by
Nov. 7, Banco de Bogota said in a filing with Superfinanciera, the financial
regulator of Colombia.
Business News Americas relates that Banco de Bogota won the auction for a
94.99% stake in Megabanco with a COP808-billion bid in March.
According to the report, Banco de Bogota will absorb Megabanco and exchange
each Megabanco share for 0.01 of its own shares.
Superfinanciera had ratified the merger on Oct. 26, BNamericas states.
Megabanco, with 187 branches throughout the country and 2025 workers,
controls a 2% slice of the banking market in Colombia.
The bank posted a net income of COP63 billion in 2005, compared with COP25
billion the year before, according to Fogafin. Bankrupt cooperative
development bank, Coopdesarrollo, previously owned the 95% stake that Grupo
Aval bought.
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C O S T A R I C A
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ARMSTRONG WORLD: Sept. 30 Balance Sheet Upside-Down by US$1.2B
--------------------------------------------------------------
Armstrong World Industries, Inc., reported third quarter 2006 net sales of
US$973.6 million that were 4% higher than third quarter net sales of
US$937.0 million in 2005, including a US$13 million favorable impact from
foreign exchange rates. Reported operating income for the quarter increased
to US$67.4 million from US$66.5 million in the third quarter of 2005.
Adjusted operating income for the quarter of US$82.5million increased 27%
compared with adjusted operating income of US$65.2 million in the prior year
quarter.
Adjusted numbers exclude spending on restructuring charges and related
costs, impacts from legal settlements, environmental charges, foreign
exchange and certain other gains and losses to allow meaningful comparisons
of operating performance.
The year-over-year growth in third quarter 2006 adjusted operating income
benefited from price increases in excess of manufacturing cost inflation,
improved product mix in European businesses, improved direct manufacturing
costs in all businesses, and lower manufacturing period expense in our floor
businesses. Increased earnings in our WAVE joint venture also contributed
to the growth. Notably, the growth was achieved despite significant volume
declines in North American resilient business where vinyl declines offset
laminate growth.
Resilient Flooring net sales were US$304.8 million in the third quarter of
2006 and US$311.5 million in the same period of 2005. Excluding the
favorable impact of foreign exchange rates, net sales decreased 4%. The
decline was primarily due to decreased volume for vinyl products in North
America. A reported operating loss of US$2.9 million in the quarter
compared with reported income in the third quarter of 2005 of US$7.7
million. Adjusted operating income of US$4.5 million compared with US$5.9
million on the same basis in the prior year period. The decline is
primarily attributable to lower sales. The benefits of increased
manufacturing efficiency were greater than the impact of cost inflation in
the period.
Wood Flooring net sales of US$217.2 million in the current quarter declined
1% from US$220.2 million in the prior year as weakness in the U.S. housing
markets drove volume declines in both engineered and solid wood floors.
Reported operating income of US$16.5 million in the quarter was below the
US$25.7 million reported in the third quarter of 2005. The reduction in
operating income was due to the sales volume decline combined with higher
lumber prices and increased promotional spending. Production costs improved
during the period.
Textiles and Sports Flooring net sales in the third quarter of 2006
increased to US$86.3 million from US$79.7 million. Excluding the effects of
favorable foreign exchange rates of US$3.9 million, sales grew 3% primarily
on higher volume in carpet tiles and better price realization in broadloom
carpet. Reported operating income of US$4.2 million in 2006 increased from
US$3.2 million in 2005 on the growth in sales.
Building Products net sales of US$304.5 million in the current quarter
increased from US$268.2 million in the prior year. Excluding the effects of
favorable foreign exchange rates of US$5.0 million, sales increased by 12%,
primarily due to price increases made to offset inflationary pressures, and
improved product mix in both the U.S. and European markets. Volume
increased in North America and the Pacific Rim. Reported operating income
increased to US$59.7 million from operating income of US$43.1 million in the
third quarter of 2005. The growth was driven by improved price realization,
better product mix and increased equity earnings in WAVE.
Cabinets net sales in the third quarter of 2006 of US$60.8 million increased
6% from US$57.4 million in 2005 on higher selling prices and improved
product mix. Volume decreased slightly. Reported operating income for the
third quarter of US$3.8 million improved from the prior year's US$0.3
million operating loss, primarily driven by the sales growth, and lower SG&A
spending.
Year-to-Date Results
For the nine-month period ended Sept. 30, 2006, net sales were
US$2,795.7 million compared with US$2,696.7 million reported for the first
nine months of 2005. Excluding the US$10.4 million impact from unfavorable
foreign exchange rates, net sales increased by 4%. The sales growth was due
to improved price and product mix on flat volume, and all segments grew
sales except Resilient Flooring.
Operating income in the first nine months of 2006 was US$188.1 million
compared with operating income of US$110.2 million for the same period in
2005. Adjusted operating income of US$209.9 million increased 59% compared
with adjusted operating income of US$131.9 million in the prior year period.
The improvement in operating income was primarily due to higher sales,
improved manufacturing productivity and reduced SG&A expenses.
Outlook
For the fourth quarter of 2006, commercial markets are expected to remain
strong, while the decline in the U.S. housing market will continue to reduce
volumes in our residential businesses. On a consolidated basis, improved
prices are anticipated to continue to offset cost inflation, and reductions
in direct manufacturing costs are expected to be sustained.
Due to fresh start reporting adjustments associated with our Oct. 2, 2006,
emergence from Chapter 11, reported fourth quarter operating income will not
be comparable to prior periods. The following outlook table includes
adjusted operating income on a pre-fresh start reporting basis to facilitate
comparison to 2005 fourth quarter adjusted operating income.
Based in Lancaster, Pennsylvania, Armstrong World Industries, Inc. --
http://www.armstrong.com/-- the major operating subsidiary of Armstrong
Holdings, Inc., designs, manufactures and sells interior floor coverings and
ceiling systems, around the world. The company has operation in Colombia,
Costa Rica, Greece Iceland and Asia among others.
The Company and its affiliates filed for chapter 11 protection on December
6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., at Weil,
Gotshal & Manges LLP, and Russell C. Silberglied, Esq., at Richards, Layton
& Finger, P.A., represent the Debtors in their restructuring efforts. The
Company and its affiliates tapped the Feinberg Group for analysis,
evaluation, and treatment of personal injury asbestos claims.
Mark Felger, Esq. and David Carickhoff, Esq., at Cozen and O'Connor, and
Robert Drain, Esq., Andrew Rosenberg, Esq., and Alexander Rohan, Esq., at
Paul, Weiss, Rifkind, Wharton & Garrison, represent the Official Committee
of Unsecured Creditors. The Creditors Committee tapped Houlihan Lokey for
financial and investment advice. The Official Committee of Asbestos
Personal Injury Claimant hired Ashby & Geddes as counsel.
The Bankruptcy Court confirmed AWI's plan on Nov. 18, 2003. The District
Court Judge Robreno confirmed AWI's Modified Plan on Aug. 14, 2006. The
Clerk entered the formal written confirmation order on Aug. 18, 2006. The
Company's "Fourth Amended Plan of Reorganization, as Modified," has become
effective and AWI has emerged from Chapter 11. (Armstrong Bankruptcy News,
Issue No. 103; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
At Sept. 30, 2006, Armstrong World's balance sheet reflected a stockholder's
deficit of US$1,189,500,000.
* * *
As reported in the Troubled Company Reporter on Oct. 9, 2006
Standard & Poor's Ratings Services raised its corporate credit rating on
Armstrong World Industries Inc. to 'BB' from 'D', following the Company's
emergence from bankruptcy on
Oct. 2, 2006. S&P said the outlook is stable.
DENNY'S CORP: Earns US$25.5 Mil. for the Quarter ended Sept. 27
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Denny's Corp. reported total operating revenue of US$258.2 million for its
third quarter ended Sept. 27, 2006, an
increase of 3.8%, or US$9.5 million over the prior year quarter.
The Company's restaurant sales increased 3.9%, or US$8.9 million, to
US$234.7 million as a result of a 4.2% increase in company same-store sales.
The sales increase offset an eleven-unit decline in company-owned
restaurants since the third quarter of last year. Franchise revenue
increased 2.6%, or US$600,000, to US$23.5 million.
The Company's restaurant operating margin for the third quarter
was 13.8% compared with 10.7% for the same period last year.
Other operating costs improved 2.4 percentage points due to a
US$7.2 million reduction in legal settlement costs resulting from US$5.8
million in specific charges taken in the prior year period.
Gains on disposition of assets increased US$39 million, from the
sale of 65 restaurant properties owned by the company and
previously leased to franchisee operators.
Operating income for the third quarter was US$55.6 million, an
increase of US$46.4 million compared with prior year operating
income of US$9.2 million. Excluding the US$39 million asset sale gain,
operating income increased US$7.5 million to US$16.6 million compared with
US$9.1 million in the prior year period.
Interest expense for the third quarter increased US$1 million to
US$15 million due to higher interest rates on the variable-rate
portions of the Company's debt compared with the prior year
period.
Net income for the third quarter was US$25.5 million, an increase of US$28.9
million, compared with prior year net loss of US$3.4 million. Excluding
asset sale gains and income taxes from the current and prior year period,
net income increased US$4.9 million to US$100,000.
The Company sold an additional five properties during the third
quarter for gross proceeds of US$5 million. The net proceeds, along with
surplus cash, were used to reduce the outstanding balance on its first lien
term loan by US$80 million during the quarter. Year-to-date the Company has
reduced its debt balances by approximately 15%, or US$84 million.
At the end of the third quarter, the Company owned 21 restaurant
properties that are being marketed for sale, of which six are
contracted for sale under the earlier multi-property transaction
and are expected to close by year end. The Company expects that
19 of the remaining properties will be sold within the next twelve months.
Headquartered in Spartanburg, South Carolina, Denny's Corp.
-- http://www.dennys.com/-- is America's largest full-service
family restaurant chain, consisting of 543 company-owned units and 1,035
franchised and licensed units, with operations in the United States, Canada,
Costa Rica, Guam, Mexico, New Zealand and Puerto Rico.
* * *
As reported in the Troubled Company Reporter on Aug. 11, 2006
Denny's Corp.'s balance sheet at June 28, 2006 showed US$500.3
million in total assets and US$758.2 million in total liabilities, resulting
in a US$257.9 million stockholders' deficit.
As reported in the Troubled Company Reporter on Oct. 9, 2006
Standard & Poor's Ratings Services raised its corporate credit
rating on Armstrong World Industries Inc. to 'BB' from 'D',
following the Company's emergence from bankruptcy on
Oct. 2, 2006. S&P said the outlook is stable.
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D O M I N I C A N R E P U B L I C
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BANCO LEON: Launches New & Modern Service Subsidiary in Samana
--------------------------------------------------------------
Banco Leon reported that it has launched a new and modern service unit in
Las Terrenas, Samana.
Lionel Senior -- the Banking group's Personal Business vice president --
told Dominican Today that with the new branch, Banco Leon embraced its
commitment to offer to all of its customers innovative business solutions
that may facilitate the pursuit of entrepreneurial plans and personal
projects, backed by a professional banking team with a dedication to
service.
According to Dominican Today, the center is a facility that adds to the
other 23 Leon branches in the Northern Zone.
The offices on Juan Pablo Duarte No. 254, Las Terrenas, offer each and every
available modern banking service facilities of evening deposits, automatic
cash machines and enough parking for customers, Dominican Today states.
* * *
Fitch Ratings assigned these ratings to Banco Multiple Leon SA:
-- CCC+ long-term issuer default rating;
-- C short-term rating;
-- BBB(DOM) national long-term rating;
-- F3(DOM) national short-term rating; and
-- Outlook Positive
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G U A T E M A L A
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BANCAFE: Protesters Demand Recovery of Their Money
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Several Guatemalans with foreign-currency deposits in Bancafe and the
latter's offshore firm in Barbados held demonstrations in front of the
firm's installments, demanding that the company bring back their money,
Prensa Latina reports.
As reported in the Troubled Company Reporter-Latin America on Oct. 30, 2006,
Banco de Desarrollo Rural, Banco Agromercantil de Guatemala, and Banco
Reformador had taken over the accounts Bancafe previously held. Bancafe had
US$204 million of its assets frozen in Refco.
Prensa Latina relates that no local financial authority or executive of
Bancafe, which was closed since Oct. 20, have given guarantees on the
recovery of the clients' capital. The funds from official firms and
institutions were frozen. Credit and debit cards are rejected throughout
Guatemala.
Willy Zapata, the Guatemalan Banking Superintendent told Prensa Latina that
the problem was due to savings and domestic currency issues.
"Mandates start this week with the governments of Barbados and United
States, where there are allegedly deposits in hard currency of the Bancafe
International Bank Company," Prensa Latina says, citing Mr. Zapata.
Bancafe is part of Grupo Financiero del Pais, a financial group that offers
personal, corporate and small business banking. It is not connected to
Banco del Cafe, a state-owned bank in Colombia.
The Guatemalan central bank permanently suspended the operations in Bancafe
due to financial problems derived from the investment of US$204 million in
the brokerage Refco. Bancafe owns US$204 million of US Treasury bonds held
by Refco Inc., a bankrupt commodities broker. The Monetary Board of
Guatemala decided to intervene in Bancafe to protect the liquidity and
solvency of the national banking system and to secure and strengthen
national savings.
BANCO INDUSTRIAL: Bancafe's Suspension Cues S&P to Affirm Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-/B' counterparty credit
rating on Banco Industrial SA. At the same time, Standard & Poor's Ratings
Services affirmed its 'BBB-' Survivability Assessment on Banco Industrial.
The outlook is stable.
"The rating affirmation follows the suspension of operations of Banco del
Cafe SA aka Bancafe by the Monetary Board of Guatemala. Banco Industrial's
exposure to Bancafe was nil," said Standard & Poor's credit analyst
Francisco Suarez.
It is also Standard & Poor's view that the impact is marginal to the banking
system of Guatemala and could even bring some benefits over the longer term,
such as strengthened credibility of the monetary and supervisory authorities
and demonstrated effectiveness of the banking reforms enacted in 2002 and
2004. Banco Industrial could benefit from a flight-to-quality effect,
further strengthening its leading market position. As of August 2006,
deposits of Banco Industrial and Banco de Occidente SA, acquired this year
by Banco Industrial, account for 23% of total deposits in the banking
system.
The ratings on Banco Industrial are limited by the bank's low adjusted
capitalization levels and structural asset concentrations, mainly in its
investment portfolio and some client concentration in its loan portfolio.
The ratings consider the bank's leading market position in Guatemala that
has been enhanced by the acquisition of a majority stake at Occidente, in
addition to a financial profile that leverages on adequate profitability
levels and asset quality indicators.
