/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/061106.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 Monday, November 6, 2006, Vol. 7, Issue 220 Headlines A R G E N T I N A ACXIOM CORP: Increases Quarterly Dividend to US$0.06 Per Share BANCO DE GALICIA: Will Pay Off ARS38.2-Mil. Debt to Central Bank BANCO DE LA PROVINCIA: Paying Off ARS87.2-Mil. Central Bank Debt BANCO PATAGONIA: Authorizes ARS233-Million Capital Increase CORPUS SRL: Deadline for Verification of Claims Is on Dec. 19 DALAFER SA: Last Day for Verification of Claims Is on Nov. 24 DARK HILL: Trustee Verifies Proofs of Claim Until Dec. 15 IMPSAT FIBER: Commences Consent Solicitation for 6% Sr. Notes PETROBRAS ENERGIA: Fitch Affirms Low B Issuer Default Ratings SAN CRISTOBAL: Moody's Places B2 Insurance Fin'l Strength Rating SCHNEIDER + KLEIN: Reorganization Proceeding Concluded TOM & JERRY: Claims Verification Deadline Is Set for Dec. 19 YPF SA: Sacyr Vallehermoso Plans to be Repsol's Main Shareholder B A H A M A S COMPLETE RETREATS: Court Allows XRoads to be Firm's Claims Agent COMPLETE RETREATS: Court Approves First Insurance Premium Pact WINN-DIXIE: Court Approves Five Alabama Power Agreements WINN-DIXIE: Wants TRP-Held SRP Plan Assets Transferred B A R B A D O S ANDREW CORP: Agrees to Acquire EMS Wireless for US$50.5 Million B E R M U D A MONTPELIER RE: Steven Gilbert Will Resign as Board of Director REFCO INC: Court Gives Final Okay on Disclosure Statement REFCO INC: Court Sets Dec. 15 Joint Plan Confirmation Hearing REFCO INC: Court Gives Clarification on Nov. 15 Claims Bar Date B O L I V I A INTERMEC INC: Posts US$195.9 Million Third Quarter 2006 Revenues B R A Z I L AGCO CORP: Third Quarter 2006 Net Sales Down 4.3% to US$1.2 Bil. BANCO DO BRASIL: Investing BRL850MM in Data Center with Caixa BANCO ITAU: Joint Venture with XL Capital Brings in BRL46 Mil. BUCKEYE TECHNOLOGIES: S&P Affirms BB- Corporate Credit Rating CAIXA ECONOMICA: Investing BRL850 Million in Data Center CHEMTURA CORP: Names Mahoney as Sr. VP & Corporate Controller CHEMTURA CORP: Posts US$80.6 Million Third Quarter 2006 Loss CHEMTURA: Selling EPDM & Certain Rubber Chemicals Businesses COMPANHIA SIDERURGICA: Tata Steel Denies Interest in Company DURA AUTOMOTIVE: Ontario Court Recognizes Chapter 11 Case FIDELITY NATIONAL: Plans to Refinance Credit Facilities FIDELITY NATIONAL: Acquires Watterson Prime GERDAU SA: Unit Completes Stake Acquisition in Joint Venture GERDAU SA: Will Seek Strategic Partnerships in Latin America NOVELL: Debenture Holders Have Until Today to Tender Consents NOVELL INC: Names Troy Richardson President of Novell Americas PETROLEO BRASILEIRO: Begins Repair on Bolivia-Brazil Pipeline PETROLEO BRASILEIRO: Intecnial to Build Three Biodiesel Plants PETROLEO BRASILEIRO: Sees 15% Return on Investments in Bolivia PETROLEO BRASILEIRO: Will Issue US$500 Million of 10-Year Bonds VARIG SA: Foreign Rep Objects to Port Authority's Payment Motion VOTORANTIM GROUP: Prices Tender Offer on 7.875% Guaranteed Notes C A Y M A N I S L A N D S FORMOSA RE: Creditors Must Submit Proofs of Claim by Nov. 16 FUND SECURITIZATION: Claims Filing Deadline Is Set for Nov. 16 GREEN T: Last Day for Proofs of Claim Filing Is on Nov. 16 G-FORCE (2002-1): Last Day to File Proofs of Claim Is on Nov. 16 G-FORCE (2001-1): Proofs of Claims Filing Is Until Nov. 16 INTERNATIONAL WATER: Creditors Must Submit Claims by Nov. 16 IL INVESTMENT: Creditors Must File Proofs of Claim by Nov. 16 JAPAN CREDIT: Proofs of Claim Filing Deadline Is on Nov. 16 JOFI YOKOHAMA-AOBA: Proofs of Claim Must be Filed by Nov. 16 KICAP (LEVERAGED): Proofs of Claim Filing Is Until Nov. 16 KICAP (STANDARD): Filing of Proofs of Claim Is Until Nov. 16 KICAP FINANCIALS: Claims Filing Deadline Is Set for Nov. 16 LONG BEACH: Creditors Have Until Nov. 16 to File Proofs of Claim TROPICAL BLUE: Last Day to File Proofs of Claim Is on Nov. 16 VIVACE TWO: Creditors Are Given Until Nov. 16 to File Claims C H I L E BLOCKBUSTER INC: Outlines New Deal for Online Renters EMPRESAS IANSA: Fitch Upgrades US$100MM Sr. Notes Rating to BB+ C O L O M B I A CA INC: Posts US$996MM Revenue for Quarter Ended Sept. 30, 2006 C O S T A R I C A DENNY'S CORP: Reports Same-Store Sales for the Month of October D O M I N I C A N R E P U B L I C FALCONBRIDGE LTD: Xstrata Completes Acquisition of Company E C U A D O R PETROECUADOR: Gets 27 Bids for Marginal Fields in Amazon PETROECUADOR: Reforms May Bring US$5B Investment in Oil Sector E L S A L V A D O R PAYLESS SHOESOURCE: Third Quarter Sales Up 5.5% to US$666.5 Mil. G U A T E M A L A AFFILIATED COMPUTER: Reports US$1.39 Billion Preliminary Revenue UNIVERSAL CORP: Declares US$0.44 Per Share Quarterly Dividend G U Y A N A DIGICEL LTD: Acquires U Mobile in Guyana H A I T I DYNCORP: Appoints Schehr as Sr. Vice President & General Counsel DYNCORP INTERNATIONAL: Secures US$450MM from Naval Facilities H O N D U R A S WARNACO GROUP: Iconix Brand to Acquire Ocean Pacific for US$54MM WARNACO GROUP: Posts US$452 Mil. Third Quarter 2006 Net Revenues J A M A I C A AIR JAMAICA: Cabinet Rejects Firm's Proposed Business Plan KAISER ALUMINUM: Reports 3rd Qtr. Claim Settlement Fund & Escrow KAISER ALUMINUM: Settles OCP Status of Fleishman & Hewitt NATIONAL WATER: Conducting Repair & Expansion Works in Kingston M E X I C O ALASKA AIR: Moody's Affirms B1 Corporate Family Rating FORD MOTOR: Reducing Health Care Benefits of Salaried Employees FORD MOTOR: Shows Improvement in October Sales Figures GRUPO CASA: Sales Up 3.27% to US$5.6B in Third Quarter 2006 GRUPO FINANCIERO: Eyes Full Control of Inter National Bank GRUPO MEXICO: La Caridad Copper Production at 75% GRUPO MEXICO: Will Pay MXN1.44 Billion in Dividends Today MERIDIAN AUTOMOTIVE: Court Extends Foreign Unit Financing Period MERIDIAN AUTO: Sells Mich. Property to Roskam for US$2.45 Mil. RADIOSHACK CORP: Ronald E. Elmquist Resigns as Board Director UNITED RENTALS: Posts US$1.07B Third Quarter 2006 Total Revenues VISTEON CORP: Balance Sheet Upside-Down by US$102MM at Sept. 30 P A N A M A CHIQUITA BRANDS: Incurs US$96MM Net Loss in Third Quarter 2006 CHIQUITA BRANDS: Mulls Great White Fleet Shipping Operation Sale CHIQUITA BRANDS: Positive About New Banana Packaging HUNTSMAN INT: Moody's Rates US$400-Million Sr. Sub. Notes at Ba3 NCO GROUP: Earns US$11.4 Million in 2006 Third Quarter NORTEL NETWORKS: Secures US$7.7 Million NRC Maintenance Contract P U E R T O R I C O CONSOLIDATED CONTAINER: S&P Affirms B- Corporate Credit Rating R&G FINANCIAL: Dividend Payments on Pref. Stocks & Sec. Approved RENT-A-CENTER: Completes Sr. Sec. Debt Financing Documentation SALOMON BROTHERS: Moody's Ratings on 3 Cert. Classes Slides to C SEARS HOLDINGS: Files Proxy Circular & Extends Offer to Nov. 20 SUNCOM WIRELESS: Sept. 30 Balance Sheet Upside-Down by US$378MM UNIVISION COMM: Acquires Full Control of Disa Records S T K I T T S & N E V I S DIGICEL LTD: Launches Credit Me Credit U Service T R I N I D A D & T O B A G O BRITISH WEST: Former Workers Lament Treatment & Firm's Closure DIGICEL LTD: Inks Roaming Accord with Azercell Telecom DIGICEL LTD: Launches Free Calls in Trinidad & Tobago DIGICEL LTD: Rival Firm Fails to Resolve Calls Conflict DIGICEL LTD: Seeks Halt of Rival Firm's Call Block HILTON HOTELS: Ends Coral Hotels Joint Development Agreement V E N E Z U E L A AES CORP: Unit Says Firm Complies with Regulations CITGO PETROLEUM: Selling Two Asphalt Plants & Stake in Pipeline CITGO PETROLEUM: Two Units Restarting Operations This Month ELECTRICIDAD DE CARACAS: Says AES Complies with Regulations PETROLEOS DE VENEZUELA: Constructing Submarine to Spot Leaks PETROLEOS DE VENEZUELA: Fails Shipping Gasoline to US PETROLEOS DE VENEZUELA: Posts US$43.6B First Nine-Month Revenue PETROLEOS DE VENEZUELA: Will Reduce Daily Oil Production * IMF Sees Continued Growth in LatAm and the Caribbean Regions * BOOK REVIEW: The Managerial Mystique - - - - - ================= A R G E N T I N A ================= ACXIOM CORP: Increases Quarterly Dividend to US$0.06 Per Share -------------------------------------------------------------- Acxiom Corp.'s board of directors decided to increase the regular quarterly cash dividend by 20% to six cents per share, from five cents per share. The dividend is payable on Dec. 4, 2006, to shareholders of record as of the close of business on Nov. 13, 2006. While Acxiom intends to pay regular quarterly dividends for the foreseeable future, all subsequent dividends will be reviewed quarterly and declared by the board at its discretion. Based in Little Rock, Arkansas, Acxiom Corp. (Nasdaq: ACXM) -- http://www.acxiom.com/-- integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions are Customer Data Integration technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom has locations throughout the United States, Europe, Australia and China. Acxiom has a team of specialists with sales and business development associates based in the largest Latin American markets: Brazil, Argentina and Mexico. * * * Standard & Poor's Ratings Services assigned on Sept. 6, 2006, its loan and recovery ratings to Little Rock, Arkansas-based Acxiom Corp.'s proposed US$800 million secured first-lien financing. The first-lien facilities consist of a US$200 million revolving credit facility and a US$600 million term loan. They are rated 'BB' with a recovery rating of '2'. As reported in the Troubled Company Reporter on Aug. 25, 2006, Moody's Investors Service assigned a Ba2 rating to Acxiom Corp.'s US$800 million senior secured credit facilities, while affirming its corporate family rating of Ba2. Moody's said the rating outlook is stable. BANCO DE GALICIA: Will Pay Off ARS38.2-Mil. Debt to Central Bank ---------------------------------------------------------------- Banco de Galicia SA will pay off its ARS38.2-million debt to the Argentine central bank, the latter said in a statement. Business News Americas relates that the payments would be the 33rd installment in the matching repayment plan the central bank drew up in 2003. With the payment, the banking sector's debt with the central bank will be reduced to ARS5.36 billion as other banks have already paid 71.1% of their combined original debt, the report notes. According to BNamericas, the debts to the central bank were due to massive liquidity lines the bank provided to the financial system during the economic and financial crisis. The matching mechanism allow banks to pay off debts to the central bank with resources from maturing long-term government papers obtained in compensation for pesofication and exchange rate-related losses, BNamericas states. About Banco de la Provincia de Buenos Aires Banco de la Provincia de Buenos Aires is Argentina's oldest bank. It is the fifth largest in terms of assets and third in terms of deposits; by 2002 they were valued at US$3.51 billion and US$1.57 billion, respectively. That same year loans were US$1.79 billion and equity US$311 million. Banco de la Provincia's focus is mainly on the province's small- and mid-sized enterprises and the retail segment. The bank has some 350 branches throughout Buenos Aires, which represents approximately 40% of Argentina's gross domestic product. About Banco de Galicia y Buenos Aires Headquartered in Buenos Aires, Argentina, Banco de Galicia y Buenos Aires SA is a private bank that offers a full range of banking services across the country, to 2.7 million individual and corporate customers. Banco Galicia operates an extensive and diversified distribution network among private sector banks in Argentina, offering more than 380 points of contact with customers through its branches and electronic banking facilities. Banco Galicia customers also have access to telephone banking services and e-galicia.com. * * * As reported on Apr. 12, 2006, the Argentine arm of Standard & Poor's assigned these ratings to Banco de Galicia y Buenos Aires' debts: -- Obligaciones negociables, series 6, issued July 19, 2002 for US$73,000,000, emitted under the program for US$1000 million * Last due: Aug. 3, 2007 * Rate: raA -- Obligaciones Negociables, class 7 for US$43,000,000, included under the US$1000 million program * Last due: Aug. 3, 2007 * Rate: raA -- Program of obligaciones negociables, media term, for US$2,000,000,000 * Rate: raA -- Obligaciones Negociables simples 8-11-93, for US$21,400,000 * Last due: Nov. 1, 2004 * Rate: raD -- Obligaciones negociables simples for US$21,400,000 * Last due: Nov. 1, 2004 * Rate: raD -- Obligaciones Negociables emitted for US$9,000,000, included under the US$1000 million program. * Last due: Dec. 20, 2005 * Rate: raD BANCO DE LA PROVINCIA: Paying Off ARS87.2-Mil. Central Bank Debt ---------------------------------------------------------------- Banco de la Provincia de Buenos Aires will pay off its ARS87.2-million debt to the Argentine central bank, the latter said in a statement. Business News Americas relates that the payments would be the 33rd installment in the matching repayment plan the central bank drew up in 2003. With the payment, the banking sector's debt with the central bank will be reduced to ARS5.36 billion as other banks have already paid 71.1% of their combined original debt, the report notes. According to BNamericas, the debts to the central bank were due to massive liquidity lines the bank provided to the financial system during the economic and financial crisis. The matching mechanism allow banks to pay off debts to the central bank with resources from maturing long-term government papers obtained in compensation for pesofication and exchange rate-related losses, BNamericas states. About Banco de Galicia y Buenos Aires Headquartered in Buenos Aires, Argentina, Banco de Galicia y Buenos Aires SA is a private bank that offers a full range of banking services across the country, to 2.7 million individual and corporate customers. Banco Galicia operates an extensive and diversified distribution network among private sector banks in Argentina, offering more than 380 points of contact with customers through its branches and electronic banking facilities. Banco Galicia customers also have access to telephone banking services and e-galicia.com. About Banco de la Provincia de Buenos Aires Banco de la Provincia de Buenos Aires is Argentina's oldest bank. It is the fifth largest in terms of assets and third in terms of deposits; by 2002 they were valued at US$3.51 billion and US$1.57 billion, respectively. That same year loans were US$1.79 billion and equity US$311 million. Banco de la Provincia's focus is mainly on the province's small- and mid-sized enterprises and the retail segment. The bank has some 350 branches throughout Buenos Aires, which represents approximately 40% of Argentina's gross domestic product. * * * On June 1, 2006, Moody's Investors Service upgraded the bank financial strength ratings of several Argentinean banks to reflect: -- the banks' improving financial fundamentals, -- the relative improvement in the operating environment, and -- the recovery of the banking system since the financial crisis of 2001-2002. Moody's changed the outlooks on the E bank financial strength rating of Banco de la Provincia de Buenos Aires to positive from stable. The rating agency also takes into consideration the effort of the bank to improve its balance sheet quality and earnings. The low rating is however, an indication of the challenges that the bank still faced to reduce its large exposures to the public sector, as well as the disadvantages of its poor private-sector asset quality, weak core earnings, and solvency. BANCO PATAGONIA: Authorizes ARS233-Million Capital Increase ----------------------------------------------------------- Banco Patagonia SA said in a filing with the local stock exchange that its shareholders have ratified an ARS233-million capital increase. Banco Patagonia told Business News Americas that bank equity is now at ARS673 million. Banco Patagonia became the fourth largest locally owned private bank in the country, after it bought the local unit of Lloyds TSB in 2004. Its assets totaled ARS4.80 billion in August, BNamericas relates. * * * Moody's Rating Services assigned these ratings on Banco Patagonia: -- long-term domestic bank deposits at Ba3, -- short-term domestic bank deposits at NP, -- long-term foreign bank deposits at Caa1, -- short-term foreign bank deposits at NP, -- bank financial strength at E+, and -- the outlook is positive. CORPUS SRL: Deadline for Verification of Claims Is on Dec. 19 ------------------------------------------------------------- Maximo C. A. Piccinelli, the court-appointed trustee for Corpus SRL's bankruptcy proceeding, will verify creditors' proofs of claim until Dec. 19, 2006. Mr. Piccinelli will present the validated claims in court as individual reports on March 29, 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 Corpus 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 Corpus' accounting and banking records will follow on May 30, 2007. M. Piccinelli is also in charge of administering Corpus' assets under court supervision and will take part in their disposal to the extent established by law. The debtor can be reached at: Corpus SRL Arribenios 2153 Buenos Aires, Argentina The trustee can be reached at: Maximo C. A. Piccinelli Montevideo 666 Buenos Aires, Argentina DALAFER SA: Last Day for Verification of Claims Is on Nov. 24 ------------------------------------------------------------- Jorge Hugo Basile, the court-appointed trustee for Dalafer SA's bankruptcy case, will verify creditors' proofs of claim until Nov. 24, 2006. Mr. Basile will present the validated claims in court as individual reports on Feb. 9, 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 Dalafer 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 Dalafer's accounting and banking records will follow on March 23, 2007. Mr. Basile is also in charge of administering Dalafer's assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Jorge Hugo Basile J.E. Uriburu 782 Buenos Aires, Argentina DARK HILL: Trustee Verifies Proofs of Claim Until Dec. 15 --------------------------------------------------------- Rosa del Carmen Irigoyen, the court-appointed trustee for Dark Hill SA's bankruptcy case, verifies creditors' proofs of claim until Dec. 15, 2006. Ms. Irigoyen will present the validated claims in court as individual reports on March 1, 2007. A court in Buenos Aires will then determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Dark Hill 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 Dark Hill's accounting and banking records will follow on April 12, 2007. Ms. Irigoyen is also in charge of administering Dark Hill's assets under court supervision and will take part in their disposal to the extent established by law. The trustee can be reached at: Rosa del Carmen Irigoyen Avenida Cordoba 1351 Buenos Aires, Argentina IMPSAT FIBER: Commences Consent Solicitation for 6% Sr. Notes ------------------------------------------------------------- Impsat Fiber Networks, Inc., solicited consents from the holders of its Series A 6% Senior Guaranteed Convertible Notes due 2011 and its Series B 6% Senior Guaranteed Convertible Notes due 2011. The consents were being solicited from holders of record of the Notes at 5:00 p.m. on Nov. 1, 2006. The terms and conditions of the consent solicitation are described in the Consent Solicitation Statement, dated Nov. 2, 2006. On Oct. 25, 2006, Impsat Fiber entered into an Agreement and Plan of Merger with Global Crossing Ltd. and GC Crystal Acquisition, Inc. Under the agreement, Global Crossing would acquire Impsat Fiber. The consents are being solicited in connection with the proposed merger. The closing of the consent solicitation is conditioned upon the receipt by Impsat Fiber of valid consents from holders of a majority in principal amount of the Series A Notes outstanding as contemplated in Section 10.02 of the indenture governing the Series A Notes and holders of a majority in principal amount of the Series B Notes outstanding as contemplated in Section 10.02 of the indenture governing the Series B Notes. If Impsat Fiber receives the required consents before the expiration of the consent solicitation, the consent solicitation will close, and the company will execute a supplemental indenture to each of the indentures for the Notes with the trustee, which will give effect to the proposed amendments. The proposed amendments will not become operative until the closing of the merger. If Impsat Fiber receives the required consents and signs the supplemental indentures, the company will make cash payments to each record holder of the Notes that validly consents to the proposed amendments and does not revoke the consent, other than holders whose Notes are not deemed to be outstanding under the indentures governing the Notes for purposes of the consents, in the amount of US$2.50 per US$1,000 in aggregate principal amount of Notes for which consent is properly given. Impsat Fiber will make the cash payments promptly after the supplemental indentures are signed. Only registered holders of Notes at 5:00 p.m. New York City time on Nov. 1, 2006, who validly deliver, and do not revoke, consents prior to the expiration of the consent solicitation at 5:00 p.m. New York City time on Nov. 15, 2006, will be eligible to receive the consent payments. The consent solicitation may be extended or terminated by Impsat at its option. Impsat Fiber has retained Goldman, Sachs & Co., to serve as Solicitation Agent, Georgeson Inc. to serve as Information Agent and The Bank of New York to serve as Tabulation Agent for the consent solicitation. Requests for documents may be made directly to: Georgeson Inc. 17 State St. 10th Floor New York, NY 10004 Tel: (212) 440-9800 (banks and brokers) (866) 277-5068 (toll free) Questions regarding the solicitation of consents may be directed to: Goldman, Sachs & Co. Attn: Credit Liability Management One New York Plaza, 48th Floor New York, New York 10004 Tel: (800) 828-3182 (toll free) (212) 357-0775 (collect) Impsat Fiber Networks, Inc., -- http://www.impsat.com-- is a provider of private telecommunications networks and Internet services in Latin America. The company owns and operates 15 data centers and metropolitan area networks in some of the largest cities in Latin America, providing services to more than 4,200 national and multinational companies, financial institutions, governmental agencies, carriers, Internet service providers and other service providers throughout the region. Impsat has operations in Argentina, Colombia, Brazil, Venezuela, Ecuador, Chile, Peru, the United States and throughout Latin America and the Caribbean. Impsat Fiber registered an increase in losses from US$14.2 million in 2004 to US$36.2 million in 2005. PETROBRAS ENERGIA: Fitch Affirms Low B Issuer Default Ratings ------------------------------------------------------------- Fitch Ratings has affirmed its low B issuer default ratings on Petrobras Energia. Fitch has affirmed these ratings: -- Foreign currency Issuer Default Rating at 'B+'; -- Local currency Issuer Default Rating at 'BB-'; and -- Senior unsecured issue ratings at 'B+/RR3'. Fitch has also upgraded the National Scale Rating of Petrobras Energia to 'AA(arg)' from 'AA-(arg)'. The issue rating reflects a recovery expectation in the 'RR3' category, indicating a recovery estimation of 51%-70%. All ratings have a Stable Outlook. Petrobras Energia's ratings are supported by the company's solid credit profile, its significant cash generation outside of Argentina, and its ability to retain a material amount of its export revenues abroad. Petrobras Energia shows balanced oil and gas reserves and an adequate reserve level. The company also benefits from the experience and strong market position of its shareholder, Petrobras Brasileiro (upgraded to 'BB+' by Fitch in June 2006). The international ratings continue to be constrained by the Argentine sovereign environment. The factors are tempered by Petrobras Energia's exposure to political interference in the regions where it operates. A high level of uncertainty exists as to the company's activities in Venezuela, which represent 30% of Petrobras Energia's EBITDA and reserves. Fitch understands that the recent conversion of the existing operating agreements into joint ventures controlled by Petroleos de Venezuela constitutes the major event risk regarding Petrobras Energia's future. However, Petrobras Energia's proven access to financing sources and proper cash management, the potential support of its controlling shareholder, and the improvement in credit protection measures in 2005 and the first half of 2006 mitigate a possible reduction in cash flow. Petrobras Energia reported solid credit protection measures that have benefited from the global increase in the price of oil and refined products limited by the effect of export taxes. Through June 2006, the company reported interest coverage of 6.1x, net debt-to-EBITDA of 1.7x, and debt-to-capitalization of 48.1%, consistent with the assigned ratings. Petrobras Energia maintains a leverage position consistent with higher rated entities outside of Argentina. Petrobras Energia is one of the most vertically integrated energy conglomerates in Latin America, with operations encompassing virtually all segments of the energy value chain. Core business activities include oil and gas exploration and production; refining and marketing; petrochemicals; and electricity. Petrobras Energia is controlled by Petrobras Energia Participacoes SL, a holding company that is in turn controlled by Brazil's national oil company, Petrobras (Long-term IDR 'BB+' by Fitch). SAN CRISTOBAL: Moody's Places B2 Insurance Fin'l Strength Rating ---------------------------------------------------------------- Moody's Latin America has upgraded the insurance financial strength rating of San Cristobal Mutual de Seguros Generales to A2.ar from A3.ar on Argentina's national rating scale and has assigned a B2 insurance financial strength rating on the global local-currency scale. Both ratings have a stable outlook. San Cristobal is a leading personal lines insurance company in Argentina, offering auto and homeowners insurance, and having some exposure to hailstorm insurance and personal accident business. It is the key entity of the San Cristobal Group, which comprises several companies, among which are Asociart ART (monoline workers' compensation) and San Cristobal Seguro de Retiro (individual annuities). The group has been in the Argentine market for more than 60 years. According to Moody's, the upgrade on the national scale rating was driven primarily by San Cristobal's reduced volatility in its underwriting results over the past few years (which are now more closely aligned with its closest peers') and by its improved reserve-coverage ratio and asset quality. Driven by price increases and organic growth, San Cristobal was successful in moving from underwriting losses (13.5% of net premiums in fiscal year 2001 and 20.6% in FY2002) to underwriting profits (2% and 2.1% of net premiums in fiscal years 2004 and 2005, respectively). Moody's expressed some concern in noting that San Cristobal again showed a 5.3% underwriting loss in 2006 fiscal year ended June 30, 2006, primarily because of an increase in claim frequency in the Argentine auto market. However, Moody's believes that management will take the necessary steps, including new price increases, to reduce such losses in the future and that the present distribution network and persistent clients will help to keep the company from experiencing heavy underwriting losses like those occurred before 2004. Moody's noted that San Cristobal's reserve coverage ratio (liquid investments to losses and LAE reserves) rose significantly, from 57.3% in 2003 to 70% as of June 30, 2006. The proportion of San Cristobal's risky assets (listed stocks, speculative grade bonds and real estate investments) relative to its total cash and invested assets declined noticeably to the current 41% from 54% three years ago (as of June 30, 2003). Moody's said that San Cristobal is one of the leaders in the property insurance market. It enjoys a sound reputation in its main regional market -- the Argentine provinces of Santa Fe and Cordoba. San Cristobal ranks third in the auto insurance business -- with a 7.7% stake -- and sixth in the total property and casualty market. The company's solid market position is based on the distributing of its insurance products through a very loyal agent network, which provides some control over its commission costs, as well as providing a good persistency rate. The administrative and net commission expense ratio remained stable at a 40% level (of net premiums written), which is close to the B2 median level. Moody's also noted some credit challenges for San Cristobal including the need to restore and maintain its underwriting profitability, to control its underwriting leverage, and to diversify its business composition given its major concentration in the auto insurance, which accounts for 77% of net earned premiums (as of 2006 fiscal year). Moody's added that a further upgrade of San Cristobal could occur if it consistently maintains underwriting profits above 5% of net premiums written, reserve coverage ratio above 90%, and a more diversified and profitable business composition. A sustained deterioration in underwriting, resulting in combined ratios above 110%, a decline in the reserve coverage ratio below 50%, an increase in gross underwriting leverage, and/or a decline in the overall market share below 2%, would likely result in a ratings downgrade. Based in Rosario, San Cristobal Mutual de Seguros posted net profits of ARS10.2 million and gross premiums written of ARS396.6 million for year-end 2006. As of June 30, 2006, the company reported shareholders' equity of ARS214.9 million and total assets of ARS640.4 million. SCHNEIDER + KLEIN: Reorganization Proceeding Concluded ------------------------------------------------------ Schneider + Klein SRL's reorganization proceeding has ended. Data published by Infobae on its Web site indicated that the process was concluded after a court in Buenos Aires approved the debt agreement signed between the company and its creditors. TOM & JERRY: Claims Verification Deadline Is Set for Dec. 19 ------------------------------------------------------------ Hector Garcia, the court-appointed trustee for Tom & Jerry SA's bankruptcy proceeding, will verify creditors' proofs of claim until Dec. 19, 2006. Mr. Garcia will present the validated claims in court as individual reports on Feb. 5, 2007. Court No. 8 in Buenos Aires will then determine if the verified claims are admissible, taking into account the trustee's opinion and the objections and challenges raised by Tom & Jerry 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 Tom & Jerry's accounting and banking records will follow on April 19, 2007. Tom & Jerry was forced into bankruptcy at the request of Maria Mackiewicz, whom it owes US$6,936.90. Clerk No. 15 assists the court in the case. The debtor can be reached at: Tom & Jerry SA Avenida Leandro N. Alem 465 Buenos Aires, Argentina The trustee can be reached at: Hector Garcia Uruguay 572 Buenos Aires, Argentina YPF SA: Sacyr Vallehermoso Plans to be Repsol's Main Shareholder ---------------------------------------------------------------- Sacyr Vallehermoso, a construction and services group in Spain, plans to become the main shareholder of Repsol, the parent firm of YPF SA, according to the country's Securities an Exchange Commission. Merco Press relates that Sacyr Vallehermoso intends to increase its stake in Repsol to 20%, after acquiring 9.24% in the company. The operation involved an average price of EUR25.32 per share, with a total investment of EUR2.855.6 million. The report says that the National Energy Commission of Spain had disclosed that Sacyr Vallehermoso's stake in Repsol did not merit an analysis, since it did not involve any regulated sector. Once Sacyr Vallehermoso manages to achieve its goal it will be Repsol's largest shareholder, Merco Press states. 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 ============= COMPLETE RETREATS: Court Allows XRoads to be Firm's Claims Agent ---------------------------------------------------------------- Pursuant to Sec. 363 of the Bankruptcy Code, the U.S. Bankruptcy Court for the District of Connecticut gave Complete Retreats LLC and its debtor-affiliates authority to employ XRoads Claims Management Services LLC as their claims and noticing agent until Sept. 30, 2006. In August 2006, the Debtors filed an application pursuant to Section 327 of the Bankruptcy Code to employ XCM as their claims and noticing agent. The United States Trustee has objected twice to the XCM Retention Application. The Debtors voluntarily withdrew the XCM Application after discussions with their counsel and the U.S. Trustee. As reported in the Troubled Company Reporter on Oct. 6, 2006, XCM was expected to: (a) assist in the preparation of the Debtors' Schedules of Assets and Liabilities, Statements of Financial Affairs, the initial reporting package for the United States Trustee, and monthly operating reports; (b) design, maintain, and administer the Debtors' claims database; (c) provide designated users with access to the claims database to track claims activity, view claims-related documents in PDF format, and create reports; (d) send acknowledgement cards to creditors confirming receipt of their proofs of claim; and (e) provide copy and notice service consistent with the applicable local rules and as requested by the Debtors and the Court, including acting as the official claims agent in lieu of the Court in: * serving notice to parties-in-interest, * maintaining all proofs of claim and proofs of interest filed and received in the Debtors' bankruptcy cases; * docketing the claims; * maintaining and transmitting to the Bankruptcy Clerk the official claims registers; * maintaining current mailing lists of all claimants and notices of appearance received; * providing free public access for claims examination at its premises during regular business hours; and * recording claims assignments to third parties and recording all transfers received pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure. The Debtors proposed to pay XCM's service at these hourly rates: Professional Hourly Rate Director or Managing Director US$225 to US$325 Consultant or Sr. Consultant US$125 to US$225 Type of Service Hourly Rate Accounting and Document Management US$125 to US$195 Programming and Technical Support US$125 to US$195 Clerical - data entry US$40 to US$65 The Debtors also proposed to reimburse XCM for its out-of-pocket expenses. XCM has not received a retainer from the Debtors, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, told the Court. The Debtors have more than 5,000 creditors and other potential parties-in-interest. Mr. Daman avered that the Bankruptcy Clerk's Office is not equipped to (i) distribute notices, (ii) process all proofs of claim filed in these cases, and (iii) assist in the balloting process for the Debtors' Chapter 11 cases. XCM is not to be retained under Section 327, Mr. Daman noted. Accordingly, the Debtors asked the Court to treat XCM's fees and expenses as an administrative expense under the Debtors' estates. The Debtors also asked the Court for permission to pay XCM's fees and expenses without the need for XCM to file any fee applications. John Vander Hooven, a managing director at XRoads Case Management Services, LLC, assured the Court that XCM does not hold or represents any interest adverse to the Debtors' estates and is a "disinterested person," as referenced in Section 327(a) and as defined in Sections 101(14) and 1107(b) of the Bankruptcy Code. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Court Approves First Insurance Premium Pact -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut gave Complete Retreats LLC and its debtor-affiliates authority to enter into a premium financing agreement and disclosure statement with First Insurance Funding Corp. The Debtors wanted to execute the Premium Finance Agreement and Disclosure Statement with First Insurance for the financing of coverage essential for the operation of their business operations, including umbrella, general liability, and property insurance policies. In the ordinary course of business, the Debtors maintain insurance coverage for themselves and their properties. To reduce the burden of funding the premiums of their insurance policies, the Debtors have in the past routinely entered into various financing agreements. Pursuant to the FIFC Premium Finance Agreement, FIFC will provide financing to the Debtors for the purchase of three Policies: Policy Effective Policy Number Insurance Company Date Premium NHA036341 RSUI Indemnity Company 8/29/2008 US$36,000 FIN TXS/FEES 0 ERN TXS/FEES 0 GL000302-02 Aspen Specialty Insurance 8/29/2008 56,330 FIN TXS/FEES 2,906 ERN TXS/FEES 1,800 7522791 Lexington Insurance Co. 8/29/2006 293,149 FIN TXS/FEES 15,032 ERN TXS/FEES 7,500 The premium to be financed pursuant to the Premium Finance Agreement is US$302,563, which is in addition to the US$110,154 cash down payment delivered upon purchase of the Policies. By virtue of the Premium Finance Agreement, the Debtors will be obligated to pay FIFC US$313,059, which includes a financing charge of US$10,495 in nine monthly installments of US$34,784 each. The Premium Finance Agreement provides FIFC with various rights to act against the Policies. To secure the repayment of the indebtedness due under the Premium Finance Agreement, the Debtors would grant FIFC a security interest in, among other things, the unearned premiums of the Policies. The Debtors would appoint FIFC as their attorney-in-fact with the irrevocable power to cancel the Policies and to collect the unearned premium in the event that they are in default of their obligations under the Premium Finance Agreement. To grant adequate protection to FIFC, the parties also agree that the Debtors would be authorized and directed to timely make all payments due under the Premium Finance Agreement and FIFC would be authorized to receive and apply those payments to the indebtedness owed by the Debtors to FIFC as provided in the Premium Finance Agreement. The parties further agree that if the Debtors do not make any of the payments due under the Premium Finance Agreement as they become due, the automatic stay would automatically lift and be vacated to enable FIFC and any insurance companies providing the coverage under the Policies to take all steps necessary and appropriate to: -- cancel the Policies, -- collect the collateral, and -- apply that collateral to the indebtedness owed to FIFC by the Debtor; provided that in exercising those rights, FIFC and insurance companies would be required to comply with the notice and other relevant provisions of the Premium Finance Agreement. The Debtors believe that the terms of the Finance Agreement are commercially fair and reasonable. Without the Policies, the Debtors assert they would be forced to cease operations and would be in default under their postpetition credit agreements. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed US$308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). WINN-DIXIE: Court Approves Five Alabama Power Agreements -------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida approved the agreements between Winn-Dixie Stores Inc. and its debtor-affiliates and Alabama Power Company and directs the Debtors to pay APCO US$861,747 as cure relating to the assumption of four contracts. The Court rules that the Debtors cannot assume the Contracts if their Joint Plan of Reorganization is not confirmed or does not become effective. As reported in the Troubled Company Reporter on Oct. 27, 2006, the five contracts under which APCO provides electricity to nearly 63 of the Debtors' operating locations in Alabama are: (a) Master Contract for Electric Service between APCO and Winn-Dixie Stores, Inc., dated May 16, 2002; (b) Master Contract for Electric Power Service between APCO and Winn-Dixie Montgomery, Inc., dated Feb. 23, 1996; (c) Master Contract for Electric Power Service between APCO and WD Montgomery dated Aug. 8, 1997, and associated Electric System Lease Agreement and Standby Generator Program Agreement each dated Sept. 3, 1997; (d) Contract for Electric Power between APCO and WD Montgomery dated April 15, 1997; and (e) Contract for Electric Power between APCO and WD Montgomery dated Nov. 5, 1996. The parties have resolved their dispute with respect to the May 2002 Contract, and have also negotiated the terms pursuant to which all of the Contracts will be assumed, except for the November 1996 Contract. The negotiations had resulted in these agreements: (1) The Debtors will assume the February 1996, April 1997, September 1997, and May 2002 Contracts, as amended; (2) APCO will facilitate the assumption of the four Contracts by agreeing to (i) amend the May 2002 and February 1996 Contracts by virtue of two separate contracts dated Oct. 12, 2006, and (ii) accept US$861,747 as cure for the four Contracts; (3) The Debtors' cure obligations will be limited to the payment of the US$861,747 cure with APCO waiving any additional requirements under Section 365(b)(1) of the Bankruptcy Code as they relate to any prepetition Defaults under the Contracts; (4) APCO's Agreements will not negate the impact of assumption on any claims held by the Debtors against APCO or otherwise expose APCO to potential preference actions with respect to payments made on account of the Contracts; (5) APCO will be entitled to an administrative claim for cure if any amounts become owing to it pursuant to Section 502(h) of the Bankruptcy Code upon assumption of the Contracts; (6) The Omnibus Motion as it pertains to the May 2002 Contract and APCO's Objection will be deemed withdrawn; and (7) The Debtors will reject the November 1996 Contract as of Oct. 25, 2006, and APCO will have a prepetition non- priority unsecured rejection damages claim for US$51,876. The Debtors will also save an estimated US$1,000,000 annually by avoiding service price increases that they would otherwise have to incur if they pursued a rejection and entered into new service contracts with APCO. The November 1996 Contract related to the provision of electricity to one of the Debtors' closed stores in Montgomery, Alabama. The Debtors say that the contract's rejection is still in their best interest although it will result in a US$51,876 rejection of damages in favor of APCO, since that amount reflects minimum charges that they are required to pay under the contract. By rejecting the November 1996 Contract, the Debtors will ensure that the charges are treated as a prepetition non-priority unsecured claim rather than as an administrative claim to be paid in cash. 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 TRP-Held SRP Plan Assets Transferred ------------------------------------------------------ Conditioned on the occurrence of the effective date of their Joint Plan of Reorganization, Winn-Dixie Stores, Inc., and its debtor affiliates ask the U.S. Bankruptcy Court for the Middle District of Delaware to direct the liquidation and transfer to Winn-Dixie Stores, Inc., of the Winn-Dixie Supplemental Retirement Plan's assets held in trust by T. Rowe Price Trust Company under an agreement effective as of July 1, 1994. Specifically, the Debtors ask the Court to direct the transfer to Winn-Dixie of SRP assets held in trust by TRP within five business days following the later of (a) the receipt by TRP of notice from the Debtors of the occurrence of the Effective Date, and (b) the receipt by TRP of a copy of the Transfer Order. Before their bankruptcy filing, the Debtors maintained the SRP to provide supplemental retirement benefits to participating employees. The SRP was intended to constitute an unfunded, unsecured, deferred compensation plan, with benefits to be paid from the Debtors' general assets. To support their obligations under the SRP, the Debtors elected to enter into the Trust Agreement with TRP. Although the Trust Agreement establishes a trust fund to hold SRP plan assets, both the Trust Agreement and the SRP indicate that the Debtors remain the owner of all Trust Assets and that Trust Assets are subject to the claims of creditors in the event of the Debtors' bankruptcy, Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, relates. As of Oct. 18, 2006, the Trust Assets had an approximate value of US$16,200,000. Under the Chapter 11 Plan, the SRP and related trust and individual agreements, including the Trust Agreement, will be terminated for all purposes as of the Effective Date, and all claims of participants under the SRP will be discharged. The Debtors wish to have the Trust Assets available as a source of funds as soon as possible following the Effective Date. However, Section 9.2 of the Trust Agreement provides, in relevant part, that when TRP determines that Winn-Dixie has filed for bankruptcy, TRP will hold for the benefit of Winn-Dixie's creditors all Trust Assets and will deliver them to satisfy the claims of the Winn-Dixie creditors as directed by a court of competent jurisdiction. Hence, the Debtors are seeking a Transfer Order from the Court to satisfy the requirement contained in Section 9.2, Ms. Jackson explains. 