Prior to the acquisition of Occidente, the bank's adjusted equity-to-assets
ratio was already below the average of rated banks in the region. Future
capital injections, internal capital generation, and the addition of
equity-like instruments will increase its adjusted capitalization to levels
consistent for the rating category.
Due to its orientation toward commercial loans, the bank's loan portfolio
experiences some client concentrations. Banco Industrial has a liquid
balance sheet, but its investment portfolio is heavily concentrated in
financial assets issued or guaranteed by the Government of Guatemala. Given
Banco Industrial's broad stockholder spectrum, which relates to the
country's most prominent firms, some related parties are present in its loan
portfolio but are not significant, while such exposures are well below the
statutory limits of the bank's capital, and have declined in the past four
years.
Banco Industrial is the largest bank in Guatemala, and benefits from its
large, well diversified, and stable deposit base, strong brand-name
recognition, and a sound branch network. The importance of Banco Industrial
to Guatemala's payment system is also high.
The outlook is stable. Standard & Poor's expects Banco Industrial's
financial profile and strong market presence to be maintained. In addition,
Banco Industrial is expected to mitigate the negative impact of goodwill
derived from the acquisition of Occidente with capital injections and the
addition of equity-like instruments enough to maintain overall
capitalization levels for the rating category. Should asset quality or
profitability ratios deteriorate, ratings could be revised negatively.
Upward rating movement could be the result of substantial higher adjusted
capitalization levels that are comparable to those of other banks in the
region, and reduction in client concentration in its loan portfolio.
GOODYEAR TIRE: Closing Tire Manufacturing Plant in Tyler, Texas
---------------------------------------------------------------
The Goodyear Tire & Rubber Company reports the planned closure of its tire
manufacturing facility in Tyler, Texas, as part of its previously announced
strategy to exit certain segments of the private label tire business.
At the time of its June private label announcement, Goodyear said that the
decision would require a corresponding reduction in North American Tire's
manufacturing capacity and that plant performance, capabilities, cost
savings opportunity and the focus on serving NAT customers would dictate
capacity reduction.
"We must take the steps necessary to reduce our costs and improve our
competitive position," said Jon Rich, president, North American Tire.
"While this is an extremely difficult decision for everyone involved, it was
required to help turn around our North American business."
Rich said the timing of the action would be coordinated to
minimize the impact on Goodyear's customers.
Goodyear previously announced to investors an aggressive strategy to reduce
costs by more than US$1 billion by 2008, including reduction in high-cost
tire manufacturing capacity. The Tyler plant principally produces small
diameter passenger tires, a segment that has been under considerable
pressure from low cost imports.
The action is expected to eliminate about 1,100 positions, create annual
savings of approximately US$50 million after tax, and result in a
restructuring charge of between US$155 million and US$165 million after tax.
The cash portion of these charges is estimated to be between US$40 million
and US$50 million.
Opened in 1962, the plant has produced approximately 25,000
passenger and light truck tires per day.
About Goodyear Tire
Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company
(NYSE: GT) -- http://www.goodyear.com/-- is the world's largest
tire company. The company manufactures tires, engineered rubber
products and chemicals in more than 90 facilities in 28 countries. It has
marketing operations in almost every country around the world. Goodyear
Tire has marketing operations in almost every country around the world
including Chile, Colombia and Guatemala in Latin America. Goodyear employs
more than 80,000 people worldwide. Goodyear employs more than 80,000 people
worldwide.
* * *
As reported in the Troubled Company Reporter on Oct. 23, 2006,
Fitch Ratings placed The Goodyear Tire & Rubber Company on Rating Watch
Negative. Goodyear's current debt and recovery ratings are -- Issuer
Default Rating (IDR) 'B'; US$1.5 billion first lien credit facility
'BB/RR1'; US$1.2 billion second lien term loan 'BB/RR1'; US$300 million
third lien term loan 'B/RR4'; US$650 million third lien senior secured notes
'B/RR4'; Senior Unsecured Debt 'CCC+/RR6'.
As reported in the Troubled Company Reporter on Oct. 19, 2006,
Standard & Poor's Ratings Services placed its 'B+' corporate
credit rating on Goodyear Tire & Rubber Co. on CreditWatch with
negative implications because of the potential for business
disruptions and earnings pressures that could result from the
ongoing labor dispute at some of its North American operations.
Goodyear has total debt of about US$7 billion.
As reported in the Troubled Company Reporter on Oct. 18, 2006,
Moody's Investors Service affirmed Goodyear Tire & Rubber
Company's B1 Corporate Family rating, but changed the outlook to
negative from stable. At the same time, the company's Speculative Grade
Liquidity rating was lowered to SGL-3 from SGL-2. These rating actions
reflect the increased operating uncertainty arising from the ongoing United
Steelworkers strike at Goodyear's North American facilities, and the
company's decision to increase cash on hand by drawing-down US$975 million
under its domestic revolving credit facility.
=============
J A M A I C A
=============
AIR JAMAICA: Sub-Committee Submitting Report on Proposal Study
--------------------------------------------------------------
The special sub-committee assigned to analyze business proposals for Air
Jamaica will present a report to the Jamaican Cabinet on Nov. 1, Radio
Jamaica reports.
As reported in the Troubled Company Reporter-Latin America on Oct. 25, 2006,
the Jamaican government's Cabinet did not approve Air Jamaica's proposed new
business plan. Donald Buchanan -- the newly installed minister of
information and development -- said that after reviewing the plan against
the background of Air Jamaica's financial situation, the cabinet felt that
there was a need for additional and better particulars about the plan. The
cabinet referred the plan to its standing sub-committee that monitors the
airline.
Radio Jamaica relates that the sub-committee has started reviewing proposals
concerning the future of Air Jamaica.
The Jamaican government has remained committed to the existence of Air
Jamaica as an economic asset, although the International Monetary Fund has
recommended the closure of the airline, Radio Jamaica states.
Headquartered in Kingston, Jamaica, Air Jamaica --
http://www.airjamaica.com-- was founded in 1969. It flies passengers and
cargo to almost 30 destinations in the Caribbean, Europe, and North America.
Air Jamaica offers vacation packages through Air Jamaica Vacations. The
company closed its intra-island services unit, Air Jamaica Express, in
October 2005. The Jamaican government assumed full ownership of the airline
after an investor group turned over its 75% stake in late 2004. The
government had owned 25% of the company after it went private in 1994. The
Jamaican government does not plan to own Air Jamaica permanently.
* * *
On July 21, 2006, Standard & Poor's Rating Services assigned B long-term
foreign issuer credit rating on Air Jamaica Ltd., which is equal to the
long-term foreign currency sovereign credit rating on Jamaica, is based on
the government's unconditional guarantee of both principal and interest
payments.
KAISER ALUMINUM: Gramercy Alumina Moves for Summary Judgment
------------------------------------------------------------
Plaintiffs Gramercy Alumina LLC and St. Ann Bauxite Limited ask
the U.S. Bankruptcy Court for the District of Delaware for partial summary
judgment against defendants Kaiser Aluminum & Chemical Corp. and Kaiser
Bauxite Company pursuant to Rule 56 of the Federal Rules of Civil Procedure.
Michael D. DeBaecke, Esq., at Blank Rome LLP, in Wilmington,
Delaware, maintains that the Defendants breached the agreement by failing to
disclose health insurance benefits provided to retirees from the bauxite
mining facility in St. Ann, Jamaica, that they sold to the Plaintiffs.
Mr. DeBaecke says the Defendants' breach of the Agreement triggers their
obligation to indemnify the Plaintiffs.
Citing Alstrin v St. Paul Mercury Ins. Co, 179 F. Supp. 2d 376,
388 (D. Del. 2002), Mr. DeBaecke asserts that partial summary
judgment is appropriate because there is no genuine issue as to
any material fact and the Plaintiffs are entitled to judgment as a matter of
law.
Because the Plaintiffs have sustained damages due to the
Defendants' failure to disclose the retiree benefits, partial
summary judgment is appropriate, Mr. DeBaecke adds.
Defendants' Motion for Summary Judgment
The Defendants tell the Court that there are no facts that support the
Plaintiffs' complaint that they breached 14 different provisions of the
Agreement in regard to the Retiree Benefits.
Kimberly D. Newmarch, Esq., at Richards, Layton & Finger in
Wilmington, Delaware, says the undisputed factual record
demonstrates that Kaiser satisfied all of its obligations under
the Agreement, thus it is entitled to judgment as a matter of law.
Furthermore, even assuming Kaiser breached the Agreement,
Ms. Newmarch contends that the Plaintiffs cannot, as a matter of
law, prove that they are entitled to damages because:
-- they have admitted that they knew the retiree life
insurance benefits existed before closing the transaction;
-- they purchased the St. Ann operations with full knowledge
of the total cost of producing bauxite, which included the
cost of the Retiree Benefits; and
-- the future costs of Retiree Benefits are highly contingent
and, thus, are not reasonably certain.
Accordingly, the Defendants ask the Court for a summary judgment
in their favor.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corp. -- 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 Corp. -- filed for chapter 11
protection on Feb. 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. Lazard Freres & Co. serves as the Debtors' financial
advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J.
Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P.
Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of
Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July
6, 2006. 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. 107;
Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or
609/392-0900)
KAISER ALUMINUM: Trustee Balks at LeBlanc's Administrative Claim
----------------------------------------------------------------
Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, objects to LeBlanc
and Waddell's request for payment of US$300,000 in
administrative expenses because it is unclear whether the firm is a proper
entity entitled to receive an administrative expense
claim under Sections 503(b)(3)(D) and 503(b)(4) of the Bankruptcy Code.
As reported in the Troubled Company Reporter on Sept. 18, 2006,
Brett D. Fallon, Esq., at Morris, James, Hitchens & Williams LLP, in
Wilmington, Delaware, related that Leblanc & Waddell
represented the interests of the CTPV and NIHL claimants in Kaiser Aluminum
Corp.'s Chapter 11 cases.
LeBlanc & Waddell filed nine Louisiana state court lawsuits in the 34th
Judicial Court for the Parish of St. Bernard, involving over 400 plaintiffs
against Kaiser between June 1997 and January 2002. The Louisiana state
court actions remain stayed as a consequence of Kaiser's bankruptcy filing.
According to David M. Klauder, Esq., in Wilmington, Delaware,
LeBlanc has not provided any support for its contention that it is a
creditor.
To the extent LeBlanc is classified as a creditor and thus
eligible for allowance of administrative expense under Section
503(b)(3)(D), then it also must be proven that it provided a
substantial contribution in the case and that the fees of the law firm it
hired are reasonable, Mr. Klauder maintains.
The U.S. Trustee asks the Court to issue a ruling commensurate
with her objection.
Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corp. -- 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 Corp. -- filed for chapter 11
protection on Feb. 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. Lazard Freres & Co. serves as the Debtors' financial
advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J.
Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P.
Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of
Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July
6, 2006. 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. 107;
Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or
609/392-0900)
===========
M E X I C O
===========
BALLY TOTAL: Files Restated Results for Quarter Ended June 30
-------------------------------------------------------------
Bally Total Fitness Holding Corp. filed with the U.S. Securities
and Exchange Commission an amended financial report on Form 10-Q
for the quarter ended June 30, 2006, correcting an error in
management's discussion and analysis of financial condition and
results of operations regarding membership roll forward statistics for the
three and six months period ended
June 30, 2006, and the related computation of average number of members
during the periods.
According to the company, as a result of the change in average
number of members for the periods, average monthly membership
revenue recognized per member and average monthly cash received
per member for the periods have been revised as the amounts are
derived using average membership in the denominator of the
calculation.
Restated 2006 Second Quarter Results
Bally Total Fitness Holding Corporation's balance sheet at
June 30, 2006, showed total assets of US$430,902,000 and total
liabilities of US$1,841,195,000 resulting in a total stockholders' deficit
of US$1,410,293,000. The company's total stockholders' deficit at Dec. 31,
2005, stood at US$1,463,686,000.
The company's June 30 balance sheet also showed strained liquidity with
US$46,964,000 in total current assets and US$611,627,000 in total current
liabilities.
For the three months ended June 30, 2006, the company reported a
US$733,000 net loss on US$254,631,000 of net revenues, compared with a
US$1,607,000 net income on US$259,617,000 of net revenues for the three
months ended June 30, 2005.
Full-text copies of the company's financial statements for the
three months ended June 30, 2006, are available for free at:
http://researcharchives.com/t/s?140c
Chicago, Ill.-based Bally Total Fitness Holding Corp. (NYSE: BFT) --
http://www.Ballyfitness.com/-- is a commercial operator of fitness centers,
with over 400 facilities located in 29 states, Mexico, Canada, Korea, the
Caribbean, and China under the Bally Total Fitness, Bally Sports Clubs, and
Sports Clubs of Canada brands.
* * *
As reported in the Troubled Company Reporter on Oct. 19, 2006,
Moody's Investors Service affirmed its junk credit ratings for
Bally Total Fitness Holding Corporation, including the company's
US$235 million 10.5% senior unsecured notes (guaranteed) due 2011 and US$300
million 9.875% senior subordinated notes due 2007. Moody's said the rating
outlook remains negative.
CHEMTURA CORP: Sells Davis-Standard Interest for US$72 Million
--------------------------------------------------------------
Chemtura Corp. has sold its majority interest in the Davis-Standard, LLC
polymer processing equipment joint venture to partner Hamilton Robinson LLC
for approximately US$72 million in cash, plus an additional US$8 million
that is contingent upon certain post-closing determinations.
D-S LLC, headquartered in Pawcatuck, Conn., had revenues for the fiscal year
ended Sept. 30, 2006 of approximately US$250 million and was classified in
Chemtura's financials as an equity investment.
"This transaction is completely consistent with our strategy of focusing our
resources on our core businesses. Formation of the joint venture with a
partner who could improve productivity, had global reach and for whom this
was a core business helped us realize significantly higher value than had we
kept it in our own portfolio," said Robert Wood, chairman and chief
executive officer. "This sale, as well as the sale of the Industrial Water
Additives business earlier this year, is another positive step in
transforming our portfolio to one that will deliver consistently higher
earnings. The proceeds from this transaction will be invested in our core
specialty chemical businesses and further debt reduction as will proceeds
from other transactions we expect to announce in the near future."
Mr. Wood continued, "Despite aggressive actions on multiple fronts to
reshape the portfolio and strengthen businesses, our earnings have not yet
caught up with our actions. In part, there is a longer than expected lag
between volume recapture and margin recovery. This, coupled with softness
in Crop in Latin America, will result in third quarter and second half
earnings that will be substantially below prior expectations. We will
discuss the actions we are taking and progress made in our Nov. 2 press
release and Nov. 3 conference call."
Headquartered in Middlebury, Connecticut, Chemtura Corp.
(NYSE: CEM) -- http://www.chemtura.com/-- is a global
manufacturer and marketer of specialty chemicals, crop
protection and pool, spa and home care products. The Company
has approximately 6,400 employees around the world and sells its
products in more than 100 countries. In Latin America,
Chemtura has facilities in Brazil and Mexico.
* * *
As reported in the Troubled Company Reporter on April 21, 2006,
Moody's Investors Service assigned a Ba1 rating to Chemtura
Corporation's US$400 million of senior notes due 2016 and
affirmed the Ba1 ratings for its other debt and the corporate
family rating.
As reported in the Troubled Company Reporter on April 21, 2006,
Standard & Poor's Ratings Services assigned its 'BB+' senior
unsecured debt rating to Chemtura Corp.'s US$400 million notes
due 2016. Standard & Poor's affirmed Chemtura's 'BB+' long-term
corporate credit rating. S&P said the outlook remains positive.
DAVE & BUSTERS: Moody's Assigns Loss-Given-Default Rating
---------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the restaurant sector, the rating agency confirmed its B2
Corporate Family Rating for Dave & Busters Inc.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and bond debt
obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
US$100M Sr. Sec.
Term d. 2/2013 B1 Ba2 LGD2 12%
US$60M Sr. Sec.
Revolver d. 2/2011 B1 Ba2 LGD2 12%
US$175M 11.25% Sr.
Unsec. Notes
d. 2/2014 B3 B3 LGD4 68%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology will also
enhance the consistency in Moody's notching practices across industries and
will improve the transparency and accuracy of Moody's ratings as Moody's
research has shown that credit losses on bank loans have tended to be lower
than those for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion of
expected loss are expressed as a percent of principal and accrued interest
at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6
(loss anticipated to be 90% to 100%).
Dave & Busters Inc. operates a chain of about 50 food and
entertainment complexes in the US, Canada, and Mexico. The
company's locations offer casual dining, full bar service, and a
cavernous game room.
EMPRESAS ICA: Reports MXN5MM Revenue for the Third Quarter 2006
---------------------------------------------------------------
Empresas ICA, S.A.B. de C.V. disclosed its unaudited results for the third
quarter of 2006.
ICA consolidated the statement of income of the Central North Airport Group
or GACN in the Airports sub-segment, effective Jan. 1, 2006. In addition,
ICA adopted the proportionate gross consolidation method of accounting for
those subsidiaries and joint ventures where there is shared control. The
accounts are consolidated line-by-line in proportion to ICA's ownership.
The change in accounting method affects the consolidation of the financial
statements of the Spanish subsidiaries that make up Rodio and the joint
venture with Mexican homebuilder GEO in the Housing segment. In accordance
with accounting principles generally accepted in Mexico, financial
statements for previous periods have not been restated; prior period results
have been restated for the effects of inflation in constant pesos of
Sept. 30, 2006.
Highlights
Total revenues for the third quarter of 2006 were MXN5.008 million,
basically unchanged from MXN5,017 million in the third quarter of 2005.
Operating income for the third quarter of 2006 was MXN343 million, as
compared with MXN348 million in the same period of 2005. The operating
margin in the third quarter of 2006 was 6.9%, which was the same as the
prior year period.
New construction contracts awarded during the third quarter of 2006 were
MXN2,545 million. ICA's construction backlog as of September 30, 2006 was
MXN10,761 million, equivalent to 7 months of work based on third quarter
construction revenues. Taking into account the volume of the construction
business that the Public-Private Partnership (PPP) projects provide, the
construction backlog was MXN12,233 million, equivalent to 8 months work
based on third quarter construction revenues.
ICA's total debt as of September 30, 2006 was MXN12,444 million, an increase
of MXN2,806 million, or 29%, as compared with MXN9,638 million in the prior
year period. ICA's management believes that discussion of its debt
excluding debt incurred for the El Cajon hydroelectric project is useful to
include as part of its analysis. Therefore, excluding the El Cajon
hydroelectric project, total debt increased MXN1,963 million. The increase
in debt other than for the El Cajon hydroelectric project principally
reflects debt incurred to finance the Irapuato-La Piedad highway PPP, bridge
loans to finance the construction of entry level housing, and a loan to
finance the GACN share purchase. The increases in these debts were offset
in part by the payment of working capital loans related to the Package II of
the Minatitlan refinery reconfiguration project, as well as the effect of
the proportional consolidation of Rodio.
Third Quarter 2006 Consolidated Results
ICA's consolidated results for the third quarter 2006 are presented with and
without the effect of the consolidation of the results of operations of
Airports, which includes GACN, Aeroinvest, and SETA, was effective as of
January 1, 2006.
Third quarter 2005 shares are adjusted for the 1:6 reverse split of Dec. 13,
2005.
ICA recognized third quarter 2006 revenues of MXN5,008 million, basically
unchanged compared with the third quarter of 2005. Increases in Civil
Construction revenues, Airports revenues, and Housing revenues were offset
by reductions in revenues from Industrial Construction as a result of the
completion of projects and from Rodio as a result of the adoption of the
proportionate gross consolidation method. The El Cajon hydroelectric
project accounted for 1% of total revenues, and Package II of the Minatitlan
refinery reconfiguration project accounted for 18% of total revenues.
During the third quarter of 2006, revenues in Mexico represented 87% of the
total. Revenues denominated in foreign currency, principally U.S. dollars,
were 28% of the total. Airports accounted for MXN408 million, or 8%, of
total revenues.
Cost of sales was 86% of revenues in the first quarter of 2006, the same as
in the third quarter of 2005. Cost of sales was MXN4,288 million, which was
basically unchanged from the MXN4,338 million reported in the same period of
2005. Airports represented MXN168 million, or 4%, of total cost of sales.
General and administrative expenses in the third quarter of 2006 totaled
MXN376 million, a 14% increase compared with MXN331 million in the third
quarter of 2005. Airports accounted for MXN67 million, or 18%, of general
and administrative expenses. The increase in general and administrative
expenses was principally due to the consolidation of Airports and to an
increase in expenses for the preparation of new bids for new construction
projects, which were MXN32 million in the third quarter of 2006 as compared
with MXN20 million in the prior year period. General and administrative
expenses increased to 8% of revenues in the third quarter of 2006, as
compared with 7% in the same period of 2005.
Operating income during the third quarter of 2006 was MXN343 million, as
compared with MXN348 million recorded during the same period of 2005. The
contribution of the Airports sub-segment to operating income was MXN173
million, which was partially offset by a reduction in the operating income
of the Civil Construction and Industrial construction segments.
EBITDA generated in the third quarter of 2006 was MXN490 million, equivalent
to a 9.8% margin, as compared with MXN501 million in EBITDA generated in the
third quarter of 2005, equivalent to a 10% margin. The Airports sub-segment
generated EBITDA of MXN238 million, or 49% of total EBITDA in the third
quarter of 2006, while the EBITDA generated by Construction segment was
lower than the prior year period.
The company's accounting policies for financed public works, in which
contract revenues include both revenue from the execution of the work and
for financing, provide that financial costs of these projects be recognized
in cost of sales. As a result, financial costs for the El Cajon
hydroelectric project are included in cost of sales. Adjusted EBITDA adds
back net interest expense included in cost of sales to EBITDA. In the third
quarter of 2006, Adjusted EBITDA was MXN612 million compared with MXN605
million during the third quarter of 2005. EBITDA and Adjusted EBITDA should
not be considered as indicators of financial performance or free cash flow
under Mexican or U.S. GAAP. However, ICA's management believes that they
provide useful measures of its own performance that are widely used by
investors and analysts to evaluate performance and make comparisons with
other companies. Other companies may define similarly titled concepts
differently.
The integral financing cost in the third quarter of 2006 was MXN38 million,
compared with MXN4 million recorded in the third quarter of 2005. Financing
costs increased to MXN113 million in the third quarter of 2006 compared with
MXN97 million in the same period of 2005, which was due to a higher level of
debt. Financial income during the quarter was MXN104 million, a MXN21
million increase as compared with MXN83 million in the third quarter of
2005. The increase was principally the result of the currency and interest
rate mix of cash balances in the 2006 quarter. The exchange loss in the
third quarter of 2006 was MXN5 million, compared with a MXN16 million gain
in the same period of last year. The exchange loss was the result of the
appreciation of the peso during the quarter, as compared with depreciation
in the prior year period.
The weighted average interest rate on total debt was 8.1% during the third
quarter of 2006, including MXN137 million in interest expense on financed
public works, compared with 8.9% registered during the same period in 2005.
The decrease in the weighted average interest rate was the result of better
financing conditions and lower interest rates.
The tax provision in the third quarter of 2006 was MXN108 million, of which
MXN155 million was current income tax, MXN51 million was a credit to
deferred taxes and the application of the valuation reserve as a result of
the reversal of timing differences. Airports accounted for MXN33 million of
the total. The effective tax rate, which takes into account both deferred
and current income taxes, was 34% in the third quarter of 2006.
ICA recognized MXN2 million from its share in the earnings of unconsolidated
affiliates during the third quarter of 2006, which included the Los Portales
real estate project in Peru and the Altiplano highway concession in Mexico,
among others.
Net income of majority interest was MXN120 million in the third quarter of
2006, or MXN0.30 per share (US$0.33 per ADS) based on 404.61 million
weighted average shares outstanding, compared with net income of majority
interest of MXN157 million recorded in the third quarter of 2005, or MXN0.43
per share (US$0.47 per ADS), based on a weighted average of 362.85 million
shares outstanding. The 2005 earnings per share and earnings per ADS are
adjusted for the reverse split and the new 1:12 ADS per share ratio that was
effected in December 2005. Airports accounted for MXN86 million of net
income of majority interest in the third quarter of 2006.
Total construction revenues decreased 10%. Civil Construction revenues
increased 9% during the third quarter of 2006, as compared with the third
quarter of 2005, which was offset by decreases in Industrial Construction
and Rodio revenues as a result of the proportional consolidation of Rodio.
The operating margin from all construction activities decreased to 2.6%
during the third quarter of 2006, as compared with 7.2% during the same
quarter of 2005 as a result of the project mix and the negotiation of prices
of change orders with clients. Third quarter 2006 Construction EBITDA was
MXN158 million, with an EBITDA margin of 3.8%.
Civil Construction revenues resulted principally from work on Terminal II of
Mexico International Airport, the Cachamay stadium in Venezuela, the
inter-terminal transport system for the Mexico City International Airport,
and the Tejocotal-Nuevo Necaxa section of the Mexico-Tuxpan highway. The
Civil Construction operating margin was 3% in the third quarter of 2006,
compared with 4.9% in the 2005 period. The reduction is the result of the
combined effect of the mix of projects under construction.
Civil Construction EBITDA was MXN82 million, a reduction of 53% compared
with MXN175 million in the third quarter of 2005. The segment's net income
of majority interest was MXN55 million, a decrease of 46%, as compared with
MXN102 million in the third quarter of 2005. The reduction was due to the
lower contribution of El Cajon hydroelectric project to ICA's results, as
the project nears completion. In the third quarter of 2006, the El Cajon
hydroelectric project accounted for MXN3 million, or 1%, of ICA's total
EBITDA, as compared with MXN105 million, or 21%, of EBITDA in the third
quarter of 2005. In addition, during the third quarter of 2006, current
projects recorded lower margins as a result of the negotiation of change
orders and unit prices in some projects. ICA expects to conclude
negotiations with clients during the fourth quarter of 2006. However, the
company can provide no assurance that agreements will be reached or that the
results will be favorable.
Industrial Construction revenues decreased as a result of completion of
certain projects, including the construction of storage tanks for the
liquefied gas terminal in Altamira and the cryogenic plants for Pemex. The
projects that contributed most to revenues in the third quarter of 2006 were
Package II of the Minatitlan refinery reconfiguration, which accounted for
18% of total revenues, the lightweight platforms for Pemex, a PET plant in
Altamira, and the Chicontepec oil field project in Veracruz. The Industrial
Construction operating margin was 2.4% in the third quarter of 2006 as
compared with 10.3% in the prior year period. The decrease in operating
margin was primarily due to the completion of projects that contributed
significantly to the company's results in the prior year's quarter and to
the cancellation of provisions related to the AES Andres power plant in the
Dominican Republic during the third quarter of 2005. Bid preparation
expenses were MXN13 million in the third quarter of 2006, as compared with
MXN3 million in the same quarter of 2005.
Industrial Construction EBITDA was MXN43 million in the third quarter of
2006, a reduction of 82% compared with MXN242 million during the same
quarter of 2005. Industrial Construction net income of majority interest
was MXN13 million, a decrease of 85%, as compared with the third quarter of
2005.
Effective Jan. 1, 2006, Rodio is proportionally consolidated line-by-line
based on ICA's 50% ownership. It should be noted that Rodio's total results
improved substantially between 2005 and 2006, despite the fact that its
contribution to ICA's results, due to the line-by-line 50% consolidation,
affects the comparison and shows reductions in revenues and operating
income.
Rodio contributed revenues of MXN417 million, a reduction of 41% compared
with MXN704 million in the third quarter of 2005. Operating income during
the third quarter of 2006 was MXN21 million, as compared with MXN25 million
in the same period of 2005, despite the proportional consolidation of 50% in
the 2006 period. Rodio's operating margin for the third quarter of 2006 was
5.1%. Rodio's most important projects are the development of shopping
centers for the El Corte Ingles department stores in Jaen, Toledo, Alicante,
and Seville and the Hipercor shopping center in Malaga.
Rodio generated EBITDA of MXN33 million, a reduction of 26% compared with
MXN45 million during the same quarter of 2005. Rodio's net income of
majority interest was MXN17 million in the third quarter of 2006, compared
with MXN4 million registered in the same quarter of 2005.
During the quarter, Consorcio Internacional de Infraestructura or CIISA, the
subsidiary responsible for the execution of the El Cajon hydroelectric
project, and the Federal Electricity Commission or CFE continued
negotiations for the accelerated delivery of the project, which is in the
final stage of construction, and prices for change orders.
The El Cajon hydroelectric project generated MXN31 million in revenues and
MXN2 million in operating income during the third quarter of 2006, with a 6%
operating margin.
The project has used US$ 643 million of the financing for the project. At
Sept. 30, 2006, 94% of the syndicated loan and the 144A bond had been
disbursed. The total financing for the project is US$ 682.4 million.
Effective in the first quarter of 2006, the certificates for completed work
that correspond to the amount that is expected to be received when the first
unit is delivered were reclassified to short term.