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 A R B A D O S =============== ANDREW CORP: Agrees to Acquire EMS Wireless for US$50.5 Million --------------------------------------------------------------- Andrew Corp. has agreed to acquire EMS Wireless -- a Norcross, Georgia-based division of EMS Technologies, Inc. Under the agreement, Andrew will pay US$50.5 million in cash for EMS Wireless, a major designer and manufacturer of base station antennas and repeaters for cellular networks in North America. Its customers include the major wireless operators in the US. John DeSana, a group president in the Antenna and Cable Products Segment of Andrew Corp., said, "EMS Wireless and its employees have a successful track record in innovation and customer responsiveness, and their addition to Andrew will deliver compelling strategic and financial benefits. EMS Wireless will strengthen our relationships with key customers and extend our leadership position in wireless subsystems." EMS Wireless had revenues of US$28.5 million for the first half of 2006. It employs 200 people in Norcross, Georgia, and Curitiba, Brazil. The transaction is expected to close within 30-60 days and be slightly accretive to earnings in fiscal 2007. Andrew expects to achieve US$5 million to US$10 million annually in synergies and reduced corporate spending beginning in fiscal 2007. Paul Domorski, the president and chief executive officer of EMS Technologies, noted, "We are very proud of our Wireless division and its remarkable achievements over the past 13 years. I credit our highly talented personnel with building the EMS Wireless cellular and PCS base station antenna business. Meanwhile, the industry is consolidating rapidly and greater scale is very important. We believe EMS Wireless and its dedicated employees will have a better future as part of a larger organization, such as Andrew, that is less affected by swings in sales of particular products and has a wider array of products to offer to wireless carriers. For these reasons, we think Andrew Corporation is the perfect match." Headquartered in Westchester, Illinois, Andrew Corp. (NASDAQ: ANDW) -- http://www.andrew.com/-- designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries including, among others, these Latin American countries: Argentina, Bahamas, Belize, Barbados, Bermuda and Brazil. Andrew is an S&P 500 company Founded in 1937. * * * As reported in yesterday's Troubled Company Reporter, Standard & Poor's Ratings Services revised its CreditWatch implications on Andrew Corp. to negative from developing. The 'BB' corporate credit rating and other ratings on the company were placed on CreditWatch developing on Aug. 7, 2006. ============= B E R M U D A ============= MONTPELIER RE: Steven Gilbert Will Resign as Board of Director -------------------------------------------------------------- Montpelier Re Holdings Ltd. reported that Steven J. Gilbert has informed the company of his intention to resign as a member of the Board of Directors for personal reasons. The resignation would take effect from the conclusion of the company's next regular meeting of the Board of Directors on Nov. 17, 2006. Anthony Taylor, Montpelier Re chairperson and chief executive, said, "We are most grateful to Steve for all his fine insights and service to the Company through its formative years." Headquartered in Bermuda, Montpelier Re Holdings Ltd., through its operating subsidiary Montpelier Reinsurance Ltd., is a premier provider of global property and casualty reinsurance and insurance products. During the year ended Dec. 31, 2005, Montpelier underwrote US$978.7 million in gross premiums written. Shareholders' equity at Dec. 31, 2005, was US$1.1 billion. * * * On Jan. 4, 2006, Moody's Investors Service assigned Ba1 rating on Montpelier Re Holdings Ltd.'s subordinated shelf and Ba2 rating on preferred shelf. Moody's said the outlook for the ratings is stable. REFCO INC: Court Gives Final Okay on Disclosure Statement --------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York has issued a final written order approving Refco Inc. and its debtor-affiliates' Disclosure Statement, as modified, with respect to its First Amended Plan of Reorganization. Judge Drain found that the Disclosure Statement contains "adequate information" as that term is defined in Section 1125 of the Bankruptcy Code. Judge Drain ruled that the Disclosure Statement may be amended and modified from time to time to incorporate immaterial modifications, fill in blanks, and reflect any modifications that the Debtors determine to be appropriate, which do not materially change the Disclosure Statement or affect any rights of a party-in-interest All objections, to the extent not withdrawn or resolved, are overruled. The Debtors are authorized and empowered to take all steps and perform acts as may be necessary to implement and effectuate the Disclosure Statement Order. Amended Disclosure Statement As reported in the Troubled Company Reporter on Oct. 11, 2006, the Debtors filed with the Court their Amended Plan of Reorganization and accompanying Disclosure Statement, with Marc Kirschner, the Chapter 11 trustee for Refco Capital Markets, Ltd.; the Official Committee of Unsecured Creditors; and the Additional Committee of Unsecured Creditors as co-proponents. The Amended Plan contemplates that on or prior to the effective date of the plan, the RCM Chapter 11 Case will be converted to a case under subchapter III of Chapter 7 of the Bankruptcy Code, unless the Debtors and the RCM Trustee agree that there is a compelling reason for the RCM Estate to be administered under Chapter 11. In the event of a conversion to Chapter 7, the Plan will constitute a settlement and compromise between the RCM Estate and the Debtors' Estates, on one hand, and among the Estates of the various Debtors and certain creditors, on the other hand, for which approval is sought simultaneously with the confirmation of the Plan. Creditor Recovery Under Amended Plan The Amended Plan separately classifies Claims against and Interests in: * Refco and its 24 affiliates -- Contributing Debtors, * Refco Capital, Markets, Ltd., and * Refco F/X Associates, LLC. Administrative and Priority Tax Claims against the Contributing Debtors, RCM, and FXA are not classified under the Plan. Administrative and Priority Tax Claims will be paid in full in cash. The Amended Plan groups Claims against and Interest in the Contributing Debtors into eight classes: Estimated Estimated Class Description Claim Amount % Recovery (in US dollars) 1 Non-Tax Priority Claims $3,000,000 100.0% 2 Other Secured Claims $700,000 100.0% 3 Secured Lender Claims $704,000,000 100.0% 4 Sr Subordinated Note Claims $397,400,000 83.4% 5(a) Contributing Debtors Gen. Unsecured Claims $522,700,000 23.0% 5(b) Related Claims - 0.0% 6 RCM Intercompany Claims - N/A 7 Subordinated Claims - 0.0% 8 Old Equity Interests - 0.0% The Class 3 Secured Lender Claims against the Contributing Debtors will be allowed and paid to the extent provided in the Early Payment Order. RCM will be entitled to an additional Claim if, at the conclusion of the claims reconciliation process: (x) the total Allowed Contributing Debtors General Unsecured Claims are less than US$394,000,000; and (y) the Distributions to be made to Holders of Allowed Contributing Debtors General Unsecured Claims would Result in a recovery for the Holders in excess of 35% from the sum of the Contributing Debtors Distributive Assets and the Contributing Debtors' portion of the RGL FXCM Distribution. Specifically, RCM will be entitled to an additional Claim equal to the positive difference between US$394,000,000 minus the amount of the Allowed Contributing Debtors General Unsecured Claims. The Additional RCM Claim will participate pro rata in all Distributions from Contributing Debtors Distributive Assets and the Contributing Debtors' portion of the RGL FXCM Distribution to Holders of Allowed Contributing Debtors General Unsecured Claims that exceed the 35% recovery threshold. The Additional RCM Claim, however, will not be subject to the 40% limit on Distributions set forth in the Contributing Debtors General Unsecured Claim Distribution. The Amended Plan groups Claims against FXA into seven classes: Estimated Estimated Class Description Claim Amount % Recovery (in US dollars) 1 FXA Non-Tax Priority Claims $165,000 100.0% 2 FXA Other Secured Claims $120,000 100.0% 3 FXA Secured Lender Claims $704,000,000 N/A 4 FXA Sr. Sub. Note Claims $397,400,000 N/A 5(a) FXA Gen. Unsecured Claims $140,700,000 to $180,700,000 35.0% 5(b) Related Claims - 0.0% 6 FXA Convenience Claims $12,500,000 40.0% 7 FXA Subordinated Claims - 0.0% The Amended Plan provides that Class 5(a) FXA General Unsecured Claims less than or equal to $10,000, or greater than US$10,000 but, with respect to which, Holder voluntarily reduces the Claim to US$10,000, will be treated as Class 6 FXA Convenience Claims. The aggregate amount of Distributions to Class 6 FXA Convenience Claims is limited to US$5,000,000. To the extent that the amount of Class 5(a) FXA General Unsecured Claims electing to receive a Class 6 FXA Convenience Claim causes the aggregate amount to exceed the cap, the Holders of Claims permitted to elect the treatment will be determined by reference to the amount of the Claim, with the Claim in the lowest amount being selected first and the next largest claim being selected thereafter until the cap is reached. The ranges of claims and recoveries for Holders of FXA General Unsecured Claims are subject to material deviations and may be significantly lower due to: (i) alleged administrative expenses incurred in trading activity post-bankruptcy; and (ii) a dispute with a related entity in Japan concerning ownership of a significant portion of FXA cash. FXA has commenced a turnover action against Japan KK to require it to turn certain cash assets over to FXA. The Amended Plan groups RCM Claims into seven classes: Estimated Estimated Class Description Claim Amount % Recovery (in US dollars) 1 RCM Non-Tax Priority Claims $90,000 100.0% 2 RCM Other Secured Claims $110,400,000 100.0% 3 RCM FX/Unsecured Claims $985,600,000 37.6% 4 RCM Securities Customer Claims $2,793,800,000 85.4% 5 RCM Leuthold Metals Claims $15,600,000 100.0% 6 Related Claims - 0.0% 7 RCM Subordinated Claims - 0.0% Holders of Allowed Related Claims will be subordinated and will receive no Distribution unless all Holders of Allowed RCM FX/Unsecured Claims, Allowed RCM Securities Customer Claims and Allowed RCM Leuthold Metals Claims have been paid in full. To the extent that a Non-Debtor Affiliate has an Intercompany Claim against RCM, the Claim will be resolved by: (a) the netting of the Claim against any Claim held by the Contributing Debtors or RCM against the Non-Debtor Affiliate; or (b) to the extent that a distribution is made by RCM on account of the Claim, the Contributing Debtors will reimburse RCM for payments from any amounts the Contributing Debtors receive directly or indirectly from any Non-Debtor Affiliate. Holders of Claims under these classes are impaired and entitled to vote on the Amended Plan: -- Class 4 Senior Subordinated Note Claims, Class 5(a) Contributing Debtors General Unsecured Claims, Class 5(b) Related Claims and Class 6 RCM Intercompany Claims, Against one or more of the Contributing Debtors; -- Class 4 FXA Senior Subordinated Note Claims, Class 5(a) FXA General Unsecured Claims, Class 5(b) Related Claims, and Class 6 FXA Convenience Claims, against FXA; and -- Class 3 RCM FX/Unsecured Claims, Class 4 RCM Securities Customer Claims, Class 5 Leuthold Metals Claims and Class 6 Related Claims, against RCM. BAWAG Proceeds Allocation On October 5, 2006, the Court approved a partial allocation of the proceeds of a settlement agreement among the Debtors, the Creditors Committee and BAWAG P.S.K. Bank fur Arbeit und Wirtschaft und Osterreichische Postsparkasse Aktiengesellschaft. The BAWAG Allocation Order provides that US$100,000,000 of the BAWAG Guaranteed Proceeds was indefeasibly allocated to Refco Group Ltd., LLC, for payment to the Senior Secured Lenders. The consideration given by BAWAG, aside from the US$100,000,000 already earmarked for RGL, will be allocated this way: * US$150,000,000 will be allocated to the Contributing Debtors for payment to the Holders of Senior Subordinated Note Claims; * US$56,250,000 -- plus 100% of up to US$150,000,000 in the form of the BAWAG Contingent Payment -- will be allocated to the Contributing Debtors for payment to the Holders of Allowed Contributing Debtors General Unsecured Claims; * US$200,000,000 will be allocated to RCM for payment to the Holders of RCM Securities Customer Claims and RCM FX/Unsecured Claims; and * the value of each release granted by BAWAG in favor of each of the Debtors and RCM would be allocated to each of the Debtors and RCM, as applicable, without any resulting transfer of Cash or other Distribution. On Sept. 21, 2006, BAWAG wired US$337,500,000 to the Debtors and US$337,500,000 to the US government. The Debtors expect to receive US$168,700,000 of the amount transferred by BAWAG to the US government prior to confirmation of the Plan. The BAWAG Settlement Agreement provides that: -- any creditor who voluntarily elects to receive any portion of the BAWAG Proceeds must release BAWAG from all claims or actions arising from or related to the Debtors; and -- any portion of the BAWAG Proceeds that would have been allocated to any creditor that elects not to provide the required release must be returned to BAWAG. The Amended Plan provides that Holders of Allowed Claims against the Contributing Debtors and RCM can, if they affirmatively elect, opt out of the BAWAG settlement and thereby return their share of BAWAG Proceeds to BAWAG in lieu of agreeing to release BAWAG from liability. Opting out, however, will significantly reduce the aggregate recoveries to be received by the Creditors under the Plan: Estimated Plan Estimated Plan Recovery With Recovery Minus Creditor Class BAWAG Proceeds BAWAG Proceeds Senior Subordinated Note Claims 83.4% 45.7% Contributing Debtors General Unsecured Claims 23.0% 12.2% RCM Securities Customer Claims 85.4% 80.6% RCM FX/Unsecured Claims 37.6% 30.9% US$140,000,000,000 Claim Pile As of Sept. 29, 2006, the Debtors' claims agent, Omni Management Group, LLC, had received approximately 14,000 timely filed proofs of claim in the Debtors' Chapter 11 cases asserting more than US$140,000,000,000 in the aggregate, not including claims asserted in unliquidated amounts. The Debtors and their professionals have been engaged in the process of evaluating the proofs of claim to determine whether objections seeking disallowance, reclassification or reduction of certain asserted claims should be filed. The Debtors expect to seek disallowance of approximately US$130,000,000,000 of the claims. Administration of Refco Estates The Joint Sub-Committee of the Official Creditors Committees will designate an entity to serve as Plan Administrator for both Reorganized Refco and Reorganized FXA. The Joint Sub-Committee will also select a trustee for the Litigation Trust to be established under the Plan. The Litigation Trust will be structured in a manner that provides for a senior Tranche A and a junior Tranche B. No Distributions of Litigation Trust Interests will be made in respect of Tranche B until Tranche A has been fully and indefeasibly paid. However, Holders of Allowed Old Equity Interests may receive recoveries directly from 10% of the IPO Underwriter Claims Recovery in Tranche A. The Litigation Trust will have an initial five-year term, which may be extended for one or more one-year terms. The Trust may be terminated earlier than its scheduled termination if: -- the Bankruptcy Court has entered a final order closing all of or the last of the Chapter 11 cases and the RCM Chapter 11 case to the extent the RCM Chapter 11 case was converted to Chapter 7; and -- the Litigation Trustee has administered all the Trust assets and performed all other duties required under the Plan. The RCM Trustee will retain his rights, powers and duties necessary to carry out his responsibilities with respect to the RCM Estate. The Court will convene a hearing on Oct. 16, 2006, at 10 a.m., to consider whether the Amended Disclosure Statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. Objections, if any, are due by Oct. 9. A blacklined copy of the Debtors' Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?132f About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal US and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). (Refco Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). REFCO INC: Court Sets Dec. 15 Joint Plan Confirmation Hearing ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York set Dec. 15, 2006, at 10:00 a.m., as the hearing to consider confirmation of the First Amended Joint Plan of Reorganization filed by Refco Inc. and its debtor-affiliates; the Official Committee of Unsecured Creditors of Refco and the Additional Committee; and Marc Kirschner, the Chapter 11 Trustee for Refco Capital Markets, Ltd. The Confirmation Hearing may be continued from time to time by announcing it in open court, without further notice to parties-in-interest. The Court also set: * Dec. 1, 2006, at 4:00 p.m., as the deadline for filing and serving objections to Plan confirmation; * Nov. 20, 2006, at 4:00 p.m., as the deadline for filing and serving objections to claims solely for purposes of voting on the Plan, which deadline will not apply to Claims Objections that may be asserted for purposes other than voting on the Plan; * Dec. 5, 2006, at 4:00 p.m., as the deadline for filing and serving motions pursuant to Rule 3018(a) of the Federal Rules of Bankruptcy Procedure seeking temporary allowance of claims for voting purposes; and * Dec. 8, 2006, at 5:00 p.m., as the deadline for submitting ballots to Financial Balloting Group LLC, the Debtors' special voting agent. Claimholders whose claims are subject to an objection that was served after the Claims Objection Deadline will not be subject to the Rule 3018(a) Motion Deadline. Pursuant to Sections 105(a) and 502(a) of the Bankruptcy Code, any claim as to which an objection has been filed before the Claims Objection Deadline will be ineligible to vote on the Plan, and that claim will not be counted in determining whether the Section 1126(c) requirements have been met with respect to the Plan: (i) unless the claim has been temporarily allowed for voting purposes pursuant to Rule 3018(a); or (ii) except to the extent that the objection to that claim has been resolved in favor of the creditor asserting the claim. Holders of claims in Contributing Debtors Classes 4, 5(a), 5(b) and 6; FXA Classes 4, 5(a), 5(b) and 6; and RCM Classes 3, 4, 5, 6, 7 and 8 are impaired and entitled to vote on the Plan. Failure of a claimholder to timely deliver a properly executed Ballot will be deemed to constitute an abstention by that holder with respect to voting on the Plan, and that abstention will not be counted as a vote for or against the Plan. The Honorable Robert D. Drain fixed Oct. 16, 2006, as the record date for purposes of determining creditors and equity holders entitled to receive Solicitation Packages and related materials, if any; and creditors entitled to vote to accept or reject the Plan and elect certain treatment. Judge Drain directed the Debtors to mail to all of their known creditors, the Senior Subordinated Note Indenture Trustee and equity security holders as of the Record Date, and all other entities required to be served under Rules 2002 and 3017, notice of, inter alia, the Confirmation Hearing, within Oct. 25, 2006. Furthermore, Judge Drain ruled that each Senior Subordinated Note Claimholder will receive BAWAG Proceeds as a component of its pro rata share of the Senior Subordinated Note Holder Distribution, unless that Noteholder opts out of the BAWAG Settlement. Only the Senior Subordinated Note Claimholders who vote to reject the Plan will be eligible to elect not to receive Senior Subordinated Note Holder BAWAG Proceeds. Election by any Senior Subordinated Note Claimholder who votes to accept the Plan will be disregarded. Holders of Class 3 RCM FX/Unsecured Claims and Class 4 RCM Securities Customer Claims under the Plan will be deemed to have agreed to: (i) assign their RCM Related Claims against the Debtors to the Litigation Trust; (ii) affirm their understandings that their RCM Related Claims against any Contributing Non-Debtor Affiliate will be subordinated pursuant to the Plan, as of each applicable Contributing Non-Debtor Affiliate Trigger Date, to all other existing claims against and equity Interests in the applicable Contributing Non-Debtor Affiliate; and (iii) release the Secured Lenders from the Secured Lender Released Claims, if any, unless the holders elect not to accept that treatment. The Ballots for Class 6 FXA Convenience Claims, Class 6 RCM FX/Unsecured Convenience Claims and Class 7 RCM Securities Customer Convenience Claims will contain the same Ballot elections as the Ballots for Class 5(a) FXA General Unsecured Claims, Class 3 RCM FX/Unsecured Claims, and Class 4 RCM Securities Customer Claims. However, the Ballot elections made on a particular Convenience Class Ballot will be effective only if Convenience Class treatment is denied to the claimant making the Ballot elections due to oversubscription of the applicable Convenience Class. Parties-in-interest are entitled to request that the Debtors demonstrate cause for any instance in which: (a) a Ballot was withdrawn; (b) a vote was changed by the filing of a superseding Ballot; or (c) the Voting Deadline was extended. The deadline for filing and serving a Request for Cause will be Dec. 14, 2006, at 12:00 noon. Notwithstanding Local Rule 3018-1(b), the Debtors' voting agents will serve by Dec. 12, 2006, notice to any claimholder who is permitted to make an election with respect to a claim treatment, but whose election is deemed ineffective or otherwise is not counted. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal US and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). (Refco Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). REFCO INC: Court Gives Clarification on Nov. 15 Claims Bar Date --------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York clarified that in the case of Refco Capital Markets Ltd., the bar date for administrative claims will apply whether RCM is being administered in Chapter 11 or Chapter 7 of the Bankruptcy Code. The Bankruptcy Court previously set Nov. 15, 2006, as the deadline for filing administrative expense payment requests in Refco Inc. and its debtor-affiliates' chapter 11 cases. The Court also set a subsequent Administrative Bar Date for claims that accrue from Nov. 1, 2006, through the effective date of the Debtors' Chapter 11 Plan of Reorganization. That deadline will be on the 30th calendar day following the Plan Effective Date. Judge Drain ruled that these claims do not require filing of Administrative Expense Payment Requests on or before the Administrative Bar Dates: -- postpetition claims of professionals retained in the Debtors' cases for compensation for postpetition fees and Expenses; -- postpetition claims based on goods or services provided in the ordinary course of business, which are paid or remain payable according to typical and customary business terms. Failure to file requests for payment of Ordinary Course of Business Claims by the Administrative Bar Dates will not bar payment of claims in the ordinary course of business. Judge Drain further ruled that the Ad Hoc Committee of Equity Security Holders, Bank of America, N.A., and the Debtors' prepetition secured lenders under the August 2004 credit agreement are exempted from the Initial Administrative Bar Date. Man Financial Inc. will have until Nov. 27, 2006, to file all of its Administrative Expense Payment Requests. Any Administrative Expense Claimholder against the Debtors who is required, but fails to file an Administrative Expense Payment Request on or before the Administrative Bar Dates or the date, as to Man, will: (i) be forever barred, estopped, and permanently enjoined from asserting Administrative Expense Claim against the Debtors, their successors, or their property; and (ii) not be entitled to receive further notices regarding the Administrative Expense Claims. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal US and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). (Refco Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ============= B O L I V I A ============= INTERMEC INC: Posts US$195.9 Million Third Quarter 2006 Revenues ---------------------------------------------------------------- Intermec, Inc., reported 2006 third quarter revenues of US$195.9 million and net earnings from continuing operations of US$3.4 million, compared with 2005 third quarter revenues of US$219.8 million and earnings of US$11.3 million. The results for the current quarter include a restructuring charge relating to the closure of Intermec's design centers in Goteborg and Lund, Sweden, announced in the first quarter, which negatively impacted operating profit by (US$1.8) million. Intermec adopted amendments to its US pension and certain employee plans, effecting a "freeze" to benefit accruals for most participants as of June 30, 2006. These changes resulted in a net curtailment gain that positively impacted operating profit from continuing operations in the current quarter by US$2.1 million, or US$.02 per diluted share. Intermec's 2006 third quarter includes (US$0.8) million of incremental stock compensation expense recorded under the provisions of FAS 123-R, which negatively impacted EPS by (US$0.01) per diluted share. The effective tax rate for the current-quarter was 37.2%, compared with 12.4% in the prior-year quarter. Intermec's third quarter 2006 revenue decreased 11%, compared with the prior-year quarter. Geographically, North American revenues decreased 14% over the comparable prior-year period. Revenues in Europe, Mid-East and Africa decreased 17%; and the rest of the world, consisting of Asia Pacific and Latin America, increased 19%. By product line during the third quarter, Intermec's Systems and Solutions revenue decreased 20%, while Printer and Media revenues increased 6% over the comparable prior-year period. Service revenue decreased 3% over the comparable prior-year period. During the quarter Intermec repurchased stock with an aggregative value of approximately US$50 million pursuant to its board authorization of US$100 million, at an average share price of US$28.77. The company's cash equivalents and short-term investments position at the end of the third quarter was US$237.7 million. The decrease in cash equivalents and short-term investments of US$85.1 million during the third quarter was primarily due to the stock repurchases and to the increase in inventory. Larry D. Brady, the chairperson and chief executive officer of Intermec, said, "In response to disappointing results for the third quarter, we are accelerating cost initiatives and aggressively reducing inventory. We expect to announce specific cost reduction plans and related restructuring activities before the end of November." Other Third Quarter Business Highlights -- Intermec named Lanny H. Michael Senior Vice President and Chief Financial Officer. During the quarter, Intermec introduced an array of new products: -- The CN3, a small rugged mobile computer with unique communications capabilities, provides users with access to multiple voice and high-speed data options. The CN3 is the first mobile computer to offer integrated GPS and Bluetooth capabilities along with 3G WAN and Cisco Compatible WiFi connectivity simultaneously in one device. -- The Intellibeam EX25 is the first area imaging bar code scan engine to read and decode 1D and 2D bar codes in any orientation from six inches to over 50 feet, as well as composite and postal codes. The EX25 can also operate as an auto focusing camera in applications requiring photographs such as evidence of damaged, expired or unsealed goods. -- The CV30 is a rugged, fixed-mount computer designed to operate in challenging mobile vehicle based environments. The CV30 offers a choice of Microsoft Windows CE.NET 5.0 or Windows Mobile 5.0 operating systems, multiple mounting options, Cisco Compatible WiFi, Bluetooth and RFID support. Radio Frequency identification "RFID" was also a source of highlights for the quarter: -- Intermec received an award from Frost & Sullivan for RFID market strategy leadership in the Asia Pacific market for the years 2005-2006. The Frost & Sullivan Award for Market Strategy Leadership is presented each year to a company whose market strategy has yielded significant gains in market presence during the research period. -- Intermec was selected to provide the Gen 2 RFID bag tag printer system for the Hong Kong International Airport or HKIA in Hong Kong. The Intermec RFID Gen 2 printers will be installed at check-in counters to enhance the existing RFID baggage sorting system, which was first installed in 2005. HKIA is the first airport in the world to implement an end-to-end RFID baggage tagging/sorting system. Intermec announced Medallion Complete, a new world-class extended service coverage program for Intermec data collection equipment. Available in 14 countries around the world, Medallion Complete covers eligible Intermec devices against incidental damage experienced in the work environment. Under normal industry practice, incidental damage to data collection equipment -- as opposed to normal wear or component failure -- is not covered by standard service agreements. Repairs due to damage are infrequent, but can be costly, as they typically involve the most expensive components of a device, such as a touch screen or LCD. Fourth Quarter Outlook Intermec also reported its GAAP basis revenue outlook for the fourth quarter 2006. Revenues for the period are expected to be within a range of US$210 million to US$230 million. Intermec Inc. -- http://www.intermec.com/-- develops, manufactures and integrates technologies that identify, track and manage supply chain assets. Core technologies include RFID, mobile computing and data collection systems, bar code printers and label media. The company has locations in Australia, Bolivia, Brazil, China, France, Hong Kong, Singapore and the United Kingdom. * * * Standard & Poor's Rating Services raised its ratings on Everett, Washington-based Intermec Inc. to 'BB-' from 'B+'. The upgrade reflects expectations that Intermec will sustain current levels of profitability and leverage. S&P said the outlook is stable. =========== B R A Z I L =========== AGCO CORP: Third Quarter 2006 Net Sales Down 4.3% to US$1.2 Bil. ---------------------------------------------------------------- AGCO Corp. reported net income of US$0.06 per share for the third quarter of 2006. Adjusted net income, which excludes restructuring and other infrequent expenses, was US$0.07 per share for the third quarter of 2006. For the third quarter of 2005, AGCO reported both net income and adjusted net income of US$0.31 per share. Net sales for the third quarter of 2006 were US$1.2 billion, a decrease of approximately 4.3% compared to the same period in 2005. For the first nine months of 2006, AGCO's net income was US$0.69 per share compared to US$1.01 per share in 2005. Adjusted net income, excluding restructuring and other infrequent expenses, was US$0.70 per share for the first nine months of 2006 compared to adjusted net income, excluding restructuring and other infrequent expenses and costs associated with a June 2005 bond redemption, of US$1.16 per share in 2005. Net sales for the first nine months of 2006 decreased approximately 6.5% to US$3.8 billion. Martin Rihenhagen -- chairperson, president and chief executive officer of AGCO -- said, "As we previously announced, our results were negatively impacted by weaker markets in both our North American and Asia/Pacific segments. In addition, the continued reduction of dealer inventories in North America resulted in lower sales and operating income in the region. This reduction is part of our plan to reduce both inventory and accounts receivable throughout the year. As of Sept. 30, 2006, our worldwide inventory and accounts receivable were approximately US$250 million lower than September 2005 levels. The working capital management also generated an improvement in free cash flow for the first nine months of 2006 of approximately US$200 million compared to the same period in 2005. While our balance sheet focus has impacted our current results, we believe these actions, along with our product and distribution initiatives, will provide a foundation for better returns in the future." "AGCO's third quarter sales were led by continued strong performance in the Europe/Africa/Middle East region. Despite relatively flat industry sales, our European revenues increased approximately 7.5% in the third quarter of 2006, excluding currency impacts, which demonstrates the value of our products and our strong distribution network," Mr. Richenhagen stated. Third Quarter and Year-to-Date Results For the third quarter of 2006, AGCO reported net sales of US$1,180.9 million and net income of US$5.4 million, or US$0.06 per share. Adjusted net income, excluding restructuring and other infrequent expenses, was US$6.0 million, or US$0.07 per share, for the third quarter of 2006. For the third quarter of 2005, AGCO reported net sales of US$1,233.6 million and net income of US$27.8 million, or US$0.31 per share. Adjusted net income, excluding restructuring and other infrequent income, was US$27.7 million, or US$0.31 per share, for the third quarter of 2005. For the first nine months of 2006, AGCO reported net sales of US$3,801.2 million and net income of US$63.6 million, or US$0.69 per share. Adjusted net income, excluding restructuring and other infrequent expenses, was US$64.3 million, or US$0.70 per share for the first nine months of 2006. For the first nine months of 2005, AGCO reported net sales of US$4,064.8 million and net income of US$95.4 million, or US$1.01 per share. Adjusted net income, excluding restructuring and other infrequent income and bond redemption costs, in the first nine months of 2005 was US$109.4 million, or US$1.16 per share. A reconciliation of adjusted income from operations, net income and earnings per share to reported income from operations, net income and earnings per share for the three and nine months ended Sept. 30, 2006, and 2005 is provided in Note 8 to our Condensed Consolidated Financial Statements. AGCO's net sales decreased 4.3% for the third quarter and 6.5% for the first nine months of 2006 compared to the same periods in 2005. Excluding the impact of currency translation, AGCO's net sales decreased 7.6% during the third quarter and 7.0% for the first nine months of 2006 compared to the same periods in 2005. Net sales declined in the North America, South America and Asia/Pacific regions, partially offset by sales increases in the Europe/Africa/Middle East region. In North America, net sales were significantly lower during 2006 compared to 2005 primarily due to weaker market conditions and lower deliveries to dealers resulting in a reduction in dealer inventory levels. In the South America and Asia/Pacific regions, weaker market conditions contributed to the sales decline. Adjusted income from operations decreased US$25.7 million for the third quarter of 2006 and US$61.5 million for the first nine months of 2006 compared to 2005 resulting from the decrease in net sales. Gross margins in 2006 were slightly below 2005, due to lower production levels, sales mix and currency impacts. Unit production of tractors and combines for the first nine months of 2006 was approximately 16% below 2005. In AGCO's Europe/Africa/Middle East region, income from operations increased US$2.6 million in the third quarter and US$11.5 million for the first nine months of 2006 compared to 2005. Income from operations in the third quarter and the first nine months of 2006 increased due to an approximate 3% and 6% increase in net sales, respectively, excluding currency impact, resulting from stronger market conditions in key regions of Europe, particularly in Germany. Operating margins remained strong due to new products and productivity improvements. Income from operations in AGCO's South America region decreased US$0.9 million for the third quarter and US$4.1 million for the first nine months of 2006 compared to 2005. Industry demand in South America was below 2005 levels, resulting in a decline in AGCO's net sales in South America, excluding currency impact, of approximately 4% and 15% for the third quarter and first nine months of 2006, respectively. In North America, income from operations decreased US$20.9 million in the third quarter and US$46.5 million for the first nine months of 2006 compared to 2005. Income from operations in the third quarter and the first nine months of 2006 was lower primarily due to an approximate 27% and 24% reduction in net sales, respectively, excluding currency impact, compared to 2005. The sales decline is a result of lower retail sales of AGCO products due to weaker industry conditions as well as the impact of dealer inventory reductions, which influence wholesale sales levels. Income from operations in the Asia/Pacific region decreased US$4.1 million in the third quarter and US$12.0 million for the first nine months of 2006 compared to 2005 primarily due to lower sales in Australia, New Zealand and Asia. Regional Market Results North America Industry retail demand softened considerably in the third quarter of 2006. Industry unit retail sales of tractors were down nearly 8% and combines were down over 18% compared to the third quarter of 2005. Third quarter 2006 industry retail sales of tractors over 100 horsepower were 24% below those in the third quarter of 2005. Industry unit retail sales of tractors for the first nine months of 2006 decreased approximately 2% over the comparable prior year period resulting from decreases in the compact and high horsepower tractor segments, offset by a slight increase in the utility tractor segment. Industry unit retail sales of combines for the first nine months of 2006 were approximately 8% lower than the prior year period. AGCO's unit retail sales of tractors and combines were also lower in the third quarter and first nine months of 2006 compared to 2005. Europe Industry unit retail sales of tractors for the first nine months of 2006 increased approximately 1% compared to the prior year period. Retail demand declined in France, Italy, Finland and Spain, but improved in Germany, the United Kingdom, Scandinavia and Central and Eastern Europe. AGCO's unit retail sales for the first nine months of 2006 were higher when compared to the prior year period. South America Industry unit retail sales of tractors and combines for the first nine months of 2006 decreased approximately 8% and 40%, respectively, compared to the prior year period. Retail sales in the major market of Brazil for tractors increased approximately 7% compared to 2005 and declined approximately 47% for combines during the first nine months of 2006 compared to 2005. AGCO's South American unit retail sales of tractors and combines declined in the first nine months of 2006 compared to 2005. Rest of World Markets Outside of North America, Europe and South America, AGCO's net sales for the first nine months of 2006 were approximately 25% lower than 2005 due to lower sales in Asia and the Middle East. Mr. Richenhagen commented, "Global industry demand in the third quarter showed mixed results. In Europe, industry retail sales improved slightly with increases in Germany and Scandinavia. In North America, third quarter industry retail sales were down sharply, especially in the large equipment sectors. In South America, industry demand remains weak overall with some recent improvement in Brazil driven by the sugar cane, coffee, and citrus sectors." Outlook Industry retail sales of farm equipment in 2006 in all major markets are expected to be relatively flat or below 2005 levels. In North America, 2006 farm income is projected to be below the prior year resulting in lower demand for equipment. In South America, the strength of the Brazilian currency and high farm debt levels are expected to continue to result in lower retail sales. Industry demand in Europe is expected to be flat to slightly increased compared to 2005. AGCO's net sales for the full year of 2006 are expected to decline 2 to 3% versus 2005 based on lower industry demand and planned dealer inventory reductions. AGCO is targeting full year earnings per share to be approximately US$1.00 per share. In addition, improved working capital utilization in 2006 is expected to result in strong free cash flow. Headquartered in Duluth, Georgia, Agco Corp. -- http://www.agcocorp.com/-- is a global manufacturer of agricultural equipment and related replacement parts. Agco offers a full product line including tractors, combines, hay tools, sprayers, forage, tillage equipment and implements, which are distributed through more than 3,600 independent dealers and distributors in more than 140 countries worldwide, including Brazil. AGCO products include the following brands: AGCO(R), Challenger(R), Fendt(R), Gleaner(R), Hesston(R), Massey Ferguson(R), New Idea(R), RoGator(R), Spra-Coupe(R), Sunflower(R), Terra-Gator(R), Valtra(R), and White(TM) Planters. AGCO provides retail financing through AGCO Finance. The company had net sales of US$5.4 billion in 2005. * * * As reported in the Troubled Company Reporter-Latin America ion Sept. 28, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the Automotive and Equipment sector, the rating agency confirmed its Ba2 Corporate Family Rating for AGCO Corp. Moody's also revised its probability-of-default ratings and assigned loss-given-default ratings on these loans facilities: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default 1.750% Conv. Sr. Sub. Notes due 2033 B1 B1 LGD5 89% 6.875% Sr. Sub. Notes due 2014 B1 B1 LGD5 89% Sr. Unsec. Shelf Ba3 Ba3 LGD5 81% BANCO DO BRASIL: Investing BRL850MM in Data Center with Caixa ------------------------------------------------------------- Banco do Brasil has collaborated with Caixa Economica Federal to invest BRL850 million in a new data center, published reports say. Jesualdo Conceicao da Silva, the president of Banco do Brasil and Caixa Economica consortium, told Business News Americas that the two firms published the proposal on Oct. 30. Banco do Brasil and Caixa Economica will study feedback from the public before sending the finalized version to government in November. Banco do Brasil and Caixa Economica expect to begin work on the center at the start of 2007, BNamericas says, citing Mr. da Silva. The facility should launch operations in the first half of 2008. Banco do Brasil and Caixa Economica have also entered into a public-private partnership to secure and construct on a 24,000 square-meter area for the center at a new technology park in Brasilia, Mr. da Silva told BNamericas. About Caixa Economica Federal Apart from its commercial banking activities, Caixa Economica Federal is responsible for executing policies in the areas of housing and basic sanitation, the administration of social funds and programs and federal lotteries. Caixa Economica Federal is Brazil's second largest financial institution and is the fourth largest bank in Latin America. According to a 2002 ranking of Latin American banks undertaken by Caracas-based SOFTline, it had US$36.3 billion (11.7%) in assets, deposits valued at US$21.7 billion and loans worth US$7 billion as of 2002. About Banco do Brasil Banco do Brasil is Brazil's federal bank and is the largest in Latin America with some 20 million clients and over 7,000 points of sale (3,200 branches) in Brazil, and 34 offices and partnerships in 26 other countries. In addition to its traditional retail banking services, Banco do Brasil underwrites and sells bonds, conducts asset trading, offers investors portfolio management services, conducts financial securities advising, and provides market analysis and research. * * * As reported on Mar. 