Total liabilities for the El Cajon hydroelectric project increased to
MXN8,469 million as of Sept. 30, 2006, of which 66% was short term and 34%
long term.
The Housing segment sold 1,241 units during the third quarter of 2006,
compared with 1,010 units in the third quarter of 2005. The increase is a
result of the start up of 7 new projects, with an average of 1,000 units in
each project; the relatively larger size of the new projects contributes to
higher profitability.
Revenues for the third quarter of 2006 were MXN346 million, a 36% increase
compared with MXN255 million in the same period of 2005. The increase in
sales reflects the increase of units sold and a higher average unit price.
The operating margin in the third quarter of 2006 was 7.2%, compared with
6.2% in the same quarter of 2005. Of the units sold, 59% were traditional
housing (vivienda tradicional), and 41% were entry level housing (vivienda
de bajos ingresos).
Housing EBITDA during the third quarter of 2006 was MXN29 million, a
decrease of 17% compared with MXN34 million during the same quarter of 2005,
as a result of a lower level of amortization recorded in the third quarter
of 2006 as compared with the prior year period. Housing net income of
majority interest was MXN31 million in the third quarter of 2006, compared
with MXN2 million in the 2005 period.
The Infrastructure segment includes the results of operations of Airports
and other ICA concessions. Revenues were MXN511 million in the third
quarter of 2006, as compared with MXN97 million in the same quarter of 2005,
an increase of MXN414 million. Airports contributed MXN408 million in
revenues during the third quarter of 2006. Third quarter 2006 operating
income was MXN204 million, principally as a result the Ps.173 million
contribution of Airports.
Revenues of the Airports sub-segment, which includes the operations of GACN,
Aeroinvest, and Servicios de Tecnologia Aeroportuaria or SETA, were MXN408
million, with operating income of MXN173 million and a 42% operating margin.
The segment generated EBITDA of MXN238 million, with an EBITDA margin of
58%. Net income was MXN86 million. During the third quarter of 2006, 2.8
million terminal passengers were served in the 13 airports, as compared with
the 2.7 million in the same period of 2005, an increase of 3.2%. Passengers
on domestic flights accounted for 82% of the passenger total, and passengers
on international flights accounted for 18%. The Monterrey International
Airport accounted for 49% of total passenger traffic.
Under Mexican law and the terms of the airport concessions, airport revenues
derived from aeronautical activities (e.g., passenger charges, landing fees,
aircraft parking charges) are subject to rate regulation, while other
revenues (consisting principally of revenue from commercial activities such
as the leasing of space in the airports to merchants and freight services)
are not subject to rate regulation.
Regulated Airports revenues during the third quarter of 2006 were MXN286
million, or 83% of the total. Non-regulated revenues were MXN57 million, or
17% of the total.
The Other Concessions sub-segment includes the Corredor Sur in Panama, the
Acapulco Tunnel, the waste water treatment plant in Ciudad Acuna, Coahuila,
and the Irapuato-La Piedad and Queretaro-Irapuato highways, which are
operated under the PPP mechanism. The two PPPs are not currently operating.
The Corredor Sur's average traffic volume in the third quarter of 2006
increased 20% to 64,314 vehicles per day, compared with 53,796 in the same
quarter of 2005. Corredor Sur's revenues were MXN61 million, an increase of
8.3%, as compared with MXN56 million in the same period of 2005.
The Acapulco Tunnel's daily average traffic volume increased to 8,899
vehicles in the third quarter of 2006, compared with 8,160 in the same
quarter of 2005. The Acapulco Tunnel's revenues were MXN28 million in the
third quarter of 2006, an increase of 4.5% as compared with MXN27 million in
the same quarter of 2005.
Modernization work on the Irapuato-La Piedad highway PPP advanced in the
third quarter of 2006, with total investment through September 30, 2006 of
MXN383 million. The transfer of resources to the concessionaire has been
made in the form of a capital contribution and a MXN580-million project
finance term loan. As of quarter end, MXN268 million of the loan had been
drawn. The costs of renovating and widening the highway are recorded as an
investment in concessions.
ICA recorded revenues of MXN15,283 million in the first nine months of 2006,
an increase of 12.3% compared with Ps 13,605 million in the comparable 2005
period. Of the MXN1,678 million increase, Airports accounted for MXN1,192
million.
Operating income was MXN1,192 million in the first nine months of 2006, as
compared with MXN777 million in the same period of 2005, an increase of
MXN315 million, or 40.6%. The contribution of the Airports sub-segment to
operating income was MXN474 million.
EBITDA generated in the first nine months of 2006 was MXN1,655 million,
equivalent to a 10.8% margin, an increase of MXN328 million as compared with
MXN1,327 million in EBITDA generated in the comparable period of 2005. The
contribution of the Airports sub-segment to EBITDA was MXN654 million.
For the first nine months of 2006, Adjusted EBITDA was MXN2,015 million, as
compared with MXN1,561 million for the same period of 2005, an increase of
MXN454 million, or 29%.
For the nine months of 2006, the provision for income tax and employees'
statutory profit sharing was MXN403 million, of which MXN163 million was
current income tax, MXN158 million was deferred taxes, and MXN82 million was
employees' statutory profit sharing. The effective income tax rate for the
nine months of 2006 was 31.5%.
Net income of majority interest was MXN348 million in the first nine months
of 2006, an increase of MXN51 million, as compared with MXN297 million in
the same period of 2005. This is equivalent to MXN0.86 per share (US$0.94
per ADS), based on 403.89 million weighted average shares outstanding, as
compared with MXN0.90 per share (US$0.99 per ADS), based on 328.41 million
weighted average shares outstanding in the first nine months of 2005. The
2005 earnings per share and earnings per ADS are adjusted for the reverse
split and the new 1:12 ADS per share ratio that was effected in December
2005. Airports accounted for MXN253 million of net income of majority
interest in the first nine months of 2006.
Construction Backlog
During the third quarter of 2006, ICA had new contract awards and net
contract additions of MXN2,545 million. New projects included: the Naval
Hospital for Specialties and the Texcoco-Zaragoza highway interchange, both
in Mexico City, and new Rodio projects.
As of Sept. 30, 2006, construction backlog was MXN10,761 million, a decrease
of MXN1,967 million, or 15%, compared with construction backlog at June 30,
2006, and was the equivalent of 7 months of work at third quarter 2006
levels. The construction backlog at both end-June and end-September 2006
includes the effect of the proportional consolidation of Rodio.
The work to be performed in concessioned projects, which is not included in
construction backlog, was MXN1,472 million at the end of the third quarter
of 2006. The combination of the construction backlog and the work to be
performed in concessioned projects generates the total volume of
construction work.
At the end of the third quarter of 2006, projects in Mexico represented
91.8% of total backlog, while projects abroad represented 8.2%. Of the
total, 80.3% was for public sector clients, and 19.7% was for private sector
clients.
Balance Sheet
The main accounts of ICA's consolidated balance sheet are shown in the
following table. The balance sheet is also presented with and without
Airports. ICA considers the disclosure of its financial position without
the effects of the consolidation of Airports useful in order to provide
comparative information against its financial position as of the third
quarter of 2005.
ICA had total assets of MXN35,310 million at the close of the third quarter
of 2006, an increase of MXN9,801 million, or 38%, as compared with MXN25,509
million at the end of the same quarter of 2005. Of the increase, MXN8,839
million was accounted for by the consolidation of Airports. The remaining
increase is a result of the combined effect of client advances, higher
levels of business activity, and a higher level of receivables related to
the execution of the El Cajon hydroelectric project.
At Sept. 30, 2006, ICA had total cash and cash equivalents of MXN5,319
million, a decrease of 5% as compared with MXN5,611 million at the end of
the third quarter of 2005. Of the total cash MXN2,055 million is
attributable to the consolidation of Airports. At Sept. 30, 2006, 85% of
cash and cash equivalents were in these subsidiaries:
-- 39% in Airports,
-- 32% in ICA Fluor,
-- 7% in the El Cajon hydroelectric project,
-- 6% in the reserves established to secure the Acapulco
Tunnel and Corredor Sur financings, and
-- 1% in Rodio.
This cash generally cannot be used by ICA in accordance with the
subsidiaries' bylaws or the governing agreements. The remaining 15%, or
MXN792 million, was held at the parent company or other operating
subsidiaries. Of total cash as of September 30, 2006, 40% represented
client advances. In addition, MXN1,009 million was paid to strategic
suppliers in order to lock-in the price of raw materials and supplies.
In the third quarter of 2006, short-term accounts receivable increased by
MXN7,658 million, an increase of 236% as compared with MXN3,248 million in
the same period of 2005. This is principally the effect of the
reclassification to short-term of MXN6,026 million in certifications for
completed work on the El Cajon hydroelectric project. Of total accounts
receivable, Airports accounted for MXN251 million.
Excluding the reclassification for the El Cajon hydroelectric project and
Airports, short-term accounts receivable were MXN4,629 million, an increase
of 43%, as compared with the same quarter of 2005. This increase was due
principally to an increase in accounts receivable of Civil Construction,
Industrial Construction, and Housing, related to projects under
construction. Accounts receivable include deferred payments from clients
that are subject to reaching defined milestones and that, in large part,
require financing, since the contracts do not provide for client advances.
The main projects that meet these characteristics were in Industrial
Construction. The total of such receivables was MXN1,007 million at the end
of September 2006, of which MXN600 million is for Package II of the
Minatitlan refinery reconfiguration project and MXN351 million is for the
Chicontepec oil field project.
At Sept. 30, 2006, inventories were MXN2,368 million, an increase MXN1,125
million compared with the prior year period. Housing inventories accounted
for MXN813 million of the increase, as a result of a higher level of
activity, and MXN370 million of the increase is work in process for client
change orders resulting from geological conditions in the El Cajón
hydroelectric project. The price for the latter is currently under
negotiation with the client.
Of the total of MXN11,654 million in long term assets at
Sept. 30, 2006, accounts and documents receivable were MXN3,432 million, or
25% of the total, of which MXN2,997 million corresponds to the
certifications of El Cajon hydroelectric project. Completed work in
concessions accounted for MXN7,824 million, equivalent to 65% of long term
assets.
Total liabilities increased MXN5,083 million to MXN21,683 million in the
third quarter of 2006, as compared with MXN16,600 million in the same
quarter of 2005. Of the total increase, Airports accounted for MXN2,773
million including the financing of US$ 125 million, equivalent to MXN1,372
million, for the acquisition of GACN's shares.
Shareholders' equity increased by MXN4,718 million to MXN13,627 million in
the third quarter of 2006, as compared with MXN8,909 million in the third
quarter of 2005. Of the total increase in shareholders' equity, majority
interests in GACN represented MXN2,182 million. The balance of the increase
in shareholders' equity reflects cumulative net income during the fourth
quarter of 2005 and the first nine months of 2006, which was partially
offset by the reduction in net income resulting from the proportional
consolidation of Rodio.
Debt
Total debt at Sept. 30, 2006, increased MXN2,806 million to MXN12,444
million, as compared with MXN9,638 million in the same quarter of 2005.
Excluding the El Cajon hydroelectric project, total debt increased MXN1,963
million. The increase in debt reflects financing for the Irapuato-La Piedad
highway PPP, bridge loans to finance the construction of entry level
housing, and a loan to finance the GACN share purchase. These increases in
debt were offset in part by the payment of working capital loans related to
Package II of the Minatitlan refinery reconfiguration project, as well as
the effect of the proportional consolidation of Rodio.
Net debt excluding the El Cajon hydroelectric project was MXN418 million,
compared with net cash of MXN1,916 million at the close of the third quarter
of 2005. The increase in net debt was the result of the financing of
investment projects, client financing, and advance payments to strategic
suppliers.
US$644 million of the El Cajon hydroelectric project financing has been used
by ICA.
Based on the source of repayment, MXN10,362 million, or 83% of ICA's total
debt, corresponds to projects, and MXN2,083 million, or 17%, is operating
company debt. ICA had no parent company debt outstanding at Sept. 30, 2006.
As a result of the reclassification to short term of debt related to the El
Cajón hydroelectric project, 45% of ICA's total debt matures in less than
one year as of Sept. 30, 2006. Most short-term debt is related to the El
Cajon hydroelectric project, and the resources for payment are expected to
come from the client's payment upon delivery of the first unit.
Eighty-eight% of total debt is denominated in foreign currency, principally
dollars, and 41% is securities debt.
The current ratio as of the end of the third quarter of 2006 decreased to
1.46 compared with 1.74 at the end of third quarter 2005. The decrease was
principally the result of the completion of projects and payments to
suppliers, advances to strategic suppliers to purchase major inputs, and the
proportional consolidation of Rodio. A portion of ICA's cash and cash
equivalents has been pledged to obtain letters of credit required by clients
to secure project advances and performance on various projects. Of total
cash, 40% represents client advances.
The interest coverage ratio (Adjusted EBITDA/net interest expense, including
interest included in cost of sales) was 4.67 in the third quarter of 2006,
compared with 5.17 in the same period of the prior year, after adding back
net financing costs included in cost of sales to both EBITDA and net
interest expense. The decrease in the coverage ratio is a result of the
increase in debt. The leverage ratio (total debt/equity) fell to 0.93 as of
Sept. 30, 2006, as compared with 1.08 at the end of the same quarter in
2005.
CAPEX and Divestments
Capital expenditures, including investments in fixed assets and deferred
expenses, totaled MXN427 million in the third quarter of 2006, as compared
with MXN114 million in the same quarter of 2005. The increase is
principally as the result of the consolidation of Airports, investments in
the Irapuato-La Piedad PPP concession, strategic machinery, and construction
vehicles.
Divestments in the third quarter of 2006 were MXN20 million. The main
divestments during the quarter were the sale of construction equipment and
assets and homes in Cancun in the Isla Dorada development.
Empresas ICA -- http://www.ica.com.mx/-- the largest
engineering, construction, and procurement company in Mexico,
was founded in 1947. ICA has completed construction and
engineering projects in 21 countries. ICA's principal business
units include civil construction and industrial construction.
Through its subsidiaries, ICA also develops housing, manages
airports, and operates tunnels, highways, and municipal services
under government concession contracts and/or partial sale of
long-term contract rights.
* * *
Standard & Poor's assigned these ratings to Empresas ICA, with
stable outlook:
-- LT Foreign Issuer Credit B; and
-- LT Local Issuer Credit B.
* * *
As reported in the Troubled Company Reporter-Latin America on
Aug. 23, 2006, Standard & Poor's Ratings Services revised its
long-term corporate credit rating on Empresas ICA S.A. de C.V.
to 'BB-' from 'B'. The ratings were removed from CreditWatch
Positive, where they were placed on April 7, 2006. The outlook
is stable.
FORD MOTOR: Closes Production at Atlanta Assembly Plant
-------------------------------------------------------
Production ended at Ford Motor Company's Atlanta Assembly Plant on Friday,
Oct. 27, at 7 a.m. when the company produced its last Ford Taurus.
Ford produced 7.5 million Taurus units since the sedan was
introduced in 1985. From 1992 to 1996, Taurus was the best-
selling car in the United States. Its peak year was 1992 with
409,751 units sold. Ford produced Taurus at two assembly plants -- Atlanta
and Chicago -- until 2004 when Chicago Assembly began
production of Ford Five Hundred, Freestyle and Mercury Montego.
The Atlanta Assembly opened in 1947 and built a variety of
historical models including the light trucks, Ford Fairlane,
Fairmont, Falcon, Galaxie, Grananda, LTD, Rachero, Torino,
Thunderbird, Marquis, Sable and Taurus.
For the past five years Atlanta Assembly has ranked among the top 10 most
productive assembly plants in North America, as reported by Harbour
Consulting. In the 2005 report, Atlanta ranked number one in productivity.
Atlanta Assembly employed 1,950 workers, including 1,800 hourly
and 150 salaried. The hourly employees, like all UAW-represented Ford
employees in the U.S., can select among eight separation, educational and
retirement packages.
About Ford Motor
Headquartered in Dearborn, Michigan, Ford Motor Company --
http://www.ford.com/-- manufactures and distributes automobiles
in 200 markets across six continents. With more than 324,000
employees worldwide, the company's core and affiliated automotive brands
include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and
Volvo. Its automotive-related services include Ford Motor Credit Company
and The Hertz Corporation.
* * *
As reported in the Troubled Company Reporter on Oct. 24, 2006,
Standard & Poor's Ratings Services placed its 'B' senior unsecured debt
issue ratings on Ford Motor Co. on CreditWatch with negative implications.
At the same time, S&P affirmed all other ratings on Ford, Ford Motor Credit
Co., and related entities, except the rating on Ford Motor Co. Capital Trust
II 6.5% cumulative convertible trust preferred securities, which was lowered
to 'CCC-' from 'CCC.'
At the same time, Fitch Ratings placed Ford Motor's 'B+/RR3'
senior unsecured debt on Rating Watch Negative reflecting Ford's
intent to raise secured financing that would impair the position
of unsecured debt holders. Under Fitch's recovery rating scenario it was
estimated that unsecured holders would recover
approximately 68% in a bankruptcy scenario, equating to a Recovery Rating of
'RR3' (50-70% recovery).
Moody's Investors Service has disclosed that Ford's very weak
third quarter performance, with automotive operations generating a pre-tax
loss of US$1.8 billion and a negative operating cash flow of US$3 billion,
was consistent with the expectations which led to the September 19 downgrade
of the company's long-term rating to B3.
HERBALIFE LTD: Amends Employment Pact with CEO Richard Goudis
-------------------------------------------------------------
Herbalife Ltd., entered into an employment agreement with Richard P. Goudis,
pursuant to which, he will continue to serve as chief financial officer and
will receive an annual salary of US$525,000.
Mr. Goudis will continue to be entitled to participate in the
Company's employee benefit plans and arrangements made available
to most senior executives, as well as long-term incentive plan for senior
executives.
The Company also granted Mr. Goudis 15,000 Stock Units pursuant to the 2005
Stock Incentive Plan, with each Stock Unit representing the right to receive
one common share of the Company.
Herbalife Ltd. (NYSE: HLF) -- http://www.herbalife.com/-- is a
marketing company that sells weight-management, nutritional
supplements and personal care products intended to support a
healthy lifestyle. Herbalife products are sold in 62 countries
through a network of more than one million independent
distributors. The company supports the Herbalife Family
Foundation -- http://www.herbalifefamily.org/-- and its Casa
Herbalife program to bring good nutrition to children.
Herbalife, now in its 26th year, conducts business in 62
countries. The company does business with several manufacturers
worldwide and has its own manufacturing facility in Suzhou,
China as well as major distribution centers in Venray,
Netherlands, Los Angeles, Calif., Memphis, Tenn., and
Guadalajara, Mexico.
* * *
Standard & Poor's Ratings Services rated Herbalife Ltd.'s long-
term foreign and local issuer credit ratings at BB+.
KANSAS CITY: Commences Cash Tender Offer for 10.25% Sr. Notes
-------------------------------------------------------------
Kansas City Southern de Mexico, S.A. de. C.V., formerly known as TFM, S.A.
de C.V. and a wholly owned subsidiary of Kansas City Southern, has commenced
a cash tender offer for any and all of its US$150 million aggregate
principal amount of 10.25% Senior Notes due 2007 (CUSIP Nos. 872402AC6 and
P91415AA0) and a consent solicitation to amend the terms of the Notes and
the related indenture. The terms and conditions are set forth in the Offer
to Purchase and Consent Solicitation Statement dated Oct. 23, 2006.
The solicitation of consents will expire at 5:00 p.m., New York City time,
on Nov. 3, 2006, unless extended. The tender offer will expire at midnight,
New York City time, on Nov. 20, 2006, unless extended.
The total consideration for Notes validly tendered and accepted for payment
pursuant to the tender offer and consents validly delivered pursuant to the
solicitation on or prior to the Consent Date will be equal to the present
value on the settlement date of all future cash flows on the Notes to the
maturity date, calculated in accordance with standard market practice, based
on the assumptions that the Notes would be redeemed in full at US$1,000 per
US$1,000 principal amount of Notes on the maturity date and that the yield
to the maturity date is equal to the sum of:
(i) the yield on the 3.50% U.S. Treasury Note due
May 31, 2007, as calculated by Morgan Stanley & Co. Inc.
in accordance with standard market practice, based on the
bid-side price for the Reference Security, as of 2:00
p.m., New York City time, on Nov. 3, 2006, the tenth
business day immediately preceding the scheduled
Expiration Date, as displayed on the Bloomberg Government
Bondtrader, Page BBT3 (or any recognized quotation source
selected by Morgan Stanley & Co. Inc. in its discretion
if the Bloomberg Government Bondtrader is not available
or is manifestly erroneous), plus (ii) 50 basis points,
minus accrued and unpaid interest from and including the
last interest payment date, to, but not including, the
settlement date. Holders whose Notes are validly
tendered and accepted for payment pursuant to the
tender offer on or prior to the Expiration Date but after
the Consent Date will be eligible to receive the Total
Consideration less a consent payment of US$30.00 per
US$1,000 principal amount of Notes tendered. The holder
of each Note tendered and accepted for payment will
receive accrued interest, if any, up to, but not
including, the applicable settlement date.
The company has engaged Morgan Stanley & Co. Inc. as Dealer Manager and
Solicitation Agent for the tender offer and consent solicitation. Questions
regarding the tender offer or the consent solicitation should be directed
to:
Morgan Stanley toll-free
Attn: Francesco Cipollone
Tel: (800) 624-1808 or collect
(212) 761-1941
Requests for documents should be directed to the information and tender
agent for the tender offer and consent solicitation:
D.F. King & Co., Inc.
Tel: (800) 488-8075
(212) 269-5550
Headquartered in Kansas City, Mo., KCS is a transportation
holding company that has railroad investments in the U.S.,
Mexico and Panama. Its primary U.S. holdings include The Kansas
City Southern Railway Company, serving the central and south
central U.S. Its international holdings include Kansas City
Southern de Mexico, S.A. de C.V., serving northeastern and
central Mexico and the port cities of Lazaro Cardenas, Tampico
and Veracruz, and a 50 percent interest in Panama Canal Railway
Company, providing ocean-to-ocean freight and passenger service
along the Panama Canal. KCS' North American rail holdings and
strategic alliances are primary components of a NAFTA Railway
system, linking the commercial and industrial centers of the
U.S., Mexico and Canada.
* * *
As reported in the Troubled Company Reporter on May 22, 2006,
Standard & Poor's Ratings Services lowered its preferred stock
ratings on Kansas City Southern to 'D' from 'C' and removed the
ratings from CreditWatch where they were initially placed on
March 23, 2006; ratings were previously lowered on April 4 and
May 1 and maintained on CreditWatch with negative implications.
Standard & Poor's other ratings on Kansas City Southern,
including its 'B' corporate credit rating, remain on CreditWatch
with negative implications, where they were initially placed
April 4, 2006. Ratings were lowered on April 10 and maintained
on CreditWatch.
KANSAS CITY SOUTHERN: Fitch Ratings Holds B+ IDR Rating
-------------------------------------------------------
Fitch Ratings has affirmed the 'B+' foreign and local currency
Issuer Default Ratings for Kansas City Southern de Mexico, S.A. de C.V. The
Rating Outlook for these ratings is Stable. Fitch has also affirmed the
'B+' foreign currency and the 'RR4' recovery rating of KCSM's notes:
-- US$150 million notes due 2007;
-- US$178 million notes due 2012;
-- US$460 million notes due 2012.
The ratings for KCSM are supported by the company's solid business position
as a leading provider of railway transportation services in Mexico with a
diversified revenue base consisting of five main industrial sectors.
Although operating earnings have improved in 2006, the ratings continue to
reflect KCSM's weak financial profile due to its high leverage and tight
liquidity. Over the past several years, KCSM has operated in a challenging
environment characterized by fierce competition, higher fuel costs, a
depreciating Mexican peso versus the U.S. dollar, and a general shift in
manufacturing to China from several countries, including
Mexico.
KCSM's capital structure remains highly levered. As of
June 30, 2006, KSCM had approximately US$1.4 billion in total debt
consisting primarily of US$788 million in unsecured notes due in 2007
(US$150 million) and 2012 (US$638 million) and an estimated US$493 million
of off-balance debt associated with lease obligations.
KCSM's EBITDAR, defined as operating EBITDA plus the company's
locomotive and railcar lease payments, was US$157 million in the
first half of 2006 and the ratio of total debt-to-EBITDAR was 4.5 times, an
improvement compared with 6.1x in 2005 and 5.5x in
2004. EBITDAR covered fixed expenses, defined as interest expense plus
lease payments, by about 2.0x in the first half of 2006 compared with 1.2x
in 2005 and 1.5x in 2004. KCSM's liquidity remains tight with US$16.3
million of cash as of
June 30, 2006. Refinancing risk is high due to the
June 15, 2007, maturity of KCSM's US$150 million 10.25% notes.
Fitch views the transaction completed on April 1, 2005 in which
Grupo TMM sold its 51% voting interest in Grupo KCSM (formerly
Grupo TFM) to Kansas City Southern as being mildly positive for
KCSM. The transaction replaced KCSM's financially distressed
controlling shareholder, Grupo TMM, with KCS, a U.S. entity that
has a stronger financial profile but one that is also highly
leveraged. On Sept. 12, 2005, KCS and other parties entered into an
agreement to resolve a dispute with the Mexican government concerning the
refund of value added taxes. The result of the settlement involved the
cashless exchange of the government's 20% stake in KCSM for the VAT refund
such that KCS now owns 100% of the common stock of KCSM via Grupo KCSM, the
holding company for KCSM. Despite the acquisition, the KCS railway group
continues to be a small operation with about 60% of consolidated earnings
generated by the Mexican railroad, KCSM.
KCSM is well positioned to continue to benefit from the growth in the
Mexican economy and cross-border trade as a result of the
North American Free Trade Agreement. The company's revenues are
derived predominantly from cross-border freight transportation
with the U.S. KCS is now focusing on integrating KCSM into its
U.S. rail network, increasing the company's traffic volumes via
truck-to-rail conversion efforts, improving efficiencies, adding
infrastructure, and developing an international inter-modal
corridor to link the port of Lazaro Cardenas on Mexico's south
Pacific coast and important commercial cities such as San Luis
Potosi and Monterrey with the southeastern U.S. via Jackson, Miss. The
route covers major distribution markets such as Mexico City and Laredo,
Texas.
KCSM is one of three main railroad networks in Mexico,
transporting approximately 40% of the country's railway freight
volumes. The company's main tracks cover 2,600 miles throughout
commercial and industrial areas in the northeastern and central
region of the country and serve three of Mexico's main seaports.
KSCM operates a strategically significant route connecting Mexico City with
Nuevo Laredo-Laredo, TX, the largest freight exchange point between the U.S.
and Mexico. In 2005, revenues were generated from diverse sectors such as
agro-industrial (23%), cement, metals and minerals (20%), chemical and
petrochemical (18%), automotive (16%), manufacturing and industrial (14%),
and intermodal (8%). Kansas City Southern of the U.S. owns 100% of KSCM via
its wholly owned subsidiary, Grupo KCSM.
MERIDIAN AUTOMOTIVE: Plan-Filing Period Extended Until Dec. 31
--------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District
of Delaware extended Meridian Automotive Systems Inc. and its
debtor-affiliates' exclusive period to file a chapter 11 plan of
reorganization until Dec. 31, 2006.
Judge Walrath also extended the Debtors' exclusive period to
solicit acceptances of that plan until March 1, 2007.
As reported in the Troubled Company Reporter on Oct. 16, 2006, the brief
extension of the Exclusive Periods is intended to enable the Debtors to
continue the Plan process in an orderly, efficient, and cost-effective
manner.
Moreover, the extension of the Exclusive Periods will enable the
Debtors to solicit acceptances of the Fourth Amended Plan, and to pursue its
confirmation without the distraction that would be
attendant to the filing of a competing plan.
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. 42; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
MERIDIAN AUTOMOTIVE: Has Until March 1 to Remove Civil Actions
--------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District
of Delaware extended Meridian Automotive Systems Inc. and its
debtor-affiliates' time to exclusively file notices of removal of
prepetition civil actions to and including
March 1, 2007.
As reported in the Troubled Company Reporter on Oct. 16, 2006, the Debtors
asserted that the extension would give them more time to make fully informed
decisions concerning removal of each pending prepetition civil action and
will ensure that they do not forfeit their rights under Section 1452 of the
Judiciary and Judicial Procedures Code.
The rights of the Debtors' adversaries will not be prejudiced by
the extension because any party to a prepetition action that is
removed may seek to have it remanded to the state court pursuant
to Section 1452(b).
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. 42; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
RADIOSHACK CORP: Fitch Affirms Low B Ratings
--------------------------------------------
Fitch affirms its ratings on RadioShack Corporation (RadioShack) as:
-- Issuer Default Rating at 'BB+';
-- Bank credit facility at 'BB+';
-- Senior unsecured notes at 'BB+'; and
-- Commercial Paper at 'B'.