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counter party credit ratings on Banco do Brasil SA to 'BB' from 'BB-'. The foreign and local currency ratings of this bank are now equalized at 'BB'. S&P said the outlook is stable. BANCO ITAU: Joint Venture with XL Capital Brings in BRL46 Mil. -------------------------------------------------------------- Silvio de Carvalho, the executive director of Banco Itau Holding Financeira SA, said in a conference call that Itau XL Seguros Corporativos, the company's joint venture with XL Capital Ltd., added BRL46 million to the its third quarter bottom line. Business News Americas relates that Banco Itau signed on Aug. 31 a final agreement with XL Capital to create XL Seguros to cover high corporate risks. Banco Itau and XL Capital first disclosed the joint venture in January. XL Seguros has not become operational yet, BNamericas says, citing Mr. de Carvalho. Mr. de Carvalho told BNamericas that XL Capital paid US$30 million for access to Banco Itau's customer base. It increased Banco Itau's revenues last quarter to BRL46 million. This and other non-recurring gains allowed Banco Itau to offset a BRL1.76-billion charge related to the acquisition of BankBoston Brasil from Bank of America and report a BRL71-million net profit for the third quarter. Alan Murray, an analyst at Moody's Investors Service, said that XL Seguros will allow Banco Itau to gain access to XL Capital's reinsurance capacity as the local industry prepares for the opening of the reinsurance market, Business News Americas reports. About XL Capital Headquartered in Hamilton, Bermuda, XL Capital Ltd. is a provider of insurance and reinsurance coverage, and financial products and services to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis. XL Capital operates through three business segments: Insurance, Reinsurance and Financial Products and Services. The company provides commercial property and casualty insurance products on a global basis. Products generally provide tailored coverages for complex corporate risks and are divided into two categories: risk management products and specialty lines products. XL Capital provides casualty, property, property catastrophe, marine, aviation, accident and health, and other specialty reinsurance and life products on a global basis with business being written on both a proportional and non-proportional basis. The company's financial products and services businesses include insurance, reinsurance and derivative solutions for complex financial risks. About Banco Itau Banco Itau Holding Financeira SA -- http://www.itau.com.br/-- is a private bank in Brazil. The company has four principal operations: banking -- including retail banking through its wholly owned subsidiary, Banco Itau SA (Itau), corporate banking through its wholly owned subsidiary, Banco Itau BBA SA (Itau BBA) and consumer credit to non-account hold customers through Itaucred -- credit cards, asset management and insurance, private retirement plans and capitalization plans, a type of savings plan. Itau Holding provides a variety of credit and non-credit products and services directed towards individuals, small and middle market companies and large corporations. * * * As reported in the Troubled Company Reporter on March 9, 2006, Standard & Poor's Ratings Services assigned a 'BB' currency credit rating on Banco Itau S.A. * * * Fitch affirmed on Aug. 28, 2006, the ratings of the Itau Group of banks and the National Long- and Short-term ratings of BankBoston Banco Multiplo S.A. and its subsidiary, BankBoston Leasing S.A. -- Arrendamento Mercantil (BankBoston Leasing). This followed the conclusion of the agreement between Banco Itau Holding Financeira with Bank of America Corp. to acquire BAC's Brazilian operations (spearheaded by BKB) and its Latin American subsidiaries. Central Bank of Brazil approved the BKB transaction on Aug. 22, 2006, and the acquisition of the local subsidiaries of BAC is contingent on approval by the Chilean and Uruguayan regulatory authorities. The affected ratings of Banco Itau were: Banco Itau Holding Financiera -- Foreign currency IDR affirmed at 'BB+', Stable Outlook -- Short-term foreign currency rating affirmed at 'B' -- Local currency IDR affirmed at 'BBB-' (BBB minus), Stable Outlook -- Short-term local currency rating affirmed at 'F3' -- Individual rating affirmed at 'B/C' -- National Long-term rating affirmed at 'AA+(bra)', Stable Outlook -- National Short-term rating affirmed at 'F1+(bra)' -- Support rating affirmed at '4' BUCKEYE TECHNOLOGIES: S&P Affirms BB- Corporate Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Memphis, Tennesee-based Buckeye Technologies Inc. to stable from negative. At the same time the rating agency affirmed all ratings, including its 'BB-' corporate credit rating on the company. John Kennedy, a credit analyst at Standard & Poor's, said, "The outlook revision reflects our view that Buckeye has taken steps that will strengthen its credit metrics to a level appropriate for the current rating. The successful implementation of price increases in its specialty fibers, fluff pulp, and nonwoven products to offset higher input costs is improving the company's profitability and cash flow. Furthermore, Buckeye has reconfigured its manufacturing capabilities to become a lower lower-cost producer. We could revise the outlook to negative if earnings and cash flow fall below current levels. It is not likely we would revise the outlook to positive in the next two years, given the company's need to strengthen its financial profile for the current rating." Buckeye Technologies is a leading producer of absorbent products and specialty pulps that serve a wide variety of end uses. Mr. Kennedy noted, "In fiscal 2007, we expect Buckeye's product mix and overall financial performance to improve because of the conversion of the company's Americana plant in Brazil to a market facility from toll manufacturing and the closure of its high-cost facility in Glueckstadt, Germany." 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. CAIXA ECONOMICA: Investing BRL850 Million in Data Center -------------------------------------------------------- Banco do Brasil has collaborated with Caixa Economica Federal to invest BRL850 million in a new data center, published reports say. Jesualdo Conceicao da Silva, the president of Banco do Brasil and Caixa Economica consortium, told Business News Americas that the two firms published the proposal on Oct. 30. Banco do Brasil and Caixa Economica will study feedback from the public before sending the finalized version to government in November. Banco do Brasil and Caixa Economica expect to begin work on the center at the start of 2007, BNamericas says, citing Mr. da Silva. The facility should launch operations in the first half of 2008. Banco do Brasil and Caixa Economica have also entered into a public-private partnership to secure and construct on a 24,000 square-meter area for the center at a new technology park in Brasilia, Mr. da Silva told BNamericas. About Banco do Brasil Banco do Brasil is Brazil's federal bank and is the largest in Latin America with some 20 million clients and over 7,000 points of sale (3,200 branches) in Brazil, and 34 offices and partnerships in 26 other countries. In addition to its traditional retail banking services, Banco do Brasil underwrites and sells bonds, conducts asset trading, offers investors portfolio management services, conducts financial securities advising, and provides market analysis and research. About Caixa Economica Federal Apart from its commercial banking activities, Caixa Economica Federal is responsible for executing policies in the areas of housing and basic sanitation, the administration of social funds and programs and federal lotteries. Caixa Economica Federal is Brazil's second largest financial institution and is the fourth largest bank in Latin America. According to a 2002 ranking of Latin American banks undertaken by Caracas-based SOFTline, it had US$36.3 billion (11.7%) in assets, deposits valued at US$21.7 billion and loans worth US$7 billion as of 2002. * * * As reported in the Troubled Company Reporter-Latin America on Sept. 4, 2006, Moody's Investors Service upgraded these ratings of Caixa Economica Federal: -- long-term foreign currency deposits to Ba3 from Ba1; and -- long- and short-term global local currency deposit ratings to A1/Prime-1 from A3/Prime-2. Moody's said the ratings outlook is stable. CHEMTURA CORP: Names Mahoney as Sr. VP & Corporate Controller ------------------------------------------------------------- Chemtura Corp. named Kevin V. Mahoney as its senior vice president and corporate controller. Mr. Mahony took the place of Michael Vagnini, who has decided to leave Chemtura to pursue other interests. Karen R. Osar, Chemtura's executive vice president and chief financial officer, said, "I want to thank Mike (Mr. Vagnini) for his dedication and many contributions to the company, and to wish him much success in his future endeavors. I also want to welcome Kevin as a key member of our finance organization and its leadership team. His 30 years of public and corporate accounting experience will serve Chemtura well." Mr. Mahoney brings thorough knowledge of US and international financial regulations, Generally Accepted Accounting Principles requirements and Sarbanes-Oxley compliance. He is versed in driving efficiency through the application of the latest technologies and is experienced at developing strategic perspectives on global business policies and strategies, acquisitions, and structures for divestitures and joint ventures. Mr. Mahoney was the senior vice president of corporate reporting at American Express Co., where he worked for 18 years. He was responsible for global financial reporting. Mr. Mahoney joined American Express in 1988 as vice president of financial reporting and analysis for Travel Related Services, became senior vice president of global business management and analysis for TRS in 1995, and was named controller, Western Hemisphere, in 2000. Before joining American Express, Mr. Mahoney was the senior manager of accounting policies and financial reporting for the Colgate-Palmolive company. Before that, he was a senior manager with KPMG LLP. 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. CHEMTURA CORP: Posts US$80.6 Million Third Quarter 2006 Loss ------------------------------------------------------------ Chemtura Corp. reported a US$80.6 million loss from continuing operations for the third quarter of 2006, and earnings from continuing operations on a non-GAAP (Generally Accepted Accounting Principles) basis of US$18.3 million. Robert L. Wood, the chairperson and chief executive officer of Chemtura, commented, "This year's third quarter results reflect a number of operating challenges and several notable accomplishments. Crop Protection results were negatively impacted by high bad debt reserves and lower sales in Latin America and competitive pressures in the US mite market, and we continued to struggle in Rubber Additives and EPDM Elastomers. We've begun recapturing volume in our non-flame retardant Plastic Additives business but it has not yet translated into the margin recovery we anticipate. Flame Retardants, Consumer Products, Lubricant Additives and Urethanes all turned in solid performances." "Over the course of 2006, our managerial emphasis has been on strengthening Chemtura's capabilities and resolving remaining legacy issues. Third quarter results demonstrate considerable progress toward those objectives. We intend to continue focusing our efforts on growing our best franchises, fixing problem areas, streamlining costs, and honing our portfolio to create a far better performing company," Mr. Wood said. Third Quarter Results Chemtura's third quarter 2006 net sales of US$917.0 million were less than one percent below third quarter 2005 net sales of US$918.4 million. The decrease is due to lower sales of US$13.6 million related to the sale of the company's Industrial Water Additives business or IWA in May 2006 and a US$21.7 million decrease in sales volume, which were mostly offset by increased selling prices of US$26.5 million and favorable foreign currency translation of US$7.0 million. Included in Chemtura's operating loss for the three and nine month periods ended Sept. 30, 2006, is a pre-tax charge of US$51.9 million, which represents the estimated impact of the goodwill impairment that is being evaluated in accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." This charge represents management's current estimate of the impairment, which may be higher or lower than the final measurement. The final measurement of the impairment is expected to be completed prior to the filing of the company's Quarterly Report on Form 10-Q on Nov. 9, 2006. Chemtura's operating loss for the third quarter of 2006 was US$45.2 million as compared with an operating loss of US$49.7 million for the third quarter of 2005. This 9% improvement is primarily due to: -- the absence of non-recurring third quarter 2005 merger related charges for the write-off of in- process research and development of US$75.4 million, and -- a purchase accounting inventory adjustment of US$37.1 million resulting from the: * merger with Great Lakes Chemical Corp. on July 1, 2005; * reduced merger costs of US$18.3 million, * increased selling prices of US$26.5 million, and * cost reduction program savings of US$21.0 million, which were partially offset by: (a) an estimated goodwill impairment charge of US$51.9 million, (b) higher raw material and energy costs of US$30.3 million, (c) a US$19.0 million increase in antitrust costs primarily related to settlements reached in the third quarter of 2006, (d) lower sales volume of US$18.4 million, (e) a US$14.5 million charge related to the impairment of long-lived assets of the Fluorine business, (f) US$11.8 million of unfavorable manufacturing costs resulting from lower production volumes, (g) higher freight costs of US$6.9 million related to fuel surcharges, (h) an increase in the provision for doubtful accounts of US$4.5 million primarily resulting from the current economic situation of the agricultural markets in Brazil, (i) inventory write-offs of US$3.6 million, (j) the absence of US$3.5 million of operating profit due to the sale of the IWA in May 2006, and (k) additional depreciation expense of US$2.9 million resulting from a change in the useful life of assets at one of the company's manufacturing facilities. Chemtura's operating loss also includes US$2.4 million (US$1.5 million after-tax) related to the incremental stock-based compensation expense for the quarter ended Sept. 30, 2006, associated with the adoption of FASB Statement No. 123R, "Share Based Payment," on Jan. 1, 2006. Chemtura's loss from continuing operations for the third quarter of 2006 was US$80.6 million, compared with US$120.3 million for the third quarter of 2005. This improvement is due in part to: -- the 9% improvement in operating profit, -- lower interest expense of US$6.8 million, -- a US$2.4 million increase in equity income from the Davis Standard joint venture, -- a gain of US$1.5 million due to the adjustment of a contingency related to the 2004 sale of the company's Gustafson joint venture, and -- a higher tax benefit in 2006 compared with 2005 principally due to: * the absence of non-recurring taxes in 2005 on dividends under the Foreign Earnings Repatriation provisions of the 2004 American Jobs Creation Act, and * the lack of any tax benefit in 2005 for the write-off of in-process research and development related to the Merger. The increases were partially offset by higher costs of US$13.5 million for the loss on early extinguishment of debt principally related to the early retirement of the company's 9.875% Notes in July 2006. During the third quarter of 2006, Chemtura recorded a gain on sale of discontinued operations of US$45.9 million (net of taxes of US$21.1 million), related to the sale of the OrganoSilicones business to General Electric company in July of 2003. This gain represents the recognition of the additional contingent earn-out proceeds related to the combined performance of GE's existing Silicones business and the OrganoSilicones business from the date of the sale through Sept. 30, 2006. Third Quarter Non-GAAP Results On a non-GAAP basis, third quarter 2006 operating profit was US$51.7 million compared with third quarter 2005 pro forma non-GAAP operating profit of US$93.6 million. This 45% decrease is comprised of: -- higher raw material and energy cost of US$30.3 million, -- lower sales volume of US$18.4 million, -- US$11.8 million of unfavorable manufacturing costs due to lower production volume, -- US$6.9 million of higher freight costs, -- US$4.5 million primarily due to an increase in the provision for doubtful accounts resulting from the current economic situation of the agricultural markets in Brazil, -- US$3.6 million of inventory write-offs, -- the absence of US$3.5 million of operating profit due to the sale of IWA, -- US$3.4 million of other strategic and corporate initiative costs, -- US$2.4 million related to the incremental effect of stock option expense, and -- other net increases in operating costs, which were partially offset by selling price increases of US$26.5 million and synergy cost savings of US$21.0 million. Chemtura's non-GAAP earnings from continuing operations for the third quarter of 2006 was US$18.3 million, excluding pre-tax charges of US$51.9 million for the estimated impairment of goodwill, US$25.7 million for antitrust costs resulting primarily from settlement offers made to certain rubber chemicals and indirect class action claimants and legal fees associated with the antitrust investigations and civil lawsuits, a US$24.3 million loss on early extinguishment of debt related to the retirement of the company's 9.875% Senior Notes due 2012, a US$14.5 million asset impairment charge related to the impairment of certain tangible and intangible assets of the Fluorine business, US$2.9 million for additional depreciation due to the change in the useful life of certain assets at one of the company's manufacturing facilities, US$1.1 million for merger costs related to the Merger, and US$0.9 million for facility closures, severance and related costs. Excluded from non-GAAP earnings is also a pre-tax credit of US$1.5 million related to the reversal of certain reserves related to the company's Gustafson joint venture that was sold in 2004. Non-GAAP earnings from continuing operations includes US$2.4 million (US$1.5 million after-tax) related to the incremental stock-based compensation expense for the quarter ended Sept. 30, 2006, associated with the adoption of FASB Statement No. 123R, "Share Based Payment," on Jan. 1, 2006. Pro forma non-GAAP earnings from continuing operations for the third quarter of 2005 excludes pre-tax charges of US$19.4 million for merger costs resulting from the Merger, US$10.9 million for the loss on early extinguishment of debt, US$6.7 million for antitrust costs, US$4.6 million for direct costs resulting from Hurricanes Katrina and Rita, and US$0.2 million for facility closures, severance and related costs. Nine-Month Results Chemtura's net sales for the nine months ended Sept. 30, 2006, of US$2,849.1 million were US$738.6 million above net sales for the comparable period of 2005 of US$2,110.5 million. The increase was primarily due to US$855.6 million in additional sales resulting from the Merger, partially offset by the exclusion of US$48.3 million of sales due to the deconsolidation of the company's Polymer Processing Equipment business in April 2005. The operating profit of Chemtura for the nine months ended Sept. 30, 2006, was US$53.6 million as compared with US$55.7 million for the nine months ended Sept. 30, 2005. This 4% decrease is primarily a result of: -- a US$51.9 million charge related to the impairment of goodwill, -- higher antitrust costs of US$57.5 million due primarily to additional settlements throughout 2006, -- US$66.0 million in higher raw material and energy costs, -- US$48.1 million in lower sales volume, -- US$28.6 million in unfavorable manufacturing costs resulting from lower production volumes, -- US$20.1 million for the impairment of long-lived assets, -- US$3.9 million in unfavorable currency translations, -- higher freight costs of US$7.6 million related to fuel surcharges, -- an increase in the provision for doubtful accounts of US$3.7 million primarily resulting from the current economic situation of the agricultural markets in Brazil, -- inventory write-offs of US$7.0 million, -- US$6.5 million due to the sale of the Industrial Water Additives business (IWA) in May 2006, and -- US$6.6 million related to the incremental effect of stock option expense. The charges were offset in part by US$130.2 million of additional operating profit resulting from businesses acquired in the Merger through the first six months of 2006, US$46.7 million in higher selling prices, US$35.2 million in cost reduction program savings, lower facility closure, severance and related costs of US$26.2 million, lower merger costs of US$12.2 million, the absence of the write-off of in-process research and development of US$75.4 million and purchase accounting inventory adjustments of US$37.1 million in 2005 related to the Merger. Chemtura's loss from continuing operations for the nine months ended Sept. 30, 2006, was US$67.0 million, or US$0.28 per diluted share, compared with the loss from continuing operations of US$91.9 million, or US$0.58 per diluted share, for the nine months ended Sept. 30, 2005. This improvement is mainly due to a higher tax benefit during 2006 compared with 2005 principally due to the absence of non-recurring taxes in 2005 on dividends under the Foreign Earnings Repatriation provisions of the 2004 American Jobs Creation Act and the lack of any tax benefit for the write-off in-process research and development related to the Merger, and an increase in other income, net of US$11.5 million, which includes a US$6.0 million increase in equity income from the Davis Standard joint venture, a US$4.3 million favorable settlement of a contractual matter and income of US$1.5 million related to the reversal of certain reserves related to the company's Gustafson joint venture that was sold in 2004. These increases were partially offset by the four percent decrease in operating profit discussed above, an increase in the loss on early extinguishment of debt of US$33.0 million resulting from the early retirement of the company's Senior Floating Rate and 9.875% Notes in 2006, and higher interest expense of US$3.0 million. For the nine months ended Sept. 30, 2006, Chemtura recorded a gain on sale of discontinued operations of US$45.9 million (net of taxes of US$21.1 million), or US$0.19 per diluted share, related to the sale of the OrganoSilicones business to General Electric company in July of 2003. This gain represents the recognition of the additional contingent earn-out proceeds related to the combined performance of GE's existing Silicones business and the OrganoSilicones business from the date of the sale through Sept. 30, 2006. Chemtura reported an income tax benefit for the first nine months of 2006 of US$0.3 million. This lower than expected tax benefit is attributable to non-deductible goodwill written-off associated with the Industrial Waters Additive divestiture and the impairment relating to the Fluorine business, partially non-deductible anti-trust costs, offset by favorable settlements of certain tax examinations and tax legislative changes. Nine-Month Pro Forma and Non-GAAP Results Pro forma net sales of Chemtura for the first nine months of 2006 were US$173.2 million or 6% less than nine-month 2005 pro forma net sales of US$3,022.3 million. Of this decrease US$201.0 million was attributable to lower volume, US$48.3 million was due to the deconsolidation of the Polymer Processing Equipment business unit in April 2005, an additional US$26.1 million was due to declines in volume and selling prices resulting from supply agreements related to the divestiture of the Industrial Water Additives business in May 2006, US$7.1 million due to the net effect of other acquisitions and divestitures, and US$20.9 million due to unfavorable foreign currency impact, partially offset by a US$130.2 million increase in selling prices. On a non-GAAP basis, Chemtura's nine-month 2006 operating profit of US$231.4 million was US$72.3 million or 24% lower than nine month 2005 pro forma non-GAAP operating profit of US$303.7 million. This decrease is comprised of raw material and energy cost increases of US$76.5 million, lower volumes of US$76.1 million, US$44.3 million of unfavorable manufacturing costs, US$13.0 million of higher freight costs, US$10.2 million of other strategic and corporate initiative costs, US$7.1 million of unfavorable foreign currency translation, US$6.6 million related to the incremental effect of stock option expense, US$6.5 million due to the sale of the Industrial Water Additives business in May 2006, US$5.5 million of inventory write-offs, an increase in the provision for doubtful accounts of US$3.7 million and other net increases in operating costs, which were partially offset by selling price increases of US$130.2 million and synergy cost savings of US$61.4 million. Chemtura's non-GAAP earnings from continuing operations for the first nine months of 2006 of US$95.3 million, or US$0.40 per diluted share, excludes pre-tax charges of US$70.8 million for antitrust costs resulting primarily from settlement offers made to certain rubber chemicals, plastic additives and urethanes civil and indirect claimants and legal fees associated with the antitrust investigations and civil lawsuits, US$51.9 million for the estimated impairment of goodwill, a US$43.9 million loss on early extinguishment of debt related to the retirement of the company's Senior Floating Rate Notes due 2010 and the 9.875% Senior Notes due 2012, a US$20.1 million asset impairment charge related to the impairment of retained long-lived assets related to the Industrial Water Additives business and certain tangible and intangible assets of the Fluorine business, US$15.9 million for merger costs resulting from the Merger, a US$12.5 million loss on the sale of the Industrial Water Additives business and US$8.7 million for additional depreciation due to the change in the useful life of certain assets at one of the company's manufacturing facilities. Also excluded from non-GAAP earnings are pre-tax credits of US$1.9 million for facility closures, severance and related costs, a US$4.3 million favorable settlement of a contractual matter, US$4.0 million of interest income on a favorable tax settlement and US$1.5 million related to the reversal of certain reserves related to of the company's Gustafson joint venture that was sold in 2004. Pro forma non-GAAP earnings from continuing operations for the first nine months of 2005 of US$135.0 million, or US$0.57 per diluted, share excludes pre-tax charges of US$25.5 million for facility closures, severance and related costs, which included a charge of US$19.5 million related to the closure of the company's Tarrytown, NY facility, US$28.1 million of merger costs resulting from the Merger, US$13.2 million for antitrust costs, US$10.9 million for the loss on the early extinguishment of debt and US$4.6 million for direct costs resulting from Hurricanes Katrina and Rita, partially offset by a pre-tax credit of US$7.2 million for insurance recoveries related to a fire at the company's Conyers, Georgia facility. The non-GAAP effective rate of tax for 2006 is forecast to be approximately 34%. Non-GAAP operating profit, non-GAAP earnings from continuing operations and non-GAAP earnings per share from continuing operations are considered non-GAAP financial measures. A reconciliation of the company's GAAP operating profit to non-GAAP and pro forma operating profit and of the company's GAAP earnings from continuing operations to non-GAAP and pro forma earnings from continuing operations is set forth in the supplemental disclosure attached to this press release. 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. CHEMTURA: Selling EPDM & Certain Rubber Chemicals Businesses ------------------------------------------------------------ In order to place greater focus on its core businesses, Chemtura Corp. has signed a letter of intent to sell its EPDM business and the Rubber Chemicals businesses associated with Geismar, Louisiana as well as Flexzone antiozonants worldwide. The parties are working toward a definitive agreement, which will be signed by the end of 2006. The transaction is subject to regulatory approvals. Proceeds from the sale will be used primarily for debt reduction. Robert L. Wood, Chemtura's chairperson and chief executive officer, said, "This sale is an important milestone in our plan to divest non-core assets and businesses. We are pleased to be transferring these businesses to a buyer who is interested in growing them, which should benefit our customers." The EPDM and Rubber Chemicals businesses being sold had revenues for the twelve months ended Sept. 30, 2006, of approximately US$300 million. 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. COMPANHIA SIDERURGICA: Tata Steel Denies Interest in Company ------------------------------------------------------------ Tata Steel Ltd. told the India Infoline News Service that it won't bid for Companhia Siderurgica Nacional SA after completing the acquisition of Corus Group Plc. According to India Infoline, Tata Steel won approval from the Corus board for its US$8 billion takeover bid. Published reports, however, suggested that Companhia Siderurgica and Russian steel makers could consider a rival bid. India Infoline relates that a national daily reported that Tata Steel and Corus may bid together for Companhia Siderurgica. Tata Steel clarified to India Infoline that the news on its interest in bidding for Companhia Siderurgica is speculative and based on unsubstantiated sources. It is false and would mislead the company's shareholders, India Infoline says, citing Tata Steel. Companhia Siderurgica Nacional aka CSN produces, sells, exports and distributes steel products, like hot-dip galvanized sheets, tin mill products and tinplate. The company also runs its own iron ore, manganese, limestone and dolomite mines and has strategic investments in railroad companies and power supply projects. * * * Standard & Poor's Ratings Services affirmed on Aug. 4, 2006, its 'BB' long-term corporate credit rating on Brazil-based steel maker Companhia Siderurgica Nacional aka CSN after the announcement of its association with U.S.-based steel maker Wheeling-Pittsburgh Corp. in the U.S. The outlook is stable. Fitch Ratings viewed the proposed merger of Companhia Siderurgica Nacional's or CSN North American operations with those of Wheeling-Pittsburgh Corporation or WPSC to be neutral to CSN's credit quality. Fitch's ratings of CSN include: -- Foreign currency Issuer Default Rating: 'BB+'; -- Local currency IDR: 'BBB-'; -- National scale rating: 'AA (bra)'; -- Senior unsecured notes 'BB+'; and -- Brazilian Real denominated debentures: 'AA (bra)'. DURA AUTOMOTIVE: Ontario Court Recognizes Chapter 11 Case --------------------------------------------------------- The Ontario Superior Court of Justice, entered a "Foreign Recognition Order," which recognized under Canadian law the Chapter 11 bankruptcy proceedings commenced by DURA Automotive Systems Inc. and its U.S. and Canadian subsidiaries filed in the United States Bankruptcy Court for the District of Delaware on Oct. 30, 2006. DURA's European and other operations outside of the U.S. and Canada, accounting for approximately 51% of DURA's revenue, are not part of the Chapter 11 proceedings nor are they part of the Canadian Court proceedings. DURA's European and other non-US and non-Canadian operations therefore remain unaffected by either orders entered by the U.S. Bankruptcy Court or the Canadian Court's Foreign Recognition Order. In the Foreign Recognition Order, the Canadian Court also: -- Granted a stay of all proceedings in Canada against DURA and its U.S. and Canadian subsidiaries; -- Recognized the U.S. Bankruptcy Court's interim order authorizing DURA to access up to US$50 million of the approximately US$300 million in Debtor in Possession (DIP) financing from Goldman Sachs, GE Capital and Barclays; -- Appointed RSM Richter Inc. as Information Officer for Canadian stakeholders in respect of DURA's Canadian recognition proceedings; and -- Recognized all other "first day orders" of the U.S. Bankruptcy Court that DURA submitted to the Ontario Court for recognition. These other first day orders authorize DURA and its U.S. and Canadian subsidiaries to: * Pay employee salaries, wages and benefits that accrued prior to the petition filing date; * Pay certain critical pre petition filing date vendor claims and certain claims of vendors whose goods were received within the 20 day period prior to the petition filing date; * Provide "adequate assurance" to utilities in the form of a deposit equal to an average of 2 weeks' worth of utilities' bills; * Pay all "trust fund" and similar taxes accruing prior to the petition filing date; and * Continue using the pre petition cash management system. DURA and its U.S. and Canadian subsidiaries previously said that they will be paying, in the ordinary course of business, all post petition employee, wages, salaries and benefits accruing on and after the petition filing date. They will also be paying on a going forward basis, and in the ordinary course of business, all vendors and service providers who provide goods and services to them after the petition filing date. The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware is presiding over the Chapter 11 proceedings of Dura and its U.S. and Canadian subsidiaries. The Application Record filed in respect of the hearing and the Foreign Recognition Order will be posted at http://www.rsmrichter.com/ About DURA Automotive Systems Rochester Hills, Michigan-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- designs and manufactures driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company also supplies similar products to the recreation vehicle and specialty vehicle industries. It currently operates in 63 locations including joint venture companies and customer service centers in 14 countries including Brazil. The Debtors filed for chapter 11 protection on Oct. 30, 2006 (U.S. Bankr. Del. Case No: 06-11202). Daniel J. DeFranceschi, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A. represent the Debtors. No Official Committee of Unsecured Creditors has been appointed in this case to date. As of July 2, 2006, the Debtors reported US$1,993,178,000 in total assets and US$1,730,758,000 total debts. FIDELITY NATIONAL: Plans to Refinance Credit Facilities ------------------------------------------------------- Fidelity National Information Services, Inc., has engaged J.P. Morgan Securities Inc., Banc of America Securities LLC and Wachovia Securities LLC to act as lead arrangers and joint book runners in connection with the refinancing of its existing senior secured credit facilities, under which there is currently US$2.7 billion outstanding. The new US$3.1 billion of facilities will consist of a US$1.0 billion 5-year unsecured revolving credit facility and a US$2.1 billion 5-year unsecured amortizing term loan facility. Headquartered in Jacksonville, Florida, Fidelity National Information Services, Inc. -- http://www.fidelityinfoservices.com/-- provides core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage-related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top ten. Nearly 50% of all US residential mortgages are processed using FIS software. FIS maintains a strong global presence, serving over 7,800 financial institutions in more than 60 countries worldwide, including Brazil. * * * Standard & Poor's Ratings Services raised, on March 8, 2006, the corporate credit and senior secured ratings of Fidelity National Information Services Inc. to 'BB+' from 'BB', and removed it from CreditWatch where it was placed on Sept. 15, 2005. FIDELITY NATIONAL: Acquires Watterson Prime ------------------------------------------- Fidelity National Information Services, Inc., has acquired Watterson Prime, LLC, a leading provider of due diligence services to financial institutions worldwide. Fidelity National delivers technology and services to support every aspect of the mortgage industry, from originations to servicing to settlement. Watterson Prime provides outsourced loan due diligence services to Wall Street investors and other financial institutions that invest in and securitize mortgage loans. The due diligence process includes evaluating the integrity of the data used in underwriting the original loan, performing an assessment of the collateral used for the loan and ensuring the loans are compliant with federal and other regulations. As a result of this acquisition, Watterson Prime's due diligence services will be integrated with other Fidelity National service offerings, such as the FIS Hansen Quality HQ Score, and will allow investors and other participants in the mortgage capital markets to obtain fully integrated service delivery for their contract finance needs. The FIS HQ Score, available in PRO and PREVIEW, was the first collateral risk score adopted by Wall Street investors and protects clients against property valuation fraud and overvaluation risk. Eric Swenson, president of the Mortgage Information Services division of Fidelity National, commented, "This acquisition expands our product breadth and our ability to assess risk and certify the quality of mortgage portfolios. It also enables us to develop innovative products and provides us with a competitive advantage in the marketplace." Bruce Watterson, president of Watterson Prime, noted, "We are delighted to be working with FIS as we continue to help our clients with new ways to reduce risk in the mortgage capital market. Fidelity National has the capital, the technology and the commitment to help our customers become increasingly more profitable by enabling them to make better informed decisions." The transaction closed on Nov. 1, 2006. Financial terms of the transaction were not disclosed. Headquartered in Jacksonville, Florida, Fidelity National Information Services, Inc. -- http://www.fidelityinfoservices.com/-- provides core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage-related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top ten. Nearly 50% of all US residential mortgages are processed using FIS software. FIS maintains a strong global presence, serving over 7,800 financial institutions in more than 60 countries worldwide, including Brazil. * * * Standard & Poor's Ratings Services raised, on March 8, 2006, the corporate credit and senior secured ratings of Fidelity National Information Services Inc. to 'BB+' from 'BB', and removed it from CreditWatch where it was placed on Sept. 15, 2005. GERDAU SA: Unit Completes Stake Acquisition in Joint Venture ------------------------------------------------------------ Gerdau Ameristeel, Gerdau SA's subsidiary in North America, has concluded its acquisition of a controlling interest in a joint venture with Pacific Coast Steel and Bay Area Reinforcing, Business News Americas reports. Gerdau Ameristeel told BNamericas that it paid US$104 million in cash for the stake. The new joint venture firm is among the largest reinforcing steel contractors in the United States, Gerdau Ameristeel said in a statement. Headquartered in Porto Alegre, Brazil, Gerdau SA -- http://www.gerdau.com.br/-- produces and distributes crude steel and related long rolled products, drawn products, and long specialty products. In addition to Brazil, Gerdau operates in Argentina, Canada, Chile, Colombia, Uruguay and the United States. Gerdau's four majority-owned Brazilian operating subsidiaries are: -- Acominas, -- Gerdau Acos Longos S.A., -- Gerdau Acos Especiais S.A. and -- Gerdau Comercial de Acos S.A.; * * * Gerdau SA's US$600 million 8-7/8% perpetual bond is rated Ba1 by Moody's, BB+ by S&P, and BB- by Fitch. * * * As reported in the Troubled Company Reporter on March 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counterparty credit rating on Banco Nacional de Desenvolvimento Economico e Social SA to 'BB' with a stable outlook from 'BB-' with a positive outlook. The company's local currency credit rating was also shifted to 'BB+' with a stable outlook from 'BB' with a positive outlook. GERDAU SA: Will Seek Strategic Partnerships in Latin America ------------------------------------------------------------ Jorge Gerdau Johannpeter, the president of Gerdau SA, told Business News Americas that the firm will continue looking for strategic partnerships in Latin American. Gerdau told BNamericas, "We will continue to invest in Latin America to keep up with the policy of consolidation prevalent in the region." BNamericas relates that Gerdau SA could buy a 51.89% stake in Acerias Paz del Rio. However, Mr. Johannpeter told BNamericas, "We feel secure with Diaco in Colombia and we are looking at other opportunities." Mr. Johannpeter also denied to BNamericas a possible deal with a steelmaker in Mexico, saying that Gerdau sees nothing concrete there in the short term but is looking at a future opportunity. Headquartered in Porto Alegre, Brazil, Gerdau SA -- http://www.gerdau.com.br/-- produces and distributes crude steel and related long rolled products, drawn products, and long specialty products. In addition to Brazil, Gerdau operates in Argentina, Canada, Chile, Colombia, Uruguay and the United States. Gerdau's four majority-owned Brazilian operating subsidiaries are: -- Acominas, -- Gerdau Acos Longos S.A., -- Gerdau Acos Especiais S.A. and -- Gerdau Comercial de Acos S.A.; * * * Gerdau SA's US$600 million 8-7/8% perpetual bond is rated Ba1 by Moody's, BB+ by S&P, and BB- by Fitch. * * * As reported in the Troubled Company Reporter on March 3, 2006, Standard & Poor's Ratings Services raised its foreign currency counterparty credit rating on Banco Nacional de Desenvolvimento Economico e Social SA to 'BB' with a stable outlook from 'BB-' with a positive outlook. The company's local currency credit rating was also shifted to 'BB+' with a stable outlook from 'BB' with a positive outlook. NOVELL: Debenture Holders Have Until Today to Tender Consents ------------------------------------------------------------- Novell, Inc., has extended until 5:00 p.m., New York City time, on Nov. 6, 2006, its solicitation of consents from the holders of its 0.50% convertible senior debentures due 2024 (CUSIP Nos. 670006AB1 and 670006AC9). The purpose of the consent solicitation is to obtain consent to amend certain provisions of the indenture pursuant to which the debentures were issued and to obtain a waiver of rights to pursue remedies available under the indenture with respect to certain alleged defaults. The consent solicitation was scheduled to expire at 5:00 p.m., New York City time, on Nov. 2, 2006. All holders of the debentures who have previously delivered consents do not need to redeliver the consents or take any other action in response to this extension. All other provisions of the consent solicitation with respect to debentures as set forth in Novell's consent solicitation statement, dated Oct. 17, 2006, as supplemented on Oct. 31, 2006, remain applicable. Novell reserves the right to further amend the consent solicitation for the debentures or further extend the expiration time in its sole discretion. Citigroup Corporate and Investment Banking is serving as the solicitation agent for the consent solicitation. Questions regarding the consent solicitation may be directed to: Citigroup Corporate and Investment Banking Tel: 800-558-3745 (toll-free) 212-723-6106 Requests for copies of the Consent Solicitation Statement and related documents may be directed to the information agent for the consent solicitation at: Global Bondholder Services Corporation Tel: 866-794-2200 (toll-free) 212-430-3774 Novell, Inc. -- http://www.novell.com/-- delivers Software for the Open Enterprise. With more than 50,000 customers in 43 countries, Novell helps customers manage, simplify, secure and integrate their technology environments by leveraging best-of-breed, open standards-based software. Novell has sales offices in Argentina, Brazil and Colombia. As reported in the Troubled Company Reporter on Sept. 29,2006, Novell, has received a letter from Wells Fargo Bank, NA, the trustee with respect to company's US$600 million 0.50% convertible senior debentures due 2024, which asserts that Novell is in default under the indenture because of the delay in filing its Form 10-Q for the period ended July 31, 2006. The letter states that this asserted default will not become an "event of default" under the indenture if the company cures the default within 60 days after the date of the notice. NOVELL INC: Names Troy Richardson President of Novell Americas -------------------------------------------------------------- Novell Inc. named Troy Richardson as president, Novell Americas. Formerly vice president and general manager of sales for Novell's Northeast region, Mr. Richardson brings more than 22 years of experience in technology sales and management to the role. He will be responsible for the full range of Novell's sales and consulting business across the US, Latin America and Canada. Susan Heystee, the former president of Novell Americas, moves to become vice president and general manager for global strategic alliances, a newly created position that recognizes the importance of Novell's partner community to Novell's success. Tom Francese, Novell's executive vice president of worldwide sales, said, "Troy has done a great job over the last year in driving Novell's success in the Northeast region, helping customers in the financial services, government and retail sectors leverage Novell(R) solutions for their businesses. I look forward to him expanding this success to our broader Americas region, where we see real potential for our growth businesses of Linux and open source and security, identity and resource management. In addition, I can't think of anyone better to lead our critical global partnering efforts than Susan, whose done an excellent job driving our Americas business over the last two years." Mr. Richardson has over 22 years in the technology industry with a proven track record for consistently delivering significant revenue and profit growth and building high performance teams. He joined Novell in July 2005 as vice president and general manager for the Northeast Area. Before coming to Novell, he served as vice president of Retail Solutions Division for the Americas at NCR Corp. He also held various executive level positions in sales and marketing management over a 15-year career with IBM Corp. Mr. Richardson commented, "This is a very exciting time for Novell as we drive our new Linux and identity, security and resource management businesses forward. Novell is well positioned to help customers leverage the performance and value of open source and standards-based solutions. I look forward to working with customers across the Americas region to help them save money and improve their business processes with Novell solutions." Novell, Inc. -- http://www.novell.com/-- delivers Software for the Open Enterprise. With more than 50,000 customers in 43 countries, Novell helps customers manage, simplify, secure and integrate their technology environments by leveraging best-of-breed, open standards-based software. Novell has sales offices in Argentina, Brazil and Colombia. As reported in the Troubled Company Reporter on Sept. 29, 2006, Novell, has received a letter from Wells Fargo Bank, NA, the trustee with respect to company's US$600 million 0.50% convertible senior debentures due 2024, which asserts that Novell is in default under the indenture because of the delay in filing its Form 10-Q for the period ended July 31, 2006. The letter states that this asserted default will not become an "event of default" under the indenture if the company cures the default within 60 days after the date of the notice. PETROLEO BRASILEIRO: Begins Repair on Bolivia-Brazil Pipeline ------------------------------------------------------------- Petroleo Brasileiro SA will begin the first stage of the repair work on the Bolivia-Brazil gas pipeline Gasbol on Nov. 11. The work is necessary because of the damage caused to the ducts by the strong rainfall in Bolivia in early April. Supply has been ensured by measures such as reductions in the company's own consumption. The first phase of the work is expected to last six days, while the second one, scheduled to begin on Nov. 23, will last about 11 days. After the repairs, the pipeline will be put back in design conditions and operate at full capacity, recovering the system's reliability. Acting jointly with the Ministry of Mines & Energy and the National System Operator, Petroleo Brasileiro assures it will attend to all of the contracted demand for the input. The rains in Bolivia caused mudslides that partially damaged the gas pipeline that runs the production of a few Bolivian gas fields off to Brazil. The situation led Yacimientos Petroliferos Fiscales Bolivianos to declare a condition of Force Majeur, which will remain in effect until the gas pipeline has been fully repaired. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. * * * Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. * * * Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petroleo Brasileiro to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. PETROLEO BRASILEIRO: Intecnial to Build Three Biodiesel Plants -------------------------------------------------------------- Petroleo Brasileiro said in a statement that it has hired Intecnial, an engineering firm, to construct three biodiesel plants. Business News Americas relates that Petroleo Brasileiro will invest BRL227 million for the three plants, which will have capacity to produce 57 million liters per year of biodiesel. The plants are: -- Candeias in northeastern Bahia, -- Montes Claros in southeastern Minas Gerais, and -- Quixada in northeastern Ceara. According to BNamericas, Petroleo Brasileiro chose Intecnial after a tender process with other three firms. Petroleo Brasileiro told BNamericas that construction will begin as soon as the company gets full environmental license. Commercial operations will start by the end of 2007. Petroleo Brasileiro is preparing to meet the obligatory 2% admixture of biodiesel into diesel from January 2008, BNamericas states. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. * * * Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. * * * Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. PETROLEO BRASILEIRO: Sees 15% Return on Investments in Bolivia -------------------------------------------------------------- Jose Gabrielli -- the chief executive officer of Petroleo Brasileiro, the state oil firm of Brazil -- told Business News Americas that the company's exploration and production contracts with Yacimientos Petroliferos Fiscales Bolivianos, its Bolivian counterpart, will bring in over 15% return on investments. Mr. Gabrielli told the press, "Petrobras (Petroleo Brasileiro) will not lose money on the operation because it will make a return of over 15% on the San Alberto and San Antonio fields, which is above the cost of capital to the company." BNamericas relates that under the 30-year accord signed on Oct. 29, Petroleo Brasileiro will be able to manage the reserves and retain control of exploration and production assets in Bolivia despite having to surrender to Yacimientos Petroliferos all gas and oil production and the fact that the latter will not invest in any of Petroleo Brasileiro's project. Mr. Gabrielli told BNamericas, "Petrobras will be paid an amount which will vary according to costs and the rate of hydrocarbons recovered. This is a risk-sharing agreement, not a service contract." Petroleo Brasileiro said that it expects to pay 80% of its revenues as taxes and royalties combined, BNamericas reports. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. * * * Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. * * * Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. PETROLEO BRASILEIRO: Will Issue US$500 Million of 10-Year Bonds --------------------------------------------------------------- Petroleo Brasileiro SA, the state-owned oil firm of Brazil, said in a statement that it will issue US$500 million of 10-year bonds in exchange for outstanding shorter-term notes. Petroleo Brasileiro said in a filing with the United States Securities and Exchange Commission or SEC that Petroleo Brasileiro wants to swap 6.125% bonds due in 2016 for securities maturing in 2008, 2011, 2013 and 2014 with coupons of 7.75% to 12.375%. Almir Barbassa, Petroleo Brasileiro's chief financial officer, told Bloomberg that it will not raise new money through bond sales until at least 2008. The company said it will focus its bond sale efforts on plans to reduce borrowing costs and extend the repayment period by exchanging old debt for new securities. Petroleo Brasileiro said in the SEC filing that the exchange would reopen the sale of bonds with the same maturity and interest coupon that were sold in October. Petroleo Brasileiro told Bloomberg that it selected Morgan Stanley and UBS AG to administer the debt exchange. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro SA was founded in 1953. The company explores, produces, refines, transports, markets, distributes oil and natural gas and power to various wholesale customers and retail distributors in Brazil. * * * Petroleo Brasileiro SA's long-term corporate family rating is rated Ba3 by Moody's. * * * Fitch Ratings assigned these ratings on Petroleo Brasileiro's senior unsecured notes: Maturity Date Amount Rate Ratings April 1, 2008 US$400,000,000 9% BB+ July 2, 2013 US$750,000,000 9.125% BB+ Sept. 15, 2014 US$650,000,000 7.75% BB+ Dec. 10, 2018 US$750,000,000 8.375% BB+ Fitch upgraded the foreign currency rating of Petrobras to BB+ from BB, with positive outlook, in conjunction with Fitch's upgrade of the long-term foreign and local currency IDRs of the Federative Republic of Brazil to BB, from BB- on June 29, 2006. VARIG SA: Foreign Rep Objects to Port Authority's Payment Motion ---------------------------------------------------------------- Eduardo Zerwes, the Foreign Representative of VARIG S.A. and its debtor-affiliates, objects to The Port Authority of New York and New Jersey's request to compel the Foreign Debtors to pay postpetition flight fees and other fees totaling US$207,500 as an administrative expense pursuant to Sections 105, 503 and 507 of the Bankruptcy Code. While VARIG, SA, acknowledges the debts mentioned by the Port Authority of New York and New Jersey -- except that it does not have a record of an invoice for a US$250 Supplemental Flight Fee -- Mr. Zerwes asserts that Sections 503 and 507 of the Bankruptcy Code do not apply in the ancillary case and allowance or disallowance of the claims must be determined in the Foreign Proceeding in Brazil. Representing Mr. Zerwes, Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, argues that: * the Port Authority's request improperly applies the Bankruptcy Code and lacks the necessary basis to support an order granting the relief it seeks; and * any order from the U.S. Court compelling payment of any claim is premature because claims should first be administered in accordance with VARIG's approved In-Court Reorganization Plan. Specifically, Mr. Antonoff says, nothing in Sections 503 and 507 authorizes a U.S. court to direct payment of a claim in a case that was commenced as an ancillary case under Section 304. Section 304(b) sets forth the relief that the Court may grant in an ancillary case, and yet Section 304 is not mentioned in the Port Authority's request other than in the caption and a background recital. Moreover, while Section 304 ancillary cases permit a court to condition the continuation of a preliminary injunction to grant certain relief, the court lacks jurisdiction to compel production of assets administered in a foreign bankruptcy proceeding, Mr. Antonoff explains. Mr. Antonoff maintains that continuation of the Preliminary Injunction should not be conditioned upon payment of a claim to Port Authority. Payment of any claim outside of the procedures approved in VARIG's In-Court Recovery Plan would unfairly and unduly prejudice other "bankruptcy creditors" that arose during the Foreign Proceeding. Mr. Antonoff further notes that the Reorganization Plan, which was approved by creditors and the Brazilian Court on July 17, 2006, expressly sets forth the procedure for addressing all "bankruptcy creditors" including Port Authority. The Reorganization Plan provides that the Foreign Debtors will make available, within 90 days after approval of the Plan, a "list of bankruptcy creditors and their credits". Within 30 days after the list is made available, "bankruptcy creditors wishing to adhere to the Reorganization Plan shall do so pursuant to the proper adhesion instrument." Bankruptcy creditors who do not state their adhesion to the Reorganization Plan remain creditors of the Foreign Debtors and are entitled to receive payments derived from the Foreign Debtors' remaining operating cash flow. Since the Foreign Proceeding addresses treatment of the Port Authority claim in a Reorganization Plan approved by creditors and the Brazilian Court, the U.S. Court should not grant the Port Authority's request, Mr. Antonoff says. Port Authority Talks Back Representing the Port Authority of New York and New Jersey, Milton H. Pachter, Esq., points out that: * VARIG concedes that it owes the Port Authority US$207,250; * since June 17, 2005, VARIG has benefited from the U.S. Court's protection with respect to its creditors' prepetition claims; and * VARIG continued to use John F. Kennedy International Airport as part of its operations in the United States in May, June and July 2006, and thus earned revenues from the flights. Mr. Pachter further notes that 90 days have passed yet no "list of bankruptcy creditors and their credits" has been issued. No specific date for the issuance of the list has been stated too. "It seems to be questionable whether the Port Authority will have any opportunity to pursue its post-petition claim in the Brazilian Court," Mr. Pachter says. The Port Authority believes that it should not be required to litigate the matter in Brazil since VARIG expressly sought and received the benefits of the U.S. Court with regard to the issuance of a preliminary injunction. Mr. Pachter contends that VARIG's argument that nothing in Sections 503 and 507 authorize a U.S. court to direct payment of a claim in a case commenced under Section 304, is disingenuous, since Section 304 specifically provides that court determination as to the relief it should grant should be guided, among other things, "with the distribution of proceeds of such estate substantially in accordance with the order prescribed by [the Bankruptcy Code]." For these reasons, the Port Authority asks the U.S. Court to compel VARIG to immediately pay the US$207,500 postpetition flight fees, parking fees and charges that are presently owed. Headquartered in Rio de Janeiro, Brazil, VARIG SA is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. VARIG, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) VOTORANTIM GROUP: Prices Tender Offer on 7.875% Guaranteed Notes ---------------------------------------------------------------- Votorantim Group disclosed the price for its cash tender offer for any and all of its wholly owned subsidiary Voto-Votorantim Overseas Trading Operations III Ltd.'s US$300,000,000 aggregate principal amount outstanding 7.875% guaranteed Notes due 2014 (CUSIP Nos.: 92908FAA4, G9393BAA2). The offer expired at 5:00 p.m., New York time, on Nov. 2, 2006. Votorantim will pay the purchase price and accrued and unpaid interest to, but excluding, the settlement date, for the notes accepted pursuant to the offer. Settlement of the offer is expected to occur on the third business day following the Expiration Date. The table below sets the relevant pricing information for the notes: Notes: 7.875% Guaranteed Notes Due 2014 CUSIP/ISIN: 92908FAA4/US92908FAA49 G9393BAA2/ USG9393BAA29 Reference Security: UST 4.875% Notes Due Aug. 15, 2016 Fixed Spread: 1.44% Actual Reference Yield: 4.642% Tender Offer Yield: 6.082% Purchase Price per US$1,000 Original Principal Amount of Notes: 1,103.28 Quotation Report: Bloomberg PXI Votorantim retained J.P. Morgan Securities Inc. to serve as Dealer Manager for the offer, Bank of New York to serve as Depositary for the offer, Dexia Banque Internationale a Luxembourg SA to serve as Luxembourg Agent for the offer and D.F. King & Co., Inc. to serve as Information Agent for the offer. Requests for the Offer to Purchase and the related Letter of Transmittal and supplements to the documents may be directed to: D.F. King & Co., Inc. Tel: (212) 269-5550 (Banks and Brokers) (800) 290-6429 toll-free (others) Requests for documentation may also be made to: Dexia Banque International Tel: + 352 4590 1 Fax: + 352 4590 4227 Questions regarding the offer may be directed to: J.P. Morgan Securities Inc. Tel: (866) 846-2874 (U.S. toll-free) (212) 834-7279 (collect) Headquartered in Sao Paulo, Brazil, the Votorantim group is one of the largest private industrial conglomerates in Latin America, with large-scale production in cement, pulp and paper, and metals and mining industries. The group is also actively engaged in the production of chemicals, frozen concentrated orange juice, energy, financial services and venture capital investments. * * * Moody's Investors Service upgraded on Sept. 5, 2006, the foreign currency rating of Voto -- Votorantim Overseas Trading Op. III's US$300 million senior unsecured guaranteed notes due 2014 to Ba1 from Ba2, while maintaining the stable outlook. The rating action was prompted by Moody's upgrade of Brazil's long-term foreign currency ceiling for bonds and notes to Ba1 from Ba2, with stable outlook. =========================== C A Y M A N I S L A N D S =========================== FORMOSA RE: Creditors Must Submit Proofs of Claim by Nov. 16 ------------------------------------------------------------ Formosa Re Ltd.'s creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Wendy Ebanks 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. Formosa Re'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. FUND SECURITIZATION: Claims Filing Deadline Is Set for Nov. 16 -------------------------------------------------------------- Fund Securitization Cayman, Inc.'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. Fund Securitization's shareholders agreed on Oct. 3, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. GREEN T: Last Day for Proofs of Claim Filing Is on Nov. 16 ---------------------------------------------------------- Green T Fund Ltd.'s creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the 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. Green T's shareholders agreed on Sept. 25, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. G-FORCE (2002-1): Last Day to File Proofs of Claim Is on Nov. 16 ---------------------------------------------------------------- G-Force CDO 2002-1 Ltd.'s creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Carlos Farjallah Joshua Grant 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. G-Force's shareholders agreed on Sept. 28, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. G-FORCE (2001-1): Proofs of Claims Filing Is Until Nov. 16 ---------------------------------------------------------- G-Force CDO 2001-1 Ltd.'s creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Carlos Farjallah Joshua Grant 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. G-Force's shareholders agreed on Sept. 28, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. INTERNATIONAL WATER: Creditors Must Submit Claims by Nov. 16 ------------------------------------------------------------ International Water Services 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. International Water'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. IL INVESTMENT: Creditors Must File Proofs of Claim by Nov. 16 ------------------------------------------------------------- IL Investment's creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Andrew Millar 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. IL Investment'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. JAPAN CREDIT: Proofs of Claim Filing Deadline Is on Nov. 16 ----------------------------------------------------------- Japan Credit Management Co., Ltd. II's creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Phillip Hinds Joshua Grant 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. Japan Credit'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. JOFI YOKOHAMA-AOBA: Proofs of Claim Must be Filed by Nov. 16 ------------------------------------------------------------ Jofi Yokohama-Aoba Holding Ltd.'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 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. Jofi Yokohama-Aoba'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. KICAP (LEVERAGED): Proofs of Claim Filing Is Until Nov. 16 ---------------------------------------------------------- Kicap Financials Leveraged Master Fund Ltd.'s creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the 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. Kicap Financials' 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. KICAP (STANDARD): Filing of Proofs of Claim Is Until Nov. 16 ------------------------------------------------------------ Kicap Financials Standard Master Fund Ltd.'s creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the 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. Kicap Financials' 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. KICAP FINANCIALS: Claims Filing Deadline Is Set for Nov. 16 ----------------------------------------------------------- Kicap Financials Fund Ltd.'s creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Richard Gordon Mike Hughes Maples Finance Limited P.O. Box 1093, George Town Grand Cayman, Cayman Islands Creditors who are not able to comply with the 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. Kicap Financials' shareholders agreed on Sept. 21, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. LONG BEACH: Creditors Have Until Nov. 16 to File Proofs of Claim ---------------------------------------------------------------- Long Beach Asset Holdings Corp. CI 2003-2's creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Chris Watler 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. Long Beach'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. TROPICAL BLUE: Last Day to File Proofs of Claim Is on Nov. 16 ------------------------------------------------------------- Tropical Blue Funding Corp.'s creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Mora Goddard 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. Tropical Blue's shareholders agreed on Sept. 26, 2006, for the company's voluntary liquidation under Section 135 of the Companies Law (2004 Revision) of the Cayman Islands. VIVACE TWO: Creditors Are Given Until Nov. 16 to File Claims ------------------------------------------------------------ Vivace Two Ltd.'s creditors are required to submit proofs of claim by Nov. 16, 2006, to the company's liquidators: Carrie Bunton 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. Vivace Two's shareholders agreed on Sept. 26, 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 ========= BLOCKBUSTER INC: Outlines New Deal for Online Renters ----------------------------------------------------- Blockbuster Inc. is giving online renters expanded access to movies through the introduction of BLOCKBUSTER Total Access(TM), a movie rental program that gives online customers the option of returning their DVDs through the mail or exchanging them at more than 5,000 participating BLOCKBUSTER(R) stores for free in-store movie rentals. The new program, available only from Blockbuster, means Total Access subscribers don't need to wait to get DVDs through the mail, essentially allowing them to double the number of movies they can access each month. Beginning Nov. 1, Blockbuster will automatically upgrade all current and new online rental subscribers to the Blockbuster Total Access program at no extra cost, immediately giving them the option of mailing back their online movies, exchanging them at any participating Blockbuster store, or a combination of the two. For each online rental exchanged in the store, customers can receive a free in-store movie rental. Subscribers to Blockbuster's lower-priced US$5.99 and US$7.99 plans will also be included in the Total Access program and will be able to exchange their online DVDs for free in-store movie rentals. Another feature Blockbuster Total Access offers subscribers is a faster shipping cycle. When subscribers return their online rentals to a participating Blockbuster store, the store check-in process automatically initiates the shipment of the next available movies in the subscriber's rental queue, whether they take advantage of the in-store exchange option or not. That means Total Access customers generally will get their online movies a day faster than if they had dropped the return movies in the mail. In addition to being able to exchange online rentals at participating Blockbuster stores for free movie rentals, Blockbuster Total Access customers will also receive a free in-store rental coupon each month. Subscribers can use the monthly rental coupon in the same visit with their in-store exchanges for another free movie, or by itself if they have already returned their DVDs through the mail or just aren't ready to return their online rentals yet. Movies received through the in-store exchange option or with the rental coupon do not count against the total number of DVDs an online customer can have out at any one time per their subscription plan. In-store movies are still subject to store rental terms, including due dates, and must be returned to the store from which they were rented. Another added convenience is that customers can now sign up for Blockbuster's online rental service right in the stores. With the launch of the Blockbuster Total Access program, almost all participating Blockbuster stores will have online wireless access, so store personnel can sign up new subscribers on the spot. As of the end of September, Blockbuster had approximately 1.5 million online subscribers, a year-over-year increase in its subscriber base of 50%, which included some 100,000 trial subscribers at quarter-end who subsequently converted to paying members. During the third quarter, the company added approximately 150,000 net subscribers. With more than 60,000 titles to choose from online, Blockbuster delivers DVDs right to subscribers' mailboxes in return-pre-paid postage envelopes. There are no due dates or late fees with movies rented from Blockbuster's online rental service, and subscription plans start as low as US$5.99 a month, with the US$17.99 three-out unlimited movie plan being the most popular. A two- week free trial membership to Blockbuster Total Access is available for a limited time, including to those customers who have previously tried Blockbuster's online rental service but are not currently subscribing to the service. About Blockbuster Blockbuster Inc. -- http://www.blockbuster.com/-- provides in-home movie and game entertainment, with more than 9,000 stores throughout the Americas, Europe, Asia and Australia. The company operates in Puerto Rico, Argentina, Brazil and Chile. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Moody's Investors Service affirmed its B3 Corporate Family Rating for Blockbuster Inc. in connection with its implementation of the new Probability-of-Default and Loss-Given-Default rating methodology for the US and Canadian Retail sector. Standard & Poor's Ratings Services lowered, in November 2005, its corporate credit and bank loan ratings on Blockbuster Inc. to 'B-' from 'B' and the subordinated note rating to 'CCC' from 'CCC+'. S&P said the outlook is negative. Fitch downgraded, in August 2005, Blockbuster Inc.'s Issuer default rating to 'CCC' from 'B+'; Senior secured credit facility to 'CCC' from 'B+' with an 'R4' recovery rating; and Senior subordinated notes to 'CC' from 'B-' with an 'R6' recovery rating. EMPRESAS IANSA: Fitch Upgrades US$100MM Sr. Notes Rating to BB+ --------------------------------------------------------------- Fitch Ratings has upgraded Empresas Iansa SA's Foreign and Local Currency Issuer Default Ratings as well as the issue rating on the US$100 million senior unsecured notes due 2012 to 'BB+' from 'BB'. In addition, Fitch has assigned a national scale rating of 'A-(ch)' to Empresas Iansa. The Rating Outlook is Stable. The rating actions are supported by the improvement of Empresas Iansa's credit protection measures as a result of debt reduction. Since the end of 2005, higher sugar prices have translated into improved profitability and cash flows. The company has used free cash flow generation to reduce debt levels, which together with higher EBITDA has strengthened credit ratios. The ratings are also supported by Empresas Iansa's strong business position as the sole producer of sugar in Chile, its low cost structure and the existence of price protection mechanisms in the domestic sugar market. The ratings also incorporate the exposure of the company's agricultural businesses to weather conditions, supply and demand imbalances and competition from sugar substitutes. In recent months, international prices of sugar have increased substantially, to an average of US$437 per ton during the first nine months of 2006 from a mean of US$270 per ton during the comparable period in 2005. This is the result of a widening gap between supply and demand due to increased production of bioethanol from sugar cane, organic demand increase, higher sugar demand from China and the anticipated adverse effects on supply from the reform of the European Union sugar policy system implemented in November 2005. It is important to note that the latter represents a structural shift in the international sugar market as an estimated 6-7 million tons of sugar will cease to be traded globally in the near term, accounting for approximately a 16% decrease in the surplus stock currently available for international trading activity. This change will yield commercial and pricing advantages to producers like Empresas Iansa. Empresas Iansa enjoys one of the lowest cost structures worldwide in the production of sugar and is the world's lowest-cost producer of sugar from beet. The company benefits from protection mechanisms in the domestic market, including a price band and a tariff system that increases the import cost of sugar. These mechanisms have been in place since 1986 but in 2003 underwent changes favorable to the company. These changes included the incorporation of imports of sugar blends in the protection system (eliminating loopholes that allowed these sugar substitutes to enter the Chilean market at a low tariff) and fixed upper and lower limits on the price band for the period 2004-2007. However, these limits gradually decline each year for the period 2008-2014, which means that under lower international sugar price scenarios (below the floor price of the band), Empresas Iansa would need to achieve continuous efficiency improvements to be able to remain profitable at all times. Over the past several years, the company, working together with sugar beet producers, has boosted yields of sugar beet production and lowered unit production costs through mechanized irrigation systems, enhanced crop management and seed improvement. Empresas Iansa is projecting continued yield gains over the next several years to face declining limits on the price band system and continue to enjoy protection from sugar imports. During the first nine months of 2006, revenues declined by 5% due to lower volume sales of sugar, sugar by-products, agricultural supplies and non-sugar businesses. However, EBITDA increased by 44% reflecting higher sugar prices. The EBITDA margin improved to 13.8% during the first nine months of 2006 from 9.1% during the comparable period in 2005. For the twelve-month period ended Sept. 30, 2006, net debt to EBITDA and EBITDA to interest expenses reached 1.9x and 5.2x, compared to 3.9x and 3.5x respectively for the comparable prior period. At Sept. 30, 2006, Empresas Iansa had US$106 million of total debt, a reduction from US$156 million at Sept. 30, 2005. The debt was comprised of US$89 million outstanding on the US$100 million senior note due 2012, and US$18 million of bank debt. As it is the case for most agro-industrial businesses, short-term debt fluctuates seasonally, increasing from March to September, when it peaks. The company provides support to local sugar beet growers in the form of financing, fertilizers, pesticides, and irrigation and harvesting technology, which requires working capital financing. At Sept. 30, 2006, grower advances reached US$30 million. In recent months, Empresas Iansa has been able to fund working capital requirements with its own cash flow generation. Relatively modest capital expenditure requirements should also help maintain debt levels stable. Empresas Iansa is the sole producer of sugar and sugar by-products in Chile. This accounted for 80% of revenues. The non-sugar businesses include the production of frozen juice concentrate for the export market under a joint venture (Patagonia) with Cargill, the production and sale of tomato paste in Peru (Icatom) and the production and sale of frozen vegetables and fruits in Chile (Iansafrut). ED&F Man, a sugar distributor and trader based in the UK, indirectly owns 22.8% of the company's equity. The remaining equity is owned by a group of Chilean pension funds and the public. During the twelve months ended Sept. 30, 2006, Empresas Iansa generated revenues of US$379 million and EBITDA of US$47 million. =============== C O L O M B I A =============== CA INC: Posts US$996MM Revenue for Quarter Ended Sept. 30, 2006 --------------------------------------------------------------- CA, Inc., reported US$996-million revenue for the second quarter of fiscal year 2007, ended Sept. 30, 2006. Financial Overview (in millions, except share data) Q2FY07 Q2FY06 Change Revenue US$ 996 US$ 950 5% GAAP Diluted EPS US$0.09 US$0.08 13% Net Income US$ 53 US$ 46 15% GAAP Cash Flow from Operations US$ 6 US$ 299 (98%) Non-GAAP Operating EPS US$0.25 US$0.25 0% John Swainson, CA's president and chief executive officer, commented, "Our second quarter total revenue, GAAP earnings per share and non-GAAP earnings per share were at or above our expectations. However, a number of changes we implemented associated with our sales organization affected our business activity in the second quarter, and consequently caused a drag on our bookings and associated billings. While a lower-than-anticipated level of bookings and billings had a negative effect on cash flow in the quarter, changes in working capital -- including a lower cash collections rate and higher-than-expected accounts payable disbursements -- were the primary factors in our cash flow from operations decline compared with the second quarter of fiscal year 2006." "We believe the issues that affected our second quarter performance are behind us and we are confident in our ability to execute in the second half of our fiscal year. While our full-year cash flow from operations will be lower than expected, we believe we are back on track and in a position to grow our business going forward," Mr. Swainson said. CA's revenue for the second quarter was US$996 million, an increase of 5% over the US$950 million reported in the similar period last year. The increase in revenue was primarily attributed to growth in subscription and professional services revenues, partially offset by declines in maintenance and software fees and other revenue. North American revenue was up 8% while revenue from international operations was up 1%, including a positive foreign exchange impact of US$15 million. CA's subscription revenue for the second quarter increased 8% to US$762 million, compared with the US$704 million reported in the second quarter of last year, and was affected positively by increases in new deferred subscription value from acquired products. Subscription revenue accounted for 77% of total revenue in the quarter, increasing from the 74% reported in the second quarter of fiscal year 2006. CA expects subscription revenue to continue to become a larger percentage of its total revenue as more contracts are renewed on a subscription basis. The company added that as it begins to reach maturity on its model and based upon the timing of remaining old business model contract renewals, the impact of the transition to its new business model on revenues will decline. CA's total product and services bookings in the second quarter decreased 10% to US$690 million, from the US$765 million reported in the same period a year ago. This decrease is attributed to a decision to realign and restructure the sales force to achieve lower cost of sales and higher productivity and more discipline on contract renewals. Direct product bookings declined 13% to US$498 million. Indirect bookings grew 3% to US$75 million. Despite flat bookings performance in the first half of the year, the company continues to expect total bookings for the full year to grow. Total expenses of CA for the second quarter increased 3% to US$918 million, from the US$893 million reported in the similar period last year. The increase was mainly due to higher selling, general and administrative expenses associated with personnel costs from recent acquisitions and increased cost of professional services related to higher revenues. The expense increase was offset partially by a decline in the amortization of capitalized software costs and a gain from the sale of marketable securities. The company announced a restructuring plan in August 2006 designed to eliminate US$200 million in costs on an annual basis by the end of fiscal year 2008. CA recorded GAAP (Generally Accepted Accounting Principles) net income US$53 million for the second quarter of 2006, compared with net income of US$46 million reported in the same period in 2005. The company reported non-GAAP net income of US$145 million for the second quarter of 2006, compared with US$151 million in 2005. For the second quarter, CA generated cash flow from operations of US$6 million, compared with US$299 million in cash flow from operations reported in the prior year period. Second quarter cash flow was adversely affected by working capital management issues, lower bookings and associated billings, and higher operating expenses. Cash flow from operations in the second quarter of fiscal year 2006 was negatively affected by a US$75 million Restitution Fund payment. Cost Reduction and Restructuring Plan CA disclosed in August a cost reduction and restructuring plan designed to significantly improve the company's expense structure and increase its competitiveness. CA expects to deliver about US$200 million in annualized savings when the plan is completed by the end of fiscal year 2008. In the second quarter, CA recorded severance costs, relating to approximately 750 positions, or US$39 million, US$11 million of which was paid during the period. The company expects total restructuring charges of US$150 million, most of which will be recognized in fiscal 2007, and a reduction in workforce of approximately 1,400 positions, including approximately 300 positions associated with the divestiture of a number of joint ventures. The company also expects to eliminate an additional 300 positions through attrition. Capital Structure The balance of cash, cash equivalents and marketable securities at Sept. 30, 2006, was US$1.295 billion. With US$2.588 billion in total debt outstanding, the company has a net debt position of approximately US$1.293 billion. Repurchase Program The company completed a US$1 billion tender offer during the second quarter and repurchased 41.2 million shares of common stock. Fiscal year-to-date, CA has repurchased about 51.1 million shares of common stock at a cost of US$1.2 billion. The tender offer was the first phase of a total of up to US$2 billion repurchase plan. Nancy Cooper, CA's chief financial officer, noted, "We are exploring options regarding the remaining portion of the share repurchase program and will provide updates on the timing and method at the appropriate time. However, we will want to see performance meeting our expectations, a return to strong cash flows, and favorable market conditions before we move forward." Updated Outlook for Fiscal Year 2007 CA updated its outlook for the fiscal year and expects to meet or exceed revenue guidance of US$3.9 billion and its original guidance for non-GAAP operating earnings per share of US$0.83. The company expects GAAP earnings per share to be below its original outlook of US$0.44 per share as a result of the still-to-be-determined timing of 2007 restructuring plan costs. The company expects cash flow from operations of between US$900 million and US$1 billion, which would be lesser than the original outlook of US$1.3 billion. The new cash flow outlook includes the company's estimates of the impact of the lower-than-expected growth in bookings for the full year, borrowing costs associated with the tender offer and payments related to the 2007 restructuring plan. The cash flow outlook also assumes that the sales force will perform as expected and the company will improve its working capital management. Headquartered in Islandia, New York, CA Inc. (NYSE:CA) -- http://www.ca.com/-- is an information technology management software company that unifies and simplifies the management of enterprise-wide IT. Founded in 1976, CA serves customers in more than 140 countries. In Latin America, CA has operations in Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela. * * * As reported in the Troubled Company Reporter on Aug. 7, 2006, Moody's Investors Service confirmed CA Inc.'s Ba1 senior unsecured rating and assigned a negative rating outlook, concluding a review for possible downgrade initiated on June 30, 2006. The Ba1 rating confirmation reflects the company's completed accounting review and reestablishment of current filing of its 10-K and subsequent 10-Q's, including the company's filing of its 10-K for its March 2006 fiscal year on July 31, 2006. Standard & Poor's Rating Services affirmed its 'BB' corporate credit and senior unsecured debt ratings on CA Inc., and removed them from CreditWatch where they were placed on July 5, 2006, with negative implications. S&P said the outlook is negative. =================== C O S T A R I C A =================== DENNY'S CORP: Reports Same-Store Sales for the Month of October --------------------------------------------------------------- Denny's Corp. reported same-store sales for its company-owned Denny's restaurants during the four-week month ended Oct. 25, 2006, compared with the related period in fiscal year 2005. Sales: Oct. 2006 YTD 2006 Same-Store Sales 3.9% 2.9 % Guest Check Average 2.8% 5.0 % Guest Counts 1.1% (1.9%) Restaurant Counts: 10/25/06 12/28/05 Company-Owned 535 543 Franchised and Licensed 1,022 1,035 Total 1,557 1,578 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. =================================== D O M I N I C A N R E P U B L I C =================================== FALCONBRIDGE LTD: Xstrata Completes Acquisition of Company ---------------------------------------------------------- Xstrata acquired on Nov. 1, 2006, all of the remaining outstanding common shares of Falconbridge Ltd., pursuant to the statutory compulsory acquisition procedures. Xstrata now beneficially owns 100% of the Common Shares. Each shareholder of Falconbridge whose common shares were deemed to have been acquired under the compulsory acquisition will receive the equivalent of Xstrata's offer price of CAD62.50 in cash for each Common Share once the shareholder delivers the certificate(s) representing those Common Shares, together with a transmittal and election form, to CIBC Mellon Trust Company in accordance with the instructions on the transmittal and election form. The aggregate cash consideration for the Common Shares acquired under this step of the Compulsory Acquisition is approximately CAD19.6 million (approximately US$17.3 million). Falconbridge completed the redemption of all of the outstanding Cumulative Redeemable Preferred Shares, Series F (TSX: FAL.PR.F) and Series G (TSX: FAL.PR.G), and Cumulative Preferred Shares, Series 1 for an aggregate cash consideration of approximately CAD306 million (approximately US$270.4 million). Following the completion of the Compulsory Acquisition and Preferred Share Redemption, the Toronto Stock Exchange halted trading in and delisted the common shares, the Series F shares and the Series G shares from the TSX as of the close of the market on Nov. 1, 2006. Falconbridge shareholders with questions or requests for copies of the documents, may contact: CIBC Mellon Trust Company Tel: +1-416-643-5500 1-800-387-0825 Further information is available from www.xstrata.com/falconbridge. About Xstrata Xstrata plc -- http://www.xstrata.com/-- is a major global diversified mining group, listed on the London and Swiss stock exchanges. The Group is and has approximately 24,000 employees worldwide, including contractors. Xstrata does business in six major international commodities markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver. The Group's operations and projects span four continents and nine countries: Australia, South Africa, Spain, Germany, Argentina, Peru, Colombia, the United Kingdom and Canada. Xstrata holds a 97% stake in Falconbridge. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Ltd. (TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel ore bodies. It employs 14,500 people at its operations and offices in 18 countries, including Malaysia. The Company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi mine and Lomas Bayas mine. Its other products include cobalt, platinum group metals, and zinc. * * * Falconbridge's CAD150 million 5% convertible and callable bonds due April 30, 2007, carry Standard & Poor's BB+ rating. ============= E C U A D O R ============= PETROECUADOR: Gets 27 Bids for Marginal Fields in Amazon -------------------------------------------------------- Petroecuador, the state-run oil firm of Ecuador, said in a statement that its tender committee has received 27 bids for seven of eight marginal fields in Amazon. The eight marginal fields tendered include: -- Armadillo, -- Chanangue, -- Eno-Ron, -- Frontera-Tapi-Tetete, -- Ocano-Pena Blanca, -- Pucuna, -- Puma, and -- Singue. Petroecuador told Business News Americas that the fields' proven reserves total 120 million barrels and initial development investment is expected at US$300 million. BNamericas relates that Petroecuador received: -- six bids for Armadillo, -- five for Frontera-Tapi-Tetete, -- six for Pucuna, -- five for Puma, -- three for Singue, -- one for Chanangue, and -- one for Ocano-Pena Blanca fields. According to BNamericas, there were no bids presented for Eno-Ron. BNamericas underscores that firms and consortiums that made offers include: -- Cayman, -- Ecopetrol, -- JTI, -- Petroriva, -- Petrotesting Colombia, -- Sociedad Internacional Petrolera, -- Petrosud-Petroriva, -- Drilling and Workover Service and Marmaoil, -- a consortium led by Dygoil, -- a consortium led by Ecuavital -- a consortium led by Pecs Iecontsa -- a consortium led by Petrobel, and -- a consortium led by Petroleos del Pacifico. BNamericas notes that Petroecuador will open technical bids the week of Nov. 6. It will open the economic bids the week of Nov. 13. The Ecuadorean oil ministry hopes the contracts will boost total output from the fields by over 400% to 30,000 barrels per day, BNamericas states. Petroecuador is Ecuador's state oil company. Its division Petroproduccion is in charge of oil exploration and production activities, while its Petrocomercial refines, markets and distributes fuels and gasoline. Petroecuador, according to published reports, is faced with cash-problems. The state-oil firm has no funds for maintenance, has no funds to repair pumps in diesel, gasoline and natural gas refineries, and has no capacity to pay suppliers and vendors. The government refused to give the much-needed cash alleging inefficiency and non-transparency in Petroecuador's dealings. PETROECUADOR: Reforms May Bring US$5B Investment in Oil Sector -------------------------------------------------------------- Galo Chiriboga, an executive of Petroecuador, told Business News Americas that investment in the nation's oil sector could reach at least US$5 billion if sector reforms advance. Mr. Chiriboga said in a statement that the oil sector's contribution to gross domestic product could be 20% in the next four years. The potential of the oil sector is not being tapped and Ecuador is becoming a net importer, BNamericas says, citing Mr. Chiriboga. Other problems are environmental liabilities and poor quality fuels. According to BNamericas, Mr. Chiriboga disclosed three strategies that could to turn the oil sector around: -- reorganizing the sector's administration to include the participation of the energy and mines ministry, Petroecuador and an entity to replace the hydrocarbons department; -- integral development of upstream and downstream operations; and -- changes in Petroecuador. Changes in Petroecuador would include turning the firm into a corporation to boost competitiveness and allowing it to enter alliances and create public-private companies, BNamericas states. Petroecuador is Ecuador's state oil company. Its division Petroproduccion is in charge of oil exploration and production activities, while its Petrocomercial refines, markets and distributes fuels and gasoline. Petroecuador, according to published reports, is faced with cash-problems. The state-oil firm has no funds for maintenance, has no funds to repair pumps in diesel, gasoline and natural gas refineries, and has no capacity to pay suppliers and vendors. The government refused to give the much-needed cash alleging inefficiency and non-transparency in Petroecuador's dealings. ===================== E L S A L V A D O R ===================== PAYLESS SHOESOURCE: Third Quarter Sales Up 5.5% to US$666.5 Mil. ---------------------------------------------------------------- Payless ShoeSource, Inc., reported that same-store sales increased 5.2% during the third quarter of fiscal 2006, the thirteen weeks ended Oct. 28, 2006. All data in this press release relate to continuing operations. Payless ShoeSource's total sales for the third quarter increased 5.5% to US$703.4 million, from US$666.5 million during the third quarter 2005. Third Quarter Sales (Dollars In Millions) Fiscal Fiscal Percent Same-Store Sales 2006 2005 Increase Percent Increase US$703.4 US$666.5 5.5% 5.2% Year To Date Sales (Dollars In Billions) Fiscal Fiscal Percent Same-Store Sales 2006 2005 Increase Percent Increase US$2.10 US$2.05 2.4% 2.6% Matt Rubel, Payless ShoeSource's president and chief executive officer, said, "We are very pleased with our sales results for the third quarter. Footwear sales were strong across all segments of our women's and children's categories." Based on third quarter results, Payless ShoeSource expects diluted earnings per share from continuing operations for the third quarter to be in the range of US$0.43 to US$0.46, which includes a favorable income tax impact of approximately US$0.02 to US$0.03 per diluted share for changes in the effective income tax rate. Payless ShoeSource said it will no longer be issuing a quarterly sales release. Quarterly sales results, including same-store sales results, will be reported as part of the quarterly earnings release beginning in the fourth quarter of fiscal 2006. Payless ShoeSource exited retail operations in Japan during the third quarter, closing its one test location. Total exit costs are estimated to be approximately US$2 million pre-tax and before minority interest, with virtually all costs incurred in the third quarter of 2006. Results of Japan retail operations for all periods will be reported as discontinued operations. Headquartered in Topeka, Kansas, Payless ShoeSource, Inc., -- http://www.payless.com/-- is a family footwear specialty retailer with 4,605 retail stores, as of fiscal yearend Jan. 28, 2006 (fiscal 2005), including 22 stores not open for operations. The Company's Payless ShoeSource retail stores in the United States, Canada, the Caribbean, Central America, South America and Japan sold 182 million pairs of footwear, in fiscal 2005. The Company operates its business in two segments -- Payless Domestic and Payless International. The Payless Domestic segment includes retail operations in the United States, Guam and Saipan. The Payless International segment includes retail operations in Canada; Puerto Rico; the United States Virgin Islands; Japan; the South American Region, which includes Ecuador, and the Central American Region, which includes Costa Rica, Guatemala, El Salvador, the Dominican Republic, Honduras, Nicaragua, Panama and Trinidad and Tobago. * * * In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US and Canadian Retail sector, the rating agency confirmed its Ba3 Corporate Family Rating for Payless ShoeSource, Inc., and upgraded its B2 rating on the company's US$200 million 8.25% senior subordinated notes to B1. Moody's also assigned an LGD4 rating to notes, suggesting noteholders will experience a 64% loss in the event of a default. ================= G U A T E M A L A ================= AFFILIATED COMPUTER: Reports US$1.39 Billion Preliminary Revenue ---------------------------------------------------------------- Affiliated Computer Services, Inc., reported preliminary revenue of US$1.39 billion. Affiliated Computer disclosed certain summary preliminary first quarter fiscal year 2007 financial information. Summary Preliminary First Quarter Fiscal Year 2007 -- Preliminarily reported total revenues was US$1.39 billion, an increase of 6% compared with the first quarter of the prior year. -- Preliminarily reported total revenue growth was 10% after adjusting for the divestiture of the welfare to workforce services business, substantially all of which was sold in the second quarter of fiscal year 2006. Consolidated internal revenue growth for the first quarter was 4%. The Commercial segment grew 10%, of which 6% was internal revenue growth, and accounted for 61% of revenues this quarter. The government segment had 1% internal revenue growth and 10% total revenue growth, excluding the WWS Divestiture, and accounted for 39% of consolidated revenues this quarter. -- Preliminarily reported diluted earnings per share was US$0.60 for the first quarter of fiscal year 2007 (which also has not been modified to take into account the financial effects of the completion of the ongoing internal investigation into stock option matters). The preliminary results include US$0.05 per diluted share of legal expenses related to the ongoing stock option investigation and shareholder derivative lawsuits, US$0.04 per diluted share related to restructuring activities, US$0.01 per diluted share related to a waiver fee on the company's credit facility and US$0.01 per diluted share related to asset impairments and other charges. -- Reported diluted earnings per share for the first quarter of fiscal year 2006 was US$0.74 (which also has not been modified to take into account the financial effects of the completion of the ongoing internal investigation into stock option matters). Reported results included US$0.04 per diluted share of compensation expense related to the departure of the company's former chief executive officer and the company's assessment of risk related to the bankruptcies of certain airline clients. -- During the first quarter of fiscal year 2007, the company executed certain restructuring activities to further support its competitive position. These activities, which were largely completed in late September, will serve to reduce annual costs by approximately US$75 million. The company believes the bulk of its restructuring activities have been completed, but will continue to review its operations. The company may execute other restructuring activities in the future if it believes these activities will benefit its business both operationally and competitively over the long-term. -- Cash flow from operations was the company's highest ever for a first quarter, preliminarily reported at approximately US$173 million, or 12% of revenues. Capital expenditures and additions to intangible assets were preliminarily reported at approximately US$110 million, or 8% of revenues. Free cash flow during the first quarter was preliminarily reported at US$63 million. -- During the first quarter of fiscal year 2007, the company acquired Primax Recoveries, Inc. for US$40 million, plus contingent payments of up to US$10 million based on future performance. Primax, with trailing twelve month revenues of approximately US$39 million, is one of the oldest and largest health care recovery firms providing subrogation and overpayment recovery services to help its clients improve their profitability. -- Subsequent to Sept. 30, 2006, the company acquired Systech Integrators, Inc., for US$65 million, plus contingent payments of up to US$40 million based upon future performance. Systech, with trailing twelve-month revenues of approximately US$61 million, is a premier partner of SAP Americas and will expand ACS' existing SAP service offering with consulting and systems integration services. -- The company signed US$132 million of annual recurring revenue during the first quarter of fiscal year 2007. In addition to the first quarter signings, the company has also been awarded approximately US$170 million of annual recurring revenue. These awards will be reflected as closed new business once the related contracts are finalized and executed. -- During the quarter, the company repurchased approximately 14.4 million shares for an aggregate purchase price of US$730.4 million, before transaction costs, or an average purchase price per share of US$50.62 pursuant to the June 2006 US$1 billion share repurchase program. As of Sept. 30, 2006, the company has completed the Prior Program and has US$1 billion of availability under the August 2006 US$1 billion share repurchase program. As a result of the company's share repurchase activity, weighted average shares used to calculate diluted earnings per common share at Sept. 30, 2006, were 104.6 million. Actual shares outstanding at September 30, 2006 were 98.9 million, consisting of 92.3 million Class A shares and 6.6 million Class B shares. Affiliated Computer is providing only certain summary preliminary quarterly financial information at this time because of the previously announced ongoing internal investigation it has been conducting into stock option matters, the outcome of which could impact these and prior period results and could involve a restatement of prior periods. The investigation, which is being conducted by an ad hoc committee of the Affiliated Computer's board of directors consisting of all the independent directors, who are proceeding with the assistance of specially engaged independent outside legal counsel, is expected to be completed later this quarter. For the same reason, the company will not be in a position to file its Quarterly Report on Form 10-Q for the quarterly period ended Sept. 30, 2006, on Nov. 9, 2006, when it would ordinarily be due for filing. Affiliated Computer has also delayed the filing of its Annual Report on Form 10-K for its fiscal year ended June 30, 2006, in view of the ongoing internal investigation. The company expects to file the Form 10-K and Form 10-Q as soon as practical following completion of the internal investigation. The summary preliminary quarterly financial information has been prepared by Affiliated Computer's management and does not take into account the financial effects of the completion of the company's internal investigation into stock option matters and has not been approved by the company's Audit Committee. In view of the company's decision to provide more limited information than is customary, there will not be a conference call to more fully discuss the results. Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. The company's global presence include operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland and Singapore. * * * As reported in the Troubled Company Reporter on Oct. 4, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating and senior secured ratings on Dallas, Texas-based Affiliated Computer Services, Inc. to 'B+' from 'BB'. S&P placed the ratings on CreditWatch with negative implications where they were placed on Jan. 27, 2006. UNIVERSAL CORP: Declares US$0.44 Per Share Quarterly Dividend ------------------------------------------------------------- Allen B. King -- chairperson, president, and chief executive officer of Universal Corp. -- disclosed that the company's board of directors has declared a quarterly dividend of US$.44 per share on the common shares of the company, payable Feb. 12, 2007, to common shareholders of record at the close of business on Jan. 8, 2007. Mr. King noted, "This is our 36th consecutive annual dividend increase, and we are proud of our record of delivering value to shareholders." Universal has raised its common dividend every year since 1971. Universal Corp.'s board of directors declared a quarterly dividend of US$16.875 per share on the Series B 6.75% Convertible Perpetual Preferred Stock, payable Dec. 15, 2006, to shareholders of record as of 5:00 p.m. Eastern Time on Dec. 1, 2006. Based in Richmond, Virginia, Universal Corp., (NYSE:UVV) -- http://www.universalcorp.com/-- has operations in tobacco and agri-products. The company, through its subsidiaries, is one of two leading independent tobacco merchants in the world. Universal Corporation's gross revenues for the fiscal year that ended on March 31, 2006, were approximately US$3.5 billion, which included US$1.4 billion related to operations that were sold on Sept. 1, 2006. The company has operations in India, Brazil, Argentina, the United States, Guatemala, the Netherlands, Belgium and other countries in Europe. 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, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its Ba1 Corporate Family Rating for Universal Corporation, and downgraded its Ba1 rating to Ba2 on the company's US$563 million MTN. Additionally, Moody's assigned an LGD5 rating to the debt obligation, suggesting noteholders will experience a 73% loss in the event of a default. =========== G U Y A N A =========== DIGICEL LTD: Acquires U Mobile in Guyana ---------------------------------------- Digicel Group has acquired the Guyanese mobile operator U Mobile through the direct acquisition of its ultimate parent holding company. After the acquisition of El Salvador mobile operator, Digicel Holdings Ltd., Digicel Group now has operations in 22 markets. Expected to introduce increased competition to the Guyana mobile market, the acquisition of U Mobile, along with its employee base of 119 people, enables Digicel to expand its footprint into South America following the launch in French Guiana earlier this year. Guyana has a population of close to 800,000 people. By making considerable investments to upgrade and expand U Mobile's existing GSM network, Digicel looks forward to making a significant impact on the quality, standard and availability of mobile telecommunications in Guyana. Guyana's President Bharrat Jagdeo, commented, "Based on their hugely successful track record across the Caribbean region in making mobile communications more accessible to countries with low mobile penetration rates, we are confident that the presence of Digicel in Guyana will bring increased competition to the market. This will result in new and improved quality services allowing more Guyanese to avail of mobile technology." Samuel Hinds, Guyana's Prime Minister, said, "We look forward to Digicel providing better coverage and better value to the Guyana mobile customer as well as being an active participant in our community." Colm Delves, Digicel Group's chief executive officer, stated, "We look forward to heralding a new era in mobile telecommunications in Guyana, where mobile users can embrace new innovative technology and accessible telecom services. At Digicel, our customers are our number one priority and we will bring this outlook to Guyana where we have already built strong ties with the people through our partnership with West Indies cricket." Barry Hon -- head of TWT, the former owner of U Mobile -- said, "We are very proud of our record of being the first cellular company to introduce competition to the Guyanese telecommunications marketplace. We are happy that our investment and hard work have now attracted a well-respected international company of Digicel's caliber who will take competition to a new level in Guyana. We know that we are leaving our investment in good hands." Tim Bahrani, a senior executive who has over 11 years experience in mobile telecommunications management, will head Digicel Guyana's operation. Before joining Digicel, he held senior management positions at Celtel, Africa's leading mobile operator, and Millicom International in Asia. With over US$1.2 billion invested in the Caribbean over the past five years, Digicel has become one of the most admired and leading brands in the region as well as a significant employer of close to 2,500 staff members. Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * On July 12, 2006, Moody's Investors Service assigned a B3 senior unsecured rating to the US$150 million add-on Notes offering of Digicel Limited and affirmed Digicel's existing B3 senior unsecured and B1 Corporate Family Ratings. Moody's changed the outlook to stable from positive. * * * Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel Ltd's proposed add-on offering of US$150 million 9.25% senior notes due 2012. These notes are an extension of the US$300 million notes issued in July 2005. In addition, Fitch also affirms Digicel's foreign currency Issuer Default Rating and the existing US$300 million senior notes due 2012 at 'B'. Fitch said the rating outlook is stable. ========= H A I T I ========= DYNCORP: Appoints Schehr as Sr. Vice President & General Counsel ---------------------------------------------------------------- DynCorp International LLC has appointed Curtis L. Schehr as its Senior Vice President and General Counsel. Mr. Schehr was the senior vice president, general counsel and secretary of Anteon International Corp. from 1996 to July 2006, where he was part of the corporate leadership team that spearheaded the company's vigorous growth, including an initial public offering in early 2002. From 1991-1996, he was associate general counsel of Vitro Corp. of Rockville, MD. Before that, Mr. Schehr was corporate legal counsel at Information Systems and Networks Corp. of Rockville, MD, and served in several legal and contracts positions at Westinghouse Electric Corp.'s defense group in Baltimore, MD. Herb Lanese, president and chief executive officer of DynCorp International, said, "I'm delighted to have Curtis join our executive team in this highly important role. We are a newly formed public company with substantial opportunity for growth, and Curtis's deep corporate legal experience, business acumen, and track record in helping grow a business will add an important dimension in support of the company's success." Headquartered in Irving, Texas, DynCorp International Inc. (NYSE: DCP) -- http://www.dyn-intl.com/-- provides specialized mission-critical outsourced technical services to civilian and military government agencies. The Company specializes in law enforcement training and support, security services, base operations, aviation services and operations, and logistics support. The company has more than 14,400 employees in 33 countries including Haiti. DynCorp International, LLC, is the operating company of DynCorp International Inc. * * * As reported in the Troubled Company Reporter on June 19, 2006, Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating to 'BB-' from 'B+', on DynCorp International LLC. The ratings were removed from CreditWatch where they were placed with positive implications on Oct. 3, 2005. S&P said the outlook is stable. As reported in the Troubled Company Reporter on June 13, 2006, Moody's Investors Service upgraded DynCorp International LLC's US$90 million senior secured revolver maturing Feb. 11, 2010, to Ba3 from B2; US$345 million senior secured term loan B due Feb. 11, 2011, to Ba3 from B2; US$320 million 9.5% senior subordinated notes due Feb. 15, 2013, to B3 from Caa1; Corporate Family Rating, to B1 from B2; and Speculative Grade Liquidity Rating, to SGL-2 from SGL-3. Moody's said the ratings outlook is stable. DYNCORP INTERNATIONAL: Secures US$450MM from Naval Facilities ------------------------------------------------------------- The Naval Facilities Engineering Command aka NAVFAC has awarded DynCorp International and its partners in Contingency Response Services LLC the Global Contingency Services Contract. The contract is valued at up to US$450 million over a five-year period. DynCorp International, Parsons Global Services, and PWC Logistics formed Contingency Response Services LLC to provide a full range of worldwide contingency and disaster-response services, including humanitarian assistance and interim or transitional base-operating support services. Key functional areas where work will be performed include: -- facility operations and maintenance; -- air operations; -- port operations; -- health care; -- supply and warehousing; -- galley; -- housing support; -- emergency services; -- security, fire, and rescue; -- vehicle-equipment repair; and -- incidental construction. Work will be performed through individual task orders extending through August 2011. Headquartered in Irving, Texas, DynCorp International Inc. (NYSE: DCP) -- http://www.dyn-intl.com/-- provides specialized mission-critical outsourced technical services to civilian and military government agencies. The Company specializes in law enforcement training and support, security services, base operations, aviation services and operations, and logistics support. The company has more than 14,400 employees in 33 countries including Haiti. DynCorp International, LLC, is the operating company of DynCorp International Inc. * * * As reported in the Troubled Company Reporter on June 19, 2006, Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating to 'BB-' from 'B+', on DynCorp International LLC. The ratings were removed from CreditWatch where they were placed with positive implications on Oct. 3, 2005. S&P said the outlook is stable. As reported in the Troubled Company Reporter on June 13, 2006, Moody's Investors Service upgraded DynCorp International LLC's US$90 million senior secured revolver maturing Feb. 11, 2010, to Ba3 from B2; US$345 million senior secured term loan B due Feb. 11, 2011, to Ba3 from B2; US$320 million 9.5% senior subordinated notes due Feb. 15, 2013, to B3 from Caa1; Corporate Family Rating, to B1 from B2; and Speculative Grade Liquidity Rating, to SGL-2 from SGL-3. Moody's said the ratings outlook is stable. =============== H O N D U R A S =============== WARNACO GROUP: Iconix Brand to Acquire Ocean Pacific for US$54MM ---------------------------------------------------------------- Iconix Brand Group Inc. has entered into a definitive agreement to purchase the brand Ocean Pacific from The Warnaco Group, Inc., for US$54 million in the aggregate. The Ocean Pacific brand is a leading global action sports lifestyle brand that is over 35 years old and currently has 30 license agreements, half of which are international. Primary licensed categories include footwear, kid's apparel, eyewear, fragrance, skateboards and surfboards. As part of the transaction, Warnaco Group will be granted a license from Iconix to continue to manufacture and sell women's and junior swimwear. Neil Cole, Iconix Brand chairperson and chief executive officer, stated, "The action sports lifestyle segment is an area that Iconix has been seeking to penetrate. Ocean Pacific is the original action sports lifestyle brand with tremendous authenticity, high brand awareness and applicability to a broad variety of consumer products, including apparel, accessories and sports equipment like surf, snow and skateboards. Ocean Pacific has a large global footprint with 15 different international licensees, and Iconix believes it can expand Ocean Pacific's international business further and significantly grow the brand's penetration in the US." Joe Gromek, Warnaco's president and chief executive officer, said, "As part of our strategy to increase shareholder value, we continually assess our portfolio of brands and licenses to ensure we focus on our strongest platforms for growth. While we have made significant progress in the restructuring of the Ocean Pacific business, the sale will allow us to increase our attention on our core brands and on our international opportunities, which are the key drivers of our growth strategy. Additionally, given the strength of the Ocean Pacific brand, we are pleased to maintain our association with the Ocean Pacific swimwear business." Under the purchase agreement, Warnaco Group will be paid US$10 million in cash at closing, which is anticipated to be in November 2006. The remainder of the purchase price will be in the form of a short-term note from Iconix Brand. The note is payable in full on or prior to Dec. 31, 2006 through a combination of cash of not less than US$17 million and shares of Iconix Brand common stock. Iconix Brand may at its election extend payment of the note until Jan. 31, 2007, at which time it would have paid cash of not less than US$30.5 million and the remainder in Iconix Brand common stock. About Iconix Iconix Brand Group Inc. owns, licenses and markets a growing portfolio of consumer brands including CANDIE'S, BONGO, BADGLEY MISCHKA, JOE BOXER, RAMPAGE, MUDD and LONDON FOG. The company has also entered into definitive agreements to purchase the brands MOSSIMO and OCEAN PACIFIC that is anticipated to close this month. The company licenses its brands to a network of leading retailers and manufacturers that touch every major segment of retail distribution from the luxury market to the mass market in both the US and around the world. Iconix Brand, through its in-house advertising, promotion and public relations agency, markets its brands to continually drive greater consumer awareness and equity. About Warnaco Headquartered in New York, The Warnaco Group, Inc., is a leading apparel company engaged in the business of designing, marketing and selling intimate apparel, men's wear, jeans wear, swimwear, men's and women's sportswear and accessories under such owned and licensed brands as Warner's(R), Olga(R), Lejaby(R), Body Nancy Ganz(tm), Speedo(R), Anne Cole(R), Op(R), Ocean Pacific(R), Cole of California(R) and Catalina(R) as well as Chaps(R) sportswear and denim, J. Lo by Jennifer Lopez(R) lingerie, Nautica(R) swimwear, Michael Kors(R) swimwear and Calvin Klein(R) men's and women's underwear and sportswear, men's, women's, junior women's and children's jeans and accessories and women's and juniors' swimwear. The company emerged from bankruptcy protection in 2003. Its Authentic Fitness unit is the North American distributor of Speedo swimwear. In 2003 the last two US-based manufacturing facilities were closed and production shifted to Honduras, Mexico, and Asia. In 2006 it acquired the license, wholesale, and retail units for Calvin Klein jeans and accessories in Europe and Asia. * * * Standard & Poor's Ratings Services revised on Aug. 11, 2006, its outlook on The Warnaco Group, Inc.'s ratings to stable from positive. At the same time, the ratings on Warnaco were affirmed, including its 'BB-' corporate credit rating. Total debt outstanding at April 1, 2006, was about US$431 million. "The outlook revision follows the company's announcement that it will restate its financial statements for the fiscal year ended December 2005 and the first quarter of 2006 ended April 1, 2006, as a result of certain irregularities and errors related to its accounting for returns and vendor allowances at its Chaps men's wear division," said Standard & Poor's credit analyst Susan H. Ding. WARNACO GROUP: Posts US$452 Mil. Third Quarter 2006 Net Revenues ---------------------------------------------------------------- Net revenues of the Warnaco Group, Inc., increased to US$452 million in the third quarter of 2006, compared with the US$326.3 million in the same period of 2005. Warnaco Group posted these results for the quarter ended Sept. 30, 2006: -- Gross profit margin was 39.3% of net revenues compared with 34.4% in the prior year quarter. -- Operating income increased to US$34.0 million, from US$17.0 million in the prior year quarter. -- Net income was US$14.6 million compared with US$6.9 million for the third quarter of fiscal 2005. -- Loss from discontinued operations was US$0.17 per diluted share. -- Income from continuing operations was US$22.5 million compared with US$9.1 million in the prior year quarter, and includes a retroactive benefit of US$3.2 million related to the previously announced favorable tax ruling from the Netherlands taxing authority. Warnaco Group notes that fiscal 2006 third quarter results include the operations of the Calvin Klein Jeans and related businesses in Europe and Asia or CKJEA Business that were acquired on Jan. 31, 2006. Excluding the CKJEA Business, net revenues increased 6.0% to US$345.8 million compared with US$326.3 million in the prior year quarter and operating income declined 5.3% to US$16.1 million from US$17.0 million in the prior year quarter. For the third quarter, net revenues for the CKJEA Business were US$106.2 million and operating income was US$17.9 million. Warnaco Group has entered into an agreement to sell certain assets of its Ocean Pacific business. The third quarter and year-to-date operating results of that business, excluding the operations of the Ocean Pacific women's and juniors swimwear business (which the company will operate under a new three year license agreement), are categorized as "assets held for sale" and are reflected in discontinued operations. For the three months ended Sept. 30, 2006, the company recorded a loss of US$7.9 million, in discontinued operations as a result of the divestiture of this business. The company expects to record additional expenses in the fourth quarter of fiscal 2006 relating to the divestiture of this business. The company also announced that over the next several months it expects to discontinue certain other non-core businesses. Joe Gromek, Warnaco Group's president and chief executive officer, commented, "We are pleased with the results reported today. For the quarter, both the pre-acquisition business, led by the Intimate Apparel Group, and the acquired CKJEA Business exceeded our expectations. The implementation of our key strategies for our continuing operations, including geographic diversification and direct to consumer expansion, drove solid gains in our top line and bottom line performance. Our international businesses continued to grow in the quarter, generating approximately half of this quarter's net revenues, and revenues from our direct to consumer business climbed to just over 16%." "We remain dedicated to enhancing the performance of our portfolio of strong brands, many of which hold leadership positions in their respective markets. We will continue to evaluate our portfolio and focus our efforts on those businesses that provide the greatest opportunity to create shareholder value. Our decisions to sell Ocean Pacific and discontinue certain other non-core businesses reflects this commitment. These decisions will allow management to focus attention and resources on our key brands and international opportunities, which are the foundation of our growth strategy," Mr. Gromek stated. Third Quarter Highlights Warnaco Group's net revenues increased 38.5% to US$452.0 million for the third quarter of fiscal 2006, compared with US$326.3 million for the third quarter of fiscal 2005. Continued strength in the Intimate Apparel Group and an improvement in the Swimwear Group's revenues more than offset declines in revenues from the Sportswear Group's pre-acquisition businesses, and contributed to a 6.0% revenue increase for the company's pre-acquisition businesses. The translation of foreign currencies, primarily as a result of a stronger euro and Canadian dollar, increased third quarter 2006 net revenues by approximately US$4.9 million compared with the third quarter of fiscal 2005. Warnaco Group's gross profit rose to US$177.8 million, or 39.3% of net revenues, for the third quarter of fiscal 2006, including US$55.5 million in gross profit from the CKJEA Business, compared with US$112.3 million, or 34.4% of net revenues, for the third quarter of fiscal 2005. The majority of the 490 basis point improvement in gross profit margin is attributed to the contributions from the CKJEA Business. Gross profit margin for the pre-acquisition businesses improved 100 basis points, driven by continued improvement in the Intimate Apparel Group's gross profit margins and increases in the Swimwear Group's gross profit margins. The translation of foreign currencies, primarily as a result of a stronger euro and Canadian dollar, increased third quarter 2006 gross profit by approximately US$2.4 million compared with the third quarter of fiscal 2005. Selling, general and administrative expenses of Warnaco Group were US$141.0 million, or 31.2% of net revenues, compared with US$95.0 million, or 29.1% of net revenues, in the prior year quarter. The increase in SG&A included: (i) US$36.1 million of SG&A from the CKJEA Business, (ii) approximately US$2.4 million of expenses incurred during the third quarter related to the previously announced investigation into accounting matters and subsequent restatement of the company's financial results, (iii) a US$2.3 million increase in Swimwear SG&A (primarily related to incremental marketing and expenses associated with businesses to be discontinued), (iv) a US$2.0 million increase in Intimate Apparel related to the expansion of its direct to consumer initiative and (v) US$1.3 million of information technology expense related to the ongoing implementation of a new systems infrastructure. The translation of foreign currencies, primarily as a result of a stronger euro and Canadian dollar, increased third quarter 2006 SG&A expenses by approximately US$1.5 million compared with the third quarter of fiscal 2005. Amortization of intangible assets increased to US$2.7 million, compared with US$1.2 million in the prior year period, primarily due to US$1.5 million of amortization expense related to finite-lived intangible assets associated with the acquisition of the CKJEA Business. Warnaco Group's operating income for the third quarter of fiscal 2006 was US$34.0 million compared with US$17.0 million in the prior year period. An increase in the Sportswear Group operating income, driven largely by the CKJEA Business, and the continued momentum of Calvin Klein Underwear more than offset seasonal losses in the Swimwear Group and approximately US$2.8 million of expenses related to the businesses to be discontinued. The translation of foreign currencies, primarily as a result of a stronger euro and Canadian dollar, increased third quarter 2006 operating income by approximately US$0.9 million compared with the third quarter of fiscal 2005. Other income of Warnaco Group was US$4.4 million, compared with US$0.1 million in the prior year quarter related primarily to realized and unrealized foreign exchange rate gains related to inter company loans denominated in foreign currencies. Warnaco Group's net interest expense increased to US$9.3 million compared with US$4.1 million in the prior year period. The US$5.2 million increase is primarily the result of incremental indebtedness incurred in connection with the acquisition of the CKJEA Business. The provision for income taxes was US$6.6 million, or an effective tax rate of 22.8%, compared with US$3.9 million, or an effective tax rate of 30.1%, in the prior year period. In the quarter, Warnaco Group benefited from a US$3.2 million reduction in the provision for taxes related to the previously announced favorable tax ruling from the Netherlands taxing authority that is retroactive to the beginning of fiscal 2006. The company expects its effective tax rate for fiscal 2006, for its continuing operations, to be approximately 30.0%. Warnaco Group's loss from discontinued operations, net of taxes, was US$0.17 per diluted share. This includes certain costs related to the sale of certain assets of the Ocean Pacific business. Net income of Warnaco Group was US$14.6 million, or US$0.31 per diluted share, compared with US$6.9 million for the third quarter of fiscal 2005, which reflects contributions from the Sportswear Group (driven largely by the CKJEA Business), the ongoing success in the Intimate Apparel Group and a lower tax rate for the quarter. Warnaco Group noted these balance sheet highlights as of Sept. 30, 2006: Cash and cash equivalents were US$113.4 million, compared with US$152.0 million of cash and cash equivalents at Oct. 1, 2005, notwithstanding US$70.8 million of cash (net of acquired cash) used in connection with the acquisition of the CKJEA Business on Jan. 31, 2006. During the quarter Warnaco Group used US$11.0 million of cash to repurchase 525,000 shares of common stock under the company's previously announced share repurchase program, at an average price of US$20.85. Approximately 1.8 million shares remain authorized for repurchase under the share repurchase program, subject to certain limitations on repurchases under applicable debt instruments. The share repurchase program may be modified or terminated by the company's Board of Directors at any time. Warnaco Group's accounts receivable were US$310.0 million, up from US$212.3 million at Oct. 1, 2005. Accounts receivable related to the CKJEA Business were US$86.4 million. Excluding the CKJEA Business, receivables were up 5.3% in the quarter in line with top line growth. Warnaco Group's net inventories were US$366.5 million, up from US$311.5 million at Oct. 1, 2005. Inventories at Sept. 30, 2006, include US$49.9 million of inventory of the CKJEA Business. Excluding the CKJEA Business, inventories were up 1.7%. Subsequent Events Warnaco Group entered into an agreement to sell certain assets of its Ocean Pacific business for US$54.0 million. The results for Ocean Pacific, excluding the operations of the Ocean Pacific women's and juniors swimwear business (which the company will operate under a new three year license agreement), are categorized as "assets held for sale" and appear in discontinued operations. Warnaco Group expects to discontinue over the next several months its Lejaby Rose, JLO by Jennifer Lopez Lingerie and Axcelerate Activewear businesses. Although the results of these businesses are currently included in continuing operations, when the operations of each of these businesses has ceased, the results will be reflected in discontinued operations. Collectively, for the nine months ended Sept. 30, 2006, Ocean Pacific and the other businesses that the company expects to discontinue over the next several months accounted for revenues of approximately US$19.4 million and produced an operating loss of US$17.0 million. Included in these results are US$5.8 million of charges, taken in the third quarter, associated with discontinuance of these businesses. Fiscal 2006 Outlook Larry Rutkowski, Warnaco Group's chief financial officer, commented, "For the year, for the company's continuing operations, we expect our pre-acquisition business revenue growth to be in the low single digits. In addition, for our pre-acquisition businesses, we expect at least a 100 basis point improvement in gross margin percentage and mid single digit percentage improvement in the operating margin percentage over the prior year (assuming minimal pension expense in fiscal 2006). Overall, for the company's continuing operations (including the acquired CKJEA Business), we expect for 2006 (i) revenue growth to be in the low 20 percent range; (ii) mid single digit percentage improvement in the operating margin percentage over the prior year (assuming minimal pension expense); and (iii) that the acquisition of the CKJEA Business will be accretive to Warnaco's earnings per share." "The elimination of investment expense associated with the Ocean Pacific brand and the planned discontinuation of certain underperforming businesses are expected to favorably affect our profitability going forward. These decisions will allow us to redeploy resources to those brands that best suit our key growth strategies," Mr. Rutkowski said. Headquartered in New York, The Warnaco Group, Inc., is a leading apparel company engaged in the business of designing, marketing and selling intimate apparel, men's wear, jeans wear, swimwear, men's and women's sportswear and accessories under such owned and licensed brands as Warner's(R), Olga(R), Lejaby(R), Body Nancy Ganz(tm), Speedo(R), Anne Cole(R), Op(R), Ocean Pacific(R), Cole of California(R) and Catalina(R) as well as Chaps(R) sportswear and denim, J. Lo by Jennifer Lopez(R) lingerie, Nautica(R) swimwear, Michael Kors(R) swimwear and Calvin Klein(R) men's and women's underwear and sportswear, men's, women's, junior women's and children's jeans and accessories and women's and juniors' swimwear. The company emerged from bankruptcy protection in 2003. Its Authentic Fitness unit is the North American distributor of Speedo swimwear. In 2003 the last two US-based manufacturing facilities were closed and production shifted to Honduras, Mexico, and Asia. In 2006 it acquired the license, wholesale, and retail units for Calvin Klein jeans and accessories in Europe and Asia. * * * Standard & Poor's Ratings Services revised on Aug. 11, 2006, its outlook on The Warnaco Group, Inc.'s ratings to stable from positive. At the same time, the ratings on Warnaco Group were affirmed, including its 'BB-' corporate credit rating. Total debt outstanding at April 1, 2006, was about US$431 million. "The outlook revision follows the company's announcement that it will restate its financial statements for the fiscal year ended December 2005 and the first quarter of 2006 ended April 1, 2006, as a result of certain irregularities and errors related to its accounting for returns and vendor allowances at its Chaps menswear division," said Standard & Poor's credit analyst Susan H. Ding. ============= J A M A I C A ============= AIR JAMAICA: Cabinet Rejects Firm's Proposed Business Plan ---------------------------------------------------------- The Jamaican Cabinet has rejected a new business plan for Air Jamaica, the Jamaica Observer reports. However, the government promised to keep Air Jamaica operating, The Observer notes. Donald Buchanan, the minister of information and development, said in a weekly post-Cabinet press briefing at Jamaica House, "What we have said is that, yes, we are committed to the airline continuing to operate, but you have to operate within the commitment of government to support you with an amount not exceeding (US$30 million)." According to The Observer, the sub-committee's review substantially supported the position of the Cabinet that it could not accommodate the proposed plan. As reported in the Troubled Company Reporter-Latin America on Nov. 1, 2006, the special sub-committee assigned to analyze business proposals for Air Jamaica would present a report to the Jamaican Cabinet on Nov. 1. As previously reported, the Jamaican government's Cabinet did not approve Air Jamaica's proposed new business plan. Minister Buchanan 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. Minister Buchanan told The Observer that among of the sub-committee's recommendations was that Air Jamaica should not, at this time, be shut down. The Cabinet accepted that recommendation. The sub-committee, however, recommended that Air Jamaica devise a new business plan with provisions to slim down its operations, including the elimination of unprofitable routes and provisions for refleeting, by looking at options for current leases and sub-leases and possible renegotiating the lease contracts. Minister Buchanan told The Observer, "One of the things that is going to be central to the whole decision, which will eventually be made in respect of Air Jamaica, is to minimize and bring to as close as possible, if not to the actual amount (of US$30 million annually) which government has committed, as the amount (needed) to support the airline." The Observer relates that Air Jamaica's executives are formulating a new business plan around its US$30-million subsidy. The Cabinet did not consider merging Air Jamaica with other regional airlines, The Observer says, citing Mr. Buchanan. 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: Reports 3rd Qtr. Claim Settlement Fund & Escrow ---------------------------------------------------------------- Kaiser Aluminum & Chemical Corp.'s Tort Claims Settlement Fund reports US$9,520 in total investments for the quarter ended Sept. 30, 2006. For the period July 1 through Sept. 30, 2006, the Tort Claims Settlement Fund made cash disbursements totaling US$15,372,704. It held US$124,398 in principal cash as of Sept. 30. Kaiser Aluminum's Asbestos Claim Settlement Escrow reports US$10,638 in total investments for the quarter ending Sept. 30, 2006. The Asbestos Claim Settlement Escrow made cash disbursements totaling US$17,086,665 in the third quarter, and held US$751,366 in principal cash as of Sept. 30, 2006. 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 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: Settles OCP Status of Fleishman & Hewitt --------------------------------------------------------- Kaiser Aluminum Corp. employed the two firms as ordinary course professionals during its Chapter 11 cases: (a) Fleishman-Hillard, Inc., assisted Kaiser with public relations matters; and (b) Hewitt Associates LLC acted as the enrolled actuary for Kaiser's defined benefit pension plans and was also employed to provide other services, including assisting in the development of a post-emergence management equity incentive plan. During the six-month period Feb. 1, 2006 through July 5, 2006, Fleishman and Hewitt were paid fees that exceeded the US$210,000 limit imposed by the U.S. Bankruptcy Court for the District of Delaware on ordinary course professionals. Specifically, Kaiser Aluminum paid Fleishman fees of US$315,911 and Hewitt fees of US$363,507. Kaiser Aluminum and Kelly Beaudin Stapleton, the U.S. Trustee for the District of Delaware, have agreed that despite the terms of the Court order governing the employment of ordinary course professionals: (1) Kaiser Aluminum should not have to seek a Court order approving the employments of Fleishman and Hewitt under Section 327 of the Bankruptcy Code; and (2) Kaiser Aluminum is permitted to pay Fleishman and Hewitt as ordinary course professionals. Judge Fitzgerald approved the stipulation on Oct. 13, 2006. 