The Rating Outlook has been revised to Negative from Stable. Approximately
US$550 million of debt is affected by these actions.
The change in Outlook reflects RadioShack's weaker-than-anticipated
operating results year-to-date in 2006 and our concern about revenue trends
and the company's ability to meaningfully cut costs. The ratings continue
to reflect RadioShack's weakness in the wireless business and competitive
operating environment as well as ongoing turnaround efforts and adequate
liquidity available to meet the company's near-term capital and debt service
requirements.
RadioShack has experienced weakness in its core wireless business that
represents about one-third of its total revenues. Wireless sales were down
9% in the first nine months of 2006, reflecting the company's struggle to
attract customers to the Cingular network despite targeted marketing efforts
especially in the northeast and northwest regions. In addition, an
unfavorable merchandise mix of higher sales of prepaid wireless services and
upgrade handsets as well as lower-margin accessories have compressed gross
margin, contributing to a decline in the company's EBITDAR margin to 13.3%
in the twelve months ended Sept. 30, 2006, from 16.4% a year earlier.
As a result of the company's weak sales and lower operating margins, its
credit metrics have deteriorated. Funds from Operations fixed charge
coverage dropped to 1.5x in the twelve months ending Sept. 30, 2006, from
2.0x in 2005 while total adjusted debt/EBITDAR increased to 4.5x from 3.5x
over the same period. Nevertheless, RadioShack has sufficient liquidity to
meet its capital needs with cash of approximately US$276 million and
availability of around US$575 million under its credit facilities as of
Sept. 30, 2006.
Fitch anticipates there will be improvements in operating margins in 2007
resulting from the new management team's execution of the company's
turnaround plan to reduce costs and improve operational efficiency, which
includes closure of underperforming stores, reduction in headquarters
staffing, an updated inventory mix and newly-remodeled stores.
Nevertheless, Fitch expects generating top-line momentum to remain
challenging and credit metrics to remain below their historical levels over
the near to medium term.
Of ongoing concern is the intense competition in the highly fragmented
consumer electronics industry and increased distribution channels in the
wireless business. RadioShack competes with national big-box retailers who
can offer a larger selection of consumer electronics products given the
larger square footage in their stores and discounters who can offer
private-label electronics at more attractive price points. In addition, the
distribution channels for wireless products and services have expanded over
time as consumers can purchase the items now through stores operated by the
wireless carriers as well as the Internet.
Fort Worth, Texas-based RadioShack Corp. --
http://www.RadioShackCorporation.com/-- is a consumer
electronics specialty retailers and a growing provider of retail
support services. The company operates a network of sales
channels, including: more than 6,000 company and dealer stores;
more than 100 RadioShack locations in Mexico and Canada; and
nearly 800 wireless kiosks.
VALASSIS COMM: Moody's Lowers Sr. Unsecured Note Rating to Ba1
--------------------------------------------------------------
Moody's Investors Service downgraded Valassis Communications, Inc.'s senior
unsecured note ratings to Ba1 from Baa3. Moody's also assigned a Ba1
Corporate Family Rating, Ba1 Probability of Default Rating, and LGD4 loss
given default assessments to Valassis' debt securities. The ratings remain
on review for downgrade.
Moody's downgraded this rating:
-- Senior Unsecured Regular Bond/Debenture, Downgraded to
Ba1 from Baa3.
Moody's made these assignments:
-- Corporate Family Rating, Assigned Ba1;
-- Probability of Default Rating, Assigned Ba1; and
-- Senior Unsecured Regular Bond/Debenture loss given default
assessment, Assigned LGD4-56;
The downgrade reflects Moody's belief that deterioration in the company's
earnings due to significant downward pressure on free-standing insert
pricing into 2007 and customer consolidation in the neighborhood targeting
segment, and the company's focus on shareholder value-enhancement
initiatives, as demonstrated by the pursuit of the leveraging ADVO
acquisition, will lead to a more aggressive leverage profile. In Moody's
opinion, Valassis' modest size and the competitive profile of its business
dictate a commitment to a very conservative capital structure to maintain an
investment grade rating. The company's current leverage, even without the
ADVO transaction (debt-to-EBITDA for 2006 about 2.5 x incorporating Moody's
standard adjustments), no longer supports the Baa3 rating. Further, there
can be no assurance that Valassis will not seek to increase its risk profile
to boost returns to shareholders if the ADVO transaction is terminated.
The ratings remain on review for downgrade pending the outcome of the
litigation related to the ADVO acquisition. Consummation of the ADVO
acquisition at the US$37 per share price set forth in the July 5th, 2006
merger agreement would likely result in a multi-notch downgrade of the CFR.
Valassis Communications, Inc. headquartered in Livonia, Michigan, offers a
wide range of promotional and advertising products including newspaper
advertising and inserts, sampling, direct mail, targeted marketing, coupon
clearing and consulting and analytic services.
Headquartered in Livonia, Michigan, Valassis Communications Inc.
-- http://www.valassis.com/-- offers a wide range of marketing services to
consumer packaged goods manufacturers, retailers, technology companies and
other customers with operations in the United States, Europe, Mexico and
Canada.
X-RITE INC: Moody's Assigns Loss-Given-Default Ratings
------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the U.S. technology semiconductor and distributor sector,
the rating agency affirmed its B1 corporate family rating on X-Rite, Inc.
Additionally, Moody's revised or held its probability-of-default
ratings and assigned loss-given-default ratings on these loans and bond debt
obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
US$40MM Sr. Secured
1st Priority
Revolver due 2011 B1 Ba3 LGD3 34%
US$120MM Sr. Secured
1st Priority
Term Loan due 2012 B1 Ba3 LGD3 34%
US$60MM Sr. Secured
2nd Priority Term
Loan due 2012 B3 B3 LGD5 86%
Moody's explains that current long-term credit ratings are
opinions about expected credit loss, which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology will also
enhance the consistency in Moody's notching practices across industries and
will improve the transparency and accuracy of Moody's ratings as Moody's
research has shown that credit losses on bank loans have tended to be lower
than those for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion of
expected loss are expressed as a percent of principal and accrued interest
at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6
(loss anticipated to be 90% to 100%).
Headquartered in Grandville, Michigan, X-Rite Incorporated
(Nasdaq: XRIT) -- http://www.xrite.com/-- offers color
measurement technology solutions comprised of hardware, software
and services for the verification and communication of color data. The
Company serves a broad range of industries, including graphic arts, digital
imaging, industrial and retail color matching, and medical, among other
industries. X-Rite is global, with 21 offices throughout Europe, Asia, and
the Americas, serving customers in 100 countries.
The X-Rite Latin America sales team provides assistance to customers in
Mexico, Central and South America, and the Caribbean. X-Rite's sales team
works together with highly qualified local vendors and distributors to
ensure the best possible personalized customer assistance, offering a wide
and unparalleled array of products, support and repair services.
===========
P A N A M A
===========
HUNTSMAN INTERNATIONAL: S&P Rates Senior Subordinated Notes at B
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to Huntsman
International LLC's proposed senior subordinated notes due 2014 and 2013.
The 'B' rating is two notches below the corporate credit rating to reflect
the deeply subordinated position of the noteholders versus approximately
US$3.1 billion of senior and secured debt obligations in the capital
structure as of Sept. 30, 2006. The proceeds from the proposed notes,
estimated to be US$394 million, will be used to redeem the company's
existing 10.125% senior subordinated notes due 2009, and to pay related
fees. The ratings on the proposed notes have been placed on CreditWatch
with positive implications.
Standard & Poor's revised the CreditWatch implications on all of our ratings
for Salt Lake City, Utah-based chemicals producer Huntsman Corp., and its
affiliate Huntsman International, to positive from developing on Sept. 29,
2006. This followed the announcement that Huntsman had signed a definitive
agreement with Saudi Basic Industries Corp. (SABIC; A+/Stable/A-1), under
which SABIC will acquire Huntsman's European base chemicals and polymers
business for US$700 million in cash (prior to closing adjustments) and the
assumption of approximately US$126 million of pension liabilities.
"If completed as planned, the transaction would be an important step forward
in the transformation of the portfolio toward greater reliance on
differentiated product categories, while providing meaningful cash for debt
reduction," said Standard & Poor's credit analyst Kyle Loughlin.
The CreditWatch indicates that the ratings could be raised modestly upon
completion of the sale, with the corporate credit rating potentially being
raised to 'BB' from 'BB-'. The transaction is subject to regulatory
approval and expected to close by the end of 2006.
Standard & Poor's expects to resolve the CreditWatch listing upon completion
of the pending sale of the U.K. petrochemical assets, or if uncertainty
related to additional asset sales remains at that time, upon review of any
subsequent developments.
Huntsman is globally manufactures and markets differentiated and commodity
chemicals. Its operating companies manufacture products for a variety of
global industries including chemicals, plastics, automotive, aviation,
textiles, footwear, paints and coatings, construction, technology,
agriculture, health care, detergent, personal care, furniture, appliances
and packaging.
Originally known for pioneering innovations in packaging, and later, for
rapid and integrated growth in petrochemicals, Huntsman has 15,000 employees
and 78 operations in 24 countries including Argentina, Brazil, Chile,
Colombia, Panama, Mexico and Guatemala. The company had 2005 revenues of
US$13 billion.
=====================
P U E R T O R I C O
=====================
ADELPHIA COM: Discloses Claims Classification Under Revised Plan
----------------------------------------------------------------
The Adelphia Communications Corp. Debtors disclosed the classification of
claims under its Revised Fifth Amended Plan of
Reorganization.
The Revised Draft Fifth Amended Plan contains 11 new types of
claims or equity interests:
(a) Century Bank Claims Administrative Agent Claims,
(b) Century Bank Claims Non-Administrative Agent Claims,
(c) Century Syndicate Claims,
(d) Century Wachovia Claims,
(e) Century BMO Claims,
(f) FrontierVision Bank Claims,
(g) Olympus Bank Claims Administrative Agent Claims,
(h) Olympus Bank Claims Non-Administrative Agent Claims,
(i) Olympus Bank Syndicate Claims,
(j) Olympus Wachovia Claims,
(k) Olympus BOFA Claims,
(l) UCA Bank Claims Administrative Agent Claims,
(h) UCA Bank Claims Non-Administrative Agent Claims,
(i) UCA Bank Syndicate Claims,
(j) UCA BMO Claims, and
(k) UCA BOFA Claims.
The new classes of Bank Claims are revisions to:
-- the Century Bank Claims Class,
-- the FrontierVision Bank Claims Class,
-- the Olympus Bank Claims Class, and
-- the UCA Bank Claims Class.
The new Bank Classes will receive payment in full in cash, subject to
disgorgement and certain other conditions.
Each holder of Bank Claims in a class that accepts the Plan will
also receive Bank Fee Claims for fees and expenses actually billed and
accrued and not pre-billed for future anticipated services.
Except for the Bank Syndicate Claims Classes, the estimated total recovery
of the Bank Claims is 100%.
The Bank Claims Classes are impaired and are entitled to vote.
The Plan also reflects revisions to the recoveries and treatment
of certain Claim Classes:
Type of Claim Treatment
------------- ---------
A. GENERAL
Administrative Claims Paid in full in cash.
Estimated total recovery: 100%
Estimated claims: US$901,000,000
B. SUSIDIARY DEBTORS
Subsidiary Debtor Paid in full in cash, plus
Secured Claims accrued postpetition interest
from the Petition Date through
the Effective Date, at the
Applicable Rate.
Estimated total recovery: 137%
Estimated claims: US$57,000,000
Unimpaired; not entitled to
vote
FPL Notes Payment through distribution
of cash and TWC Class A Common
Stock equal to payment in full,
and of CVV Series FPL Interests.
Estimated total recovery: 122%
Estimated claims: US$127,000,000
Impaired; entitled to vote
Olympus Notes Payment through distribution
of cash and TWC Common Stock
equal to payment in full, and of
CVV Series Olympus Interests.
Estimated total recovery: 139%
Estimated claims: US$213,000,000
Impaired; entitled to vote
C. ACOM DEBTORS
ACOM Debtors Secured Paid in full in cash.
Claims Estimated total recovery: 137%
Estimated claims:
Unimpaired; not entitled to
vote
ACOM Senior Notes Payment through distribution
of cash and TWC Common Stock,
and of CVV Series ACC-1
Interests.
Estimated total recovery: 58%
Estimated claims:
US$5,110,000,000
Impaired; entitled to vote
ACOM Trade Claims Payment through distribution
of cash and TWC Common Stock,
and of CVV Series ACC-2
Interests.
Estimated total recovery:
42% - 45%
Estimated claims: US$293,000,000
Impaired; entitled to vote
ACOM Other Unsecured Payment through distribution
Claims of cash and TWC Common Stock
and of CVV Series ACC-3
Interests.
Estimated total recovery:
42% - 45%
Estimated claims: US$89,000,000
Impaired; entitled to vote
Based in Coudersport, Pa., Adelphia Communications Corp.
(OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest
cable television company in the country. Adelphia serves
customers in 30 states and Puerto Rico, and offers analog and
digital video services, high-speed Internet access and other
advanced services over its broadband networks. The Company and
its more than 200 affiliates filed for Chapter 11 protection in
the Southern District of New York on June 25, 2002. Those cases
are jointly administered under case number 02-41729. Willkie Farr &
Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the
Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and
Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of
Unsecured Creditors.
Adelphia Cablevision Associates of Radnor, L.P., and 20 of its
affiliates, collectively known as Rigas Manged Entities, are
entities that were previously held or controlled by members of the Rigas
family. In March 2006, the rights and titles to these
entities were transferred to certain subsidiaries of Adelphia
Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March
31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases
are jointly administered under Adelphia Communications and its
debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No.
150; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
CARIBBEAN RESTAURANTS: Moody's Assigns Loss-Given-Default Rating
----------------------------------------------------------------
In connection with Moody's Investors Service's implementation of
its new Probability-of-Default and Loss-Given-Default rating
methodology for the restaurant sector, the rating agency confirmed its B2
Corporate Family Rating for Caribbean Restaurants LLC.
In addition, Moody's revised its rating on the company's US$30
million Senior Secured Revolver Due 2009 and US$180 million senior Secured
Term Loan B Due 2009 to B1 from B2. Moody's assigned those loan facilities
an LGD3 rating suggesting lenders will experience a 33% loss in the event of
default.
Moody's explains that current long-term credit ratings are
opinions about expected credit loss which incorporate both the
likelihood of default and the expected loss in the event of
default. The LGD rating methodology will disaggregate these two
key assessments in long-term ratings. The LGD rating methodology will also
enhance the consistency in Moody's notching practices across industries and
will improve the transparency and accuracy of Moody's ratings as Moody's
research has shown that credit losses on bank loans have tended to be lower
than those for similarly rated bonds.
Probability-of-default ratings are assigned only to issuers, not
specific debt instruments, and use the standard Moody's alpha-
numeric scale. They express Moody's opinion of the likelihood
that any entity within a corporate family will default on any of
its debt obligations.
Loss-given-default assessments are assigned to individual rated
debt issues -- loans, bonds, and preferred stock. Moody's opinion of
expected loss are expressed as a percent of principal and accrued interest
at the resolution of the default, with
assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6
(loss anticipated to be 90% to 100%).
Caribbean Restaurants LLC is a Puerto Rican fast-food company.
FIRST BANCORP: Fitch Places Ratings on Negative Watch
-----------------------------------------------------
Fitch Ratings has placed First Bancorp's long-term issuer default ratings
'BB' and Individual ratings 'C/D' on Rating Watch Negative. At the same
time, Fitch is affirming the ratings of First Bancorp's subsidiary,
FirstBank of Puerto Rico at 'BB' and 'B', respectively. The bank's Rating
Outlook is Negative.
In December 2005, First Bancorp liquidated certain securities at the parent
to make a capital contribution to the bank. While this had a positive
effect of restoring capital ratios at the bank, it depleted a substantial
portion of liquid assets at the parent. The weakened liquidity profile is
exacerbated by the requirements for dividend approval by regulators.
Positively, First Bancorp has enhanced its liquidity contingency planning at
the parent. As part of the regulatory agreement in place, First Bancorp
submitted a written plan to provide for the maintenance of an adequate
liquidity position, including establishing appropriate liquidity measures at
the parent, and maintenance of sufficient liquidity to meet commitments and
unanticipated needs. While further enhancement is needed, the increase in
capital ratios, and continued dividend approval from regulators evidences
that First Bancorp is making progress and meeting current needs. Fitch will
closely monitor the progress of enhancing parent company liquidity in the
near term to resolve the Negative Rating Watch.
Ratings reflect outstanding restated financials, an ongoing investigation by
the Securities and Exchange Commission, the formal regulatory agreements in
place, shareholder lawsuits, and weaker financial performance. At the same
time, the company has made progress as it continues to navigate through its
accounting problems. First Bancorp recently filed its restated financials
for 2000-2004, and has achieved some success in addressing the reduction of
the mortgage-related transactions with Doral Financial Corporation and R & G
Financial (RGF). In May, First Bancorp recovered US$2.4 billion of its
US$2.9 billion loan to Doral, largely addressing the bank regulators'
concern of the single borrower concentration risk to Doral. The company
continues to work with both Doral and R&G in reducing remaining balances.
Beyond accounting-related problems, the company's financial performance has
been substantially weakened. Elevated expenses associated with restatement,
legal issues and contingency costs are also squeezing profitability. While
some of these expenses should be nonrecurring in nature, core earnings are
still estimated to be fairly weak. Margin contraction is also pressured by
a levered balance sheet, the rate differential on its interest rate swaps
which are Libor-based, and the loss of interest income from the repayment of
Doral loans which were floating rate assets. A slower local economy will
also likely keep earnings under pressure.
Resolution of the Negative Outlook will focus on the ongoing challenges of
managing through the accounting, funding and financial aspects related to
the mortgage transactions. A return to a Stable Rating Outlook will likely
not precede the conclusion of the audited financials, SEC investigation,
settlement of lawsuits and regulatory agreements, and the expectation of a
period of steady state performance.
These ratings have been placed on Rating Watch Negative:
First BanCorp
-- Long-term IDR at 'BB'; and
-- Individual at 'C/D'.
These ratings have been affirmed with a Negative Outlook:
First BanCorp
-- Short-term at 'B'; and
-- Support '5'.
FirstBank Puerto Rico
-- Long-term IDR at 'BB';
-- Long-term deposit obligations at 'BB+';
-- Short-term deposit obligations at 'B';
-- Short-term at 'B';
-- Individual at 'C/D'; and
-- Support at '5'.
First BanCorp (NYSE: FBP) -- http://www.firstbankpr.com/-- is
the parent corporation of FirstBank Puerto Rico, a state
chartered commercial bank with operations in Puerto Rico, the
Virgin Islands and Florida; of FirstBank Insurance Agency; and
of Ponce General Corporation. First BanCorp, FirstBank Puerto
Rico and FirstBank Florida, formerly UniBank, the thrift
subsidiary of Ponce General, all operate within U.S. banking
laws and regulations.
PEP BOYS: Closes US$120MM Expansion of Senior Unsecured Loan
------------------------------------------------------------
The Pep Boys-Manny, Moe & Jack closed on a US$120 million expansion of its
senior secured term loan facility syndicated by Wachovia Capital Markets,
LLC.
The facility was amended and restated to
(i) increase the size from US$200,000,000 to US$320,000,000,
(ii) extend the maturity from Jan. 27, 2011, to
Oct. 27, 2013, and
(iii) reduce the interest rate from London Interbank Offered
Rate or LIBOR plus 3.00% to LIBOR plus 2.75% (with the
ability to further reduce the interest rate to LIBOR
plus 2.50%, upon achieving a specified leverage ratio).
An additional 87 stores (bringing the total to 241
stores) were added to the collateral pool securing
the facility.
Proceeds were used to satisfy and discharge US$119 million in outstanding
convertible notes that mature June 1, 2007. Such notes, however, do remain
convertible into shares of the company's common stock, at approximately
US$22.40 per share, through maturity. The company expects:
(i) to record, in the third quarter, approximately US$3.5
million dollars in costs associated with such
satisfaction and discharge and
(ii) to earn, in future periods through the notes' maturity
date, an approximately equivalent amount of interest on
the funds placed into escrow to effectuate such
satisfaction and discharge.
CFO Harry Yanowitz said, "We are very pleased with the support we received
from our current lenders in expanding this facility. This final piece of a
three-year program of extending our debt maturity schedule now leaves the
Company with no significant funded debt maturities until 2013, allowing Pep
Boys to focus its energies squarely on operating improvements."
The Pep Boys - Manny, Moe & Jack -- http://pepboys.com/-- has
593 stores and more than 6,000 service bays in 36 states and
Puerto Rico. Along with its vehicle repair and maintenance
capabilities, the Company also serves the commercial auto parts
delivery market and is one of the leading sellers of replacement
tires in the United States.
* * *
As reported in the Troubled Company Reporter on Sept. 22, 2006,
Standard & Poor's Ratings Services affirmed its 'B+' rating on
Pep Boys-Manny, Moe & Jack's term loan after the company
announced plans to increase the size of the facility by US$120
million to US$320 million. Proceeds from the additional US$120
million term loan will be used to refinance its convertible
notes which mature in June 2007. At the same time, the rating
on the US$357.5 million asset-based revolver was raised to 'B+'
from 'B' to properly realign its ratings with the term loan and
to reflect Standard & Poor's increased comfort with the
collateral and terms securing this facility. The 'B-' corporate
credit and other ratings were affirmed; the outlook is negative.
PILGRIM'S PRIDE: Extends Gold Kist Notes Tender Offer to Nov. 29
----------------------------------------------------------------
Pilgrim's Pride Corp. has extended its tender offer to purchase all of the
outstanding shares of Gold Kist Inc. common stock for US$20.00 per share in
cash. The offer and withdrawal rights, which were scheduled to expire at
midnight, New York City Time, on Oct. 27, 2006, have been extended until
5:00 p.m., New York City Time, Nov. 29, 2006, unless further extended.
Gold Kist's stock price, on average, has been approximately 50% of the
Pilgrim's Pride stock price since Gold Kist's initial public offering in
2004. While stocks in the poultry industry are subject to significant
volatility, applying this average relative trading value of 50% to Oct. 27,
2006, Pilgrim's Pride closing stock price of US$25.16 implies a Gold Kist
stock price of approximately US$12.76. The offer therefore represents an
approximately 57% premium to this implied Gold Kist stock price. The offer
also represents a 55% premium over Gold Kist's closing stock price of
US$12.93 per share on Aug. 18, 2006, the last day of trading before
Pilgrim's Pride notified Gold Kist's board of directors in a public letter
that it was offering US$20 per share in cash for the company.
As of midnight on Oct. 27, 2006, a total of approximately 16.84
million shares of Gold Kist common stock, or approximately 33% of Gold
Kist's outstanding shares, had been tendered and not withdrawn.
On Sept. 29, 2006, Pilgrim's Pride commenced its tender offer to purchase
all of the outstanding shares of Gold Kist common stock for US$20 per share
in cash. The transaction is valued at approximately US$1 billion, plus the
assumption of approximately US$144 million of Gold Kist's debt.
Pilgrim's Pride also extended its offer to purchase and related consent
solicitation for Gold Kist's outstanding 10-1/4% Senior Notes due March 15,
2014, until 5:00 p.m., New York City Time, Nov. 29, 2006, unless further
extended. The debt tender offer is being made in connection with Pilgrim's
Pride's proposed acquisition of Gold Kist. As of midnight on Oct. 27, 2006,
the company had received tenders and related consents with respect to
approximately 99.9% of the aggregate principal amount of the outstanding
Gold Kist Notes. In accordance with the terms of the Offer to Purchase the
Gold Kist Notes and as previously announced, tenders of the Notes and
related consents to proposed amendments to the indenture governing the Gold
Kist Notes became irrevocable as of 5:00 p.m. on Oct. 13, 2006, and tenders
of Notes and consents delivered after that date will also be irrevocable.
In accordance with the terms of the offer, a new price determination date
for the Gold Kist Notes will be fixed (which will be 10:00 a.m. New York
City time on the eleventh business day immediately preceding the new
expiration date) and the consideration to be paid to holders of Gold Kist
Notes will be redetermined as of the new date.
On Oct. 17, 2006, Pilgrim's Pride disclosed that the Antitrust Division of
the Department of Justice has granted early termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in
connection with its tender offer for the outstanding shares of Gold Kist.
Baker & McKenzie LLP and Morris, Nichols, Arsht & Tunnell, LLP are acting as
legal counsel and Credit Suisse, Legacy Partners Group LLC and Lehman
Brothers Inc. are acting as financial advisors to Pilgrim's Pride.
Innisfree M&A Incorporated is acting as information agent for Pilgrim's
Pride's offer.
Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corp.
(NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and
markets poultry processed products through retailers, foodservice
distributors and restaurants in the United States, Mexico and in Puerto
Rico. Pilgrim's Pride employs approximately 40,000 people and has major
operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North
Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and
Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi
and Utah.
* * *
In connection with Moody's Investors Service's implementation of its new
Probability-of-Default and Loss-Given-Default rating methodology for the
U.S. Consumer Products sector, the rating agency held its Ba2 Corporate
Family Rating for Pilgrim's Pride Corp. In addition, Moody's revised or
held its probability-of- default ratings and assigned loss-given-default
ratings on the company's note issues, including an LGD6 rating on its US$100
million 9.250% Sr. Sub. Global Notes Due Nov. 15, 2013, suggesting
noteholders will experience a 95% loss in the event of a default.
R&G FINANCIAL: Late Filing Cues Fitch to Lower Rating to BB
-----------------------------------------------------------
Fitch Ratings has lowered R&G Financial Corporation's long-term issuer
default rating to 'BB' from 'BBB-'. The Rating Outlook is Negative.
The rating action is driven by concerns which center on longer than expected
delay in releasing audited financial statements for fiscal year-end 2005 and
quarterly financials for 2006, regulatory restrictions on subsidiaries
including recently received cease and desist at R-G Crown Bank, operational
performance in 2006, and mix and level of capitalization.
The resolution of the Rating Outlook Negative will be driven by the
establishment of timely filing of financial statements and greater clarity
regarding the magnitude and timing of the resolutions for various issues
facing R&G Financial. These issues would include regulatory agreements and
restrictions, the SEC investigation, and shareholder lawsuits. In addition,
management's ability to remain well capitalized and improve capitalization
levels and mix, and demonstrated ongoing steady state level of profit
generation will be reviewed.
Following the restatement and unwinding of mortgage sales, R&G Financial's
capital levels are at the low end of the current rating category. Somewhat
offsetting the low capital levels, is the reduction/elimination of the
riskier assets on R&G Financial's books, including residual interests and
mortgage servicing rights. The capital structure has a large percentage of
hybrid equity versus peers. In late March 2006, R&G was able to increase
their capitalization with US$139.7 million of preferred stock. Fitch
expects the capital levels to remain at the low levels over the near term as
profitability will be pressured and internal capital formation will be low.
Fitch would view positively the issuance of common equity to improve
capitalization and would view any additional hybrid equity as debt due to
the current hybrid equity levels.
The lack of audited financial statements pressures the company's ability to
attain cost efficient funding. R&G Financial has been able to attain
funding, liquidity, and capital but has paid a premium that has effected the
profitability of the company. In addition, the amount of operational
resources allocated to the restatement has been taking away from the
day-to-day operations as seen by the operational issues causing a cease and
desist order issued on R-G Crown Bank.
R&G Financial has made many high-level management changes since the
announcement of the restatement. The continued management changes at the
CFO level do little to add stability to a firm with many pressing issues.
Although mid-level management seems to be keeping the day-to-day operations
performing, upper management has been unable to devote a normal level of
direction and oversight due to the extensive demands required to resolve the
aforementioned regulatory and accounting issues.
These ratings have been downgraded by Fitch:
R&G Financial Corporation
-- Long-term IDR to 'BB' from 'BBB-';
-- Preferred stock to 'B' from 'BB'; and
-- Individual to 'D' from 'C'.
R-G Premier Bank
-- Long-term IDR to 'BB' from 'BBB-';
-- Short-term issuer to 'B' from 'F3';
-- Long-term deposit obligations to 'BB+' from 'BBB';
-- Short-term deposit obligations to 'B' from 'F3'; and
-- Individual to 'C/D' from 'C'.
R-G Crown Bank
-- Long-term IDR to 'BB' from 'BBB-';
-- Short-term issuer to 'B' from 'F3';
-- Long-term deposit obligations to 'BB+ from 'BBB'; and
-- Individual to 'C/D' from 'C'
R&G Mortgage
-- Long-term IDR to 'BB' from 'BBB-'.
In addition, Fitch rates the following:
R-G Premier Bank
-- Support '5'.
R&G Financial Corporation
-- Support '5'.
R-G Crown Bank
-- Support '5'.