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 filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off 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) NATIONAL WATER: Conducting Repair & Expansion Works in Kingston --------------------------------------------------------------- The National Water Commission of Jamaica is conducting repair and expansion works to a water supply and wastewater system in Kingston's metropolitan area, the government said in a statement. Business News Americas relates that the project costs US$85 million and is partly financed by the Japan Bank for International Cooperation and the European Union. According to BNamericas, the project is the largest of its kind that the National Water has ever carried out. It involves four main activities: -- institutional strengthening of National Water, -- rehabilitation of existing facilities, -- development of new water sources to supply the growing customer base, and -- recharge of artificial aquifers. Charles Buchanan, the communications manager of National Water, told BNamericas that the project is intended to complement a number of other projects that are being undertaken, including the US$55-million Soapberry phase I to expand water services. Mr. Buchanan said that National Water wants to decrease the level of non-revenue water lost due to leaks in the existing pipe system, BNamericas notes. BNamericas underscores that rehabilitation works are slated for water treatment plants: -- Mona, -- Hope, -- Constant Spring, and -- Sea View. The report says that the works will decrease the amount of water lost due to overflows in treatment plants and water distribution tanks. They will also improve the manageability of the system. About 92% of repairs on existing facilities have been carried out, 81% of new water supplies have been developed and 27% of recharge aquifer works have been completed, BNamericas says, citing Mr. Buchanan. * * * As reported in the Troubled Company Reporter on Feb. 7, 2006, the National Water Commission of Jamaica had been criticized for failing to act promptly in cutting its losses. For the fiscal years 2002 and 2003, the water commission accumulated a net loss of US$2.11 billion. The deficit fell to US$1.86 billion the following year, and to US$670 million in 2004 and 2005. =========== M E X I C O =========== ALASKA AIR: Moody's Affirms B1 Corporate Family Rating ------------------------------------------------------ Moody's Investors Service affirmed the corporate family rating of Alaska Air Group, Inc., and the Equipment Trust Certificate rating of Alaska Airlines, Inc., at B1, and changed the outlook to stable from negative. Moody's also withdrew the prospective ratings on certain inactive shelf registrations. The B1 rating reflects Alaska Air's credit metrics of EBIT to Interest of 1.3x and Debt to EBITDA of 6.0x (through Sept. 30, 2006, using Moody's standard adjustments), and the potential for further improvement as a result of management programs to reduce non-fuel costs during an improving operating environment. Nonetheless, growth in unit revenues and passenger yield over the last twelve months through Sept. 30 2006, while positive, somewhat lags the meaningful recent improvements at other air carriers suggesting that Alaska Air has been less successful in passing through fare increases. This weaker yield performance is one factor that constrains the rating. Nonetheless, financial performance has benefited from the company's fuel hedging program as well as operating cost reductions as part of the "Long-Term Transformation Plan". Positively reflected in the ratings are the company's solid brand and specialty markets served (intra- and inter-Alaska) which are somewhat more protected from competition, and the company's particularly strong liquidity. The stable outlook reflects Moody's expectation that Alaska Air's fleet transition program -- replacing the MD-80 aircraft with a new B737-800 fleet -- will not increase financial leverage meaningfully and that operations will not be disrupted as the transition occur. As well, operating profit, EBIT to Interest and retained cash flow to debt should improve steadily over the near term and remain consistent with other issuers with a B1 corporate family rating. Ratings could be pressured down should EBIT to Interest fall below 1.5x, or retained cash flow to debt fall below 7.5%. Inability to efficiently employ its new B737-800 aircraft, higher-than-expected borrowing as a result of fleet deliveries and/or a worsening of the operating environment would likely put downward pressure on the rating. The rating could be raised if sustained growth in operating income and cash flows, resulting from further unit cost reductions and accelerated yield growth, results in ratios of EBIT to Interest sustainably exceeding 2x and retained cash flow to debt in excess of 15%. Outlook Actions: Alaska Air Group, Inc. -- Outlook, Changed To Stable From Negative. Alaska Airlines Inc. -- Outlook, Changed To Stable From Negative. Withdrawals: Alaska Air Group, Inc. -- Multiple Seniority Shelf, Withdrawn, previously rated (P)Caa1. Alaska Airlines Inc. -- Multiple Seniority Shelf, Withdrawn, previously rated (P)B2. Seattle, Wash.-based Alaska Air Group, Inc. (NYSE: ALK) -- http://alaskaair.com/-- is a holding company with two principal subsidiaries, Alaska Airlines, Inc. and Horizon Air Industries, Inc. Alaska operates an all-jet fleet with an average passenger trip length of 1,009 miles. Alaska principally serves destinations in the state of Alaska and North/South service between cities in the Western United States, Canada, and Mexico. Horizon operates jet and turboprop aircraft with average passenger trip of 382 miles. Horizon serves 40 cities in seven states and six cities in Canada. FORD MOTOR: Reducing Health Care Benefits of Salaried Employees --------------------------------------------------------------- Ford Motor Co. plans to reduce expenses for U.S. salaried workers by abolishing merit-pay raises, requiring bigger payments for health benefits and reducing health-care payouts for retirees, Bill Koenig and John Lippert at Bloomberg News report. The changes will take effect June 1, company spokeswoman Marcey Evans said in the report. Ford will require active salaried workers to increase monthly health-care contributions and pay higher deductibles, Ms. Evans told Bloomberg. Specifics will vary because the company offers those employees five health-care plans, she explained. Ford also will now provide salaried retirees and their spouses 65 and older US$1,800 each for health-care expenses. The automaker currently provides the employees company-paid supplemental health insurance beyond U.S. Medicare benefits. The affected retirees can use the US$1,800 payments to purchase supplemental insurance, the source said, citing Ms. Evans. In addition, Ms. Evans noted that Ford will no longer provide supplemental health insurance for dependent children of retirees older than 65. Ms. Evans also noted that Ford will cut merit-pay increases to active salaried employees and will reinstate matching contributions for the salaried employee 401(k) retirement plans. Ford had suspended such matching payments in July 2005. The company will pay 60 cents for each dollar employees contribute for the first 5 percent of a worker's base pay, Bloomberg relates. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company -- -- 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 Corp. * * * 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. FORD MOTOR: Shows Improvement in October Sales Figures ------------------------------------------------------ Ford Motor Company's dealers delivered 215,985 vehicles to U.S. customers in October, up 8 percent compared with a year ago. It is the second monthly sales increase for the company, which posted a 5-percent increase in September. October car sales were up 22 percent as sales for the company's new mid- size cars (Ford Fusion, Mercury Milan and Lincoln MKZ) were more than double a year ago. The Ford Focus and the outgoing Ford Taurus also posted sharply higher sales. Truck sales were up 1 percent, led by gains for the new 2007-model Expedition and Navigator, which now are on sale in dealerships. Expedition sales were 8,553 (up 41 percent), and Navigator sales were 2,066 (up 44 percent). Ford's F-Series pickup also was up 3 percent, and the Ford Econoline full- size van was up 31 percent. October sales for the Ford Escape (9,603) lifted the vehicle's lifetime sales to more than 1 million. The Escape has been the best-selling small utility vehicle in the United States since it was introduced in late 2000. Cumulative sales now total 1,001,186. Lower U.S. Inventories Lower Ford, Lincoln and Mercury inventories were estimated at 622,000 units. This level is 107,000 units lower than a year ago and 30,000 units lower than at the end of September. The company estimates three- quarters of the present inventory is new 2007 models. "We are very serious about aligning inventories with demand," said Al Giombetti, president, Ford and Lincoln Mercury sales and marketing. "Our dealers did an outstanding job with the 2006 model sell-down program, and we took a painful but necessary action to reduce fourth-quarter production." 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. GRUPO CASA: Sales Up 3.27% to US$5.6B in Third Quarter 2006 ----------------------------------------------------------- Grupo Casa Saba reported consolidated financial and operating results for the third quarter of 2006. Financial Highlights -- Sales in the third quarter increased 3.27% to US$5,590.61 million; -- Cost of sales in the quarter rose by 3.66%; -- Gross margin declined by 34 basis points from 3Q05 to 9.15%; -- Operating expenses decreased 4.09% in the third quarter; -- Operating income grew 6.00% from 3Q05; -- Operating margin gained 9 b.p. to 3.47%; -- Operating income plus depreciation and amortization totaled US$214.86 million, increasing 1.65% from 3Q05; -- Third quarter net income rose 26.74%, while the net margin rose from 2.28% in 3Q05 to 2.80% in 3Q06; -- No cost-bearing liabilities were registered during the quarter; and -- company's cash position rose 41.75% from 3Q05. Quarterly Results Net Sales During the third quarter of the year, sales of its Private Pharma division showed the highest growth of all of its divisions, when compared to 3Q05. This result is attributable to the positive performance of the private pharmaceutical market, which maintained its sustained growth in terms of values as well as the competitive market participation of Grupo Casa Saba during the period. The divisions of Government Pharma and Health, Beauty, Consumer Goods, General Merchandise and Others registered lower sales when compared to 3Q05, affecting the Group's total sales. Reduction of sales in these divisions stems from the lack of sales of certain products to some clients due to changes in bidding processes and/or sales characteristics. In addition, the company no longer distributed some beauty and consumer goods lines that did not meet the company's established profitability parameters. It is worth noting that Grupo Casa Saba will continue to operate under strict profitability parameters established for each business line and/or product, seeking to incorporate new product lines that add value and increase profitability to its operations. As a result, Grupo Casa Saba recently acquired a specialized pharmaceutical products distributor. Through this acquisition, which amounted to less than US$5.0 million, the company expects to penetrate faster and more efficiently the distribution and commercialization market of specialized pharmaceuticals, which represent a new market niche and a potential site of additional sales in the short and medium term. As per its operating structure, the company has been renewing the automatic picking and order fulfillment systems of its main distribution centers. This decision will allow us to improve its efficiency and, consequently, its profitability levels. In addition, it entered into the vaccine business, which represents a potential sitsce of growth in the medium term, given the arrival of new vaccines developed to prevent diverse and complex diseases, which will soon be available in the market. Grupo Casa Saba continues with its technological renewal program. It is currently working with IBM and SAP to develop the most advanced technology that will allow us to offer its clients and suppliers the most efficient national distribution network. Sales By Division Private Pharma During third quarter 2006, sales in the Private Pharma division grew as a result of the sustained growth in terms of value of the private pharmaceutical market as well as Grupo Casa Saba's competitive performance, which includes combined operations both with clients and suppliers. Private Pharma's sales as a percentage of the Group's total sales were 83.65%, showing a slight increase from 3Q05, when it represented 82.23%. Government Pharma Government Pharma's performance shifted from previous quarters, decreasing 12.43% from 3Q05 as a result of lower sales of subrogate products. It is worth noting that sales to state-owned health institutions continued increasing during the quarter. As a result of such trend, sales of this division represented 3.24% of total sales, decreasing from the 3.82% posted in 3Q05. Health, Beauty, Consumer Goods, General Merchandise Sales from this division declined 5.24% when compared to 3Q05, as sales of certain products and to certain clients decreased along with the discontinuation of some health and beauty product lines that did not meet established profitability parameters. As a percentage of total sales, this division decreased its participation from 9.91% in 3Q05 to 9.10% in 3Q06. Publications Citem's sales increased 2.51%, mainly due to changes in magazine mix according to points of sale requirements. These efforts were aimed to increase volumes sold. In addition, more booths were placed in the different markets attended in order to better display the magazines. As a percentage of total sales, Citem's sales slightly decreased from 4.04% in 3Q05 to 4.01% in 3Q06. Grupo Casa Saba's consolidated sales increased 3.27% from 3Q05. Gross Income Gross income during the quarter slightly decreased 0.49% when compared to 3Q05. Consequently, gross margin decreased 34 basis points with respect to 3Q05, reaching 9.15%. Gross margin decreased as a result of greater discounts offered to its diverse clients with which we have operations due to the competition registered in the different markets in which we participate. Operating Expenses The improvement in productivity and efficiency in the Group as a result of implementation of efficiency programs in warehouses, delivering routes, employees and operations in general, allowed us to reduce its expenses as a percentage of sales above the reduction showed in its gross margin. Consequently, Grupo Casa Saba's operating margin improved in 3Q06 when compared to 3Q05. Operating expenses decreased 4.09%, or US$13.53 million, in the quarter. As a percentage of sales, operating expenses represented 5.67% in 3Q06, down 44 b.p. from 6.11% in 3Q05. Operating Income Operating income increased 6.00% as sales grew and operating expenses declined. The operating margin increased from 3.38% in 3Q05 to 3.47% in 3Q06, representing a nine basis point growth. Operating Income Plus Depreciation & Amortization Operating income plus depreciation and amortization of the Group in 3Q06 rose 1.65% from 3Q05 to US$214.86 million. Its margin showed a slight decrease of six basis points from 3.90% in 3Q05 to 3.84% in 3Q06, influenced by the 26.49% decrease registered in depreciation and amortization during the quarter due to the complete depreciation of the company's computer systems. Cash And Cost-Bearing Liabilities Grupo Casa Saba's balance remained free of cost-bearing liabilities in the third quarter of the current year. During the quarter, cash and cash equivalents totaled MXN586.59 million, 41.75% higher than in 3Q05. Comprehensive Cost Of Financing Grupo Casa Saba's comprehensive cost of financing during the quarter was US$3.65 million, 73.99% higher than the US$2.10 million of 3Q05. The increase is primarily due to a greater expense as a result of monetary position, which shifted from US$5.11 million in 3Q05 to US$13.55 million in 3Q06. This increase was not compensated by higher interest gain registered during the quarter, which rose by 159.11% to MXN12.35 million. Other Expenses/Income Other expenses/income decreased 12.82% with respect to 3Q05, totaling a net income of US$3.29 million. It is worth noting that in this line, the company registers expenses and revenues from operations differently than for its core business, such as the sale of transportation equipment and other services. Tax Provisions Tax provisions during the third quarter decreased 40.87% from 3Q05 to MXN36.36 million pesos. The Group's tax rate provision declined from 33.27% in 3Q05 to 18.77% in 3Q06. Net Income Net income in the period increased 26.74% to US$156.27 million as a result of greater operating profit and lower tax provisions. As a percentage of sales, net income increased from 2.28% in 3Q05 to 2.80% in 3Q06. Working Capital Accounts receivables in the third quarter increased slightly by 0.2 days in 3Q05 to 58.3 days. Inventory days to costs rose 6.1 days to 51.2 days. Account payables increased 5.5 days to 47.3 days. Grupo Casa Saba, S.A. de C.V., operates as a multichannel, multiproduct wholesale distributor in Mexico. It primarily offers pharmaceutical products, health, beauty aids and consumer goods, general merchandise, publications, and office and other products. The company distributes its products through pharmacies, mass merchandisers, retail and convenience stores, supermarkets, and other specialized channels. As of Dec. 31, 2005, it operated a network of 22 distribution centers. Grupo Casa Saba also offers a range of value-added services, including multiple daily deliveries and emergency product replacement services, as well as provides services that include training, conferences, and trade fairs. The company was founded in 1892 and is based in Mexico City, Mexico. * * * Moody's assigned a Ba2 long-term corporate family rating on Grupo Casa Saba S.A. de CV since July 15, 2003. GRUPO FINANCIERO: Eyes Full Control of Inter National Bank ---------------------------------------------------------- Luis Pena Kegel, the chief executive officer of Grupo Financiero Banorte, said in published reports that the firm is considering taking full control of Inter National Bank. Business News Americas relates that Grupo Financiero disclosed in January a plan to purchase a 70% stake in Inter National for US$259 million in cash with an option to buy the remainder, as part of its plan to offer banking services to the US Hispanic market. Mr. Kegel told BNamericas that he expects to complete the acquisition in the fourth quarter of 2006 and would then consider purchasing the remaining 30% if the initial results from the Inter National deal are promising. Grupo Financiero is keen on buying another bank but only after carefully evaluating the returns from the Inter National purchase, BNamericas says, citing Mr. Kegel. Mr. Kegel said that he expects to launch about 220 new offices in Mexico during the next three years, with a special focus on the capital, according to reports. Grupo Financiero Banorte SA de CV is a holding company that operates, through its subsidiaries, in the Mexican banking industry. The company's main activities include commercial, personal and investment banking, securities trading, insurance, pension funds, leasing and credit financing. Its two main subsidiaries are Banorte (96.11%) and Bancentro (99.99%), which both offer personal and commercial banking services such as credit and debit cards, insurance products, savings accounts and mortgage financing. As of Dec. 31, 2005, Grupo Financiero Banorte run a total of 986 offices and over 2,800 automated teller machines across Mexico. * * * As reported in the Troubled Company Reporter-Latin America on Aug. 2, 2006, Fitch upgraded the individual and Issuer Default Ratings of Mexico's Grupo Financiero Banorte and Banco Mercantil del Norte as: Grupo Financiero Banorte and Banco Mercantil del Norte: -- Foreign & local currency IDR to 'BBB' from 'BBB-'; -- Short-term local currency to 'F2' from 'F3'; and -- Individual to 'C' from 'C/D'. Fitch said ratings outlook is stable. GRUPO MEXICO: La Caridad Copper Production at 75% ------------------------------------------------- Grupo Mexico SA de CV told Noticias Financieras that copper output at its La Caridad mine is 75% of its capacity after the four-month strike in July. As reported in the Troubled Company Reporter-Latin America on Sept. 6, 2006, Grupo Mexico restarted operations at its copper mine and cathode plant in La Caridad at a minimal production level. The company said that production at the mine would return at reasonable levels by late September or early October. Grupo Mexico rehired people and trained new workers to bring La Caridad's production back to normal, Noticias Financieras reports. Grupo Mexico SA de C.V. -- http://www.grupomexico.com/-- through its ownership of Asarco and the Southern Peru Copper Company, Grupo Mexico is the world's third largest copper producer, fourth largest silver producer and fifth largest producer of zinc and molybdenum. * * * Fitch Ratings assigned these ratings to Grupo Mexico SA de C.V.: -- foreign currency long-term debt, BB; and -- local currency long-term debt, BB. GRUPO MEXICO: Will Pay MXN1.44 Billion in Dividends Today --------------------------------------------------------- Grupo Mexico SA de CV told Dow Jones Newswires that it will pay out MXN1.44 billion in dividends at the rate of MXN0.56 per share. Grupo Mexico told Dow Jones that based on the company's third-quarter results, the dividends will be paid on Nov. 6. Grupo Mexico SA de C.V. -- http://www.grupomexico.com/-- through its ownership of Asarco and the Southern Peru Copper Company, Grupo Mexico is the world's third largest copper producer, fourth largest silver producer and fifth largest producer of zinc and molybdenum. * * * Fitch Ratings assigned these ratings to Grupo Mexico SA de C.V.: -- foreign currency long-term debt, BB; and -- local currency long-term debt, BB. MERIDIAN AUTOMOTIVE: Court Extends Foreign Unit Financing Period ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Meridian Automotive Systems Inc. and its debtor-affiliates to modify the terms of the Foreign Funding Order to: (a) extend the time in which they may advance funds to their Foreign Subsidiaries to the earlier of: (i) the effective date of a plan of reorganization, or (ii) June 26, 2007; and (b) allow them to reallocate US$750,000 of the US$8,500,000 that was previously allocated to Meridian Mexico to Meridian Brazil. The Debtors previously obtained permission from the Court to advance up to US$9,700,000 to their non-debtor Foreign Subsidiaries over a 14-month period ending on June 26, 2006. As reported in the Troubled Company Reporter on Oct. 17, 2006, under the terms of the Foreign Funding Order, the Debtors were authorized to advance: -- up to US$8,500,000 to Meridian Automotive System, S. de MR. de C.V., -- up to US$200,000 to Voplex of Canada; and -- up to US$1,000,000 to Meridian Automotive Systems-DO Brazil LTDA. As of Oct. 5, 2006, the Debtors had advanced approximately US$3,500,000 to the Foreign Subsidiaries pursuant to the Foreign Funding Order. The Foreign Subsidiaries generally had been able to generate positive cash flow from their operations and as a result, the Debtors had only advanced approximately US$3,500,000 to the Foreign Subsidiaries. The Debtors, however, required the continued ability to advance additional funds to the Foreign Subsidiaries up to the US$9,700,000 cap to ensure that the Foreign Subsidiaries can operate their business without interruption. It is necessary for the Debtors to continue advancing funds to their Foreign Subsidiaries to: (i) safeguard the Debtors' investment in the Foreign Subsidiaries; and (ii) ensure that the Foreign Subsidiaries continue to manufacture parts that the Debtors use to make end- product component parts to sell to OEMs. The advances are necessary to permit the Foreign Subsidiaries to, among other things, continue their production and manufacturing operations. If the Foreign Subsidiaries ceased operations: (i) the value of the Debtors' interest in the Foreign Subsidiaries would be significantly reduced; (ii) any incremental revenue produced by the Foreign Subsidiaries would be eliminated; (iii) the Debtors' market share in the automotive parts industry would be reduced; and (iv) the Debtors' relationship with numerous OEM customers would be materially and adversely affected. 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 AUTO: Sells Mich. Property to Roskam for US$2.45 Mil. -------------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorizes Meridian Automotive Systems Inc. and its debtor-affiliates to sell a parcel of real property located at 3225 32nd Street Southeast, in Kentwood, Michigan, referred to as the GR1 Plant to Roskam Baking Company for US$2,450,000, free and clear of all liens, claims and encumbrances, and pursuant to the terms of the Sale Agreement, as amended on Oct. 19, 2006. The Sale Agreement has been amended to include these provisions: 1. The Due Diligence Period for Roskam to complete the Phase1 Review, Title Review and Survey Review is extended for two additional weeks. The new deadline for Roskam to complete due diligence is on Nov. 2, 2006. 2. The Debtors agree to work with Consumers Energy regarding the release of the easements that the existing building encroaches on the Premises. In the event the matter cannot be resolved by Nov. 2, 2006, the parties agree to enter into an Escrow Agreement, whereby US$50,000 will be withheld from the proceeds of closing to assume Roskam's continued work towards the release of the encroached easements. The closing deadline, however, will not be delayed as a result of it. 3. Subject to the satisfaction or waiver of Roskam's remaining contingencies, the closing of the sale of the Premises will take place on a date mutually agreeable to the parties within 10 days of Nov. 2, 2006. The Court also authorizes the Debtors to pay the commission earned by real estate broker NAI West Michigan. 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: Ronald E. Elmquist Resigns as Board Director ------------------------------------------------------------- RadioShack Corp.'s board of directors accepted Ronald E. Elmquist's resignation from his post as director. Mr. Elmquist has informed the company that he has resolved to devote his entire time and energies to his defense against charges recently filed against him in Clay County, Missouri. 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. * * * As reported in the Troubled Company Reporter on Oct. 27, 2006, Standard & Poor's Ratings Services lowered the corporate credit and senior unsecured ratings on Fort Worth, Texas-based RadioShack Corp. to 'BB' from 'BBB-'. At the same time, the rating agency lowered the short-term rating to 'B-1' from 'A-3'. The outlook is negative. Total debt was US$610 million as of Sept. 30, 2006. UNITED RENTALS: Posts US$1.07B Third Quarter 2006 Total Revenues ---------------------------------------------------------------- United Rentals, Inc., reported record third quarter 2006 diluted earnings per share of US$0.85. The third quarter 2006 diluted earnings per share, which absorb charges of US$.03 per diluted share related to two previously announced debt prepayments, represent an increase of 20% compared with US$0.71 for the third quarter 2005. Total revenues of US$1,070 million for the third quarter increased 9.3% from the third quarter 2005. Third quarter net income of US$95 million increased 25% from US$76 million for the third quarter 2005. Same-store rental revenues increased 3.5% from the third quarter 2005, and dollar utilization was essentially flat at 72.2%. Free cash flow for the third quarter was US$135 million after total capital expenditures of US$192 million. Free cash flow is a non-GAAP measure. The company adjusted its full year 2006 outlook range for diluted earnings per share to US$2.12 to US$2.22 after absorbing the charges of US$.03 per diluted share for the debt prepayments. Diluted earnings per share for 2005 were US$1.80. The company expects to generate US$3.95 billion in total revenues in 2006, and raised its outlook for free cash flow to US$175 million after total capital expenditures of approximately US$955 million. Third Quarter 2006 Financial Highlights For the third quarter 2006 compared with last year's third quarter: -- Return on invested capital improved 2.3 percentage points to 13.0%. -- Rental rates increased 5.1%. -- SG&A expenses improved 1.2 percentage points to 15.3% of revenues. -- Operating income of US$216 million increased 25%. -- Free cash flow generation was US$135 million compared with negative free cash flow of US$62 million. -- Contractor supplies sales increased 23% to US$109 million. The size of the rental fleet, as measured by the original equipment cost, was US$4.1 billion and the age of the rental fleet was 38 months at Sept. 30, 2006, compared with US$3.9 billion and 40 months at year-end 2005, and US$4.0 billion and 39 months at Sept. 30, 2005. Cash flow from operations was US$237 million for the third quarter 2006 compared with US$96 million for the same period last year. After total rental and non-rental capital expenditures of US$192 million, free cash flow for the third quarter 2006 was US$135 million compared with negative free cash flow of US$62 million for the same period last year. First Nine Months Results For the first nine months 2006, including second quarter charges of US$.05 per diluted share to correct previously recorded depreciation expense and provide for a tax contingency and third quarter charges of US$.03 per diluted share related to two debt prepayments, the company reported diluted earnings per share of US$1.56, an increase of 18% compared with US$1.32 for the first nine months 2005. Net income, including the second and third quarter charges totaling US$9 million, increased 24% to US$171 million for the first nine months 2006 from US$138 million for the first nine months 2005. Total revenues of US$2.91 billion for the first nine months 2006 increased 12.0% from the first nine months 2005. After total rental and non-rental capital expenditures of US$851 million compared with US$736 million for the first nine months 2005, free cash flow for the first nine months 2006 was US$19 million compared with negative free cash flow of US$83 million for the same period last year. Net debt, which represents debt plus subordinated convertible debentures less cash, of US$2.82 billion at Sept. 30, 2006 decreased US$19 million from Dec. 31, 2005, and US$190 million from Sept. 30, 2005. Wayland Hicks, chief executive officer for United Rentals, said, "The combination of improved rental rates and excellent profit flow-through resulted in our continued strong performance in the quarter. We also continued our strong contractor supplies growth, improved our SG&A expense ratio and increased our operating margin to more than 20%. "The investments we have been making to take advantage of the growth opportunities in our markets are paying off in the form of free cash flow generation, debt reduction and return on invested capital improvement." Mr. Hicks also said, "We remain focused on driving revenue growth, improving our margins and increasing our return on capital. For the full year 2006, after absorbing the impact of the second and third quarter items, we are adjusting our outlook range for diluted earnings per share to US$2.12 to US$2.22 on total revenue of US$3.95 billion and increasing our outlook for free cash flow to US$175 million." Return on Invested Capital Return on invested capital was 13.0% for the twelve months ended Sept. 30, 2006, an improvement of 2.3 percentage points from the same period a year ago. The company's ROIC metric uses operating income for the trailing twelve months divided by the averages of stockholders' equity, debt and deferred taxes, net of average cash. The company reports ROIC to provide information on the company's efficiency and effectiveness in deploying its capital and improving shareholder value. Segment Performance The company's financial reporting segments are general rentals; trench safety, pump and power; and traffic control. General Rentals The general rentals segment includes rental of construction, aerial, industrial and homeowner equipment, as well as related services and activities. Third quarter 2006 revenues for general rentals were US$921 million, an increase of 9.1% compared with US$844 million for the third quarter 2005. Rental rates for the third quarter increased 5.3% and same-store rental revenues increased 3.3% from the same period last year. Operating income for general rentals was US$190 million for the third quarter, an increase of 21.8% compared with US$156 million for the same period last year. First nine months 2006 revenues for general rentals were US$2.54 billion, an increase of 11.8% compared with US$2.27 billion for the first nine months 2005. Operating income for general rentals was US$414 million for the first nine months, an increase of 18.3% compared with US$350 million for the same period last year. General rentals segment revenues represented 87% of total revenues for the first nine months 2006. Trench Safety, Pump and Power The trench safety, pump and power segment includes rental of steel trench shields and shoring, pumps, temporary power and climate control equipment, as well as related services and activities. Third quarter 2006 revenues for trench safety, pump and power of US$62 million, including a rental rate increase of 2.9%, represent an increase of 19.2% compared with US$52 million for the third quarter 2005. Operating income for trench safety, pump and power was US$18 million for the third quarter, unchanged from the same period last year, reflecting the impact of start up costs related to seven new branch locations. First nine months 2006 revenues for trench safety, pump and power were US$166 million, an increase of 27.7% compared with US$130 million for the first nine months 2005. Operating income for trench safety, pump and power was US$44 million for the first nine months, an increase of US$9 million from the same period last year. Traffic Control The traffic control segment includes rental of equipment used for traffic management, as well as related services and activities. Third quarter 2006 revenues for traffic control were US$87 million, an increase of US$4 million from the third quarter 2005. Operating income for traffic control was US$8 million for the third quarter compared with an operating loss of US$1 million for the same period last year. First nine months 2006 revenues for traffic control were US$209 million, an increase of 4.5% compared with US$200 million for the first nine months 2005. Traffic control had an operating loss of US$4 million for the first nine months 2006 compared with an operating loss of US$14 million for the first nine months 2005. Third Quarter 2006 Charges The third quarter 2006 results include debt prepayment charges of US$6 million pre-tax, or US$.03 per diluted share, related to the retirement of US$63 million of subordinated convertible debentures in connection with the QUIPs redemption and a US$400 million prepayment of the term loan. Status of the SEC Inquiry The previously announced SEC inquiry of the company is ongoing and the company is continuing to cooperate fully with the SEC. The inquiry appears to relate to a broad range of the company's accounting practices and is not confined to a specific period. Headquartered in Greenwich, Connecticut, United Rentals, Inc. -- http://unitedrentals.com/-- is an equipment rental company, with an integrated network of more than 750 rental locations in 48 states, 10 Canadian provinces and Mexico. United Rentals is a member of the Standard & Poor's MidCap 400 Index and the Russell 2000 Index(R). * * * As reported in the Troubled Company Reporter on June 8, 2006, Fitch affirmed the ratings of United Rentals, Inc. and its principal operating subsidiary, United Rentals (North America), Inc., and removed them from Rating Watch Negative where they were placed on July 14, 2005. Approximately US$2.9 billion of debt is affected by the action. The rating outlook for URI and URNA was Stable. Fitch's affirmed United Rentals Inc.'s Issuer Default Rating and United Rentals (North America) Inc.'s Issuer Default and Senior Unsecured Debt ratings at 'BB-'. * * * 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. rental company sector, the rating agency confirmed its B1 Corporate Family Rating for United Rentals (North America), Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans, bond debt obligations and QUIPS: Issuer: United Rentals (North America), Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Sec. Revolving Credit Facility due 2009 B1 Ba1 LGD2 16% Sr. Sec. Institutional Letter of Credit Facility due 2011 B1 Ba1 LGD2 16% Sr. Sec. Term Loan due 2011 B1 Ba1 LGD2 16% 6.5% Gtd. Sr. Unsec. Nts due 2012 B2 B1 LGD4 52% 7.75% Gtd. Sr. Sub. Nts due 2013 B3 B3 LGD5 83% 7.0% Gtd. Sr. Sub. Nts due 2014 B3 B3 LGD5 83% 1.875% Gtd. Convertible Nts due 2023 B3 B3 LGD5 83% Issuer: United Rentals Trust I Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 6.5% Convertible Quarterly Income Pref. Securities (QUIPS) due 2028 Caa1 B3 LGD6 96% VISTEON CORP: Balance Sheet Upside-Down by US$102MM at Sept. 30 --------------------------------------------------------------- Visteon Corp. reported third quarter 2006 results that included a net loss of US$177 million, or US$1.38 per share, an improvement over the third quarter 2005's net loss of US$207 million, or US$1.64 per share. The company also reported continued progress in implementing its three-year plan, which includes restructuring, improving base operations and profitably growing its business. "Our third quarter results came under pressure due, in part, to significant reductions in vehicle production by a number of our customers. We are taking aggressive actions to resize the business in light of these declines, and we expect conditions to continue to be challenging for the remainder of the year and into 2007," said Michael F. Johnston, chairman and chief executive officer. "Through the efforts of our employees around the world, we continued to make solid progress implementing our three-year plan which is key to positioning Visteon for the long-term." Third Quarter Results For third quarter 2006, product sales were US$2.48 billion. Sales for the same period a year ago totaled US$4.12 billion. Lower product sales were primarily due to the Oct. 1, 2005, transaction with Ford Motor Co. that transferred 23 Visteon facilities to Automotive Components Holdings, LLC, a Ford-managed business entity. Services sales for third quarter 2006 were US$133 million; no sales for services were recorded in third quarter 2005. Visteon reported a net loss of US$177 million, or US$1.38 per share, for the quarter that included US$14 million of restructuring expenses that qualify for reimbursement from the escrow account established to fund restructuring activities. In the third quarter 2005, Visteon reported a net loss of US$207 million, or US$1.64 per share, which included US$11 million of restructuring expenses. EBIT-R for the third quarter was a loss of US$127 million, improving US$10 million from the same period a year ago. Nine-Month Results For the first nine months of 2006, product sales were US$8.16 billion. More than half of the company's product sales were generated from customers other than Ford, demonstrating continued progress in diversifying Visteon's customer base. Sales for the same period a year ago totaled US$14.11 billion, of which non-Ford sales were 35%. Product sales were lower by US$5.95 billion, primarily due to the transfer of certain plants to Automotive Components in October 2005. Services sales for the first nine months of 2006 were US$416 million; no sales for services were recorded in the first nine months of 2005. Visteon's net loss of US$124 million, or US$0.97 per share, for the first nine months reflects cost savings net of customer price reductions, the financial benefit of the elimination of the plants transferred to Automotive Components and lower depreciation and amortization expense. The results include US$22 million of non-cash asset impairments related to the company's restructuring actions and an extraordinary gain of US$8 million associated with the acquisition of a lighting facility in Mexico, both of which were recognized in the second quarter of 2006. Also Visteon recognized a cumulative benefit of US$72 million in the first half of 2006 related to the relief of post-employment benefits for Visteon salaried employees associated with two Automotive Components manufacturing facilities transferred to Ford. For the first nine months of 2005, Visteon reported a net loss of US$1.61 billion, or US$12.78 per share. These results included US$1.18 billion, or US$9.35 per share, of non-cash asset impairments and US$18 million of restructuring expenses. EBIT-R for the first nine months of 2006 totaled US$64 million, an increase of US$339 million compared to an EBIT-R loss of US$275 million for the first nine- months of 2005. New Business Wins During the first nine months of the year, Visteon was awarded new incremental business totaling nearly US$1 billion, more than 20 percent of which will go into production in 2007. The company continues to win new business from a diverse range of customers around the world and across each of the company's key product lines of climate, electronics, including lighting, and interiors. "Our business wins highlight the strength of our global footprint, our innovation, the capability of our people and the growing diversification of our customer base," said Donald J. Stebbins, president and chief operating officer. "Growing the business profitably and leveraging technology for our customers are key elements of our three-year plan." Free Cash Flow and Financing Activities Free cash flow of negative US$116 million for the quarter was an improvement of US$137 million over third quarter 2005. For the first nine months of 2006, free cash flow was negative US$223 million, compared with negative US$25 million for the same period in 2005 in which Visteon received the benefit of accelerated payment terms from Ford as part of the funding agreement. During the third quarter, Visteon closed on a new U.S. secured five-year revolving credit facility with an aggregate availability of up to US$350 million and a European accounts receivable securitization facility that provides for up to US$325 million of funding for qualified trade receivables, both of which expire in 2011. These facilities replaced the company's multi-year secured revolving credit facility of US$500 million that was to expire in June 2007. The completion of these financings, including the seven-year US$800 million secured term loan closed earlier this year, provides Visteon with additional flexibility as it implements its three-year plan. Restructuring and Other Actions Visteon's three-year restructuring plan remains on track. In January of this year, the company announced plans to fix, sell or close 23 facilities, of which 11 were to be addressed in 2006. To date, the company has addressed seven of the 11 facilities. The company continues to evaluate alternatives and solutions for the remaining facilities, including divestitures that yield acceptable returns to the company. In the third quarter, the company announced two additional restructuring actions that were not in the original plan. These actions were the announcement of the closure of Visteon's Chicago facility and the exit of its Vitro Flex glass joint venture. Visteon expects to reduce its salaried workforce by approximately 900 people, primarily in higher cost countries. A charge of up to US$65 million is expected to be recorded in the fourth quarter of 2006, and the related costs will qualify for reimbursement from the escrow account. The company anticipates that this action will generate up to US$75 million of annual savings when completed. "We are making good progress implementing our restructuring activities," said James F. Palmer, executive vice president and chief financial officer. "In addition to the original actions identified, we have addressed more facilities and announced plans to further reduce our salaried workforce to continue improving performance. We know we have to do more to meet our objectives, and we are taking the necessary actions." Outlook The fourth quarter of 2006 is expected to be challenged by low production volumes from several key customers globally. Visteon currently estimates that its 2006 full year EBIT-R will be in the range of US$40 million to US$50 million, reflecting lower production levels and other cost pressures in the second half of the year. Additionally, the company currently expects free cash flow to be negative US$100 million for full year 2006. Full year product sales are expected to be US$10.9 billion. Headquartered in Van Buren Township, Michigan, Visteon Corp. (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in the Michigan (U.S.); Shanghai, China; and Kerpen, Germany; the company has more than 170 facilities in 24 countries, including Mexico, and employs approximately 50,000 people. * * * As reported in the Troubled Company Reporter on Nov. 2, 2006, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Visteon Corp. to 'B' from 'B+' and its short-term rating to 'B-3' from 'B-2'. These actions stem from the company's weaker-than-expected earnings and cash flow generation, caused by vehicle production cuts, inefficiencies at several plant locations, sharply lower aftermarket product sales, continued pressure from high raw material costs, and several unusual items that will impact 2006 results. =========== P A N A M A =========== CHIQUITA BRANDS: Incurs US$96MM Net Loss in Third Quarter 2006 -------------------------------------------------------------- Chiquita Brands International, Inc., reported that net sales increased by 8% year-over-year to US$1.0 billion. The company reported a quarterly net loss of US$96 million, including a noncash charge of US$43 million, for goodwill impairment at Atlanta AG, the company's German distributor. In the third quarter 2005, the company reported net income of US$0.3 million. "Our third quarter results were disappointing and worse than expected for several reasons," said Fernando Aguirre, chairman and chief executive officer. "First, we recorded a noncash charge for goodwill impairment at Atlanta AG due to a decline in its business performance resulting primarily from intense pricing pressure in Germany. Second, temperatures during the third quarter reached record highs across much of northern Europe. This unusually hot weather reduced consumer demand for bananas, depressed prices and contributed to substantial price weakness in trading markets, where we incurred substantial losses on the sale of temporary excess supply from Latin America. Third, beginning in September, our Fresh Express operations experienced lower sales and unforeseen costs due to consumer concerns regarding the safety of fresh spinach in the United States, despite the fact that no confirmed cases of consumer illness were linked to our Fresh Express products." Mr. Aguirre continued, "While the banana market dynamics in Europe have been more difficult than expected, we continue to sustain our leadership position in the premium quality segment and believe we are well-positioned to win in this market in the long-term. In addition, we continued to drive sustained progress in other key markets. Our North American banana pricing remained strong, reflecting successful customer contract negotiations, and our Fresh Express business continued to grow as distribution gains and new product introductions drove strong year-over-year volume growth in retail value-added salads in spite of the spinach issue." Quarterly Financial Summary -- Net sales were US$1.0 billion, up 8% from US$954 million in the third quarter 2005. The increase resulted primarily from increased banana volume in Europe, higher banana pricing in North America and increased sales in retail value-added salads. These were partly offset by lower banana pricing in Europe. -- Operating loss was US$79 million, compared with operating income of US$20 million in the year-ago period. Higher banana pricing in North America was more than offset by several factors, including the Atlanta AG goodwill impairment charge as well as the impacts from hot weather in Europe, temporary excess banana supply from Latin America, regulatory changes in the European banana market, which have resulted in lower local pricing and increased tariffs, the recent concerns about the safety of fresh spinach and higher fuel and other industry costs. -- Operating cash flow was US$27 million, compared with US$63 million in the year-ago period. -- Total debt was US$990 million at Sept. 30, 2006, compared with US$1.1 billion at Sept. 30, 2005. -- Cash was US$102 million at Sept. 30, 2006, compared with US$181 million at Sept. 30, 2005. Quarterly Segment Results Bananas In the company's Banana segment, which includes the sourcing, transportation, marketing and distribution of bananas, net sales were US$444 million, up 8% from US$411 million. The operating loss for the segment was US$43 million, compared with operating income of US$17 million in the prior year. Segment operating income was adversely affected by the following factors: -- US$39 million from lower core European local banana pricing, attributable to unseasonably hot weather in many parts of Europe, which depressed consumer demand, as well as the impact of excess supply from Latin America and regulatory changes that resulted in more intense price competition in the market. -- US$19 million of net incremental costs associated with higher banana import tariffs in the European Union, reflecting the duty increase to EUR176 from EUR75 per metric ton effective Jan. 1, 2006. This increase resulted in approximately US$27 million of incremental tariff costs, which was partially offset by savings of approximately US$8 million as the company was not required to purchase banana import licenses. -- US$15 million of industry cost increases for fuel, fruit, paper and ship charters, which was in line with previous company guidance. -- US$14 million noncash charge for goodwill impairment of Atlanta AG. -- US$13 million from higher volumes and lower banana pricing in the company's trading markets, which are primarily European and Mediterranean countries that do not belong to the European Union, and from losses incurred on excess fruit sold in Latin America. These adverse items were partially offset during the quarter by: -- US$9 million of net cost savings in the Banana segment, primarily related to efficiencies in the company's supply chain and tropical production. -- US$8 million from higher pricing in North America, including the impact of the company's fuel surcharge policy. -- US$7 million from lower accruals for performance-based compensation due to lower operating results relative to targets. -- US$5 million from lower marketing costs in Europe. -- US$4 million from higher banana volume in the company's core European markets. -- US$4 million benefit from the impact of European currency. Fresh Select In the company's Fresh Select segment, which includes the sourcing, marketing and distribution of whole fresh fruits and vegetables other than bananas, net sales were US$291 million, up 8% from US$268 million. The operating loss was US$30 million, including a US$29 million noncash charge for goodwill impairment at Atlanta AG, compared with an operating loss of US$3 million in the 2005 third quarter. Aside from the impairment charge, year-over-year improvements in the company's North American Fresh Select operations were partially offset by a decline in profitability at Atlanta. During the third quarter, due to the decline in Atlanta AG's business performance, the company accelerated the testing of Atlanta's goodwill and fixed assets for impairment. Although the analysis is not yet complete, the company recorded a goodwill impairment charge in the 2006 third quarter for the full amount, of which US$29 million was included in the Fresh Select segment and US$14 million was included in the Banana segment. Upon completion of the impairment analysis in the fourth quarter 2006, the company does not anticipate additional, material asset impairments at Atlanta AG. Fresh Cut In the company's Fresh Cut segment, which includes value-added salads and fresh-cut fruit operations, net sales were US$278 million, up 8 percent from US$259 million. The operating loss for the segment was US$3 million, compared with operating income of US$7 million in the same quarter of 2005. Fresh Cut operating income benefited from these factors: -- US$5 million from the achievement of acquisition synergies; and -- US$4 million from 13% higher unit volume in retail value-added salads. However, these items were more than offset by: -- US$9 million of higher direct costs, including lost raw product inventory and noncancellable purchase commitments, related to consumer concerns about the safety of fresh spinach products following the discovery of E. coli and resulting investigation by the U.S. Food and Drug Administration; -- US$4 million of higher industry costs; -- US$3 million of increased production overhead costs, including higher costs for maintenance and repair and warehousing; and -- US$2 million from lower volume in foodservice. In addition to the direct costs, the company believes that third quarter operating income was at least US$3 million lower than it otherwise would have been as a result of reduced sales and decreased margins during the final three weeks of the quarter. Although the FDA investigation has linked no cases of illness to the company's Fresh Express products, this industry outbreak will likely continue to have a significant impact on Fresh Cut segment results into the 2007 first quarter, and possibly beyond. "Looking ahead to the fourth quarter, we anticipate better banana pricing in Europe along with improvement in several factors that negatively impacted third quarter results, such as unseasonably hot weather and temporary excess supply. We also believe the impact of the spinach outbreak will begin to diminish in the fourth quarter as consumer confidence returns," said Mr. Aguirre. "In sum, while European banana prices remain under pressure, we believe certain of our challenges in the third quarter were unusual, and we remain focused on driving profitable growth in each of our operations. Most importantly, we are confident in our ability to manage through this challenging period and remain on-track to achieve our long-term vision to be a consumer-driven leader in branded, healthy, fresh foods," Mr. Aguirre concluded. Financial Covenant Waiver At the beginning of October the company obtained from its lenders a temporary waiver of certain financial covenants in its revolving credit and term loan facility, effective through Dec. 15, 2006. The company is currently seeking an amendment of its credit facility to cure any violation of its covenants that otherwise would occur upon the expiration of the temporary waiver and to provide additional flexibility in future periods. While the company is targeting completion of the amendment process prior to the filing of its next Quarterly Report on Form 10-Q, no assurance can be given regarding the timing and terms of such an amendment. Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide including Panama. * * * As reported in the Troubled Company Reporter on Oct. 3, 2006, Moody's Investors Service affirmed all ratings for Chiquita Brands L.L.C. (senior secured at Ba3), as well as for its parent Chiquita Brands International, Inc. (corporate family rating at B2), but changed the outlook to negative from stable. This action followed the company's announcement that its operating performance continues to be negatively impacted by lower pricing in key European and trading markets, as well as excess fruit supply. CHIQUITA BRANDS: Mulls Great White Fleet Shipping Operation Sale ---------------------------------------------------------------- Chiquita Brands International, Inc., is considering the sale of the Great White Fleet, its shipping operation, Bulletin Panama reports. The Great White Fleet runs 12 owned refrigerated cargo vessels and charters additional vessels for use principally in the long-haul transportation of Chiquita Brands' fresh fruit products from Latin America to North America and Europe. The owned vessels consist of eight reefer ships and four container ships that carry 70% of Chiquita's banana volume delivered to core markets in Europe and North America. According to Bulletin Panama, Chiquita Brands disclosed that it is taking two initiatives designed to improve financial flexibility and lessen debt, with the aim of investing the firm's resources in ways that help to create long-term shareholder value. Chiquita Brands said in a statement, "The two actions are the exploration of strategic alternatives for the sale and long-term management of its shipping assets and shipping-related logistics activities, and the suspension of its quarterly dividend." Bulletin Panama relates that Chiquita Brands will analyze various structures, including: -- sale and lease-back of the firm's owned ocean-going shipping fleet, -- sale and/or outsourcing of related ocean-shipping assets and container operations, and -- entry into a long-term strategic partnership to meet all of Chiquita Brands' international cargo transportation needs. Fernando Aguirre, Chiquita Brands' chairperson and chief executive officer, told Bulletin Panama, "Our Great White Fleet has represented a strong competitive advantage for Chiquita for many years, and continuing to excel in cold-chain management -- delivering our high-quality fresh products quickly and efficiently - will remain critical to our company. However, we believe there is an opportunity to enhance shareholder value while maintaining high quality and competitive long-term operating costs by partnering with an expert shipping service provider that can grow with Chiquita. This would allow us to focus our efforts and resources even more on strengthening customer relationships and providing healthy, fresh foods to consumers. In addition, an asset sale would generate significant capital, which would be used primarily to reduce debt, as well as to invest in new growth opportunities." Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide including Panama. * * * As reported in the Troubled Company Reporter on Oct. 3, 2006, Moody's Investors Service affirmed all ratings for Chiquita Brands L.L.C. (senior secured at Ba3), as well as for its parent Chiquita Brands International, Inc. (corporate family rating at B2), but changed the outlook to negative from stable. This action followed the company's announcement that its operating performance continues to be negatively impacted by lower pricing in key European and trading markets, as well as excess fruit supply. CHIQUITA BRANDS: Positive About New Banana Packaging ---------------------------------------------------- Chiquita Brands International, Inc., believes it has developed a new way of packaging bananas that would let the fruits stay yellow and fresh until the consumer is ready to eat them, the South Florida Sun-Sentinel reports. Through the new packaging, bananas will stay fresh up to four days longer than a traditional bunch, the Sun-Sentinel says, citing Chiquita Brands. The company claimed that it has developed the perfectly ripened banana through the new packaging. The Sun-Sentinel underscores that Chiquita Brands' packaged bananas are all natural with no preservatives added. The firm's patented packaging slows the ripening by controlling the amount of air that the bananas are exposed to over time. Mike Mitchell, a spokesperson of Chiquita Brands, told the Sun-Sentinel, "We're offering consumers perfectly ripe bananas for the week between their shopping pattern." According to the Sun-Sentinel, Chiquita Brands is packaging bananas in sealed three-serve packs at its Port Everglades ripening plant and testing them in 10 Publix grocery stores in Broward and Miami-Dade counties. The report says that Chiquita Brands' packaging test with Publix is an extension of its new single-serve, packaged bananas. They are sold to convenience stores across North America. Marketed as "Chiquita To Go", Chiquita Brands tested the product at 200 convenience stores and is on target to distribute them to about 7,500 outlets by the end of 2006. Chiquita Brands' company and port officials told the Sun-Sentinel that Port Everglades handles over 20% of Chiquita Brands' American bananas and plantains imports. Mr. Mitchell told the Sun Sentinel that the packaged bananas hit six Broward County stores on Oct. 31, the Sun-Sentinel notes. Over the next several months, Chiquita Brands will be analyzing response from clients to decide whether to bring the new packaging on a large scale in 2007. Other than the 10 Publix stores in South Florida, Chiquita Brands will test the product in dozens of grocery stores in other states. According to the report, Chiquita Brands is selling up to 15 single bananas daily per store. "We're very pleased with how they are selling," Mr. Mitchell told the Sun-Sentinel. The Sun-Sentinel emphasizes that Chiquita Brands and Publix are hoping buyers will go for bananas with Fresh & Ready packs. However, Earle Fischer, a resident of Fort Lauderdale, told the Sun-Sentinel, "It's fancy packaging. I still prefer the old-fashioned ones." The bananas, which are best for two to three days after the package is opened, are expensive, the Sun-Sentinel says. The bananas cost US$1.59 per 17.2-ounce package or US$2.98 for two packages. Regular bananas cost 49 cents a pound, or US$1 more for the Chiquita Fresh & Ready bananas. Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide including Panama. * * * As reported in the Troubled Company Reporter on Oct. 3, 2006, Moody's Investors Service affirmed all ratings for Chiquita Brands L.L.C. (senior secured at Ba3), as well as for its parent Chiquita Brands International, Inc. (corporate family rating at B2), but changed the outlook to negative from stable. This action followed the company's announcement that its operating performance continues to be negatively impacted by lower pricing in key European and trading markets, as well as excess fruit supply. HUNTSMAN INT: Moody's Rates US$400-Million Sr. Sub. Notes at Ba3 ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Huntsman International LLC's, a wholly owned subsidiary of Huntsman Corp., proposed US$400 million senior subordinated notes. Moody's also assigned Loss Given Default Assessment of LGD6 to these notes in accordance with its Loss-Given-Default rating methodology that was initially implemented at the end of September 2006. Proceeds from the private offering of the proposed US dollar and euro denominated notes will be used to redeem part of the company's outstanding 10-1/8% senior subordinated notes due 2009. The corporate family ratings of B1 for both Huntsman International and Huntsman Corp. were affirmed and the rating outlooks for both companies remain developing. Moody's assigned these new ratings: -- Proposed Sr. Sub Notes, US$400 million, due 2013 and 2014: B3, LGD6, 91%. The proposed transaction is a modest credit positive for Huntsman Corp. (and Huntsman International) as it will reduce the company's interest expense by redeeming high coupon debt. The rating outlook (for both, Huntsman Corp. and Huntsman International) was changed to developing from positive in March 2006 after Huntsman Corp.'s management announced plans to separate Huntsman Corp.'s Base Chemicals and Polymer segments from Huntsman Corp.'s differentiated segments. The developing outlook reflects the possibility of additional transactions, over the medium term, to further separate the company. The outlook also reflects that the ratings may change subject to the development of a more formal debt structure and financial philosophy (including the possibility of dividends and incremental acquisitions) for the remaining businesses to be held at the differentiated segments. Moody's believes the decision to pursue a split by Huntsman Corp.'s management was prompted by ongoing concern over stock price valuation along with the receipt of an indication of interest from an outside party, occurring in late 2005, regarding an acquisition of all of the outstanding stock of Huntsman Corp. Moody's continues to believe that objectives for incremental debt reduction approaching US$1.45 billion by the end of 2007 are possible. Upon completion of debt reduction with proceeds of the proposed sale of Huntsman's European Commodities Business to SABIC, the ratings outlook may move to positive. The notching of the proposed senior subordinated notes at B3 and LGDA of LGD6 take into consideration the unconditional guarantees, on a subordinated basis, from all of Huntsman International's domestic subsidiaries and certain foreign subsidiaries. LGDAs 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%-9%) to LGD6 (loss anticipated to be 90%-100%). Huntsman 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. NCO GROUP: Earns US$11.4 Million in 2006 Third Quarter ------------------------------------------------------ NCO Group, Inc., reported net income of US$11.4 million, including special charges of US$3.6 million, net of taxes for the third quarter of 2006. This compares to net income of US$7.6 million in the third quarter of 2005; including special charges of US$2.2 million, net of taxes. The special charges are associated with the restructuring of the Company's legacy operations to streamline the Company's cost structure, the integration of recent acquisitions, and costs associated with the Company's proposed merger. The special charges for 2005 also included the impact from Hurricane Katrina. The restructuring charges are included as a separate line item under operating costs and expenses, and the integration, merger, and Hurricane Katrina charges are included in payroll and related expenses, and selling, general and administrative expenses. NCO is organized into four divisions that include Accounts Receivable Management North America, Customer Relationship Management, Portfolio Management, and Accounts Receivable Management International. Overall revenue in the third quarter of 2006 was US$301.6 million, an increase of 21.0%, or US$52.4 million, from revenue of US$249.2 million in the third quarter of 2005. For the third quarter of 2006, ARM North America's revenue was US$205.7 million as compared to US$186.8 million in the third quarter of 2005. The increase was primarily attributable to the acquisition of Risk Management Alternatives, Inc., which was completed on Sept. 12, 2005, and an US$8.7 million increase in inter-company revenue from Portfolio Management, which is eliminated in consolidation. During the quarter, this division recorded approximately US$3.4 million, net of taxes, of restructuring charges, costs associated with integration of the Company's recent acquisitions, and merger costs. For the third quarter of 2006, CRM's revenue was US$62.8 million as compared to US$44.9 million in the third quarter of 2005. The increase was primarily attributable to new clients ramping up business during the end of 2005 and during 2006. While these new contracts have allowed this division to expand its revenue base in 2006, the deployment of large numbers of seats on an expedited schedule adversely impacts near-term profitability because the operating expenses are incurred in advance of the revenue growth. Partially offsetting the revenue from new clients in the third quarter of 2006 was the reduction in revenue from a major client where NCO ceased providing certain services when the client exited the consumer long-distance business due to changes in telecommunications laws. During the quarter this division recorded approximately US$133,000, net of taxes, of restructuring and integration charges. For the third quarter of 2006, Portfolio Management's revenue was US$55.3 million compared to US$35.1 million in the third quarter of 2005. The increase included additional revenue from portfolio assets acquired as part of two business combinations at the end of the third quarter of 2005. Portfolio Management recorded US$13.1 million of revenue during the third quarter of 2006 from the sale of portions of several older portfolios with little or no remaining carrying value, as compared to US$2.8 million during the third quarter of 2005. For the third quarter of 2006, ARM International's revenue was approximately US$8.4 million compared to US$3.5 million in the third quarter of 2005. The increase in revenue was primarily attributable to the acquisition of the international operations of RMA. During the quarter this division recorded approximately US$80,000, net of taxes, of restructuring and integration charges. NCO Group, Inc. -- http://www.ncogroup.com/news/-- provides business process outsourcing services including accounts receivable management, customer relationship management and other services. NCO provides services through 90 offices in the United States, Canada, the United Kingdom, Australia, India, the Philippines, the Caribbean and Panama. * * * As reported in the Troubled Company Reporter on Nov. 2, 2006, Moody's Investors Service assigned a B3 rating to NCO Group, Inc.'s proposed US$165 million senior unsecured notes and a Caa1 rating to its proposed US$200 million of senior subordinated notes, which are intended to replace a proposed US$365 million senior subordinated notes offering that was cancelled. Concurrently, Moody's withdrew the Caa1 rating assigned to the discussed US$365 million of senior subordinated notes. Pro-forma for the aforementioned capital mix changes, Moody's affirmed the B2 corporate family rating and the Ba3 rating on the US$565 million senior secured credit facility. NORTEL NETWORKS: Secures US$7.7 Million NRC Maintenance Contract ---------------------------------------------------------------- Nortel Government Solutions(x), a company wholly owned by Nortel(x), has been selected by the U.S. Nuclear Regulatory Commission to operate and maintain its digital courtroom systems in Rockville, Maryland and Las Vegas, Nevada. Nortel Government Solutions will provide the services under an agreement estimated at US$7.7 million over four years. The agreement also includes support for NRC hearings, as well as application development and testing. The systems were developed by Nortel Government Solutions and delivered to the NRC earlier this year. They provide electronic evidence presentation, digital audio and video transcripts, and electronic capture and display of evidence. This enables immediate electronic access to documents, and live video and audio feeds to ensure the widest possible public access to NRC proceedings. The digital courtroom systems are designed to help the NRC's Atomic Safety and Licensing Board Panel simplify proceedings ranging from routine cases to more complicated hearings involving nuclear reactor licenses. The Company says that one of the proceedings is the potential adjudication regarding a U.S. Department of Energy license application for a commercial nuclear reactor waste storage facility at Nevada's Yucca Mountain, located 100 miles northwest of Las Vegas, which is expected to last three to four years as mandated by Congress and could become one of the largest and most complex administrative hearings in U.S. history. The digital database available to the two courtrooms is capable of storing and providing electronic access to the millions of pages of evidence and thousands of hours of testimony that may accumulate. "These showcase systems integrate everything into one multimedia system with real-time access to information for all participants," Chuck Saffell, chief executive officer, Nortel Government Solutions, said. "Our operations and maintenance services will help the NRC to achieve and sustain the highest performance, efficiency, security and reliability from its electronic courtrooms." About Nortel Government Solutions Based in Fairfax, Virginia, Nortel Government Solutions -- http://www.nortelgov.com/-- is a network-centric integrator, providing the services expertise, mission-critical systems and secure communications that empower government to ensure the security, livelihood, and well being of its citizens. The company is a provider for solutions designed to improve workforce productivity, reduce operating costs, and streamline inter-agency communications. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Limited (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband. Nortel does business in more than 150 countries including Mexico. * * * As reported in the Troubled Company Reporter on July 10, 2006, Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd- 5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. As reported in the Troubled Company Reporter on June 20, 2006, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed US$2 billion senior note issue; downgraded the US$200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed US$2 billion notes. S&P said the outlook is stable. ===================== P U E R T O R I C O ===================== CONSOLIDATED CONTAINER: S&P Affirms B- Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Consolidated Container Co. LLC and removed all ratings from CreditWatch with negative implications, where they were placed on Aug. 23, 2006. The corporate credit rating on Consolidated Container is 'B-'. The CreditWatch placement had followed the company's announcement that it would delay filing its June 30, 2006, 10-Q, due to an evaluation of the accounting implications of a settlement agreement with a customer related to historical bottle and resin supply contracts. The outlook is negative. Atlanta, Ga.-based Consolidated Container had total debt outstanding of about US$592 million at June 30, 2006. "The affirmation of the ratings follows Consolidated Container's October 2006 announcement that it has concluded its accounting review," said Standard & Poor's credit analyst Liley Mehta. The negative outlook incorporates refinancing risk and concerns regarding the company's ability to meet its significantly increased interest burden from 2007 onward when interest on the 10.75% senior secured discount notes becomes cash payable. Improved operating results support the current ratings, although the ratings outlook will be constrained until management takes steps to extend its credit facilities, senior secured discount notes, and subordinated notes that mature in December 2008, June 2009, and July 2009 respectively. The company also reported improved financial results for the quarter ended June 30, 2006. The restatements for prior periods resulted in somewhat weaker operating results for the periods in question and related primarily to the company's customer contracts with Dean Foods. In August 2006, the company entered into a settlement agreement with Dean Foods, whereby Consolidated Container agreed to pay US$10 million to Dean Foods in installments through 2008 (US$4 million by year-end 2006, US$3 million by August 2007, and US$3 million by August 2008). Because of the financial restatement and resultant delay in reporting its financial statements, the company obtained a permanent waiver and amendment to its credit agreement and regained access to its revolving credit facility in October 2006. Consolidated Container's cash generated from operations is expected to be sufficient to meet capital expenditures and working capital needs in 2006. The ratings on Consolidated Container and its wholly owned subsidiary, Consolidated Container Capital Inc., reflect the company's highly leveraged financial profile, which overshadows its weak business risk profile in the relatively stable beverage and consumer product packaging markets. With annual revenues of about US$870 million, Consolidated Container is a domestic producer of rigid plastic containers for dairy products, water, juice, and other beverages; food, household, and agricultural chemicals; and motor oil. The company derives about 59% of its revenues from dairy, water, and juice packaging, which are relatively commodity-type products and have mature demand patterns. Headquartered in Atlanta, Georgia, Consolidated Container Company LLC -- http://www.cccllc.com/-- which was created in 1999, develops, manufactures and markets rigid plastic containers for many of the largest branded consumer products and beverage companies in the world. CCC has long-term customer relationships with many blue-chip companies including Dean Foods, DS Waters of America, The Kroger Company, Nestle Waters North America, National Dairy Holdings, The Procter & Gamble Company, Coca-Cola North America, Quaker Oats, Scotts and Colgate-Palmolive. CCC serves its customers with a wide range of manufacturing capabilities and services through a nationwide network of 61 strategically located manufacturing facilities and a research, development and engineering center. Additionally, the company has 4 international manufacturing facilities in Canada, Mexico and Puerto Rico. R&G FINANCIAL: Dividend Payments on Pref. Stocks & Sec. Approved ---------------------------------------------------------------- R&G Financial Corp. has requested and received regulatory permission to pay its dividend obligations for both November and December on its four outstanding series of preferred stock, three of its trust preferred securities issues that have payments due in November and five of its trust preferred securities issues that have payments due in December. Regulatory approvals are necessary as a result of the company's agreements with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and Commissioner of Financial Institutions of the Commonwealth of Puerto Rico. Headquartered in Hato Rey, Puerto Rico, R&G Financial Corp. (NYSE: RGF) -- http://www.rgonline.com/-- is a diversified financial holding company with operations in Puerto Rico and the United States, providing banking, mortgage banking, investments, consumer finance and insurance through its wholly owned subsidiaries, R-G Premier Bank, R-G Crown Bank, R&G Mortgage Corporation, Puerto Rico's second largest mortgage banker, R-G Investments Corporation, the Company's Puerto Rico broker- dealer, and R-G Insurance Corporation, its Puerto Rico insurance agency. At June 30, 2006, the Company operated 37 bank branches in Puerto Rico, 35 bank branches in the Orlando, Tampa/St. Petersburg and Jacksonville, Florida and Augusta, Georgia markets, and 49 mortgage offices in Puerto Rico, including 37 facilities located within R-G Premier Bank's banking branches. * * * Fitch Ratings lowered on Oct. 30, 2006, these ratings of R&G Financial Corp. and its subsidiaries: R&G Financial Corp. -- 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-'. Fitch said the rating outlook is negative. RENT-A-CENTER: Completes Sr. Sec. Debt Financing Documentation -------------------------------------------------------------- Rent-A-Center, Inc., completed the documentation of its previously announced senior secured debt refinancing. The new US$1,322.5 million senior credit facilities consist of US$922.5 million in term loans and a US$400 million revolving credit facility. The company intends to utilize the proceeds of the new senior credit facilities to repay its existing senior debt, currently US$365.2 million outstanding, finance the proposed acquisition of Rent-Way, Inc., and for general corporate purposes. The funding of the new senior credit facilities is contingent upon the closing of the pending acquisition of Rent-Way, Inc. and customary closing conditions for financings of this nature. The company anticipates closing the refinancing substantially contemporaneously with the closing of the acquisition of Rent-Way, Inc. In connection with the closing of the refinancing, the company will record a charge in the fourth quarter of approximately US$2.7 million relating to capitalized costs incurred in connection with the Company's existing senior credit facility. Based in Plano, Texas, Rent-A-Center, Inc. (Nasdaq:RCII) -- http://www.rentacenter.com/-- operates the largest chain of consumer rent-to-own stores in the U.S. with 2,751 company operated stores located in the U.S., Canada, and Puerto Rico. The company also franchises 297 rent-to-own stores that operate under the "ColorTyme" and "Rent-A-Center" banners. * * * Standard & Poor's Ratings Services lowered on Oct. 10, 2006, its corporate credit rating on Plano, Texas-based Rent-A-Center Inc. to 'BB' from 'BB+'. S&P said the outlook is negative. At the same time, Standard & Poor's assigned its 'BB' bank loan rating to Rent-A-Center Inc.'s proposed US$1.325 billion credit facility. The rating agency also assigned a recovery rating of '2' to the facility, indicating the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. The proposed loan comprises: -- a US$400 million revolving credit facility due in 2011, -- a US$200 million term loan A due in 2011, and -- a US$725 million term loan B due in 2012. "The downgrade is due to an increase in debt leverage and a decline in cash flow protection, as the acquisition of Rent-Way Inc. will be funded with US$600 million of incremental debt," said Standard & Poor's credit analyst Gerald Hirschberg. SALOMON BROTHERS: Moody's Ratings on 3 Cert. Classes Slides to C ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes, affirmed the ratings of six classes and downgraded the ratings of four classes of Salomon Brothers Mortgage Securities VII, Inc., Commercial Mortgage Pass-Through Certificates, Series 2000-C2: Class A-2, US$452,975,589, Fixed, affirmed at Aaa Class X, Notional, affirmed at Aaa Class B, US$33,214,000, Fixed, upgraded to Aaa from Aa1 Class C, US$33,215,000, Fixed, upgraded to A1 from A2 Class D, US$7,815,000, Fixed, upgraded to A2 from A3 Class E, US$11,723,000, Fixed, affirmed at Baa1 Class F, US$13,677,000, Fixed, affirmed at Baa2 Class G, US$9,769,000, WAC, affirmed at Baa3 Class J, US$13,677,000, Fixed, affirmed at B3 Class K, US$5,861,000, Fixed, downgraded to Caa2 from Caa1 Class L, US$5,861,000, Fixed, downgraded to C from Caa2 Class M, US$8,792,000, Fixed, downgraded to C from Caa3 Class N, US$2,833,398, Fixed, downgraded to C from Ca As of the Oct. 18, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 20.6% to US$620.9 million from $781.5 million at securitization. The Certificates are collateralized by 164 mortgage loans ranging in size from less than 1% to 4.8% of the pool, with the top 10 loans representing 28.8% of the pool. Thirty loans, representing 22.4% of the pool, have defeased and have been replaced with U.S. Government securities. Six loans have been liquidated from the pool resulting in aggregate realized losses of approximately $9 million. Six loans, representing 6.6% of the pool, are currently in special servicing. The largest specially serviced loan is Diamond Point Plaza, which is discussed below. Moody's has estimated aggregate losses of approximately US$13.3 million for all of the specially serviced loans. Thirty seven loans, representing 19.7% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2005 operating results for 98.7% of the performing loans. Moody's loan to value ratio is 92.6%, compared to 95.5% at Moody's last full review in February 2005 and compared to 84.2% at securitization. Moody's is upgrading Classes B, C and D due to increased credit support, defeasance and stable overall pool performance. Class B was upgraded on Aug. 2, 2006 and placed on review for further possible upgrade based on a Q tool based portfolio review. Moody's is downgrading Classes K, L, M, and N due to realized and expected losses from the specially serviced loans. Class P has been eliminated in its entirety due to losses and Class N has sustained approximately $4.1 million in losses. The top four non-defeased loans represent 12.4% of the pool. I The largest loan is the 1615 Poydras Street Loan (US$27.7 million - 4.5%), which is secured by a 502,000 square foot office building located in the Warehouse District of New Orleans, Louisiana. Damage from Hurricane Katrina has been repaired and the property is fully operational. The largest tenant is FM Services Company, which occupies 61% of the premises under a lease that expires in April 2011. The property is 89% leased, compared to 90.4% at last review. Moody's LTV is 91.2%, compared to 76.4% at last review. II The second largest loan is the Western Plaza II Loan ($17.9 million - 2.7%), which is secured by a 343,000 square foot strip shopping center located in Mayaguez, Puerto Rico. The center is anchored by Sam's Club, Caribbean Cinemas and Pep Boys. The center is also shadow anchored by a Super Kmart. The property has maintained a stable occupancy since securitization and is currently 98.6% leased. Moody's LTV is 80.2%, compared to 83.1% at last review. III The third largest loan is the Red Lion Shopping Center Loan ($16.1 million - 2.6%), which is secured by a 218,000 retail center located 10 miles northeast of downtown Philadelphia, Pennsylvania. The property is anchored by Best Buy, Staples and Pep Boys. The property is currently 67.0% occupied, compared to 100.0% at last review. The decline in occupancy is due to the 2005 lease expiration of two tenants. The loan is on the master servicer's watchlist due to declines in occupancy and a low debt service coverage ratio. Moody's LTV is in excess of 100%, compared to 88.6% at last review. IV The fourth largest loan is the Diamond Point Plaza Loan ($14.6 million - 2.4%), which is secured by a 251,000 retail center located in suburban Baltimore, Maryland. The loan was transferred to special servicing in June 2002 and became REO in March 2006. The loan was transferred due to the unexpected vacancy of Sam's Club which went dark in 2002 although it continues to pay rent (56% GLA; lease expiration January 2009). Ames, formerly the second largest tenant, also vacated its space prior to its lease expiration. The property is currently 67% leased but only 5.5% occupied. The Trust was awarded a $22.8 million judgment against the borrower and its affiliates in December 2005 and successfully won the appeal in Sept. 2006, defeating the debtors' attempts to have the judgment overturned. Moody's anticipates a significant loss upon the resolution of this loan, although the loss could be partially or substantially mitigated if the special servicer is successful in its efforts to collect on the judgment. The pool collateral is a mix of office, U.S. Government securities, retail, industrial and self-storage, multifamily, lodging, and healthcare. The collateral properties are located in 39 states and Puerto Rico. SEARS HOLDINGS: Files Proxy Circular & Extends Offer to Nov. 20 --------------------------------------------------------------- Sears Holdings Corp. disclosed that its wholly owned subsidiary, SHLD Acquisition Corp., has filed a proxy circular to permit it to solicit proxies in connection with the Nov. 14, 2006, meeting of the shareholders of Sears Canada Inc. At the meeting shareholders will be asked to consider a proposed consolidation of the shares of Sears Canada, which if approved in accordance with all legal requirements, would result in Sears Canada becoming a wholly owned subsidiary of Sears Holdings. On Oct. 23, 2006, the Ontario Securities Commission issued a stay of its Aug. 8, 2006 cease trade order to permit Sears Canada to hold the meeting. The holding of the meeting complies with all requirements of the Canada Business Corporations Act and has been authorized by the Ontario Securities Commission. Sears Holdings encourages Sears Canada shareholders to review this proxy circular in its entirety. Sears Holdings also disclosed that SHLD Acquisition Corp. has extended its take-over bid for all the shares not already owned by Sears Holdings and its affiliates to 5:00 p.m. (Toronto time) on Nov. 20, 2006. As a result of the cease trade order issued on Aug. 8, 2006, by the Ontario Securities Commission, no Sears Canada shares may be accepted or taken up under such offer. Hoffman Estates, Illinois-based Sears Holdings Corp. (NASDAQ: SHLD) -- http://www.searsholdings.com/-- is the nation's third largest broadline retailer, with approximately US$55 billion in annual revenues, and with approximately 3,800 full-line and specialty retail stores in the United States, Canada and Puerto Rico. Sears Holdings is a home appliance retailer as well as a retailer of tools, lawn and garden, home electronics, and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including well-known labels as Lands' End, Jaclyn Smith, and Joe Boxer, as well as the Apostrophe and Covington brands. * * * As reported in the Troubled Company Reporter on June 23, 2006, Standard & Poor's Ratings Services revised its outlook on Sears Holdings Corp. to stable from negative. All ratings, including the 'BB+' corporate credit rating, and the 'B-1' short-term rating for Sears Roebuck Acceptance Corp., are affirmed. As reported in the Troubled Company Reporter on Jun 22, 2006, Fitch affirms its ratings of Sears Holdings Corp. including its Issuer Default Rating (IDR) at 'BB'; Senior notes at 'BB'; and Secured bank facility at 'BBB-'. SUNCOM WIRELESS: Sept. 30 Balance Sheet Upside-Down by US$378MM --------------------------------------------------------------- SunCom Wireless Holdings, Inc., reported 2006 third quarter financial results, which reflected higher average revenues per user, an increase in the number of subscribers and higher roaming revenues as compared with the second quarter of 2006. These factors contributed to Adjusted EBITDA of US$30.2 million compared with US$24.5 million in the second quarter of 2006, while net cash used in operating activities improved to US$5.3 million from US$21.2 million in the second quarter. During the quarter, the company added a net 15,387 subscribers on gross additions of 105,564. Monthly churn was 2.9%, up from 2.2% in the second quarter of 2006. Approximately 25% of the increased churn was due to the planned decommissioning of SunCom's domestic TDMA - Time Division Multiple Access -- network. Additionally, the temporary deployment of service representatives to help with the transition of customers from the TDMA network had a negative impact on churn related to non-TDMA customers. SunCom transitioned more than 40,000 subscribers from its TDMA network to the GSM network, the most popular standard for mobile phones in the world. Most of the 40,000 were not under long-term contracts and SunCom successfully transitioned 84% of those into a one or two-year agreement on the GSM network. Deactivations due to the TDMA conversion were 13,667 in the third quarter as compared with 8,055 in the second quarter of 2006. "Any time you require customers to change technology, it has a negative impact on your customer service support system ... even when the outcome is positive, that is, converting subscribers to long-term contracts and replacing out-of-date handsets with newer versions," said Bill Robinson, executive vice president of operations. ARPU increased 3.2% to US$54.56 from US$52.89 in the second quarter of 2006, driven by a combination of higher access revenues, increased feature revenues and seasonal increases for customer usage and roaming charges. The ARPU gain along with the higher subscriber count produced a 4.1% increase in service revenues to US$171.1 million from US$164.4 million in the second quarter. "The positive third quarter results are another indication that SunCom is making gains in growing its cash flows and building its subscriber base," said Chairman and Chief Executive Officer Michael E. Kalogris. "Our Associates have done a fantastic job of positioning SunCom as a viable competitor in a very tough industry." Mr. Kalogris added, "The third quarter demonstrated SunCom has a solid foundation from which to generate additional growth and we are looking forward to an exciting fourth quarter." SunCom recently launched a fresh marketing campaign featuring new equipment offerings and promotional rate plans and new television advertising. Additionally, SunCom successfully launched a new prepaid product -- GoodCall -- during the quarter. Financial Highlights -- Adjusted EBITDA in the third quarter was US$30.2 million, a 23.2% increase from US$24.5 million reported in the second quarter of 2006. Net cash used in operating activities was US$5.3 million in the third quarter of 2006 compared with a use of US$21.2 million in the second quarter of 2006. -- ARPU increased sharply to US$54.56 from US$52.89 in the second quarter of 2006, which reflected a combination of higher access revenues, increased feature