=================================
T R I N I D A D & T O B A G O
=================================
HILTON HOTELS: Expects US$2.5 Bil. Revenue from Website Bookings
----------------------------------------------------------------
Hilton Hotels Corp. expects more than US$2.5 billion in revenues generated
from bookings on its proprietary websites for the full-year 2006 compared to
US$709 million five years ago, in 2002. The company further reports that
bookings through its websites have increased at a steady 30% year over year
since 2002, and accelerated to a 39% increase in the third quarter of 2006
versus the third quarter of 2005. This represents a 60% increase in
revenues and a 43% increase in room nights for third quarter 2006 versus
prior year.
Website bookings currently represent 17.2% of the company's overall
distribution of bookings, compared with 9.1% in 2002, making it the most
dominant central delivery channel for the company. In contrast,
contribution of third-party online agencies has remained flat at 3% of
reservations, and now represents just 15% of the company's Internet
business.
Websites contributing to the record-breaking increases in bookings include:
-- www.hilton.com,
-- www.conradhotels.com,
-- www.doubletree.com,
-- www.embassysuites.com,
-- www.hamptoninn.com,
-- www.hiltongardeninn.com,
-- www.hgvc.com,
-- www.homewoodsuites.com and
-- www.scandichotels.com.
"Our brand site bookings have increased at a staggering pace since 2002 and
will continue to show compounded increases through the remainder of 2006 and
beyond," said Tom Keltner, president -- brand performance and development
group, Hilton Hotels Corp. "With its acquisition of the lodging assets of
Hilton Group plc and a growing international presence, website bookings
outside of North America represent the next frontier for significant growth,
where we are in the process of implementing our successful online
distribution strategy and enhanced features."
"The Hilton Family of Hotels has made numerous enhancements to its websites
that place more choice and control in the guest's hands, making it even more
convenient for them to find the right hotel accommodations and services at
the best value," said Bala Subramanian, senior vice president --
distribution and brand integration for Hilton Hotels Corporation. "From a
business standpoint, these enhancements will enable our company to continue
increasing the%age of website bookings across all of its brands. Already,
our Hilton Family of Hotels websites collectively rank among some of the
largest revenue-generating commercial/retail sites in the world, excluding
those that generate advertising revenue."
Recently Introduced Industry-Leading
Website Enhancements
These online booking features have been introduced or enhanced within the
past 18 months, resulting in the increased bookings on the company's brand
websites:
-- e-Events is an industry first small group product that
enables customers to go online and book anywhere from five
to 25 Guest Rooms at any Hilton Family hotel with
real-time, instant booking confirmation of guest rooms,
meeting rooms, and food & beverage. No RFP (request for
proposal) is required -- the entire transaction is online.
In addition, the e-Events product includes a Guest List
Manager, that allows customers and meeting planners to
book multiple reservations at a time, as well as view and
manage their group guest lists/ reserved rooms.
-- Calendaring is another first in the hotel industry, which
enables customers with flexible travel dates to view
at-a-glance a single hotel's best available rates and
discounted advance purchase rates for their preferred
length of stay across a 31-day span, and mix and match
options that work best for their schedule. Members of the
Hilton HHonors guest reward program may also use this
feature to view award redemption availability to more
easily plan/book their reward vacations online.
-- Compare/Travel Cart features allow customers the option to
compare hotels side by side, without the hassle of jumping
from one page to the other, and the ability to store
hotels in a "shopping cart" for future access. The
customer now has the appropriate level of information in
an easy to read format, so they can more quickly make a
well-informed purchasing decision.
-- eCheck-in allows Gold and Diamond Hilton HHonors members
the convenience of checking in on the Web from two to 36
hours prior to their arrival regardless of method of
reservation. They can pre-select a specific room with
features that best meet their needs and print a
confirmation in less than two minutes. Upon arrival,
guests simply stop at the desk or a lobby kiosk to collect
their room key. Hilton was the first hotel company to
introduce online check-in across multiple brands, enabled
by its proprietary OnQ platform.
-- Travel Agent Portal is a one-stop, dedicated portal where
any travel agent planning a trip can easily find all the
hotel information they need including images/virtual
tours, access the full-array of available Hilton Family
products, as well as other convenient resources and agent
services (such as the Unlimited Budget(r) travel agent
incentive program, real-time commission inquiry).
-- Weddings Portal offers an easy and uniquely tailored
experience for wedding planners and their guests,
available on each of the Hilton Family of Hotels Websites.
Features of the portal include event planning resources
such as Wedding Checklist, Banquet Space Calculator,
Request Pricing, the ability to reserve and confirm guest
rooms, and manage your invitees through your own
Personalized Online Group that also includes Guest List
Manager.
In addition to the above-mentioned features, Hilton continues to evolve its
websites based on customer input. Last week's launch of redesigned brand
home pages include many customer designed enhancements including
improvements in search, reservations, navigation and access to
specials/promotions all of which add up to more guest control, more choice,
greater flexibility, ease of use, and speed. Please visit selected brand
websites' News & Updates section to enjoy a website tour.
Encouraging loyalty to its brand websites, Hilton Hotels Corporation
introduced Our Best Rates Guaranteed in 2003. If consumers who book
confirmed reservations for a Hilton Family hotel stay within the U.S.,
having booked their reservation through any of the Hilton Family booking
channels -- (i.e. brand websites, Hilton Reservations Worldwide toll-free
reservations or directly at a Hilton Family hotel) and find a lower publicly
available rate on some other booking channel within 24 hours of making the
reservation, the Hilton Family of Hotels will match it, plus give the guest
a US$50 American Express Gift Cheque.
Headquartered in Beverly Hills, California, Hilton Hotels Corp.
-- http://www.hilton.com/-- together with its subsidiaries, engages in the
ownership, management, and development of hotels, resorts, and timeshare
properties, as well as in the franchising of lodging properties in the
United States and internationally, including Australia, Austria, Barbados,
India, Indonesia, Trinidad and Tobago, Philippines and Vietnam.
* * *
In connection with Moody's Investors Service's implementation of its new
Probability-of-Default and Loss-Given-Default rating methodology for the
gaming, lodging and leisure sectors, the rating agency confirmed its Ba2
Corporate Family Rating for Hilton Hotels Corporation.
Additionally, Moody's revised and held its probability-of-default ratings
and assigned loss-given-default ratings on these loans and bond debt
obligations:
Projected
Old POD New POD LGD Loss-Given
Debt Issue Rating Rating Rating Default
---------- ------- ------- ------ ----------
Senior Notes
with an average
rate of 8.1%
due 2007 - 2031 Ba2 Ba2 LGD4 53%
Chilean inflation
indexed note
effective rate
7.65% due 2009 Ba2 Ba2 LGD4 53%
3.375%
Contingently
convertible
senior notes
due 2023 Ba2 Ba2 LGD4 53%
Minimum Leases
Commitments Ba2 Ba2 LGD4 53%
Term Loan A
at adjustable
rates due 2011 Ba2 Ba2 LGD4 53%
Term Loan B
at adjustable
rates due 2013 Ba2 Ba2 LGD4 53%
Revolving loans
at adjustable
rates, due 2011 Ba2 Ba2 LGD4 53%
Senior unsecured
debt shelf Ba2 Ba2 LGD4 53%
Subordinate debt
Shelf Ba3 B1 LGD6 97%
Preferred B1 B1 LGD6 97%
=================
V E N E Z U E L A
=================
INTERNATIONAL PAPER: Completes US$1.13-Bil. Sale of Forestland
--------------------------------------------------------------
International Paper has completed the sale of 900,000 acres of forestland in
Louisiana, Texas and Arkansas to TimberStar Southwest, whose lead investor
is TimberStar, a subsidiary of iStar Financial Inc. for approximately
US$1.13 billion in cash and notes.
The transaction was announced in April 2006 as part of International Paper's
sale of the majority of its U.S. forestlands. In connection with the
transaction, the parties also entered into a 50-year fiber supply agreement
for IP's pulp and paper mills, and a 30-year fiber supply agreement for IP's
wood products facilities, both at market prices. Under TimberStar Southwest
management, the forestlands will continue to be managed and third-party
certified under the requirements of the Sustainable Forestry Initiative
Standard.
About TimberStar and iStar Financial Inc.
Atlanta-based TimberStar, a new timber and timberland company, was founded
in 2005 for the purpose of acquiring productive forestlands and managing
them for long-term timber production. TimberStar is a subsidiary of iStar
Financial, Inc., and is managed by industry veterans Jerry Barag and John
Rasor.
The former IP lands in Louisiana, Texas and Arkansas lands will be managed
as TimberStar Southwest from a central office in Shreveport, La. TimberStar
has additional landholdings in the Northeastern United States.
About International Paper
Based in Stamford, Connecticut, International Paper Company
(NYSE: IP) -- http://www.internationalpaper.com/-- is in the
forest products industry for more than 100 years. The company
is currently transforming its operations to focus on its global
uncoated papers and packaging businesses, which operate and
serve customers in the U.S., Europe, South America and Asia.
Its South American operations include, among others, facilities
in Argentina, Brazil, Bolivia, and Venezuela. These businesses
are complemented by an extensive North American merchant
distribution system. International Paper is committed to
environmental, economic and social sustainability, and has a
long-standing policy of using no wood from endangered forests.
* * *
Moody's Investors Service assigned a Ba1 senior subordinate
rating and Ba2 Preferred Stock rating on International Paper
Company on Dec. 5, 2005.
* IDB Says Latin America Needs safer Sovereign Debt Management
--------------------------------------------------------------
Latin American and Caribbean governments should take advantage of benign
conditions prevailing in global markets to adopt safer strategies to manage
public sector debt and reduce their vulnerability to financial crises,
according to a new report released by the Inter-American Development Bank.
The book-length study entitled "Living with Debt: How to Limit the Risks of
Sovereign Debt" notes that while Latin American debt-to-GDP ratios are not
higher than in other regions and spreads of emerging market bonds have
reached record low levels in recent months, "caution is still in order."
"The current relatively benign global environment is partly due to better
policies and safer debt management, but it heightens the risk that the
international community will become complacent and needed initiatives will
be postponed," says the report. "Tranquil times are the best for
discussing and introducing new initiatives aimed at reducing the
vulnerabilities that still lurk in the global financial system."
Among steps sovereign borrowers could take to address the risk of a sudden
stop in capital inflows, the report recommends countries to continue to
shift their debt structures away from foreign currency-denominated debt and
into debt denominated in their own currencies.
Countries should develop sound domestic bond markets based on a core of
institutional investors, such as private pension funds, and consider using
contingent foreign currency debt as a mechanism of insurance against adverse
shocks caused by recessions, commodity price collapses or natural disasters.
Strong fiscal rules and stabilization funds can help build confidence and
credibility at the same time as they control deficits and establish limits
on debt issuance, the report added.
The report also discusses the role international financial institutions
could play in improving crisis prevention, such as establishing
fast-disbursing liquidity facilities or supporting developing countries'
arrangements to pool their foreign currency reserves.
International financial institutions could also promote the development of
markets for contingent and local currency financial instruments by including
these features in their own bonds and in their loans to member countries.
The report's authors acknowledged they are proposing a broad agenda that may
not win universal support on every single aspect. But they emphasized that
the risks of inaction are higher than the risks of adopting a reform
initiative that is too ambitious.
The background research for the report focused on the development of
domestic bond markets in six Latin American and Caribbean countries. The
work was conducted and financed through an IDB-sponsored network of research
centers in Latin America. Other background papers were produced in the
United States and France.
* LatAm and Caribbean Are Largest Recipients in IFC Financing
-------------------------------------------------------------
The International Finance Corporation, the private sector arm of the World
Bank Group, today announced that it provided a total of US$2.6 billion in
financing to the Latin America and the Caribbean during fiscal 2006, making
the region the largest recipient of IFC financing during this period and
bringing IFC's investments in the region to US$31 billion over the last 50
years.
In fiscal year 2006 (July 2005-June 2006), IFC committed US$1.75 billion to
69 private sector projects, as well as US$888 million from commercial banks
through syndicated loans, for a total of US$2.6 billion. This financing was
broadly distributed throughout the region, with the largest support for
companies in Brazil, Mexico, Argentina, Colombia, the Caribbean, Central
America, and Peru, benefiting such sectors as infrastructure, housing,
microfinance, agribusiness, and oil and gas.
IFC's support to Latin America and the Caribbean also included advisory and
technical assistance activities to improve the investment climate and the
prospects for small businesses, the region's largest source of employment.
"The private sector in Latin America and the Caribbean plays a key role in
the region's social and economic development by investing and creating the
majority of jobs available in the market," said Atul Mehta, IFC's Director
for Latin America and the Caribbean. "Our focus here is on improving the
conditions for private sector investment by financing projects in
infrastructure, developing financial markets, and improving the regulatory
environment. We also actively support private sector companies in their
efforts to raise the environmental, social, and corporate governance
standards of their operations."
IFC's strategy to support development in Latin America and the Caribbean
includes:
-- Improving the business enabling environment, and helping
small businesses join the formal economy;
-- Increasing access to finance for micro-entrepreneurs and
small businesses;
-- Providing long-term financing for corporations;
-- Strengthening infrastructure by increasing private sector
participation and advising on reforms of the regulatory
framework; and
-- Promoting sustainability through higher standards for
corporate governance and environmental and social
performance.
Among the projects that IFC supported in fiscal year 2006 are:
-- Fostering access to finance by committing a record US$635
million through 25 transactions in the region, including
US$59 million in syndicated loans from participating
banks. These commitments included US$156 million in
Colombia, US$130 million in Mexico, US$111 in Brazil, and
US$81 million in the Caribbean;
-- IFC committed US$407 million and mobilized an additional
US$312 million for 14 infrastructure projects in the
region, working on public-private partnerships to maximize
impact. Projects included a 310-megawatt thermal power
plant in Brazil, the expansion of Jamaica's Sangster
International Airport, construction of the Samana airport
in the Dominican Republic, and the construction of new
campuses by Universidad Tecnologica de Mexico aka Unitec;
-- Sustainability initiatives supported by IFC included
technical and financial assistance to improve
environmental, social, and corporate governance practices.
In Brazil, for example, IFC supported the development and
launch of the Business Sustainability Index, the second
index of its kind in emerging markets, which was recently
launched by the Sao Paulo Stock Exchange -- Bovespa. It
recognized 28 of the companies listed on the Bovespa for
their environmental, social, and corporate governance
performance.
IFC's first investment in Latin America, and worldwide, was a US$2 million,
15-year loan to Siemens in 1956 to support manufacturing of
electricity-generating equipment in Brazil. Fifty years later, IFC has
invested and mobilized up to US$31 billion in the region, including US$600
million for 30 companies in the region's lowest-income countries, Haiti and
Bolivia.
***********
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
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Information contained herein is obtained from sources believed to be
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The TCR Latin America subscription rate is US$575 per half-year, delivered
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* * * End of Transmission * * *