revenues as well as seasonal increases for customer usage and roaming charges. -- Service revenues increased 4.1% to US$171.1 million from US$164.4 million in the second quarter of 2006, reflecting a higher ARPU and the greater number of subscribers in the quarter. -- Roaming revenues were US$23.5 million compared with US$19.5 million in the second quarter of 2006. The quarter-to-quarter increase was due to a higher volume of minutes. Total roaming minutes of use -- MOUs - were 296 million compared with 256 million in the second quarter 2006. -- Monthly churn was 2.9% compared with 2.2% in the second quarter of 2006. This increase was due, in part, to the planned decommissioning of SunCom's TDMA network. -- Cost of service for the third quarter of 2006 was US$66.7 million, unchanged from the second quarter. Lower cell site expenses, primarily from the decommissioning of the TDMA network, were responsible for the flat quarter-over-quarter costs, despite the company's higher subscriber count. Average home MOUs for the quarter was 1,459 compared with 1,455 in the prior quarter. -- Total cost of equipment was US$38.0 million compared with US$32.3 million in the second quarter of 2006. The increase in the third quarter compared with the second quarter was due to higher gross additions and increased handset upgrades related to retention programs. -- Costs per gross addition of US$400 declined from US$409 in the second quarter due to increased leverage on advertising and fixed costs from higher gross additions. -- Capital expenditures in the quarter were US$7.3 million versus US$34.9 million a year ago. -- The company ended the quarter with US$236.2 million in cash and short-term investments. Based in Berwyn, Pennsylvania, SunCom Wireless Holdings Inc. (NYSE: TPC) -- http://www.suncom.com/-- offers digital wireless communications services to more than one million subscribers in the southeastern United States, Puerto Rico and the U.S. Virgin Islands. SunCom is committed to delivering Truth in Wireless by treating customers with respect, offering simple, straightforward plans and by providing access to the largest GSM network and the latest technology choices. SunCom Wireless' balance sheet showed a stockholders' deficit of US$378,099,000 at Sept. 30, 2006, compared with a deficit of US$338,223,000 at June 30, 2006. UNIVISION COMM: Acquires Full Control of Disa Records ----------------------------------------------------- Univision Communications Inc. purchases the remaining 50% of Mexico-based Disa Records and Edimonsa Publishing. Univision purchased 50% of Disa from the Chavez family of Monterrey, Mexico, in June 2001 with the provision to purchase the remaining 50% in five years. With this purchase, Univision Music Group accounts for over 40% of the Latin music market share in the country. Disa Records will continue to operate as a separate label under Univision Music, similar to Fonovisa Records, Univision Records and La Calle Records. Edimonsa Publishing will be merged into the Univision Music Publishing companies. Carlos Ruiz has been appointed Vice President/General Manager of Disa Records. He previously served for Univision Music Group-Mexico, where he developed commercial strategies to leverage business growth. Mr. Ruiz' career in the Latin music industry spans over 18 years and includes leadership positions with Warner Music Brazil, Peerless-MCM and Metro Casa Musical. "I want to congratulate the Chavez family for building a successful record and publishing company that has endured the test of many years in the Latin music industry and I wish them success in future endeavors," said Jose Behar, President and Chief Executive Officer, Univision Music Group. "I am very excited about the role Carlos Ruiz will play in continuing the success of Disa Records. I am confident in his ability to capitalize on the label's current position in the marketplace and further strengthen the Disa brand under Univision Music Group." The Chavez family expressed, "We deeply thank our friends Mr. Jerry Perenchio and Mr. Jose Behar for opening the doors of Univision to the Disa Records label and for their confidence and support during our five-year venture. We believe that, under the direction of Mr. Carlos Ruiz and Mr. Jos� Behar, Disa will continue to be one of the most important and successful regional Mexican music labels. Congratulations to Univision and we reiterate that, Disa Records and Edimonsa Publishing will continue to flourish within the Univision Music Group." "I am thrilled about my new position with Disa Records and look forward to the challenge of leading a music label with such a powerful roster of artists and with such a rich catalog of music," said Mr. Ruiz. Disa Records currently represents an impressive roster of international artists including Montez de Durango, Los Horoscopos, Patrulla 81, Los Brindis and Beto y Sus Canarios. Disa Records will continue to operate primarily from Monterrey, Mexico, with major offices in Mexico City, Los Angeles, San Antonio and Miami. Headquartered in Los Angeles, Calif., Univision Communications Inc., -- http://www.univision.net/-- a Spanish-language broadcaster, owns and operates more than 60 television stations in the U.S. and Puerto Rico offering a variety of news, sports, and entertainment programming. The company had about US$1.4 billion in debt at March 31, 2006. * * * As reported in the Troubled Company Reporter on July 4, 2006, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured notes ratings on Univision Communications Inc. to 'BB-' from 'BBB-', based on the company's agreement in principle to a US$12.3 billion (excluding existing debt) LBO led by investor group Madison Dearborn Partners LLC. As reported in the Troubled Company Reporter on June 30, 2006, Fitch downgraded Univision Communications Inc.'s IDR and senior unsecured debt ratings to 'BB' from 'BBB-', and the ratings remain on Rating Watch Negative. ============================ S T K I T T S & N E V I S ============================ DIGICEL LTD: Launches Credit Me Credit U Service ------------------------------------------------ Digicel Ltd. has launched a new service called the Credit Me Credit U in St. Kitts and Nevis, SKNVibes reports. According to SKNVibes, the new service makes it easier for prepaid clients to receive credit on their prepaid mobile phones in St. Kitts and Nevis, and the wider Organization of Eastern Caribbean States. SKNVibes relates that Credit Me Credit U is a secure and dynamic handset to handset based method of topping up account that allows for persons to request "Credit Me" from another Digicel subscriber by dialing *127*1areacodenumber*amountrequested#. For the other client to "Credit U", he/she would dial *128*1areacodenumber*amount to be transferred#. The "Credit Me" service is free of charge, SKNVibes notes. However, the "Credit U" service will be charged at EC$0.25 per transaction. SKNVibes emphasizes that prepaid clients can use Credit Me Credit U to request or send credit from or to, any Digicel client pre or postpaid located in any Eastern Caribbean Island. With this product, Digicel offers the Federation the most ways to top up their prepaid mobile phones with: -- Direct Flex, -- Flex Cards, -- Top u Up, -- Webflex, -- E Top Up, and -- Credit Me Credit U. Donovan White -- the marketing manager of Digicel St. Kitts, Nevis & Anguilla -- told SKNVibes that the company is delighted to offer prepaid clients another method of recharging their Digicel mobile phones. Credit Me Credit U grants the convenience of receiving credit quickly from a friend or family member at the most inconvenient times when phones need recharge. Digicel continues to work hard to meet clients' needs and offer convenience in the service it provides to the Federation of St. Kitts and Nevis, SKNVibes says, citing Mr. White. Credit Me Credit U is perfect for parents who provide their children with mobile phones because it gives them an alternative of recharging their children's mobile phones at their own convenience, Kevin Edwards, also a marketing manager of Digicel St. Kitts and Nevis -- told SKNVibes. Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * On July 12, 2006, Moody's Investors Service assigned a B3 senior unsecured rating to the US$150 million add-on Notes offering of Digicel Ltd. and affirmed Digicel's existing B3 senior unsecured and B1 Corporate Family Ratings. Moody's changed the outlook to stable from positive. * * * Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel Ltd's proposed add-on offering of US$150 million 9.25% senior notes due 2012. These notes are an extension of the US$300 million notes issued in July 2005. In addition, Fitch also affirms Digicel's foreign currency Issuer Default Rating and the existing US$300 million senior notes due 2012 at 'B'. Fitch said the rating outlook is stable. ================================= T R I N I D A D & T O B A G O ================================= BRITISH WEST: Former Workers Lament Treatment & Firm's Closure -------------------------------------------------------------- The former workers of British West Indies Airlines aka BWIA in the United States mourned the airline's closure and the way the company treated them, Newsday reports. According to Newsday, BWIA is in transition mode towards closure by Dec. 31. Caribbean Airlines will take its place on Jan. 1. US workers said in a statement that they were deeply saddened over the loss of BWIA after the airline gave the region and its foreign destinations 66 years of excellent service with an impeccable safety record. The workers told Newsday that the International Association of Machinists or IAM, the union representing them, had rejected the voluntary separation offer, as the Trinidad and Tobago workers were offered substantially greater packages for the same level of jobs. The management had completed negotiations with IAM on the voluntary separation packages for its workers in New York and Miami, BWIA said in a statement. The company said it entered into a Memorandum of Understanding on Oct. 12, under the auspices of the US National Mediation Board. British West Indies aka BWIA was founded in 1940, and for more than 60 years has been serving the Caribbean islands from Trinidad and Tobago, the hub of the Americas, linking the twin island republic and many other Caribbean islands with North America, South America, the United Kingdom and Europe. The airline has reportedly been losing US$1 million a week due to poor operational management. An employee survey revealed that lack of responsibility by the management is a major issue in the company. A number of key employees moved to other companies caused by a deadlock in the airline's negotiation with its labor union. The Trinidad & Tobago government, which owns 97.188% of BWIA, decided to shut down the airline on Dec. 31, 2006, and reopen a new airline that will be called Caribbean Airlines. The government approved a substantial capital injection for the creation of Caribbean Airlines. DIGICEL LTD: Inks Roaming Accord with Azercell Telecom ------------------------------------------------------ Digicel Trinidad and Tobago has signed a roaming agreement with JV Azercell Telecom, the latter told Azertag. Azertag relates that other firms that entered into the same agreement with JV Azercell include: -- Digicel (Curacao) -- T Mobile, and -- Bharti Airtel. JV Azercell has signed 296 roaming accords with mobile operators in 134 nations, Azertag reports. Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * On July 12, 2006, Moody's Investors Service assigned a B3 senior unsecured rating to the US$150 million add-on Notes offering of Digicel Ltd. and affirmed Digicel's existing B3 senior unsecured and B1 Corporate Family Ratings. Moody's changed the outlook to stable from positive. * * * Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel Ltd.'s proposed add-on offering of US$150 million 9.25% senior notes due 2012. These notes are an extension of the US$300 million notes issued in July 2005. In addition, Fitch also affirms Digicel's foreign currency Issuer Default Rating and the existing US$300 million senior notes due 2012 at 'B'. Fitch said the rating outlook is stable. DIGICEL LTD: Launches Free Calls in Trinidad & Tobago ----------------------------------------------------- Kevin White, the chief executive officer of Digicel Trinidad and Tobago, said in a news conference that the firm has launched its latest "Talk for Free" promotion. Mr. White told the Trinidad & Tobago Express that once the client speaks for five minutes -- Digicel to Digicel -- and paid for five minutes, calls for the rest of the day until midnight will be free. The promotion ends on Nov. 29, The Express reports. Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * On July 12, 2006, Moody's Investors Service assigned a B3 senior unsecured rating to the US$150 million add-on Notes offering of Digicel Ltd. and affirmed Digicel's existing B3 senior unsecured and B1 Corporate Family Ratings. Moody's changed the outlook to stable from positive. * * * Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel Ltd's proposed add-on offering of US$150 million 9.25% senior notes due 2012. These notes are an extension of the US$300 million notes issued in July 2005. In addition, Fitch also affirms Digicel's foreign currency Issuer Default Rating and the existing US$300 million senior notes due 2012 at 'B'. Fitch said the rating outlook is stable. DIGICEL LTD: Rival Firm Fails to Resolve Calls Conflict ------------------------------------------------------- The Telecommunications Services of Trinidad and Tobago aka TSTT failed to resolve the calls conflict with Digicel Ltd. at the deadline the Telecommunications Authority demanded, the Trinidad and Tobago Express reports. According to The Express, TSTT has not implemented any changes to its networks. As reported in the Troubled Company Reporter-Latin America on Oct. 25, 2006, the Telecommunications Authority called for immediate action from TSTT to fully cooperate with the investigation resulting from Digicel's complaint against TSTT. Digicel claimed that TSTT intentionally blocked the former's calls. TSTT blamed the call conflict on a software problem resulting from the "decommissioning" of its Time Division Multiple Access, The Troubled Company Reporter-Latin America relates. TSTT said that it had not intended to block calls from Digicel's clients. TSTT said that the software conflict had been resolved and the company was waiting for feedback from Digicel as to whether that problem is still affecting the latter's users. The Express underscores that the Telecommunications Authority told Samuel Martin, the chairperson of TSTT, that the latter had seven days to correct the problem. Bernard Mitchell, the chief operating officer of TSTT, pointed to correspondence existing between TSTT and Digicel, agreeing to domestic traffic only because of Digicel's injection of international traffic and that call completion was proving very low, The Express says. Mr. Mitchell told The Express, "With respect to the issue of the link between us being deployed strictly for domestic traffic, we have the correspondence to prove that." "TSTT's claim that the interconnection was to, or should apply to domestic traffic only, is unsustainable. Digicel is authorized, as TSTT was at all material times well aware, to carry both domestic and international traffic... the lack of a formal interconnection agreement between TSTT and Digicel is irrelevant. TSTT agreed to provide interconnection services between TSTT and Digicel on a sender keeps all basis and has been doing so for more than six months now," The Express says, citing the Telecommunications Authority. Elizabeth Camps, the legal and policy adviser of TSTT, assured The Express that the company is addressing the issue with the Telecommunications Authority. Mr. Mitchell told The Express, "We've gone the distance in facilitating the competitive process... and what we're saying now is we need an agreement that would guide the relationship between the two players in the market. One may ask why we have an issue with the injection of international traffic. Really it is because apart from the issue of reduced call completion, you must bear in mind that TSTT has been able to sign two interconnect agreements so far -- one with Laqtel which deals with mobile communications and one with 360 Communications, a subsidiary of Illuminat, for bringing into Trinidad and Tobago international traffic. It would be discriminatory against our very local entrepreneurs from participating in the local sector, while allowing other entities from abroad to reap the benefits of the competitive process, so we are studiously resisting having to entertain such a situation." Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * On July 12, 2006, Moody's Investors Service assigned a B3 senior unsecured rating to the US$150 million add-on Notes offering of Digicel Ltd. and affirmed Digicel's existing B3 senior unsecured and B1 Corporate Family Ratings. Moody's changed the outlook to stable from positive. * * * Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel Ltd's proposed add-on offering of US$150 million 9.25% senior notes due 2012. These notes are an extension of the US$300 million notes issued in July 2005. In addition, Fitch also affirms Digicel's foreign currency Issuer Default Rating and the existing US$300 million senior notes due 2012 at 'B'. Fitch said the rating outlook is stable. DIGICEL LTD: Seeks Halt of Rival Firm's Call Block -------------------------------------------------- Kevin White, the chief executive officer of Digicel Trinidad and Tobago, told the media that the company has filed an injunction to stop the Telecommunications Services of Trinidad and Tobago aka TSTT from blocking calls from the firm's clients. "We filed an injunction with the courts on Monday (Oct. 30) and we served notice on TSTT last night (Tuesday night) and we expect a court hearing tomorrow (Nov. 2). The injunction has nothing to do with interconnect rates...the injunction is to stop them from blocking calls. TSTT are blocking calls-we have independent proof. We've invited in the engineers from the regulators office, they saw it, they were horrified and TATT had written to TSTT last Monday-as far as I know neither of these letters have been responded to," the Trinidad and Tobago Express says, citing Mr. White. Mr. White said that TSTT is not willing to negotiate with regards to the interconnection issue, The Express notes. "TSTT are not willing to negotiate, they are only willing to negotiate on their own terms," Mr. White told The Express. Digicel Ltd. is a wireless services provider in the Caribbean region founded in 2000, and controlled by Denis O'Brien. The company started operations in Jamaica in April 2001 and now offers GSM mobile services in Caribbean countries including Jamaica, St. Lucia, St. Vincent, Aruba, Grenada, Barbados, Bermuda, Cayman, and Curacao among others. Digicel finished FY2005 with 1.722 million total subscribers -- 97% pre-paid -- estimated market share of 67% and revenues and EBITDA of US$478 million and US$155 million, respectively. * * * On July 12, 2006, Moody's Investors Service assigned a B3 senior unsecured rating to the US$150 million add-on Notes offering of Digicel Ltd. and affirmed Digicel's existing B3 senior unsecured and B1 Corporate Family Ratings. Moody's changed the outlook to stable from positive. * * * Fitch Ratings assigned on July 14, 2006, a 'B' rating to Digicel Ltd's proposed add-on offering of US$150 million 9.25% senior notes due 2012. These notes are an extension of the US$300 million notes issued in July 2005. In addition, Fitch also affirms Digicel's foreign currency Issuer Default Rating and the existing US$300 million senior notes due 2012 at 'B'. Fitch said the rating outlook is stable. HILTON HOTELS: Ends Coral Hotels Joint Development Agreement ------------------------------------------------------------ Coral Hotels & Resorts and Hilton Hotels Corp. jointly decided to dissolve their agreement to develop the Coral by Hilton brand. The decision, reached by mutual agreement, is effective Oct. 31, 2006. "This de-branding stems from a mutually agreed and amicable decision," states Simon Suarez, executive vice president of Coral Hotels & Resorts. "The superior infrastructure and unique characteristics of Coral Hotels & Resorts guarantee seamless branding without starting from zero. Under the new structure, guests will continue to enjoy four exciting all-inclusive resorts with a wide variety of activities and accommodations to please any discerning traveler." "Hilton has enjoyed a successful three year relationship with Coral Hotels & Resorts. This mutual decision is a result of our companies pursuing new direction and focus for development opportunities," said Matthew J. Hart, president and chief operating officer, Hilton Hotels Corporation. Coral's four existing all-inclusive resorts in the Dominican Republic will no longer operate under the Coral by Hilton brand as of Oct. 31, 2006, and will revert back to the Coral Hotels & Resorts brand. All existing reservations will be honored by all four hotels. Since 1996, Coral Hotels & Resorts has operated in the Dominican Republic, and will continue to do so under that banner. Following the de-branding process from Hilton, Coral Hotels & Resorts will soon launch a comprehensive marketing campaign, and will continue to sell through all existing distribution channels, including tour operators, travel agencies, electronic media and direct-consumers. 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 ================= AES CORP: Unit Says Firm Complies with Regulations -------------------------------------------------- "AES's purchase complied with all the norms of the regulatory bodies. There is no problem because it complies with all the regulations," Julian Nebreda -- the executive president of Electricidad de Caracas, AES Corp.'s unit in Venezuela -- told reporters. Reuters relates that the Supreme Court of Venezuela disclosed on Oct. 30 that it would hear a lawsuit challenging AES Corp.'s acquisition of a 71.3% stake in 2000 and questioning the legality of a foreign firm controlling a public utility. Electricidad de Caracas contested on Oct. 31 charges that AES Corp.'s purchase of the controlling stake in the company was illegal, Reuters notes. The court will decide whether to continue with the lawsuit after hearing testimony from the executives of Electricidad de Caracas and Venezuela's parliament, Reuters states. About Electricidad de Caracas Electricidad de Caracas is a vertically integrated utility in Venezuela, operating in electricity distribution, transmission, and generation in the capital city of Caracas and its metropolitan area. It is the largest private electric utility in the country and is owned by US-based AES Corp. (B+/Positive/--). Electricidad de Caracas reported net profits of US$20.6 million from January to March, versus net losses of US$26.9 the same period in 2005. AES Corp. -- http://www.aes.com-- and its subsidiaries engage in the generation and distribution of electric power. It generates power for sale to utilities and other wholesale customers, as well as operates utilities that distribute power to retail, commercial, industrial, and governmental customers through integrated transmission and distribution systems. The company operates through three segments: Contract Generation, Competitive Supply, and Regulated Utilities AES Corp.'s Latin America business group is comprised of generation plants and electric utilities in Argentina, Brazil, Chile, Colombia, Dominican Republic, El Salvador, Panama and Venezuela. Fuels include biomass, diesel, coal, gas and hydro. The group also pursues business development activities in the region. AES has been in the region since May 1993, when it acquired the CTSN power plant in Argentina. * * * As reported in the Troubled Company Reporter on Oct. 16, 2006, Moody's Investors Service affirmed its B1 Corporate Family Rating for AES Corp. in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on the company's loans and bond debt obligations including the B1 rating on its senior unsecured notes 7.75% due 2014, which was also given an LGD4 loss-given default rating, suggesting noteholders will experience a 55% loss in the event of a default. CITGO PETROLEUM: Selling Two Asphalt Plants & Stake in Pipeline --------------------------------------------------------------- Felix Rodriguez, the president of Citgo Petroleum Corp., told Business News Americas that the company will sell two asphalt refineries on the East Coast and a stake in a pipeline system. "We are carrying out the due diligence for the asphalt refineries we have in Paulsboro [New Jersey] and Savannah [Georgia]," BNamericas says, citing Mr. Rodriguez. BNamericas relates that the sale of Citgo Petroleum's 15.8% stake in the 5,500-mile Colonial pipeline system is more advanced than the plants. "We are in the process of receiving offers for it," Mr. Rodriguez told BNamericas. Mr. Rodriguez said that Citgo Petroleum will stop providing gasoline to 1,600 7-Eleven gas stations in the US and plans no expansions for its remaining US plants in the foreseeable future, BNamericas notes. Citgo Petroleum will expand the sale of heating oil at subsidized prices to poor communities, BNamericas says. Mr. Rodriguez told BNamericas, "We are estimating that we will reach 100M gallons [379M liters] in 19 states this year. Last year, we served seven states and 40M gallons." According to BNamericas, the sales are part of Citgo Petroleum's strategy to lessen its presence in the US. Petroleos de Venezuela ratified earlier this year the sale of a 41.25% interest in a Houston refinery to Lyondell Chemical, its majority partner in the venture, BNamericas states. Headquartered in Houston, Texas, Citgo Petroleum Corp. -- http://www.citgo.com/-- is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela SA, the state-owned oil company of Venezuela. Petroleos de Venezuela is Venezuela's state oil company in charge of the development of the petroleum, petrochemical, and coal industry, as well as planning, coordinating, supervising, and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * Standard and Poor's Ratings Services assigned a 'BB' rating on Citgo Petroleum Corp. Citgo Petroleum carries Fitch's BB- Issuer Default Rating. Fitch also rates the company's US$1.15 billion senior secured revolving credit facility maturing in 2010 at 'BB+', its US$700 million secured term-loan B maturing in 2012 at 'BB+', and its senior secured notes at 'BB+'. CITGO PETROLEUM: Two Units Restarting Operations This Month ----------------------------------------------------------- Operators told El Universal that the catalytic cracking unit and an alkylation unit in a Citgo Petroleum refinery in Lemont, Illinois, will restart operations in the middle of November. El Universal relates that the catalytic cracking unit is used to manufacture gasoline. The Citgo Petroleum refinery has a daily production of 167,000 barrels. According to El Universal, the two units were slated for maintenance starting in October. The specific date for the restart of the operations were not disclosed, El Universal states. Headquartered in Houston, Texas, Citgo Petroleum Corp. -- http://www.citgo.com/-- is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela SA, the state-owned oil company of Venezuela. Petroleos de Venezuela is Venezuela's state oil company in charge of the development of the petroleum, petrochemical, and coal industry, as well as planning, coordinating, supervising, and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * Standard and Poor's Ratings Services assigned a 'BB' rating on Citgo Petroleum Corp. Citgo Petroleum carries Fitch's BB- Issuer Default Rating. Fitch also rates the company's US$1.15 billion senior secured revolving credit facility maturing in 2010 at 'BB+', its US$700 million secured term-loan B maturing in 2012 at 'BB+', and its senior secured notes at 'BB+'. ELECTRICIDAD DE CARACAS: Says AES Complies with Regulations ----------------------------------------------------------- "AES's purchase complied with all the norms of the regulatory bodies. There is no problem because it complies with all the regulations," Julian Nebreda -- the executive president of Electricidad de Caracas, AES Corp.'s unit in Venezuela -- told reporters. Reuters relates that the Supreme Court of Venezuela disclosed on Oct. 30 that it would hear a lawsuit challenging AES Corp.'s acquisition of a 71.3% stake in 2000 and questioning the legality of a foreign firm controlling a public utility. Electricidad de Caracas contested on Oct. 31 charges that AES Corp.'s purchase of the controlling stake in the company was illegal, Reuters notes. The court will decide whether to continue with the lawsuit after hearing testimony from the executives of Electricidad de Caracas and Venezuela's parliament, Reuters states. About AES Corp. AES Corp. -- http://www.aes.com-- and its subsidiaries engage in the generation and distribution of electric power. It generates power for sale to utilities and other wholesale customers, as well as operates utilities that distribute power to retail, commercial, industrial, and governmental customers through integrated transmission and distribution systems. The company operates through three segments: Contract Generation, Competitive Supply, and Regulated Utilities AES Corp.'s Latin America business group is comprised of generation plants and electric utilities in Argentina, Brazil, Chile, Colombia, Dominican Republic, El Salvador, Panama and Venezuela. Fuels include biomass, diesel, coal, gas and hydro. The group also pursues business development activities in the region. AES has been in the region since May 1993, when it acquired the CTSN power plant in Argentina. About Electricidad de Caracas Electricidad de Caracas is a vertically integrated utility in Venezuela, operating in electricity distribution, transmission, and generation in the capital city of Caracas and its metropolitan area. It is the largest private electric utility in the country and is owned by US-based AES Corp. (B+/Positive/--). Electricidad de Caracas reported net profits of US$20.6 million from January to March, versus net losses of US$26.9 the same period in 2005. * * * On Feb 9, 2006, Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit rating on C.A. La Electricidad de Caracas and its 'B' rating on Electricidad de Caracas Finance BV's US$260 million senior unsecured notes. S&P said the outlook is stable. On Feb. 3, 2006, S&P raised the long-term local and foreign currency sovereign credit ratings on the Bolivarian Republic of Venezuela to 'BB-' from 'B+'. The decision to raise the ratings on Venezuela was supported by the continued sharp improvements in Venezuela's external indicators, which are attributable to a large current account surplus, a high level of international reserves, and lower external debt in addition to buoyant economic growth and the potential buyback of external debt. PETROLEOS DE VENEZUELA: Constructing Submarine to Spot Leaks ------------------------------------------------------------ Petroleos de Venezuela SA, the state oil firm of Venezuela, is working with a university in Carabobo to develop a submarine, which could spot leaks in underwater pipelines in the Maracaibo lake, Business News Americas reports, citing Ana Elisa Osorio, the company's corporate manager for environmental and occupational hygiene. Maracaibo is one of Petroleos de Venezuela's leading exploration and production areas. The area has for decades been faced with a series of environmental issues due to large-scale crude oil and gas production, BNamericas relates. Ms. Osorio declined to tell BNamericas the launching date for the submarine. Petroleos de Venezuela SA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 3, 2006, Standard & Poor's Ratings Services revised the CreditWatch implications on its 'B+' long-term foreign currency corporate credit rating on Petroleos de Venezuela SA to positive from developing. The revision of the CreditWatch status on Petroleos de Venezuela reflects S&P's expectations that downgrade risk has receded, and the issuer credit rating will either be raised and equalized with the rating on Petroleos de Venezuela's owner, the Bolivarian Republic of Venezuela (BB-/Positive/B), or affirmed at 'B+'. PETROLEOS DE VENEZUELA: Fails Shipping Gasoline to US ----------------------------------------------------- Petroleos de Venezuela SA, the state-owned oil firm of Venezuela, has not delivered gasoline to the United States since September, El Universal reports. Oil operators and shipping agents told Reuters that the delay of the shipment was partly due to problems on Petroleos de Venezuela's US refining operations. According to El Universal, power troubles and scheduled plant closures in three of the four refineries comprising the domestic circuit led to a significant output reduction in September and October. However, Rafael Ramirez, Venezuela's minister of energy and petroleum and Petroleos de Venezuela chief told El Universal that exports to the US have been within normal limits. Petroleos de Venezuela SA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 3, 2006, Standard & Poor's Ratings Services revised the CreditWatch implications on its 'B+' long-term foreign currency corporate credit rating on Petroleos de Venezuela SA to positive from developing. The revision of the CreditWatch status on Petroleos de Venezuela reflects S&P's expectations that downgrade risk has receded, and the issuer credit rating will either be raised and equalized with the rating on Petroleos de Venezuela's owner, the Bolivarian Republic of Venezuela (BB-/Positive/B), or affirmed at 'B+'. PETROLEOS DE VENEZUELA: Posts US$43.6B First Nine-Month Revenue --------------------------------------------------------------- Rafael Ramirez -- the president of Petroleos de Venezuela SA, the state-run oil company of Venezuela, and the energy and oil minister of the country -- said to lawmakers that the firm had a US$43.6 billion revenue for the first nine months of 2006, Business News Americas reports. BNamericas relates that Petroleos de Venezuela incurred costs and expenses of US$11.1 billion in the first nine months of 2006, paying US$13.7 billion in royalties to the treasury and US$4.58 billion in taxes. Minister Ramirez told BNamericas that Petroleos de Venezuela invested about US$8.31 billion in social development or missions in the first nine months of 2006 to provide health care and eliminate illiteracy. BNamericas underscores that Petroleos de Venezuela has experienced serious delays in releasing its financial results since the 2002-03 oil workers' strike. According to BNamericas, Petroleos de Venezuela published its financial results for the year 2003 in late 2005, reporting a US$2-billion profit. However, Minister Ramirez told BNamericas that Petroleos de Venezuela's auditing system had been repaired. Petroleos de Venezuela's results for January-September 2006 have not been audited or published. The company does not report to any Venezuelan regulator as it is not publicly traded and lists the energy and oil ministry as stockholder, BNamericas states. Petroleos de Venezuela SA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 3, 2006, Standard & Poor's Ratings Services revised the CreditWatch implications on its 'B+' long-term foreign currency corporate credit rating on Petroleos de Venezuela SA to positive from developing. The revision of the CreditWatch status on Petroleos de Venezuela reflects S&P's expectations that downgrade risk has receded, and the issuer credit rating will either be raised and equalized with the rating on Petroleos de Venezuela's owner, the Bolivarian Republic of Venezuela (BB-/Positive/B), or affirmed at 'B+'. PETROLEOS DE VENEZUELA: Will Reduce Daily Oil Production -------------------------------------------------------- Petroleos de Venezuela SA, the state oil firm of Venezuela, has warned its clients that it will slash output in line with 138,000 barrels per day (b/d) reduction agreed with the Organization of the Petroleum Exporting Countries or OPEC, Business News Americas reports. Rafael Ramirez, the president of Petroleos de Venezuela and the country's energy and oil minister, told BNamericas that to honor the commitment, Venezuela will reduce the production of its heaviest cheapest crude. Minister Ramirez said in a statement posted on the firm's Web site, "A letter is being sent to all foreign consumers of Venezuelan crude explaining to them our sovereign position and the cut of 138,000b/d we will make starting on Nov. 1." Minister Ramirez told BNamericas that he expects that oil prices could keep on decreasing but would always remain above the US$8-10/b levels in 1998. "The price of a barrel will not go back to US$30/b due to structural factors," BNamericas says, citing Minister Ramirez. Petroleos de Venezuela SA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As reported in the Troubled Company Reporter-Latin America on Nov. 3, 2006, Standard & Poor's Ratings Services revised the CreditWatch implications on its 'B+' long-term foreign currency corporate credit rating on Petroleos de Venezuela SA to positive from developing. The revision of the CreditWatch status on Petroleos de Venezuela reflects S&P's expectations that downgrade risk has receded, and the issuer credit rating will either be raised and equalized with the rating on Petroleos de Venezuela's owner, the Bolivarian Republic of Venezuela (BB-/Positive/B), or affirmed at 'B+'. * IMF Sees Continued Growth in LatAm and the Caribbean Regions -------------------------------------------------------------- The Latin American and Caribbean region continues to grow robustly and above its historical average, the International Monetary Fund concludes in its 2006 Regional Economic Outlook. In 2006, real growth should average around 4.75%, making the ongoing expansion the most vigorous three-year period since the 1970s. This is about a half percentage point higher than in 2005. Mr. Anoop Singh, Director of the IMF's Western Hemisphere Department, presented the 2006 Regional Economic Outlook today in a conference in Mexico City, during the 11th Annual Meeting of the Latin American and Caribbean Economic Association, hosted by the Instituto Tecnologico Autonomo de Mexico. The report's main findings are: Strong economic performance Recent economic performance in Latin America and the Caribbean has been strong, and is expected to remain solid in 2007. Moreover, this expansion is generally on a sound macroeconomic footing. Latin America and Caribbean growth is projected to reach around 4.75% in 2006. The growth pace is expected to recede slightly to about 4.25% in 2007, in line with a more measured global expansion, the likely easing of commodity prices, and the maturing of recoveries within the region. The region's recovery in recent years has contributed to an increase in employment and falling poverty rates. In many countries, employment growth has accelerated, with formal unemployment declining toward 10% on average. Reductions in poverty have been widespread. In Brazil, for example, the poverty rate fell from 28% in 2003 to 23% in 2005, with the income of the poorest half of the population growing over twice as fast as that of the top 10 percent. Inflation has generally remained subdued and is expected to decline moderately further, to a regional average of about 5% in 2007, testimony to the growing credibility of central banks in the region. This expansion is supported by solid economic fundamentals. External current accounts and primary fiscal balances are generally in surplus, exchange rates are more flexible than in previous expansions, inflation is much lower, and the structure of public debt is safer, with lower shares of short-term and foreign currency debt in most large countries. In this regard, further progress was made in recent months, with Peru and Brazil issuing 20-and 16-year bonds in their own currencies, and Mexico issuing a 30-year peso bond. Potential risks Notwitstanding this solid performance, a number of factors warrant monitoring. External risks to the outlook include a sharper-than-expected slowdown in U.S. growth; an unexpected tightening of global financial markets; commodity price volatility (particularly sharply lower non-oil commodity prices); and trade pressures following the erosion of preferential access in the Caribbean and lack of progress on agreements to liberalize trade further. Some domestic vulnerabilities remain. Public debt remains relatively high, at over 50% of GDP on average. Budgets remain rather rigid, with a high proportion of expenditures mandatory and a large share of revenues earmarked. Government spending in a number of countries has recently accelerated, and lower commodity prices could erode fiscal surpluses. Public revenue remains low in some countries, particularly in light of social needs. And, while not yet a source of concern in most countries, high real credit growth requires close monitoring. Policy challenges To entrench macroeconomic stability, raise growth, and help more countries in the region move toward investment grade ratings, countries are preparing to confront these vulnerabilities, and address the longstanding causes of crises in the region, including high inequality. Although making societies more equitable is inherently a slow and difficult process, policy levers exist that could be used more, including fiscal reforms to make the tax system fairer and focus public spending on social programs for the poorest; labor market policies; and other reforms that extend public services to economic opportunity to disenfranchised groups. To raise investment and productivity growth to the levels of the most dynamic emerging market economies, these reforms need to be matched with greater efforts to make Latin American economies more open and competitive, to build stronger institutions, and to raise the level of human capital in the region. Achieving lasting improvements in these areas will require building constituencies that support reform. * BOOK REVIEW: The Managerial Mystique -------------------------------------- Author: Abraham Zaleznik Publisher: Beard Books Paperback: 320 pages List Price: $34.95 Order your personal copy at p://amazon.com/exec/obidos/ASIN/1587982811/internetbankrupt"|http://amazon.c om/exec/obidos/ASIN/1587982811/internetbankrupt "Business in America has lost its way ... desperately needing leadership to face worldwide economic competition." Zaleznik wrote these words in 1989 when The Managerial Mystique was first published. But his observation remains as true today as it was then. In 1989, the problems included high debt and the decline of major industries such as steel and automobiles. To these problems can now be added outsourcing and the growing economic power of China and India. Zaleznik primarily attributes the weakened condition of American business to errors in business management. "The causes of this decline in competitiveness are complex, but at the forefront is the attitude of American management," he says. Mainly, management strayed from its critically important role of encouraging, nurturing, and recognizing initiative and creativity of individuals. Instead, management concentrated myopically on restructuring, lateral organization, communication, charismatic leadership, and mergers and acquisitions. While each of these strategies has a place in the corporate world, they are not the basis for a strong business that can compete effectively. Zaleznik contends that it is the relationship between management and employees that count the most in generating the ideas, goals, cooperation, and endurance that make a corporation competitive. Zaleznik puts to good use his background in social psychology and psychoanalysis to explore this essential, yet neglected, area of business management. Social psychology and psychoanalysis are not normally associated with business management. However, the author applies these so-called "soft sciences" to business organizational structures and processes. He critiques business organizations and their activities and management at all levels by looking at what has been excluded that really accounts for the quality of a business. Zaleznik points to some high-profile examples to illustrate what is wrong with American management. One is Harold Geneen, the former chief executive officer of ITT, who, the author says, epitomized a managerial approach that stifled company energy and potential. According to Zaleznik, Geneen is one of the many business managers who "have put their faith in numbers, managed by process, and formed elaborate structures to get people to do the predictable thing." Geneen's perspective fails to acknowledge that there are differences between one business and another. That such a belief -- easily disproved by experience -- has come to be the core principle of American business evidences, to Zaleznik's mind, just how far off course American business has strayed. Zaleznik offers a business approach that concentrates on nurturing creativity and moral connections among employees. He recognizes employees as individuals and as a corrective to business practices gone awry. The values advocated by Zaleznik should not be regarded as an alternative technique or peripheral considerations. They are the basis of a strategy that all businesses need to compete effectively. A professor emeritus of Harvard Business School and a certified psychoanalyst, Abraham Zaleznik has an international reputation for his studies and teaching on social psychology in the business setting and the characteristics of managers and leaders. *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter - Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Marjorie C. Sabijon, Sheryl Joy P. Olano, Stella Mae Hechanova, and Christian Toledo, Editors. Copyright 2006. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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